India's Power Sector

Katare · Post by **Katare** » 09 Apr 2010 18:53

Paul wrote:
Katare wrote:Another sector of economy following the path of nirvana via liberalization and competition.......

Private sector charge adds record 9,585 MW to grid

A total of 9,585 MW of capacity was added during the last fiscal, of which 4,287 MW or 45 per cent was by private developers. The Central and State sector utilities cumulatively added 5,298 MW during the period. To put it in perspective, the capacity added during the year is roughly equivalent to the peak demand met in Gujarat last fiscal and about double that of Delhi.
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According to Government data, of the 9,263 MW commissioned in 2007-08, the private sector accounted for only about 8 per cent. This improved to 25 per cent in 2008-09 (883 MW out of the 3,454 MW commissioned that year) and now to 45 per cent during 2009-10.
Sometimes it is good to read the article as well before posting ..............

What do you mean?

Paul · Post by **Paul** » 10 Apr 2010 04:01

Headline you posted does not tally with the content.

Katare · Post by **Katare** » 10 Apr 2010 06:28

what doesn't match? Please explain?

Paul · Post by **Paul** » 13 Apr 2010 00:08

http://www.thehindubusinessline.com/201 ... 850800.htm

Power's private surge

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The surge of the private players is a game-changing development that holds major implications for a power-starved economy riding mainly on the investments of public utilities.

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In the bleak desert that is the country's power sector, there's finally an oasis taking shape in the form of the private generating companies. Private developers were responsible for almost half the total power capacity added in the last fiscal, up from just a quarter in 2008-09. They account for 4,287 MW of the total 9,585 MW capacity added during 2009-10. This is clearly a game-changing development and holds major implications for a power-starved economy that has been riding predominantly on the investments of public utilities till now. Though private players or IPPs (independent power producers), as they were called, were allowed to set up projects back in the mid-nineties, they seem to have come into their own only over the last couple of years. Those such as Lanco Infratech, JSW Energy, Adani Power and Torrent Power have been busy executing projects in the last three years and the results are now beginning to show. To be sure, over the next three years the contribution of private developers will only increase; as much as 11,250 MW of capacity is currently under implementation by them, including the 4,000 MW ultra mega project of Tata Power.

The surge of the private sector is noteworthy especially given the numerous hurdles that these companies have had to cross, starting from clearances for land acquisition and delay in fuel linkages to long lead times for equipment. The take-off of power trading and the permission to set up merchant power plants that operate on free-market principles have been major factors in attracting private investment. Yet there is a lot more to be done to give private investment a leg-up. Quicker project clearances, promoting investment in transmission infrastructure and, importantly, ensuring that the finances of State electricity boards (SEBs) do not once again falter are some steps that will encourage greater private investment.

This is important because the public utilities, especially NTPC, seem to be bogged down by equipment shortage and execution delays. The government needs to examine the causes behind the under-performance of major utilities such as NTPC and NHPC simply because they hold the key to meeting the ambitious Plan targets. Interestingly, despite the surge of the private developers, total capacity addition fell short by a third of the 14,507 MW target set for 2009-10, mainly because the largest central utility, NTPC, added a piffling 990 MW. As for State utilities, the poor financial health of the SEBs appears to be coming in the way of their investing in new capacities, which is a cause for worry. Any attempt at bridging the 16 per cent power deficit in the country has to be a joint effort between the public utilities and private developers as neither can succeed single-handedly. It is important, therefore, for those such as NTPC and NHPC to pull up their socks, leverage their strengths and experience to commission projects on time.

Katare · Post by **Katare** » 13 Apr 2010 00:38

This is possiblt since this year BHEL reported that almost 80-90% of its new orders are from private sectors........

In next decade Indian power sector is going to do what Telecom sector did in 2000s, lead by private sector investment....

IDFC sees pvt sector adding 50,000 MW capacity in 3 years

geeth · Post by **geeth** » 13 Apr 2010 16:54

>>>This is possiblt since this year BHEL reported that almost 80-90% of its new orders are from private sectors........

Hey! How did a screw Driver company manage that from the private players??

tejas · Post by **tejas** » 13 Apr 2010 23:09

^^^^ geeth, boss, 82% of BHEL's sales from last year were from products based on foreign tech, a miserable indictment of its R & D abilities. This is similar to all the monopolist PSUs in India.

Private players in India's power sector have been sourcing from China but are now being discouraged from doing so by the GOI. They have to turn to BHEL beacuse they are cheaper than US/Oiropean sources. Hopefully L & T and other private sources in India will build up enough capacity to be a credible alternative.

The sooner BHEL, BEL, BEML etc. are euthanized the better Bharat Mata will be.

Cheers.

Katare · Post by **Katare** » 13 Apr 2010 23:40

tejas,

You are going on and posting this all over the BRF based on a recent news report in BS that said revenue of Rs6000corer was earned from domestically designed products. You deducted that rest of the revenue comes from products made from licensed tech and got yourself a nice 82% number. Things are not that simple and straight forward, EPC business is little more than selling products alone.

GoI has no power or intentions to discourage anyone from sourcing equipments/products from China. The reason so many companies went to China was because BHEL had huge capacity constraints and Chinese had the next best price quote with spare capacity. They are all coming back to BHEL because BHEL's products are superior in quality because they are high tech EU products instead of cloned Chinese products. Also BHEL is local company with better after sales support infrastructure.

The private sector that is getting into power equipment manufacturing, like L&T, will also be licensing their technology from foreign companies. With time and continuous reform and liberalization PSUs like BHEL would also develop cutting edge technology for Indian needs but for right now efficient license production is more important for them to meet the power demand in the country. Chinese companies didn’t become large and R&D intensive overnight, they also went through this phase of getting rich and than independent.

Rishirishi · Post by **Rishirishi** » 14 Apr 2010 02:34

Katare wrote:This is possiblt since this year BHEL reported that almost 80-90% of its new orders are from private sectors........

In next decade Indian power sector is going to do what Telecom sector did in 2000s, lead by private sector investment....

IDFC sees pvt sector adding 50,000 MW capacity in 3 years

I am a bit sceptic. Telecom was about selling stuff directly to the public.

Power is a complex game, where the GOI sits between the producer and consumer. Fundamental problem is that the organised theft of power.

tejas · Post by **tejas** » 14 Apr 2010 04:31

Katare, boss, I am sorry but I can't share your enthusiasm with BHEL maturing from license manufacture to independent R&D and production. L&T sure but not BHEL. BHEL and BEL are mirror images of each other. 5 decades into into their existence, the majority of their products are foreign designed.

BTW BHEL and BEL are among the best PSUs, which shows you just how bad the rest can be. While an argument could be made for gov't. ownership of certain industries at independence IMHO no reasonable argument can be made for the gov't. to be owning airlines, cell phone companies or watch companies now (unless losing billions of dollars is felt to be a good thing).

How many more decades will it take for these PSUs to become world beaters? Why is when BHEL imports super critical boiler tech. it needs to go to a private foreign vendor. It seems the mistakes other countries have remedied decades/centuries ago we continue to commit today.

As an aside, I am a physician working in the US. I have worked at a VA hospital ( govt' run), an academic hospital ( fixed salary) and private practice (fee for service). The (US) gov't run facility was the epitome of inefficiency and incompetence. What 4 physicians would do at the VA one physician in my group does easily. The nurses on a regular floor ( non-ICU) were not allowed to give IV injections even saline or dextros ! This had to be done by a physician.

One day post call (I was a resident at the time) one of my co-interns asked me why I looked so tired. I grumpily responded I was up all night giving various injections. He laughed at me incredulously. I said what the hell is so funny? He responded that that the way to avoid getting up out of bed was to order the nurse to hang an IV minibag which would drip in thru the patient's IV catheter rather then do the injection myself. This the nurse was allowed to do ( by fiat of some idiot bureaucrat in Washington, D.C). I was told the IV minibag had to specially made in the pharmacy which was an $80 charge. But what the hell did I care, the taxpayer got shafted and I got to sleep. BTW every other hospital in the US would allow nurses to inject these medications with a verbal order.

BTW I used to draw blood from my patients and take care of a lot of routine other work that VA employees were paid to do but wouldn't because if I didn't do it, it wouldn't get done. My first experience with socialism was truly an eye opener. Some how I doubt the GOI is somehow miraculously more efficient than the US gov't.

Cheers.

Rishirishi · Post by **Rishirishi** » 17 Apr 2010 02:00

tejas wrote:Katare, boss, I am sorry but I can't share your enthusiasm with BHEL maturing from license manufacture to independent R&D and production. L&T sure but not BHEL. BHEL and BEL are mirror images of each other. 5 decades into into their existence, the majority of their products are foreign designed.

BTW BHEL and BEL are among the best PSUs, which shows you just how bad the rest can be. While an argument could be made for gov't. ownership of certain industries at independence IMHO no reasonable argument can be made for the gov't. to be owning airlines, cell phone companies or watch companies now (unless losing billions of dollars is felt to be a good thing).

How many more decades will it take for these PSUs to become world beaters? Why is when BHEL imports super critical boiler tech. it needs to go to a private foreign vendor. It seems the mistakes other countries have remedied decades/centuries ago we continue to commit today.

As an aside, I am a physician working in the US. I have worked at a VA hospital ( govt' run), an academic hospital ( fixed salary) and private practice (fee for service). The (US) gov't run facility was the epitome of inefficiency and incompetence. What 4 physicians would do at the VA one physician in my group does easily. The nurses on a regular floor ( non-ICU) were not allowed to give IV injections even saline or dextros ! This had to be done by a physician.

One day post call (I was a resident at the time) one of my co-interns asked me why I looked so tired. I grumpily responded I was up all night giving various injections. He laughed at me incredulously. I said what the hell is so funny? He responded that that the way to avoid getting up out of bed was to order the nurse to hang an IV minibag which would drip in thru the patient's IV catheter rather then do the injection myself. This the nurse was allowed to do ( by fiat of some idiot bureaucrat in Washington, D.C). I was told the IV minibag had to specially made in the pharmacy which was an $80 charge. But what the hell did I care, the taxpayer got shafted and I got to sleep. BTW every other hospital in the US would allow nurses to inject these medications with a verbal order.

BTW I used to draw blood from my patients and take care of a lot of routine other work that VA employees were paid to do but wouldn't because if I didn't do it, it wouldn't get done. My first experience with socialism was truly an eye opener. Some how I doubt the GOI is somehow miraculously more efficient than the US gov't.

Cheers.

Bear in mind that the US uses 16% of its GDP, and still millions are without helthcare. In Canada and most other developed countries, usual is arround 9% of GDP and there is universal helthcare. It is an illusion that Government run facilities are expensiver. Private helthcare is often extreemly expensive and at the same time can be unnessecery. the private players are interested to milk the customers as much as possible,. Just look at the helth care situation in India.

saurabhmbapm · Post by **saurabhmbapm** » 17 Apr 2010 16:25

Dear Friends...

Check the following blog to know about the latest happenings on Indian Power Sector..

http://sparkspower.blogspot.com

SaraLax · Post by **SaraLax** » 21 Apr 2010 13:07

IMHO - one of the previous post's request to euthanize BHEL, BEL and etc...is a crazy one...fit to be chucked into the garbage bin.

Please correct me if i am wrong - But neither South Korea (Doosan) nor China (Harbin et Al) have developed their sub-critical / Super-Critical Boiler technologies on their own from the scratch...either they bought into the European companies having that technology or went for a tech-transfer (which is what BHEL has done with Alstom). Its almost impossible for a late-comer (late by 50-60 years if not more) to develop own tech. and compete with the originators of Super-critical boiler developers like Siemens. If you want to develop every technology on your own and then compete for orders - you cannot do any business other than maybe service boilers & turbines on an AMC basis and in the meanwhile blow up a lot of capital for atleast a decade if not more, in learning to do things on your own & in catching the leaders.

BHEL is as good as the Indian state can do..... Without BHEL, NTPC and a host of others, we will be fleeced by the MNCs left & right...like how Russian, Israeli, American & etc defence companies are doing to us...because nobody shares their defence technology jewels with others unless that tech is no longer a jewel.

Remember BHEL, BEML (& to some extent even BEL) are companies & not research organisations like ISRO, BARC, NAL and DRDO. But all of these organisations basically operate in a scenario where they are catching up with the latest technologies in their field (mostly because India was no where in the picture before 1950's) and to come up with technologies that are relevant to India. Some like BHEL, BEL go for tech-transfer and improve on them because tech-transfer is still legally possible in their field of operation due to absence of any obstructing rules like the MTCR, NPT & etc . While DRDO, ISRO, BARC have to develop all the core technologies on their own because in their area of operation - no foreign company would either go for tech-transfer (even for a very hefty price) nor do certain globally ratified rules allow such technology to be shared with India.

Following BHEL -other Indian companies like L&T, Thermax, Cethar vessels and a few others have started or tied up with other foreign purveyors (like Mitsubishi, Hitachi, Siemens, Babcock, Riley & etc) of Sub/Super-critical boiler technology as well as Turbine technology. If these joint ventures, tech-transfers (with some years of non-compete stipulations) work out good in their Indian power project implementations and these companies diligently climb up the ladder of cost-effectiveness & performance through quality, R&D & skill development measures - in the future, we could see these Indian ventures starting to compete with Chinese, Korean, American & European companies for Power projects in other countries and start becoming an export manufacturing base for their associated Foreign company.

'Why China, we are not afraid of any competition'

...With our 600 Mw set, we also improved efficiency. The heat rate of our 600 Mw system is much better than Chinese heat rates — so much so that the Chinese were able to offer that kind of heat rate only in their super-critical range. And when we’re able to give the same efficiency as super-critical systems at sub-critical costs, naturally we have the edge over them.

Similarly, we have even improved our 500 Mw set to 525 Mw, our 250 Mw set to 270 Mw, and in our lower range of 125 Mw, to 150 Mw. These strategies have paid off and greatly improved our competitiveness. Coupled with that is the performance of our equipment — the kind of operating ability, PLF and availability of spares and so on. All these factors have effectively countered the Chinese competition for us. Last year, about 90 per cent of our orders in the utilities segment came from private players — and some of these players have earlier been going to the Chinese and have now come back to us

Last year, our R&D expense was nearly Rs 825 crore, which is 2.3 per cent of our sales and, remember, our sales are growing by about 20 per cent every year. We are probably one of the few companies in the country to spend this kind of money on R&D.
We also have a number of patents to our credit. Last year, for instance, we applied for a patent or a copyright every day! 153 of our patents have already been granted and 300 to 400 patent applications are pending.
Coupled with this, many operational improvement strategies were also introduced, such as design-to-cost, lean manufacturing and so on. Of course, this has been a continuous process in the company but in the recent past we have increased focus on these activities.

BHEL’s service network and the kind of service support we give is one of the differentiating factors. For instance, the Srisailam project in Andhra Pradesh was flooded for the second time in October and after one call from the chairman of the utility, we lined up our people in 24 hours. They took over the entire renovation of that power station in record time. In fact, we even provided parts for some of the units supplied by the Japanese. Nathpa-Jhakri was another plant that suffered flood damage. In this case, none of the equipment was supplied by BHEL, it was entirely Japanese. We also played a key role in the revival of the Dabhol plant together with NTPC. In fact, we have reached the stage where customers feel comfortable with us. For example, at Santaldih, Chinese units are operating — however, the next units are coming to BHEL.

But we are already taking major cost initiatives in R&D such as the Integrated Gas Combined Cycle Project. We are also working on the Ultra Super Critical project that the government of India has initiated. We are taking a lead role in this both for the boiler and the turbine. We are also setting up more centres of excellence at our corporate R&D facility.

SaraLax · Post by **SaraLax** » 21 Apr 2010 13:35

^^^
If we were to say Euthanize BHEL....we would be killing the possibility of the generation (and evolution) of many manufacturing companies, skilled employees, graduates and etc.

There are so many private & publicly listed companies (like Cethar vessels, IGT and etc) which are basically started by Ex-BHEL employees, started out as sub-contractors of BHEL and have now evolved into flourishing enterprises that now not only compete with BHEL but also with others outside India (in 3rd world countries expecially) in bagging boiler orders for Power projects.

A huge belt of manufacturing companies have come up in the last couple of decades around BHEL-Trichy (BHEL's main Boiler manufacturing division) and BHEL-Ranipet and these companies have diversified into manufacturing equipments in other areas too (like parts for Wind turbines, heavy vehicles, Mining equipments & etc). BHEL has in a big way helped the nearby NIT - Tiruchirappalli (erstwhile REC-Trichy) and the BIM management institution (by deputing its technical people for teaching the latest that they do in their operations, running workshops, providing internships, graduate project opportunities and in fundamentally providing optimism to the graduating students) in producing graduates with good learning and skills...not to forget their similar efforts with numerous nearby ITIs & diploma institutes that have benefited from BHEL capabilities. We should not forget their CSR efforts too. I think, this all round salutary effect of BHEL's Trichy division on the surrounding area would have also been replicated in their other divisions at Haridwar and elsewhere in India. Similarly, it is possible that other PSUs like ONGC, BEL, NTPC and etc have also helped in the growth of regions around their establishments. There is so much that is still undocumented and invisible - when it comes to understanding the positive impact of certain PSUs & Private companies on our country.

I doubt if foreign MNCs and even most of the Indian private companies can contribute in the above mentioned way to our country.

Ameet · Post by **Ameet** » 22 Apr 2010 00:02

Coal India Said to Plan $2.9 Billion IPO, Nation’s Biggest

http://www.businessweek.com/news/2010-0 ... -sale.html

India plans to raise as much as 130 billion rupees ($2.9 billion) selling shares in Coal India Ltd. in July, in the nation’s biggest initial public offering, said two government officials with direct knowledge of the sale.

Coal India, the nation’s monopoly producer, aims to file share-sale documents to the stock market regulator in June, said the officials, who declined to be identified pending Cabinet approval. A sale of shares in Steel Authority of India Ltd., India’s second-biggest producer, will follow in August or September, one of the officials said.

Prime Minister Manmohan Singh’s administration said Feb. 26 that it wants to raise $9 billion in the year ending March 31 selling shares in one state-run company almost every month. The government said in January it may sell shares in 60 companies to shrink its budget deficit after the key Sensitive Index of the Bombay Stock Exchange rose 58 percent in the past year.

tejas · Post by **tejas** » 22 Apr 2010 07:46

saralax, the only thing that needs to go into the dustbin is your love of socialism. Wake up and smell the coffee, gov't ownership of industry produces poor quality, limited choices and stagnating technology. The uber PSU HAL cannot make a propeller driven trainer by itself!! The monopoly aircraft builder and self proclaimed premier aerospace complex has to beg for turboprop engines and propellers from PRIVATE US and British companies.

Keep reading Das Kapital and save me your wisdom on BRF.

RamaY · Post by **RamaY** » 22 Apr 2010 08:32

tejas-garu,

A friendly suggesion, take it FWIW.

Saralax is providing an opposite perspective, that too logically. It is unfair to call his/her thoughts socialistic trash (Socialistic trash sounds really different)

SaraLax · Post by **SaraLax** » 22 Apr 2010 13:26

Tejas,

Do you care to explain, How BHEL being a major factor in the below listed - amounts to socialism ??.

- genesis & growth of many private/public manufacturing companies.
(FYI, providing more details - Its not just BHEL but many other PSUs (including those which are presently not as strong as they used to be in the past) that have played a big role in the growth of Indian private sector companies in their related area of industry. For ex :- There is a connection between IDPL & Dr.Reddy's Lab, there are many other instances like this.)

- Strengthening the technical and management skills, knowledge being taught in the partner institutions like BIM, SASTRA, IIT-M, NIT-Trichy

- Energizing the regions around its facilities (providing employment, improving number & quality of the skilled people, medical facilities & other society uplifting CSR projects)

- The veritable orchard of skilled engineers for every other Private companies to pluck from , starting from L&T, Thermax, ABB, Samsung Heavy Engineering, Doosan, Foster-Wheeler, Siemens and many of the 'who-is-who hardcore engg. companies' from all around the world.

FYI - Presently in our stock markets, BHEL with a PE ratio of ~32 is being estimated for its worth at the same level as an older, bigger & more capable, private sector engineering giant like L&T. I bet that there is no other company in the whole world, with a similar industrial profile as BHEL, that would have a PE ratio even equal to this value. Further, I would advice you to go to the BSE/NSE website or BHEL's website - to have a look at the shareholders list of the company. You will find that 663 Foreign Institutional Investors are invested in BHEL. I bet there are also other PSUs like NTPC, BEL & others which are doing good, invested into in large numbers by FIIs and have a good future ahead. It is for this reason that many Indian and Foreign company operated Indian Mutual Funds - have seperate "PSU" Thematic Mutual Funds where they invest upto 65% of their fund's money in PSU stocks alone !!!!!!!!!!!!!!.

Take your idea of euthanizing BHEL, BEL, NTPC & etc to these 'Hardcore Capitalism oriented' FIIs, fund managers and I am sure you will get laughed at (or worse even spat at) on your face.

Whether you are stting in the US or India - please spare us with your posts on euthanizing PSUs of India ?. (Of course there are also some cases like Air India - which are mis-managed & operated in a manner that is 180 degree out of phase in comparison to others)

If you euthanize BHEL - So who is going to replace the production capability & capacity of BHEL and still provide India with cost effective solutions to our power, railway requirements ?.

Would you call in the Indian Pvt Cos (basically joint ventures with foreign cos) & foreign cos. to take up the void of BHEL and provide power generation solutions to India ???... It won't take much time for them to make India totally depend on them & start fleecing India out of its money. I assure you that the geo-politics would soon creep into the business of foreign companies supplying Power equipments to India and India will get arm twisted in a variety of possible manners. We can see that this has been happening in our defence import orders and has now started happening in our Nuclear Power Projects which are on the verge of being given to some foreign companies.

An anecdote to further boost your knowledge in this area - Recently NTPC & Indian Power Ministry to, seems to have been asked by the Indian govt. to pay more money for a Boiler order for the Phase-1 Barh thermal Power plant project in Bihar, than the amount quoted initially by some Russian company that won the related global tender. The foreign company later refused to complete the work..stating that it needed more money than it had quoted to win the tender. NTPC threated to sue the foreign company for breach of the agreement. But Putin stepped in with ideas of turning the lever (in the wrong direction, of course) on some of India's Oil field investments in Russia through OVL & on certain pending defence projects. Now it seems that NTPC is being asked to pay more to the Russian company than what was quoted by that company when it won the tender. This is a lesson on how geo-politics seeps into big commercial deals with foreign companies. The Phase-1 of the project which was to have been commissioned in 2006 is now supposedly going to be commissioned in 2012 but the details are still murky. Meanwhile, BHEL has started work on the Phase-2 of the Barh thermal project and it shouldn't suprise if BHEL finishes & commissions the Phase-2 project earlier than Phase-1. India will have to suffer Time Delays, Cost Overruns, geo-political arm-twisting if it completely depends on foreign companies when it comes to certain strategic areas including Power production.

Just because you use words like 'Das Kapital', 'Socialism' etc in your posts and etc, Don't think your low-on-information, high-on-statements, basically , IMHO, useless-to-read posts like these will be accepted and not rebutted at, in a widely known well-participated forum. I can see muddled, shoot-your-foot ideas in these posts of yours.

Finally - Please do not provide others the opportunity to measure your level of unreasonability & 'doesn't-deserve-any-more-reply' posting style.

Theo_Fidel · Post by **Theo_Fidel** » 22 Apr 2010 19:57

It is not good for a government to own a commercial entity.

This always creates distortions in the market that the consumer ends up paying for.

In our case in India, despite having some of the largest coal reserves in the world we are energy starved and pay some of the highest electricity prices in the world. Even in Nominal dollar terms.

A significant contributor to this problem is BHEL (I say this despite holding BHEL stock).

Right now equipment is available from Korea and China at about Rs 2 Crore per MW. BHEL's cost structure means their equipment is Rs 4 Crore per MW. Look up the bidding prices for Reliance vs NTPC for the Sasan project. It is quite revealing. There is no internal drive in BHEL to reduce costs and improve efficiency. Failure of the company is not feared.

At the UMPP at Sasan, the project cost for NTPC with BHEL equipment was Rs 18,000 Crore for 4000 MW. Reliance quoted Rs 12,000 Crore with foreign equipment shipped over the ocean from 1000's of Kms away.

Guess who pays for this.

The weird thing about India is that we have some the worst infrastructure in the world at some of the highest cost structure in the world. The comfortable cost structure of our PSU's have a lot to do with this.

In other news,

http://www.businessweek.com/news/2010-0 ... -fuel.html

Coal India Defers Plan to Import 10 Million Tons of Fuel

State-run generators in India, Asia’s third-biggest energy consumer, are expected to import more coal this year as the nation seeks to cut electricity shortages. India’s thermal coal imports surged last year to about 60 million tons from about 30 million tons in 2008, Macquarie Group said in March.

India plans to increase its coal imports to 81 million tons in the year ending March 2012, Sriprakash Jaiswal, coal minister, said on Nov. 23.

About 75 percent of India’s power output is coal-fired, Finance Minister Pranab Mukherjee said in his budget speech on Feb. 26. The South Asian nation plans to double electricity generation capacity by 2012, when the coal shortage may exceed 200 million tons.

http://timesofindia.indiatimes.com/city ... 841762.cms

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Vipul · Post by **Vipul** » 22 Apr 2010 20:31

Theo you had earlier posted about India's total coal reserves being capable to service our projected power needs.
India is now importing more and more coal from abroad. This does not portend well for India's Energy security.
Whats stopping us from increasing the domestic output? Is the quality of Indian Coal a cause for the surge in Imports??

RamaY · Post by **RamaY** » 22 Apr 2010 22:38

Vipul wrote:Theo you had earlier posted about India's total coal reserves being capable to service our projected power needs.
India is now importing more and more coal from abroad. This does not portend well for India's Energy security.
Whats stopping us from increasing the domestic output? Is the quality of Indian Coal a cause for the surge in Imports??

IIRC there are a couple of reasons -

1. Quality of Coal
2. Mining and transportation infrastructure

tejas · Post by **tejas** » 22 Apr 2010 23:07

SaraLax, you are clearly an intelligent and well read poster( as are most people on this forum). I also believe we both want what is best for India. When I talk of euthanising BHEL and other PSUs, I simply mean privatsing them. If 82% of BHEL's 2009 sales ( recent Business Standard article) are of foreign designed products how can we ever expect India not to be held hostage by foreign companies?

A few years a ago I read a report looking at rates of return on investment of profitable PSUs vs. similar private sector companies, I am sorry I can't recall the source. Anyway the sudy showed the private ROI was slightly greater than 2x that of the PSUs. All that extra money would be available for R&D and new products as well as new jobs. Even the GOI's well run PSUs like BHEL, BEL and HAL are all dependent for the majority of their products on foreign private companies.Initiative, risk taking and entrepeneurship are foreign words to gov't. owned enterprises.

The total assets of all of the central PSUs of tthe GOI are ~ $500 billion. If these were privatised all of that money could go into rural infrastructure which is abysmally poor and in many areas on par with sub-saharn Africa. in the meantime these companies would be run far more efficiently and productively. A win-win situation. Just a final question, at the time of Indian indepedence, India was at the same level if not richer on a per capita basis than Korea . Today where do South Koera, North Korea and India stand per capita income wise and why?

Cheers.

RamaY · Post by **RamaY** » 22 Apr 2010 23:25

^

Tejas garu,

Assuming we have $500B extra cash by privatizing all PSUs, what ROI do you expect from (current-state of) GOI governance philosophy and organization?

Right now annual Indian budget is around $150-$200B. How much of it is contributing to GDP growth?

1. < 20%
2. 20 - 40%
3. 40 - 50%
4. 50 - 60%
5. 60 - 80%
6. 80 - 100%

Now think yourself if your claim of PSU's ROI being 50% of private sector is any different from GOI's functioning.

I can guarantee that the $500B will get distributed in this manner, no matter what the program is, under current governance structure. Please note that all this is happening under the leadership of mananiya, clean-image, honest, embodiment of dharma Mr. MMS.

1. Politician/Babu corruption = 20% = $100B
2. High-level contractors = 20% = $100B
3. 2nd Level contractors = 20% = $100B
4. Operational Inefficiencies = 25% = $125B (Includes delays in project execution, poor solution engineering, poor leadership)
5. Uneven Benefit cost = $5% = $25B (losses due to uneven development)
6. Actual Benefit = 15% = $75

So the ROI here is 15% compared to current PSU ROI of 50% compared to the most efficient usage of capital. At this point PSU approach is the most optimal usage of the capital.

***

I would reiterate my belief: Unless India changes its philosophical, governance, social structures (I call it Civic infrastructure); it is of very little use to pump more money into the broken system. Let us wait until the public, social-entrepreneurial tendencies of new age NGOs (such as Akshaya Patra and EKal), and private sector controls the majority of public space (80% of economy) then we can divest PSUs and spend it on the society.

Theo_Fidel · Post by **Theo_Fidel** » 23 Apr 2010 04:58

We don't have power from coal because we havn't made it a priority.

We don't produce enough coal for the same reason.

Every single obstacle from land acquisition to Technology to Cash, turns into a mountain that defeats us.

As the Delhi/Mumbai/Bangalore/Chennai Metro or the NHDP shows, once we decide something is a priority we can get it done. Think or the millions of houses, shops, temples, mosques and churches that have been demolished to widen the highways and build metro's. With almost no flare ups.

We seem to lack conviction in mining coal and generating power and the opposition knows this. When we go at a problem with planning and conviction all opposition fades.

The Sasan block under Reliance is getting mined super quick while CIL is still talking about Damodar coal 25 years later.

As far as BHEL goes, remember this is a ~ $15 Billion company, once you add in the construction wing per their prospectus. They should be planning on becoming a world class company of $100 Billion in the next 5-10 years. There is no mention of this in their financial statements. Their mindset is not to become lean and mean but to become fat and government protected. Look at all those 30 year career Jobocrats at those BHEL meetings. You think they care about the burden they place on the consumer. All they do is stand around and pat each other on the back over what a difficult job they accomplish.

Think about this too. With just present investment in power equipment we have made, with a world class low cost producer we could have had an additional minimum 50,000 MW of power. Next time you go through a load shedding moment think about that. Also when you pay your power bill through the nose.

Imagine we had a $15 Billion private sector power company. We would be shaking the world with it.

Consider that Mukesh Reliance is a $25 Billion company. In 6 years they figured out deep water Gas technology while ONGC flops around unable to produce gas from its equally large Krishna block. Undoubtedly this gas will remain stuck there because we need to protect yet another holy cow. This particular Billion dollar holy cow expresses no shame about it either.

Do you know that Reliance only holds 5% of the KG blocks. The rest are with various PSU's. What have they done with them I wonder. Even GSPC flops around unable to produce its block. Even tendering has not begun cos it does not know how to do this.

The fat Indian PSU is completely indefensible. I'm shocked and stunned when people still try.

tejas · Post by **tejas** » 23 Apr 2010 06:16

Arre Rama Y babu, I cannot argue with your contention that much of the gov't spending in infrastructure will end up in a rat hole, the political-economic equivalent of the second law of thermodynamics. Hopefully $150 billion would be usefully spent rather than $75 billion.
The real benefit, IMHO, would be removal of bureaucratic feet of clay management and ( hopefully) replace it with the world class management we see with Reliance, L&T and TATAS.

I want to see the next Iphone to come out of India not California. Look at the new ADAM tablet, by Motion Ink, which looks like a real IPAD beater.Could we ever see such a product from a PSU ? I think not. Your comment on civic infrastructure is right on the money. With increasing literacy and increasing middle class numbers this entity can only improve. I look forward to seeing more of your posts.

Cheers.

RamaY · Post by **RamaY** » 23 Apr 2010 19:43

tejas wrote:Arre Rama Y babu, I cannot argue with your contention that much of the gov't spending in infrastructure will end up in a rat hole, the political-economic equivalent of the second law of thermodynamics. Hopefully $150 billion would be usefully spent rather than $75 billion.
The real benefit, IMHO, would be removal of bureaucratic feet of clay management and ( hopefully) replace it with the world class management we see with Reliance, L&T and TATAS.

I want to see the next Iphone to come out of India not California. Look at the new ADAM tablet, by Motion Ink, which looks like a real IPAD beater.Could we ever see such a product from a PSU ? I think not. Your comment on civic infrastructure is right on the money. With increasing literacy and increasing middle class numbers this entity can only improve. I look forward to seeing more of your posts.

Cheers.

Tejas garu,

PSUs are not in the business of making pens, pins, watches and consumer electronics. We moved from that socialistic-sheek to current public-private structure a long time ago.

If we do not have supporting civic-infrastructure, we will lose on two fronts by blind-privatization drive.

One is that our strategic interests will be mortgaged to multi-national interests: If India has $500B excess capital it is better to invest that money in next gen infrastructure based on a public-private ownership model. Few ideas in this line are developing industrial corridors (public participation ensure that Govt has some say in how these corridors are developed and land-leasing vs land-buying etc) and developing next-gen industrial grid (electrical, fiber-optic communication, water, etc). If we are expecting to sell the stake to FII then we are royally f*cked, as our are opening up our strategic sector to multi-national interests. Our national interests might not align with multi-national interests all the time.

Second is the efficient use of capital as I explained earlier.

Ameet · Post by **Ameet** » 26 Apr 2010 11:03

India's wind power draws global majors

http://economictimes.indiatimes.com/new ... 857628.cms

Ameet · Post by **Ameet** » 27 Apr 2010 02:35

India Hydroelectric Project Suspended On Environmental Concerns

http://www.nasdaq.com/aspx/stock-market ... l-concerns

India's federal government has ordered the suspension of construction work at the 400-megawatt Maheshwar Hydroelectric Project--the first such project in India to be privately promoted--for flouting environmental regulations.

In a letter dated April 23, the Ministry of Environment said the INR27 billion project, which is being promoted by Shree Maheshwar Hydel Power Corp. Ltd., has been suspended for violations including a failure to carry out rehabilitation and resettlement work for the displaced local population.

The controversial Maheshwar Dam--part of the Narmada Valley Development Project in the central state of Madhya Pradesh--is expected to displace around 35,000 people, according to volunteer-based organisation Friends of River Narmada.

SMHPCL, a special purpose vehicle of Mumbai-based MW Corp., has a 35-year power purchase agreement with the Madhya Pradesh electricity board, according to the company's website.

Read more: http://www.nasdaq.com/aspx/stock-market ... z0mFAs81AX

SaraLax · Post by **SaraLax** » 29 Apr 2010 17:37

Theo_Fidel wrote:It is not good for a government to own a commercial entity.

.
.
.A significant contributor to this problem is BHEL (I say this despite holding BHEL stock).

Right now equipment is available from Korea and China at about Rs 2 Crore per MW. BHEL's cost structure means their equipment is Rs 4 Crore per MW.

Theo Sir,

My initial post in this topic was primarily to refute immature ideas of 'Euthanizing' BHEL and what is now, was supposedly meant 'to privatize' BHEL.

But can you please provide evidence for your assertion that South Korean power equipment vendors (like Doosan..which is supplying for a power plant being setup by Tata, IIRC) are providing equipments at costs lower than BHEL ??. I am not aware of that and am aware of the otherwise.

Chinese vendors can be cheap....they are subsidized directly by their government and also additionally helped by the artifically weak valued yuan currency. But then Chinese vendors can be low in quality too as well as bad in equipment service... And they provide equipments to India which violate blatantly IPRs that they had signed with european equipment technology vendors (risking possibilities of unnecessary delay, as well as litigation problems for power plant owners in commissioning of the project)

Below is one more article on the Chinese equipments, their vendors & the quality of their equipment, low suitablity for indian coal & etc.

Reliance ADAG group runs after Chinese equipments irrespective of whether its power or telecom.... Let us wait until some time in the future to certify the efficacy of their motivations to choose Chinese vendors when these respective projects of theirs earn points in factors such as efficiency & cost effective working.

Link

Quality worries

The deployment of Chinese equipment in the power sector too has been mired in controversy. Concerns have been raised on the quality of the generation equipment supplied by Chinese manufacturers, including their ability to handle indigenous high-ash coal.

With well over 35,000 MW of new power generation capacity, mostly in the private sector, coming up using Chinese equipment, the Prime Minister's Office recently directed the Power Ministry to come up with an action plan for plant servicing and spares for these projects.

Dongfang Electric, Harbin Power Equipment Company and Sepco are among the Chinese players that have bagged big-ticket orders here.

West Bengal Power Development Corporation's 300-MW Sagardighi project and Sterlite Industries-run Balco's 540-MW captive plant are among projects that have faced operational hurdles after using Chinese equipment. these are new projects..one of which suffered breakdown at trial running stage itself

I am quite busy at work and unable to spend time on posting with relevant info - that is different from some of the aspects that you had earlier posted. BHEL is definitely not sleeping at the wheel....When i get time within the next couple of weeks, i hope to come back with the details...until then permit my absence.

tejas · Post by **tejas** » 29 Apr 2010 20:05

SaraLax, I had no idea opposing gov't. ownership of businesses was "immature." Thanks to "mature'' viewpoints such as yours India is one of the poorest nations on earth with infrastructure on par with subsaharan Africa rather than Japan or Germany. BTW I have no idea how old you are but I have visited this forum since its inception and would be very surprised if I was not a great deal older than you.

In my teens and early twenties I was also suspicious of big business but soon( and this was many years ago) realized from real life experiences what a disaster gov't. run businesses are. If you cannot look around you and realize the same I have no hope for you. I do not understand where your arrogance and condescending attitude come from nor do I care. BTW I see you had no response to my query on why the worker's paradise of North Korea compares so poorly with the capitalist running dog of South Korea. My last post on this thread was meant as a peace offering and to acknowledge that even with different viewpoints we all want whats best for India. Unfortunately you seem very Nehruvian in your attitude-- 1000% wrong but arrogant nonetheless. I would not term your affinity for gov't ownership of businesses in India immature, I would simply term it in this and age, INCOMPREHENSIBLE. Let me go back to my menial job as a physician and you can go on spreading poverty under the guise of socialism.

Good bye and good riddance.

Suraj · Post by **Suraj** » 29 Apr 2010 22:40

tejas and SaraLax: Please stick to the debate topic, and avoid ad hominem statements. I'm sure you can make a point without imputing anything personal about yourself or the other person. Thanks.

tejas · Post by **tejas** » 30 Apr 2010 06:56

Suraj, no problem, I am done discussing anything further with that poster.

Sanjay M · Post by **Sanjay M** » 08 May 2010 23:28

Could Gujarat Become the Texas of India?

http://www.renewableenergyworld.com/rea ... arat-india

Not speaking in oil terms, but just as an overall energy supplier to the country.

Sanjay M · Post by **Sanjay M** » 09 May 2010 13:33

India to save 6000 MW with Fluorescent Bulbs

http://earthandindustry.com/2010/05/ind ... with-cfls/

but what about the mercury content?

Paul · Post by **Paul** » 14 May 2010 10:44

Home Page - Power
Industry & Economy - Electrical Goods
Power capacity addition may trip on Chinese gear issues
Panel concerned at lack of vendor base.
Our Bureau

New Delhi, May 13

A high-level Government panel has warned of the possibility of an "energy security crisis" in the event of diplomatic differences with China arising in the future.

With well over 33,000 MW of new power capacity coming up using Chinese equipment, even as vendor support for spares and service is almost non-existent in India, the panel has concluded that a "Pokhran-like situation" could arise if bilateral relations turned sour in the coming years.

The failure to develop a local vendor base could lead to continued dependence on the Chinese for the entire life of the power station, the panel headed by Planning Commission member, Mr Arun Maira, has warned.

Spares and service costs are also exposed to higher uncertainty, the panel has concluded.

Besides, due to the intellectual property rights violations by Chinese suppliers, support from technological leaders from Europe and the US for upcoming supercritical sets will not be available in case of any technical problem, the report has said.

Of the 49 orders for supercritical sets awarded in the country so far, over half (26) have been secured by Chinese vendors.

Only 12 have been bagged by domestic manufacturers, with the remaining 11 going to international manufacturers from Russia, Korea and Japan. Steps to be taken

The Cabinet Secretary is slated to chair a meeting on May 25 to consider implementing recommendations of the panel. The report has also taken note of specific instances of malfunctioning of Chinese equipment deployed at various plants.

Besides, availability of manuals only in Chinese has also been cited as a major impediment.

Orders should be awarded after factoring in the life-cycle costs of Chinese equipment and not just upfront costs, the panel has said for future contracts.

Related Stories:

http://www.thehindubusinessline.com/201 ... 110100.htm

abhischekcc · Post by **abhischekcc** » 14 May 2010 14:09

Since there is a huge PSU vs private sector debate going on, I would like to point out that historically, all strong governments in India have had strong public sector. Beginning under the Mauryas, who controlled the iron mines. The Mughal had an iron grip over the financial sector of the country.

A strong public sector is a good source of non-tax income and provides a buffer to the government - not to mention its usefulness in buying off potential rivals.

Theo_Fidel · Post by **Theo_Fidel** » 18 May 2010 23:08

There were some questions earlier on why electricity in India is so expensive.

Here is one major reason.

The numbers are shocking.

Trust me we pay for that. No power company operates in losses.

Average cost of power supply & average realization ( paise/kWh )
Year cost of supply realization(paise/unit)(paise/unit) Including Agriculture Only Agriculture
2001-02 246 181 58.67
2002-03 238 195 77.48
2003-04 239 203 72.39
2004-05 254 209 75.68
2005-06 258 221 79.37
2006-07 276 227 71.32
Source:- PFC Reports on the performance of State Power Utilities

Vipul · Post by **Vipul** » 30 Jun 2010 23:10

Anil plans Ambani 8,000 MW plant in Gujarat.

Govt. to add 5 UMPP projects, Gujarat offers site for four.

Gujrat Govt has gone on an overdrive to ensure it quite literally becomes a "Powerhouse". In addition to the above 16,000 MW of proposed plans the State has power development projects of 8,000 MW under varrious stages of execution

For Maharashtra, its erstwhile competitor which till 2003 was a Power Surplus state, the new capacity addition is either held up for environmental clearances or is happening at a speed which is not keeping pace with the increase in demand.It had a peak power shortage in summer reaching 5,000 MW against an installed capacity of 10,500 MW.

Shows what a difference an able administrator and proactive bureaucracy can make.

Prem · Post by **Prem** » 01 Jul 2010 01:59

NPCIL To Provide Nuclear Equipments

DELHI, INDIA (GaeaTimes.com)- NPCIL has been joined by the French energy equipment supplier Alstom Power in a tripartite joint venture agreement to contribute a total of 45,000 MW of power for the Indian market. Reportedly, the agreement signed between NPCIL (Nuclear Power Corporation of India Limited) and Alstom Power also has BHEL (Bharat Heavy Electricals Ltd) as the third party.Guy Chardon who happens to be the Senior Vice President of Alstom Power told the media that the joint venture tripartite agreement with BHEL and NPCIL has been finalized from all ends and has been handed over to the Atomic Energy Commission for review. APIL which serves as Alstom Power's Indian body shall be setting up a new joint venture company with BHEL and NPCIL which shall serve to provide technical support and run nuclear turbines in the Indian market. On a primary basis, the joint venture company shall focus to provide turbines for a total of eight units of 700 MW (Mega Watt) each of which are being developed by NPCIL. It is speculated that the value of the total supply would rest somewhere round Rs 6,000 crore. India on a whole shall be crafting eight nuclear reactors (700 MW) for the prominent states of the county which includes Haryana, Rajasthan and Gujarat.

http://blog.taragana.com/index.php/arch ... quipments/

Prem · Post by **Prem** » 10 Jul 2010 03:23

http://www.treehugger.com/files/2010/07 ... mpaign=th_

A number of sources have outlined new plans of India's Tata Power Company to help electrify rural India through deployment of small-scale wind turbines, the same general type that are marketed throughout the US for rooftop and backyard usage. It's a great idea in India, where rural electric grid access is spotty and energy usage low, less so elsewhere.Earth & Industry sums up the Tata plan:
The Tata Power Company, a subsidiary of the Tata group, plans to test a 2 kW wind turbine which would generate enough electricity to meet the basic demands of an small rural home. With several thousand villages still not connected with the national grid this micro turbine could prove highly beneficial.The 2 kW turbine which can be mounted on rooftops would be enough to power multiple ceiling fans (rated 60 W) and bulbs/lights (rated 40 W). Even more appliances if battery systems are coupled with the wind turbines.ata's also experimenting with a 35 kilowatt wind turbine mounted to a blimp that will float about 1000 feet above the ground, and generating power from rice husks in rural areas as part of program to "establish a model for rural Indian that can have mass usage at low cost."