GAS GRID

Many industries shutting down


The other pipeline, Reliance Gas Transportation India transports gas from Kakinada on the Andhra coastthe landfall point for gas from the Krishna Godavari Basinto Bharuch in Gujarat. It is about 1,386 km, connecting south India to the west.
GAIL has extended the pipeline connecting an LNG (liquefied natural gas) terminal at Dahej in Gujarat to Uran in Maharashtra. RIL plans to connect its KG Basin finds with Chennai and Bangalore.
But there is still a gaping hole in the east, with no existing or a future pipeline pointing to that direction. Even northern states like Punjab, Rajasthan and Bihar, which have a desperate need for energy , have no new piplines being set up in them. According to reports, the government may announce plans to build a 6,000 km pipeline, at a cost of over Rs 30,000 crore soon, by laying a gas cess.
The most logical sources of gas for the east are in Indias eastern neighborhood, Myanmar and Bangladesh. However, less-than friendly political relations come in the way of tapping these gas sources and building pipeline networks to carry gas from these sources.
Says AOGO (Association of Gas Operators) secretary general Ashu Sagar: If the Myanmar to Delhi via Kolkata pipeline had fructified, we would have had a east-north corridor, criss-crossing the existing HBJ backbone. It would have supplied gas to far-flung areas in the east. Currently, Myanmar is building a pipeline to China. But talks with India have not borne fruit. The Myanmar pipeline may be further extended to Malaysia and Indonesia, thus benefiting China all the more.
With Indias two largest pipelines currently pointing to Gujarat, many chemicals, textiles and cement makers in the state have already switched to LNG for power generation. As an India-wide pipeline system gets built, GDP growth may get better, due to a manufacturing boost in many states.
Of the 25,000 MW captive power generation, only 13% takes place through natural gas at present. Industries like IT and BPO, which generate captive power through fuel oil, will switch to the cheaper alternative, thus boosting Indias IT offshore advantage.
Indeed, the demand for gas in the country is huge. The demand for gas is expected to shoot up to 280 mmscmd whereas the supply will only be about 202 mmscmd by 2011-12 . In 2008-09 , the supply was about 120 mmscmd against a demand of over 197 mmscmd, according to KPMG.
While the petroleum and natural gas ministry is awarding bids for city gas distribution (CGD) networks in smaller cities like Meerut, Sonepat, Kota, Dewas, industries still continue to rely on costlier fuels like naptha and fuel oil for captive power generation. A CGD in major cities will solve the problem to a big extent alongside reducing Indias oil bill, as citizens shift to using CNG, rather than petrol for automobiles. A shift to natural gas will also drastically reduce air pollution.
Says KPMG India ED Jai Mavani: The main driver for the development of gas transmission and CGD shall be the availability of requisite volumes of gas. What now matters is whether the CGD licence-holders can obtain gas supplies and develop gas distribution infrastructure.
Besides, there are numerous internal challenges as well. Companies are wary of adding capacities to existing or proposed pipelines without tax sops from the government as it is a financial burden due to lack of gas supplies. Then there is a lack of planning in the industry on how to consolidate gas from numerous smaller CBMs (coal bed methane) resources like in Bokaro. Unlike in India, CBM has become a major source of energy for US, Australia and Canada.
Rapid technology advancement is also needed in the area to improve pipeline utilisation and efficiency.
India also has one of the lowest densities of gas being carried in per km of pipeline at 116 km/mmscmd compared to US (1086 km / mmscmd ) and France (1,405 km / mmscmd).
Currently, plans are underway to build CGDs in 33 cities with an investment of over Rs 10,000 crore. Only three locations in IndiaMumbai , Delhi and Gujarathave a well-developed CGD.
For utilisation of newly-found gas reserves, the government has prioritised gas based fertiliser (urea) plants, LPG extraction plants, existing gas based (standard) power plants and city gas grids for allocation , in that order.
Last year, the government incurred a record fertiliser subsidy of about Rs 1 lakh crore, which might be eased if the fertiliser plants get the required gas. Currently, naphtha prices are about $17 per mmbtu compared to RIL gas, which fertiliser plants are being delivered at about $6.5 per mmbtu. Many plants are not getting adequate gas due to pipeline limitations. Namrup in Assam, for instance, has not been allocated gas because of an absence of pipeline in the east, says a Fertliser Association of India official.
Many coal-based fertiliser plants of FCI and HFC in the east have shut primarily because the companies dont see a gas grid coming close to them in near future, adds Shubhranshu Patnaik, associate director at PwC. On the other hand, refineries need about 24 mmscmd of gas, but the supply to them is only about 2 mmscmd.
Analysts say it is a chicken-and-egg situation, where supplies have to precede the pipelines. Gas infrastructure typically grows and expands as there is increasing availability of gas in fields. With now more gas being available in India, I see a reasonably good pipeline structure 5 years down the line, says Ajay Arora, partner & national leader, oil & gas sector, at Ernst & Young.
Some, however, feel that a scene where gas will be available in every home in India is nowhere to be seen.
Five years hence, I see gas being available in towns closer to industrial hubs. But a US or Europe like distribution network in India is still a far-fetched dream, adds Mr Sagar of AOGO.
There was another pipeline proposal to transport gas from Bangladesh to India. The Tatas were in talks to build this pipeline. But the group later withdrew owing to the anti-India stance of Bangladeshi politicians.
Similarly, the Iran-Pakistan-India (IPI) pipeline, commonly called the peace pipeline, has also not taken off. But Pakistan is already in the process to raise loans for a pipeline from Iran to itself. Iran was seen recently talking to China for another pipeline.
While India has no transnational pipeline supplying gas to it, other countries have been able to overcome the stumbling blocks. Europe, for instance, has a large gas circulatory system, courtesy the oil and gas pipelines emanating from Russia, and supplying to Germany, Austria, Poland and Romania. The UK has a fully developed gas market with a gas regulator Ofgem, Xoservethe distribution network, and an independent watchdog EnergyWatch.
India is still to develop a gas trading exchange. Currently, most natural gas is traded through forward contracts, as a gas futures market doesnt exist in India. Gas pricing is also decided by the government, thus indicating a very nascent market.
But this years budget carries ambitious plans. With the recent find of natural gas in the KG Basin, the indigenous production of natural gas is set to double. The government has proposed to develop a blueprint for long-distance gas highways leading to a National Gas Grid, in this years budget. On the other hand, many companies like Indrapratha Gas, Gujarat Adani Energy, Gujarat Gas Company, GAIL, RIL, Mahanagar Gas, Avantika Gas and Tripura Gas have shown interest in building the city gas grids across the country. While the government plans to provide gas to 84 cities in India by 2011 and 250 cities by 2018, it remains to be seen whether it will be able to fulfill its promise considering the non-existent major gas aortas in the country.

CROSSCOUNTRY GAS GRID SYSTEM

Out of gas, country still living pipe(line) dream

Consumers Wait For Gas At Home Gets Longer

Harsimran Singh NEW DELHI


THE countrys energy sector may be dotted with numerous gas findings in recent months, but with a crosscountry gas grid system yet to be seen anywhere on the horizon, the average Indian consumers wait for gas at his home, like in the US and Europe, is getting longer.
While developed economies in the west have a well-developed gas trading market with gas exchanges, futures and city-wide gas pipelines, India still has none. The country has a total pipeline length of about 10,600 km. In comparison, even Pakistan has a pipeline length almost five times at about 56,400 km.
The US, on the other hand, boasts of among the largest networks with a total pipeline length of 18.3 lakh km. India also has the unique distinction of having one of the lowest pipeline spreads per sq km of land at .003 km compared to the UK (1.08 km) and the US (0.19 km).
Critical to the development of an economy, a widespread gas transmission system is like the circulatory system of the human body. While the US has a gas hub called Henry Hub, which connects nine interstate and four intrastate gas pipelines in Louisiana, India still lacks one. With a transportation capacity of 1.8 billion sq ft, Henry Hub acts as the pricing point for Nymex gas futures.
Currently, there are two major pipelines running across the country connecting north to west and south to west. The HBJ pipeline operated by GAIL acts as the backbone, connecting an ONGC delivery point in Hazira (Gujarat) to Jagdishpur (UP) to Bijapur in Madhya Pradesh. It is the largest at 3,187 km.

Coal-eating bugs may solve energy crisis

Coal-eating bugs may solve energy crisis

Insects Found A Mile Underground Posess Ability To Break Down Coal, Releasing Methane


Craig Venter, the controversial American scientist who helped decode the human genome, has announced the discovery of ancient bacteria that can turn coal into methane, suggesting they may help to solve the worlds energy crisis.
The bugs, discovered a mile underground by one of Venters microbial prospecting teams, are said to have unique enzymes that can break down coal. Venter said he was already working with BP on how to exploit the find.
Venter even suggested the discovery could open up the worlds coalfields to an entirely new form of mining, where coal is infected with the bacteria, allowing methane to be harvested without even digging up the coal .
Venter, speaking at the recent La Jolla research and innovation summit, in La Jolla, California, told an audience of researchers and technology investors how he had harvested 20 million new genes by analysing the DNA of micro-organisms collected underwater or deep underground.
He said: We have found a huge number of microbes a mile or so deep in the earth. In fact, there is more diversity under the surface of the earth than in the ocean. It is absolutely stunning. Some of these underground water sources have been isolated for 50 million to 135 million years and we have found totally unique organisms.
Venter flashed up a black-andwhite image of a piece of coal that appeared to be carpeted with a mossy substance. He said: We have a large number that eat coal and break it down into organic acids, hydrogen, CO2 and so on. Then we have other organisms with enzymes that can take those organic acids, hydrogen and CO2 and make methane.
Venter added: We have a deal with BP to look at the biological conversion of coal into natural gas, where microbes colonise coal particles and produce methane.
He added: We and BP think we can scale this up substantially to provide a huge increase in the amount of natural gas available without even digging up the coal.
If it worked, the potential would be huge. Coal is the worlds most important fossil fuel with 6.5 billion tons used each year. This is slated to rise by 60% by 2030. This has serious environmental implications as coal is highly polluting, generating more CO2 per ton than any other major fossil fuel. Methane , by contrast, is much less polluting. SUNDAY TIMES, LONDON

SOUTH ASIAN GRID

India-Lanka undersea power cable pact soon

Sanjay Dutta | TNN

New Delhi: India and Sri Lanka are set to energise their relations. Literally. The two neighbours will soon sign an MoU to study the feasibility of laying an undersea cable which will be one-ofits-kind in Asia when completed to connect their power networks. Sources said the MEA has approved the draft agreement which is to be signed shortly.
An interlink between India and Sri Lanka will also firm up the idea of establishing a South Asian energy grid being discussed by the Saarc grouping. India already has a heavy-duty power link with Bhutan and connecting Bangladesh and Pakistan will not pose much of a technical problem. Final touches are being given to a study on the South Asian grid.
An undersea link will allow both countries to manage peak demand or at times when hydel capacities in their respective areas run low just as it is doing now in India . The link will help Sri Lanka reduce use of expensive fuels and import cheaper power from Indias surplus. For India, the link will open up a new market for its projected surplus.
An initial report prepared by the stateowned transmission utility PowerGrid, which will be the implementing agency from India for the subsea link, has pegged the cost at Rs 2,292 crore and said it could be completed within 42 months of getting investment approvals.
The report said the power supply scenario between India and Sri Lanka will allow them to exchange about 500 mw of electricity in the short term.
Once the two sides settle down with this quantity, power flow can be ramped up to 1,000 mw, roughly one-fourth of Delhis peak consumption, by 2015-16 . These are the time frames when the generation capacities in both countries are projected to improve, with surplus in the Indian southern grid.
PowerGrid and Ceylon Electricity Board will be looking at laying a cable under the Gulf of Mannar between Rameshwaram in Tamil Nadu and Talaimannar on the left flank of the Mannar islands in Sri Lanka. On the Indian side, the cable will be connected to the southern grid at Madurai through an overhead transmission line. On the Sri Lankan side, the underwater cable will be linked to that countrys network at Anuradhapura through an overhead line.
The undersea link will be laid on the seabed just as telecom and Internet cables run across ocean beds around the world. It will have safeguards on both sides against electrocution in case of damage from ship anchors or sharks. An optic-fibre cable will also run alongside the main power cable to keep an eye on the link and also provide extra telecom capacity between the two countries.
At present, India is facing a 16% electricity shortage, with a peak demand of 107,000 mw. The government plans to add 78,500 mw capacity by 2012, with more envisaged in the captive and merchant segments by private investors. Many other proposals are in the pipeline, which, after taking into account the projected growth in load, suggests that there will be surplus of 6,000 mw during peak hours and 12,300 mw during lean periods.

Brazilian town turns human waste into clean energy

Brazilian town turns human waste into clean energy

Petropolis: High in the cool hills of eastern Brazil, this tourist hot spot also known as the Imperial City is attracting worldwide attention thanks an innovative scheme to recycle human sewage.
It has fostered a relatively simple idea now gaining traction in other parts of Latin America, as nations struggle with the impact of burgeoning populations compounded by dwindling supplies of fuel and water. Here bio-digesters specially designed organic enzymes and bacteria are used to break down waste water and turn it into an alternative energy sources such as gas.
During three fermentation processes, the bio-digesters are unleashed on human effluent and as they break it down they produce a bio-gas , a mixture of methane and carbon dioxide, which can then be piped into homes for use in heating or cooking. In fact this is a greenhouse gas, which is harmful to the atmosphere when it is unleashed, but can be collected to be useful, said Jorge Gaiofato, technical director at the Environmental Institute, the NGO behind the scheme. Today there are more than 80 such bio-digesting ponds in Petropolis, a town some 65km from Rio de Janeiro. AFP

DAYLIGHT SAVING TIME

Bangladesh joins league of nations that work on Daylight Saving Time

TIMES VIEW



We should follow suit


Our neighbour, Bangladesh, has just bought some more time. In an effort to make the most of summer sunshine, Bangladesh advanced its clocks by an hour last week. In doing so, it has joined a whole host of countries that squeeze in an extra hour or more during summer. Its an example that India could consider emulating.
The concept of Daylight Saving Time (DST) is not entirely a modern one. Ancient civilisations are known to have adjusted their daily schedules to the changing course of the sun through seasons . It was a flexible system that was revised as and when necessary . The Roman water clock is a good example of this practical arrangement. In the early 20th century, the concept gained wide acceptance, and more countries especially those starved of sunshine adopted it. Today, most developed countries operate on two clocks.
The basic idea behind advancing clocks in spring and summer is to elongate the day, thus enhancing productivity, and allowing for people to soak in the sun after hours. In the days of yore it meant that farmers had more hours to till their fields. In the modern, industrialised world, the stakes are higher. The current climate change threat has brought home the need to conserve energy like never before . The amount of energy that goes into sustaining operations in an organisations workday air conditioning and lighting, for instance is mindboggling . By adopting DST, organisations are well placed to cut energy costs.
Critics would argue that in a country like India, where sunshine is abundant, adopting DST is a pointless exercise. But precisely because sunshine is abundant, we should make the most of it. If all it takes to being eco-friendly and maximising our productivity while being in tune with nature is to reset our clocks by one hour with changing seasons, theres no reason not to do it. Change is always viewed with scepticism initially. But its the only constant in evolution.

COUNTER VIEW



Its just tokenism



Ratna Goswami


Bangladeshis are expected to start and end their day an hour earlier everyday, thanks to their countrys switch to Daylight Saving Time (DST) as a summertime powersaving measure. Its estimated that advancing the clock will help save electricity, said to fall woefully short of peak hour demand. Now, good intentions are one thing, getting results quite another when policymakers resort to tokenism in the name of energy conservation . So, India neednt ape its neighbour. The idea makes sense in countries in the northern hemisphere where sunlight is at a premium and the seasons can be told apart. Sunshine isnt exactly a scarce commodity in tropical countries. Theres enough of it year round in India to not warrant giving time a tweak.
India being a geographical behemoth, adopting DST will mean creating two time zones. Not only would more than a billion confused people have to adapt to a system whose utility isnt a given, it would also be costly in terms of the changes forced on businesses . Whether its transportation, IT-BPO , media or the medical profession, strategies and schedules will need reworking, adding to the general chaos. Taking all this trouble wont make sense when India has a system that functions pretty well as it is. More, when experts estimate the energy-saving dividends to be modest.
Again, lifestyles cant be altered by fiat. Take the problematic idea of getting people to shop during the day. In societies the world over, increasing numbers of men and women work. After-sunset shopping is a growing trend in India not because its a fad but because its sprung organically from the rhythms of modern life. Complaints of inconvenience to the public and traders are already audible in post-DST Bangladesh. Finally, the effective way to promote energy conservation is to have the political will to push green technologies . For example, building designs arent always energy-efficient , resulting in daylong use of artificial lights in countless offices. Switching to DST wont address such a problem ; switching to green buildings will.

Coping with power shortage

With every passing year, it is becoming increasingly clear that power shortage in India is unlikely to disappear anytime soon. The shortage went on mounting as the demand for electricity has kept on growing, while capacity expansion has fallen short of targets: both in the ninth and tenth plans, the capacity additions in the power sector were just about half the targets. It is unlikely that the ambitious target of 90,000 MW can be reached in the eleventh plan (2007 – 12). Does it mean, therefore, that electricity consumers should learn to live with scarcity and regular load shedding? It is high time we start looking for options that would keep the situation from getting out of hand. As has been widely reported in the media, cities and towns in Maharashtra faced load shedding of up to 10 hours or more this summer and, in several states, industries had to shut down for more than one day a week due to load shedding. In fact, in Maharashtra, the situation had reached such a point that the state’s power distribution company MSEDCL approached Maharashtra Electricity Regulatory Commission (MERC) with a proposal to extend the closure days from one to two every week for industrial units. However, in today’s changed context, throwing one’s hands up in helplessness is not the answer. When the Indian economy has entered an era of high economic growth, distribution utilities in the states have an added responsibility to seek out solutions that do not hinder growth. In Pune, for example, the CII’s local chapter in consultation with MSEDCL submitted a proposal to MERC to utilise the surplus captive generating capacity of around 90-100 MW available with the top 30 companies in its area. MERC on its part, after holding public hearings, issued an order approving the proposal, which mitigated the supply shortfall. But, since these captive plants were running on liquid fuels, their cost of generation was much higher than the conventional power plants running on coal. Hence, to ensure viability, the captive generating units had to be reimbursed with the difference in costs by levying a reliability surcharge of 42 paise per unit on all the units sold in the area, except sales to residential and commercial customers consuming less than 300 units per month. In return, all the consumers in Pune were guaranteed zero load shedding. What one learns from this example is that with some innovation and bold approach it is possible to manage power shortages. Moreover, most consumers are willing to pay more for reliable power supply. The Pune solution was specific to that city and may not be easily replicable in cities or industrial areas that do not have adequate captive generating capacity. Yet, in a situation where the cities and semi-urban areas are commercial hubs and the industries are bulwarks of India’s GDP growth, it is imperative that their power requirements are met. However, as discoms have universal service obligation they cannot discriminate between consumers or areas. Hence, when there is a demand-supply gap, the discom must distribute that shortage uniformly over its customers. The SERCs have to ensure that this 'distribution' is equitable. The issue is, can the state utilities and ERCs rise above conventional thinking and start planning for anticipated power shortages in their areas of operation? MERC has proposed a franchisee model based on the principle of distributed generation to cater to the needs of urban agglomerations and industrial areas. This model is an extension of the distribution franchisee concept provided within the legal framework of the Electricity Act 2003. The concept of distributed generation, unlike the conventional generating stations, is based on small, modular and short-gestation technologies for electricity generation, located close to the load. Distributed generation can be in stand alone or in grid parallel mode. Here we are concerned with the latter. In the MERC model, such distributed generation franchisee will not only undertake supply of power in an agreed area of discom based on performance-linked contracts but will also bring in enough power through distributed generation to meet the power deficit for that area. Similar to the Pune model, MERC will determine the reliability surcharge for electricity injected by this franchisee. The proposed franchisee would have various options for alleviating the supply deficit in its area. For example, it could harness available captive power; source power from the power trading companies in short term; or even set up a decentralised power generating unit based on gas, liquid fuel or even renewable energy sources in the long term. With a clear contractual obligation to ensure adequate power supply at all times, the franchisee could ring fence his area from the general power shortages subject to regulatory scrutiny to keep his procurement costs reasonable. The benefits of this model become clear if one considers that there are many districts in India where distribution losses are as high as 60% and the bill collection is as low as 30%. Hence, any attempt by a discom to buy expensive power to meet the deficit universally is a non-starter. Since franchisees’ generating stations would typically be connected to local feeders at 33, 22, or 11 KV, the transmission losses associated with the supply of electricity from the pit head power stations would be avoided. Moreover, since the power would be supplied to consumers in areas where the willingness to pay for reliable power is high, the revenue leakage due to theft or defaults in bill payments would also be low. In Pune, distribution losses are lower than 15% and collection of bills almost hundred per cent. Hence this model can work only in areas where distribution losses are lower and collection efficiency is high. This would enable unhampered economic growth in the vital sectors of the country’s economy and is, therefore, worth pursuing. Especially, when there is no guarantee that power shortages will not persist in the foreseeable future. Further, the success of the franchisee model would usher in the much needed public-private partnership in the power sector, as opposed to privatisation of distribution which, faces many a political and economic obstacle. (The author is chairman, MERC)