Vol 3 Issue 5 July 2012 Rs. 100www.powerwatchindia.com

Interview withA B L Srivastava

Chairman and Managing Director, NHPC Limited

Alain SpohrUnit Managing Director,

Alstom Hydro India

Sameer ShettyManaging Director, B Fouress Limited

Mahadevan AnandManaging Director,

Andritz India

Dilip OommenManaging Director and CEO,

Essar Steel

HYDRO POWER FEASIBLE SOLUTION TO ENERGY WOES

• FORUM: SMALL HYDRO • MONNET: CSR COMMITMENT • GE: ENERGY MODULES

The country’s power generation capacity is estimated to grow from 190 GW in 2012 to more than 300 GW by 2020. While traditionally, we have depended on thermal power as the mainstay of generation,

increasing issues with fuel supply and availability, land acquisition issues, climate change and supply chain management will eventually render fossil fuel-based generation unfeasible. The government has aware of the problem and has been responsive. The power ministry has set an ambitious target of 10,000 MW of hydro power generation capacity in the country for the 12th Five Year Plan (2012-17) itself, within a larger plan of almost 150 GW of hydro capacity addition.

But the issues with hydro are far too many – both within the country and, as it increasingly appears now, also external.

The country’s north eastern region for instance, accounts for an estimated 43 per cent (63,257 MW) of the total identified potential of the country. This is due to large water flows through the Brahmaputra basin and the unique topography of the region. In terms of actual development, however, only 2 per cent (1,158 MW) of this potential has been tapped. The key reasons for the lack of development in the region include lack of physical infrastructure, erratic weather, difficult terrain, local insurgency, land acquisition and issues around environmental clearances.

Not the development of the small hydro sector has shown a lot of promise yet.

The total estimated potential of small hydropower (SHP) in India is approximately 15.3 GW, of which 22.7 per cent of the potential has been achieved as on April 30, 2012 (Source: MNRE). India is still short of 11.6 GW of the actual estimated potential of small hydro generation capacity. Considerable work needs to be done in order to achieve the estimated potential. The low utilization of the country‘s SHP potential can be attributed to several factors, such as difficult and remote terrain, delays in acquiring statutory clearances, grid connectivity and hydrological risk.

Another issue, largely ignored for now, is the looming threat that China poses today.

The Chinese government has initiated a massive hydro power development plan, with eyes set on an installed hydro capacity of almost 350 GW by 2020. Such a plan can only be achieved by aggressive development of a large number of dams and hydropower projects across its Tibetan Plateau and tapping into the capacity of the Yarlung Tsangpo (or, the Brahmaputra, as we know it in India). The Yarlung Tsangpo Gorge at the bend as a potential site for two mega hydro projects which would dwarf the size of world’s largest Three Gorges dam (22,500 MW). Both these projects would involve diverting water from its natural course during construction and eventually holding up substantial flow upon completion. This can only translate into major changes of the ecology and sustainability of the Northeast.Read on to know more.

Editor Saptarshi R Dutta

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Editor: Saptarshi R Dutta

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PowerWatch Editor’s noteEditor’s note

Saptarshi R DuttaEditor

16Page

20 tête-à-têteInterview with Chairman and Managing Director (CMD), NHPC Limited, Mr A.B.L Srivastava

24 Inside ViewInterview with Managing Director, B Fouress Ltd. (BFL), Mr Sameer Shetty

Playing Chinese checkers with India’s hydro sectorThe Indo-China discord over sharing of the Brahmaputra waters has prevented the development of hydropower potential in the northeast, including Arunachal Pradesh, considered to be the ‘future powerhouse’ of India...

Industry SpeakThe small hydropower (SHP) sector has witnessed considerable growth during the 11th Five Year Plan (2007-12). However, real potential still remains rather untapped owing to geographical and hydrological hurdles, issues with getting clearances from various departments and local problems. PWI presents the industry’s voice on the sector’s situation and the future prospects of small hydro in India...

35 Money MattersAlstom inks JV with Druk Green Power

Dispatches National...................................08International...........................10Finance....................................12

Vital Stats............................60

Regulars

TIMe To Go FoR HyDRoIf developed in accordance with good environmental and social practices, hydropower plants have the advantage of producing power that is both renewable and clean, as they emit less greenhouse gases than traditional fossil fuel plants and do not emit polluting suspended particulate matter. Although hydro power plants have huge up-front capital costs, they also have a long and productive life, which significantly helps reduce costs over a period of time...

Contents

CoVer Story

The joint venture with a shareholding of 49:51, entails setting up one of its kind hydropower plant service centre in Bhutan...

Interview with Unit Managing Director, Alstom Hydro India, Mr Alain Spohr

38 Tech & ServicesBringing cost efficiency in hydroThe WMO benchmark model is the leading benchmarking systems in the world that promises cost efficiency in the operations of hydropower developers. An insight...

Interview with Managing Director, Andritz India Pvt. Ltd., Mr Mahadevan Anand

Integrated modules from Ge oil & GasThe modules represent a fully integrated, tested and ready-to-start application-specific solution for oil and gas findings in restrictive locations...

Interview with Ge oil and Gas’ Modules and Turnkey executive operation Leader, oil and Gas, Ge energy, Mr Davide Iannucci

3-level inverter: easy online dimensioning Inverter manufacturers can quickly decide which topology and which module...

Carrying forward the legacy of innovation Power plants are long life buildings –

the typical expectation is at least 30 years - that requires high performance building systems. Delivering high performance building systems is exactly what Centria has been doing for more than 100 years...

54 en-conessar Steel’s stint with Waste Heat RecoveryThe global producer of steel has commissioned a 19 MW power plant in Hazira to utilize waste heat for generating electricity...

Interview with MD and Ceo, essar Steel India Ltd., Mr Dilip oommen

56 CSR WatchMonnet “Go for Gold”With London Olympics 2012 around the corner, the campaign aims to cheer up athletes in a nation, which is striving hard to consolidate grounds on the global map for sports beyond cricket...

Interview with executive Vice Chairman & Managing Director, Monnet Ispat & energy Ltd., Mr Sandeep Jajodia

Cover Image: Dam of Rißbach, Power Plant Group Walchensee, E.ON Wasserkrafta © E.ON AG

10• PowerWatch INDIA • July 2012

Siemens AG and Gamesa Corp. Tecnologica SA (GAM) are reportedly planning to export wind turbines from their U.S. factories in the wake of domestic demand stagnating, before a renewable-energy tax credit expires in December. Executives from the largest German and Spanish turbine companies are told to have discussed their plans at the American Wind Energy Association’s annual Windpower 2012 conference in Atlanta. European wind manufacturers that invested in U.S. factories to meet growing demand for renewable energy are counting on developing markets in the rest of the Americas to deal with an expected slump. It is informed that U.S. sales are already slowing and are

expected to plunge next year if the credit lapses. “We are using our manufacturing in the U.S. to export. Those shipments may not offset the expected decline in U.S. sales. Exports from the U.S. will be an important strategy but you don’t get the volumes you need,” David Flitterman, Chairman of Gamesa’s North American unit was quoted as saying. Gamesa has already exported 102 MW of U.S. made turbines to the Honduras and is seeking sales to projects in Uruguay and Nicaragua. The so-called production tax credit, which offers a 2.2- cent-a-kilowatt-hour credit for electricity produced by wind turbines, biomass, geothermal and landfill-gas plants, is due to expire December 31. A bill to extend it has stalled in Congress and wind-

industry executives are urging its renewal.

Siemens AG is a German multinational conglomerate headquartered in Munich, Germany. It is the largest Europe-based electronics and electrical engineering company. Its activities are spread across the fields of industry, energy and healthcare. Spanish firm, Gamesa, on the other hand, is a world leader in the wind industry. Its comprehensive response includes the design, manufacturing, installation and maintenance of wind turbines, with more than 24,000 MW installed and 16,300 MW under maintenance.

Siemens, Gamesa exporting U.S. made wind turbines

Sunsolar Energy, a small solar installation firm based in the West Midlands and currently employs less than 20 full-time staff, is building a £10 million PV solar panel manufacturing plant in Oldbury after securing £5 million from the Government’s Regional Growth Fund. The new plant will be the first in the UK to manufacture entire solar PV panels and will create 565 jobs over the next five years. “This represents a massive boost. We’re one of 50 local businesses to have got regional growth funding. For a very small company like ourselves to get that sort of amount is a stake in the ground,” Sunsolar Business Development Manager, Rob Grant was quoted as saying. With a capacity of 30 MW a year, the plant will produce both

monocrystalline and polycrystalline PV modules, all under the Sunsolar brand. The production is scheduled to begin in November, with cells at first imported from Europe. However, the facility would be fully manufacturing PV

modules, including the cells, from early 2013, creating wider benefits to the UK economy. “The whole idea is to bring manufacturing back to the UK. Everything we purchase will be local,” Grant added. Interestingly, there are currently only a handful of solar manufacturers in the UK and currently all focus on assembly. The new manufacturing plant offers further encouragement that the UK’s solar sector could be recovering after being rocked by months of uncertainty due to changes in the feed-in tariff (FIT), the government’s subsidy scheme for small-scale solar electricity.

As part of the restructuring aimed at reducing fixed costs, improve profitability and increase customer focus, Vestas will unite its two current sales business units, Vestas Asia Pacific and Vestas China. As a consequence of this reorganisation, Sean Sutton, President of Vestas Asia Pacific, has left Vestas after mutual agreement. The creation of a combined sales business unit for China and Asia Pacific will support Vestas’ ability to share best practises across Asia, ultimately benefitting Vestas’ customers.

GE will supply all the equipment and PV technology systems required for the expansion of Brazil’s Tauá project, which is underway. The company will also deliver more than 8,000 solar panels for the project. Upon completion, Tauá will have nearly 13,000 solar panels being used to produce energy. The construction is expected to begin during the second half of this year and operation to begin in 2013.

After nearly 33 years of uninterrupted operation, EURODIF’s Georges Besse enrichment plant, located in the Tricastin site in France’s Drôme department and operated by AREVA, permanently ceased production at the end of the shutdown process which began last May 14. The EURODIF plant has been a showpiece in the global market for uranium ever since it was commissioned back in 1979.

News brief

Midlands’ solar firm to build UK PV manufacturing plant

Dispatches international

Swiss power and automation technology company, ABB Ltd. has received an order worth around $75 million from Iraq’s Ministry of Electricity to extend an existing transmission grid in the country. According to the company, the Amara substation will connect a new gas-based power plant as well as smaller power stations, currently under construction, to the grid. “The substation extension will enable the integration of additional power generation sources and boost power supply to the region. It will also help to improve grid reliability and power quality,” Brice Koch, head of ABB’s Power Systems division was quoted as saying. It is informed that the project is scheduled for completion by 2013. ABB had recently released its annual estimate of the savings achieved by its installed base of drives. It disclosed that about 310 million MW hours of electric power was saved by the company’s drives in 2011.

Brazil’s Vale has entered in a consortium agreement with Australian renewable energy company, Pacific Hydro to build and operate two wind farms in northeast Brazil. Under the terms of the agreement, the companies with each have a 50 per cent ownership of both wind farms, which are expected to be completed by late 2014. The projects will represent an investment of approximately $315 million. It is informed that the wind farms will be located in Rio Grandedo Norte and have already been granted all necessary environmental permits. Vale will be the sole off-taker of clean electricity produced by the projects for a period of 20 years, utilizing 100 per cent of its generation as self-production for its operations. According to Executive Director of Human Resources, Health

and Safety, Sustainability and Energy of Vale, Vânia Somavilla, this is the company’s first venture into wind energy and represents an important step for increasing the use of clean and renewable sources in Vale’s energy matrix. She reportedly added, “Vale’s global demand for electricity is expected to increase 150 per cent by 2020 and we’ve been seeking options to meet this demand, on a sustainable way, using renewable sources such as hydro, wind and biomass. The option to develop wind projects also helps diversify our energy matrix, reduces our emissions and ensures cost competiveness in the long term.”

Brazilian multinational Vale is a diversified metals and mining corporation and one of the largest logistics operators in Brazil. In

addition to being the second-largest mining company in the world, Vale is also the largest producer of iron ore. Pacific Hydro is a renewable energy company headquartered in Melbourne, Australia. It is a wholly owned subsidiary of the Industry Funds Management, an Australian investment management company. Pacific Hydro develops hydro, wind, solar and geothermal power projects. It also operates in Brazil and Chile.

Suzlon sells China arm for Rs 340 croreDebt-laden wind turbine major, Suzlon has reportedly sold its Chinese manufacturing subsidiary to China Power (Tianjin) New Energy Development Company for $60 million. The two companies have signed a binding term-sheet for sale of the subsidiary, Suzlon Energy Tianjin, with the majority of its assets and liabilities for $60 million. “The dynamics of the wind energy market have changed considerably over the past year, and we are re-aligning our strategy in the Chinese market with an agile, asset-light business model to achieve high growth and margins but with lower investments. We have decided to realign our business there, as reflected in this transaction,” Suzlon Group Chairman, Tulsi Tanti was quoted as saying. The world’s fifth largest wind power maker by installed capacity, Suzlon has over Rs 10,000 crore in debt, out of which around Rs 6,000 crore in working capital loan and Rs 4,000 crore in long-term debt. This year, the company has a repayment obligation of $750 million including a $550 million in foreign currency convertible bonds. Out of this, it has already repaid $306 million worth of FCCB early month.

ABB gets $75 million order to reinforce grid in Iraq Taiwan-based BenQ Solar has received the Japan Electrical

Safety and Environment Technology Laboratory (JET) certification. JET is a Japanese institution that tests and inspects electronic products. It is to be noted that BenQ Solar has been developing a PV module, the Green Triplex PM200M00) designed for the usage in residential installations and an all-black module (Green triplex PM250M00) in addition to a module that withstands salt mist corrosion (Green triplex PM240P00), specifically for commercial rooftop installations. It is a great feat for BenQ Solar considering that due to the large demand in the Japanese market and the specific requirements with regard to product safety, receiving a JET certification is not that easy. In fact, the Japanese government has announced generous feed-in tariffs for the month of July, making the country an appealing solar market for the future.

BenQ Solar acquires JET certification

Vale forms wind farm joint venture with Pacific Hydro

Dispatches Financeinternational

14• PowerWatch INDIA • July 2012

16• PowerWatch INDIA • July 2012

If developed in accordance with good environmental and social practices, hydropower plants have the advantage of producing power that is both renewable and clean, as they emit less greenhouse gases than traditional fossil fuel plants and do not emit polluting suspended particulate matter. Although hydro power plants have huge up-front capital costs, they also have a long and productive life, which significantly helps reduce costs over a period of time...

Cover Story

Time To Go For Hydro

dam of rißbach, Power Plant group Walchensee, e.oN Wasserkrafta© e.oN ag