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Unfazed By Poor Patronage, Chennai Metro Starts Land Acquisition For Second Phase

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Undeterred by low ridership, the Chennai Metro Rail Limited (CMRL) has decided to go ahead with the second phase of the rapid transit project serving Tamil Nadu’s capital city. The CMRL has started issuing notices to residents whose land is to be acquired for the 108 km-long project that will see the Metro go towards the extended suburbs of the city at a cost of Rs 85,000 crore.

A report by the Times of India states that officials have started issuing notices to property owners in Madhavaram, Sembium, Otteri and Perambur where the third and fifth lines are being planned. Line 3 will connect Madhavaram in the north to Siruseri in the south, passing through Perumbur, Chetpet, Royapettah, Mandaveli and Adyar. Line 5 will connect Madhavaram to Shollinganallur along the Old Mahabalipuram Road (OMR) via Kolathur, Maduravoyal, Valsaravakkam and Adambakkam.

Similar to the first phase where 55 per cent of the two corridors ran underground, phase two will see a bulk of the metro – 80 per cent – go underground. Phase one required 180 acres of land while phase two will require only 86 acres.

Most of the land to be acquired will be government land, owned by the Metropolitan Transport Corporation (MTC) and the Tamil Nadu Co-operative Milk Producer’s Federation Limited that operates under the brand Aavin.

In December last year, when the CMRL and Government of Tamil Nadu approached the Centre seeking funds for the second phase, the latter responded by asking why CMRL wanted to expand the metro when its ridership was so low.

Construction for the second phase is set to begin in 2019.

Power Reform: 10 Lakh New Smart Meters To Help Haryana Discoms Improve Efficiency And Cut Losses

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In a bid to improve the financial health of power distribution companies in the state and to clamp down on electricity theft, Haryana Chief Minister Manohar Lal Khattar has given his approval to install a million smart meters in five districts – namely Panipat, Karnal, Panchkula, Faridabad and Gurugram. The meters would be installed by Energy Efficiency Services Limited (EESL) after it signs a memorandum of understanding with the state’s power discoms.

The smart metering system would obviate the need for manual meter reading, thus bringing down labour costs and eliminating data entry errors. These smart meters are also expected to bring down Aggregate Technical & Commercial (AT&C) losses – a proxy for power theft and various infrastructure inefficiencies.

Since the central government launched Ujjawal Discom Assurance Yojana was launched three years ago, Haryana government has installed 10,000 metres in Panipat as part of a pilot project. Currently, the total smart metering coverage in Haryana stands at less than 1 per cent.

UDAY DashboardUDAY Dashboard
UDAY Dashboard UDAY Dashboard 

According to EESL, smart meters which are connected through a web-based monitoring system, will help reduce commercial losses and enhance revenues of power companies. As far as Haryana is concerned, UDAY has proved to be a boon for the two discoms of the state which posted a profit after a period of 15 years. Smart metering reform is expected to further improve the efficiency of power utilities.

Why The World Is Betting High On India’s Renewable Energy Sector

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Snapshot
  • Adopting renewable energy is no longer a choice. The good news is that tariffs are falling; the not-so-good news is that the high initial costs require substantial finances, and then there are other hitches.With government going all out with policy support, subsidies and other incentives, the world is betting high on the Indian RE sector.

“Three countries are leading the renewable energy revolution”, said a headline on the World Economic Forum (WEF) website, and hold your breath – the flags of China, US and India follow on a graphic, titled with the caption, “These three countries will account for two-thirds of global renewable expansion to 2022”. One can’t help but feel a moment of pride.
The WEF article is based on a report by the International Energy Agency’s (IEA’s) Renewables Report 2017, which says that sharp cost reductions and improved policy support are paving the way for continued growth in the renewables sector in India.

The Palpable Energy In India

Sure enough, the energy has been palpable in the Indian Renewable Energy (RE) sector scene for several years now.

When the world decided – in the Paris Agreement – to make the world a better, cooler place, 162 countries gave in writing the steps they would take to contain the rise in Earth’s temperature. India, committed to sourcing 40 per cent of its electricity from non-fossil fuels. The country set itself the goal of generating 175 gigawatts (GW) of electricity from renewable sources by 2022 – with 100 GW of Solar, 60 GW of Wind, 10 GW of bio energy and 5GW of small hydro power. The major sources are energy and solar energy, and this article focuses on these two.

India benefits from alternative energy sources in many ways: energy security, countering pollution, decreasing greenhouse emission, lower prices, and so on. Going further, a report from International Labour Organization (ILO) even talked about how India’s target of RE had the potential to create close to 3 lakh jobs. Adopting RE is a totally win-win situation, for every agency in the economy – households, discoms, state governments and of course, the country as a whole.

Yet, we’ve been hearing about challenges and how the targets are lofty and unattainable. So, international acknowledgement of making good progress helps.

The Financing And Purchase-Uncertainty Hitches

According to industry experts, the biggest bottleneck to attaining targets is financing. As a report by IndiaSpend found out, there is a mismatch between commitments given by RE developers and RE financiers. Lenders and investors find it risky because of uncertainty about whether publicly-owned power distribution companies will purchase the power, and also fears related to grid management of the electricity, regulatory issues, and so on.

Purchase Obligations
Now, the Central government has been continually striving to make its RE plans and programme a success, and the latest in this is related to the purchase part referred to above. As this article in QuartzIndia informs us, government is pushing private companies to increase the share of renewables in their overall power mix.
The power ministry has increased its renewable purchase obligation (RPO) – which mandates distribution companies and other private companies to procure a part of their requirement from RE sources – target from 17 per cent to 21 per cent by 2022. To the extent that this purchase bit was causing financers anxiety, this assurance of a readymade market would allay their fears. Of course, enforcement of the RPO is key, and the Ministry of New and Renewable Energy is also taking steps to ensure this, as reported.

Cost-efficiency, Policy Support And Financing

Related to financing, Climate Policy Initiative had made a few suggestions in its research study on Reaching India’s Renewable Energy Targets Cost-effectively, in 2105. The project investigated how much it would cost the Indian government to reach its RE targets; this was important because the government’s finances are always constrained by its fiscal deficit and multiple development priorities.

The five authors of this study found that when using the levelised cost of electricity from imported coal (which is what RE seeks to replace, rather than domestic coal/natural gas) – that wind power was already competitive (see graph below), and the cost of solar power would be competitive by 2019. The authors concluded two things: that wind power already does not require any government support; and that by 2019 solar power is expected to be cheaper than imported coal-based power given that learning effects will drive solar costs down and fossil fuels will become more expensive because of transport costs and inflation.

The following figure illustrates the point:

The conclusion and recommendation based on the above findings was that: Wind power does not require government support, and solar power will require policy support till 2019. This works out to Rs 2.71/W under Indian accounting policies in this sector. The authors recommended that government provide debt at lower cost and higher tenor than market; this would lower the cost of government support by 96 per cent to Rs 0.1/W. Second, wind could be deployed starting right then, given its already competitive cost, and solar deployment could be scheduled such that the larger part of the target is met after 2019.

For solar developers, the report also said that the government may need to provide more financial support to solar project developers. At present, solar energy is competitive only in the presence of policy support. A larger proportion of solar capacity will be commissioned only after 2019, when it becomes competitive – in the absence of policy support.

Why India Aabsolutely Needs Renewable Energy: For Its “Massive Deflationary Impact”

US-based Institute for Energy Economics and Financial Analysis (IEEFA’s) Energy Finance Studies Australasia director, Tim Buckley suggested substituting conventional energy with renewables, in an earlier study titled, ‘Indian Power Prices — How Renewable Energy is Cheaper than Coal’ that compared cost escalations.

The comparative costs arrived at as per their model are:

The cost of thermal power was arrived at by incorporating in the financial model estimated per annum increases in US$ coal prices, shipping costs, rupee depreciation.
The author had argued that India had one of the lowest retail electricity prices, much lower than that required for profitable generation of thermal power, which was dependent on expensive imported coal. Hence, it made sense for Discoms to go for renewables – both for the sake of their own profitability as well as lower tariffs.

In fact, the news on the solar tariffs front is very positive. Driven by scale, prices of solar power have dropped dramatically, from about Rs 17 per unit in 2010 to about Rs 2.50 per unit.

A mid-term update was provided in December 2017 by the MNRE, which revealed the following solar tariffs during recent times, in chronological order:

Source: PIB

Low-Cost Financing: Policy Recommendations In Niti Aayog Report

A Niti Aayog report – India’s Renewable Electricity Roadmap 2030: Toward Accelerated Renewable Electricity Deployment – says that RE technologies have high capital costs, but very low operating costs spread over 25 to 30 years. It suggests interventions that are sector (RE) specific, and to do it in multiple stages:
Stage 1: Reducing the risk perception of the sector by de-risking and hence managing/reducing investors’ return expectations (both debt and equity).

Stage 2: Increasing the quantum of money available and reducing the cost of such money (by)
• Allowing special green bonds — such as tax-free, and/or capital gains tax-exempt bonds — in line with infrastructure bonds;
• Bringing RE under priority-sector lending;
• Allowing pension funds, insurance companies, and sovereign funds with long-term horizons to invest in RE projects through securitisation markets;
• Lowering the sovereign guarantee fee for non-banking financial companies (NBFCs)/public-sectorentities involved in financing RE projects;
• Allowing tradable tax credits to be issued by developers who do not have corresponding set-offs against such tax benefits, so they can sell them to others who are eligible to do so;
• Allowing longer-tenure loans from the infrastructure debt fund to RE projects that meet well-defined criteria, even if they are not public-private partnerships (PPPs), or creating mechanisms that allow structuring of projects as PPPs.
Stage 3: An existing central government entity such as IREDA or PFC could pool various sources of funds including commercial (banks, FIs, MDBs’ lines of credits etc) and noncommercial (National Clean Energy Fund {NCEF}, grants, subsidies, corporate social responsibility money, etc) capital from domestic as well as international sources. This pool of funds could be administered and managed to lend debt (and even part equity, if possible) at lower interest rates.

Other Ifs And Buts

Of course, grid transmission efficiency – another big issue in India’s electricity scene – will still need to be sorted, even after cost efficiency is reached.

Then, the smaller issues: many of those suspicious of renewable energy say it is unwise to go for wind and solar power, given their inconsistency; for instance, solar is available only in the day. For this, the Central government has suggested to states to give power to agricultural and industrial users during the day, where the peak demand coincides with availability of solar energy. Many states were doing the opposite.

The Bottom-line: Renewables Require Renewed Thinking

The Niti Aayog report on India’s Renewable Electricity Roadmap 2030 says it well: “For India to capture the benefits of RE.… will require the rethinking and reengineering of institutions, the redefinition of policies, the re-tuning of power grids and systems, and the replacement of old habits with new ones.

“Renewables are different from the power technologies of the past. The enormous benefits they bring – zero fuel, electricity prices free from volatility and external influence, reduced imports, dramatically reduced pollution and water use – will not be had without significant effort…To capture the benefits, India would need to raise the necessary capital, and to get comfortable with managing the variability and uncertainty of renewable energy generation.” Enough said.

‘Charge’ Is The Key To Change In Electric Vehicle Revolution

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Snapshot
  • Government support will be needed to democratise the technology, but it will need to play only the role of facilitator in a public-private ecosystem.

The stated objective of the government to have 30 per cent electric vehicles (EV) by 2030 is an ambitious target given the current state of the EV ecosystem. Advancements in the EV arena will take its own course, and the government should choose to remain neutral to the various kinds of technologies that are evolving to allow them to run their course. An increased volume of EVs will perhaps drive technology to evolve faster. The government can, at best, intervene to make it attractive for manufacturers to produce more and consumers to buy more EVs through a combination of tax incentives and subsidies. However, the most effective state intervention can come by way of facilitating setting up of charging infrastructure, which will form the backbone of any EV revolution.

The charging cost to the end consumer for an EV will have four major components: the electricity tariff, the land cost, the cost of charging infrastructure, and manpower among other miscellany. The tariffs are likely to continue to remain regulated in the foreseeable future through the orders passed by the State Regulatory Commissions (SRCs). But unless SRCs show initiative in allowing “open access” to operators to purchase electricity from the market, things may not work out as expected.

The sum of other costs, and the ability of operators to manage those effectively, particularly the land cost, will decide the ultimate price at which the charging facility shall be provided to the consumer. Till such time EV volumes are low, the cost is likely to be high. In that context, it is possible that setting up of EV charging infrastructure may not be economically viable for operators, and it may require some degree of fiscal or other incentives, including subsidies from the government. The government too does not appear to be averse to the idea of offering subsidies and incentives, but it needs to tread this path carefully.

The most viable sites for setting up charging infrastructure would be existing fuel stations. Since most fuel stations are dealer-operated, dealers will need to be nudged into investing in setting up EV charging infrastructure. It may not be an easy task, given the low returns in the short-to- medium term. The Oil Marketing Companies (OMCs) may be asked by the government to take the initiative and invest in setting up charging infrastructure in both owned as well as dealer-operated fuel stations.

However, such a move may be counter-intuitive for many reasons. Since OMCs are listed companies with a significant public stake, it will be unfair on their shareholders if they are indeed asked to invest in a business that they have no expertise in, and which is, otherwise, a low-return proposition. Also, there is an obvious conflict of interest for OMCs to invest in electric charging infrastructure when they are clearly dependent on conventional fuel for bulk of their revenues.

Public sector behemoths such as National Thermal Power Corporation (NTPCL) or Power Grid Corporation of India Limited (PGCIL) may be asked to invest in setting up of charging infrastructure. However, they too being listed companies will face similar concerns around shareholder value and business profitability. The problem for them will be compounded as unlike OMCs they may also need to invest in acquiring land, or enter into arrangements with thousands of fuel station dealers to set up the infrastructure.

The issue of viability for any player, whether state-owned or private, may be addressed by the government through fiscal incentives and viability gap funding to those setting up the charging infrastructure. This is where foresight will be required to ensure that sufficient competition and capacity in charging infrastructure is developed in India. It will be important that the government is not driven by its socialist baggage to nudge public sector undertakings (PSUs) to take up the task at the cost of shareholder value, or provide fiscal incentives and subsidies to PSUs alone who undertake the task of building such infrastructure.

The incentives and subsidies should be distributed in the most efficient manner to achieve the maximum impact. It will be prudent on the part of the state to allow private players and PSUs alike to participate in any subsidy-driven scheme. An open competition will ensure that players with requisite technical expertise or those who have the ability to bring in the know-how internationally available and their best practices will be able to optimise their costs to set up infrastructure with minimal subsidy support. It will not only ensure that government funds are utilised by those who are best placed to deliver results, but will also create capacity outside the PSU ecosystem.

An open competition in setting up of solar and renewable projects has shown how private sector participation can result in lowering of tariffs, besides creating a bench strength of operators who can deliver such projects in India. A similar approach in promoting EV charging infrastructure is desirable. Private sector may show the way forward in not only managing the cost of charging infrastructure, but also in managing manpower and other miscellaneous costs, which will go a long way in ensuring sustainable and reasonable charging cost to the end consumer.

The EV revolution will need government support, but it will need to play the role of the facilitator, without taking sides. Its involvement will need a sufficient degree of detachment, particularly from the temptations of getting involved in setting up the charging infrastructure, directly or indirectly.

Salem-Chennai Green Expressway Corridor Myth-Buster: Here Is All You Need To Know

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Snapshot
  • Salem-Chennai expressway corridor faces opposition over half-truths floated by vested groups. Here are the facts

Tamil Nadu has been among the states that is preferred by investors for various advantages it enjoys in setting up industries. It is one reason why Tamil Nadu has been able to attract a good volume of foreign investments all these years. But a perceived weakness in the state’s leadership is attributed to all kinds of protests against anything and everything by forces trying to make their presence felt. In their eagerness to assert themselves as leaders working for the people’s welfare, these forces are even scuttling projects that can benefit Tamil Nadu.

The forces are blindly opposing projects that are in proposal stage. The Rs 10,000 crore 274 km Salem-Chennai green expressway corridor is among the projects that is facing opposition. Unfortunately, slack intelligence gathering has resulted in these forces entering the villages and inciting the people there against the project. What has happened is these forces have floated a lot of half-truths, misleading statements and myths about the project that could turn out to be beneficial for the people of the state. Here then are the myths and facts about the project.

Allegation One

The expressway will be laid through villages and farms that could affect mango farms in Salem. A total of 2,300 hectares of land is required.

Fact

The expressway isn’t going to affect village and farms all through the 274-kilometre course it runs through. In fact, most of the land that the highway will run through are wastelands. Second, the government will need to acquire only 1,900 hectares for the highway. Of these, 400 hectares are irrigated lands, another 400 belongs to the government and the rest are the ones where farming is being carried out, partially.

For example, paddy is cultivated in over 1.15 lakh hectares in Thiruvannamalai, one of the districts through which the expressway will traverse. But the amount of farmland that is likely to be acquired in the district for the project will be less than one per cent of the area under paddy cultivation. And of these, some 100 hectares will likely be irrigated lands.

Allegation Two

The expressway will be 900 feet wide.

Fact

The detailed project report (DPR) says the project’s maximum width will be 90 metres or a little more than 256 feet. The thumb rule is that the width of a four-lane highway is 23.5 m and that of a six-lane one is 43.6 m. The 90 m includes service roads.

Allegation Three

The corridor alignment cuts through 22 km of reserve forests

Fact
The corridor has been realigned in such a way that less than 10 km cuts through reserve forests. This means the area through which the expressway would traverse isn’t any highly sensitive ecological zone or one inhabited by wildlife animals. Tamil Nadu Chief Minister Edappadi K Palaniswami told the Tamil Nadu Assembly on 11 June that the project cuts through only 9.9 km of reserve forest land, but those involved in its execution say it will actually be lower. The length of the expressway has been increased by 10 km since it was realigned to avoid affecting forest lands. Sources in the central government say the expressway will pass through only on the fringe of the forest and only for 6 km. Of this, 3 km will be a tunnel.

Allegation Four

The project is being conceived to help only corporate firms and multi-nationals. It will result in high mining activity in the area. The Japanese will control the highway since the country is setting up an industrial park in the corridor.

Facts

The corridor is coming up because the Chennai-Bengaluru and Chennai-Madurai national highways are being used at nearly 150 per cent of their capacity. The talk of high mining is false because all such activities are monitored by the National Green Tribunals and courts. The Salem Steel Plant was set up to use iron ore that is available in the district. But its quality was found to be poor that the plant is importing coal from Orissa through Ennore port. The talk of magnesite mining isn’t correct because mining companies find bigger mines in eastern India. The Japanese industrial park is coming up at Mamallapuram and has got nothing to do with this corridor.

Allegation Five

The corridor is unnecessary since the Chennai-Bengaluru and Chennai-Madurai national highways can be extended to accommodate increase in traffic.

Fact

The Chennai-Bengaluru National Highway is seeing some 60,000 PCU (passenger car units) traffic that is 20,000 more than its capacity. The Chennai-Madurai National Highway is seeing a traffic of 80,000-90,000 PCU against its capacity of 40,000. In the next 15 years, the traffic will increase to 2.1 times of what it is now.

These highways cannot handle such a high capacity of traffic and accidents are bound to increase due to this. Currently, 3,000 persons lose their lives and another 10,000 become handicapped due to accidents on these highways. The number will only rise.

The extension of these highways will mean demolishing nearly 20,000 houses on each highway, which is totally not feasible.

On the other hand, the corridor is being envisaged to decongest the Chennai-Bengaluru and Chennai-Madurai National Highways. Of the 1.40 lakh PCU now operating in both these highways, 60,000 are bound for the western districts like Erode, Tiruppur and Coimbatore in Tamil Nadu and Kerala. This underlines the importance and potential of the proposed project.

Allegation Six

Hills on way from Salem to Chennai will be knocked down causing damage to environment and ecology.

Fact

None of the hills on the route will be damaged or brought down. Only a tunnel less than three km in length will be dug up in one of the hills near Salem. This is the perfect way to preserve ecology and ecosystem. Similar strategy has been adopted to construct highways to Jammu and Kashmir and other places in the world.

Allegation Seven

Actual time taken to travel from Salem to Chengalpattu is 2.5 hours and it takes an equal amount of time to travel from Chengalapattu to Chennai.

Fact

The expressway isn’t meant to cater to Chennai alone. It is to help people reach other connecting places quicker. The problem with the current national highways connecting Chennai to Bengaluru and Madurai is that the authorities either have no control or have only partial control over elements that hinder traffic on these routes. The expressway corridor, on the other hand, will allow entry or exit only at nine points. This will speed up the travel time besides providing faster connectivity to important towns like Kanchipuram, Chengalpattu and Thiruvannamalai. This will also provide a faster connectivity to industrial hubs and special economic zones.

Moreover, fears that it will be hard for people to access their lands or farms on the other side of the road are unfounded. The corridor will be an elevated one, providing for sufficient underpasses for the people to go across. There will be an underpass every 300 metres to make it easy for people to move about.

Allegation Eight

The corridor stops at Chengalpattu and doesn’t come to Chennai. Connectivity to port and other places could be a problem.

Fact

The corridor aligns with the outer ring road at Vandalur. From here, getting to Chennai, Ennore or the private Kattupakkam ports will be easy since vehicles can use the Chennai-bypass and then latch on to the proposed elevated highway to Chennai port or travel further on the bypass and reach Ennore or Kattupalli ports. The Vandalur outer ring road can provide quicker access to north and central Chennai. For south Chennai, the Vandalur-Kelamabakkam four-lane road will stand in good stead besides helping those headed to Mamallapuram or the East Coast Road.

A flyover is coming up at Perungalathur on the Chennai-Madurai highway to help ease traffic congestion of vehicles entering and leaving Chennai.

Allegation Nine

The travel cost will be high as toll charges will prove to be a burden on those using it.

Fact

One, the expressway corridor isn’t going to be the only route from Chennai to Salem. If people have the time and feel the toll charges are high, they can use the alternate routes. Second, the DPR has estimated the travel cost for a car on the proposed corridor at Rs 2,240 compared with a cost of over Rs 2,900 on the Chennai-Krishnagiri-Salem route and Rs 2,625 on the Chennai-Ulundurpet-Salem route.

The costs have been arrived at taking into consideration the cost of running the vehicle, the value of travel time, the actual time, toll charges and the trip length.

Defence Industrial Corridor

The expressway will also help the units that come under the defence industrial corridor connecting Chennai, Tiruchi, Salem, Coimbatore and Bengaluru. With various industries, particularly those in Salem and Coimbatore, showing keen interest, the corridor will serve them in good stead to get their supplies or transport their product.

report in Tamil daily Dinamalar said the Tamil Nadu government has begun acquiring the lands for the project. A tender for the project under the Bharatmala Pariyojana scheme will likely be issued in 45 days and before the year ends, construction work should begin.

Revving Up The EV Revolution: How Policy-Making And Technical Challenges Can Be Overcome

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Snapshot
  • Policies on tariff, open access charging and easing technical roadblocks are key to unleashing an EV revolution.

Electric Vehicles (EV) are the future of the automobile industry. Lofty visions have been unveiled and even loftier targets have already been set. What seems to be the biggest roadblock is the absence of charging infrastructure (CI) for EV in India. Technical challenges aside uncertainty in policy-making is also considerably slowing the pace of the expansion of CI. Some positive movement has been seen at last, in the government recognising that setting up of CI for EV will not require any distribution licence under the Electricity Act, 2003 (Act).

Precious time was lost in taking what should have been an obvious interpretation of the Act with the forum of regulators (a body consisting of electricity regulatory commissions) initially taking a view that charging of electricity at a charging station would amount to sale of electricity. The controversy is at rest, at least for now, that charging through CI does not amount to sale of electricity, and hence players setting up CI will not require a distribution licence. This potentially removes a major roadblock, with private players getting the opportunity to set up such infrastructure.

Policy on tariffs is the next battleground. For an EV revolution to kick off, at least in the short term, the operating cost of an EV needs to be significantly lower than the operating cost of running a vehicle on conventional fuel. Higher electricity tariffs will effectively make EV unattractive vis-a-vis its conventional counterparts. Some state regulatory commissions (SERC) have already woken up to the reality of electric charging stations as a distinct category of consumer, and charging stations have been given a separate category under the tariff orders. These SERCs are taking a reasonable view in keeping the tariff for charging stations lower than the industrial and commercial tariffs, while keeping it marginally higher than the retail consumer tariff.

The states which have not yet implemented a separate category of tariff for charging stations are putting the tariff at much higher levels corresponding to the commercial tariff category. While this may appear tempting, particularly for distribution companies (Discoms) that are stressed, such higher tariffs are not desirable to further the overall goal of transitioning to EV. It is also important to reduce chances of price arbitrage in EV charging. Lower retail tariff than the tariff at charging stations is likely to incentivise consumers to shift to charging through home-based charging points, which in turn, will result in electricity demand peaking at times when the demand is expected to be low. This may create problems in grid management.

Open access for charging stations is another area that needs intervention. Open access is the ability of a consumer to buy power from any other generator or trader under a private contract. Open access for charging stations needs to be allowed on a pan-India basis to ensure consistent supply. The idea that the bill of consumers, which are being subsidised, should be recovered from customers who can afford to pay higher tariff has already prevented the development of an orderly power market in India. Discoms, perhaps for some good reason, have for long resisted attempts at permitting open access, and where permitted, cross-subsidy surcharges are increasingly making open access a costly proposition.

Whether cross-subsidy surcharge is indeed required or not, or should such subsidy be borne by the governments through budgetary allocations, requires much broader policy debate. However, the policy goal of replacing conventional vehicles with EV should leave no one in doubt that EV charging stations need consistent supply of power, and they should not be subsidising any other category of consumer. Consistent supply of power makes open access a paramount requirement on a pan India basis, considering many Discoms reeling under financial stress may not be able to guarantee consistent supply of power to CI. Similarly, such open access should not be subject to cross-subsidy surcharges to ensure that the price of power is not artificially inflated through such charges.

Further, where such charging stations are setting up or investing in captive generation units, there should be low wheeling and no banking charges. Wheeling is the use of the transmission or distribution network of transmission or a distribution licensee for conveyance of electricity, while banking is the process whereby excess electricity generated by a generator is fed into the grid (i.e. banked into the grid), which can be used at a later point in time by the generator. Banking essentially involves accounting of electricity generated and fed into the grid, creating a credit entry, which can be debited once the consumer utilises the same through the grid. Wheeling and banking charges are being used by some Discoms as a tariff measure, much like cross-subsidy surcharge to meet the subsidy deficit. For reasons similar to the arguments for no cross-subsidy surcharges, banking charges should not be levied for EV charging stations. Time-of-the-day charges during peak demand may be introduced, but the same should not be used a tariff measure to recover subsidies.

Since providing CI is recognised as a service, as opposed to sale of electricity, one may hope that the CI providers will have the flexibility to charge for their service on the basis of the quantum of charge supplied (as perhaps unit of electricity delivered in charging the battery (or charge basis), or the time for which the battery is plugged into the CI (time basis). The flexibility may enable the CI providers to deploy technologies for faster charging, the cost of which may not be directly linked to the tariff structure determined in the tariff orders. This may be understood more simply as follows: If an EV user is charged merely on the charge basis, the CI provider may not have the incentive to invest in faster/optimum charging technology, as its recoveries are linked to the units of charge supplied to the EV.

On the other hand, by charging on time basis, a CI provider may be able to charge a premium, and use such premium in investing on faster charging technology. Flexible pricing may also enable the CI provider to price the use of CI as per ‘time-of-the-day’, with off-peak charging being cheaper than peak hour charging. It is imperative that the CI providers are not forced into choosing one model over the other, and the entry barrier for setting up the charging infrastructure is sufficiently low, subject to traffic management and urban planning constraints. Lower entry barriers will enable appropriate level of competition which should automatically result in balanced pricing, with need for little or no regulatory intervention.

CI expansion obviously needs certain policy decisions on the technical front as well, such as the decision between AC charging stations versus DC charging stations, and managing peak demand and grid stability. These issues will eventually need to be addressed by a combination of technological advances and strengthening of the transmission infrastructure. However, what is indeed required is the necessary flexibility in the regulatory framework to enable technology and market to develop symbiotically. Solutions may, in fact, emerge if the regulations do not pre-judge a solution to be better than the other.

Also Read: India Needs An Electric-Vehicle Policy; Here’s How It Can Go About It

Did Infrastructure Failure Cost Karnataka Coast Dearly?

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Snapshot
  • Rains have played havoc on the Karnataka coast, but much of the damage in cities like Mangaluru could have been averted if there was sound infrastructure in place and the authorities were better prepared.

Karnataka’s coast has been constantly in the news this summer. And the reason is, the city has witnessed a couple of things for the first time in decades. While a fortnight ago it was the saffron wave in the state assembly election, the full moon saw Mangaluru under deluge. For the first time in three decades, the city witnessed flooding that left the future ‘smart city’ paralysed.

Swarajya spoke to those affected by the floods, those who helped in rescue efforts, the authorities, as well as those in charge of planning the city’s infrastructure. Mangaluru seems to have failed in infrastructure building and preparedness.

The twin districts of Dakshina Kannada and Udupi witnessed incessant rain for over 48 hours early this week. But that is no news. The coastal districts witness incessant rains every year, with the monsoon lasting for over five months, from mid-May to October. But this time it was the combined impact of the cyclone Mekunu and the early onset of the monsoon that left citizens puzzled as to why the authorities didn’t see what everyone else in the city did.

The authorities cannot claim that they were prepared as the floods were a clear indication that not much attention was paid to the drainage system that would send the rain water to the sea.

The storm water drains were over-flowing. The roadside drains were absent on most roads that were concretised in the past five years. In many areas, the roadside drains did exist, but construction work on them had gone on to a point before it was abandoned mid-way.

Two lives were lost in landslips, five houses collapsed, 43 houses damaged, of which 12 are beyond repair, hundreds of coconut palms uprooted, over a 1,000 heads of livestock missing and presumed perished, and around 1,200 vehicles submerged. The total loss is estimated to be in excess of Rs 100 crore, according to the preliminary estimation carried out by the newly elected members of the legislative assembly U T Khader (Mangaluru), Dr Bharat Shetty Y (Mangaluru North), Vedavyas Kamath (Mangaluru South), and Member of Parliament Nalin Kumar Kateel.

“We have jointly demanded from the government a sum of Rs 100 crore immediately and, depending upon the further losses being estimated, we may ask for a similar amount later. The damage has been extensive to public property. Many shops where many people were eking out a livelihood have been flooded, mobile phone shops, grocery shops, tailoring shops, petty shops, cobblers, electronic goods shops, and over 600 houses were flooded in all the three constituencies,” Kateel said.

The city’s central section in Mangaluru South constituency suffered great damage as huge stretches of road have been concretised without leaving any scope for rainwater drainage. Main roads like the M G Road, which has high-rise buildings on both sides, had drains that connected to the stormwater drain earlier, which have all disappeared or exist only in sections serving no purpose.

“I am not happy at the estimation of the district administration, which has put the losses at Rs 20 crore. I have told my party workers to visit every area and extend help to the people who have incurred property losses,” Kamath said.

But why did a future smart city drown?

What led to the deluge despite there being several signs and weather reports predicting heavy rains because of the cyclone?

“We were preparing for the monsoon based on its date of arrival, but rains arrived three days earlier. According to the MET (Meteorological Department) office, the monsoon arrived three days earlier due to the depression in the Arabian sea. The first wave of monsoon arrived in full swing, resulting in this deluge,” says Deputy Commissioner of Dakshina Kannada Shashikanth Senthil.

But Mangaluru is no stranger to early monsoons. Mango showers generally grace the coast by mid-May and hence, unpreparedness is not understandable. And the chief of city planning agrees. “There was a cyclone, but that can’t be an excuse for the lapses in the infrastructure work in Mangalore,” says architect and Mangaluru City Corporation consultant Dharmaraj.

In the rush to concretise the roads, the city corporation did not take up stormwater drains, culverts, and underground water channeling; all the storm water is now flowing on the roads and settling in the low lying areas. “Our house in Kodialguthu area behind the Empire Mall was worst affected. We were lucky that the fire brigade was equipped with boats and we were taken out safely from the neck-deep water. But most of the residents in this area have lost their electronics, household goods, and many valuables,” said Purushottam, a resident of Kodialguthu.

Stormwater drains, sewage water

“Two huge buildings have come up in this area [Kottara cross]. They have blocked the natural stormwater drains with a small outlet at the spot where the drain entered their property, resulting in a blockage. This is a place where three stormwater drains come together to form one big drain that opens into the Bangra Kulur main drain,” said Jagannath, a resident of Kottara cross. Wetlands within a 2km distance from the sea have all been occupied to host large buildings. Wetlands hold water in the monsoons and release it in the summers. But most of these wetlands are now seen sporting large structures, some of which are also sinking, owing to the mushy nature of the soil, and have thereby clogged the natural facility for rainwater drainage.

In many areas, the flood has led to sewage water mixing with the water in the wells and other water sources. The district administration has asked people in such areas not to use the water and assured supply of water to them until the problem has been sorted.

“My salon was dunked in 5m of water. Since the stormwater drains are also used as open sewage drains, my shop was drowned in the sewage mixed with storm water, rendering my furniture and all that was in my shop unusable. I have made makeshift arrangements to open the salon with available resources,” said Keshav Bangera, who runs a salon.

In many areas, sewage mixed with storm water had entered homes. People alleged that the Mangalore City Corporation allows stormwater drains to carry even sewage water, as many areas in the city, particularly in the low-lying areas, are not connected to the sewage pipeline network.

But why has Mangaluru lacked the smarts with respect to its infrastructure? It boils down to planning, or rather, the lack of it.

Drains have been constructed on the basis of what the architects ‘deem fit’, for they, in their defence, say there is no data available for the same.

Lack of topographic data

Mangaluru is called the city of seven hills. But sadly, one cannot spot many hills today as some of them have been razed to the ground. And that, explains a member of the the Association of Consulting Civil Engineers (ACCE), is partly a factor for the inadequate infrastructure planning in the city.

In the past, the water from uphill regions in Mangaluru would flow through the natural stormwater drains into the fields, which would act like a catchment area, hold the water, and then drain it into the sea. Unlike the smaller drains, the fields can accommodate a greater amount of water. During the course of urbanisation though, the hills have made way for construction.

“The entire topography of the region has changed. Which means the natural course of water is no longer the same. But whatever topography data we have is more than hundred years old. The contour map and the topography data available is from around 1890, which is more than hundred years ago, based on the surveys done in the British era. Despite repeated attempts to get various agencies to try and get a survey done, we have not been able to ensure latest data on the topography, nor furbish a contour mapping of the city,” the ACCE member explained.

So, though the city has grown a hundredfold in the last 100 years, the infrastructure planning has to rely on data which is over a century old.

Politics and lack of cooperation

Lack of funds as well as diversion of it to different projects have resulted in areas having roads but no drains. Local politics and lack of cooperation have also seen drainage work being left incomplete. People are unwilling to let go of small portions of their land to accommodate drains despite being compensated. Some have even gone to court stalling the work in progress. The result is that drains have been made only in certain areas and not connected to the large drains. Local corporators compete for funds to be allocated to their areas too. Which is why there are areas that either have roads or drains but rarely both.

But all is not lost, believe the locals who have seen individuals and organisations take charge of the situation and rescue people in flood-affected areas, providing food and shelter. “The changed political atmosphere in the region is surely a ray of hope as most of the leaders who have been elected are young faces who will want to prove their mettle,” say the locals. One sure hopes so.

Indian Expressways Gather Momentum As Two Big Ticket Projects Get Off Ground

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India’s expressway scene gathered more momentum with two major expressway projects – the Mumbai-Nagpur Maharashtra Samruddhi Mahamarg and the Lucknow-Ghazipur Purvachal Expressway – going one step closer to fruition.

The Maharashtra State Road Development Corporation (MSRDC) has awarded contracts for 13 of the total 16 packages of the 700 km-long Samrudhhi Corridor. The remaining three packages will be awarded once land acquisition is complete and environmental clearance is received. Around 82 per cent of the 9,000 hectares of land has been acquired. Once complete, the expressway will cut down the travel time from Mumbai to Aurangabad to four hours and Mumbai to Nagpur to eight hours.

The Uttar Pradesh government had last week awarded seven contracts for the 350 km-long Purvachal Expressway. Prime Minister Narendra Modi is expected to lay the foundation stone for the project at Azamgarh next month. The total cost of the project is Rs 11,800 crore that includes Rs 6,500 crore to acquire around 4,332 hectares of land. A 3 km stretch near Kudebhar in Sultanpur will be developed as a road runway or highway strip for emergency take-offs and landings by the air force.

Once complete, the Purvachal Expressway will be India’s second longest expressway while the Samrudhhi Corridor will be the longest. The former is connected to the National Capital at Delhi through the 302 km Agra-Lucknow Expressway and the 165 km Yamuna Expressway.

Construction On India’s Longest Expressway – Maharashtra Samruddhi Mahamarg – To Begin Soon

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The Maharashtra State Road Development Corporation (MSRDC) on Wednesday (23 May) shortlisted 18 contractors for the 13 phases involved in the construction of the Maharashtra Samruddhi Corridor connecting the state’s capital city of Mumbai to its winter capital in Nagpur, thus paving way for the Rs 46,000 crore project to enter its final pre-construction stage.

Work on the 800 km-long expressway that will feature four lanes in each direction will begin once the monsoons are over with developers mobilising machinery and labour by June-end.

The entire expressway project is being planned in 16 packages of which bidding for 13 has taken place. Bidding for the balance three sections will take place once environmental clearance is received for forest areas in the Nashik and Vidharba regions. Financial bids have been opened and will be evaluated in the coming week. The MSRDC is looking at issuing work orders by June.

Around 82 per cent of the land has been acquired for the project that will pass through ten districts, 26 taluks, and 392 villages apart from connecting over 14 major tourist destinations. It is also slated to reduce the travel time between the two cities from 18 hours to eight hours. Toll on the road is slated to be around Rs 800.

Also Read: The Economics Of Mumbai-Nagpur Expressway

Namma Metro May Save Rs 65 Lakh A Month; Now Is The Time To Consolidate And Make Things Better

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Snapshot
  • The stage is set for Namma Metro to scale new heights, and one hopes that the corporation does not miss out on the opportunities that lie ahead.

Giving the Bangalore Metro Rail Corporation Limited (BMRCL) a reason to cheer about, the Karnataka Electricity Regulatory Commission (KERC) recently reduced the rate of electricity supplied to the Namma Metro by Re 1 per unit. The BMRCL will now get electricity at Rs 5 per unit instead of Rs 6, and this rate will be applicable retrospectively, from 1 April of this year. KERC also reduced the cost for suburban trains by 40 paise per unit.

BMRCL expects to save at least Rs 65 lakh a month for 65 lakh units of electricity consumed. It has, however, said that there is no proposal to reduce fares for commuters currently. However, it can pass on the benefits to consumers indirectly.

As patronage continues to increase and the BMRCL boosts the frequency of services, the electricity consumption will certainly go up. Along with this, the BMRCL’s plans to increase the train length from three cars to six will mean more energy consumption.

The corporation saw its losses go down from Rs 60 crore in 2015-16 to Rs 41 crore in 2016-17. While it is not clear whether the discounted power is used only for powering trains or for overall infrastructure including the stations, two things are clear: BMRCL must look at alternative sources for power and it must capitalise on its assets in order to generate more non-fare revenue.

Going Green With Solar

Other major cities like Mumbai and Chennai have gone ahead with setting up solar panels atop metro stations to handle electricity requirements for non-train purposes. The 11km-long Line 1 of the Mumbai Metro has solar panels atop all 12 stations and its depot to generate 2.29 MW of power, taking care of 30 per cent of the power requirements at stations. Similarly, the Chennai Metro has set up solar units that would generate 6 MW at all its elevated stations and administrative block. The BMRCL, meanwhile, is still toying with the idea of going solar.

While the cost of a setting up solar power units could be nearly Rs 5 crore per MW. Generating 1 MW would help in reducing the electricity bill by 1,000 units of power. The BMRCL can then choose to either fund the initiative by generating more non-fare revenue or partnering with private players to allow them to monetise real estate within the stations.

Capitalising On Assets

The more important thing that BMRCL must be looking at is to capitalise on its assets. The corporation’s biggest assets are the real estate that it holds as well as the footfalls it witnesses. With 3.5 lakh passengers using the service every day, it can very well follow what Mumbai and Gurgaon did in terms of exploiting its assets.

The Rapid Metro Rail in Gurgaon set a benchmark back in 2013 when it auctioned off station naming rights to interested parties, a move that was successfully emulated by the Delhi Metro and then the Mumbai Metro. Apart from this, space within the stations – at the concourse level and not the platform level – has been leased out to various eateries, cafes, banks for ATMs and more on all of Mumbai’s existing Metro stations. While BMRCL has leased out part of a few stations such as M G Road to cafes and parted some land near the Nagasandra station to furniture retailer IKEA, it needs to go the full distance and lease out space at all its stations. The HUDA City Centre station on Delhi’s Yellow Line is a mall in itself. Adding more retail outlets will certainly aid in increasing patronage on the metro itself.

However, the most important aspect of commercialising assets is through advertising by taking a feather out of Mumbai’s cap once again. The Mumbai Metro currently features advertisements on the pillars of the metro, at stations on platforms, between the tracks, on the outer body of trains – also seen on the Gurgaon and Chennai metro – and ads through the public announcement system inside the train. Mumbai Metro One Private Limited expects more than 40 per cent of its revenue to come from advertising and retail spaces, something that the BMRCL must certainly emulate.

The Impact On Fares

While many have demanded that the BMRCL reduce fares, it’s actually a no-brainer as why that shouldn’t happen. The 24-km journey from Nagasandra to Yelachenahalli on the Green line costs Rs 60 (for token users, it costs Rs 51 for smart card users). In comparison, the 25-km journey from Kempegowda Bus Station to Bommasandra on Hosur Road costs Rs 95 on an air-conditioned bus operated by the Bangalore Metropolitan Transport Corporation. It must be noted that metro fares should be compared to air-conditioned bus fares since metro also offers air-conditioned services.

By keeping fares constant for the time being, the BMRCL can start earning more revenue which can then be utilised for future investments such as better amenities at stations and on trains as well as staff salaries. While the revenue is certainly not going to be in line to fund future expansions, it can help offset the cost by a small margin, which in turn would be akin to passing on the benefits to the commuter.

In the short term, keeping fares as they are will help insulate commuters from the effects of drastic fare hikes. When the Delhi Metro Rail Corporation showed that its long-delayed fare hike resulted in ridership dipping significantly, it came as a wake-up call to other operators. While periodic fare revisions are needed to allow the system to function efficiently and prevent shock due to drastic hikes, offsetting the fare hike with non-fare revenue can help insulate commuters from the hike itself. The BMRCL – while it does need to revise fares on a real-time basis – can keep the margin of revision low enough for commuters to not be affected much.

The time is ripe for Namma Metro to scale new heights, and one hopes that the corporation does not miss out on the opportunities that lie ahead.

Also read: How Emulating The Jio Model Could Put India’s Public Transport System In The Fast Lane