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123 Year Old Udvada Railway Station To Be Redeveloped As A Pilgrimage Destination For Parsis

By
Indian Infra Hub Staff
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0

A 123 year old railway station serving Udvada in the Valsad district of Gujarat is all set to get a makeover. The Udvada station – that acts as a gateway to the Atash Behram or Iranshah, among the oldest and holiest fire temples for Zoroastrians in India – will be remodeled by Western Railways (WR) to become a “pilgrimage destination station” reports Rajendra Aklekar for Mid-Day.

The railway station was originally built in 1895 and owing to its location witnesses thousands of pilgrims visiting the agiary. However, it has been unable to handle the load, leading to several accidents. In response to this, WR had sanctioned the construction of a foot-overbridge (FOB) for passengers and upgraded the station’s platforms.

However, a new plan from the Railways seeks to change the face of the station altogether. WR has called for tenders to remodel the station with a Parsi heritage design featuring bricks, teak wood doors and and Mangalore tiles. Other proposals include murals on the walls and heritage benches and domes along with a slew of upgrades for regular facilities including toilets, drinking water and more.

Udvada is an important station and we have worked out a plan to completely revamp and convert it into a pilgrimage destination with enhanced facilities and infra. The station will get a makeover over the next year.

Western Railways’ Public Relations Officer Ravinder Bhakar

Designing Energy-Efficient Cities For A Global Urban Future

By
Indian Infra Hub Staff
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0
Snapshot
  • The world moves rapidly towards greater urbanisation over the next few decades. And the backbone of any urban ecosystem is energy.The key question then is, how do we go about building energy-efficient cities? Here’s a possible path.

As our economic activities have come to be concentrated in our cities, so has our energy consumption. According to a World Urbanisation Prospects study by the United Nations, even though cities constitute only 2 per cent of land surface, they are home to over 54 per cent of the population. The report also projects that by 2050, two-thirds of the population will be living in cities and India, Nigeria and China will register the highest population growth rates.

The backbone of any urban ecosystem is energy; it is essential for all commercial and residential purposes, as well as for services such as transport and communication.

Several factors control the energy demand for a city. The rate of expansion and type of functions that a city performs play a significant role. Energy use would differ according to the spatial design of the city, type and location of economic centres, the transport system (especially availability of public transport), climate and lifestyle.

A relation between energy consumption and gross domestic product (GDP) growth can also be seen. Gaining access to energy sources boosts GDP growth and higher GDP in turn drives energy demand. This forms a vicious cycle. In 2013, urban areas accounted for 64 per cent of total energy demand. As the world economy is expected to double over the next 20 years, the demand will only increase further. However, with improving sensitivity about our planet’s limited fossil reserves and the alarming rate of increase of global greenhouse gases, there is a shift away from the power-intensive growth model and towards a more sustainable one. This article looks at some particular instances of sustainable energy practice in cities. Before charting out solutions, however, let us look at some major issues with energy in cities.

1. Affordability

Most cities, while trying to meet their energy requirements, face the challenge of providing energy for all. In addition, developing nations also face high supply costs on petroleum products due to inadequacies in the supply chain. This limits the ability of such governments to provide basic goods and services to people (especially the poor). Subsides are often used as a political tool, but they affect the financial health of generators and distributors. The only sustainable way forward is a shift away from fossil fuels and towards cleaner ones.

2. Access

Cities around the world are struggling to provide clean, affordable and reliable energy to all. According to a World Bank study, 132 million people in urban areas lack access to energy and 482 million people lack clean fuel, the latter contributing to indoor air pollution. Setting up infrastructure to meet this demand can often be time-consuming and capital-intensive.

3. Air quality

Combustion of fossil fuels releases a number of harmful gases such as carbon dioxide, mono oxides of sulphur and nitrogen, and particulate matter, impacting human health and environment adversely. Our policy makers therefore also have to focus on increasing energy efficiency by scaling up renewable resources, adopting pollution control measures and innovations in capture and storage of carbon.

Now, here’s a road map for building energy-efficient, sustainable cities:

1. Lowering consumption

Every unit of power saved is equal to two units of power generated. Thus, one important step towards sustainability can be reducing the total power consumption on the part of end users. This can be done either by developing appliances that use less power or by cutting down on activities (such as driving) that are energy-intensive.

2. Energy-efficient transport

Cities need to focus on people and not vehicles, and so there is a need to develop efficient transport systems. To move away from fossil fuels, city planners and policy makers need to move towards non-motorised modes of transport such as walking and cycling as well as mass transits, to optimise fuel use.

For example, with its dedicated cycle lane, Rotterdam now has more cycles than people. Barcelona too has developed a system of bicycle sharing with over 400 stations spread across the city, especially near public transport stations, to provide efficient last-mile connectivity.

3. Energy-efficient buildings

Large buildings are the largest consumers of energy, but they are also the biggest opportunities for saving energy. Since a large portion of the energy is consumed in heating and cooling of buildings, building design can be altered to tackle this problem. Buildings should provide adequate day lighting, ventilation and passive heating and cooling, green roofs, solar thermal water heating and energy-efficient appliances and lighting.

An example of an energy-efficient building can be found in New Delhi at Indira Paryavaran Bhawan, the office building of the Ministry of Environment and Forests. It is a “net zero” building which consumes 70 per cent less energy than a conventional building, and has its own solar plant, water recycling facility and geothermal heat exchange system.

4. Urban planning

As cities expand horizontally, their energy consumption also increases. More energy becomes necessary for transport as well as new infrastructure and services. Compact and dense cities, on the other hand, require less energy. Planned distribution of residential and commercial services along with mixed land use and mass transit corridors reduce dependency on private vehicles and, consequently, energy consumption.

5. Improving renewable energy

While the renewable energy market is expanding, it can receive further impetus from government policy initiatives, cost reduction and better energy output. One of the major shortcomings of energy sources like solar and wind is that they don’t offer continuous supply, and they need to be supplemented with traditional sources such as coal to overcome intermittency. Renewables offer opportunities for decentralised power generation and can generate income at the local level.

6. Designing circular energy systems

A circular energy system transforms unutilised energy into a source of energy for other functions. The system can manifest itself as “co-generation” – simultaneous production of two types of energy from the same source. Such a circular system can help conserve energy especially in large establishments such as malls or factories. For example, Rotterdam connects higher temperature effluents from industries and its waste to the city’s central heating system to be used for heating purposes for residential areas.

7. Efficient transmission

India loses around 20 per cent of its total power generated to inefficiencies of the grid. Introduction of smart grids along with smart metres and appliances can help minimise such losses and optimise power delivery.

There is a need for an integrated and comprehensive approach to conserve and optimise energy in urban areas. As energy use is scattered and multi-sectoral, so has to be the policy concerning it. So an ideal energy policy for a city would involve planning for transport, infrastructure and design of buildings. This has to be further augmented through a sustainable shift towards renewables and sensitisation of consumers to conserve energy.

Ekta is a staff writer at Swarajya.

UPA Land Act Is Creating 20,000 Rural Crorepatis A Year – And Making Infrastructure Less Viable

By
Indian Infra Hub Staff
-
0
Snapshot
  • It is good that farmers and landowners are finally getting a good deal from infrastructure development.However, the balance is now tilting in favour of creating thousands of rural crorepatis at the cost of taxpayers and citizens.

Every year, the National Highways Authority of India (NHAI) and other highway projects end up creating some 20,000 crorepatis, give or take a few. In one expressway project (Delhi-Jaipur), land prices have gone so high that anyone parting with one hectare of land gets to be a dollar millionaire. The average price per hectare went as high as Rs 6.43 crore in this project.

The United Progressive Alliance (UPA)-era Land Acquisition Act, which mandates the payment of upto four times the market price for land compulsorily acquired, has had two major implications: on the one hand, land acquisition has become easier, for who does not want to become a crorepati or dollar millionaire? On the other hand, many infrastructure projects are becoming unviable, more so since some states are charging hefty commissions from NHAI for acquiring land on its behalf. Payback periods will now stretch to many more decades compared to the past.

With per hectare prices hitting Rs 2.5 crore or even more for highway projects, most farmers are happy to sell.

According to a report in The Financial Express, land acquisition costs have soared from around nine per cent of total project costs in 2009 to 16 per cent in 2012 and a whopping 37-55 per cent now, with the higher end being reported in the New Delhi-Jaipur Expressway, with each hectare costing a staggering Rs 6.43 crore.

Put another way, anyone selling one acre of land for this expressway will be getting Rs 2.6 crore. Even where per hectare costs are lower at upto Rs 2.5 crore, each acre will fetch Rs 1 crore. In the Mumbai-Nagpur Super Communication Expressway, which is being overseen by the Maharashtra State Road Development Corporation, land is being acquired at five times the market value, which means average acquisitions costs even in rural areas are upwards of Rs 2.5 crore.

Effectively, the highway building programme is creating crorepatis out of ordinary farmers, who are lucky enough to own the land to be acquired for building highways. Since roughly one hectare is needed for building one kilometre of national highway, and one hectare translates to 2.47 acres, it means every one km of national highways is helping create two-and-a-half crorepatis.

While this suggests that at least some farmers and landowners are getting an easy pathway out of unviable agriculture, there is some bad news. When land costs are going to be more than half of overall project costs, it essentially means these projects will be unviable for decades. It also means that highways can no longer be financed through public-private partnerships, since no private player will want to invest so much only in land acquisition.

There are also other serious implications. When land is purchased at such high prices, it follows that the land immediately next to the highway will also zoom in value. The owners of these lands will be making huge gains for doing almost nothing. More crorepatis are being created.

Vinayak Chatterjee, co-founder and chairman of Feedback Infra, an infrastructure services and consulting company, told this writer in an informal conversation that one way to raise finances for future land acquisitions is to charge land development fees from the unintended beneficiaries of current highway development.

But there is another point worth checking: is most of this acquisition bounty going to the original landowner or middlemen and land aggregators? This can easily be found out by checking how many times the land acquired changed hands in the three years before final acquisition by NHAI or other agencies. Since agricultural land can only be sold to other agriculturists in many parts of the country, aggregators with prior knowledge of highway plans will be able to use this inside knowledge to make a killing.

Some changes are clearly warranted.

First, the Land Acquisition Act needs tweaking for several reasons. Given the high prices already being paid for acquisition, paying four times market prices hardly makes sense when the base on which this multiple is calculated has gone up.

Second, the real issue is about making sure that farmers are compensated fairly, and not overpaid. But this cannot be ensured if land is finally sold by aggregators, and not by the original owners. Aggregators and land sharks gain an upper hand since they have better knowledge of when the land use is going to change from farming to multi-use, including for building roads or urban housing. The only way to ensure that the original farmer gains is to make all land multi-use, but after identifying zones where there cannot be any development, or where the land which must always remain agricultural land. Once land becomes multi-use, no farmer will get a bad price since he need not sell it to another farmer. He can sell it to builders or NHAI or anybody.

Third, given that land prices are going to remain high, the only way to bring effective prices down is by allowing cities to build more vertically, which brings down average land prices. Another option is to make an inventory of all land that is already with government – with the railways, defence, public sector companies and state government entities. Once we know the total land available and its location, it can be leased out to builders, infrastructure companies, and others for development. This will benefit both the companies that own the land, and ease the pressure on land prices.

In 2016-17, 8,200 km of highways were built. If every km of land needs one hectare bought at an average price of Rs 2.5 crore, we have essentially created 20,000 crorepatis in one year, assuming an average land sale of just one acre per household.

It is good that farmers and landowners are finally getting a good deal from infrastructure development. However, the balance is now tilting in favour of creating thousands of rural crorepatis at the cost of taxpayers and citizens.

(This article was partly published first in DB Post)

Jagannathan is Editorial Director, Swarajya. He tweets at @TheJaggi.

UPA Land Act Is Creating 20,000 Rural Crorepatis A Year – And Making Infrastructure Less Viable

By
Indian Infra Hub Staff
-
0

Snapshot
It is good that farmers and landowners are finally getting a good deal from infrastructure development.

However, the balance is now tilting in favour of creating thousands of rural crorepatis at the cost of taxpayers and citizens.

Every year, the National Highways Authority of India (NHAI) and other highway projects end up creating some 20,000 crorepatis, give or take a few. In one expressway project (Delhi-Jaipur), land prices have gone so high that anyone parting with one hectare of land gets to be a dollar millionaire. The average price per hectare went as high as Rs 6.43 crore in this project.

The United Progressive Alliance (UPA)-era Land Acquisition Act, which mandates the payment of upto four times the market price for land compulsorily acquired, has had two major implications: on the one hand, land acquisition has become easier, for who does not want to become a crorepati or dollar millionaire? On the other hand, many infrastructure projects are becoming unviable, more so since some states are charging hefty commissions from NHAI for acquiring land on its behalf. Payback periods will now stretch to many more decades compared to the past.

With per hectare prices hitting Rs 2.5 crore or even more for highway projects, most farmers are happy to sell.

According to a report in The Financial Express, land acquisition costs have soared from around nine per cent of total project costs in 2009 to 16 per cent in 2012 and a whopping 37-55 per cent now, with the higher end being reported in the New Delhi-Jaipur Expressway, with each hectare costing a staggering Rs 6.43 crore.

Put another way, anyone selling one acre of land for this expressway will be getting Rs 2.6 crore. Even where per hectare costs are lower at upto Rs 2.5 crore, each acre will fetch Rs 1 crore. In the Mumbai-Nagpur Super Communication Expressway, which is being overseen by the Maharashtra State Road Development Corporation, land is being acquired at five times the market value, which means average acquisitions costs even in rural areas are upwards of Rs 2.5 crore.

Effectively, the highway building programme is creating crorepatis out of ordinary farmers, who are lucky enough to own the land to be acquired for building highways. Since roughly one hectare is needed for building one kilometre of national highway, and one hectare translates to 2.47 acres, it means every one km of national highways is helping create two-and-a-half crorepatis.

While this suggests that at least some farmers and landowners are getting an easy pathway out of unviable agriculture, there is some bad news. When land costs are going to be more than half of overall project costs, it essentially means these projects will be unviable for decades. It also means that highways can no longer be financed through public-private partnerships, since no private player will want to invest so much only in land acquisition.

There are also other serious implications. When land is purchased at such high prices, it follows that the land immediately next to the highway will also zoom in value. The owners of these lands will be making huge gains for doing almost nothing. More crorepatis are being created.

Vinayak Chatterjee, co-founder and chairman of Feedback Infra, an infrastructure services and consulting company, told this writer in an informal conversation that one way to raise finances for future land acquisitions is to charge land development fees from the unintended beneficiaries of current highway development.

But there is another point worth checking: is most of this acquisition bounty going to the original landowner or middlemen and land aggregators? This can easily be found out by checking how many times the land acquired changed hands in the three years before final acquisition by NHAI or other agencies. Since agricultural land can only be sold to other agriculturists in many parts of the country, aggregators with prior knowledge of highway plans will be able to use this inside knowledge to make a killing.

Some changes are clearly warranted.

First, the Land Acquisition Act needs tweaking for several reasons. Given the high prices already being paid for acquisition, paying four times market prices hardly makes sense when the base on which this multiple is calculated has gone up.

Second, the real issue is about making sure that farmers are compensated fairly, and not overpaid. But this cannot be ensured if land is finally sold by aggregators, and not by the original owners. Aggregators and land sharks gain an upper hand since they have better knowledge of when the land use is going to change from farming to multi-use, including for building roads or urban housing. The only way to ensure that the original farmer gains is to make all land multi-use, but after identifying zones where there cannot be any development, or where the land which must always remain agricultural land. Once land becomes multi-use, no farmer will get a bad price since he need not sell it to another farmer. He can sell it to builders or NHAI or anybody.

Third, given that land prices are going to remain high, the only way to bring effective prices down is by allowing cities to build more vertically, which brings down average land prices. Another option is to make an inventory of all land that is already with government – with the railways, defence, public sector companies and state government entities. Once we know the total land available and its location, it can be leased out to builders, infrastructure companies, and others for development. This will benefit both the companies that own the land, and ease the pressure on land prices.

In 2016-17, 8,200 km of highways were built. If every km of land needs one hectare bought at an average price of Rs 2.5 crore, we have essentially created 20,000 crorepatis in one year, assuming an average land sale of just one acre per household.

It is good that farmers and landowners are finally getting a good deal from infrastructure development. However, the balance is now tilting in favour of creating thousands of rural crorepatis at the cost of taxpayers and citizens.

(This article was partly published first in DB Post)

Jagannathan is Editorial Director, Swarajya. He tweets at @TheJaggi.

How RCom Assets Acquisition Will Give Jio A Significant Edge In Its Rural Coverage And 4G Offerings

By
Indian Infra Hub Staff
-
0
Snapshot
  • Getting ownership of tower assets would also be crucial for Jio to expand the 4G footprint and take on rivals.

With Reliance Jio Infocomm agreeing to buy wireless assets like spectrum, towers and optic fibre from Reliance Communications (RCom), a long telecom chapter in the history of Reliance Group seems to have closed. RCom was started by the older Ambani sibling in the undivided Reliance Group. But in the subsequent, bitter split of the group businesses in 2003, it went to the younger Ambani. Now that RCom is getting back to the Reliance Industries’ fold, not only will Mukesh Ambani gain valuable assets, he will also have one less competitor to contend with.

That the end of RCom was coming was evident for the last many months, as it struggled with insurmountable debt and dwindling fortunes. The loans on its books totalled about Rs 45,000 crore and it was already under a strategic debt restructuring plan where some deadlines for creditors had been breached.

This report quotes analysts to say that the debt on RCom’s books had nearly doubled since 2009-10. Then earlier this year, RCom announced plans to shut down its 2G network across all circles, which meant substantial erosion in its subscriber base. It could not continue to run 2G services due to high costs and also the upcoming expiry of spectrum needed for 2G – spectrum in the 800 mhz and 2100 mhz bands. The precarious financial position of RCom was further exacerbated with the entry of Jio in September last year but anyway, by then, RCom’s share of total industry subscribers had almost halved to 8.3 per cent over six years.

Jio came with free voice calling, fast data speeds and freebies – it shook up every player in India’s telecom market, not just RCom. While other incumbents then went for accelerated mergers and acquisitions to cut costs and consolidate spectrum holdings, RCom’s proposed merger with Aircel was called off. And things continued to spiral out of control, with creditors lining up at RCom’s door. With the announcement of a definitive agreement, it could mean anywhere between Rs 20,000-25,000 crore debt is off RCom’s books, though neither company has announced the financial details of this transaction. Overall, RCom has said it will reduce debt to mere Rs 6,000 crore through this and other measures under the approved strategic debt restructuring plan.

As for Jio, its very arrival in the market in September 2016 was a game changer, accelerating industry consolidation. Brokerage firm Indian Ratings & Research said in a note to clients recently that the structure of India’s telecom industry is being redrawn to oligopolistic from large number of operators earlier, as smaller, unprofitable telcos exit. “Over the last one year, smaller telcos lost 38 million subscribers on an aggregate basis, which has challenged their business continuity. Most of the smaller telcos have sold business at rock-bottom valuations and even need to restructure their debt. Hastened consolidation has benefited larger telcos… large telcos have (also) benefited from the acquisition of spectrum and telecom assets at lucrative prices, which has in turn has strengthened their business model.”

Most notable was the merger between Idea Cellular and Vodafone India, the number two and three ranked operators in India. Post the merger, the combined entity is likely to be the largest telecom operator with 34 per cent subscriber share and 43 per cent revenue market share. Several smaller operators have either scaled down operations or exited the business completely, including Bharti Airtel’s acquisition of Telenor, Tikona and Videocon’s spectrum and the spectrum trading-sharing arrangement between RCom and Reliance Jio (signed before the latest announcement). Bharti Airtel has also subsequently acquired Tata Teleservices’ mobile business.

With the RCom assets’ buy, Jio is expected to get significant and further leverage. First, it will get ownership of RCom’s spectrum holding in the precious 800 mhz band, which stands at 101.75 Mhz. In seven telecom circles across the country, this spectrum is valid until 2033. So since RCom holds this spectrum for a long validity period, Jio will enjoy the acquisition without fear of renewal costs for at least a decade and more. Jio’s own holdings in these circles are valid only until 2021. But brokerage Jefferies said in a note to clients that the timing of completion of the Jio-RCom deal is uncertain, deal value is unknown. “But unless Reliance pays much less than the Rs 240-290 billion, we estimate as their fair value, upside may be limited, especially as it already has access to the towers/fibre at favourable terms.”

The analysts are referring to a spectrum sharing deal, which has been operational between the two companies since last year. They go on to say that Jio has emerged as the successful bidder for RCom’s 122.4 MHz 4G spectrum, 43k towers, 178k RKM of OFC (fibre) and 248 MCNs (nodes). RCom expects the deal to conclude in the first quarter of next fiscal “but it has slipped on such timelines before.”

“It could (slip) yet again with the deal contingent, among others, on approvals from the government, regulators, lenders and maybe even some creditors. It may be a complex process; it isn’t always that Reliance engages seven advisors to buy assets it is intimately familiar with,” they added.

Also, by gaining about 43,000 towers as part of this deal, Jio gains a significant edge in its rural coverage and 4G offerings. Remember, RCom had a significant play in the hinterland and this would come to the aid of Jio’s rapid expansion in these circles. Getting ownership of tower assets would also be crucial to expand the 4G footprint and take on rivals.

Meanwhile, the Jefferies analysts went on to say that though the deal value is unknown, but “Rs 240-290 billion would be fair, in our view. Spectrum forms the bulk of this at Rs 150 billion based on the last auction prices with towers (Rs 70-90 billion) and OFC (Rs 30-50 billion) making up the rest.”

And this piece speaks of Jio’s grand plans on launching high-speed fibre to the home (FTTH) broadband in more than 30 cities. It is expected to bundle its TV service with FTTH broadband to tap over 100 million TV households across these cities, including Tier II and III. With RCom’s fibre now in its pocket, these ambitions of Jio will also get wings.

Sindhu Bhattacharya is a senior journalist.

Building The Electric Vehicle Infrastructure In India, The PPP Way

By
Indian Infra Hub Staff
-
0
Snapshot
  • The government will want to use the PPP model to attract the much-needed foreign and domestic investment to develop the electric vehicle industry along with building the necessary R&D capabilities in the country.

Electric vehicles (EVs) are making inroads into unknown territories with its wider adoption across the world. While Finland is leading the global charge in adopting EVs, France and Britain have ambitious plans to make a complete shift to EVs by 2040. China’s effort to replace its oil and diesel fleets with EVs is gathering pace. India is slowly but steadily catching up. It is making the right noises now with the government determined to switch over to EVs in a phased manner by 2030.

So, India is set for yet another major disruption as it starts working its way towards an ‘all electric future’ by 2030. It has the potential to not only change the face of the transport sector but also the energy sector. The disruptions would impact the Indian economy in more than one way. Supported by a massive $454 million funding from the Global Environment Facility (GEF), India’s Energy Efficiency Services Limited (EESL) is investing in cutting-edge technology to develop EVs, besides fast-charging and battery storage infrastructure. EESL, as a nodal agency of the government, has planned a procurement of 20,000 EVs.

While vehicle manufacturing companies are gearing up for supplying these units to EESL, the process of setting up charging infrastructure is also gaining momentum. Public sector establishments such as NTPC Limited and the Power Grid Corporation of India Limited as well as many other private players such as the Hero Group are planning to set up the required infrastructure.

Following the successful implementation of the light-emitting diode (LED) programme in the country, which witnessed LED prices drop from Rs 330 per watt to Rs 50 per watt, EESL is now making all the right moves in adopting EVs. It has adopted scalability approach in fleet procurement to drive down the cost and create an ecosystem for EV implementation. Under the first phase, EESL has invited tenders for the supply of 25,000 e-autos and 25,000 e-rickshaws, which will then be sold to various aggregators.

The other ways for faster adoption of such vehicles include roping in cab aggregators to switch to EVs. Mahindra and Mahindra recently tied up with Uber for supplying EVs to its fleet by providing lucrative incentives and soft loans for procurement. The deal is envisaged to help driver partners with Uber to get Mahindra’s electric cars at competitive prices with attractive financing and insurance premiums and maintenance packages. Similarly, Tata Motors has partnered with Ola to provide them with EVs. The central government already incentivises electric vehicles under the FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) scheme.

While India is taking baby steps to adopt EVs, there are major barriers in terms of operational, commercial and financial aspects to their adoption, coupled with a lack of clear direction from the government in terms of policy guidelines.

Barriers to adoption of EVs

The major barrier to adoption of EVs is the cost factor. The battery cost for an EV comes to around 40-50 per cent of the total capital cost. A standard 35kWh battery could be considered the equivalent of a standard 40-litre fuel tank costing $8,800 or Rs 5.7 lakh in India. The battery cost added to other costs such as taxes and import duties make it a costlier purchase for a common man.

Further, a lack of charging infrastructure across India makes the investment in EVs virtually go waste.

So, while the focus is to push for EV adoption in a big way to customers, the need for the parallel development of a charging infrastructure is paramount for early adoption of EVs in India, which, however, poses a huge challenge. As per NITI Aayog estimates, the changeover to EV would result in a saving of $60 billion in fuel cost, which would in turn help in averting the purchase of 156 million tonnes of oil, along with achieving 1 gigatonne of reduction in carbon emission. The faster adoption will no doubt help in more renewable energy coming to stream with cheaper supply of clean power along with a rise in coverage by the transmission and distribution sector. Development of associated charging infrastructure will indirectly lead to an expansion of distribution and transmission infrastructure in the country, which would inadvertently lead to better revenue prospects for the ailing sector.

The government has a plethora of options to choose from while adopting EVs in a bigger way. It can start with phase-wise implementation of the scheme with first adoption in the public transport system in the cities. Major cities have their own public transport fleets and have dedicated depots for parking. The depots can be transformed into charging stations with a bit of redesign and redevelopment. While charging can be done at night, buses can ply throughout the day. For an efficient use of infrastructure, these charging stations can be open to private vehicles, which would double up as a commercial revenue stream for the public transport companies. Further, these stations can be developed on a public-private partnership (PPP) model, attracting competition and private investment into the system without burdening the public exchequer.

There is no battery manufacturing base in India. If India has to import the battery for its charging requirements, the whole effort of adopting EVs would negate the very basic objective of switching over to a new technology. It will also not help in achieving the oil import reduction target of the government. So, for real gain in terms of saving foreign currencies, India should look for manufacturing batteries locally. This would not only help in reducing the overall cost but also help generate employment. Consequently, any step in this direction will help strengthen the government’s “Make in India” initiative.

In the initial phase, the government can handhold the industry to provide the impetus with grant support, providing direct or indirect subsidies and provisioning of Viability Gap Funding (VGF) to the nascent industry. It can also provide a buy-back guarantee for the batteries in a phased and timely manner to provide the industry with visibility for long-term operation and stability. The government can design suitable PPP models to develop indigenous capacity in storage technology. These initiatives, coupled with investment in research and development technology for storage systems, would help in reducing the overall cost of the battery systems, which would drive its adoption faster.

The major outcome of these initiatives would be meeting the domestic demand first and export the surplus, if any. It will help in a establishing world-class manufacturing hub for storage systems/battery in the country and eventually lead to lower the battery cost and improve efficiency. The residual battery may also help in developing an alternate market for storage requirements in e-rickshaws, agriculture pump sets and the telecom sector.

How PPP can help in aggressively pushing the agenda

PPPs can be designed to augment the sector in many ways, starting from the operational aspects to running commercial fleets and developing the storage infrastructure to charging assets for EVs.

– Running the commercial vehicles in the city in PPP model (the operational aspect):

Instead of procuring EVs directly, there can be a PPP model where the investment and operations and maintenance can be transferred to a private party on the basis of the build, own, operate, transfer model, wherein a private party will invest and run the buses for a specific time period with user fees fixed for a base year with an escalation criterion. The rest of the amount can be provided by the government under the VGF scheme.

This is where public transport can actually make a difference. Once they start operating electric vehicles, they can additionally be given the responsibility for setting up charging points for the public. The existing space for city bus parking can be used for commercial purposes, making it a revenue source for municipalities. Multi-level parking structure of municipalities can be converted into charging stations.

Selling advertising rights in commercial city buses for a period of years to private parties can add on a revenue stream for the private operators.

– By creating a manufacturing base for storage systems (manufacturing):

The government can think of establishing large-scale battery-manufacturing base with an off-take guarantee to the manufacturer. Standards can be preset.

It may go for an open international competitive bidding on the basis of lowest VGF as criteria for winning a bid for a specific volume of battery procurement. EESL can be made the nodal agency for procurement of such batteries.

Battery swapping as an option can also be thought of as an alternative revenue source for the private party and they may be given a free hand to establish and carry out such operations.

– By creating the associated infrastructure like charging stations for the city or identified clusters (asset creation):

Charging station criteria can be integrated with the battery manufacturing model development based on the PPP model.

Else, city-wide charging infrastructure can be rolled out in the PPP model. The number of charging poles can be scaled up by clubbing various cities according to their sizes, to make the project commercially viable and to attract serious players.

The number of charging stations and development of parking space can be integrated into the PPP model of development. The land allotted for creating parking spaces can be leased out for a long-term period and handed over to the private party for a longer duration, say 20 to 30 years for commercial exploitation as an add-on revenue stream.

While there are various PPP models that can be worked out to bring in private sector investment and efficiency to the sector, the government may also want to rope in public sector undertakings to set up some additional infrastructure. In this scenario, players like NTPC, Power Grid and major oil companies’ roles cannot be ruled out. The government may think of inviting the oil and gas companies to take a lead and build some of the assets and strategically shift their base from oil and gas to electric. This may be a clear possibility from the government side. Along with this, the government may support the transport sector with a sunset policy for phasing out their petrol and diesel vehicles completely in a phased manner.

The PPP model would definitely be used as a strategic tool by the government to attract the much-needed foreign and domestic investment into the segment along with building the necessary research and development capabilities in the country.

Also Read:

Piyush Goyal’s Push For Electric Vehicles Can Transform Public Transport In India

A Quiet Revolution: Electric Vehicles Strategy Turning The Corner

Radha is a senior fellow in CUTS Institute for Regulation and Competition, New Delhi, a think tank engaged in public policy advocacy, people-first PPP and matters related to competition and regulation. His interests include public-private partnerships, energy sector reforms and sustainable development.

$15.4 Billion Decline In Energy Subsidies: Government Is Now Backing Renewables, Says Report

By
Indian Infra Hub Staff
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0
Snapshot
  • Government is switching focus on subsidies for renewable energy sources though coal subsidies remain stagnant.

India has seen a significant drop in energy subsidies provided by the government between 2014 and 2016.

A new report by the International Institute of Sustainable Development (IISD), the Overseas Development Institute (ODI) and ICF India shows that the total value of energy subsidies from the central government has declined between financial years 2014 and 2016, from Rs 216,408 crore ($35.8 billion) to Rs 133,841 crore ($20.4 billion).

The $15.4 billion decline could be because of India’s reforms to curb wasteful consumption in oil and gas subsidies as well as due to the decrease in global oil price, said the report.

“While the decline is significant, subsidies still favour fossil fuels much more than renewables. This is not well aligned with several government objectives – reducing harmful air pollution and tackling climate change through its nationally determined contribution, both of which require less fossil fuel use, particularly coal, and more renewable,” said IISD associate Vibhuti Garg.

Garg said the government is gradually switching its support to favour renewable – but more could be done.

“With the introduction of the goods and services tax (GST), it isn’t clear how some fossil fuel subsidies will go up or down, and there is still a very incomplete picture of state-level subsidies. To make informed decisions, policy-makers need ongoing transparency on these issues,” said Garg.

The report captures the main trends in energy subsidies in India in the following graph.

In FY2014 oil and gas subsidies, mainly in the consumption sphere, were by far the largest of all energy subsidies in India, at Rs 157,678 crore ($26 billion). In FY2016, oil and gas subsidies amounted to Rs 44,654 crore ($6.8 billion), implying a reduction by almost three quarters, partially due to India’s reforms and partially due to the decrease in the world price for oil.

Subsidies to electricity transmission and distribution (T&D) increased from Rs 40,331 crore ($ 6.7 billion) in FY2014 to Rs 64,896 crore ($9.9 billion) in FY2016, and this grouping became the main recipient of energy subsidies in India.

The total subsidies to coal have remained relatively stable over the reviewed years and amounted to Rs 14,979 crore ($2.3 billion) in FY2016. Subsidies to renewables have significantly increased from Rs 2,607 crore ($431 million) in FY2014 to Rs 9,310 crore ($1.4 billion) in FY2016. Overall, the scale of support to fossil fuels (coal, oil and gas) has remained more significant than subsidies to renewables through the entire review period.

The IISD, ODI and ICF India report reveals that India has been steadily increasing central government subsidies on electricity transmission and distribution, while cutting down subsidies on oil and gas over the last three years. Central government subsidies for electricity transmission and distribution increased from Rs 40,331 crore ($6.7 billion) in 2014 to Rs 64,896 crore ($9.9 billion). In 2016, transmission and distribution became the main recipient of energy subsidies in India.

These sums do not include the even larger volume of state government subsidies that have been provided through the government’s UDAY programme, which provided an additional Rs 170,000 crore ($25 billion) over 2016 and 2017. The total subsidies to coal mining and coal-fired electricity have remained stable to a slight decline over the reviewed years and amounted to Rs 14,979 crore ($2.3 billion) in 2016. Subsidies to renewables have significantly increased from Rs 2,607 crore ($431 million) in FY2014 to Rs 9,310 crore ($ 1.4 billion) in FY2016.

As a member of the G­20, India committed in 2009 to “phase out inefficient fossil fuel subsidies that encourage wasteful consumption while providing targeted support for the poorest.” Overall, the scale of support to fossil fuels (coal, oil and gas) has remained more significant than subsidies to renewables through the entire reviewed period.

The report’s co-author and ODI’s climate and energy programme head Shelagh Whitley said though there have been significant positive changes in terms of a decline in India’s subsidies to oil and gas consumption, there is still very limited transparency in terms of subsidies provided to the energy sector.

“The scale of several subsidies could not be determined due to gaps in government reporting. More information on subsidies is critical for ensuring subsidies are aligned with wider government objectives. Reallocating the balance of government support to sustainable energy, or other priorities like health and education, may be better able to serve people’s interests,” Whitley said.

IISD’s Garg said that China and Indonesia, India’s largest peers in Asia and fellow members of the G20, have both opted for self-reports and peer reviews of fossil fuel subsidies.

“More countries are expected to announce reviews in the coming months, and many others will be encouraged to start reporting fossil-fuel subsidies under the sustainable development goals. This is a good opportunity for India to provide leadership with a voluntary self-report or a peer-review that can help to address its domestic policy-making needs with the help of the international best practices,” Garg said.

In 2016, Rs 28,500 crore was collected through the clean environment cess, a tax on coal whose revenues are allocated to a clean energy fund. Yet only Rs 9,310 crore was utilised for clean energy development. In the same year, India incurred an expenditure of Rs 14,990 crore to coal subsidies. Such subsidies have ramifications for the markets, society and the environment.

 

Hyderabad Metro Shows The Way: India Should Evolve PPP Model For Metro Projects

By
Indian Infra Hub Staff
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0
Snapshot
  • A new metro policy which makes the PPP component mandatory, would augur well for taking metro implementation to the next level.

The world’s first railway journey took place in 1804 in England, and the first metro rail appeared as underground rail in London in 1863. In India, the first railway journey kicked off in 1853 in Bombay (Mumbai) while the first Indian metro line started in Calcutta (Kolkata) in 1984. Ever since, the Mumbai suburban railway system has been transplanted in other Indian cities where they were not able to match up to the modern lifestyle and transport demands of the people.

Then came Delhi Metro, commissioned in 2002, ushering the metro movement as an urban transport solution to Indian metropolitan cities, so much so that now even cities with population under five million are also going the metro way.

Thus far, operational metro projects in the Indian cities of Kolkata, Delhi, Chennai, Bengaluru, Jaipur, and Kochi are government projects. Because of viability challenges, among other reasons, none of these projects are entirely in the private sector domain with even Delhi Airport Metro Express now taken over by Delhi Metro Rail Corporation. Mumbai Metro is a public-and-private joint venture, while Gurugram is through the government’s special purpose vehicle, not a regular private sector company.

Hyderabad Metro, on the other hand, is coming up on the back of private sector investment by the Indian engineering giant Larsen & Toubro, which, with its earlier investment in Hyderabad, launched L&T Information City “Cyber Towers” in November 1998 that propelled Hyderabad into a top information technology destination in India. Now after 19 years, it’s expected to launch Hyderabad Metro in November 2017 with the potential to propel the city into a global hub.

Here are the highlights for which Hyderabad Metro deserves credit:

  1. It is India’s first, and probably the world’s, largest single public-private-partnership elevated metro project, of 72km.
  2. As it’s 100 per cent elevated, Hyderabad Metro will ride in the footsteps of global cities such as Tokyo, London, and New York, which have three layers (ground, underground, elevated).
  3. The largest intelligent train system in India, the communications-based train control, a continuous automatic train control system that is capable of automatic train protection, optional automatic train operation and automatic train supervision; that is, technically, it can lead to making the metro driverless in the near future, should the legal and operational framework in India become available.
  4. The project targets 50 per cent revenues outside of passenger fares by commercially leveraging the space within the station and an additional large space provided by the state government close to the major new metro stations, where L&T is building three malls with integrated multiplexes, real estate contributing to 45 per cent of the planned revenues for the project. This also speaks for the vibrancy of Hyderabad’s economy and innovative business model for sustainability with minimum possible impact on passenger fares and taxpayer money.
  5. The project integrates the largest station at Secunderabad and the largest state bus terminals at Mahatma Gandhi bus station and Jubilee bus station, enabling large-scale multi-modal transport for the people of Hyderabad.
  6. All three lines have interconnection for easy changeover, effectively giving one direct and four additional line extensions, with one change for all passengers.
  7. It’s a green metro, with 520,000 saplings planted and 2,000 trees translocated.
  8. The metro’s energy efficiency could also become the highest per passenger-kilometre with the deployment of sophisticated regenerative breaking system that, instead of wasting the kinetic energy while stopping a moving train, reverses the motors to use the energy to generate power and feedback. Given that the entire corridor has a dense station setup with a high frequency of halts, its claim of up to 35 per cent energy-saving and carbon dioxide emissions is quite possible.
  9. Since all three metro lines take the elevated route on dense routes, where people travel in city buses and other modes of transport in large numbers, it becomes easier for travellers to switch the mode of transport to metro.
  10. The project will transform Hyderabad into a people-friendly green city.

Because of the large-scale investment involved in metro projects, the role of government in the success of metro projects is significant anywhere in the world. While rich countries with large-scale tax revenues could afford high costs and drive the metro projects’ scale and penetration, developing countries find it quite hard to sustain the cost of metro setup and operation. Hence, India needs to evolve its own public-private-partnership model for metro projects that make both government and the private sector play to their strengths.

While India has already opted for the bullet train and its technology from Japan, it should also look to get Japan’s private sector railway business model, which has propelled urban transformation across the country with regional railways, providing comprehensive transport choices to people by creating new townships with shopping malls integrated with metro rail lines.

Central and state governments also must review the lessons learnt from Phase 1 in terms of delays and their potential impact to the private sector investor, and examine how they could de-risk the investor from such risks as the approach should be to attract as much private sector investment as possible while the risk in which private sector has no influence must be addressed by the state and central governments adequately, including the required public investment by the government.

While Phase 1 has addressed the core of inner city transport in Hyderabad, further phases should drive Hyderabad’s geographical growth, leveraging airport and the Outer Ring Road with arterial roads in all directions of Medchal, Shamirpet, Ghatkesar, Hayat Nagar, Shamshabad, Vikarabad, Patancheru, and so on.

A new metro policy which makes the PPP component mandatory, would augur well for taking metro implementation to the next level – by not only driving transit-oriented development but also pushing the development of satellite townships to decongest the cities and giving them radian wings to expand faster to accommodate a young, aspirational India.

The metro is an inevitable part of making any big city in India pollution-free.

Government Charts Out Roadmap To Achieve 175 GW Renewable Energy Targets

By
Indian Infra Hub Staff
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0
Snapshot
  • The Centre has provided the required support to the states to ensure 24×7 power for all by strengthening the intra-state transmission networks and by ensuring mandatory presence of metered connections.

Silencing critics, the BJP-led Narendra Modi government is confident of not just achieving the ambitious targets of developing 175 gigawatt (GW) or 1,75,000 megawatt (MW) of renewable energy (RE) capacity in India, but far exceeding it.

Union Minister of State (IC) for Power and New and Renewable Energy, Raj Kumar Singh on Friday shared a detailed roadmap for achieving this target of commissioning 175GW of renewable energy that includes 100GW of solar generating capacity and 60GW of wind power in the country by 2022.

In a bid to encourage the Make in India initiative in the RE sector, Ministry of New and Renewable Energy (MNRE) has worked a scheme and will soon issue an Expression of Interest (EoI) for establishing domestic manufacturing facilities to the tune of 20 GW, in the near future.

Alongside, the MNRE is exploring ways to achieve additional installed RE capacity through floating solar power plants over dams, offshore wind energy systems and hybrid solar-wind power systems, which may provide over 10GW additional capacity.

The MNRE team of experts has already surveyed the Bhakra Nangal dam for floating solar power plants and off-shore Gujarat and Tamil Nadu for wind power plants, the Minister announced.

Singh expressed confidence in comfortably achieving “a rather conservative RE target of 175GW by 2022” as he was sure of exceeding this target along with providing 24×7 affordable, clean and efficient power for all.

Singh said that all these targets would be positively achieved with the cooperation of the states in ensuring that their power utilities/DISCOMS remain financially viable.

Presently, India’s total installed generation capacity is around 330GW, out of which the coal based power stations in the country generates 193GW. Clearly, India relies a lot on thermal power generation and 80 per cent of its electricity is coal based power. In comparison, hydro power share is 10 per cent while renewables is just seven per cent.

Given the rising environmental concerns and coal based generation, India’s shift to green energy and decarbonisation policy has been acknowledged across the globe.

To achieve the RE targets, the Centre has already provided all the required support, including funds under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS), to the states to ensure 24×7 power for all by strengthening the intra-state transmission networks and by ensuring mandatory presence of metered connections.

Singh added that the Ministry is in talks with the states to ensure 100 per cent metered connections through smart/pre-paid meters.

Talking about issues in power Purchase Agreements (PPAs), Singh made it very clear that the sanctity of the PPAs have to be ensured and they would have to be mandatorily honoured.

“The Ministry is in constant talks with state governments, including Andhra Pradesh and Karnataka, to ensure the same,” he said.

Talking about the renewable purchase obligations (RPOs), the Minister that these obligations are mandatory and need to be adhered to strictly.

Elaborating on the RE development roadmap, MNRE secretary Anand Kumar said that for achieving 100GW solar power target by 2022, the Ministry, along with the states, would lay out bids for ground mounted solar parks for 20GW in 2017-18, out of which 3.6GW have already been bid out, 3GW will be bid out in December 2017, 3GW in January 2018, 5GW in February and 6GW in March. 30 GW will be bid out in 2018-19 and 30 GW in 2019-20.

Further, Kumar said that against the target of 60GW for wind power, 32GW have already been commissioned. The central government in participation with the state governments intends to issue bids of cumulative capacity of about 8GW this year.

Out of this, 5GW (including present 2GW) have already been bid out, 1500-2000MW will be bid out in January 2018 and 1500-2000 MW in March 2018.

A total of 10GW will be bid out in the financial year 2018 and 10GW in 2019, leaving a margin of two years for commissioning of projects. Further adding to this, Kumar informed that the Ministry would soon be issuing the wind bidding guidelines.

He also said that with wind power tariffs becoming competitive and State DISCOMs encouraged to buy more of renewable energy power, the government has doubled the auction capacity for the third national level wind auction from 4GW last year to around 9GW in the current year.

Regarding clarity on goods amd services tax (GST) rates on solar panels, r Kumar said that the MNRE is in talks with the Ministry of Finance and in the next sven-10 days all the issues would be resolved.

The present scheme of wind power auction is for setting up of 2000 MW wind power project connected to Inter-State Transmission System (ISTS).

The bidder can bid for a minimum capacity of 50MW and maximum up to 400MW.  The projects under this scheme are expected to be commissioned towards the end of 2019.

Power Sale Agreements (PSA) for purchase of wind power under second wind auction with states were also signed on Friday with Solar Energy Corporation of India with utilities of Uttar Pradesh, Bihar, Jharkhand, Assam, Punjab, Goa and Odisha.

The reverse auction for SECI-II wind bid was conducted on 4 October 2017, which resulted in very competitive tariff of Rs 2.64/2.65 per unit.

It may be mentioned that the winners of SECI II wind bid namely Renew Power (250MW at Rs 2.64/unit), Orange (200MW at Rs 2.64/unit), Inox (250MW at Rs 2.65/unit), Green Infra (250MW at Rs 2.65/unit) and Adani Green (50 MW at Rs 2.65/ unit) would be setting up wind power plants in Gujarat, Tamil Nadu and Madhya Pradesh to sell power to these utilities.  PPAs with the successful bidders are expected to be signed shortly.

Anupama Airy is a senior journalist and executive editor of Swarajya. She is also the founder and editor of DefenceAviationPost.com and EnergyInfraPost.com.

The Burning Question About Electric Vehicles – What Kind Of Batteries Do We Use?

By
Indian Infra Hub Staff
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0
Snapshot
  • Even as discussions about the adoption of electric vehicles continue to revolve around charging stations, there is another challenge to consider – batteries.What kind of batteries do we use? And do we integrate the batteries into the vehicle or keep them replaceable? Here’s a review of the options.

The growing emphasis on electric transport in India is raising a lot of pertinent questions. Some questions have revolved around charging stations, while some others have been about batteries. For India to set up a sustainable electric vehicle (EV) ecosystem, proper charging infrastructure needs to be put in place. Without charging stations, the plan to adopt EVs won’t go anywhere anytime soon.

Several suggestions have been made in the past to overcome this challenge, such as enabling state-run transport bodies to open up their facilities for the public to charge their vehicles, to allowing individuals to lease out parking spaces with charging facilities.

However, there is another aspect that stands in the way – batteries. What kind of batteries do we use? And do we integrate the batteries into the vehicle, thus requiring them to be charged in situ, or keep them replaceable so that a used battery can be swapped out for a fresh one, much like in the case of a flashlight?

The Battery Conundrum

The case with batteries in EVs is very similar to that of batteries in mobile phones. With devices becoming slimmer, batteries are being integrated into the unit, making them non-removable. Thus, when the battery needs to be replaced, it has to be done at a service centre.

So what if the battery is built-in?

Built-in or integrated batteries have a lot of advantages. For starters, they’re designed around the vehicle of which they are a part. This can be done in a way that they are integrated into the overall design with the space available.

Further, because they are integrated, they can be smaller, lighter and installed in such a way that they are not accessible to the owner. Thus, the rest of the vehicle’s components can be installed with less design specifics.

However, the major drawback would be when the battery stops working or in an emergency situation, like when it needs immediate replacement.

The upside is that since the battery is never leaving the vehicle, it will, in all likelihood, be more efficient, depending on the driver. The downside? Waiting for hours to charge it at a charging station when it runs out.

So why not keep replaceable batteries?

Battery-swapping is gradually becoming the preferred concept. The core advantage here is the time saved. If the battery needs charging, one needs to drive into an EV station, swap out the battery for a fully charged one and leave. It’s as quick as filling up the tank with petrol or diesel. However, this does come with several riders.

For starters, it would require standardisation of battery designs for a class of vehicles. Along with this, each vehicle would require its internal components placed in such a way that the battery and its connecting circuit are accessible, leading to a possible waste of space, or a lack of space for components. If there is no standardisation, then vehicles will have to come with enough space to fit a variety of batteries, thus causing more space crunch on the inside.

Further, due to this design, the battery might become heavier, which impacts the overall speed and efficiency of the vehicle. Given that each vehicle owner treats their vehicle differently, the overall efficiency of batteries will also go down faster over time.

It is too early in India to decide which of the two will succeed. The EV charging and battery swapping (EVCBS) sector needs more users to switch over before any conclusion can be derived; however, in the interest of promoting the EV sector, both need to exist to compete with each other.

At the end of the day, both types of batteries – once they outlive their life cycle – can be reused. They can move from higher-load vehicles to smaller-scale uses such as e-rickshaws and agricultural pumps. However, it is still too early to tell.

Srikanth’s interests include public transit, urban management and transportation infrastructure.

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