Monday, November 10, 2014

De-Regulation of Diesel and Its Impact

The eagerly awaited decision to de-regulate diesel prices announced on 18th October 2014, brings a hope for a fair and a competitive market with a level playing field for all marketing companies.

According to Moody’s, an International Credit Rating agency, Diesel de-regulation is “credit positive” for India as “this will allow the market to adjust to global commodity price trends and reduce the exposure of government finances to those trends”.

The International oil prices have been on a steady and steep decline in the past few weeks. This falling trend warrants a decrease in selling price of Diesel in the domestic market. Thus, a steep downward revision in selling price of Diesel as provided in the below table.

RSP (Rs. per Litre)
New Delhi
Price before de-regulation
Revised Price (Oct 19, 2014)
Further Reduction (Nov 1, 2014)
While these cuts are good for denting inflation further, we should be cautious that pump prices do not fall too low as this shall provide us a cushion in case global prices rise later this year, and also prevent diesel consumption from soaring once again.
For Government, OMCs and Upstream Oil Companies - From now, the OMCs are selling diesel at market-linked prices which would remove the under-recoveries on the sale of the fuel and would also lower their working capital and short-term debt requirements.This will further reduce the subsidy burden for the government, although fiscal savings are likely to be limited. Upstream oil companies will also be benefitted as they share the government's subsidy burden.
For private Players–Private Players would stand to gain Public Sector OMCs market share in the medium to long term. Currently the three Public Sector OMCs accounts for around 98% share of fuel retailing market in India, of this Diesel accounts for aOil Companiesround 55% of overall sales.
Earlier, the private players were forced to shut down their retail outlets or slow their pace of expansion as they were unable to compete with the OMCs who were getting government support for their losses. Reliance held a 12% market share in 2005, but this has slipped to less than 0.5% now (with ~300 Operational ROs).Essar Oil, the private player with the largest number of retail outlets currently operating - 1,400 expects a gradual pick up in diesel sales from its outlets, which only sell petrol at the moment.  Shell India, has around 75 of its 82 large-format outlets functioning in six states.
A foray by private oil refiners into the domestic oil marketing space could, according to an October 22, 2014 report by India Ratings, a credit rating and research firm, "gradually lead to greater competitive intensity and also result in these private refiners eating into the market share of existing national oil companies over the long run, as also impacting revenue and profit margins."
The government should also start raising kerosene and LPG prices gradually in the coming months so that subsidies on these fuels are also steadily reduced.India’s annual subsidies on these two common man’s cooking fuels will be INR.65,000-80,000 Crore this year, depending on how global oil prices move.
However, it remains to be seen what the government will do in case of substantial increase in International crude prices, whether it will succumb to the pressure or will it stick to the current plan. The movement of prices in international oil market and INR-USD exchange rate shall continue to be closely monitored and developing trends of the market will be reflected in future price changes in Diesel prices.
                 InfralineEnergy Oil&Gas Knowledgebase Team


The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the Infraline Technologies (India) Pvt. Ltd. (organization). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom.

Wednesday, October 29, 2014

Carbon Capture & Storage: Cutting down the Carbon Footprint

One of the major talking points in world-wide discussions concerning carbon emission mitigation is the Carbon Capture and Storage (CCS) technology. As per the Global CCS Institute, Carbon Capture & Storage involves capturing carbon dioxide (CO2) emissions from various sources viz. Power plants etc, compressing the gas followed by transporting and storing it below the earth’s surface in deep geological formations such as depleted oil & gas basins, coalfields or saline formations. Such areas can hold the captured gas for indefinite time periods. 

Global energy demand is rising steadily and is expected to increase by 55percent by 2030. The rise in demand will be driven by developing countries. Fossil fuels such as Coal, Oil & Gas are expected to meet a major share of this demand. This increased consumption of fossil fuels will lead to an unprecedented increase in CO2 emissions.

CCS results in significant reductions in CO2 emissions as it cuts down emissions across a host of carbon intensive industries. Considering widely distributed CCS Storage areas globally, CCS projects are expected to play a significant role in reduction of greenhouse emissions.

Exhibit A: Carbon Capture & Storage Process

Source: CO2CRC, Australia

Major International CCS Projects

1.       Petra Nova Carbon Capture Project – CCS @ WA Parish Power Project, Texas
[1] Global CCS Institute

The Texas based W.A. Parish power project is one of the largest generation facilities in the United States with a gross generation capacity of 3.75 GW (2.47 GW coal based and 1.27 GW gas based). The coal-fired units require around 30 KT of coal per day, which is sourced from Powder River Basin in Wyoming State.

The proposed CCS project will include retrofitting of Unit 8 (Coal based) of the power plant with post combustion CO2 capture system within the existing plant site. The capture facility would use an advanced amine-based absorption technology to capture at least 90 percent of CO2 from the coal-fired generating unit.

The captured CO2 would be transported via a new 132 km long, 12-inch diameter underground pipeline to the depleted basin of the West Ranch oil field, located near the city of Vanderbilt in Jackson County, Texas. The purity of the CO2 transported would be around 99 percent.

1.    China Resources Power (Haifeng) Integrated CCS Demonstration Project

China Resources Power is one of the seven biggest utilities in China, having installed capacity of 26.9 GW at the end of 2013 from 79 power plants. Its proposed Haifeng power project in the Guangdong province of China constitutes of 8 X 1GW ultra-supercritical units and is expected to be commissioned by April 2015.
The Development and Reform Commission of Guangdong Province held its first CCS demonstration project coordination meeting in June 2013 and chose China Resources Power (Haifeng) power plant for setting up a CCS demonstration project.  The proposed CCS facility is expected to capture and compress 1 MT of CO2 emissions from Haifeng Unit 3 from a slip stream of flue gas. The CCS project is expected to be completed by August 2018.
The CO2 captured at the CCS facility will be transported via underground pipeline to the CO2 storage site in a deep saline formation in the South China Sea, which falls in the oilfields operated by the China National Offshore Oil Corporation (CNOOC). As of September 2014, the project team has identified two carbon storage sites located approximately at 90 km and 150 km to the south of the China Resources Power (Haifeng) project. A full feasibility study for the CCS project commenced in May 2014 and is expected to be completed by the same period next year, following which a front end engineering design (FEED) study is expected to start.

CCS Initiatives in India

There have numerous research level initiatives on Carbon Capture and Storage technology in India over the years but the country lacks a project which could demonstrate the full CCS process. However, things are expected to change as the National Aluminium Company Ltd. (NALCO), a major PSU is all set to commission the country’s first-ever CCS project at its Angul plant.  The CCS project will capture CO2 from NALCOs captive power plant (CPP) using algae based on Indo-Canadian technology. NALCO envisaged the project which is fifth of its kind globally after persuasion from the Odisha State Pollution Control Board. The project is being executed by Indo-Can Technology Solutions (ICTS).

As per ICTS, the algae will be developed in shallow ponds and CO2 from the CPP will be captured and introduced into the pond. As CO2 is soluble in water, the gas will be absorbed in the pond. The captured gas and water will stimulate the growth of the algae in the pond, which in turn will release oxygen as a by-product. The project initially will be a demonstration project. However, if the desired results are obtained, NALCO expects to start the project on a commercial basis.

Way Forward

The major hurdle for CCS globally is the cost factor. Research agencies globally have estimated that capturing, transporting and storing the CO2 from a thermal power plant would increase the cost of electricity generation ranging from 37 percent to as high as 91 percent. This would make CCS a comparatively costlier method for mitigating greenhouse emissions.

However, as seen with other technologies, the cost of CCS systems are expected to decline over time due to technological improvements and increased global experience in commercial applications. The costs of transportation and storage can be minimized by setting up emitting plants close to storage sites.
India is expected to depend on fossil fuels for satisfying its energy demand in the foreseeable future. Hence, reduction of greenhouse emissions will be a critical environment issue faced by India and various other countries. Considering the global dependency on fossil fuels, CCS is expected to be at the forefront of all carbon emission mitigation strategies in the years to come.

                InfralineEnergy Metals & Mining Research Team 


The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the Infraline Technologies (India) Pvt. Ltd. (organization). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom.               


Global CCS Institute
World Coal Institute, “CCS & Clean Development Mechanism”
Times of India, “NALCO embarks upon green project”, February 10, 2013

Monday, October 13, 2014

Roads infrastructure: Unclogging Logjams by new Government

Strap: Empowering States for Fast Tracking Clearances and Approvals locallyStrap: Focused approach towards EPC Mode for awarding contracts substituting PPP

A Journey of a Thousand Miles Begins with a Single Step. Roads infrastructure is at murky stage with the current backlogs and Logjams of Projects. The newly formed government has tough Roads ahead to put in place correct policies and reforms to overcome the situation. Road sector is crucial for the growth of the economy. Realising this development of Roads Transportation Tops the Priority list of the newly form government. Moreover, as per Business leader it was lack of political will which didn’t allow policies to take off in recent past.

The Indian road sector continued to face multiple challenges in this financial year in the form of high interest rates, sluggishness in award of road contracts, reduced availability of funds, execution slowdown, and increased competitive intensity. However, execution on many of the projects awarded over the last one year remained slow primarily because of delays in land acquisition, clearances, and financial closure.   

Rough Roads

  • 260 projects involving about 60,000 Crore rupees implemented on PPP model are currently delayed due to various reasons
  • From 2004 to 2014, the road making activity has declined from an average of about 20 km a day to 3 km per day
  • 189 projects worth INR 1,80,000 Crore are stuck because of difficulties in land acquisition and clearances
  • Road building cost has increased from INR 5 crore a kilometre in 2004 to INR 13 crore a kilometre in 2014
  • The PPP Model has proved  to be absolute failure  for the sector
  • Since 2009, only 350 odd kilometers have been added to India’s national and state highways

Aspirations are fairly high from the Narendra Modi government who won clear majority in elections. After few days of becoming Prime Minister, he said "A nation that gives impetus to infrastructure, be it roads, rail, airport, that is where chances of development increase. We have to take ownership to build a strong nationBusiness sentiments are improving and corrective actions are being taken to kick off the sector from the prolonged sluggishness.

PPP model of awarding road projects has proved to be complete failure in India leading to dipping down of road construction to merely 3 km per day.  Challenges are many- Overall economic downturn, Lack of equity in the market, Difficulty in arranging debt, Highly leveraged balance sheets for highway developers, Land acquisition & approval and clearance related issues. Blaming the UPA regime for the present situation, the Roads Minister said the previous government awarded projects with ought even acquiring 10 percent of land which resulted in delays and cost overruns. As a major policy shift, it is decided to implement projects on EPC model.

At present, there are 437 projects entailing an investment of around INR 21 Lakh Crore is delayed due to various issues across infrastructure sector. Around 260 Road Projects worth INR 60,000 crore are stuck owing to different issues like clearances and approvals. All efforts are being made to unite Roads and Railway ministries for faster implementation of projects. Also in an important decision, the process of clearance for Roads bridges has now been simplified with online application and NHAI would bear the construction and maintenance cost of the projects. Few of the decisions are:

   MoEF to allow state governments to give permission for sand mining up to 20 hectares as against        the existing norm of 5 hectares 
  State government and regional office MoEF will be allowed to clear linear projects involving forest   land up to 40 hectares 
  National Board of Wild Life approves number of projects falling within 5-10 kms radius of various     sanctuaries 
  Railways to do standardize ROB & RUB designs & to put the mechanism online

To take up the stalled and non commercial viable projects, the NHAI board has given in principle approval for creation of a body i.e. Asset Reconstruction Company which would try to make projects feasible. Indian Banker’s Association has already given their consent as most of the Roads assets are turning NPA’s.  The entity would have two options: - firstly, it could take over the entire project according to the clause of the concession agreement. Secondly, it can take small portion of the delayed work and then complete it. It is a welcome move as it would help in improving the situation of cash starved sector.

There is huge number of ongoing disputes, involving arbitration cases amounting to INR 26,556 crore investments between developers and NHAI. To resolve this NHAI has by now settled INR 10,550 Crore projects with concessionaires. As of now 49 pending claims involving 26 contractors has been cleared (See the Graph).

                                Source: Infraline Research

For ending corruption the Amendment in Motor Vehicle Act is proposed in next session of parliament. Few of the changes would be based out of the best practices of the world like E-Governance. The RTOs would be linked to e-governance to bring total transparency in the system as they are lots of malpractices prevailing which needs to correct.
The government would have to work on the policy framework to assure at least 16 percent Internal Rate of Return for infrastructure projects. This would safeguard the developers from Foreign Exchange fluctuations and boost investment in the sector.

India has to soon embark on next wave of economic growth which will encompass some fundamental shifts in growth model as well as larger and bigger social reach to benefit its vast population. Being one of the fastest growing economies of the world requires physical infrastructure facilities to continue the pace of development process. With the advent of the new Government, firstly, it has to build and expand its key infrastructure to global standards and Road sector has to play major role in this advancement.

         InfralineEnergy Roads Knowledgebase Team


The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the Infraline Technologies (India) Pvt. Ltd. (organization). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom.

Open Access – Basics & Beyond


As per Electricity Act, 2003 Open Access has been defined under Section 2 (47) as follows:

“The non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission.”

To put simply, Open Access implies enabling of non-discriminatory sale/purchase of electric power/energy between two parties utilizing the system of an in-between (third party), and not blocking it on unreasonable grounds. Open Access, is mandated to allow freedom for consumers to choose suppliers. It basically means that the buyer has the freedom of selecting the seller, and vice-versa.

Open access, is a framework for development of power market and for promoting competition.

What was the need?

Key to growth and development in power sector lies in some radical changes and these changes are not limited to business model only, but in operational model as well. Countries round the globe had already treaded that path leaving us far behind. A lagging power sector can prove a major hindrance to a country’s growth. All these factors propelled the Indian Power sector to bring in some transformations and open access is one major tool for that.
Reasons why Open Access has been introduced in the Indian Power Sector is based on following benefits that is expected to accrue:

1.       Promoting competition
2.       Changing and developing market structure
3.       Optimum resource utilization
4.       Consumer friendly

How is it going – Effects & After-effects:

Open Access is available for power purchase or sale by utilities or distribution licensees. However, when it relates to generators and consumers, only some of the states have permitted limited open access. Some are permitting open access to generators if they are connected to Central Transmission Network.

Lack of Open Access in Inter-state transmission has stifled the development of power market, jeopardising competition. The competition is only feasible if players in the power market are permitted access to both intra and inter-state transmission networks on payment of reasonable charges.

While inter-state Open Access within the limitation of adequate ‘available transfer capability’ (ATC) has been operational, intra-state open access has not progressed because of tardy implementation of certain pre-requisites.

Lack of open access has also restricted transfer of power from surplus to deficit regions and failed to optimise procurement costs.

Reasons behind the lag and the way forward:

Regulatory hurdle:
1.     The Act calls for gradual reduction of open access charges but no such reduction trajectory is being found in any of the states resulting in consistent high and irrational open access charges acting as deterrent to this whole mechanism.

2.     Also states like Karnataka, Maharashtra and Tamil Nadu have invoked section 11 of the act to prevent generators to sell their power outside the state. As per this section, states have the right to issue directions to generators in case of extra ordinary circumstances. States use this ambiguity in Act to hamper open access. Clarification of section 11 is necessary through an amendment of the Act.

3.     States like Delhi, sheer lack of willingness on the part of the state commission is evident from the fact that even after pressing requirements for availing open access, the procedure for availing OA from SLDC has not been notified yet. There is an urgent need to look into such issues.

Infrastructural hurdle: There is an urgent need to separate the supply and wire business of the distribution licensees. This becomes essential because licensees have a natural monopoly on the infrastructure i.e ‘wires’. In order to avail full open access if the consumer wishes to switch from the Discom to a third party, he is uncertain about the network availability which is under the control of the discom. This seriously deters the ability of the consumer to avail the supply. This can be curbed by separating the accounting of supply and wire business followed by its financial separation.

Inconsistencies across states: The provisions in the current inter-state regulations do not encourage open access transitions. Inter-State Open Access is granted on monthly basis and maximum upto 3 months.

Transmission Corridor Availability: Transmission congestion is one of the major deterrents in availing Open Access. The evacuation systems are planned mainly based on the transmission capacities required to meet long-term PPAs but the present transmission system has to meet the firm transmission needs as well as Open Access requirements arising in the short term. Therefore transmission planning should inherently include margins for medium and short term open access.

          InfralineEnergy Power Knowledgebase Team


The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the Infraline Technologies (India) Pvt. Ltd. (organization). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom.

Friday, September 26, 2014

LNG: The Changing Global Dynamics

LNG The changing Global Dynamics sets up in the backdrop of some major shifts expected in the global LNG business market place. The Shale Gas Revolution in USA as well as large discovery of conventional gas in different parts of the world, notably East Africa has brought in new dimension for the global LNG trade in coming years and following few decades. US, certainly is very interesting story as it gets ready to enter LNG export market in big way.

Australia is progressing well with a huge ramp up in its Liquefaction capacity. Russia too has tweaked its gas export policies to have a bigger pie from LNG cake. Canada too has lined up of new projects aggregating to huge new liquefaction capacity. Many years down the road- USA, Australia, Qatar and possibly East Africa, Canada and Russian would emerge as major suppliers of LNG during this century.

Will LNG market transit to ‘Buyers Market’ or the demand growth would dictate the build up of new capacities so that it continues to be ‘Suppliers Market’ or more liquid LNG market will emerge. The oil indexed base pricing is witnessing growing pressure and hub based pricing has entered the scene. Possibility of regional LNG trading hubs is being discussed and debated. The so called Very Rigid LNG SPA’s are seemingly becoming more flexible and good volume of LNG is now being traded on non long term basis.

Importing of LNG is a relatively new phenomenon for many Asian countries: India started in 2005, China in 2006, Thailand in 2011, and Indonesia & Malaysia in 2012. Japan imports the largest quantity of LNG of any nation (87.4 million tonne in 2012), accounting for around 35% of global demand. China’s growing demand for cleaner fuel, combined with new re-gasification terminals, has pushed LNG imports to a new high, which saw the country importing close to 13 million tonne in the first nine months of 2013, up by 23% compared with 2012.

Needless to say, Asia Pacific has long stood as an important LNG market for both consumers and suppliers with Japan and South Korea primary import market players, together accounting for over half of global LNG demand.

India, with around 1.2 TCM of natural gas reserves is also set to play a key role in LNG demand in the next decade. With many of the country’s largest oil and gas companies looking to expand the country’s LNG re-gasification capacity, 2013 was expected to mark a turning point for the gas retail industry, which is in growing need of more supplies. India will become significant partner in this new global dynamics of LNG. India will soon revert back to high economic growth trajectory, would strengthen its manufacturing base very significantly and gas/LNG will have growing relevance in its energy basket.

      InfralineEnergy Oil & Gas Research Team           


The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the Infraline Technologies (India) Pvt. Ltd. (organization). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom.

Monday, September 8, 2014

Impact of Budget on Coal consumers

The Narendra Modi led government presented its first budget on 10th July 2014 that focused on key issues like widening fiscal deficit, high inflation, slumped economic growth (below 5 percent in last two years) and limited infrastructure facilities. The budget outlined the plan of new government for reviving the Indian economy by reducing the current account deficit, promoting FDI and push to manufacturing and infrastructure sector among others.

For coal sector, the budget offered proposals ranging from tax simplification, rationalization of supplies, and increasing production among others. In FY14, the values of India’s steam-coal and coking-coal imports were 1.9 percent and 1.3 percent respectively of the total imports, which sums around to be about 3.2 percent of the value of the total imports basket. The coal consuming industry, naturally, had mixed reactions on the new budget as it provides incentives on some counts but increases cost of procurement for several players.

Impact on the Imported Coal Consumer: The budget rationalized custom duty imposed on different grades of coal that is expected to remove assessment disputes and transaction costs associated with testing of various parameters of coal. Table below shows change in custom duty and impact on associated sectors.

Type of Coal
Sectors Impacted
Basic Custom Duty
Non-Coking Coal
Negative: Increased cost of generation;  major impact where cost of coal cannot be passed on to consumers through increase in tariffs
Negative: Increased cost of production; to not allow for increase in prices in a competitive market
Sponge Iron
Negative: Increased cost of production; to not allow for increase in prices in a competitive market
Coking Coal
Negative: Increased cost of production; margins of players to shrink further
Met coke
Counter Veiling Duty (CVD)

Power, Cement, Sponge Iron
Status Quo
Coking Coal
Positive: however increase in basic custom duty from zero percent to 2.5 percent to nullify the positives

Apart from custom duties, clean energy cess on coal has also been increased from INR 50 per tonne to INR 100 per tonne. This increase in clean energy cess will impact the power and metal producers using imported coal. This recent increase in duties and cess on imported coal in conjunction with slowing global coal prices has forced the industry to rethink their fuel sourcing strategies based on imports. The impact will be more on industries where increased cost cannot be passed on to the consumers.

Impact on Domestic Coal Consumer: The limited supply of domestic coal in the past and huge demand supply deficit has triggered the new government to augment domestic coal supply. In this regard, the government proposes to initiate exercise to rationalize coal linkages to optimize transportation of coal that will include provisions for swapping of FSA based coal linkages among power, steel and cement sector. Apart from this government is also considering comprehensive measures for enhancing domestic coal production specifically by reducing statutory delays.

The government has also increased clean energy cess for domestic coal from INR 50 per tonne to INR 100 per tonne, similar to imported coal. This increase in cess will directly be passed on to the consumers by coal producing companies affecting the cost of production for all coal consumers..

      InfralineEnergy Metals&Mining Research Team


The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the Infraline Technologies (India) Pvt. Ltd. (organization). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom.

Monday, September 1, 2014

Wind energy-going above 200m

The current scenario:

Wind energy, the so called future of energy, has been growing at the rate, incomparable with other sources of energy. Total installed capacity of the segment has crossed the mark of 20GW. It remains one of the lead sources of generation in fleet of Renewable energy. Sector has seen a growth rate of double digits. Renewable energy is contributing a share of 12% in the Generation portfolio of India, lagging behind hydro by a mere 6% or so. For a country like India, where cost of electricity remains not just an issue of investment and growth but can even leads to change of government. Wind Energy seems to be a potential solution provider to our energy problem. National policies and state government policies have been favouring the development of wind energy. Foreign investment clubbed with the business calibre of local players has also added boost to the development of it.

But the picture doesn’t remain brighter throughout. There is another side of it, which is matter of concern for the power sector. The total quantum of units generated by a wind turbine remains low. Capacity utilization factor (CUF) barely touches an average of 22%, whereas a national average for a conventional coal based plant hovers around 70 %( Both figures are for Indian geographical conditions). Such data clearly speaks of the inability of the wind to meet the growing demand of World’s population. Reasons that attribute to such low generation are exogenous in nature and can’t be governed. Seasonal flow of winds and whimsy nature of wind makes it unreliable in a large power system, like that of India.

There have been few proposed solutions to this problem, one of which includes having a higher tower height for the turbine. The idea proposed behind this approach, is to tap the higher and consistent wind velocity present in the higher layer of atmosphere. Air turbulence remains low, as the altitude goes high. The average height of a wind turbine remains around 100m, and at this altitude wind blows with an average speed of 6-9m/s. also the nature of such wind remains inconsistent and this takes away the reliability factor from wind power. Also it involves huge cost and complex engineering to erect high towers and thereafter mounting hub on it. This raises the cost of wind turbine from a national average of INR 6 Crores (USD 1 mn, 1USD =INR 60) to a higher economically unfeasible.  But that doesn’t stop engineers from engineering a viable solution.


One such possible solution emerges from the bright minds of the west, Corwin Hardham, Don Montague, and Saul Griffith formed Makani Power in USA, and their airborne turbine seems to be providing a technically and economically feasible solution. Engineered in an unorthodox manner, the turbine is actually a set of small turbines mounted over a kite, the kite which is tethered to a ground station, is capable of transferring power from the tower to the ground station through the tether itself. This technology seems quite attractive in terms of finance involved and hassles removed. Since the kite is tethered to a moveable ground station, it can be easily moved within the region, to tap the maximum potential. Not just this, but also it utilizes the wind’s kinetic energy at an altitude of 200 - 400m. The technology will help the wind energy developers to avoid hurdles like:

·         Land acquisition
·         Whimsical wind flow
·         Poor CUF
·         Reaching higher heights
·         High costs of tower erection etc.

The kite is controlled by a controller that monitors the real time data of wind velocity and other weather related parameters. Size of the turbine has been somewhat lower than tower mounted turbines, 400-500KW compared to 1-2.5 MW on a global average. But that too remains an area of development along with many others, for team at Makani Power. Just like other start ups acquired by bigger market players, Makani Power too has been acquired by Google in 2013. That would help Makani in funding its research work and continuing forward in the direction of wind turbine development. Innovation just doesn’t stop at one milestone, but it keeps modifying it forms and covers milestones. Similar airborne turbine called as The Buoyant Air Turbine (BAT) has been developed by Altaeros Energies, founded in 2010 at MIT, USA. Their concept involves a helium filled shell which has a turbine in its hollow centre; the helium filled shell easily reaches a height of more than 500m and channels the wind through the turbine. Energy generated is transferred through the tether.  The benefits of BAT remain more or less similar to that of turbines developed by Makani Power. And moreover both the technology avoids the high cost of tower erection and land acquisition.

Approach used by both the technologies involves tapping of air potential at higher altitude and providing mobility to the generator. This concept has been put to use in many parts of USA and Europe. For a country like ours, where land acquisition has remained an issue, and availability of finance to adopt new technology doesn’t exist, it remains an opportunity untouched to bring in this technology and end our power crisis. We have grown mature enough in the global world, and adopting new technologies has been one of the targets. I don’t see any hindrance or bounds that would prevent adoption of such technology in India. So it remains just a matter of time that it would take to enrich the share of wind energy in our energy mix. A cleaner and cheaper energy is all that would help us in reaching one of the Millennium Development Goals as well.

Fig 1. Turbine developed by Makani Power

Fig 2: Trajectory traced by Makani’s  turbine

Fig 3: The Buoyant Air Turbine(BAT)

          InfralineEnergy Power Knowledgebase Team


1.     Makani Power -
2.     Altaeros energies -


The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the Infraline Technologies (India) Pvt. Ltd. (organization). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom