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.