NEW DELHI: Power sector planning body CEA has sought PMO intervention on fuel supply agreement as several companies have refused to sign pact with CIL amid differences over penalty to be paid by the coal firm if it fails to supply 80 per cent of the contracted fuel to them.
In a letter to the Power Ministry, CEA has requested that the matter be taken up with the Prime Minister’s Office so that the FSAs (fuel supply agreements) could be signed.
Last month, a Presidential Directive was issued to Coal India Ltd (CIL) forcing it to sign FSAs with power companies at 80 per cent commitment levels or pay penalties.
The Central Electricity Authority’s request to the ministry comes ahead of its meeting with power firms, which have not signed the FSAs, on Wednesday.
“CoalIndiahas placed an entirely different FSA which is detrimental to the interests of the power sector,” CEA has said in the letter.
The recently released new FSA, which is being insisted on by coal companies is monopolistic in nature and pro-coal companies, the letter stated.
CEA has also requested the government to re-look some of the clauses of the FSA.
It said, “The rate of compensation for the “Failed Quantity” is 0.01 per cent, which is too little a penalty for non-fulfilment of obligations and that too is applicable after three years.”
“It is hardly a disincentive and won’t discourage low fuel supplies,” it said.
The missive also insists that the provision for sampling of coal at both loading and unloading ends and through third party agency should be done.
The power companies have said the seller should not sell low quality coal and in case it is supplied, the purchaser is not liable to make any payment including rail transportation.
The supply of imported coal should be based on mutual consultations preferably in line with supply of imported coal being made by Minerals and Metals Trading Corp or State Trading Corporation, the letter said.
Country’s largest power producer NTPC has refused to sign the FSA as the company wants the useful heat value (UHV) formula for coal instead of the new gross calorific value (GCV) formula proposed by CIL, the country’s largest supplier.
Indian coal is classified on the basis of UHV into seven grades from A-G. UHV is based on ash and moisture contents for non-coking coals in line with the government’s directive.
These grades are wide, while under the GCV method, the bands would be narrower, closely resembling their quality.
POWER PRODUCERS WARY OF COAL PACTS, CEA TELLS PMO
Power sector planning body CEA has sought PMO intervention on fuel supply agreement as several companies have refused to sign pact with CIL amid differences over penalty to be paid by the coal firm if it fails to supply 80% of the contracted fuel to them.
In a letter to the power ministry, CEA has requested that the matter be taken up with the Prime Minister’s Office so that the FSAs (fuel supply agreements) could be signed.
Last month, a Presidential Directive was issued to Coal India Ltd (CIL) forcing it to sign FSAs with power companies at 80% commitment levels or pay penalties.
The Central Electricity Authority’s (CEA) request to the ministry comes ahead of its meeting with power firms, which have not signed the FSAs, on Wednesday. “CoalIndiahas placed an entirely different FSA which is detrimental to the interests of the power sector,” CEA has said in the letter.
The recently released new FSA, which is being insisted on by coal companies is monopolistic in nature and pro-coal companies, the letter stated.
CEA has also requested the government to re-look some of the clauses of the FSA.
It said, “The rate of compensation for the “Failed Quantity” is 0.01%, which is too little a penalty for non-fulfilment of obligations and that too is applicable after three years.”
“It is hardly a disincentive and won’t discourage low fuel supplies,” it said.
HYDEL POWER GENERATORS MISSED THEIR GENERATION TARGET BY ABOUT 4% DURING APRIL 2012
KOLKATA: Hydel power generators missed their generation target by about 4% during April 2012 against an excess generation of 18% during the previous corresponding period.
According to figures released by the Central Electricity Authority, the hydel power units were to generate 8368 million units of electricity during April 2012. However, they managed to generate about 8041 million units during the period – a shortfall of 326 million units. During the previous corresponding period, the target for the month was set at 7521 million units and they generated 8874 million units, which was 1353 million units more than the target.
Hydel units in southernIndiasaw a large decline in generation. They missed the target for power generation by about 15%. The target for the period was set at 2539 million units while, they managed to generate 2159 million units and was short by 379 million units. In contrast, during April 2011, these units generated 4.6% more than the target which was set at 2346 million units. They generated 2454 million units.
The hydel power generation plants in the North Eastern states missed the target generation by by as muh as 25%, against an excess generation of 6.3% in the previous period. Target for April 2012 for these units were set at 186 million units while they managed to generate a38 million units — short of target by 47 million units. The shortfall has dragged down total generation in the region which is heavily dependent on hydel generation.
In comparison, during April 2011, the region generated 225 million units of power, against the target of 211 million units. This was more by 13 million units during the period.
POWER CONSUMERS CAN BEAR HIGHER TARIFF: STUDY
NEW DELHI: Policymakers should realise the importance of economic pricing of electricity and allow power distribution companies to hike tariff to save the sector from an impending financial collapse, Crisil Infrastructure Advisory said on Monday.
In its report prepared by the agency on the power sector, it has said that Indian consumers can pay more than the electricity they consume and it is necessary that regulators revise tariff at regular intervals depending on the prevailing situation.
Power distribution companies’ combined losses are estimated to have crossed R2 lakh crore in the financial year 2011-12 due to increasing gap between revenue and expenditure of discoms in the absence of timely revision of tariffs.
Electricity tariff increase has lagged behind the rise in per capita income and the growth in household expenditure during the second half of the past decade. For example, power tariffs grew at 5% annually during the period while per capita income and household expenditure increased by 13.4% and 10.6% a year. Crisil MD Roopa Kudva said: “This indicates that Indian consumers can bear higher tariffs, and policyma-kers may have more flexibility to increase tariffs that they are currently exercising.”
To drive home the point that electricity tariffs in the country remain artificially low, Kudva pointed out that energy expenditure accounted for 10% of the average household’s budget in 2004-05. But the figure fell to 8% in 2009-10. This happened for the first time in 20 years.
“Had power tariffs been hiked to keep pace with other household expenses, power utilities would have earned additional revenue of R950 billion in this period. Instead of making aggregate losses of R870 billion, they would have made an aggregate profit of R80 billion,” she added.
To restore the financial viability of the sector, the consultancy firm has suggested implementation of key reform measures like publication of commercial and technical losses separately at the circle level, automatic state government funding of subsidy and regulatory assets and pass-through of increase in fuel costs on an automatic basis and without regulatory approval.
To prod discoms on reform path, the consultancy has suggested, the Reserve Bank should give its nod for shifting discom’s losses to the state government’s balance sheets. Besides, discoms should also be rewarded with lower interest rates and roll-over of their outstanding loans.
POWER DISTRIBUTION COMPANIES’ LOSSES CROSS RS 2 LAKH CRORE, SAYS CRISIL
NEW DELHI: The losses of power distribution companies crossed Rs 2 lakh crore at the end of March this year, as lower consumer tariffs and higher fuel costs continued to hurt their bottom lines, according to Crisil.
Analytical firm Crisil today also said there should be about 6.5 per cent hike in electricity tariff per annum in the next five years, which would help in improving the health of distribution companies (discoms).
“Aggregate accumulated losses of Indian utilities (state-owned) are estimated at over Rs 2 trillion as at the end of FY’12. About three-fourth of these losses were incurred over the last five years and these were funded mainly by borrowing from banks and financial institutions,” Crisil Infrastructure Advisory, a part of Crisil, said in a report.
There are about 89 discoms in the country. The estimates come against the backdrop of precarious financial health of discoms raising concerns of default in the banking system.
The overall exposure of discoms to financial institutions is estimated to be Rs 2.6 lakh crore.
As per Crisil, power tariffs inIndiarose just under five per cent per annum in the five years ended FY’10. During the same time, per capita income grew by 13.4 per cent every year while household expenditure increased by 10.6 per cent per annum.
“This indicates that Indian consumers can bear higher tariffs and policy makers may have more flexibility to increase tariffs than they are currently exercising,” Crisil Managing Director and CEO Roopa Kudva told reporters here.
Kudva noted that current power tariffs are well below the rates of inflation.
She pointed out that if power tariffs had kept pace with other household expenses, utilities would have earned additional revenue of about Rs 950 billion in this period.
“Instead of making aggregate losses of Rs 870 billion, they would have made an aggregate profit of Rs 80 billion,” Kudva said.
Going by Crisil estimates, the realised tariff as a percentage of power generation cost is 74 per cent compared to 80-90 per cent in some of the major developing countries.
The Indian power sector’s dependence on imported coal — more expensive than domestic fuel — in recent years.
“The power sector’s reliance on more expensive imported coal doubled from 7 per cent of coal-based power generation in FY 2007 to 15 per cent in FY 2012,” it said.
Automatic tariff increases, reduction of Aggregate Technical & Commercial (AT&C) losses and timely payment of subsidies by governments to their respective discoms, are among the steps that can help in bettering the power sector, Crisil noted.
JINDAL STEEL & POWER’S BOLIVIAN ORE PROJECT ON SHAKY GROUND
NEW DELHI: Naveen Jindal-controlled Jindal Steel & Power’s ambitious Bolivian project to mine 20 billion tonnes of iron ore is at risk after the Bolivian government encashed yet another $18-million bank guarantee from the Indian firm for not meeting contractual terms.
Jindal Steel Bolivia (JSB) was billed to become the largest foreign direct investment in the Latin American country under President Evo Morales’ reign. The South American nation had, in 2010, encashed a similar amount blaming the company for not meeting its commitments. JSB has sought the intervention of the international court of arbitration.
According to sources close to the development, it could well be the end of the road for the Indian steel maker inBolivia. “The writing is on the wall. It is hard to see how we can make this relationship work from here,” said the person, who didn’t want to be identified.
The Indian company has been struggling to hang on to its half of the El Mutun deposit, touted to be among the largest iron ore deposits in the world, that was to be developed into a 10-million-tonne per annum mine. Since the mine was located close to the inner border of the landlocked country, it required an expensive network of road, rail and river port infrastructure.
Despite dire statements made by senior ministers inBolivia, including Morales who threatened to take over the mines, negotiations for subsidised gas for the pellet, steel and power plants had continued till recently. Reports quoting company officials of JSB say work has been suspended since March when it informed the government it couldn’t go ahead with plans without a commitment of gas supply.
State-owned gas firm Yacimientos PetrolAferos Fiscales Bolivianos offered 2.5 million standard cubic metres per day (mscmd) against JSB’s requirement of 4.5 mscmd required by October 2014 leading up to 10 mscmd by 2017.
Last month, senior officials from the Indian steelmaker told The Economic Times that the two sides were discussing possibility of scaling down plans to adjust to reduced gas supply. But developments over the last few days have taken a nasty turn, with yet another annual bank guarantee being executed, and both sides issuing ultimatums.
Jindal Steel had won the 40-year rights to the iron ore deposit in 2007. According to the contract withBolivia, JSB was to invest $600 million by 2012. The Morales-led Bolivian government has already reworked a more profitable share for state-owned miner in zinc, lead and tin mines that was long operated by Swiss firm Glencore. It has nationalised non-renewable natural resources in 2006.
Increased resource nationalism may not have a big impact onIndia, say industry experts. With the exception of Jindal’s buy, whose terms are not really in public domain, Indian companies have stayed away.
“The cost of developing infrastructure is very high. And the distance fromIndia, makes it difficult to raise finance for a pure market play (without captive purpose) investment. But the primary reason is the opportunities opening up nearer home in the east board of Africa andAustralia, where many junior explorers have come to the fore and states such asQueenslandandVictoriaare also offering new opportunities.”
CESC TO ADD 500 MW RENEWABLE ENERGY BY 2015
MUMBAI: CESC, RP-Sanjiv Goenka-led power company, is planning to add 500 MW renewable energy capacity by 2015 through solar, wind and small hydro projects, its executive director said.
The Rs. 10,000 crore group recently commissioned 9 MW solar project in Kutch inGujarat. The company now plans to set up solar projects with total capacity of 50 MW across Maharashtra,Gujaratand Rajasthan.
CESC had invested R110 crore onKutchproject.
“We are creating a land bank in Rajasthan for solar projects. We already bought 250 acres,” said Subrata Talukdar, executive director, finance, CESC.
While CESC’s 100 MW hydel project in Arunachal Pradesh is underway, it plans to add two more hydel projects with combined capacity of 250 MW the state alone.
Meanwhile, its 15 MW wind farm in Jaisalmer will be commissioned by December this year.
CESC hopes the proposed solar, wind and hydel projects will help the company meet renewable purchase obligation (RPO) without buying renewable energy certificates (RECs) from the power exchanges.
Besides the renewable energy projects with combined capacity of 500 MW, CESC is also planning to add 7000 MW coal-based power capacity in six years by investing R36,000 crore.
GVK POWER FINANCE CHIEF MAY STEP DOWN
HYDERABAD: GVK Power & Infrastructure Ltd is likely to restructure its finance functions.
The rejig may follow the likely exit of a GVK veteran, Mr Isaac A. George, who may step down as the company’s Chief Finance Officer and Non-Independent Director.
Mr George has been instrumental in driving the group’s finances for nearly two decades. He had been handling vital finance related functions of the group, and has played a key role in making it a diversified business entity. Mr George has even taken the power and infrastructure subsidiary public and raised funds for various projects over the years. He was also key in firming up various term sheets for company projects and associated with its efforts at arranging finances and attracting private equity investments.
Sources close to the development said Mr George was certain to quit, and would do so formally during the company’s next board meeting.
Business Line’s attempts to confirm this development with the company had not yielded results till the time of going to the press.
The GVK Group and the listed company have two airports – Mumbai andBangalore, under their fold. Several power and road projects are handled through different business verticals. The company had last year made a major acquisition of coal mines inAustraliaand is in the process of finalising finances.
BGR ENERGY’S STOCK LOSES STEAM AFTER WINNING NTPC BULK TENDER ORDER
Generally, infrastructure stocks gain in anticipation of or after winning orders as it provides visibility to the business. BGR Energy Systems, the company which provides balance of plant services to power projects and has gradually extended its business model with manufacturing of power equipment through joint venture withJapan’sHitachi, is no exception.
The stock gained 14% in three days before it announced that it has emerged as the lowest bidder for steam turbines-generators in NTPC’s bulk tender order round 2 (9*800mw) worth Rs 6,750 crore. According to the terms of the contract the company will get 4 units (Rs 3,000 crore). Sensex gained around 3% and BSE Capital Goods (CG) index was flat in the same period.
The same movements was witnessed again when the company emerged as the lowest bidder for boilers in NTPC’s bulk tender order round 1 (11*660mw) worth Rs 10,164 crore. The stock gained 16% in three days before the announcement. This time, Sensex was flat and CG index was down 1.3%. According to the terms of contract, the company will get 7 units (three projects) worth Rs 6,500 crore out of which the company is already awarded two projects of 2*660mw each (Solapur in Maharashtra and Meja in Uttar Pradesh). Third project of 2*660mw (Raghunathpur of West Bengal) will be awarded by May-end.
From the date the company has got the turbine order (September 16, 2011) till the boiler order (February 29, 2012), the stock has remained stable gaining 1.75% while CG index has crashed by 13.5%. This is partly because of the investors hope and confidence of the company receiving the boiler order in round 1 after beating infrastructure giants like Bharat Heavy Electricals and Larsen and Toubro) in turbine order of round 2.
However, the stock has lost momentum after receiving the boiler order and it is down 15% since then, despite the order book of Rs 8,200 crore (as on February-end) more than doubling after winning the bulk tender orders. CG index has further declined by 15% in the said period.
Scrapping of orders worth Rs 12,000 crore (4*660mw), which was expected to be ordered in the current quarter, announced by Rajasthan Rajya Vidyut Utpadan Nigam (RRVUNL) on April 30 is also partly responsible for the free-fall. Before RRVUNL announcement, stock and CG index was down around 10% each from the date of receiving the boiler order.
BHEL and BGR were lowest and second lowest bidder respectively. Analysts had not factored RRVUNL order into their estimates for BGR as there was uncertainty surrounding the awarding. But RRVUNL is now going to refloat the tenders and number of bidders are expected to double from three earlier. Thus, BGR will have to compete even more aggressively than before for boosting its order book as ordering pipeline appears to be limited. Analysts remain negative on the company and consensus recommendation is to ‘sell’. Says Rohit Singh, analyst, IDBI capital, “Margins will remain under pressure due to stiff competition in BTG (Boiler-turbine-generator) and BoP (balance of plant).”
After remaining in the negative zone, the stock suddenly zoomed towards the end of today’s trading session and closed with 3.08% gain. After the markets closed, the company announced that the contract with State Company of Oil Projects (SCOP), Iraq for development of two gas fields namely Akas and Al-Mansuria valued at $80.50 million (around Rs 427 crore) has been terminated with mutual consent of the Company and customer. It has also been agreed that contractual claims of the Company will be settled with mutual agreement.
BANGLADESH TO BUY POWER FROM INDIA’S OPEN MARKET
DHAKA: The government has for the first time moved to purchase electricity fromIndia’s open market, following a competitive bidding, a top official said Sunday.
The state-owned Bangladesh Power Development Board (BPDB) has already invited bids fromIndia’s potential gas or coal-based power plant owners, suppliers or traders to supply 250 megawatts (mw) of electricity to Bohrompur substation at Murshidabad inIndia, a senior BPDB official said.
This is the first timeBangladeshhas invited bids exclusively from Indian bidders to purchase electricity through competitive bidding to meet domestic demand. The deadline to submit bids is June 11.
The selected sponsor will be required to supply power up to Bohrompur substation at 400 KV level. The power will be transferred to Bheramara grid substation in Kushtia by the Power Grid Company of India (PGCI) and the Power Grid Company of Bangladesh (PGCB).
The BPDB seeks to select the sponsor, having the capacity of exporting 250 MW electricity toBangladesh, and asks the interested bidders to submit technical and commercial and tariff proposals.
The BPDB will ink a power purchase deal with the successful bidder, and the tenure of the agreement can be extended further on mutual understanding.
The BPDB official saidBangladeshwill purchase 250 mw electricity directly from Indian sponsors apart from importing of already agreed 250 MW from the Indian state-run NTPC to meet the country’s mounting electricity need.
Bangladeshis eyeing to purchase the total 500 mw of electricity fromIndiaby July 2013 for local needs.
Earlier, the BPDB and the NTPC Vidyut Vyapar Nigam (NVVN), a wholly owned subsidiary ofIndia’s National Thermal Power Corporation (NTPC), inked the deal on February 28, 2012 to import 250 mw of electricity.
The deal has 25 years term, and as per its provisionIndiawill also be able to purchase electricity fromBangladesh, if the latter has surplus electricity.
According to the deal,Bangladeshwill purchase 250 mw of electricity fromIndiaat a cost of around Taka 4.0 (4.87 US cents) / kWh, the BPDB sources said.
The BPDB will have to pay additional Taka 0.80 per unit as wheeling charge to the power distribution firm.
The electricity tariff may, however, change as per directives from the Indian Central Electricity Regulatory Commission (CERC).
Work of constructing transmission line and substations to facilitate electricity import will be completed by June 2013.
The country’s overall electricity generation is now hovering around 5,000 mw against the demand for over 6,500 mw. The government has a target to augment electricity generation to 20,000 mw by 2021.
Officials said the imported electricity will help easeBangladesh’s power supply shortage. It will also help establish a South Asian Association for Regional Cooperation (SAARC) electricity grid.
DHAKA, NEW DELHI TO HASTEN EXTRADITION TREATY
NEW DELHI: Dhaka andNew Delhion Monday agreed to expedite efforts to sign an extradition treaty at the earliest.
Foreign Minister Dipu Moni and her Indian counterpart S M Krishna noted that the legal framework for bilateral security cooperation would be completed with the signing of the extradition treaty.
According to a joint statement issued after Krishna and Moni co-chaired the first meeting of the Joint Consultative Committee in New Delhi on Monday, Dhaka and New Delhi reiterated their commitment that the territory of either side would not be allowed for activities inimical to the other, and resolved not to allow their respective territories to be used for training, sanctuary and other operations by domestic or foreign terrorist/militant or insurgent organisations and their operatives.
The two countries also rejected extremism, violence and terrorism and agreed to cooperate proactively in combating these evils.
Moni andKrishnawelcomed the commencement of implementation of the Coordinated Border Management Plan (CBMP) to control cross-border illegal activities and crimes as well as for maintenance of peace and harmony along the border.
They expressed confidence that it would enhance cooperation between the border guarding forces of the two countries, and enable them to manage the identified vulnerable areas with a view to preventing criminal activities, illegal movement, acts of violence and loss of lives along the border areas. They also noted that the fencing work in 185 vulnerable patches along the international border was progressing satisfactorily.
They noted that the signing of the Protocol to the Land Boundary Agreement had paved the way for settlement of all remaining land boundary issues. They agreed on the need for early implementation of the Protocol, including the early signing of the strip maps pertaining to Adverse Possessions and recently demarcated segments.
Moni and Krishna welcomed the Power Purchase Agreement signed between Bangladesh Power Development Board and NTPC Vidyut Vitaran Nigam for purchase of 250 MW power fromIndiabyBangladeshas well as the decision of the Government of Bangladesh to shortly invite tenders for the purchase of an additional 250 MW power fromIndia.
Both sides agreed to complete the pending administrative formalities for commissioning the inter-grid connectivity by July 2013. They also welcomed the establishment of a joint venture between NTPC and BPDB to set up a 1320MW thermal power plant in Bagerhat and directed them to complete its installation expeditiously.
They also directed to speed up the conclusion of a feasibility report for a similar power plant inChittagong. Both sides welcomed the constitution of a technical team to conduct feasibility study for transmission of power fromIndiato the eastern part ofBangladeshand options for interconnection for evacuation of power.
Indiawelcomed the participation ofBangladeshin power projects inIndia, particularly in the north-eastern states ofIndia.
Both sides called for an early implementation of the MoU for Cooperation in Renewable Energy and the MoU on the Conservation of the Sunderbans, along with the signing of a Protocol on Conservation of Royal Bengal Tigers of the Sunderban.
IS IRAN ON THE NUCLEAR EDGE?
Early on May 4, 2003, an unsigned, one-page fax arrived at the State Department inWashington,D.C.It contained an extraordinary secret offer fromIran’s rulers: in return for regime security, an end to sanctions and access to civilian nuclear technology,Iranpromised full transparency in its nuclear programme and a termination of material support for terrorist groups.
Tim Guldimann,Switzerland’s Ambassador toTehran, wrote in his covering letter that the proposals had been approved byIran’s supreme leader, Ayatollah Ali Khamenei, then-President Mohammad Khatami, and then-Foreign Minister Kamal Kharazzi.
Eight days later, an al-Qaeda bomb ripped through downtownRiyadh— and theUnited StatesblamedIran. Mohammad Javad Kharazzi,Iran’s Ambassador to the United Nations, flew toGenevaon May 24, to push forward the deal. His interlocutor, topU.S.diplomat Zalmay Khalilzad, didn’t show up.
Pressure onIndia
Nine years to the month since that lost opportunity, U.S. Secretary of State Hillary Clinton is inNew Delhi, seeking greater Indian support for harsh oil sanctions intended to chokeIran’s nuclear programme. ForNew Delhi, this involves real costs: the alternatives to Iranian oil are relatively expensive;Iran, moreover, offersIndiathe sole reliable land route into strategically-importantAfghanistan, where both countries have common interests.
The sanctions have been advertised as necessary to force a recalcitrantIranto end its pursuit of nuclear weapons — a pursuit, many fear, that could lead other regional powers likeTurkeyandSaudi Arabiato also seek similar capabilities, and even conceivably end in a nuclear holocaust. Earlier this monthIranand the P5+1 — the five permanent members of the Security Council, plusGermany— held their first nuclear talks in over a year. Gary Samore, a keyU.S.adviser, said sanctions helped. “There was much less posturing, no preconditions,” he said.
Little evidence
InIndia, though, there is mounting fear that the sanctions regime could just as easily lead the regime to dig in its heels — as it did after the spurned 2003 offer. For one, there is little evidenceIranis in fact within striking range of producing nuclear weapons. In testimony to the U.S. Senate in January, Director of National Intelligence James Clapper said there was no evidence to suggestIranwas working to build a bomb. David Petraeus, the director of the Central Intelligence Agency, concurred. Past intelligence estimates provided to President Barack Obama have arrived at much the same conclusions.
Last year, the International Atomic Energy Agency (IAEA) warned thatIranhad significantly enhanced its stockpile of 20 per cent enriched uranium — a level that can be converted relatively quickly into weapons-grade material. The stockpile far exceedsTehran’s stated needs for medical use.
However, the respected Institute for Science and International Security (ISIS) concluded last year, that a decision on whether or not to make a bomb was “unlikely to occur untilIranis first able to augment its enrichment capability to a point where it would have the ability to make weapons-grade uranium quickly and secretly.” Lieutenant-General Benny Gantz,Israel’s army chief, said last month that he did not think Mr. Khamenei would “want to go the extra mile” needed to build a bomb. “I think the Iranian leadership is composed of very rational people,” he said.
None of this is reason enough to be sanguine. Iran has developed missiles that can deliver a one-tonne warhead, the typical weight of a nuclear weapon, up to 1,000 kilometres — evidence that the idea of possessing one figures in its military imagination. Bruno Tertrais, an eminent French scholar, has also pointed out that just two countries that acquired the capabilities to make nuclear weapons didn’t eventually succumb to the temptation of building one.
But will they use one? “Iranians,” Israeli expert Avner Cohen has aruged, “are aware of the catastrophic consequences of such an act.” The Centre for Strategic and International Studies estimates that the Israeli nuclear arsenal, at more than 200 boosted and fusion weapons, is enough to annihilateIran.
Irrational actors?
InIsraeland theU.S., some experts argue thatIran’s theocratic leadership simply can’t be counted on to be deterred by nuclear weapons — and thus, even the smallest risk that it could acquire one must be eliminated. In 2005, Iranian President Mahmoud Ahmadinejad delivered an apocalyptic speech, arguing that the “establishment of the Zionist regime was a move by the world oppressor against the Islamic world.” “The outcomes of hundreds of years of war will be defined in Palestinian land,” he continued. “Israelmust be wiped off the map.”
Mr. Ahmadinejad’s apocalyptic words were recently invoked by Israeli Prime Minister Benjamin Netanyahu, who claimed thatIran“determinedly works for our destruction.”Iranwas, he continued, “feverishly working to develop atomic weapons to achieve that goal.”
Iran’s religious right, though, is more divided on the issue than the country’s adversaries insist. Mr. Khamenei has gone on record to assert that nuclear weapons are un-Islamic. Mohammad Taqi Mesbah-Yazdi’s Mesbah-Yazdi, one of Mr. Ahmadinejad’s key ideological mentors, and his disciple, Mohsen Gharavian, have defied this line. In February 2006, for example, Mr. Gharavian said there was “no religious constraint in using nuclear weapons to retaliate.” However, figures like Mohammad Reza Bahonar, once one of Mr. Ahmadinejad’s loyalists, have criticised him for giving the impression thatIranis “bent upon destroying the prevailing global management.”
Messianic fantasies, it bears mention, aren’t an Iranian monopoly. Former U.S. President Ronald Reagan, who presided over the most formidable nuclear arsenal on earth in the midst of the Cold War, said in 1971 that, “for the first time ever, everything is in place for the battle of Armageddon and the second coming of Christ.” Later, in 1980, he told fundamentalist television evangelist Jim Bakker: “we may be the generation that sees Armageddon.” The world survived Mr. Reagan; there is no particular reason to believe it won’t survive Mr. Ahmadinejad.
Iran’s foreign policy, analyst Sergey Markedonov recently pointed out, consisted of “loud revolutionary rhetoric [but] realist foreign-policy moves”: consisting of cultivating Christian Armenia, a refusal to back Islamists in the Russian Caucuses and its cultivating détente with pro-U.S.Georgia.
For now,Iranis talking, hoping to stave off a sanctions regime that hurts. Escalating the pressure to unbearable levels, though, could mean the regime loses any stakes in the regional and international order — tipping the balance in favour of those inIranwho believe it is imperative to acquire the most potent instrument of regime survival known to the human race.
RENEW WIND PLANS RS 6,000 CRORE INVESTMENT IN 2 YEARS
GANDHINAGAR: Independent renewable energy producer ReNew Wind Power Pvt Ltd plans to invest around Rs 6,000 crore on development of 1,000 MW of wind power in the next couple of years in the country. It commissioned its first wind farm project of 25.2 megawatt (MW) at Jasdan inRajkotdistrict of Gujarat on Sunday.
“We are working on 15 projects aggregating 1,000 MW of wind power in States like Rajasthan, Karnataka, Tamil Nadu and Maharashtra as well,” Mr Sumant Sinha, Founder Chairman and CEO, ReNew Wind Power, told Business Line on Monday.
Currently, the per megawatt cost of installation of wind power equipment is Rs 6 crore while per unit of electricity would cost, on an average, Rs 4.50 to the customer, which is far cheaper than solar energy at Rs 8 to Rs 9 an unit (kilowatt hour), he said.
Global major Goldman Sachs had infused Rs 1,000 crore as equity in September last year into the company, which invested Rs 140 crore on the Jasdan project. The PTC India Financial Services Ltd (PFC), promoted by PTC India LTD as an investment vehicle, financed the Jasdan project in a 70:30 debt-equity ratio, he added.
The Chief Minister, Mr Narendra Modi, inaugurated the facility, which comprises 12 units of Suzlon S88 wind turbines with 2.1 MW capacity each. It is selling its output under a under long-term power purchasing agreement contract to Gujarat Urja Vikas Nigam Ltd (23.1 MW), and the remaining output to PhilipsIndia(2.1 MW).
Mr Tulsi Tanti, Chairman, Suzlon Group, the world’s fifth leading andIndia’s largest wind turbine manufacturer, said his company is partnering with ReNew Wind Power.
Apart from Suzlon, ReNew Power is working closely with key players such as Regen, Gamesa, Vestas and EnerconIndia. The Jasdan wind farm is also expected to qualify as a Clean Development Mechanism project under the Kyoto Protocol, which will add to the financial viability of the project, Mr Sinha said.
ReNew is also exploring the opportunity of diversifying into alternative energy sources such as biomass and hydroelectricity apart from solar and wind power in the coming years. Currently,Indiagenerates 3,000 MW of wind power.
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