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Desalination service providers/ manufacturers can look for two types of business avenues
Industrial Desalination
Plants: Large companies
inclination to have captive
desalination plants to meet
their process water
demands.
State Government-Owned
1245
500
FY11
FY12
FY13
1
2
Gujarat
Indian Desalination Services market: Current Desalination Plants State Wise
Capacity: 291,820 cum/day, (India), 2013-14
Others
16%
Tamilnadu
37%
Gujarat
47%
Government
and Political
Market
Drivers
Support
Urban infrastructure development support under JNNURM and INR 536.60 billion has
been allocated for urban water supply under 11th five year plan that will support more
desalination plants in India.
Political leaders agree to the argument of using desalination to rectify water
problems in their respective states. Ms.Jayalalitha and Mr.Karunanidhi in Tamilnadu
are strongly supporting desalination. Gujarats t h e n Chief Minister, Mr. Narendra
Modi, has taken inputs from companies like Hyflux and GE Water for using
desalination plants in Gujarat.
Industrial Water Use Restriction
Increase in ground water contamination by industries is pushing state
governments to impose restriction on ground water use. Such restrictions will give
boost to desalination plant usage by industrial setups.
Reduced Plant Prices
An RO plant costs approximately 60 percent of its cost 10 years ago. This reduced
price gives incentives to build new plants.
Population Growth and Water Shortage
Water scarcity
and decreased per capita water availably push the use of desalination plants.
Market
Drivers
Market
Restraints
Cost of Production
Cost of production of water from desalination plants is as low as 15 paisa per liter, but
it is still high in comparison to water from other sources. Increase in cost of water
will inflate overall production costs for any industrial unit. This factor impedes the
adoption of desalination plants.
Restructuring
Infrastructure maintained by industries, which started a decade ago will have to go for
restructuring to accommodate desalination plant. Such restructuring is not supported
by most of the industrial setups.
Wastewater Recycling and Improved Production process
Many industrial units are installing plants for water recycling and reducing water usage.
This, in turn, will reduce the opportunities for desalination plants.
Global Economic Recession
Although India is not much effected by global recession, still a few projects have been
put on hold by industries to keep their energies focused on the core work.
Challenges Faced:
Industry Fragmentation: Desalination market in India is
highly fragmented with so many Tier-2 and regional
players. Creation of industry wise standards is a major
challenge.
Industry
Bureaucratic
Hurdles: There
are many
desalination
projects, which
were announced
in 2005 in
Orissa, Andhra
Pradesh, and
Pondicherry.
However, due to
slow execution
and bureaucratic
Challenges
Protests:
Industry
Recent
desalination plant in
Bhuj, Gujarat has
Fishermens
raised questions on
protest against
the growth of
Adani groups
desalination plants
SEZ and its
near the coastal
Improper Training and Skill sets: As the desalination
market in India is new, there is a scarcity of proper human resources.
India desalination
market to grow at 22% CAGR till 2017 to reach INR 6000 Cr
Future
Capacity
India is expected to have over 500 desalination plants by 2017
Additions
With more than 300 plants being built in the states of Tamil Nadu, Gujarat
and
Maharashtra
The top five states to emerge as desalination hubs are Maharashtra, Gujarat, Tamil Nadu,
Karnataka and West Bengal
A 150-million-litre-a-day desalination plant to convert sea water to drinking water is to
come up adjacent to the Nemmeli desalination plan. The additional capacity will supply
drinking water to over 6.46 lakh residents in the suburbs to the south of Chennai which
were added to the City Corporation limits.
With growing demand and more focus on desalination by states, the capacity is expected to
reach 1,449,942 cubic m/day by 2015
Hyflux to start a new project at Dahej, Gujarat.
Recently completed
Capacityprojects:
For Tata chemicals GE installed a 5.8 MLD sea water desalination plant
IDE technologies has installed nine
desalination plants at Jamnagar and two at
1,450,000
Kakinada for Reliance Petroleum, two each in Essar Oil limited and Sanghi Industries
1,210,000
limited, four for Nuclear Power Corporation of India and one for EID Parry
BHEL has commissioned
a desalination plant on a turkey basis in the Gulf of Mannar
910,000
in Tamil Nadu. 730,000
Chemplast
has set up a desalination plant in Karaikal to meet the needs of its
580,000
461,000
caustic
soda plant.
367,000
291,000
Tata Steel has a set up an integrated water and power plant for its Titanium Dioxide
facility in Tamil Nadu
FY 08
FY 09
FY 10
FY 11
FY 12
FY 13
FY14
FY15
Sterlite Industries has set up a desalination plant for its copper smelting plant at
Tuticorin in Tamil Nadu
L&T has set up a thermal desalination plant for its cement plant in Gujarat
Ramanathapuram in Tamil Nadu on PPP for rural water supply.
Hyflux to start a new project at Dahej, Gujarat.
Market Destined
2
2
Overview: India
The oil and gas sector is one of the six core industries in India. It is of strategic importance
and plays a pivotal role in influencing decisions across other important spheres of the
economy.
India is the fourth-largest energy consumer (2013) of oil & gas in the world, accounting for
37 per cent of total energy consumption. Oil consumption is estimated to reach four million
barrels per day (MBPD) by FY16, expanding at a compound annual growth rate (CAGR) of
3.2 per cent during FY08-16. By 2025, India is expected to overtake Japan to become the
third-largest consumer of oil.
The country has 5.7 billion barrels of proven oil reserves. It had 47.8 trillion cubic feet
(TCF) of gas reserves and produced 33.7 billion cubic meter (BCM) of gas in 2013.
India has 19 refineries in the public sector and three in the private sector. In FY14, public
sector refineries accounted for 53.4 per cent of total refinery crude throughput.
India has 9,460 km of crude oil pipelines and 14,083 km of product pipelines.
Bharat Petroleum Corp Ltd (BPCL) has planned to invest Rs 13,000 crore (US$ 2.04 billion)
in energy exploration and production in Mozambique and Brazil over the next four years. It
will be the firm's biggest investment in the upstream sector.
Petronet LNG Ltd plans to expand capacity of its Dahej terminal in the western state of
Gujarat to 17.5 million tonnes per annum (MTPA), said Mr A K Balyan, Managing Director,
Petronet LNG.
Gujarat State Petroleum Corp Ltd (GSPC) plans to pick up stakes in Vadodara Gas Co Ltd
(VGCL), which services the Vadodara municipality area and Sabarmati Gas Ltd (SGL) that
supplies gas in three northern district of Gujarat.
Finland-based Chempolis Ltd has signed a partnership agreement with Bharat Petroleum
Corporation Ltd's Assam-based refinery, Numaligarh Refinery Ltd (NRL), to build a world
class biorefinery.
Gulf Petrochem Group plans to invest an additional Rs 500 crore (US$ 78.59 million) in
India to enter the cluttered and competitive lubricants market worth Rs 6,000 crore (US$
943.13 million).
ONGC Videsh Ltd (OVL) and Pemex-Exploracion Y Produccion, the National Oil Company of
Mexico, have entered into a memorandum of understanding (MoU) to cooperate in the
hydrocarbon sector in Mexico.
Bharat Petroleum Corp Ltd (BPCL) has planned to invest Rs 13,000 crore (US$ 2.04 billion)
in energy exploration and production in Mozambique and Brazil over the next four years. It
will be the firm's biggest investment in the upstream sector.
Government Initiatives:
Three landmark initiatives for energy efficiency Design Guidelines for Energy Efficient MultiStorey Residential Buildings and Star Ratings for Diesel Gensets and for Hospital Buildings
were launched by Mr Dharmendra Pradhan, Minister of State with Independent Charge for
Petroleum and Natural Gas, Government of India.
Some of the major initiatives taken by the Government of India to promote oil and gas sector
are:
India and Norway have discussed bilateral relationship between the two countries in the
field of oil and natural gas and decided to extend cooperation in hydrocarbon exploration.
India and Vietnam have stepped up cooperation in the energy sector as ONGC Videsh and
PetroVietnam Exploration Production Corporation has signed an agreement to explore three oil
blocks.
The Government of India has planned to set up a Petroleum, Chemicals and Petrochemicals
Investment Region (PCPIR) near Bina, Madhya Pradesh with an investment worth around Rs 1
trillion (US$ 15.71 billion).
The Government of India gave its approval to sign a memorandum of understanding (MoU)
between India and the US for cooperation in gas hydrates for a period of five years.
Future Prospects:
India has been among the worlds fastest growing economies. With expanding economy comes
an increasing demand for energy and, if current trends continue, India will be the worlds third
largest energy consumer by 2020.
Due to the expected strong growth in demand, Indias dependency on oil imports is likely to
increase further. Rapid economic growth is leading to greater outputs, which in turn is increasing
the demand of oil for production and transportation.
The National Gas Hydrate Programme (NGHP) Expedition-02 and 03 are under advanced stage
of planning and are due in the period 2014 - 2017. Under the programme the government plans
to core 20 sand prone sites and drill 40 wells.
References: Media Reports, Press Releases, Press Information Bureau, Ministry of
Petroleum and Natural Gas
POWER SECTOR.
Overview: India
Power or electricity is one of the most critical components of infrastructure, affecting
economic growth and wellbeing of nations.
The existence and development of adequate power infrastructure is essential for sustained
growth of the Indian economy.
With a production of 1,006 terawatt hours (TWh), India is the fifth largest producer and
consumer of electricity in the world after US, China, Japan and Russia.
The Indian power sector is one of the most diversified in the world. Sources for power
generation range from commercial sources such as coal, lignite, natural gas, oil, hydro and
nuclear power to other viable non-conventional sources such as wind, solar, and agriculture
and domestic waste.
The demand for electricity in the country has been growing at a rapid rate and is expected
to grow further in the years to come. In order to meet the increasing requirement of
electricity, massive addition to the installed generating capacity in the country is required.
Larsen & Toubro Ltd (L&T) has signed a contract worth US$ 200 million to set up a 225 MW
gas-based power plant at Sikalbaha in Chittagong, Bangladesh.
Adani Power has bought Lanco Infratechs Udupi power plant for Rs 6,000 crore (US$
978.24 million), which has made it the largest acquisition in the thermal power space.
ReGen Powertech has forayed into solar power business as it plans to produce Indias first
solar powered inverter devices.
Astonfield Renewables plans to set up two 2 MW solar projects in Mauritius with an
investment of approximately US$ 8.2 million.
Government Initiatives:
India has emerged as one of the fastest growing economies in the world. Its current economic
performance reflects a healthy trend based on increased consumption, investment and exports.
Over the next five years, this growth is expected to continue. The Government of India has
identified the power sector as a key sector of focus to promote sustained industrial growth.
Some of the initiatives taken by the Government of India to boost the power sector of India are
as follows:
The Government of India has planned to invest Rs 2 trillion (US$ 32.61 billion) in solar and
wind power projects in the deserts to compensate for Indias depleting fossil fuel reserves.
Mr Narendra Modi, the Prime Minister of India, has dedicated to the nation the four laning of
Pune-Solapur National Highway no 9 section and 765 kilovolt (kV) Raichur-Solapur
transmission lines.
The Government of India has dedicated the 1,000 MW stage I of Mouda Super Thermal
Power Project to the nation in Mouda, Maharashtra, on the August 21, 2014.
The Government plans to accelerate wind energy generation by adding an ambitious 10,000
MW every year, or five times the total new capacity that came up in the last fiscal, in order to
reduce India's dependence on costly energy imports.
The Government of India has decided to provide automatic clearance for coal linkage to new
power plants and will also be allowed to enhance capacity up to 50 per cent.
The Government of Andhra Pradesh (AP) plans to set up a 1,000 MW solar park in Guntur
district. This move comes in the backdrop of AP seeking to offer 24x7 power supply from
October 2, 2014.
Road Ahead:
The government is targeting capacity addition of around 89 GW under the 12th (201217) and
around 100 GW under the 13th (201722) Five-Year Plan. The expected investments in the
power sector during the 12th Plan (201217) is US$ 223.9 billion. There is a tangible shift in
policy focus on the sources of power. The government is keen on promotion of hydro, renewable
and gas-based projects, as well as adoption of clean coal technology.
Wind energy is the largest source of renewable energy in India; it accounts for an estimated 87
per cent of total installed capacity (18.3 GW). There are plans to double wind power generation
capacity to 20 GW by 2022.
Biomass is the second largest source of renewable energy, accounting for 12 per cent of total
installed capacity in renewable energy. There is a strong upside potential in biomass in the
coming years.