DESALINATION

Desalination Service Providers/Equipment Manufacturers

Desalination service providers/ manufacturers can look for two
types of business avenues
Desalination Service Providers/Equipment
Manufacturers

Industrial Desalination
Plants: Large companies
inclination to have captive
desalination plants to meet
their process water
demands.
The model used in tenders/projects
by industrial institutions is custom
build and transfer. In some projects, O
& M is also taken care for 3 to 5 years.

State Government-Owned
Desalination Plants: Government
comes out with desalination plants
to fulfill states household and
municipal water needs

The model used in tenders/projects

by government is BOOT (build,
own, operate and transfer). Usual time
spread is of 10 to 20 years

 The Indian desalination

market is very nascent and in the development stage
Competitive
Landscape
Desalination market is expected to outperform the other water treatment markets.
Government support, private sector participation, and awareness will help in the growth of
this market
With Government support, private sector participation, and awareness will help in the growth
of this market. With foreign players eyeing this market, it will witness some best practices,
in terms of technologies and processes, being adopted in near future.
Past Market Trend (INR in crs)
2500
2164
2000
1664
1500

1245

1000
500
0
FY11

FY12

FY13

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Indian Desalination Services market:Current

Desalination Plants State Wise
Capacity: 291,820 cum/day, (India), 2013-14

Gujarat and Tamil Nadu have been

more active in setting up desalination
plants in comparison to other coastal
states in India.

Others
16%
Gujarat
47%

Tamilnadu
37%

Others include states such as Maharastra,

AndhraPradesh, Rajasthan, Orissa, and
West Bengal. Large projects such as
Krishnapatnam port, Kasnau-Matasukh
Lignite Mines, Visakhapatnam, and so on
are scheduled to be functional in the
coming years.

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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.

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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.

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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
hurdles, they
have not started
yet.

Challenges

Protests: Recent
Fishermens protest
against Adani
groups SEZ and its
desalination plant in
Bhuj, Gujarat has
raised questions on
the growth of
desalination plants
near the coastal

Improper Training and Skill sets: As the desalination

market in India is new, there is a scarcity of proper human resources.
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 India desalination market to grow at 22% CAGR till 2017 to reach INR 6000 Cr

Future
Additions
IndiaCapacity
is expected to have
over 500 desalination plants by 2017

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.
Capacity

FY14

1,450,000

FY 13

1,210,000

FY 12

910,000

FY 11

730,000

FY 10

580,000

367,000

FY 09

461,000

291,000

FY 08

FY15
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Recently completed projects:

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
Kakinada for Reliance Petroleum, two each in Essar Oil limited and Sanghi Industries
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
in Tamil Nadu.
Chemplast has set up a desalination plant in Karaikal to meet the needs of its caustic
soda plant.
Tata Steel has a set up an integrated water and power plant for its Titanium Dioxide
facility in Tamil Nadu
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.

Future Capacity Additions

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Future Capacity Additions

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Market Destined

OIL AND GAS

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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.

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Oil and Gas Market in India:

Backed by new oil fields, domestic oil output is anticipated to grow to 1 MBPD by FY16.
With India developing gas-fired power stations, consumption is up more than 160 per cent
since 1995.
Gas consumption is likely to expand at a CAGR of 21 per cent during FY0817.
Domestic production accounts for more than three-quarter of the countrys total gas
consumption.
India increasingly relies on imported LNG; the country was the fifth-largest LNG importer in
2013, accounting for 5.5 per cent of global imports.
Indias LNG imports are forecasted to increase at a CAGR of 33 per cent during 201217.
State-owned ONGC dominate the upstream segment (exploration and production),
accounting for approximately 60 per cent of the countrys total oil output (FY13).
IOCL operates 11,214 km network of crude, gas and product pipelines, with a capacity of
1.6 MBPD of oil and 10 million metric standard cubic metre per day (MMSCMD) of gas. This
is around 30 per cent of the nations total pipeline network. IOCL is the largest company,
operating 10 out of 22 Indian refineries, with a combined capacity of 1.3 MBPD.
Reliance launched Indias first privately owned refinery in 1999 and gained considerable
market share (30 per cent). Essars Vadinar refinery has a capacity of 20 MMTPA, currently
accounting for around 10 per cent of total refining capacity.

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Key Projects and Investments:

According to data released by the Department of Industrial Policy and Promotion (DIPP), the
petroleum and natural gas sector attracted foreign direct investment (FDI) worth Rs 31,620
crore (US$ 4.97 billion) between April 2000 and September 2014.
Following are some of the major investments and developments in the oil and gas 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.

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 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.

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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.

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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

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POWER SECTOR.

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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.

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Power Sector in India:

Electricity production in India (excluding captive generation) stood at 911.6 TWh in FY13, a
4 per cent growth over the previous fiscal. During FY14, electricity production stood at 967
TWh. Over FY0714, electricity production expanded at a compound annual growth rate
(CAGR) of 5.6 per cent.
The Planning Commissions 12th Plan projects that total domestic energy production would
reach 669.6 million tonnes of oil equivalent (MTOE) by 201617 and 844 MTOE by 2021
22.
As of April 2014, total thermal installed capacity stood at 168.4 gigawatt (GW), while hydro
and renewable energy installed capacity totalled 40.5 GW and 31.7 GW, respectively. At 4.8
GW, nuclear energy capacity remained broadly constant from that in the previous year.
Indian solar installations are forecasted to be approximately 1,000 megawatt (MW) in 2014,
according to Mercom Capital Group, a global clean energy communications and consulting
firm.

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Key Projects and Investments:

The investment climate is positive in the power sector. Due to policy of liberalisation, the sector
has witnessed higher investment flows than envisaged. The Ministry of Power has sent its
proposal for the addition of 76,000 MW of power capacity in the 12th Five Year plan (2012-17),
to the Planning Commission. The Ministry has set a target of adding 93,000 MW in the 13th Five
Year Plan (2017-2022).
The industry has attracted FDI worth US$ 9,269.45 million during the period April 2000 to
August 2014.
Some of the major investments made into the Indian power sector are as follows:
Three landmark initiatives for energy efficiency Design Guidelines for Energy Efficient
Multi-Storey 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.
Neyveli Lignite Corporation (NLC), as part of its entry into green energy generation, has
lined up renewable energy projects worth Rs 500 crore (US$ 81.51 million) to set up wind
and solar energy projects of 80 MW in India.
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.

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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.

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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.

References: Ministry of Power, Press Information Bureau, Media Reports

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