Energy News Monitor | Volume XII; Issue 36

[Coal Auctions is really a Game Changer?]

                             “The government promoted the idea of auctions on the premise that the process will bring transparency and offer an equal opportunity for all consumers of coal. The government also hoped that the process will determine the true value of coal and started the auction process. Selected coal blocks were divided into three categories…”

Energy News

[GOOD]

A shift to spot market purchase of crude oil is a step in the right direction!                                   

                                                                                                  [BAD]

More subsidies to the solar sector will add to the woes of distribution companies! 

[UGLY]

Failure to take advantage of the low gas price environment carries a huge economic and environmental opportunity cost!  

 

 [WEEK IN REVIEW]

Coal Auctions is really a Game Changer?

Ashish Gupta, Observer Research Foundation

n August 25, 2014 the Supreme Court declared that the allocation of coal blocks was illegal & arbitrary.  On September 24, 2014 it cancelled the allocation of all the 218 coal blocks. Following this, the Indian government issued the Coal Mines (Special Provision) Ordinance 2014. The Coal Mines (Special Provision) Bill 2014 and its subsequent rules were passed in December 2014 and the Coal Mines (Special Provision) Act, 2014 was included in the Indian coal mining legislative framework. The government was then free to auction or allot coal blocks to state owned firms. This is how the idea of auctions was introduced. But the process adopted to lay down the framework of auctioning coal blocks started before the cancellation order. The developments are given below:

·         On September 10, 2010, the government amended the Mines & Minerals Development & Regulation Act to facilitate way for competitive bidding

·         On February 2, 2012, the government drafted the framework for auctions by competitive bidding of Coal Mines Rules, 2012 which was amended on December 27, 2012 and further amended on March 11, 2014

·         On May 30, 2012, 54 coal blocks across seven States identified for allocation by Ministry of Coal (MoC)

·         On November 23, 2013, the Cabinet Committee on Economic Affairs approves the bidding methodology

·         In February 2014, MoC releases draft Request for Proposal and Coal Mines Development and Production Agreement

The government promoted the idea of auctions on the premise that the process will bring transparency and offer an equal opportunity for all consumers of coal. The government also hoped that the process will determine the true value of coal and started the auction process. Selected coal blocks were divided into three categories: Schedule I included all coal blocks; Schedule II included 42 coal blocks ready to operate and Schedule III included 32 coal blocks which have made progress towards development. The auction process was held separately for power (regulated sector) and non-power (non-regulated) sectors. A floor price was set by the Government for each mine based on its intrinsic value and bidders were required to quote above this floor price.

Auction Status

Allottees	No. of Blocks	Disputed	Remarks
Pvt. Sector	33	5	Key disputed cases: Gare Palma IV/2 and IV/3, Tara, Chitarpur and Parbatpur Central
PSU	27		Status not in public domain
Pvt. + PSU	6		Operational

Source: MSTC

As of now 66 coal blocks have been offered through auctions but only 6 coal blocks are in operational stage. The companies are losing interest in coal auctions because they bid aggressively in the first two rounds and agreed to pay huge additional premiums which cannot be charged to the consumer.  In the first round when Schedule II mines were put up for the auctions, the government received 176 bids for 21 coal blocks (for eg Gare Palma V – 16 bidders). The auction of Schedule III mines in round two also witnessed large number of bidders (for eg Utkal C - 16 bidders, Jamkhani – 11 bidders etc). This clearly shows intense competition for some blocks. The extra premium the bidders quoted for power sector ranged from INR 470 to INR 940 per tonne, all negative. In negative bidding, power producers forego their right to pass on the mining cost to the consumers and instead agree to pay additional premium to the government. For the non-power, the prices quoted ranging from INR 900 to about INR 3000 rupees per tonne.

Source: ORF Coal Auction Roundtable

In the first two rounds, the companies were desperate to secure coal blocks as they had invested heavily in the end use plant for which they needed fuel security. Now companies are very cautious in participating in auctions. 

Till now, three rounds of coal auction have been conducted by the government. While the first two tranches of the coal auction had fetched the government over INR 2 lakh crore from the auction of 29 mines, the third round saw bidding of only 3 mines as against planned 10 mines. Four blocks were withdrawn due to lack of bids at the technical qualification stage. The government cancelled the fourth round of coal block auction scheduled in January 2016 owing to a lukewarm response. Apart from this firms are reluctant to proceed with the coal block takeover and subsequent operations owing to uncertainty of coal cost recovery. Recently, Monnet Ispat proposed to surrender its Utkal C block due to proposed capping of fixed charge in the judiciary. This is among many reasons why the last two rounds were not able to garner enthusiasm. This also shows that companies now are considering many factors such as savings in development risks, views on alternate fuel cost, fuel security, and realisation of production/returns than just the intrinsic value. 

With the inputs negatively priced or priced at a high cost, the economic viability of their project becomes uncertain. The negative prices for inputs for a period of, say, 25 years, may not be a realistic solution, since this will lead to significant cost recovery pressures. Combined with the proposed capping of fixed charges by the government, cost recovery casts a long shadow on the viability of the winning bids. As such, efficient mining, cost control and maximum recovery are key for success. But the question remains as to whether the companies will be able to attract good technology/design at competitive prices and whether the coal auctions will be able to deliver concrete outcomes in terms of efficiency and commercial viability?      

Views are those of the author                    

Author can be contacted at [email protected]

TAPI and India's energy diplomacy

Sreemati Ganguli*

he recent ground-breaking ceremony of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, was followed by several Indo-Russian Memoranda of Understanding (MoUs) on energy during the 16th annual Indo-Russian Summit in Moscow in December 2015. These events add to Rosneft’s decisions in 2014 to buy a 49 percent share in Essar Oil in mid-2015 and to cooperate with OVL, both Indians companies, on exploration and hydrocarbon production in Russia’s offshore Arctic. Also, Prime Minister Narendra Modi visited Central Asia in July 2015, particularly Kazakhstan and Turkmenistan, to declare India’s growing importance as an alternative energy market in Eurasia, aside from the EU, China and Japan, and as a potential power in the energy-rich Eurasian space.

Background 

TAPI has come a long way after its initial conceptualization in 1995, promoted by the U.S. Yet the 1998 bombing of the U.S. Embassies in Kenya and Tanzania, the establishment of Taliban rule in Afghanistan, and later the U.S. and ISAF operations in Afghanistan following the 9/11 attacks put this project on the backburner. The long delay testifies to how insecurity in one country affects regional security in a much broader sense and even inter-regional security in the long-term. The project’s viability was only seriously considered after the signing of a tripartite agreement among India, Pakistan and Afghanistan in 2008 and the resulting agreement on a uniform transit fee and gas purchases among these countries in 2012.

Other proposals aiming to involve India in the Eurasian energy market have included the Russia-China-India (RCI) pipeline – an ambitious project linking Russia, Turkmenistan, Uzbekistan, Kazakhstan, Xinjiang and Ladakh (India) in 2003, bypassing Pakistan and Afghanistan, whose feasibility was nevertheless a problem. Another project was discussed during a visit of Kazakhstan’s Foreign Minister to New Delhi in March 2013, aiming to bring gas from Russia to India through a pipeline covering Kazakhstan, Uzbekistan, Afghanistan and Pakistan. OVL showed an initial interest in the project, but it could not be finalized due to the regional security situation and the resultant apathy of international energy companies. Russia has also supported the Iran-Pakistan-India (IPI) pipeline, intended to prevent Turkmenistan from entering the South Asian market, and as a counterweight balance to the U.S.-backed TAPI. However, the project fell under the U.S. sanctions against Iran and serious doubts existed regarding its feasibility. While India lost interest in the project (now transformed into an Iran-Pakistan-China pipeline project), it could potentially reconsider its participation after the lifting of sanctions against Iran. 

On the other hand, it should be noted that India has already entered the Eurasian energy market through the 2001 Rosneft-OVL deal for a 20 percent stake in Sakhalin-1 and OVL’S 2009 acquisition of Imperial Energy for fields in the Tomsk region, while the company in 2011 obtained a 25 percent stake in Kazakhstan’s offshore Satpayev field in the Northern Caspian Sea.

Implications

With an expected annual economic growth of over 7 percent, it is calculated that by 2030, India’s dependence on imported fossil fuels will exceed 53 percent of India’s total energy consumption. India therefore needs alternative energy suppliers, aside from its traditional ones in the Middle-East and North Africa. Simultaneously, Eurasian suppliers are in search of alternative markets to tackle diminishing demand in the EU and their over-dependence on China as a market. Indeed, diversification of sources and markets is essential to ensure the future energy security of both producers and markets.

Notably, PM Modi’s insistence during his visit to Turkmenistan on searching for multiple options for supply routes to make TAPI successful, including the land-sea route via Iran, demonstrated India’s renewed interest in Eurasia as a viable energy source. And for Turkmenistan, access to India, which displays the second fastest growing energy market in South Asia, would be highly beneficial. TAPI also promotes the idea of establishing energy interdependence between countries like India and Pakistan, which share a history of animosity, and with Afghanistan, with a troubled past and a struggling present. This project promotes sharing of economic benefits among the participants, and the gas volumes and the amount of transit fees from the pipeline assist economic restructuring in all the participating countries. A dedicated guard force for TAPI, seminar to that established for the BTC pipeline, should be organized by the partner countries to guarantee TAPI’s security, and thus, its viability.

This experimental venture, if successful, could open up new possibilities for energy cooperation, involving other Central Asian states like Kazakhstan and Uzbekistan in petro-energy and Tajikistan and Kyrgyzstan in the hydro-energy spheres. A mechanism for energy cooperation already exists in the form of CASAREM in South Asia, but it is imperative for this organization to go beyond the geopolitics of exclusion and to include India in the venture for the long-term viability of the project.

The recent Indo-Russian oil deals, such as Rosneft’s sale of a 10 percent stake in Vankorneft to OVL for US$ 1.3 billion, are modest in monetary terms, especially if compared to Russo-Chinese energy agreements. But they remain significant in the current international energy scenario. Energy prices have dipped to a record low in international energy markets; demand is falling in the EU market; new energy suppliers have emerged like Iran and the U.S. after its historic decision to export shale gas; and Russia is reeling under the western economic sanctions after the Ukrainian crisis. All this provides strong incentives for countries depending on energy exports, like Russia, to engage India’s energy market, not least to balance its over-reliance on China.

These moves could also enable India, now a full member of the SCO, to choose more freely between pipeline projects and energy fields through the SCO Energy Club. But this also requires India to demonstrate much more resolute political will, suave diplomacy and strong economic prowess to prove its capability as a rising energy power in the region. To date, India has repeatedly been prevented from gaining stakes in Central Asia’s energy fields (most importantly in Kazakhstan’s Kashagan field in September 2013), in favor of others. 

Significantly, geopolitics is at play at Eurasia’s grand energy chessboard. China, Japan and the EU compete for favourable deals and suitable routes, while Russia, Kazakhstan and Turkmenistan vie for their share of existing and new markets. Interestingly, the SCO Energy Club, hoping to be a formidable energy alliance in Eurasia, does not include Turkmenistan. India therefore needs to engage in a delicate balancing of competing interests, a game that China has been playing well for a long time, to make any inroad into the Eurasian market. This task is made all the more difficult by the security situation in South Asia. Any pipeline project from Eurasia to India would have to cross a neighbourhood whose instability was most recently underlined by the simultaneous attacks against the Pathankote air base in India and the Indian Consulate in Mazar-e-Sharif in Afghanistan in early January 2016. TAPI therefore still has a long way to go, and India also needs to consider optional pipeline routes and their cost-benefit ratio. India can only satisfy its growing energy needs through multiple options involving competing producers like Russia and Turkmenistan. For these producers, India in turn provides the option for balancing China. 

Conclusions 

India so far has a very limited presence in Eurasian energy sphere, which does not match the potential it possesses and the options it offers. Recently, the changing international energy scenario has opened up several opportunities for India to fuel and sustain its growth. Mutual recognition of the fact that sustainable energy security is not a choice but an imperative for both India and Eurasia is the need of the hour. In a long-term perspective, energy diplomacy will constitute India’s main claim to influence in Eurasia – it will lead the way for India to become actively engaged in the region and to develop a strategy to sustain its rise as an alternative great power. 

*Dr. Sreemati Ganguli is a Fellow at the Institute of Foreign Policy Studies, University of Calcutta, India. She is the author of two books; “Indo-Russian Relations 1992-2002: The Making of a Relationship' (2009)” and “Russia and the Central Asian Republics: Post-Soviet Engagements” (2012). She also edited the volume “Strategizing Energy: An Asian Perspective” (2014). 

Courtesy: The Central Asia-Caucasus Analyst (http://www.cacianalyst.org/publications/analytical-articles/item/13327-tapi-and-indias-energy-diplomacy.html)

Crude Oil & Petroleum Products Scenario in India

Akhilesh Sati, Observer Research Foundation 

Crude Oil: Production, Consumption & Imports

P- Provisional     E- Estimated

Source: Compiled from PPAC, MoPNG

Indian basket crude oil price oscillating around $30 per barrel

Neeraj Tiwari, Observer Research Foundation

What is Oil Supply Security Risk Index? The Oil Supply Security Index aims to capture oil security of India using a simple quantitative methodology and represent the outcome (oil security index) in the form of a single number.  The index aims to offer a simple gauge of India’s access to oil measured in terms of physical, financial, environmental, political and other parameters. The index used here can take values from 0 to 100.  Higher the score higher is the risk. The quantitative risk index does not claim high degree of accuracy.  As qualitative factors such as geopolitical risk are captured in quantitative form there is an element of simplification and generalisation that compromises on accuracy. The fact that only secondary sources of data are used also compromises on the level of accuracy.   The simplified quantitative index is designed to serve only as a reference to judge shifts or changes in risk.

 

 

 

 

NEWS BRIEF

[NATIONAL: OIL & GAS]

February 15, 2016. With the $140 billion oil and gas industry in India slated to grow at five percent per annum, a major part of the 3.14 million square km area of the country's reserves remain unexplored, Oil Minister Dharmendra Pradhan said. According to the International Energy Agency's forecast, India's oil and gas demand will more than double by 2040 and will be close to that of the US, he said. This would require state-of-the-art technology in the upstream sector for exploring and producing oil and gas from difficult areas like deep water, ultra-deep water, high pressures and high temperature areas in the country, Pradhan said. (www.business-standard.com)

February 11, 2016. Oil and Natural Gas Corp (ONGC) hopes to agree new cheaper drilling contracts for its western offshore fields, in its biggest ever cost-saving drive in response to lower crude prices. The state-owned explorer wants to end existing expensive contracts for drilling rigs signed in the 2014-15 fiscal year when crude prices averaged $85 a barrel and to sign new ones at a lower price. That could help the company save ` 5-10 billion ($74-$148 million) a year, analysts said. Brent crude has fallen to just over $30 a barrel. This, along with a sharp drop in commodity prices, has led to a fall in the cost of equipment used for drilling for oil and gas. ONGC's plan to slash costs, a final decision on which is still to be taken, would come about a year and half after crude prices first started to decline, and underscore the challenges Prime Minister Narendra Modi faces in trying to turn around large but slow-moving public sector giants. ONGC's plan comes against the backdrop of overseas explorers lowering spending and scaling back drilling, forcing rig contractors to idle or even scrap rigs, due to the prolonged slump in oil prices. ONGC has close to 15 jack-up rigs in the western offshore fields, according to a company presentation in December 2014. Jindal Drilling and Industries Ltd and Dynamic Offshore Drilling Ltd have said in the past they had rigs working for ONGC. Other areas for cost-cutting could include the staffing and maintenance cost of rigs and offshore marine and air logistics costs. ONGC's average cost of production in the western offshore fields, India's biggest for crude oil and gas, is about $40 per barrel and, at current crude prices, the company is losing money fast. The company's western offshore interests, home to the company's biggest crude oil field Mumbai High and biggest natural gas asset Bassein & Satellite, are located off the west coast of India in the Arabian sea. The western offshore field contributes 60 percent of the company's total crude oil production. As ONGC makes additional investments in the near future, it expects the average cost of production at Mumbai High, the most productive field in the western offshore area, to go up to $44-$45 a barrel. (in.reuters.com)

February 11, 2016. In a U-turn, Reliance Industries Ltd (RIL) has decided to participate in the deliberation of one-man A P Shah Committee deciding over the company allegedly producing gas belonging to Oil and Natural Gas Corp (ONGC). While RIL and Canada’s Niko Resources had initially decided to boycott the panel set up by the government contending it had no legal basis and only arbitration can decide such disputes, its partner BP plc had been cooperating with it. Participation in the deliberation of the meeting is being seen as a U-turn from the company’s earlier stand of boycotting the proceedings. The panel had given the companies one-month time to make their submissions over the dispute and ONGC has already done that. ONGC is seeking compensation from RIL for the gas that allegedly flowed from its KG blocks to neighbouring fields of RIL. It rejected contentions that the cost incurred by RIL in setting up production facilities at KG-D6 will have to be first deducted before any money is due to it, saying the private company had invested money on the basis of discovered and producible gas resources it projected in its block. None of the investments made was for producing ONGC gas. Moreover, all that investment incurred has been recovered by RIL since April 2009 from sale of gas, 15 percent of which has now been established by an independent consultant to have come from ONGC’s blocks. RIL in deciding not to cooperate with the Shah Committee had contended that the defined process in law is not being followed in the current matter and that disputes under the signed Production Sharing Contract (PSC) have to be referred to arbitration. It had stated that the company and ONGC have no underlying contract between them and so the only process in law for any dispute to be adjudicated has to be in a court of competent authority. ONGC said the committee will meet next on March 19. Oil Ministry said the Shah panel was constituted after the Delhi High Court directed it to decide on the dispute within six months of receiving a report of the independent consultant DeGolyer and MacNaughton (D&M). D&M, which was appointed mutually by RIL and ONGC under orders from the Court, in its November 30 report established that reservoirs in ONGC’s KG basin blocks KG-DWN-98/2 (KG-D5) and the Godavari-PML are connected with Dhirubhai-1 and 3 (D1 & D3) field located in the KG-DWN-98/3 (KG-D6) Block of RIL. It said as much as 11.122 billion cubic meters of natural gas, worth over ` 11,000 crore, had migrated from idling fields of ONGC to adjoining KG-D6 block of RIL. (www.financialexpress.com)

February 12, 2016. The government, which had planned to set up a mega refinery on the western coast, has sought 15,000 acres of land in Maharashtra, Oil Minister Dharmendra Pradhan has said. The Maharashtra government will decide on the location of the land, Pradhan said. Besides IOC, BPCL and HPCL, EIL might also pick up stake at a later stage. Presently, EIL is a consultant. The quantum of investment and capacity would be decided after completion of the techno-economic feasibility study. Regarding savings from low crude prices, Pradhan said 55 percent of the saved amount was being passed on to the consumers. (indiatoday.intoday.in)

February 12, 2016. Hindustan Petroleum Corp Ltd (HPCL) is seeking diesel for import into the country for the first time in many years, at a time when demand for the fuel is rising in the domestic market. It was not immediately clear why HPCL was in the spot market seeking diesel. But its spot requirements could boost Asian diesel margins, traders said. While India remains a net exporter of diesel, its state-owned refiners have not imported diesel for many years as their increased production has been able to meet domestic demand. But a rise in construction activity in the country has been pushing up demand for the industrial fuel at a time when economies in other countries are slowing and surplus of the fuel is building, traders said. In its tender, HPCL is seeking two cargoes of 30,000 tonnes each of diesel with 40 parts per million (ppm) and 300ppm sulphur for delivery to Mundra from Feb. 29 to March 5, they said. The cargoes will be purchased either on a free-on-board (FOB) or cost and freight (CFR) basis. The tender closes on Feb. 17 and is valid until Feb. 18. The company last imported diesel in 2010. India's annual fuel demand in January rose at its fastest pace in three months, with consumption of gasoil or diesel, which comprises about 40 percent of refined fuels used in India, rising nearly 8 percent to 6.28 million tonnes. (in.reuters.com)

February 10, 2016. The construction of India's strategic petroleum storage in Karnataka's Mangaluru with the assistance of the UAE's Abu Dhabi National Oil Company is proceeding on schedule and will be completed soon. India, which imports nearly 80 percent of its crude oil needs, is building underground storages at Visakhapatnam in Andhra Pradesh and Mangaluru and Padur in Karnataka to store about 5.33 million tonnes of crude oil to guard against global price surges and supply disruptions. Oil Minister Dharmendra Pradhan had said that Abu Dhabi National Oil Company (ADNOC) and Kuwait Petroleum Corp had shown interest in hiring a part of India's strategic oil storage. The storages at Visakhapatnam, Mangaluru and Padur will be enough to meet the country's oil requirement of about 10 days. Pradhan said state-run Indian explorers are interested in acquiring producing assets participating in the prospective exploration rounds in UAE. (www.business-standard.com)

February 16, 2016. Bharat Petroleum Corp Ltd (BPCL) has received clearance from the Environment Ministry for a ` 337 crore project at its Kochi Refinery in Kerala. The coastal regulation zone (CRZ) clearance has been given to the project. The project is estimated at ` 337.06 crore. BPCL, which operates two refineries, one each at Mumbai and Kochi, has pipelines from respective ports to the refineries for transfer of low pour intermediates. (www.khabarindia.in)

February 15, 2016. Distya Akula, a crude oil vessel co-owned by Elektrans Group, has become the first Indian tanker to load Iranian crude post removal of US sanctions against the Gulf nation. The vessel has a deadweight tonnage of 150,000 tonnes. The loading of the crude has taken place from February 5 to 11, 2016. Previously, Distya Akula was in the Persian Gulf heading towards Al Basrah port in Iran on January 31, 2016. Post loading, the vessel will travel from Kharg Island in the Persian Gulf to Constanta on the Black Sea, the company said. Built by Mitsui Ichihara Engineering and Shipbuilding, Japan, Distya Akula has a capacity of carrying a full load of about 149,000 metric tonnes of oil cargoes equivalent to about 6,000 oil carrying road trucks of standard size. (indiatoday.intoday.in)

February 12, 2016. City gas distribution (CGD) network in Gujarat is set to wider with more regions being opened up. As many as seven companies have evinced interest in laying, building and operating CGD networks in eight different regions of the state. As part of 6^th round of CGD bidding, Petroleum and Natural Gas Regulatory Board (PNRGB) had last year invited bids for 34 geographical areas across India. In Gujarat, bids were invited for Amreli, Patan, Dahej, Banaskantha, Panchmahals, Ahmedabad and Anand. In case of Ahmedabad and Anand, players were asked to bid for regions excluding already authorized areas. Companies such as Gujarat Gas Ltd, Adani Gas Ltd, Sabarmati Gas Ltd, Gujarat State Petronet Ltd, Unison Enviro Pvt Ltd, IRM Energy Pvt Ltd and consortium led by Mahesh Resources Pvt Ltd have submitted their bids for developing CGD networks in these eight areas. The data available with PNRGB shows that Gujarat Gas Ltd has bid for all the eight districts, while Adani Gas Ltd has submitted bids for Dahej and Ahmedabad. Anand and Panchmahals each have seen total four companies vying for CGD network. Cities like Ahmedabad, Vadodara, Rajkot, Surat and Gandhinagar among others already have CGD networks. Last year two companies were authorized to operate CGD network in Kutch, Jamnagar and Bhavnagar. The work is in full swing in Jamnagar and Bhavnagar. Gujarat has the highest number of piped natural gas (PNG) consumers, which includes 14.30 lakh domestic, 15,808 commercial and 3913 industrial customers. Gujarat accounts for 47.7% of India's total domestic consumers. High penetration of gas pipeline networks and the demand from domestic as well as industries are the major drivers for growth of CGD networks in the state. The major CGD players in Gujarat include Gujarat Gas Ltd, Adani Gas Ltd, Vadodara Gas Limited and Sabarmati Gas Ltd. (timesofindia.indiatimes.com)

February 16, 2016. The Competition Commission of India (CCI) has approved two joint ventures (JVs) involving GAIL (India) Ltd and Andhra Pradesh Gas Distribution Corporation (APGDC) for setting up a floating LNG terminal in Andhra Pradesh (AP). The first JV is between APGDC, GDF SUEZ Energy International Global Development BV, also known as Engie, and Shell Gas. APGDC, a JV between the Andhra Pradesh government and GAIL, GDF SUEZ and Shell would have 48 percent, 26 percent and 26 percent equity, respectively, in the project. The second agreement is between GAIL, GDF SUEZ and Shell and covers both the sourcing of LNG and the marketing of the regassified LNG from the terminal. GAIL, GDF SUEZ and Shell would have 48 percent, 26 percent and 26 percent equity, respectively, in the project. The JVs are formed for the incorporation of separate companies for setting up a floating LNG import, storage and regasification, among others, at Kakinada, Andhra Pradesh. The two agreements were signed by the companies in September last year. GAIL is a leading marketer and transporter of natural gas and is an international player in LNG business whereas APGDC was incorporated primarily to create gas infrastructure in Andhra Pradesh. In India, Shell is active in wholesale and downstream supply of natural gas. The Engie group provides efficient solutions to individuals, cities and businesses by relying on diversified gas supply sources, among others. (www.business-standard.com)

February 16, 2016. In a few months, colourful, lighter and easier-to-handle cooking gas cylinders will make their way into Indian kitchens, long used to heavy and potentially hazardous steel containers. Most importantly, the new composite cylinders, made of fibre, will be safer because they do not explode even when engulfed in fire, potentially saving thousands of lives, who fall victim to kitchen accidents every year. To begin with, Hindustan Petroleum Corp Ltd (HPCL) has placed orders for about 5,000 cylinders with capacities of 2 kg, 5 kg and 10 kg of cooking gas, oil ministry said. Current cylinders typically carry a net 14.2 kg of gas. The company will likely receive the new cylinders by March-end and start offering them to customers in the following month in Gujarat and Maharashtra. HPCL will start a marketing campaign closer to the launch to familiarise customers with the composite cylinders, which would weigh half and cost double that of the steel cylinders currently in use. These cylinders would be freely available to anyone at several stores. The biggest advantage of the composite cylinder is that it doesn't explode in the event of a leak or fire. This is due to the advanced fibreglass technology used in manufacturing the composite cylinders. The new cylinder would be translucent, letting consumers see the level of gas contained in it and reducing the possibility of rigging, as is common with opaque steel cylinders. (energy.economictimes.indiatimes.com)

February 15, 2016. The Oil Ministry will shortly move a Cabinet note on crude import policy that will allow the country to do away with tendering and begin spot purchases. The move will also provide a common crude platform for all state-owned oil refiners, Oil Minister Dharmendra Pradhan said. Under the tendering route, the country normally pays higher prices and incurs delays while a system of spot purchases ensures better delivery at lower prices. Pradhan said that despite being the third-largest consumer of oil, India is the only country that still procures crude through the tendering process. Pradhan has been very vocal on pitching for an Asian discount against the Asian premium forced through by OPEC. The Asian premium refers to higher prices to the tune of $2-3 a barrel which the Brent basket, which sets the Asian prices, charges over the Nymex (American) basket. However, Pradhan clarified that he is not advocating a trading desk per se, but is all for better inventory management that helps reduce unnecessary losses from procuring crude months in advance. Currently, oil companies individually have a centralised procurement system, under which they have to take prior permission from the ministry on a periodic basis to go ahead with crude purchase. Normally, companies take almost three months to start processing crude after concluding the tendering process. For instance, if IOC closes a tender for May loading, then the tender would be concluded in March and it can begin processing only early June. Given the way crude is moving down, there is no way companies that follow tendering route can avoid inventory losses at all. (www.business-standard.com)

February 15, 2016. As growth rates in the global economy contracts and oil producing countries getting squeezed, the Indian economy needs to focus on domestic infrastructure to push domestic demand. The coming Budget 2016, could accelerate India’s economic growth by increasing infrastructure spending. A focus on low gestation projects like rural roads, canals, bridges can result in immediate economic benefits. These can be accomplished by extending the budgetary allocations and non-plan expenditure to small-scale projects, railways, ports, etc. While the fiscal targets of 3.9 percent for FY16 and 3.5% for FY17 are in the right direction, a stimulus to the infrastructure can be accommodated by extending fiscal targets. The government can also increase its revenue. Excise hikes on oil and petroleum products can therefore be considered as a right move by government to increase revenue, which can give the government room to raise infrastructure-related spending. Efforts should be made to bring revenue deficits under control through an effective tax implementation and collection system. (www.thehindu.com)

February 14, 2016. Natural gas prices in India are likely to decline 17 percent in April to $3.15 per unit, further straining economics of developing discoveries in deep sea. As per the new gas pricing formula approved by the NDA­government in October 2014, gas prices are to be determined on a semi­annual basis and calculated based on a volume weighted average of rates in gas surplus nations of the US, Canada and Russia, based on the twelve­month trailing average price with a lag of three months. Using benchmark prices for the period of January 1, 2015 to December 31, 2015, gas price for the period April 2016 to September 2016 is likely to be about $3.15 per million British thermal unit as against $3.82 currently. On a net calorific value (CV) basis, the gas price is likely to be $3.50 per million British thermal unit (mmBtu) as compared to $4.24 currently. Development of numerous existing discoveries in the blocks operated by Oil and Natural Gas Corp (ONGC) as well as Reliance Industries Ltd (RIL) are dependent on remunerative price. ONGC said that developing finds in the firm's Krishna Godavari (KG) basin block KG­DWN­98/2 or KG­D5 was economically unviable at current price. Gas price in India is lower than $9 per mmBtu in China, $10.5 in the Philippines, $6.5 in Indonesia and $8 per mmBtu in Thailand and Malaysia. Going by current price trends, gas price may rise marginally to $3.32 (on gross calorific value or GCV basis) in second half of 2016­17 fiscal. They may further rise to $3.36 per mmBtu and $3.42 in the first and second half of 2017­18 fiscal and would be around $3.45 in the following fiscal. (economictimes.indiatimes.com)

February 11, 2016. State­run fuel retailers will meet the target of blending 5% ethanol in petrol for the first time this year, about a decade after the government set the target, Oil Minister Dharmendra Pradhan has said. Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp will together purchase 120 crore litre of ethanol in the sugar year beginning November 2015 to meet the blending target, he said. In the previous years, the ethanol blending ratio has remained below 3%. The government has now brought the focus on ethanol blending by resolving pricing uncertainties around the biofuel and encouraging oil companies to procure more. Last year, the government fixed the minimum delivered price of ` 48.50­49.50 per litre for ethanol, bringing in pricing certainty for suppliers, although a collapse in crude prices remain a hindrance. The government had also scrapped the excise duty on ethanol supplied for blending with petrol. The production cost of ethanol is about ` 42 per litre. India consumes 2,800 crore litres of petrol and 8,800 crore litres of diesel. For achieving the 5% blending target, companies would need to procure an additional 140 crore litres of ethanol and biodiesel. Pradhan said lower crude oil prices will not impede companies' progress towards purchasing more biofuels. Crude prices move in cycles and so the country has to take a long­term view, he said. India has the potential to replace up to 20% of its fossil fuel demand with biofuel. India has a business potential of ` 2 lakh crore in biofuel, he said. Oil companies have already finalised contracts to buy four crore litres of biodiesel and plan to procure more for blending with diesel this year, he said. (economictimes.indiatimes.com)

February 11, 2016. India’s annual fuel demand in January rose at its fastest pace in three months, thanks to higher gasoline consumption after the country's top court temporarily banned the sale of large diesel cars in its capital city. The Supreme Court had imposed the ban in December to combat toxic smog in Delhi, one of the world's most polluted cities, and said it would consider extending the ban to diesel cars with engine capacity of less than 2,000 cc. Fuel consumption, a proxy for oil demand in Asia's third-largest economy, surged 12.7% to 15.71 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed. India is a bright spot in a dull international energy market and the International Energy Agency said that New Delhi would be the primary driver of global energy demand over the next 25 years. (www.business-standard.com)

February 11, 2016. The third reverse e-auction to provide subsidy to buy gas for running stranded power projects and those operating at sub-optimal level is likely to be conducted in a few weeks. The Centre had introduced a Power System Development Fund (PSDF) scheme for importing spot R-Liquefied Natural Gas (RLNG) for the stranded gas and partly stranded gas-based plants selected through a reverse e-bidding process. The scheme provides for financial support from PSDF. The outlay for the support from PSDF was fixed at ` 7,500 crore (` 3,500 crore and ` 4,000 crore for the year 2015-16 and 2016-17 respectively). Auctions for the 1^st phase (June 1 to September 30, 2015) of PSDF Support to gas-based power plants was held in the months of May, 2015. A combined total of 10,270 MW plants were able to secure gas allocation. The entire process was completed in less than a month and gas supply by GAIL started on June 1, 2015. Auctions for 2^nd Phase (October 1, 2015 to March 31, 2016) were held in the month of September 2015 and helped in revival of gas-based generation plants with installed capacity of 11,717.72 MW. Total incremental electricity expected to be generated under phase II is 12,472.6 million units. Power plants rarely use costly imported LNG as electricity produced from the fuel would cost much more than that from a domestic coal-fuelled plant or a domestic gas-fired plant. (www.business-standard.com)

 [NATIONAL: POWER]

February 15, 2016. Power generation in the first 1000 MW reactor of the Kudankulam Nuclear Power Plant (KKNPP) resumed after it suffered a breakdown earlier this month. After resuming, the plant initially generated 160 MW, KKNPP said. The generation came to a halt at 10.35 p.m. on February 4 following a minor steam leak in the secondary line of the turbine. After a long gap, the first reactor commenced operation on January 30, generating 300 MW which later went up to 730 MW. The generation was suspended for a planned shutdown on January 31, KKNPP said. (www.thehindu.com)

February 15, 2016. Bharat Heavy Electricals Ltd (BHEL) said that it has commissioned a 101 MW gas-based combined cycle power plant on engineering, procurement and construction (EPC) basis in Tripura. Gas turbine of 65.4 MW was earlier commissioned by BHEL in March. With the commissioning of the 35.6 MW steam turbine, BHEL has commissioned the 101 MW CCPP. Gas for the project is being supplied from the fields of ONGC. Due to infrastructure constraints in transporting over dimensional consignments, multi-modal transportation was used by BHEL for ensuring safe transportation. With the commissioning of this project, the share of BHEL supplied sets in the installed power generating capacity of Tripura has gone up to 88 percent, with BHEL having supplied 1,000 MW of generating equipment so far. In the recent past, BHEL has contributed to capacity addition in Tripura by commissioning two sets 363 MW each at the gas-based OTPC Palatana project, totalling 726 MW. (www.thehindubusinessline.com)

February 13, 2016. Bharat Heavy Electricals Ltd (BHEL) has won a major order for supply of two 800 MW steam generators with super-critical parameters, outbidding competitors in an open global tender. Estimated at ` 3,500 crore, the contract has been placed on BHEL by NTPC Ltd, for setting up 2 x 800 MW Steam Generator island package at Telangana Super Thermal Power Project. The project is located within NTPC’s existing Ramagundam Power Station in Karimnagar district of Telangana. BHEL has a long-standing partnership with NTPC and has supplied over 30,000 MW of the coal-based power plants of NTPC and its joint ventures that account for around 80 percent of NTPC’s coal-based installed capacity. (www.thehindu.com)

February 10, 2016. Tata Power culminated the company's centennial celebrations with the commissioning 450 MW of hydro power capacity. The company, having successfully served the nation for over 100 years, achieved yet another milestone: the 450 MW of hydro power has been successfully commissioned in the centenary year, the company said. Tata Power will aspire to add up to 40 percent generation capacity through non-fossil options to its incremental portfolio. (www.business-standard.com)

February 15, 2016. Private independent transmission systems developer Sterlite Grid and Finnish Unmanned Aerial Vehicle (UAV) solutions provider Shaper Shape have entered into a partnership to deliver technologies for the power transmission industry. Sterlite Grid and Shaper Shape alliance will help transmission line operators to reduce project delivery time and increase power systems uptime. The agreement was inked in the presence of Finnish Prime Minister Juha Sipila in Mumbai. Under the agreement, Sterlite Grid will set up operations for all customer facing activities while technology provider Shaper Shape will offer software solutions, technical know-how and other required capabilities. (www.business-standard.com)

February 12, 2016. Power Grid Corp of India Ltd (PGCIL), Sterlite, Adani and Essel have submitted their financial bids for the ` 6,000 crore Warangal transmission project. Reliance Power Transmission, which had qualified the technical round, did not submitted its financial bid. PGCIL, Sterlite, Adani and Essel have submitted the financial bids to participate in the auction for Warangal transmission project. To develop the country's power transmission capacity, the government is in the process of auctioning projects worth ` 1 lakh crore in the current fiscal. These are auctioned through the tariff-based competitive bidding (TBCB) process. Under this arrangement, the developer quoting the lowest annual tariff is awarded the project. The Warangal project is one such case and the largest so far this fiscal in terms of value (cost). The project involves setting up of 765/400 kv sub-stations at Warangal in Andhra Pradesh and includes a series of 765 kv double-circuit lines including Warora (Pool) to Warangal (New), Warangal (New) to Hyderabad, Hyderabad-Kurnool, and Warangal (New) to Chilakaluripeta. There are two 400-kv double-circuit lines, which will also be part of the project. The main aim is to augment power supply to the southern grid. (www.businesstoday.in)

February 16, 2016. The government will soon consider a proposal for setting up 1,980 MW Ghatampur thermal power project, which has been hanging fire for over three years, entailing investment of ` 16,029.32 crore in Kanpur district of Uttar Pradesh. According to the latest estimates, the project will cost ` 16,029.32 crore, up from initial projection of ` 14,375 crore. The project to be implemented by Neyveli Uttar Pradesh Power Ltd (NUPPL) is a joint venture between Neyveli Lignite Corp (NLC) and Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd (UPRVUNL). The equity sharing between NLC and UPRVUNL will 51:49 percent respectively. The joint venture agreement was signed on October 6, 2012, and the joint venture company NUPPL was registered on November 9, 2012. The Ministry of Environment has accorded green clearance to the project based on use of imported coal for the project till Pachwara south coal block attains the rated coal production. NUPPL has taken into possession of the entire land of 828 hectares required for the project and Government of India sanction for the project is awaited, the company has stated on its portal. (www.business-standard.com)

February 16, 2016. India is likely to highlight the “best practices” in the international nuclear industry and its national nuclear safety record in the Nuclear Security Summit (NSS) slated to be held from March 31-April 1 this year. The summit is seen as important as this is the last time U.S. President Barack Obama will host the participating countries and the first time Prime Minister Narendra Modi will take part. India has been a part of the summit since it convened for the first time in 2010, but came into focus recently due to a critical campaign by the Centre for Public Integrity, a Washington DC-based non-governmental organisation. Nuclear scientists said the summit provided another opportunity for India to stay ahead in the field of security and safety in the nuclear industry. (www.thehindu.com)

February 16, 2016. The Coal Ministry is likely to come out with the approach paper for formulating a detailed policy on commercial coal mining by March this year. The government had taken an initiative in legislating Coal Mines (Special Provisions) Act, 2015 and consequently adding a new Section 3A of the Coal Mines (Nationalisation) Act, 1973, along with amending Section 11A of the Mines and Minerals (Development and Regulation) Act, 1957, to enable commercial mining of coal. The Coal Mines (Special Provisions) Act, 2015 permits private coal mining companies to sell coal in the open market. Earlier, private companies could utilise allocated coal mines only for their own industries. The Joint Secretary, Ministry of Coal, Vivek Bharadwaj said the consultations with stakeholders would help in firming up the format for commercial mining in the country and would provide an enabling provision to the private sector. As on date, the government has auctioned 31 coal mines and alloted 43 coal mines to the central and state government companies. (energy.economictimes.indiatimes.com)

February 15, 2016. Coal and Power Minister Piyush Goyal said country's coal, power and renewable energy sector will provide for $1 trillion investment opportunity by 2030.  He informed the three combined together offer $250 billion investment opportunity over the next five year period. Goyal emphasised the focus of the government to ensure adequate electricity to industry, individuals and farmers. On the implementation of UDAY (Ujjwal Discom Assurance Yojana), Goyal said it was not designed on the back of subsidies or government intervention; but it was a bottom up programme being conceptualized by the joint endeavors of all stake holders of the power sector. (www.business-standard.com)

February 15, 2016. Kerala and Karnataka have shown their willingness to come on board for UDAY (Ujjwal Discom Assurance Yojana) scheme meant for reviving stressed discoms and will be soon joining it, Coal and Power Minister Piyush Goyal said. He said so far 15 states have joined the scheme. UDAY aims at reviving ailing state electricity boards and operational efficiencies of power distribution companies. It envisages on reducing interest burden, cost of power and aggregate technical and commercial losses (AT&C losses). Goyal said Tamil Nadu has peculiar problem because they have discom, generation and transmission under one company and the government is working with the Centre to sort the issue. Goyal said the government is also creating a framework to help 12 states and union territories, that don't have discoms but have utilities, to come on board. (www.business-standard.com)

February 10, 2016. Australia will support Adani Group's $16.5 billion Carmichael coal mine and rail project in Queensland that will provide power to 100 million Indians, Australia Resources and Energy Minister Josh Frydenberg said. Frydenberg said even the state government and the federal opposition are in support of the project, which is expected to attract billions of dollars in investment. The Carmichael coal, railway and port project includes building Australia's largest thermal coal mine in the north Galilee Basin, approximately 160 km northwest of Clermont in Central Queensland, linked by a new 388 km standard gauge rail line to a new terminal at Abbot Point Port near Bowen. Coal and Power Minister Piyush Goyal is leading a delegation to Australia for the India-Australia Energy Dialogue. He is in the capital, meeting Frydenberg and Investment and Trade Minister Andrew Robb. This project will create thousands of jobs, worth billions of dollars in investment, and more importantly, it will provide energy and electricity to 100 million Indians, Frydenberg said. The Group led by Gautam Adani plans to build one of the world's largest coal mines in Australia, along with a railway line and a port to shop coal to India. (www.business-standard.com)

 [INTERNATIONAL: OIL & GAS]

February 15, 2016. Australian energy company Woodside has make a second gas discovery in the Thalin-1A exploration well in Block AD-7 in the Rakhine Basin, off the west coast of Myanmar. The group had already struck gas at the Shwe Yee Htun-1 well in Block A-6 in January 2016. The seismic survey is scheduled to commence in March 2016 and will facilitate further evaluation and expansion of the prospect portfolio. Woodside is the largest acreage holder in the offshore Rakhine basin with interests in six blocks. (www.enerdata.net)               

February 15, 2016. Italy's Eni has invested $4 billion in the development of the first phase of Egypt's giant offshore Mediterranean gas field, Zohr, including the drilling of four wells. Eni's total investment in Zohr is between $12 billion and $16 billion. (af.reuters.com)

February 14, 2016. BP plc and Oman Oil Company agreed to expand an exploration and production sharing agreement of the Khazzan natural gas field to include a second development phase, at an estimated cost of $16 billion for the entire project. Block 61 will add 1,000 square kilometers to the original 2,700 square kilometer area of development, BP said. The project will produce 1.5 billion cubic feet of gas per day, or 40 percent of Oman’s current output. The new development requires final approval of Oman’s government and BP, which is expected in 2017, the company said. The reservoir is known to have “tight gas,” which is trapped in impermeable rocks and requires techniques including hydraulic fracturing to extract. Oman, an exporter of liquefied natural gas to Spain, Japan and South Korea, is studying options to import LNG to help generate power. Domestic consumption jumped to 774 billion cubic feet in 2013 from 520 billion cubic feet in 2009, according to the U.S. Energy Information Administration. Oman imports gas via a pipeline from Qatar and is in talks to build a link with Iran across the Persian Gulf. The first phase of the project is expected to deliver gas in 2017 and the second will start in 2020. BP owns 60 percent of the block, with the remaining 40 percent held by Oman Oil. More than 325 wells are planned over 15 years. (www.bloomberg.com)

February 13, 2016. Chesapeake Energy Corp. is planning to pay $500 million of debt maturing in March, using a combination of cash on hand and other liquidity that may include its credit line. The second largest natural gas producer in the U.S. is also considering selling assets to shore up its capital so it can address more than $1 billion of debt coming due in 2017. Creditors are gearing up for negotiations over how to reorganize the energy producer’s debt load of about $10 billion. At least one group of unsecured bondholders has hired advisers to help evaluate the company’s assets in the U.S. (www.bloomberg.com)

February 11, 2016. France's Total S.A. is likely to sign an agreement with the government in Sri Lanka for the exploration of potential oil and gas resources off the island's east coast. Exploration activity by the French supermajor could commence offshore Sri Lanka as early as April or May after the Sri Lankan Cabinet gave its approval to the Petroleum Resources Development Secretariat (PRDS) -- which is entrusted by the government with responsibility for the South Asian nation's upstream oil and gas industry -- to ink the agreement in early February. Total's interest to explore for hydrocarbons offshore Sri Lanka comes amid a downturn in the global petroleum industry, with oil prices currently hovering 70 percent below the levels in the second half of 2014. Sri Lanka will sign a "joint-study agreement" with Total, giving the firm three years of exclusivity for the data it acquires after which the latter can be viewed by other oil companies. Ownership of the data will be held by the government from the point of its acquisition. Total has the right to negotiate for a production sharing contract with Sri Lanka if it finds commercial quantities of oil or gas reserves. But should these talks failed within a stipulated period, the government may open the reserves to other bidders although Total will be given the right to match the highest bidder within a specified timeline. All residual rights will lapse after 51 months. Separately, Sri Lanka intends to launch a marketing campaign for the gas reserves that Cairn India Ltd had earlier discovered and subsequently abandoned. Cairn India had found gas at the Dorado-91H/1z and Barracuda-1G/1 wells in Block SL 2007-01-001 in the Mannar Basin. The company tried to sell the discovered gas to the Sri Lankan market but failed to reach an agreement on price. (www.rigzone.com)

February 10, 2016. The head of Russian state-run oil company Rosneft floated the idea of a coordinated output cut by major oil-producing countries to prop up sagging prices but fell short of saying whether Moscow would contribute to such a plan. Rosneft Chief Executive Igor Sechin attributed oversupply in the market to overproduction by members of the Organization of the Petroleum Exporting Countries (OPEC). He suggested major oil producers each cut production by 1 million barrels per day (bpd). Oil prices have slumped more than 70 percent to near $30 a barrel over the past 18 months as supply exceeded demand by up to 2 million bpd after OPEC, seeking to drive higher-cost producers out of the market, decided not to cut production. Struggling oil-producing countries have urged OPEC leader Saudi Arabia in recent weeks to call a special meeting to discuss output cuts. Riyadh has indicated it would be willing to consider a cut only if all major producers agreed to one. Sechin nevertheless said U.S. shale production, a key driver behind the global glut, would decline in the long term. Sechin, a close ally of Russian President Vladimir Putin, said however that onshore U.S. producers had proven more resilient to the oil price downturn. Sechin said he expected Iran to ramp up oil production to between 5 million and 6 million bpd by 2025. (af.reuters.com)

February 10, 2016. U.S. shale oil production will double over the next 20 years as drillers that became more efficient amid a slump in oil prices unlock new resources, British energy giant BP said. U.S. shale or tight oil production using fracking technology was a key driver behind global supply growth in recent years. The sector, with relatively expensive production costs, has nevertheless been hard hit by a 70 percent decline in oil prices over the past 18 months to around $30 a barrel. But in the longer term, shale production is set to grow from around 4 million barrels per day (bpd) to 8 million bpd in the 2030s, accounting for almost 40 percent of U.S. production, according to the report. U.S. onshore production in the lower 48 states has declined by around 500,000 bpd since last spring and is expected to fall further in the near term as the global market readjusts before rebounding, BP Chief Economist Spencer Dale said. Globally, tight oil production will rise by 5.7 million bpd to 10 million bpd but remain primarily concentrated in the United States. The head of Russian state-run oil company Rosneft, in which BP holds a near 20 percent stake, said he expected U.S. shale oil production to peak by 2020 and decline in the long term. Dale also said global oil demand, which grew by 1.8 million bpd last year, would continue to grow "strongly" this year albeit at a slower pace. (www.reuters.com)

February 16, 2016. Brazil imports of refined products such as gasoline and diesel fuel fell 74.5 percent in January from a year earlier, Brazil's petroleum agency ANP said. Imports of diesel fell 78.8 percent, liquefied petroleum gas (LPG) used by many Brazilians as a cooking fuel, fell 69.4 percent, fuel oil fell 67 percent, and gasoline imports fell to zero compared to January 2015. Exports of refined products fell 16.8 percent in January. Meanwhile crude oil imports rose 135 percent compared with a year earlier and crude exports rose 17 percent. (af.reuters.com)

February 13, 2016. Venezuelan PDVSA's unit in the United States, Citgo Petroleum, is working to restart some processing units at the Aruba refinery under a 25-year lease contract with the government of the Caribbean island. The Aruba refinery's former operator, Valero Energy Corp, has not been involved in the negotiations, but the island has guaranteed the U.S. company that it can walk away from the refinery with zero environmental liability and without obligation to dismantle it. Even though PDVSA's financial condition is weak amid low crude prices, its subsidiary Citgo enjoyed some relief in 2015 due to higher refining margins, which would allow it to direct a portion of its profit to Aruba. (www.reuters.com)

February 12, 2016. The prospect that U.S. oil refiners might respond to rising stockpiles of refined fuels and weakening margins by cutting the amount of crude they process has roiled oil markets in recent days. There are already more than 500 million barrels of crude in storage at refineries, tank farms, pipelines and oilfields across the United States, an increase of 84 million barrels compared with 12 months ago. Over the last year, U.S. refineries have operated their distillation units at record rates to satisfy strong demand for gasoline. Economic growth, job gains and lower oil prices combined to produce the strongest growth in gasoline consumption in more than a decade. U.S. refiners reaped large profits by exploiting the difference between depressed crude prices and strong demand and high prices for gasoline. The economics of every refinery are different, depending on the type of crude they are able to buy and the mix of fuels they can produce. But one way to think about the gross margin refiners are able to achieve is to consider an illustrative refinery that processes three barrels of crude to produce two barrels of gasoline and one barrel of distillate fuel oil. Between January and the middle of August 2015, the gross 3-2-1 cracking margin averaged $24 for every barrel of crude processed through a refinery. (www.reuters.com)

February 11, 2016. Iran and Brazil are in talks about a possible Iranian investment in troubled refinery projects controlled by Brazilian state-led oil company Petroleo Brasileiro SA. Iran, which is boosting oil output after the end of sanctions over its nuclear program, is interested in exporting oil to Brazil and processing that crude at refineries in Brazil's northeastern region. (in.reuters.com)

February 16, 2016. Cheniere Energy Inc.’s Sabine Pass export terminal in Louisiana is scheduled to receive a record amount of natural gas, signaling that it’s closer to sending the first exports of U.S. shale gas abroad. Gas scheduled for a pipeline delivery point that serves the liquefied natural gas plant more than doubled to about 333.3 million cubic feet. It’s the latest development in America’s bid to supply the world with the gas flowing out of its prolific shale formations. Cheniere, which had planned to load its first tanker in January, put off the cargo until late February or March due to faulty wiring. U.S. drillers have been looking to send gas to markets in Europe, Asia and Latin America as they grapple with the biggest supply glut at home since July 2012. (www.bloomberg.com)

February 15, 2016. China's crude oil imports fell 20 percent in January from record high volumes the previous month to their lowest level since October, customs data showed. January crude oil imports were also down 4.6 percent on a year earlier at 26.69 million tonnes, or 6.29 million barrels per day (bpd). China's imports reached a record 7.81 million bpd in December to close out 2015 with an average 6.71 million bpd - a figure well above China's still growing demand for oil. China took advantage of low global oil prices last year to add up to 185 million barrels to its reserves, while oil demand - refinery throughput plus net imports of oil products - grew 3.1 percent. In January, fuel exports rose 45.2 percent to 3.01 million tonnes, or 679,700 bpd, after hitting a record 975,500 bpd in December, as China continued to export more diesel amid weakening demand for the industrial fuel. Diesel exports in the first quarter of 2016 may high a record high for that period, flooding Asia with supply at a time when profit margins are close to six-year lows. Net fuel exports were 350,000 tonnes in January. (www.reuters.com)

February 15, 2016. Royal Dutch Shell sealed the $53 billion (36 billion pounds) acquisition of British rival BG Group to form the world's top liquefied natural gas company, even as slumping oil prices cast a shadow on the upcoming years of transition. The success or otherwise of the complex merger will define the legacy of Shell Chief Executive Ben van Beurden, seeking to transform Shell into a more specialized group focused on the rapidly growing LNG market and deepwater oil production. Van Beurden's vision won overwhelming support from shareholders, though a number of major investors had voiced concerns that the forecast slow recovery in oil prices would strain Shell's financials and risk its growth plans. (www.reuters.com)

February 15, 2016. Three liquefied natural gas (LNG) traders at Asia's biggest commodity trade house, Noble Group Ltd, including two co-heads of the team, are leaving to join rival trader Glencore. Noble will continue to trade LNG, having restarted its London-based trading desk in 2014. Noble will still have about five people involved in the LNG business. LNG has been an attractive area for commodity traders, as a wave of export projects planned over the past decade come to fruition, boosting supply and creating trading opportunities. One of Noble's biggest LNG ventures has been its two-year supply deal into the burgeoning Egyptian market after the country launched two import terminals last year, enabling it to quickly become a significant buyer of the fuel. Switzerland-headquartered Glencore noted last year that LNG offered growth opportunities for the trade house. (www.reuters.com)

February 15, 2016. Russia's top natural gas producer Gazprom said that its pipeline gas exports to Europe rose 43.7 percent year-on-year between Feb. 1 and Feb. 14. Exports by Gazprom - as measured for Turkey and the European Union, excluding the three former Soviet Baltic states - rose to 159.4 billion cubic metres (bcm) last year from 147.2 bcm in 2014. (af.reuters.com)

February 14, 2016. Iran loaded its first cargo of oil to Europe since international sanctions ended, signaling more supplies will add to the global glut of crude. A tanker for France’s Total SA was being loaded at Kharg Port while vessels chartered for Chinese and Spanish companies were due to arrive later, Iranian oil ministry said. A tanker hired by a Russian company hadn’t arrived, and was still expected, the ministry said. The Suezmax vessel Distya Akula, chartered by Lukoil PJSC’s trading unit Litasco, departed Iran’s loading terminal at Kharg Island in the Persian Gulf and was located in the Gulf of Oman off the east coast of the United Arab Emirates, according to ship tracking data. Suezmaxes can hold 1 million barrels of oil. The draft of the Distya Akula vessel in the water indicated it is full, according to the data. Iran is trying to rebuild its oil production after sanctions were lifted in January, with plans to boost output and exports by 1 million barrels a day this year. Supply deals were signed with Totaland Hellenic Petroleum SA of Greece. Iran pumped 2.86 million barrels a day in January, according to data. Iran is planning three initial shipments to Europe carrying 4 million barrels of oil with 2 million barrels going to Total and the rest to companies from Spain and Russia, National Iranian Oil Co. said. (www.bloomberg.com)

February 10, 2016. Eni SpA, Italy’s largest oil producer, is in the early stages of exploring a sale of gas and power retail assets as part of plans to reduce debt. The business, which provides gas and power to households in Italy, could fetch as much as € 2 billion ($2.3 billion), depending on which exact assets are included in the carve out. The Italian company is discussing the potential divestment with advisers and could still decide against a sale. The company has approved raising 2 billion euros in debt and scrapped its dividend and € 6 billion stock buyback plan as it looks for ways to conserve cash. Standard & Poor’s said this month that it may cut the debt rating of a number of major oil and gas companies, including Eni, as the industry adjusts to the collapse in oil prices. (www.bloomberg.com)

February 16, 2016. The fate of the first global oil deal in 15 years could be decided when OPEC members travel to Iran to persuade the country to participate in a deal to freeze output levels, possibly by offering Tehran special terms. Dominant OPEC power Saudi Arabia and non-OPEC Russia, the world's top two producers and exporters, agreed to freeze production levels but said the deal was contingent on others joining in - a major sticking point with Iran absent from the talks and determined to raise production. OPEC members Qatar, Venezuela and Kuwait said they were also ready to freeze output and oil sources in Iraq - the world's fastest-growing producer in the past year - said Baghdad would abide by a global deal aimed at tackling a growing oversupply and helping prices recover from their lowest in over a decade. Venezuelan Oil Minister Eulogio Del Pino and Iraqi Oil Minister Adel Abdel Mahdi will travel to Tehran for talks with their Iranian counterpart Bijan Zanganeh. OPEC member Iran, Saudi Arabia's regional arch rival, has pledged to steeply increase output in the coming months as it looks to regain market share lost after years of international sanctions, which were lifted in January following a deal with world powers over its nuclear programme. The fact that output from Saudi Arabia and Russia is near record highs complicates any agreement since Iran is producing at least 1 million barrels per day below its capacity and pre-sanctions levels. The last global deal - OPEC and non-OPEC - dates back to 2001 when Saudi Arabia persuaded Mexico, Norway and Russia to contribute to production cuts, although Moscow never followed through and raised exports instead. (www.reuters.com)

February 15, 2016. The Department of Communications, Energy and Natural Resources has awarded 14 new Licensing Options in the Irish offshore, following the conclusion of the first phase of awards in the 2015 Atlantic Margin Licensing Round, which had received 43 applications by September 2015. The offer of awards involves eight companies, namely Eni, Europa, ExxonMobil, Nexen, Scotia, Statoil and Woodside as Operators, along with BP who will partner with Eni. The phase of awards focusses on an area in the southern Porcupine Basin, where a number of applications included commitments to acquire new seismic surveys later in 2016. The second and final phase of awards is planned for mid-May 2016. (www.enerdata.net)        

February 15, 2016. Scotland's finance minister has told the British government he is concerned that some of Britain's remaining North Sea oil will never be recovered as companies active in the area have scaled down investments due to the weak oil price. John Swinney, who is also Scotland's deputy first minister, urged British finance minister George Osborne in a letter to cut taxes on oil and gas companies and to consider giving loan guarantees to the sector to avoid early field shutdowns and more job losses. Scotland is home to most of Britain's oil and gas production and the oil market downturn has already led to around 10,000 job losses and salary cuts. Scotland's First Minister Nicola Sturgeon said her government would ask for a meeting with Osborne to urge him to make oil and gas tax cuts in his annual budget announcement scheduled for next month. More specifically, Swinney asked for a reduction in the headline oil and gas tax rate, more support for exploration, access to decommissioning tax relief and loan guarantees for oil and gas investors. The head of Britain's oil regulator said the country would offer more flexible North Sea oil and gas licenses in its next tender round, in a bid to make exploration work in the mature basin more attractive to oil and gas companies. Exploration work in the North Sea has dropped to just a quarter of levels seen at peak time around the turn of the century as costs to look for and operate oil and gas fields in the British part of the North Sea have soared. The British and Scottish governments announced a 250 million pound ($362 million) deal to support the Scottish city of Aberdeen, hit hard by job losses in the oil sector. (uk.reuters.com)

February 15, 2016. China, one of Asia's largest energy consumer, experienced slower growth in natural gas consumption last year on weaker demand, while surplus supplies appeared on the domestic market as gas imports under long term contracts started to flow into the country. The country's apparent consumption of natural gas reached 6.74 trillion cubic feet or 191 billion cubic meters (bcm) in 2015, up 3.7 percent from the previous year. In 2015, China's natural gas imports rose 4.7 percent year on year to 2.20 trillion cubic feet (62.4 bcm), while domestic production grew 3.5 percent in the corresponding period to 4.65 trillion cubic feet (131.8 bcm). The country had signed several long-term natural gas import contracts around 2010 to ensure its energy security amid forecasts of strong gas demand growth, a development that did not materialize last year due to a weaker Chinese economy. China National Petroleum Corporation (CNPC) said China's natural gas consumption is expected to rebound this year, thanks to a reduction in gas prices and pressure to protect the environment. (www.rigzone.com)

February 14, 2016. Israeli Prime Minister (PM) Benjamin Netanyahu took on opponents trying to block his government’s contentious plan to develop natural gas fields in unprecedented testimony before the country’s highest court. Opposition parties and non-governmental organizations have petitioned the court to halt the gas program, challenging the government’s override of the antitrust commissioner’s objections. With global energy prices tumbling, Netanyahu is eager to have Israel’s largest offshore natural gas field developed, and asked to address the court in an effort to sweep away this legal challenge to the plan. The prime minister led a political and legal maneuver that allowed him to override the antitrust chief’s objections by maintaining the government’s natural gas policy was in the interest of national security. Opposition to the plan has been fierce, prompting Antitrust Commissioner David Gilo to resign in protest in May. Critics contend it entrenches a gas monopoly and would make Israeli consumers pay indefensibly high energy prices. Israel’s failure to draft a coherent gas strategy more than six years after it discovered offshore reserves has held up development, complicated export deals and antagonized investors. The regulatory logjam has stifled the production of gas from Israel’s largest field, Leviathan, and hampered expansion of the second-biggest reserve, Tamar. Energy Minister Yuval Steinitz said that the drop in energy prices isn’t expected to derail the timetable for developing Leviathan. Noble said the Israeli gas could reach foreign markets by 2019. (www.bloomberg.com)

February 14, 2016. The mood inside the Organization of the Petroleum Exporting Countries (OPEC) is shifting from mistrust to a growing consensus that a decision must be reached on how to end the global oil price rout, Nigerian Oil Minister Emmanuel Ibe Kachiwku said. Oil prices have slumped by more than 70 percent to near $30 a barrel over the past 18 months as OPEC, led by top producer Saudi Arabia, sought to drive higher-cost producers out of the market by refusing to cut production despite a supply glut. The price crash has crippled some economies that depend heavily on oil sales for income, such as Nigeria and Venezuela, and even Saudi Arabia is shoring up its resources to withstand the painful revenue drop. Struggling oil producers have made repeated calls for an emergency OPEC meeting, but Kachikwu said that the timing had not been right. The cartel's next regular meeting is in June. The International Energy Agency said that oil markets could be oversupplied by as much as 1.5 million barrels per day in the first half of 2016 and warned that prices could decline further as Iran's emergence from economic sanctions brings more crude to the market. OPEC has declined to trim output without help from non-members, which so far have refused to participate. Russia, the world's biggest oil producer, has played coy by floating the idea of a cut without saying whether it would participate. In an attempt to find a compromise, Venezuela's oil minister recently proposed a freeze on new production to place a cap on the growing glut while not requiring countries to surrender market share. Kachikwu said that he would meet his Qatari and Saudi counterparts to discuss the situation. (www.reuters.com)

February 13, 2016. Kuwait Petroleum International (KPI) said oil prices could reach a range of $50 to $60 a barrel by mid-2017. The company's top executive Bakheet al-Rashidi as saying prices could reach the range of $60 to $80 a barrel in three years' time. Rashidi attributed the drop in oil prices to excess supply in the market and slow demand from Asia, particularly China. Asked whether oil prices would ever reach the $100 per barrel level again, Rashidi said. On Vietnam's Nghi Son refinery, Rashidi said it would start operations by the end of 2016. (www.reuters.com)

February 12, 2016. Venezuela's Oil Minister Eulogio Del Pino said the country is on the right track to clinch action by oil producers to prop up depressed energy prices, though he did not provide details. Del Pino, who is also president of state oil company PDVSA, proposed a production "freeze" at current levels during the tour of producing countries this month, sources familiar with the discussions say, in an attempt to tackle the global glut without cutting supply. While the idea was met with openness by Saudi Arabia, talks are still at an early stage and Riyadh will not commit unless Tehran agrees to restrict supplies. U.S. crude prices jumped more than 10 percent after a report once again suggested OPEC might resort to a production cut to reduce the world glut, and resilient stock markets added to the risk appetite in oil. The United Arab Emirates' energy minister said the Organization of the Petroleum Exporting Countries (OPEC) was willing to cooperate on an output cut. He said cheap oil was forcing supply reductions that would help rebalance the market. The drop in oil prices has worsened a brutal recession in Venezuela, which depends on oil for over 90 percent of its export revenue. (www.reuters.com)

 [INTERNATIONAL: POWER]

February 16, 2016. French energy firm EDF will extend the life of four of its eight nuclear power plants in the UK. Heysham 1 and Hartlepool will have their life extended by five years until 2024, while Heysham 2 and Torness will see their closure dates pushed back by seven years to 2030. EDF said its 2015 profits fell 68% to €1.18 bn mainly due to write downs on coal-fired plants. The four nuclear plants employ about 2,000 permanent staff and 1,000 contractors. They provide electricity to about a quarter of the UK's homes. The announcement comes amid concern about the amount of energy available to keep the lights on, due to the closure of many of Britain's ageing power plants. EDF has yet to finalise the investment for a new nuclear plant to be built at Hinkley Point in Somerset. It has agreed a deal in principle under which China General Nuclear Power Corporation will pay a third of the cost of the £18 bn project in exchange for a 33.5% stake. (www.bbc.com)

February 15, 2016. Power generation in Nigeria has dropped by 488.7 MW of February 8, after attaining a peak of 5,074.7 MW on February 2, 2016. The report said that energy generation fell by 774.04 MW in the same period to 4,300.66 MW, resulting in a reduction in the amount of energy sent out to electricity consumers, which was put at 4,212.32 MW. The report said that the country’s peak power demand was still 12,800 MW. The report said that the recent 488.7 MW fall in electricity generation came after the Minister of Power, Works and Housing, Babatunde Fashola, had promised that the country would increase its power production by 2,000 MW before the end of this year. He stated that given the various plans undertaken by the present administration in the sector, power generation would increase by 2,000 MW in the last quarter of 2016. (en.starafrica.com)

February 14, 2016. China's Harbin Electric and Saudi Arabian company ACWA Power will jointly build a coal-fired power plant in Dubai to supply the Dubai World Exhibition in 2020. The 1,200 MW clean coal power plant is the first commitment under a deal the two companies signed in December to explore the power generating market in the Middle East, Asia and Africa, Harbin Electric Corporation, China's largest producer and exporter of power generation equipment, said. Harbin Electric has constructed more than 50 power plants in more than 20 countries. (news.xinhuanet.com)

February 12, 2016. Independent power provider Azura Power West Africa has awarded Siemens an order for the key components of the 459 MW Azura-Edo IPP gas-fired power plant in the south of Nigeria. The company has been awarded a long-term service contract for maintenance and service of the plant for a period of twelve years. The project is expected to be commissioned in July 2018. (www.enerdata.net)

February 12, 2016. According to preliminary estimates by Estonian electricity transmission network operator Elering, gross electricity production in the Baltic States fell by 6% in 2015. Despite a higher generation in Latvia and in Lithuania, power generation fell by 17% in Estonia, due to cheaper inflows of electricity from the Nordic states that boosted electricity imports from Finland by more than 40%. Electricity production in the Nordic countries exceeded consumption by 4%. (www.enerdata.net)       

February 15, 2016. Colombia's coal output in 2015 fell 3.5 percent from a year ago to 85.5 million tonnes, due to train transport restrictions and closures along the border with Venezuela. The Andean nation, the world's fifth-largest exporter of the fuel, had produced 88.5 million tonnes in 2014. The sector struggled last year with court-ordered transport restrictions, including a ban on nocturnal train shipping on the Fenoco railroad, which serves U.S.-based Drummond Co, Glencore PLC's Prodeco unit and Murray Energy's Colombia Natural Resources. Closures along the border with neighboring Venezuela forced small producers to use more expensive transport to Colombian ports, rather than using Venezuelan ports closer to their mines. (www.reuters.com)

February 12, 2016. Chile begun selling electricity to neighboring Argentina for the first time ever, said local power producer AES Gener SA, which owns the transmission line used for the transfer. Chile's government authorized AES Gener, a local unit of U.S. power group AES Corp, to transfer electricity back and forth with neighboring Argentina through one of its transmission lines. AES Gener said integrating the power grids in Chile and Argentina will improve energy safety and optimize operating costs on both sides of the Andes. Argentine president Mauricio Macri has said he wants to build new Pacific trade links in energy supply as he seeks improved relations with Chile. (www.reuters.com)

February 12, 2016. South Korea cut off electric power transmission to the Gaesong industrial complex in North Korea. South Korea announced it would suspend the operation of the complex in response to the North's nuclear and missile tests. The North responded by seizing all assets in the complex and expelling South Korean personnel from there. (www.koreatimes.co.kr)

February 16, 2016. Japanese power utility Kansai Electric and Japan Atomic Power Company (JAPC) have submitted their decommissioning plans for the three nuclear units to the Nuclear Regulation Authority (NRA) for approval. The units 1 and 2 of the Kansai Electric-operated Mihama nuclear power plant and the unit 1 of JAPC's Tsuruga nuclear plant were all officially shut down on 27 April 2015. JAPC estimates that it will take 24 years to decommission the 341 MW Tsuruga-1 boiling water reactor that started up in 1970. Kansai Electric expects the decommissioning of 340 MW Mihama-1 and 500 MW Mihama-2 to take around 30 years. Both were commissioned in the early 1970s. The decommissioning of these three units was announced in March 2015, after an assessment of the work needed to meet new post-Fukushima requirements by the NRA. Kyushu Electric submitted a decommissioning plan for the Genkai-1 nuclear reactor to the NRA in December 2015, while Chugoku Electric has yet to submit a decommissioning plan for the Shimane-1 reactor that it plans to decommission. (www.enerdata.net)            

February 16, 2016. Europe is short of more than € 118 billion (£92 billion) to dismantle its nuclear plants and manage nuclear waste storage, a European Commission working paper shows. The data is part of a periodic analysis of Europe's nuclear capacity designed as a basis to discuss the role of nuclear energy in achieving EU objectives, such as reducing greenhouse gas emissions. The Commission's last analysis was published in 2007, before Japan's Fukushima nuclear crisis five years ago and was meant to be updated by the end of last year. In response to Fukushima, Europe's largest economy Germany decided to abandon nuclear power by no later than 2022, relying on solar, wind, coal and gas for its energy instead. To meet nuclear decommissioning costs, about € 150.1 billion of assets are available, the study found, compared to an estimated € 268.3 billion in expected costs - which include the lengthy dismantling of nuclear power stations as well as the removal and storage of radioactive parts and waste. (uk.reuters.com)

February 15, 2016. The storage and disposal of nuclear waste in South Australia would probably deliver significant economic benefits to the state, generating more than A$5 billion ($3.6 billion) a year in revenue, the Nuclear Fuel Cycle Royal Commission said. Such a facility would be commercially viable, with storage commencing in the late 2020s, the commission said. It doesn’t make economic sense to generate electricity from a nuclear power plant in the state in the “foreseeable future” due to costs and demand, the commission said. South Australia, where BHP Billiton Ltd. operates the Olympic Dam mine, set up the commission last year to look at the role the state should play in the nuclear industry -- from mining and enrichment to energy generation and waste storage. While Australia is home to the world’s largest uranium reserves, it has never had a nuclear power plant. Concerns over climate change have prompted debate about whether to reverse Australia’s nuclear policy. The Commission’s final report will be delivered on May 6. (www.bloomberg.com)

February 12, 2016. China planning to bring a safe nuclear power plant that will not suffer from meltdowns online in November 2017. It would be the world’s first high-temperature, gas-cooled pebble-bed nuclear plant built on an industrial scale. China’s Nuclear Engineering Construction Corporation wants to introduce a high temperature, pebble-bed, gas-cooled nuclear reactor, in the Shandong Province, south of the capital, Beijing. The company is planning to bring twin 105 MW reactors online that would be immune to meltdown. It is hoped that the power station will start working by November 2017. The Chinese are using a design developed in Germany, though the nuclear reactor which is being built in Shandong will be the first commercial-scale atomic power plant of its kind to be constructed. (www.rt.com)

 [RENEWABLE ENERGY / CLIMATE CHANGE TRENDS]

February 16, 2016. Inox Wind has bagged 100 MW wind power project order from Tata Power Renewable Energy (TPREL) at Rojmal, Gujarat. The order is TPREL's fourth project with Inox Wind taking the cumulative orders placed with the energy solutions provider to over 300 MW, Inox Wind said. TPREL is a 100 percent subsidiary of Tata Power and has around 215 MW commissioned renewable assets, with another 250 MW under construction or on order. Inox Wind's Rojmal site is one of the largest wind farms in Gujarat with a capacity of 400 MW. Over 140 MW of capacities are already operational at the wind park including 50 MW capacities of TPREL. The commissioned common infrastructure facilities at the site are capable of supporting power evacuation of 400 MW. (energy.economictimes.indiatimes.com)

February 16, 2016. Delhi government has decided to give a generation-based incentive (GBI) of ` 2 per unit of solar energy produced to domestic consumers and charitable organisations in a month. This incentive will be funded by Delhi government's "air ambience fund" created from the 25 paise cess on each litre of diesel bought in the city. Experts say GBI, which is meant to be offered only for two years, can be a great boost for domestic consumers. Another good news for those investing in solar power is that the Centre has restarted its 30% subsidy on the capital cost of the project. The subsidy had been rolled back to only 15% last year. Delhi Dialogue Commission (DDC) had released a draft solar policy in September after getting inputs from industry as well as NGOs. The focus of the subsidy is to ensure that all existing and proposed Delhi government buildings install solar rooftop systems within three years of notification of the policy. The same applies to all new commercial buildings, with plot size greater than 500 sq m and 50% shadow-free rooftop area, and all new residential buildings, with plot size greater than 300 sq m and 50% shadow-free area. Projects of 5 MW will soon be commissioned at Netaji Subhash Institute of Technology and Delhi Technological University, among others. The reason for not making GBI a permanent feature is because solar energy is already very competitive. Recently solar tariffs for large projects fell to a record low of ` 4.34 per unit. To promote solar projects in the city, the power department said it has waived off the mandatory certification of solar projects by the electrical inspector for projects up to 200 KW. Till now it was required for any project of 100 KW and above. (energy.economictimes.indiatimes.com)

February 15, 2016. The total installed solar power generation capacity is likely to cross over 9,000 MW mark by end of March from existing 5,248 MW and will be over 20,000 MW by the end of next financial year, according to a status report by Ministry of New and Renewable Energy. During the remaining period of the current fiscal, as much as 3,790 MW of solar power generation capacity is expected to be added by March-end, taking total capacity to 9,038 MW from existing 5,248 MW, the report said. Tendering for solar project totalling a capacity of 15,177 MW has already been completed and a total capacity addition of 12,161 MW is expected during the financial year 2016-17, it said. Adding 12,161 MW solar power generation capacity in 2016-17 will increase India's solar generation capability to 21,199 MW by March 2017. During the remaining months of February and March of this fiscal, tendering of 4,431 MW is expected, it said. The government has revised the National Solar Mission (NSM) target from 20,000 MW to 1,00,000 MW by 2022. Of the 1,00,000 MW of power that will be generated through solar power, 40,000 MW is to come through grid connected solar rooftop systems. Solar power generated by each individual household, industrial, institutional, commercial or any other building can be used to partly fulfill the requirement of the building occupants and the surplus, if any, can be fed into the grid. This target will result in the abatement of about 60 million tonnes of CO₂ per year and will help to fulfill India’s commitment to mitigate the effect of climate change. (www.newindianexpress.com)

February 15, 2016. Odisha plans to set up solar park in Balasore district spreading over 3,000 acres of land. The park is likely to involve an investment of about ` 6.5 crore per MW. Twenty one states, including Odisha, have proposed to develop 27 solar parks with aggregate capacity of 18,418 MW in country. Union government has set a target to generate 1,75,000 MW of power through renewable sources of energy. Out of the target, solar energy would account for 1,00,000 MW while 60,000 MW would be generated by harnessing wind capacity. Besides, 10,000 MW and 5,000 MW would come from biogas and small hydro projects. Similarly, Odisha government has also set an ambitious target to add 3,000 MW renewable energy capacity by 2022 in the draft Odisha Renewable Energy Policy. The target includes 2,300 MW in the solar sector, 350 MW from wind sources, 150 MW from the small hydro-electricity projects, 180 MW from biomass and 20 MW from municipal solid waste (msw). The solar sector is divided into four areas such as land based solar projects (500 MW), projects utilising water bodies (250 MW), projects on the consumer side of the meter (50 MW), solar park (1,500 MW). (www.business-standard.com)

February 15, 2016. Power, Coal, New and Renewable Energy Minister Piyush Goyal admitted at the Make in India, Mumbai edition that biofuel and hydro power had taken a bit of a backseat recently, but added that there would be a big thrust to get them going again. He said solar and wind had matured “to a level in India” and the focus of his ministry will now be on biofuel. The minister asked entrepreneurs to take on the challenge put forth by wind energy. Currently, India produces 5,000 MW of solar energy and 18,000 MW of wind energy. (www.business-standard.com)

February 15, 2016. Solar power industry wants the government to give tax incentives and financial support to make "solar" an attractive and viable option, ahead of the Union Budget. The government has ambitious plans for deployment of 175 GW renewable power capacities by 2022, including 100 GW of solar power. Amplus Solar said extension of tax holidays, waiver of electricity duty and banking charge for solar rooftops, activating REC benefits for rooftop projects and captive projects will certainly motivate more rooftop installations to come up in cities and towns. While bankability of the discoms still remains a concern, going ahead it will be necessary for the state and centre to conduct targeted studies to assess strengthening of grid infrastructure to accommodate intermittent solar power and banking of power, Amplus Solar said. (timesofindia.indiatimes.com)

February 10, 2016. Adani Enterprises Ltd., the mining company whose plans to build Australia’s largest coal project have been delayed, is now looking to invest in the country’s solar-power sector. The company is focusing on solar opportunities in Queensland and South Australia states. Adani said any solar investment in Australia would come on top of its ambitions to develop the Carmichael mine and rail project in Queensland. Adani is interested in joining companies from Canada, China and Europe in developing solar projects in Australia with costs projected to halve by the end of the decade. Large-scale solar in the country is forecast to experience a 15-fold increase in capacity by 2021. The company has a green-energy unit in India, which targets 10,000 MW of photovoltaic capacity by 2022. Adani’s plans to use a port near the Great Barrier Reef have stoked opposition from environment groups. The coal industry is under siege with utilities facing pressure to close aging power plants, countries taking their boldest steps yet to cut greenhouse gas pollution and prices languishing near the lowest levels since 2006. (www.bloomberg.com)

February 16, 2016. Greater competition between renewable energy technologies bidding for subsidies could cut British taxpayer costs by as much as 2.2 billion pounds ($3.2 billion), according to a new report written for biomass producer Drax Group Plc. Wind power is more expensive than biomass when “hidden costs” like the need for back-up generation are accounted for, the report said. Biomass technologies already generate more than a quarter of the U.K.’s renewable electricity, or about 5 GW, according to government figures. The U.K. is planning to host three auctions offering subsidies to developers of “less-established” renewable-energy technologies including offshore wind, wave and tidal stream, geothermal and biomass plants. According to the Department of Energy and Climate Change (DECC), the first auction will be held this year and the remaining two before 2020. (www.bloomberg.com)

February 16, 2016. SunEdison Inc. is about to buy into the rooftop solar business just as demand growth is expected to slow. The company is seeking to close its contentious $1.9 billion acquisition of Vivint Solar Inc. this quarter, and a judge in Delaware is scheduled to hear arguments from an investor seeking to block the deal. U.S. residential solar installations had surged at least 50 percent for three straight years, driven largely by solar leasing. Demand for residential solar in the U.S. is expected to climb 39 percent this year, with about 2,160 MW of new systems. Rooftop solar’s growth has been driven in large part by solar leasing. Companies like Vivint install panels for customers who pay little or nothing up front and agree to make monthly payments under long-term deals. (www.bloomberg.com)

February 16, 2016. US power utility NV Energy and US copper mining company Nevada Copper have signed an agreement to conduct a feasibility study for a proposed solar power plant that would be developed on private land, at Nevada Copper's Pumpkin Hollow copper development project near Yerington (Nevada, United States). The solar power project could have a capacity of up to 500 MW. Solar energy generated at the project could be used at the site or transmitted into the grid via existing high voltage transmission lines located east of the project area. (www.enerdata.net)

February 16, 2016. Solar Frontier K.K., the Development Bank of Japan (DBJ) and Taiyo Oil Co. plan to build a 17 MW solar power station in the western prefecture of Yamaguchi. Construction of the plant is scheduled to begin this year and operation is targeted to start next year, the companies said. The station is expected to produce enough electricity to power more than 3,800 homes annually. Solar Frontier will supply panels and provide operation and maintenance services, according to the companies. DBJ will invest in the project and will also invite financial institutions to support raising funds. (www.bloomberg.com)

February 15, 2016. The government of Egypt has officially launched a solar programme aimed at developing up to 40 solar power plants in the Aswan region, which will cumulate a total capacity of 2,000 MW. The giant solar project is expected to help Egypt meet its rising energy demand. (www.enerdata.net)

February 15, 2016. Energy intensive industries most likely to leave the European Union (EU) because of costs should get all of their EU Emissions Trading System (ETS) permits free until other major blocs have a carbon price in place, French Economy Minister Emmanuel Macron said. The European Commission is revising its rules for handing out free permits to cushion energy intensive industries, such as the steel sector and oil refiners, from the expense of offsetting emissions on the ETS. Thousands of steel industry workers marched in Brussels to demand action to defend their jobs against competition from cheap Chinese imports, as well as higher energy costs in Europe, caused in part by the ETS. Macron also backed proposals for border carbon adjustments - measures that would impose a tax on imports according to the emissions that went into their production, at the same price faced by domestic consumers - to level the playing field. Ten years ago the EU launched a plan to tackle climate change by asking heavy industry and utilities to pay for every tonne of carbon dioxide they produced by buying permits to pollute. After fierce lobbying, it conceded the biggest users of energy could have free permits to prevent what is known as "carbon leakage", or industry leaving the EU because of regulatory costs. Environmental campaigners say the Paris Agreement on climate change and China's own plans to develop an emissions market belie comments from industry that costs associated with the ETS can drive them to produce more cheaply elsewhere. But industry says the international playing field is not yet level and the ETS is a heavy burden. Macron suggested the EU might pilot a scheme of carbon border adjustments on imports in certain energy-intensive sectors, before rolling it out across the 28-member bloc. (af.reuters.com)

February 15, 2016. The International Finance Corporation (IFC) has signed an agreement with the government of Senegal to develop up to 200 MW of solar power capacity under Scaling Solar, an initiative helping African countries procure renewable energy quickly and affordably. IFC will help the Government of Senegal conduct due diligence and tender the solar project, and IFC, the World Bank and the Multilateral Investment Guarantee Agency are expected to support its bidding phase. (www.enerdata.net)

February 13, 2016. Canada, the US and Mexico signed a deal in Winnipeg, Canada, to tap into energy cooperation among the three countries, National Resources Canada said. The Memorandum of Understanding on Climate Change and Energy Collaboration was signed at the, which was hosted by Canada's Minister of Natural Resources Jim Carr, with the attendance of US Secretary of Energy Ernest Moniz and Mexican Secretary of Energy Pedro Joaquin Coldwell. Under the memorandum, the three countries will collaborate and share information in key areas such as low-carbon electricity, clean energy technologies, energy efficiency, carbon capture, use and storage, climate change adaptation, and reducing emissions from the oil and gas sector, including from methane. They will also work together to increase policy alignment and ensure that the North American energy sector is developed responsibly, effectively and efficiently. (zeenews.india.com)

February 12, 2016. Valero Energy Corp filed lawsuits against the U.S. Environmental Protection Agency (EPA) to push the regulator to alter a U.S. policy designed to boost use of renewables in transportation fuels. The country's top refiner and No. 3 ethanol producer filed a challenge with the U.S. Court of Appeals in Washington to review the EPA's latest Renewable Fuel Standard plans for 2014-2016. It separately asked the court to reopen its standards from 2010 and 2007, according to court documents. This is the latest push by refiners to move the responsibility of complying with the program further downstream. Oil refiners are required to meet EPA targets for biofuel use. Those without adequate capacity to blend ethanol with gasoline have to buy compliance credits in a thinly traded market. Each year, the EPA is required to set targets for biofuel use. In November, it set volumes for 2014-2016 below a 2007 plan laid out by Congress, disappointing both the oil and biofuel industries. (www.reuters.com)

February 12, 2016. Environment Minister Barbara Hendricks said Germany’s decision to admit more than 1.1 million refugees within the last year is likely to strain the government’s target to cut greenhouse gas pollution. The minister in Chancellor Angela Merkel’s cabinet who also oversees housing asked for € 3.9 billion ($4.4 billion) in additional spending though 2020 to build homes for asylum seekers. Her ministry is studying the impact of rising energy demand from an increased population on Germany’s pledges to cut fossil-fuel emissions. The comments add to friction within Merkel’s government over how to cope with refugees who surged into Germany because of political conflict from Syria to north and east Africa. Hendricks oversees climate policy and represented Germany at the United Nations global warming talks in Paris, where 195 countries agreed to take steps to limit climate change. Merkel has pledged to cut greenhouse gas emissions by 40 percent by 2020 compared with 1990 levels. Wind and solar energy have been the main drivers of those reductions, helping Germany replace nuclear- and coal-fired power plants and reduce CO₂ by about 28 percent by 2014. The government is staking steps to scale back the rate of clean energy expansion because of bottlenecks in adapting the grid to more variable power flows. Clean power now accounts for 33 percent of all electricity consumed in Germany, helping the nation reduce its annual emissions even though energy demand rose 1.3 percent, according to AG Energiebilanzen e.V., a research group the government consults. Cooler weather and economic growth of 1.8 percent helped boost emissions, and the number of asylum seekers lodged in Germany also expanded growth, the group said. (www.bloomberg.com)

February 12, 2016. The European Bank for Reconstruction and Development (EBRD) will expand its support for sustainable energy financing in Turkey with an additional €500 mn, raising the funds available under the Mid-size Sustainable Energy Financing Facility (MidSEFF) to €1.5 bn. Funds will be provided to Turkish banks in the form of loans and capital market instruments for on-lending to private sector companies and will benefit renewable energy and resource efficiency projects in Turkey as well as projects in energy efficiency, water saving and waste minimisation projects. So far, the MidSEEF programme has financed 43 projects through 7 Turkish banks, building over 800 MW of additional renewable energy capacity. (www.enerdata.net)

February 11, 2016. China-based green energy company Kaidi is planning to build a new wood-based biodiesel plant in Finland with an investment of about €1 bn (US$1.1 bn). Planned to be built in the northern city of Kemi by the end of 2019, the biodiesel refinery will use wood-based biomass as main feedstock to produce 200,000 tons of biofuels per year. The output from the refinery, which is expected to be the first of its kind in the world, will be a mix of 75% biodiesel and 25% biogasoline. Kaidi plans to make the final investment decision by the end of this year. Construction work on the refinery is planned to commence in 2017. The refinery project has already secured environmental impact assessment approval from the Centre for Economic Development, Transport and the Environment of Lapland. (biofuelsandbiomass.energy-business-review.com)

February 11, 2016. Honda Motor Co Ltd plans to start making gasoline-electric hybrid cars in China later this year, to meet increasingly stringent fuel economy regulations in a country blighted by worsening air pollution. The Japanese automaker will build hybrid versions of its Accord sedan and Acura compact crossover sport utility vehicle (SUV) in the southern city of Guangzhou. It will follow those with a hybrid version of its Spirior sedan. Chinese cities are frequently enveloped by smog from coal-fired power plants, heavy industry and clogged roads. To help clear the skies, the government has been tightening fuel economy regulations and offering tax breaks for new-energy cars. Regulations will tighten gradually through 2020, likely forcing Honda and its peers to meet them by calling on all types of fuel-efficient technologies, such as all-electric and conventional gasoline-electric hybrids. It was unclear how regulations will be enforced. Honda markets four gasoline-electric models in China, including a version of its Fit subcompact, but sales are limited as all four models are shipped from Japan and are subject to relatively high import duties. (www.reuters.com)

February 10, 2016. Japan’s environment ministry gave the green light to construction of new coal-fired power plants in exchange for power companies and the industry ministry taking tougher measures to reduce global warming emissions. While the environment ministry had been wary of allowing such plants on fears they could increase emissions, Environment Minister Tamayo Marukawa said her ministry will give approval. She said the government will review each plan and “check whether it is consistent with the state’s targets.” The environment ministry and the Ministry of Economy, Trade and Industry will request all utilities to report how much carbon dioxide they have emitted in generating electricity after the country fully liberalizes its power market in April. (www.japantoday.com)

February 10, 2016. The unprecedented drought in California cost consumers an extra $2 billion in power bills because it dried up hundreds of hydroelectric stations in the U.S. state, curbing a key source of renewable energy, a new report found. The drought has also undermined efforts to tackle climate change since it started in 2011, because the extra gas power replacing hydro increased emissions, the research group Pacific Institute in said the study. Hydropower is one of the cheapest ways of generating electricity. It can also balance out other intermittent sources of renewable energy needed to tackle climate change, which is blamed for the rise in extreme weather events such as droughts. California Governor Jerry Brown said the drought in his state showed that “climate change is not a hoax”. The technology provided about 18 percent of the California’s electricity needs for the last 30 years. That fell to 10.5 percent from October 2011 to September 2015, according to the report. The dip in hydropower was replaced by a growth in gas, which increased carbon dioxide emissions by 23 million tons, or 10 percent, during the four years, according to the study. (www.bloomberg.com)

February 10, 2016. A divided U.S. Supreme Court blocked President Barack Obama’s sweeping plan to cut emissions from power plants, putting on hold his most ambitious effort to combat climate change. The 5-4 order halts the Environmental Protection Agency’s (EPA) Clean Power Plan until at least the final months of Obama’s presidency -- and casts doubt on its ultimate fate before the nation’s highest court by suggesting concern among a majority of the justices. Utilities, coal miners and more than two dozen states say the agency had overstepped its authority and intruded on states’ rights. The delay is a blow to Obama’s environmental agenda, highlighting the prospect that his signature program for combating climate change could be in legal jeopardy. It also risks undermining the U.S. commitment to pare greenhouse gas emissions as part of an international accord reached in Paris last December. The plan will be on hold until the Supreme Court either rules or refuses to get involved. The EPA won’t be able to enforce a Sept. 6 deadline for states to either submit their emission reduction plans or request a two-year extension. A federal appeals court is hearing challenges to the rule on an expedited basis, with arguments set for June 2. If the court rules quickly enough, the Supreme Court could consider the case in the nine-month term that starts in October. A final ruling in 2017 would leave it up to Obama’s successor -- potentially one of the Republicans who have criticized the Clean Power Plan on the campaign trail -- to decide how to respond. The EPA rule requires states and utilities to use less coal and more wind power, solar power or natural gas. It is designed to bring about cuts in carbon emissions from power plants of 32 percent below 2005 levels by 2030. (www.bloomberg.com)

February 10, 2016. The U.K. will struggle to meet its climate change targets and could miss out on earnings from empty oil and gas fields because of a surprise government decision to scrap a 1 billion-pound ($1.4 billion) carbon-capture and storage (CCS) contest, a panel of lawmakers said. Ministers must urgently devise a new plan to bolster CCS or it risks losing all investment in the emerging technology, Parliament’s Energy and Climate Change Committee said in a report. The equipment would trap fossil fuel emissions from factories and power plants and store them permanently underground. Prime Minister David Cameron’s Conservative government scrapped the competition in November, even though the party’s 2015 election manifesto listed the funding among its measures to tackle climate change. It’s the second time the government has dropped funding for CCS. The Department of Energy and Climate Change said that it’s still open to the technology. (www.bloomberg.com)

 

 

 

 

 

 

 

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