Energy News Monitor | Volume XII; Issue 37

[February 2016: A Month of Low Expectations]

                             “The government announced that it is considering the development of an oil trading platform. This will enable companies to use the spot market rather than long term tender based crude purchase and thus enable them to take advantage of falling prices…”

Energy News

[GOOD]

India should get power deals in other countries not only to beat China but also to beat global benchmarks!                                   

                                                                                                 [BAD]

Carbon neutrality in power generation through hydropower is a matter of resource endowment and not carbon mitigation policy!

[UGLY]

Energy shortage may have reduced but this does not mean energy poverty has reduced!

 

 [WEEK IN REVIEW]

India monthly energy briefing

February 2016: A Month of Low Expectations

Lydia Powell, Observer Research Foundation

Conventional Fuels

Oil & Gas

ebruary was not the best of months for the Indian upstream oil & gas industry. The price of crude in the global market was below break-even prices but upstream companies announced that this was the right time to invest in deep sea exploration blocks as oil services have become more affordable. Talk on developing strategic reserves picked up as the opportunity cost of storing oil is relatively low now. The loading of Iranian crude on to an Indian tanker after the removal of sanctions on Iran is among the few interesting developments in the oil sector in February. The government announced that it is considering the development of an oil trading platform. This will enable companies to use the spot market rather than long term tender based crude purchase and thus enable them to take advantage of falling prices. 

Refiners who thrive on margins had little to complain about as demand for fuels was reported to be growing at the fastest pace in three months. Indian refiners were also said to be joining forces to extract better deals from OPEC oil sellers. The inauguration of the IOC’s Paradip refinery offered photo opportunities for political leaders. Paradip also increased the prospect for shipping oil products to Bangladesh. One of the unexpected developments in the refining sector was the emergence of China as a major exporter petroleum products.  This is unlikely to be pleasant news for export oriented private refineries.  

The government is supposedly attempting to reintroduce taxes and levies such as the customs duty on crude imports that were withdrawn when oil prices were high in the budget to be announced next month. Refiners were said to be resisting the move to impose a tax of 5% on the import of crude as it will add to the tax on the import of products. On the other hand, the government is also said to be considering a change of the cess on petroleum to ad valorem basis. The government continued to exempt subsidy payments from PSU companies.   

Natural gas prices continued to fall in the global market and consequently domestic prices that were linked to global prices in the hope that global prices will stay high also fell. Unless a new formula is devised that has a component that will increase with the increase in geological and technological complexity of the gas field the fall in domestic prices is unlikely to be arrested. The government is anxious to pursue subsidy auctions for gas based power generation and the hope is probably that they will get bids that will offer a premium to the government rather than a mere discount on the subsidy. The news item that may have puzzled many in the context of gas is that of an India Australia panel for supply of Australian LNG to Indian power plants. In an environment of subdued demand for power and falling prices of coal why would anyone want to use expensive Australian LNG for generating expensive power? Is it a strategy for Indian tax payers subsidising Australian LNG producers under the subsidy auction scheme?

Coal

There wasn’t much to celebrate on the coal front either. Coal block auctions seem to have just replaced an old set of problems with a new set of problems. Continued tinkering of auctions framework did not appear to be helping the situation. It is not without reason that they say markets grasp situations better than bureaucrats: markets have to put their money where their mouth is. The Minister in charge of coal and power sectors said that coal and power were a trillion dollar opportunity but once again markets may beg to differ! Coal imports continued to fall not only because of improvements in domestic production but also because of lower demand for coal. 

A special forward e-auction for power producers and non-power producers that was supposed to have been implemented in February is said to have been deferred indefinitely. The official reason for such cancellation is not known but coal buyers are of the view that it was the result of poor demand probably on account of the fact that the base price was about 20% higher than the notified prices.

On the other hand, The Cabinet Committee on Economic Affairs, chaired by the Prime Minister approved the framework for auction of linkages of non-regulated sector. All coal allocations of linkages/Letter of Assurance (LoAs) for non-regulated sector i.e. cement, steel/sponge iron, aluminium, and others (excluding Fertilizer (urea) sector), including their captive power plants, are to be auction based with separate quantities earmarked for sub-sectors of non-regulated sector. The tenure of Fuel Supply Agreement (FSA) will be as decided by Ministry of Coal from time to time. The idea is to ensure all market participants of non-regulated sector have a fair chance to secure coal linkage, irrespective of their size. No new linkages or LoAs have been allocated to non-regulated sector since 2007.

Regarding new initiatives taken for quality improvement of coal, it has been made mandatory to supply 100 percent crushed coal of (-) 100 mm size to power sector consumers having FSA excluding pit head power plants of Northern Coal Fields and Eastern Coal Fields. To further strengthen the system, an independent Third Party Agency is to be empanelled by Central Institute of Mining and Fuel Research at the loading end on behalf of both the power plant and coal companies. The Parliamentary Consultative Committee attached to the Ministry of Coal reviewed the status of implementation of the mandate on coal washeries and measures being taken for improvement of quality of coal by Coal India Ltd (CIL) and its subsidiaries. However, the question of poor capacity utilisation of washeries remains.

Power

The power sector did not make it to the headlines in February as there were no power cuts. There is nothing to celebrate because no power cuts does not necessarily mean power for all. Power that could have lit up over 16 million households remained unsold not because there was no access (wires) but because there was no demand. It is tempting to assign blame on state electricity boards (SEBs) for having destroyed demand but lack of demand for electricity is a clear sign of lack of development. Illiquid SEBs are a consequence of the lack of development not the cause of it. The states enlisting on the Government’s UDAY (Ujwal Discom Assurance Yojana) scheme for financial turnaround of Power Distribution Companies was reported. Though the scheme is being promoted as the answer to all problems at the distribution end of the power sector, there appears to be little that is new in the scheme that has not been tried before.  Some of the more positive news from the power sector included news on India submitting the Instrument of Ratification of the Convention on Supplementary Compensation for Nuclear Damage, 1997 to the International Atomic Energy Agency (IAEA), the depositary of the said Convention which may pave the way for greater clarity on the nuclear liability regime in India. There was also positive news that the nuclear plant in Koodankulam had started generating after repeated delays on account of technical faults but by the end of the month it was reported that generation had terminated on account of yet another technical problem! 

Renewable Energy

Apart from the routine stream of news on new renewable energy projects being proposed or implemented there was also news that the United States had won a ruling against India at the World Trade Organization after challenging the rules on the origin of solar cells and solar modules used in India's national solar power program. So much for make in India!

Views are those of the author                    

Author can be contacted at [email protected]

Electricity Generation through Small Hydro Projects

Akhilesh Sati, Observer Research Foundation

State/Utility	Generation (MU) 2015-16 (till October)	State/Utility	Generation (MU) 2015-16 (till October)
Haryana	556.413	Kerala	286.651
Himachal Pradesh	1553.85	Tamil Nadu	110.215
J & K	213.478	Andaman Nicobar	9.45
Punjab	387.33	Bihar	18.84
Rajasthan	1.501	Orissa	202.934
Uttar Pradesh	17.737	Sikkim	31.06
Uttarakhand	451.58	West Bengal	86.989
Chhattisgarh	24.488	DVC	108.91
Gujarat	18.75	Arunachal Pradesh	0.391
Madhya Pradesh	60.431	Assam	50.369
Maharashtra	344.805	Meghalaya	45.83
Andhra Pradesh	45.374	Mizoram	17.791
Telangana	36.342	Nagaland	67.06
Karnataka	1140.247	Tripura	5.121
Total		5893.937

All India Region-wise Generation for SHP

MU: Million Units;    1 Unit = 1 KWh

Source: Lok Sabha (Unstarred Question No. 1996)

The Oil Supply Security Index is Stable

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 22, 2016. A consortium of Oil and Natural Gas Corp (ONGC) and an arm of Essar Energy have struck natural gas in the Mumbai High fields, an ageing reservoir in the Arabian Sea. The consortium of ONGC and Essar Exploration and Production Ltd (Mauritius) has filed details of the discovery with the Directorate General of Hydrocarbons (DGH). The gas discovery was made in the first exploratory well of the Block MB-OSN-2005/3 in the Mumbai Offshore Basin, which the consortium bid for as part of New Exploration Licensing Policy (NELP) VII. ONGC has 70 percent participating interest in the block, while Essar holds the remaining 30 percent with a production sharing contract with the government of India. ONGC is the operator of the field, while Essar mapped the target field. After the technical engagement with the DGH, the consortium will conduct a final appraisal of the discovery after which the reservoir will be delineated and commercialised. The whole process could take a minimum of 18-24 months. The discovery is significant geologically because it’s the first on the west coast in the Pliocene formation, a shallower shelf at a depth of about a kilometre below sea level. The Mumbai High fields have been flagging over the past decade, with ONGC undertaking several drilling campaigns here to revive the reservoir. ONGC has gas reserves of 17.86 billion cubic metres (roughly 631 billion cubic feet). Essar Oil has in-place reserves of five trillion cubic feet at its coal-bed methane fields, while the Mauritius company has partnered for reserves in Vietnam and Nigeria. (www.thehindubusinessline.com)

February 20, 2016. Oil and Natural Gas Corp (ONGC), will invest ` 5,050 crore in Tripura to drill new gas wells and strengthen infrastructure to improve natural gas supply to thermal power units and for domestic purposes. The increased gas supply will also pave the way for setting up gas-based industries in the state by the private sector. ONGC had given green signal to invest ` 1,946 crore in the ongoing projects. It sanctioned another ` 3,104 crore for investment in the state. ONGC said the ` 5,050 crore would be used to dig 153 new wells across the state. ONGC said new gas-gathering stations would be launched in Sonamura subdivision of Sipahijala district and Gazalia under Sabroom subdivision of South Tripura district. The capacity of existing gas-gathering stations in AD Nagar and Konaban in West Tripura and Sipahijala districts will also be increased. ONGC had traced 11 major gas-bearing zones across the state and only seven of them were being utilised for gas collection. ONGC's aimed to increase the daily production of natural gas from 4.1 cubic metre to 5.1 cubic metre to take care of all kinds of gas requirements in the state for the next 15-20 years, including domestic consumption. (www.telegraphindia.com)

February 18, 2016. The Confederation of Indian Industry (CII) has recommended market-linked pricing for natural gas fields, which are discovered but yet to be developed -- a long-standing demand of the Oil and Natural Gas Corporation (ONGC) to make its ` 40,000 crore planned investments in the Krishna Godavari (KG) Basin viable. CII has supported awarding contracts under the new regime for duration till the end of the economic life of the field - a major demand by Vedanta-owned Cairn India, which has been seeking extension of contract for its flagship Barmer oil and gas field in Rajasthan. According to the oil ministry, the proposed policy changes are at the forefront of its efforts to reform the exploration and production (E&P) sector and are aligned with the larger intent of "ease of doing business". The basic idea stems from the concerns over the country's stagnant crude oil production -- which has inflated the energy-hungry nation's fuel bill to a massive $112 billion annually - and the huge decline in natural gas production. The new policy proposes a switch towards pricing and marketing freedom for companies and a more investor-friendly revenue sharing model of development that allows companies to indicate the revenue they will have to share with the government at different stages of production. (www.business-standard.com)

February 23, 2016. Mangalore Refinery and Petrochemicals Ltd (MRPL) has put on hold the appointment of petrol pump dealers following a reminder by the government that the policy guiding the appointments was in abeyance. MRPL had sought applications from potential dealers for setting up filling stations at 115 locations in Karnataka and Kerala. By February 10, the deadline for submission, MRPL had received about 37 applications for about 20 locations, according to the company. The company has license to operate 500 filling stations and intends to build a strong presence in the fuel retailing business. (www.diligentia.net.in)

February 18, 2016. Indian Oil Corp (IOC) will likely take a 40% stake in the country's largest refinery project slated to come up on the western coast in Maharashtra, while two other state refiners Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) may own 20% each. Engineers India Ltd (EIL) will have a 5% stake and the balance will be split between the financial institutions and the state of Maharashtra. The 60 million tonnes a year refinery will require an investment of ` 1.5 lakh crore, prompting state firms, which usually compete with each other, to join hands. The biggest refinery any state firm has ever built in the country is of 15 million tonnes. By bringing together resources and competence, the state firms plan to put their best behind a project that would help meet future fuel demand rapidly rising with the economy. The project will be developed in two phases, with 40 million tonnes capacity being completed in the first. A petrochemical unit will also likely be set up along with the refinery. IOC is the largest refiner in India with an installed capacity of about 80 million tonnes per annum. The country has a total capacity of about 230 million tonnes, with about 80 million tonnes capacity owned by the private sector. India is a net exporter of petroleum products but rising domestic demand and lower international prices have slowed exports. The export of petroleum products was down 18% in December and 11% during April-December 2015. The domestic consumption of petroleum products grew 9.5% during April-December. At this pace, the country would need a new refinery soon to meet local demand. (energy.economictimes.indiatimes.com)

February 23, 2016. Indian state refiners are jointly negotiating oil purchase deals with OPEC producers for the first time, as the world's third biggest consumer seizes on low prices to wrest better terms in a market awash with crude. In a sign of the shift in power from oil sellers to buyers, India is reviewing its import policy at a time when OPEC members are focused more on protecting market share than boosting prices that are down some 70 percent in the last 20 months. While producers have shown no sign yet of willingness to discount long-term price benchmarks, or official selling prices (OSPs), they have discussed concessions on loan terms and shipping that would reduce costs. In the last two months officials from Indian Oil Corp (IOC), Bharat Petroleum Corp, Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals Ltd visited Abu Dhabi, Kuwait and Saudi Arabia to negotiate deals for the next fiscal year beginning in April. The four refiners together control about 60 percent of India's 4.6 million barrels per day (bpd) capacity. The UAE, Kuwait and Saudi Arabia declined to give discounts on OSPs to Indian refiners. India's oil import policy was approved by the cabinet in 1979 and was last modified in 2001 to expand the list of companies that can supply crude. In 2015, Indian state refiners lifted about 250,000 barrels per day (bpd) from Kuwait, about 514,000 bpd from Saudi Arabia, and about 214,000 from UAE, according to data. In the last fiscal year, IOC halved its term deal with Kuwait to about 100,000 bpd. IOC said that for the next fiscal year the company planned to restore volumes to about 200,000 bpd. (www.reuters.com)

February 22, 2016. India imported 189 million tonnes (mt) of crude oil in 2014-15, valued at $112 billion. In the current financial year, the value of imports is expected to come down to $61 billion Ahead of the Union Budget to be tabled in Parliament on February 29, Indian Oil Corp (IOC) has urged the government not to consider reimposing a five percent customs duty on crude oil imports arguing the levy would jack up costs. The Centre had cut Customs duty on crude oil imports from five percent to zero in June 2011 when global crude oil prices had shot up to around $100 a barrel. However, the government might now look at introducing the duty again in the Union Budget 2016-17 with the oil prices having crashed below $30 a barrel - a 12 year low. The government maintains a 2.5 percent import duty differential between crude oil and petroleum products, petrol and diesel, to protect the domestic industry. Currently, while crude oil attracts nil import duty, the levy on petrol and diesel stands at 2.5 percent. A five percent import duty likely to be imposed on crude in this year's Budget could, therefore, be accompanied by an increase in petrol and diesel import duty to 7.5 percent. The Centre might look at tweaking the current ` 4,500 a tonne cess on crude production by making it ad valorem to align with global oil prices or cut it down to a low fixed per tonne levy. The move, if implemented, would benefit producers of oil from pre-NELP (New Exploration Licensing Policy) blocks - Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) apart from the Rajasthan field of Cairn India - but offset the government's gains from a possible import duty hike on crude oil. The Oil Industry (Development) Act provides for a cess as duty of excise on indigenous crude oil. This is a production cess, which is not a pass-through and has to be borne by the producer. However, this is not applicable to domestic oil produced from blocks auctioned under NELP. The cess was increased to ` 4,500 a tonne from ` 2,500 a tonne in 2012 when the crude oil prices rose to $100 a barrel and remain at that level even now. (www.business-standard.com)

February 18, 2016. Gujarat State Petronet Ltd (GSPL) said it has bought 27.43 percent stake in Sabarmati Gas Ltd (SGL) from financial institutions for ` 56.23 crore. SGL is a joint venture of Bharat Petroleum Corporation Ltd (BPCL), Gujarat State Petroleum Corp Ltd (GSPC) and GSPL, which was incorporated 2006 for retailing CNG to automobiles and piped cooking gas to households in Gandhinagar, Mehsana and Sabarkantha districts of Gujarat. GSPL held 13.75 percent stake in SGL. BPCL has 25 percent interest, GSPC 11.25 percent and the balance 50 percent stake was held by Financial Investors. (indiatoday.intoday.in)

February 18, 2016. After a five-year hiatus, Reliance Industries Ltd (RIL) is likely to resume buying crude oil from Iran beginning next month. RIL, which operates the world’s biggest refining complex at Jamnagar in Gujarat, is looking at quickly ramping up purchases to the old levels of about five million tonnes a year. Bowing to international pressure to isolate Iran over its nuclear programme, RIL had in stopped exporting gasoline or petrol to Iran January 2009. And from February 2010, it stopped buying crude oil from the Persian Gulf nation. RIL, which has substantial investments in US shale gas projects besides being a big supplier of fuel, shelved its business with Iran over fears of being sanctioned. With sanctions on Iran ending, RIL is looking to reestablish ties with the nation. To begin with, it is likely to buy Iranian crude from the spot or current market even as it negotiated a term contract for about five million tonnes of oil annually. The company is talking directly to the National Iranian Oil Company (NIOC), not involving any trader. Indian Oil Corp (IOC) too is evaluating Iranian grades. Iranian oil mostly comprises of heavy and sour grades such as Norouz and Soroush. The country is creating its own benchmark for pricing by moving away from Saudi-linked rates till now. Mangalore Refinery and Petrochemicals Ltd (MRPL) and Essar Oil Ltd are the main buyers of Iranian oil India, importing between them about 10 million tonnes a year. Hindustan Petroleum Corp Ltd (HPCL) too may take small quantities this year. Oil products from RIL's refining complex at Jamnagar, with a total capacity of 62 million tonnes, are currently sold more to eastern markets. RIL expects fuel exports to the Middle East to diminish as local refineries start. (www.business-standard.com)

February 18, 2016. Reliance Gas Pipeline Ltd (RGPL), a wholly-owned subsidiary of Reliance Industries Ltd (RIL), has got the final environment clearance for its ` 1,428 crore project to build a 486 km long pipeline through Gujarat and Maharashtra for transportation of liquid ethane. The clearance to the project Dahej Nagothane Ethane Pipeline (DNEPL) was given subject to certain conditions. The clearance letter was issued to the company. RGPL has proposed to build a 486 km dedicated pipeline network to transport liquid ethane to the tune of 1.25 million metric tonnes per annum made available from RILs Dahej manufacturing division to Hazira manufacturing unit and to RILs Nagothane manufacturing facility. DNEPL will originate from Dahej in Gujarat and terminate at Nagothane in Maharashtra. About 256 km of the pipeline would pass through Gujarat and 230 km would pass through Maharashtra. (indiatoday.intoday.in)

February 21, 2016. The Centre's green panel has given clearance to the Oil and Natural Gas Corp (ONGC) for its ` 1,752 crore project involving drilling of 406 development wells in oil fields in Gujarat's Cambay Basin. The proposed drilling is expected to be undertaken at the company's Ahmedabad asset located in Gandhinagar, Ahmedabad and Kheda districts. The asset currently produces 3,725 tonnes per day crude oil and 5.8 lakh cubic meters (m3) of natural gas on a daily basis. Based on the expert appraisal committee (EAC) recommendations, the Union environment ministry will soon take a final call on the proposal. The cost of the ONGC's drilling project is estimated at ` 1,752 crore. The depth of drilling wells will be in the range of 800-2,000 metres. According to EAC, the final environmental clearance to the project would be subject to obtaining prior clearance from the wildlife point of view, including clearance from the Standing Committee of the National Board for Wildlife as applicable. It also suggested that the ministry impose specific conditions, including monitoring of ambient air quality, putting in place a mechanism to control noise from the drilling activity, preparation of oil spillage prevention and mitigation scheme, among others. (www.thestatesman.com)

February 21, 2016. Billionaire Mukesh Ambani, owner of the world's largest refining complex, said that global oil prices are likely to remain low for 3-5 years, benefitting a net importing nation like India. Ambani said there have been spikes in oil prices in past. The US, he said, has gone from less than a million barrels a day to nine million barrels a day of oil production. (timesofindia.indiatimes.com)

February 18, 2016. India has registered a total of 72 lakh consumers who have surrendered the Direct Benefit Transfer for LPG (DBTL), according to the Oil Minister Dharmendra Pradhan. As per a rough estimate, giving up subsidised LPG by these many people has cut the government's subsidy bill up to ` 2571.42 crore. The benefit of these surrendered subsidies has been given to 50 lakh Below Poverty Line (BPL) citizens of India as they were given LPG connection. Under DBTL, subsidy amount is directly credited into the bank accounts of consumers even as they pay full amount for LPG cylinder at the time of purchase. Consumers are currently entitled to 12 14.2-kg cylinders or 34 five-kg bottles in a year at subsidised rates. (timesofindia.indiatimes.com)

February 18, 2016. A new oil import policy tailored to suit the changed economic scenario is being framed by the Centre and its draft will soon be placed before the Cabinet, Oil Minister Dharmendra Pradhan said. Pradhan said as the economic scenario has changed a lot since the last oil import policy about 10-12 years ago, and a new oil import policy is being laid down whose draft will soon be put before the Cabinet. On benefits of falling crude prices in international market not reaching consumers, Pradhan said petrol prices have been lowered as many as 23 times while those of diesel reduced 17 times after global oil prices dropped in July last year. (www.business-standard.com)

 [NATIONAL: POWER]

February 23, 2016. The government has allotted coal blocks in Odisha to power PSU Neyveli Lignite Corporation (NLC), which is looking to ramp up coal-based electricity generation capacity. The development follows allotment of a coal mine in Jharkhand to NLC, which had asked the government to allot more mines to it in view of its expansion plans. NLC plans to have 19,000 MW capacity by 2025, and projects to generate 6,000 MW from coal and 2,500 MW from lignite were already underway. NLC had said that the company was not limited to lignite mining and lignite-based power generation in Neyveli complex. It has diversified into coal-based power generation, renewable energy and coal mining. (energy.economictimes.indiatimes.com)

February 22, 2016. State-run NHPC said that its completely shutdown 520 MW Parbati-III power station in Himachal Pradesh had started generating power. The Parbati Stage-III power station is located in Kullu district of Himachal Pradesh. It is a run-of-the-river scheme whose design discharge includes the diversion of the tail race releases of Parbati Stage-II Power house as well as inflows from river Sainj and Jiwa nallah. The power station is designed to generate 1,963 million units in a 90 percent dependable year. The plant was fully commissioned in 2014. (profit.ndtv.com)

February 22, 2016. State-run Indian firm Bharat Heavy Electricals Ltd (BHEL) is poised to seal a contract to build a $1.6 billion power plant in Bangladesh, beating out a Chinese competitor in the latest commercial tussle between the region's two dominant powers. After years of negotiations, BHEL will sign a contract to build a 1,320 MW thermal power station in Khulna in southern Bangladesh on Feb. 28. China's Harbin Electric International Company Ltd, which has power projects in Iran, Turkey and Indonesia among others, lost the bid on technical grounds. The Bangladesh-India Friendship Power Company Limited, a joint venture set up to build the coal-fired plant, said BHEL was the lowest bidder. The Indian government's external lending arm, the Exim Bank, has backed up BHEL's offer with nearly 70 percent funding of the project's costs at a soft interest rate of around 1 percent above Libor, the leading global benchmark for pricing transactions. It would be the biggest foreign project by an Indian power firm, eclipsing a plant already built in Rwanda and a planned one in Sri Lanka. The loss of the power project is the second setback for China, after Japan muscled into Bangladesh's port sector last year, offering 80 percent financing on easy terms for a seaport, barely 25 km from a $8 billion deep water port that Beijing was negotiating to construct. The proposed power plant will have two units of 660 MW that will generate power for local consumption. Nearly two-fifths of Bangladesh's 160 million people do not have access to electricity, according to the World Bank. The project, though, has raised environmental concerns, with activists warning that the movement of coal posed a threat to the nearby Sundarbans, the world's largest mangrove forests. (in.reuters.com)

February 20, 2016. NTPC said power generation from the second unit of 660 MW capacity of its Barh Super Thermal Power Station has started. This would help Bihar in tiding over a power crisis as it is heavily dependent on the scheduled allocation of power from central generating units. Out of the 660 MW, Bihar would get 429 MW from the second unit as its share. The Central Electricity Regulatory Commission (CERC) has asked NTPC to declare commercial generation of Barh's second unit by March 31 as it was functioning properly on all parameters, NTPC said. The commercial operation for the first unit 660 MW of NTPC's Barh Super Thermal Power Station was formally declared by Power and Coal Minister Piyush Goyal on November 15, 2014. Bihar is already getting 429 MW (65 percent) from the first unit. Bihar's share from Stage II has gone up to 65 percent from 50 percent, which the Centre had earlier allocated to the state government. With the second unit of Barh starting generation, Bihar's total power allocation from central generating plants has gone up to 3,400 MW against which Bihar normally draws around 2,500 to 2,600 MW. Altogether five units - one each of 660 MW - have to be constructed at Barh plant, which means there would be 3,300 MW generation at the plant. Two units of 660 MW (1,320 MW) have been constructed under Stage II, while three units of 660 MW (1,980 MW) would come up under Stage I. The first unit of 660 MW of Stage I was expected to start generation by the end of 2017. The plant (Stage I and II) would be constructed on 3,196 acres of land in Barh. The Stage II has been completed at an estimated cost of around ` 7,500 crore. The plant would draw water from the River Ganga, while it would get coal supply from Amrapali block of North Karanpura coal region and coal blocks of Chatti Bariatu and Kerandari, in Jharkhand. (profit.ndtv.com)

February 18, 2016. Bharat Heavy Electricals Ltd (BHEL) said it has commissioned a 270 MW generation unit at the Goindwal Sahib Thermal Power Project of private producer GVK Power & Infra in Punjab. The second unit of the same project is also expected to be commissioned soon, it said. BHEL has earlier commissioned four hydro sets of 82.5 MW each at the Alaknanda Hydro Power Project in Uttarakhand by the same developer. Thermal sets of 270 MW rating are in-house improvisations of the 210/250 MW sets supplied by the company earlier, which currently form the backbone of the Indian power sector and have been performing much above the national average as well as international benchmarks, BHEL said. All the operational sets of 210-270 MW class in Punjab have been supplied, erected and commissioned by BHEL, i.e., six units of 210 MW at Ropar, 2 units of 210 MW and 2 units of 250 MW at Bhatinda, besides 270 MW Unit at Goindwal Sahib. BHEL is currently executing electro-mechanical works for hydel power plants at Shahpurkandi (206 MW) and Mukerian (18 MW) in Punjab, the company said. (timesofindia.indiatimes.com)

February 17, 2016. Electricity generation in the first reactor of Kudankulam Nuclear Power Project (KKNPP) was stopped again following leak in a secondary circuit tube. Following the seven-month-long maintenance carried out in the reactor and the allied systems following the scheduled annual fuel outage, the reactor started generating power on last January 30. However, the generation had to be stopped following the leak in the pipe carrying steam. Though it was reportedly rectified, the problem has resurfaced to hit power generation once again. (www.thehindu.com)

February 21, 2016. Coal India Ltd (CIL) has asked its subsidiaries to ensure supply of crushed coal to power plants and said any case related to non-addressal of the same should be brought to the notice of the Maharatna firm. Crushing reduces the overall top-size of the run-of-mine coal – the coal that comes directly from mine – so that it can be more easily handled and processed within the captive power plants. Terming quality determination of fossil fuels a challenge, the government had earlier taken a decision to supply crushed coal from January one. Coal Secretary Anil Swarup had also said that all the coal of G10 grade will be washed and transported after October 1, 2017. Coal India accounts for over 80 percent of the domestic coal production. CIL is aiming to double its production to one billion tonnes by 2020. The government has set an output target of 550 million tonnes for the company in the current fiscal. (www.financialexpress.com)

February 21, 2016. Delhi Government dedicated to public power transmission projects worth ` 136 crore aimed to strengthen the electricity supply in the national capital. Delhi Power Minister Satyendar Jain dedicated the projects spread over six assembly constituencies and said it will benefit areas such as Wazirpur, Ashok Vihar, Shalimar Bagh, Pitampura, Palam, Dwarka, Kakrola, Matiala, Delhi Metro, Bawana, Narela, Okhla, Jasola, Kanjhawala, Rohini Extension and Karola. These projects will help distribution companies draw sufficient and reliable power from the state grid and make Delhi a power cut-free area, he said. He said that 34 lakh of the total 42 lakh electricity consumers using up to 400 units per month have been benefited by Government's subsidy. He said that Delhi Electricity Regulatory Commission (DERC) has been asked to frame policy that DISCOMS would only be able to file case against consumer if he has been found guilty by Public Grievances Cell. Jain noted the demand for electricity in the city is "increasing every year" and said that it is a challenging task to keep pace with the increasing demand. (energy.economictimes.indiatimes.com)

February 20, 2016. Prime Minister Narendra Modi and his Nepalese counterpart K P Sharma Oli launched the Muzaffarpur-Dhalkebar power transmission line. Under the project, initial supply will be 80 MW, which will be augmented to 200 MW by October and 600 MW by December 2017. The Nepal portion of the 400 KV Muzaffarpur-Dhalkebar line is being implemented by the government of Nepal, under an LoC (line of credit) of USD 13.5 million. The 80 MW power would flow immediately through this line, with an initial charge of 132 KV. Thereafter, it will be augmented to 200 MW in October 2016 at 220 KV, and then to 600 MW by December 2017 at 400 KV. India and Nepal also inked pacts on transit between Nepal and Bangladesh through Kakarbitta-Banglabandh corridor and Operationalisation of Vishakhapatnam Port. (www.ptinews.com)

February 18, 2016. Thermal Powertech Corporation India Ltd (TPCIL), which owns and operates a 1,320 MW coal­fired power plant in Krishnapatnam in Andhra Pradesh's Nellore district, said it has signed a long­term power purchase agreement (PPA) with power distribution companies in Telangana. Under the PPA, 570 MW of power would be sold to the southern and northern power distribution companies of Telangana for a period of eight years, TPCIL said. Together with the 500 MW of power supplied to the power distribution companies in  Andhra Pradesh and Telangana under a 25 year power purchase agreement, TPCIL has secured more than 85 percent of its net total generating capacity under long­term PPAs, it said. The approximately $1.5 billion plant completed its first 660 MW unit in March 2015 and second 660 MW unit in September 2015. (economictimes.indiatimes.com)

February 18, 2016. Coal linkages granted to old power projects will now be automatically transferred to the new plants of super-critical capacity as the government aims to provide round-the-clock electricity to all. If the capacity of the new super-critical plant is higher than the old plant, additional coal is likely to be given priority, subject to the availability of the dry fuel. Automatic transfer of linkages/letter of assurance will be permitted only when the new plant is set up within the state in which the old plant was located. Old unit which has completed its useful life and is being replaced needs to be retired in a phased manner. The proposal for formulation of the policy for automatic transfer of coal linkage was granted to the old plants while scrapping and replacing them with new plants was placed before the inter-ministerial panel on coal linkages in its meeting held in 2014. (timesofindia.indiatimes.com)

February 17, 2016. Government has granted customs duty exemption on electricity imported from Bhutan and Nepal while power generated from a plant located in Special Economic Zone (SEZ) would attract a levy of up to 89 paisa per unit. India presently imports 1.5 GW of hydropower from Bhutan. This is projected to rise to 8 GW by 2022 and imports from Nepal too may start. A customs duty of 40-89 paisa per kilowatt hour (kWh) or unit will be levied on power supplied from Processing Area of SEZ to Domestic Tariff Area (DTA), the Central Board of Excise and Customs said in a notification. Giving break-up, it said 40 paisa per unit import duty would be levied on electricity generated in a Processing Area of SEZ using imported coal as fuel and 65 paisa a unit for the same generated using domestic coal as fuel. The import duty will be 59 paisa per unit if the power was generated using a mix of domestically produced natural gas and imported Regasified Liquefied Natural Gas (RLNG) and 89 paisa if it was generated using RLNG alone. An import duty of 18-24 paisa per unit would be levied on electricity supplies from Non-Processing Area of SEZ to Domestic Tariff Area, the notification said. Presently, power from project of 1,000 MW and above capacity are charged ` 100 per 1,000 unit as import duty if the electricity is generated using imported coal and nil if generated using domestic coal. The duty for the same generated using domestic gas is ` 110 per 1,000 kwh. In case of projects of less than 1,000 MW, the import duty is ` 40 per 1,000 kwh for imported coal based plants and ` 60 per 1,000 kwh for domestic gas-based units. (indiatoday.intoday.in)

February 23, 2016. Moody's Investors Service said that the Government of India's sale of its 5 percent stake in NTPC Limited has no impact on the company's ratings. After the sale, the government will continue to hold a majority stake of 69.96% in NTPC. NTPCs ratings remain supported by its strategic importance to the Indian economy, given its position as India’s largest power generation company. NTPCs Baa3 issuer rating reflects its baseline credit assessment (BCA) of baa3. The rating does not factor in any uplift from the government due to the high baa3 BCA relative to the Baa3 sovereign rating. NTPCs rating could be upgraded if India’s sovereign rating is upgraded and if NTPCs underlying credit quality remains in line with its current BCA of baa3. In the absence of any upgrade to the sovereign rating, an upgrade to NTPCs rating is very unlikely because the company’s business profile is highly dependent on India’s economy. NTPCs issuer rating would come under downward pressure if there are unfavorable regulatory developments, such as tariff reductions, and which could negatively affect the companys financial position. A sovereign downgrade could also impact the rating negatively. Furthermore, a rating downgrade could result if the government reduces its interest in NTPC to below 50%, or evidence emerges of a weakening in government support. NTPC is engaged in the construction and operation of power plants. It is the largest power generating company in India (Baa3 positive), with an installed generation capacity of 45,548 MW. As of end-December 2015, it had a nationwide presence through its coal-based (34,425 MW), gas-based (4,017 MW), hydro (800 MW), renewables (110 MW) and joint-venture projects (6,196 MW). It generated revenue of INR806 billion ($12.6 billion) in the fiscal year ended 31 March 2015. (www.newkerala.com)

February 23, 2016. Centre has fixed a target of electrifying 7,000 un­electrified villages by Marchend, Power and Coal Minister Piyush Goyal said. Centre has already electrified 5,542 villages out of the total 18,452 un­electrified villages so far, he said. Prime Minister Narendra Modi on his Independence Day speech, last year, had set a target of electrifying 18,452 villages in one thousand days, that is by May 1, 2018. The government said 5,537 villages have been electrified in the current fiscal so far under the Deen Dayal Upadhyaya Gram Jyoti Yojna (DDUGJY). Solar power tariffs fell to an all­time low, with Finland­based energy firm Fortum Finnsurya Energy quoting ` 4.34 a unit to bag the mandate to set up a 70 MW solar plant under NTPC's Bhadla Solar Park tender. Before this, the solar power tariff had touched ` 4.63 per unit in November last year, following aggressive bidding by the US­based SunEdison, the world's biggest developer of renewable energy power plants. (economictimes.indiatimes.com)

February 23, 2016. President Pranab Mukherjee said the energy shortage in the country has come down to 2.3 percent from the earlier 4 percent since the new government assumed office in May 2014. The President said the government is committed to providing electricity to all the census villages by May 2018. The government, Mukherjee said, has launched the Ujwal Discom Assurance Yojana (UDAY) for financial turnaround of power distribution companies of states and Union Territories. Jharkhand, Chhattisgarh, Bihar, Rajasthan, Uttar Pradesh and Gujarat have formally joined the UDAY scheme, which is meant for revival of debt-ridden power distribution utilities. He said the government has introduced critical amendments in the tariff policy for ensuring availability of electricity to consumers at reasonable and competitive rates. The government, he said, has focused on commissioning major transmission projects for reducing congestion in transmission. The President said that to revive gas-based power generation capacity, the government implemented a new initiative of supply of refined LNG. This has ensured revival of stranded gas plants with installed capacity of 11,717 MW, he said. In 2015, India saw the highest-ever generation of electricity. The President said two ambitious National LED Programmes have been launched for cities for street lighting and domestic lighting. On the coal sector, the President said the government has introduced dynamic and comprehensive reforms and conducted transparent auction/allocation of over 70 coal blocks. (www.moneycontrol.com)

February 22, 2016. Bihar has become the sixth state to join the central government’s financial revival scheme for electricity distribution utilities which will give the state a benefit of ₹ 9,000 crore over the next three years. The State Government and the distribution utilities of Bihar – North Bihar Power Distribution Company Ltd and South Bihar Power Distribution Company Ltd – signed the Memorandum of Understanding (MoU) with the Ministry of Power. Under the Ujwal DISCOM Assurance Yojana (UDAY), savings in interest cost, reduction in AT & C and transmission losses, coal reforms and other initiatives will help give the state ₹ 9,000 crore. Out of the total debt of ₹ 3,110 crore with the state’s electricity distribution utilities, Bihar Government will take over ₹ 2,332 crore of the debt and the remaining will be issued as state guaranteed discom bonds. This would give annual interest cost savings of ₹ 117 crore. The biggest chunk of financial benefit will come from reduction in AT & C losses and transmission losses of around ₹ 6,650 crore. Coal reforms in the state which include swapping of coal linkages, correction in coal grade slippage and 100 percent washed coal supply will help the state reduce the cost of power and provide ₹ 1,086 crore of financial benefits. Apart from Bihar, Rajasthan, Uttar Pradesh, Chhattisgarh, Jharkhand and Gujarat have also signed the MoU for UDAY which covers ₹ 1.4 lakh crore or 33 percent of the total DISCOMs debt in the country. Gujarat has signed the MoU for operational turnaround as its DISCOMs are in a relatively healthy financial position. (www.thehindubusinessline.com)

February 22, 2016. The Power Ministry will seek Cabinet's approval to final bid document for domestic coal-based ultra mega power projects (UMPPs) of 4,000 MW capacity each. The ministry plans to auction three UMPPs, entailing an investment of over ` 80,000 crore, by the end of this fiscal. The bid document of the UMPPs based on domestic coal has been sent for inter-ministerial consultations. After receiving the comments from all ministries, it would go to Cabinet for approval, Coal and Power Minister Piyush Goyal said. The three UMPPs would be set up in the states of Bihar, Odisha and Tamil Nadu. Power Secretary P K Pujari had said that auction of three UMPPs would be conducted definitely "by March". The three projects are Banka in Bihar, Bedabahal in Odisha, and Cheyyur in Tamil Nadu. The committee has sought public comments on the draft bid document for UMPPs on imported coal to be submitted by January 15, 2016. Earlier, Pujari had also said that the Cheyyur UMPP was based on imported coal but there was a possibility of putting the project on the block. The project cost of an UMPP of 4,000 MW has been revised upwards from ` 20,000 crore to about ` 27,000 crore recently on basis of rise in the price of coal and land. Thus the three projects would entail an investment of over ` 80,000 crore. (www.business-standard.com)

February 21, 2016. Andhra Pradesh (AP) saved about 421 mn unit of power last year thanks to a major push given by the state government to use of LED bulbs in four of the 13 districts, an independent survey has revealed. The state government distributed 57.03 lakh LED bulbs (two nine Watt bulbs per house) in Anantapuram, Guntur, West Godavari and Srikakulam districts, while overall 1.75 crore bulbs were distributed so far in all the 13 districts as against the target of 1.87 crore. A study conducted by Andhra University and Engineering Staff College of India ­ covering 57,667 households in the four districts ­ reveal that 421 million unit of power could be saved in one year because of the use of LED bulbs. The actual energy saving per bulb has been 73.7 unit on an average, as against the projected 55.65 units. Under the scheme two bulbs (of nine Watts) would be given at a subsidised price of ` 10 each. The two power distribution companies have submitted proposals to the government for additional 57 lakh LED bulbs to cover 100 percent households. With this, the total number of LED bulbs goes up to 2.44 crore, AP State Energy Conversation Mission (SECM) said. Once the distribution is complete the state would save a whopping 1,806 million unit annually. (economictimes.indiatimes.com)

February 20, 2016. The government has come out with fresh guidelines for setting up of power plants in special economic zones (SEZs), stipulating that generation units could be set up only in the non-processing area of SEZs and there will be no fiscal benefits towards maintenance. As per the modified norms, the power plants which are set up in the IT/ITeS zones that require an uninterrupted power supply at stable frequency will be entitled to fiscal incentives for setting up and maintenance of generating units. A power plant, including non-conventional energy power plant, to be set up by developer/co-developer in an SEZ as part of infrastructure facility will be in the non-processing area of SEZ only and will be entitled to fiscal benefits only for its initial setting up and no fiscal benefit would be admissible for its operation and maintenance, the Commerce Ministry guidelines for the power generation, transmission and distribution in SEZs said. Such a power plant can supply power to Domestic Tariff Area (DTA) after meeting the power requirement of the SEZ subject to payment of customs duty. The guidelines for the generation, transmission and distribution of power in SEZ were initially announced in February 2009 and were revised subsequently in 2012. The present guidelines would supersede the earlier ones. (www.dnaindia.com)

 [INTERNATIONAL: OIL & GAS]

February 23, 2016. Bulgaria sealed a deal with Royal Dutch Shell to explore for oil and gas (O&G) in an offshore block in the Black Sea in a bid to end its almost total dependence on Russian natural gas. Shell won a tender for a five-year permit for deepwater exploration at the 1-14 Silistar block that covers 7,000 square km in September and pledged to invest € 18.6 million ($20.5 million) in seismic surveys. French oil company Total, together with its partners Austria's OMV and Spain's Repsol, plans to start drilling for gas and oil in Bulgaria's biggest offshore block in the Black Sea, 1-21 Han Asparuh, by June. Silistar is near a block in Romanian waters where OMV has said it could produce up to 84 billion cubic metres of gas, raising Bulgaria's hopes it will be able to exploit reserves off its coast to diversify its energy supplies. Bulgaria is building a gas pipeline with Greece and is overhauling its gas transport network in the hope of becoming a regional gas hub and transporting Russian and Caspian gas, as well as gas it finds at its Black Sea blocks, to central Europe. At present, the EU's poorest country meets over 95 percent of its gas needs with imports from Russia's Gazprom, which also come only via one route - a situation that its allies in Brussels and Washington want to see change. (www.reuters.com)

February 23, 2016. Oil and gas producers in the U.K. North Sea will spend 40 percent less this year than in 2014 as low crude prices force them to tighten budgets, Oil & Gas U.K. said. Capital expenditure will drop to 9 billion pounds ($12.7 billion) this year from 11.6 billion pounds last year and 14.8 billion pounds in 2014, affecting the whole supply chain, Oil & Gas U.K. said. Operators will approve less than 1 billion pounds of new projects, down from an average of 8 billion pounds a year in the past five years. Operating costs are set to drop to $17 a barrel of oil equivalent this year from $29.30 in 2014, according to Oil & Gas U.K., which represents more than 450 companies in the offshore industry. Even with extensive cost cuts, 43 percent of all U.K. North Sea oil fields will operate at a loss if crude prices stay at around $30 a barrel this year, and more than 100 fields will cease production between 2015 and 2020, Oil & Gas U.K. said. Production from the region actually rose last year for the first time since 1999 after projects such as Golden Eagle and Kinnoul came on stream, the International Energy Agency (IEA) said. Output climbed by 90,000 barrels a day to 950,000 a day, the IEA said in a report. U.K. oil output will reach 980,000 barrels a day in 2018 before falling back, according to the IEA. (www.bloomberg.com)

February 22, 2016. Oil production in the United States (US) will reach a record high by 2021 as efficiency gains help domestic producers to combat the low prices that are likely to force hefty output cuts this year and next, the International Energy Agency (IEA) said. After an initial dip this year and next, U.S. output is expected to climb to 14.2 million barrels per day (bpd), the IEA said. Production of shale oil is expected to drop by 600,000 bpd this year and a further 200,000 bpd in 2017 before recovering to 5 million bpd in 2021. That would be an increase of 770,000 bpd from 2015 output. The extent of the temporary decline in U.S. shale oil production is likely to be such that it could help to nudge the market into balance in 2017 after several years of huge surpluses. (www.reuters.com)

February 22, 2016. Spanish oil and gas group Repsol has reportedly made major natural gas discovery in the Caipipendi block in southern Bolivia. The firm discovered 4 trillion cubic feet of potential natural gas reserves in Bolivia and expects to start production in 2019. Repsol Bolivian unit head Diego Diaz said that the Caipipendi block, which comprises three fields including Boicobo, Ipaguazu and Boyuy, is estimated to produce gas enough to meet the demands of neighbouring Brazil for over 10 years. With the new discovery, Bolivia is estimated to hold 10.45 trillion cubic feet of proven reserves. Bolivia Energy Minister Luis Alberto Sanchez said that the new discovery is expected to add $1.3 bn to the annual oil and gas proceeds for the country. Bolivian President Evo Morales said that about $2.4 bn is planned to be invested by the government in exploration and extraction in 2016. Repsol has mining rights to 26 blocks in Bolivia including four exploratory licenses and 22 under development. In 2015, Repsol has made new gas discovery in the Margarita-Huacaya block, in Bolivia. (explorationanddevelopment.energy-business-review.com)

February 21, 2016. Eni announced that it has completed the authorization process for the development of the giant Zohr natural gas field, offshore Egypt. Zohr, which is estimated to hold up to 30 trillion cubic feet of gas, is the largest gas discovery made in the Mediterranean Sea. The Italian oil firm said that the Egyptian Ministry of Petroleum and Mineral Resources approved the grant to it of a development lease by Egyptian Natural Gas Holding Company. This approval means that the gas field, located in the Shorouk Concession, can be developed by Eni. The development plan envisages the start of production by the end of 2017, just two years after Zohr's discovery. Production is expected to ramp up to a volume of approximately 2.65 billion cubic feet of gas per day by 2019. Eni said the quick realization of such a large project is possible thanks to cooperation between it and its contractors Petroject, Enppi and Saipem. The discovery of Zohr was announced at the end of August last year, following the drilling of the Zohr-1 well. Eni is currently drilling Zohr-2 – the discovery's first appraisal well. (www.rigzone.com)

February 20, 2016. Russia's top oil producer Rosneft and Venezuela's state oil company PDVSA signed an agreement to set up a joint venture to develop natural gas in the South American country, Rosneft said. Each firm will have a 50 percent share in the venture, which with develop three offshore fields. The gas production at the three fields is expected to be up to 25 million cubic meters per day (9 billion cubic meters a year), providing the potential to develop the world-class, export-oriented pipeline or LNG project, Rosneft said. Rosneft plans to invest $500 million to raise its stake in its Petromonagas gas joint venture with PDVSA in Venezuela's Orinoco Belt region to 40 percent, Venezuelan President Nicolas Maduro said. (www.reuters.com)

February 20, 2016. Exxon Mobil Corp. failed to replace all of the oil and natural gas it pumped last year with new discoveries and acquisitions for the first time in more than two decades. Exxon’s so-called reserve-replacement ratio fell to 67 percent in 2015, the Irving, Texas-based company said. Prior to that, the world’s largest oil explorer by market value had achieved ratios of 100 percent or higher for 21 consecutive years. Exxon held reserves equivalent to 24.8 billion barrels of crude as of Dec. 31, enough to continue current rates of production for 16 years, according to the company. That is down from 17.4 years or reserves life at the end of 2014, according to data. The company added reserves last year in Abu Dhabi, Canada, Kazakhstan and Angola. In the U.S., gas reserves declined by the equivalent of 834 million barrels as tumbling prices for the furnace and power-plant fuel made some fields unprofitable to drill. The gas reserves removed from Exxon’s books probably will be drilled at some point in the future when prices are higher, according to the company. (www.bloomberg.com)

February 18, 2016. Saudi Arabia is "not prepared" to cut oil production, the Saudi foreign minister Adel al-Jubeir said. If other producers want to limit or agree to a freeze in terms of additional production that may have an impact on the market but Saudi Arabia is not prepared to cut production, al-Jubeir said. Oil prices rose more than 14 percent over the last three days after a plan by Saudi Arabia and Russia, endorsed without commitment by Iran, to freeze oil output at January's highs. The Saudi-Russian production freeze plan, also joined by Qatar and Venezuela, is the first such deal in 15 years between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members. Iran's Oil Minister Bijan Zanganeh had welcomed the plan without committing to it. (www.reuters.com)

February 17, 2016. BP and its joint venture partners Sonatrach and Statoil in Salah Gas have commenced production from the In Salah Southern Fields (ISSF) project in Algeria. The ISSF project is the second phase of the In Salah Gas (ISG) project, which involves development of seven gas fields located in the Saharan desert in Algeria. The Southern Fields project, which comprises the development of four dry gas fields including Gour Mahmoud, In Salah, Garet el Befinat and Hassi Moumene, will maintain planned production at 9 billion cubic meters per annum. Over the next two months, the firms plan to begin production from the Hassi Moumene and Garet el Befinat fields, increasing the production to 14.1 million cubic meters per day. The In Salah Gas is estimated to hold recoverable resources of 159 billion cubic meters. (drillingandproduction.energy-business-review.com)

February 17, 2016. China's state-owned Sinopec will shut four oilfields this year at Shengli in the eastern province of Shandong, the company said, as low global oil prices take a toll on output of the country's aging fields. The Shengli field, which has been operating since 1974, lost 9.2 billion yuan ($1.41 billion) in 2015, 2.9 billion yuan in January this year, the company said. China is the world's fourth largest crude producer, with an output of 4.3 million barrels per day (bpd) in 2015, up 1.7 percent, but has felt the pressure from global prices that have fallen 70 percent since mid-2014. The country's central economic planning commission said in January that on average domestic crude production costs more than $40 a barrel. China's imports of crude oil climbed almost 9 percent in 2015 to 6.71 million bpd. Production at Daqing, the country's oldest and largest field by output, fell roughly 12 million barrels, or 4 percent, in 2015, data showed. (www.reuters.com)

February 23, 2016. France's Total and Saudi Arabia's national oil company are considering expanding by 10 percent their joint refinery project to 440,000 barrels per day, Philippe Sauquet, head of Total's refining and chemicals division, said. He said a decision on the expansion of the Saudi Aramco Total Refining and Petrochemical (SATORP), which was started up in 2014, will be made in the next six months. If approved, the increase will take more than one year and will include clearing bottlenecks from existing production, he said. (af.reuters.com)

February 20, 2016. Venezuela’s state oil company Petroleos de Venezuela SA is said to be looking into leasing the Aruba refinery, where it would ship tar-like oil to be upgraded into higher value synthetic crude rather than produce fuels like gasoline. PDVSA, through its U.S. subsidiary Citgo Petroleum Corp., is in talks with the Aruba government to lease the refinery, Aruba government said. The Caracas-based state oil company is studying whether to configure the refinery into an upgrader that processes heavy crude from Venezuela’s Orinoco Belt. Negotiations with Citgo are being led by the government of Aruba on behalf of Valero Energy Corp., owner of the refinery, Aruba government said. Talks are in the final stages and a lease accord is expected by the end of March. The refinery has the capacity to process 235,000 barrels a day, according to data. (www.bloomberg.com)

February 18, 2016. U.S. crude oil and gasoline inventories rose to new record highs as imports of crude grew and refineries increased output, data from the Energy Information Administration (EIA) showed. U.S. crude imports rose by 795,000 barrels per day (bpd). U.S. crude futures pared gains after the data, which was in stark contrast for more bullish numbers from industry group the American Petroleum Institute that reported a 3.3 million-barrel drop in crude inventories. Refinery crude runs rose 338,000 bpd, EIA data showed as refinery utilization rates rose by 2.2 percentage points to 88.3 percent of capacity. Gasoline stocks rose 3 million barrels, far more than forecasts for a 500,000-barrel gain, to a record high of 258.7 million barrels. Distillate stockpiles, which include diesel and heating oil, rose 1.4 million barrels, versus expectations for a 1.5 million-barrel drop, the EIA data showed. On the Gulf Coast, stockpiles were at their highest seasonal levels since 2011. (www.reuters.com)

February 18, 2016. Rising demand for diesel in South Korea is slowing the pace of exports from one of Asia's top shippers of the fuel, offering a rare bright spot in a region where surplus supply has driven down refining margins. Growing sales of diesel cars and increased use by the freight sector have stoked appetite for the fuel in the country, while subsidies to encourage diesel taxis may provide a further boost this year. That local demand crimped diesel export growth to 1 percent in 2015 from 7 percent in 2014, and could turn it negative this year. Analysts estimate the country's refiners will likely ship 2 to 3 percent less diesel in 2016. South Korea's consumption of diesel, also known as gasoil, climbed around 8 percent in 2015 from the previous year to about 156.4 million barrels - the largest annual growth in at least five years, according to data from Korea National Oil Corp. (www.reuters.com)

February 22, 2016. The province of Cordoba in Northern Argentina has awarded contracts to Chinese companies, Odebrecht (Brazil) and Argentine companies Lecsa and Electroingenieria, for the construction of an ARS 8.6bn (US$522 mn) gas pipeline, including ten new systems of gas pipelines. Construction will start in July 2016 and should be completed in the first quarter of 2019. Electroingeniería and China Petroleum Pipeline Bureau will be in charge of developing the gas pipelines in the north and south of the area, while China Communications Construction Company and Argentina Lecsa will be in charge of the east and central areas. Odebrecht will be responsible for building the gas pipeline system to the major cities of Valle de Punilla, and for the construction of gas pipelines in the west area, the Cordoba ring, the Grand Cordoba, the centre, Ruta 2 and southeast area. (www.enerdata.net)

February 19, 2016. Gulf Keystone Petroleum (GKP) said the Kurdistan Regional Government (KRG) had authorised a net payment of $12 million to the company for crude exports. GKP said the expected gross $15 million payment included $5.8 million the company was entitled to for crude oil exports from the Shaikan oilfield in January. The remaining $9.2 million related to the repayment of arrears for previous exports, GKP said. The KRG still owes oil companies billions of dollars for oil exports. (uk.reuters.com)

February 18, 2016. The world's oil market is likely to see a drop in supply over the next three to five years as cheap debt dries up and majors cut capital spending, but the timing of any recovery in prices is too difficult to call, Woodside Petroleum's Chief Executive Officer (CEO) Peter Coleman said. The uncertain outlook is deterring Australia's top oil and gas producer from going ahead with its biggest growth project, Browse floating liquefied natural gas (LNG), or from chasing acquisitions. Key factors pointing to tighter supply include harder access to capital, and oil and gas majors' slashing capital spending by 30 to 40 percent which in turn forces the oil service industry to retire rigs, Coleman said. But Coleman added it was difficult to be bullish as too many producers cannot afford to cut output. Woodside is among the first oil companies to have cut its long-term projections, predicting $75 a barrel in real terms from 2021 - 20 percent lower than an earlier assumption. Smaller and mid-sized producers, especially U.S. shale oil and gas producers loaded with debt, are reluctant to shut any wells. Even if they do shut them, they can easily restart them. At the same time, some OPEC and large non-OPEC producers are facing budget problems, encouraging them to keep producing at full tilt, despite efforts by Saudi Arabia, Qatar and Russia to forge an agreement to freeze output. They are likely to remain reluctant to cut output as long as U.S. shale oil producers remain viable. Woodside still likes assets in Papua New Guinea, even after failing in an $8 billion takeover approach to PNG-focused Oil Search Ltd last year. These include the PNG LNG project, run by ExxonMobil Corp and co-owned by Oil Search and Santos, and the Elk Antelope gas fields, run by France's Total and co-owned by InterOil Corp as well as Oil Search, but Coleman said there was no chance of a deal with Oil Search and others were too expensive. (www.reuters.com)

February 18, 2016. Japan Oil, Gas and Metals National Corp (JOGMEC) bought liquefied petroleum gas (LPG) for the country's national reserves via tender, the trade ministry said. JOGMEC was seeking one cargo with 44,000 to 47,000 tonnes of propane for a stockpiling base in Namikata in Ehime prefecture, for delivery until March 25. JOGMEC in December bought 22,000 tonnes of propane for the national reserves. Japan, which has five national LPG stockpiling bases, plans to increase strategic stockpiles by 200,000 tonnes to around 1.35 million tonnes by the end of March 2017 and raise further to full capacity of 1.5 million tonnes by the end of March 2018. (af.reuters.com)

February 23, 2016. Nigeria and Saudi Arabia are committed to a stable oil market and efforts to support a price rebound, Nigeria's President Muhammadu Buhari said. Nigeria, Africa's biggest oil producer, has been suffering from a slump in crude prices eroding vital oil revenues and hammering its currency. President Buhari is in Riyadh to discuss ways to stabilize prices with Saudi Arabia's King Salman. Russia, Saudi Arabia, Qatar and Venezuela said, following talks in Doha, that they were ready to freeze production at January levels if other producers did the same. (www.reuters.com)

February 22, 2016. GrDF, the distribution unit of French gas company Engie will raise its prices by 2.76 percent on July 1, below its requested rise of 11.4 percent, the French energy regulator CRE said. CRE said the price increase would apply to some 11 million French households and would evolve annually between 2017 and 2019 at a rate equal to the inflation rate minus 0.8 percentage points while GrDF had asked for price increases equal to the inflation rate. The distributor's price increase will lead to a hike of 0.60 percent excluding tax of regulated prices applied to households using gas. (af.reuters.com)

February 22, 2016. Oil and gas investors relinquished 15 exploration blocks to the Indonesian government in 2015, nearly double those they returned the previous year, according to the country's energy regulator, amid low oil prices and slowing global demand growth. Indonesia's energy sector has seen a string of production curbs and asset cuts in recent months, with companies reeling from crude prices that have improved little since hitting a 12-year low in January. Oil and gas companies lost $820 million on exploration and other costs for the 15 blocks handed back to the government last year, the regulator said. (www.reuters.com)

February 22, 2016. Kazakhstan’s government has concluded it has no preemptive right to buy BG Group Plc’s stake in the Karachaganak oil and gas field because of the company’s takeover by Royal Dutch Shell Plc. The government studied the issue and concluded preemption would not occur because the main activity of BG and Shell is not linked to resource use in the country, the Energy Ministry said. The Karachaganak field has gross reserves of more than 2.4 billion barrels of condensate and 16 trillion cubic feet of natural gas, according to BG. It accounts for 45 percent of the country’s total gas output and 16 percent of liquids. (www.bloomberg.com)

February 22, 2016. Iraq's Oil Minister Adel Abdel Mahdi said development costs for foreign oil companies had been revised down to just over $9 billion in 2016 from $23 billion following complex negotiations. Abdel Mahdi said that most foreign oil companies had approved the revised costs, and that it would not affect production and development plans. The slump in crude prices has slashed government revenue in Iraq, OPEC's second biggest exporter, just as it faces an economic crisis and surging expenditure to fund a military campaign against Islamic State. Around $13.6 billion had been paid to firms in 2015 and $13.1 billion the previous year. Abdel Mahdi said Iraq plans to increase oil output to more than 7 million barrels per day (bpd) over the next five years, and export 6 million of that. Abdel Mahdi said Iraq would use all its gas production to supply the electricity grid and industry, requiring investments of $300 billion over the next 15 years. (af.reuters.com)

February 21, 2016. Iran and Oman are interested in pursuing closer ties and shared investments in the energy sector, Iran's Oil Minister Bijan Zanganeh said. Zanganeh said the most important shared project between the two countries was a planned undersea gas pipeline to connect Iran's vast gas reserves to Omani liquefied natural gas (LNG) export plants. Oman said it expected speedier completion of the pipeline under the Gulf now that sanctions on Iran have been lifted, but the project has also been delayed by price disagreements and U.S. pressure on Muscat to find other suppliers. (www.reuters.com)

February 21, 2016. Oil prices may drop to near $20 a barrel this year as the global glut of crude persists into 2017, National Bank of Abu Dhabi (NBAD) said. Prices at the lower end of the range will stimulate demand growth, NBAD said. Producers have sold less of their crude this year through forward transactions than in past years, and forward-selling would likely accelerate if prices rallied much above $40 a barrel, NBAD said. Abu Dhabi is the capital of the United Arab Emirates, which holds about 6 percent of the world’s oil reserves. Almost all regional oil exporters are set to register “twin deficits” on both their current and fiscal accounts for last year and this year, NBAD said. (www.bloomberg.com)

February 20, 2016. Consultations on a preliminary deal between leading oil producers to freeze output should be concluded by March 1 after a group led by Russia and Saudi Arabia reached a common position this week in Doha, Russia's Energy Minister Alexander Novak said. Alexander Novak said that the agreement announced was weighty enough. Russia, Saudi Arabia, Qatar and Venezuela said after talks in Doha that they were ready to freeze production at January levels if other producers do the same. Iran welcomed the deal. But it stopped short of saying it would itself freeze production at January levels and its Deputy Oil Minister Rokneddin Javadi said it would increase production soon. Novak said talks between Venezuela and Iran were still ongoing, and said consultations would also be held with non-OPEC countries, including Mexico and Norway. Novak said Iran had taken a relatively constructive stance on the Doha deal but not yet said it was ready to sign up to the proposals. Javadi said that Tehran aimed to increase oil production by 700,000 barrels per day in the near future. Alexey Texler, Russia's first Deputy Energy Minister, said that even without Iran there would be an effect from the deal. According to Texler, Russia is talking about freezing January production levels. January output was around 1.5 percent higher than the annual average for 2015. Novak said it was "discussed with colleagues" that an oil price of $50 per barrel would suit consumers and exporters in the long term. (www.reuters.com)

February 19, 2016. Venezuela is sending new proposals to leaders of Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries to stabilize the oil market, President Nicolas Maduro said. The latest move by price-hawk Venezuela comes days after leading OPEC member Saudi Arabia, non-OPEC member Russia, Qatar and the South American country agreed to freeze output at January levels if others joined in. Oil prices have crashed more than 70 percent in the past 20 months, driven by near-record production by the OPEC and other producers, adding to one of the worst supply gluts in history. Crisis-hit Venezuela has been pushing for an oil deal to offset a brutal recession that cost the leading Socialist Party its legislative majority in a December election. The global oil market is oversupplied by around 1.8 million barrels per day (bpd), but that glut could be halved if the deal to freeze oil production at last month's levels takes effect. Russia and OPEC were both pumping oil at near-record volumes last month, with Russia reaching another post-Soviet high of 10.88 million bpd. (www.reuters.com)

February 17, 2016. United Arab Emirates (UAE) Oil Minister Suhail bin Mohammed al-Mazrouei said that the country's oil policy was open to cooperation with all producers toward the mutual interest of market stability. He said the UAE was optimistic about the future. He did not say anything more specific about a proposal for oil producers to freeze output at January levels in order to prop up prices. The proposal was made by Saudi Arabia, Russia, Qatar and Venezuela. (www.reuters.com)

 [INTERNATIONAL: POWER]

February 22, 2016. Thai company Banpu, a leading coal mining company in the ASEAN area, plans to raise its installed power capacity to 4,300 MW by 2025, including 20% of renewable energies. The group already owns a 50% stake in BLCP Power, a 1,434 MW coal-fired power plant in Map Ta Phut Industrial Estate (Thailand) and a 40% in the 626 MW Hongsa lignite-fired power plant in Lao, where three additional 626 MW units are under development (two under construction and planned for 2016).  Banpu expects current investments projects to raise its power capacity to nearly 2.4 GW by 2020 and its coal sales from Indonesia, Australia and China to reach 44 million tonnes (mt) in 2016. (www.enerdata.net)           

February 22, 2016. Russian energy group EuroSibEnergo has announced a US$200 mn modernisation programme for its Siberian hydropower plants on the Angara and Yenisei rivers in Russia. The New Energy modernisation programme will include a replacement of the plants’ hydraulic components, 12 turbine runners, generator transformers and switchgear and will increase the plants' capacity by 400 MW. When completed by 2018, the modernisation programme will enable to raise production by 1.5 TWh/year, without increasing the amount of hydro resources in use. (www.enerdata.net)         

February 19, 2016. British energy group Centrica has unveiled its 2015 results. The group generated 19.3 TWh in 2015, a 13% fall compared to 2014, due to adverse market conditions reducing gas-fired generation by 37%. In Ireland, the number of customers supplied by Bord Gáis Energy rose by 3% to 629,000. In the United States, Centrica's subsidiary Direct Energy posted decreasing gas sales, both on the residential (-14%) and business segments (-2%). (www.enerdata.net)

February 22, 2016. United States power utility Tennessee Valley Authority (TVA) has invited stakeholders to express their views on a potential sale of the Bellefonte nuclear project in Alabama. TVA, which is already building the Watts Bar 2 nuclear power plant, aims to commission this project in 2016, before resuming works at Bellefonte, which is not included in TVA's 2015 integrated resource plan. The project is unlikely to be continued and may be offered for sale to the "highest qualified bidder" through a public auction with an established minimum price. (www.enerdata.net)

February 21, 2016. South Africa’s Finance Minister Pravin Gordhan will order the national treasury to scrutinize all the coal-supply contracts awarded by Eskom Holdings SOC Ltd. State-owned electricity provider Eskom is building two coal-fired power plants and a hydro-power complex as well as renewable energy plants to help reduce rolling power cuts that were implemented due to inadequate generation capacity. (www.bloomberg.com)

February 20, 2016. Russia is expected to keep its coal exports to China flat at 15 million tonnes this year, Russian Deputy Energy Minister Anatoly Yanovsky said. Russia's exports to China in 2015 were down compared with the previous year by 10 million tonnes, Yanovsky said. This amount was sold to other Asian customers, according to him. He expected Russia to keep its total coal production and exports flat in 2016. (www.reuters.com)

February 22, 2016. China will aim to close more than 1,000 coal mines over this year, with a total production capacity of 60 million tonnes, as part of its plans to tackle a price-sapping supply glut in the sector, the country's energy regulator said. China is the world's top coal consumer but demand has been on the wane as economic growth slows and the country shifts away from fossil fuels in order to curb pollution. The National Energy Administration (NEA) said the closures would form part of the plan released earlier this month to shut as much as 500 million tonnes of surplus production capacity within the next three to five years. China has a total of 10,760 mines, and 5,600 of them will eventually be required to close under a policy banning those with an annual output capacity of less than 90,000 tonnes, the China National Coal Association has estimated. China has promised to stop approving all new coal mine projects for three years in a bid to control capacity. The country produced 3.7 million tonnes coal last year and has an estimated capacity surplus of 2 billion tonnes per annum. Last year, the supply overhang dragged down domestic coal prices by a third, but there has been some recovery this year with thermal coal at the port of Qinhuangdao up 2.7 percent at 380 yuan ($58.29) per tonne. Apart from coal, China will also aim to tackle overcapacity in the thermal power sector this year by controlling new builds and cancelling projects in regions with the biggest capacity surpluses. Utilization rates in the power sector last year fell to their lowest since 1978, with demand failing to keep up with the rapid expansion in capacity. As part of its power market reforms, China will further promote a scheme allowing suppliers to enter into direct power sales agreements with consumers, and also work to reduce power prices this year. (www.reuters.com)

February 22, 2016. The Ministry of Electricity and Renewable Energy of Egypt has announced that electricity subsidies would be halved by 2020 and would be totally removed by 2025. The Ministry has prepared a long-term strategy aimed at investing up to US$135.3 bn to provide 51 GW of electricity until 2035. It aims to boost power capacity through new coal-fired power projects and new nuclear power plants. (www.enerdata.net)

February 22, 2016. French energy group EDF plans to shut down its entire fuel oil-fired power fleet in France by 2018, which corresponds to a total capacity of 5.2 GW, i.e. half of its thermal power generation capacity in the country. The group will shut the two 700 MW units of its Aramon power plant in Gard in April 2016 as announced earlier. By 2018, the group would also stop operations at its 2,400 MW Porcheville plant and the two 700 MW units at Cordemais. The plants could be operated until 2023 but adverse market conditions have made their operation unprofitable: in 2015, fuel-oil power plants accounted for 6.7% of EDF's capacity but only 0.6% of power generation, leading to a negative cash flow of €800 mn. (www.enerdata.net)

February 19, 2016. The Nigerian Senate has requested the Nigerian Electricity Regulatory Commission (NERC) to immediately suspend the 45% increase in electricity tariffs, which took effect on 1 February 2016 and aroused massive protests. The Senate has promoted the implementation of electricity meters to avoid arbitrary billings by power distribution companies that estimate electricity consumption and refused to make pre-paid meters available. (www.enerdata.net)

February 19, 2016. Coal states must decide within days whether Peabody Energy Corp, the largest U.S. coal company, can continue to tap a taxpayer subsidy that has lowered its mine cleanup insurance costs for years, federal regulators said. If regulators revoke Peabody Energy's right to the subsidy, known as "self-bonding," the cash-strapped company may need private financing to underwrite roughly $1.38 billion in liabilities that do not now have concrete backing. Coal companies have used cash, surety bonds and other financing to assure that spent mines will be restored, but self-bonds allow some large coal companies to use their balance sheets as collateral. Coal companies are struggling with two of Peabody's peers, Alpha Natural Resources and Arch Coal, having filed for bankruptcy in recent months. Interior Secretary Sally Jewell has said that shielding taxpayers from roughly $3.6 billion in self-bond liabilities was "a huge priority" but regulators have only recently taken concrete action. The Office of Surface Mining Reclamation and Enforcement called on Colorado, New Mexico, Wyoming, Illinois and Indiana regulators to rule on Peabody's use of the self-bonding program by early March. (www.reuters.com)

February 19, 2016. The Ministry of Energy of South Africa expects to connect to private coal-fired power plants to the national power grid by 2021, in an attempt to overcome chronic power shortages. The Ministry will soon announce the preferred bidders for the first tranche of 2,500 MW of coal-fired capacity to be built under the independent power producer programme. South Africa expects it new gas-fired power programme to lead to investments of around ZAR64 bn (US$4 bn) over the next four to five years. (www.enerdata.net)               

 [RENEWABLE ENERGY / CLIMATE CHANGE TRENDS]

February 23, 2016. Maharashtra and Uttar Pradesh (UP) have been set the stiffest solar energy targets by the Ministry of New and Renewable Energy (MNRE). By 2022, Maharashtra, which has an installed solar capacity of 378.7 MW, will have to increase it more than 30 times to 11,926 MW. UP, with a solar capacity of 140 MW, will have to raise it more than 75 times to 10,697 MW. With the stipulation that 8% of the power consumed by a state should come from solar sources by 2022, Maharashtra's target rises to 12,611 MW and UP's to 13,248 MW, though the shortfall could be drawn from other states. The ministry recently sent out letters specifying targets and deadlines for renewable energy generation and absorption. Rajasthan and Gujarat and probably the best placed to achieve their solar energy targets. Rajasthan already has solar capacity of 1,264.35 MW installed and needs to raise it less than five times to 5,762 MW by 2022. Gujarat, with a solar capacity of 1,024.15 MW, has to increase it to 8,020 MW. (economictimes.indiatimes.com)

February 22, 2016. Canada-based renewables firm SkyPower has signed power purchase agreements (PPAs) with the Indian state of Telangana for four PV projects totalling 200 MW combined. At the end of 2015, many solar developers who were allocated capacity in Telangana’s 2 GW solar auction were facing severe delays in the signing of PPAs with the state’s government. A letter had revealed that a group of disgruntled PV developers were facing serious delays in receiving Letters of Approval, which were being held up at the chief minister of Telangana’s office. SkyPower has been awarded a total of 400 MW of PV projects across Madhya Pradesh and Telangana since last summer. (www.pv-tech.org)

February 21, 2016. Oil Minister Dharmendra Pradhan said farmers in the state can earn between ` 500 crore and ` 600 crore by producing biofuel from agricultural waste emphasising promotion of green energy. Pradhan said the oil ministry will buy the ethanol to blend it in petrol. Ethanol is a cost-efficient alcohol-based fuel that is added to petrol to reduce consumption of oil and decrease the impact of pollution on environment. Inaugurating Paradip refinery, Prime Minister Narendra Modi had said that India has targeted to reduce 10% crude oil imports by 2022 by capitalising on biofuel and ethanol blending programmes. (www.thehindu.com)

February 21, 2016. With more and more developers lining up their mega solar power projects, India's solar power generation capacity is expected to almost double by March 2017. National Solar Energy Federation of India (NSEFI) estimates the power generation from solar energy will rise to 10,000 MW. India is currently ranked 11^th in the world in terms of solar power generation. The Ministry of New and Renewable Energy (MNRE) has approved 33 solar parks in 21 states with aggregate capacity of 19,900 MW .Many corporate companies such as SunEdison, Azure Power India Pvt Ltd and Adani Group are planning to set up big solar projects in various parts of the country. Haryana, Delhi, Telangana have come up with attractive policies to promote rooftop solar power generation. (timesofindia.indiatimes.com)

February 20, 2016. The government said the installed capacity of solar power crossed 5,000 MW in January and expressed confidence that the target of 18,000 MW would be achieved by 2017-end. Parliamentary Consultative Committee attached to the Ministries of Power and New and Renewable Energy held the meeting in Tirupati, Andhra Pradesh and reviewed the progress of implementation of solar park scheme and also steps taken by the NTPC to reduce emissions and increase efficiency. Power, Coal, New and Renewable Energy Minister Piyush Goyal said that the NDA government has initiated world's largest renewable energy programme by increasing five-fold target from exiting 35,000 MW to 175 GW capacity by 2022. He said the government has initiated several projects like Scheme for Development of Solar Parks. It is envisaged to achieve 20 GW through ultra-mega solar parks. Solar Energy Corporation of India (SECI) has been made implementing agency and out of ` 374 crore sanctioned, it has released ` 54.93 crore to respective states development agencies. (www.dnaindia.com)

February 19, 2016. Government of Ontario, Canada has committed investments worth ` 300 crore in India's cleantech sector to boost the latter's renewable and other innovative clean technologies. Ontario-based Advanced Energy Centre signed agreements with Tech Mahindra, Himachal Pradesh State Electricity Board Limited (HPSEBL) and India Smart Grid Forum. Ontario is putting its new 'Climate Change Strategy' into action by investing nearly USD 100 million from the Ontario Green Investment Fund into projects that would reduce greenhouse gas emissions, increase energy efficiency and support cleantech innovation. (www.newindianexpress.com)

February 18, 2016. Coal India Ltd (CIL) will soon start a tender for 800 MW of photovoltaic (PV) capacity. Investment in the solar complex is estimated at approximately ` 48 billion ($701 mn). The coal producer recently initiated a competitive bidding process for 200 MW of solar power plants in consultation with domestic sector player Solar Energy Corp of India (SECI). Coal India plans to start working on all of the solar projects simultaneously. The 1,000 MW of solar auctions are part of the company’s strategy to reduce its carbon footprint. India has officially committed to boost its installed renewable energy capacity to 175 GW by 2022, including 100 GW of solar PV parks. (renewables.seenews.com)

February 18, 2016. Solar tariffs are likely to fall further on a reduction in capital costs and solar power companies' access to competitive funding, India Ratings and Research (Ind-Ra) said. Solar tariff hit record low of ` 4.34 per unit in an auction for a 70 MW solar plant under NTPC's Bhadla Solar Park tender. However, creditors will have to avoid the pitfalls of thermal power where aggressive assumptions and leverage build up at the holding company level to fund equity contributions in underlying special purpose vehicles resulted in significant stress, it said. According to the Ind-Ra, the solar sector has huge potential and if developed responsibly, it could transform the structure of India's power sector. Ind-Ra expects the developers will favor projects under the Jawaharlal Nehru National Solar Mission scheme state projects on account of healthy credit profiles of the off-taker i.e. NTPC Ltd ('IND AAA'/ Stable/'IND A1') compared to weak credit profile of the state distribution companies. The internal rate of return (IRR) for the recently awarded solar projects is likely to shrink to 12-14 percent from the over 20 percent registered by projects awarded over the past few years. Despite this, Ind-Ra believes that the credit profile of the projects will remain comfortable with an average debt service coverage ratio of 1.3x. The capital cost could fall in the medium term and as a result lower bids to, or below, ` 4/kWh by FY17. Ind-Ra expects capacity additions to remain robust with 12.5 GW to be added by FY18, taking the cumulative capacity to 17 GW in FY18 from 4.9 GW in December 2015. However, it will still fall short of achieving the government of India's target of 19 GW by FY18. The government plans to increase renewable energy capacity to 175GW by 2022 including 100 GW of solar capacity, it said. (profit.ndtv.com)

February 17, 2016. Experts and legislators in Uttarakhand came on one platform, a round table jointly organized by Confederation of Indian Industry (CII) and the British Deputy High Commission, Chandigarh, to mull the climate change and its ill effects of the hill state. On the occasion, the Uttarakhand government said the state will become carbon neutral by 2020. MLAs from across the political spectrum met at the conference to discuss the role of legislators in increasing the state's resilience to climate change and ensuring an environmentally sustainable growth. Experts in the conference expressed concern over what they alleged rapid depletion of groundwater table and adverse effect of climate change on agriculture, livelihoods and the health of the people. Dinesh Agarwal, minister for forest, in Uttarakhand said the government has prepared a comprehensive plan over the issue. David Lelliote OBE, British Deputy High Commissioner, (Chandigarh), said that the most important aspect of climate change mitigation is grass-root level awareness. (timesofindia.indiatimes.com)

February 23, 2016. Statkraft AS and partners including a Credit Suisse-backed fund will invest 1.1 billion euros ($1.2 billion) in wind-power in central Norway. Together with Nordic Wind Power DA and utility Troenderenergi AS, Statkraft plans to build six wind farms in mid-Norway by 2020 with a combined capacity of 1,000 MW, the company said. Statkraft will own 52.1 percent, while Nordic Wind, a company backed by Credit Suisse Energy Infrastructure Partners, will hold 40 percent. Norwegian state-owned Statkraft in 2014 canceled a similar $1.4 billion wind project because it was deemed unprofitable. (www.bloomberg.com)

February 23, 2016. Pakistan parliament became the first in the world to completely run on solar power, a venture supported by China with $55 million funding. Prime Minister Nawaz Sharif in a simple ceremony switched on solar-powered building of the parliament in capital Islamabad. First announced in 2014, the venture has been funded by the Chinese government as an act of friendship, with the solar power plant costing around $55 million. China provided over $55 million to carry out the project. The parliament solar panels will generate 80 MW power. He said 62 MW will be sufficient for parliament while 18 MW will be given to national grid. Pakistan's parliament has become the first in the world to run entirely on solar power. (timesofindia.indiatimes.com)

February 23, 2016. The bill from battling climate change is just about due in California, and for some oil companies that do business in the state, it’s in the nine figures. The Golden State’s biggest fuel suppliers, led by Tesoro Corp. and Chevron Corp., face the biggest costs under California’s carbon cap-and-trade system, with expenses that may top $3 billion a year for the whole industry, according to the report. The emissions-trading program, the most extensive of its kind in the U.S., requires refiners, power plants and other polluters to pay for each ton of climate-changing carbon dioxide they release in the form of allowances. They may cost Tesoro, the state’s largest emitter, more than $700 million annually, about 20 percent of its current operating expenses, according to the report. Chevron may be on the hook for $580 million, about 9 percent of its worldwide expenses, based on 2014 emissions. Carbon allowances, trading at around $13 a metric ton, add about 12 cents to the retail price of a gallon of gasoline, the analysts estimated. While more-efficient vehicles may lower the overall tab for drivers, the report showed the metric-ton cost of carbon in California is set to rise. The minimum price for allowances, known as the “floor price,” is expected to roughly double over a decade, according to the report. (boereport.com)

February 23, 2016. Citicore Power opened its first solar power plant in Silay City, Negros Occidental, making it well on track to becoming eligible for incentives given to renewable energy developers. Citicore Power is a sister company of construction giant Megawide. Silay Solar Power Inc. (SSPI), the project vehicle under Citicore, is applying for feed-in-tariff (FIT) eligibility. The 25 MW solar energy generating facility is expected to power 30,000 homes connected to the Visayas grid. The engineering and construction work for the project, which spans 43 hectares and includes more than 96,000 photovoltaic (PV) modules, was done by Megawide Construction Corp. The plant is expected to help avoid 18,000 metric tons of carbon emissions per year—equivalent to planting 800,000 trees over the life of the facility. Project funding was secured through Landbank of the Philippines. Candelaria disclosed that Citicore Power is also launching other solar power projects in key areas of Visayas and Luzon. Department of Energy data show that more than 1,000 MW of solar power will soon come from Negros Occidental once all targeted projects in the area are commissioned. (technology.inquirer.net)

February 22, 2016. Japan should probably reduce incentives for solar-power-project developers by 11 percent after costs to roll out solar systems fell, a government-appointed panel said. Solar tariffs for approved applications could be cut to 24 yen (21 cents) per kilowatt hour from the current rate of 27 yen for the fiscal year beginning April 1, according to a proposal presented by the panel in charge of reviewing Japan’s clean-energy-incentive program. The panel reviews the tariffs every year as part of the incentive, known as a feed-in tariff, to encourage investments in clean energy. The tariffs are for as many as 20 years, depending on the type of energy. Tariffs for wind, geothermal, biomass and small hydropower would remain unchanged, the panel said. (www.bloomberg.com)

February 22, 2016. Australia risks not meeting its commitments agreed to under the Paris Climate Change agreement while also being ill-prepared to offset the local impact due to job cuts at the nation's chief scientific body, the report said. The Commonwealth Scientific and Industrial Research Organisation (CSIRO) recently announced it would halve the number of employees in its climate science programme, with approximately 100 jobs to go from its two main climate monitoring and modelling stations, the report said. The losses were in response to significant budget cuts by former Prime Minister and climate change sceptic Tony Abbott, but also current Australian Prime Minister Malcolm Turnbull's drive for increased scientific innovation. The report follows a protest letter signed by thousands of international climate scientists that said the job losses proceed, without being filled elsewhere, Australia would not develop its capability to assess the accelerating risks associated with the climate change. (zeenews.india.com)

February 21, 2016. The Japanese government has decided to offer a yen loan of about 10 billion yen (about $88,829,700) to support construction of a gigantic solar power plant with a large-capacity storage battery system in Egypt. A large-capacity storage battery system is a large-scale recharge and discharge equipment built into the electrical system of a power plant and other facilities. This equipment is seen as essential to ensuring a stable supply of electricity from renewable sources, as weather can greatly affect the amount of power generated. Egypt is expected to hold a public tender open only to Japanese companies with advanced battery technology. The government hopes this will give the Japanese firms a leg up in the rapidly expanding renewable energy markets in the Middle East and North Africa. Egyptian President Abdel-Fattah el-Sissi is scheduled to make his first visit to Japan from Feb. 28 to March 2, during which a written agreement on the project is expected to be signed. The plan is to build a 20 MW solar power plant with a 30 MW capacity storage facility in the eastern Egyptian city of Hurghada. The plant is to be completed by 2019 and would supply electricity to about 7,000 households. The total construction cost is expected to be about $92 million (about 10.5 billion yen), which is to be fully covered by a yen loan to be paid back over a long period at a low interest rate. This would be Egypt's first major solar power plant equipped with a large storage facility. Egypt produces oil and natural gas, but it also imports energy from other countries. To address this, the Egyptian government has set a goal of increasing the proportion of energy generated from renewable sources from the current 3 percent to 20 percent by 2022. Other resource-rich countries in the Middle East and North Africa are also expecting demand for electricity to rise, and are therefore looking to renewable energy. Projects in the Middle East to construct solar power plants capable of generating more than 10 megawatts rose from three in 2013 to 40 in 2015, according to the Middle East Solar Industry Association, which is headquartered in the United Arab Emirates. (www.chicagotribune.com)

February 21, 2016. Americana “big box” stores could host around 62.3 GW of rooftop solar photovoltaic (PV) capacity — enough to generate enough electricity to provide for the equivalent needs of roughly 7 million US households — according to a new report from Environment America Research & Policy Center. Considering that big box stores, grocery stores, etc, use roughly 5% of all of the electricity used in the US — and also the fact that there’s more than 4.5 billion square feet (cumulatively) of rooftop space on these buildings that is well suited to solar energy installations — such an approach to solar energy development has a lot of potential. The potential is there for the US to meet roughly a quarter of its electricity needs through rooftop solar PV alone, according to the National Renewable Energy Laboratory. (cleantechnica.com)

February 19, 2016. Japan's wind-power capacity is expected to grow threefold as the two leading developers invest tens of billions of yen in new installations. That would bring the total to the equivalent of 10 nuclear reactors. Eurus Energy Holdings and Electric Power Development, better known as J-Power, each plan to invest around 60 billion yen ($528 million) in new facilities by 2020. Together, they accounted for roughly a third of total wind-power capacity in Japan as of fiscal 2014, based on Nikkei estimates, ranking first and second, respectively. J-Power plans a 200,000 KW capacity increase, which would take it to 600,000 KW. It will build new installations on the northern island of Hokkaido and in Ehime Prefecture, south of Hiroshima. To achieve its target for reducing greenhouse-gas emissions, the government seeks to raise renewable-energy sources, excluding hydropower, from around 3% of Japan's total electricity output to around 15% by fiscal 2030. (asia.nikkei.com)

February 19, 2016. The European Union (EU) may draft by 2019 a climate strategy for the middle of the century after countries worldwide meet a year earlier to discuss how to step up pollution-reduction efforts under a United Nations deal, according to a draft EU document. The European Commission may start work on the strategy this year, according to its draft assessment of the Paris climate agreement to be discussed by EU leaders at their March 17-18 summit. It would take into account the result of global climate-ambition talks scheduled for 2018, offering an analytical basis for a potential review of the EU 2030 climate targets in 2020, according to the draft. Europe aims to lead the global fight against greenhouse gases, which analysts blame for heating up the planet. EU leaders pledged to cut emissions domestically by at least 40 percent in 2030 compared with 1990 levels, leaving the possibility of tougher reductions open if other countries show comparable efforts. Under a deal reached in Paris in December, nations agreed to work toward capping global temperature increases since pre-industrial times to 2 degrees Celsius (3.6 degrees Fahrenheit). (www.bloomberg.com)

February 19, 2016. According to the Chilean energy regulator Comision Nacional de Energia (CNE), Chile has reached the 1 GW milestone in terms of installed PV capacity. At the end of January 2016, Chile had 1,013 MW of solar PV capacity, i.e. 36% of total renewable capacity (2,806 MW); wind capacity reached 910 MW, followed by small hydro and biomass (417 MW) and biogas (48 MW). More than 2.8 GW of renewable capacity are also under construction, mainly solar PV (2.2 GW) and wind (409 MW). (www.enerdata.net)               

February 18, 2016. The U.S. will join the Paris deal on climate change this year and stick to its carbon-cutting goals even though the U.S. Supreme Court froze President Barack Obama’s program to cut pollution from the power industry. The Supreme Court decided to halt enforcement of the Environmental Protection Agency’s (EPA) Clean Power Plan after it was challenged by utilities, coal miners and more than two dozen states. The high court is allowing time for lower bodies to determine whether the agency overstepped its authority with the program. Obama has adopted a goal to cut emissions by 17 percent below 2005 levels by the end of this decade, and Todd Stern, the administration’s chief envoy on climate, said the U.S. would stick with that target “come what may.” By 2025, the goal is to cut pollution by as much as 28 percent. Countries have been invited by the UN to sign on that day the deal that was adopted in Paris in December envisioning measures to limit global warming to well below 2 degrees Celsius (3.6 degrees Fahrenheit) by the end of the decade. Stern said he had “a lot of confidence in the case” after justices voted 5-4 on the order to halt the EPA’s effort. Justice Antonin Scalia died days later, removing from the panel one of the fiercest critics of the Clean Power Plan. (www.bloomberg.com)

February 18, 2016. The French market for wind energy will boom over the next few year surpassing the 15 GW mark by 2019, French research and marketing consultancy Xerfi said. Having passed the 10 GW mark in 2015, wind power in France will expand to 14 GW in 2018 and to 17 GW by 2020, Xerfi projects. French wind developers will have to adjust to the new rules for direct sale of power on the market plus a premium but the new system is also expected to open new business opportunities. By 2023, a total of 425 wind turbines are planned for installation across the five offshore wind farms which won the first two tenders. The third offshore wind power tender is not expected to be launched before the end of 2017 and its scope will be smaller when compared to its predecessors, the consultancy estimates. The development of offshore wind is costlier than onshore plants and this is the reason that the government is taking its steps slowly there. According to Xerfi, the tariff for offshore wind in 2025 will be two times more expensive than the current purchase price for onshore wind. The development of the international market for offshore wind will be crucial for the development of this industry in France. (renewables.seenews.com)

February 17, 2016. Thames Water, Ennoviga Solar and Lightsource Renewable Energy have commenced construction of 6.3 MW floating solar plant on the Queen Elizabeth II reservoir near Walton-on-Thames in London, UK. Featuring 23,000 panels, the solar park is being developed as Thames Water looks to self-generate 33% of renewable energy by 2020. Ciel et Terre International will manufacture the floating mounting system for the project, which is expected to generate 5.8 million kilowatt hours in its first year, enough to the meet power needs of around 1,800 homes. Lightsource will be responsible for the deployment of more than 61,00 floats and 177 anchors. Power generated from the floating pontoon, which will cover around a tenth of the reservoir, will be used to help power a nearby water treatment plant. (solar.energy-business-review.com)

February 17, 2016. Statoil ASA, Norway’s biggest oil and gas producer, will invest as much as $200 million in renewable energy over four to seven years as part of Chief Executive Officer Eldar Saetre’s plan to diversify the company’s portfolio. A new fund, Energy Ventures, will take a minority stake in startups developing technologies including wind power, energy storage and smart grids, according to the company. (www.bloomberg.com)

 

 

 

 

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