ONGC and OIL, two of India’s upstream oil PSUs were reportedly looking at a cess charge of USD 1 billion. Indian upstream companies have a rough time irrespective of whether oil prices are high are low (please refer to Data Insight). When oil prices are high the Government imposes a disproportionate burden of subsides on them. When oil prices are down they are weighed down by the burden of the cess imposed on them. Naturally upstream companies in India were reported to be demanding a reduction on the cess. The cess was set at 20% ad valorem of crude price in the budget for 2016-17 from a fixed sum of ₹4500/tonne of crude earlier. According to media reports, Oil Industry Development Cess has increased from ₹60/tonne in 1970 to ₹4500/tonne now. If we ignore all the complex interactions between oil price, inflation and exchange rates we can say that the cess in rupees has increased by an average of over 9.8% over the 46 year period ending in 2015 while crude prices in 2015 US$ has increased only by just over 3.4%. Surely there is a case for reduction in cess as it is being demanded by oil companies. A more important reason for reduction of cess relates to the fundamental question over the legality and purpose of collecting a cess.
Legal observers note that the growing number of cess charges imposed on corporates and other tax payers in India is the result of the Parliament conferring power to the Government through ‘removal of difficulty clauses’ to implement certain laws pertaining to collection of new taxes and levies under the Finance Act of 1994 amended by Finance Act of 2012. According to legal and tax experts when a law is enacted to implement a new socio-economic scheme and the legislature is not sure of the difficulties that may come in the way of implementing the law the legislature includes the said clause in the statute. The ‘removal of difficulty’ clause enables the Government to remove any difficulty (such as the difficulty of imposing a new tax or levy for the purpose of implementing the socio-economic scheme) that may
arise over implementing the law. Even if we do not want to stray into the debate on the relative powers of the legislature, executive and judiciary in India what we need to know is the socio-economic purpose for which the petroleum cess is collected. In most hydrocarbon platforms experts call for the petroleum cess to be spent within the oil sector for research and development or for investment in new and efficient technologies. This could be taken to mean that the cess is currently being spent outside the petroleum sector. If so who decides how the huge sums collected as cess is spent?
Moving on, fuel pump owners in the country were reported to be demanding ‘one nation one rate’ for petroleum products. They are definitely right. Sales tax levied by State governments vary across the nation leading to leakages and distortions. Tamil Nadu has the highest tax rates which results in many filling up their tanks in the Pudhucherry a union territory with lower taxes. Staying with petroleum, Indian Oil Corp (IOC) was quoted as saying that India may not be surplus in refining capacity in the next 15 years. India currently has a refining capacity of 230 million tonnes (mt) which is expected to increase to 300 mt by 2030. The reason for IOCs concern is probably the fact that consumption of petroleum products rose much faster (at over 11%) compared to production growth of just 4.5%. The government was reportedly setting up a committee to review the situation. Clean energy advocates may want the Government to redirect its energies on finding ways to curb demand rather than finding ways to meet demand for petroleum products.
Oil prices were not a reason to celebrate in July, at least not for producers of oil. The International Energy Agency (IEA) reported that the global glut in oil cannot be wished away despite robust demand growth and steep declines in non-OPEC production. The IEA revised up its forecasts of 2016 and 2017 global oil demand growth by 0.1 million barrels per day (mb/d) from last month to 1.4 mb/d and 1.3 mb/d respectively. OPEC remained hopeful of a tight market in 2017 as it expected global demand for crude to increase. It expected global oil demand to rise by 1.15 mb/p in 2017 which is lower than 1.19 mb/d expected in 2016. OPEC forecasts supply from outside producers will decline by 110,000 b/d in 2017 after an 880,000 b/d drop this year.
Neither the ruling against China by the tribunal in The Hague, Netherlands, over breach of sovereign rights of the Philippines in the South China Sea nor the failed coup in Turkey succeed in taking oil prices above $50/bbl. The South China Sea is a major shipping lane between Europe, the Middle East and Africa. According to Reuters at least 25 Very Large Crude Carrier (VLCC) super-tankers pass the disputed area in the Sea at any time (not counting other oil carriers).
There was news of competition for market share in India and China between leading oil exporters Iraq, Russia and Saudi Arabia. Saudi Arabia was reported to have regained its position as China’s top crude supplier in June, after losing out to Russia in the previous three months. On the other hand Iraq was reported to have overtaken Saudi Arabia for the first time to become India’s top oil supplier in June helped by sales of discounted heavy crude that refiners have also been using to make bitumen to build roads. The Saudi market share in India was reported to have fallen to 18% from 20% last year.
Apparently Nigeria was paying militants a stipend so as to keep them away from oil installations. Oil production in Nigeria was reported to have reduced by 700,000 b/d to 1.4 mb/d. As Nigeria is running out of money to pay stipends to its home grown militants, one can expect more attacks on oil installations in the future. When payments dry up, the Niger Delta Avengers attack which means that Nigeria needs high oil prices to keep militants at bay. The irony is that oil prices tend to increase when militants attack!
August 2: The Comptroller and Auditor General (CAG) of India has red-flagged $1.6 billion of excess cost recovered by Reliance Industries Ltd (RIL) in the KG-D6 gas block and took note of ONGC’s gas flowing into the eastern offshore fields of the RIL. CAG said 831.88 sq km of KG-D6 area needs to be taken away from RIL as per the contract and cost of discoveries it had relinquished should not be allowed to be recovered from sale of oil and gas from the block. Also, cost recovery for doing discovery conformity test should be looked into, CAG said. CAG said November 2015 report of independent expert DeGolyer & MacNaughton (D&M) submitted on reservoir continuity between the KG-D6 and contiguous ONGC operated blocks has pointed out that gas has migrated from the blocks owned by state-owned firm to the private company operated fields. The government has appointed one member committee under Justice A P Shah to consider the report and recommend future action.
Source: The Hindu Business line
August 1: BP Plc is working with its partner Reliance Industries Ltd (RIL) to increase natural gas production from the deepwater D6 block in the Krishna Godavari (KG) basin as much as fourfold by 2022, Sashi Mukundan, head of BP’s India unit, said. The companies aim to produce 30 million to 35 million metric standard cubic meters a day of gas from the block on India’s east coast after they develop three new fields, he said. Gas production from KG-D6 averaged about 8.7 million cubic meters a day in the April to June quarter, he said. The companies are preparing to restart work in four offshore oil and gas blocks as they seek to revive development activity stalled for seven years by disputes with the government. Production from the KG-D6 block, discovered in 2002, has tumbled since hitting a peak in 2010 of around 62 million cubic meters a day. The companies continued with offshore exploration activities there, while pausing development drilling because of disputes with the government over gas prices and cost recovery.
Source: Bloomberg
July 29: Oil and Natural Gas Corp (ONGC) management assured residents of Maathirimangalam that it would halt exploration work and remove equipment installed for the process. The public sector behemoth is likely to shift exploration activities to a new place very soon. The announcement came after talks at the Maathirimangalam panchayat office in which George Fernandez, VAO, Lakhsmi Selvam. Panchayat President, officials from ONGC, and public have participated. The villagers raised their strong objections to the exploration work and demanded the officials to terminate it immediately saying the exploration of natural gas and oil would affect the groundwater. Though officials have orally agreed to stop the drilling work, the villagers are yet to obtain a written statement. ONGC has sought time to halt it and fill the well. They have agreed to withdraw the machinery once the process of filling ends.
Source: The New Indian Express
July 27: Hindustan Oil Exploration Company (HOEC) expects to produce gas from its Assam field in the last quarter of this financial year. The company believes that the quarter will mean a decisive turning point for the company, whose revenues fell from a high of ₹328 crore in 2010-11 to ₹37 crore last year. Indeed, in the first quarter of the current year, the company made more net profit than it did in the full year 2015-16 — ₹9.3 crore against ₹8.2 crore — but that was due to a windfall of income tax refunds. The company recently got back around ₹100 crore of dues from the IT Department and the interest portion of ₹11 crore was recognised as income in the statements for April-June 2016. While the spike in profits of the quarter is a one-off event, the big story of the year is the production of gas from the Dirok field in Assam, in which HOEC has a 27 percent interest. The company said the field will produce 20 million cubic feet (600,000 cubic meters) per day of gas and 100 barrels of condensates (liquid similar to crude oil). In contrast, the current production is 2 million cubic feet a day of gas and 100 barrels of oil. The Dirok field is good for 15 years.
Source: The Hindu Business line
August 1: Eight years after Reliance Industries Ltd (RIL) began shuttering its fuel retail outlets, the company is refocusing on this segment as fuel price deregulation takes effect and it seeks to expand its presence in consumer-facing businesses. RIL holds licences to set up 5,000 fuel retail outlets. However, it has set up only 1,470 filling stations so far, of which 1,022 are operational. Currently, RIL’s fuel retail outlets are largely concentrated in the western region. RIL’s key competition are state-owned oil marketing firms —Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL)—which together operate 55,000 outlets, or about 95% of the fuel retail market. In 2008, RIL began shutting down some of its fuel pumps when crude oil price climbed to $158 a barrel. At its peak in 2005, the company had a 12% market share in fuel retailing. Now, it splits a 5% market share with Essar Oil Ltd. Prior to October 2014, diesel was sold at subsidized prices in India with the government compensating state-owned oil companies later. Private fuel marketers received no such subsidy, and were thus edged out of the market. Petrol prices were market-linked in June 2010. With deregulation, private fuel retailers such as RIL, Shell and Essar Oil could retail their fuel at the same rate as state-owned firms and are now making a comeback. With RIL currently accounting for almost one-third of fuel production in India, which it currently supplies to state-owned oil firms, it has the back-end sewn up. In the June quarter, Reliance reported a 21% year-on-year increase in the volumes of its petrol and diesel sales. This was faster than the market growth, albeit on a smaller base. In the April-June quarter, while petrol sales growth was flat, diesel sales rose 4.7% and jet fuel 11%. However, it will be some time before fuel retail makes any significant contribution to RIL’s revenues.
Source: Livemint
July 28: India’s initial plan to build-up its strategic petroleum reserves (SPR) is not shaping out to be the dramatic event that some in the market had hoped could help reignite global oil demand. While New Delhi has not shown its full hand in revealing its intentions, the first reports that SPRs might provide 90 days of net import coverage had stoked industry hopes of an important new pillar of oil demand. Indeed, India’s initial SPR plan pales in comparison to a program that is ten-fold bigger in China and is a further sign that Asia’s demand outlook may not be as strong as expected. India initially plans to build up oil reserves of 5 million tonnes (almost 40 million barrels) at three locations – Visakhapatnam, Padur and Mangalore – equivalent to almost 10 days of its average daily imports of 4 million barrels per day.
Source: Reuters
August 1: India’s liquefied natural gas (LNG) buyers are being encouraged to renegotiate long-term contracts after spot prices tumbled amid a global glut. India wants to turn an oversupply of LNG to its favour as it seeks greater use of natural gas in its energy mix and tries to reduce the dependence on crude oil imports. India is among the first countries in Asia to renegotiate a long-term deal after the glut pushed down prices. Petronet LNG Ltd in December reworked a 25-year contract with Qatar’s RasGas Co, resulting in prices dropping by almost half. The price of spot LNG to Asia has fallen by more than 25 percent during the past year. India’s LNG imports surged 59 percent to 8.13 million metric tons in the first five months of the year, while domestic output slipped 8 percent, according to data. Aligning LNG contracts to current market rates can make natural gas more affordable to Indian customers as the government plans to increase regasification capacity to 55 million tons within five years, from about 21 million, Oil Minister Dharmendra Pradhan said. GAIL (India) Ltd is seeking to defer a 20-year contract to buy liquefied natural gas from Gazprom PJSC until the Russian company’s Shtokman project begins production, according to the South Asian country’s biggest gas transporter. GAIL has an agreement to buy 3.5 million tons a year for two decades from Cheniere Energy Inc’s Sabine Pass terminal, with the supplies expected to start in March 2018.
Source: Bloomberg
July 30: Bharat Petroleum Co Ltd (BPCL) has acquired 21 percent stake in Fino Paytech. BPCL said the company was in the process of rolling out various customer service initiatives in its core retail fuels business using the emerging technology solutions and this investment would provide a base for supporting this imitative. Fino PayTech is looking at launching its banking operations by December-January and is yet to apply to the Reserve Bank of India for the final approval. The BPCL management has said it expects the transactions is closed by 31 December. One of the key reasons for it is because profitability will be a challenge for these palayers. However, analysts believe that for the payments banks increasing these partnerships will be a key to improve their distribution reach to ensure a quick break-even.
Source: Business Standard
August 2: Oil Minister Dharmendra Pradhan favoured a proposal by explorers to cut a key levy linked to crude prices from the current 20 percent. Indian explorers such as Oil and Natural Gas Corp (ONGC) have urged the government to levy cess at 8-10 percent of crude oil prices instead of the current 20 percent. India earlier charged a cess of ₹4,500 a tonne on oil production, amounting to $9 a barrel.
Source: Reuters
August 2: Oil Minister Dharmendra Pradhan said that fuel retailers Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) have been allowed to increase the retail price of kerosene sold through the public distribution system by 25 paise a litre per month for 10 months. In 2015-16, retailers realized ₹11,496 crore less than what the fuel’s international price warranted. Such revenue losses had been declining over the last three years due to falling global oil prices. An oil marketing company executive said companies have advised states to notify the revised prices. The oil ministry had said that the allocation of 8.68 billion litres of kerosene to states in 2015-16 was more than the 7.13 billion litres reported by the National Sample Survey 2011-12, despite improvements in village electrification and the higher use of LPG for cooking, indicating its diversion. In Mumbai, oil firms sell subsidized kerosene at ₹15.42 a litre at a loss of ₹13.12, according to the oil ministry’s Petroleum Planning and Analysis Cell. According to credit rating agency ICRA Ltd, kerosene price revision will help in reducing revenue loss from selling the fuel below global market prices by ₹760 crore in 2016-17.
Source: Livemint
August 2: Oil Ministry is not considering any proposal to merge 13 state-owned oil PSUs like ONGC, IOC and GAIL to create a behemoth, Oil Minister Dharmendra Pradhan said. His ministry has 13 PSUs ranging from upstream oil producers like ONGC and Oil India to downstream oil refining and fuel marketing firms IOC, BPCL and HPCL to gas transporter GAIL India Ltd to engineering firm Engineers India Ltd. Pradhan said it was just an idea and he is willing to look at an viable proposition. Pradhan said he is pitching with the finance ministry to cut cess on domestically produced crude oil to provide life to companies like Oil and Natural Gas Corp (ONGC). In the Budget for 2016-17, Finance Minister Arun Jaitley had moved from a fixed ₹4,500 per ton cess on domestically produced crude oil to a percentage of oil prices or ad valorem rate of 20 percent. At crude oil price of $45 per barrel, the two breakeven and if rates go up, oil companies will end up paying more, ONGC said.
Source: The Times of India
August 1: The price of subsidised cooking gas (LPG) has been hiked by ₹1.93 per cylinder. With this hike, a 14.2-kg subsidised LPG cylinder will now cost ₹423.09 in Delhi as against ₹421.16 previously. The last price-hike of the LPG cylinder was on July 1 when the government had raised the price by ₹1.98 per cylinder. Indian Oil Corp (IOC) reduced the price of petrol by ₹1.42 per litre, while that of diesel by ₹2.01 per litre. After the reduction in price, the present price of petrol ₹61.09 per litre in Delhi, with corresponding changes in the other states. The price of diesel in Delhi is ₹52.27 per litre. The price of petrol and diesel was last revised on July 15 in which the price of petrol was decreased by ₹2.25 per litre while the price of diesel was slashed by ₹0.42 per litre.
Source: Business Standard
July 31: With the aim to replace firewood with LPG for cooking in the houses of people belonging to the economically weaker sections, Oil Minister Dharmendra Pradhan handed over free LPG connection papers to women from below poverty line (BPL) families to mark the launch of Pradhan Mantri Ujjwala Yojana (PMUY) in East Champaran district. Pradhan said the PMUY is aimed at empowering rural women of BPL families and protecting their health from firewood smoke. According to an estimate, five lakh women die each year due to smoke-related diseases in the country. He sought the state government’s cooperation in laying natural gas pipeline in Bihar.
Source: The Times of India
July 27: The millennium city is going to become kerosene free district from November 1, ‘Haryana Day’, and by then, all the kerosene users and those families of the district whose names appear in the BPL list as per Socio Economic Caste Census (SECC) will be given LPG gas connections free of cost under the ‘Pradhan Mantri Ujjwala Yojana’ (PMUY). The deputy commissioner T L Satyaprakash said that making LPG connection available to every household in the district is in fact giving quality of life to women and this is flagship programme of the government. He said that the Gram Sachivs will take ‘Know Your Customer’ (KYC) forms from the oil company authorities and get these forms filled up from the beneficiaries. Then deposit the same with the nearest gas agency after getting it certified from the village Sarpanch. PMUY is aimed at providing LPG connections to poor families as part of ensuring smokeless kitchens. The scheme is intended to benefit poor families both in urban & rural areas, Satyaprakash said. Deputy Manager (Sales), LPG, of Hindustan Petroleum Deepak Aggarwal said that they have the list of kerosene users and BPL families as per SECC, which will be handed over to the Gram Sachivs. In district Gurgaon, about 12000 families are kerosene users and names of 18000 figure in the SECC BPL list. There is every possibility that the names of majority of the kerosene user families are included into the BPL list of SECC. The gas connection, gas pipe and regulator etc will be provided free of cost. None of the members of the family should have a LPG Gas connection in his or her name, then only the family will be given free gas connection, Agarwal said. On the occasion, district food & supply controller Dilawer Singh Dhonchak said that from November 1, onwards, no kerosene will be distributed through Fair Price Shops of Public Distribution System in district Gurgaon.
Source: The Times of India
August 2: National Hydroelectric Power Corp (NHPC) has been facing rough weather completing the 330 MW Kishanganga hydroelectric project in the Bandipora district of Kashmir due to turbulence in the valley for the last one month. Rampaging mobs have been attacking labourers and officers, besides stopping drinking water supply to the site. Being constructed in the Kashmir valley since 2009, Kishanganga is a project perceived as India’s victory over Pakistan in international courts. According to NHPC, despite all odds the project at a cost of ₹5,600 crore will be completed by December this year.
Source: The Times of India
August 1: India’s total installed power generation capacity has crossed the 300 GW mark, which includes 42 GW of renewable energy sources, including solar and wind. India’s total power generation capacity was 3,03,118.21 MW as on June 30, 2016, which includes 42,848.43 MW, Power Minister Piyush Goyal said. Private sector’s cumulative installed power generation capacity was 1,24,995. 51 MW as on June 30, 2016 while central plants account for 76,296.76 MW and state capacities 101,825,94 MW. The minister said that the country has generated 12.01 billion units of electricity from renewable energy sources till June-end this fiscal while the output was 65.78 billion units in 2015-16 and 61.78 billion units in 2014-15. The minister said that 1,107.82 billion units of electricity were generated last fiscal. Thermal power constituted 85.19 percent of the total generation in 2015-16 while hydro contributed 10.96 percent and nuclear power’s share was 3.38 percent. India imported 5.24 billion units of electricity from Bhutan last fiscal, which was 0.47 percent of the total output. Goyal said that to meet the rising demand of power, as per 18th Electric Power Survey (EPS), the capacity addition target of 88,537 MW from conventional sources has been planned during 12th Five-Year Plan. Against this target, 86,565.72 MW has been achieved till June 30, 2016, he said.
Source: NDTV
July 28: Of the 50 proposals received from various states for setting up hydro power projects, 35 are awaiting the Central Electricity Authority (CEA) concurrence or appraisal, Power Minister Piyush Goyal said. He said that 15 Hydro Electric Projects (HEPs) have been concurred by the CEA. Accordingly, sanction of the government is not required for setting up of thermal power projects. However, for setting up of HEPs, the detailed project reports are required to be submitted for concurrence of the CEA, he said. The proposed hydro capacity addition during the 12th Plan period is 10,897 MW.
Source: Business Standard
August 2: India is set to export coal for the first time, shipping 2-3 million tonnes (mt) of the fuel to neighbouring Bangladesh, as domestic stocks swell following a record output. Coal India Ltd (CIL) raised output by 8.5% in 2015-16 to 536 mt, which helped bring down imports by 34 mt. By the end of March, coal stock available with power generation companies also rose to the equivalent of 27 days’ requirement, up from 18 days a year ago. While the quantum of exports is yet to be finalized, 2-3 mt a year will make a good beginning, Coal Secretary Anil Swarup said. CIL, which is planning to double output to 1 billion tonne by 2019-20, wants to explore neighbouring markets to boost sales. Though coal is in surplus, India is heavily import-dependent on the other two primary sources of energy—crude oil and natural gas.
Source: Livemint
August 2: Higher hydropower generation and easing of inter-state power transmission network led to a drop of 7 percent in average spot market price of electricity to ₹2.16 per unit at Indian Energy Exchange (IEX) in July. Average Area Clearing Price (ACP) – the price at which settlement takes place, came down across all states and varied from ₹2.10 per unit to ₹2.35 per unit during the month. This July, IEX said, 3,581 MUs (million units) were transacted through IEX Day-Ahead Market, the highest ever. This was higher by 14 percent over 3,147 MUs traded in June 2016. On a daily average basis, close to 116 MUs were traded, 10 percent increase over 105 MUs traded last month. The market saw average daily purchase bids of 5,360 MW and average daily sell bids of 9,061 MW.
Source: Business Standard
August 1: Four years after it lost a claim on the Baitarani West coal block in Orissa, the state is making a fresh bid for coal block allocation. The State Government has requested the Centre to allocate it a new coal block for power generation. Electricity Minister Kadakampally Surendran formally made the request during a meeting with Union Power Minister Piyush Goyal. A tentative plan is to use the coal to fuel a power plant that would be established jointly by Kerala and Odisha in Odisha.
Source: The New Indian Express
August 1: India’s plan to deepen its friendship by providing power to Bangladesh is gathering steam with an Indian expert panel finally clearing the terms of reference for the 1,600 MW thermal power project of Adani Power (Jharkhand) Ltd in Jharkhand. The 1,600 MW Godda thermal power project in Jharkhand is the result of an agreement between India and Bangladesh signed in January 2010 with a view to enhancing their ties through economic cooperation. The agreement, signed by Adani Power and the Bangladesh Power Development Board (BPDB), is aimed at developing the thermal power plant and supplying the entire power generated to BPDB through a dedicated transmission line.
Source: Livemint
July 27: With renewed interest in emerging-market debt, the appetite for offshore dollar bonds of Indian companies is slowly making a comeback, even for riskier high-yielding corporate paper. The latest issuer to scout for dollars through a bond sale is Gautam Adani-controlled Adani Transmission Ltd. The firm plans to raise about $400 million through a dollar bond issue and has mandated seven banks to market it to offshore investors. Adani Transmission’s bond issue would be the third this month by an Indian company in the offshore market.
Source: Livemint
August 2: The government has won all the nine cases in which high courts have given verdict on petitions filed by coal block bidders following disputes over e-auction provisions, according to government data. The winning spree can be considered a vindication of the e-auction as these nine favourable verdicts came even as 31 of the 40 cases which were disposed of by the courts were either dismissed or petitioners decided against pursuing them. The outcome in the nine cases as well as observation of courts in other cases indicate the efficiency of the eauction process. The CAG report on eauction of coal blocks had found fault with the process, saying that allowing corporates to submit multiple bids through joint ventures and subsidiaries could have hit competition.
Source: The Times of India
August 2: Regulatory hurdles like high cross subsidy charges and resistance from utilities are affecting the growth of open access market for energy consumers, domestic ratings agency ICRA said. Under the provisions of the Electricity Act, 2003, open access is permitted and involves the non-discriminatory use of transmission and distribution infrastructure of the licencees by any consumer with demand greater than or equal to 1 MW to procure electricity from the source of their choice. Among the states studied by ICRA, namely Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Rajasthan and Tamil Nadu, the cross-subsidy surcharge (CSS) level remains high in Tamil Nadu and Maharashtra, while there has been a significant y-o-y increase in other states like Andhra Pradesh, Karnataka and Gujarat. In the absence of the phase out/reduction of cross-subsidisation of domestic and agriculture tariffs by industrial and commercial tariffs, the upward pressure on open access charges is likely to continue, ICRA said. In addition to CSS, State Electricity Regulatory Commissions in states like Rajasthan, Gujarat and Andhra Pradesh have approved an additional surcharge in the last two-year period.
Source: Business Standard
August 2: Coal India Ltd (CIL) secured a booking of 12.95 million tonnes of coal against the offered 13.43 million tonnes in the first five days of auction that began on July 26, the company said. The ongoing linkage auction to captive power plants (CPPs) will close and a total quantity of around 18 million tonnes would be put on the block for CPPs. Captive power producers are taking interest in the linkage auction because of high demand for power for captive use along with surging prices of imported coal, coal consumers said.
Source: The Times of India
August 2: Power generator NTPC, with an installed capacity of 47,178 MW, in a serious bid to maintain its 25 percent market share, is aggressively pursuing thermal and solar power addition. The thermal strategy is domestic coal-driven. Projects of 24,000 MW, with an investment of ₹1.5 lakh crore, are under various stages of construction. The company hopes to commission projects of 4,500 MW capacity during 2016-17. Of these, the commercial operation of 4,000 MW is expected. The NTPC-run Dabhol plant with total generation capacity of 1,967 MW is currently supplying 500 MW to Indian Railways.
Source: Business Standard
August 1: In a relief to domestic consumers, Uttar Pradesh State Electricity Regulatory Commission (UPSERC) spared them from any hike in power tariff and did not propose any increase in tariff for small users for private tubewell or pumpsets for irrigation purposes. The new tariff for 2016-17 was announced by UPSERC. The tariff has been planned in such a way so as to compensate the rising costs of the licencees without putting excessive load on the consumers. In an initiative to revive the financially-distressed distribution companies, the Centre has approved a new scheme proposed by the Ministry of Power, Ujwal Discom Assurance Yojna. The commission has approved telescopic tariff for LMV-4 category of consumers which, in turn, would result in a lesser amount in the electricity bill for those who consume less electricity and would also help in smooth implementation of pre-paid metering. To encourage consumers to make payments on or before the due date, the rebate has been increased from 0.25 to 0.5 percent.
Source: India Today
July 29: The government is aiming at information technology driven power distribution in the next three years that will allow users to get a supply status at 4,041 urban towns on a real-time basis. Power Minister Piyush Goyal said once this project is up and running, the consumers can get the information through the URJA mobile application. Stressing on the need for transparency and accountability, the minister urged everyone to monitor data monthly on Urja mobile app (www.urjaindia.co.in) and seek better services from their discoms. The minister kicked off the induction programme of the Urban Vidyut Abhiyantas (UVAs) Which will involve as many as 48 engineers being roped in to assist the power discoms, to facilitate better consumer connect and monitoring of Integrated Power Development Scheme (IPDS). The UVAs with an experience of 3-15 years in project management, distribution franchisee and infrastructure sector will be positioned at every discom. As many as 50 discoms will be covered under the programme. The current model follows the success of Grameen Vidyut Abhiyantas (GVAs) in expediting rural electrification across the country. The minister quoted Mahatma Gandhi, terming consumer as the king. The minister interacted with newly recruited UVAs and motivated them to work with full commitment in their respective discoms and be a part of nation building and create a movement towards better Power.
Source: Business Today
July 28: Batting for nuclear energy as key to delivering on the Paris Climate Change Summit commitments, former Atomic Energy Commission Chairman Anil Kakodkar expressed optimism over India being included in the Nuclear Suppliers Group (NSG). Bhabha Atomic Research Centre (BARC) said the issue of inclusion of India in the NSG is a matter of discussion and negotiation. One of the examples, said Kakodkar, is climate change and India’s new climate plan (Intended Nationally Determined Contributions or INDC) to ramp up its share of non-fossil-based power capacity from 30 percent to about 40 percent by 2030 (with the help of international support). Batting for thorium as “nuclear energy proliferation resistant”, Kakodkar also elaborated on the reasons why nuclear energy doesn’t grow globally.
Source: New Kerala
July 28: Power Ministry is planning to organise an international conference of Power Ministers to improve co-operation in area of energy. During the Switch Conference scheduled on October 6-10 at Vadodara, the Power Ministry has planned to hold a conference of state power, coal and mines ministers. Power Ministers from various countries will also participate in the conference. Switch is one of the largest electrical expos in the country.
Source: The Financial Express
July 28: No final decision has been taken to scrap special purpose vehicles (SPVs) set up for four Ultra Mega Power Projects (UMPPs) in Maharashtra, Odisha, Karnataka and Chhattisgarh. Activities in the UMPPs — Maharashtra, Odisha (second additional UMPP), Karnataka and Surguja in Chhattisgarh — are stuck due to various reasons, including agitation by local people and non-identification of a suitable site. Power Minister Piyush Goyal said that around ₹96.82 crore has been spent by SPVs set up for these UMPPs. According to the minister, the Chhattisgarh government has said it in not keen on setting up of 4,000 MW UMPP in the state. Four UMPPs, namely Sasan in Madhya Pradesh, Mundra in Gujarat, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand, have already been transferred to the developers, he said. The minister said 6×660 MW Sasan UMPP in Madhya Pradesh, which was awarded and transferred to Reliance Power in 2007, is fully commissioned.
Source: Business Standard
July 28: The central government has asked all states to offer stable power to industries at a fixed rate over a long-term period in order to attract investments. According to the Central Electricity Authority (CEA), energy shortage countrywide was reduced to 2.1 percent during 2015-16, which is the lowest in last two decades. During the current fiscal between April-June, energy shortage has further reduced to 0.9 percent, Power Minister Piyush Goyal said.
Source: The Times of India
July 28: Four states, including Madhya Pradesh, Telangana and Tamil Nadu, may soon join the Centres UDAY scheme meant for revival of debt-stressed power distribution companies. Madhya Pradesh discoms have an accumulated debt of ₹35,000 crore. The state is estimated to get benefit to the extent of ₹11,500 crore during next three years of the turnaround. Following the reforms, it could go up to ₹14,500 crore annually. In the case of Tamil Nadu, the total debt is ₹67,000 crore, including around ₹46,000 crore in the distribution segment. It is estimated that during three years of the turnaround, the state will get cumulative benefit of ₹18,600 crore. After three years, the annual benefits are estimated at ₹22,420 crore. Power Minister Piyush Goyal has recently met Tamil Nadu Chief Minister J Jayalalithaa in an effort to get the state on board on UDAY. Source: India Today
July 27: Power consumers in poll-bound Punjab were spared from hike in tariff by the power regulator which also slashed the energy rates for industrial users to promote growth. The Punjab State Electricity Regulatory Commission (PSERC) did not raise the power tariff for Punjab State Power Corporation Limited (PSPCL). This is the second consecutive year that power tariffs were not raised in the state. The regulator has decided to abolish Peak Load Hours Restrictions (PLEC), surcharge and offered rebate for existing large industrial consumers for consuming power beyond threshold limit, a move which is aimed to boost production and generate employment. Deputy Chief Minister Sukhbir Singh Badal said the step has been possible due to reforms taken by the government in the power sector and rejected suggestions that the move came in view of the upcoming assembly polls in the state. He said that the old thermal plants in the state are being replaced by new technology plants. Sukhbir said that the Transmission and Distribution losses had been brought down from existing 24 to 14 percent in the state. Under industrial category, the power rates for Small Power (SP), Medium Supply (MS) and Large Supply (LS) have been slashed by 38 paise a unit, 36 paise a unit and 11 paise a unit respectively. After this reduction, the revised power rates for SP, MS and LS will be 547 paise per unit, 599 paise per unit and 635 paise per unit respectively. The new tariff, however, will be effective from August 1 till March 31, 2017 which means industrial category should not expect any refund on account of reduction in tariff. Power tariff is usually made effective from April till March.
Source: India Today
July 27: The Maharashtra government’s move to seek a CAG audit of Mumbai distribution companies, Tata Power and Reliance Infrastructure, may hit a legal hurdle. AAP government’s decision on CAG audit of BSES Yamuna Power Ltd, BSES Rajdhani Power Ltd and Tata Power Delhi Distribution Ltd in Delhi cannot be applied in Mumbai. This is because, in Delhi’s case, the state government holds equity in three discoms while Tata Power and Reliance Infrastructure are private distribution utilities in Greater Mumbai without any government stake.
Source: Business Standard
August 2: Russia’s oil output edged up in July to 10.85 million barrels per day (bpd) thanks to increases at some of the country’s biggest producers, Energy Ministry data showed. Russia, the world’s leading oil producer and second-biggest oil exporter after Saudi Arabia, pumped an average of 10.84 million bpd in June. In July, oil output reached 45.894 million tons. Oil production by Saudi Arabia came to 10.50 million bpd last month, according to a survey.
Source: Rigzone
July 29: Indonesia expects to start natural gas production from two deepwater fields this year and next, even as major oil companies are reviewing economics for other projects, Wiratmaja Puja, the director general of oil and gas at Indonesia’s Energy Ministry, said. The Bangka project, majority owned by Chevron, will start operation in August, he said. Italian oil firm Eni’s Jangkrik project is expected to commence operation in July 2017, he said.
Source: Reuters
July 29: Canada’s Jura Energy Corp reported a gas discovery at the Khamiso-1 exploration well in the Guddu Block in Pakistan. The well, drilled to the total depth of 2,470 feet in the Pirkoh Limestone formation of Eocene age, encountered gas flow at an average of 2.95 million cubic feet per day during a short duration pre-stimulation test on a 32/64 inch choke. The gas has a heating value of around 697 British thermal unit (Btu) per standard cubic feet, with average wellhead flowing pressure of 505 pounds per square inch. Jura, which holds a 13.5 percent interest in the Guddu Block operated by Pakistan’s Oil and Gas Development Co Ltd (OGDCL), said future production from the Khamiso-1 gas find could fetch a gas price of $3.75 per million Btu, based on carriage and freight crude oil price of $45 per barrel, under the Pakistan Petroleum (Exploration & Production) Policy, 2012.
Source: Rigzone
July 29: Norwegian energy firm DNO ASA, hoping to expand its presence in Iraqi Kurdistan, offered to buy rival Gulf Keystone Petroleum Ltd for $300 million, following the latter’s junk bond deal. A deal would make DNO by far the largest foreign oil producer in the Kurdish-run region. The offer also represents a 20 percent premium to the price at which Gulf Keystone plans to issue further shares as part of its restructuring. DNO operates the Tawke field in Iraqi Kurdistan. The field produces about 120,000 barrels per day.
Source: Reuters
July 28: Two Canadian energy companies outlined preliminary plans to add new oil sands production at their northern Alberta operations, a sign that the industry may have come to grips with the slump in crude prices after two years of heavy cost-cutting. Cenovus Energy said that it was doing engineering and rebidding work on phase G of its Christina Lake thermal project, which was put on hold in 2015. It said it would decide whether to proceed with the 50,000 barrel per day expansion by December. Source: Reuters
July 28: Improved fracking techniques have helped cut Pioneer Natural Resources Co’s production costs in the Permian Basin to about $2 a barrel, low enough to compete with oil rival Saudi Arabia, CEO Scott Sheffield said. Sheffield said high costs would continue to make U.S. shale plays outside the Permian basin relatively less competitive. Pioneer expects output to grow 15 percent a year through 2020 after posting production of 233,000 barrels of oil equivalent a day this past quarter.
Source: Reuters
July 27: Iraq is negotiating with Exxon Mobil Corp and Petrochina Co. to develop two oil fields in the south of the country as it seeks to maintain overall production at about 4.8 million barrels a day for the rest of 2016, Deputy Oil Minister Fayyad Al-Nima said. The companies have submitted offers to develop the Artawi and Nahran Omar fields, which Iraq’s Oil Ministry hopes will produce a combined 550,000 barrels a day, Al-Nima said.
Source: Bloomberg
August 2: TransCanada Corp said it plans to build an $800 million marine terminal and oil pipeline project for refined products like gasoline and jet fuel, as the Canadian pipeline operator continues to expand its footprint in Mexico. The project, a joint venture with Sierra Oil & Gas and Grupo TMM, comes at a time when TransCanada’s key projects closer to home are facing delays. The proposed development includes a marine terminal, a 265 km refined products pipeline and an inland storage and distribution hub in central Mexico. TransCanada did not give a timeline for the project, which would tap into growing demand in Mexico for gasoline, diesel and jet fuel.
Source: Reuters
August 1: Italian oil refiner Saras has paid back € 100 million ($112 million) of the debt it owes Iran for cargoes of crude oil taken before sanctions were imposed on the country in 2012, the company said. Saras paid a first instalment of €50 million in the second quarter and another 50 million euros in July. Saras, which is partly owned by Russian oil giant Rosneft, used to take a significant part of its crude feedstock from Iran before the embargo on the country.
Source: Reuters
August 1: Honeywell Process Solutions (HPS) announced it will provide full automation and safety systems and serve as integrated main automation contractor (I-MAC) for a new liquefied natural gas (LNG) facility being built in Eastern Canada to process North American natural gas for international export. Honeywell technology is currently being used in more than 40 similar LNG import and export terminals around the world. Located on the eastern shore of Canada in Nova Scotia, Pieridae Energy’s Goldboro LNG project will include a natural gas liquefaction terminal and facilities for LNG storage and marine export. The facility will be able to process 10 million metric tons of LNG a year and have a storage capacity of 690,000 cubic meters. Startup is expected in 2021.
Source: Downstream Today
July 29: Phillips 66 joined larger rival Valero Energy Corp in saying that refiners are expected to process less crude in the second half of the year as margins shrink due to a gasoline glut. Phillips 66’s profit halved in the second quarter as earnings from its refining business plunged 75.3 percent. Phillips 66 said its refineries are expected to function at a mid-90 percent capacity in the current quarter, compared with the 100 percent utilization it reported in the second quarter.
Source: Reuters
July 27: South African energy workers plan to strike indefinitely over pay, the union representing them said, a stoppage that will potentially hit oil refineries of companies including Shell, BP Chevron and Sasol. South African petrochemical giant Sasol said it had made arrangements to ensure minimal disruptions to customers. The country is a net importer of refined petroleum products and long strike could lead to shortages.
Source: Reuters
August 1: Tokyo Gas Co., Japan’s second-biggest buyer of liquefied natural gas (LNG), is in talks with European companies to swap cargoes it owns from the U.S. with those in Asia to reduce shipping times and costs. Japan is among countries forecast to have an LNG oversupply in coming years, transforming some of the world’s biggest buyers of the fuel into sellers.
Source: Bloomberg
August 1: Iraq’s oil exports from its southern ports rose to 3.2 million barrels per day (bpd) on average in July, up from 3.175 million bpd in June, as the OPEC nation increased crude production.
Source: Reuters
August 1: Oil fell below $40 a barrel in New York for the first time since April, falling into a bear market on concern that the global supply glut will expand. Saudi Arabia cut prices to Asian customers as the country continues to fight for market share.
Source: Bloomberg
August 1: Iran’s Oil Minister Bijan Namdar Zanganeh says the oil market is oversupplied but predicts balance between demand and supply will be restored. A Survey showed the Organization of the Petroleum Exporting Countries’ oil output was likely to reach its highest in recent history in July as Iraq pumps more and Nigeria manages to export additional crude despite militant attacks.
Source: Reuters
August 1: The Nord Stream gas pipeline, which carries Russian gas to Germany under the Baltic Sea, will undergo planned maintenance from August 9 to 17, the Switzerland-based operating consortium said. Annual maintenance, usually carried out in the low demand summer season, requires a temporary shutdown of both lines at once, the consortium said.
Source: Reuters
July 31: Libya’s state oil company said it welcomed the “unconditional” reopening of blockaded oil ports following a deal between the U.N.-backed government and an armed force which controls key facilities, saying it would begin work to restart exports from the terminals. The agreement, signed, could be a major step in reviving Libya’s crippled oil output. The National Oil Corp (NOC) said the U.N.-backed Government of National Accord (GNA) had released money that would allow it to increase production by 150,000 barrels per day (bpd). The NOC said it aims to gradually increase output to 900,000 bpd by the end of the year.
Source: Reuters
July 31: China’s Sinopec said a section of the Sichuan-East China gas pipeline reopened, 10 days after it was hit by a landslide and fire. The shutdown caused natural gas supplies to industrial users in at least five provinces to be cut from 24 million to 7 million cubic metres per day, Sinopec said. Remedial measures had included PetroChina increasing supplies to certain areas and Sinopec redirecting liquefied natural gas shipments.
Source: Reuters
July 29: Moscow and Ankara have been discussing the construction of two lines of the TurkStream natural gas pipeline from Russia to Turkey, Russian Energy Minister Alexander Novak said. Capacity of one line is around 15.75 billion cubic meters of gas per year.
Source: Reuters
July 28: Japanese oil refiner TonenGeneral Sekiyu has bought its first oil from Iran since becoming independent from U.S. oil major Exxon Mobil Corp. The company bought the Iranian spot cargo through a trading house due to attractive pricing and the shipment arrived Japan.
Source: Reuters
July 28: Enterprise Products Partners said the first ship to load ethane for export from its new terminal on the Houston Ship Channel will arrive on August 1, the first such export of the light natural gas liquid from the U.S. Gulf Coast. Exports from the terminal are expected to ramp up to 1.9 million barrels per month by the end of the year.
Source: Reuters
July 27: Excelerate Energy L.P. confirmed that the firm, Petrobangla, and the Government of Bangladesh have executed the Terminal Use Agreement and the Implementation Agreement for the construction and operation of Bangladesh’s first liquefied natural gas (LNG) import terminal — Moheshkhali Floating LNG (FLNG). The FLNG, to be located offshore near Moheshkhali Island in the Bay of Bengal, will provide the crucial infrastructure required for Bangladesh to import natural gas when the terminal becomes operational in 2018.
Source: Rigzone
August 2: A U.S. appeals court upheld a decision confirming a $465 million judgment won through arbitration by a unit of KBR Inc in a contract dispute with Mexico’s national oil company, Pemex. The judgment also includes $59 million of interest, court papers show.
Source: Reuters
August 1: Sri Lanka plans to upgrade its sole oil refinery and double its capacity to boost output and to reduce the cost of importing refined fuels, Oil Minister Chandima Weerakkody said. The island nation is home to a single oil refinery, Ceylon Petroleum Corp’s (CPC) decades-old 50,000 barrels-per-day (bpd) plant. CPC replaced the Iranian crude with supply from Malaysia and Abu Dhabi but the efficiency of processing the grades was low.
Source: Reuters
August 1: Tanzania plans to complete construction of a crude oil pipeline from Uganda in 2020 at an estimated cost of $3.5 billion, its energy ministry said. Tanzania said three oil firms operating in Uganda – London-listed Tullow Oil, France’s Total and China’s CNOOC – have all agreed to participate in the construction of the pipeline, with building work scheduled to start in June 2017. The jointly developed pipeline will carry Ugandan crude oil to Tanzania’s Indian Ocean port of Tanga for export.
Source: Reuters
August 1: China, the world’s third-largest natural gas consumer, is planning to lower distribution prices for gas, part of anticipated sector reforms to boost use of the cleaner-burning fuel. The cuts on transportation fees may also apply to trunk lines controlled by state giants, predominantly PetroChina, industry experts have said. Under the current mechanism, Beijing sets the ceiling for wholesale gas prices via a link to alternative fuels and also encourages bulk consumers to negotiate prices directly with suppliers such as PetroChina and Sinopec Corp. But price adjustments, last made in November 2015, often lagged changes in benchmark fuels, making gas relatively more costly versus competing fuels.
Source: Reuters
July 29: Iran needs two to three months to achieve its pre-sanctions level of oil production, Iranian Communications Minister Mahmoud Vaezi said. Iran has to date reached 80 percent of its pre-sanctions oil output, Vaezi said.
Source: Reuters
July 29: Chevron Corp, the second largest U.S.-based oil producer, posted a second-quarter loss, its largest since 2001, due to the slump in crude prices and refining income. While the adjusted results beat Wall Street expectations, they highlighted the deep uncertainty facing the energy industry at a time when depressed commodity prices have eroded profitability.
Source: Reuters
July 29: Wholesale gasoline in California became the cheapest in the country, but that change has largely gone unseen at the pump, where consumers are still paying the highest prices in the continental United States to fill up their cars. The declines in the state’s retail gasoline market over that period of time have averaged less than 14 cents, according to data from the U.S. Energy Information Administration (EIA). Gasoline prices across the country have plunged as crude has also slumped in the past two years, pressured by a global supply glut. On the West Coast, gasoline stocks are at a five-year seasonal high of 29.6 million barrels, according to the EIA.
Source: Reuters
July 29: Libya’s U.N.-backed government has signed a deal with an armed brigade controlling the major Ras Lanuf and Es Sider oil ports to end a blockade and restart exports from the terminals shut down since December 2014.
Source: Reuters
July 29: OPEC’s oil output is likely in July to reach its highest in recent history, a survey found, as Iraq pumps more and Nigeria manages to export additional crude despite militant attacks on oil installations. Top OPEC exporter Saudi Arabia has kept output close to a record high, the survey found, as it meets seasonally higher domestic demand and focuses on maintaining market share rather than trimming supply to boost prices.
Source: Reuters
July 27: Britain has cut rental fees by up to 90 percent in its latest tender for oil and gas (O&G) licenses in the North Sea launched in a bid to attract companies to find new fields in the mature basin. Companies will now be able to apply for cheaper and more flexible licenses to gain access to 1,261 blocks by October 26, followed by license awards to be issued by the Oil and Gas Authority at a later date. The hunt for new oil and gas fields in the British part of the North Sea is expected to fall to the lowest in 45 years this year as energy companies have scaled back exploration budgets due to weak oil prices.
Source: Reuters
Generation
August 2: GE and GAMA Consortium have been awarded the engineering, procurement and construction (EPC) contract by Aluminium Bahrain (Alba) for the 1,792 MW combined cycle gas turbine power plant. Under the contract, GE and GAMA Consortium will design, engineer, procure, construct and commission the power plant, which will have an efficiency of 54%.
Source: Energy Business Review
July 28: The board of French utility EDF narrowly voted to proceed with a controversial project to build two nuclear reactors in Hinkley Point, Britain – the country’s first new nuclear plant in decades. The 18 billion pound ($24 billion) nuclear reactors carry huge risks for both France and Britain. EDF will assume the up-front costs, which unions say could jeopardize the firm’s survival, while Britain has committed to pay a price twice current market levels for the power generated by the plant. EDF said that the pouring of the first concrete at Hinkley Point, scheduled for mid-2019, will coincide with the expected start-up of a nuclear reactor it is building at Flamanville, France, which is scheduled for the end of 2018.
Source: Reuters
July 27: Jimah East Power has started the construction of its MYR 12 bn (US$2.6 bn) Project 3B coal-fired power project in Jimah (Malaysia). The joint venture was set up to develop Project 3B, a 2,000 MW coal-fired power project, consisting of two 1,000 MW ultra-supercritical units, that will be built near the existing Jimah power plant in Negri Sembilan. The first unit is expected in 2018 and the second in 2019.
Source: Enerdata
August 2: China Electric Power Equipment and Technology (CET) commenced the construction of the Ethiopia-Kenya high voltage electric power transmission line project within Ethiopia. The 500 KV transmission line will have the transmitting capacity of 2,000 MW. The project, which aims to achieve regional power grids interconnection in the East Africa sub-region, is expected to be completed within 12 months.
Source: Shanghai Daily
July 28: French utility EDF (EDF.PA) has entered exclusive talks with state-owned bank Caisse des Depots (CDC) and its unit CNP Assurances to sell them a 49.9 percent stake in power grid unit RTE, it said. In line with EU regulations on power grid independence, EDF has no management control over RTE, which needs to be independent and must guarantee equal access to its power network to all power producers.
Source: Reuters
August 2: A policy document prepared for Chancellor Angela Merkel shows the German government is hesitating to set fixed coal-reduction targets ahead of national elections. Even as the European Union’s biggest economy boasts the most installed green power on the continent, it also continues to emit the most greenhouse gas in the 28-nation bloc. Hard coal and lignite plants owned by RWE AG and EON SE generated about 43 percent of Germany’s power last year. At the same time, investors including Allianz SE and Commerzbank AG have advocated for a speedy phase-out from coal.
Source: Bloomberg
August 1: According to the Institute of Energy Economics of Japan (IEEJ), Japan is likely to restart seven nuclear reactors by the end of March 2017 and a further 12 reactors by the end of March 2018, generating nearly 120 TWh/year of nuclear power, compared to 288 TWh in the 2010-2011 year. In the IEEJ’s high-case scenario, up to 25 units could be restarted by the end of March 2018, for a total power generation of 151 TWh/year.
Source: Enerdata
August 1: Britain said that it wanted closer ties with China but resisted pressure from Beijing to sign off on a $24 billion nuclear power project that was delayed at the last minute by Prime Minister Theresa May. Under plans drawn up by former prime minister David Cameron, French utility EDF and Chinese partner China General Nuclear would fund the $24 billion cost of the project, while Britain committed to pay a minimum price for the power generated by the plant for 35 years.
Source: Reuters
July 29: Thermal coal, the first energy market to go into a tailspin in 2011, has turned around with prices rallying for much of this year on an unexpected jump in imports from top consumer China that some analysts say will underpin sentiments further. Coal prices crashed 70 percent over 2011 and 2015, to the lowest since the early 2000s, as analysts like the International Energy Agency and Goldman Sachs said China’s imports had peaked on measures to combat pollution and a move away from power-intensive industries. But some analysts say the coal rally will be short-lived and that, like the oil market which has fallen 20 percent since June after a strong rally in the first half of the year, prices will start coming off soon.
Source: Reuters
July 27: The World Bank has suspended funding to help develop a $14 billion hydropower project in the Democratic Republic of Congo, a stage in what could become the world’s biggest power plant, after a disagreement with the nation over implementation plans. The World Bank agreed to $73 million in technical assistance for the first phase of the $100 billion Grand Inga hydropower project which would produce 44,000 MW. Inga 3 alone would produce at least 4,800 MW almost double Congo’s current installed capacity.
Source: Bloomberg
July 27: South Korea plans to select a site for permanent storage of high level radioactive waste by 2028. Twenty-five nuclear power plants are operational in the country and used nuclear fuel is stored in temporary storage facilities. The government plans to expand temporary storage facilities as of 2019 and to build a new temporary facility from 2030.
Source: Enerdata
July 27: The State-owned Assets Supervision and Administration Commission of China has announced that China Shenhua Group, China National Coal Group Corp, China Reform Holdings Corp and China Chengtong Holdings Group had jointly set up a coal asset management company, in order to reduce overcapacity in the Chinese coal sector. The new company will be used to cut excess capacity, accelerate the consolidation of state-owned coal resources and promote state-owned coal companies to upgrade and restructure.
Source: Enerdata
August 2: The 2,000 MW Pavagada Solar Park—which is being set up on 12,000 acres of land—has hit a hurdle with farmers refusing to give up land for drawing transmission lines. The Pavagada project in Tumakuru district is the largest solar power generation plant in the country. Of the 2,000 MW, the National Thermal Power Corp will develop 1,600 MW. Karnataka will get 500 MW power in the first phase from September 2017 and the power will be shared among the five Escoms. But with farmers demanding higher compensation, work on the solar project reportedly slowed down in recent times.
Source: The Times of India
August 2: NTPC has commissioned 50 MW (1X50 MW) capacity of NP Kunta Ultra Mega Solar Power Project Stage-I at Anantapuramu on July 29, 2016. With this, the installed capacity of NP Kunta Ultra Mega Solar Power Project Stage-I at Anantapuramu has become 250 MW and that of NTPC Group has become 47,228 MW. The company is aiming to generate 248 billion units during the current financial year. In this regard, the company had signed a Memorandum of Understanding (MoU) with Government of India.
Source: Livemint
August 1: As part of harvesting solar energy for critical utilities, the state government is in the process of completing work on 70 solar tube wells in Barmer district under the Mukhyamantri Solar Adharit Nalkoop Yojana (MSANY). The project is being implemented by Rajasthan Electronics and Instrumentation Ltd and the firm has received a work order of ₹11.91 crore for the same. For the district, reeling under acute power shortage, the project will prove to be a boon as water will be available round-the-clock from December. According to the Public Health Engineering Department (PHED), the project in Barmer district will be completed this year by December.
Source: The Times of India
August 1: There is no shortage of power in the country to cater to the demands of states and government is trying to fully tap the potential of new and renewable energy to produce 175 GW of power by 2022. Power Minister Piyush Goyal said the government was exploring producing energy from waste and garbage and clearance of certain projects were awaited from National Green Tribunal and the Supreme Court, monitoring the use of technology which does not impact on environment. Goyal said as regards the total amount of energy generated last year from solar power and renewable sources of energy put together was 65 billion units. As per the new tariff policy, government has made compulsory grid inclusion for all new projects converting waste into energy, he said. Goyal said there was a proposal to tap the potential of wind power along the 7,500 km coastline in the country, but the cost turns out to be higher than in Europe.
Source: Business Standard
August 1: As part of its ₹3,000 crore diversification plan to venture into solar and wind power projects, NHPC Ltd is looking at feasible options in various states in the sector. The company plans to raise ₹4,500 crore through private placement, but is waiting National Green Tribunal (NGT) clearance for the 2,000 MW Lower Subansiri hydroelectric project at Gerukamukh along the Assam-Arunachal Pradesh border. On NHPC’s plans to meet its commitment of adding 430 MW in five years in renewable energy, Singh said it has inked deals with Andhra, Tamil Nadu and Uttar Pradesh government to set up new solar and wind power projects. In another venture, NHPC has joined hands with Uttar Pradesh government to develop a 50 MW solar power project. The project will be executed through the state government’s Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA). The company has already reached the final stage of completion of a 50 MW wind power project in Jaisalmer, Rajasthan.
Source: Business Standard
July 29: Tata Power Company’s joint venture in South Africa has commissioned a 134 megawatt wind energy farm in the country. Tata Power’s 50:50 JV with Exxaro Resources in South Africa, namely Cennergi (Pty) achieved commercial operations for its 134 MW Amakhala Emoyeni Wind Farm Project. Cennergi was selected as the preferred bidder for two wind projects under the second window of the Renewable Energy Independent Power Producer Procurement Programme by the South African government.
Source: The Economic Times
July 29: Chandigarh will be the first model solar city of the country. Power minister Piyush Goyal said that master plan has been already prepared. The solar city cell has also been established. The minister further said that UT Administration, Chandigarh has empaneled 48 Solar Power Aggregators from whom any resident of Chandigarh can install Rooftop Solar Power Plant and can avail 30% subsidy. Solar rooftop power plants of aggregate 7.70 MWp capacity are installed on 145 government buildings till May in this city.
Source: The Economic Times
July 28: Floating solar panels will be set up on a surface area of 891 square kilometres on Koyna dam will be used for solar power generation. The primary survey for the same has already been completed and the next stage of planning is currently underway. Various departments such as water resources, renewable power generation, and transmission department are involved in the project. As part of the project, the solar panel will be set afloat on the water to generate power. Such panels will be connected to each other to multiply power generation. The power so generated will then be linked with the state power grid. The Koyna dam is the largest hydro-electric power plant in the country with a total capacity of 1,920 MW.
Source: The Times of India
July 27: Punjab revenue and non-conventional energy minister Bikram Singh Majithia said the border state is poised to make another history in “green power solar revolution”, after the “game-changing” green revolution. Majithia said in the past few years the state has registered a growth rate of more than 100 times in the field of solar power generation. The minister said that in the past four years, solar power generation in the state has reached 1,050 MW from mere 9 MW, backed by investments to the tune of ₹8,000 crores. Majithia said Punjab is also leading the nation in rooftop solar power generation.
Source: Hindustan Times
July 27: India’s Ministry of Power has raised its Renewable Purchase Obligations (RPO) trajectory for solar power. The RPO is a mandate for states and Distribution Companies (Discoms) to purchase a certain percentage of their energy from renewables. India’s Discoms will have to purchase 2.75% of their energy mix from solar during 2016/17, followed by 4.75% in 2017/18 and 6.75% in 2018/19. The new targets represent a significant ramp up. Last January the Ministry of New and Renewable Energy (MNRE) announced that the solar RPO would be need to be set at 8% by 2022. However, the renewables industry has consistently cited the Discoms’ lack of compliance with the RPO, although the Central Government’s UDAY scheme, which sought to alleviate Discoms’ ballooning debts also seeks to address the lack of RPO enforcement. Bridge to India said the new guidelines should drive the next round of solar plans and tenders. India recently sanctioned 10 ‘Solar Zones’ of 10,000 hectares each for both PV development (50%), manufacturing (25%) and small and medium enterprises, farmers and unemployed youth (25%).
Source: PV-Tech
August 2: Researchers at the US Energy Department’s National Renewable Energy Laboratory (NREL) have developed a new method to increase the efficiency of perovskite solar cells. The research, which was carried out in collaboration with researchers at Shanghai Jiao Tong University (SJTU), has found a way to make perovskite solar cells more efficient and reliable with higher reproducibility. The technique resulted in improving the efficiency of perovskite film to convert sunlight into electricity to 19%.
Source: Energy Business Review
August 2: After four rocky years as a publicly traded company in the volatile renewable energy sector, SolarCity Corp may now be wading into an equally uncertain future. The company has said it will seek to build more solar systems for utilities – a part of the market in which SolarCity has limited experience.
Source: Reuters
August 2: Chinese solar panel manufacturer Trina Solar has signed a deal worth $1.1 bn with an investor consortium to go private. The deal will follow completion of Trina Solar merger with Fortune Solar and its subsidiary Red Viburnum. Scheduled to be completed during the first quarter of 2017, the merger is subject to customary closing conditions including approval by at least two-thirds of the owners of Trina Solar’s voting shares.
Source: Energy Business Review
August 2: The auto industry will need to step up introduction of fuel-saving technology to help the U.S. meet aggressive goals to combat climate change despite manufacturers’ requests for relief from existing rules, the Environmental Protection Agency (EPA). The U.S. will have to accelerate carbon reductions beyond current regulations calling for average vehicle gas mileage of 50 miles per gallon by 2025 to meet targets called for in the global climate agreement reached in Paris last year, the EPA said.
Source: Bloomberg
August 1: Researchers from the US Department of Energy’s Argonne National Laboratory and the University of Illinois at Chicago have found a way to convert carbon dioxide to useful fuel. The researchers converted carbon dioxide to useful fuel by using solar energy which could open up possibility of a new source of energy as well find way in combating climate change.
Source: Energy Business Review
August 1: U.S. regulators should alter a much-debated biofuels program that disadvantages small fuel retailers, Bill Douglass, the founder of Texas-based Douglass Distributing and Chairman of the Small Retailers Coalition, said. The Renewable Fuel Standard (RFS) gives an unfair advantage to large petroleum retailers and sidelines smaller ones, Bill Douglass said. The Environmental Protection Agency (EPA) oversees the RFS, setting annual targets as to how many gallons of ethanol and other renewable fuels need to be blended with gasoline and diesel. Oil refiners and importers are required to prove compliance with the policy by either blending biofuels or buying paper credits, known as RINs, from companies that are in compliance.
Source: Reuters
July 30: A sweeping carbon tax in the oil-rich Canadian province of Alberta will hit residents harder than similar environmental measures in other parts of the country, an economist said. The tax of C$30 ($22.96) per ton, which comes into effect next year, will cost Albertans 1.5 percent to 2 percent of their household incomes, McGill University’s Chris Ragan said. That’s higher than the impacts of carbon-pricing programs in other provinces because of Alberta’s abundance of oil-sands bitumen and coal-fired electrical plants, Ragan said.
Source: Bloomberg
July 28: Deforestation in the Amazon region dropped by 30 percent from 2005 to 2010, sparing trees that soak up carbon dioxide. After trees are cut down, they gradually decay, releasing carbon, degrading the habitat, and threatening species long after the cutting stops. These lagging emissions have an important impact on the battle against global warming, a study released in the journal Current Biology finds. Even with the 30 percent reduction in Amazon deforestation, there was only a 10 percent decrease in carbon emissions, the researchers found.
Source: Bloomberg
July 28: A Philippine rights body has set a deadline of 45 days for 47 global oil, mining and cement firms to answer a complaint that their carbon emissions caused human rights violations, in what rights advocates and green groups have called a landmark case. The action followed a petition by human rights and environmental groups led by Greenpeace seeking to hold the companies accountable for infringement of Filipinos’ rights to life, food, water, sanitation and adequate housing, through the adverse impact of climate change. The Philippines is among nations most vulnerable to the impact of global warming. In June last year, a district court in the Netherlands ordered the government to cut greenhouse gas emissions faster than currently planned, making rare use of the legal system to curb global warming.
Source: Reuters
July 27: A 1,500-word manifesto that Elon Musk unveiled, outlining his plan to expand Tesla Motors Inc.’s electric-vehicle line and to build “stunning solar roofs,” may end up costing the company tens of billions of dollars to carry out. Musk, Tesla’s chairman and chief executive officer, gave the estimate after a tour of the company’s battery factory under construction in Nevada. Musk took heat from investors after delivering a “master plan” that was seen as long on vision and short on details about how he’ll finance his ideas for merging Tesla with rooftop solar installer SolarCity Corp, developing an all-in-one solar and battery solution, and offering electric buses and trucks and autonomous ride-sharing fleets.
Source: Bloomberg
July 27: New Google-powered software will help the world tackle problems related to climate change, deforestation and food production, a United Nations (UN) agency said, as it presented its revamped online platform. Open Foris, UN Food and Agriculture Organisation software, uses high-resolution satellite images to monitor the environment and changes in land use and forest cover. According to the UN agency it will help tackle problems related to climate change, deforestation and food production. It uses high-resolution satellite images to monitor environmental changes and maps can be made in a shorter span of time. The software is free to use by anyone.
Source: The Hindu
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