Energy News Monitor | Volume XIV; Issue 24

     ENM, Energy Monitor, November, NIB, electricity, NTPC, NTPC, GST, RIL

    WILL ELECTRICITY FOR ALL SCHEMES LIFT POWER DEMAND?

    Power News Commentary: October - November 2017

    India

    The power ministry has engaged postmen for door-to-door survey to expedite the Saubhagya scheme for complete household electrification by December 2018. India Post through its network 173,000 outlets has begun collecting data on un-electrified households spread over three states of Odisha, Chhattisgarh and Madhya Pradesh. Similar initiatives are being launched in Assam and Jharkhand. The data for a total 175,000 villages in the five states is likely to be submitted in a month. The programme could be extended to other areas. The data is being uploaded online through a web portal and a mobile application by the postmen called ‘Gram Dak Sewaks’ by the postal department. The web portal and the application have been created and are being monitored by Rural Electrification Corp. The data will help the Central government in speedy assessment of project reports that will be submitted by states seeking grant under the Saubhagya Scheme. The Pradhan Mantri Sahaj Bijli Har Ghar Yojana –Saubhagya- launched in September with over ₹ 160 billion outlay for universal household electrification, will cover a total of 30 million—25 million households in rural areas and 5 million in urban areas. As per scheme, the states will have to submit detailed project reports to the Centre. Projects would be sanctioned based on the detailed project reports to be submitted by the states. The postal department will collect status of electrification of households and details of heads of the un-electrified households in villages.

    NTPC Ltd has decided to expedite its expansion plans of installing four super-critical units of 660 MW in two more power plants in UP ahead of 2019 Lok Sabha elections. NTPC confirmed that installation of at least one 660 MW units each in Meja (Allahabad) and Tanda (Ambedkarnagar) power plant will be completed in August and September next year. The Tanda power plant, which is totally owned by the NTPC, has a total installed capacity of 440 MW, while the Meja power plant is a new venture being jointly set by the NTPC in association with the state owned UP Rajya Vidyut Utpadan Nigam Ltd. The expansion plans of NTPC also fall in line with the Centre's ambitious ‘Power For All' scheme, envisaging round the clock to every household before 2019. Prime Minister Narendra Modi had pressed the accelerator in September by launching the ‘Saubhagya Scheme' under which electricity connections would be provide to poor families free of cost. The 2000 MW Singrauli power project happens to be the flagship project of the NTPC in UP. Some commentators observed that providing power had now become the path to political power.

    Bihar state energy department is to submit within a week a detailed project report to the Centre to seek ₹ 11 billion for providing household electricity connections under Saubhagya scheme that envisages payment of power installation charges to every household in 60:40 ratio by the Centre and state, respectively. The Pradhan Mantri Sahaj Bijli Har Ghar Yojana or Saubhagya scheme launched on September 25 aims at providing electricity connections to over 40 million families in rural and urban areas by December 2018. State energy department has already provided meter-based electricity supply to more than 1.3 million households till date under Mukhya Mantri Vidyut Sambandh Yojana, commonly known as Har Ghar Bijli scheme, launched in Bihar in 2015. The state has allocated ₹ 1,896 billion for providing electricity to 3.5 million APL households under the scheme. The beneficiaries under Har Ghar Bijli scheme are required to pay ₹ 2,200 in 10 easy instalments for electricity connection. However, Saubhagya scheme envisages payment of power installation charges to every household by the Centre and state in 60:40. The scheme also stipulates that Centre would pay 75% of the cost to those states which achieve the desired targets on or before time. Energy department said the state is most likely to be benefited by the incentive as it is set to achieve 100% electrification by December 2018.

    UP government is taking slew of measures to improve power supply to the people of the state, counting on initiatives like trust billing system and e solution app. In trust billing system, consumer would be offered the facility of self-billing like filing of income tax return. However, its misuse would invite punitive action, including heavy penalty. Moreover, existing meters would be replaced by "smart meters" in order to monitor the power used by consumer. For ensuring proper roaster and adequate power supply in rural areas, monitoring of line loss in feeder system would be the priority. Encouraging results with the introduction of e. solution app, face-book, twitter, whatsapp and the introduction of toll free number (1912) are expected to become an added advantage to consumer. Import capacity of power has been enhanced from 8,100 MW to 10,000 MW but also the capacity of power been increased from 18,500 MW to 22,000 MW. Priority of the government is on recovery of arrears, providing 21 million new connections, electricity in 75 mazars, ensuring installation of meter in every house, upgrading the transformers and replacing old line with the new ones.

    Maharashtra appealed to the farmers to clear their pending power dues without payment of any penalty under the 'Mukhyamantri Krushi Sanjeevani Yojana'. There are around 4.1 million farmers whose electricity dues are pending. To avail the benefit of the scheme the farmers should pay their current bill immediately. If the bill is not cleared the government will issue order for disconnection. The consumers, whose dues are less than ₹ 30,000 will get the option of paying it in five instalments. The payment dates for this dues are in December 2017, March 2018, June 2018, September 2018 and December 2018. Those consumers whose electricity bill dues are over ₹ 30,000 will get an option to clear the same in 10 installments with a time span of 45 days between each instalment. The government is spending ₹ 6.50/kWh for supplying electricity to farmers, but it is charging merely ₹ 1.80/kWh from them. The present situation is that electricity bill of ₹ 192.72 billion is pending from the farmers. In the last three years not a single electricity connection of a farmer has been disconnected by the government. The government appealed to the farmers to pay their pending electricity bills as the government has to purchase electricity from power supply companies every day.

    The farm sector in Telangana will get 24 hours free electricity from March-April next year. The authorities will supply uninterrupted power on an experimental basis across the state. This will continue for five to six days and based on the feedback, the Telangana State Transmission Corp (TS Transco) will take follow up action. Farmers in Telangana are currently getting nine hours free supply every day. The state had been supplying round-the-clock electricity to farmers in three districts on pilot basis. Rao instructed that all the arrangements for distribution and supply systems should be in place for 24-hour power to farmers by March-April 2018. Power generation and transmission corporations and distribution companies are making arrangements for the same. They have spent ₹ 120 billion to strengthen the distribution and supply systems.

    Higher electricity demand coupled with supply constraints led to India recording a peak time power deficit of 2 percent in September – highest since April 2016 when the gap between demand and supply stood at 2.1 percent, according to ratings agency Ind-Ra. Ind-Ra said coal inventory levels at power plants declined in September due to a sudden rise in electricity generation from thermal plants amid limited coal output and supply. CIL’s production in September rose 10 percent year-on-year. However, the increase was lower on a month-on-month basis at 3 percent. CIL has increased its supplies to improve the coal situation at power plants. During the month, the growth in coal supply to power plants was 21 percent at 35.1 mt compared with 29.1 mt in September 2016.

    NTPC does not want to acquire any stressed assets from private companies. Instead it wants to help banks that take them over for non-repayment of debt, run these stations in lieu of a service charge. NTPC had decided on taking over stressed assets a few years ago. However, it did not end up acquiring any such power units or plants from the private sector although a number of plants were up for grabs. Later the company, decided on taking over assets from state-owned power companies that were not running very well. Latest in NTPC’s list of acquisitions has been the Chhabra Thermal Power Plant from Rajasthan government.

    Telangana is on its way to becoming a power surplus state with the construction of new plants to generate additional 13,752 MW. The government has fixed a target of increasing the installed generation capacity to 28,000 MW with an investment of ₹ 940 billion. When Telangana was created the installed capacity was 6,574 MW, a deficit of 2,700 MW. During the last three-and-half years additional 7,981 MW capacity was commissioned. When the state was formed there was severe crisis in power sector with two-to-nine-hour power cuts for domestic sector every day and two-day power holidays in a week for industries. Telangana has created new record in the country by supplying quality power free of cost for 24 hours to the agricultural sector. 25 percent of the power in the state is being utilised by agriculture pump sets. With the 24-hour supply to agriculture sector, the total power demand will increase to 11,000 MW and power utilities were ready to meet this demand. New lift irrigation projects also require 8,500 MW of power. The new power plants will meet the demand for lift irrigation projects and new industries being established in the state. The construction of 4,000 MW capacity Yadadri Ultra Mega Power Plant has started while 1,880 MW of power will be available by 2018 through the power plants which are under construction at Manuguru and Kothagudem. Another 1,600 MW power plant is under construction under aegis of NTPC Ltd. The per capita power consumption has increased from 1,200 units at the time of formation of the state to 1,505 units. This is higher than the national average of 1,122 units. The transmission and distribution systems were strengthened with an investment of ₹ 121.36 billion.

    Load-shedding's back, with sporadic unscheduled power cuts disrupting normal life in several parts of Bengaluru. Power-outage complaints came in from Indiranagar, Chamarajpet, Shantinagar, Rajajinagar, Nagarbhavi, Tatanagar, Malleswaram, Malathahalli, BTM Layout, Madiwala and Mathikere, among other areas. Bangalore Electricity Supply Company said the load-shedding is due to the shutdown of two units of the Raichur Thermal Power Station that normally functions on 4-5 units.

    Long power cuts due to grid failure or a natural calamity can cause disruption in mobile telephony services in Delhi NCR any time as use of generator sets for powering towers has been banned till March 15, telecom infrastructure players said. The DPCC following a decision of Environment Pollution (Prevention and Control) Authority has imposed ban on generator sets running on petrol, kerosene or diesel till March 15, 2018. Telecom infrastructure industry body TAIPA said that though mobile towers are deployed with high-capacity batteries including fast charging to extend backup, these cannot run for long in case of long power outage due to grid failure or a natural calamity. TAIPA that as the DPCC has allowed use of generators for essential services such as hospital, railways, airports and elevators, mobile infrastructure should also be included in the list of essential services. TAIPA said that besides need to provide telecom services, telecom operators are required to comply with rules of Telecom Regulatory Authority of India to maintain round the clock network availability with 99.95 percent uptime. Under the new Quality of Service norms, effective October 1, telecom operators may face a maximum penalty of ₹100,000 for call drops which will now be measured at mobile tower level instead of telecom circle level.

    IEX said the average spot power price rose by 66 percent to ₹ 4.08/kWh in October compared to the year-ago period, mainly due to supply side constraints. The average MCP for the month at ₹4.08/kWh was almost same as in September, 2017 and 66 percent higher over ₹ 2.46/kWh in October, 2016, the IEX said. According to the IEX, a total volume of 4,079 MU was cleared, almost same as trade volume of September and about 13 percent more over 3,609 MU traded in October, 2016. On a daily average basis about 132 MU were traded. With average daily sell bids at 169 MU against buy bids at 179 MU, the market largely remained a deficit market. The total sell bids during the month were 5,248 MU and the total buy bids were 5,535 MU.

    India must move into a single power market for lowering tariffs and better performance by distribution companies, the Chief Economic Adviser to the Union finance ministry, said. In Bihar, there are about 100 power tariff slabs, including separate tariffs for day and night. Given the strength of cooperative federalism, a common market should be created for power sector to make electricity available at the same tariff across the country. Owing to availability of renewable power at lower cost on account of subsidies being given to the installations, discoms (distribution companies) reduce power purchase from thermal units. Though power comes under the concurrent list, states only manage the sector. Centre has powers to prevent discoms from levying cross subsidy. Regulators have to work out ways to introduce a common tariff for the country. The CEA recommended introduction of direct transfer of benefits to beneficiaries' accounts in the power sector also.

    A recent Supreme Court ruling that electricity regulators’ “inherent powers” are circumscribed and can’t be used “to deal with any matter which is otherwise specifically provided under the Electricity Act 2003,” would have implications for many delayed power projects wanting to extend the “tariff periods” under the existing PPAs, industry analysts said. The apex court, in an October 25 ruling, set aside the Gujarat Electricity Regulatory Commission’s order, which allowed a private generator — Solar Semiconductor Power Company — to extend the start of the tariff period from 2010, when the PPA was signed, to 2012, when it actually commenced operations. While the regulatory panel used the power under the Act to extend the tariff period — which would practically raise the tariffs, the court said that such decision, which has the effect of amending the PPA can be done only as per PPA’s own provisions, and not by invoking the regulator’s inherent power. Industry experts believe that the Supreme Court has raised its objections to arbitrary exercise of powers by regulators.

    In an unprecedented step, the Karnataka government has overruled a regulatory order that had reduced the tariff the state discom would pay for wind energy projects for which PPAs were signed before this fiscal year. The state has invoked special provisions under Section 108 of the Electricity Act to veto the decision of the KERC -- largely an autonomous body -- to insist that developers whose PPAs were signed before March 31 this year, should be paid ₹ 4.50/kWh and not ₹ 3.74/kWh as the KERC had laid down. The regulatory order had jeopardised many wind projects.

    Three-fourths of LED bulbs sold in India’s $1 billion market were found non-compliant with government’s consumer safety standards, market research firm Nielsen said in a survey. The report, based on a study of 200 electrical retail outlets across major cities like Mumbai, Hyderabad, Ahmedabad and New Delhi in July, found the products to be spurious and riskier, with the highest number of violations in the national capital. In August, the BIS had ordered LED makers to register their products with BIS for safety checks, in a market where smuggling of Chinese products is rampant. The findings showed that 48 percent of LED bulb brands had no mention of manufacturer’s address and 31 percent did not have a manufacturer’s name.

    Kerala state electricity board has approached the state power regulatory authority, seeking permission to recoup close to ₹ 750 million from consumers as power surcharge. The power surcharge is demanded for the additional liability of ₹ 746 million the board had incurred for purchasing an additional 3,632 million units of power to meet the demands during the first quarter of the financial year 2017-18, that is, from April 2017 to June 2017. As per the provisions in the electricity act and the regulations issued by the KSERC, the power utility KSEBL can approach the commission, seeking approval for recouping the additional expense on power purchase from consumers. As per KSERC (terms and conditions for determination of tariff) Regulations, 2014 KSEBL is eligible to recover the additional liability on account of variation in actual fuel cost over approved level through fuel surcharge at the rates approved by the commission. The board has also sought commission's approval for the purchase of 61.5501 million units power from BSES, Kochi.

    The Punjab government has ordered an audit of all PPAs signed between the previous SAD-BJP regime and private power companies.  It is alleged that the previous government had signed PPAs with private thermal plants at unreasonably higher rates. After reviewing all the agreements, the government would endeavour to rationalize power tariffs soon. The current government blamed the previous state government for the recent power tariff hike in the state. The SAD-BJP government had signed a tripartite MoU with the central government and Punjab State Power Corp Ltd to hike tariff every year in the state. As per the UDAY MoU, the previous government agreed to a 5% hike in power tariff for 2016-17 and 9% for 2017-18. Punjab was paying fixed charges at ₹ 1.35/kWh to Talwandi Sabo plant, ₹ 1.50/kWh to Rajpura plant and ₹ 1.93/kWh to Goindwal Sahib plant. However, fixed charges for Mundra thermal plant in Gujarat were ₹ 0.90/kWh and for Sasan thermal plant in Madhya Pradesh was ₹ 0.17/kWh only. Power tariff in the state during the previous regime of the Congress government from 2002 to 2007 was raised by 22.51% (average 4.5% per year. The SAD-BJP had effected a hike of 77.33% (average 7.73% per year) during their decade long tenure.

    MSEDCL consumers need not fear about paying surcharge to recover cost of extra power purchase done in the past three months to mitigate load-shedding. Calculations done by MSEDCL show that the average rate of extra power purchase was ₹ 3.89/kWh, which is well within the cap of ₹ 4/kWh imposed by Maharashtra Electricity Regulatory Commission. MSEDCL was forced to go for extra power purchase because its power suppliers, including MAHAGENCO, were not supplying contracted quantum due to coal shortage. The acute shortage of fuel had hit private as well as state-run plants. In order to prevent heavy burden on consumers, MSEDCL had preferred load-shedding in high-loss areas in August and September instead of buying power at exorbitant rates. From October, it started buying 1,450 MW on short-term basis, which ended load-shedding. This power purchase was reduced as soon as availability from regular sources increased. Nevertheless, power experts have flayed MSEDCL for load-shedding. According to them, the company should have foreseen the situation and arranged power accordingly.

    In a major relief to power consumers in the state, the Odisha Electricity Regulatory Commission rejected the petitions filed by OHPC and OPGC on power tariff hike and kept the power tariff rate unchanged in the state. Both OHPC and OPGC had moved the OERC seeking a hike in power tariff. They sought an average hike of ₹ 2/kWh. However, the petition filed by the Grid Corp of Odisha (Gridco), the bulk power supplier to the consumers, is yet to be heard by the commission. The power generating bodies had filed the review petitions four months after the power tariff was increased by ₹ 0.10/kWh on March 23. A high-level panel will look at possible checks on foreign firms investing in the Indian power sector, a move aimed at preventing cyberattacks on the electricity grid. This comes about two months after the eastern electricity grid suffered a malware attack, allegedly from China. Overseas firms eyeing investments in power plants in the country may have to undergo security clearances and may be mandated to employ majority Indian nationals including at top managerial positions. Most private power generators prefer Chinese power equipment that comes with cheaper line of credit. Chinese firms such as Dongfang Electric Corporation, Harbin Electric International Company and Shanghai Electric have bagged a chunk of equipment orders from Indian power developers in the past. Restricting foreign stake in power companies is a bad idea. Experts said that India must take steps that further its energy security goals, and should focus on making it possible for Indian companies to become competitive. Security checks make sense, especially given the vulnerability of power systems to outside attack. Rather than a diktat on hiring local workers and executives, the focus should be to invest in their training and skilling.

    Power tariffs are set to go up in Punjab with the regulator PSERC announcing a 9.33 percent hike in electricity rates for 2017-18. The hike will be implemented with effect from April 1 this year. However, increase in electricity charges will be recovered from consumers in instalments over a period of nine months, PSERC said. The consolidated gap of Punjab State Power Corp Ltd was worked out at ₹ 25.22 billion against power utility’s proposal of ₹ 115.75 billion. The hike in power tariff was announced after a gap of three years. The Commission this year decided to introduce a two-part tariff structure in the new tariff order for all categories except for agriculture sector. For industrial sector, the power tariff has been increased by 8.50 percent to 12 percent while for commercial category, the electricity rates have been jacked up by 8 percent to 11 percent.

    The government plans to give electricity consumers the freedom to choose the supplier by enacting a new law that will bring the long-awaited system similar to mobile number portability. It plans to table the necessary bill in the winter session of Parliament that begins in the third week of November, although it has faced resistance from states. Several state distribution companies are keen to protect their monopolistic position, without which consumers can shift to the suppliers they trust. The new bill will usher in competition, which analysts say will attract investors apart from giving consumers reliable supply at affordable rates and reducing losses. The proposal, to separate electricity supply and network maintenance services and introduce multiple licensees for a single area by amending the Electricity Act 2003, has been in works for last many years. The proposal is similar to mobile number portability where consumers can switch to a telecom operator of their choice. Currently, the power distribution utilities are responsible for operating and maintaining distribution system in their licensed areas. Segregation of the network maintenance and electricity distribution businesses is seen as an important reform for improvement in quality of electricity supply services. Earlier the government had planned specific timelines for opening up the retail electricity sector.

    Rest of the World

    A deal to merge the British retail power businesses owned by SSE and Germany’s Innogy could pave the way for more industry consolidation as pressures mount on the big suppliers in an increasingly crowded market. SSE and Innogy said they planned to join forces in Britain to create a company with $14 billion (£10.7 billion) in sales, which would reduce the country’s “Big Six” energy providers to five if the deal is approved by competition authorities. The new company would be the second largest player in Britain’s retail power market with a 23 percent market share, behind Centrica’s British Gas which has 27 percent.

    CNPC has launched a national power company to buy and sell electricity at lower prices, taking advantage of Beijing’s push to liberalize the country’s power markets. CPEEC will primarily source electricity from the wholesale market for CNPC and will also eventually sell power to external customers. CNPC consumes as much as 60 billion kWh each year. That is equivalent to the amount of power that Qatar and Denmark consumed combined in 2014. CPEEC unifies different regional units that CNPC set up to market power in some provinces that have launched power trading platforms. The National Development and Reform Commission has approved the platforms in 13 provinces and the city of Beijing during the past year. In October, CPEEC’s Guangxi branch signed a contract to buy power in the long-term and monthly power markets for CNPC’s Guangxi subsidiary in 2018, CNPC said.

    A unit of China’s Shanghai Electric Group Co Ltd is near closing a deal to take over a power transmission project in southern Brazil owned by a subsidiary of Eletrobras (Centrais Eletricas Brasileiras SA). The project in Rio Grande do Sul state requires roughly 3.3 billion reais ($1.0 billion) in investment and had originally been awarded to the Eletrobras unit Eletrosul (Eletrosul Centrais Eletricas SA). Eletrobras said that the companies had reached a non-binding agreement. The deal follows a spree of Chinese acquisitions in the Brazilian power sector. State Grid Corp of China has become Brazil’s second largest electricity transmission company while China Three Gorges Corp is the country’s No. 2 private power generation firm, according to China’s embassy in Brasilia.

    Swedish power group Vattenfall has created a new electricity networks business unit in the United Kingdom. The new subsidiary, Vattenfall Networks, is expected to start operations in 2018 and will support Vattenfall's investments and expansion in the British electricity market. The British energy regulator Ofgem has granted the electricity distribution operating license for the company. This marks the first step for the establishment of a new independent power distribution network. Vattenfall already has experience in operating power networks and in particular smart meters.

    A state-run Bangladeshi power generation company has signed a deal with Germany’s Siemens AG to boost its electricity production by more than 20 percent to help support the country’s economic development. North-West Power Generation Company Ltd of Bangladesh said the project would be implemented in three phases and completed by 2021. It aims to produce 3,600 MW of electricity. The project will be set up in Payra of southern Patuakhali district, 320 kilometre (200 miles) from Dhaka and from there power will be transmitted to the capital. At present Bangladesh has only 12.68 trillion cubic feet of gas and it will be exhausted by 2030 if no new gas fields are discovered and the consumption rate remains at the present level. At present Bangladesh has the theoretical capacity to produce power of up to 15,000 MW but it produces a maximum of 10,000 MW. It cannot produce to the optimum level of capacity due to a lack of natural gas and the fact that some plants need upgrade work. About 81 percent people of 160 million population in Bangladesh have access to power.

    NATIONAL: OIL

    ‘Decision on bringing petroleum under GST after considering revenue impact’

    November 21, 2017. The Madhya Pradesh (MP) government said it would decide on bringing petroleum products under the Goods and Services Tax (GST) after considering its impact on the revenue. Finance Minister Jayant Malaiya admitted that there is a shortfall in tax collection following the introduction of the GST, but added that the situation has been improving. On October 13, the state government reduced the Value Added Tax (VAT) on petrol and diesel by three and five percent, respectively. Besides, the additional cess of Rs 1.5 per litre on diesel was also withdrawn. Malaiya had then claimed that diesel had become cheaper in MP compared to neighbouring Rajasthan, Gujarat and Chhattisgarh, while also mentioning that about 34 percent of the commercial tax revenue comes from VAT and other taxes on petroleum products.

    Source: The Hindu Business Line

    ONGC buys 15 percent stake in Namibia offshore block from Tullow

    November 21, 2017. ONGC Videsh Ltd (OVL), the overseas investment arm of the country’s top explorer Oil and Natural Gas Corp (ONGC), said it had acquired a 15 percent stake in Namibia’s offshore Block 2012A from Tullow Oil. OVL executed the deal through its subsidiary ONGC Videsh Vankorneft Pte Ltd, it said.

    Source: Reuters

    India's MRPL seeks 1 mn barrels of high-sulphur US oil

    November 20, 2017. India’s Mangalore Refinery and Petrochemicals Ltd (MRPL) has floated its first tender to buy high-sulphur crude oil from the United States (US), a tender document showed. The refiner is seeking 1 million barrels of US crude for delivery between February 1-15. The tender will close on November 28 with bids valid up to November 30. Other state refiners such as Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) have also bought US oil in recent months.

    Source: Reuters

    Oil Minister asks experts to cut fuel import dependency by 10 percent

    November 17, 2017. Oil Minister Dharmendra Pradhan asked geo-scientific community to reduce oil and gas import dependency by at least 10%, and ensure energy accessibility as well as affordability for entire spectrum of people to fulfill the vision of Prime Minister Narendra Modi. Pradhan said the country ranks third in energy consumption in the world and with the efforts of scientists exploration and production (E&P) industry was growing. He said the sector is a priority of the government and the time was ripe for energy to synergy. He said that revenue collection increased from 1 lakh crore to 2 lakh crore after he took over the charge in the ministry. He emphasised on the importance of oil sector in India’s energy ecosystem and its role in national economy.

    Source: Business Standard

    India’s oil import bill seen rising 29 percent to $85-90 bn current fiscal

    November 16, 2017. India’s crude oil import bill jumped over 20 percent to $56.25 billion in the first seven months (April-October 2017) of the current financial year and is likely to rise up to $90 billion by March 2018 – a 29 percent increase over last fiscal. The swelling oil bill could further impact the already widening trade deficit and push up inflation. India’s trade deficit widened to its highest in nearly three years in October, government data showed. Higher crude price, coupled with a more than a quarter jump in volumes from a year ago pushed petroleum import bill to $9.2 billion in October. Any further increase in oil bill will add pressure on the country’s trade deficit which widened to $14 billion for the month of October, an increase of 26 percent as compared to the corresponding month a year ago, primarily on the back of a 28 percent increase in oil import bill. Crude oil and products were responsible for 25 percent of the country’s total import bill of $37 billion in the month of October.

    Source: The Economic Times

    NATIONAL: GAS

    India's GAIL to skip mid-term LNG deals for 2018 due to US imports

    November 21, 2017. GAIL (India) Ltd will skip medium-term liquefied natural gas (LNG) deals for 2018 as it starts getting supplies from its US (United States) portfolio from February. GAIL has signed contracts for sourcing up to 5.8 million tonnes of LNG from the US.  The company is also likely to cut its spot purchases once volumes from the United States begin. In 2018 GAIL expects to obtain close to 80 cargoes from the US. The company currently sells close to 35 million cubic metres per day (mcmd) of super-cooled gas, of which close to 17 mcmd is procured through medium-term and spot purchases. India wants to raise the share of natural gas in its energy mix to 15 percent in the next few years from about 6.5 percent now. But price-sensitive customers in the South Asian nation forced renegotiation of the price of two long-term LNG deals. Pricing of US LNG is linked to a formula but other charges including freight to India add an extra $2-$3 per million British thermal units, leading to GAIL scouting for destination, time and volume swap deals. GAIL has swapped about 30 percent of its US volumes through destination swaps. The company has kept some US volumes for trading, while selling some through time-swap and direct sales in international markets. In March, GAIL signed its first time-swap deal with Swiss trader Gunvor to sell some of its US LNG. It has also sold some of the US volume to Shell. India’s gas demand could rise by about 10 percent in 2018/19 from about 140 mcmd now as the country expands capacity of power generation and fertiliser production. Oil Minister Dharmedra Pradhan asked state-run companies to boost supply of gas and alternate fuels in the states where use of petcoke and furnace oil is banned to cut emissions.

    Source: Reuters

    Industry pitches for bringing natural gas under GST

    November 16, 2017. More than four months after the launch of GST (Goods and Services Tax), the industry has pitched for inclusion of natural gas in the new indirect tax regime so as to help producers contain cost and aid in moving towards a gas-based economy. In letter to Finance Minister Arun Jaitley, industry body Ficci has said that keeping natural gas out of the GST is causing hardships and having adverse impact on the producers as it is increasing their costs. Currently, crude oil, petrol, diesel, jet fuel or aviation turbine fuel (ATF) and natural gas are not included in GST, which kicked in from July 1. Hence, while various goods and services procured by the oil and gas industry are subjected to GST, the sale and supply of oil, gas and petroleum products continue to attract earlier taxes like excise duty and VAT (Value Added Tax). Unlike other industries which can take credit for any tax paid towards furtherance of business, no credits on input GST will be available to the oil and gas industry leading to huge additional indirect tax burden. Currently, gas sales including CNG (compressed natural gas) and piped gas supplies attract lower VAT, ranging from 5 percent to 12 percent and inclusion of natural gas in GST should not result in any large revenue loss, it said. A GST based taxation for the natural gas sector would help the domestic gas producers to contain costs and also help spread use of natural gas which is 40 percent leaner than conventional fuels, it said. The chamber has requested the Centre and states to immediately consider covering natural gas under GST to avoid cascading effect and ensuring that the industries presently operating on natural gas do not get a "raw deal" under GST. Until introduction of GST on natural gas, the producers should get a refund of GST paid on all goods and services use din the exploration and production, it said.

    Source: The Times of India

    ONGC, Cairn bid for 41 O&G areas

    November 15, 2017. Oil and Natural Gas Corp (ONGC) and Vedanta Ltd emerged as the biggest bidders for oil and gas (O&G) blocks as they put in 41 out of 57 bids in India's maiden open acreage licensing regime auction that was shunned by several major global and domestic players. ONGC put in expression of interest to explore for oil and gas in 41 areas while Vedanta's oil unit, Cairn India, sought rights over 15 areas. Oil India Ltd (OIL) was the other main bidder, while private player Hindustan Oil Exploration Co (HOEC) bid for one area in a round that saw none of the big companies putting in EoI (Expressions of Interest). India in July opened 2.8 million square kilometre of sedimentary basins for oil and gas exploration under the Open Acreage Licensing (OAL) regime in a bid to raise domestic production and cut excessive dependence on imports.

    Source: Business Standard

    RIL prima-facie not complied with CBM policy norm: Oil ministry

    November 15, 2017. Reliance Industries Ltd (RIL) has prima-facie not complied with one clause of the government’s coal-bed methane (CBM) marketing policy because it sold the gas it produced to its own unit after participating in auctions, the oil ministry has found in its preliminary assessment. RIL said it has abided by CBM pricing policy’s stated objective of discovering the best possible price that maximises state revenue and royalty, which was achieved by its participation in the transparent auctions conducted by CRISIL. The policy allows sale of CBM to an affiliate only if another buyer is not found but RIL said it acted in line with the policy and has regularly informed the government about its actions. It said the CBM price discovered in the auction will also maximize royalty and profit-linked payments to the government under the CBM contract.

    Source: The Economic Times

    NATIONAL: COAL

    NCC-BGR Infra consortium bags coal mine project from NTPC

    November 21, 2017. Infra firm NCC Ltd said that the consortium formed by it and BGR Infra has bagged a project from NTPC Ltd to develop and operate around Rs 25,071 crore coal block in Chhattisgarh. The coal ministry allocated the coal block located in Chhattisgarh. The dry fuel from this block will be put to captive use for NTPC's 4,000 MW Lara Power Project. A special purpose vehicle to be formed between NCC Ltd and BGR Mining & Infra Ltd with a sharing ratio of 51:49 will execute the project. The peak rated capacity of the mine is 18 million tonnes per annum which is to be achieved by the fifth year of commencement of operation, it said. The coal production from the block is likely to being in FY'20.

    Source: Business Standard

    Government plans eco-friendly coal transportation in covered trucks, rail wagons

    November 21, 2017. Scurrying for solutions to fight the toxic air pollution, the government has said it plans to transport coal in covered rail wagons and trucks across the country. Ferrying of coal in uncovered vehicles and rail wagons is said to be one of the key reasons behind high pollution levels along the transportation route from coal mine or importing sea port to user plants like power generation houses. For the third straight year, in the month of November, thick toxic smog enveloped the national capital region (NCR), leading to what has been called a health emergency. Coal-fired power plants are said to be one of the sources of pollution. India generates about 65 percent of its electricity using coal as fuel. It is abundantly available in the country and is cheaper than alternate fuel sources like natural gas and liquid hydrocarbons. Coal and Railway Minister Piyush Goyal said the government is consistently working to see how the impact of coal-based power plants on environment is reduced. While power plants follow stringent standards, newer equipments like Flue-gas desulphurisation (FGD), which removes sulphur dioxide, will take time to be installed, he said. But, to begin with, transporting coal in covered wagons and trucks is being done, he said.

    Source: Business Standard

    India's US coal imports highest since 2015, seen up further on petcoke ban

    November 20, 2017. India’s coal imports from North America quadrupled to 2.1 million tonnes in October from a year ago, the highest since at least January 2015, data showed, and buyers are looking to boost purchases amid a domestic shortage of the fuel. A ban on the use of petroleum coke, a dirtier but better-burning alternative to coal, is spurring expectations India will buy even more coal from the United States (US) in coming months. Petcoke has been banned in some states around the Indian capital New Delhi which is battling heavy smog. But rising pollution in other Indian cities could lead to tougher restrictions such as a nationwide ban on use and imports of petcoke, with environmentalists requesting other states in the country to consider banning the use and import of the dirty fuel. Indian imports of North American coal stand at about 1.5 million tonnes from November 1 to 20, ship tracking data on Thomson Reuters Eikon showed, already more than 70 percent of last month’s purchases.

    Source: Reuters

    Coal dispatches from CIL to power sector rise 18 percent to 39.9 mt in October

    November 19, 2017. Coal dispatches from state-run miner Coal India Ltd (CIL) to power sector improved by 18 percent to 39.9 million tonnes (mt) in October, data showed. The power ministry earlier this month had also stated that coal stocks at power plants were "much better" and dry fuel inventories had started building up at the plants. CIL had supplied 33.8 mt of dry fuel to power producers in October 2016. The dispatches by the world's largest coal miner rose by 9.6 percent to 248.9 mt in the April-October period of this financial year over 227 mt in the year-ago period. The supply of coal by Singareni Collieries Company Ltd (SCCL), a state-owned coal mining company, also registered an increase of five percent to 4.2 mt, over 4 mt in the same month of the previous financial year. Power Secretary Ajay Kumar Bhalla had earlier in the month said that the number of plants facing acute coal shortage had come down to 12-13. The coal ministry earlier had blamed power producers for low stocks of dry fuel at their plants. Karnataka Chief Minister Siddaramaiah had asked the Centre to ensure adequate supply of coal and early allocation of a coal block situated in Odisha to meet the severe fuel shortage being faced by power units in his state. Rajasthan Urja Vikas Nigam in September had said that power generation at thermal power stations reduced by 2,700 MW due to shortage of coal, forcing it to resort to load shedding in the state.

    Source: Business Standard

    CIL mulling increase in prices to meet rise in wage costs

    November 17, 2017. Coal India Ltd (CIL) is considering raising prices to meet the cost of the 20% wage hike. It last raised prices by 10% in May last year. The company said the wage bill puts an additional burden Rs 5,800 crore annually, and another Rs 9,500 crore needs to be spent on expansion. Further, the company has decided to sell more coal to power plants, which gets it lesser revenue than other buyers. Coal sold through spot e-auctions earns the highest while that sold to the non-power sectors earns 20% higher revenue. In the second quarter of the current financial, CIL’s profit halved to Rs 368.88 crore against Rs 612.44 crore a year ago.

    Source: The Economic Times

    NATIONAL: POWER

    Karnataka government fears power crisis before assembly elections

    November 19, 2017. With Karnataka heading to a power crisis triggered by coal shortage, the Siddaramaiah government suspects a political conspiracy behind the crisis that threatens to explode in the run-up to the assembly polls. The Chief Minister (CM) Siddaramaiah said he would write to the Centre to help Karnataka avert a power crisis during the summer. The state has thermal power stations at Raichur and Ballari, both generating around 30 million units of power daily. While the Raichur station requires 30,000 tonnes of coal per day, the Ballari station requires 22 tonnes per day. As Karnataka does not have coal mines, it sources coal from the Western Coal Fields Ltd in Maharashtra, Mahanadi Coal Fields in Odisha and Singareni Coal Mines in Telangana. However, there was a disruption in supply of coal from these companies for April-September this year and it had crippled power generation. In October second week, the state had urged the Union coal ministry to ensure supply of coal from the three mines that come under it.

    Source: The Times of India

    Meghalaya government cancels power project pacts with private firms

    November 18, 2017. The Meghalaya cabinet has cancelled power project agreements with two private companies over non-initiation of work. The government also approved a proposal for allotting 210 MW Myntdu Leshka Hydro Power Project - Stage II and 15 other smaller power projects to the Meghalaya Energy Corp Ltd (MeECL). The Chief Minister (CM) Mukul Sangma said the decision was taken as these firms did not show any interest in proceeding with the projects. The modalities to ensure proper cash flow to MeECL for the development of Myntdu Leshka Hydro Power Project have been worked out, he said. The cabinet has also approved the establishment of renewal energy projects in line with the recommendations of the empowered committee. These projects will be set up at three locations - Byrnihat in Ri-Bhoi district, Mendipathar in North Garo Hills and Ampati in South West Garo Hills, he said. The CM expressed hope that these projects will require minimum land and said the power scenario in the state will transform soon.

    Source: Business Standard

    ‘Pre-paid power meters across Haryana in 2 yrs’

    November 17, 2017. Power meters in Haryana are set to enter the mobile phone pre-paid mode. The Haryana Power Utilities have firmed up plans to install pre-paid electricity meters at houses in the state. Consumers would get power according to the amount of the pre-paid recharge done by them. They would also be able to shut their meters if and when required. In case of no usage, the recharge amount would remain in their account and the meter would be recharged on the pattern of pre-paid mobile. Consumers would also be relieved of the charge levied on making online payment of electricity bills. Disclosing this in Sirsa, chairman-cum-managing director of Haryana Power Generation Corp Ltd (HPGCL) Shatrujeet Singh Kapoor said about 10 lakh pre-paid electricity meters had already been purchased under this scheme, and work to install them would soon be given to an agency. In the next two years, the meter at each house would be replaced with a smart meter. This would help address the complaints pertaining to meter-reading. Kapoor said the HPGCL had taken effective steps to redress the grievances of people. 'Bijli Sudhar Samiti' would be constituted in each village and cooperation of gram panchayats would be sought in meeting the challenges faced by the corporation. Assistance of people would also be sought in the villages to bring down the line losses. The corporation had been making efforts to increase power supply by reducing line losses, he said. As many as 280 villages in the state were being supplied power on the urban pattern.

    Source: The Times of India

    NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    India needs over $200 bn of investment in renewable infrastructure

    November 21, 2017. India is on track to catalyse $200-300 billion of new investment in its renewable energy infrastructure in the next decade with global capital inflows playing an increasingly crucial role, Tim Buckley, Director of Energy Finance Studies Australasia with the Institute for Energy Economics and Financial Analysis (IEEFA), said. At present, India relies on thermal power generation for 80 percent of its electricity, while hydro supplies a significant 10 percent and renewables just seven percent. However, India has set an ambitious but achievable national target of 275 GW of renewable capacity installed by 2027. Indeed, the tipping point may have been 2016-17, when the net thermal capacity plummeted and renewable installs more than doubled, Buckley said in his report "Indian electricity sector transformation" made public. The report examines the rapid transformation in India's electricity market, showing how renewable energy and energy efficiency measures can help the country minimise the growth of coal-fired electric generation. Electricity demand in India is expected to double over the coming decade, and how this electricity will be generated is important for both India and the world. Clearly India can look forward to further renewable energy tariff reductions medium term, the report said. While renewables are expected to surge, IEEFA forecasts that net thermal power capacity additions are likely to remain below five GW annually in the next decade, held in check by increased retirements of highly polluting, end-of-life sub-critical coal-fired power plants.

    Source: Business Standard

    Schneider provides solar lights to 350 families in Kargil

    November 21, 2017. Schneider Electric India said the firm, along with non-government organisations, has provided solar lights to 350 households in Kargil, Jammu and Kashmir. Under its rural electrification project, SEIF (Schneider Electric India Foundation) & SHIF (Spreading Happiness InDiya Foundation) contributed Mobiya range of portable solar lights to the households of Darchik and Garkone villages in Kargil, Schneider Electric India said. The foundations organised portable solar light distribution programme at primary school of Darchik village and Jamyang School in Leh district. This solar lighting system could benefit the residents, especially children, with improved lighting for late night studying and safety for night time transportation. The Mobiya range of portable products for lighting and mobile charging is an energy-efficient and eco-friendly LED (light emitting diode) lamp that provides up to 48 hours of lighting with one day of solar charge.

    Source: Business Standard

    Green energy sector facing headwinds on low bidding for projects: ICRA

    November 21, 2017. The bidding activity for wind and solar energy projects has slowed down in the current calendar year in terms of awarded project capacity, research and ratings agency ICRA said. The solar project capacity awarded in 2017 stood at 3.75 GW by October end as against 7.2 GW in the corresponding period of 2016. ICRA said state utilities are preferring reverse auction for wind projects owing to lower tariffs than feed-in tariffs approved by SERCs (State Electricity Regulatory Commissions) varying from Rs 3.74 per unit to Rs 5.76 per unit. Solar power tariffs too have come down to Rs 2.44 per kilowatt hour (kWh) in May 2017 for Bhadla solar park in Rajasthan. The agency also said the recent increase of around 15 percent (or 6-7 cents per watt) in imported PV (photovoltaic) module prices, if sustained, could have an adverse impact on the viability of projects with tariffs lower than Rs 3.5 per unit. The slowdown in the bidding activity for solar projects comes on the back of GST (Goods and Services Tax) roll-out from July 2017, upward pressure on PV module prices, and finalization of new bidding guidelines for award of solar projects. India requires 63 GW of additional renewable energy through 2022. Within this, ICRA estimates the share of wind and solar energy capacity addition requirement to be at least 35 percent and 55 percent, respectively.

    Source: The Economic Times

    ReNew Power to buy wind power business of KC Thapar Group for Rs 10 bn

    November 21, 2017. Sumant Sinha-led ReNew Power is making a Rs 1,000 crore acquisition of wind power assets of the KC Thapar Group, helping India’s biggest renewable energy player strengthen its position in the rapidly consolidating sector. ReNew Power will acquire three fully operational plants with a total capacity of 103 MW in Andhra Pradesh in one of the biggest deals in renewable energy sector this year, as the market leader shifts its strategy from primarily organic growth to big acquisitions. Re-New Power competed with a dozen Indian and foreign bidders for the assets.

    Source: The Economic Times

    India, World Bank ink $100 mn loan agreement for solar parks

    November 20, 2017. India and the World Bank signed a $100 million loan and grant agreement to help the country increase its solar power generation capacity. The loan for "Shared Infrastructure for Solar Parks Project" would go towards financing solar parks in the country, the finance ministry said. The funding has two components: a $75 million loan from the International Bank for Reconstruction and Development (IBRD), which has a five-year grace period and a maturity of 19 years, and a $23-million loan from the Clean Technology Fund (CTF) with a 10-year grace period, and a maturity of 40 years. The second component of $2 million is an interest-free CTF grant. According to the World Bank, the first two solar parks are in Rewa and Mandsaur districts of Madhya Pradesh with targeted installed capacities of 750 MW and 250 MW. Other states where potential solar parks could be supported under this project are in Odisha, Chhattisgarh and Haryana.

    Source: Business Standard

    In Pune, CME to set up solar panels to generate 5 MW electricity

    November 20, 2017. The College of Military Engineering (CME) will soon have a 5 MW solar power system as part of the larger plan to meet its power requirement and also contribute to the national grid. In September this year, the Pune zone chief engineer of the Military Engineering Services (MES) released a notice calling for tenders relating to the 5 MW solar power system at CME. The project is estimated to cost Rs 33 crore. The CME wants to establish its own solar system to generate adequate power not only to cater to its own electricity needs but also to the national grid. The project has been sanctioned in two phases. CME's current requirement is around 3 MW. The college conducts about 130 courses for commissioned and junior commissioned officers (JCO) every year and trains over 1,450 officers, 2,200 JCO and 175 nationals from friendly countries. In January, CME authorities had claimed that the solar power project was part of several new developments and expansion initiatives and that the authorities wanted to eventually have a 12 MW solar power system over course of the next four to five years. On reaching the 12 MW capacity, CME would be in a position to contribute surplus power to the national grid, the authorities said.

    Source: The Times of India

    Agra Cantonment railway station to soon become solar powered

    November 17, 2017. In the railway ministry's continuing bid to go solar, the railway division here is installing a 375 Kilowatts (kW) solar power plant consisting of 1,191 rooftop panels at the Agra cantonment railway station. After Allahabad and Kanpur stations, Agra Cantonment station, in the NCR region, will harness solar energy under a public-private partnership (PPP) model. According to a conservative estimate, the Agra railway division is likely to save Rs 5 lakh and 60,000 kilovolt electricity annually with this initiative. The private firm is expected to provide power at Rs 4 per unit by the use of solar cell panels. The Agra division currently pays around Rs 8 per unit for conventional electricity. Earlier, the north central railway zone had installed similar rooftop solar panels at Allahabad station, Kanpur station, several hospitals, the divisional railway manager offices and in residences of government officials. Under a green initiative, in 2014, the Indian railways had proposed to install solar power plants of about 8.8 MW capacity at 200 railway stations, 26 railway office buildings and 2,000 level crossing gates throughout the country under railway funding. The railways will also install windmill plants, with about 40% subsidy from the ministry of new and renewable energy.

    Source: The Times of India

    NHPC could bid for Nepal's $2.5 bn hydropower project pulled from China

    November 17, 2017. Indian power company NHPC Ltd could bid for a $2.5 billion hydropower project in Nepal, its Chairman Balraj Joshi said, after Kathmandu cancelled a deal with China Gezhouba Group Corp. China and India jostle for influence over infrastructure projects in Nepal and the deal with China was scrapped after it was criticised for being handed to the company without any competitive bidding. NHPC could look at developing what will be the country's biggest hydropower plant, its Chairman said. Among other projects in Nepal, a 750 MW project is to be built on the western part of the country by China's state-owned Three Gorges International Corp, while two Indian companies - GMR Group and Satluj Jal Vidyut Nigam Ltd - are set to build one 900 MW hydropower plant each, mainly to be exported to India.

    Source: Business Standard

    Indian reaffirms commitment to achieve 175 GW renewables target at CoP23

    November 17, 2017. Reaffirming India’s resolution to go ahead with the set clean energy agenda with determination and clarity, Environment Secretary C K Mishra said the country has been pursuing its goals of setting up renewable energy capacities and changing its energy mix, and will continue to do so to provide equitable sustainable development. He was speaking at a panel discussion on ‘Innovative Financing and Market Evolution to achieve 175 GW renewables by 2022’ organized by the Ministry of New and Renewable Energy (MNRE) in partnership with Confederation of Indian Industry (CII) at Conference of Parties (CoP) 23 in Bonn, Germany. Stressing upon the need to push for higher research in storage technology which could compliment the infirm renewable power, Ajay Mathur, Director General of The Energy and Resources Institute (TERI) said during the discussion there was an imminent need to look at bringing down storage costs.

    Source: The Economic Times

    Lucknow is now country’s second-most polluted city

    November 16, 2017. The air quality of all cities in the country improved except those in Uttar Pradesh (UP), where two cities remained 'severely' polluted. The state capital was the second-most polluted in the country, while Ghaziabad topped the list with the Air Quality Index (AQI) of 418. According to the AQI data released by Central Pollution Control Board (CPCB), the pollution levels in Lucknow went down by 80 units but it remained under severely polluted category with AQI 404. AQI of 500 is the end of the scale and means a public health emergency. Only Lucknow and Ghaziabad were under the 'severe' category on the CPCB list. Both cities were more than 50 units more polluted than the national capital where AQI was 361. It figured in the 'very poor' category. A dip in pollution levels was recorded in other cities of UP which had earlier figured in the severely polluted category. Kanpur and Agra improved by 31 and 48 units respectively. According to CPCB, the concentration of PM2.5 in Lucknow was seven times higher than the permissible limit of 60 micrograms/cubic metre, set by the National Ambient Air Quality Standard. The most polluted location in Lucknow was Talkatora.

    Source: The Times of India

    UP CM orders complete ban on garbage burning to curb pollution

    November 16, 2017. Uttar Pradesh (UP) Chief Minister (CM) Yogi Adityanath, in a cleanliness drive, directed the municipal corporation of the state to implement complete ban on garbage burning in urban areas. He also focussed on water sprinkling on roads and to not burn crop residue, creating awareness of the same in rural areas. The CM also directed to run an awareness campaign till January 15 on air pollution, through FM/community radio. He also directed to take steps to deal with air pollution in order to create artificial rain using latest technology in Lucknow, with the help of Indian Institute of Technology (IIT), Kanpur. Meanwhile, in the national capital, the content of particulate matter, PM 2.5, in the air has been quite high, often crossing 500, while the safety limit is 50. The PM 2.5 is responsible for respiratory problems and reduced visibility. Delhi Chief Minister Arvind Kejriwal and his Haryana counterpart, Manohar Lal Khattar, promised to jointly address the toxic smog situation that has beset the northern India.

    Source: The Economic Times

    Solar companies protest Tamil Nadu’s move to not pay for excess power

    November 15, 2017. Solar developers are up in arms over Tamil Nadu’s decision not to pay for power they produce by achieving higher efficiencies, which they claim has already cost them over Rs 100 crore. In a memorandum to the Tamil Nadu Generation and Distribution Co (TANGEDCO), the National Solar Energy Federation of India (NSEFI) has protested its decision not to pay for the excess power generated by any solar plant which exceeds a capacity utilisation factor (CUF) of 19%. CUF is the ratio of the actual output from a solar plant to the maximum possible output from it under ideal conditions. Most solar plants in India achieve an average CUF of 15-19%, depending on the quality of the plant and the strength of the solar radiation, but have on occasions, especially in sunshine-rich states like Rajasthan, crossed 20%. Tamil Nadu began conducting solar auctions only in mid-2016 before which solar tariffs were fixed by TNERC (Tamil Nadu Electricity Regulatory Commission). The first TNERC order, in September 2014, set the tariff at Rs 7.01 per unit, while the second, in March 2016, lowered it to Rs 5.10 per unit. All the 1600 MW odd of solar projects currently supplying power to TANGEDCO do so at tariffs fixed by TNERC, since the projects won through auctions have yet to be completed. They are paid either Rs 7.01 per unit or Rs 5.10 per unit, depending on whether they were commissioned before March 2016 or after.While passing its orders, TNERC had also set down the parameters it used to arrive at the tariff, and assigned estimated values to each parameter. These included capital cost, operation and maintenance cost, interest on working capital, depreciation and many more, including the CUF expected. In both the orders, it estimated the CUF at 19%. TANGEDCO has interpreted this to mean that power produced in excess of a CUF of 19% will not be paid for.

    Source: The Economic Times

    REC to provide Rs 140 bn loan for 2.4 GW Patratu thermal power plant

    November 15, 2017. Rural Electrification Corp (REC) will provide Rs 14,000 crore debt to set up 2,400 MW thermal power plant of power giant NTPC's arm Patratu Vidyut Utpadan Nigam Ltd (PVUNL) in Jharkhand. The project cost of Rs 18,668 crore is funded in debt: equity ratio of 75:25 and Rs 14,000 crore is sanctioned by REC as sole lender for the project. PVUNL is a subsidiary of NTPC holding 74 percent stake in the company and 26 percent of stake is held by Jharkhand Bijli Vitran Nigam Ltd.

    Source: Business Standard

    INTERNATIONAL: OIL

    South Africa eyes BRICS partners to build new $10 bn refinery

    November 21, 2017. South Africa wants the national oil companies of its BRICS partners to help build a new 400,000 barrel per day refinery that will be structured by senior debt and equity, Energy Minister David Mahlobo said. The idea of building a refinery in Africa’s most industrialized economy has been under consideration for almost a decade. The cost of the new refinery was estimated at $10 billion in 2010. In May, Mahlobo’s predecessor Mmamoloko Kubayi-Ngubane said South Africa, a net importer of refined oil products, would consider West Africa and the Middle East, including Iran, for potential partners on a new refinery project. She said cabinet expects to decide by December whether to build the refinery that has never came to fruition because of a lack of equity partners. Mahlobo said some refinery owners in South Africa wanted to exit the domestic market, citing the high costs of upgrading refineries to meet cleaner fuel specifications. Royal Dutch Shell, BP, Total and Sasol are among the main refinery operators in Africa’s most industrialized country.

    Source: Reuters

    BP, Eni interested in developing Iraq's Majnoon oilfield

    November 21, 2017. BP and Eni are among companies that have expressed an interest in developing the giant Majnoon oilfield which Royal Dutch Shell plans to leave next year. Shell has agreed to exit the Majnoon field in southern Iraq and hand over its operation to the Basra Oil Company by the end of June 2018. BP is developing Rumaila, Iraq’s biggest oilfield, in the south. The field currently produces around 1.45 million barrels per day (bpd). Eni operates the 4 billion barrel Zubair oilfield in the south, which currently produces around 430,000 bpd. Iraqi Oil Minister Jabar al-Luaibi said that Chevron and Total were among the companies that had expressed an interest in developing Majnoon. Iraq is developing the Majnoon field itself until it can find a foreign partner.

    Source: Reuters

    CME to list WTI-Dubai crude futures as US-Asia oil trade flow grows

    November 21, 2017. CME Group Inc said it will list a new futures contract that prices the spread between West Texas Intermediate (WTI) and Middle East benchmark Dubai as the flow of US (United States) crude to Asia rises. The January WTI-Dubai crude oil futures contract could start trading on December 18 pending all relevant Commodity Futures Trading Commission regulatory review periods, CME said. Each contract will represent 1,000 barrels.

    Source: Reuters

    Iraq's southern oil exports rise to near record in November

    November 20, 2017. Oil exports from southern Iraq have risen by 150,000 barrels per day (bpd) this month to close to a record high, according to shipping data and an industry source, as OPEC (Organization of the Petroleum Exporting Countries)’s second-largest producer seeks to offset a shortfall from the north. Southern Iraqi exports in the first 20 days of November averaged about 3.50 million bpd, up 150,000 bpd from October, according to shipping data. The increase follows a decline in output in northern Iraq since mid-October, when Iraqi forces took back control of fields from Kurdish fighters. The rise brings southern exports within a whisker of the record high of 3.51 million bpd seen in December 2016, the last month before an output cut agreement led by the OPEC took effect. Northern exports have averaged about 250,000 bpd so far in November, according to shipping data and the industry source, down from an estimated 450,000 bpd in October and levels of more than 500,000 bpd in earlier months this year. The drop in supplies from Iraq comes as OPEC, Russia and other producers are cutting output by about 1.8 million bpd until March 2018 in an effort to get rid of a glut and support prices. Iraq has adhered less to the supply deal with non-OPEC producers than OPEC peers such as Saudi Arabia and Kuwait, but the drop in Kirkuk output helped to boost Iraqi and overall compliance with the deal. The bulk of Iraq’s oil is exported via the southern terminals. Smaller amounts are shipped from the Kirkuk fields in northern Iraq via Ceyhan in Turkey.

    Source: Reuters

    Russia to determine position on oil output deal in November: Energy Minister

    November 20, 2017. Russian Energy Minister Alexander Novak said Russia would determine its position on the possible extension of a global deal to cut oil output later in November. Novak said he would discuss the possible deal extension with Russian oil producers.

    Source: Reuters

    Market to remain oversupplied by March 2018: Saudi Energy Minister

    November 17, 2017. The world will still have a surplus of oil by end-March next year, Saudi Arabia’s Energy Minister Khalid al-Falih said, signaling a willingness to extend output cuts when OPEC (Organization of the Petroleum Exporting Countries) meets at the end of November on whether to extend caps well into 2018. He said OPEC will have a better picture closer to the meeting on market fundamentals that will help in making the decision. Asked how OPEC would deal with potential supply shocks to the market including from OPEC member Venezuela where oil production hit a 28-year low recently, he said OPEC’s reaction would depend on the length of the disruption. But in the United States, he said, Saudi Arabia deliberately trimmed its supply because it was an oversupplied market.

    Source: Reuters

    US to account for most world oil output growth over 10 yrs: IEA

    November 16, 2017. The United States (US) is expected to account for more than 80 percent of global oil production growth in the next 10 years and it will produce 30 percent more gas than Russia by that time, he International Energy Agency (IEA) said. IEA head Fatih Birol said the United States, whose upstream energy industry has seen a resurgence with the development of fracking technology, would become the “undisputed leader of oil and gas production worldwide.” On the broader market, he said the IEA expected oil markets to rebalance in 2018 if oil demand remained “more or less” as robust as it was now and if the Organization of the Petroleum Exporting Countries (OPEC) and its allies extended output cuts. OPEC and other producers are expected to extend production cuts beyond a March deadline in a bid to cut oversupply. The Paris-based IEA cut its oil demand forecast in its latest monthly report by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd and 1.3 million bpd, respectively. According to OPEC’s own numbers, inventories were 154 million barrels above the five-year average in September. OPEC states have said they want to reduce stocks to their five-year average.

    Source: Reuters

    Ecuador drops plan to request exemption from OPEC cut: Oil Minister

    November 16, 2017. Ecuador has abandoned for now a plan to ask OPEC (Organization of the Petroleum Exporting Countries) for an exemption from its share of the organization’s oil production cut as crude prices are reacting positively to the group’s measures, the country’s Oil Minister Carlos Perez said. Ecuador, one of the smallest producers in the OPEC, said that it would request an exemption from the joint output cut when the group meets in Vienna. It said then that it could even consider leaving the cartel for two years to avoid reducing its production. OPEC, Russia and nine other producers plan to meet on November 30 to decide whether to extend a 1.8 million barrel per day (bpd) cut beyond March in an attempt to eradicate a supply glut that has weighed on oil prices. Perez said Ecuador continues negotiating with China’s PetroChina and Unipec and Thailand’s PTT PCL to change the terms of oil-for-loan agreements signed by the country. Perez said that major repairs at the Esmeraldas refinery’s fluid catalytic cracker (FCC) are scheduled to start in March.

    Source: Reuters

    US crude oil stocks soar 6.5 mn barrels in unexpected build: API

    November 15, 2017. US (United States) crude and gasoline stockpiles rose unexpectedly, while distillate inventories drew, industry group the American Petroleum Institute (API) said. Crude inventories rose by 6.5 million barrels in the week to November 10 to 461.8 million, compared with analysts’ expectations for a decrease of 2.2 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.8 million barrels, API said. Refinery crude runs fell by 289,000 barrels per day (bpd), API data showed. Gasoline stocks rose by 2.4 million barrels, compared with analysts’ expectations in a poll for a 919,000 barrel decline. Distillate fuels stockpiles, which include diesel and heating oil, fell by 2.5 million barrels, compared with expectations for a 1.3 million barrel drop, the API data showed. US crude imports rose last week by 652,000 bpd to 8.1 million bpd.

    Source: Reuters

    Petrobras oil output in Brazil hits 2.16 mn bpd in October

    November 15, 2017. Brazil’s state-controlled oil company, Petróleo Brasileiro SA (Petrobras), said that oil production in the country in October reached 2.16 million barrels per day (bpd) on average, stable compared with September. The firm said natural gas production in Brazil in October reached 80.3 million cubic meters/day, 1.5 percent less than in September.

    Source: Reuters

    INTERNATIONAL: GAS

    Ancala acquires Apache's two North Sea gas pipeline assets

    November 20, 2017. Independent UK (United Kingdom)-based infrastructure investment fund Ancala Partners has finalised its acquisition of Apache Corp’s interests in two North Sea gas pipeline assets for an undisclosed sum, it said. Through its North Sea-focused mid-stream oil and gas acquisitions platform, Ancala took Apache’s 30.28 percent stake in the Scottish Area Gas Evacuation (SAGE) System and its 60.58 share of the Beryl Gas Pipeline. The SAGE system comprises a 323 kilometre (200 mile) pipeline and gas processing terminal at St. Fergus near Aberdeen in Scotland, where gas from nine offshore fields is treated.

    Source: Reuters

    Dutch court rejects government's Groningen gas production plan

    November 15, 2017. The highest Dutch administrative court has rejected the government’s plan to cap production at a major gas field that has caused damaging earthquakes, saying it might be possible to cut output further without endangering supplies. The decision adds another chapter to the long fight over gas production in the northern Dutch province of Groningen, where citizens accuse the government of endangering their lives while protecting gas revenues. The government had proposed capping production at the Groningen gas field at 21.6 billion cubic meters (bcm) per year over the next five years, after a 2015 report found production was risking lives. That would be down from 24 bcm in the production year just ended and 39.4 bcm in 2015-16. But the Council of State said the government had failed to properly substantiate its decision, describing it as “unacceptable” to potentially keep production unchanged for five years when it might be possible to further reduce demand. The Council ordered the government to review its decision within the next 12 months, but production could be maintained at 21.6 bcm for the year through October 1, 2018.

    Source: Reuters

    Vietnam inks gas purchase deals to boost supplies post-2023

    November 15, 2017. Vietnam could receive a significant boost to its natural gas supplies as soon as 2023, allowing it to expand its power and petrochemical sectors, after it signed two agreements during APEC (Asia-Pacific Economic Cooperation) summit to buy gas at home and from Indonesia. Against the backdrop of the Asia-Pacific Economic Cooperation meeting of heads of government that took place in Danang, Vietnam, state oil company Petrovietnam agreed to buy gas from the Tuna Block in Indonesia’s north Natuna Sea. It signed up to take gas from the Vietnam-Russia joint venture Rong field off Vietnam’s shore. Vietnam’s gas production could surge to about 2,400 million standard cubic feet per day (mmscfd) in 2025, up from the current 800 mmscfd, when other new supplies and Ca Voi Xanh come online, Andrew Harwood, research director of Asia Pacific upstream oil and gas at ‎Wood Mackenzie, said. Located in the South China Sea, Blue Whale is Vietnam’s biggest gas project with an estimated 150 billion cubic metres in reserves.

    Source: Reuters

    LNG giant Qatar's empty shelves pose upside risk for Asian gas prices

    November 15, 2017. Gas exporting giant Qatar has all but sold out of winter supply after committing its spare output to China and South Korea, a development that could tighten Asia’s gas markets as the peak demand season bites. Doha’s bumper sales will also ring alarm bells for other regions reliant on Qatari liquefied natural gas (LNG) such as Europe and may further boost Asian spot prices, which have already surged 55 percent since September, traders said. Despite widespread forecasts of an LNG glut, China’s shift to gas this year as it moved millions of households away from coal to combat smog has lifted its LNG imports by 43 percent and squeezed global gas markets. But some traders are split on the sustainability of the rally, citing weather, crude oil price movements and the degree of residual demand left in China as big unknowns that could potentially dampen prices. Normally Qatar plays the role of swing supplier to global LNG markets, churning out cargoes to cover demand spikes. Qatar’s absence from spot markets may be felt in higher LNG prices which some traders predict may hit three-year highs above $11 per million metric British thermal units (mmBtu) this winter, from $9.40 per mmBtu currently. The shift in sentiment has bulls wondering whether forecasts of global LNG markets re-balancing in the early 2020s may not be wide of the mark given the quickening pace of Chinese consumption growth.

    Source: Reuters

    INTERNATIONAL: COAL

    China likely to complete coal capacity reduction target by 2018

    November 21, 2017. China is likely to complete its coal capacity reduction target by 2018, the National Development and Reform Commission (NDRC), China’s top economic planner, said. China is expected to cut the total number of coal mines to 7,000 next year, from 10,800 in 2015, NDRC said. Coal supplies will be ample in 2018 with many coal mines increasing their production capacity. The domestic market will be balanced next year as China keeps importing coal and increases domestic output.

    Source: Reuters

    China's coal miners to keep contract prices for next year stable

    November 20, 2017. China’s biggest coal producers China Energy Investment Group and China National Coal Group (ChinaCoal) will keep their 2018 coal contract prices at the same level as 2017. After rounds of discussions between policy makers, major producers and utilities, the producers will set the price at 535 yuan ($80.72) per tonne. The new level has disappointed utilities just one week before China’s annual coal trade meeting in the northern port city of Qinhuangdao from November 21 to 23 when producers and utilities will negotiate volumes for next year. Last year, the National Development and Reform Commission (NDRC), China’s top economic planner, asked coal producers to sell at 535 yuan per tonne to bring down rising prices. Analysts said rolling the policy over to this year will not help lower coal prices.

    Source: Reuters

    Chinese company starts construction of Serbian coal-fired power plant

    November 20, 2017. A Chinese company started construction of a new 350 MW unit at Serbia’s second largest coal-fired power plant, the first new electricity capacity in the Balkan country in nearly 30 years. The $613 million project is part of a wider deal between Serbia and China that includes expansion of a nearby coal mine and upgrade of existing capacity in the Kostolac coal-fired plant complex. Export-Import Bank of China will provide 80 percent of the funding for the entire project of $715 million through a 20-year loan. The Serbian government will secure the rest of the funds. China Machinery and Engineering Corp is carrying out the construction. Serbia generates two thirds of its electricity from ageing coal-fired plants and the rest from hydro power.

    Source: Reuters

    Japan to examine if coal destination restriction limits trade

    November 17, 2017. Japan’s Ministry of Economy, Trade and Industry (METI) is seeking to determine whether clauses in long-term coal contracts that bar buyers from diverting and reselling cargoes are limiting trade. Destination clauses limit where cargoes can be delivered and prevent companies from selling excess coal to third parties in other places.

    Source: Reuters

    At least 15 states join global alliance to phase out coal by 2030

    November 16, 2017. At least 15 countries have joined an international alliance to phase out coal from power generation before 2030, delegates at UN (United Nations) climate talks in Bonn said. Britain, Canada, Denmark, Finland, Italy, France, the Netherlands, Portugal, Belgium, Switzerland, New Zealand, Ethiopia, Mexico and the Marshall Islands have joined the Powering Past Coal Alliance, delegates said. The alliance aims to have 50 members by the next UN climate summit in 2018 to be held in Poland’s Katowice, one of Europe’s most polluted cities. But some of the world’s biggest coal users, such as China, the United States, Germany and Russia, have not signed up. The event triggered a peaceful protest by anti-coal demonstrators and jarred with many ministers who are working on a rule book for implementing the 2015 Paris Agreement, which aims to move the world economy off fossil fuels. Since signing the Paris Agreement in 2015, which aims to wean the world off fossil fuels, several countries have made national plans to phase out coal from their power supply mix.

    Source: Reuters

    Indonesian coal miner Bumi expects 5 percent rise in 2018 output

    November 15, 2017. Indonesia coal miner Bumi Resources estimates its output will rise to around 95 million tonnes in 2018 from between 88 million and 90 million tonnes this year, the company director Dileep Srivastava said, amid an improving price outlook for the fuel. Bumi had not officially revised its earlier guidance of up to 94 million tonnes this year, Srivastava said. But with “unusually heavy rainfall” the company hopes to achieve sales of between 87 million and 88 million tonnes of coal in 2017, he said. Higher coal prices this year compared to a year ago would compensate for the flatter than expected output volumes, he said.

    Source: Reuters

    INTERNATIONAL: POWER

    NIB provides funds for advanced metering and power grid upgrades in Norway

    November 16, 2017. NIB has inked a 15-year loan of NOK400 mn (€41 mn) with the Norwegian regional utility Glitre Energi for introducing an advanced smart metering system and regional and distribution power grid upgrades in Buskerud, Norway. Part of the loan will finance advanced electricity meters for nearly 100,000 customers in the Buskerud and Hadeland area, as well as the communications infrastructure and collection system to gather meter values. The roll-out of AMS will be completed by 2019 as part of a national plan to upgrade the grid and centralise Norway’s electricity market data. The other part of the loan will cover investments in transmission and distribution grids within the Buskerud region. This includes new connections and distribution grid reinforcement, as well as investment in the regional grid in Drammen, Flesaker–Setersberg, Numedal and Kongsberg.

    Source: Energy Business Review

    INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    Vinci Energies to build eight solar power plants in Senegal

    November 21, 2017. Vinci Energies, through its brand Omexom, has been awarded by the Societe d’Electricite du Senegal - Senelec - a contract to construct eight photovoltaic power plants with a combined capacity of 17 MW in Senegal within a period of 10 months. The project represents a €2 6.8 million investment, financed by the German bank KFW and Senelec. Handover is scheduled in July 2018.

    Source: Energy Business Review

    Vattenfall to upgrade two reactors at Ringhals nuclear plant in Sweden

    November 20, 2017. Swedish utility Vattenfall has announced its plan to invest SEK900 mn ($107 mn) to upgrade 1064 MW, unit 3 reactor and 1130 MW unit 4 reactor at the Ringhals nuclear power plant in Sweden. Located in Scandinavia, the power plant is equipped to generate about 28 billion kilowatt-hours of electricity, which represents approximately one fifth of total electrical energy consumption in the country. The investment, which will see upgrade of Ringhals 3 and 4 units with independent core cooling, will allow the facility to continue to supply electricity into the 2040s.

    Source: Energy Business Review

    Syria formally joins Paris climate agreement: UN

    November 15, 2017. Syria has formally jointed the 2015 Paris deal aimed at slowing climate change, the United Nations (UN) said, leaving the United States (US) as the only country opposed to the pact. Syria, racked by civil war, and Nicaragua were the only two nations outside the 195-nation pact when it was agreed in 2015. Nicaragua’s left-wing government, which originally denounced the plan as too weak, signed up last month. Syria announced that it intended to join. Syria had submitted instruments of accession to the Paris climate deal and that the move would enter into force for the country on December 13. US President Donald Trump, who has expressed doubts that man-made greenhouse gas emissions are the prime cause of global warming, announced in June that he intended to pull out and instead promote US coal and oil industries. Overall, the Paris agreement seeks to limit a rise in temperatures to “well below” two degrees Celsius (3.6 Fahrenheit) above pre-industrial times, ideally 1.5.

    Source: Reuters

    Struggling Philadelphia refiner sells biofuel credits, raises cash

    November 15, 2017. Oil refiner Philadelphia Energy Solutions (PES) has raised tens of millions of dollars in cash by selling US (United States) biofuels credits in recent weeks. The US Renewable Fuel Standard (RFS) requires oil refiners to blend increasing amounts of biofuels like ethanol into their fuels every year, or purchase credits from those who do. Independent refiners like PES, lacking blending facilities, typically are dependable buyers in the niche market. The company might also believe prices for the biofuels credits will fall before the refiner must hand them in to the Environmental Protection Agency (EPA) in March 2018 to meet the requirements of the RFS.

    Source: Reuters

    Researchers discover new process to reduce carbon emissions from stored wood pellets

    November 15, 2017. The New York State Energy Research and Development Authority (NYSERDA) said that Clarkson University discovered a new method to eliminate the release of carbon monoxide gas from wood pellets in storage. The use of wood pellet boilers and stoves to replace heating oil, propane or older wood boilers supports Governor Andrew M. Cuomo’s nation-leading energy goals to reduce greenhouse gas emissions 40 percent by 2030. The research leading to the new process was funded through the State’s Renewable Heat NY initiative, which is administered by NYSERDA.

    Source: Energy Business Review

    DATA INSIGHT

    Indian Petroleum Sector: Subsidies by Allocation

    Source: Petroleum Planning & Analysis Cell


    Publisher: Baljit Kapoor

    Editorial Adviser: Lydia Powell

    Editor: Akhilesh Sati

    Content Development: Vinod Kumar Tomar

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