Energy News Monitor | Volume XIV; Issue 4

     energy, coal, oil, power, ORF, energy monitor

    WE SAID IT FIRST

    We are happy to see that Draft National Energy Policy (DNEP) carried some suggestions made by Observer Research Foundation (ORF) in its report “Modernising India’s Coal Sector” published in September 2016.

    Suggestion on Production Targets

    Excerpts from DNEP:

    Coal India Ltd (CIL) is expected to remain the principal vehicle of coal production in the country in the immediate future. It has to strive hard to achieve the target of 1 billion tonne production by 2019. However, with subdued demand for coal, we may not require the production level envisaged above. A careful assessment of demand for coal-based power is needed so that the over $1 billion annual investment being made by CIL, in raising its production capability is not left stranded. Looking to the fact that power demand is growing only at 5% per annum presently, the coal sector is allowed to respond autonomously rather than pursue a target-led strategy.

    Excerpts from ORF Report:

    CIL has achieved an unprecedented increase in domestic coal production in 2015-16 aided by lower regulatory and logistical barriers within the constraints of state ownership. However, the turnaround in CI L’s production efficiency has come at a time when demand and price of globally traded commodities in general, and coal in particular, have fallen to their lowest levels in a decade, raising questions over policies that exclusively focus on the quantity of coal production.

    Suggestion on De-merging CIL

    Excerpts from DNEP:

    In the medium to long run, it is essential that we move away from this opaque coal economy and introduce greater competition in it. This requires two key steps. First, we must corporatize the seven subsidiaries of CIL into independent companies and allow them to compete against one another in an open coal market…..

    Excerpts from ORF Report:

    Reform, liberalisation and privatisation of the coal industry must take into account the fact that certain rigidities that are locked up or institutionalised in the sector cannot be undone quickly. It may not be credible to expect that CIL, a holding company with several subsidiaries each of which is a monopoly in their particular geographies, would become more efficient through closer government intervention. Goal-setting and development of policy frameworks cannot be replaced by investing all resources in micromanaging CIL. The inevitable consequence is that insufficient attention is paid to dealing with institutional and framework issues. In the absence of broad-based institutional reforms, it makes sense to de-merge CIL into several constituent companies – Bharat Coking Coal Ltd, Eastern Coalfields Ltd, Central Coalfields Ltd, Western Coalfields Ltd, Northern Coalfields Ltd, Mahanadi Coalfields Ltd, South Eastern Coalfields Ltd and North Eastern Coalfields Ltd – and leave them to thrive in an environment of friendly competition.

    OVERSUPPLY STRESSES POWER ASSETS

    Monthly Power News Commentary: June 2017

    India

    The government expects the demand for electricity to pick-up in the next couple of years, which experts believe is critical to revive the power sector saddled with stressed assets. Experts said transferring the assets from one developer to the other would not be enough to revive the stranded assets till the time demand for electricity does not pick up. The government, however, feels the problem is of over-supply rather than of lean demand. The demand for power has grown by a robust 6.4% in the last three years against 6.2% in 2004-2014, the power ministry said. The government proposes to set up a special purpose vehicle to hold stressed power assets and revive them by debt-equity swaps, offering last mile equity or asking public sector companies like NTPC Ltd to operate them on a contractual basis. The government is close to resolution of the stressed thermal power projects where developers are not wilful defaulters or there are no significant irregularities.

    While one hand of the government is dealing with over supply the other is trying to resolve the crisis of bad loans of the sector. The government said it is close to resolving the issue for companies that owe money and are not avoiding repayment on purpose. Bad loans in the power sector continue to weigh on India’s banks, and the government has been looking for ways to help ease the pain for companies struggling to service their debts. he power ministry, which is also working on reviving stalled hydro projects, already had extensive discussions with bankers and stakeholders. The power ministry and the Niti Aayog, are jointly working on a policy for next 25 years to ensure energy security.

    Government companies are poised to play a crucial role in the revival of stressed power plants by acquiring them or enabling their lenders to operate them on contract. Once converted into public assets, the private projects will resolve issues of lack of fuel, funds or even PPAs. The National Tariff Policy, amended in January last year, allows state-run power generation companies to sign PPAs with discoms without tariff bidding. PSUs are also entitled to coal blocks and coal supply from Coal India on nomination basis. The government is considering setting up a holding company for identified stressed assets with the help of NTPC, PFC and Rural Electrification Corp besides banks, which will auction such plants or lease them on contract basis after the lenders take management control. The proposal includes converting debt into equity, bringing last mile equity for under-construction projects, or auctioning the power projects once the lenders take over their management. In most cases, the lenders and promoters will have to take a haircut through debt-equity swap. Estimates show that of Rs 9 trillion of stressed assets in the country, more than half are in the power generation sector.

    PFC tried to allay fears of rising stressed assets on its books, saying that it was caused by the lender’s decision to apply new central bank rules and not because of any sudden deterioration in asset quality. The company will expand into refinancing and launch special financial packages for power transmission projects won through competitive bidding. The state-run company, the largest financier of the power sector, posted a net loss for the fourth quarter and a sharp drop in fiscal 2017 profit as it made a huge retroactive provision against the stressed assets. PFC has been applying the guidelines spelt by the power ministry for treatment of loans sanctioned to electricity generation projects before April 2015. The company will expand into refinancing and is developing small tenure loan products for transmission projects bid under tariff-based competitive bidding.

    To add insult to injury the CEA said that India is building more power plants than it can utilize as state-level distributors struggle to connect 50 million households. As a result, about 25 GW of coal-fired power-generating capacity is “stranded” and unused, CEA said. That’s equivalent to the entire installed capacity of neighbouring Pakistan.Demand growth for power is slowing as discoms struggle to purchase enough electricity for the populations they serve. Most discoms lose money selling below cost to poor and agricultural customers and through power theft. The CEA defines demand as the amount of electricity that distributors buy, not necessarily how much would be needed for the whole country, helping explain why millions still lack power and several cities face regular blackouts despite the under-utilized capacity. Electricity use is estimated to grow 6.2 percent a year over the six years ending March 2022. Consumption over the previous six years expanded 5.3 percent, missing a 7.6 percent forecast, the CEA said.

    Desperate to contain the growing losses in electricity supply, the Rajastan government has succeeded in bringing down AT&C by 4-5%, which has accrued a benefit to the tune of Rs 18 billion. The programme has brought significant results in not only bringing down the electricity losses but also ensuring quality and uninterrupted power supply to the consumers. The first phase of the programme saw renovation of 6,500 feeders out of the total 20,000 feeders across the state and this proved to be successful in obtaining the desired results.

    AAP accused the BJP government in Madhya Pradesh of grossly overestimating the power consumption by agricultural pumps, leading to wrong people benefiting from subsidy of Rs 40 billion. The figure of Rs 84 billion is based on the estimate of consumption of 20.75 billion units of power, but the actual consumption by farm pumps is 10.63 billion units, AAP said. This huge amount of Rs 40 billion could have been used for loan waiver or other schemes for farmers which would have prevented many suicides, AAP said.

    After a delay of almost six months, the four discoms of UP Power Corp have filed their ARR for determination of the electricity tariff with the regulator for three years starting 2017-18. The discoms have projected a total deficit of Rs 206.18 billion in the current financial year alone. The four discoms, Madhyanchal, Paschimanchal, Poorvanchal and Dakshinanchal, have projected their total revenues at Rs 48,056 crore in 2017-18 against the expected expenditures of Rs 686.74 billion out of which Rs 527.90 billion will be spent on the electricity purchase alone. Even if the Rs 55 billion government subsidy, later in the year, is taken into account, the gap would still be a whopping Rs 151.18 billion. The revenue gap in the previous year’s ARR was less than Rs 80 billion. Kanpur Electricity Supply Company, the fifth discom, will file the ARR later. With power to all in mind, the four discoms will purchase 128.908 billion units of electricity worth Rs 529.19 billion in FY18 and if transmission charges are included, the amount comes to around Rs 547.87 billion. As per the proposal, for FY19, the discoms would need to purchase 153.577 billion units of power worth Rs 660.33 billion and in the third year (2019-20), 17.955 billion units would be purchased at Rs 774.33 billion. Based on the ARR, it is expected that the four discoms would file the tariff hike proposal separately to make up for the projected deficit during the current financial year.

    Since July 1, transformers as well as other power equipment cost more for TANGEDCO as the GST rate for such equipment will rise to 28% compared to lower rates now. Due to this, the discom has calculated that the total cost will increase by Rs 5 billion per year. Though electricity is not part of GST, the equipment used by TANGEDCO will be part of GST. The discom will not be transferring the increase in equipment cost to consumers and will bear the cost of changing transformers as well as power equipment in all areas as they are situated in public places. At the same time, GST will also help the discom save millions of rupees in the form of lower taxes on coal. The discom has calculated the total saving after GST on coal alone to be around Rs 3 billion annually. The green cess is laid on coal to prevent it being burned as this increases pollution. The Power Minister sees no possibility of increase in power tariff across the country post GST. The GST, which is set for July 1 kick-off, will usher in a new system under which there will be one tax on commodities and services across the country. One of the issues is the tax on product made up of fly ash, a by-product at coal-based thermal power plants. The industry association has not sought postponement of the GST implementation and all are content with the new framework. The power ministry will make an analysis on the basis of tax collection before and after implementation of GST to find out if the new tax rates are “inordinately” high or not.

    The capacity of India’s southern electricity grid has increased 89 percent in the last three years and the Centre plans to double it in the next three years. The central government is blaming the Karnataka government for posing hurdles to these plans. There is apparently no shortage of power in any state, including Karnataka, and if a state wants to purchase power it is available at a price of Rs 2.40/kWh.

    UP power employees and engineers threatened to hold an indefinite strike if the state power board fails to implement the seventh pay commission. Backed by various employee unions including four-zone discoms, two city discoms, UP power transmission corporation, UP hydro electric power corporation and UP thermal power generation corporation, more than 60,000 chief engineers and below rank employees are gearing up to boycott work across the state. Advance notices have been given to senior officials of corporation, as the union of power employees is going to hold massive protest against the board in Lucknow though to ensure that residents don’t suffer. India is scaling back expectations for power demand growth as it struggles to electrify millions of homes despite a glut in generation capacity.

    In a bid to shed light on the unprecedented negative growth in power consumption recorded during this summer, Kerala State Electricity Board has decided to carry out a comprehensive study. While the daily power demand in the state reached 4,004 MW during the peak of the summer in 2016, the same recorded during the 2017 summer was 3,843 MW only. This happened at a time when the board was expecting an average six percent annual growth in power consumption. The fact that the negative growth in power consumption took place during one of the worst summer the state has ever faced has baffled the board. The consumption forecast the board prepares every year plays an importance role in its planning and decisions regarding power purchase and internal generation. If the consumption dip is not a onetime wonder, the long-term power purchase agreement the board had signed with various generators would backfire.

    The Indian Railways, which is working on a mega energy saving plan, is looking forward to more states coming on board in allowing Non-Objection Certificates for procurement of electricity directly from a supplier of the transporter’s choice and reducing its dependence on state discoms. This comes following the nod given by the CERC in 2015 to Indian Railways granting the national transporter the status of deemed distribution licence under the Electricity Act, 2003 bringing railways on a par with discoms. CERC has issued directions to state transmission utilities and state load dispatch centres to facilitate open access to railways on existing transmission network as deemed licensee. The railways expects the governments of West Bengal and Odisha too to come on board soon. As other states like Tamil Nadu, Telangana and Kerala start allowing direct sourcing of electricity from generators, railways expects total savings of Rs 10.5 billion in the current financial year in its energy bill. The railways expected savings of Rs 30 billion accruing as a result of the 2015 CERC order. The national transporter contracted about 500 MW power from Ratnagiri Gas and Power Pvt Ltd in 2015 for consuming it in the states of Maharashtra, Gujarat, Madhya Pradesh and Jharkhand at about Rs 4.70/kWh. Railway Energy Management Company Ltd, an arm of Indian Railways, contracted 50 MW power through open tender at Rs 3.69/kWh in its central transmission utility-connected network from Dadri to Kanpur in Uttar Pradesh in December 2015, according to the railways ministry. The railways, which expects its energy demand to go up to 49 billion units by 2030, currently consumes 18 billion units of electricity annually drawing a bill of around Rs 100 billion. The transporter’s power bill stood at Rs 92 billion last financial year.

    Rest of the World

    The Norwegian and Swedish power TSOs Statnett and Svenska Kraftnät have started to propose an updated power system balancing model between the two countries, based on new methodology and IT solutions. They have also invited Finnish (Fingrid) and Danish (Energinet) TSOs to join.The main driver of the idea is to ensure the maintained balance and security of power supply in the Nordic system and cope with the closure of thermal power plants and the increasing integration of renewables in it. The new power system model will be called Modernized Area Control Error and is based on the existing Area Control Error model.

    The EIB has signed a €300 mn loan agreement with Norwegian transmission system operator Statnett for the completion of the 500 kilovolt Nordlink interconnector between Germany and Norway. The construction of the €1.5-2 bn NordLink project, consisting of a bipolar High Voltage Direct Current 1,400 MW subsea interconnector between Schleswig-Holstein (Germany) and Tonstad (Norway), started in September 2016. Commercial operations are expected to come onstream in 2019-2020. Germany would then be able to import hydropower surplus from Norway, while Norway would be supplied with German wind and solar surplus.

    A 483 MW gas-steam CHP plant built by a China-Russia joint venture has been officially brought online, China’s Huadian Corp announced in Moscow. The CHP is the tangible result of the Huadian-Teninskaya joint project, which was launched by China Huadian Hong Kong Co. Ltd and Russia’s second regional power company TGC-2 in 2011, with a total investment of $571 million.Listed as a priority project in 2014 by Yaroslavl authorities, the new CHP plant is expected to tackle the province’s chronic problem of power shortages. According to TGC staff, the project will bring down Yaroslavl’s power deficit from 40-50 percent to 5-15 percent and fully cover its total power demand in warmer months. The project is widely seen as a symbol of further deepening of cooperation between China and Russia in the field of electric power.

    Natural gas constraints in Southern California could pose a risk to the region’s power supply this summer, while New England and Texas could face tight electricity supplies, the US FERC said. The anticipated reserve margin in ISO New England, the regional power grid operator, is forecast at 14.9 percent, slightly below the target of 15.1 percent. The operator could be forced to import additional power from neighbouring regions in case peak summer conditions materialize, as forecast, since the commissioning of about 700 MW of new resources could be delayed, FERC said. In Texas, FERC forecast that reserve margins in the Electric Reliability Council of Texas, which operates the power grid for about 75 percent of the state, would continue to be tight when compared to other regions, even though the operator expects to have adequate generating capacity to meet peak demand.

    Eastern Australia’s power grid will be stretched again if fierce heatwaves hit over the next two summers, despite recent government steps to beef up supply, the AEMO said. The latest outlook from the AEMO comes three months after it warned that Australia’s most populous states face a gas shortfall from the end of 2018 that could spark power or gas cuts to homes and businesses. The AEMO said power supply should be adequate in normal summer weather, assuming 140 MW of energy storage backed by the South Australian and Victorian state governments is in place, there are no planned generator outages and three gas-fired generators return to service as promised. The market will need more coal-fired power in the state of New South Wales, more renewable power and higher output from gas-fired generators to replace a 1,600 MW plant shut by France’s Engie SA in neighbouring Victoria in March.The grid would be most vulnerable in extreme heat on weekday afternoons and evenings when people switch on air conditioners, with the risk rising if the wind drops and the sun is down or other generation is disrupted at the same time, the AEMO said.

    Last year, Pakistan held informal talks with General Electric, Siemens and Switzerland’s ABB to build the country’s first high-voltage transmission line. Chinese power giant State Grid committed to building the $1.7 billion project in half the time of its European counterparts – and clinched the deal. In Pakistan, whose geographical position makes it central to Beijing’s “Silk Road” plans, contracts have been awarded for projects worth more than $28 billion – all by Chinese companies working together with local firms. More than $20 billion in new investment is likely in the next few year. In the transmission line project deal, for example, General Electric estimated it could make one key part of the line – the converter stations – for about 25 percent less than what State Grid was charging. By awarding the contract to State Grid, Islamabad paid a higher price.The edge of Chinese companies in Pakistan is likely to continue. Under the Silk Road plan, China and Pakistan are planning to build $57 billion worth of power plants, port facilities, railway lines and roads in Pakistan.The transmission line project was conceived as a government-to-government contract to build a 878 km connection between soon-to-built power plants near the coastal town of Matiari and Pakistan’s industrial heartland by the eastern city of Lahore.

    Four Western African countries have broken ground for a new 1,303 km electricity interconnector project built with an investment of €370 mn. The four countries include Liberia, Guinea, Cote d’Ivoire and Sierra Leone, which are all part of the Mano River Union with the interconnectivity project expected to help them out with access to reliable and affordable energy. Dubbed as CLSG Interconnector, the project developed by Transco CLSG will see the first ever cross-border energy supply through a new transmission line and substations. The energy project will be assisted with a 25-year loan of €75 mn from the EIB apart from funding from the African Development Bank, World Bank and KfW, and the respective governments involved. Another notable funding coming for the CLSG Interconnector project is the €27 mn grant from the EU-Africa Infrastructure Trust Fund. The grant is expected to support feasibility studies, assistance for engineering, and electrification in rural areas.

    Sharp gains in US utilities stocks have driven the safe-haven group to expensive levels, leaving doubts about how far the rally can go as equity investors look elsewhere for returns. Utility stocks, with hefty dividends, are among the sectors considered “bond proxies” and have benefited from declines in longer-dated Treasury yields this year. Goldman Sachs, Bank of America-Merrill Lynch and Credit Suisse have recommended since last year that investors be “underweight” in utilities. The sector includes power and energy companies such as NextEra Energy, Duke Energy and Dominion Energy and offers an overall dividend yield of 3.4 percent. Utilities are trading at a 2 percent premium to the broader market, based on price-to-earnings ratios. Historically, the group has traded at a 7.5 percent discount.

    NATIONAL: OIL

    Subsidised LPG rate hiked by up to 32 per cylinder post GST

    July 4, 2017. Domestic cooking gas or liquefied petroleum gas (LPG) price has been hiked by up to ₹ 32 per cylinder — the steepest increase in six years — following implementation of the Goods and Services Tax (GST). Subsidised LPG rates have been increased to ₹ 477.46 per 14.2-kg cylinder from ₹ 446.65 in Delhi after GST was implemented from July 1. In the previous indirect tax regime where separate factory-gate duty and sales tax were levied, LPG attracted a zero or nil excise duty all over the country. VAT or sales tax was nil in Delhi as well as Chandigarh, Haryana, Jammu and Kashmir, Rajasthan, Tamil Nadu, Uttar Pradesh, West Bengal and some north-eastern states. It ranged from 1 percent to 5 percent in other states. However, under GST, which subsumed more than a dozen central and state levies, a 5 percent tax was levied on subsidised LPG. This essentially meant that states where VAT was nil or less than 5 percent, rates have gone up. Besides Delhi, subsidised LPG price has been hiked by ₹ 31.67 per cylinder to ₹ 480.32 in Kolkata and ₹ 31.41 in Chennai to ₹ 465.56, according to information available from oil companies. In Mumbai, where a VAT of 3 percent was applicable previously, the price has gone up by ₹ 14.28 to ₹ 491.25 per cylinder. This is the steepest increase in domestic subsidised LPG rate since June 25, 2011, a hike of ₹50 per cylinder, which was necessitated due to a jump in international oil prices. Every household is entitled to 12 cylinders of 14.2-kg each at subsidised rates in a year. Any requirement beyond that has to be purchased at market price. The rate of market-priced 14.2-kg cylinder in Delhi is ₹ 564. The 5 percent GST resulted in a ₹26.88 increase in rate per cylinder in Delhi and the remaining hike of about Rs 3 is because of the decision since June last year to raise prices by about ₹ 2 to cut the subsidy. The rate of non-subsidised LPG, which consumers pay after exhausting their quota of below-market priced bottles, went up by ₹ 11.5 to ₹ 564. Such bottles attract an 18 percent GST.

    Source: The Hindu

    Indian refiners tap spot crude market to feed increased capacity

    July 4, 2017. Indian companies have stepped up purchases of high-sulphur crude oil from the Middle East and Russia in the spot market to feed demand from expanded refining capacity, traders said. Four refiners in the world’s third largest crude importer bought 9 million barrels of Middle East and Russian crude loading in July-August via spot tenders last month, drawing down excess supplies in the market after China’s demand slowed. Refiners such as Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) have opted to buy more spot crude as they gradually ramp up output, rather than increase long-term crude supplies, traders said. IOC expects to run its new 300,000 barrels per day (bpd) Paradip refinery at full capacity this year, while BPCL plans to ramp up output at its Kochi refinery to 310,000 bpd by September after an expansion. Indian refiners have also increased spot purchases during a period of abundant supplies, allowing them to react quickly to market changes and pick up cargoes when prices are competitive. IOC said in May it plans to buy 68 percent of its oil needs from term suppliers, down from 80 percent earlier. Mangalore Refinery and Petrochemicals Ltd (MRPL) and BPCL have bought Omani and Bahraini crude while IOC bought 5 million barrels of Abu Dhabi, Iraqi and Russian Urals crude. India is buying more Brent-linked Urals crude this year, with imports to hit an all-time high of 4 million barrels in July, after the price gap between Brent and Dubai narrowed to multi-year lows of below $1 a barrel. Some Indian refiners are also exploring the feasibility of importing U.S. crude, sources said, joining other Asian buyers such as China and Japan that stepped up imports from the United States this year on weak West Texas Intermediate (WTI) prices. IOC issued its first ever tender seeking sour crude from the United States and Canada, traders said. Still, India’s crude demand is expected to fall early in the fourth quarter as several refineries are scheduled to shut for maintenance.

    Source: Reuters

    India’s highest petrol pump runs out of diesel

    July 3, 2017. At an altitude of 12,250 feet from sea level, the only petrol pump in the entire Spiti valley has been without diesel for nearly a week now. This in the midst of the peak tourist season. Spiti is connected by road from Shimla and Manali but the tankers carrying fuel are not able to reach the filling station in Kaza, which is claimed to be the highest petrol pump of the country, due to multiple landslides and a damaged bridge. The nearest filling stations are in Kinnuar, Manali or Tandi (Lahaul) which are reachable only after several hours of journey. While local residents claim that they are not getting sufficient petrol or kerosene either, the administration has claimed that problem was limited to availability of diesel only. The Indian Oil’s filling station at Kaza is being run by HP State Civil Supplies Corp. As the Apka bridge in Kinnaur was not able to carry heavy machineries, the official were planning to transfer fuel to small vehicles to decrease the weight on tankers. On the other side, landslides between Gramphu and Chhatru on Manali-Kaza road were blocking the road repeatedly. June to October is the peak tourist season in Spiti valley. Other months being extremely cold with temperature at some places dipping below minus 25 degrees Celsius, this is the season to start various construction works in the valley. Not only tourists but local taxi operators, buses and all machines running on diesel have been rendered useless.

    Source: The Times of India

    Petrol cheaper by over Rs 2 per litre, diesel by Rs 1 since daily revision

    July 3, 2017. While petroleum is yet to come under the Goods and Service Tax (GST), since the dynamic pricing regime came into effect pan-India from last month, petrol prices have fallen by over Rs 2 a litre till date and of diesel by more than Rs 1. Petrol prices per litre have decreased by Rs 2.35, and of diesel by Rs 1.02, ever since the daily revision in rates was implemented throughout the country from June 16. On that day, petrol cost Rs 65.48 a litre in Delhi, while diesel sold for Rs 54.49 per litre. Prices vary at locations according to state taxes. The GST, which rolled out pan-India, except in Jammu and Kashmir, from July 1 is a unified national tax subsuming the earlier myriad central and state levies and the petroleum industry has been demanding inclusion in the new regime so as not to lose the benefit of input tax refund available under the GST. Following the success of a pilot project in five cities, India switched to the daily pricing mode for transport fuels in line with global rates. Earlier, the state-run oil marketing companies (OMCs) used to review and revise retail fuel prices every fortnight on the basis of global crude oil prices, while the revision took effect from midnight. Prices of petrol and diesel are now revised at 6 a.m. every day. Dynamic fuel pricing is followed in many developed countries and India opted for it as a response to the recent volatility in global crude oil prices. According to the government, this move will ensure that the benefit of even the smallest change in international oil prices can be passed down the line to the dealers and the end-users. The pilot project on daily revision of retail selling prices was implemented in Udaipur, Jamshedpur, Visakhapatnam, Chandigarh and Puducherry from May 1. The accumulated daily revision leading to a decrease of over Rs 2 in petrol, for instance, is the result of the recent trend in global prices. The Indian basket of crude oils again went below the psychologically important $50-a-barrel mark last month as geopolitical tensions in the Middle East raised market concerns. Crude prices have continued on their downward spiral following the 13-nation Organisation of Petroleum Exporting Countries (OPEC) cartel’s decision in May to extend output cuts in response to a supply glut that has been pushing down prices over a prolonged period. According to the data, the Indian basket, comprising 73 percent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, closed trade on the previous trading day at $46.72 for a barrel of 159 litres.

    Source: Hindustan Times

    No LPG connection in 6 northeast states till May

    July 3, 2017. In six out of eight northeastern states, the Modi government failed to provide even a single liquefied petroleum gas (LPG) connection under its flagship scheme Pradhan Mantri Ujjwala Yojana (PMUY). The Yojana is an initiative on whose success the Bharatiya Janata Party (BJP) rode to power in Uttar Pradesh, having provided over 4.3 million connections in the state to BPL families. The information was received from Indian Oil Corp (IOC) through an RTI application in May. According to the RTI reply, till May 8, 2017, not a single family benefitted from the PMUY in states like Arunchal Pradesh, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim. Just the two BJP-ruled states in northeast India — Assam and Manipur — saw five and 27 LPG connections, respectively. In Assam, Baksa district received one connection, Darrang got one, Dhemaji district one and Dibrugarh got two. In Manipur, Kakching district received highest number of connections with 15, followed by eight in Thoubal, two in Imphal West and one each in Jiribam and Churachandpur. The RTI reply said that till May 8, 2017, a total of 75 districts in Uttar Pradesh have released 4,337,706 connections under the PMUY. The RTI reply said that till May 8, 2017, a total of 21.933 million connections had been released in the whole country under PMUY. Meanwhile, on the website of PMUY under the oil ministry, it is mentioned that till July 1, 704 districts had been covered and 24.4 million BPL LPG connections had been released.

    Source: The Economic Times

    Petroleum dealers call nationwide strike on July 12

    July 3, 2017. The All India Petrol Dealers’ Association (AIPDA) has announced a nationwide “no-purchase” agitation on July 5 that will be followed by a petrol pump strike on July 12. AIPDA is protesting against the oil marketing companies’ failure to install 100 percent automated system at the pumps and lack of transparency in the daily dynamic pricing mode. West Bengal Petroleum Dealers’ Association said that in West Bengal and many other states, the automated system has been installed in only one percent of the petrol pumps. The greater Guwahati unit of North East India Petroleum Dealers’ Association has called a 24-hour strike. Earlier, the AIPDA protested daily revision of petrol, diesel rates.

    Source: The Indian Express

    Petrol, diesel, aviation fuel kept out of GST, to be decided upon later: Civil Aviation Minister

    July 1, 2017. After the historic Goods and Services Tax (GST) became a reality, Civil Aviation Minister Ashok Gajapati Raju said it will help in the economic rejuvenation of this country. Raju said the petroleum products such as petrol, diesel and aviation turbine fuel have been kept out of the GST as of now and the decision on it will be taken later.

    Source: Business Standard

    O&G fields to be monitored closely: Oil Minister

    June 30, 2017. Oil Minister Dharmendra Pradhan has asked officials to intensify monitoring of oil and gas (O&G) fields given to state-owned firms such as Oil and Natural Gas Corp (ONGC) and ensure that there are no slippages in domestic output. The move comes close on the heels of the government’s internal committee suggesting faster production time and cost reduction, to cut down on India’s dependence on oil imports. Prime Minister Narendra Modi has been reiterating since 2015 that India should focus on cutting down its dependence on oil imports by 2022 by 10 percent (it was 77 percent in 2015). But, the growing demand for oil has only led to more dependence, which has gone up to 81 percent from 77 percent in 2015. The government has consciously tried to reduce administrative and regulatory roadblocks and to infuse new technologies, he said He said that the government is committed to sustaining the efforts taken to liberalise the sector. He said it has been done by simplifying processes, increasing market access and bringing developments in the technology domain to enhance the efficiency of our O&G industry. He said that in India, the current recovery factors of ONGC and Oil India Ltd for crude oil are as low as 27 percent and 23 percent, against international benchmark of 35-40 percent and 55-70 percent.

    Source: The New Indian Express

    GST council has to decide on petroleum, centre for its inclusion: Finance Minister

    June 30, 2017. The Centre is fully for bringing petroleum products under Goods and Services Tax (GST) scheduled for implementing from July 1, and the GST Council will require to take a decision on taxing these as per the new indirect tax regime, Finance Minister Arun Jaitley said. He said the NDA government at the Centre is all for including petroleum under GST. However, state governments led by the Congress party had consistently opposed including petroleum under GST. Petroleum, including oil and gas, is a strategic sector that is still not under GST, while the industry has been pushing for its inclusion so as not to be deprived of the benefits of input credit.

    Source: The Economic Times

    ONGC rescinds pacts with Schlumberger, Halliburton

    June 30, 2017. Oil and Natural Gas Corp (ONGC) has scrapped the initial agreements it signed with oilfield services providers Schlumberger and Halliburton to raise output from its ageing fields, and has decided to go for competitive bids. In December, the state firm had signed agreements with Schlumberger and Halliburton for enhancement of production from its matured fields of Geleki in Assam and Kalol in Gujarat, respectively. Output at ONGC, which made up 57% of country’s crude production in 2016-17, has been stagnating for years, putting the company under tremendous pressure to look for innovative ways to raise output from its fields that are mostly old and witnessing a natural decline. To raise output, ONGC had partnered with Schlumberger and Halliburton, which were expected to bring in money and technology to the two fields of the state firm. ONGC sought Expression of Interest from service providers for production enhancement contracts. The contracts will be 15 years or longer and the service providers will have to provide for capital and operational expenditure to raise output from the ‘baseline’ production, which will be decided by ONGC and vetted by a third party. Prospective investors must submit their proposal by July 18. ONGC is organising a conference of prospective service providers on July 7 in Ahmedabad to offer them more details and seek their views on the nature of the contract that would give them confidence to bid, the company said.

    Source: The Economic Times

    Now RIL set to deliver fuel at your doorstep

    June 30, 2017. At a time when the oil ministry is exploring ways to start home delivery of petroleum products such as diesel and petrol, Reliance Industries Ltd (RIL) is looking to enter the segment as well. RIL has applied for a licence to home-deliver motor fuel to the Petroleum and Explosives Safety Organisation (PESO). However, though the company has been allowed to use bowsers to transport fuel to its mobile phone towers, it has not been granted licence for fuel home delivery as of now. Home delivery of petroleum products is not allowed anywhere across the world as it is a risky affair. However, since there is a push by the government to explore the opportunities state-run Indian Oil Corp (IOC) has been asked to look for methods for trial. The challenge it faces is that the state-run oil marketing companies (OMCs) already occupy the best locations across the country. The country has a total of 59,500 retail outlets of which almost 95% are run by OMCs. Home delivery of motor fuel is one of the ways through which the company can establish its presence in areas already occupied by other operators. Earlier, Bengaluru-based ANB Fuels under the brand name MyPetrolPump had started home delivery of diesel in parts of the city through customised

    Source: The Financial Express

    Vedanta makes $3 bn bet to re-energize biggest oilfield

    June 29, 2017. India’s Vedanta Ltd will spend $3 billion over the next three years as it seeks to expand oil reserves and nearly double output from its largest field. India’s biggest non-state producer, plans to drill more wells at its Barmer block in the western Indian state of Rajasthan and other blocks in the eastern part of the country, according to Sudhir Mathur, acting Chief Executive Officer (CEO) of Vedanta’s Cairn Oil & Gas unit. Vedanta aims to produce half of the energy-hungry nation’s oil by 2020 and replace some aging fields. The spending plan contrasts with global investments that are set to drop a third year after falling 24 percent to $450 billion in 2016, following years of low oil prices. Vedanta is cutting production costs by about $3 a barrel to $7.50, which it says is among the lowest in the world. It aims to raise oil and gas output from the Barmer block to about 300,000 barrels of oil equivalent a day over next three years from a daily average of 161,571 barrels in the year ended March, Mathur said. Vedanta is keen to get an extension for the block and will submit a 10-year development plan by September, he said. The license given to Cairn, which merged with Vedanta, expires in 2020. The company has started reassessing reserves to find newer prospects in the block that stretches over more than 3,100 square kilometers. The company is aiming to increase its effective reserves through the new exploration by almost a quarter from its current 500 million barrels.

    Source: Bloomberg

    NATIONAL: GAS

    India gives Iran $11 bn ‘best offer’ on Farzad-B gas field

    July 3, 2017. An Indian consortium is willing to spend as much as $11 billion to develop a giant Iranian natural gas field and build the infrastructure to export the fuel as long as the Persian Gulf nation guarantees a “reasonable return” on the project, according to the company leading the group. ONGC Videsh Ltd (OVL) has offered to invest as much as $6 billion on the Farzad-B field and spend the remaining amount to build a liquefied natural gas export facility, according to Oil and Natural Gas Corp (ONGC). The group is seeking a return of about 18 percent, and Indian companies are willing to buy all the gas exported from the project, ONGC said. As India, the world’s fourth-largest liquefied natural gas (LNG) buyer, seeks to lock up gas resources to meet growing demand and spur the use of cleaner-burning fuels, Iran is emerging from sanctions that stifled investment in its energy sector. The two countries had aimed to conclude a deal by February on developing the field, which India has said holds reserves of almost 19 trillion cubic feet. The consortium, which includes Indian Oil Corp (IOC). and Oil India Ltd (OIL), has been trying to secure development rights to the Farzad-B gas field since at least 2009. OVL and IOC each own 40 percent interest in the Farsi block that holds Farzad-B field, while OIL has 20 percent.

    Source: Bloomberg

    RIL signals end of output from three KG-D6 wells

    June 29, 2017. Reliance Industries Ltd (RIL) has signalled that its three operational wells at the Krishna Godavari Dhirubhai 6 (KG-D6) basin block are close to the end of their production and the company is working on extending its life cycle until a time it can replace it with output from new wells. RIL, along with partner BP Plc, expresses renewed confidence in the policy environment and the regulatory regime and said they would jointly invest $6 billion in new fields discovered earlier in the deep-sea KG basin block. As part of the early monetisation of existing discovered resources in KG-D6 Block, RIL wants to leverage on the deflation in market to optimise capex and hopes to award contracts for development of KG-D6 discovery known as R-Cluster, with option to use in development of discoveries known as MJ and Satellite. The company is scaling up its coal bed methane output as well to make up for the declining output from KG-D6.

    Source: The Economic Times

    NATIONAL: COAL

    SCCL produces 14.3 mt coal in June quarter

    July 3, 2017. Singareni Collieries Company Ltd (SCCL) said coal production during the quarter ended June 30 stood at 14.34 million tonnes (mt). It was up two percent as compared to 14.1 mt during the corresponding quarter of last fiscal. During June, the production was up at 4.81 mt against 4.74 mt during the same month in 2016, it said. It said the company has set a record in coal dispatches by transporting 15.6 mt, up 11 percent, when compared to 14 mt dispatched during the corresponding quarter of last year.

    Source: The Economic Times

    CIL announces linkage auction for non-regulated sector

    July 3, 2017. Coal India Ltd (CIL) announced auction of coal linkages of tranche III for the non-regulated sector. However, it has not yet finalised the quantity of fuel to be offered in the proposed auction. CIL had offered 22 million tonnes of coal in the first tranche and 15 million tonnes in the second tranche. The Union cabinet had in February 2016 approved that all allocations of linkages/Letter of Assurance for non-regulated sectors like cement, steel/sponge iron, aluminium and others should be auction based. The government claimed the framework attempts to make the coal available in a fair manner to the end-users and it ensures that all market participants of non-regulated sector have a fair chance to secure coal linkage, irrespective of their size.

    Source: The Financial Express

    India should revisit lofty coal output targets as demand weak: NITI Aayog

    June 30, 2017. India should rein in its lofty coal output target as power demand is growing at a slower pace than expected, the government policy think-tank NITI Aayog said, even as state monopoly Coal India Ltd (CIL) struggles to sell already-mined coal. A turnaround in India’s coal sector, from crippling shortages three years ago to a surplus thanks to faster government clearances, is seen as a major success for Prime Minister Narendra Modi. The production boost means CIL is for the first time scouting for buyers abroad. But it is sticking to its plans to nearly double coal production to 1 billion tonnes a year by the end of this decade. Given that power demand was only growing at 5 percent a year at present, the coal sector should respond as needed, rather than pursue a “target-led strategy”, it said. Some experts said the weaker-than-expected power demand, though growing slightly faster than previous years, is also an indication of the softness in India’s $2 trillion economy, whose growth in the January-March quarter unexpectedly slipped to its lowest in more than two years. NITI Aayog said that nearly 304 million Indians are still not connected to the grid, suggesting there was scope for demand to rise. NITI Aayog proposed splitting CIL’s seven units into independent companies to improve efficiency through competition. It also called for more private participation in coal mining. Power and Coal Minister Piyush Goyal has repeatedly said CIL will remain a single entity.

    Source: Reuters

    NITI Aayog proposes break-up of CIL into seven firms

    June 28, 2017. India should split the seven units of Coal India Ltd (CIL) into independent companies to make it more competitive, the government policy think-tank NITI Aayog said. About 70 percent of India’s power generation is fired by coal. The country is the world’s third-largest producer and third-biggest importer of coal, which the government wants to change by boosting local coal production. CIL is often criticized for being bloated and inefficient. Its output-per-man shift is estimated at one-eighth of Peabody Energy, the world’s largest private coal producer.

    Source: Reuters

    NATIONAL: POWER

    Now, show SMS and pay power bills in Maharashtra

    July 4, 2017. The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) consumers no longer need to carry physical copy of their power bills. They can now pay their dues across billing counter by showing the SMS of pending dues. More than 1.39 crore consumers have registered their mobile numbers with the power utility firm and can avail the service. They will be issued a payment receipt at the counter.

    Source: The Times of India

    SC’s ‘no’ to constitution bench on CAG audit of discoms

    July 3, 2017. The Supreme Court (SC) rejected the plea of power distribution companies (discoms) seeking a Constitution bench for hearing the issue of validity of an audit by the Comptroller and Auditor General (CAG). The SC order came on a plea filed by three discoms challenging the AAP government order to audit their accounts, contending that CAG was not empowered to scrutinise the accounts of private firms under Section 20 of the CAG Act. The discoms are 51:49 percent joint venture between private companies and the Delhi government. In 2014, the Delhi government had ordered the CAG audit of three power distribution companies — BSES Rajdhani Power Ltd, BSES Yamuna Power Ltd and TATA Power Delhi Distribution Ltd — on grounds of alleged financial irregularities. The companies supply power to the city. The High Court had said that once a regulatory body Delhi Electricity Regulatory Commission had been set up with the power to audit accounts of private power distribution companies, there can be no other audit by CAG at the instance of the state government.

    Source: Business Standard

    Maharashtra exempts RGPL from taxes, transmission charges

    July 3, 2017. The Maharashtra Cabinet decided to give an exemption to energy company Ratnagiri Gas and Power Ltd (RGPL) from various taxes and transmission charges for the next five years. The State government’s concessions to RGPL come in the backdrop of the Centre deciding to review this project under the Power System Development Fund scheme to save it from becoming a non-performing asset (NPA), the Chief Minister’s Office (CMO) said. RGPL will now be exempt from payment of Value Added Tax (VAT), Central Sales Tax and transmission charges.

    Source: The Hindu Business Line

    Generate your power bill, pay online through power app in Uttar Pradesh

    July 1, 2017. Uttar Pradesh Chief Minister Yogi Adityanath launched the e-Nivaran app. The app will help consumers across the state generate their own electricity bills and pay the amount online. Consumers would also be able to register their complaint as well by clicking on the ‘grahak seva’ icon of the app. One can download the app from google playstore. Consumers who already pay their bills online can use the same password while others will have to create a new password. As soon as one gets registered by providing one’s account number and password, one can see consumption details of the past six months. To generate the bill, one will have to click a picture of the meter reading and submit it. The bill will be generated in 24 hours which one can pay online. The app also allows for payment of bills of relatives and friends. Besides, consumers can complain on 1912 helpline by making a call or by sending an SMS through the app. Complaints can be made against poor supply, erratic bills and other services of the energy department.

    Source: The Times of India

    10k power connections pending in Kolhapur

    July 1, 2017. Around 10,253 residential power connections have been pending in Kolhapur zone for the past six months due to lack of infrastructure and unavailability of funds, power utility officials said. Sangli district has 6,325 pending connections while Kolhapur 3,928. Kolhapur has been developing at a rapid pace for the past few years. The housing sector has witnessed a boom due to various developmental activities in the region. However, citizens have been facing difficulties in getting new connections. Confederation of Real Estate Developers’ Associations of India said that the power company has centralised all permissions for transformers and it is facing a shortage of single- and three-phase power meters. Kishor Pardeshi, chief engineer of Kolhapur zone, said the shortage of power meters is over.

    Source: The Economic Times

    Centre approves Rs 4.5 bn more for power sector in Gurugram

    June 29, 2017. Under the Rs 1,350 crore scheme aimed at the development and modernisation of power sector in Gurugram, the power ministry has accorded in principle approval of Rs 450 crore while an amount of Rs 272 crore has already been approved under the scheme. Power and Coal Minister Piyush Goyal said commendable work has been done towards strengthening the power sector in Haryana. Goyal said that the Aggregate Technical and Commercial losses in Haryana have only been 5 percent 2016. Goyal said Haryana is the first state in the country to expedite the process of installation of smart meters. In 2017, Haryana has set a target to reduce line losses by up to 20 percent, he said. Haryana Chief Minister Manohar Lal Khattar said the process for the improvement in power sector would be continued in a planned manner and all efforts would be made to achieve all the targets set by the Ministry in this regard in a time-bound manner.

    Source: The Statesman

    Govt stitches rescue plan for Tata, Adani power plants

    June 28, 2017. The biggest rescue package being stitched together for distressed power plants could see lenders take over three imported coal-fired generation stations of the Tata, Adani and Essar groups, involving an estimated investment of over Rs 40,000 crore, and transfer 100% equity for Rs 1 to consumers states, including Gujarat where these plants are located. But the transfer of ownership of these plants, aggregating a capacity of 9,820 MW, will not get the promoters off the hook as far as bank loans are concerned. At a meeting of stakeholders, called by the power ministry, lenders insisted that the corporate guarantees given by the promoters will continue even after the change in ownership. The plan hinges on the outcome of due diligence conducted by India’s biggest generation utility NTPC. The promoters offered to operate and maintain their respective projects even after the ownership transfer. But Gujarat Urja Vikas Nigam Ltd said the state would prefer to source coal, which is at the crux of these plants becoming unviable. Both the Adani and Tata groups have made the audacious offer to sell majority stake in their projects, located at Mundra in Gujarat, for Rs 1 to the state. These projects became unviable after the Supreme Court denied higher tariff to compensate for increase in fuel costs due to policy changes in Indonesia, where the captive coal mines are located. It is not clear at the moment whether Gujarat alone will take over the ownership of these plants or the states will take ownership in proportion to the quantity of capacity they have tied up under the 25-year power purchase agreements.

    Source: The Times of India

    Power discoms’ subsidy dependence to rise to Rs 810 bn current fiscal: ICRA

    June 28, 2017. The overall subsidy dependence of state-owned power distribution companies (discoms) for the current financial year (2017-18) is estimated at Rs 81,000 crore, an increase of around 7-8 percent over the previous fiscal, research and ratings agency ICRA said. The overall subsidy requirement is further estimated to constitute around 17-18 percent of the revenue requirement approved or estimated for the utilities for 2017-18, the agency said in a report. According to the assessment, Punjab and Madhya Pradesh are likely to witness a sharp increase in the subsidy support, of 29 percent and 49 percent respectively, in financial year 2017-2018, against the previous fiscal. ICRA said that in case schemes such as Direct Benefit Transfer (DBT), which is being proposed in Bihar, were to be implemented, the direct subsidy dependence on the state government would reduce for the discoms. According to policy research firm Brookings India, the Indian power sector has been facing sharp increases in subsidies and cross-subsidies since the 1970s.

    Source: The Economic Times

    NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    Solar energy draft policy of Goa government open to public for comments

    July 4, 2017. The draft of the solar energy policy prepared by the Goa energy development agency (GEDA) is now open for suggestions and comments from the public and stakeholders. The policy is available on the department of science & technology website, www.dstegoa.gov.in, and on the official government portal www.goa.gov.in. Comments have to reach the member secretary, GEDA, by post or through email: gedagoa@yahoo.com latest by 5.45pm on July 14. It goes on to add that the challenge before the state government is not only to meet the ever-growing demand for power, but also to progressively increase the share of renewable sources.

    Source: The Economic Times

    Telangana set to generate 5 GW solar power by 2019

    July 3, 2017. Telangana is set to cross the 5000 MW solar power generation capacity by 2019 , more than the 1300 MW installed capacity at present. This was because the state adopted a distributed development model which is supported by the Centre. Under this system, solar project developers are offered opportunity to develop units based on the demand-supply situation with minimal operational losses. The renewable energy capacity of the state will touch 3000 MW by this year end as projects which have been tendered and are under execution, are expected to be commissioned as per schedule. These projects were awarded during 2015 and are expected to come on stream before December 2017. The state government has signed power purchase agreements for 3800 MW of power from these units and all of them are expected to be operational by March-June 2018. By touching 3000 MW-mark, the state will also cross another milestone of achieving over 15% of total energy contribution from renewable energy sector. Currently, Rajasthan, which generates 1300 MW solar power, tops the list in the country with the highest solar power generation. Unlike other states, Telangana has not opted for mega solar parks but has planned for a decentralized model wherein it assesses the extra demand in different parts of the state and floated tenders accordingly. The state government also seeking to encourage setting up of mini solar plants close to transformers so that it could help provide power to agriculture sector with less transmission and distribution losses.

    Source: The Economic Times

    NLC biggest winner in 1.5 GW Tamil Nadu solar auction

    July 3, 2017. India’s latest solar auction, one of the biggest in the country, drew a surprisingly enthusiastic response with a big chunk of the 1,500 MW of projects on offer won by public sector mining giant NLC India Ltd. The lowest bid in the auction in Tamil Nadu, where solar radiation is weaker than in Rajasthan, came from Bengaluru-based Raasi Green Earth Energy, which won 100 MW at Rs 3.47 per unit. Bids were invited in May and the results were declared. The tariff of Rs 3.47 is well above the lowest solar bid in the country so far of Rs 2.44 per unit, made at an auction at the Bhadla Solar Park in Rajasthan in May, but it is a substantial drop from the winning bid of Rs 4.40 per unit at Tamil Nadu’s auction in February. The biggest winner was public sector mining giant NLC India, which had bid for the entire 1500 MW, but was awarded 449 MW. The company mines lignite, which is also called brown coal, and generates power.

    Source: The Economic Times

    Tata Power completes 187 MW Shuakhevi hydro power project in Georgia

    July 3, 2017. Private utility Tata Power said it has completed the construction of its 187 MW Shuakhevi hydro power project in Georgia. The company, through Adjaristsqali Georgia, its joint venture with Norway’s Clean Energy Invest AS Norway and IFC InfraVentures has completed the construction of the 187 MW plant, Tata Power said in a statement. The Shuakhevi project is the largest hydropower plant to be built in Georgia over the past fifty years, and its project investment cost exceeded $420 million, it said. The project will generate about 470 GW of clean energy while lowering greenhouse gases emissions by more than 200,000 tons per year and the power generated by this will be exclusively sold within Georgia throughout the winter which is a period of energy deficit.

    Source: The Financial Express

    Cabinet may consider Rs 167 bn hydropower policy

    July 2, 2017. The Union Cabinet may take up for approval this month the hydro-power policy which aims to provide Rs 16,709 crore support for stalled 40 hydel projects, entailing 11,639 MW capacity, and to classify all such ventures as renewable energy. Once it is approved, the distinction between large and small hydro plants would go, which would enable India to achieve clean power capacity of 225 GW by 2022. At present, a hydropower project of up to 25 MW is classified under renewable energy and is entitled to various incentives provided by the government. Projects beyond this capacity are not in this category and hence not entitled to the benefits. Out of the 30 GW installed power generation capacity, 44.59 GW comes from large hydro projects (above 25 MW) and 57.26 GW from other renewable power generation capacities. India has set an ambitious target of adding 175 GW of renewable energy capacity by 2022 which includes 100 GW of solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power (up to 25 MW capacity each). Under the policy, the government will provide interest subvention of 4 percent during construction for up to 7 years and for 3 years after the start of commercial operation to all hydropower projects above 25 MW. It is proposed that the funding for this policy would come from coal cess or national clean energy fund or non- lapsable central pool of resources for northeastern states for eight years till 2024-25. A Hydro Power Fund would be created under the power ministry for providing funds to the projects under the policy. The policy provides for Hydro Purchase Obligation (HPO) for hydro projects of over 25 MW capacity. Under this, the distribution companies would be mandated to buy a proportion of power from these plants. However, this benefit would be available to those hydropower plants, which would be able to begin commercial operations after five years of notification of this policy. The policy would also mandate power ministry to engage with bankers and financial institutions for modifying lending terms and conditions for hydropower projects.

    Source: The Economic Times

    Chandigarh cuts line to earn from solar power, says rate high

    July 2, 2017. Even as the Chandigarh Renewal Energy, Science and Technology Promotion Society (CREST) is struggling to meet the target of generating solar power set by the central government, the electricity department has stopped giving connections on gross metering under which the total solar power generated is sold to the department. The centre had selected Chandigarh to be developed as a “model solar city”. The CREST has to achieve target of generating 50 MW of solar energy , both residential and government, by 2022 through net and gross metering. Net metering is an agreement that allows a consumer to sell excess solar energy to the utility. According to the solar tariff for the current financial year, the administration has fixed buying rate at Rs 8.57 per units with an aim to promote solar power. High tariff rate is the main bone of contention between the electricity department and CREST. The electricity department has been turning down the applications for gross metering move by residents on the grounds that the high tariff will increased the power purchase cost. The department has been pressing for framing a policy. The department caters to 2.15 lakh consumers, of which 1.75 lakh are in the domestic category. The CREST, on the other hand, has decided to move a petition before Joint Electricity Regularity Commission seeking direction to the electricity department for resuming gross metering connections. The standoff with the power department is hurting CREST, which is already struggling to meet the target due to shortage of space in the city, which is spread in an area of just 114 square km. The CREST in last three years has generated 20.36 million units, equivalent to reduction of 1,410 metric tonne of CO2 and planting a total of 15.3 lakh trees. Of 20.36 million units, bulk of power has been produced by plants on government buildings. So far, the response from private sectors has not been impressive.

    Source: The Times of India

    Orient Green Power to sell loss-making biomass biz for Rs 2.7 bn

    July 1, 2017. Orient Green Power Company Ltd (OGPL), which is part of the Shriram Group and a renewable energy-based power generation company, is looking to sell its bulk of biomass operations to its promoter company- Shriram Ventures Ltd (SVL) Ltd or its subsidiaries. The enterprise value of the sale is estimated to be around Rs 275 crore. The development comes ahead of company’s plan to merge it’s wind energy assets with IL&FS Wind Energy Ltd. OGPL generated 96 MW of biomass energy, out of which 30 MW was already sold to Rajasthan and Maharashtra. The company is now planning to sell another 68 MW to SVL. According to the company, almost 50 percent of OGPL’s losses accrued from its biomass business. OGPL will merge its wind assets, to the tune of 425 MW, with IL&FS Wind Energy Ltd that currently has the capacity of around 700 MW of energy. The merged entity, under which all the wind assets of both the company will come, will be listed.

    Source: Business Standard

    India, EU to boost environmental cooperation

    June 30, 2017. India and the European Union (EU) agreed to strengthen cooperation in the areas of environment, resource efficiency and, circular economy under the EU’s Resource Efficiency Initiative for India. At the eighth EU-India Environment Forum, hosted in New Delhi, the necessity of moving to a resource efficient ‘circular economy’ wherein waste is reduced, or becomes useful input in others, or renewable inputs replace non-renewable ones, was discussed. Union Environment Secretary A N Jha, who took part in the forum said India was preparing its own campaign to develop a resource efficiency strategy and experience sharing with European experts would be of immense help in this regard. Astrid Schomaker, Director for Global Sustainable Development, Environment Directorate-General, European Commission said that market-based incentives and eco-innovation will create new and exciting products, services and job opportunities in India. The Resource Efficiency Initiative project will be implemented on behalf of the EU by a consortium led by Deutsche Gesellschaftfür Internationale Zusammenarbeit GmbH, with The Energy and Resources Institute, Confederation of the Indian Industry and Adelphi.

    Source: The Indian Express

    REC raises $450 mn through green bonds

    June 30, 2017. Rural Electrification Corp (REC) said it has become the first Indian public sector undertaking to raise $450 million through ‘green bonds’. The REC launched its maiden USD green bonds to become the first Indian PSU corporate to launch green bonds denominated in US dollars, against the backdrop of green energy’s enormous potential in the Indian power sector and the Indian Government’s thrust on developing this space. The company said that the proceeds will be allocated for financing existing projects including refinancing and new eligible green projects in solar, wind, biomass and small hydro (less than 25 MW), subject to availability of sector-specific technical criteria under Climate Bonds Standard.

    Source: The Financial Express

    India’s solar power capacity to be 22 GW by March: Goyal

    June 29, 2017. India’s solar power generation capacity would nearly double to 22 GW by the end of current fiscal and more wind power auctions would be conducted in the coming months, Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal said. India has set ambitious target of having 100 GW of solar energy and 60 GW of wind power capacities by 2022. Solar power tariff had dropped to all time low of Rs 2.44 per unit in the auction conducted for Bhadla solar park. ACME Solar Holdings had emerged as the lowest bidder by quoting Rs 2.44 per unit tariff for 200 MW followed by SBG Cleantech One at Rs 2.45 per unit for 500 MW capacity. Similarly, the 1 GW wind power auction also evoked good response as the tariff dropped to Rs 3.46 per unit in an auction conducted by the Solar Energy Corp of India (SECI). Goyal had said that government will soon bring out a hydro power policy to revive the stalled projects.

    Source: India Today

    Assam CM asks power department to frame policy on solar energy

    June 29, 2017. Assam Chief Minister (CM) Sarbananda Sonowal asked the state power department to formulate a comprehensive policy for harnessing solar power to ensure uninterrupted power supply to all villages and towns. Prime Minister Narendra Modi has been emphasising on alternative sources of energy and to get success in harnessing the non-conventional sources of energy, solar power has to be tapped to the fullest potential, the CM said. He asked the department to look for ways and means to address the shortfall of electricity requirement through generation of power and also asked to put in place complaint boxes to address grievances of consumers on priority basis. Expressing concern over reported the deaths in the Guwahati flash flood due to electrocution, Sonowal asked the department to carry out a survey and inspect the status of transformers, wires etc to avert recurrence of such incidents. Sonowal also took stock of the progress of work related to Deendayal Upadhaya Gram Jyoti scheme and asked the Additional Chief Secretary and other senior officials to plug all loopholes including slackness of contractors in illuminating all un-electrified villages on war footing.

    Source: India Today

    CIL betting big on renewables: Goyal

    June 29, 2017. Coal India Ltd (CIL), the world’s largest miner of the dirty fuel, will generate 1 GW of renewable electricity this year as part of its plan to produce as much as 10 GW clean power in total, Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal said. State companies such as CIL and NTPC Ltd, the country’s biggest thermal power producer, are planning to aggressively spend on solar projects under Prime Minister Narendra Modi’s personal push for renewable energy. He did not give a timeline for Coal India’s 10 GW target. The renewable energy industry is already booming in India. Solar power generation capacity has more than tripled in three years to over 12 GW, as Modi targets raising energy generation from all renewable sources to 175 GW by 2022. Indian solar power plant developers – including companies backed by Japan’s Softbank and Goldman Sachs – are meanwhile quoting ever-lower tariffs in auctions to win big projects, raising the possibility of clean power outpricing fossil fuel energy in the near future even without direct government subsidy.

    Source: Reuters

    Rooftop solar to be the norm by 2040: Niti Aayog

    June 28, 2017. Rooftop solar set-ups would have become the norm by 2040, according to the Niti Aayog. But in the immediate run-up to universal coverage of electricity, it may not be viable to tap rooftop solar for homes, according to the government policy think-tank NITI Aayog’s Draft National Energy Policy. The policy notes that the share of solar and wind is expected to be 14-18 percent and 9-11 percent in electricity, and 3-5 percent and 2-3 percent in the primary commercial energy mix by 2040. However, oil and gas would have almost maintained their shares of 26 percent and 6.5 percent in 2015-16 to 25-27 percent and 8-9 percent in 2040, respectively. This will be in spite of a more than three times increase in gas consumption, owing to a large increase in total energy, the increase in gas would be less in percentage terms. While coal would have risen in absolute terms (nearly double), but in relative terms, it would have reduced its contribution from 58 percent in 2015 to 44-50 percent in 2040. The overall share of fossil fuels would have come down from 81 percent in 2012 to 78 percent by 2040. By 2040, solid biomass is expected to be replaced by liquid and gaseous fuels, and electric cooking will be a major practice across the country, according to the Niti Aayog’s vision. But 30 percent of the rural households will remain dependent on solid biomass for cooking.

    Source: The Hindu Business Line

    INTERNATIONAL: OIL

    Oil market to rebalance in second half of 2017: IEA Chief

    July 4, 2017. The global oil market is expected to rebalance in the second half of 2017, but further output increases among key producers such as Nigeria and Libya could hamper this process, International Energy Agency (IEA) Chief Fatih Birol said. He said some key producers including Libya and Nigeria had significantly increased output in recent months.

    Source: Reuters

    Italian energy company Eni makes new discovery in Barents Sea

    July 3, 2017. Italian energy company Eni has made a new discovery in the PL532 license, southwest of the Johan Castberg field. The new discovery was made via well 7219/9-2, which is located approximately 14 miles southwest of the discovery well of Johan Castberg in the Barents Sea. Preliminary estimates of the size of the discovery are between 100 and 180 million barrels of oil in place (25–50 million barrels of oil recoverable), with further potential to be evaluated. Extensive data capture and fluid sampling has been conducted in the well.

    Source: Rigzone

    Iraq has right to achieve oil output in line with reserves: Oil Minister

    July 3, 2017. Iraq has the right to achieve oil output that is in line with its crude reserves, Oil Minister Jabar al-Luaibi said. Iraq is the second-largest producing member of the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia. OPEC members and other producers led by Russia agreed last year to cut output by about 1.8 million barrels per day (bpd) to tackle bloated crude inventories and support prices. Under the deal, Iraq agreed to cut production by 210,000 bpd. Its output reached 4.4 million bpd in June, marking a cut of 170,000 bpd, according to a survey of OPEC output.

    Source: Reuters

    All eyes on July for US oil demand to drain glut

    July 2, 2017. US (United States) oil traders are hoping the sweltering days of July are also hot ones for demand, believing the new month is the last best opportunity this year to see the overhang of inventories finally subside. Export opportunities to Asia and big US summer driving demand are seen as the primary drivers for a drawdown in stocks that have remained stubbornly above seasonal averages. July is usually a big month for drawdowns: Over the last five years, inventories of crude oil have dropped by an average of 2.9 million barrels per week in July, according to the US Energy Information Administration. But analysts warn that if inventories do not draw down in earnest, it may dash the hopes of many in the industry of seeing higher prices by the end of this year. A record number of motorists are expected to hit the road for the Fourth of July holiday. US gasoline demand was up 0.4 percent in April from the year-ago period, the first year-over-year increase since December, according to the latest US government data.

    Source: Reuters

    Brazil’s Petrobras to review diesel, gasoline prices more frequently

    June 30, 2017. Brazilian state-controlled oil company Petróleo Brasileiro SA (Petrobras) said it would review fuel prices more frequently as it seeks to regain market share it lost by keeping wholesale prices to retailers above global benchmarks. Petrobras has been caught flat-footed by more nimble competitors that have been able to import gasoline and diesel they can sell more cheaply to gas station networks in the country. Since 2016, the state oil company has set fuel prices at least once a month, which is not often enough to keep up with international oil price changes and volatility in Brazil’s exchange rate, the company said. From July 3, the Petrobras sales and marketing division will adjust diesel and gasoline prices a maximum of 7 percent from a reference point set by an executive committee. The reference price will include the cost of imports, taxes and margins.

    Source: Reuters

    Libya’s oil output nears 1 mn bpd, highest in 4 yrs

    June 29, 2017. Libyan oil production is fluctuating between 950,000 barrels per day (bpd) and “close to” 1 million bpd, rising from around 935,000 bpd. Production has been fluctuating mainly due to technical and power generation problems. At near one million bpd, Libya has succeeded in beating a production target the National Oil Corp (NOC) announced recently by a month. Production should stabilize at the higher end of the range “very soon”. Also, oil began to be pumped from storage tanks at Al-Majid field, which has been closed for eight months because of power problems, Arabian Gulf Oil Company (AGOCO) said. Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), has been exempted from OPEC-led supply cuts as it tries revive its battered oil industry. It had produced more than 1.6 million bpd before a 2011 uprising, and average production has not exceeded 1 million bpd since July 2013.

    Source: Reuters

    $20 bn investment in shale was a mistake: BHP Chairman

    June 29, 2017. BHP Billiton’s Chairman Jac Nasser said on Thursday BHP’s $20 billion investment in US (United States) shale oil and gas six years ago was, in hindsight, a mistake. BHP entered the shale business at the height of the fracking boom in 2011 and invested billions more developing the operations. The fall in oil prices since then has led to pre-tax writedowns of about $13 billion on the business. Activist shareholder and hedge fund Elliott Management, holding 4.1 percent of BHP’s London-listed shares, has been trying to gain support from other shareholders to persuade BHP to sell the shale oil and gas business.

    Source: Reuters

    North Sea spot crude market suggests oil outlook may be too glum

    June 29, 2017. The North Sea crude oil market is finally showing signs of long-lost strength, suggesting that some of the pessimism that has driven down oil futures by 5 percent and created a record bet against a price rise may be unjustified. About 6 million barrels of North Sea Brent crude were being stored on ships, down from four-month highs of as many as 9 million, and traders said it seemed now refineries were starting to take in more cargoes. Traders holding physical oil could “make a good sale” if they had bought the oil a couple of weeks ago and were now ready to sell it on the spot market. A major driver of the weakness in both the physical and the futures market has been the resistance of global crude inventories to the efforts of OPEC (Organization of the Petroleum Exporting Countries) and its 11 major partners to force a drawdown by cutting their oil production. OPEC and a number of exporters such as Russia and Oman agreed to extend a 1.8-million barrels per day production cut into March next year to force global inventories to return to their long-term average levels and help price rise.

    Source: Reuters

    China completed new crude pipe in Shandong in boost to teapot refiners

    June 29, 2017. China has completed a new crude pipeline in eastern Shandong province as improves infrastructure for independent refiners in the region. The pipeline links crude facilities run by energy trading house Mercuria in Qingdao port to the city Weifang, which is home to several teapot refiners, the port said. The pipeline, which has a capacity of 30 million tonnes, or 608,000 barrels per day (bpd), will serve major teapots such as Shandong Chambroad Petrochemicals Co. and Shandong Dongming Petrochemicals Co. The port of Qingdao has also started construction of several branches of the pipeline extending to central and north parts of province, which will increase its capacity to 60 million tonnes, or 1.2 million bpd.

    Source: Reuters

    Linn, Citizen Energy form Oklahoma oil venture with 2018 listing plan

    June 28, 2017. Linn Energy Inc and Citizen Energy II, LLC have agreed to form a joint oil and gas venture to develop 140,000 acres in Oklahoma, with the newly-created company expected to list early next year. The venture known as Roan Resources will be provided land by the two companies, on an equal basis, in an area which stretches across the SCOOP, STACK and Merge oil-rich shale formations in south and central Oklahoma. By forming the venture, Linn and Citizen aim to accelerate the development of the largely-contiguous acreage, with production reaching more than 40,000 barrels of oil equivalent per day by the end of the year, double the output as of May 2017. Technology improvements allow companies to drill sideways over a longer distance, meaning oil and gas producers have been seeking out ways to acquire adjacent land to boost production from single oil wells. EQT Corp said it had agreed to buy fellow Appalachian gas and oil firm Rice Energy for $6.7 billion, a transaction that would make it the largest U.S. natural gas producer. One of its main rationales was Rice’s complementary acreage.

    Source: Reuters

    Pemex declares force majeure on Maya crude from Pacific coast

    June 28, 2017. Mexico’s state oil company Pemex said it had declared force majeure on five cargoes of Maya crude slated to load at its Salina Cruz terminal on the Pacific Coast after flooding and a fire hit the refinery there earlier this month. The oil was redirected to the Gulf of Mexico for sale to other customers, and the company sees no impact on its total US (United States) exports, Pemex said. The oil had been destined for the US West Coast. The 330,000 barrel per day Salina Cruz refinery, Mexico’s biggest, has been inactive since the fire in mid June. Pemex plans to restart in late July and increase gasoline imports by 3.5 million barrels for the coming months to supply Mexico’s domestic market. The incident also affected Salina Cruz’s crude loading operations, which serves customers on the Pacific, a source told Reuters. A source at Pemex said the company is currently loading crude at its Gulf terminals only. Mexico’s crude exports are more reliable than Colombian or Venezuelan oil sales, which are often affected by problems at terminals, attacks or lack of production of certain grades.

    Source: Reuters

    Platts proposes removing restrictions on Qatar crude from July

    June 28, 2017. Oil price agency S&P Global Platts is proposing to remove from next month restrictions it had placed on Qatari crude in its pricing assessment after Saudi Arabia and some other Arab states cut ties with Doha. Platts, a unit of S&P Global Inc, initiated a review on June 6 on the deliverability of crude loading from Qatari ports in its Middle East crude price assessments after Saudi Arabia and the other states moved to isolate Qatar over charges that it was supporting terrorism. The dispute disrupted Gulf shipping routes and raised problems with oil and gas deliveries. That prompted Platts to stipulate that during its review Al-Shaheen loading from Qatar could not – unless mutually agreed by buyer and seller – be nominated for delivery once a deal had been struck in its pricing process known as market-on-close. Platts said it will continue to monitor events in the Middle East crude markets and is ready to renew its review of any crude stream deliverable into the Dubai and Oman benchmarks.

    Source: Reuters

    INTERNATIONAL: GAS

    Poland’s PGNiG in talks with US on more LNG imports

    July 4, 2017. Poland’s state-run gas firm PGNiG is in talks over more imports of liquefied natural gas (LNG) from the United States (US), Krzysztof Szczerski, a senior adviser to the Polish president, said. US LNG supplies to central and eastern Europe are to be discussed during US President Donald Trump’s visit to Warsaw later this week, during his meeting with Polish President Andrzej Duda. In June, Polish government energy official Piotr Naimski said he expected more US spot LNG deliveries as well as mid- and long-term agreements on U.S. LNG supplies, following Trump visit. PGNiG received its first US spot delivery of LNG from Cheniere Energy.

    Source: Reuters

    Total marks Iran return with South Pars gas deal

    July 3, 2017. France’s Total signed a deal with Tehran to develop phase 11 of Iran’s South Pars, the world’s largest gas field, marking the first major Western energy investment in the Islamic Republic since the lifting of sanctions against it. Total will be the operator with a 50.1 percent stake, alongside China National Petroleum Corp with 30 percent, and National Iranian Oil Co subsidiary Petropars with 19.9 percent. The project will have a production capacity of 2 billion cubic feet per day, or 400,000 barrels of oil equivalent per day including condensate, Total said that the gas will supply the Iranian domestic market starting in 2021. The first stage of the South Pars development will cost around $2 billion, Total said. The project will cost up to $5 billion and production is expected to start within 40 months, Iran’s oil ministry said. The offshore field was first developed in the 1990s. Total was one of the biggest investors in Iran until the country drew international sanctions in 2006 over suspicions that Tehran was trying to develop nuclear arms. Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries, hopes its new petroleum contracts will attract foreign companies and boost oil and gas output after years of under-investment.

    Source: Reuters

    Trump to promote US natural gas exports in Russia’s backyard

    July 3, 2017. President Donald Trump will use fast-growing supplies of US (United States) natural gas as a political tool when he meets in Warsaw with leaders of a dozen countries that are captive to Russia for their energy needs. In recent years, Moscow has cut off gas shipments during pricing disputes with neighbouring countries in winter months. Exports from the US would help reduce their dependence on Russia. Trump will tell the group that Washington wants to help allies by making it as easy as possible for US companies to ship more liquefied natural gas (LNG) to central and eastern Europe, the White House said. Trump will attend the “Three Seas” summit – so named because several of its members surround the Adriatic, Baltic and Black Seas – before the Group of 20 leading economies meet in Germany, where he is slated to meet Russian President Vladimir Putin for the first time. Among the aims of the Three Seas project is to expand regional energy infrastructure, including LNG import terminals and gas pipelines. Members of the initiative include Poland, Austria, Hungary and Russia’s neighbours Latvia and Estonia. The US is expected to become the world’s third-largest exporter of LNG in 2020, just four years after starting up its first export terminal. US exporters have sold most of that gas in long-term contracts, but there are still some volumes on offer, and more export projects on the drawing board. Cheniere Energy Inc, which opened the first US LNG export terminal in 2016, delivered its first cargo to Poland in June. Five more terminals are expected to be online by 2020.

    Source: Reuters

    Norway government wins ruling over lowered gas pipeline tariffs

    June 30, 2017. A Norwegian appeals court ruled in favour of the government in a lawsuit brought by investors who argued Norway’s cut in gas pipeline tariffs was unlawful and would cost them 15 billion Norwegian crowns ($1.8 billion) in lost earnings through 2028. The decision upheld the 2015 verdict of a lower court, which said the government acted within its rights when it lowered tariffs on offshore gas pipelines. Some of the companies involved have said the unexpected decision to lower gas transportation tariffs had hurt the image of Norway as a country to invest in. The government cut tariffs shortly after the four firms bought their stakes in Gassled in 2011 and 2012 from ExxonMobil, Total, Statoil and Royal Dutch Shell for a total of 32 billion Norwegian crowns. The lowered tariffs took effect on gas transport agreements on October 1, 2016. The oil ministry said last September the move was in line with its longstanding policy of keeping a pretax return on capital investment in transportation infrastructure at around 7 percent.

    Source: Reuters

    KOGAS signs MoU with Alaska Gasline on LNG development

    June 29, 2017. The Alaska Gasline Development Corp and Korea Gas Corp (KOGAS) signed a Memorandum of Understanding (MoU) in Washington to cooperate on developing an Alaska liquefied natural gas (LNG) project. Alaska LNG is a gas pipeline and LNG infrastructure project aimed at moving natural gas from Alaska’s North Slope to growing LNG markets in Asia, while KOGAS is a state-run natural gas company that is the primary LNG buyer in South Korea and the second-largest corporate LNG buyer in the world.

    Source: Reuters

    China’s natural gas output, imports surge, beating target

    June 28, 2017. China is ramping up both imports and domestic production of natural gas, with the combined rate of growth running well ahead of the government’s target for boosting the use of the cleaner-burning fuel. Official data for domestic production, imports via pipelines and imports of liquefied natural gas (LNG) show the total amount of natural gas available in China in the first five months of the year was the equivalent of 72.01 million tonnes of LNG. China has set a target of increasing the share of natural gas in energy consumption from 5.9 percent in 2015 to 10 percent in 2020, an average annual increase of 4.1 percent. So far this year, China’s output and imports of the fuel are running at more than double the annual rate needed to reach the official target. The biggest gainer has been imports of LNG, which are up 38.4 percent in the first five months of 2017 to 12.86 million tonnes, while pipeline imports have dropped 4.4 percent to 12.65 million tonnes. Domestic natural gas production has been a strong gainer, rising almost 7 percent in the January to May period to 62.88 billion cubic meters, equivalent to 46.5 million tonnes of LNG. The rise in natural gas output stands in sharp contrast to the decline in crude oil production, which fell to the lowest on record in May as output declines from older fields. Natural gas has also outperformed coal, with domestic output of the polluting fuel up 4.3 percent to 1.4 billion tonnes in the first five months of the year. The jump in imports of LNG shows how the super-chilled fuel is becoming more competitive with pipeline imports from central Asia. Customs data from May shows that the average landed cost of LNG was $7.28 per million metric British thermal units (mmBtu). Among China’s LNG suppliers Australia has fared best, with imports rising 42.7 percent in the first five months to 5.39 million tonnes, almost double that of second-placed Qatar at 2.84 million tonnes. Malaysia is the third-biggest supplier to China, with 1.82 million tonnes in the first five months, up 90 percent from the same period in 2016. The price being paid by China for LNG tells part of the story, with cargoes from Australia landing at $6.80 per mmBtu in May, well below the $8.95 for Qatar and slightly ahead of the $6.49 for Malaysia. Australia’s price advantage is still largely tied to the 25-year supply deal from the North West Shelf venture, signed in 2002 at a fixed price of $3.80 per mmBtu.

    Source: Reuters

    Shell, Exxon to appeal latest Groningen gas production cap

    June 28, 2017. A joint venture between Royal Dutch Shell and Exxon Mobil said it would appeal against a Dutch government plan to lower a production cap at the Groningen natural gas field by a further 10 percent. The latest cap, announced in May, would lower production to 21.6 billion cubic meters (bcm) per year from October. It was 53.9 bcm in 2013. The 50-50 Exxon-Shell joint venture, known as NAM, said it had been left in an impossible position by being told it could continue production – vital to supply homes with gas – but without guarantees it is meeting safety standards.

    Source: Reuters

    INTERNATIONAL: COAL

    Zimbabwe coal producer Hwange expects to return to profit in second half

    June 30, 2017. Zimbabwe coal producer Hwange Colliery expects to return to profit in the second half, for the first time since the country dumped its currency for the US dollar in 2009, as it triples output, its Chairman Winston Chitando said. Hwange, in which the government is the biggest shareholder with a 37 percent stake, is Zimbabwe’s second-largest coal producer and supplies coke to state-owned electricity generating firm Zimbabwe Power Company. The company expects coal production to rise to 230,000 tonnes, compared to a monthly average of 80,000 tonnes in the past year, Chitando said.

    Source: Reuters

    China calls on coal miners, oil refiners to ensure summer power supplies

    June 30, 2017. Beijing called for coal miners to boost output and oil majors to maintain fuel operating rates as part of a series of steps to ensure power supplies over the summer as the government warned that some regions are still under pressure. The National Development and Reform Commission said companies should import early supplies of liquefied natural gas ahead of the winter.

    Source: Reuters

    INTERNATIONAL: POWER

    Siemens to supply the power train for Sabiya power plant in Kuwait

    July 4, 2017. Siemens has won an order to supply the key power generation equipment for the Sabiya Extension 3 combined cycle power plant in Kuwait. The power train will provide an electrical capacity of about 900 MW. A long-term service agreement with Alghanim International is also included to help ensure the reliability, availability, and performance of the main components. The country will be able to cover its steadily growing energy demand with the Sabiya Extension 3 plant. The plant will start simple cycle operation in winter of 2019.

    Source: Times of Oman

    UK energy regulator proposes price cap for poorest customers

    July 3, 2017. Britain’s energy regulator Ofgem could cap bills for some of the most vulnerable customers and make it easier to switch supplier in response to a government request to set out plans to help customers on the poorest-value tariffs. Utilities have denied overcharging, but last year the Competition and Markets Authority found that British households overpaid a total of 1.4 billion pounds ($1.8 billion) a year on average from 2012 to 2015 because of uncompetitive standard energy tariffs. Ofgem would consult with consumer groups over the potential changes and vulnerable customers could cover around 2 million consumers already on discounts to help them heat their homes, the regulator said. The proposals are likely to have a limited impact on Britain’s dominant big six energy suppliers who have around 85 percent of the market. Energy prices became an issue in last month’s national election with the threat of a broader cap in standard variable tariffs hanging over the industry. Ofgem said it would seek to make switching energy supplier easier, by allowing people to switch directly by using comparison websites. It would also trial its own online switching service to help customers who have been on the same poor value tariffs for three or more years. Under the plans, the cost of installing pre-pay meters would be capped at 150 pounds ($195), another move designed to help poorer customers.

    Source: Reuters

    Australia power grid demand forecast to be flat over two decades

    June 29, 2017. Australian demand for power from the grid is expected to be roughly flat over the next 20 years even with a 30 percent rise in population, thanks to a projected rise in rooftop solar and energy efficiency, Australian Energy Market Operator said. Total power demand from the grid is expected to inch up to about 190,000 gigawatt hours (GWh) by 2037 from 185,000 GWh in 2016, the Operator said.

    Source: Reuters

    INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    Companies have to open up about climate risks: Shell CEO

    July 4, 2017. Climate change poses one of the biggest long-term risks to the global economy and companies, including big oil and gas firms such as Shell, have to be open about how the risks will affect them, its Chief Executive Officer (CEO) Ben van Beurden said. Shell, one of the biggest oil and gas producing firms in the world, is under growing pressure from some shareholders to improve its carbon footprint and sustainability credentials. Shell said it assesses climate change risks internally but it has so far not disclosed in detail what financial impact climate-related risks could have. A think-tank estimated that energy companies could be wasting more than $2 trillion by 2025 on projects that will not be needed if governments’ carbon-reduction targets are met. Shell signed up to a G20 task-force working on a framework to improve the ability to assess and price climate-related risks.

    Source: Reuters

    Facebook drone could one day provide global internet access

    July 4, 2017. A solar-powered drone backed by Facebook that could one day provide worldwide internet access has quietly completed a test flight in Arizona after an earlier attempt ended with a crash landing. Facebook founder Mark Zuckerberg’s long-term plan for the drone, called Aquila, is to have it and others provide internet access to 4 billion people around the world who are currently in the dark.

    Source: Japan Today

    Bulgaria nuclear power plant reconnects 1 GW reactor after repairs

    July 4, 2017. Bulgaria’s nuclear power plant Kozloduy reconnected one of its 1,000 MW reactors to the power grid after replacing electric protectors in the non-nuclear part of the reactor. The plant switched off the turbo-generator of its Unit 5 and reduced its power capacity to 40 percent to carry out the repairs that posed no threat for radioactive contamination. The other reactor at the plant, situated on the Danube River in northwestern Bulgaria, was working at 96 percent of its capacity, it said.

    Source: The Economic Times

    New solar-powered smart windows can help save energy costs

    July 3, 2017. Scientists have developed solar-powered smart windows with tunable glazing that can control the heat and light inside a home, saving up to 40 percent in an average building’s energy costs. The system developed by researchers at Princeton University in the United States (US) features solar cells that selectively absorb near-ultraviolet (UV) light, so the windows are completely self-powered, inexpensive and easy to apply to existing windows. The smart window controls the transmission of visible light and infrared heat into the building, while the new type of solar cell uses near-UV light to power the system. Since near-UV light is invisible to the human eye, the researchers set out to harness it for the electrical energy needed to activate the tinting technology.

    Source: The Indian Express

    Brazil wind, solar projects stall as power demand remains sluggish

    July 3, 2017. Brazil’s government will not award new licenses for wind and solar power generation projects, despite requests from the renewable energy sector, as power markets struggle with oversupply in a sluggish economy. Brazil was one of the world’s fastest growing markets for the wind power sector in the first half of the decade with a flurry of farms appearing along the nation’s vast, windy coast. But a deep recession that began in early 2014 and from which Brazil is only now emerging brought the trend to a halt. The last licenses for new wind or solar generation projects were awarded in 2015. An auction for licenses was called off in 2016 and it is unlikely new licenses will be issued this year. Deputy Energy Minister Paulo Pedrosa said the government has received requests from wind and solar equipment makers to resume licensing. He said pressure also comes from governors of states holding the bulk of the wind generation capacity in Brazil.

    Source: Reuters

    Court rejects Trump administration move to delay methane regulation

    July 3, 2017. The United States (US) Environmental Protection Agency (EPA) cannot freeze implementing a rule requiring oil and gas companies to fix methane leaks in their equipment, a federal appeals court ruled in a setback for President Donald Trump’s push to cut environmental regulations. The EPA announced a stay in the rule, which would have required drillers and transporters to start reporting and fixing any methane leaks they found in wells and transfer stations, after EPA Administrator Scott Pruitt wrote in an April 18 letter the agency intended to reconsider imposing it. But the US Court of Appeals for the District of Columbia Circuit said the agency did not have the authority to halt the rule during those deliberations.

    Source: Reuters

    Statoil wins contract to evaluate carbon storage project on Norwegian continental shelf

    July 3, 2017. Norwegian state-owned carbon capture technology firm Gassnova has assigned multinational oil and gas company Statoil to evaluate the development of a full-scale carbon capture and storage project on the Norwegian continental shelf. The project will capture CO2 from three onshore industrial facilities in eastern Norway and transport it by ship to an onshore receiving plant on the west coast of Norway. The CO2 pumped from the ship to tanks onshore will be sent through pipelines on the seabed to several injection wells east of the offshore Troll field. It is also planned to include carbon sources from other countries later. According to Statoil, the carbon storage facility could be the world’s first storage site to receive carbon dioxide from several industrial sources. The location for the receiving plant will be finalized based on criteria such as safety, costs and expansion flexibility.

    Source: Energy Business Review

    Scottish government gives green light to Vattenfall 170 MW wind farm

    July 3, 2017. Swedish utility Vattenfall said the Scottish government has given consent for it to build a 170 MW wind farm in southwest Scotland, enabling it to speed up talks with local communities about buying a share in the project. Vattenfall submitted a planning application for the 50-turbine, onshore South Kyle wind farm four years ago. Vattenfall plans to provide a community benefit fund of 5,000 pounds ($6,482.50) per MW installed per year over the operational lifetime of the wind farm.

    Source: Reuters

    Scientists develop substance to kill water pollutants using solar power

    July 2, 2017. Researchers at the Swansea University in the United Kingdom have developed a new non-toxic substance that can help eradicate harmful synthetic dye pollutants released into water bodies, using solar power. Nearly 300,000 tonnes of pollutants get diffused with water in water bodies in a year.

    Source: The Economic Times

    Germany produced record 35 percent of power from renewables in first half

    July 2, 2017. Germany raised the proportion of its power produced by renewable energy to 35 percent in the first half of 2017 from 33 percent the previous year, according to the BEE renewable energy association. Germany is aiming to phase out its nuclear power plants by 2022. Germany has been getting up to 85 percent of its electricity from renewable sources on certain sunny, windy days this year. The overall share of wind, hydro and solar power in the country’s electricity mix climbed to a record 35 percent in the first half, the BEE said. The government has pledged to move to a decarbonized economy by the middle of the century and has set a target of 80 percent renewables for gross power consumption by 2050. It aims to cut greenhouse gas emissions by 40 percent in 2020 from 1990 levels and 95 percent by 2050.

    Source: Reuters

    Chilean scientists produce biodiesel from microalgae

    June 30, 2017. Biodiesel made from microalgae could power buses and trucks and reduce greenhouse gas emissions by as much as 80 percent, Chilean scientists said, possibly curbing pollution in contaminated cities like Santiago. Experts from the department of Chemical Engineering and Bioprocesses at Chile’s Catholic University said they had grown enough algae to fragment it and extract the oil which, after removing moisture and debris, can be converted into biofuel. Most of the world’s biodiesel, which reduces dependence on petroleum, is derived from soybean oil. It can also be made from animal fat, canola or palm oil. Researcher Carlos Saez said a main challenge going forward would be to produce a sufficient volume of microalgae. A wide variety of fresh and salt water algaes are found in Chile, a South American nation with a long Pacific coast. The scientists are trying to improve algae growing technology to ramp up production at a low cost using limited energy, Saez said.

    Source: Reuters

    China energy demand may already have peaked: Researchers

    June 30, 2017. China’s energy demand has reached peak levels and is set to fall in coming years, an influential government think tank said, in a study offering an optimistic view on Chinese efforts to combat climate change. The study by the China Academy of Social Sciences (CASS) study said China’s total energy consumption is expected to fall to the equivalent of 4 billion tonnes of standard coal in 2020, which would represent a decline of 8 percent from last year. Consumption would then inch down to 3.74 billion tonnes in 2030 and 3 billion tonnes by 2050, the study said. The CASS study suggests Beijing is cutting coal use far faster than expected, and comes weeks after US President Donald Trump decided to quit the 195-nation Paris agreement on climate change and reaffirmed his commitment to revive US fossil fuels. It also indicates China could reach its pledge to bring climate-warming greenhouse gas emissions to a peak by “around 2030” earlier than expected, given that the energy sector is estimated to account for 70-80 percent of its CO2 emissions. British researchers suggested last year that China’s CO2 emissions were likely to peak far earlier than the official target and could have hit their maximum in 2014. But despite China’s “over-performance by a big margin”, nations still needed to pledge more if the Paris target of holding temperature increases to “well below” 2 degrees Celsius is to be met.  However, Chinese experts said Beijing was unlikely to adjust its CO2 reduction targets.

    Source: Reuters

    Kenya says major wind power line to be ready in 3 months

    June 29, 2017. A power line linking a 310 MW wind power plant to Kenya’s national grid, delayed by landowners’ compensation demands among other issues, is expected to be ready in the next three months, the energy ministry said. Kenya relies heavily on geothermal and hydro power for its electricity, providing the bulk of the country’s total 2,341 MW output. Wind power provides about 25 MW. The construction of the 266 mile (428 km), 400 kilovolt power line from the Lake Turkana Wind Power project, running from Loiyangalani in the north to Suswa in the center, started in November 2015 and had been due to be completed by December.

    Source: Reuters

    EDF must replace Flamanville reactor cover by 2024: Regulator

    June 28, 2017. EDF’s Flamanville 3 nuclear reactor being built in northwest France is fit for service despite weak spots in its steel, but the utility will have to replace the reactor cover by 2024 at the latest, nuclear regulator ASN said. The ASN’s green light for Flamanville, slated for start-up in late 2018, is also a European Commission precondition for approving EDF’s planned takeover of Areva’s reactor business. EDF plans to build two of the same Areva-designed European Pressurized Reactor models in Hinkley Point, Britain.

    Source: Reuters

    DATA INSIGHT

    LPG Scenario in North-Eastern States

    All India LPG Consumption (for 2016-17):                                                                21.55 Million Tonnes (Provisional)

    LPG Coverage National Average:                                                                              61% (As on January 1, 2016)

    No. of Registered LPG Customers (of PSUs) in North Eastern States

    North-Eastern StatesAs on April 1, 2016As on April 1, 2017
    Arunachal Pradesh2.632.76
    Assam39.3642.93
    Manipur4.194.47
    Meghalaya1.992.09
    Mizoram3.083.14
    Nagaland2.442.57
    Sikkim1.691.76
    Tripura5.125.51
    Total North East60.5065.22
    All India2017.892346.05

    LPG Coverage in North-Eastern States (as on March 1, 2017)

    Source: Compiled from PPAC and Rajya Sabha Unstarred Question No. 3151

    Publisher: Baljit Kapoor
    Editorial advisor: Lydia Powell
    Editor: Akhilesh Sati
    Content development: Vinod Kumar Tomar

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