8Energy News Monitor I Volume VIII, Issue 30

Energy Availability in India: Hostage to Hype

 

 

 

NEWS BRIEF

OIL & GAS

January 10, 2012. ONGC's gas find in the Krishna-Godavari basin, adjoining Reliance's D6 block, is found to be economically viable at the current market price of $4.20 per unit. ONGC had earlier estimated that the block would be commercially viable at a price of $7 per unit. If the block's management committee approves the project at its meeting scheduled, UD-1 can start producing natural gas in four years. ONGC's proposal, which has passed preliminary scrutiny of the Directorate General of Hydrocarbons (DGH) and the oil ministry, proposes an investment of $2.9 billion to achieve a peak output of about 20 million standard cubic meters per day from the UD-1 discovery. DGH has also trimmed ONGC's in-place reserve estimate from 4.25 trillion cubic feet (tcf) to 3.94 tcf. The government's technical advisor for hydrocarbons estimates that 2.31 tcf could be recovered. ONGC discovered the UD-1 gas field in the southern part of KG-DWN-98/2 block along with five other discoveries within two years of increasing its stake to 90% in the block, in which Cairn India has reduced its holding to 10% in 2005. This is the deepest gas discovery in the Indian basin at a depth of 2,841 metres. The block is divided into two parts, the northern discovery area (NDA) and SDA. NDA has nine discoveries and SDA has the UD-1 discovery.

January 10, 2012. Jubilant Energy expects to initially invest $70 million to $80 million on an onshore oil and gas block in Myanmar. Myanmar awarded 10 onshore oil and gas blocks in its biggest energy tender in years. The blocks were awarded mostly to Asian companies, including Malaysia's Petronas, Thailand's PTT Exploration and Production and Jubilant. The production sharing contract for the block will likely be signed shortly. Jubilant Energy is part of the New Delhi-based Jubilant group that controls drugmaker Jubilant Life Sciences, agrochemicals maker Jubilant Industries and restaurant chain Jubilant FoodWorks.

January 5, 2012. ONGC has discovered about 4 trillion cubic feet (Tcf) of gas reserves off the Daman coast, which can produce 7 million cubic meters a day of gas in four years time. The Daman cluster fields constitutes the B-12 North & B-12 South, C-26 and SD. The exploratory efforts and drilling in the area is continuing. The company is currently working on a plan to develop the reservior found in the Arabian Sea. ONGC may invest $4 billion in developing the reserves. ONGC currently produces about 51 mmcmd of gas and the new reservior found in a block that the company had got on nomination basis, would help add over 13 per cent to its output. Its biggest gas field, Bassein off the west coast, currently produces 31 mmcmd. ONGC said it has made four oil and gas discoveries in the country. Gas was found in a well drilled about 7 km from Karimganj town in Assam while oil flowed in an exploratory well near Mandhali village of Mehsana district in Gujarat. Also, oil and gas was would in a well in Nambar block, about 6-km from Noajan town in Golaghat district of Assam as well as in Viral block near Kadi town of Mehsana district of Gujarat.

January 5, 2012. Reliance Industries has reported natural gas output from its eastern offshore KG-D6 fields dipping below 39 million cubic meters a day as it shut five wells because of high water ingress. Natural gas production from the Dhirubhai-1 and 3 gas fields and the MA oilfield in Block KG-D6, in the Krishna-Godavari Basin of the Bay of Bengal was 38.43 mmcmd in the week ended December 25, according to a status report filed by the company with the Oil Ministry. The output comprised 31.58 mmcmd from the D1 and D3 gas fields and 6.85 mmcmd from the MA oilfield. The KG-D6 production is lower than 61.5 mmscmd rate achieved in March, 2010, as a drop in pressure in the wells and increased water ingress has led to a lower per-well gas output. The report said of the 18 wells drilled, completed and put on production in the D1 and D3 fields, five wells -- A2, A10, B1, B2 and B13, were kept closed due to high water cut/sanding issues. The output from KG-D6 is short of the 70.39 mmscmd-level (61.88 mmscmd from D1 and D3 and 8.5 mmscmd from the MA field) envisaged by now as per the field development plan approved in 2006. While RIL holds 60 per cent interest in KG-D6, UK's BP Plc has 30 per cent and Niko Resources of Canada the remaining 10 per cent. RIL started natural gas production from the KG-D6 fields in April 1, 2009, with output of about 30 mmcmd. The MA oilfield, where one of the five oil wells had been shut due to water loading, produced about 12,623 barrels of crude oil per day in the week ending December 25. In addition, 1,672 barrels of condensate are produced from the field every day. The report said 15.03 mmcmd of the gas output was sold to fertiliser plants and 20.18 mmcmd to power plants. The remaining 3.22 mmcmd was consumed by other sectors, including compressors and internal use of the East-West pipeline that transports gas from the East Coast to consumption centres in the West. RIL projected an output of 38.50 mmcmd of gas in January. As per the status report, out of the 22 wells planned in in Phase-I of D1 and D3 field development, 18 wells have been drilled and completed so far. Of these, 13 wells were put on production, while five wells were kept closed due to high water cut and sanding issues. The field development plan envisages drilling of an additional 9 wells by March 2012.

January 4, 2012. ONGC will buyout British energy major BG Group's stake in three of its eastern offshore oil and gas exploration blocks. ONGC will buy BG Group's 45 per cent participating interest in Krishna-Godavari Basin block KG-OSN-2004/1, 25 per cent interest in exploration block MN-DWN-2002/02 in the Mahanadi Basin and 30 per cent stake in deep water block KG-DWN-98/4. While it is ONGC which is buying BG's stake in the three blocks, no cash will be transferred from its side. Instead, it will get cash in lieu of past liabilities of the British group in the blocks. BG Group will pay about $50 million to ONGC toward settlement of past costs that the state-owned firm incurred on its behalf in the three blocks. BG and ONGC had won the 1,131 sq km KG-OSN-2004/1 block under the sixth round of the New Exploration Licencing Policy (NELP) in 2006. ONGC, which held a 55 per cent in the block, would have a 100 per cent stake after the transaction in the block, where one well was spud. In 2008, BG Group had farmed into ONGC's 5,895 sq km MN-DWN-2002/02 block and KG Basin deepsea block KG-DWN-98/4. The KG-DWN-98/4 block has been relinquished as the two firms could not find any commercially exploitable hydrocarbon reserves. ONGC would hold a 100 per cent interest in the remaining two blocks after the BG stake buy. After the exit from the three blocks, BG is now left with just one exploration property -- the KG-DWN-2009/1 deepwater block in the KG basin -- which it won alongside ONGC and Oil India in the 8th NELP round in 2010. BG holds a 30 per cent stake in the block, while ONGC has 45 per cent, OIL 15 per cent and AP Gas Infrastructure the remaining 10 per cent. The British group also holds a 30 per cent stake in the Panna/Mukta and Tapti oil and gas fields off the West Coast. ONGC has 40 per cent in the producing fields and Reliance Industries the remaining 30 per cent. BG was exiting the blocks as part of its global portfolio alignment strategy and added that ONGC thought the blocks were prospective. Incidentally, BG Group has also put its 65.12 per cent stake in Gujarat Gas Co Ltd, which retails CNG and piped gas in Gujarat, on the auction block.

January 4, 2012. ONGC said its board has approved a ` 352.5 crore investment in producing oil from a marginal field off the Mumbai coast. ONGC said the company board has also approved payment of an interim dividend of ` 6.25 per equity share of ` 5 each for the 2011-12 financial year. Including dividend tax of ` 867.45 crore, the total payout works out to ` 6,214.65 crore. As a result, the total payout to the government of India, including dividend tax, will amount to ` 4,831.81 crore. The board has approved redevelopment of the B-173A marginal field situated 50 km West of the Mumbai coastline for improving its recovery factor. The field was discovered in 1992. The field is currently producing 1,870 barrels of oil per day. Till October 31, 2011, the field has produced about 2,076 million tonnes. With these additional inputs, recovery from the field is expected to be enhanced from 16.98 per cent, as envisaged in the base case for development, to 20.36 per cent of OIIP (Oil Initially In-place). From a production perspective, this would result in a cumulative output of 3.330 million tonnes of oil and 0.4719 billion cubic metres of gas from the field by 2025-26, as against the business-as-usual scenario of 2.763 million tonnes of oil and 0.4009 bcm of gas. The project is scheduled to be completed by March, 2014. The board also approved a ` 115 crore investment in the Heera and South Heera fields, situated 70 km South-West of Mumbai city. Considering the onset of the monsoon in mid-2012, the ONGC board decided to grant approval to the project ahead of ratification of the feasibility report as it would enable expeditious production of oil and gas through three clamp-on structures, of which two will be completed before the onset of the monsoon. It has been felt that with this proactive and advanced action, drilling activities in the slots of the clamp-on could be conducted even during the monsoon, which would make early production from these wells during 2012-13 & 2013-14 possible.

January 4, 2012. ONGC has found four new potential hydrocarbon reserves in the country's west and northeast. The new finds will take ONGC's total number of discoveries in 2011/12 to 15. The new discoveries have been made in the northeastern state of Assam and the western Gujarat state.

January 10, 2012. Hindustan Petroleum Corp is seeking 140,000 tonnes of diesel for the first time in nine months because of a refinery outage and increased demand after a cold spell hit north India. A diesel hydro-desulphurisation unit at HPCL's 166,000 barrels-per-day (bpd) Vizag refinery in south India has been shut for unplanned maintenance, which has boosted the sudden demand for the product. The cold winter in north India has also led to an increase in demand for diesel which is used in diesel generators.

January 6, 2012. Reliance Industries will shut several units at its newer 580,000 barrels-per-day Jamnagar refining complex for a three-week maintenance in February. The shutdown will reduce its appetite for crude and also cut back gasoline output, tightening supply of the motor fuel in Asia. Reliance will shut a 290,000 bpd crude distillation unit (CDU) or half of the crude processing capacity at the Jamnagar complex. Other units such as a 70,000 bpd coker, a catalytic reformer (CCR) and a residue fluidised catalytic cracker (RFCC) or gasoline-making unit may also be idled during the February turnaround. A CCR converts naphtha into reformates used in gasoline blending. The company confirmed the maintenance, but declined to specify which units will be shut. Reliance has a 110,000 bpd CCR and a 200,000 bpd RFCC at the newer complex, which analysts had said could produce 8 million-10 million tonnes of gasoline a year. Taiwan's CPC will also be shutting a 50,000 bpd RFCC in February for a two-month maintenance, while Formosa will only restart a 84,000 bpd RFCC in the later half of January. Reliance, owner of the world's biggest refining complex, also operates an older, 660,000 bpd refinery at Jamnagar. It plans to shut another 300,000 bpd CDU for maintenance but the schedule was not immediately clear.

January 7, 2012. The consortium led by the state venture Gujarat State Petronet Ltd (GSPL) is planning to raise ` 8,500 crore to fund three cross-country gas transmission projects with total length of 4,000 km. Oil marketing companies IOC, BPCL and HPCL are the partners in the projects entailing an investment of ` 12,000 crore. Balance money would come from the equity to the tune of ` 3,500 crore to be infused into two SPVs. In 2010, the Petroleum and Natural Gas Regulatory Board awarded three licences to Gujarat State Petroleum Corporation (52%) in consortium with IOC (26%), BPCL (11%) and HPCL (11%). They will lay pipelines between Bhatinda-Jammu (700 km) and Mehsana-Bhatinda (1,650 km) through one SPV and Mallavaram-Bhilwara (1,595 km) under another banner. Partners have also started exploring possibilities to import LNG to transmit through pipelines with capacity to transport 95 mmscmd of gas. GSPL promoter Gujarat State Petroleum Corporation is in talks with BG Group and Gazprom Global LNG to procure LNG under the term contracts to feed the proposed gas grid. BPCL too is chalking out plans to strengthen its gas business through its interests in exploration blocks in Mozambique, Brazil and Indonesia besides participating in LNG terminals. The boards of IOC and HPCL will soon approve the capital structure for the proposed pipeline project connecting the width and breadth of the country.

January 4, 2012. The Adani group and state-run oil companies have signed confidentiality agreements to bid for the controlling stake of the BG Group in India's biggest private-sector city gas distribution venture Gujarat Gas Co Ltd (GGCL). State-run companies, such as Oil India Ltd and GSPC, are among the companies that have signed non-discosure agreements with the BG Group for the controlling stake in Gujarat Gas which BG is exiting. Torrent Power, which was also considering a bid, is learnt to have shelved its plan. Gail India Ltd has still not got the approval to bid. BG Group's adviser Citigroup has opened a virtual data room with past 10 years financial records of GGCL besides gas contracts details. Incorporated in 1980, GGCL caters to around 3.50 lakh gas customers in South Gujarat market. Indian and foreign institutions and retail investors together hold 35% stake in GGCL. BG Group is aiming to sell off its entire 65.12% stake in GGCL. Besides overall sentiment, the capitalisation of GGCL is eroded on account of rising dollar against Rupee, high LNG prices and BG Group's announcement to exit from CGD business in November last year.

January 10, 2012. India's state-run Bharat Petroleum Corp expects its capital expenditure at 42.5 billion rupees ($815.9 million) for the financial year beginning March, up from 35 billion rupees this fiscal. The company could also raise 20 billion rupees in the 2012/13 fiscal year through local and foreign loans.

January 10, 2012. The government will gradually increase diesel prices in small doses at an "appropriate time" to help oil companies that are selling the fuel below market rates, and insulate consumers from a sharp increase, oil minister Jaipal Reddy said. With inflation showing signs of abating, the government has room to consider raising prices of diesel, which currently sells at 11.30 below international rates, but Reddy said the oil ministry will be cautious. Food inflation turned negative in last week of December, at -3.36%, while fuel inflation accelerated to 14.6%, government data indicated. In the previous week, annual food inflation dipped to a four-year low of 0.42%. Diesel prices have been frozen since June, and are widely expected to be raised only after assembly elections scheduled between the end of this month and early March. Reddy said the extent of the price hike would be determined in consultation with oil companies, which are closely monitoring market volatility and the value of the rupee.

January 9, 2012. Indian refiners and oil ministry officials are meeting to discuss alternative methods to pay for Iranian oil imports should an existing mechanism via Turkey's Halkbank be halted under US sanctions against Tehran. Financial sanctions signed into law by President Barack Obama on New Year's Eve make it difficult for pay for Iranian oil. The European Union is expected to announce tough measures of its own at the end of the month. The meeting was to explore alternative modes of payment for Iranian supplies. Halkbank has already refused to open an account for state-refiner Bharat Petroleum Corp for Iran oil imports. Iran has so far not cut supplies to India. Indian companies have begun talks with alternative suppliers to slowly replace some of the 350,000 barrels a day (bpd) of oil they buy from Iran. India is talking to a Russian bank as an alternative to Halkbank. Washington and its allies are imposing the measures to force Iran to abandon a nuclear programme which they say is aimed at producing an atomic bomb. Iran says the programme is peaceful. India imports 400,000 barrels a day of crude - worth about $12 billion a year - from Iran, making it India's seventh largest trading partner.

January 9, 2012. Cairn and Vedanta Resources may have jumped the gun in concluding the $8.5-billion deal before they received the government's formal approval, but the oil ministry has recommended to the Cabinet that the transaction that was conditionally cleared in June should get the final consent. Vedanta has already paid the money to Cairn for acquiring the controlling stake in Cairn India and appointed its nominees on the board. The home ministry has also cleared the deal, but along with the approval, it has placed on record various environmental, regulatory and human rights issues that Vedanta has faced in recent years.

January 9, 2012. State-run oil companies reported a revenue loss of $6.46 billion in the third quarter ending Dec. 31 for selling subsidised fuel. At 190 billion rupees, the bulk of under-recovery was that of Indian Oil Corp.

January 9, 2012. Industry body Assocham asked the government to lend a helping hand to troubled airlines by treating jet fuel as 'declared goods', which will lower local taxes on the fuel. If a commodity is given declared goods status, it will enjoy a significant reduction in value-added tax. The chamber said the Indian aviation industry is adversely affected by taxation on Aviation Turbine Fuel (ATF) as the rate varies substantially from state-to-state. ATF should also be brought under the proposed GST. Once implemented, GST would subsume central and state taxes like excise, customs, service tax, sales tax and VAT.

January 6, 2012. Despite a fall in the rupee making oil imports costlier, petrol prices may not be hiked before the end of February, when elections in five crucial states like Uttar Pradesh conclude. State-owned oil companies have on two occasions during the past one month refrained from raising petrol prices as the government, wary of the political fallout of such a move, advised them to defer the decision. A ` 2 per litre hike in petrol retail prices is needed to level domestic rates with the cost of imports. Tensions between Iran and the West have pushed up oil prices and oil companies may come under pressure if they rise further. The ruling Congress has high stakes in Assembly elections, particularly in Uttar Pradesh, where the last phase of polling ends on February 28, and does not want any "mood spoilers" before the polls. Indian Oil (IOC) and other state-run firms, which had last month refrained from hiking petrol prices by about a rupee as the government was wary of protests while Parliament was in session, decided against revising rates even this month.

January 5, 2012. The government will soon sign an amended contract with BP, Reliance Industries' minority partner in 21 blocks, as it has received a clean chit from the Directorate General of Hydrocarbons on the global energy major's financial obligations in the D6 block. The move will give BP a legal role in the management of India's giant gas block in the eastern coast.

POWER

January 8, 2012. Tata Power said the first 800 MW unit of the Mundra Ultra Mega Power Project (UMPP) has started power generation. The project at Mundra in Kutch district of Gujarat, shall have five units of 800 MW each, generating 4,000 MW of power using supercritical technology. The first unit was slated to be ready for commissioning by September 2011. Power Finance Corporation, the nodal agency for these UMPPs, has so far awarded four such projects. The other three projects -- Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) -- have been bagged by Reliance Power. The Tata Group firm, which currently has power generation capacity of 3,797 MW, has ambitious plans for 25,000 MW capacity by 2017. Of this, 4,000 MW will come from Mundra.

January 6, 2012. Jindal Steel & Power said it has started commercial generation of power at the third unit at Dongamahua, Raigarh in Chhattisgarh. The Delhi-based steel and power company is building 10 units of 135 megawatts each - 6 units of at Angul in Odisha and 4 units at Dongamahua. With the commissioning of this unit at Raigarh, JSPL now has total 4 units of 135 MW each in commercial operation. The total power generation capacity of the company has increased to 917 megawatts. Thermal power plants in India have been hit be delays due to lack of environmental clearances or due to inadequate coal linkages. Jindal Power, a subsidiary of JSPL, had been given permission by the Chhattisgarh Environment Conservation Board, to carry out the expansion project of its 2,400 MW power plant.

January 5, 2012. Adani Enterprises, India's largest coal trader accounting for half of the thermal coal that is imported, is now entering the coking coal business to meet growing demand for the mineral from steel companies. The Ahmedabad-based energy-to-logistics major will bring in its first shipment of 57,000 tonnes of coking coal from Canada to Dhamra on the eastern coast for use by an unnamed steel company. Coking coal is used by steel companies and is different from thermal coal that power plants burn to generate fuel. Major coking coal countries include Australia, South Africa, Indonesia and Mozambique. The US and Canada also have adequate deposits of coking coal. Indian power plants import about 65 million tonnes of coal which is expected to go up to 80 million tonnes. Adani brings in about 40 million tonnes of thermal coal annually. However most of the imported coal hasn't been able to reach consumers due to high prices and lack of adequate transport facilities. Adani Enterprises recently said it will invest more than $4 billion to develop and mine coal blocks awarded to its various joint ventures with state electricity boards, in line with the government plan to increase fund injection in power projects for thermal plants. The Gautam Adani-promoted company which last year acquired Australian coal company Linc Energy for $3 billion in one of the largest outbound transactions, has been appointed as a mining operator in five coal blocks, through a competitive tender process, and will also build the infrastructure to deliver coal to the projects under an agreement with the electricity boards.

January 4, 2012. Power exchanges may be heading for a shake-up as Ahmedabad-based Marquis Energy Exchange gets ready to launch country's fourth such bourse. According to power market regulations, once a third exchange comes into play, existing bourses with less than 20% market volume have to shut operations or merge with another exchange within two years. Financial Technologies-promoted India Energy Exchange currently commands a market share of 93% while Power Exchange India, jointly promoted by NSE and NCDEX is the smaller exchange, which needs to improve its share. The exchange has been given time till January 2013 to revive and increase market share. A third exchange called National Power Exchange, a JV of NTPC, NHPC, PFC and TCS, has been approved by the government and is likely to begun operations in next six months. The exchange was likely to begun operations in July this year.

January 10, 2012. Neyveli Lignite Corporation Limited has undertaken three thermal power projects worth ` 13,270.22 crore for further expansion in Tamil Nadu, the Ministry of Coal said. The projects include the expansion of thermal power station TPS-II at Neyveli at an estimated cost of ` 2,452.57 crore, the NTPL coal-based power station at Tuticorin at ` 4,909.54 crore and the New Neyveli Thermal Power station at Neyveli at ` 5,907.11 crore, the ministry said. NTPL is a joint-venture between NLC and the state electricity board. While the Neyveli project is expected to be completed by July 2012, the Tuticorin project is scheduled to be completed by January 2013 and the New Neyveli project by December 2015.

January 9, 2012. Private power companies have asked government to stop gas supply to non-priority sectors to prevent 8,200 MW electricity generation assets from being stranded. The companies have also demanded curtailing supply to existing power plants to help fresh projects. Association of Power Producers has requested government to consider discontinuing 18 mmscmdgas supply to non-core sectors like fertilisers and steel and also suggested supplying gas to run power projects at 60% capacity against 70% at present. About 8,200 MW gas-based generation capacity is likely to be commissioned in the next 18 months of which 4,000 MW projects would be ready for commercial operation by March, 2012. Public money in the form of debt provided by various Indian banks and financial institutions is at a grave risk unless these projects start commercial operation by March 31, 2012.

January 8, 2012. The Power Ministry is likely to finalise about eight smart grid technologies-related projects on pilot basis worth nearly ` 500 crore in two months. The basic idea of a smart grid is to improve overall efficiency of the power sector, especially in transmission and distribution segments, with the aid of information technology. Around 14 state utilities are expected to submit plans for pilot projects related to smart grid technologies. Each pilot project would take about 12 to 18 months for completion. Around 50 per cent of the total cost of a pilot project would be borne by the Ministry while the remaining would come from the utilities.

January 7, 2012. The ministry of power has asked coal ministry to suspend the new coal pricing system based on gross calorific value (GCV), introduced by the state-owned monopoly Coal India from January 1, saying it will increase costs for both producers and consumers. The ministry had written to the coal ministry on December 30, 2011, saying the infrastructure for introducing the GCV system was not yet in place. Following the migration to the new system, NTPC, the largest consumer of the state-owned monopoly Coal India and the biggest power producer in the country, is set to see its coal bill rise 40%, to ` 28,000 crore a year from ` 20,000 crore. NTPC had also requested the power ministry to take up the issue with the coal ministry. Despite the request, Coal India moved to the new system from January 1.

January 6, 2012. Power distribution utilities fear financial disaster as a recent government directive allowing industrial consumers to buy electricity directly from generators and traders will wipe out a third of their revenue, leaving no room for cheap supplies to farmers and retail consumers. The law ministry's decree, in step with international practices, cheers industrial buyers, who complain power rates in India are abnormally high, but state utilities said small consumers face a "tariff shock" if high-paying clients migrate. Regulators in states like Gujarat, Tamil Nadu and Maharashtra plan to hold stakeholders meetings on the matter. The move can compound the problems of the power sector, where projects to generate more than 43,000 mw face uncertainty of fuel supply and banks, which are funding projects worth ` 1.6 lakh crore, fear defaults. The law ministry says distribution companies are duty-bound to provide network access to large industries that consume above 1 MW power and regulators cannot fix charges for them.

January 5, 2012. Adani Power has approached the Supreme Court to scrap an electricity sales contract because of fuel supply uncertainty and unexpected rise in cost of imported coal, in a case that can make or break mega projects worth ` 1.6 lakh crore and their lenders.

The company had signed a power purchase agreement in 2007 for supply of 1,000 MW to a state utility at a fixed tariff of 2.35 per unit for 25 years. But project economics changed drastically with the fall in domestic coal supply and abrupt rise in cost of imports, prompting Adani Power to issue a notice to terminate the contract. The utility, happy with the low tariff that Adani had bid, rejected the notice and won its case in the state's regulatory body and the appellate tribunal. Adani Power has filed a civil appeal challenging the regulators. The court's verdict would have huge implications for ultra mega power projects by Tata Power at Mundra and Reliance Power at Krishnapatnam, which have become unviable because of the abrupt rise in price of Indonesian coal but are locked in contracts to sell cheap electricity. It will also impact projects of Essar, JSW, Lanco, India Bulls and Shapoorji-Pallonji.

January 5, 2012. The government said there is no proposal to increase coal prices at present even as Coal India has adopted a new system for pricing and excise duty on dispatches of fossil fuel has been raised. Coal India (CIL), however, said that the burden on account of increase in duty will be passed on to the consumers, adding that it would be negligible.

The Coal Ministry had hiked stowing duty - levied for rehabilitation, stowing and infrastructure development of abandoned mines - from ` 10 a tonne to ` 20 a tonne. The step follows a Cabinet decision to raise the cap on Stowing Excise Duty (SED) to ` 50 a tonne from ` 10 a tonne. Although coal pricing has been deregulated since 2000, the government still plays a role in determining the price. CIL, which accounts for 80 per cent of coal production in the country, switched over to new pricing mechanism from January 1. Under the new pricing mechanism, the price of coal will be graded by CIL on gross calorific value, the international benchmark for expressing the heat content of coal, from the earlier practice of grading prices on the basis of useful heat value of the fuel. A partial revision in prices of coal was last undertaken by CIL in February 2011. The PSU on an average raised the price of fossil fuel by about 15 per cent.

OIL & GAS

January 5, 2012. Shell said it had restarted production at its Bonga oil field offshore Nigeria, after an oil leak in December forced it to shut down the facility. The Anglo-Dutch oil major was forced to shut down the facility, after a leak during a tanker loading operation led to Nigeria's worst offshore oil spill in more than a decade. Investigation into the exact cause of the leak is still ongoing, but Shell said it had completed the clean-up from the spill and resumed output at the 200,000 barrel a day oil field, which makes up some 10% of Nigeria's total oil output. The company also restated its denial of accusations from Nigerian villagers that oil which washed up on the shoreline was from the Bonga spill. According to Shell, oil from the Bonga leak--which resulted in at least 40,000 barrels of oil spilling into the ocean--had largely dispersed thanks to the combined response efforts of the company, its partners and the Nigerian government.

January 4, 2012. China Petrochemical Corp., the second-largest Chinese oil company, agreed to buy a one-third stake in five Devon Energy Corp. exploratory oil projects in the U.S. for $900 million to expand holdings of reserves trapped in shale. The company, known as Sinopec Group, will pay $900 million in cash and as much as $1.6 billion in Devon’s future drilling costs, funding 125 wells. China National Petroleum Corp., Sinopec Group and Cnooc Ltd. are seeking to gain technology through partnerships in order to develop China’s shale reserves, estimated to be larger than those in the U.S. Chinese companies announced about $18.3 billion worth of bids in 2011 for overseas oil and gas exploration and production companies.

Sinopec Group bought Daylight Energy Ltd., based in Calgary, for about C$2.2 billion ($2.18 billion) after falling crude and natural-gas prices made valuations attractive. Chinese shale may hold 1,275 trillion cubic feet of gas, or 12 times the country’s conventional natural-gas deposits. China’s “technically recoverable” reserves are almost 50 percent more than the 862 trillion cubic feet held by the U.S.

January 9, 2012. State oil giant Saudi Aramco will sign a final deal to build a new 400,000 barrels per day (bpd) oil refinery in Yanbu with China's Sinopec Group, the company said. Under the initial agreement, Aramco will hold a 62.5 percent stake in the joint venture formed to develop the project - now rebranded as Yanbu Aramco Sinopec Refining Co- while Sinopec will own the rest. For Sinopec, the venture would be the first refining project the Chinese state-run oil major, parent of top Asian refiner Sinopec Corp, builds outside China, putting it in a race against rival PetroChina which has snatched a string of refinery deals beyond Chinese borders.

Construction of the refinery, located on the Red Sea, is now underway and was to have been carried out by U.S. oil firm ConocoPhillips and Aramco. But Conoco pulled out of the plans in April 2010 as it shifted away from the refining business to focus on oil and gas exploration.

Aramco has said it will push on with the project even after the withdrawal of Conoco as it is part of its drive to boost domestic refining capacity to 3.5 million bpd in 2016. In July 2010, Aramco awarded deals to build the plant seen complete in 2014. The refinery is slated to process heavy crude from Saudi Arabia's Manifa oilfield, which is currently under development to reach an output of 900,000 bpd by 2014. Aramco has already partnered with Sinopec at the joint venture Fujian plant in southeast China. It is considering to build three new joint venture refineries in Asia, Aramco's largest and fastest growing oil market as part of plans to boost its global refining capacity by 50 percent to over 6 million bpd.

January 7, 2012. Ethanol futures were unchanged with corn in Chicago as crude oil dropped and gasoline gained. Futures capped a third weekly gain as oil fell amid concern Europe may slide into recession and gasoline advanced after the U.S. added 200,000 jobs in December. Corn is the primary component in U.S. ethanol, which is blended into gasoline.

January 6, 2012. U.S. refiners could see new opportunities as Europe's largest independent refiner and wholesaler of petroleum products shuts down three of its five refineries, analysts said. Petroplus Holdings AG announced the three closings as banks starting freezing more than $2 billion worth of the financially troubled Swiss company's credit lines. Petroplus has faced stubbornly high crude prices, stagnant demand and fierce competition from overseas refiners, which has led to net losses in every quarter except one since 2009. The refinery shutdowns in France, Belgium and Switzerland could help U.S. crude processors fill refining gaps and grab market share in Europe. That could increase the expanding U.S. exports of oil distillates, such as heating oil and diesel, to the Continent. Output from the combined 667,000 barrels a day of refining capacity at the shuttered refineries already has ceased, while the company's refineries in U.K. and Germany are running at half of their combined 330,000 barrel-a-day capacity.

January 6, 2012. Exterran Holdings, Inc. announced that Petrobras has awarded the company a contract for the design, fabrication and sale of a major natural gas processing and treating facility in Itau, Bolivia. The facility is a dew point gas processing plant that can process 200 million standard cubic feet of natural gas per day and is expected to start up during 2013. The project, which is Exterran's largest gas processing facility by capacity in Latin America, builds on the company's many years of experience providing oil and gas infrastructure and surface production solutions for clients in the region.

January 5, 2012. Kuwait Petroleum Corporation (KPC) and China Petrochemical Corporation., known as Sinopec, agreed to step up cooperation towards the smooth execution of their planned $9 billion joint venture to build a refinery and petrochemical complex in south China. The project with Asia's top refiner Sinopec, potentially to be the largest Sino-foreign joint venture in China, involves a 300,000 barrel-per-day refinery, a 1 million-ton-a-year ethylene plant and retail network in the southern Guangdong Province. Kuwait will be the sole supplier of crude oil to the world-class integrated complex, to be located on Donghai Island in the southern coastal city of Zhanjiang. With an eye to starting operations of the refinery part at the end of 2014, construction has already begun. As one of the pillars of KPC's expansion strategy for 2030, the joint venture represents a highly significant step forward in plans to expand its business in China. With a population of some 100 million, Guangdong is China's largest oil consuming province that creates a huge energy market.

January 9, 2012. A pipeline that would allow oil from the United Arab Emirates to bypass the Strait of Hormuz separating it from Iran has been delayed because of construction difficulties. As many as 270 construction issues have pushed back the completion date. The $3.3 billion project won’t be ready until at least April. Abu Dhabi, holder of most of the U.A.E.’s oil reserves, had planned to start exports in January 2011 through the pipeline to a port outside the strait. The 1.5 million barrel-a-day link would ensure the U.A.E. can export crude without risking a blockade at Hormuz, where fully laden tankers exit the Persian Gulf with one-fifth of the world’s traded oil. The possibility that Iran might try to close the waterway has intensified as Europe prepares to follow tougher U.S. sanctions on the country over its nuclear program. Iran has started to enrich uranium at its Fordo production plant. An average of 14 crude tankers sail each day through the strait, which is 21 miles (34 kilometers) wide at its narrowest point.

January 5, 2012. Several Canadian oil-sands companies emerged as financial backers of Enbridge Inc.'s controversial plan to build an oil pipeline to Canada's west coast in regulatory filings. France's Total SA, Suncor Energy Inc., Nexen Inc. and Cenovus Energy Inc. all said in a filing with Canada's National Energy Board that they plan to ship oil on the Northern Gateway oil pipeline, which would transport up to 525,000 barrels of oil a day from Alberta to a port in Kitimat, British Columbia, and then on to markets in Asia. The four companies are all oil-sands producers that are planning major expansions of their operations, and looking for more pipeline capacity to export production--especially to Asia, where the companies can fetch higher prices for their oil. However, Enbridge's Northern Gateway project faces substantial resistance from native and environmental groups in Canada who said they oppose the pipeline due to the potential for spills on land and water, and due to the environmental effect of oil-sands development in Alberta. The four companies named are also funding participants for the pipeline--meaning they are among several Canadian and international oil producers that have contributed a total of $100 million in preliminary funding for the project, which has been estimated to cost $5.5 billion to construct by 2017. Other companies yet undisclosed may also be providing financial backing for Northern Gateway--the four were disclosed as a group because they used the same law firm to prepare the filing. State-owned China Petroleum & Chemical Corp., or Sinopec, has been previously disclosed by Enbridge as one of the funding participants for the pipeline.

January 10, 2012. Surging prices for oil and natural- gas shales, in at least one case rising 10-fold in five weeks, are raising concern of a bubble as valuations of drilling acreage approach the peak set before the collapse of Lehman Brothers Holdings Inc. Chinese, French and Japanese energy explorers committed more than $8 billion in the past two weeks to shale-rock formations from Pennsylvania to Texas after 2011 set records for international average crude prices and U.S. gas demand. As competition among buyers intensifies, overseas investors are paying top dollar for fields where too few wells have been drilled to assess potential production.

January 10, 2012. According to some experts, Iran is unlikely to shut down shipping through the Strait of Hormuz in response to Western sanctions targeting its oil exports. Oil prices fell as concern eased that Iran would attempt to impede shipping through the Strait, which accounts for about a fifth of the oil traded globally. The decline occurred even as tensions increased, with Iran announcing it has taken another step in its nuclear program and that it had sentenced to death a former U.S. soldier of Iranian descent accused of spying. The European Union is weighing whether to move up to Jan. 23, from Jan. 30, a meeting of foreign ministers to consider imposing an embargo on imports of Iranian oil. Separately, France condemned Iran’s production of enriched uranium at its facility near Qom and called for sanctions of an “unprecedented severity”.

January 10, 2012. The Organization of Petroleum Exporting Countries can’t get involved in the dispute over Western sanctions against Iran, Venezuela’s oil minister Rafael Ramirez said. The Middle East country, OPEC’s second biggest producer, has threatened to block the Strait of Hormuz in response to U.S. and European sanctions aimed at reducing Iranian oil revenues.

January 5, 2012. Chevron Corp. lost its challenge to an $18 billion judgment before an Ecuador appeals court in a lawsuit alleging the company is responsible for chemicals spilled in the Amazon River basin more than 20 years ago. The decision upholding the lower-court judgment was issued by a panel of three judges in the Provincial Court of Justice of Sucumbios in Lago Agrio, Ecuador. Chevron appealed a February ruling that it was responsible for chemical-laden wastewater dumped in jungle land from 1964 to about 1992 by Texaco Inc., which Chevron acquired in 2001. Chevron, the second-largest U.S. energy company, has no assets or operations in Ecuador. The plaintiffs must wait until the appeals court makes its decision final, which could take at least a two weeks, before moving ahead with enforcement actions in foreign courts.

January 5, 2012. Some groups feel that President Barack Obama’s energy policy is on the “wrong track” by promoting natural gas while drafting restrictions on the hydraulic fracturing process that produces the fuel. A boom in gas production using hydraulic fracturing, or fracking, increased production of the fuel, cut prices 32 percent and raised environmental concerns about tainted drinking water supplies. Further development of shale resources using fracking may add more than 1.6 million jobs by 2035.

U.S. natural gas production rose to a record 2,483 billion cubic feet in October. While Obama said that fracking enabled the U.S. to tap “a century’s worth of reserves,” he also said the production must be done safely and without polluting drinking-water supplies. The Environmental Protection Agency and the Interior Department are drafting regulations aimed at ensuring drinking water supplies are protected, while states, such as West Virginia and Colorado, impose rules on operators.

January 4, 2012. A New Year’s Eve earthquake in Youngstown, Ohio, that prompted the state to stop or delay operations at five wells for disposing of wastewater from oil and natural-gas extraction won’t affect production. The wastewater is a byproduct of hydraulic fracturing, also called fracking, used to unlock fossil fuel deposits.

Governor John Kasich and the Ohio Department of Natural Resources consider the earthquake and others like it to be isolated occurrences and will continue using the state’s other 177 disposal wells without interrupting shale-gas development that may produce thousands of jobs. Kasich has touted the potential economic benefits of using hydraulic fracturing to release oil and gas from rock formations by forcing millions of gallons of chemically treated water and sand underground.

January 4, 2012. Nigerian President Goodluck Jonathan called an emergency meeting of his Cabinet to discuss the goverment’s scrapping of subsidies on fuel. The Nigeria Labor Congress and the Trade Union Congress of Nigeria are scheduled to meet to set a date for a strike involving “tens of millions” of people. Protesters marched in the market area of Yaba in the commercial capital, Lagos, as long lines of vehicles formed around fuel stations. Nigeria, Africa’s biggest oil producer, abolished 1.2 trillion naira ($7.5 billion) of subsidies on Jan. 1. That’s likely to more than double the price of unleaded gasoline to 140 naira a liter (0.26 gallon). Nigeria imports most of its fuel because of a lack of refining capacity.

POWER

January 9, 2012. Poland's JSW, the European Union's biggest coking coal producer, will launch a tender in January for a 70-75 megawatt (MW) power plant fuelled by coal production waste. The total cost of the investment could significantly exceed 0.5 billion zlotys ($141.75 million). The project is part of the miner's investments aimed at helping the state-controlled group generate all its needed power supplies by 2016. The group currently produces some 70 percent of the energy it consumes.

January 9, 2012. Harbin Electric International Co, the major subsidiary of state owned Harbin Electric Corp, has inked an agreement with La Corporacion Electrica del Ecuador to start a hydropower project in Ecuador. Ministry of Electricity and Renewable Energy of Ecuador without disclosing the timetable that the project named Minas San Franc will cost $477 million and is designed to have an installed capacity of 275 megawatts. The project will be completed within four years. The project is expected to generate 1,290 gigawatt hours of power per year accounting for 12% of Ecuador total electricity output. Harbin Electric Corp signed a contract to start a thermal power project in Ecuador which is designed to have 12 8,000-kW diesel engines with a total installed capacity of 96 MW. The company which owns six overseas branches has inked contracts to build power stations out of China including Pakistan, Philippines, India and Indonesia with a combined installed capacity of more than 1.3 gigawatts.

January 7, 2012. The Three Gorges Power Plant, the country's largest hydropower project, generated 78.29 billion kilowatt-hours of electricity in 2011, China Yangtze Power Co., Ltd said in Yichang, Central China's Hubei province. Affected by reduced water inflow, the total power generation volume was down 7.2 percent compared with that of 2010, the company said. The Three Gorges Dam has seen water inflow quantities from the upper reaches of the Yangtze River during the flood season drop by about fifty percent compared with other years.

January 10, 2012. The National Power Corporation (NPC) has cut down its power allocation for this city and nearby areas in Sarangani and South Cotabato provinces by 32 megawatts (MW) as a result of the dwindling capacity of its hydropower plants in Mindanao. The NPC reduced its contracted power supply to the cooperative’s service area starting this year to 72 MW from its average peak requirement of 102 MW reportedly due to the unstable condition of its maintained power plants, especially the hydropower plants in Bukidnon and Lanao del Norte.

January 9, 2012. Iranian consortium of private sector will invest $571 million in two Armenian projects for the transmission lines between the two states.

The investments will raise the power of hydroelectric power plant on the River Araks to 1.7 gig watt annually. The agreement was reached during the Iranian President Mahmoud Ahmadinejad’s recent visit to Armenia. Iran will build a pipeline to transfer gas to Armenia and will import energy from neighboring state.

January 9, 2012. Iran plans to connect its national power electricity grid to Russia by the next calendar year which will end on March 20, 2013. Iran will exchange up to 15 billion kilowatt hours (BkWh) of electricity with its neighboring countries by the end of the current year, up 50 percent year on year.

The country is currently exchanging electricity with Afghanistan, Armenia, Azerbaijan, Iraq, Pakistan, Nakhichevan, Turkey and Turkmenistan and plans to add 5,000 megawatts of capacity to its power grid annually. The country will be exporting up to $1 billion in electricity by March 2012. Iran's total power generation capacity stands at 63,403 megawatts (MW) while total length of the power grid exceeds 780,000 kilometers.

Exchange of electricity with neighboring countries reached 1,341 MW in late December 2010. The top exporter was Armenia with 237 megawatts, and the top importer of Iranian electricity was Iraq with 650 megawatts. Iran seeks to become a major regional exporter of electricity and has attracted more than $1.1 billion in investments to build three new power plants. The country is ready to connect national power grid to Russia through Azerbaijan. Iran and Azerbaijan are holding final negotiations in this regard.

January 9, 2012. Persistent power shortages being experienced in the country will have an adverse effect on the economic growth envisaged in the Medium Term Plan (MTP). The synergy between economic growth and adequate energy supplies was critical. Improved energy supply is one of the major underlying macro-economic assumptions of the plan. Power generation capacity should be increased to 3 000 megawatts per day by 2015 to be sufficient. Infrastructure is one of the key enablers that the MTP is anchored on and under the plan, power generation capacity must be increased to meet national demand and for export in the region. Zesa Holdings is currently producing between 1 300 and 1 400 megawatts a day against a demand of about 2 000 megawatts. Energy and transport, both air and railways, remained two key areas needing redress.

January 8, 2012. Iran has started to enrich uranium at its Fordo production facility. Iran will soon have a ceremony to open the site officially. The existence of the Fordo plant, built into the side of a mountain near the Muslim holy city of Qom, south of Tehran, was disclosed in September 2009, heightening concern among the U.S. and its allies who say Iran’s activities may be a cover for the development of atomic weapons. The Persian Gulf country has rejected the allegation, saying it needs nuclear technology to secure energy for its growing population.

January 10, 2012. ICRA expects wind energy capacity to clock annual growth of 15% in 2012-13 and beyond, driven by growing demand from independent power producer (IPP) segment. The rating agency pegs the wind energy capacity addition in 2011-12 at around 2,800 megawatts as against 2,350 MW added a year ago. Also rising cost of conventional energy sources and persistent domestic fuel shortages would make wind energy more cost-competitive.

The increase in the share of IPPs can be attributed to larger project size undertaken by them, ranging above 50 MW. Also, the share of retail and corporate investors is likely to reduce when the accelerated depreciation benefit available to them goes away after the implementation of the Direct Tax Code. Although ICRA maintains a favourable long-term demand outlook for wind energy sector aided by regulatory and fiscal support, it says that capacity addition could be affected by weak financial position of state utilities. Also implementation of renewable energy portfolio obligation norms and strengthening of the intra-state transmission network would also impact the capacity addition.

January 10, 2012. Mahindra Solar One, a joint venture between the Mahindra Group and Kiran Energy, plans to invest ` 1,000 crore in solar power generation to build a capacity of 100 megawatts over the next two years, continuing the trend of large business houses investing heavily in the sector.

India's solar energy sector has attracted several last business groups such as the Tatas, Anil Ambani's Reliance Power, GMR and the Adani group, which recently commissioned India's biggest solar unit to generate 40 MW. Foreign companies are also bidding for projects as India aims to scale up its solar power generation capacity to 20,000 MW by 2020 from around 250 MW now. The company announced the commissioning of its first grid-connected solar power unit of 5 MW in Rajasthan. M&M has forayed into the renewable space through Mahindra Cleantech Ventures, which has set up three divisions - Mahindra Solar for power generation, Mahindra EPC for engineering of solar projects and Mahindra Off-grid solutions that offers rooftop setups for solar power generation.

January 9, 2012. Pitching for exploiting tremendous energy available from the Sun, former President A P J Abdul Kalam proposed 'nano energy packs' for transmitting energy collected by space-based power plants to the earth. Explaining the limitations of the surface-based solar power plant, Kalam said space-based solar power has many advantages over traditional terrestrial based solar power plants and so was "far more effective, in their efficiency, in power generation than the land-based system." The energy collected by space-based plant can be transmitted to earth either by microwave or technologies similar to that of laser technology, he said.

January 5, 2012. Diversified Adani Group announced the commissioning of country's largest 40 MW solar power plant in Kutch district Gujarat. For India's largest private thermal power producer, the Solar Power Plant marks Adani's first big foray in the renewable energy sector. Going forward, Adani Group is planning to expand the capacity of this plant to 100 MW. The group is claiming to have commissioned country's largest solar power plant in record time of 150 days starting from foundation stone laying to electricity generation. The solar power plant is using solar PV technology and has over 400,000 solar PV modules mounted on 21,600 structures, which are erected on 130,000 foundations.

The power generated from this solar plant will be evacuated through a 66 KV line linked to a substation in Netra, located 20 kms away from the project site. The project was awarded under Gujarat Solar Power policy of 2009. Adani Power, a company of Adani Group, is currently operating 3,300 MW at Mundra with 4 units of 330 MW and 3 units of 660 MW, and is in the process of commissioning two more units of 660 MW by March 12 to achieve the final plant capacity of 4,620 MW. This will position Mundra as the single largest thermal power plant in India. Within this financial year, Adani Power also plans to commission 1320 MW at Tiroda enhancing operational capacity of Adani Power to 6000 MW by March 12. Further Adani Power plans to commission 6000 mw by March 2012 and 10,000 mw of power generation capacity by March 2013. This capacity will be achieved with Mundra (4620MW), Tiroda (3300MW) and Kawai (1320MW).

January 5, 2012. Developers of projects under construction in India’s largest solar program have been given a month’s extension to complete their plants without losing their preferential payment rates. The deadline for all projects has been extended until Jan. 28, after which the above-market rates to be paid for their power will no longer be applicable. Gujarat promoted solar plants by promising to provide sites, distribution infrastructure and quick approval to projects built in its designated solar park.

The state electricity regulator pledged to pay 15 rupees (28 cents) a kilowatt-hour for 12 years, about three times the wholesale market rate for power, to photovoltaic plants completed by the extended deadline. It plans to lower that rate by as much as 32 percent after this date. India, the world’s third-biggest energy consumer, plans to become one of the fastest-growing solar markets by building 20,000 megawatts of capacity by 2022. Gujarat was the first Indian state to invite companies to build sun-powered plants in the country, and how it deals with delayed projects may set a precedent.

January 4, 2012. Azure Power has commissioned the first 5MW solar PV power plant under the Jawaharlal Nehru National Solar Mission (JNNSM) at Kathauti village, Rajasthan. The project, spread over 40+ acres of wasteland has been commissioned in a record time of 11 months. This power plant, set up under the Phase I Batch I of JNNSM will supply power to the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. It is also expected to reduce carbon emissions of up to 5500 metric tonnes every year. For batch 1 of the phase 1, NVVN (NTPC Vidyut Vyapar Nigam) had invited request for qualification for 150 Mw of solar PV projects, with a capacity of five Mw each, and 500 Mw solar thermal projects, with a minimum capacity of five Mw and maximum of 100 Mw each. Sixty companies participated in the bidding. JNNSM aims at tapping the huge potential of solar power in India, which is estimated to be around 5,000 trillion kWh per year energy. Government recently indicated that the target to achieve grid-parity would be reduced from 2022 to 2017 looking at the huge participation and low tariffs quoted by solar energy companies.

January 10, 2012. California Governor Jerry Brown plans to use half of the revenue from the nation’s first state- run cap-and-trade air-pollution program to help ease a $9.2 billion deficit in the most populous U.S. state. Brown estimates the state will take in about $1 billion in the year beginning July 1 under the landmark legislation, which allows industry to buy and sell carbon credits to reduce greenhouse gases. He wants to use about $500 million on environmental programs now financed through the general fund. California will auction tradable allowances that permit industries such as power generators and oil refiners to release carbon into the atmosphere if they can’t meet requirements to lower their pollution to 1990 levels. Brown is seeking to boost general-fund spending by 7 percent to $92.6 billion while asking voters to raise income and sales taxes to ward off further cuts to schools. California regulators in October approved the design of the cap-and-trade program, so named because it will put a ceiling on carbon emissions and allow companies to trade pollution permits to comply. Known as AB 32, it is the first mandatory regulation of its kind in the U.S. Emission reductions will be enforced by decreasing the number of allowances over time.

January 10, 2012. Japan’s wind power installations for the year ending in March will decline 68 percent after the government halted a program that provided subsidies for clean energy projects. The country will add 33 turbines generating 82 megawatts of wind power for the year ending March. For the year ended March 2011, Japan installed 256 megawatts. Japan stopped direct subsidies in 2010 that paid for a third of the cost of renewable energy projects as the country planned a shift to an incentive payment program. The preferential tariffs that are due to start in July have yet to be set and that may have contributed to the decline. Japan is targeting an increase in renewable energy generation as most of the country’s nuclear reactors are shut for checks following the worst nuclear accident since Chernobyl last March. Before the accident, nuclear power provided about 30 percent of Japan’s electricity supply. The country’s cumulative wind power capacity may reach 2,600 megawatts by March 2014 from the current 2,522 megawatts, urging the government to make an early decision on the tariffs and wind power generation targets.

January 10, 2012. Honda Motor Co., which gets the highest portion of autos sold in the U.S. from North American plants among Asian and European automakers, will produce its Acura NSX sports car in Ohio. Production and sales of the mid-engine V6 hybrid “super car” will start within three years. Development of the car is being shared between engineering groups in the U.S. and Japan.

January 10, 2012. When the U.S. Environmental Protection Agency called to say it would start delivering fresh water to people in Dimock. A retreat by the federal government within two days has left people feeling abandoned yet again in a bid to clean up water they say was turned toxic by Cabot’s use of hydraulic fracturing to hunt for gas in Pennsylvania. A community of 1,368 people in Dimock and a single, blinking traffic light along Highway 29 in northeast Pennsylvania -- have come to symbolize the national debate over the use of fracking, in which water and chemicals are shot into the earth to free gas or oil from rock formations. Their case has taken on a new importance as the EPA says it will test well water in the area, and advised residents not to drink from their wells -- reversing an earlier, initial determination that the water was safe. Dimock residents say their water went bad more than three years ago. Since then more questions have been raised about the safety of fracking.

January 10, 2012. Experts say that United Nations climate envoys should set a carbon price rather than fix a global cap on greenhouse- gas emissions, cutting the complexity of international negotiations. Developing nations may accept a global harmonized carbon price as long as they receive the money from setting that amount as well as a portion of funds raised by developed nations that have mostly caused climate change.

January 10, 2012. Solarworld AG, Germany’s largest solar-panel maker, plans to initiate anti-dumping proceedings against Chinese competitors in Europe. Solarworld seeks to join forces with European peers to take its case to the European Commission’s competition agency after Chinese panels were allegedly dumped in recent months on German markets at below-market costs.

January 9, 2012. The final grant of free-of-charge European Union carbon allowances to power utilities next month may be followed by a wave of fossil-fuel station closures. Potential sales in the first quarter of this year by factories with spare allowances means carbon permits will probably fall rather than rise. The second phase of the greenhouse-gas market, the world’s largest, runs through 2012 and most utilities will need to pay for allowances after that year instead of receiving free grants. Western Europe will need to retire about 148 gigawatts of coal-station capacity alone in the 25 years through 2035 in order to help keep temperatures from rising more than 2 degrees Celsius (3.6 degrees Fahrenheit). That’s enough to supply about 300 million EU homes. The U.S. will need to retire 182 gigawatts.

January 9, 2012. Ford Motor Co. is driving in different directions on its hybrid strategy by pulling the plug on its 7-year-old gasoline-electric Escape sport-utility vehicle while rolling out two hybrid versions of its Fusion family car. Ford at the Detroit auto show introduced a sleekly restyled Fusion, a midsize that aims to gain ground on Toyota Motor Corp.’s top-selling Camry. This Fusion will come with a choice of three propulsion systems: traditional gasoline engine, a gas-electric hybrid and a plug-in hybrid. When Ford debuted a new Escape in November, it dropped the hybrid, which sold 10,089 copies, 9.8 percent fewer than in 2010.

January 9, 2012. The inclusion of airlines in the European Union’s carbon plan will cost the industry 3.5 billion euros ($4.5 billion) and may increase ticket prices by an average of 3 percent.

The EU, which wants to lead the global fight against climate change, decided that flights to and from European airports should become as of 2012 a part of the bloc’s emissions trading system, or ETS, after airline carbon-dioxide discharges in the region doubled over two decades and international organizations failed to enact pollution curbs.

January 8, 2012. Six people were killed and two others injured in a geothermal plant explosion in northern China’s Hebei province. The blast occurred in a residential area in the city of Shenzhou and an investigation into the cause is underway.

January 7, 2012. China will issue plans to develop energy from forest biomass through 2020. The nation targets 1.52 percent of renewable energy generated from forest biomass by 2015, and 2 percent by 2020, the report said.

January 7, 2012. A unit of Warren Buffett’s MidAmerican Energy Holdings Co. acquired three wind-energy projects in Iowa that will have a combined generating capacity of 404.8 megawatts at completion. MidAmerican Energy Co., Iowa’s largest utility, bought from RPM Access LLC the 103.5-megawatt Vienna wind project that will be built in Marshall and Tama counties. The Des Moines, Iowa-based company also purchased two projects from Clipper Windpower Development Co., including the 200.1-megawatt Eclipse project in Guthrie and Audubon counties and the 101.2-megawatt Morning Light project in Adair County. The projects are expected to be completed by year-end, increasing MidAmerican’s wind generation to 2,284.8 megawatts, according to the statement. The company will have invested $4 billion in Iowa wind farms once the three plants enter service.

January 7, 2012. Via Motors Inc., a closely held assembler of plug-in vehicles for fleet customers, received $29.8 million in funding before it introduces new models at the North American International Auto Show in Detroit. The funding follows $5.5 million received in March and $4.5 million in 2010. The company, based in Orem, Utah, was formed in 2010 after acquiring the electric drive vehicle technology of geothermal power plant developer Raser Technologies Inc., now known as Cyrq Energy. Via’s plug-in trucks, like the Volt, have a gas- powered generator that can be used to extend driving range by recharging the batteries.

Via currently is using Valence and A123 Inc. batteries to repurpose stock vehicles, including GM’s Silverado pickup truck, though it is seeking an agreement with an original equipment manufacturer to obtain frames, axles and bodies for cheaper assembly. Its trucks retail for $79,000 and have a 40-mile (64-kilometer) range that’s extended by as much as 400 miles by the gasoline generator. It plans to deliver 50 vehicles in the first half of 2012 for customers including PG&E Corp., Duke Energy Corp. (DUK), Verizon Communications Inc., PacifiCorp and the U.S. government’s General Services Administration. In the second half of the year it will increase production to a few thousand vehicles.

January 6, 2012. German solar power installations surged in December as developers rushed to finish projects before subsidy reductions, keeping the market for new facilities powered by the sun near the record achieved in 2010. Developers installed panels with 2 gigawatts to 3 gigawatts in capacity, meaning installations for the full year will be near the 7 gigawatts recorded in 2010.

January 6, 2012. CEZ AS, the Czech Republic’s largest power producer, may spin off its renewable energy operations and sell a minority stake to investors this year, raising money as the company seeks to expand into Poland, Romania and Germany. A final decision on the sale, which may be to institutional investors such as insurance companies and pension funds or via a stock-exchange offering, will probably be made during the first quarter. CEZ is building a 600-megawatt wind farm in Romania and studying Poland and Germany. The Prague-based utility plans to build as much as 2,000 megawatts of wind farms in Poland by 2015.

January 5, 2012. Satcon Technology Corp., a U.S. maker of inverters for renewable energy sources, plans to close a factory in Canada that makes systems for smaller solar plants as it shifts its focus to large-scale, utility sun-powered projects. A hundred and forty employees will be fired, about 35 percent of the workforce. Satcon is eliminating its Solstice line of inverters for smaller, distributed solar systems, which are too expensive to be profitable. It’s the latest company to cut back as increased supply and waning demand growth drives down prices for solar panels.

January 5, 2012. The U.S. Commerce Department is delaying for a month its decision on additional tariffs for Chinese solar-equipment imports. The department will make a preliminary determination on whether to add tariffs Feb. 13. The postponement will allow more time for analysis. U.S. solar-equipment manufacturers say they are being harmed because China’s government uses cash grants, discounts on raw materials, preferential loans and tax incentives, and manipulates its currency to boost exports of solar cells. SolarWorld, a maker of solar modules, filed a complaint with the U.S. International Trade Commission and the Commerce Department, seeking duties to offset the practices. The trade commission said the Chinese subsidies have harmed equipment makers, ruling on the petition by Bonn- based SolarWorld seeking antidumping and countervailing duties. The commission is proceeding with an investigation. The commission is examining possible economic harm to SolarWorld from Chinese imports, while the department determines the penalty for Chinese companies that illegally dump products.

January 5, 2012. The U.S. Environmental Protection Agency must delay implementing rules on interstate air pollution on Jan. 1, a federal court ruled, siding with electric power producers seeking to defeat the new regulations. A three-judge panel of the U.S. Appeals Court in Washington granted a request by electric power producers and other challengers to delay the deadline for plants in 27 states to begin reducing emissions of sulfur dioxide and nitrogen oxide while the court considers the rule’s legality.

January 4, 2012. Mandatory pollution limits will create rather than kill jobs in the Chesapeake Bay region, according to a new study by an environmental group working to restore and protect the nation's largest estuary. A federal cleanup plan requires the six bay states -- Delaware, Pennsylvania, Maryland, New York, Virginia and West Virginia, as well as the District of Columbia -- to cut pollution flowing into the Chesapeake Bay by 25 percent by 2025. The nonprofit Chesapeake Bay Foundation said national agricultural and homebuilder lobbyists branded the pollution limits issued by the U.S. Environmental Protection Agency in 2010 as "job killers." But the group said and previously published material, as well as interviews with economic experts, business owners and workers, showed the cleanup would allow so-called green jobs to flourish. It would also spur growth of traditional jobs in areas such as fisheries and tourism, according to the study. Some say that The Chesapeake Bay foundation's claims about job creation were "almost laughable." Pollution limits would make it impossible to create jobs for the 250,000 new people moving to the watershed every year.

January 4, 2012. Range Fuels Inc., a closely held U.S. cellulosic ethanol company that was offered $156 million in federal government backing, sold its only factory to LanzaTech NZ Ltd. as part of a government-approved liquidation. The U.S. Department of Agriculture approved lender AgSouth Farm Credit to hold the foreclosure sale. The deal didn’t include Range’s intellectual property. The liquidation comes as other government-backed renewable energy companies have failed. Solar panel maker Solyndra LLC and energy storage company Beacon Power Corp. filed for bankruptcy after receiving government loan guarantees under a different program. Range Fuel’s plant, located in Soperton, Georgia, was completed in 2010 and was shut in January 2011 without ever producing ethanol. It was designed to process wood chips into as much as 10 million gallons (37.8 million liters) of biofuel a year with plans to expand this to 100 million gallons.

January 4, 2012. Ascent Solar Technologies Inc said it will sell an additional 21 percent stake to TFG Radiant Group, in a move that will double the Chinese group's ownership in the U.S. photovoltaic cell maker to 41 percent. TFG, a joint venture between Radiant Group and Tertius Financial Group, will purchase the additional stake in Ascent for $4 million, or about 50 cents per share, a 19 percent premium to the stock's Tuesday close of 42 cents on Nasdaq. TFG snapped up a 20 percent stake in Ascent and the two parties agreed to set up manufacturing facilities in east Asia, in a deal valued at about $450 million. The deal is expected to close within the next 90 days.

January 4, 2012. Windstream Wolfe Island Shoals Inc. said it has signed a binding agreement with Siemens AG (SIE) to supply as many as 130 turbines for a 300-megawatt offshore wind power project on Lake Ontario. The turbine blades will be manufactured at Siemens’ factory in Tillsonburg, Ontario, the company said.

January 4, 2012. General Motors Co.’s Chevrolet Volt missed its U.S. sales target of 10,000 cars in 2011, the company said. Chevy dealers sold 1,529 of the plug-in hybrids last month, leaving the brand 2,329 shy of its goal. A slow production increase kept dealers in short supply until December, and a federal investigation of three fires that occurred after Volt crash tests lowered demand for the car. While the Volt had its best sales month yet, its December tally was less than half of the 3,750 a month GM plans to produce starting this month. Even fatter Volt inventory in December didn’t help GM get near its sales target for the car. GM is expanding production to 60,000 Volts this year with 45,000 of them earmarked for the U.S. The Volt is being investigated by the National Highway Traffic Safety Administration because its batteries caught on fire in the weeks following three government crash tests. NHTSA announced a safety probe of the Volt Nov. 25.

January 4, 2012. Danish wind turbine maker Vestas will review its manufacturing in the United States in the fourth quarter if the U.S. production tax credit (PTC) is not extended, the group's chief executive said. The CEO did not expect to see the same development cost problems with the company's new 7-megawatt turbine as it has had with the industrialization of its V112-3.0 MW turbine. Engel's remarks followed Vestas' downgrade of its full-year 2011 guidance on Tuesday due to higher-than-expected costs and delayed revenue.

January 4, 2012. China's airlines will refuse to pay any charges under the European Union's new carbon trading scheme, while other Asia Pacific carriers, already battling a weak travel market, are likely to pass on the extra cost to passengers. The EU's Emissions Trading Scheme (ETS) was launched in 2005 as one of the major pillars of the bloc's efforts to combat climate change. From January 1, all airlines using EU airports are included in the cap-and-trade scheme.

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