MonitorsPublished on Mar 02, 2010
Energy News Monitor I Volume I, Issue 37
Will Meeting Electricity Shortages Lead to Economic Development?

Continued from Volume VI, Issue No. 36…


Equilibrium of total supply and demand


he social costs of generation of power are ignored thus far. We can include these costs by drawing another supply curve by including social costs.

Each of the sources of power has some externalities or social costs. Nuclear power has problem of storage of nuclear waste, risk of accidents and dependence on uranium imports. Thermal has the problem of carbon emissions, displacement during mining of coal etc. Hydro has problems of deterioration of water quality, methane emissions, submergence of forests, loss of biodiversity, reservoir induced seismicity, increased landslides, creation of virulent strains of malaria in reservoirs and loss of aesthetic and cultural values of free-flowing waters. A new supply curve of electricity is drawn after taking these various costs into account.

The social equilibrium of supply and demand of electricity is now attained at level Q1. Long term economic growth is attained only of we produce electricity at this level and sell to the consumer at price of P1. The ‘shortage’—or the demand in excess of the social optimum is now increased to Q4 – Q1.

CEA’s approach of meeting ‘shortages’

The 17th Electric Power Survey published by the Central Electricity Authority sets the aim of meeting and eliminating all shortage of power by 2012. This assumes that the demand of power as it exists today is ‘true’ or ‘genuine’ and has to be met for the purpose of economic growth. This is clearly not the case. The long term economic growth requires production of electricity to the level of Q1 only. Production in excess of this is not efficient. Production of electricity to meet all current demand at the level Q4 will hit at our long term economic growth just as it did for our ancestors of the Indus Valley.

Political compulsions may not permit pricing of electricity at P1, however. In this situation, the correct policy would be to actually produce power only at the level of Q1 and allocate it between the rural and urban consumers and agriculture and industry administratively. In other words, the inefficiency must be limited to allocation between different users but not allowed to extend to the long term economic growth.

Production above Q1 will hit at long term economic growth even if it delivers short run economic growth.

Responsibility cast by Electricity Act, 2003

The responsibility to determine the social equilibrium of electricity (and not commercial equilibrium) is cast upon the CEA in various ways by the Electricity Act, 2003:

1      The Preamble says it is an Act (for the) “promotion of efficient and environmentally benign policies.” Similarly Section 23 requires the authorities to regulate supply, distribution and consumption of electricity “for maintaining the efficient supply, securing the equitable distribution of electricity and promoting competition.” The pivot of efficiency here is national economy, not producer’s profits, hence efficiency has to be assessed as per social equilibrium. CEA must determine the total electricity to be produced after taking into account the externalities. The focus on ‘equitable distribution’ is a clear statement that objective of the Act is social welfare and not producing companies’ profit.

2      Section 61(c) says that tariff should be determined such that would “encourage competition, efficiency, economical use of the resources, good performance and optimum investments.” Here efficiency and economical use of resources have to be assessed on the basis of social costs. Further, ‘optimum investments’ means that investment above a certain level will turn counterproductive. This optimum level would be determined by the total costs incurred by the society.

3      Section 61(d) requires the authorities to safeguard “consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner.” This stipulation is made necessary because electricity is not priced in the market at its true cost. Therefore, authorities have to intervene to bring the under-priced regime as close to the social equilibrium as possible.

4      Section 73 (a) requires the CEA to “Formulate short-term and perspective plans for development of the electricity system and co-ordinate the activities of the planning agencies for the optimal utilization of resources to subserve the interests of the national economy and to provide reliable and affordable electricity for all consumers.” The explicit mention of ‘short-term’ and ‘perspective’ plans indicates that the lawmakers were aware of the necessity to make a perspective plan and then develop a short-term plan to reach us to the long-term destination. The explicit mention of ‘national economy’ again indicates that all costs incurred by the society in the production of electricity should be taken into account.

It will be obvious that the CEA’s approach of generating as much power as dictated by existing shortages is not in tune with the Electricity Act, 2003.

Special treatment to Hydro Power

Section 8(1) of the Electricity Act provides special status to hydro-power. The CEA is required to examine that the proposed river-works will lead to the “best ultimate development of the river or its tributaries for power generation, consistent with the requirements of drinking water, irrigation, navigation, flood-control, or other public purposes.”

The statement that hydro power should be generated in a way that is consistent with other public purposes puts a special responsibility upon the CEA to examine the various environmental aspects which are ‘other public purposes’. Maintenance of water quality, control of methane emissions, submergence of forests, loss of biodiversity, increase in reservoir induced seismicity, increase in landslides, creation of virulent strains of malaria in reservoirs and loss of aesthetic and cultural values of free-flowing waters are all public purposes that the CEA is explicitly mandated to take into account.

The cycle of long-term destruction

The present policy of the CEA of meeting existing shortages involves a regressive cycle of long term economic destruction. The steps are as follows:

1      Present demand is taken as final demand. The under-pricing of power that is leading to the generation of this huge demand is ignored. The long-term economic costs via externalities and destruction of environment are ignored.

2      Production of electricity is sought to be increased to meet this demand.

3      Yet more long-term economic costs are imposed on the society if production of electricity is increased.

In this way ignoring social costs becomes a gateway to the imposition of yet more long-term social costs leading to a regressive cycle.


to be continued…

Views are those of the author

Author can be contacted at [email protected]



Note: Part V of the article on Oil & Gas Discovery & Production in India: Historical Milestones, part XIII of the article on Gas in India – Issues, Opportunities and Challenges will be published in Volume VI, Issue 38

Energy in India’s Future: Insights (part –XXII)

Jacques Lesourne and William C. Ramsay*

Continued from Volume VI, Issue No. 36…


ndia’s impressive evolution for the last years gave birth to new forms of opposition forces, namely environmental Non Governmental Organizations. The general belief is that NGOs will tolerate the building of new nuclear power plants as those plants increase neither the local pollution due to SO2, NOx and particulate emissions nor the Indian CO2 emissions. Nevertheless NGOs could support local opposition to specific plant implementation, more on a “Nimby syndrome”3 than on ideological basis. India is a democracy and central government planning or state decisions may be challenged. Recent local opposition to new uranium mines succeeded in delaying operations in three different states (Jharkhand, Meghalaya and Andhra Pradesh).

Opposition could grow if a nuclear accident were to happen. No significant accident was recorded in the past decades, but the exclusion of India from many international nuclear forums means that local safety authorities could not benefit from their counterparts’ experience. Indian operators were also deprived of many “peer reviews” which play a major role in suggesting ways to update daily operations and safety routines. There is no doubt that India can catch up with the best-performing countries as regards nuclear safety, and the recent agreements on nuclear cooperation will certainly be a wonderful tool for quick improvement. The doubt lies more in the ability to manage in a short period many requirements, such as those induced by a new technology—light water—in several different applications—VVER, EPR, AP 1000, ESBWR—and in a large number of units.

Technical crossroad

As specified by the IAEA agreement India will build a new reprocessing facility. It will be dedicated to reprocessing spent fuel of foreign origin under IAEA safeguards. It is yet unclear whether India will be able to extrapolate its reprocessing experience from heavy water reactors spent fuel to the new unit or whether foreign technology will be required. The IAEA agreement lacks in precision with respect to transfer of technology related to reprocessing. However, there is no urgency to start building the facility and this issue can only have minor influence on Indian nuclear power strategy.

The game is more open as regards other aspects. The three stage program cannot be openly rebuked for political reasons: Its founder is still much honored throughout the country and the validity of self reliance is still strongly anchored in many politicians’ minds. Most of them fear that in case of regional tension foreign uranium supply might be once again restricted for India. Thus the three-stage strategy will not be discarded but the second and third stages might be altered.

As for the second stage, India is now among the world leaders with the construction of its 500 MWe prototype fast breeder reactor (PFBR). Russia is the only other country with a larger FBR under construction. But the PFBR design is based on improving former concepts without real breakthrough; it is the “evolutionary” way. Many countries in the world have shown interest in FBRs, but they hope to jump directly to new concepts: it is the “revolutionary” way. These countries have set the “Generation IV International Forum” to coordinate research efforts and share results. After the signing of the international agreements it will be in the interest of all parties that India fully participates in the worldwide research about new FBRs. While the rest of the world will benefit from Indian expertise in this field, India may well wait for fresh shared knowledge before duplicating its PFBR in four units as previously envisaged. However, under the present agreement it is unclear how far collaboration can take place.

As for the third stage, the use of thorium in a new type of reactor could prove very costly. Research is still far from conclusive but it appears that materials-related constraints will require high quality metallic alloys not easily available. Thorium was only meant to replace fertile uranium. India now having access to international uranium resources, the use of thorium has lost relevance under current economic conditions. The 238U content in the depleted uranium rejected by enrichment plants and the uranium coming from light water reactors spent fuel reprocessing currently have a very low economic value. Under the new agreements India will have access to large quantities of this uranium coming from reprocessing plants and could probably also acquire from abroad large quantities of depleted uranium in good economic conditions. This may respond to Indian needs for fertile materials for hundreds of years while thorium may be kept in the ground for an even more distant future. As a result, the building of a prototype reactor able to be fuelled with thorium (advanced heavy water reactor) will likely not be cancelled but it may evolve more into a research tool rather than the first of a kind.

The upcoming participation of India in international forums will undoubtedly benefit all parties. Its long-standing experience and research programs will help speed up progress in many nuclear applications. To mention only one, in addition to its works on FBRs India is pursuing research efforts regarding high temperature reactors for hydrogen production, and its contribution in this field will certainly be valued by many research teams around the world. On the other hand, it is most likely that India will adjust its own strategy from the experience of the international nuclear community to which India now has access.


India has all cards in hand to become a nuclear giant in the 21st century. The country operates in good condition a consistent number of nuclear power plants, its industry is able to supply most of the equipment, and its research centers have given it a leading position in the field of fast breeder reactors, which will play a major role for the future of nuclear energy. However, the growth of Indian nuclear capability will depend on the country’s ability to tackle serious problems.

Prior to all other measures India must provide economic sustainability to its electricity sector. This means pricing electricity in a way that a larger share of investments can be based on power sale revenues, including investments needed for improving, reinforcing and extending all networks. A sound economic framework will be the best guarantee for foreign contributions to the financing of new nuclear power plants.

Another set of reforms could open the India nuclear industry to private capital. Up to now only public companies have been allowed to build nuclear facilities. In a country as large as India, with a federal constitution, the issue of enlarging the nuclear industrial base through semipublic or private undertakings makes sense. It might be suitable to involve more operators, considering the huge construction program ahead. Commitment of private actors in the enhanced nuclear program could be a good way to secure long term investments.

Further on, public authorities will have to convince the Indian people that nuclear energy has the advantage of providing a safe supply while avoiding large emissions of CO2. In this respect, as India becomes more and more a global player its responsibilities in the global fight against climate change will certainly appear as a normal duty to a larger range of politicians. But these leaders will have to win the support of the people.

Finally, Indian authorities will have the difficult task of not sacrificing the medium and long-term future to short-term and present pressure. Indeed, the capital needs for nuclear plants and infrastructure are larger than those for coal plants, and especially for coal plants that do not avoid local pollution. Nuclear is competitive only if one considers the operation of the plant for decades. In addition, if there is a premium for not emitting CO2, then nuclear should be very competitive. But at the time decisions are made in a country that is developing rapidly, there may be very strong pressure to minimize the capital investment.

Sources of information

World Nuclear Association (WNA)—Country Briefings.

Shakti’s avatars: Which energy for India? Joël Ruet (CNRSLatts-Paristech) and Zakaria Siddiqui (Jawaharlal Nehru University and Université catholique de Louvain).

Meeting the demand—A strategy for growth of electrical energy in India—DAE—2004.

Milestones in Indian Atomic Program—Department of Atomic Energy—2008.

Prime Minister’s statement in the Lok Sabha (lower house of the Indian Parliament) on Civil Nuclear Energy Cooperation with the United States, August 13, 2007.

Evolving Indian Nuclear Program—Dr. Anil Kakokdar, Indian Atomic Energy Commission, 2008.

World Energy Outlook 2007—China and India insights—International Energy Agency.


3. Nimby (“Not in my back yard”) syndrome refers to opponents who do not condemn the technology (be it nuclear energy, wind power, motorways, etc.) but do not want such a facility close to their home.


* Editors




On the Verge of Collapse, Emerges the Copenhagen Accord as a Near Obituary to Kyoto Protocol (part IV)


K K Roy Chowdhury*, Energy & Environment Expert, Delhi

Continued from Volume VI, Issue No. 36…


t did so by formally pushing for changes in the long-term draft agreement text in an overnight manouvre (the summit plenary being extended beyond 18th December to continue till 19th December, 2009). Barack Obama’s new deal was no different from the old Bush project when it came to climate change. A perfect example of ‘Old Wine in New Bottle’.                                                        

World leaders went into an extra night of discussions between 18th and 19th December, 2009 to work out a deal on climate change, prompting PM Manmohan Singh to delay his departure and later engage himself in discussions again with US President Barack Obama and other summiteers. So did other leaders on the request of the UN Secretary General Ban ki-Moon.

Meet of BASIC countries: Dr Singh reportedly had unscheduled discussions with leaders of Brazil, South Africa and China to evolve a common BASIC view on the latest draft after which they had another unscheduled meeting with Obama.

The salient points of events that took place in the Last Ditch Effort to make a ‘Copenhagen Deal’ on Climate may be highlighted below:

§  26 Heads of States meet to discuss draft of political statement,

§  India, US, Australia, UK, France, China, Algeria, Bangladesh, Sudan, Brazil, Saudi Arabia and South Africa are among these 26 states,

§  Talks continue for over 10 hours,

§  Anger spreads among excluded countries. Presidents of Bolivia and Venezuela storm out of convention.

This followed the plea of UN Secretary General for a truce as already stated above and his appeal to the world leaders to logically conclude the Summit.

About 16 hours after US President Barack Obama strived to sail through with his “non-binding political” accord in Copenhagen, agreed to by India and China, the climate conference of Copenhagen decided to take note of the accord but refused to adopt it fully. Many poor nations refused to sign the accord as they believed it would eventually kill the Kyoto Protocol, which had obligatory emission reduction commitments for rich countries. The Copenhagen deal will be a voluntary agreement for countries to adopt, not a UN document like the Kyoto Protocol. The summit thus turned into a dump squib without a legally binding document.

The UNFCCC Executive Secretary Yvo de Boer called the accord ‘a letter of intent’ that ‘reminds us there is huge ground to be covered before the next climate meet in 2010 in Mexico[COP 16]. “Finally, we see the deal”, said UN Secretary General Ban ki-Moon, admitting it was short of what the world leaders were expected to deliver. “The challenge is to turn this non-binding deal into a binding one”.

Back home, our Prime Minister himself is telling that none is happy with the Copenhagen Accord. With due regard to the Indian Foreign Policy, my comment is that India should not have allowed windows for rich countries to kill the Kyoto Protocol.

Many nations refused to sign the Copenhagen Deal unless altered to meet the goal of a 1.5 deg. C temperature rise by 2020 and 25 – 40 % emission cuts for rich countries. The accord failed to give any emission reduction targets for 2020, but spoke of 50 % reductions by 2050. The accord, which lists commitments of rich countries and developing economies and provides for $ 130 billions for least developed countries, will be applicable from January 2010.


*Views are his personal. He may be contacted at ‘[email protected]






Reliance may look elsewhere as Lyondell hopes fade

March 2, 2010. Reliance Industries is likely to turn its attention to other acquisition opportunities if its bid for LyondellBasell, valuing the bankrupt firm at $14.5 billion, falls short.  Reliance made a $2 billion offer to buy private Canadian oil-sands firm Value Creation Inc.  Other possible targets include assets owned by US-based Valero Energy and Sunoco, energy assets belonging to ConocoPhillips and refineries in Europe that are up for sale, bankers have said. Reliance is being advised by boutique U.S. investment banking firm Perella Weinberg Partners on the Lyondell bid.

Venezuelan oil co may buy stake in ONGC-MRPL

March 1, 2010. Venezuelan government-owned oil major, Petroleos De Venezuela, is likely to buy stake in ONGC Mangalore Petrochemicals, which is promoted by ONGC and MRPL for setting up an aromatic unit in Mangalore SEZ.  OMPL project is expected to be commissioned by this year-end. According to plans, OMPL will produce 920 TMT (thousand metric tonnes) of paraxylene and 140 TMT of benzene per annum. ONGC has a 46% stake in OMPL while its subsidiary, Mangalore Refinery and Petrochemicals Ltd, (MRPL) has a three% stake in it which together amounts to 49%. The balance 51% is proposed to be offered to the public or strategic partners.

ONGC to spend up to Rs 70 bn to enhance oil output

February 27, 2010. State-run explorer, Oil and Natural Gas Corp (ONGC) said it plans to invest up to Rs 70 bn over the next 3-4 years to increase oil and gas output from its fields in India's western offshore. The Navratna oil company will spend this amount as part of a redevelopment programme to enhance output from ageing fields. The explorer currently has in-place reserves of 1,659-million tonnes and plans are already on the drawing board to take ultimate recovery to 40 per cent.

Cairn to Start Ocean Survey in Sri Lankan Exploration Program

February 25, 2010. Cairn India, which is exploring for oil in Sri Lankan waters, is to start gathering meteorological data and monitoring ocean currents next month ahead of a test drilling program. The sub-contract for the 'metocean and currents survey' in the Gulf of Mannar, off the island's northwest is to be awarded soon, said Neil de Silva, head of Sri Lanka's petroleum resources development secretariat overseeing exploration efforts.  Cairn India is to drill three test wells before October 1, 2011 according to their work program. 

ONGC eyes Latin America, Africa assets in growth push

February 24, 2010. State-run Oil and Natural Gas Corp is pushing to strengthen its presence in Africa and Latin America but is less interested in Canadian oil sands for now, the state-run company's chairman said. ONGC, which recently won exploration rights for a major project in Venezuela through a tie-up with Spain'sInvesting in Canada's oil sands was not a priority for now given the logistical and environmental challenges associated with extracting energy there. 


Duty hike on crude to put cos on a slippery track, Hike in import duty to 5 pc on crude a negative

February 27, 2010. The key issues facing the Indian oil and gas sector over the next three quarters are global crude oil prices, the government’s ability to implement a free-market pricing system for auto and cooking fuels and implementation of long-pending regulations in the gas transportation and distribution sector. On the other hand, the government’s decision to increase import duty to 5% on crude oil and impose an additional Re 1/litre excise duty on diesel and gasoline is a negative, particularly for downstream oil companies. The government has announced a price increase to offset the increase in taxes.

India IOC seeks 370,000 tonnes naphtha for April 2010-March '11

February 25, 2010. Indian Oil Corp (IOC) is seeking up to 370,000 tonnes of naphtha by tender for April 2010-March 2011 delivery to Goa and Mangalore ports, about 70 per cent more than it bought for the 12-month period ending this March, traders said. This is coming at a time when crack spreads --premiums/losses obtained from refining Brent crude into naphtha -- are nearly at a three-week high at $147.03 a tonne premium, lifted by demand from petrochemicals makers in South Korea, Japan and Taiwan. The Indian state refiner is seeking up to 216,000 tonnes for the 12-month period, or 10 cargoes at 18,000 tonnes each month, with two optional cargoes, for delivery to Goa port.  

Transportation / Trade

Get ready for another round of fuel price hike in near future

February 26, 2010. Consumers of petrol and diesel should prepare themselves for another round of fuel price hike in near future. The government will be left with no option but to free pump prices of petrol and diesel unless finance ministry fully compensates state-owned oil marketing companies (OMCs) for selling auto and cooking fuel below the cost, a senior oil ministry official said. Deregulation or an ad-hoc price hike or a combination of the two would be the last resort to save oil PSUs (public sector undertakings)... Oil ministry is in constant dialogue with the finance ministry to provide full compensation to OMCs for their losses at least in kerosene and LPG.  Finance ministry has budgeted only Rs 120 bn as cash compensation for the three state-owned OMCs for 2009-10 against their demand of Rs 310 bn for selling only cooking fuel below the cost, he said. They will also make a revenue loss of around Rs 140 bn on retail sale of petrol and diesel in the current financial year, which will be fully met by the upstream companies — ONGC, OIL and Gail India.

Policy / Performance

Saudi willing to double crude supplies

March 1, 2010. Saudi Arabia is willing to increase crude supplies to India to 40 million tonnes from about 25.5 million tonnes currently to meet the rising energy demand of the south Asian country, the Indian government said.  “India (is looking) for (the) doubling of crude oil supply by Saudi Arabia,” the government said in a statement after Indian Oil Minister Murli Deora met his Saudi counterpart Ali al-Naimi in Riyadh. “India also indicated sourcing heavier crude from Saudi Arabia,” the statement said without giving a time frame for the increase in Saudi crude supplies to India. India will add 1 million barrels per day to its refining capacity within two years, which would increase Saudi crude exports by 500,000 barrels per day (bpd) over the next two years. Virtually all Indian oil refineries are designed to process Saudi oil. The Indian government has offered a 10% stake in the upcoming Paradip refinery of Indian Oil Corp to Saudi Aramco for about $650 million. 

Every time you tank up at gas station, govt gets richer

February 28, 2010. Each rupee you spend on buying petrol in Delhi, almost 51 paise out of that goes to the two governments by way of various taxes and surcharge. In case of diesel, they walk away with about 24 paise of every rupee. This will vary marginally in other cities due to the difference in state taxes.  A back-of-the-envelop calculation shows that on a national average price of Rs 47 per litre of petrol, you pay approximately Rs 26 as taxes. Similarly, taking an average countrywide price of Rs 35 for diesel, around Rs 13 goes to the government's kitty.  Admittedly, these are ballpark figures and there are many variables such as the rupee exchange rate and varying efficiency of refineries besides other cost build-ups. The story gets better with cooking gas because it has been given the status of 'declared goods' . This means states cannot use it as a milch cow and levy a uniform 4% sales tax against an average of 21% on diesel and 27% on petrol. So out of an average price of Rs 300 for a cylinder, the governments get about Rs 11 as taxes, while they get about 40 paise from sale of each litre of kerosene that costs close to Rs 10 a litre.  Taking an average crude price of $69 a barrel, a rough calculation shows that the leftover after paying taxes and other costs does not even cover the cost of buying crude. For example, the cost of crude comes to about Rs 23 a litre but the companies are actually left with Rs 21 after accounting for other costs and commissions, from sale of each litre of petrol. Similarly, they get around Rs 22 from each litre of petrol. The Budget raised customs duty on motor fuels by 5% to 7.5% and also slapped the excise duty of Re 1 a litre. It also slapped a 5% customs duty on crude. These moves created an impact of Rs 2.71 a litre on petrol and Rs 2.55 on diesel. The actual hike of retail prices was a little higher due to incremental increase in other surcharge and local levies. At the pre-budget rates, major Central tax components on petrol included the basic cenvat duty of Rs 5.35 a litre, special additional excise duty of Rs 7, additional excise duty of Rs 2, a notional basic customs duty at 2.5%, additional customs duty (countervailing duty) of Rs 5.35 plus Rs 6 special additional duty as well as an additional customs duty of Rs 2. In addition, a 2% education cess is also charged.  On diesel, the Central taxes include a Rs 1.60 basic cenvat duty, additional excise duty of Rs 2, a notional basic customs duty at 2.5%, additional customs duty (countervailing duty) of Rs 1.60 and an additional customs duty of Rs 2.  The states, too, add their bit as sales tax and pollution cess. Among the states, Andhra Pradesh has the highest fuel tax rate of 33%, followed by Tamil Nadu with 33% and Maharashtra 30%. Haryana has the cheapest tax rate of 9%. A majority of the remaining states tax fuels between 18 and 28%. 

ONGC plans $25 bn spend on overseas oil blocks over 10 years

February 27, 2010. State-run explorer, Oil & Natural Gas Corp (ONGC), has earmarked up to USD 25-billion over the next 10-years to be spent for acquisition of oil blocks overseas and to enhance output from existing assets.  ONGC has recently been in talks with some African oil-producing countries such as Nigeria, Sudan and Uganda to explore opportunities for buying stakes in hydrocarbon blocks.  Sagging output from three-decade oil fields in India is forcing ONGC to scout for oil blocks abroad for the country's energy security.  The Navratna oil major was trying to produce 20- million tonnes of oil or about 4,02,000-barrels of oil per day from overseas assets, he said.  ONGC has a capex plan of Rs 260 bn in the fiscal year starting April 1, 2010.

DG Hydrocarbons gets extension

February 25, 2010. The Petroleum Ministry has asked Mr S.K. Srivastava, Director (Operations) at Oil India Ltd, to stay on for another six months as the Director-General at the Directorate-General of Hydrocarbons (DGH).

GAIL donates CNG vehicles to govt for its 'Aap Ki Rasoi' prog

February 25, 2010. The Gas Authority of India today donated three CNG propelled pick-up vehicles to the city government to help it distribute cooked food to the homeless people under its 'Aap Ki Rasoi' programme.  The programme, part of government's Bhagidari initiative, was launched in 2008 with an aim to providing nutritious meal to the destitute people.  Currently, 13 'Aap Ki Rasoi' centres are functioning in various parts of the city.

Govt overrules Pawar on ethanol

February 25, 2010. A government plan to buy ethanol for blending with petrol at a price of Rs 27 per litre may be limited to six months, although agriculture minister Sharad Pawar has asked the price to be frozen for the next three years in line with the demand by sugar mills. Mr Pawar’s plan had faced resistance from the ministries of petroleum and finance that believe ethanol prices may drop next year.

The Cabinet is expected to take the final decision soon.  Oil marketing companies buy ethanol at a fixed price from local sugar companies for a 95:5 mix with petrol for retailing. For the last three years, they have been buying ethanol for Rs 21.50/litre. This contract ended on October 31, 2009 and is therefore, now up for re-negotiation between the government and mills.

The sugar industry has collectively quoted a price of Rs 27/l for the new contract and would like this price to be locked for the next three years to remove uncertainty in revenue. But the ministries of oil and finance are in favour of re-negotiating the price after six months to keep it in line with the spot market. India allows duty-free import of ethanol, making it necessary for sugar mills to remain on a par with imported ethanol from chief rival Brazil.

Govt offers 10 pc stake in IOC refinery to Saudi Aramco

February 25, 2010. The government has offered a 10-per cent stake in the upcoming Paradip refinery of state-run Indian Oil Corp to Saudi Aramco for about $650 million.  Indian firms currently buy 25 million tonnes of crude oil annually from Saudi Aramco. Historically, the Saudis have been interested in investing in refineries and distribution, but distribution at the moment in India is not viable (due to government-regulated fuel prices.  

India has recently sent a proposal offering stake in IOC's 300,000 barrels-per-day (bpd) coastal refinery in eastern India and the discussions would continue during Prime Minister Manmohan Singh's visit to Saudi Arabia.  India has also offered stakes to Saudi Basic Industries Corp (SABIC) in petrochemical projects to be set up by Oil and Natural Gas Corp in the western Gujarat state and in the southern Karnataka state. 



India's L&T sees $1.7 bn contract from utility JV

February 25, 2010. India's Larsen & Toubro expects a contract worth around 80 billion rupees ($1.7 billion) from a joint venture to build a 1,600 megawatts power plant in central India, a senior company official said. The leading construction and engineering firm signed on Wednesday a joint venture with the state utility in southern Karnataka to build the coal-based power plant in coal-rich Chhattisgarh, estimated to cost 100 billion rupees.

Shree Cement to earn from power sale

February 24, 2010. Shree Cement targets to earn Rs 4.6 bn by selling power next year as it looks to derisk its income from the cyclical downturn of cement business. It earned Rs 600 mn from this business in the past year. The company which runs the largest single-location cement factory in North India, is expanding its power generation capacity to 560 mw by the next year. It will add 130 mw by the next month and another 300 mw by the end of the current fiscal. The company consumes lion’s share of its generation of 120 mw, leaving only 20-30 mw available for the grid.

Transmission / Distribution / Trade

High tension consumers in AP face power holiday, cuts

March 2, 2010. The high tension (HT) industrial power users in Andhra Pradesh are now faced with severe power shortage and forced to contend with one way power holiday and four-hour cut during peak hours in the week days.  AP Transco and four distribution companies in the State have decided to bring in a four-hour power cut for the industrial consumers between 6.30 pm and 10.30 pm during the week days and one day power holiday once a week. The decision to regulate power was taken as the State is faced with huge demand supply gap. The gap has widened further to about 40 million units a day with the peak demand at 260 MW. The demand has gone up further due to additional demand for power to support pump sets during the rabi crop season demand.

TFC for at least 7 pc annual hike in power tariff by states

February 26, 2010. Power tariff across the country may have to be revised upwards in excess of 7% annually, if the government goes by the recommendations of the Thirteenth Finance Commission tabled in Parliament.  In its assessment of the country’s power sector, the report has favoured upward revision of power tariff by state utilities to prevent these from adversely impacting the finances of states. It said that tariff increase should be accompanied by enhancement of operating efficiencies of utilities and reduction in overall transmission and distribution losses.  Without going into the exact prescription on tariff revision, TFC has pointed out that even better performing states need a minimum of 7% increase in tariff on an annual basis (at 2007-08 subsidy levels) to bridge the gap between actual receipts and government subsidy. The need is as high as 19% per annum in poorly performing states, which is indeed difficult to achieve, the commission has said.

BEST eyes legal options to halt consumer exits

February 26, 2010. After the Maharashtra State Electricity Regulatory Commission (MERC) allowed Tata Power to supply power to consumers in BEST’s territory in south Mumbai, BEST is planning to consider legal options to seek prevention of migration of its high-end consumers.  The 70-year-old Brihanmumbai Electric Supply and Transport undertaking, better known as BEST, has nearly 10 lakh commercial and residential consumers in the island city, which is spread from Colaba to Mahim. On February 23, the MERC issued an order allowing Tata Power to supply power to consumers in BEST’s territory, saying consumers should be given the choice. Under the Electricity Act of 2003, consumers can choose their utility supplier through the Open Access System.  After the Supreme Court’s order in 2008, Tata Power is the licensee for the entire Mumbai, that aggregates licensed distribution in the area of BEST and Reliance Infrastructure, admeasuring 444 sq kms.  Last year, MERC allowed R-Infra consumers to switchover to Tata Power. So far, about 30,000 high-end consumers of R-Infra have migrated to the Tatas.

Tata Power Q3 PAT down 81 pc, stocks sink on BSE

February 26, 2010. India’s leading power generation company, Tata Power company’s third quarter earnings show a dip in the profits. The company stated in a filing with the BSE that on a consolidated basis, the net profit declined 81.67% to Rs.925.7 mn on a 6.27% fall in total income to Rs.43.7895 bn in Q3 December 2009 over Q3 December 2008. The consolidated net profit fell sharply as the company paid Rs.3.51 bn as a one-time charge after an amendment in contractual arrangements, including pre-stripping, related mainly to coal mining.

Power Grid board oks investment worth Rs 28.46 bn

February 25, 2010. Power Grid Corp of India said its board has approved investment proposals totalling Rs 28.46 bn in three different projects. This includes system strengthening in southern region at a cost of Rs 2.32 bn, for Mauda Transmission system at a cost of Rs 4.69 bn and for transmission system for Pallatana gas based power project for a cost of Rs 21.44 bn, it said in a statement to the NSE. 

PowerGrid inks pacts with 37 private developers

February 24, 2010. In a big push to private power generation capacity, Power Grid Corporation of India Ltd (PGCIL) signed long-term transmission pacts with 37 private developers, entailing a gross generation capacity of over 42,000 MW. The signing of the pacts would help PGCIL to go ahead with the implementation of the seven proposed high-capacity transmission corridors for wheeling power from a bevy of private projects coming up in the eastern and southern States. The move, entailing investments of about Rs 480 bn, is aimed at facilitating transfer of electricity to the power-starved northern and western regions of the country.

Cos in overseas drive to tie up N-fuel supply

February 24, 2010. Indian companies such as Essar, the London-listed Vedanta and a subsidiary of shipmaker Varun Industries are scouting around for opportunities to explore and mine uranium in countries like Australia, Canada and parts of Africa, which have deposits of the mineral used for nuclear reactors. An overseas subsidiary of Reliance Industries, India’s biggest private sector company, had last year bought a 49% stake in a special purpose vehicle, or SPV, set up by a company called Uranium Exploration of Australia (UXA) which has licences to mine uranium at four locations in Australia. The Indian companies contemplating overseas foray into uranium mining have sounded out the Department of Atomic Energy and the state-owned Uranium Corporation of India (UCIL), which is itself exploring overseas operations. A person close to the development said Indian companies could form joint venture with UCIL for overseas exploration.

Policy / Performance

Three major power plants for Greater Noida

February 28, 2010. The Uttar Pradesh government has decided to set up three mega power plants in the Noida and Greater Noida areas to meet the increasing demand of power in the fast-growing region. Each of these plants is proposed to be of 1,000-1,300 MW capacity.  

A proposal in this regard has already been made to the Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) which has shown keen interest in undertaking one of these projects at Jehangirpur village.

Meanwhile, the Uttar Pradesh Power Corporation has set up a subsidiary in collaboration with the Great NOIDA authority and Yamuna Expressway Authority for setting up the Chola project in Bulandshahr district.  Hoping to have the proposed plants in place before the end of 2014, he was confident of augmenting Uttar Pradesh’s power generation to 25,000 MW by then.

Budget update -Impact on coal prices in India

February 28, 2010. INR 50 clean energy cess per tonne of coal, announced in the union budget proposals, will not only raise the cost of power generation but would also affect steel, fertilizer and cement, which are dependant on coal as well. In the short run this cess will straight away increase power generation cost by about 3.5-4 paise per unit, which is actually less than 1% of the total cost of generation. Sectors like tea, steel, cement and fertilizer will also see some rise in their costs, since they all depend on coal in some way or other.  Estimates are that the INR 50 per tonne cess on coal which will fund the new National Clean Energy Fund, will mobilize about INR 3,250 crore in 2010-11.

Govt mulls competitive bidding for coal blocks allocation

February 26, 2010. The Government proposes to introduce competitive bidding process for allocating coal blocks for captive mining. This would ensure greater transparency and increased participation in production from these blocks, said the Finance Minister, Mr Pranab Mukherjee, presenting the Union Budget 2011. Coal is the mainstay of the country's energy sector and three-fourth of the power generation in the country is coal-based. The Plan outlay for the Coal Ministry has been fixed at Rs 135.1839 bn. This will be met by the budgetary support of Rs 2 bn and IBER of Rs 131.1839 bn. Mr Mukherjee also announced that the Government proposes to set up a coal regulatory authority, to create a level-playing field in the coal sector. This, he said, would facilitate resolution of issues such as economic pricing of coal and benchmarking of standards performance. A cess of Rs 50 a tonne on coal produced in the country and imported has been levied to fund the National Clean Energy Fund to promote clean environment technologies. The levy could push up the power prices marginally by four-five paise a unit.

Coal cess of Rs 50 per ton to push power tariff up

February 26, 2010. The electricity bill is expected to burn another hole in consumers' pocket as power tariff will go up by 3-4 paisa per unit with the Budget announcing coal cess of Rs 50 per tonne. The National Clean Energy Fund is being created through the additional cess on coal for funding research in and innovative clean energy projects.  After last year's coal-price hike by Coal India Ltd (CIL), the domestic fuel cost is currently hovering in the range of Rs 448-2,500 per tonne.

Union Budget 2010: Power sector to attract fresh investments

February 26 2010. The Budget proposal to double allocation for power development would accelerate generation capacity and attract fresh investments into the sector. Finance minister Pranab Mukherjee raised the allocation for the sector to Rs 51.3 bn, from the previous Rs 21.3 bn. With this, the government targets to add over 78,000 megawatts of capacity by 2012. Further, other proposals such as policy reform for fuel linkages and for lowering generation cost for thermal, would ensure timely execution of projects. Thermal project constitute 75% of energy generation. Shortages in coal supply have already resulted in a generation loss of 10.7 billion units of power at various thermal power projects in the country during April-December 2009.  The government also has plans to allocate more captive coal mines for the power companies. NTPC, India’s largest power generator, has said it would be able to achieve its FY10 generation targets. Private players such as Tata Power, Reliance Power, JSW Energy, Essar Power, Adani Power are also expected to develop coal mine linkages for their proposed generation projects. The tax relief on import of equipment used for solar and wind energy would also attract fresh investments into the sector. The Budget proposes to spend Rs 10 bn for renewable energy and a separate fund to promote clean energy.  India plans to add 20,000 MW of solar energy by 2022. 

KPCL, L&T sign JV for 1.6 GW power plant in Chhattisgarh

February 24, 2010. State-owned power generating company Karnataka Power Corporation Limited (KPCL) and L&T signed a Joint Venture agreement  for the 1,600 MW (2 X 800 MW) coal-based super critical thermal power project at Godhna in Chhattisgarh. KPCL officials said the Chhattisgarh Government has allotted 1,260 acres to KPCL for the project.

The Chief Minister said the government of Karnataka is not blessed with coal or gas or oil and so the Government took initiatives to approach the coal-rich Chhattisgarh to put up a big thermal plant there.  L&T is in discussions with the Karnataka government to participate in various infrastructure projects in the State. 

India's power equipment outlook stable in 2010

February 24, 2010. Fitch Ratings has commented in a just published Special Report, that the outlook for India's power equipment industry in 2010 is stable. The performance of the sector will be driven by the strong demand for both power generation, and transmission and distribution (T&D) equipment. However, competition will likely intensify as international players increased their focus on the fast-growing Indian market, which can potentially pressure margins over the medium-term as, new players bid aggressively to gain market share.  In the Special Report entitled, "Power Equipment Outlook 2010", Fitch says competition could also heat up due to the capacity expansion undertaken by domestic T&D players in FY09.

Coal sector regulator by March 15

February 24, 2010. Even though the bill for setting up a regulator for the coal sector is yet to be placed in Parliament, the Union Coal Minister, Mr Sriprakash Jaiswal, maintains that the regulator would be in place within the March 15, 2010, timeline set by his ministry. The minister was in the city in connection with the laying of the foundation stone for the proposed headquarters and office complex of Coal India Ltd (CIL) at Rajarhat on the Eastern fringes of the city.




Australian oil, LNG production to climb next year, Bureau says

March 2, 2010. Australian oil production is set to rise 6 percent next fiscal year and liquefied natural gas exports may climb 4 percent as energy projects start up, the Australian Bureau of Agricultural and Resource Economics said.  Oil output is expected to increase to 29.5 billion liters (508,000 barrels a day) in the year ending June 30, 2011, because of projected increases from BHP Billiton Ltd.’s Pyrenees project and Apache Corp.’s Van Gogh development, the Canberra- based bureau said in a report today.

LNG exports may jump to 18 million metric tons, boosted by Woodside Petroleum Ltd.’s Pluto venture, it said.  Australia’s total energy exports may rise 20 percent to A$66 billion ($59 billion) next fiscal year as a global economic recovery drives oil prices higher, the report said. The bureau forecasts the average price for the West Texas Intermediate benchmark will gain 25 percent to $77 a barrel in 2010. 

Pyrenees pumps first oil offshore Western Australia

March 1, 2010. First oil production has commenced ahead of schedule from the BHP Billiton operated Pyrenees project, offshore Western Australia. The full project involves 13 subsea wells, an extensive subsea gathering system and a Floating Production Storage and Offloading (FPSO) facility, with production capacity of approximately 96,000 barrels of oil and gas reinjection capacity of 60 million cubic feet of gas per day (100 percent basis). As planned, the wells will be drilled and brought on in phases, with approximately half the field ramping up from first oil and the other half over the next six months.

OGDC discovers gas at Shah Well in Pakistan

March 1, 2010. Pakistan's Oil & Gas Development Company says it has discovered gas from its exploratory well Shah Well No. 1 in Hyderabad. The well was drilled to the depth of 3,227 meters and sizeable reserves of hydrocarbon were found, the company said in a statement to the stock exchange.

Shell, IBM team up to extend life of oil, gas fields

February 26, 2010. Shell and IBM have announced a research collaboration that aims to extend the life of oil and natural gas fields. Shell sees potential to reduce the time and money required to model its reservoirs.

IBM's long-standing analytics and simulation experience will meet Shell's strong subsurface and reservoir expertise to create a more efficient, more accurate picture of energy recovery.

The companies will explore advanced techniques for reconciling geophysical and reservoir engineering field data. As a result of applying improved algorithms, analytics and accelerated simulations, Shell can reduce the educated guesswork and extract natural resources with more certainty and efficiency, thereby optimizing the recovery of oil and gas.

OPEC output reaches 14-month high on Saudi gain, survey shows

February 26, 2010. The Organization of Petroleum Exporting Countries increased crude-oil production to a 14-month high in February, led by a Saudi Arabian gain.  Output rose 125,000 barrels a day, or 0.4 percent, to an average 29.17 million barrels a day, the highest level since December 2008, according to the survey of oil companies, producers and analysts.

The January production total was revised higher by 45,000 barrels a day.  OPEC cut its production quotas by 4.2 million barrels to 24.845 million barrels a day beginning in January 2009 as fuel demand tumbled during the worst global recession since World War II.

The group left the targets unchanged at a Dec. 22 meeting in Luanda, Angola. Ministers are next scheduled to gather on March 17 in Vienna.  Oil futures have more than doubled to $78.17 a barrel on the New York Mercantile Exchange from a four-year low of $32.40 touched in December 2008, which caused OPEC to curb output.

Santos starts up Netherby Gas production, off Victoria

February 25, 2010. First gas flowed from the Netherby Field, offshore Victoria, back to the onshore processing facility at Iona.

The Netherby and Henry Gas Fields, in the VIC/P44 permit, are being developed by AWE in conjunction with their Joint Venture partners. This Stage 2 development incorporates tying in the two offshore fields to the existing Casino subsea facilities. At Year End 2009, the Henry-Netherby fields were estimated to have a combined 2P gross recoverable natural gas reserve of 330 Bcf .

Centrica joins LNG trend in Trinidad & Tobago

February 25, 2010. Centrica, through its subsidiary Centrica Resources (Armada) Limited (CRAL), has signed an agreement with Suncor Energy, under which Centrica will acquire Suncor's Trinidad and Tobago portfolio of gas assets for US $380 million (£246 million) in cash.

This acquisition provides Centrica with its first producing Liquefied Natural Gas (LNG) position and significant development opportunities for future, long-term LNG supplies. This portfolio of gas assets comprises a 17.3 percent stake in the North Coast Marine Area (NCMA-1) gas production area and equity interests in three blocks; Blocks 22, 1(a) and 1(b), for future development.

Petrobras finds oil near Barracuda, offshore Brazil

February 25, 2010. Petrobras announced the discovery of two new oil accumulations in reservoirs located in the Campos Basin, after the drilling of the exploratory well 6-BR-63A-RJS, located in the Barracuda concession area, some 100 km off the coast of the State of Rio de Janeiro, and at water depth of 860 meters.  One of the accumulations was discovered in pre-salt carbonate reservoirs, at a depth of 4,340 meters.

Qatar's RasGas fires up LNG production from new facility

February 24, 2010. Ras Laffan Liquefied Natural Gas Company Limited (3) (Ras Laffan 3) announced the completion and start-up of Train 7 at Ras Laffan Industrial City, Qatar.

The project is a joint venture of Qatar Petroleum (70 percent) and ExxonMobil Ras Laffan (3) Limited (30 percent) and represents another expansion of LNG production facilities operated by RasGas Company Limited. 

Ras Laffan 3 Train 7 is the fourth 7.8 million tons per year LNG plant brought online by Qatar Petroleum and ExxonMobil joint ventures within the past 12 months. It matches the capacity of Ras Laffan 3 Train 6, one of the largest operating LNG production facilities in the world, inaugurated in October 2009.

These mega facilities have sufficient scale to competitively reach markets around the globe. Qatar's giant North Field, which is estimated to contain in excess of 900 trillion cubic feet of natural gas, will supply both trains.

Nigeria says total to invest $20 bn in gas, deepwater

February 24, 2010.  Total and its partners will invest $20 billion in deepwater oil and gas exploration in Nigeria over the next four to five years, the country's acting president and the French firm said. Total said its share of the total investment in the four Nigerian energy projects -- offshore fields Usan, Ofon II and Egina and the upgrade of the OML 58 licence -- would be around $7 billion. It said its partners in the investments included ExxonMobil, Chevron and Canada's Nexen for Usan, Nigerian state-run oil firm NNPC for Ofon II and OML 58, and NNPC, Sapetro, China's CNOOC and Brazil's Petrobras. 

E&P firms see higher spending, drilling activity in '10

February 24, 2010.  Oil and Natural Gas explorers including Goodrich Petroleum Corp and Whiting Petroleum Corp forecast higher drilling activity and spending for 2010, as the industry takes advantage of a recovery in hydrocarbon prices. Benchmark U.S. crude oil prices CLc1 averaged $76 per barrel in the fourth quarter, up sequentially, and from a year ago. And while heavy supplies and weak demand continue to drag, natural gas prices have also recovered from record lows.


S. Korean firms sign UAE refinery deals totalling $8.5 bn

March 2, 2010. GS Engineering & Construction Corp. and two other South Korean builders said that they have signed record deals to build and expand oil refinery facilities in the United Arab Emirates (UAE). GS Engineering & Construction said it has signed a US$3.63 billion plant construction project, the biggest-ever won by a single South Korean company.  Samsung Engineering Co., South Korea's largest plant builder, also signed a US$2.73 billion order to build an oil refinery in Ruwais, 250 kilometres west of Abu Dhabi. SK Engineering & Construction Co. also inked a US$2.1 billion contract to build an oil refinery. The three South Korean builders won the deals in November last year from Takreer, also known as Abu Dhabi National Oil Co.  The contracts are part of a project to expand crude oil refinery facilities in Ruwais. The project aims to raise the site's refining capacity by 417,000 barrels per day.

LyondellBasell board said to reject $14.5 bn Reliance bid

March 2, 2010. The board of bankrupt LyondellBasell Industries AF rejected a $14.5 Billion bid from Reliance Industries Ltd. The offer pitted Reliance against creditors including Apollo Management LP, a New York- based private-equity firm led by Leon Black, which had backed an earlier reorganization plan that would give them an equity stake in the chemicals maker.

Mitsui obtains license for Danish cellulosic ethanol tech

March 1, 2010. Mitsui Engineering & Shipbuilding (MES), one of Japan's leading heavy industries, and Inbicon, the Danish pioneer of cellulosic ethanol technology announced the signing of a license agreement for the Inbicon Biomass Refinery technology.  The agreement grants Mitsui the right to build a number of biomass refineries in Southeast Asia using Inbicon's technology. Mitsui intends to apply the technology in the palm oil industry, where wastes from palm oil production can be converted into ethanol, solid biofuel for energy production, and animal feed. The agreement marks the first sale of licensing for Inbicon.

BP: CO2 rules may delay US refinery projects

February 25, 2010. Some of BP's U.S. refinery and natural gas projects may be delayed by permitting bottlenecks and legal uncertainties under the Environmental Protection Agency's plans to regulate greenhouse gases, a senior BP official said Wednesday.

The comments by Karen St. John, BP's U.S. director of regulatory affairs, follow an EPA announcement earlier this week that it would delay its new greenhouse gas regulations and raise the emissions limits for the initial stages of regulations.  BP shared state regulators' fears that a lack of staff and resources wouldn't enable them to manage the expected large influx of new permitting applications in the early years of a greenhouse gas program.  

China’s refining to rise, boosting crude purchases, Poten says

February 24, 2010.  China, the world’s second-largest energy consumer, may boost refining capacity by more than 10 percent by 2014, leading to gains in crude imports, according to calculations based on estimates by Poten & Partners.  China’s capacity to convert crude into petroleum products may rise to more than 7.5 million barrels a day from less than 7 million barrels a day last year, according to a report by the U.S. energy consultant last week. The U.S. continues to account for the largest portion of global refining capacity, at 17.8 million barrels a day, followed by China, Russia, Japan and India, Poten said. The top 10 refining nations make up about half of worldwide processing output, with India responsible for 3 percent.  China processed a record 374.6 million metric tons of crude oil last year, or 7.5 million barrels a day, China Mainland Marketing Research Co., which compiles data for the government, said Jan. 10.  China may see an oversupply of oil products this year as the country adds 31.5 million tons a year of refining capacity, China National Petroleum Corp. said.

Transportation / Trade

Statoil to ship Marcellus gas to NYC

March 2, 2010. Norwegian petroleum major Statoil ASA said that it has signed contracts, ensuring the right to transport and deliver natural gas produced in the Northern Marcellus shale gas area of Pennsylvania, USA, to the areas of New Jersey and New York City.  No financial details were available.  Statoil, which has concluded the agreements with Tennessee Gas Pipeline, part of US energy company El Paso Corp, and Texas Eastern Transmission, a unit of Spectra Energy Corp, will be able to transport up to 2bn cu m per year, or 200m cu ft daily.   

Cardinal Pipeline to expand capacity

March 2, 2010. Cardinal Pipeline Company, LLC announced that it has executed precedent agreements to increase the pipeline's firm transportation capacity by 199,000 dekatherms per day. The pipeline will transport additional natural gas supplies to serve growing markets served by Piedmont Natural Gas Company, Inc., and Public Service Company of North Carolina from an interconnect with Williams Partners L.P.'s Transco pipeline.

El Paso's Elba Express Gas Pipeline now in service

March 2, 2010. El Paso Corporation announced that its subsidiaries, Southern LNG, Inc. and Elba Express Company, L.L.C., have placed in service two significant projects, the expansion of the Elba Island LNG receiving terminal near Savannah, Georgia and the new Elba Express Pipeline in eastern Georgia, respectively.

PNG LNG signs sale and purchase deal with CPC

March 2, 2010. Santos announced that the PNG LNG Project participants have finalized a binding Sale and Purchase Agreement (SPA) with CPC Corp. of Taiwan for the long-term sale and purchase of liquefied natural gas (LNG) totaling approximately 1.2 million tonnes per annum.  Under the agreement, the PNG LNG Project will supply LNG to CPC Corp. for a period of 20 years. With the finalization of this SPA, all of the PNG LNG Project's production capacity has been committed on a long-term basis. Finalization of the financing arrangements with lenders is expected later this month.

Don't bank on gasline riches - Alaska officials

February 25, 2010. Many Alaskans think a natural gas pipeline to the Lower 48 would give the state new riches in the form of taxes and royalties. Don't bank on it, some state senators say. In fact, under some scenarios presented to the Senate Finance Committee Wednesday, if the big gas pipeline is built, and gas starts to flow, the state could make nothing off the gas and might even see a drop in oil revenue. The loudest alarm is coming from Sen. Bert Stedman, a Republican from Sitka who chairs the Senate Finance Committee, but he's not alone, and many lawmakers are paying attention to hearings he's conducting to get to the bottom of the situation.

European fuel oil shipments to Asia increasing 33 pc in March

February 25, 2010. European fuel oil shipments to Singapore will increase 33 percent in March as traders take advantage of prices in Asia that have been driven higher by the region’s accelerating economic growth. Fuel oil, used to power ships or burnt to generate electricity, is moving east because of declining demand in Europe. An estimated 15 supertankers have been chartered to make the six- week journey to deliver 4 million metric tons in March, more than the monthly average of 3 million tons during the past year. 

Woodside still in LNG talks with PetroChina, CEO says

February 25, 2010.  Woodside Petroleum Ltd. remains in talks to sell PetroChina Co. liquefied natural gas from the $30 billion Browse project off Australia, after an initial supply agreement lapsed.

Australia’s second-largest oil and gas producer was also contacted by as many as five other potential buyers when the PetroChina accord wasn’t renewed. The preliminary agreement with China’s largest oil and gas company to supply as much as 3 million metric tons of LNG a year was valued at about A$45 billion ($40 billion).

Woodside expects Chinese demand for its LNG to increase. PetroChina’s Hong Kong-based spokesman Mao Zefeng wasn’t immediately available to comment.  Woodside rose 1.3 percent to A$43.86 at 1:40 p.m. in Sydney, compared with the 0.3 percent drop in the benchmark S&P/ASX 200 Index. The oil and gas producer has gained 29 percent in the past year, lagging behind the index’s 39 percent advance.

OMK to supply pipes for Nord Stream's second link

February 25, 2010. United Metallurgical Co. (OMK) announced that it has become Russia's only supplier of pipes for the construction of the second link of the Nord Stream gas pipeline on the bed of the Baltic Sea from Russia to Germany. OMK won 25% of the contract. The remainder will be shared by the European company Europipe (65%) and Japan's Sumitomo (10%). Pipe delivery under this project is scheduled to start in May 2010. OMK participated in supplying pipes for Nord Stream's first link. From May 2008 to November 2009, Vyksa Steel Works (VSW, Nizhni Novgorod Region), part of OMK, shipped more than 260,000 tonnes of large-diameter pipes (LDP) designed for subsea gas pipelines meeting the international standard of Norway's Det Norske Veritas (DNV) and the additional customer specification requirements. For the first link of the gas pipeline, OMK manufactured a batch of x70 steel pipes of 41 mm in wall thickness. The pipes are designed to withstand pressure of 220 atmospheres. The combination of these characteristics in one product is unique for pipes of this diameter and grade, OMK stated.

Sempra to acquire Mexican pipeline assets from El Paso

February 24, 2010. Sempra Pipelines & Storage, a unit of Sempra Energy, announced that it will acquire the Mexican pipeline and gas infrastructure assets of El Paso Corp. for $300 million. The acquisition involves El Paso's wholly owned natural gas pipeline and compression assets in the Mexican border state of Sonora. The transaction also includes El Paso's 50-percent interest in a joint venture with PEMEX, the Mexican state-owned oil company. The joint venture operates two natural gas pipelines and a propane system in northern Mexico. The pipeline and natural gas infrastructure assets being acquired are supported by customer contracts with an average duration of 13 years. The acquisition is expected to be accretive to Sempra Energy's earnings by $0.05 in 2010 and $0.10 in 2011.

Policy / Performance

Second Vietnam NG Pipeline to begin ops in 2014 - Official

March 2, 2010. Vietnam's Deputy Prime Minister Hoang Trung Haihas has asked the state-owned oil giant Petrovietnam to conduct a feasibility study on building the second natural gas pipeline in the country's Nam Con Son Basin. According to the document signed by the Deputy PM, the pipeline, which is part of a master plan to develop the country's oil and gas sector between now and 2015, will start operation in 2014.  After completion, the pipeline will take natural gas from two blocks - 05.1 and 05.2 - to feed power plants in Phu My in the southern oil and gas rich province of Ba Ria-Vung Tau.  Nam Con Son Basin's first pipeline, built by BP at a cost of US$1.3billion, now supplies about 4 billion cubic meters of gas annually to constituting 32 percent of Vietnam's domestic power generation.

Indonesia, Japan to renew Botang LNG contracts

March 1, 2010. The Indonesian and Japanese energy and mineral resources ministers will soon sign extension of contracts to export liquefied natural gas (LNG) to Japan's western buyers. The Bontang LNG plant in East Kalimantan has to prepare for the shipments to the six buyers in western Japan including Chubu EPC, Kansai EPC, Kyushu EPC, Nippon Steel Co. Ltd, Osaka Gas Co.Ltd and Toho Gas Co. Ltd. Under the new contract, annual shipments of 3.2 million tons will begin next year until 2015 to be followed with the second phase with annual shipments of 2 million tons from 2016 to 2020, the paper said.  

Korea Gas to invest $1.1 bn in Canadian natural gas fields

March 1, 2010. The state-run gas agency Korea Gas Corp. will invest US $1.1 billion to jointly develop natural gas fields in Canada with local firm Encana Corp. a deal that will secure gas shipments to South Korea, the local firm said.  Under the deal with the biggest natural gas company in North America, Korea Gas acquired a combined 50 percent stake in three oil fields in northeast British Columbia and will start extracting 1.1 million tons of natural gas every year for 40 years beginning in 2017, the company said.  In the meantime, Korea Gas will invest $1.1 billion to build gas exploration and production facilities, it said.  South Korea relies heavily on imports for its fuel needs. The country consumes around 25 million tons of natural gas per year and after the deal, around 3.5 percent of the nation's total gas use will be produced from South Korea's own gas extraction activities at home and abroad, the company said.

Chevron secures Shale exploration rights in Poland

February 26, 2010. In a filing with the Securities and Exchange Commission, Chevron, the second-largest U.S. oil company, confirmed that it has secured exploration rights for an additional Polish shale gas concession, although the size of the acreage was not divulged. The oil major is joining such industry heavyweights as ExxonMobil and ConocoPhillips in tapping Poland's shale plays to help meet growing demand for gas supplies in Europe. Noted in the annual report, Chevron has acquired rights to explore for natural gas in the Grabowiec concession, located in the southeastern part of Poland. The confirmation follows Chevron's announcement in December that the company was awarded three five-year exploration licenses for the Zwierzyniec, Kransnik and Frampol concessions, also located in Poland, to explore for unconventional gas resources.

Freedom Energy, Oilcana to market heavy oil technology

February 26, 2010. Freedom Energy International dealing with Heavy-oil conversion technology, has just signed a non-exclusive Distributor Agreement with Oilcana, Inc. (a privately held Corporation) to focus on marketing KC 9000 in new markets beginning with Canada. Canada, renowned for its vast supply of natural resources, particularly Heavy Oil and Oil Sands, for years has been a leader in the race to find the most economical and environmentally friendly technology to produce Oil from the proven and known reserves of Oil Sands and Bitumen located in the country.

Rig shortage delays Ugandan drilling programs

February 26, 2010. A shortage of drilling rigs is hampering appraisals and drilling activities in oil fields in Uganda's Block 2 and Block 4B, the senior geologist at the petroleum exploration and production department said Friday. Block 2 is operated by Heritage Oil PLC and U.K.-based Tullow Oil PLC holds a 50% stake in the block.  Early this month, London-listed Tower Resources Ltd. delayed drilling a second well after Tullow Oil failed to deliver in time a rig that it had been using at its Kasemene fields.

CSB Investigator: Gas blows 'inherently unsafe'

February 26, 2010. There were multiple potential ignition sources in the congested area where workers were venting natural gas that could have caused the deadly explosion at a Middletown, Conn., power plant earlier this month, according to the U.S. Chemical Safety Board. The revelation came almost three weeks after the blast at the $1 billion, 620-megawatt Kleen Energy power plant, where construction was ongoing.  It also comes after a number of experts, including an engineer from the New England Association of Power Engineers, said that gas purges should be done into well-ventilated areas and that all work should stop because it is a highly dangerous situation.  The lead investigator for the safety board, during a press briefing Thursday at the Middletown Inn, agreed.

Indonesia bank row may hinder cut in $11 bn fuel subsidies

February 26, 2010. Indonesia may delay raising energy prices as a dispute over a 2008 bank bailout divides President Susilo Bambang Yudhoyono’s coalitio, undermining efforts to rein in almost $11 billion in subsidies.  Government allies Golkar and the Prosperous Justice Party joined the opposition in calling for a probe into the finance minister and vice president over the rescue of PT Bank Century. Faced with a split in his coalition and public anger at the bailout, Yudhoyono may resort to populist measures to contain inflation, economists Helmi Arman and Anton Gunawan said.

Va. House panel kills bill indexing gas tax

February 25, 2010. A House subcommittee has killed a bill to index the gas tax, but delegates said they believe it's a good idea and they hope for a special transportation session this year to work on it.  Sen. Emmett Hanger's bill would have linked the gas tax, which is 17.5 cents per gallon, to federal CAFE (Corporate Average Fuel Economy) standards for fuel efficiency in cars.  Hanger's proposal would take the percentage increase in the CAFE rate each year and multiply that by the 17.5 cents-per-gallon gas tax in Virginia. So each year, assuming that fuel efficiency standards continue to go up, the effective tax paid on each gallon of gas would go up.  

Origin & Conoco in Australia gas jv with BG Group

February 24, 2010.  Australia's Origin Energy and its partner, U.S. oil major ConocoPhillips have teamed up with Britain's BG Group in Australia's booming coal-seam gas sector, where consolidation pressures are building. Under the new partnership, Origin and ConocoPhillips will sell gas extracted from coal deposits in the northern state of Queensland to a BG's mutli-billion-dollar liquefied natural gas project planned for the same region, Origin said. Origin's existing joint venture with ConocoPhillips, known as Australia Pacific LNG, expects to sell around 190 petajoules of gas to BG over an initial ramp-up period of about two years.

Saudi Arabia unveils natural gas find in North Xinhua

February 24, 2010. Saudi Arabia announced that a local gas company has discovered a commercially-viable natural gas field in the northern Jalameed area. Saudi Aramco has discovered new quantities of gas at Jalameed- Well 3 at the depth of 2,986 meters, state-run SPA news quoted Minister of Petroleum and Mineral Resources Ali bin Ibrahim al- Naimi as saying. The gas flows at a rate of 12.1 million standard cubic feet per day from the well, which is located about 95 km east of Turaif city, the minister said. The Jalameed-Well can produce large quantities of gas under normal production conditions, the minister noted.

Brazil: Oil volumes pegged at 30MM-90MM in OGX-5 section

 February 24, 2010. OGX has completed the drilling of well 1-OGX-5-RJS, located in block BM-C-43, in the shallow waters of the southern part of the Campos Basin. OGX holds a 100% working interest in this block. The well OGX-5 was drilled to a depth of 4,100 meters, resulting in the detection of hydrocarbons in carbonate reservoirs in the Albian and Aptian sections, as was previously announced on January 22 and February 1, 2010.

Cable tests performed after the conclusion of drilling also identified an oil-bearing column in the Maastrichtian section, from which oil samples were collected. Based on the final well information combined with the 3D seismic data interpretation, OGX estimates recoverable oil volume for the Maastrichtian section between 30 and 90 million barrels. Volume estimates for the Albian and Aptian reservoirs will be provided following the drilling of additional wells.



Heat from power generation could trim U.K.’s 2050 energy needs

March 2, 2010. Capturing heat from power plants could help reduce Britain’s future generation capacity, projected to exceed 150 gigawatts by 2050, by 13 percent, according to a Combined Heat and Power Association report. Diversifying the ways heat is supplied and using combined heat and power, or CHP, plants would reduce peak demand, making it easier to manage electricity usage, the report said. Heat represented 41 percent of Britain’s total final energy consumption in 2007. 

The U.K.’s low-carbon transition program assumes electricity will be used for a growing percentage of the country’s transport and heating needs, the report said. By providing 7.9 million tons of oil equivalent of heat and 4.5 million tons of oil equivalent of electricity from gas-fired and biomass-fired CHP plants, would reduce demand for electricity 13 percent and demand for primary energy by 5 percent, the report said

Cleco Power acquires 580 MW Acadia unit from Acadia Power partners

February 24, 2010. Cleco Power LLC, a subsidiary of Cleco Corp. announced the completion of its Acadia Power Station Unit 1 acquisition, valued at approximately $304 million.

The acquisition of the 580-megawatt natural gas generating unit and 50 percent of the plant's common assets closed on Feb. 23, 2010, after being authorized by the Louisiana Public Service Commission (LPSC) and the Federal Energy Regulatory Commission (FERC).  In 2007, Cleco Power solicited bids for up to 600 megawatts of intermediate and/or peaking capacity and selected Unit 1, or half of the Acadia plant, as the lowest bid in its request for proposal (RFP) for long-term capacity beginning in 2010.

Transmission / Distribution / Trade

National parks group opposes $750 mn power line project in northern N.J.

March 2, 2010. The National Parks Conservation Foundation is opposing a major Pennsylvania-New Jersey power line project that would cut through three federal parks, the group has announced.

The proposed Susquehanna-Roseland project would have negative impacts on the Delaware Water Gap National Recreation Area, Middle Delaware National Scenic and Recreational River, and Appalachian National Scenic Trail, the group said in a statement released last week.

New study looks at cost of burying high-voltage transmission line

February 24 2010. Residents concerned about the high voltage Heartland Transmission Line are welcoming a new study indicating the cost of burying the line would not be unreasonable.

The Alberta Electrical System Operator, or AESO, has released a new study that suggests burying one stretch of the high voltage power line would not be financially prohibitive.

The report, prepared by U.K. firm Cable Consulting International Ltd., looks at the technical feasibility of partially burying the 500-kilovolt line along the East Transportation Utility Corridor. The route, which runs along east Edmonton and the western outskirts of Sherwood Park, has been identified by Epcor and AltaLink as the preferred option.

Policy / Performance

E.ON looking to sell U.S. utility-sources

March 1, 2010. German power and gas company E.ON is looking to sell its U.S. regulated utility unit, formerly known as LG&E, according to sources familiar with the matter. Goldman Sachs is advising E.ON on the possible sale, the sources said. Potential bidders for the unit could include Duke Energy Corp, Southern Co, American Electric Power Co Inc and PPL Corp, the sources said. According to the company's website, E.ON U.S. owns and operates Louisville Gas and Electric Company, a regulated utility that serves 318,000 natural gas and 390,000 electric customers, and Kentucky Utilities Company, an electric utility that serves 518,000 customers in Kentucky and Virginia.

Bulgaria Energy Minister: Nuclear Plant needs EU investor

February 27, 2010. Bulgaria’s Economy and Energy Minister, Traicho Traikov, reiterated earlier statements that the Belene Nuclear Power Plant needs a strategic investor other than Russia. Photo by BGNES Bulgaria’s Economy and Energy Minister, Traicho Traikov, declared that there aren’t any disagreements between him and Finance Minister, Simeon Djankov. The Energy Minister further informed he had asked the assistance of the US Ambassador to Bulgaria, James Warlick, in finding American investors, but pointed out he doubts US businesses would want to invest in Russian technology. Traikov, however, said that European investors would be willing to do so, while the withdrawal of the German RWE in October was due to financial and not technology issues.

Ecuador could sell Venezuela up to 1 GW

February 26, 2010. The Ecuadorian government is able and ready to sell up to 1,000 MW/h daily to mitigate the electric power crisis undergone in Venezuela, in the event of a formal request, said on Friday a high-ranking official. The electric power transmission from Ecuador to Venezuela could pass through Colombia. The Colombian government has clashed with Caracas due to ideological disagreements, resulting in a diplomatic crisis. However, Colombia has voiced its willingness to cooperate in view of the electricity crisis in Venezuela.

Putin may fine tycoons for low utilities investment

February 24, 2010.  Russian Premier Vladimir Putin threatened to slap heavy fines on some of the country's top tycoons for not investing enough in the power sector, while praising Western investors. In one of his classic appearances, Putin, who has a lengthy track record of market-moving attacks on the nation's business elite, said he was particularly upset by four oligarchs - Vladimir Potanin, Leonid Lebedev, Mikhail Prokhorov and Viktor Vekselberg. If they fail to fulfil their investment obligations, taken before the crisis when the state agreed to privatise power assets, they will not only face fines but will also be banned from selling power at market prices. Putin said state-run power firms and foreign power companies, such as Enel Eon and Fortum were sticking to investment obligations.

Nigeria: Gas cuts - Electricity generation plunges to 2,543 MW

February 24, 2010. Following a steep plunge in the national electricity power generation due to acute shortage of gas fuel at the thermal generation stations across the country, government has directed the Power Holding Company of Nigeria (PHCN) to enter a commercial gas purchase deal with the Nigerian National Petroleum Corporation (NNPC). The directive came as available electricity volumes on the national grid dropped from the highly advertised 3, 710 megawatts (MW) in December 2009 to 2, 543 MW last weekend, translating to longer periods of supply outage to consumers and worsening revenue generation to PHCN.

Russia to spend over $1 bn building nuclear power plant: Putin

February 24, 2010. Russian Prime Minister Vladimir Putin said that the government would spend 53 billion rubles (1.76 billion U.S. dollars) on construction of new nuclear power plants, Russian news agencies reported. The premier criticized Russian electric power companies for ineffectively spending 66 billion rubles (2.2 billion dollars) out of 450 billion rubles (14.9 billion dollars) allocated from state coffers for investment projects in the electric power sector. Putin also said that electric power consumption in Russia had resumed to the level recorded before the country was hit by the global economic crisis in 2008.

Russians to fund Sofia’s nuclear plant project

February 24, 2010. Russia will extend funding to Bulgaria to build the stalled Belene nuclear power plant project until Sofia said after meeting Energy Minister Sergei Shmatko and Sergei Kiriyenko, head of the Rosatom state nuclear corporation, that details on the funding would be worked out in March. Work on the 2,000 megawatt plant on the Danube river needed up to 1.9 billion euros ($2.56 billion) this year and next, Kiriyenko said.

Renewable Energy / Climate Change Trends


India to have own body on Himalayan glaciers

March 2, 2010. India would have its own body to assess the impact of climate change on Himalayan glaciers, Environment Minister Jairam Ramesh announced adding it cannot depend only on the IPCC s projections after the "goof-up" by the UN body.

Announcing the setting up of the National Institute of Himalayan Glaciology at Dehradun in Uttarakhand, Ramesh took a dig at the wrong projections on the Himalayan glaciers by the Intergovernmental Panel on Climate Change (IPCC) headed by India s R K Pachauri, saying climate science and climate evangelism are not the same. Ramesh said the IPCC undoubtedly created scare and panic by not basing its warnings on science.  Ramesh said he nevertheless has respect for IPCC, a body of 200 scientists, but India is setting up something like Indian Network on Comprehensive Climate Change Assessment (INCCA).

Japan to help India with modernizing power plants

March 2, 2010. Japan Coal Energy Center, or JCOAL, is close to signing an agreement with India’s apex power sector planning body for the renovation and maintenance of old and inefficient power plants to reduce carbon emissions.

JCOAL works in the area of coal mining and utilization to cut down the emission of carbon dioxide, which causes large-scale climate change. India has been ranked fourth among contributors to global carbon dioxide emissions (9%) by the Netherlands Environmental Assessment Agency, even though its emissions are low on a per capita basis.

Climate change: rich nations faulted

March 1, 2010. Jana Vignana Vedika organised a convention at the Commerce Department of Andhra University on the tasks to be taken up after the Copenhagen global meet on climate change to mark Science Day. MLC Balasubramanyam criticised the Indian stand stating instead of standing by the underdeveloped countries and bringing pressure on the rich nations it had supported the US. MLC M.V.S. Sarma environment had become a marketing commodity for the rich nations and countries with three per cent population were destroying 30 per cent of the environment. The rich nations passing on the burden of saving environment to the developing countries was a conspiracy, he stated.

KSEB scouting for validation agency for CDM projects

March 1, 2010. The Kerala State Electricity Board (KSEB) is on the look-out for a Designated Operational Entity (DOE) for validation of the three small hydro-electric pilot projects in the State being taken up for implementation under the Clean Development Mechanism (CDM).

The board has already appointed SMEC International of Australia for providing advisory services for registration of the projects under CDM.  The validation by an independent agency accredited by the United Nations Framework Convention for Climate Change is mandatory for registration of the projects under CDM.

Budget 2010: High on renewable energy

February 27, 2010. The Indian government appears to have discovered a new sunrise sector. It unveiled an ambitious programme for bringing down carbon emissions and helping the country's emerging clean-energy sector even as India’s $50-billion IT industry — long the recipient of tax breaks — expressed its chagrin that a long-established tax holiday for software exports would not be extended beyond March 2011.

The Finance Bill 2010-11 has created a corpus called National Clean Energy Fund, which will invest in entrepreneurial ventures and research in the field of clean energy technologies.

The money for this will be garnered through a so-called ‘clean energy cess’ — Rs 50 on every tonne of coal, both domestic and imported. Inputs for products such as solar energy panels and wind turbines have been showered with tax sops, while machinery used for setting up photovoltaic and solar thermal power units have been offered a concessional customs duty of 5% and exempted from excise duty. Some inputs needed for the manufacture of rotor blades for wind energy generators have also been exempted from excise duty.

Centre for feasibilty study on offshore windmills in TN

February 27, 2010. The Union government's Centre for Wind Energy Technology (C-WET) will tie up with international research organisations to study the feasibility of setting up offshore windmills in the country, Tamil Nadu in particular. Now, a search is on for international organisations with experience in setting up and running offshore windmills successfully. Once the tie-up is complete, different spots will be tested to see how much wind can be generated from each place.

India, with an installed capacity of 10,891 MW (as on October 31, 2009), ranks number 5 in the world in the wind energy sector. Tamil Nadu, with a generation capacity of 4,000 MW, ranks first in the country and its gross potential is said to be somewhere around 5,530 MW.

Renewable energy gets boost with 61 pc hike in outlay

February 26, 2010. The Renewable Energy sector has got a major boost with the Finance Minister, Mr Pranab Mukherjee, announcing a 61 per cent hike in outlay. He has also reduced duties for equipment required for setting up solar photovoltaic and wind energy units.

India is seeking to reduce its dependence on fossil fuels to tackle climate change and as part of the process had set up Jawaharlal Nehru Solar Mission targeting a 20,000 MW of solar power by 2022.

Mr Mukherjee has also proposed a concessional customs duty of 5 per cent to machinery, instruments, equipment and appliances required for the initial setting up of photovoltaic and solar thermal power generating units. He also intends to exempt them from the Central excise duty. Similarly, ground source heat pumps used to tap geo-thermal energy would be exempt from basic customs duty and special additional duty.


Ed Miliband unveils loans scheme for green home improvements

March 2, 2010. The energy and climate change secretary, Ed Miliband, announced details of a "green loans" scheme to help people pay for improvements to their homes to make them more energy efficient.

The scheme, which would see loans remain attached to the house where insulation, solar panels or other green technology was installed, aims to overcome the financial barriers and upfront costs people face when trying make their homes greener.

With the expense of green technology and people moving house on average every nine to 12 years, householders may not have a long enough period for paying back the loan before they move to ensure they save more on their bills than the cost of the repayments.

 UK consumers driven by price, not saving CO2: survey

March 1, 2010. British consumers are still thinking about the price of the electronic goods they buy, rather than saving energy, according to a survey commissioned by energy-saving technology manufacturer Energenie.

Only 16 percent of British consumers said energy efficiency influences their purchasing decisions, whereas 60 percent said price was the main factor, according to research conducted by consultancy Vanson Bourne.

Out of the families surveyed, 73 percent of thought they were doing enough to be considered environmentally friendly and most claimed to have energy efficient devices in their homes.

But out of those, 81 percent had energy-saving light bulbs but much fewer had adopted other energy-saving measures such as double glazing, cavity wall insulation or energy-saving dishwashers or washing machines.

U.S. carbon market worth $2.7 bn, analyst says

March 1, 2010. The U.S. carbon market is worth $2.7 billion, environmental market analysis firm Point Carbon said. That is less than 3 percent of the total value of carbon- dioxide permits in the European Union’s cap-and-trade program.

That amount was 69.4 billion euros ($93.9 billion) last year, Point Carbon said in a Jan. 27 report.  Most of the U.S. value is tied to a 10-state cap-and-trade program for power plants in the nation’s Northeast called the Regional Greenhouse Gas Initiative, the Oslo-based company said today in a statement.

Besides the carbon dioxide permits from the Northeast’s program, $74 million in so-called offsets were traded last year, Point Carbon said. Offsets are emission reductions from sources such as landfills and dairy farms that are used to cancel out pollution increases at industrial sources like power plants and factories.

Spain eyes doubling renewables output by 2020

March 1, 2010. Spain's government proposed more than doubling production from renewable energy sources by 2020 to just over 20 percent of total energy use, which would meet European Union targets.

The government is seeking cross-party consensus on its plans to turn a record 3.6-percent decline in the economy in 2009 into a 2.9-percent increase in 2012. The document predicted renewables production by 2020 would be the equivalent of 27.9 million tonnes of petroleum, up from 11.96 million tonnes in 2009. That would be 20.2 percent of Spain's projected primary energy consumption, or just above a target of 20 percent set by the 27-nation European Union. Total electricity demand was seen rising to 300,186 gigawatt-hours from 246,397 in 2009. 

German state agency calls for quick energy plan

March 1, 2010. Time will soon run out for Germany to build up enough power generation if politicians continue dragging their feet on decisions over the fuel mix, German state energy agency Dena said.

As the quarrelling central coalition government remains fixated on a state-level election in May, it has delayed a raft of measures for the sector until a wider, long-term energy plan arrives in the autumn, which experts say loses valuable time.

Dena forecasts that Germany may be short some 14,000 to 16,000 megawatt of generation capacity if nuclear laws phase out reactors by 2021 as now planned and new projects for coal or gas plants fail to materialize due to public opposition.

Germany, which has around 80,000 MW of total installed capacity, expects power demand to hold stable at around 500 terawatt hours a year, as energy savings are offset by more new gadgets.

At least 3 more firms probed in Norway CO2 case

March 1, 2010. At least three more firms are under investigation over allegations of tax fraud relating to carbon emissions, Norwegian police said on Monday. Two companies were known to be under investigation, but police said that they were looking into several others.

Startup Bloom unveils fuel cells to power buildings

February 25, 2010. Silicon Valley start-up Bloom Energy unveiled a new fuel cell technology that can power buildings, positioning the energy generators as an alternative to the electricity grid.

Questions, however, remain about the long-term adoption and viability of a technology that has been around for decades but has yet to see mass market commercial applications.

Bloom's solid oxide fuel cell has managed to attract powerful early adopters, including Google Inc, eBay Inc, Coca Cola Co, Wal-Mart Stores Inc, FedEx Corp and Staples Inc.

Chinese solar firms to gain as demand rises: Deutsche

February 25, 2010. Deutsche Bank said it expects Chinese solar firms to be the major beneficiaries of a growth in global demand for photovoltaic modules in 2010, and upgraded shares of four companies in the sector. It said the proposed feed-in-tariff cut in Germany, which would exert significant downward pressure for global players, is less of a concern the Chinese companies.

Deutsche Bank said despite an oversupply of solar modules in the second half of the year, the branded Chinese manufacturers are likely to maintain plant utilization at high levels and gain market share.

EU industry CO2 fell 11 pc in 2009: Analysts

February 25, 2010. Carbon dioxide emissions by companies regulated under the European Union's Emissions Trading Scheme fell by 11 percent last year in the wake of the economic downturn, analysts said. Emissions by heavy industry across the 27-nation bloc fell to 1.886 billion tonnes in 2009, 233 million lower than the previous year, Point Carbon estimated.

The drop means there was a surplus in allocated EU carbon permits of 77 million tonnes, Point Carbon added. It said emissions from utilities fell 88 million tonnes to 1.18 billion tonnes -- a 7 percent drop -- while those from industrial sectors like cement and steel tumbled by 17 percent or 145 million tonnes to 704 million tonnes.

Scientists examine causes for lull in warming

February 25, 2010.  Climate scientists must do more to work out how exceptionally cold winters or a dip in world temperatures fit their theories of global warming, if they are to persuade an increasingly skeptical public. At stake is public belief that greenhouse gas emissions are warming the planet, and political momentum to act as governments struggle to agree a climate treaty which could direct trillions of dollars into renewable energy, away from fossil fuels.

Public conviction of global warming's risks may have been undermined by an error in a U.N. panel report exaggerating the pace of melt of Himalayan glaciers and by the disclosure of hacked emails revealing scientists sniping at skeptics, who leapt on these as evidence of data fixing. Scientists said they must explain better how a freezing winter this year in parts of the northern hemisphere and a break in a rising trend in global temperatures since 1998 can happen when heat-trapping gases are pouring into the atmosphere.

IMO Seeks Emission Cuts for Emerging-Nation Ships

February 25, 2010.  Emissions from shipping would fall about 20 percent as early as 2012 under proposed rules for 169 nations, the secretary general of the United Nation’s International Maritime Organization said. New rules for vessels from rich and emerging nations would probably require owners to adopt so-called slow steaming to cut fuel consumption. For new ships, technical measures including new hull designs for improved propulsion would reduce emissions an additional 15 percent, he said.  

Google develops Solar Technology

February 24, 2010.  Google Inc has developed a prototype for a new mirror technology that could cut by half the cost of building a solar thermal plant, the company's green energy czar said. Bill Weihl said that if development and testing go well, he could see the product being ready in one to three years. Google has been looking at unusual materials for the mirror's reflective surface and the substrate on which the mirror is mounted. In solar thermal technology, the sun's energy is used to heat a substance that produces steam to run a turbine. Mirrors focus the sun's rays on the heated substance. The Internet search engine company, which has been investing in companies and doing research of its own to produce affordable renewable energy, wants to cut the cost of making heliostats, the fields of mirrors that track the sun.

Iberdrola may invest $22 bn through 2012

February 24, 2010. Iberdrola SA, Spain’s biggest electricity company, said net investment from 2010 through 2012 may total 16 billion euros ($22 billion) as it spends more on renewable-energy projects and networks. Gross investment may climb to 18 billion euros, while asset sales may raise as much as 2.5 billion euros through 2012, Iberdrola said today in a filing. The utility targets average annual growth of 5 percent to 9 percent in profit excluding one- time items and in earnings before interest, tax, depreciation and amortization from 2009 through 2012.  

Italy delays new solar plan again, industry worried

February 24, 2010. The Italian government has delayed again a long-awaited unveiling of a new incentive plan for the booming solar energy sector, government officials said, fuelling concerns among market operators. A new date for presentation of the plan is yet to be set, the officials said.  Aiming to bring incentives in line with falling sector costs, Rome plans to cut the current scheme that is among the most generous in Europe and has given a boost to Italy's photovoltaic (PV) market since it was adopted in 2007. 

Dear Reader,


You may have received complimentary copies of the ORF Energy News Monitor. Our objective in bringing out the newsletter is to provide a platform for focused debate on India’s energy future. You could be a partner in this effort by becoming a subscriber. You could also contribute recommendations for India’s energy future in the form of brief insightful articles.


We look forward to receiving your patronage and support.


ORF Centre for Resources Management


   ORF ENERGY           



Sponsorship Form

Please fill in BLOCK LETTERS

·    Commercial Sponsorship: Rs 15, 000 per annum

   1 hard copy (52 issues) + soft copies by email as per list provided by  sponsor

·    Non Commercial/ Academic Sponsorship: Rs 2, 500 per annum               

1 hard copy (52 issues) + soft copies by email as per list provided by  sponsor

·    Individual Sponsorship: Rs 1, 000 per annum   

    Soft copy only

Yes! I/we would like to receive copies of the weekly ORF Energy News Monitor for a period of ______year(s).  I/we shall be entitled to one hard copy along with the option of soft copies to a list of e-mail addresses provided by me/us for the period specified. 


Please find enclosed cheque/Bank Draft No.........................dated …………………drawn at New Delhi for Rs.........……….favouring ‘Observer Research Foundation

Please fill in this form and mail it with your remittance to


Mr. Vinod Kumar Tomar  

ORF Centre for Resources Management 


20 Rouse Avenue,

New Delhi - 110 002

Phone +91.11.4352 0020 extn 2120

Mobile: 9871417327

Fax: +91.11.4352 0003

E-mail: [email protected], [email protected]


Registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485


Published on behalf of Observer Research Foundation, 20 Rouse Avenue, New Delhi–110 002 and printed at Times Press, 910 Jatwara Street, Daryaganj, New Delhi–110 002.


Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted and edited from reliable sources.  ORF does not accept any liability for errors therein.  News material belongs to respective owners and is provided here for wider dissemination only.  Sources will be provided on request.


Publisher: Baljit Kapoor                 Editor: Lydia Powell

Production team: Akhilesh Sati & Vinod Kumar Tomar

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.