MonitorsPublished on May 11, 2009
Energy News Monitor I Volume I, Issue 47
Power Sector Inefficiency – Economic & Legal Implications (part V)

Shankar Sharma, Power Policy Analyst, Thirthahally


Continued from Volume VI, Issue No. 46…


4. Issues of constitutional and other legal importance – matters of serious concern


hen we look at the huge inefficiency and public unaccountability prevailing within the electric power sector in the country with a correct perspective, the violation in letter and spirit of many provisions of various Acts of parliament and our Constitution becomes obvious.

As per the sections 48 (a) and 51 (a) (g) of our Constitution it is the duty of the STATE and every citizen to make honest efforts to protect and improve our environment by protecting and improving rivers, lakes, forests and living beings. The large number of conventional power plants, which are continuing to be planned and implemented, are destroying thick forest cover, severely interfering in the natural flow of rivers, and destroying /hastening the extinction of many species of bio-diversity. This is being done despite clear knowledge of huge inefficiency prevailing in the system, which if addressed correctly will drastically reduce the need for such conventional power projects.

It is almost impossible to notice the compliance of the letter and spirit of Indian Electricity Act 2003, and National Electricity Policy as far as salient features such as efficiency, economy, responsible use of natural resources, consumer interest protection, reliable supply of electricity, protection of environment are concerned.

Whereas the National Forest Policy recommends that  33% of the land mass should be covered by forests and trees for a healthy environment, our practice of continuing to divert forest lands for large power projects will bring this percentage much below even the present low level of 24% in the country.

When we objectively look at the massive deleterious impacts of large size conventional power projects, it becomes evident that the letter and spirit of Environmental Protection Act, the Forest Conservation Act and the Wild Life Protection Act have not been complied at all, and in most cases there seem to serious & willful violation of these Acts. 

5. Issues of Global Warming and Climate Change – huge risk to the country’s vulnerable sections

As per IPCC some of the catastrophic consequences of Global Warning beyond 20 Centigrade increase are: famines and droughts threatening millions of lives; worldwide drop in agricultural and horticultural crops; up to 3 billion people at risk of flooding and without access to fresh water supplies; destruction of half the world's nature reserves and a fifth of coastal wetlands; global sea levels increase by more than 20 feet; significant effects on biodiversity and ecological productivity; potential for international conflicts, border disputes, war due to water and food shortages, forced migration, extreme weather events,  huge impact on general health etc. 

In this background all out efforts to mitigate and adapt to the Global Warming by reducing the Global GHG emissions to the lowest possible levels are considered an urgent necessity by the global community. Being a country with the second largest population India’s potential to be one of the three biggest GHG emitters is credible. Also tipped to become one of the most affected countries by Global Warming India has an important role to play in the comity of nations.

In this regard the govt. of India has published a National Action Plan on Climate Change (NAPCC), and the same is being projected at the international forums as India’s unique contribution in addressing Global Warming. The Plan has identified eight broad areas for focused action, encompassing both mitigation and adaptation. It is relevant to note that one of these 8 missions is: National Mission for Enhanced Energy Efficiency. So much is the realization about the importance of high level of energy efficiency, but the commensurate action plan is lacking as a national priority.

6. Non-fulfillment of International obligations – serious implications to the national welfare

In the Cocoyoc declaration of 1974, at Mexico, as part of UN Conference it is said on the purpose of development: ” Our first concern is to define the whole purpose of development. This should not be to develop things but to develop man. Human beings have basic needs: food shelter, clothing, health, education.  Any process of growth that does not lead to their fulfillment - or even worse, disrupts them – is travesty of the idea of development. The problem today is not one primarily of absolute physical shortage but of economic and social maldistribution and usage.” Large conventional power plants lead to the displacement of thousands of people, who because of highly insensitive rehabilitation process are most likely to become destitute. Additionally, because of high rates of pollution people living close to these power plants experience severe health problems for no mistake of theirs.

World Charter for Nature, which was adopted by consensus by UN General Assembly in 1982, has provided some guiding principles for protecting biodiversity: activities which are likely to cause irreversible damage to nature should be avoided; activities which are likely to pose significant risk to nature shall be preceded by an exhaustive examination; their proponents shall demonstrate that the expected benefits outweigh potential damage to nature, and where potential adverse effects are not fully understood, the activities should not proceed.

Convention on Biological Diversity was signed by 156 states in 1992, the objectives of which are the conservation of biological diversity, the sustainable use of its components, and the fair and equitable sharing of the benefits arising out of the utilisataion of genetic resources.  India, which is a signatory to this convention and which is also one of the most important bio-diversity hotspots as per UN, cannot stake claim as a diligent protector of its own bio-diversity. The large size dams are not only reducing the land based bio-diversity by drowning thick forests, but also are reducing aquatic bio-diversity by denying water and precious silt to the downstream of the dam. While a recent statement by Sri. Jairam Ramesh, Minister of Environment & Forests has indicated that almost one-third of the country’s top grade coal reserve would not be available for mining as these areas are now considered to be ecologically too fragile to allow mining, it should be noted that almost all coal mines which were opened in the past and those which are going to be opened were /are below thick forests. If we continue to opt for more of coal power stations the rich bio-diversity in these forests will be destroyed.

Recently, the minister of State for Coal said. "There are no two opinions about the need to switch over to other modes of power generation ……. Coal-based power production has to be restricted". 

A recent report by MoEF "Achieving 2010 Biodiversity Target: India's contributions" has copiously described the rich biodiversity in the country, the threats to it and the remedial measures. It can be safely said that without holistically reviewing the present practice of issuing environmental clearance to almost all projects presented before MoEF, we, as a society, cannot take any credit for contributing to the conservation of global biodiversity.

At the global scale the value of ecological functions as well as resources of the environment has been estimated to be about $33 trillion per year, which is almost twice the global domestic product (refer: Bio-diversity Impact of Large Dams, prepared for IUCN / UNEP / WCD).  In this context if we care to assign a financial value to the ecological services associated with forests and fresh water resources in the country the enormity of loss to the nation’s economy in the form of destruction to forests, rivers and bio –diversity, which is happening every year, becomes evident.  As per the Convention on Biological Diversity it will be a wise policy to apply Precautionary Principle and take necessary action to conserve Bio-diversity before components of it are permanently lost. In view of the fact that about 42% of CO2 and about 24% of all GHGs are known to be associated with the electric power plants, the need to operate the electrical power sector with the highest possible efficiency and responsibility requires no special emphasis.

As per STERN REVIEW – The Economics of Climate Change, the Climate Change could have very serious impacts on growth and development. The costs of stabilising the climate are significant but manageable, while delay would be dangerous and much more costly. The benefits of strong, early action on climate change outweigh costs.  This Review has estimated that certain scenario of Global Warming may result in poor countries like India suffering economic costs of about 20 % of its GDP, whereas the mitigation of the same now can be achieved at a cost of about 1% of present GDP. The Review also indicates that more we delay in addressing the Global Warming the higher we will have to spend in mitigation of the same in future.  STERN REVIEW also indicates that “Emissions from deforestation are very significant – they are estimated to represent more than 18 % of global emissions”.  Hence “curbing deforestation is a highly cost-effective way of reducing greenhouse gas emissions.”  Large conventional power plants lead to complete violation of these conventions.

The international community has attached so much importance to the forests that the main outcome of the UNFCC meet at Poznan was the decision to set in motion an international mechanism on ‘Reducing Emissions from Deforestation and Forest Degradation’ (REDD). Large conventional projects and coal mines can only reduce the all important forest cover and bring negative changes to the forest area that limit its production capacity.

A report “Bio-diversity Impacts of large dams” prepared for UNEP & IUCN, has listed a large number of such impacts. Among other things it says that about 60% of the world’s river flow is regulated. There are about 40,000 large dams and more than 100 dams with heights more than 150 meters.

Keeping the letter and spirit of these and large number of other international reports, seminars, and conventions it will be no exaggeration to state that we, as a responsible member of the international community, have largely failed to implement the necessary policies to safeguard the interest of our bio-diversity, environment and weaker sections of the society.

7. Techno-economically viable alternatives to meet electricity demand – towards a sustainable the future

As per IREDA, under the Ministry of Non-Conventional Energy (NCE) Sources:

“Promotion of energy conservation and increased use of renewable energy sources should be the twin planks of sustainable energy policy.”

Whereas it will be impossible to satiate the ever escalating demand for electricity in our urban areas in the business as usual scenario, it is well recognized that with an efficient and responsible approach, the legitimate demand for electricity of all sections of our society can be met satisfactorily without having to add too many conventional power plants such as large size dam based, coal based or nuclear fuel based power plants. Efficiency improvement of the existing electricity infrastructure to the international best practice levels can provide us with a virtual additional capacity roughly equivalent 30-40% of the present available capacity. These measures include: improving the national average PLF of thermal power stations to a figure above 85%; annual load factor of hydel power stations to a figure above 65%; bringing down the AT& C losses below 10%; and improving the efficiency of end use applications to the level of world best practices. The efficiency improvement measures in different applications can provide us with savings of 5 to 20 % of the total electricity consumption; lighting applications (5 to 8%); agricultural pumping (15 to 19%); factories and commercial enterprises (5 to 8%); transmission & distribution (15 to 20%).

Effective steps in energy conservation and Demand Side Management will provide considerable relief in meeting the legitimate demand.  As per IEP: India’s conventional energy reserves are limited and we must develop all available and economic alternatives. … Clearly over the next 25 years energy efficiency and conservation are the most important virtual energy supply sources that India possesses.” Planning Commission also estimates that CO2 generated from energy use can be reduced by 35% through effective deployment of efficiency, DSM measures and renewables. Planning Commission’s main action recommendation for energy security is: “… relentlessly pursue energy efficiency and energy conservation as the most important virtual source of domestic energy”.

Being a tropical country India is endowed with a huge potential to harness the new and renewable energy sources such as solar, wind, bio-mass, wave energy etc.  These energy sources when deployed effectively in distributed mode at the level of individual premises or communities can not only eliminate all the negative effects of the large conventional additional power plants, but will also bring self sufficiency to villages and also can stop urban migration. These renewable energy sources, when deployed effectively in distributed mode, will be able to drastically reduce the demand pressure on grid, and hence will limit the need for the number of additional conventional power plants.

Explains Subhash C Mullick, professor, Centre for Energy Studies, IIT Delhi: 

“Fossil fuel reserves are limited and nuclear energy has waste disposal and other safety concerns. Renewable energy sources are our only hope.”

A pilot study conducted for Karnataka in 2006 has established that by undertaking measures such as efficiency improvement, DSM and energy conservation, and effective use of small size distributed renewable energy sources it is possible to satisfactorily meet even the projected demand in 2018 without adding any conventional power projects. By diligent application of these measures a considerable portion of the future demand for electricity also can be met.  Compared to the option of additional generation capacity based on conventional power projects, these measures provide a large number of additional benefits to the society such as:

·          greatly reduced AT&C losses,

·          avoided cost of network expansion,

·          improved voltage profile,

·          much lower gestation periods for additional power projects,

·          much reduced growth in demand (CAGR) for grid electricity,

·          reduced need for land acquisition for power stations, transmission lines and substations,

·          avoided costs of recurring fuel expenditure,

·          reduced complexity in system operation,

·          avoided costs of peak load power stations,

·          absence of the need for people’s displacement,

·          advancement of local employment opportunities,

·          reduced urban migration,

·          much higher success in rural electrification because of smaller gestation periods. 

There are many international reports, such as the one from Greenpeace India, wherein experts are of the view that a people friendly and environmentally friendly electricity supply system can be ensured on a sustainable basis by honest implementation of the above mentioned measures.  Renewable energy, combined with efficiencies from the ‘smart use’ of energy, can deliver half of India’s primary energy needs by 2050, according to the report: ‘Energy [R]evolution: A sustainable Energy Outlook for India’.

What is needed is an honest and objective effort in implementing ‘Integrated Energy Management Approach’ taking all aspects /potential of energy resources in the country on a holistic basis. At the same time we cannot afford to forget that there are more pressing needs of the society such as clean air, water, right not to be displaced by large projects, poverty alleviation, health, education etc.  The legitimate demand for electricity must be determined in the background of the overall needs of the society instead of looking at the electricity demand in isolation.

In the background of all these glaring issues, it would tantamount to letting down the public if the STATE continues to spend thousands of crores of rupees of the state’s revenue and precious natural resources in establishing large number of additional conventional power plants without harnessing all the techno-economically benign alternatives first. 

The society can ill afford to allow the current chaotic situation to continue if we are hoping to become a welfare state. In this regard there is an urgent need to thoroughly review the past and present practices in electrical power sector, which has the potential to become the biggest polluter of our environment, and the fastest exploiter of our natural resources if not managed responsibly.  There should be onus on the project proponent of establishing the real societal need for additional conventional projects beyond reasonable doubts. The project proponent should satisfactorily convince the public that all the other alternatives to dam based OR coal based OR nuclear based power projects have been fully explored, and that the proposed project is in the best interest of the society. It must also be mandated that all the details of project report (except those which are commercially sensitive), Costs and Benefits Analysis (CBA), and the Environmental Impact Assessment (EIA) reports should be put on public domain for adequate periods so that concerned people can study the same.

While it is recognized that GDP growth rate emphasis by successive governments cannot be wished away in the near future, an effective tool to discourage ill conceived conventional power projects is needed in the present scenario of political economics. Such a tool could be the effective implementation of Costs and Benefits Analysis (CBA), wherein all the direct and indirect costs & benefits to the society of such high impact projects are analysed, assigned economic value and objectively compared.  Externalities such as costs associated with social, environmental and health aspects of our society should be accorded due importance in such a CBA model. This is a common practice in all business enterprises, and is being widely practiced in the industrialsied countries.  Satisfactorily establishing beyond reasonable doubt the efficacy of a given project through CBA should be made a prerequisite for the project proponent before the application for environmental clearance is lodged with MoEF.

Another crucial step in ensuring that environmental and social aspects of our society are adequately protected is to make it mandatory that effective public consultations are held at all important stage of approval process.


to be continued…


Views are those of the author

Author can be contacted at [email protected]



Note: Part III of the article on Managing Volatility & Growth: A New Energy Paradigm, part V of the article on Oil & Gas Discovery & Production in India: Historical Milestones and part III of the article on Living with Coal will be published in Volume VI, Issue 48


Indo-Japan Nuke Deal in Pipeline (part II)

By Rajeev Sharma*

Continued from Volume VI, Issue No. 46…

A joint statement released after talks between Naoshima and Ahluwalia said that the two sides reiterated the important role of nuclear energy in meeting energy demands in a safe, sustainable and non-polluting manner As a follow up to the Joint Statement issued at the Third Meeting of the Japan-India Energy Dialogue, the two Ministers reviewed the progress made in discussions on the Regional Energy Efficiency Centre (REEC) Project, reaffirmed the significance of this project in promoting energy efficiency on a practical level in India, and decided to proceed through the signing of a Memorandum of Understanding (MOU) by India’s Bureau of Energy Efficiency (BEE), National Productivity Council (NPC) and Japan’s New Energy and Industrial Technology Development Organization (NEDO) for its establishment in Chennai. Capacity building, such as training of trainers and dispatch of experts, will take place by the end of 2010, following the completion of ongoing construction work and the installation of training equipment at the Centre. The Japanese side expressed its willingness to positively consider possible cooperation in other similar initiatives upon receipt of specific proposals from the Indian side.

The two Ministers welcomed the progress of the feasibility study by NEDO regarding the potential for applying heat pump and heat storage technologies to urban buildings. The two sides recognized that a project to demonstrate such technologies would be useful and could lead to large reductions in energy use in the urban area if widely deployed. It is hoped that these energy-saving technologies together with the Energy Service Companies (ESCO) business model for promoting energy conservation will be mutually reinforcing.

An Indo-Japan nuclear deal is a win-win situation not only for the two sides but also for Washington.

Japan: A nuclear deal with India would do away with pretentious and out-dated diplomatic concept and remove confusion on nuclear-related issues in Japan-India ties. In concrete terms, it would fetch big ticket business contracts for Japanese companies. Naoshima was neither unaware nor unmindful of these issues. It was clear by the fact that Naoshima was accompanied on his India trip by a large business delegation which included the CEOs of three major Japanese companies — Norio Sasaki of Toshiba, Hiroaki Nakanishi of Hitachi and Kazuo Tsukuda of Mitsubishi Heavy Industry. All these Japanese business honchos were in attendance during the Japan-India energy dialogue in New Delhi on April 30. Japan has an active civilian nuclear energy sector with 30 % of its power coming from nuclear sources.

United States: An Indo-Japan civilian nuclear energy agreement is not just desirable but essential for its business interests. This is because US-based companies General Electric and Westinghouse Electric Company (WEC) — the two companies that are seeking to build nuclear reactors in India — have Japanese links with Westinghouse Electric Co being a subsidiary of Japan's Toshiba Corp while GE has a partnership with Hitachi. Therefore, without a Japan-India nuclear deal in place these Japanese-American companies cannot participate in projects in India which has awarded construction of plants to both these companies.

India: A nuclear deal with Japan would give the “khul ja sim sim” code to the Alibaba cave of Indian nuclear energy. In many ways, India’s nuclear deal with Japan will be as crucial as the Indo-US nuclear deal and more important than the similar agreement India has signed with seven other countries. After the Indo-Japan nuclear deal is signed – and the two sides should look at doing this during their next annual summit in Tokyo at the end of this year – only one hurdle would be left for India to cross. The Indian government will have to get the nuclear liability bill passed by its Parliament so that companies of the developed world start nuclear trade with India in right earnest.

*The author is a New Delhi-based commentator and analyst on foreign policy and international relations.


Views are those of the author

Author can be contacted at [email protected]







Small fields in KG-D6 unviable at $4.20 per mmBtu: RIL

May 10, 2010. Reliance Industries has said that developing smaller gas fields in the KG-D6 block is economically unviable at the current price of USD 4.20 per mmBtu and it may seek a rate of at least USD 6 per mmBtu in 2014, when the fields are put into production. RIL has made 18 gas finds in the eastern offshore KG-D6 block, of which two -- Dhirubhai-1 and 3 -- were put into production from April, 2009, at a cost of USD 8.836 billion. It is working on an integrated development plan for the rest, but wants a price higher than the USD 4.2 per million British thermal unit rate paid for gas from Dhirubhai-1 and 3.  The smaller fields are proposed to be developed as a common pool, using existing facilities of the Dhirubhai-1 and 3 fields and RIL was in the process of preparing a multi-billion dollar integrated development plan.  RIL had in 2008 submitted plans to the government to invest USD 5.91 billion to develop nine satellite fields, but last year pruned the list to just four, as the current gas price of USD 4.2 per mmBtu did not justify such a huge investment.

RIL to keep Rs 30 bn a year that might have gone to RNRL

May 8, 2010. As a result of the Supreme Court ruling that sovereign interest cannot be overridden by private agreements, Reliance Industries (RIL) gets to keep an estimated Rs 30 bn a year that might have gone to Anil Ambani and the 2.5 million shareholders of Reliance Natural Resources (RNRL). The end of the five-year dispute translates into a market value of Rs 35 a share for RIL, which had revenues of $45 billion last year. But for RNRL, set up to mainly deal in gas, it has to begin afresh.  Some 14,000 megawatt of power to be produced by Anil Ambani group firm Reliance Power with fuel from RIL is under peril.

Indian firms to increase oil production in Venezuela

May 5, 2010. India told Venezuela that Indian companies would be increasing production from oil fields in the Latin American country that could be sent for further processing in upcoming refining projects in India. Petroleum Minister Murli Deora met the visiting Venezuelan Vice Minister for Foreign Affairs Temir Porras Poncelon and conveyed the decision, officials said. Indian state oil companies ONGC Videsh, Indian Oil Corp and Oil India Ltd have recently been awarded 40 percent participating interest to develop two oil blocks by the Venezuelan government. OVL also holds 40 percent participating interest in another oil field that was awarded in April 2008. The overseas arm of India's flagship oil explorer is also carrying out reserve assessment of Junin Norte in the Orinoco belt of Venezuela.


Reliance shuts VGO unit for about a month

May 10, 2010. Reliance Industries Ltd has shut a 100,000 barrels per day (bpd) vacuum gas oil (VGO) hydrotreater for about a month to change the catalyst. Reliance Industries operates the world's biggest refining complex at Jamnagar in the western Indian state of Gujarat, with capacity to process 1.24 million bpd of crude. The VGO hydrotreater is one of two such units of the same capacity at Reliance's 660,000 bpd refinery at Jamnagar. There would be no significant impact on throughput as the refinery had enough feedstock to process at the fluid catalytic cracking unit during the shutdown. A VGO hydrotreater removes sulphur from heavy feedstock to produce naphtha, jet fuel and LPG.

Widening crack spread to shore up refiners' margins

May 6, 2010. State-owned crude oil refiners are expecting to improve their gross refining margins in the March quarter as the price spreads of jet fuel and diesel widen in the international over-the-counter (OTC) market. But if the European Union credit crisis worsens, it could act as a dampener, a refinery official said.  Refineries distill crude oil to obtain crack which is grouped into three categories — light, middle and heavy distillates. To protect their margins and profitability, local refiners hedge themselves by selling crack spreads forward to banks and trading outfits of major oil companies operating out of Singapore, Hong Kong, Dubai, Tokyo and Sydney. If the prices rise, they book a loss on the paper trades while realising a profit on the physical sale and vice versa in case the prices fall.

Transportation / Trade

Indian Oil seeks June volumes

May 7, 2010. Indian Oil Corp (IOC) is looking to buy at least one 15,000-tonne gasoline cargo for June, as it continues to regularly seek Euro IV-compliant fuels meeting cleaner fuel standards after a recent switch, traders said.   This could lift sentiment, although very marginally, as the market remains awash with supplies. The state-owned refiner is seeking the 91-octane cargo for June 12-15 arrival at Chennai, and/or two 15,000-tonne parcels for June 2-5 lifting from the Middle East and June 7-12 loading from Singapore by tender.

Policy / Performance

Ruling helps uphold security of contracts

May 11, 2010. BP said that a ruling by India’s Supreme Court clarifying the government’s ultimate authority over natural gas pricing and sales helped to uphold the security of exploration contracts in the country. “BP strongly supports the notion of the sanctity of contracts,” which provide the long-term stability and regulation necessary for companies to make investment decisions.

SC ruling positive for RIL, energy sector: Moody’s

May 11, 2010. The global rating agency Moody’s said last Friday’s Supreme Court ruling on gas pricing will have a positive impact not only for Reliance Industries but also on the country’s energy sector. Reliance Industries (RIL) emerged victorious in a long-drawn legal battle with his younger brother Anil Ambani-run Reliance Natural Resources when the Supreme Court nullified a 2005 family contract between the brothers under which RIL was to supply natural gas to RNRL at a 44% discount to the government-set price of $4.2/mmbtu, for 17 years.  The apex court also rued that the government, and not any private parties, has the right to set prices for gas as it remains a national property until it reaches end-consumers.

Govt may tweak gas policy to power Anil's Dadri plant

May 10, 2010. The government may rework natural gas allocation priorities to accommodate Anil Dhirubhai Ambani Group’s (ADAG) Dadri power plant after Reliance Industries (RIL) and Reliance Natural Resources Ltd (RNRL) successfully re-negotiate a gas supply deal based on the prevailing policies. Reliance Power’s proposed 7,480 mw Dadri project is the single-largest gas-based power plant at a single location in the world.  EGoM could review its decisions periodically.  The EGoM has allocated 61.61 metric million standard cubic meters per day (mmscmd) of gas to various industrial users on firm basis. About 30 mmscmd is allotted under fallback option, the ministry official said citing the EGoM decision.

Fuel pricing: EGoM likely to decide on May 21

May 10, 2010. An Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee is likely to meet on May 21 to decide on freeing petrol and diesel prices from government control.  The ministerial panel will also decide on ways to deal with the revenue lost on selling domestic LPG and PDS kerosene below cost.  Besides Mukherjee, the EGoM also includes Oil Minister Murli Deora, Agriculture Minister Sharad Pawar, Chemical and Fertiliser Minister M K Alagiri, Railway Minister Mamata Banerjee, Road Transport Minister Kamal Nath and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

RIL independent directors may oversee RNRL talks

May 10, 2010. Reliance Industries plans to ask some of its independent directors to supervise upcoming negotiations with Reliance Natural Resources (RNRL) which could result in a new contract for supply of natural gas to power plants of the Anil Dhirubhai Ambani Group or ADAG.  MP Modi and DV Kapur, two independent directors on the board of India’s largest private sector company, are likely to be on the panel of non-executive directors which will oversee a core team of senior RIL executives tasked to carry out the negotiations, ordered by the Supreme Court, according to an executive close to RIL. LV Merchant, part of chairman Mukesh Ambani’s office and senior vice-president (commercial), B Ganguly will be among the top executives who will carry out the negotiations. The team is likely to be spearheaded by PMS Prasad, an executive director on RIL board and the head of its exploration and production (E&P) business.

Govt to regulate price and usage of gas produced from blocks under NELP

May 8, 2010. The unequivocal ruling that domestically produced natural gas is not family business but a national asset has established government’s control over its utilisation and pricing, creating space for its allocation as per policy.  Oil secretary S Sundareshan said that it also established the supremacy of production sharing contract (PSC). The PSC, signed by the government and the contractor (energy firms), defines the rights of the contractor over natural resources. The government will continue to regulate price and usage of gas produced from blocks auctioned under the new exploration licensing policy (NELP), Mr Sundareshan said. This will mean that the empowered group of ministers (EGoM) will continue to fix gas price and prioritise its distribution even in future.  In 2007, the empowered group headed by the then external affairs minister Pranab Mukherjee had approved the pricing and usage of gas from all NELP gas for five years.

Fertiliser cos see a smooth run, but Street’s not excited

May 8, 2010. The fertiliser industry, the key beneficiary of the government’s gas allocation policy, sees a smooth flow of natural gas for urea production following the RIL-RNRL verdict, boosting investment and reducing reliance on imported gas.  The industry says the verdict has upheld the decision of the empowered group of ministers (EGoM) on gas and the current government policy of according the highest priority to the fertiliser sector in gas allocation.  

Naik welcomes SC ruling on RIL-RNRL row

May 7, 2010. Former Petroleum Minister Ram Naik welcomed the Supreme Court ruling on the RIL-RNRL gas row, saying the court has "rightly upheld that gas and oil resources are the national property". The private MoU would distort the marketing arrangements, he said.  While the Supreme Court has settled the issue, he said that he was sorry that in spite of having drawn his attention in July 2009, before the matter went to the Supreme Court, Prime Minister Manmohan Singh did not act swiftly and the country could not use natural gas for nearly a year, thereby causing irreparable economic loss to the country, Naik said. 

RIL-RNRL verdict has no bearing on NTPC case: Power Minister Sushil Kumar Shinde

May 7, 2010. Power Minister Sushil Kumar Shinde said the Supreme Court upholding the government's right to approve price and utilisation of gas was a "fair decision" and it had no bearing on the gas supply dispute between NTPC and Reliance Industries. "It has nothing to do with RIL-NTPC case," he said shortly after a three-judge bench of the apex court ruled that private family agreements cannot over-ride the government's right under Production Sharing Contract (PSC) to approve price and fix users of gas. Supreme Court had ruled that Anil Ambani Group's Reliance Natural Resources Ltd cannot claim gas at concessional rate of 2.34 per million British thermal unit from RIL. The rate RNRL is claiming is the same that RIL had bid in a 2004 NTPC tender to supply 12 million standard cubic meters per day of gas to the state utility.

Oil retailers get Rs 140 bn for subsidised sales

May 6, 2010. The Finance Ministry has decided to pay Rs 140 bn to state-owned oil marketing companies (OMCs) as part compensation for selling kerosene and cooking gas below cost in 2009-10.  As per ruling UPA core committee’s decision, the government will fully compensate public sector OMCs for their revenue losses on selling kerosene and cooking gas in 2009-10 at controlled prices. Members of core committee include UPA chairperson Sonia Gandhi, Prime Minister Manmohan Singh, finance minister Pranab Mukherjee and UPA chairperson’s political adviser Ahmed Patel.  In the first instalment, the finance ministry paid Rs 120 bn to OMCs for their revenue losses in 2009-10 on these two fuel. Another instalment of Rs 140 bn doesn’t fully cover their revenue losses of about Rs 190 bn for the previous financial year. A third instalment of about Rs 5,000 is still due.

PetroMin seeks Rs 196.2 bn compensation for oil PSUs

May 5, 2010. The Petroleum Ministry sought over Rs 196.20 bn in compensation for state retailers IndianOil, Bharat Petroleum and HPCL, which sold cooking fuels below cost in 2009-10 fiscal.  Oil Secretary S Sundareshan met Expenditure Secretary Sushma Nath seeking Rs 196.2095 bn to fully compensate oil marketing companies' revenue loss on PDS kerosene and domestic LPG in 2009-10, official sources said.  The three firms lost Rs 460.51  bn on selling petrol, diesel, domestic LPG and PDS kerosene below imported cost in 2009-10. He told Nath that upstream firms Oil and Natural Gas Corp (ONGC) and Oil India Ltd are meeting the entire Rs 144.30 bn loss on petrol and diesel.  Upstream firms, which are meeting 32 per cent of the total revenue loss, are unwilling to contribute anything beyond this.



Pune's Tiana Group in industry, services pact with Japan's Mitsubishi Corporation

May 11, 2010. The diversified Pune-based Tiana Group plans to enter into a partnership with Japan's industrial behemoth Mitsubishi Corporation in the area of power generation, infrastructure development, oil and gas and an array of industry and services sectors in India.  The Government of India has accorded an in-principle approval to Tiana Group's plans to set up 90 power projects across the country in hydel, thermal, solar, wind and nuclear power segments using the expertise of Mitsubishi Japan to set up, operate and maintain these power plants. The group is committed to supplying low cost power to the Indian consumers and will take the necessary steps right from the beginning. Tiana Group is particularly keen on contributing to the effort of pollution control in India and will seek the help of Mitsubishi Corp in this effort as well.

Concurrent to set up 40 MW hydropower project in Sikkim

May 10, 2010. Concurrent (India) Infrastructure Ltd said it has entered in a pact with Sikkim Power Development Corp to set up a 40 MW hydropower station at an estimated cost of Rs 1.11 billion. Concurrent will put in 51 per cent equity as well as debt in the project while Sikkim Power would put in the rest, it said. The project has already incurred expenses of 300 million rupees on preparation of detailed project report, land procurement, construction of approach road, bridge and other civil works, it added. 

2012 completion for Himachal's 800 MW Koldam project

May 9, 2010. Work on the 800 MW Koldam hydroelectric power project being executed by the National Thermal Power Corporation in Himachal Pradesh would be completed by 2012, union Power Minister Sushil Kumar Shinde said. The project would be commissioned by March 2012, he said while reviewing the project near Barmana in Bilaspur district. The hydropower project is located on the border of Bilaspur and Mandi districts.  Himachal Pradesh has abundant water resources with a power potential of about 23,000 MW. About 6,480 MW have been harnessed till now by the central and state governments, private players and joint venture companies.

GPPC plans Rs 25.45 bn gas-based power plant at Pipavav in Guj

May 7, 2010. GSPC Pipavav Power Company Limited (GPPC), plans to set up a 1,053 MW gas-fired combined cycle power plant project at Pipavav in Gujarat.  GPPC is a a Special Purpose Vehicle (SPV) set up by GSPC (Gujarat State Petroleum Corporation) along with GPCL (Gujarat Power Corporation Ltd) to implement a power project catering to energy requirements in Gujarat. The first 351-MW unit is scheduled to be commissioned in December 2010 and the second unit by March 2011. The second phase of the project envisages expanding the capacity of the power plant by another 351 MW. The project cost is estimated at Rs 25.45 bn that would be funded through 20 per cent of equity and 80 per cent of debt.

India snubs Pak over hydro project

May 6, 2010. In a clear message to Pakistan to keep its hands off the Kishanganga dam project, India is going ahead with the construction of the 330-MW hydroelectric power plant on the river in north Kashmir. Pakistan has threatened to move the International Court of Arbitration to get the project work stopped, citing an alleged violation of the Indus Water Treaty, brokered by the World Bank, of 1960 that empowered Islamabad to monitor the usage of the three rivers — Jhelum, Chenab and Indus — that flow from Jammu and Kashmir to Pakistan occupied Kashmir. Kishanganga, which is called Neelam in Pakistan, is a tributary of the Jhelum. The treaty also empowered India with full control over the waters of three Punjab rivers — Ravi, Sutlej and Beas.

Bahwan CyberTek eyes power sector

May 5, 2010. Bahwan CyberTek has won a contract from the public sector power equipment major, BHEL, for ‘computerised maintenance and management system' for the Maithon power project. Bahwan will supply the software and run the system that will throw up data about the functioning of each part of the plant so that engineers can keep an eye on the performance and manage inventory better. 

Transmission / Distribution / Trade

Orissa lifts load restrictions for power consumers

May 11, 2010. The Orissa government lifted the load restriction imposed on both domestic and industrial consumers about two months back. The decision to ease load restriction was taken in a high level meeting chaired by the state energy minister, Atanu Sabyasachi Nayak. The government had restricted power supply to domestic and industrial sectors since March 5, 2010 due to acute shortage of power in the state. The regulators, the Orissa Electricity Regulatory Commission (OERC), had given the green signal to the government to go ahead with the measure.  All the power distribution companies have been asked to enforce the directive and the government would monitor the situation.

Kalpataru Power raises Rs 4.5 bn

May 6, 2010. Kalpataru Power Transmission said it has raised about Rs 4.50 bn through a qualified institutional placement. The shares were placed at a price of Rs 1,074.20 per equity share. The QIP proceeds are likely to be utilised for capacity expansion of tower manufacturing along with investments in BOOT (build, own operate and transfer) projects and long term initiatives.

Domestic LED lamp makers to lower price barrier

May 6, 2010. Even as a gradual switchover from incandescent bulbs to CFLs (compact fluorescent lamps) for domestic lighting is under way, the Government is working on simultaneously ensuring the LED technology, touted as the future of lighting, breaches the price barrier. A core committee constituted by the National Manufacturing Competitiveness Council (NMCC) has recommended that the Centre needs to promote the shift to LEDs (light emitting diode-based lighting) by aggregating demand in various States and encouraging domestic manufacturing to reduce costs. The panel, which was formed to take forward a policy outline prepared by the Bureau of Energy Efficiency (BEE) earlier to address the high initial cost of LEDs, has stressed that domestic manufacturing of LEDs for lighting, starting with the non-semiconductor chip portion, needs to be encouraged in a phased programme to bring down costs.

Policy / Performance

Centre may get tough on power equipment from China

May 11, 2010. The Centre could get cracking on power equipment imports, especially those coming in from China. The Cabinet Secretary is slated to chair a high-level meeting to deliberate on implementing recommendations of a Planning Commission-led panel on ways to provide a level playing field for domestic equipment manufacturers.  The measures under consideration include the immediate adoption of strict performance standards, safeguard or anti-dumping actions against Chinese suppliers and levying a Customs duty of 10 per cent and SAD of 4 per cent for both mega power projects and upcoming UMPPs (ultra mega power projects). The meeting comes in the backdrop of about 33,000 MW of power equipment orders already having been placed on Chinese manufacturers.

Final allotment of hydel projects soon: Uttarakhand CM

May 11, 2010. Despite renewed controversy over the self-identified hydel projects, Uttarakhand Chief Minister Ramesh Pokhriyal Nishank said the final allotment would be done shortly. Nishank’s comments came soon after the government initiated action against Ratan Singh Gunsola, a private developer, who alleged that he had paid Rs 10 mn to the BJP party funds to bag hydel projects under the self-identified route, the tenders for which were invited in 2008. In February, the government had quietly allotted a total of 56 small projects having capacity to generate 960-Mw. However, the issue snowballed into a major controversy with the Opposition parties claiming most of the projects were allotted to some liquor companies and unknown individuals and they called for a CBI probe into the allotment process. Since then, the government was going slow on the issue.

Indian team to visit Myanmar for expediting power projects

May 10, 2010. As part of India’s economic diplomacy initiative to engage Myanmar and counter China’s growing influence in that country, an Indian team will be leaving for the eastern neighbour to discuss building power plants and transmitting some of the electricity to India. India plans to revive the stalled 1,200MW Tamanthi hydroelectric power plant and 642MW Shwezaye project on the Chindwin river, the largest tributary of the Irrawaddy river, Myanmar’s key commercial waterway. The memorandum of association for these projects are expected to be signed by December. The delegation will comprise officials from state-owned firms NHPC Ltd and Power Grid Corp. of India Ltd (PGCIL). The visit is part of the Indian government’s exercise to improve diplomatic and economic ties with a neighbour that has rich deposits of natural gas. Myanmar has natural gas reserves of 89.722 trillion cu. ft (tcf), of which 18.012 tcf are proven recoverable reserves, or gas that can be easily extracted and tapped.

IPPs contribute Rs 330 bn to BHEL's order book

May 10 2010. Independent power producers contributed over Rs 330 bn to the BHEL's orderbook in the previous financial year, the state-run power equipment producer said. The orders received from independent power producers (IPPs) accounted for 14,689 MW, in financial terms the orders amount to Rs 337.87 bn, the company said in a statement. Total order book of the company in the last financial year stood at Rs 590.31 bn with orders for equipment that can generate 16,489 MW of electricity. Ninety per cent of the orders came from the IPPs.  During the year, orders were received from ACC, Adhunik, Avantha, Hindalco, Indiabulls, Jaypee Group, Jindal Power, Sterlite, Tatas, Videocon among others.  BHEL manufactures equipment that can generate 15,000 MW of power and it plans to ramp up this capacity to 20,000 MW soon. 

Work on Power Grid FPO to start soon

May 11, 2010. The process for preparing a Cabinet note for state-run Power Grid Corporation of India's follow-on-public offer will start soon. The government, in an effort to raise Rs 400 bn from disinvestment, would sell stake in 10 more PSUs, including IndianOil, MMTC, Coal India Ltd, SAIL, RINL and Shipping Corporation, in the current financial year.  Engineers India is likely to be divested in June, Coal India in August, Hindustan Copper in August-September, SAIL in September and Power Grid in November this year. The Budget has upped the revenue target from sale of government equity in CPSUs to Rs 400 bn in 2010-11 from the Rs 250 bn in the last fiscal.  The first stake sale of this fiscal--SJVNL--has got a good response from investors, prompting the government to fix the issue price at the upper end of the band at Rs 26 a share.

Maha govt to resolve Tata Power-RInfra row

May 6, 2010. The Maharashtra government’s cabinet sub-committee on power is scheduled to meet on to resolve the Tata Power-Reliance Infrastructure row over supplying electricity in Mumbai. The state government had asked Tata Power (TPC) to continue supplying power to Reliance Infra (RInfra) till May 3. TPC is maintaining status quo. TPC has been contending that it won’t supply power to RInfra without a legal power purchase agreement (PPA). In fact, TPC, which has generating stations at Trombay and Khopoli, had set April 30 as the deadline. TPC said it could meet the demand from its retail consumers and also fulfill the PPA it has signed with the BEST undertaking for 100 mw supply. TPC supplies 458 mw to RInfra and claims it cannot cater to its retail consumers and honour PPA with BEST unless it withdraws 458 mw from RInfra.

JSL signs MoU with Orissa to set up 1320 power plant

May 6, 2010. Ratan Jindal led JSL Limited and the Orissa government on signed a memorandum of understanding for establishment of 1320 MW Super Critical Thermal Power Plant (SCTPP) with an investment of Rs 73.75 bn. The project would come up at Luni in Dhenkanal district.  As per the MoU, the company would draw water from the Mahanadi river system.  

CIL may seal Rs 77 bn in overseas deals in May

May 6, 2010. State-owned Coal India said it expects to seal deals worth USD 1.7 billion (about Rs 77 bn) with foreign firms this month for mining coal abroad.  The company has already appointed three consultants -- DSP Merrill Lynch, Royal Bank of Canada and Royal Bank of Scotland -- for fast-tracking the proposed ventures. The world's largest coal producer, which meets nearly 82 per cent of the country's requirement of the dry fuel, has already named US-based Peabody as a possible ally for such ventures.  At present, the company is looking to forge equity and joint venture agreements with the concerned companies, but it may consider entering into offtake pacts later. In the current fiscal, CIL has earmarked 60 per cent out of its total capital outlay of about Rs 100 bn for such global deals.  As part of efforts to expand its global footprint, the coal monolith had floated global bids in July last year inviting players to partner with it for joint ventures in coal mining abroad, which saw firms like Rio Tinto and Peabody evincing interest.




Empire estimates $2.2 bn of oil in Tasmania Basin

May 11, 2010. Empire Energy with its wholly owned subsidiary, Great South Land Minerals announced that GSLM has received and signed the documents for its Tasmania Basin license EL14/2009.

This license area includes the two main structures identified in GSLM's previous seismic and gravity surveys; the Bellevue and Thunderbolt domes which leading independent consultants, RPS Energy, estimate could contain undiscovered potential petroleum resources totaling 447 million barrels of oil, which would potentially have a value of $2.2 billion assuming $5 per barrel.

China stakes in Australian offshore unconventional gas

May 11, 2010. Under the sales and purchase agreement CNOOC signed with BG Group to buy Australian gas, CNOOC will take a 5-percent stake in some of BG's coal seam gas fields, part of the British gas producer's $7.35 billion gas project Queensland. 

Through a joint $3.1 billion bid with Shell for Australian gas producer Arrow Energy, PetroChina will own 50 percent of the gas produced by a planned LNG plant on Curtis Island, Queensland, which processes mostly coal seam gas.

BP, Halliburton, Transocean blame each other in Gulf oil spill

May 11, 2010. BP Plc and contractors Transocean Ltd. and Halliburton Co. are singling out each other for responsibility after the explosion of the Deepwater Horizon rig in the Gulf of Mexico.  Halliburton was “contractually bound,” to follow BP’s instructions the Houston-based energy services company, will tell the panel. The executives debated the significance of the blowout preventer, a device designed to close off a well, that failed to work after the explosion.  Transocean said “it simply makes no sense” to blame the accident on the blowout preventers because “the drilling process was complete” and the well already “had been sealed with casing and cement.”

Hydrates stymie oil spill containment box

May 10, 2010. Interference from gas hydrates, a natural phenomenon found on ocean floors, has stopped BP's first attempt to significantly stem the flow of crude oil from a blown-out underwater oil in the Gulf of Mexico. BP lowered a 98-ton containment chamber to the site of the oil leak; the chamber is intended to contain one of two leaks gushing at least 5,000 barrels per day (bpd) (210,000 gallons/795,000 liters) of crude oil into the northern Gulf. The leaks threaten the economy and environment along the U.S. Gulf Coast from Louisiana to Florida. The hydrates have formed what is described as a slush blocking a pipe meant to carry the oil gushing from the well to a ship on the ocean surface about 5,000 feet above the well site.

Marathon Oil drills discovery well in GOM

May 10, 2010. Marathon Oil has drilled a discovery well on the Flying Dutchman prospect, located on Green Canyon Block 511, in the Gulf of Mexico. The Flying Dutchman well is located approximately 100 miles south of New Orleans, La., and was drilled in about 3,700 feet of water, to a total depth of approximately 30,000 feet. The well encountered 100 feet of net hydrocarbon-bearing sands in an Upper Miocene reservoir. The results of Flying Dutchman will be evaluated along with additional potential drilling on Green Canyon Block 511 to determine overall commerciality.

China's efforts to tap unconventional gas

May 7, 2010. China is at an early stage in finding and producing unconventional gas which is expected to meet 15 percent of forecast domestic supply, or 10 percent of demand, by 2020. The gas revolution that is taking place in the United States, where unconventional gas takes up nearly half of the gas supply, was a great inspiration to Beijing's energy policy makers.  Activities in all the three main types of unconventional gas -- shale gas, coalbed methane (CBM) and tight gas -- are picking up in China and across borders where state-run energy giants seek alliances with majors with established technologies. But it will take time before China becomes a significant player in unconventional gas as hurdles remain like limited access to land, the fight for mining rights and state controls on gas prices.

Murphy makes discovery on GOM

May 6, 2010. Murphy has made a discovery at its Dalmatian North prospect in the Gulf of Mexico. The well was drilled to a total depth of 13,195 feet and encountered 156 feet of oil pay in three zones. Located in DeSoto Canyon Block 4, the well was drilled by Diamond Offshore's Ocean Confidence in approximately 5,820 feet of water.

Rockhopper finds first Falkland Basin oil

May 6, 2010. Rockhopper Exploration's Sea Lion prospect has reached a depth of 2,744 meters. The 14/10-2 well was drilled by Diamond Offshore's Ocean Guardian. Initial indications from the data collected suggest that this well is an oil discovery, which would be the first in the North Falkland Basin. The Company has run a suite of wireline logs and logging data collected thus far indicate that the well has encountered a 150 meter gross interval of sand and shales.


S. Africa urged to consider imports over new refinery

May 11, 2010. South Africa should consider tapping excess crude-oil refining capacity worldwide before committing to a new refinery earmarked for its southeast coast, according to BP PLC's (BP).

State oil company PetroSA has proposed a 400,000-barrel-a-day refinery at Coega, in the Eastern Cape, which the government has argued is necessary in order to meet expected demand and secure fuel supplies.  

However, BP said there wasn't an economic argument for a new refinery and the matter should be debated.  There has been a rise in unused refining capacity globally to about 20%, which is likely to last through 2030 now that demand from Organization for Economic Cooperation and Development countries has peaked but capacity has been added in the Middle East, India and elsewhere.

Russian Refinery turnaround concludes ahead of schedule

May 7, 2010. TNK-BP announced the completion ahead of schedule of the planned turnaround on eight of its processing units at the Ryazan Refinery, which is part of the TNK-BP Group. The Refinery has returned to the normal targets in terms of its throughput.

The scheduled turnaround at the Ryazan Refinery started on April 2. The entire scope of the program for replacement of worn-out equipment intended for the turnaround was completed.

During this period, there were implemented 12 investment projects, and 35 significant equipments were replaced or upgraded. Over 1,400 contractor employees were engaged in the turnaround operations. For the turnaround period the Refinery had built up necessary stocks of oil products to ensure that customers would see no disruptions to their requirements.

Libya eyes refinery project in Indonesia

May 7, 2010. Libya's National Oil Corp (NOC) wants to take part in the development of an oil refinery in Bojonegara, Banten and expansion of the Balongan oil refinery in West Java.

NOC also wants to become a supplier of crude oil for the two oil refineries, which will have processing capacity of 300,000 barrels of crude oil per day each. Indonesia, a former members of OPEC, imports a substantial volume of crude oil to feed its oil refineries.

BOC to build LNG plant as part of Aussie LNG highway

May 6, 2010. Gas supplier BOC will invest A$65 million (US$58.83 million) in its liquefied natural gas (LNG) plant at Dandenong in Victoria as part of a A$200 million LNG "highway" along the east coast of Australia.  BOC said that its existing air separation unit and LNG facilities would undergo a A$65 million expansion and refurbishment to be completed in mid-2012.

BOC said the expansion would support the opening of a network of LNG refueling stations for heavy road transport vehicles along Australia's eastern seaboard.

The network will be use fuel processed from BOC's micro LNG plant at Chinchilla in Queensland as well as LNG from the Dandenong plant. The expanded Dandenong plant will produce up to 100 tonnes of LNG per day.

Petrobras to sell refinery, distribution assets in Argentina

May 5, 2010. Petrobras announced that its subsidiary Petrobras Energia S.A. has approved the terms and conditions of the sale of the refining and distribution assets in Argentina to Oil Combustibles S.A. The deal includes a refinery located in San Lorenzo, Santa Fe province; a river unit; and a fuel marketing network linked to the refinery, consisting of 360 service stations and their associated wholesale customers.

The offer for the mentioned assets was approximately $36 million. In addition, inventories of oil and of the different products will be sold to Oil Combustibles, on the closing date, for approximately $74 million. The total amount of the transaction is estimated at some $110 million.

Transportation / Trade

Qatargas celebrates milestone cargo loading

May 10, 2010. Ras Laffan Terminal Operations (RLTO), part of Qatargas Operating Company, achieved yet another milestone when it celebrated the loading of its 1000th cargo. This feat has been achieved without any lost time accident or hydrocarbon spillage in four years of RLTO's operation of the terminal.  The cargo was headed for Khor Fakkan in the UAE.

TDW completes pipeline pressure isolation in Malaysia

May 7, 2010. TDW completed a key pipeline pressure isolation and joint testing operation offshore western Borneo in Malaysia for Sarawak Shell Berhad. TDW worked on platform F23P-A, which is part of the facilities operated by Sarawak Shell Berhad located 80 to 200 km from Miri and Bintulu. The operation was carried out on a gas export line that forms a portion of the line that runs from the F23P-A to the E11R-A platform.

GE invests $150 mn in new LNG terminal

May 7, 2010. GE Energy Financial Services, a key player in funding alternative energy projects, has not abandoned core energy sources, investing $150 million in a liquefied natural gas terminal under construction on the Mississippi Gulf Coast. GE EFS has acquired Houston-based investor Crest Group's 30 percent interest in the $1.1 billion Gulf LNG (liquefied natural gas) Energy terminal, expected to be completed late next year with the goal of increasing natural gas supplies to the Northeast and Southeast. The terminal, adjacent to the Bayou Casotte Ship Channel in Pascagoula, will receive, store and "re-gasify" imported, liquefied natural gas.

Alaska Gov. Candidates offer wide view of gas pipeline

May 6, 2010. Those running to be Alaska's governor have hugely different visions for a natural gas pipeline long touted as savior of the state's economy. One says it's a pipe dream to think Alaska will export much gas anytime soon. Others argue the state should finance multibillion-dollar pipelines from the North Slope to Fairbanks or Valdez.

The pipeline was a central issue, as it's been for Alaska politicians since the 1970s, when the candidates had their first major debate in front of an Alaska State Chamber of Commerce audience in Anchorage. The large new supplies of natural gas discovered in Lower 48 shale rocks mean Alaska has missed its chance for the near term.

Santos delays LNG project decision on tax

May 6, 2010.   Santos Ltd Australia's-second largest oil and gas producer, said it will defer for up to six months a decision on whether to build an LNG export terminal in Gladstone in Queensland state, as it assesses the impact of a proposed new tax.  Global miner Rio Tinto has also said it is reviewing its Australian operations after Canberra unveiled a hefty new 40 percent mining tax.

Dolphin ready for Taweelah-Fujairah gas deliveries

May 5, 2010. Abu Dhabi-based Dolphin Energy said it completed a 128-kilometer section of its Taweelah-Fujairah pipeline project that will boost its capacity to transport gas to the eastern United Arab Emirates to 350 million standard cubic feet of gas a day.

Dolphin, which imports natural gas to the U.A.E. via a pipeline from Qatar, said in a statement that the pipeline will provide enough gas capacity to fully operate two power stations at Fujairah, F1 and F2.  The 128-kilometer, 48-inch pipeline connects to a hot-tap connection on an existing Al Ain-Fujairah pipeline, and will transport gas to the Fujairah power stations.

Policy / Performance

USA NEB launches Arctic safety

May 11, 2010. The National Energy Board of USA announced it is starting a review of Arctic safety and environmental offshore drilling requirements in light of the oil spill in the Gulf of Mexico.

Full details of the review will be announced in the near future, when the focus in the Gulf of Mexico shifts from stopping the leak and protecting the environment to understanding what happened. The process will be public and consultative. The NEB will welcome the participation of other regulators in this process.

Oil demand will not grow in line with global economy – OPEC

May 11, 2010. Global oil demand will not grow in line with the world economy this year, the Organization of the Petroleum Exporting Countries (OPEC) said, reacting to an upward revision of the International Monetary Fund's (IMF) forecast.

In its latest monthly market report, Vienna-based OPEC said demand for crude oil would grow by 1.12 percent, only 0.06 percentage points higher than the previous assessment. In April, the IMF predicted global economic growth of 4.2 percent in 2010, up from a January forecast of 3.9 percent.

Bridge, Paramax wrap up ops in Idaho

May 11, 2010. Bridge and Paramax Resources announced that their initial five well exploratory program in the Western Idaho Basin has been completed significantly ahead of schedule and under budget at a gross cost of $4.5 million. The drilling results were at the top end of expectations, comprising two discoveries confirmed by production testing, the M.L. Investments 1-10 and Espino 1-2, and two potential discoveries pending production test confirmation, the Island Capitol 1-19 and State 1-17. The Espino 1-2 well has been perforated in Pliocene sands below 1,600 feet and has cleaned-up to start producing water-free gas. Flow rate tests will be conducted over several days.

Fla. Governor leans toward special session to curb drilling

May 10, 2010. Florida Gov. Charlie Crist said he was close to calling reluctant lawmakers back to the Capitol so they could approve a constitutional amendment for the November ballot that would ban oil and gas drilling in state waters.

A similar ban is already in state law. And the proposed constitutional change would not have prevented the Deepwater Horizon disaster now flooding the Gulf of Mexico with oil. But it would stop bills like the one the Florida House approved last year to open drilling within 10 miles of state beaches.

Shell Nigeria declares force majeure on Bonny oil

May 7, 2010. Royal Dutch Shell declared force majeure on Nigerian Bonny crude oil lifting for May and June as a result of leaks and fires on its Trans Niger pipeline, which was shut down two days ago.

The Anglo-Dutch firm declined to specify how much production was affected but the pipeline had a supply capacity of 150,000 barrels per day (bpd). Exports of Bonny Light crude -- a sweet Nigerian oil that is popular with U.S. and European refiners -- had been expected to average 158,000 bpd in May and 152,000 bpd in June, according to loading programmes.

Brazil says too early for offshore drilling change

May 7, 2010. Brazilian authorities said it is too early to know if the country will implement environmental regulation for offshore drilling in the wake of the BP Gulf of Mexico oil spill. Any changes to existing licensing procedures or contingency plans would depend on the results of an investigation into the causes of the deep-water accident off the coast of Louisiana.

Contingency plans for offshore oil accidents have been under revision for about two years. That revision is expected to be completed at the end of 2010. The vast majority of the roughly 2 million barrels per day that state oil company Petrobras produces in Brazil come from offshore fields, and most of the country's future output growth is seen coming from ultra-deep water fields.

Gulf spill will "forever" change drilling-BP exec

May 6, 2010.   The explosion and sinking of a BP Plc oil rig and subsequent massive oil spill will "forever" change the offshore drilling industry, a top executive with the London-based oil giant said.

The leak is one of the worst environmental disasters in U.S. history, with the amount of oil released into the Gulf of Mexico estimated to be at least 5,000 barrels a day.

The leak, which occurred almost a mile under the surface of the ocean, threatens the coastline of Louisiana, Mississippi, Alabama and Florida and could rival the 1989 Exxon Valdez spill in Alaska, as the worst U.S. oil spill.

Turkey, Azerbaijan wrap up gas talks

May 6, 2010. The Azerbaijani Energy and Industry Minister, Natiq Aliyev, said that talks between Turkey and Azerbaijan had been completed, and Azerbaijan would supply natural gas to Turkey after a purchase agreement was signed.  Aliyev said that

Azerbaijan's production was on a record level in oil and natural gas areas. Aliyev said that more than 500 Azerbaijani companies invested in Turkey, adding that the investment amount was US$500 billion. He noted that Azerbaijan was one of the countries which made the highest investment in Turkey among Central Asia and Caucasus countries.

Petrobras gets more time to decide Cuba oil plans

May 6, 2010. Cuba has given Brazil's state-owned oil company Petrobras a six-month extension on its May deadline to decide whether it will drill a well in Cuban waters, a Petrobras spokesman said. Petrobras, which has rights to one of 59 exploration blocks in Cuba's part of the Gulf of Mexico, was supposed to notify state-owned oil company Cubapetroleo (Cupet) of its intentions but needed more time. Petrobras signed up for its Cuba block in October 2008 in a Havana ceremony attended by Cuba's President Raul Castro and Brazilian President Luiz Inacio Lula da Silva.  The company got what was considered a prime block, hugging Cuba's northern coast next to the island's most prolific onshore oil field at Varadero, east of Havana.

Aussie Govt's resources tax bad for oil & gas sector

May 6, 2010. Australian oil and gas producer Santos Ltd says the federal government's proposed new tax on profits in the resources sector is nothing but "bad news."  Santos chairman Peter Coates said that Australia really was the lucky country when it came to providing the resources that were fuelling economic growth in Asia. Mr Coates said Australian resources companies already faced heavy taxation rates by international standards. He said that in 2009, Santos had paid 44 percent of its pre-tax profits in tax and would face an even higher burden under the resources tax regime proposed by the federal government.

Iraq takes extra security measures to protect oil fields

May 5, 2010. Iraq has begun implementing extra security measures to protect oil fields in and around the south-eastern city of Basra, security sources announced.  Iraq's oil pipelines have frequently been attacked in the past. Last month, a bomb destroyed a section of pipeline linking northern Iraqi oil fields to the Turkish port of Ceyhan. Security forces are cooperating with oil companies connected to the oil ministry, and have signed security agreements with foreign companies licensed to develop a number of oil fields in the area.

The aim is to take appropriate security measures that adapt to the demands of the companies operating in the area and ensure their safety.  Iraq relies on its current 2.5 million barrels per day production for more than 90 percent of its government revenue and about 60 percent of its gross national product.



Peabody cuts bid for Australia's Macarthur Coal

May 10, 2010. U.S. miner Peabody Energy has cut its takeover bid for Australian miner Macarthur Coal to A$15 per share, from A$16, the target firm said, after Peabody completed due diligence. The revised offer also followed the Australian government's announcement of a new 40 percent tax on mining profits.

Transmission / Distribution / Trade

Smart grid's big promise lures blue chips

May 7, 2010. After the Internet, the power grid is seen as the new frontier for many big companies. The lucrative challenge of converting the antiquated electrical transmission system into an intelligent network is attracting heavy investment from technology giants, telecommunication companies and industrial conglomerates. From Cisco, IBM, Motorola, Sprint to industrial conglomerates GE and Siemens, companies are vying for contracts with utilities that own the power lines and racing to stake claim on the opportunities in the emerging market. Modernizing the aging grid and deploying smart grid technologies is a market that is forecast to grow to $200 billion over the next five years, according to Pike Research.

Policy / Performance

Chinese bank to invest $1 bn in Zambia power plant

May 11 2010. China plans to spend $1 billion to help build a power plant to boost Zambia's electricity supply by 600 megawatts. China was ready to provide equity amounting to $1 billion for the Kafue Gorge Lower power plant. Construction of the plant was expected to begin next year, and will be completed in 2017. 

The government has said the Kafue Gorge Lower power plant, estimated to cost $1.5 billion, will help reduce a power deficit expected in 2011, due to increased mining output as more foreign owned mines bring their new projects into production.

Mexico’s Federal Electricity Commission requires $91.8 bn

May 11, 2010. Mexico’s Federal Electricity Commission (Comisión Federal de Electricidad), will require US$91.8 billion in order to finance the country’s new infrastructure plan.

The infrastructure program will be financed by Mexico’s own resources and private investments from the period of 2010 to 2024.Private participation occurs primarily in power generation, in which companies involved with construction products use power plants as their external energy producer.

Within the framework of private investment, Mexican law allows companies to participate in the construction and operation of self-generated power plants, cogeneration, self-sufficiency and independent power producers.

Gilani satisfied over “visible improvement” in energy situation       

May 10, 2010. Pakistan’s Prime Minister Syed Yusuf Raza Gilani expressed satisfaction on “visible improvement” in power supply situation and reiterated his government’s resolve to mitigate load-shedding in the shortest possible time.

The Prime Minister commended support and constant follow up by the Chief Ministers to implement the aggressive conservation measures taken at the last meeting to make the campaign a success.

Renewable Energy / Climate Change Trends


Steep rise in India greenhouse gas emissions 

May 11, 2010. India's annual greenhouse gas emissions increased by nearly 60% between 1994 and 2007, a government study says. The government says that emissions grew from 1.2bn tonnes in 1994 to 1.9bn tonnes in 2007, confirming India as one of the world's biggest emitters. India argues its per capita emissions are far lower than that of most industrialised nations. The jump is attributed to the growth of industries such as cement production, electricity and transport. Over the last 15 years India's economy has developed at breakneck pace. Correspondents say that developing nations such as India and China are under pressure to reduce greenhouse gas emissions. But at climate change talks in Copenhagen in December, India did not sign up to binding targets. Environment Minister Jairam Ramesh maintains that India's emissions are not comparable with those of the US and China.

Cos jittery as govt plans import of solar power tools

May 11, 2010. The government’s decision to import solar power equipment for its flagship clean energy programme has run into strong opposition from domestic equipment makers, who have argued that it will open up the floodgates for import of cheaper and sub-standard equipment from China. The government is contemplating import of cells (photo voltaic) and modules from other countries for the its Jawaharlal Nehru National Solar Mission. It is believed that the national solar mission, which will be implemented using Indian taxpayers money, is somehow becoming the reason for many countries to dump their untested, sub-standard solar products in the country.

Climate talks at dead-end, says India

May 10, 2010. India has low expectations of reaching a global agreement to fight climate change when world leaders meet later this year in Mexico to take forward the bitterly divided Copenhagen talks held last December.

The political authority of the US to influence a binding agreement at Cancun (in Mexico) has eroded after failing to push through its own climate legislation. Both the US and China, the world’s top two polluters, are reluctant to make a major concession without the other side giving in first.

The US remains ‘very uncomfortable’ with the bonhomie between India and China in resisting pressure from the developed nations to make binding emission cuts.  After a watered-down Copenhagen statement was signed China’s top climate negotiator Xie Zhenhua ‘thumped his fist twice on the table and shouted at US President Barack Obama’. Obama reportedly defused the tension by saying that Xie was congratulating them.

Solar power: Govt hopes to seal buy-deals for 800 MW this fiscal

May 10, 2010. The Government expects about 800 MW of power purchase agreements (PPAs) to be signed between the procurers and solar power developers during the current fiscal, under the phase I of the National Solar Mission. 

For smaller roof top systems, it is expected that PPAs for 90 MW out of the 100 MW be signed, the official told Business Line.  According to the Ministry of New and Renewable Energy, the target for the first phase (up to March 2013), under the Mission, is to set up 1,100 MW grid connected solar power plants, 100 MW of roof top and small solar plants connected to grid and 200 MW capacity equivalent off grid solar applications.

Solar energy offers ‘enormous coal savings'

May 8, 2010. India should hike its solar power and solar thermal (steam-based power production) generation targets in the short term to achieve grid parity in terms of MW and KWhr cost with coal-based power plants in the long run, according Areva Renewables.

Areva has non-disclosure agreements with nine developers that are participating in the National Solar Mission plan. The cost of electricity generation from solar thermal and solar PV (photovoltaic) systems is Rs 13.45 and Rs 18.44 a unit, while the unit cost from thermal projects, including coal and gas-based stations, are between Rs 3 and Rs 7.

Suzlon in talks with Caparo for power deal

May 7, 2010. Suzlon Energy is in advanced talks with Lord Swraj Paul’s Caparo Group to set up 3,000 mw capacity wind farms over a period of six years, a deal which could bring in around $3 billion to the world’s third-largest wind turbine manufacturing company.  

The power plants will be developed for Caparo Energy, the London-based group’s JV with Finland’s Wartsila, and most of them are likely to be executed in India. Each mega watt of wind power set up by Suzlon for Caparo Energy could fetch the company over $1 million in revenue.  

Five MW power generation possible from solid, liquid waste

May 6, 2010. A 4 MW power plant can be installed by making use of solid waste generated in Tiruchi city alone, according to M. Kamaraj, Professor, Department of Bioenergy, Tamil Nadu Agricultural University, Coimbatore. Similarly one MW of electricity can be generated when 36 MLD (million of litres per day) gets treated and purified through anaerobic digestion.

The cost of investment required to create such waste water treatment system can be recovered within two years. The TNAU has developed a technology to treat the waste water within a day, Prof. Kamaraj said, delivering the key note address at a day-long Renewable Energy Orientation cum Awareness camp organised by the Science Club of Mookambikai College of Engineering at Kalamavur near here recently with sponsorship from the Tamil Nadu Energy Development Agency (TEDA).

Lanco Solar plant to come up in Orissa

May 6, 2010. Lanco Solar, the special purpose vehicle (SPV) of Lanco Infratech Ltd, has finalised plans for a polysilicon and solar wafer manufacturing base in Ramdaspur village, near Cuttack District, in a notified special economic zone (SEZ) and it has recently invited qualification from equipment suppliers. In December 2009, the Board of Approval for Special Economic Zones accorded clearance for Lanco's solar photovoltaic project. The company has now invited request for qualification (RFQs) to provide equipment, procurement and construction (EPC) contract services for the greenfield project. As per its plan, Lanco has proposed a 120 tonnes-per-annum (TPA) polysilicon, ingot and wafer manufacturing base in the project.  According to the company, the manufacturing plant is likely to be completed within 18 months from the date of receiving all Government clearances.

Wind energy sector to boost capacity

May 5, 2010. Wind energy sector in India is all set to add over 5,000 MW generation capacity per annum by 2015 Wind Turbine Manufacturers Association has said.  The cost of production of a MW power would be Rs 50 to 65 mn which is much cheaper than the solar energy.  

According to the data supplied by the association, the country today has about 11,000 MW of installed wind energy capacity and the utilisation (plant load factor) is between 15 to 20 per cent.  The association with 13 wind turbine and related equipment manufacturers has also been lobbying for policy reforms in expanding the wind energy generation.  According to Giri, 1,485 MW capacity was added to the sector in 2008-09, and in 2009-10, it was about 1,576 MW.


Connie Hedegaard seeks 30 pc carbon cuts target for Europe

May 11, 2010. The European commission is to formally propose stricter carbon cuts across Europe over the next decade in an effort to kick-start investment in clean technologies such as renewable energy. The costs and benefits of increasing to 30% the EU target of a 20% cut in carbon emissions by 2020 on 1990 levels, will be discussed in a paper to be published later this month. Connie Hedegaard, the European commissioner for climate change, said that a move to strengthen the target could be the only way to boost Europe's carbon price to levels high enough to drive green investment. Hedegaard said the recent recession made both the 20% and 30% targets cheaper to achieve than original calculations in 2008 suggested. A European analysis claimed that the cost of cutting emissions 20% by 2020 had fallen from €70bn to €48bn. Toughening the target to 30% by 2020 would cost €81bn, a cost that would be partially offset by savings such as from improved air quality, of between €6.5bn-€10bn.

Brazil to promote biofuel use in aviation

May 11, 2010. An alliance of aircraft manufacturers in Brazil, the Brazilian Alliance for Aviation Biofuels (Abraba), will promote 'development and certification of sustainable biofuel' for use in air transport.

The 10-member group arrived at the decision based on cost of fuel and protecting the environment, aircraft manufacturer Embraer, one of the top aircraft producing companies in the world said.  The alliance also spoke about the country's leadership in biofuel production. Brazil leads the globe in exports of ethanol made from sugarcane.

Earth may be too hot for humans by 2300: study

May 11, 2010. Climate change could make much of the world too hot for human habitation within just three centuries, research showed. Scientists from Australia's University of New South Wales and Purdue University in the United States found that rising temperatures in some places could mean humans would be unable to adapt or survive. Professor Steven Sherwood said there was no chance of the earth heating up to seven degrees this century, but there was a serious risk that the continued burning of fossil fuels could create the problem by 2300. The study -- which examined climate change over a longer period than most other research -- looked at the "heat stress" produced by combining the impact of rising temperatures and increased humidity.

Gamesa to build fifth manufacturing plant in China

May 11, 2010. Gamesa is breaking ground on its fifth manufacturing plant in China, in the city of Da'an. The factory, which is scheduled to begin operating in 2011, will manufacture the G8X 2-megawatt (MW) wind turbines and is expected to have a production capacity of 500 MW per year. Once the new facility is complete, Gamesa's manufacturing capacity in China will rise to 1,500 MW in one year.  The company currently has four manufacturing plants for blades, generators, and nacelle and gearbox assembly in the province of Tianjin, which employ 1,000 people. Gamesa's presence in China dates to 2000, though it is in the past five years that the company has stepped up expansion of its manufacturing base and wind farm development business there. In 2009, China accounted for 15% of the total MW sold worldwide. 

RWE, Dong win extra offshore U.K. wind farm permits

May 11, 2010.   RWE AG, Vattenfall AB and Dong Energy A/S won extra permits to develop offshore wind farms totalling 2 gigawatts of capacity, enough to power 1.4 million U.K. homes. Centrica Plc, Scottish & Southern Energy Plc and Warwick Energy Ltd. also won extensions to existing offshore wind projects, the Crown Estate said. The estate administers 55 percent of the U.K. coastline and most of the surrounding seabed on behalf of the monarchy.  The U.K. in 2008 overtook Denmark to become the leading nation in installed offshore wind power, and last month reached 1 gigawatt of generating capacity.. The added capacity will bring to about 10 gigawatts the capacity of projects awarded in the first two offshore wind licensing rounds held by the Crown Estate. In the third round in January, the body awarded permits for 32,200 megawatts more of wind power. 

U.S. climate bill cuts carbon, expands oil drilling

May 11, 2010. Two U.S. senators will introduce climate-change legislation that gives coastal states a share of revenue from expanded offshore oil and natural-gas drilling in a bid to win support for greenhouse gas limits.

The proposal, scheduled to be unveiled tomorrow by Senators John Kerry, a Massachusetts Democrat, and Joseph Lieberman, a Connecticut independent, would give states a 37.5 percent share of drilling revenue and the authority to block oil and gas production from occurring within 75 miles of shore, according to a summary of the proposal. 

The Senate bill aims to cut U.S. emissions of carbon dioxide and other greenhouse gases that scientists have linked to climate change to 17 percent below their 2005 level by 2020, according to the summary. That’s the same pollution reduction target in climate-change legislation that narrowly passed the U.S. House last year. 

German solar-panel growth will slow, Phoenix says

May 11, 2010.   Solar-panel installations in Germany, the world’s largest market in 2009, may slow their growth in the coming years as other countries catch up. New construction probably will “level off” at about 5,000 megawatts a year over the next few years. That would be less than the 6,000 megawatts forecast for 2010. 

Federal lawmakers in Germany passed a law that reduces consumer-paid subsidies for producers of solar power earned by operators including Phoenix Solar and SAG Solarstrom AG. Germany, with about 8,000 megawatts of photovoltaic panels currently producing power, accounted for about half of global panel sales in 2009. 

Samsung to spend $21 bn solar cells

May 11, 2010. Samsung Group unveiled a 23.3 trillion won ($21 billion) spending plan to expand into solar batteries and other markets benefiting from rising government investment in renewable energy and the environment. South Korea’s biggest industrial group, with businesses ranging from semiconductors to shipbuilding, aims to invest in five new areas by 2020, Samsung Electronics Co., the group’s electronics unit said. The spending includes 5.4 trillion won in batteries for electric vehicles and 6 trillion won in solar cells, Samsung said, without providing details on specific plans. 

Sanyo to invest $1.8 bn in battery businesses

May 11, 2010. Sanyo Electric Co., the world’s biggest maker of rechargeable batteries acquired by Panasonic Corp., will invest 170 billion yen ($1.8 billion) over three years to expand in batteries and solar panels.

The company will invest 120 billion yen to speed up development of new technology to lower the cost of making rechargeable batteries and boost production, the Osaka-based company said. Sanyo will also invest 50 billion yen in its solar-cell operations by March 2013, it said.  Panasonic and Sanyo plan to speed up development of next- generation power cells as they aim to win a bigger share of the market for renewable energy.

French wind sector welcomes changes to green law

May 10, 2010.  The French wind power sector welcomed a series of amendments to a French green law which they said could have, in its original version, hurt the industry if left unchanged.

The amendments drew mixed political reactions, with the green and socialist parties still opposing the measures.  Some amendments remained negative for the sector, but the worse had been avoided, an industry body said. A key amendment on forcing the sector to create wind farms with a minimum production capacity of 15 megawatts was withdrawn.

France is drawing up regional zones for wind turbines meaning that they will be banned in the rest of the country. That involved the classification of wind farms in the same category as dirty industries such as refineries, which means a big increase in red tape for the sector. The wind industry says France has the biggest wind potential in Europe after Britain but lags Spain and Germany which produce 16,000 MW and 23,000 MW, respectively.

Pentagon focused on developing alternative energy

May 10, 2010. The Pentagon is working hard to promote development of biomass fuels that could power future fighter jets and other warplanes, but defense officials say it could take years to get a full-fledged industry on its feet.

Top U.S. defense officials and executives from the petroleum, alternative fuels and renewable energy sectors are meeting outside Washington to address new technology developments and initiatives such as the Pentagon's work on developing biofuels to power military aircraft. The long-term goal is to decrease U.S. dependence on foreign crude oil. 

Transforming waste plastic into an alternative fuel

May 10, 2010. Northeastern engineering students and faculty researcher collaborate on prototype of apparatus that could drive electric power plants without fossil fuels.  Student researchers at Northeastern University have designed an apparatus to convert plastic waste into clean energy without releasing harmful emissions.

Under the leadership of Yiannis Levendis, distinguished professor of mechanical and industrial engineering, a team of undergraduate and graduate engineering students developed a waste combustor, which breaks down non-biodegradable plastics to create an alternative source of fuel. Their prototype was featured at the fifth annual MIT Energy Conference. The team worked for nine months on the research, which, for the undergraduates, was their senior capstone project.

Run Energy signs 460 MW wind O&M deal

May 10, 2010. Run Energy announced that it had reached a long term operations and maintenance service agreement under which it will service 460 megawatts (MW) of wind capacity at three different U.S. wind sites.

Run’s wind team provides operations and maintenance services including troubleshooting, scheduled and unscheduled services, retrofits, post and in-warranty inspections, 24/7 coverage, major component changeouts, tower/nacelle/blade installation, quality control inspections, commissioning, mechanical completions and tower wiring.

EPA seeks comments on fuel conversion approval streamlining

May 10, 2010. The U.S. Environmental Protection Agency (EPA) is proposing to make it easier for manufacturers to gain approval to sell fuel conversion systems.

The conversion systems allow vehicles to run on alternative fuels, which may appeal to consumers concerned about energy security, fuel costs, or emissions. The proposal reflects EPA's interest in encouraging innovation and spurring conversions that use clean energy technologies, according to the agency.

Lufthansa to use biofuel on flights by 2012

May 9, 2010. Lufthansa is set to become one of the world's first airlines to mix biofuel with traditional kerosene on commercial flights as carriers seek ways to cut soaring fuel costs, its chief executive said. The German flag carrier will start running its engines on some flights on a mix of biofuel and kerosene within two years.  The airline will likely decide on a more precise schedule by the end of this year.  Aircraft account for an estimated 2-4 percent of global carbon dioxide (CO2) emissions, which scientists say could cause global temperatures to rise, triggering widespread disease, famine, flooding and drought.

Experts say global aviation emissions could reach 2.4 billion tonnes in 2050, which would be 15-20 percent of all CO2 permitted under a global agreement and a nearly four-fold increase on current levels.

Lufthansa rival KLM, part of Franco-Dutch Air France, last year became the first airline to test biofuel in a passenger airplane, filling one of four engines on a Boeing 747 with biofuel for a 1.5 hour test flight.  The carrier has said it aims to make commercial flights which use biofuel from 2011.

IPCC lauds initiative to build food security in face of climate change

May 7, 2010. The UN Inter-governmental Panel on Climate Change (IPCC) has reportedly welcomed a new research initiative that focuses on how to build food security in the face of climate change.

One of the IPCC members, John R. Porter, said: "In the months and years to come, together with leading experts from the whole world, we will focus on developing tools to understand climate change with a view to making the world community ready to tackle the challenges we are facing. At the same time, Danish agricultural research will help contribute to solving the most important challenges in the future, climate change and food security."

Brazil to lead Latin America to 46 GW of wind by 2025

May 7, 2010. Led by Brazil, Latin America is expected to reach 46 GW of total installed wind capacity by 2025 with an annual growth rate of 12.6% according to a new market study, Latin America Wind Power Markets and Strategies: 2010-2025, from IHS Emerging Energy Research.  

Brazil will lead the region with 31.6 GW installed by 2025, trailed by Mexico with 6.6 GW. Chile will also add significant wind power, boosted by the country's Renewable Portfolio Standard, according to the study.

Brazil’s market size, expected to represent 69% of the total installed capacity in 2025 in Latin America, positions the country as a leader in the region and a relevant supply hub.

Demand and local content requirements are encouraging operation equipment manufacturers to invest primarily in Brazil-based manufacturing of turbines 1.5 MW and larger.

US carbon-dioxide emissions dropped 7 pc in 2009

May 6, 2010. US emissions of carbon dioxide tumbled seven percent in 2009, government figures have showed, marking the largest one-year decline in the heat-trapping gas blamed for global warming since records began in 1949.

The Energy Information Administration (EIA) attributed the sharp fall to a drop in energy use as the United States battled through its worst recession in decades, coupled with a smaller 2.3-percent drop in the "carbon intensity" of energy sources.  US carbon pollution had fallen annually on average just 0.9 percent over the last decade, amid improved energy efficiency and a slow transition to cleaner energy sources. Carbon-dioxide emissions rose 1.4 percent per year during the 1990s, according to the EIA.

Germany approves solar power incentive cuts

May 6, 2010. Germany's Bundestag lower house of parliament approved controversial cuts for solar power incentives to take effect from July. Solar subsidies for rooftop installed solar power will see a one-off cut of 16 percent, while most open-field installations will be cut by 15 percent. Support for farmland solar systems is to be scrapped completely from July. Cuts of one percentage point in addition to those set out in the German renewable energy act (EEG) will be made by the beginning of 2011, if newly installed capacity exceeds 3.5 gigawatts within a year. Germany is the world's largest market for solar power with about half of all solar power produced there. Critics of the cuts have said they could harm development of the technology. Oversupply of cells and modules has caused prices for solar products to fall by as much as 50 percent over the past year, which has increased pressure on industry players to have more efficient production and become more competitive.

Europe development agencies to launch climate fund

May 6, 2010.  A group of European development agencies will launch a joint climate change fund to promote low-carbon and sustainable investments in emerging countries. The European Investment Bank (EIB), France's Agence Francaise de Developpement (AFD) and 12 members of the European Development Finance Institutions (EDFI) will sign a memorandum of understanding to launch the Interact Climate Change Fund at a meeting in Bruges, Belgium. The fund will create a portfolio of climate friendly private sector investments across countries in Africa, the Caribbean, Asia-Pacific and Latin America, the agencies said in a statement. 

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