Energy News Monitor I Volume VI, Issue 35

Will Meeting Electricity Shortages Lead to Economic Development?

Power required for economic development

he environmental and cultural costs of nuclear, thermal and hydro power are often admitted. Question raised then is this: “Yes, these costs are there. But we need to supply electricity to our villages that are facing power cuts of up to 16 hours or more. We also need cheap electricity for our industries in this era of global competition. Therefore, we have to bear some of these costs in order to push economic development.”

It is argued in this short note that a tradeoff is involved here between short- and long term economic growth. Under-pricing of electricity for economic growth provides short term economic growth but hits at long term economic growth. The crucial question is whether we are willing to risk the long term existence of our civilization for short run gains of economic growth.

Pricing and economic growth

The correct or ‘efficient’ price and quantity of a good is determined by equilibrium of supply and demand. Production higher- or lower than this level leads to inefficiency. We are trying to develop a market for trade in electricity in the country to attain this efficiency.

The market is driven by private costs only. The private costs incurred by the producer do not capture the total cost of production. Some costs are not accounted by the producer. For example, a cigarette producer does not pay for the higher incidence of cancer due to smoking. This cost of health is called an ‘externality’. The Government intervenes and imposes taxes etc. to bring the private costs in line with the total costs. Taxes equal to the social costs must be imposed so that the quantity and price in the market reflects the true total costs incurred by the society and not only the costs incurred by the private supplier. Thus, the Government imposes high taxes on cigarettes, requires printing of a statutory warning and also orders the producers not to advertise this harmful product.

Section 61(c) of the Electricity Act, 2003 states: that “tariff to be determined (such that it) would encourage competition, efficiency, economical use of the resources, good performance and optimum investments.” The efficiency, economical use of the resources and optimum investments are to be reckoned on total costs and not private costs because the objective of the government is public welfare not private profit.

Importance of long term economic costs

The importance of externalities is explained by a historical precedent. Our ancestors of the Indus Valley Civilization produced bricks, beads, wines, etc. for exports. They had to compete with producers in other countries. They cut the forests for fuel wood in order to keep the cost of production low. They failed to account for the externalities of increased sediment flow into the rivers, biodiversity, etc. In the result, the forests were cut, the rivers got filled with sediments, the level of river water increased, the cities got flooded and the entire civilization collapsed. They harvested short term gains from cheap fuel wood by ignoring externalities. This gain was undone by the long term loss imposed by these same externalities.

It is necessary, therefore, to account for the true total costs of electricity if we want sustainable economic growth.

to be continued…

Views are those of the author

Author can be contacted at [email protected]

‘Green Bonus' for Forest Cover Protection

Getting bonus for being green (part II)

Shankar Sharma, Consultant to Electricity Industry, Thirthahally

Continued from Volume VI, Issue No. 34…

A recent statement attributed to the Union minister for Environment & Forests on the subject of accelerated melting of Himalayan glaciers says: “I am glad they (IPCC) have issued a regret but let us not forget that the health of the Himalayan glaciers is poor and we need to take immediate remedial measures.” In this regard can there be any doubt that the large number of proposed hydel projects in Himalayas will negate all 'immediate remedial measures'? The same view will be true in case of hydel /coal /nuclear power projects in the vicinity of Western Ghats and Deccan Plateau.

The economic, environmental, and social impacts including many cultural and heritage impacts of building large dam based power projects cannot be ignored under any circumstance. World Charter for Nature was adopted by consensus by UN General Assembly in 1982. It has provided some guiding principles for protecting biodiversity. Two key principles are: (a) activities which are likely to cause irreversible damage to nature should be avoided; (b) 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 clearly outweigh potential damage to nature, and where potential adverse effects are not fully understood, the activities should not proceed. Since forests are the predominant source of bio-diversity the protection of forest wealth need not be emphasised.

A recent report by MoEF "Achieving 2010 Biodiversity Target: India's contributions" has copiously described the rich bio diversity in the country, the threats to it and the tall claims about the remedial measures taken. It can be safely said that without holistically reviewing the recent past 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.

As per State of Environment Report 2009 by MoEF India is a mega diversity country with only a 2.4 percent of land area of the Globe but is accounting for 7-8% of the recorded species of the world. It is the home for 11.8% of the plant species documented so far. The National Forest Policy 1988 envisages that one third of the geographical area of the country to be covered by forests and trees, and considers it as essential for economic and ecological security of the country. But as per the MoEF report "Achieving 2010 Biodiversity Target: India's contributions" this figure as at present is about 23% of which forest cover alone accounts for 21%. Only some of the Himalayan states have forest & tree cover of more than the national target, but all other states are known to have this cover below 33%. Hence it is not only critical that we do not loose the pristine forest cover anymore, but it is crucial to increase the cover to the target figure of 33% as early as possible.

The United Nations programme on Reducing Emissions from Deforestation and Forest Degradation (REDD) in Developing Countries is collaboration between FAO, UNDP and UNEP. REDD is accepted as a critical step in addressing the threat of Global Warming. The Intergovernmental Panel on Climate Change (IPCC) estimates that the cutting down of forests is now contributing close to 20 per cent of the overall greenhouse gases entering the atmosphere. Forest degradation also makes a significant contribution to emissions from forest ecosystems. Therefore, it says, there is an immediate need to make significant progress in reducing deforestation, forest degradation, and associated emission of greenhouse gases.

to be continued…

Views are those of the author

Author can be contacted at [email protected]

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

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

Continued from Volume VI, Issue No. 34…

t may be recalled here that these rich nations had to cut emissions by a mere 5% over 1990 levels during the first commitment period of the Kyoto Protocol – the action so decided as per the legally binding international agreement under the UNFCCC Framework in view of their historical and current contributions to global emissions. The largest polluter, US, didn’t ratify the Protocol earlier along with Australia. However, the global emissions have increased by 14.8 per cent between1990 –2006. The developing countries have demanded at least 40 % reduction in emissions below 1990 level from the rich world. In addition they want the world to decide upon implementation in respect of Mitigation, Adaptation, Technology transfer and Finance as per the directions entailed in the Bali Action Plan that also entitles the developing countries to enhance their sustainable development actions with help from the industrialized countries in these areas for which the industrialized countries are entitled to get due credits.

On the contrary, the rich and renegade polluters (so called the Umbrella group of countries consisting of the US, Australia, New Zealand, Japan, Canada and Russia) were asking for a completely different deal at the cost of undermining the UN Framework Convention on Climate Change, which is based on the distinction between the polluters who created the problem and others who need their right to development. The rich now wanted to scrap the Kyoto Protocol to simply get rid of any legally binding international agreement to cut emissions with compliance and now put the onus on the entire world to help solve the problem. This group pushed forward a completely new framework: the Copenhagen Accord, asking the conference to declare a political vision to guide action for a new legally binding treaty with a different kind of multilateral regime.

Their proposal called for all countries to agree to pledge what action they can undertake domestically in the nature of individual emission reduction targets of each country from 2005 level to be achieved by 2020, demanding substantial domestic actions by countries like India and China, and with the requirement that all these actions be monitored, reported and verified, implying thereby an international legal commitment out of such domestic actions. This move by the rich nations can be seen as the most tactical one in their favour as it could bring about a fundamental change forever, in the distinction between the past polluters (Annex I countries) and the rest of the world.

This would have forgone the principle of equity and equal rights of every individual to the atmospheric space forever. Thus the obituary in totality of the Kyoto Protocol was very sharply scripted in the early part of the Copenhagen Summit.

India had already taken a clear position as made out by the Environment Minister Jairam Ramesh in the Rajya Sabha on November24, 2009 that ‘under no circumstances will India accept a legally binding emission reduction /cut as part of any international pact’, however, also defending himself saying, the purpose is to open up windows of flexibility for India because the world is changing, countries are taking different positions. The Minister has now to rethink about such openness and reorient extremely carefully, India’s position to counter, strongly and very strongly, the so-called Accord at Copenhagen before signing it at any stage of the process of due diligence before it goes to our Parliament for approval and even after that before we communicate to the UNFCCC. Thereby India must ensure in the interest of all the developing countries and small Nations that the Kyoto Protocol, placed in I. C. U. by Copenhagen, survives with gaining additional strength till we reach Mexico.

to be continued…

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

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

Jacques Lesourne and William C. Ramsay*

Continued from Volume VI, Issue No. 34…

Nuclear power in India

C. Pierre Zaleski and Michel Cruciani

Historical background: The three-stage strategy

ndia has a long relationship with nuclear energy. The country’s central government set up a policy body, the Indian Atomic Energy Commission, in August 1948 in the early months of the young independent nation. The promoter of nuclear energy, Dr. Homi Bhabha, persuaded the government that India should master all aspects of nuclear development, from uranium mining to advanced reactor design. He insisted on India developing atomic research. The first research center was launched in 1954 near Mumbai (formerly Bombay); it was eventually renamed Bhabha Atomic Research Centre. Four more research centers opened in the following decades.

As activities developed, it became necessary to create an umbrella structure. The Department of Atomic Energy was set up in August 1954 under the direct control of Prime Minister Jawaharlal Nehru. Today it is as important as a ministry, managing the five research centers and all public undertakings and industrial organizations committed to nuclear energy. Under current law all activities related to nuclear energy must remain under public control.

The Indian nuclear strategy was outlined by Dr. Bhabha in 1954 and fully endorsed by the prime minister. Although uranium was available in the international market and international cooperation was still open, nevertheless India’s strategy was based on achieving self reliance as soon as possible; it sought to exploit India’s large thorium reserves and domestic industrial capability. The national nuclear program was therefore based on a closed nuclear fuel cycle in which the spent fuel would be reprocessed. This strategy aimed at the future use of thorium instead of uranium as fertile material¹.

The program comprised three stages:

· In the first stage, India would commission and operate nuclear reactors fueled with uranium. The spent fuel of these reactors would be reprocessed to obtain plutonium.

· In the second stage, India would rely on fast breeder reactors using fissile plutonium to convert both thorium and uranium into more fissile materials. Research and development for this stage was to start immediately.

· In the third stage, India would develop advanced nuclear power systems for utilization of fissile uranium obtained from thorium instead of natural uranium. Research for this stage could be postponed.

This strategy has been thoroughly applied during 50 years, and India still officially states that it adheres to the three-stage program.

The concept of “self reliance,” which did not forbid international exchanges in the early days, took on dramatic importance after the war between China and India in 1962. In the ensuing years, India became convinced that nuclear weapons were necessary to balance China’s nuclear capability. This perceived need grew when it appeared China was supporting Pakistan’s nuclear armament program. India therefore remained outside the 1970 Nuclear Non-Proliferation Treaty and accepted International Atomic Energy Agency (IAEA) safeguards for only some of its facilities. After India conducted an underground nuclear test explosion in 1974, the country was excluded from trade in nuclear plants or materials, except for some supplies devoted to the safeguarded facilities. Nuclear trade is regulated by the Nuclear Suppliers Group, which was formed in 1974 in the wake of this test explosion. The exclusion severely restricted access to natural and enriched uranium. India’s uranium resources are modest and the possibility of using thorium became more appealing.

In spite of its isolation, India was able to develop a complete—if small—set of nuclear power technologies.

Main achievements within the first stage

The emphasis put on research was reflected in the early building of two research reactors and critical facilities in the Bhabha Atomic Research Centre: Apsara (1 MWth, operating from 1956) which was the first research reactor in Asia, and Cirus (40 MWth, 1960). Later on a third research reactor was built on the same site, Dhruva (100 MWth, 1985).

The first steps of nuclear power generation were painful. India decided to test both the light water and the heavy water lines. The Nuclear Power Corporation of India Ltd. (NPCIL) was established under the Department of Atomic Energy to design, build, commission and operate all nuclear power plants.

For the light water line, two 200 MWe boiling water reactors—Tarapur 1 and 2—were purchased from General Electric on a turnkey basis. Both reactors started commercial operation in 1969. Recurrent problems caused them to be downgraded to 150 MWe. The first pressurized heavy water reactor, Rawatbhata 1, used Canada’s Douglas Point reactor (200 MWe) as a reference unit. It was built as a collaborative venture between Atomic Energy of Canada Ltd. and NPCIL. Though construction of both plants began about the same time, Douglas Point started operation in 1967 but numerous setbacks prevented its Indian twin from starting operation until 1972. Rawatbhata 1 incurred a series of early difficulties and was soon retrogressed to 90 MWe. The reactor was duplicated by NPCIL, but Rawatbhata 2 also faced problems. It was ready to operate only by 1980 and its power was limited to 187 MWe. These four reactors (Tarapur 1 and 2 and Rawatbhata 1 and 2) are under IAEA safeguards. The two light water reactors were using imported enriched uranium initially from the United States. Eventually Russia and France were allowed to supply enriched uranium for these reactors.

Finally, India chose pressurized heavy water reactors (PHWRs) for the first stage of its strategy. Officially this choice was guided by the industrial capability that existed in India at that time. An advantage of heavy water reactors is that they need only natural uranium. Therefore India could avoid developing the difficult technology of enrichment for civilian purposes. What is even more important is that heavy water reactors generate more plutonium than light water reactors for the same amount of mined uranium, which is a decisive criterion for a country having scarce uranium reserves and needing plutonium for the second stage of its strategy. Maybe the choice was also guided by the fact that plutonium for military purposes is easier to obtain by reprocessing spent fuel from heavy water reactors than spent fuel from light water reactors.

The industrial situation steadily improved during the following decades. Indian engineers successfully duplicated the PHWRs: nine reactors of 202 MWe were commissioned between 1984 and 2007. In recent years, an upgraded version of the PHWRs was developed indigenously, to enhance output to 490 MWe. The first two reactors of the new series (Tarapur 3 and 4) started operation in September 2005 and August 2006, 5 years after pouring first concrete and several months ahead of schedule, which is a remarkable achievement. Beyond the 490 MWe series, design is now complete for a further upgrading to 700 MWe. According to Indian sources, capital cost of the 700 MWe (estimated 1700 $/kW) will be far below world range (2000 to 2500 $/kW).

It must also be noticed that during recent years the operational performance of nuclear power plants showed gradual improvement. According to Indian sources, the PHWRs have consistently achieved availability factors of about 90% in the recent past along with an excellent safety record consistent with the best performing reactors in the world.

Since 2005, difficulties have shifted to nuclear fuel supply. In the summer of 2008 most of Indian nuclear power plants were running at about half of capacity due to a chronic shortage of fuel. The situation was expected to persist for several years, as political opposition has delayed new uranium mines.

Prospects for the second and third stages

India’s uranium resources are modest but its resources of thorium are among the largest and best quality in the world. Thorium cannot be used as a fissile material but in a fast breeder reactor (FBR) it can be converted to fissile uranium (²³³U), as ²³⁸U—the main component of natural uranium—can be converted to ²³⁹PU.

In the second stage of the strategy, a 40 MWth fast breeder test reactor (FBTR) based on the French Rapsodie design has been operating since 1985 at the Indira Gandhi Centre for Atomic Research at Kalpakkam. It was built by Bhavini, the public undertaking in charge of the fast reactor program. It is now planned to be operating for another 20 years. It served to develop Indian knowledge on FBRs and notably the technology of carbide fuels.

Bhavini is now building a 500 MWe prototype fast breeder reactor at Kalpakkam with a technology close to the European fast reactor project developed by France and Germany after the Superphoenix experiment. The unit is expected to operate by 2010 or 2011, fueled with uranium-plutonium oxide (the plutonium stemming from existing PHWRs). It will have a blanket with thorium and uranium to breed fissile uranium and plutonium, respectively. This will set the scene for eventual full utilization of the country’s abundant thorium-to-fuel reactors. Four more such 500 MWe FBRs have been announced with 2020 as goal year for operation.

In the third stage of the strategy, a series of three research reactors (Purnima 1, 2 and 3) have explored the thorium cycle, the first (1971) running on plutonium fuel, the second and third (1984 and 1990) on fissile uranium fuel made from thorium. In the next step, a 300 MWe advanced heavy water reactor (AHWR) will be developed as a technology demonstration project. A large critical facility to validate the reactor physics of the AHWR core was being commissioned at Bhabha Atomic Research Centre in September 2007. Indian engineers would like the AHWR to provide a platform to demonstrate new passive safety features. It is hoped enhanced safety requirements will enable AHWR to be built close to population centers.

New considerations on the nuclear strategy

Because of constraints on fissionable material, Indian nuclear experts became aware that the third stage of the strategy would require in the second stage a huge capacity in fast breeder reactors if the country were to aim at a large quantitative development of nuclear energy. Studies indicate that the optimum strategy would need an FBR capacity of 200 GWe (or 200,000 MWe) to start introducing thorium-based fuel in the FBRs. With the first FBR (0.5 GWe) being commissioned in 2010, such a capacity of 200 GWe could not be achieved before 2050 in the best scenarios. Meanwhile, the Indian economy saw unexpected growth since 2000, averaging close to 7% per year. This compares to an average growth of 3% per year in the 1970s, picking up to 5.8% per year in the 1980s and 1990s. Indian growth reached 8.3% in 2004, 9% in 2005 and 9.7% in 2006. The Indian government’s growth target during the eleventh Five Year Plan (2007–2012) is 9% per year, with the aim to provide decent conditions of life for all citizens by 2050.

Economic growth leads to a surge in power demand. In “A Strategy for Growth of Electrical Energy in India” (August 2004) the Department of Atomic Energy (DAE) has estimated that the use of all available domestic resources (coal, gas, hydroelectric, renewables and nuclear in the three-stage program) will not be sufficient to meet the required electricity generation profile. According to the estimation, the deficit will increase sharply after 2020 and would be of the order of 412 GWe by 2050. If it wants to meet the power requirement, India will have either to import growing amounts of coal, up to 1.6 billion tons in 2050, or to import nuclear reactors and nuclear fuel under international cooperation. DAE stated that the gap between requirement and supply can easily be met if about 40 GWe capacity of light water reactors is imported during the period 2012–2020. The additional condition is that the plutonium from spent fuel of these light water reactors is used in a series of fast breeder reactors.

In order to grasp the magnitude of the DAE proposal, the figure of 40 GWe imported nuclear capacity must be compared to the capacity of Indian operating nuclear power reactors: 3.8 GWe by 2007, another 3 MWe being under construction.

Turning point: India-USA and India-NSG agreements

The Indian government endorsed the Department of Atomic Energy view and decided to act on the diplomatic front. It soon became clear that the United States would respond positively. The U.S. attitude toward India had shifted since September 2001 and the war in Iraq. Although India never ratified the Nuclear Non-Proliferation Treaty, the country has maintained an impeccable nonproliferation record in the sense that it never divulged its nuclear knowledge to other parties. In a time when the United States was seeking “global partnership” and China was appearing more and more as a fierce competitor, closer ties with India could help.

The visit of Prime Minister Dr. Manmohan Singh to the United States in July 2005 ended with a joint statement on possible cooperation between the two countries regarding peaceful use of nuclear energy. It was confirmed after the visit of President George W. Bush to India in March 2006. Other countries, such as Russia, France and the United Kingdom, indicated their strong support for greater cooperation.

India and the United States started then to draft a bilateral agreement. Parallel negotiations were launched with the IAEA. Negotiations with United States ended in July 2007 and the proposal was then open to ratification. In his statement to the Lower House of the Indian Parliament, the prime minister underlined that the agreement would fully maintain the autonomy of India’s strategy based on Dr. Homi Bhabha’s three-stage program. But he added:

“For India, it is critically important to maintain our current GDP growth rate of 8 to 10% per annum if our goal of eradicating poverty is to be achieved. The energy implications of this growth rate over the next couple of decades are enormous. Even if we were to exploit all our known resources of coal, oil, gas and hydropower, we would still be confronted with a yawning demand and supply gap. Indigenous supplies of uranium are highly inadequate and hence we need to source uranium supply from elsewhere. […] Our target for the year 2020 is 20,000 MW of nuclear power generation. It is quite modest. However, if international cooperation once again became available, we could hope to double this target.”

Incidentally, the environmental benefits of nuclear energy, namely as a non-CO₂ emitting energy, were hardly mentioned in the discussion, which shows that for the time being Indian responsibilities toward climate change are not an issue in the country.

After strenuous discussions the Indian Parliament approved the agreement in August 2008. India’s new safeguard agreement with IAEA was also adopted in August 2008. In September 2008, the Nuclear Suppliers Group adopted by consensus a resolution to exempt India from its rule of prohibiting trade with nonmembers of the Non-Proliferation Treaty. This exemption was granted in spite of some opposition from countries like Austria and Ireland and, more noticeably, in spite of the presence of China within the group. A bilateral agreement for civil nuclear cooperation was signed with France in September 2008. In October 2008, the U.S. Congress passed the bill allowing civil nuclear trade with India. In early December an agreement between India and Russia was signed following a memorandum of understanding agreed upon in February 2008.

Notes:

1. Uranium is an element with several isotopes. Natural uranium contains on average 99.3 % of isotope ²³⁸U and 0.7 % of isotope ²³⁵U. In this mix only isotope ²³⁵U is fissile. Heavy water reactors accept natural uranium when light water reactors need higher contents in uranium ²³⁵U. Enrichment of uranium is aimed at enhancing its contents in isotope ²³⁵U (up to 4 % for light water reactors). Uranium²³⁸U and thorium ²³²Th are fertile materials. Under the action of neutrons in reactors they convert into fissile materials ²³⁹Pu and ²³³U, respectively. The usual source of fast neutrons is plutonium. Plutonium does not exist in nature. It comes from the transmutation of ²³⁵U or ²³³U. Fast-neutron reactors are called “breeders” when the quantity of produced plutonium is higher than the quantity of burnt plutonium.

* Editors

to be continued…

Courtesy: ENERGY IN INDIA’S FUTURE: INSIGHTS, GOUVERNANCE EUROPÉENNE ET GÉOPOLITIQUE DE L’ÉN

Note: Part V of the article on Oil & Gas Discovery & Production in India: Historical Milestones, part XIII of the article on Gas in India – Issues, Opportunities and Challenges will be published in Volume VI, Issue 36

NEWS BRIEF

NATIONAL

OIL & GAS

Upstream

BP, Reliance in race to acquire stake in a Canadian firm

February 15, 2010. British energy major BP and Indian conglomerate Reliance Industries are in the race to buy a majority stake in a Canadian company Value Creation. BP is in talks to pay about $1.2 billion for a majority stake in Value Creation, a Canadian company that has substantial reserves of the oil-rich sand deposits. Reliance Industries, the Indian conglomerate, is thought to have made a rival $2 billion takeover bid, but BP is understood to be the preferred partner. BP, however, is likely to face fierce opposition from environmentalists and some of its shareholders, as they believe that the deal is expensive and environmentally damaging, the report added.

ONGC, IOC, OIL consortium wins oil block in Venezuela

February 11, 2010. Oil and Natural Gas Corp (ONGC) and partners Indian Oil Corp (IOC) and Oil India Ltd (OIL) have won a bid to develop a major crude oil block in Venezuela, its first major overseas success since Imperial Energy Plc acquisition in 2008. The Indian firms will develop the Carabobo-1 block in Venezuela's Orinoco Belt with Spain's Repsol YPF SA and Malaysia's Petroliam Nasional Bdh, ONGC said in a statement. The group will pay USD 1.05 billion to Venezuela as signing amount and will initially invest another USD 9 billion in developing the block that can produce 400,000 barrels of heavy oil per day (20 million tonnes per annum). Total spending on the block over 25 years would be USD 19 billion. Besides, the consortium would also extend some credit to Venezuela's state oil company Petroleos de Venezuela SA (PdVSA), which would hold 60 per cent interest in the project.

Downstream

Shell ramps up fuel retail network to 74

February 15, 2010. Country’s only international fuel retailer Shell India has silently ramped up its petrol pump network to 74, a 50% jump in just one year, even as other private retailers fret about the lack of level playing field in the retailing business between the private players and government-owned companies. After getting a licence to open 2,000 retail outlets in India in 2004, Shell opened only 50-odd pumps in over four years, citing predatory pricing by state-owned competitors — Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL). Petrol and diesel sold at Shell pumps are costlier by Rs 2-5 a litre (depending on the location), compared with those sold at a public sector fuel station. The company, which does not have a refinery in the country, buys petrol and diesel from Mangalore Refinery & Petrochemicals (MRPL) and sells through its pumps.

RIL may shift HQ to Jamnagar, retain others at Nariman Point

February 11, 2010. Reliance Industries (RIL), the nation’s biggest company, is contemplating shifting its registered office to Jamnagar in Gujarat from Mumbai, which, if it happens, may deal a blow to the image of the nation’s financial capital, but ease its administrative burden.

A possible move to Gujarat, which is one of the most-favoured destinations of businessmen, including Ratan Tata, was discussed at the RIL board meeting on January 22 “informally”. RIL’s internal debate about shifting of the registered office may not be because of the one upmanship between political parties, but the need to have key staff closer to its 60-million tonne refineries, the largest single-location facilities in the world.

Transportation / Trade

Roadmap for clean fuel supplies in place

February 14, 2010. Bihar, Jharkhand, Eastern Uttar Pradesh, Kerala and the North-East will be the last to get supplies of Bharat Stage III petrol and diesel on October 1, 2010. This is because refineries in these States need more time to get their clean fuel act in place. Till then, they will continue using BS II auto fuels. Incidentally, the six million-tonne Bina refinery will be commissioned in the coming months, and is expected to play a key role in supplies to central India.

Goa will be the first recipient of BS III petrol and diesel from April 1, the day when 13 top cities will move to BS IV levels. Maharashtra and Madhya Pradesh will follow, from June 1. By July 1, other states like Tamil Nadu, Andhra Pradesh, Karnataka, Rajasthan, Gujarat, Orissa and West Bengal will be added to the BS III list.

Fuel prices not on cabinet agenda

February 11, 2010. Cabinet will not review petrol and diesel prices when it meets. Local media had reported the issue would be considered by cabinet.

Policy / Performance

Petro Ministry pressing for deregulating fuel prices

February 15, 2010. The Petroleum Ministry is pushing for freeing petrol and diesel prices from government control and is awaiting political consensus on the issue to implement it. The ministry is also proposing a marginal hike in domestic LPG and kerosene prices, ministry sources said. If implemented, petrol and diesel prices would be changed on the first of every month based on the average international price in the preceding 30 days.

No hike in fuel prices for now: Oil Minister

February 14, 2010. Facing opposition from key allies in the UPA Government, Finance Minister Pranab Mukherjee and Oil Minister Murli Deora discussed an "all-acceptable" hike in fuel prices but it appeared the two failed to reach a consensus and the fuel price hike may not happen immediately. PSU retailers are projected to lose Rs 455.71 bn on selling petrol, diesel, domestic LPG and kerosene below cost. To avert bankruptcy, the Kirit Parikh panel has suggested freeing auto fuels from government control along with a steep hike in cooking fuel. Pending a decision, Deora wanted the Government to fulfil its promise of meeting the Rs 315.74 bn revenue Indian Oil, Bharat Petroleum and Hindustan Petroleum will lose on selling domestic LPG and kerosene below cost.

Oil regulator asks RIL to club gas margin with sale price

February 13, 2010. In a surprise move, oil regulator DGH has asked Reliance Industries to include the marketing margin the company charges on sale of natural gas from its field to the approved gas price for calculating the government's share from the project. DGH wants the $0.135 per million British thermal unit margin that RIL charges to cover marketing risks of gas from Krishna Godavari basin-D6 fields to be added to the sale price of $4.20 per mmBtu for calculating royalty and profit share to the government, sources in the know said. This runs contrary to the Production Sharing Contract under which a contractor (RIL in case of D-6) can recover the capital and operating expenditure incurred on producing oil or gas from sale of the produce. However, costs involved in marketing of oil or gas are excluded and a contractor is not allowed to recover the same from the sale proceeds. DGH wants 5 per cent royalty payable to the government to be calculated at $4.33 per mmBtu price (sale price plus marketing margin), making this by implicit action the sale price from which RIL will recover the cost.

Iraq offers more crude oil supply to India

February 11, 2010. Iraq has offered to increase long-term crude oil supply arrangement to India and invited Indian companies to invest in its refining sector. The Minister of Industry and Minerals of the Republic of Iraq, Mr Fawzi F Hariri, during his meeting with the Minister of Petroleum and Natural Gas, Mr Murli Deora, offered more supply of crude oil to Indian refiners stating that Iraq is ramping up its current crude oil production capacity substantially in next few years. He also invited Indian companies to invest in the refining sector in Iraq with assured supply of crude oil, according to an official statement. The Iraqi Minister also said that long-term crude oil supply arrangement could be made for Indian refiners.

Green signal on, Cairn-ONGC JV begins work in Gujarat

February 11, 2010. The Cairn India-ONGC JV has initiated exploration in its Gujarat-Saurashtra basin block. The Gujarat-Saurashtra basin block (GS-OSN-2003/1) is 51% owned by ONGC while Cairn India owns the balance 49%. The JV partners had sought environment clearance for the block, which is over 12 nautical miles away from the west coast. The MoEF said that if commercial viability of the Gujarat-Saurashtra project is established, the operator will be required to prepare a detailed plan for development of oil and gas fields and obtain a fresh environmental clearance.

India to complete first oil storage tank by mid-2011

February 10, 2010. India will complete building its first emergency crude oil storage terminal by the middle of next year as it seeks to insulate the country against price fluctuations and ensure fuel supplies. The tank at Visakhapatnam on the east coast will have a capacity of 1.33 million metric tons. The nation’s storage capacity will rise to 5 million tons when two more terminals are built at Mangalore on the west coast by 2012. That’s equal to two weeks of current imports.

POWER

Generation

Tata Power in pact with Korean firm

February 16, 2010. Tata Power Company said it had signed a memorandum of understanding with Korea East West Power Co to explore maintenance and operation opportunities of third party power generation assets in Asia, the Middle East and Africa.

Maoists target another Indian hydro-power project in Nepal

February 16, 2010. Maoists in Nepal have stopped survey work on a hydro-power project being developed by an Indian firm. This is the fourth major power project targeted by the country’s main opposition party. Members of Tamu Rashtriya Mukti Morcha affiliated to UCPN (Maoist) stopped survey work on 250 MW Upper Marsyangdi project being developed by GMR Group in the western development region. Terming the project as against the interests of Nepal, president of the outfit and Constituent Assembly member Amar Tamu stated that the firm failed to consult local residents before starting work. The GMR Group has acquired 80 percent stake in Himtal Hydropower Company, a Nepali company developing the project. The project is expected to be commissioned in 2016.

Adani Power to execute 1,320 MW project in MP

February 15, 2010. Adani Power said it would execute a 1,320-MW power project at Chhindwara in Madhya Pradesh. Adani Power has been awarded a letter of intent (LOI) by the Madhya Pradesh government for the development of a 1,320 -MW power project at Chhindwara in the state, a company statement said. The project envisages an invest of an estimated Rs 52.8 bn. Generation of 1 MW thermal power entails an investment of Rs 40 mn. At present, Adani Power along with its subsidiaries is developing 4,620 MW project at Mundra in Gujarat, 3,300 MW Tiroda project in Maharashtra, 1,320 MW at Kawai in Rajasthan and 2640 MW at Dahej in Gujarat. With the addition of this project, the total power generation capacity of the company would exceed 13,000 MW from the current 11,880 MW.

BHEL bags 330 MW hydro power project in J&K

February 10, 2010. State-run BHEL said it has bagged a Rs 4.95 bn order for setting up a 330-MW hydro-electric power project in Jammu & Kashmir. Of the turnkey contract, BHEL has been awarded the order for the complete electro-mechanical package. The company's scope of work in the contract envisages design, manufacture, supply, installation and commissioning of complete electro-mechanical works for the project.

Surya Roshni to invest Rs 200 bn to set up steel, power plants

February 10, 2010. Lighting major Surya Roshni said it will invest Rs 200 bn in the next few years for setting up steel manufacturing and power plants, through an associate company. The total investment in these two projects would be around Rs 200 bn, which the company will raise through a mix of debt and equity. Surya Roshni also announced the launch of energy efficient T5 and T8 tubelights, which it claims can save up to 85 per cent power.

Transmission / Distribution / Trade

RPG Group looks to rejig power biz

February 12, 2010. The Rs 150 bn Goenka group is looking to rejig its power business in the run-up to flagship CESC’s foray into hydro-power generation. The Goenkas are weighing the pros and cons of positioning the recently-acquired Dhariwal Infrastructure as a subsidiary of Haldia Energy instead of retaining it as a CESC unit. Haldia Energy, which is a CESC subsidiary, is executing a 600 mw greenfield thermal venture in West Bengal, while Dhariwal Infrastructure is setting up a 600 mw thermal venture in Chandrapura, Maharashtra.

Policy / Performance

India and Bangladesh to hold talks on energy cooperation

February 16, 2010. An Indian delegation headed by Union power secretary H.S. Brahma will visit Bangladesh to hold discussions on a power plant that NTPC Ltd is planning to set up there, apart from other areas of energy cooperation. The negotiations follow the January visit of Bangladeshi Prime Minister Sheikh Hasina and are part of an effort to improve diplomatic and economic ties between the two countries. Bangladesh has resisted calls until now for the export of natural gas—of which it has substantial reserves of 135.8 billion cu. m—to its larger neighbour, which needs supplies of the fuel for its projects. The talks will also cover grid interconnectivity. While Bangladesh is short of power, with an installed capacity of 10,000MW, India has an installed capacity of 153,000MW, of which 16,822.85 MW is gas-based. Bangladesh plans to set up two coal-fuelled power projects of 1,320MW each, of which one project requiring an investment of around Rs 66 bn will be offered to the state-owned NTPC, India’s largest power generation utility, to be developed in a joint venture with the Bangladesh Power Development Board (BPDB).

Arunachal power project cleared

February 15, 2010. The 2,700MW Lower Siang hydroelectric project in Arunachal Pradesh has been given techno-economic clearance by the Central Electricity Authority (CEA) and its first phase will be completed in six years. The company was awarded the contract for executing the project, estimated to cost Rs 200 bn, in 2007. The other clearances — environment and forest — will come from the respective ministries. Altogeher 250 workers have been deployed at the project site and work is expected to start by 2011. In Arunachal Pradesh, the other power project is Hirong, where operations are expected to commence in 2018. A total of 89 sites have been identified in Arunachal Pradesh for hydro-power potential by the Central Electricity Authority.

RINL may swap Jharkhand coal blocks

February 15, 2010. State-run steel maker Rashtriya Ispat Nigam (RINL) is looking at swapping two coal blocks in Jharkhand with other such reserves, citing difficulties in developing the mines to meet its growing raw material needs. Also, the firm is considering forming joint ventures with state mineral entities to mine iron ore and feed its expanding production line. The company has already sent the proposal to the Steel Ministry which is expected to forward the request to the Coal Ministry for replacing the mines with other such rich reserves. While Mahal has an estimated coal reserve of about 1,100 million tonnes (MT), Tenughat-Jhirki blocks contain about 215 MT of coking coal. The firm’s appetite for vital raw materials - iron ore and coking coal - is set to surge by the next year as RINL would commission the expanded production line at its Vishakhapatnam facility. RINL is undertaking about Rs 120 bn project to almost double its annual production capacity to about 6 MT by March 2011, for which trial runs are expected start later this year.

Planning Commission for cut in outlay for Power Ministry

February 15, 2010. Worried by the concerns of a huge fiscal deficit and the under-performance of the power sector, the Planning Commission is understood to have recommended slashing the budget outlay of the Power Ministry by over 25 per cent to Rs. 106.3 bn for the next fiscal against the Ministry’s demand of Rs. 144.305 bn. Officials in the Power Ministry said the Planning Commission has despatched a letter informing it of the recommendation. The allocation of Rs. 106.3 bn recommended would be the gross budgetary support (GBS) for the Ministry during 2010-11. The Planning Commission as well as the Prime Minister’s Office have expressed concern in recent months over the poor performance of the power sector which could hamper economic growth.

Decision on reviving U’khand hydel projects after Kumbh fair

February 15, 2010. The Centre is unlikely to take a decision on restarting work on the suspended hydel power projects in Uttarakhand until the culmination of the Mahakumbh in April. Three projects—NTPC's 600 mw Lohari Nagpala, Uttarakhand Jal Vidyut Nigam Limited's 480 mw Pala Maneri and 380 mw Bhaironghati on Bhagirathi river in Uttarkashi district were suspended on religious and environmental grounds. Meanwhile, the Uttarakhand government has told a high-powered committee that 4 cumax of water flow would be sufficient to maintain the perennial flow of the river Bhagirathi on which the three projects were being built. Earlier, an NTPC expert committee had suggested maintaining at least 16 cumax of water in the river, but Prasad claimed it had no scientific basis. With the projects remaining in suspended animation, they would face a cost escalation of 8 to 10% per year, experts said.

WCL's Rs 18 bn plans may run into R&R rough weather

February 15, 2010. The Rs 18 bn expansion plans of Western Coalfields Ltd (WCL), a subsidiary of the world's largest coal-producer Coal India Ltd (CIL), are likely to run into rough weather due to the existing resettlement and rehabilitation (R&R) policy. WCL, which runs coalmines in Maharashtra and Madhya Pradesh and producing 45 million tonnes (mt) of coal a year currently, is set to close down 9 to 10 mines in a year or two due to their being economically unviable and 33 new ones are being planned. For this, WCL had envisaged acquisition of 12,000 hectares of land. The 33 new mines planned by WCL were part of the 134 expansion projects of the Ministry of Coal, to be implemented with a capital outlay of $5.6 billion in the Eleventh Plan to increase production from 492 mt in 2008-09 to meet the projected demand of 730 mt in 2011-12. Most of the mines of the Eastern Coalfields Ltd are located in the Naxalite-infested States, making it difficult to achieve the targets. In March 2009, the Government had allotted 201 captive coal blocks with a reserve of 47 billion tonnes (BnT), expected to add a production of 81 mt by 2011-12. This fiscal, CIL, which owns 473 mines, is expected to produce 435 mt, a growth of 31.3 mt over last year, i.e., 7.75% (year-on-year basis).

CIL chairman conferred HR award

February 15, 2010. Mr Partha S. Bhattacharyya, Chairman, Coal India Ltd, was conferred with ‘CEO with HR Orientation' award by the Council of World HRD Congress during the Global HR Excellence Awards Ceremony 2010 in Mumbai on February 12, according to a CIL release. CIL is the largest corporate employer in the country having over four lakh employees.

AP keen to speed up power projects

February 14, 2010. The Andhra Pradesh Chief Minister, Mr K.Rosaiah, laid the foundation stone for the 600-MW coal-based project of Singareni Collieries Company Ltd (SCCL) coming up at Jaipur Mandal in Adilabad district and 700 MW phase I of the 2,100 MW gas-based power plant of APGenco at Nedunur in Karimnagar. After laying the foundation stone, the Chief Minister expressed the Government's keenness to ensure rapid implementation of various ongoing power projects to help bridge the demand-supply mismatch and improve the quality of life. The coal-based plant is being set up with an outlay of Rs 27 bn and the phase one of the gas-based plant to be completed in 36 months with an outlay of Rs 33.36 bn. Mr Rosaiah earlier directed APGenco to take up pending and ongoing projects in a time bound manner and ensure creation of additional power generation capacity of 15,945 MW of 17 projects within the next 4-5 years.

Centre planning to develop 25 GW of gas fired plants

February 14, 2010. With gas availability perking up, new power generation capacity using gas as fuel is once again finding favour. The Power Ministry is working on plans to develop 25,000 MW of new generation capacity using gas as feedstock over the next three-four years. After a freeze on building new capacities earlier on account of vagaries on the gas price front and supply constraints, gas is again gaining acceptance on the back of firm supplies on the horizon. The Ministry recently gave a presentation to the Prime Minister's office citing the plans for new capacities of 25,000 MW. Apart from expecting more gas from the Reliance-operated Krishna Godavari Basin D6 block, the policy makers are also banking on LNG capacity of 50 mscmd at Dahej and Ratnagiri, which are expected to go on stream by 2011-12. Gas from the ONGC and GSPC fields may add further to this by the Twelfth Plan.

NHPC-Satluj may alter Tipaimukh proj

February 11, 2010. The detailed project report (DPR) of the 1,500 mega watt (mw) Tipaimukh hydroelectric power project, being set up in Manipur, may undergo changes or updation. The project, initially entrusted to North Eastern Electric Power Corporation (Neepco), is now being jointly developed by NHPC, Satluj Jal Vidyut Nigam (SJVN) and the Manipur Government through a joint venture. While NHPC will hold 69% stake in the JV, SJVN will hold 26% and the balance 5% will rest with the Manipur Government. The joint venture, the background work for which is currently in progress, is yet to be registered. The project was considered by the Public Investment Board and clearances were accorded in December 2006.The environmental clearance was obtained in October, 2008, while the forest clearance is still pending.

Coal India's move to boost underground output suffers setback

February 11, 2010. Coal India's plan to boost production from underground mines through various forms of private participation has suffered a major set back. The company's plans to re-open 18 abandoned mines (including a few prime coking coal mines) in 50:50 joint ventures with private partners is now facing an uncertain future due to a recent instruction from the Centre restricting the role of private equity in the proposed ventures to that of a minority partner. On the other hand, CIL's bid for contractual development and operation of seven high capacity (3-5 million tonne per annum) underground mines has drawn a blank, as none of the shortlisted parties have submitted tenders in the recently concluded bidding rounds. The projects were supposed to lift the underground coal production by no less than 50 per cent from 44 million tonnes as in 2008-09 (out of a total production of 404 mt) bringing about some correction to a severely lopsided underground-opencast ratio in total production. Underground production which was nearly 70 per cent during the nationalisation period has now come down to approximately 11 per cent.

Energy mission norms to be finalised by year-end

February 11, 2010. Fixing a mandatory target for achieving energy efficiency in a phased manner will be among the guidelines expected to be finalised by the year-end for implementation of the National Mission on Enhanced Energy Efficiency (NEE). The guidelines to be arrived at after discussions with various stakeholders, including the industry and regulatory entities in different States, would be presented to the Union Cabinet for its approval, said Mr Ajay Mathur, Director-General, Bureau of Energy Efficiency, and Member of the Prime Minister's Council on Climate Change. It is expected to be implemented from April 2011. Energy efficiency improvement targets will be set in a manner that reflects their current energy intensity as compared to other units in the same sector, and the economic effort involved.

Singareni Collieries to develop APGenco coal blocks

February 11, 2010. The Andhra Pradesh Government has decided to entrust the development of coal blocks of APGenco to the State-owned mining company Singareni Collieries Company Ltd (SCCL) instead of earlier move to rope in private developers. This decision also addresses the adverse reaction from different sections on the proposal to award coal mining work of APGenco to private developers. According to the proposals, APGenco would take up the second unit of 500 MW at Bhoopalapalli and Singareni Collieries Company Ltd would provide the coal linkage from its mines. However, the SCCL management indicated that they were not in a position to provide coal for additional 500 MWproject at Bhoopalapalli and mentioned that this could come from Tadicherla mining block.

India, UK sign joint declaration on nuclear co-operation

February 11, 2010. India and the UK signed a joint declaration for civil nuclear cooperation. The move is expected to offer greater access to British companies in the Indian atomic power sector and foster cooperation between scientific institutions on either side.

India and the UK had finalised the text of the joint declaration earlier this month during the Commerce Minister, Mr Anand Sharma's visit to London for the UK-India Joint Economic Trade Committee meet. UK Trade and Investment, the British government's trade arm, had said that British companies were keen to collaborate with Indian partners in civil nuclear technology. The UK's nuclear industry, with 19 reactors on 10 sites, currently supplies a fifth of the country's electricity. In September 2008, the British Government had announced a new manufacturing policy focused on the nuclear industry supply chain.

Rel Infra, Brakel power dispute lands in SC

February 11, 2010. The dispute between Netherlands-based Brakel Corporation and Anil Ambani’s Reliance Infrastructure on allotment of tender for twin hydro-power projects in Himachal Pradesh has reached the Supreme Court. The Himachal Pradesh High Court had ordered cancellation of two hydro power projects on river Satluj allotted to Brakel Corporation in 2006, holding that it was not qualified to bid. The high court order has been challenged by Brakel Corporation in the apex court.

INTERNATIONAL

OIL & GAS

Upstream

New oil field in Mexico's GOM waters could revive industry

February 16, 2010. A new oil field was identified in the south of the Gulf of Mexico that could help rescue Mexico's lagging industry. The field is located off the coast of the Mexican state of Campeche, and contains an estimated 66 million tonnes (900 million barrels) of the fossil fuel. The discovery is one of the most important in the past decade, the state oil company Petroleos Mexicanos (Pemex) said. Exploitation of the field could begin in about two years, when up to 150,000 barrels a day could be pumped out. The new field could compensate for one-third of recent losses in Mexican production. Mexico's oil industry has been in crisis for years. The infrastructure operated by Pemex -- which supplies 40 per cent of government revenues -- is getting old and wearing out.

Apache fires up oil production at Van Gogh

February 16, 2010. Oil production has commenced at Apache's Van Gogh development in Production License WA-35-L in the Exmouth Basin, offshore Western Australia. Apache, the Van Gogh field operator, owns a 52.5-percent interest in the Van Gogh field with INPEX owning the remaining interest. Van Gogh is located 32 miles (53 km) north-northwest of Exmouth.

Van Gogh, discovered in 2003, is Apache's first field development utilizing a floating production, storage and offloading (FPSO) vessel. The field was developed with 19 horizontal production laterals, two water injection wells and one gas injection well. The total horizontal interval drilled for all of the production wells exceeds 106,000 feet (32 km). The Ningaloo Vision FPSO has capacity to process 150,000 barrels of liquids per day, including 63,000 barrels of oil per day, and store 540,000 barrels of oil.

OMV high fives over Fella-1 find

February 16, 2010. OMV confirmed the discovery and successful testing of gas and condensate in its Fella-1 exploration well in the recently granted Nawara Production Concession within the Jenein Sud exploration block in southern Tunisia. This is the fifth successive discovery in this area in the last four years and underpins the significant potential of the block.

Australia needs skilled workers to tap LNG sector potential

February 15, 2010. The Queensland government must overhaul training to ensure the state has enough skilled workers to take advantage of Australia's burgeoning liquefied natural gas (LNG) industry, a conference has heard. Queensland Resources Council klcalled for an independent statutory skills commission in Queensland to reform the state's vocational education and training (VET) system.

Aramco to inject CO₂ into biggest oilfield by 2012

February 15, 2010. State oil giant Saudi Aramco plans to inject carbon dioxide into the world's biggest oilfield by 2012, a year ahead of previous plans. The giant field Ghawar pumped 5 million barrels per day (bpd) in 2008, more than half of top oil exporter Saudi Arabia's output. The kingdom announced plans last year for a pilot project to pump the climate-warming gas into the field to both improve production and reduce emissions.

The project would be entirely financed by Aramco. The kingdom plans to inject 40 million standard cubic feet per day (cfd) of CO2 into the field, and has said this is part of the global push to trap emissions rather than because it needs to enhance oil recovery from the field. Carbon capture and storage is looked upon favourably by oil producers as they need to inject gas into oilfields anyway to maintain oil pressure. If they can use CO2 instead of natural gas, they can send the natural gas to local grids where it can be used by industry or in power plants.

Pakistan govt pushes oil exploration FDI with Shark I well visit

February 15, 2010. Pakistan's Petroleum Minister Syed Naveed Qamar visited offshore well Shark 1 on February 8 in a Ministry of Petroleum and Natural Resources (MPNR) drive to encourage foreign investment and exploration in the oil and gas sector.

The minister surveyed the site and met with the drilling team during the visit. The drilling of Shark I began on January 17, 2010. The well is expected to be drilled to the depth of approximately 3,540 meters. Shark 1 is the first exploratory well being drilled in the Indus 'M' Block, located 87 kilometers southwest of Karachi. The Block is a joint venture between the operator ENI, which has a 70 percent working interest, and PPL with the remaining 30 percent.

Petrobras reaffirms Tupi estimate at 5-8 bn barrels

February 12, 2010. Petrobras, would like to clarify the news published by the press about the results of extended well test (EWT) of Tupi, which started in May 2009. The EWT is occurring as planned by the company, whose main goal is to collect technical information for the development in pre-salt reservoirs. The company reaffirms the estimated recoverable oil volume, broadly announced for Tupi, from 5 to 8 billion barrels. Brazil's largest discovery to date, Tupi was discovered in July 2006 and is located in block BM-S-11 in the Santos Basin, 155 miles (250 kilometers) from the southern coast of Rio de Janeiro.

Suncor notes oil sands production for January

February 12, 2010. Suncor's oil sands production during January averaged approximately 156,000 barrels per day (bpd). Production was impacted by unplanned maintenance activities following a fire at one of two upgraders (U2) in December. The repairs were successfully completed and the upgrader has returned to production. Production numbers include upgraded sweet and sour synthetic crude oil and diesel, as well as non-upgraded bitumen sold directly to the market, from all Suncor-operated facilities. Reported volumes do not include Suncor's proportionate production share from the Syncrude joint venture.

Sky Petroleum reports on Mubarek production in UAE

February 12, 2010. Sky Petroleum reported that during the fourth quarter ending December 31, 2009 Mubarek production from the K2-ST4 well totaled 15,363 barrels of oil or 167 bopd and production from the H2 well totaled 2,197 barrels of oil or 24 bopd.

During the year ended December 31, 2009 Mubarek production from the H2 and K2-ST4 wells was 78,577 barrels of oil. The Mubarek K2-ST4 well produced 73,766 barrels of oil or 202 bopd during the 2009 fiscal year. During the same period the Mubarek H2 well produced 4,811 barrels of oil despite being shut down for more than 8 months.

Petronas awards PSC for offshore Malaysian Block

February 12, 2010. Petronas awarded a Production Sharing Contract (PSC) for Block SK320 offshore Sarawak to MDC Oil and Gas (SK320) Ltd, a subsidiary of Abu Dhabi owned Mubadala Development Company, and Petronas Carigali Sdn Bhd. The block spans 5,786 square kilometers and is located in the central part of the Sarawak Basin in water depths ranging from 100 to 200 meters. Previous exploration efforts discovered a number of gas fields in the block. Three of the gas fields namely M5, Biji Sawi and Daun Kari are included in the SK320 PSC.

Arrow Energy to acquire Major Australian LNG project

February 11, 2010. Arrow Energy has reached an agreement with LNG Limited to acquire the entire Fisherman's Landing Liquefied Natural Gas (LNG) plant and associated infrastructure through the acquisition of LNG Ltd subsidiary Gladstone LNG Pty Ltd (GLNG). The agreement is subject to the completion of confirmatory due diligence by Arrow and LNG Ltd gaining shareholder approval for the transaction at a meeting expected to be held within the next 45 days.

Statoil shrugs off small North Sea oil find

February 10, 2010. A limited oil column was proven during drilling of an exploration well on the Omega Nord prospect six kilometers northeast of the Snorre field in the North Sea. However, the reservoir qualities of the sand and shale rocks were below expectations and the find is probably not commercially viable. The purpose of the exploration well was to confirm the presence of petroleum in upper Triassic reservoir rocks in the Lunde formation. Drilling of the exploration well is now concluded.

Kuwait holds oil price discount on weak Asian demand

February 10, 2010. Kuwait Petroleum Corp. maintained a discount for its official crude oil price to Asia as refiners kept processing rates low amid weak fuel demand. The state-owned company set its March price at a discount of $1.20 a barrel to the average of Middle East benchmarks Oman and Dubai grades.

Refiners in Japan, which import about a third of Kuwait’s crude oil, used 83.9 percent of their processing capacity last week, according to the Petroleum Association of Japan industry group. The average rate was 84.9 percent a year earlier. Cosmo Oil Co., partly owned by the government of Abu Dhabi, said on Jan. 5 it will cut processing through March.

Papyrus flows gas Offshore Nile Delta, Egypt

February 10, 2010. Atwood Aurora Operator GDF Suez and partner Dana Petroleum have made a second gas discovery in the West El Burullus concession, offshore Nile Delta, Egypt. To date, GDF Suez and Dana have drilled two wells in this concession and made two discoveries. GDF Suez and Dana each hold a 50% interest in the discovery and concession area, which contains numerous additional prospects at both shallow and deeper horizons.

Downstream

BP sees no big rise in refining margins in 2010

February 16, 2010. Oil major BP does not see refining margins improving substantially in 2010, its chief financial officer for refining and marketing said. Oil companies including BP and Royal Dutch Shell have reported billions of dollars of losses from their refining business in the fourth of quarter 2009 as the economic crisis hit fuel demand. BP said refining margins had averaged $4 a barrel in 2009, at least $2 below the 10-year average and well below the $10 per barrel seen in 2007.

2-Saudi's Jubail refinery to start in late 2013-Aramco

February 16, 2010. Saudi Arabia's Jubail oil refinery is scheduled to start up in late 2013, later than a previous target of March 2013. The 400,000 barrels per day (bpd) plant is a venture between state oil company Saudi Aramco and France's Total.

Saudi Aramco currently has a 62.5 percent stake in the project while Total has 37.5 percent. That timescale is later than previously stated. The Jubail Refinery's project director told Reuters in October that the plant would come online in March 2013 and cost more than $12 billion to build. Jubail is among the new plants Saudi Arabia, the world's top oil exporter, is planning as it looks to boost domestic refining capacity.

S. Korea's STX Heavy to build LNG terminal in Mexico

February 11, 2010. South Korea's STX Heavy Industries Co. said it has clinched a preliminary deal with Mexico's Grupo Indi to build a liquefied natural gas (LNG) terminal at a port on Mexico's Pacific coast.

The LNG terminal, to be built at the Lazaro Cardenas port, is projected to have the capacity to receive and process up to 3.8 million tons of LNG, said STX Heavy, an unlisted manufacturer of ship parts. The South Korean company did not disclose financial terms of the deal. Construction of the terminal, which will cost US $700 million, is scheduled to begin in 2011 for completion in 2014.

Sasref begins ULSD project commissioning

February 10, 2010. Commissioning activities for the Ultra-Low Sulfur Diesel (ULSD) project of Saudi Aramco Shell Refinery Co. (SASREF) are under way, the company reported. The project will produce around 100,000 barrels per day of diesel with sulfur levels less than 10 parts per million.

Ky. Refinery to close this week

February 10, 2010. A Somerset refinery that has turned out gasoline for generations will shut down this week, putting more than 30 people out of work, company officials said.

A New York real estate magnate bought the refinery out of bankruptcy in 2008 with plans to build it back into a significant producer of petroleum products. The plan didn't work out because the company could not get a sufficient supply of crude oil from suppliers.

Transportation / Trade

Yanukovich says ready for Russian gas deals

February 13, 2010. Opposition leader Yanukovich, who beat current Prime Minister Yulia Tymoshenko in the second round by a narrow margin said he was keen to improve gas relations with Russia and would revive the idea of a gas consortium that would allow Moscow to co-manage Ukrainian pipelines. Ukraine fully depends on Russian energy while Moscow is keen to keep its fleet in Sevastopol -- one of its last large foreign bases -- seeing it as a certain guarantee that Kiev will not join NATO, a prospect raised by Ukraine's outgoing pro-Western president, Viktor Yushchenko. Moscow had said it could increase supplies via Ukraine if it was allowed to co-own and manage gas pipelines, but Ukraine adopted a law forbidding their privatisation. Since then Moscow decided to increase supplies bypassing Ukraine and two gas crises with Kiev under Yushchenko only spurred key projects, Nord Stream and South Stream, which will deliver gas under the Baltic and Black Sea to Europe's north and south.

Finnish Authority grants permit to underwater gas pipeline

February 12, 2010. An international consortium that plans to bring natural gas from Russia to Germany via a pipeline under the Baltic Sea said it hoped to begin construction work in April. The Nord Stream consortium statement was made after the Regional Administrative Agency for Southern Finland said it had approved the last permit needed for work to begin in the Finnish economic zone. The consortium's headquarters are based in Zug, Switzerland. In total 374 kilometers of the underwater section of the 1,200- kilometer-long pipeline will pass through the Finnish economic zone. The consortium has earlier been granted permits by Russia, Sweden, Denmark and Germany. The first gas deliveries were envisaged in late 2011. The two parallel pipelines are envisaged to run from Vyborg in Russia to Greifswald, Germany. Partners in the consortium include Russian gas monopoly Gazprom, Germany's E.ON and BASF/Wintershall and Dutch company Gasunie.

Calvalley agrees to terms for crude transport in Yemen

February 12, 2010. Calvalley Petroleum has provided an operational update on recent exploration activities and developments in its continued efforts to finalize agreements for the transportation of blended crude oil from Block 9. Calvalley has agreed on all key terms and conditions with the Ministry of Oil and Minerals ("MOM") and the Third Party Operator ("Third Party") to transport blended crude from Block 9 through Block 51 to the Masila System (Block 14) for export. MOM, Calvalley and Third Party are expected to sign all agreements at a signing ceremony in February, 2010.

Enbridge to expand E. Texas Gas Gathering System

February 11, 2010. Enbridge Energy Partners, L.P. ("the Partnership") announced plans to expand its East Texas Gas Gathering System by constructing three lateral pipelines into Haynesville Shale producing areas in East Texas together with an additional large diameter lateral from Shelby County to Carthage, Texas. The Haynesville Shale expansion is expected to increase the Partnership's takeaway capacity from Shelby, Nacogdoches and San Augustine counties to 900 million cubic feet per day (mmcf/d).

ETP to launch open season for Tiger Pipeline expansion

February 10, 2010. Energy Transfer Partners, L.P. announced the expansion of the planned Tiger Pipeline that will service the Haynesville Shale producing region in Louisiana and East Texas. Energy Transfer has entered into a binding, 10-year agreement with the expansion's foundation shipper for 400 million cubic feet per day of capacity, bringing the pipeline's long-term contractual commitments to 2.4 billion cubic feet per day. Energy Transfer will launch a binding open season later this month to solicit additional shipper interest in the Tiger Pipeline expansion. Ultimate capacity of the expansion will be based upon producer response.

Policy / Performance

Africa Oil to take assignment of Kenyan Blocks

February 16, 2010. Africa Oil has signed a definitive agreement with Platform Resources Inc., a wholly owned subsidiary of Alberta Oilsands Inc., to take an assignment of Platform's 100% interest in Blocks 12A and 13T in Kenya. The new contract areas are adjacent to the Company's Block 10BB which hosts the Loperot-1 oil discovery. Existing gravity data on Blocks 12A and 13T suggests that the proven Lokichar basin and other prospective sub-basins and known strong leads in Block 10BB may extend onto these new blocks.

US Chamber challenges EPA's endangerment finding

February 16, 2010. Steven J. Law, chief legal officer and general counsel of the U.S. Chamber of Commerce, issued the following statement on the Chamber's intention to challenge EPA's decision to trigger Clean Air Act regulation: "The U.S. Chamber strongly supports efforts to reduce greenhouse gas emissions in the atmosphere, but we believe there's a right way and a wrong way to achieve that goal. "The wrong way is through the EPA's endangerment finding, which triggers Clean Air Act regulation. "The right way is through bipartisan legislation that promotes new technologies, emphasizes efficiency, ensures affordable energy for families and businesses, and defends American jobs while returning its economy to prosperity.

Nigeria's new leader woos oil companies

February 12, 2010. Nigeria's new acting president, Goodluck Jonathan, is attempting to breathe life into the nation's ailing energy sector just two days after assuming the duties of President Umaru Yar'Adua, who has been out of the country since November with health problems. Mr. Jonathan summoned several executives from foreign oil companies to meet with top Nigerian officials. A focal point of the talks: militants who have sabotaged pipelines, disrupting production and oil prices. Mr. Jonathan is Nigeria's first president from an ethnic minority or the Niger Delta -- an area the size of England that is rich in oil but long plagued by poverty and violence against the energy industry.

Vietnam targets oil and gas exploration in Sudan

February 12, 2010. State-owned Vietnam Oil and Gas Group (PetroVietnam) is interested in investing in oil and gas exploration and production in Sudan. The Vietnam Ministry of Industry and Trade today expressed hopes that the Sudanese government and state-run Sudapet will create favorable conditions for PetroVietnam to invest in projects in the African country. Sudan now produces 500,000 barrels a day, most of which is exported to China, Japan and Indonesia. In December, PetroVietnam and Sudapet signed an oil cooperation framework agreement. The pact will enable the two companies to jointly invest in oil and gas projects in Sudan, Vietnam and in third countries. Since March 2007, Sudan and Vietnam agreed during a held by Sudanese presidential aide Nafi Ali Nafi to promote friendly ties and multifaceted co-operation.

Russia's Medvedev supports control over oil export

February 12, 2010. Russian President Dmitry Medvedev lent his support to the idea of tightening state control over oil and refined products exports flows, put forward by a deputy Prime Minister. Russia's top energy official, Sechin, during a January meeting proposed for the state to take full control over exports of oil and refined products.

UK Treasury chief opens wallet for energy, infrastructure

February 12, 2010. U.K. Treasury chief Alistair Darling will use his upcoming budget to promote investment in U.K. infrastructure and energy supplies. Darling will announce plans Friday to set up a new body, Infrastructure U.K., which will be tasked with drawing up in time for the budget a strategy for developing the country's infrastructure and the funding needed to secure it. Long an energy exporter because of its North Sea oil supplies, the U.K. has become a net importer in recent years. That has led to concerns that U.K. energy prices could rise sharply in coming years, with a report by energy regulator Ofgem this month saying private-sector investment could fall short of what's needed to secure the U.K. has sufficient energy supplies by as early as 2015.

OVL consortium to develop Heavy Oil Blocks in Orinoco Belt

February 11, 2010. The consortium of ONGC Videsh Limited (OVL, 11.0%), Indian Oil Corporation Limited (IOC, 3.5%), Oil India Limited (OIL, 3.5%), Repsol YPF (Repsol, 11.0%) and Petroliam Nasional Berhad (Petronas, 11.0%), was awarded by the Government of the Bolivarian Republic of Venezuela a 40% ownership interest in an Empresa Mixta ("Mixed Company"), which will develop the Carabobo 1 Norte and Carabobo 1 Centro blocks located in the Orinoco Heavy Oil Belt. The Corporación Venezolana del Petróleo (CVP), a subsidiary of Petróleos de Venezuela S.A. (PDVSA), Venezuela's state oil company, will hold the remaining 60% equity interest.

Refinery outlook bearish through 2011 - IEA

February 11, 2010. The gloomy outlook for the refining sector is expected to linger through 2011, the International Energy Agency said. The IEA expected global refinery throughput to reach 72.6 million barrels a day in the first quarter, a slight downward revision from January's report. The level of first-quarter refinery runs will reflect a 1 million barrel rise on the year, but a decline of 1.35 million barrels compared with the first quarter of 2008. Refining margins--the amount a refiner can make from processing a barrel of crude oil--have rebounded this winter due to a drawdown in oil product inventories and higher demand. But the construction of refineries over the past two years and a massive contraction in oil consumption during the recession have led to a glut of capacity. Excess capacity has forced refiners to sharply curtail their output in recent months in a bid to trim oversupplied markets. Despite the run cuts, oil companies are being hit hard by weakness in the downstream sector, which dragged down fourth-quarter profits across the board. The IEA has warned for months that longer-term "capacity rationalization," or the shutdown of some refinery units or entire plants, may be necessary to restore profitability in the industry. The global surplus of crude distillation capacity could grow by the fourth quarter to as much as 3.4 million barrels a day, or 3.9% of global capacity in the first quarter of 2008, assuming typical run rates at 84%, the agency estimated.

Iraq adopts ASCI benchmark price for US crude sales

February 11, 2010. Iraqi state-owned oil marketing firm Somo will price sales of US-bound crude at differentials to the Argus Sour Crude Index ("ASCI") benchmark from April onwards. The latest Iraqi official formulas for March loadings of Kirkuk and Basrah Light crudes have been set at differentials to Platts WTI, but the next batch of formulas, to be issued next month, will use the ASCI benchmark price. Iraq's switch in benchmarking away from WTI means that over 1.6mn b/d of Mideast Gulf crude exports to the US are now set at differentials to the ASCI price. Iraq exported 450,000 b/d to the US last year, with Kuwaiti sales amounting to over 180,000 b/d and Saudi Arabia selling nearly 1mn b/d to refiners in the US. The daily ASCI price is calculated from a volume-weighted average of deals done for three grades of US Gulf of Mexico medium sour crude combined: Mars, Poseidon and Southern Green Canyon. These are the grades against which exporters of sour crude to the US compete.

Brazil's oil bills may see stamp of approval by June

February 11, 2010. Brazil's Congress will likely approve bills containing changes for the oil sector before legislators go into recess in June. The bills under consideration create a centralized fund for managing future oil revenues, create a special state company to oversee exploration and production activities, change rules for distribution of oil royalties among Brazilian states, and cede rights to state-controlled oil company Petrobras to 5 billion barrels of crude oil from subsalt reserves as part of a capitalization plan for the company.

Seoul's new envoy to Russia vows to speed up pipeline project

February 10, 2010. South Korea's new ambassador to Russia said that he is committed to implementing the envisioned South Korea-North Korea-Russia natural gas pipeline. South Korean President Lee Myung-bak and Russian President Dmitry Medvedev agreed at their 2008 summit in Moscow to cooperate on building a tripartite gas pipeline involving North Korea. But the agreement has yet to be realized, as Pyongyang has failed to respond amid chilly inter-Korean relations. Lee then called for significant improvement of ties between South Korea and Russia, claiming the two are now more ready and fit than ever to forge a relationship that will be mutually beneficial.

South Korea to begin drilling for gas hydrates

February 10, 2010. South Korea will start drilling for gas hydrates and searching its continental shelf as part of an effort to develop new energy resources. Under the ministry's plan to begin commercial use of gas hydrates from 2015, the country will soon conduct in-depth research in the East Sea. Gas hydrates are formed by natural gas and water under high pressure and at low temperatures, usually at the seabed or in tundra regions. Korea will also begin exploring its continental shelf region for undiscovered oil and gas fields, Yonhap said, citing unidentified ministry officials. Through active exploration and production of oil, the country aims to raise its energy self-sufficiency level to 18.1% of domestic demand by 2012 from 8.1% now, it said.

POWER

Generation

Philippines hydroelectric power plants reduce capacity to 50 pc

February 14, 2010. Hydroelectric power plants in Mindanao have been forced to reduce their capacity to 50 percent since Feb. 3 due to the low water inflow into Lake Lanao and Pulangi River because of the onset of El Niño, the National Grid Corporation of the Philippines (NGCP) said. This is due to the unavailability of the Agus 5, Mindanao coal-fired power plant Unit 2, the Iligan diesel-powered plant, and the Western Mindanao power plant in Zamboanga City, which has reduced its output from 90 to 80 megawatts. To address the power shortage in the short term, Bicar said the preventive maintenance of the Agus 5 hydroelectric plant’s Units 1 and 2 must be fast-tracked and the repair of Kibawe 138 KVA lines must be completed as soon as possible.

China Valves signs deal with Dongfang Electric

February 12, 2010. China Valves Technology will manufacture and install specialty valves for Dongfang Electric's power generation projects, the company said. Dongfang Electric produces power generation equipment for power stations worldwide. The two companies will also develop a joint research and development center. China Valves Technology Inc. already supplied $6 million worth of valves to Dongfang Electric prior to the agreement. Deliveries under the new venture will begin the first quarter.

Transmission / Distribution / Trade

Thimpu invites Dhaka to invest in power infra

February 16, 2010. Bhutan has invited Bangladesh to invest in power transmission and distribution equipment, as the Himalayan kingdom looks to greatly expand electricity coverage, the Bhutanese minister for economic affairs said. The South Asian country currently produces about 15,000 MW through hydro-power plants and hopes to add another 10,000 MW within the next 10 years, he told the meeting. Bangladesh proposed the Himalayan kingdom to export its hydro power during prime minister Sheikh Hasina's visit last year. The Bhutanese minister also expressed his country's interest for importing 'pre-engineered steel buildings' from Bangladesh.

Power firms sign new Finland-Estonia link deal

February 15, 2010. The power transmission companies of Estonia and Finland signed a preliminary agreement on a second electricity cable between the two countries worth 300 million euros ($408.4 million). A first link, Estlink 1, between the two nations was opened at the end of 2006 and joined the Baltic markets with a western European nation for the first time. The second link, Estlink 2, is due to open no sooner than the end of 2013. The preliminary agreement will be followed by a final capital investment decision if the wholesale market of electricity opens in Estonia as planned and if the European Union's co-funding of 100 million euros for the project becomes reality. It also said the Nordic electricity exchange would expand to Estonia April 1, 2010.

Power cuts in Mindanao worsen due to critical water level

February 15, 2010. The power outages in Mindanao worsened due to the critical water level in the Lake Lanao and Pulangi river, source of the Mindanao grid. It was also learned that the National Grid Corporation of the Philippines (NGCP) forced hydroelectric power plants located at various areas in the southern island in Mindanao to reduce their power generation by at least 50 percent of their total capacity due to low water inflow of Lake Lanao and Pulangi River because of the onset of the dry spell. It was also gathered that the Western Mindanao Power Corporation's power plant in Zamboanga City also decreased its output from 90 to 80 megawatts as of February 9, this year.

Policy / Performance

Bulgaria bids for Russian loan to keep building Belene Nuclear Plant

February 16, 2010. Bulgaria’s government of PM Boyko Borisov would like to complete the Belene Nuclear Power Plant because a lot of money has been invested in the project so far. This has been declared by Bulgaria’s Minister of Economy, Energy, and Tourism, Traicho Traikov, as cited by BTA. He announced that the Bulgarian government was going to hold talks with representatives of the Russian State Atomic Energy Corporation “ROSATOM.” Bulgaria is going to seek a loan of about EUR 2 B from the Russian company ROSATOM so that the construction works on the site in the Danube town of Belene could continue in 2010 and 2011.

Obama urges new round of nuclear power plants

February 16, 2010. Risking a confrontation with anti-nuclear activists, President Obama announced his administration will provide more than $8 billion in loan guarantees to help build a nuclear power plant in Georgia. The anticipated announcement, made to union electricians and others at a job training facility in Lanham, Maryland, begins to fulfill a pledge the president made in his State of the Union address, his budget and in a meeting with the nation's governors this month to recharge the nuclear energy industry after a 30-year hiatus. The budget would add $36 billion to an existing $18.5 billion in available loan guarantees, for a total of $54.5 billion. Federal regulators are reviewing applications for 22 plants to be built in the next two decades.

Poyry wins EUR6.1m hydro power contract In Sri Lanka

February 15, 2010. Poyry has bagged a EUR6.1m contract for feasibility studies, design and construction supervision of the Uma Oya hydropower project in Sri Lanka. The project comprises two dams and over 15km of water conveyance tunnels, a 700mt deep shaft and an underground powerhouse with two Pelton turbines of total 150MW installed capacity. The design phase is expected to be completed by the end of 2011. The main construction activities are scheduled to start in early 2011 and the power station will be commissioned in early 2016. Farab International of Dubai is the EPC contractor of the project.

Bangladesh PM opens first of two new power plants

February 15, 2010. Prime Minister Sheikh Hasina switched on the first of two new power plants near the capital Dhaka adding 120 megawatts to the national grid as Bangladesh struggles to ease chronic shortages of power. Each costing USD 163 million, including USD 113 million from the Asian Development Bank (ADB), the plants have been built by India's Bharat Heavy Electricals Limited. Hasina took office in January 2009 following a massive election win and promised to address the issue of power generation with top priority. The prime minister also said her government wanted to raise power production at 7,000 MW by 2013 by setting up more peak-hour power plants, coal fired power units and renewable energy plants.

Babalola orders PHCN to end power supply crisis

February 15, 2010. As the power situation in the country takes a turn for the worse, the Federal government has asked the management of the Power Holding Company of Nigeria (PHCN) to speedily finalise discussion on various projects that will improve electricity supply. When completed, these agreements are expected to help tackle the gas supply challenges that has affected operations at the thermal stations. The Nigerian Electricity Regulatory Commi-ssion (NERC) with the support of the World bank has provided the framework in the GSPA and Purchase Agreement (PPA) to make operators accountable for their operations.

German Environment Minister stands firm on nuclear power plant closure

February 15, 2010. German Environment Minister Norbert Roettgen has rejected calls to immediately extend the operating lifetimes of nuclear power plants. Roettgen said that he would not intervene to delay closure dates for reactors in coming months. According to present rules, the Neckarwestheim power plant is set to shutdown in May. The Biblis A nuclear plant in Hesse is earmarked for closure in summer. Conservative regional environment ministers Markus Soeder from Bavaria, Tanya Goeder from Baden-Wuerttemberg and Silke Lautenschlaeger from Hesse advocate a further 20 years on top of Roettgen's suggestion. The three represent German states with nuclear power plants and argue that renewable energy will not be ready to replace atomic power in time to realize Roettgen's proposal.

Enel seeks more open French electricity mkt-report

February 15, 2010. The CEO said Enel could participate in the modernisation of the French electricity production system, which is 80-percent controlled by French state-owned operator. A reform of the French electricity market already plans to force EDF to sell part of its nuclear-made electricity at cost price to private operators like GDF Suez and Poweo.

Arkansas high court will examine power plant approval process

February 12, 2010. The Arkansas Supreme Court will hear oral arguments on April 15 about the process used to approve the certificate that granted SWEPCO's construction of the John W. Turk Power Plant located in southern Arkansas. The high court will decide if the Arkansas Public Service Commissions' process for considering permits is flawed. The state Supreme Court granted SWEPCO's appeal of the Arkansas Court of Appeal's 2009 decision that revoked the permit for the $1.6 billion coal-fired power plant. In June 2009, with an unanimous decision, the appellate court overturned the commission's approval of the plant. Rejecting the Certificate of Need permit that allowed the construction, the court said state regulators did not adequately review plans and said the approval process was flawed.

Renewable Energy / Climate Change Trends

National

Find cheaper ways of storing solar energy, says Minister

February 16. 2010. The Union Minister for New and Renewable Energy Farooq Abdullah has called for research targeted at reducing the cost of storing solar energy in the context of the National Solar Mission, recently launched by the Prime Minister Manmohan Singh, which aims at generation of an installed capacity of 20,000 MW of solar energy by 2022.

Dr. Abdullah said that under the National Solar Mission, in the next three years, the Government of India hopes to add 1300 MW of solar energy, of which 1100 MW would be grid-connected, and 200 MW would be utilised for providing electricity to villages which do not have energy, and therefore have not seen any electricity so far.

Climate change action plan soon in Gujarat

February 15, 2010. Exactly a year after the announcement of formation of the state climate change (control) department in February last year during the budget session, chief minister Narendra Modi is likely to announce the state's climate change action plan in the upcoming budget session. Sources in the state government said Gujarat climate change (control) action plan is in the final stages of preparation and is likely to be announced in the upcoming budget session by the chief minister himself. The functional structure at the state and district level will also be announced. A total state action plan is almost ready. A separate plan has been prepared for each district considering the regional environmental issues. The new climate change department will work in four different zones and each zone will have separate plans. Focus of the total plan will be considerable cut in carbon emission and earning more carbon credit.

Bengal Aerotropolis plans solar-equipment hub

February 15, 2010. Bengal Aerotropolis Projects (BAPL) plans to set up a solar power equipment manufacturing hub within the proposed Rs 100 bn airport city coming up in West Bengal. Coined as the ‘solar valley’, the area is expected to attract an investment of Rs 40 bn. BAPL, in which Singapore’s Changi Airport International holds a 26% stake, has just received 1,090 acres from the West Bengal government for the airport city project. It has roped in IL&FS to prepare a detailed roadmap for the solar valley project, which will be a part of the science and technology park being planned by the company.

CLP Power to invest $800 mn in renewable energy by December

February 15, 2010. Hong Kong-based CLP Group company CLP Power India Pvt Ltd will invest $800 million (over Rs 37 bn) to augment its power generation capacity from renewable resources to 650 Mw by the end of this year. Out of the total target, 346 Mw is under construction, while 104 Mw is operational. The company has also identified locations for building the remaining capacity. CLP Power has identified locations in Gujarat, Maharashtra, Karnataka and Tamil Nadu for setting up these renewable energy projects. The projects would be funded through a debt and equity ratio of 70:30. The company is in talks with various banks and financial institutions such as HSBC, IDBI, Power Finance Corp, Asian Development Bank, Bank of Baroda and Punjab National Bank for loans.

BHEL to focus on transmission equipment, renewable energy

February 13, 2010. With competition intensifying in the power generation equipment business, Bharat Heavy Electricals Ltd (BHEL) is planning to step up focus on other areas of operations, including the transportation sector, transmission equipment and renewable energy. The state-owned firm is planning to form special purpose vehicles (SPVs) for increasing focus on some of these businesses, company officials said. A bevy of competitors has begun entry into the high-end power equipment business — including the L&T-Mitsubishi Heavy Electric combine, Bharat Forge-Alstom, Toshiba-JSW, Italian firm Ansaldo and a host of Chinese firms.

Cabinet okays renewable energy pact with Scotland

February 11, 2010. The Cabinet gave its nod to a memorandum of understanding (MoU) inked between the Ministry of New and Renewable Energy and Government of Scotland in the field of renewable energy. The objective of the MoU is to promote bilateral cooperation between the two countries in various areas of new and renewable energy. The bilateral cooperation is to be implemented through exchange and training of scientific and technical personnel/information and transfer of know-how technology and development research in specific fields/projects, it said. It is hoped that the MoU will not only help in bilateral cooperation between the two countries but will also enhance cooperation between India and Scotland in general, the statement said.

India can be source of wind power tech, says Gamesa chief

February 10, 2010. Spanish company Gamesa Corporación Tecnológica, the world's third largest wind turbine manufacturer (after Vestas and GE), has named its new Chennai facility as one of its two manufacturing hubs in Asia (the other being, Tianjin, China). But the company is also looking at India as a “technology source”. Gamesa has 40 per cent share of the Spanish market for wind power. The two fastest growing markets in the world are the US and China.

NLDC to issue renewable energy certificates

February 10, 2010. The National Load Despatch Centre (NLDC) has been designated as the central agency for implementing Renewable Energy Certificates (REC) mechanism meant to give push to renewable energy capacity addition in the country. Official sources said that the Central Electricity Regulatory Commission (CERC) has recently designated NLDC, an apex agency responsible for ensuring integrated operation of the national power system, as the central agency for implementation of REC mechanism at the national level. The CERC had notified regulation on REC fulfilment of its mandate to promote renewable sources of energy.

Global

Time running out for fixing climate change, says Norwegian Minister

February 16, 2010. For every one degree rise in temperature, 6 million tonnes of wheat will be lost in India, the Food and Agricultural Organisation of the UN estimates. How do you feed a hungry, growing world population with climate change knocking at the door? Scientists, policy makers and researchers from 23 countries across the world to address how the biological diversity of life on earth — the vast genetic array of plants, animals and micro-organisms — could be preserved, adapted and shared to provide enough food in a warming planet. In the last century alone more than 75 per cent of all known food crops have disappeared and the world relies on just a few varieties of rice, potatoes, maize, wheat and other staples.

British Airways signs deal to make biofuel for Aircraft

February 15, 2010. British Airways (BA) announced plans to produce jet fuel from waste matter by 2014 at a plant to be built in London.

The facility, which will be constructed by US company Solena Group, is set to produce 72 million liters of fuel a year from 500,000 tons of waste - fed into a high temperature "gasifier" to produce BioSynGas.

A chemical process known as Fischer Tropsch is then applied to convert the gas into biofuel. The process could potentially reduce annual carbon emissions by 145,000 tons, according to Arcadis, the consultancy involved in the project.

Windy Wyoming debates excise tax for wind energy

February 14, 2010. A proposal in Wyoming to impose the nation's first state excise tax on wind energy production is generating debate over how the state should handle the arrival of massive wind farms to its wind-swept plains and plateaus.Gov. Dave Freudenthal made the wind energy tax a centerpiece of his legislative agenda, drawing surprise and alarm from some in the state's fledgling wind industry. The proposal cleared its first hurdle Thursday when the state House voted to introduce the bill.

Rising home use may cut Argentina's bio-diesel exports

February 12, 2010. Increasing domestic biodiesel use in Argentina will cut the country's soya oil exports in 2010, Hamburg-based oilseeds analysts Oil World forecast. If the Argentine Government's plans for five per cent biodiesel content in fossil diesel are implemented, coupled with compulsory use of biodiesel to generate electricity, it would create an annual demand for 860,000 tonnes of biodiesel, largely made from soya oil, Oil World estimates.

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