MonitorsPublished on Apr 30, 2010
Energy News Monitor I Volume VI, Issue 50
Electricity Supply Management - Lessons from Kerala

Shankar Sharma, Power Policy Analyst, Thirthahally


Continued from Volume VI, Issue No. 49…



here is an urgent need for the country to adopt a paradigm shift in the way we look at the electricity demand.  In addition to the measures initiated by Kerala, other measures such as bringing down the T&D losses below 10%; transferring most of the domestic, street light and commercial lighting loads to solar photovoltaic panels; encouraging community based bio-mass power plants can all provide huge amount of virtual additional power capacity without having to build additional conventional power capacity. 

As per the official reports, such as Integrated Energy Policy and National Electricity Policy, the potential available in efficiency improvement measures alone in the areas of generation, transmission, distribution and utilisation of electricity is huge. As per some estimates this can be as high as 30-40 % of the present installed capacity. Considering the capital cost of Rs. 5 to 7 Crores per MW of setting up new conventional power plants, and the established fact that a unit of electricity saved is worth more than 4 units generated, the socio-economic benefits from this potential should be obvious.

The National Electricity Policy states: “It would have to be clearly recognized that Power Sector will remain unviable until T&D losses are brought down significantly and rapidly. A large number of States have been reporting losses of over 40% in the recent years. By any standards, these are unsustainable and imply a steady decline of power sector operations. Continuation of the present level of losses would not only pose a threat to the power sector operations but also jeopardize the growth prospects of the economy as a whole. No reforms can succeed in the midst of such large pilferages on a continuing basis.”

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

The domestic electricity consumption, which is about 24% of total consumption in the country, has huge potential for savings. Lighting application in domestic consumption is estimated to account for about 19% of the total, where the replacement of inefficient incandescent lamps by compact fluorescent lamps alone is estimated to yield benefits equivalent to 10,000 MW of new power generation capacity, as per Bureau of Energy Efficiency.  Inefficiency in other applications such as domestic water pumps, fans, refrigerators, ACs, water heaters, electric stoves etc. can bring considerable amount of savings without huge investment by the STATE. As per a recent study report by Prayas Energy Group, Pune (“Energy Savings Potential In Indian Households From Improved Appliance Efficiency”) usage of  energy efficiency models of common house hold appliances such as lamps, refrigerators, fans, TVs, radios etc. can result in about 30% energy savings annually by 2013. This corresponds to an avoided additional generating capacity of 25,000 MW. 

Another area for urgent focus should be Demand Side Management (DSM). Though the efficiency improvement measures will bring down the future demand for electricity by a considerable margin, there are additional avenues to reduce the legitimate demand for electricity without hampering the economic/productive applications. Most of the additional demand for electricity is coming from the urban areas. The usage of electricity for night time sports, air conditioned shopping malls/housing complexes even in cooler places, heavy usage of illumination for advertisements, unscientific use of illumination for street lights, avoidable & inefficient use of a large number of electrical and entertainment appliances, whether in houses, shops, offices, public places or factories are all escalating but cannot be associated with economic/productive applications.  Such applications must be minimised.

Positive intervention through tariff policies has huge potential to reduce the peak hour electricity demand on the electricity grid by measures such time-of-day tariff and penalties/incentives for peak hour usage; staggering of weekly holidays and factory working hours; encouraging feed-in- tariff solar PV panels on the roof of large establishments such as schools, colleges, offices, industries etc..

Each state has to objectively consider as to which type of industries are suitable to its environs keeping in view the inescapable limits to its natural resources to feed into such industries and the carrying capacity of its natural environment. The real need for energy intensive and polluting industries such as those based on iron & steel, cement and aluminium etc. should be carefully viewed from these perspectives, in addition to the state’s ability to meet their energy demand on a sustainable basis. An objective analysis of all the direct and indirect costs & benefits to the society of each of such industry in a given state will be able to provide a clear picture in this regard. The states such as Karnataka, Andhra Pradesh, Tamil Nadu, Maharastra, which seem to be continuing to encourage large scale industrial activities despite facing energy crises, will benefit vastly in undertaking such detailed studies.

Elimination of the need for additional conventional power projects will have huge positive impact on the socio-economic aspects of the states, and will tremendously assist in arresting the fast degradation of the fragile environment. The hugely unpopular issues such as people’s displacement, drowning of thick forests/agricultural lands and environmental degradation have been the sources of social upheaval in the country for a number of years, and hence addressing the same effectively will lead to all-round prosperity due to reduced tension in the society. Whereas the social, economic and environmental benefits from the measures discussed are perpetual in nature and will create large number of additional jobs, they will also avoid the perpetual costs to the society associated with large size conventional power projects.

It is very sad that considerable quantities of water in many reservoirs, which have been built at huge costs to the society basically with the objective to meet the domestic and agricultural needs of the people, are being diverted to coal power plants at the cost of reliable supply of drinking water. Karnataka’s penchant for large additional industries is a classical example in this regard. Many coal power plants proposed in the state will demand huge quantities of fresh water, which will have to be diverted from its reservoirs, even in the northern parts of the state which have been facing acute shortages of drinking water since decades. 

In the background of all these glaring issues, it would be against the interest of the public if different states continue to spend thousands of crores of rupees of revenue and precious natural resources in establishing  additional conventional power plants without harnessing all the techno-economically viable and environmentally benign alternatives first. There is no alternative to our society but to implement the lesson from Kerala to pursue all the techno-economically viable and environmentally benign measures to meet the demand for electricity on a sustainable basis, than relying largely on additional conventional power projects.



Views are those of the author

Author can be contacted at [email protected]


Indian Power Sector Full of Promise and Potential

By Rajeev Sharma*



f India wants to become a developed nation by 2025, it cannot do so without a surplus electricity generation. India has vast resources for making this happen, like huge coal reserves for thermal power and states like Arunachal Pradesh which hold massive hydel power potential. Arunachal’s hydel power potential has been assessed at 65,000 MW and only a fraction of it is currently being exploited. Of course, the Indo-US nuclear deal that paved the way for similar agreements with seven more nations is a major game changer when it comes to the nuclear power sector. Overall, the Indian power sector looks promising and full of potential.

In terms of production and consumption of electricity, India ranks sixth in the world, according to the CIA World Factbook. But the statistics can be misleading as they definitely are in this context. The Indian power sector is a malnourished baby. One can imagine how strong and prosperous this baby would become if electricity generation in India were to increase manifold. Now consider these points.

·       T N Thakur, CMD of Power Trading Company (PTC) went on record a few days ago as saying that as per the latest estimates, the Indian power market needs funding of USD 600 billion over a seven-year period. This provides a significant opportunity for private equity to lead the initial investments.

·       Jerome Booth, Head of Research at Ashmore, said India is expected to be the third largest electricity market globally by 2030. He said the Indian energy market is characterised by a lack of capital, rising demand and a strong and non-discriminatory regulatory framework and thus presents a compelling investment opportunity. Britain-based Ashmore Investment Management Limited is one of the world's leading investment managers dedicated to emerging markets. PTC has launched a fund in collaboration with Ashmore to provide equity financing to various kinds of power projects in India. The fund will be known as PTC Ashmore India Energy Infrastructure Fund, It will give equity funding to projects across the spectrum of activities in the power sector, like generation, transmission, distribution, fuel extraction and fuel transport infrastructure. For meeting the widening demand-supply gap in India, the fund will target the private sector to lead the initial investments and exit once assets mature. The portfolio will contain an optimum mix of holding and asset companies to secure various exit channels. The closed-ended fund will offer a target return of 20 per cent with 10 years' maturity, and is aimed at local and international investors.

·       The following are the latest statistics of the CIA World Factbook about the Indian electricity sector:

Electricity - production: 723.8 billion kWh (2009 estimate)

Electricity - consumption: 568 billion kWh (2007 estimate)

Electricity - exports: 810 million kWh (2009 estimate)

Electricity - imports: 5.27 billion kWh (2009 estimate)

If India has to take its development drive to the next gear, electricity production will have to be increased substantially. The public sector alone cannot do this. The private sector will have to come into the picture in a far bigger way than it has so far. Straws in the wind suggest that this is set to happen in near future. The private sector is going to contribute sixty per cent of the one lakh MW capacity addition in the power sector in 12th Five Year Plan.

Power Minister Sushil Kumar Shinde told the CII-organised Construction Summit 2010 on May 14 that the government is now planning to set the target of achieving 1 lakh MW capacity addition in the 12th Five Year Plan, 60% of which is expected to be added by the Private Sector.  In terms of contribution to the total installed capacity, the share of private sector has grown from 4% in 1990 to 11.5% in 2006, and further to 18% as of date.  During the current plan the capacity addition of over 19,000 MW is likely to be added in the private sector which is nearly ten times of the capacity added in the private sector in the tenth plan. In power sector, the year 2009-10 accounted for the highest capacity addition i.e. 9,585 MW in a single year in the last 60 years.   Altogether in the 11th five year plan 62302 MW capacity is likely to be added in the power sector.  

The demand has always outpaced the supply despite India placing significant emphasis on the power sector in its decades of economic planning since independence. The all India installed power generation capacity as of November 2009 was 155,859 MW comprising of 99,628 MW thermal, 36,885 MW hydro, 4120 MW nuclear and 15,225 MW of renewable energy sources. The per capita electricity consumption remains much lower than the world average and even lower than some of the developing Asian economies. The National Electricity Policy, however, mandates “Power for All” and increase in per capita annual consumption to 1000 kWh by 2012. India’s annual electricity consumption accounts for about four percent of the world’s total electricity consumption, and is set to grow rapidly, propelled by the country’s growing economy.

The power sector was among the first sectors to be opened up for private sector investment. Though the initial impetus was on investment in power generation projects, subsequently, it was also allowed in distribution and transmission projects. There is a massive funding requirement of 10.3 lakh crore for the XI Five Year Plan alone which offers a huge investment opportunity. The investment opportunities in the thermal power development segment has been conducive as The Electricity Act 2003 provides opportunity for any generating company to establish, operate and maintain a thermal generating station without the need of a license. Strong supportive factors to investment exist in the country such as vibrant, strong, and stable economy, low cost indigenous fuel, availability of skilled man-power, indigenous power plant manufacturing capability, presence of independent power producers and power sector reforms initiatives.

The Indian government needs to do many things to cater to the growing electricity demands. One of such tasks is the urgent need for reforming the distribution system in the power sector. Power distribution reform is fundamental to improving commercial performance and financial viability of the power sector in India. Recent initiatives include the enactment of the Electricity Act 2003, which provides a framework for a more competitive, transparent and commercially driven power sector. The Act recognizes the need for a strategy that distinguishes urban power distribution from rural electricity supply. 

The Re-structured Accelerated Power Development Reform Program (R-APDRP) initiative is aimed at financing the modernization of sub-transmission and distribution networks. It demonstrates the recognition and commitment by the Ministry of Power (MoP) to urgently address the issue of reducing losses and improving the quality of power delivery. 

The National Electricity Policy approved by the Union Cabinet of India in February 2005, seeks to expedite rural electrification and ensure supply of power at a reasonable rate for the overall development of rural India. The policy has set the minimum lifeline consumption of electricity at one unit (kilowatt hour) a household a day, and envisions fully meeting the power demand by the year 2012.


Views are those of the author

*The author is a New Delhi-based author, commentator and analyst of strategic issues.

Author can be contacted at [email protected]




Note: Part III of the article on Managing Volatility & Growth: A New Energy Paradigm, part V of the article on Oil & Gas Discovery & Production in India: Historical Milestones will be published in Volume VI, Issue 51






RIL's stake in Iraq oil block reduces to 80 pc

May 31, 2010. Reliance Industries' holding in northern Iraq oil block has been reduced to 80 per cent after the Kurdistan Regional Government assigned 20 per cent stake in the block to Austria's OMV Petroleum Exploration Gmbh. Rovi and Sarta onland blocks in northern Iraq may hold one billion barrels of oil reserves. In 2007 Reliance had paid a signing amount of USD 15.5-17.5 million (rpt) million to autonomous Kurdish Regional Government (KRG) for the two. Reliance has so far not signed the agreement to assign 20 per cent stake in the two blocks to OVM and it is not clear if the stake was transferred with its consent. When Reliance Exploration and Production DMCC, a unit of Reliance Industries, was awarded the Rovi and Sarta blocks in 2007, Austria's OMV signed up for Mala Oman and Shorish blocks with the KRG. It now has a stake in Rovi and Sarta as well.

RIL makes fifth oil discovery in Gujarat block

May 28, 2010. Reliance Industries said it has made a fifth oil discovery in a block in Gujarat, but did not give reserve estimates. The discovery was made in exploration block CB-ONN-2003/1, which is located in the Cambay Basin at a distance of about 130 km from Ahmedabad, the company said. Reliance had won the block in the fifth round of auction under the New Exploration Licensing Policy (NELP). The block covers an area of 635 sq km in two parts, dubbed Part A and Part B. Reliance is the operator of the block with a 100 per cent participating interest.

RIL to improve accuracy of 4D seismic acquisition

May 28, 2010. A further step towards improving the accuracy of 4D seismic using towed streamer acquisition for monitoring oil and gas reservoirs during production is being introduced this summer by Reservoir Imaging (RIL).  RIL's 4D Specialists are due to start using the new version of RIL's Osprey suite of 4D technologies around the world for major oil companies which for the first time addresses the impact of waves, current and weather on the movement of towed streamers during a survey so that repeat surveys can effectively follow the so called 'feathering' pattern of previous surveys. Osprey software is expected to produce more economic, better quality data for monitoring reservoir performance at some of the most important oil and gas fields worldwide.

Drilling suspension due to mechanical issues offshore India

May 26, 2010. Hardy announced that the KGV-D3-W1 exploration well has been temporarily suspended due to unresolved mechanical issues associated with the blow out preventer (BOP) of the Deepwater Expedition drilling rig.  The KGV-D3-W1 exploration well commenced drilling on April 2, 2010 using the Transocean rig Deepwater Expedition. The well was drilled to a depth of 2,608 m MD at which time intermediate casing was set. Subsequently, the operator spent a considerable amount of time attempting to resolve a problem with the control system of the drilling rig's BOP. The operator has been unable to resolve the issue to its satisfaction and, mindful of safety and operational matters, has taken the decision to suspend the well. The operator intends to re-enter the well at the earliest possible opportunity, with an alternative deepwater rig.


IOC says executing projects worth $10.1 bn

May 28, 2010. State-run Indian Oil Corp is implementing projects worth 470 billion rupees ($10.1 billion), the company said.  The company imported 39 million tonnes of crude oil last fiscal year, the statement said. 

HPCL plans to set up Rs 300 bn refinery on west coast

May 27, 2010. State run Hindustan Petroleum Corporation (HPCL) plans to invest Rs 300 bn to set up a 15-16 million tonne-a-year refinery on the west coast. The new refinery, which may be in Raigad district of Maharashtra, is being mulled to make up for space constraint that its Mumbai refinery faces at present.  HPCL has got cost estimates for the 15-16 million tonne refinery, which is Rs 300 bn, and is currently extrapolating that for a 20 million tonne-a-year unit. 

Indian oil cos won't bid for Gulfsands Petroleum

May 27, 2010. State-run Oil India and refiner Indian Oil Corp denied reports that they were still considering an offer for Syrian-focussed oil explorer Gulfsands Petroleum. The companies had been asked by Britain's takeover watchdog to submit a bid by May 11 or walk away for a minimum of six months. However, they agreed they can return with an offer within the six month period if a rival bid materialises.

Transportation / Trade

Oil cos cut jet fuel prices by over 7 pc

May 31, 2010. After six consecutive increases, state-owned oil retailers slashed price of jet fuel, or ATF, by over seven per cent, a move that will cut fuel bill of airlines.  Aviation turbine fuel (ATF) rates in Delhi have been reduced by Rs 3,052, or 7.17 per cent, to Rs 39,504 per kl.  The reduction follows more than $10 per barrel drop in international crude prices to around $72-73 per barrel. The rate cut has wiped away most of the six consecutive hikes in jet fuel prices since March 1.  

ATF in Delhi was priced at Rs 37,982.22 per kl in the second half of February before a spurt in international rates prompted rate hikes in every fortnight subsequently. Jet fuel prices had risen by 12 per cent in six installments since March 1. Jet fuel constitutes roughly 40 per cent of the operating cost of an airline and reduction in fuel rates would ease the burden on Indian carriers.  

Policy / Performance

Oil output rose 7 pc in 2009-10, says govt

June 1, 2010. The Congress-led UPA government heavily banked on private firms Reliance and Cairn India to paint a rosy picture of rising oil and gas production in the first year of its second term in office, while sweeping under the carpet the falling output of state-run companies. "The domestic crude oil production during 2009-10 has increased by 7 per cent over the last year," the government said in its report card of the first year in governance. In saying so, it relied on the 60,000 barrels per day output from Rajasthan fields of Cairn India and 32,000 bpd from RIL's eastern offshore KG fields. The two on an annual basis have added some 4.5 million tonnes of crude oil production, while state-owned Oil and Natural Gas Corporation saw its output falling from 25.36 million tonnes to 24.85 million tonnes in 2009-10.

ONGC round II selloff talks grow louder as reform nears

May 31, 2010. The government is exploring further stake sale in Oil and Natural Gas Corporation, as it pushes for at least one more big-ticket disinvestment, other than SAIL and Coal India, to achieve the Rs 400 bn target for the year.

The department of disinvestment and petroleum and natural gas ministries have begun discussions on further divestment of government stake in ONGC through a follow-on public offer. The government could divest 5%-10%. A 5% stake sale in the company could fetch the government over Rs 120 bn at current prices. A final decision is expected to be taken soon.

Anil Ambani may get priority gas if RIL picks equity

May 28, 2010. The government may give preference in gas allotment to power projects of the ADAG group if RIL picks up equity stakes in them.  The brothers’ combined strength will enhance project viability.

The Mukesh Ambani-promoted Reliance Industries (RIL) could reportedly buy equity stakes in gas-based power plants run by ADAG companies.  

Globally, fuel suppliers regularly acquire equity in power projects to enhance their viability and cut risks.  Project viability and magnitude are key issues involved in providing gas linkages to new plants. The ministry is in the process of finalising a fuel-linkage system that will provide gas to new power plants.

Oil India steps up hunt for foreign assets

May 26, 2010. State-run Oil India is actively searching for overseas oil and gas assets and is currently evaluating one or two proposals, backed by its strong cash reserves. Oil India was more aggressive now than it had been in the past on overseas acquisitions as it has cash reserves of 100 billion rupees (about $2.1 billion).  The company reported net profit of 4.31 billion rupees ($152.5 million).

India has been scouting for oil and gas assets abroad to meet the supply deficit in Asia's-third largest oil consumer.  India's 2009/10 oil product consumption, rose an annual 3.5 per cent, above government estimates of 2.4 per cent, while annual crude output rose 0.5 per cent and gas output was up nearly 45 per cent.

IOC sees India fuel reforms soon

May 26, 2010. State-run Indian Oil Corp expects the government to soon reform the country's fuel pricing system and has a budget of $1 billion to acquire oil and gas assets abroad. IOC, the biggest fuel retailer in India, may have to cough up a net revenue loss of about 30 billion rupees ($638 million) in the last fiscal ending March because of government control on fuel prices.

The Indian government caps the retail prices of gasoline, diesel, kerosene and liquefied petroleum gas (LPG) to protect the poor and control inflation. A ministerial panel is scheduled to meet to consider the recommendation of a government panel on fuel pricing.



R-Power may slash Dadri project capacity, eyes new sites for plants

June 1, 2010. Anil Dhirubhai Ambani Group company Reliance Power (R-Power) may substantially scale down its 7,480 megawatt Dadri power project and instead set up two or more plants totalling 8,000 mw capacity at multiple locations. R-Power may not altogether abandon the Dadri project as was widely speculated. It had been reported that due to disputes over the land acquisition, the company may relocate its Dadri project.  

Instead of the proposed 7,480 mw gas-based Dadri project (the largest plant in the world at a single site), R-Power is looking at multiple locations with relatively smaller capacities for strategic reasons, industry experts said.  Both western and southern regions are facing an acute power shortage. Also there is no significant capacity addition in Andhra Pradesh, Gujarat and Maharastra. So tariff in a competitive bidding in these regions are expected to be high.

Neyveli Lignite to up power generation capacity by 72 pc

June 1, 2010. Neyveli Lignite Corporation (NLC) is planning to increase its power generation capacity to 4,290 mega watt (Mw) from the present 2,490 Mw for an outlay of Rs 99 bn. The corporation also said it plans to acquire coal mines in Indonesia and South Africa.  Meanwhile, the corporation had said that one of its major power project is being delayed by two years since Bharat Heavy Electrical Limited (BHEL), another public sector major, and the state government are not co-operating. So is the case with another project in Orissa.

Pak withdraws objection to two J-K power projects

May 31, 2010. In a significant development, Pakistan withdrew its objection to construction of Uri-II and Chutak hydel power projects in Jammu and Kashmir.  At the Indus Water Commissioner-level talks, the Pakistani side said it had no objection to the designs of the two power projects after the Indian side provided details of these. Pakistan had earlier raised objections over the 240 MW Uri-II project being constructed on Jhelum river in Kashmir valley and the 44 MW Chutak plant being built on Suru, a tributary of Indus river in Kargil district of Jammu and Kashmir's Ladakh province.  Pakistan had claimed that the projects would deprive it of its share of water.

NTPC to invite fresh bids for Lata Tapovan hydro project

May 30, 2010. State-run NTPC is likely to invite fresh bids for the 171 MW Lata Tapovan Hydroelectric Project in Uttrakhand and may cancel the previous tender due to several problems, including high price quoted by firms. The project is being developed by NTPC's 100 per cent subsidiary NTPC Hydro Ltd (NHL).  NHL has already sent its recommendation for floating fresh tender for Lata Tapovan Hydroelectric Project to NTPC board which is likely to approve this soon.

Jindal finally enters Nepal's hydropower sector

May 29, 2010. After Indian infrastructure company GMR broke the ice in Nepal's hydropower sector and entered the Himalayan republic with a licence to develop the 900 MW Upper Karnali hydropower project, a string of other Indian firms have turned their attention to Nepal, with GMR's competitor Jindal being the latest entrant. Jindal, which had even gone to court over the Upper Karnali project, has been given a licence to develop the 454 MW Chainpur Seti project in remote Bajhang district. Jindal Power Limited, a subsidiary of Jindal Steel and Power Ltd, has been issued a two-year licence to complete the first survey. The project is reportedly estimated to cost about (Nepali) Rs.24 billion and is expected to be completed in seven years.

Reliance Power to acquire Reliance Infra power assets for Rs 10.95 bn

May 28, 2010. ADAG firm Reliance Power said it will acquire 433 MW of power generation assets from Group company Reliance Infrastructure for Rs 10.95 bn in order to bring the entire power generation portfolio under one roof.   The board of director of the company at its meeting decided to acquire 433 MW generation capacity owned by Reliance Infrastructure, comprising of 220 MW at Samalkot in Andhra Pradesh, 165 MW in Kerala and 48 MW in Goa for Rs 10.95 bn, Reliance Power said in a regulatory filing to the Bombay Stock Exchange. The assets are held by the subsidiaries of Reliance Infrastructure and the transfer would take place after obtaining the requisite approval, the filing added.

Transmission / Distribution / Trade

Orissa loses Rs 20 bn per annum on ATC losses

May 31, 2010. More than a decade after Orissa took lead in the country in initiating bold reforms in power sector, the state ironically loses about Rs 20 bn every year on account of Aggregate Transmission and Commercial loss in power sector. Shockingly, power theft itself accounts for Rs 12 bn. The state government clearly emerged as the biggest beneficiary of the reform process, raking in direct and indirect benefits to the tune of Rs 72.27 bn. Leave aside ploughing back the money into the sector, Rs 50 bn by way of surpluses earned from export of power on account of consecutively good monsoons, were used to wipe out past liabilities, even those liabilities which were incurred before the distribution companies were privatized.

R-Infra issues LoI for medium-term power purchase

May 30, 2010. Anil Ambani-led Reliance Infrastructure, which supplies power to Mumbai suburbs, has issued a Letter of Intent (LoI) to power producers for medium- term power purchase. The long-term bids are under process and it would take a few days more to reach finalisation. The company had invited bids from domestic and foreign companies to procure 1,500 MW of power to meet demand for its Mumbai distribution licence area, in July, 2009.  As per the medium-term contracts, the power supply will start from April 1, 2011. The company is looking for 315 MW for the first year and 460 MW for the next two-years.

Policy / Performance

Lanco will triple power capacity this fiscal

June 1, 2010. Hyderabad-based Lanco Infratech will add 2600 mw capacity in the current financial year to take its total power generation capacity to 3950 mw.  The company is in talks with several power purchasing companies to enter into long-term contracts to mitigate the risk of its merchant business, which accounts for 50% (660 mw) of its total generation. The average realisation from the merchant power business is between Rs 4.5 and Rs 5.5 per unit, which is more profitable than long-term purchasing contract.  However, demand in the merchant business is fluctuating and the company wants to decrease its merchant power share by 30% by the end of this year.

Kerala cannot close hydel option: Chennithala

June 1, 2010. Kerala cannot afford to turn its back on developing new hydroelectric power projects, Kerala Pradesh Congress Committee president Ramesh Chennithala said. Presiding over the inaugural function of a seminar organised by the Nature Watch Centre for Environmental Protection and Ecological Balance, he said the Athirappilly project could be developed as an environmentally sustainable option, unlike the Silent Valley and the Pathrakadavu hydel projects. Mr. Chennithala said blind opposition to hydel power by the environmental lobby was unreasonable. Highlighting the threat posed by climate change and other environmental challenges, he stressed the need to strike a balance between development and environment.

Four more nuclear power plants by next year: PM

Jun 1, 2010. Prime Minister Manmohan Singh said his government plans to increase nuclear power generation by setting up four more atomic power plants by next year.  Singh noted that with the commissioning of the Rajasthan Atomic Power Station Units 5 and 6 during the year, the total installed capacity of nuclear power has reached 4560 MWe.  Currently, India has 19 operational nuclear reactors.

Gujarat to set up two more power projects soon

May 31, 2010. Gujarat Chief Minister Narendra Modi announced that two more power projects of 500 MW capacity would be set up in the southern part of the state soon. Modi made the announcement after dedicating a 250 MW Surat Lignite Power Plant Expansion Project to the nation at Nani Naroli in Surat district.  He criticised the Congress-led United Progressive Alliance government for not allowing coal from neighbouring Nagpur coalfields in Maharashtra for Gujarat's coal-based power projects.  He said such "anti-Gujarat" policy had forced his government to bring coal from Bihar and Jharkhand. This had led to high cost of power for the consumers in the state.

DERC writes to discoms, rejecting their demand for tariff hike

May 31, 2010. Hardening its position in the ongoing face off over the power tariff dispute, Delhi's power regulator DERC has shot off letters to all three private discoms rejecting point-by-point all their arguments demanding an increasing in the rates. The Delhi Electricity Regulatory Commission also sent a letter to the government, believed to be sympathetic to the demands by the discoms, strongly objecting to any hike in tariff.  The letters to discoms as well as to the government from the DERC came days after a top official in the Chief Minister's office said genuine demands of the discoms must be addressed by the regulator while finalising the new electricity rates.

NBPPL hopes to bag Rs 65 bn projects this fiscal

May 30, 2010. NTPC-BHEL Power Projects Pvt Ltd (NBPPL) is hoping to bag contracts worth Rs 65 bn for executing thermal power projects in the next two months.  The turnkey order is worth Rs 35 bn. The scope of work includes providing equipment, engineering, construction and civil works.  State-run power producer NTPC may also award a turnkey contract for its 500 MW thermal power station at Singrauli (Madhya Pradesh) to NBPPL. An investment of approximately Rs 60 mn is required for generating one megawatt of electricity.  NBPPL is a 50:50 joint venture firm between NTPC and power equipment maker BHEL. It was set up in April, 2008, for carrying out engineering, procurement and construction (EPC) contracts for power projects as well as manufacture and supply equipment in India and abroad.

Mahagenco calls for EoIs for Ratnagiri power plant development

May 30, 2010. In a bid to increase its power generation capacity, the state power utility Mahagenco has called for Expression of Interest (EoIs) from companies for participating in a joint venture for development of a 3,200 MW coal-based power plant at Ratnagiri. The plant, which would have four units of 800 MW each, would be set up at MIDC's Veldur Industrial Area near Dhopave village in Ratnagiri.  The annual coal requirement for the proposed power plant is expected to be 16.8 million tonnes. A detailed techno-economic feasibility study for development of the port has also been done through Maritime Consultancy Private Limited. The Maharashtra Maritime Board has given its approval for construction of the jetty at Anjanwel bay.

IREDA, 4 others join energy efficiency body's funding platform

May 30, 2010. Efforts to unlock the estimated Rs 740 bn energy efficiency investment market in the country has got a fillip, with IREDA, Power Finance Corporation, SIDBI, PTC India Ltd and HSBC India coming on board the Bureau of Energy Efficiency's proposed financing platform. YES Bank is also in talks for possibly joining the Bureau's energy efficiency financing platform (EEFP), which aims to create a mechanism to provide non-recourse financing for demand side management programmes in all sectors by capturing future energy savings. EEFP will provide instruments such as bankable Detailed Project Reports (DPRs) and other risk mitigation measures to enhance comfort for lenders towards aggregated energy efficiency projects in areas such as energy efficiency improvements in commercial buildings, municipalities, small and medium enterprises and the agriculture sector.

Andhra seeks fuel linkage for three power projects

May 27, 2010. The Andhra Pradesh Chief Minister, Mr K. Rosaiah, has written to the Union Power Minister, Mr Sushil Kumar Shinde, seeking coal linkage for three power projects of AP Genco, including the mega 5x800 MW coal-fired power project planned at Vodarevu. Mr Rosaiah sought early clearance for linkage for the 600-MW Sattupally thermal power station to be taken up by AP Genco. While the Union Ministry of Coal in April recommended the case for linkage to the Power Ministry as a XI Plan project, the Standing Linkage Committee for power did not approve this. However, with the Power Ministry taking up the matter for consideration, the proposal to provide linkage to this project is coming up for scrutiny of the Standing Committee in the next meeting. The State is hopeful that this time, it would be cleared. This will enable AP Genco to initiate works on the project.

No immediate relief for Tata from HC in feud with Reliance

May 26, 2010. The Bombay High Court granted no immediate relief to Tata Power, which has moved the court against Maharashtra government's directive that it supply 360 MW power to Reliance Infrastructure for distribution in Mumbai suburbs.  Tata contends that under Electricity Act government has no power to direct it to sell the power to a particular buyer, and the present order causes it loss of Rs 300 mn per month.  Reliance Infra, which distributes power in the Mumbai suburbs, has said that consumers would face power cuts if Tata were to stop the supply.  Vacation bench of Justices S J Kathawala and R G Ketkar refused to stay the government's directive immediately, as Reliance and the Government sought time to file replies.

Maharashtra to curb power consumption

May 26, 2010. The Maharashtra Chief Minister, Mr Ashok Chavan said that in view of the power shortage in the State, which has shot up to over 5,000 MW, excessive use of electricity in the State would be curbed. Addressing the media person after the Cabinet meeting, Mr Chavan said that the government will review the use of power in the state and look at the ways to save power and restrict consumption. A decision could be taken in the next Cabinet meeting and concerned officials have been asked to come up with a plan to save power and also delineate areas where consumption is more than required, he said.

TNEB signs loan agreement with REC

May 26, 2010. Tamil Nadu Electricity Board (TNEB) has signed a loan agreement with Rural Electrification Corporation Ltd (REC) for Rs 24.75 bn to the 1x600 megawatt North Chennai Thermal Power station stage II Unit I project of the TNEB. The project is being implemented by BHEL on a single engineering, procurement and construction (EPC) contract, in Thiruvallur District, North Chennai. The entire debt requirement of the project of Rs 24.75 bn (project cost: Rs 30.95 bn) is funded by REC.




BP ready for spill 10 times Gulf disaster, plan says

May 31, 2010.  BP Plc said in permit applications for drilling in the Gulf of Mexico that it was prepared to handle an oil spill more than ten times larger than the one now spewing crude into the waters off the southern United States.   “Proper execution of the procedures detailed in this manual will help to limit environmental and ecological damage to sensitive areas as well as minimizing loss or damage to BP facilities in the event of a petroleum release,” the company said in its oil-spill response plan, filed with the U.S. Minerals Management Service in 2008. 

Dubai oil gains means China buys Angola, Brazil

May 31, 2010.  The price of Dubai crude rose above Brent oil for the first time in three months in May, leading China, the world’s second-biggest energy user, to buy from Angola and Brazil. Dubai climbed to a premium of 28 cents a barrel to the U.K. grade on May 13, the highest since Dec. 15. Brent has traded at a premium to Dubai 81 percent of the time this year, peaking at $2.26 April 6. West Texas Intermediate oil futures for July slumped to a $3.71 discount against Dubai on May 14. The Middle Eastern grade has risen faster as demand in Asia, led by India and China, climbs while the debt crisis in Europe prompts concerns the region’s fuel use will fall.

Mideast oil producers seek heavy crude output boost

May 30, 2010.  Middle East oil producers and international companies will meet to discuss how to tap heavy crude, a thicker form of the commodity that’s harder to refine, to boost output capacity even as prices fall.  Saudi Arabia, the largest OPEC producer, aims to develop heavy crude at deposits such as Manifa and is planning refineries to process the oil. Kuwait, seeking to boost production capacity 50 percent to 4 million barrels a day by 2020, is in talks with companies such as Exxon Mobil Corp. and Total SA about developing the resources. Heavy oil, which takes more work to extract and yields less valuable refined products than easier flowing light oil, can cost more to produce, depending on the location and technology needed to pump it. 

BP's spill costs hit $930 mn

May 28, 2010. The total financial cost of the response in the five weeks since a rig explosion killed 11 workers and unleashed the oil from a well head one mile down now stands at $930 million, up from a $760 million estimate earlier.

OPEC oil output climbs to 17 month high in May, survey shows

May 28, 2010. The Organization of Petroleum Exporting Countries’ crude-oil output rose to a 17-month high, led by gains in Nigeria. Production climbed 187,000 barrels, or 0.6 percent, to an average 29.372 million barrels a day, the highest level since December 2008, according to the survey. Output by members with quotas, all except Iraq, climbed 167,000 barrels to 27.042 million barrels a day, 2.197 million above their target. OPEC cut its quotas by 4.2 million barrels to 24.845 million barrels a day beginning in January 2009 as fuel demand fell during the worst recession since World War II. Compliance among the 11 members with quotas fell to 48 percent from 52 percent in April. All members with quotas exceeded their production limits. Nigeria’s production surged 60,000 barrels to 2.085 million, the highest level since December 2007. It was the largest increase of any member. Africa’s biggest producer exceeded its quota by 412,000 barrels a day.

Rising drilling costs mean $90 crude in 2018

May 26, 2010. The rising costs of extracting oil are propping up New York futures for the years ahead, even as prices sink for crude that will be delivered over the rest of this year. The futures contract closest to delivery on the New York Mercantile Exchange tumbled 13 percent in the past three months to below $70 a barrel as investors fled riskier assets and the December 2015 contract lost 5 percent. At the same time December 2018 futures remain above $90 a barrel, suggesting analysts are less pessimistic about the long term. The U.S. Labor Department’s index for oil- and gas-field machinery costs rose in April for the first time in six months. The oil contract closest to delivery slumped to $64.24 a barrel on May 20, the lowest intra-day price since July 2009, on concern that Europe’s sovereign debt crisis will derail the economic recovery.


KBR to perform design, engineering for $3 bn Nigeria refinery

June 1, 2010. KBR announced that it has been awarded a contract by Houston-based FPR Inc. to provide Design and Early Engineering Services for the development of the Araromi Refinery Project in the OK Free Trade Zone (OKFTZ) in Nigeria. KBR will execute the Design and Early Engineering Services for a low complexity 160,000 barrels per day Greenfield refinery and marine facility estimated in excess of US$3 billion. The refinery will produce motor gasoline, automotive gas oil, kerosene and jet fuel. This work will be executed primarily in the Republic of South Africa and the United States. This award marks the first contract awarded under a Memorandum of Agreement (MOA) under which the two firms anticipate executing various phases of the project which include EPC-GM and Operation and Maintenance. The Araromi Refinery Project will be developed in phases, with an ultimate capacity of 320,000 barrels per day with a full petrochemical complex.

Technip hands over refinery to Petrovietnam

May 31, 2010. A ceremony was held in the central Vietnamese province of Quang Ngai for the Technip contractors consortium to officially hand over the Dung Quat Oil Refinery to its management board. A key national project, the Dung Quat refinery is the first of its kind in Vietnam and was built in the Dung Quat Economic Zone at the cost of US$3 billion. It is designed to have a capacity of 6.5 million tonnes of oil products a year, meeting over 30 percent of the country's needs. After 44 months of construction, on February 22, 2009, the plant rolled out its first product. Three months later, it began producing all kinds of products as designed and it ran at full capacity.

Iran aims for gasoline self-sufficiency with upgrades

May 31, 2010. Iran aims to be self-sufficient in gasoline production within two years when it completes $11.4 billion in upgrades to its existing refineries, the country’s deputy petroleum minister said. Seven new refineries planned in Iran, partly to process heavy crude, will also help to more than quadruple the amount of gasoline and almost double the amount of gasoil the country produces. The second-largest producer in the 12-member Organization of Petroleum Exporting Countries, Iran imports refined products such as gasoline because it lacks output capacity. The U.S. administration of President Barack Obama may impose sanctions against the sale of the fuel to Iran to prevent it from developing nuclear weapons.  The seven planned refineries will need investments of $27 billion. The government will provide 20 percent and expects to find private investors domestically and abroad for the remainder.

Samsung total completes largest LPG storage tank in S. Korea

May 28, 2010. Samsung Total Petrochemicals Co., a South Korean petrochemical producer, said it has completed a facility that stores liquefied petroleum gas (LPG) imported from the Middle East.  Since January last year, Samsung Total, a 50-50 joint venture between South Korea's Samsung Group and the French chemical group Total, has been building the LPG storage tank in Daesan, a coastal city 137 kilometers southwest of Seoul, at a cost of 50 billion won (US$40.2 million).   The tank, which can store as much as 40,000 metric tons of LPG, is the country's single largest LPG storage facility, Samsung Total said.  The company plans to bring 80,000 to 90,000 metric tons of LPG from Saudi Arabia and other Middle Eastern countries every month.

PDVSA struggles to restart Curacao refinery

May 28, 2010. A restart process at a Curacao refinery is encountering problems, and the nearly 100-year-old plant has yet to process any significant amount of oil after being shut down three months ago. The refinery has a capacity to refine 320,000 barrels a day, and was averaging about 230,000 barrels a day when a power outage brought the plant to complete halt March 1. Since then, officials have struggled to get access to most of the key requirements in refining, including steam, water, compressed air and electricity.

Shell: Asia capacity boom will cap Europe refinery sales

May 27, 2010. Oil companies still looking to sell off their existing refinery operations in Europe will struggle to secure the offers they are looking for in light of the boom in Asian capacity, Royal Dutch Shell Plc said. Additional refinery capacity rapidly added in Asia had put a "pretty clear lid," on acquisition deals for existing operations in Europe. A marked decline in global refinery rates, gives rise to a reduction in throughput worldwide of between 2-3 million barrels a day of crude oil.

China 2015 oil capacity seen at 15 mn bpd

May 26, 2010. China's oil refining capacity could rise nearly 50 percent in the coming five years to 15 million barrels per day (bpd) by 2015, a report by Asia's largest refiner Sinopec showed. China's national oil capacity will rise 6.4 percent from a year earlier to 10.15 million bpd by the end of this year, the report said, without detailing the source of the estimates.  Refining capacity will reach 15 million bpd by the end of 2015 if all planned projects, to be built and under construction, are brought online as scheduled, the report said.  The estimates were much higher than the 11 million bpd capacity target for 2015 endorsed by Beijing or the goal of 8.8 million bpd set for 2011 under an industry "revitalisation plan" announced in May last year. However, regional imbalance may persist as the expansion will concentrate in east, south and north China.

Russia to fine oil refiners $1 bn on prices

May 26, 2010.  Russia’s competition watchdog plans to fine oil companies including OAO Rosneft and OAO Lukoil a combined $1 billion over domestic prices for refined products. Russia’s Higher Arbitration Court rejected an appeal by TNK-BP of a related fine of 1.1 billion rubles.

Transportation / Trade

Pemex awards $125 mn for pipeline work in GOM

June 1, 2010. Global Industries has been awarded a project from Petroleos Mexicanos (Pemex) for pipeline work in Pemex's Ku-Maloob-Zaap Field in the Bay of Campeche. The project, worth approximately US $125 million, is scheduled to begin in July 2010 and be completed by the end of December 2010. Global will be utilizing the Hercules as the pipelay vessel and the Titan II as the main operating vessel, with other additional support vessels assisting.

Energy Transfer Partners begins Tiger Pipeline construction

June 1, 2010. Energy Transfer Partners, L.P. announced that construction has begun on the approximately 175-mile Tiger Pipeline, an interstate natural gas pipeline to serve the Haynesville Shale and Bossier Sands producing regions in Louisiana and East Texas. The 42-inch diameter Tiger Pipeline will have an initial capacity of 2 billion cubic feet per day and is expected to be in service in the first quarter of 2011. Through a planned expansion project announced in February, and subject to FERC approval, the ultimate capacity of the Tiger Pipeline is expected to be 2.4 billion cubic feet per day, all of which is sold out under long-term contracts ranging from 10 to 15 years. Pending necessary regulatory approvals, the expansion is expected to be in service in the last half of 2011.

New pipeline won't sate Asian oil demand

May 31, 2010. The planned C$5.5 billion ($5.3 billion) Northern Gateway pipeline will not be big enough to satisfy demand for Canadian oil sands crude from Pacific Rim nations, Enbridge Inc the line's backer, said in regulatory filings. The company, which filed for regulatory approvals for the 525,000 barrel per day oil line, said in the filing that the potential market for Canadian crude in China, Japan, and South Korea could be as high as 1.75 million barrels a day, more than three times the capacity of the proposed line. The estimate excludes the possibility of further demand from refiners on the U.S. West Coast, which will need to replace declining production from Alaska's North Slope, Enbridge said. 

Trans-Alaska pipeline spill toll: 5,000 barrels

May 31, 2010. The oil spill from the trans-Alaska pipeline totaled about 5,000 barrels, making it the third-largest spill ever from the 800-mile pipeline.

The new estimate of the spill size compares with earlier estimates from the company that runs the pipeline that "up to several thousand" barrels spilled. Alyeska kept the pipeline shut down for more than three days after discovering the spill at Pump Station 9 near Delta Junction.

NW Natural vows to build Oregon pipeline

May 31, 2010. Northwest Natural Gas Co. will forge ahead with plans to build a portion of its Palomar pipeline through Eastern Oregon, despite failed plans to connect it to a proposed liquefied natural gas terminal at the Columbia River. The announcement comes despite opposition from environmental advocates, including some shareholders, who fear the pipeline's construction will damage crucial habitats and displace landowners along its path.

Williams Partners announces $214 mn Transco expansion

May 26, 2010. Williams Partners L.P. announced the execution of precedent agreements for a proposed expansion of its Transco pipeline to provide 225,000 dekatherms of incremental firm natural gas transportation capacity to serve growing markets in the Southeast region in 2012 and 2013. The Mid-South Expansion project is designed to provide service on the Transco natural gas pipeline to the city of LaGrange, Ga., Progress Energy Carolinas, Inc., and Southern Company Services, Inc.

Policy / Performance

Obama outlines scope of BP oil spill commission

June 1, 2010. President Barack Obama said he wants a commission created to thoroughly investigate the catastrophic Gulf oil spill, as frustration builds about the government's response and investors shave billions off BP's market value in response to a once-promising attempt to plug the leak that failed. Obama said the commission will report back to him in six months on the causes of the spill, the government's response and what changes are needed to oil regulations to prevent a repeat of the disaster.  Obama said the commission is needed to help understand what caused the catastrophe, which has now leaked more oil off the coast of Louisiana than the 1989 Exxon Valdez spill in Alaska.

East Timor: Onshore LNG plant only way forward for Sunrise

June 1, 2010. The government of East Timor said that an onshore liquefied natural gas terminal in the country was the only way forward to develop gas from the Greater Sunrise field.  Woodside Petroleum Ltd. (WPL.AU) and its joint venture partners want to process gas from the field, which straddles Australian and East Timorese waters, on a floating LNG platform. In a statement, the East Timorese government said that Greater Sunrise can't be classified under the conditions that would constitute a need for a floating LNG platform.

Petrobras scoops up blocks offshore New Zealand

June 1, 2010. Petrobras has acquired, by means of its wholly owned subsidiary Petrobras International Braspetro - PIB BV, 100% of the rights for Block 2, located in the Raukumara Basin, offshore New Zealand. The block was offered in a public tender organized by the New Zealand Government (Block Offer 2010), held in January 2010, in which Petrobras was the highest bidder. On June 1, Petrobras and the Government of New Zealand formalized the agreement, and the Company was granted the Petroleum Exploration Permit for Block 2.

Bangladesh team leaves for Qatar to explore LNG import potential

May 31, 2010. A 7-member delegation of Bangladesh's Energy Ministry left for Doha, the capital of Qatar, to gather information about import potentials of liquefied natural gas (LNG) from the gulf country.  This will be the first tour by a Bangladeshi delegation to explore the potential source of LNG that the government is planning to import to meet the countrys deficit and overcome the nagging energy crisis.

Pakistan, Iran finalise gas pipeline deal

May 29, 2010. Pakistan and Iran have finalised a deal for the construction of a much-delayed pipeline to pump Iranian natural gas to the energy-starved South Asian country, the Pakistan petroleum ministry said. The $7.6 billion project is crucial for Pakistan to avert a growing energy crisis already causing severe electricity shortages in the country of about 170 million units. Pakistani and Iranian petroleum officials signed the agreement in Islamabad, the ministry said. Pakistan said the first gas is scheduled to flow by the end of 2014 and expects its total cost on the project to be $1.65 billion, funded through private and state capital. Under the deal, Pakistan will import from Iran 750 million cubic feet of gas daily for 25 years.

Abu Dhabi's Takreer awards $463 mn project to Hyundai

May 28, 2010. Abu Dhabi Oil Refining Co. announced that a contract worth US$463 million has been awarded to Hyundai Engineering Co. Ltd. for engineering, procurement, construction and commissioning (EPC) works of the Group III Base Oil Production Facilities Project at Ruwais Refinery.  The planned facility will be capable of producing 500,000 tonnes per year of Group III Base Oils as well as 100,000 tonnes per year of Group II Base Oils. The project comprises a new Pre-Distillation, Hydroisomerization and Product Distillation Units. The project also includes a revamp of the existing Hydrocracker Unit, new storage tanks and integration with existing refinery units and utilities.  

GLNG crosses Queensland enviro hurdle

May 28, 2010. Gladstone LNG (GLNG) became Australia's first major coal seam gas to LNG project to receive its environmental approval from the Queensland government, Santos announced. The GLNG project is a joint venture between Australia's largest domestic gas producer, Santos, and Malaysia's national oil and gas company, Petronas, the world's second largest LNG exporter. The environmental approval follows review of the project's Environmental Impact Statement (EIS) by the Queensland Coordinator-General. The review involved widespread community consultation. The environmental approval process will now continue with Federal Government consideration of the project.

PetroChina expects to import 30 pc more heavy crude this year

May 28, 2010. PetroChina Co. (PTR) is expected to import around 13 million metric tons of heavy crude oil this year, or around 261,000 barrels a day, up around 30% compared with last year. The expected higher heavy crude imports this year, compared with 10 million tons in 2009, are due to China's robust demand for bitumen, which can be produced by processing heavy crude and used for road building and in infrastructure projects. Most of the heavy crude it imports comes from Venezuela.

China buyers may target oil search, Karoon Gas, Bernstein says

May 28, 2010.  Oil Search Ltd., Karoon Gas Australia Ltd. and InterOil Corp. are among potential acquisition targets as companies in China, the world’s fastest-growing major economy, seek to snap up gas resources, Sanford C. Bernstein & Co. said.  Spending on overseas acquisitions by oil and gas companies in China and India may more than double to $30 billion in 2010 from a year earlier, assuming oil prices stay between $70 a barrel and $80 a barrel Bernstein said in a report.  China is likely to keep hunting for resources that can be developed as liquefied natural gas after PetroChina Co. and Royal Dutch Shell Plc agreed to acquire Australia’s Arrow Energy Ltd. for A$3.5 billion ($3 billion).  

Shell buys U.S. gas assets from East Resources for $4.7 bn

May 28, 2010.  Royal Dutch Shell Plc, Europe’s largest oil producer, agreed to buy most of the assets of closely-held East Resources Inc. for $4.7 billion in cash, expanding its portfolio of U.S. unconventional gas deposits. East Resources owns and operates more than 2,500 producing oil and gas wells in New York, Pennsylvania, West Virginia, and Colorado and is actively exploring drilling programs in Wyoming. It has been operating in the Marcellus Shale Area for 25 years. Companies from India’s Reliance Industries Ltd. to Japan’s Mitsui & Co. are spending billions of dollars on drilling to dislodge natural gas from shale -- sedimentary rock composed of mud, quartz and calcite.

With Iran supply deal, Indonesia eyes $7.5 bn refinery

May 27, 2010. Indonesia is considering building a refinery to produce fuels and naphtha southwest of Jakarta, following a commitment from Iran to supply it with crude oil.  The government may appoint a state-owned company to form a joint venture with an Iranian counterpart to build the facility would require $7.5 billion in investment. Iranian Energy Minister Majid Namjou gave a commitment to supply crude at a meeting in Tehran this month with Indonesian Industry Minister Mohamad Suleman Hidayat.

EQT, DCP plan Appalachian NGL venture

May 27, 2010. EQT Corp. and DCP Midstream Partners, LP (DPM) and its sponsor, DCP Midstream, LLC (together, DCP), announced they have signed a letter of intent to create a natural gas processing and related natural gas liquid (NGL) infrastructure joint venture to serve EQT and third-party producers in the Marcellus and Huron shale areas of the Appalachian basin, two of the country's most active shale plays. Under the letter of intent, EQT and DCP would pursue gas processing and related NGL infrastructure opportunities in the Marcellus and Huron shale areas through the joint venture. The joint venture will be the preferred processor for EQT's wet gas in the Marcellus and Huron shale areas.

East Timor denies progress on Woodside Sunrise LNG

May 26, 2010. Australia's Woodside Petroleum has not successfully lodged a proposal to East Timor's government to develop the Sunrise gas project using a floating liquefaction plant, the tiny nation's petroleum regulator said.  Woodside said it had already submitted a proposal, but East Timor's National Petroleum Authority (ANP) said the firm and its partners had failed to provide feasibility studies of all other development options, including an onshore facility in East Timor. Greater Sunrise - the largest known petroleum resource in the Timor Sea -- straddles the waters of East Timor and Australia and hold 5.13 trillion cubic feet of gas as well as 300 million barrels of valuable condensate.

Obama to revamp drilling rules as demands grow to take on BP

May 26, 2010. President Barack Obama will announce new safety measures for offshore drilling as calls increase for him to exert more control over BP Plc’s efforts to stop its oil spill in the Gulf of Mexico and repair the damage. After receiving an initial report on the cause of the April 20 explosion at a BP well, Obama will respond with new permitting procedures for oil exploration and tougher inspections to ensure safety and environmental rules are being followed.

Singapore oil spill clean-up resumes; Tanker unloads

May 26, 2010. An oil tanker that spilled 2,500 metric tons of crude into the Singapore Strait is being unloaded as efforts to clean up a slick near the world’s busiest container port resumed. AET Tanker Holdings Sdn., the owner of the MT Bunga Kelana 3 that collided with the bulk carrier MV Waily, is undertaking an “internal transfer” of Bintulu grade oil, the company said. The vessel, struck on its port side as it sailed east to west, will be moved after the underwater damage is assessed. The spill, equivalent to 18,325 barrels, is enough to fill an Olympic-sized swimming pool and is about three days of leakage from BP Plc’s damaged well in the Gulf of Mexico.

Transocean can’t cap spill liability using old law, Lawyers say

May 26, 2010. Transocean Ltd. can’t use a 150-year- old statute to cap its liability against claims arising from the Gulf of Mexico oil spill, lawyers for victims of the disaster said at a hearing in federal court in Houston. The Oil Pollution Act of 1990, passed after the 1989 Exxon Valdez oil spill in Alaska, supersedes the older law in this situation, attorneys for the Louisiana Environmental Action Network and the United Commercial Fisherman’s Association said in court papers, citing earlier decisions. Even under the old law, the negligence of BP and Transocean would make it inapplicable, plaintiffs’ lawyer said. Transocean asked to cap its financial liability at $26.7 million under a maritime statute that limits a vessel-owner’s exposure to the value of its ship and cargo.

Trans-Alaska oil pipeline shut down after valve leak

May 26, 2010. Alyeska Pipeline Service Co., whose biggest shareholder is BP Plc, shut the Trans-Alaska system after a leak of “several thousand barrels.”  The spill occurred as Alyeska tested a fire command system at pump station No. 9 near the town of Delta Junction, Alaska, the company said in a statement.



Indonesia’s new green policies may reduce production of coal

June 1, 2010. Regulations by Indonesia to protect the environment and to designate mining areas may reduce production from the world’s biggest exporter of power plant coal. Indonesia plans to impose a moratorium on deforestation, a new environmental law and is currently undertaking an exercise to classify areas for mining and as forest reserves. Indonesia’s coal production may increase 7 percent this year to 320 million metric tons from about 300 million tons in 2009 as demand from buyers in India and China remains “bullish,”. Coal demand in Indonesia may almost double in five years as the biggest economy in Southeast Asia adds power-generating capacity.  President Susilo Bambang Yudhoyono said at the Oslo Climate and Forest Conference, where a global climate and forest partnership is being established, that his country will “protect” its rainforest. The two-year moratorium may effectively stop open cast mining, a prevalent form of mining practice in Indonesia of extracting rock or minerals from the earth by their removal from an open pit. 

China's Sepco lowest bidder for Saudi power plant

May 30 2010. A group led by China's Sepco III Electric Power Construction has made the lowest bid of $2.44 billion to build a 2,400 megawatt power plant in Saudi Arabia. The group, which also includes Saudi Arabia's Al-Arrab Contracting, is bidding for the project in Ras Azzour, on the Gulf coast.

The project is integrated with a water desalination facility with a daily capacity of over 1 million cubic meters.  A $2.86 billion bid from Spain's Iberdrola and Saudi partner Arabian Bemco Contracting came second. 

South Korea's Doosan Heavy Industries came third with a bid of $2.91 billion while South Korean Hyundai Engineering & Construction bid with Siemens and Saudi Services for Electro Mechanic Works at $3.7 billion.

UAE Nuclear power plant security unveiled

May 30. 2010. First details of the massive security cordon that will protect the UAE’s nuclear power plants were unveiled.  Each of the four plants, scheduled to go online in 2017, will have a security detail of 160 personnel. Troops on land and at sea will ensure a 1.2-kilometre “protective bubble” around the facilities. And the plants will be strong enough to withstand the impact of a Boeing 777 aircraft – an engineering feat that will require nearly a million cubic metres of concrete, three times the amount used in the Burj Khalifa.

Advanced coal plant to be built in Mississippi

May 27, 2010. Southern Co's Mississippi Power unit will move forward to build an advanced coal-fired power plant after state regulators loosened financial restrictions that the company said earlier would kill the project, the utility said.

Mississippi Power had asked the Mississippi Public Service Commission to reconsider conditions it placed on the utility's plan to build a 582-megawatt integrated gasification combined-cycle (IGCC) plant in Kemper County, Mississippi.

Transmission / Distribution / Trade

Water Authority eyes power for pipeline plan

May 31, 2010. Southern Nevada Water Authority is on the verge of getting into the geothermal power business. The water agency purchased a lease on 4,473 acres south of Ely from the Bureau of Land Management for about $9,000. The agency hopes to build a geothermal energy plant there to power pumps for a planned groundwater pipeline that would siphon off up to 170,000 acre-feet of water from springs in Eastern Nevada for use in Las Vegas and the Coyote Springs development. Moving all that water will take a huge amount of electricity, something the agency doesn’t have.

Policy / Performance

Pakistan to double power generation capacity by 2020

May 31, 2010. The government is taking steps to double the power generation from 20,000 megawatts to 40,000MW in the next ten years. 6,000MW of electricity would be hydro based, 6,000MW coal based, 5,000MW gas based, 1,000MW Naphtha and 2,000MW would be generated from renewable resources. No power generation project had been launched during the last ten years, which had caused acute electricity shortage.

The government planned to launch various projects including the Tarbela IV Extension (960MW), Suki Kinari (840MW), Neelum Jhelum (960MW) and Dasu (2200MW in two stages) and the remainder in small to medium sized projects to meet the aim of generating 6,000MW of electricity.

GDF Suez wins Oman power plant deal

May 30, 2010. Oman has awarded France’s GDF Suez contracts to build two power plants with an investment of RO700 million ($1.82 billion) in the Persian Gulf state. Oman had picked GDF as a preferred bidder for contracts to build the two combined cycled gas-fired Barka 3 and Sohar 2 power plants.

The plants, with a capacity of 750 megawatts each, are expected to be completed in 2013, and Oman will buy electricity from the company for 15 years and then transfer the ownership to the government. Electricity demand is increasing about 8 percent a year in Oman due to an expanding economy and the government is looking for private companies to build power plants in a BOOT system.

Bangladesh Army likely to get a deal for 100 MW power plant

May 30, 2010. The Power Development Board initialled deals with two local companies for installation of two more 100MW rental power plants without floating any tenders, taking the total number of unsolicited ‘quick plants’ to 11.

The board is likely to initial another unsolicited agreement with the Bangladesh Army for installation of a 100MW or a 2x50MW plant while there is a separate plan for striking a deal with another local company for a 100MW plant within a day or two. The PDB and Dutch Bangla Power Ltd initialled an agreement for installation of a 100MW furnace oil-fired plant at Kodda in Gazipur or any other suitable place in the country within nine months.

Africa: World Bank scores region low in power generation

May 26, 2010. The World Bank has said that only 24 per cent of the Sub-Saharan Africa population could access electricity in spite of the various intervention to address energy power crisis on the continent by various international agencies.

The number of those without electricity access was projected to rise from 590 million in 2008 to 700 million in 2030, following the growing population on the continent. The installed power generation capacity is extremely low at 39 Mega watts per million population , resulting in regular outages and load shedding in more than 30 countries.

Japan power sector moves closer to CO2 target

May 26, 2010. Carbon dioxide emissions per unit of electricity produced fell in Japan in the financial year ended in March to the level of 2006/2007, an industry estimate showed, thanks to more electricity being produced by nuclear power. But at least two of the 10 power companies bucked the overall trend, increasing chances they would need to buy more of carbon credits to offset their emissions.

The improvement helps Japan to meet its absolute volume-cutting goal for CO2 and other greenhouse gas emissions over 2008-2012 under the Kyoto Protocol.

Power companies, which account for about 30 percent of Japan's greenhouse gas emissions, each set a self-pledged goal to emit 20 percent less CO2 per kilowatt hour than 1990 levels over a five-year period to March 2013. 

Renewable Energy / Climate Change Trends


Climate change measures highlight of UPA report

June 1, 2010. Launch of National Action Plan on Climate Change, the passage of a bill for early disposal of environmental cases and unlocking of Rs 99 bn green fund lying unused for last several years, were the highlights of the UPA government mentioned in its annual report card. The "Report to the People" released by Prime Minister Manmohan Singh on the environment sector talks about the eight missions of the NAPCC of which solar mission has already been launched. Three others namely Himalayan Ecosystem, Strategic Knowledge on Climate Change and Enhanced Energy Efficiency have already been approved "in principle".

Renewable power capacity soars

June 1, 2010. Capacity addition in the domestic renewable power sector during the last financial year was much better than the year before, government numbers showed. India added 2.33 gigawatt (gw) (billion watts) of grid-connected renewable power generation capacity during 2009-10, an all time record, which is more than double the 1.1 GW added during 2008-09.  The highest growth was shown by the biomass-agriwaste and small hydro sector, which nearly tripled their contribution from 0.25 gw to 0.75 gw in 2009-10. The biggest contributor of all, wind power, showed growth, but remained bogged down by economic downturn related problems. It added 1.57 gw, compared to 0.79 gw the previous year, but the level of addition was lower than two years ago, when it expanded by 1.66 gw.

PM's climate council clears water mission

May 31, 2010. The Prime Minister's Council on Climate Change has given an in-principle clearance to the long pending National Water Mission — one of the eight missions planned under the National Action Plan on Climate Change.  As a first step under the plan, the council has agreed that all the data on water should be put in the public domain to help mobilise better action on water conservation and augmentation.  The PM, who chaired the council, recommended an integrated approach based on river basins and said that political leadership at the local body level, state level and civil society organisations need to be involved in activities of the mission.  It was decided that a water data base would be put up in the public domain and an assessment of the impact of climate change on water would be carried out.

Govt releases renewable energy count

May 31, 2010. The Ministry of New and Renewable Energy has said that about 2330 MW grid-interactive renewable energy has been achieved during 2009-10.  According to an official statement, this consists of 1565 MW of wind power, 305 MW of small hydro power (up to 25 MW), 295 MW of cogeneration-bagasse and 153 MW of biomass power (Agro residues). Over 8 MW of solar power and 4.7 MW of waste to energy were also added during the year, the statement said.  Following the targets achieved in 2009-10, the cumulative achievement in grid-interactive renewable energy was 16817 MW.

India's first solar plant to be built

May 31, 2010. Astonfield Renewable Resources and Belectric have entered into an agreement for the execution of Astonfield’s 5 MW solar power plant in Osiyan, Rajasthan, India.  The Osiyan project is one of several Astonfield plants expected to be approved under the Migration Phase of the Jawaharlal Nehru National Solar Mission and will be Astonfield’s first solar power plant to be commissioned and come online in FY2010-11.  Belectric has already completed site designs and engineering on the plant.  The construction will begin immediately following Migration approval. Belectric is one of the largest photovoltaic system integrators in the world, with over 75 commissioned power plants in Europe to date.

Suzlon FY 10 loss at Rs 9.8 bn

May 30, 2010. Wind energy major, Suzlon group, has clocked a loss of Rs 9.8256 bn in FY 10 as against a net profit of Rs 2.3648 bn in the year-ago period. The group's income from operations stood at Rs 206.20 bn in FY 10 as against 260.81 bn in the year-ago period, a press release stated. The group order-book stood at Rs 184 bn. Suzlon Wind's order-book (excluding REpower) stood at 1,126 MW (Rs 61.74 bn).  In Q4 FY 10, the group clocked a total income of Rs 61.64 bn as against Rs 92.0791 bn in the year-ago period. Its loss stood at Rs 1.88 bn for the period as against a net profit of 3.1489 bn in the year-ago period.  During the year, Suzlon also reduced its net debt and net operating working capital as well as brought down costs at various levels.

Westerlies boost power generation in Tamil Nadu

May 26, 2010. The westerly winds appear to have given a boost to wind power generation in the State. About 25 per cent of the total consumption of 214.23 million units on May 25 amounting to 55.61 MUs has come from wind generation. Maximum consumption was slightly higher at 226.19 MUs a week ago (on May 14), but was lower at 194.79 MUs around the same day (May 27) last year.  Going by the data on wind power generation in the State, the available capacity at 8 a.m. on May 25 stood at 1,855 MW. This peaked to 2,179 MW this morning, and the minimum load around noon stood at 2,286 MW on May 26.  The total installed capacity of windmills is 4,889 MW of which private wind mills account for 4,872 MW

Mahindra buys 55 pc stake in electric car co Reva

May 26, 2010. Country's largest utility vehicle maker Mahindra & Mahindra said it has bought a majority, 55.2 per cent, stake in Maini Group's Reva Electric Car Company as it expects alternative technology to drive a large part of global vehicle growth in the future.  But post this development, Reva's tie-up with General Motors to produce Spark electric vehicles has turned shaky. General Motors had earlier said that it will launch its electric car in association with Reva towards the end of this year.  The foray into electric vehicles may not lead to immediate benefits or profits but the company is betting big on hybrid as well as electric technology.  M&M will own 55.2 per cent in the joint venture, which has been named Mahindra Reva Electric Vehicle Company, through a combination of equity purchase from the promoters and a fresh equity infusion of over Rs 450 mn into the new company.

Sahara-Israel firm to develop solar power tech

May 26, 2010. Lucknow-based Sahara India’s subsidiary Sahara India Power Corporation Limited (SIPCL) today joined hands with Safesky Software of Israel for promoting advanced solar power and other technologies in India. An MoU was signed between SIPCL and Safesky. Safesky Software will be setting up a demonstration solar power plant of 5 Mw at a Sahara location in India.  Safesky has advanced technologies in solar power, medical, communication and water, which will be available to SIPCL for marketing and manufacturing in India.

Govt plans to increase green cover to check climate change

May 26, 2010. As part of its efforts to check the climate change phenomenon, the government has come out with a mission document aiming to increase forest cover to serve as 'carbon sinks' removing greenhouse gases. The draft of Green India Mission document aims to double the country's afforestation and eco-restoration efforts in the next 10 years, with the primary objective of reducing GHG emissions.  Under the "ambitious" mission document, being put up for public consultation, the government aims to afforest and restore 10 million hectares of land. The massive mission, which is expected to cost Rs 440 bn over the next decade, aims to increase forested areas to 20 million hectares by 2020, reducing GHG emissions by 6.35%. Without the mission, GHG reductions would be 1.5% less.


Florida takes giant step with huge solar-power plant

June 1, 2010. Florida Power & Light Co.'s newest solar-energy plant will have enough mirrors to cover 80 football fields. But those mirrors will focus sunlight onto surfaces that add up to slightly less than the area of a single football field. That concentration of solar power will generate temperatures of more than 700 degrees — hot enough to make electricity for 11,000 homes. The Martin Next Generation Solar Energy Center here will rank as the world's second-largest solar plant when it begins pumping out as many as 75 megawatts of electricity late this year. It will also be the only system of its kind in the world.

Climate change to hurt Egypt farming, tourism

June 1, 2010. Egypt's farming and tourism sectors could be hurt as climate change takes its toll on the country, fuelling food security concerns in what is already the world's largest wheat importer, an environment official said.   Climate change in Egypt threatens to cut key agricultural crops, force millions to migrate, flood or alter tourism destinations, and dramatically cut water supplies, head of the climate change unit of the environmental affairs agency said. Tourism, a major source of revenue, could be damaged as increased acidity destroys fragile coral reefs, a major draw for divers and snorkelers, and rising seawaters wash away beaches on the Mediterranean coast, another popular tourist destination.

DNV: Shipping industry could cut emissions 30 pc with LNG

June 1, 2010. "Global shipping can reduce its CO2 emissions by 30 % the next 20 years through measures that are profitable for the shipping companies. The single most effective move is to introduce LNG as fuel," said DNV.  DNV has carried out a study of 59 ship segments representing the major shiptypes and sizes of international shipping, identifying 25 different measures that can contribute to reduced emissions. Each of these segments have been modelled separately with regard to operational assumptions, the reduction potential of each measure, the cost of each measure and the year when available measures are phased in.

Indonesia to scrap permits to save forests

May 31, 2010. Indonesia will revoke existing forestry licences held by palm oil and timber firms to save natural forests under a $1 billion climate change deal signed with Norway. Indonesia's president, Susilo Bambang Yudhoyono, who announced the deal said new concessions for the conversion of natural forest and peatlands would be suspended for two years. But he did not say at the time how existing concessions would be affected. Preserving forests is seen as crucial to slowing climate change because trees absorb enormous amounts of greenhouse gases. 

Panasonic combines its strengths for a full-scale entry into solar power generation business

May 31, 2010. The Panasonic Group will launch on July 1, 2010 its HIT(R) 215 Series household solar power generation systems, the first series of collaborative products to be developed since SANYO became a part of the Group. The launch signifies how the newly extended group has combined its collective strengths for a full-scale entry into the solar cell business.  Since the announcement of the capital and business partnership with SANYO in December 2008, Panasonic has established a Collaboration Committee and promoted discussions, under all applicable laws and regulations, to maximize the potential synergy effects within the new Panasonic Group.

Figueres says UN will set ‘pillars’ of climate deal

May 31, 2010. Christiana Figueres, the Costa Rican revolutionary’s daughter who becomes the top United Nations climate official in July, said envoys will form “pillars” of an agreement to tackle global warming at a summit in December. The meetings, set to take place in Cancun, Mexico, “will provide very clear progress” while falling short of drawing up a final treaty, she said in an interview in Cologne, Germany. Figueres said negotiators will “deliver on some of the elements” in the 2009 Copenhagen Accord that represent “pillars” for an eventual a global agreement. 

NGO to Noynoy: Link land policies to climate change

May 30, 2010. With farmers and the rural poor most vulnerable to the destructive effects of climate change, a non-government organization is asking president-apparent Sen. Benigno "Noynoy" Aquino III to take up new agrarian reform policies. Land reform is "critically" linked to addressing the devastation caused by climate change.  Agrarian Reform Undersecretary Narciso Nieto earlier said existing water impounding systems and communal irrigation were not built to withstand climate change effects such as the El Niño dry spell and massive flooding during the rainy season.

New global 'thermometer' to monitor climate change

May 29, 2010. Researchers have found a new way to use satellite instruments to get reliable surface temperatures over most of the world's land area using satellite microwave sensors. The new technique developed in the Earth System Science Center at The University of Alabama in Huntsville, uses microwave sensors on NOAA and NASA satellites to collect surface temperature data over virtually all of Earth's land area. Although always in use, satellite sensors posed problems. Which means that due to differences in their microwave emissions, a forest at 70 degrees F and a sandy desert at 70 degrees F look different to the satellite instruments.

Maldives president calls for direct action over climate change

May 29, 2010. A 1960s-style campaign of direct action must ignite on the streets as a catalyst for decisive action to combat climate change, according to President Mohamed Nasheed of the imperilled Maldives. Nasheed said it was the United States, not China, that was the biggest obstacle to a global agreement to check carbon emissions. Nasheed, who held an underwater meeting of his cabinet last autumn and is presiding over the relocation of people from some islands because of the effects of warming oceans and rising sea levels, put his hopes in the emergence of "huge" grassroots action after the failure of talks in Copenhagen in December.  But he said the US was where the focus of pressure had to be, whereas China and India were actually far more receptive to the concept of climate change.

China opens Asia’s largest solar power plant

May 28, 2010. China inaugurated Asia’s largest solar power plant with a designed installed capacity totalling 166 megawatts.  The power plant located at Kunming, capital of Yunnan province went into operation in the first stage with installed capacity of 20 MW.  

The plant, which started construction in December 2008 and involves total investment of RMB 9 billion, is jointly built by Huaneng Shilin Photovoltaic Energy Development Co Ltd and a subsidiary of Yunnan Provincial Power Investment Co Ltd.  The solar power plant, which will be entirely completed in 2015, is designed to generate 195 million kilowatt hours of electricity per year, reducing 175,000 tons of carbon dioxide emission.

Lufthansa wants 1-year emission trade delay

May 28, 2010. Lufthansa wants a one-year delay to the inclusion of airlines in Europe's emission trading scheme due to the flight disruption from a volcanic ash cloud in April. The ETS plans to use 2010 as the base year for determining how many free emissions certificates, or licenses to pollute the air, each airline will receive. Lufthansa has estimated its annual costs from the ETS at 150 million to 350 million euros ($184 million to $429 million) once airlines join the scheme.  It would be unfair to stick to 2010 as the base year because of the number of forced cancellations from the volcanic cloud. 

China may start state-guided carbon market by 2014

May 28, 2010. China will likely set up a domestic market for trading carbon emissions by 2014 and hand companies “half-mandatory” targets for limiting their greenhouse gases, said a government official who oversees climate-change issues. Authorities are drawing up rules for a market to be run by “associations” overseen by the government. China and India, which have captured the most investment in emissions-reducing projects overseen by the United Nations, are trying to set market mechanisms to encourage polluters to slow their growth of carbon-dioxide emissions even as both resist legally binding limits on the gases they release. Those plans contrast with market delays seen in several richer nations. 

Frustrated EU carbon traders play waiting game

May 28, 2010.  Major changes proposed to the European Union's emissions market could dramatically alter the landscape for traders, who are increasingly frustrated by regulatory uncertainty and political stalemate. A deeper 2020 EU greenhouse gas reduction commitment, qualitative and quantitative restrictions on carbon offset eligibility and details on carbon permit auctioning in the scheme's third phase are among the decisions expected to be made this year by the 27-nation bloc's executive.  But policymakers at the annual Carbon Expo conference in Cologne were tight-lipped, and the uncertainty caused gloom among traders.

Green sector bond could unlock climate funding: IETA

May 28, 2010. Green sector bonds could help drive financing to ensure large capital investment flows into low-carbon technologies in developing countries, IETA said.  Under IETA's proposal, green sector bonds should be issued with the approval of an international body, which would administer the mechanism. The oversight body would apply standards to the bond, which should remain unchanged for a certain period of time, after which they could be reviewed, IETA said.

Host countries would then issue the bonds with credit support by one or more international financial institutions. They would be issued with a low-coupon rate and a stream of carbon credits to be split between the investor and the project sponsor. They should be designed to be fully tradable.  Holders of the bond could be offered special tax advantages to provide additional support, IETA added.

China to subsidize alternative-fuel cars, securities news says

May 28, 2010.  China may start a trial program to subsidize cars powered by alternative energy in five cities this month.  The government will provide as much as 60,000 yuan ($8,780) to individuals purchasing an electric vehicle and as much as 50,000 yuan for buyers of hybrids. The subsidies will be available in Beijing, Shanghai, Shenzhen, Chongqing and Wuhan. China, the world’s largest auto market, aims to increase annual production capacity of alternative-energy powered vehicles to half a million units by 2011 to cut reliance on oil and improve air quality. Carmakers including Toyota Motor Corp. and Warren Buffett-backed BYD Co. are preparing to introduce new electric and hybrid models in the nation even as sales of the vehicles have remained sluggish due to a lack of affordability.

"Green" spending to double in Europe by 2015

May 28, 2010. Sales of environmentally friendly products are set to double in Europe by 2015, but will still only account for 5 percent of total retail sales, with shoppers deterred by higher prices, a study said.

The Center for Retail Research (CRR), in a report commissioned by shopping comparison website Kelkoo, forecast the price premium on "green" products would shrink from 46 percent to 40.5 percent by 2012, still too high for many consumers.

The CRR said sales of green products, which cover a wide range of items from energy-efficient lightbulbs to recycled paper and hybrid cars, had soared to 56 billion euros ($68.6 billion) in 2009 from 10.3 billion in 2000, and forecast they would approximately double to 114 billion euros by 2015.

European households currently spend 369 euros on average a year on green products, with Swiss consumers spending the most (555 euros) and Spaniards the least (315 euros). French (413 euros), German (364 euros) and British (352 euros) consumers ranked fourth, fifth, and sixth, respectively.

World warms as public cools to climate action

May 27, 2010. This year is on track to be the warmest worldwide since records began in the 19th century yet voters seem to be cooling to strong action to combat climate change.  Their doubts may be quietly sapping the will of governments and companies to cut greenhouse gas emissions after the Copenhagen summit in December failed to agree a treaty meant to slow more droughts, floods and rising seas, analysts say. 

Yet so far in 2010 there has been record warmth especially in many tropical regions, Australia and parts of the Arctic -- despite a chill start to the year in western Europe and some eastern parts of North America. That would eclipse 1998 and 2005 as the warmest years since records began and undermine an argument used by some skeptics that warming has peaked. The decade just finished was the warmest on record, ahead of the 1990s.  In the first four months, land and ocean temperatures were 56 degrees Fahrenheit (13.3 C) and 1.24 F (0.69 C) above the 20th century average, the warmest on record in NOAA data. 

BP oil spill shows need for biofuels, developers say

 May 27, 2010. The disastrous oil spill in the Gulf of Mexico illustrates a pressing need for the United States to pass legislative incentives to drive investment dollars into cellulosic and algae-based biofuel facilities, biofuel industry leaders said. 

A range of commercial-scale projects to develop cellulosic and algae biofuels are ready to be built, but the economic downturn, uncertainty in global financial markets and the lack of long-term U.S. government support is making it hard to raise capital, company officials said in a conference call.

A massive jobs bill pending in Congress includes a $1-per-gallon tax credit for biodiesel retroactive to January 1 and valid through the end of 2010. The bill also includes a 50-cent credit for fuel produced from biomass. 

Tesla says Toyota deal on electric cars not formal

May 27, 2010. Electric carmaker Tesla Motors said it has not struck a formal deal with Japanese automaker Toyota Motor Corp to develop electric vehicles. The California start-up said in an amended registration statement for its initial public offering that it had "announced an intention to cooperate" with Toyota.

The two companies announced their partnership at Tesla's headquarters in Palo Alto, California, attended by California Governor Arnold Schwarzenegger and Toyota chief Akio Toyoda, who flew to the United States for the joint news conference. But new details from Tesla cast doubts on the relationship between the companies, which would give the Japanese automaker a chance to repair its public image and propel the California start-up onto the world stage. 

Green energy investment surviving crisis, says IEA

May 27, 2010. Investment in renewable energy is faring better than initially expected despite the economic crisis, the International Energy Agency (IEA) said. IEA Executive Director Nobuo Tanaka said the agency was maintaining its forecast for carbon dioxide-free power generation to make up 60 percent of the electricity mix by 2030, a target set in the IEA's World Energy Outlook last year. The current share is 33 percent. Green policies in the stimulus packages that were decided by governments during the economic turmoil in 2009, would trickle through in 2010, helping investment. China's economic stimulus package includes the world's largest green investment programme, earmarking $230 billion compared with the United States' $80 billion and about 25 billion euros ($30.70 billion) in the EU, according to the International Institute for Environment and Development. 

Nissan: electric cars could shed govt aid in 4 years

May 26, 2010. Nissan Motor Co and alliance partner Renault could market electric vehicles without government incentives within four years as global sales reach 500,000 to 1 million vehicles per year.

Nissan, which is introducing a mass-market Leaf electric car later this year, needs government incentives to spark initial demand but understands those incentives will not be permanent, Nissan-Renault Chief Executive Carlos Ghosn said. Nissan-Renault could have as many as eight electric vehicles between them within a few years, allowing the companies to reach the scale that would make the government incentives unnecessary. 

Carbon traders ‘gloomy’ about industry regulation, survey says

May 26, 2010. Traders in greenhouse-gas markets are frustrated over slow progress on a new climate agreement and unclear regulations that discourage investment in lower-carbon projects, according to an industry association survey.

While traders remain “broadly positive” on future trading volumes in carbon markets, their view on prices in the European Union and United Nations carbon markets worsened from last year, said the survey, conducted by PricewaterhouseCoopers for the Geneva-based International Emissions Trading Association.  The weighted average-price prediction for EU allowances in the third phase of the program starting in 2013 is 25.97 euros, down from 30.11 euros last year, IETA said.  

Electric cars can win 10 pc share by 2020

May 26, 2010.  Pure and hybrid electric cars may grab five to 10 percent of a European autos market by 2020 if governments help overcome cost hurdles, said the authors of an engineering academy report. Limits included infrastructure costs of about 5,000 pounds ($7,152) per roadside charge spot, plus costly lithium batteries with a limited range of about 100 miles. In addition, cross-border standards were needed for plugs and billing. Driving adoption in Britain were targets to curb greenhouse gases, meaning the fossil fuel-dependent country would also have to invest heavily in low-carbon electricity. In the near term, gasoline hybrids would continue to dominate pure electric vehicle (EV) models, as their flexibility extended driving range and cut dependence on a charging network.  Advantages of electric cars included lower running costs compared with gasoline.  He estimated the running cost of the full 100 mile range of a standard battery at about 2 pounds ($2.87), assuming a storage capacity of 20 kilowatt hours and British consumer power prices of 10 pence per kilowatt hour. In addition to a limited range, re-charging time for batteries was a concern at 6-8 hours or more. Faster charging was possible, but could impact the performance of batteries.

Taipower plans to build Taiwan’s biggest solar power station

May 26, 2010. Taiwan Power Co. plans to build the island’s biggest solar power station in the southern county of Tainan as the government aims to reduce carbon emissions.  The proposed 5-megawatt plant will surpass a 4.6-megawatt facility being constructed in the neighboring Kaohsiung County. One megawatt is enough to power 800 U.S. homes.  Taiwan is joining countries including the U.S. and Spain to tap renewable sources of energy to help cut greenhouse gas production. President Ma Ying-jeou has pledged to reduce carbon emissions to 2000 levels by 2025.   The utility, known as Taipower, is negotiating with state- run Taiwan Sugar Corp., which owns the land for the proposed site.   Taipower plans to build another solar power station, with installed capacity of 4 megawatts, on Taiwan Sugar-owned land in Tainan.

Sanyo receives order to build solar plant in Italy

May 26, 2010. Sanyo Electric Co., the battery maker acquired by Panasonic Corp., received an order to build a solar power-generating plant in Puglia, southern Italy, from a group led by Deutsche Bank AG. The plant’s 32,202 solar panels will have a capacity of 7.567 megawatts and will be completed by September, Osaka-based Sanyo said in a statement today. Financial details of the order weren’t disclosed.  Sanyo is investing 50 billion yen ($555 million) in its solar-cell operations as part of a plan to boost its operating margin to 4.5 percent from 2.3 percent in the three years to March 2013, the company said earlier this month. Panasonic, which acquired the smaller electronics maker in December and aims to develop next-generation solar panels with Sanyo, intends to invest another 100 billion yen in the solar operations. 

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