WHAT NEXT IN LIBYA-THE REAL FIGHT BEGINS
R.S. Kalha*
ow that the Gaddafi regime has finally been overthrown by a combination of sustained western military intervention and an assorted amalgamation of ‘freedom fighters’ can we expect that a new democratic government will emerge? It was earnestly hoped that this would be the one positive result after the overthrow of the discredited regime and that the new regime would be democratically elected and all inclusive in character. That Gaddafi would eventually be toppled was never in doubt, after NATO and particularly France and the UK, supported from the outside by the US, took the lead in taking military action. Reports indicate that NATO flew some 7459 sorties to ‘soften’ pro-Gaddafi elements. From its original public intention of only ‘preventing a massacre’ the whole western intervention quickly morphed itself into an enterprise for a regime change.
There is sufficient evidence available already that the National Transitional Council [NTC] is already beset with problems and if it degenerates into quarrelling factions owing allegiance to Libya’s various tribal groups, it would probably surprise no one. The murder of the TNC army commander much before the fall of Tripoli is a case in point. Then there are the assorted Jihadi outfits, each wishing to take a piece of the pie. The more well known amongst them is Abdelkarim al-Hasadi, leader of the Libyan Islamic Fighting Group, who in his earlier incarnation had been detained by US forces as a suspected ‘terrorist’. On the other hand there is the former Professor of Economics from the University of Washington/Seattle, Ali Tarhouni who is now the NCT Minister of Oil and Finance and who undoubtedly will be a major player in decision making when it comes to handing out oil contracts. No one expects that he will not ‘sympathise’ with his erstwhile benefactors.
Conscious of the stakes involved the French moved smartly to be the first off the blocks. While the Italian Foreign Minister was making public statements on TV, even before the NTC fighters entered Tripoli, that ‘Italian oil company ENI will have a number one role in the future’, the French according to a letter published in the French newspaper Liberation had already tied up their share. The letter purported to show an undertaking by the National Transitional Council (NTC) to reserve ‘35% of total crude oil in exchange for the total and permanent support for our council’. The document was addressed to the Qatari government, which Libération described as acting as an intermediary between Libya and France, and said that the NTC had ‘authorized brother Mahmoud’ to sign the deal with France – a reference to Mahmoud Shammam, the NTC’s Information Minister.
The French Foreign Minister Alain Juppe did not deny the existence of the letter, but simply said he was ‘unaware of the letter’ that referred to the reported deal and published in the French daily newspaper Libération . Juppe however significantly added that it was only ‘fair and logical’ that those that had helped the NTC be given ‘preferences’. It may be noted that in 2010 the French ‘share’ of Libyan oil was about 15%, much behind Italy, but if the new promise was to materialise it would translate itself to about 500,000bpd of oil. France would have left Italy trailing behind!
Not to be left behind, the UK had also set up a ‘Libyan oil Cell’ in the Foreign Office much before the fall of Tripoli. The cell was reportedly the brainchild of the UK Minister for International Development, Alan Duncan. Its main purpose was to ensure that the UK did not get left behind its other co-partners. Duncan a former oil trader had served as a ‘consultant’ to the oil firm Vitol, the largest trader of oil and refined products in the world and which handles about 5mb/d of oil and controls about 200 super tankers to move oil around the world. Vitol was fined and paid $17.5 m for violations during Saddam’s oil for food programme. It is alleged that Duncan insured that Vitol received the contracts to supply and market the oil for the NTC during the period leading up to the fall of Gaddafi and Tripoli.
Not to be left behind are BP and Shell. The British press has published stories of the fact that BP officials are already in contact with the NTC and that private talks are fairly at an advanced stage. It would be recalled that BP was seriously involved with Libya even during the Gaddafi regime and reports have appeared that the then British government had released the Lockerbie bomber as a part of a deal involving BP.
While European governments continue to manoeuvre to obtain a slice of the cake, it is ultimately a call that US oil companies will make. Without US support none of the Europeans would be able to sustain their Libyan enterprise. Therefore the space to watch would be in the United States.
Concluded
Views are those of the author
* The author is a former Secretary, Ministry of External Affairs, Government of India.
HOW REALISTIC IS IT TO RELY ON COAL POWER? (part II)
Shankar Sharma, Power Policy Analyst
Continued from Volume VIII, Issue No. 11…
s listed in the table below the social, environmental and economic concerns to our densely populated communities are grave in nature, and hence can be ignored only at our own peril.
Major issues with coal based power policy
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Economic
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Puts huge pressure on natural resources such as land, water and minerals; demands a lot of construction materials like Cement, steel, sand; will increase average cost of power; road and rail transportation infrastructures need a lot more strengthening; pressure on ports will increase due to the need for import of coal; land costs around coal power projects will become unaffordable to locals; overall efficiency from coal energy to end use of electrical energy is very poor of the order of about 10% only.
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Social
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Peoples’ displacement will cause additional unemployment & increase in slums; will affect agricultural production, and health; prospect of displacement will create social tensions and stiff opposition; local buildings of heritage importance will degenerate; nearby places of tourist and religious importance loose prominence; causes serious erosion of local communities;
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Environmental
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Issues of Global Warming and Climate Change; pollution of Land and water and air; acid rain will affect flora and fauna including forests and agricultural crops; coastal power plants will affect marine creatures; destruction of forest lands to open more of coal mines; have to contend with nuclear radiation in coal ash; wet lands in coastal areas of AP and Orissa are under serious threat;
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It will be against all the welfare considerations in India to ignore such growing evidences against the coal based power policy.
Costs, Benefits, and societal issues
The above discussed issues are particularly relevant to states like Karnataka and Kerala which have no known fossil fuel reserves, and which are generally water stressed states. There is a mad rush to set up more and more coal power plants even in states far away from coal fields.
The efficiency of converting coal energy to electrical energy in Indian power stations is about 33% only. The world’s best technology claims that this can be increased to a maximum of about 39%. About 8 - 9% of such generated electrical energy gets consumed by the processes within the coal power station itself. With Transmission and Distribution loss level of about 25%, and end use loss of about 15% prevailing in the country, the overall efficiency of converting coal energy to electrical energy put into productive / economic use can be only of the order of about 10%. Compared to this efficiency the Solar Photo Voltaic systems, which are being used in India have efficiency of about 14%, and is expected to reach about 25% soon with improved material technology. Our society has to carefully consider this economic aspect of coal power before embracing coal based power policy.
It is worthy of notice that large addition of coal power capacity will require opening up of many more coal mines, and hence will reduce the forest cover at an accelerated pace, because most of the coal deposits are below or close to thick forests. Setting coal power stations in these areas will also demand sizable chunk of forests for buildings, coal and ash handling facilities, townships and transmission lines. It should be a matter of great concern to the civil society that while forests are well known to be very good sinks of CO2, setting up of coal power stations will not only reduce the forest cover but will also result in large addition of GHG emissions.
In this regard the concept of Costs V/S Benefits Analysis, if applied objectively, will be able to indicate the real costs to our society of setting up a given coal power plant. All the external costs of setting up a coal based power station such as environmental and social costs, tax exemptions, tax holidays etc are being left out of such calculations. If an objective study of costs V/S benefits of setting up a coal based power station is carried out, the direct and indirect costs to the society will be so heavy that the benefits will be tiny in comparison.
As demonstrated in a Greenpeace report “hiding behind the poor” a small percentage of high income earners in our cities are consuming a high percentage of the electricity generated, while the majority of the poor and rural population (about 40% of the total population in the country) do not have even access to it. Elimination of such glaring inequity itself can reduce the real demand for electricity by a considerable margin.
The need to establish more and more of coal power stations has been associated with the power deficits prevailing in the country. The data for various states during last 10 years indicate that this deficit is mostly during the peak hours of the day, and the annual energy deficit has not been huge. In this context also the blind addition of coal based power stations is not advisable because they are essentially base load stations, which means they become optimally economical only when they are run for most time of the day / year. So the present policy of setting up a large number of coal power plants to address the peak hour deficits cannot be a viable solution. A simulation study of Karnataka scenario indicates that the planned addition of a number of coal power stations by 2025 is likely to lead to a highly reduced utilization capacity of coal power stations in the state.
Because of the high percentage of coal power, the effective price of electricity to consumers has been rising steadily, and is expected to rise even more steeply. An objective analysis of all the direct and indirect costs to society of coal power can clearly establish that the overall benefits of renewable energy sources such as solar, wind and bio-mass is much higher than that of the coal power.
Sustainable alternatives to coal power
It is also very sad that many people in influential positions are advocating adding hugely to the generating capacity through coal power technology without even mentioning the potential impact of such additional capacity on social and environmental aspects of our densely populated society. Our society would do well to take a holistic look at the electricity needs of all sections of the society without ignoring other needs of the society such as clean air, drinking water, agricultural and forest lands, right to live in one’s ancestral property without being forcibly evacuated etc. We have no other option but to take an "integrated energy resource management" approach which will include the highest possible operational efficiency of the existing assets, effective Demand Side Management, optimal energy conservation and wide spread use of new and renewable sources of energy. Tables below show the gross inefficiency prevailing in the power sector of the country, which provides a huge scope to reduce our reliability on coal power.
Power Sector Efficiency in India
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Power Sector Area
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Prevailing level of efficiency / loss in India
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International best practice
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Generating capacity utilisation
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50 - 60%
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More than 85%
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Aggregate Technical & Commercial losses (AT&C)
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35 – 40 %
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Less than 10%
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End use efficiency in agriculture
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45 – 50 %
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More than 80%
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End use efficiency in industries and commerce
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50 – 60 %
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More than 80%
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End use efficiency in other areas
(domestic, street lights and others)
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20 – 30 %
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More than 80%
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Demand Side Management
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Potential to reduce the effective demand by more than 20%
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Source: Based on Integrated Energy Policy, Planning Commission, and few other reports
Despite many hidden/ignored costs there is no doubt that the coal power cost will keep increasing, while the costs of power from renewable energy sources is coming down all the time. The observers of the power sector costs have projected that the effective cost of solar power is likely to be the same as that of coal power by 2017. Suitable policy interventions by the government can bring forward this date.
Being a tropical country with a huge agrarian society the potential of renewable energy sources such as solar, wind and bio-mass is huge. These sources if deployed effectively along with optimum utilization of the electricity infrastructure can address our power sector issues effectively. There will not be a need for many coal power plants. In this context a Greenpeace report deserves special attention. This report titled “energy {R}evolution, A SUSTAINABLE INDIA ENERGY OUTLOOK" with international authorship has dealt with the Indian energy scenario in good amount of detail, and has come up with a credible set of solutions. An important point highlighted in this report is the huge potential available in reducing the demand for energy without adversely affecting the legitimate needs of our society. This projection indicates the feasibility in reduction of about 38% in demand by 2050 as compared to the reference scenario of IEA. The study report is confident that by adopting suitable measures “by 2030 about 35% of India's electricity could come from renewable energies" AND " by 2050, 54% of primary energy demand will be covered by renewable energy sources". The report states: “A more radical scenario - which takes the advanced projections of renewables industry into account - could even phase out coal by 2050. Dangerous Climate Change might force us to accelerate the development of renewables faster."
Renewable Energy potential in India
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Potential (Grid interactive power only)
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1. Wind energy
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> 45,000 MW
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2. Small hydro
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> 15,000 MW
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3. Solar
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Over 5,000 trillion kWH/year Potential
(estimated to be more than the total energy needs of the country)
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4. Bio-mass
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> 17,000 MW
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5. Ocean Wave
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With about 7,000 Km of coastal line it should be huge, but no estimates available
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Source: MN&RE and other sources
Looking at the difficulties in adding huge generating capacity as experienced in the last few five year plans, when the actual additions were much less than the targeted capacity, it will be credible to assume that the country will continue to see chronic deficits indefinitely unless there is a paradigm shift.
It is very pertinent to note that there are unambiguous requirements under our Constitution to protect the environment. Article 48A says: “Protection and improvement of environment and safeguarding of forests and wild life.—The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country.” Article 51A says: “Fundamental duties.—It shall be the duty of every citizen of India—(g) to protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures.”
Conclusions
As compared to the situation soon after independence, when the society was looking for urgently meeting energy needs of our people, and when we did not have much experience of coal power, the scenario now is vastly different now because of our own experience and the experience all over the world. Our society should have no doubt that the coal reserve is getting depleted at an accelerated pace, it’s overall cost to the society is very high, and that its supply is going to be increasingly unreliable.
The overall cost of coal power dependent economy in the form of economic, social and environmental issues is so huge that these issues cannot be ignored in the name of GDP growth centred development. At a time when the human kind is staring at the existential threat due to Global Warming, the necessity of coal power stations which are associated with about 42% of CO2 emissions worldwide must be reviewed urgently. The misery being suffered by the vulnerable sections of our society, including the flora and fauna, because of the coal power impacts cannot be continued to be ignored. The basic needs of the vulnerable sections of our society should be ranked much higher than the insatiable electricity demands of the urban population.
Our country, which has been boasting of a major initiative in the name of National Action Plan on Climate Change (NAPCC), cannot go on blindly adding coal power stations because this will negate the very claim under NAPCC.
Since the sole objective of a coal power station is to generate electricity, the society must urgently adopt various benign alternatives available to us in the overall interest of our communities.
Concluded
Views are those of the author
NEWS BRIEF
OIL & GAS
Cairn projects 3 lakh bpd production from Rajasthan oil block
September 6, 2011. Cairn India has projected a peak projection of 300,000 barrels per day from its prolific Rajasthan oil block, a quarter more than the previously projected peak output. Cairn informed the Management Committee which overseas operations of the block, that Mangala and other oilfields in the block can produce 300,000 bpd, subject to regulatory and partner approval. Mangala, the biggest of the 18 discoveries Cairn has made in Rajasthan block, can produce 150,000 bpd as against current output of 125,000 bpd.
Bhagyam can produce 60,000 bpd and Aishwariya another 25,000 bpd. Other fields can produce 65,000 bpd. The oil regulator DGH and the oil ministry, which are represented on the Management Committee, need to approve field development and investment plans as also extension of the exploration over the rest of the block. Cairn India holds 70 per cent interest in the block and state-owned Oil and Natural Gas Corp (ONGC) the remaining 30 per cent. Separately, Cairn India said the production from Bhagyam will start in the last quarter of this year subject to regulatory approvals.
The start of output is awaiting ONGC and Management Committee approval. Oil ministry has not approved Bhagyam development since London-listed Vedanta Resources announced $9.6 billion acquisition of Cairn India. Cairn and Vedanta have now agreed to the government conditions on paying royalty and cess on Rajasthan block to get approval for the transaction. With this, the company hopes to get necessary approvals for output boost.
Hardy's Cauvery work grinds to a halt as Oil Ministry blocks key contract
September 3, 2011. London-based Hardy has been forced to stop crude oil production at its Cauvery basin block because the Oil Ministry has refused to extend a key contract in the field without competitive bidding. The ministry, which is facing a CAG probe into its dealings with private firms in recent years, and its technical arm, the Directorate General of Hydrocarbons (DGH) are being very cautious. They have rejected a move by the field's operator to extend the contract for a floating production, storage and offloading (FPSO) unit supplied by Chennai-based Aban Offshore, bypassing global bidding. As a result, crude oil production from PY-3 oilfield stopped. The PY-3 block was producing 3,000 barrels of high-quality light crude oil every day and partners were expecting the production to jump by 6,000-7,000 barrels in the next few months. Oil from the field is sold to Chennai Petroleum Corp's refinery in Nagapattinam. The block was also producing a small quantity of natural gas. Hardy, the operator, holds an 18% stake in the block while the balance is split between ONGC that holds 40%, Tata 21% and Hindustan Oil Exploration Co 21%. Energy companies have criticised the DGH's move to insist on bidding. They say the procedure would take a lot of time and often oil and gas equipment, supplied by very few companies, is not easily available. India is an energy hungry country with huge refining capacity and imports over 80% of its crude oil requirements.
ONGC seeks producing assets in politically stable countries
August 31, 2011. India ONGC Videsh Ltd., the overseas investment arm of Oil and Natural Gas Corp, seeks to buy producing assets in politically less risky countries like North America to cut its risk and boost output. The Indian government has charged ONGC with securing energy supplies overseas to fuel the country's fast-growing economy. India, the world's fourth-biggest oil importer, buys in nearly 80 per cent of its oil needs as expanding refining capacity has outpaced growth in local oil output. ONGC's local oil output has been almost stagnant in the last five years. ONGC Videsh aims to source 400,000 barrels per day of crude from its assets overseas by 2020. It expects output from such assets to reach 175,000 bpd in the current financial year through to March 2012.
Reliance Industries, BP complete $7.2 bn deal
August 31, 2011. Reliance Industries and BP have completed the $7.2-billion deal in which the British company will pick up 30% in 21 blocks, including D-6, where technical expertise of the oil major is expected to reverse the decline in output from India's biggest gas field. BP, the first global oil major to make a significant investment in India, will form a 50:50 joint venture with Reliance Industries for sourcing and marketing of gas in India which will also accelerate the development of infrastructure in the sector. Technical experts from both companies are expected to quickly work out ways to address the problems at the D-6 block in the Bay of Bengal. Reliance's gas output has dipped below 50 million metric standard cubic meter per day (mmscmd) instead of rising to 80 mmscmd as the deep-sea reservoir turned out to be structurally different from what was imagined during surveys.
Downstream
Need to raise gasoline prices: IOC
September 6, 2011. Indian Oil Corp (IOC) said local gasoline prices need to be raised as revenue losses from selling the fuel at government controlled rates have widen more than seven-fold. Revenue losses on gasoline sales now stand at about three rupees compared to about 0.41 rupees a litre in the fortnight ending Aug. 31 due to an increase in Singapore spot prices of the fuel. Indian state-run firms last raised gasoline prices in mid-May by a record. The increase of 5 rupees a litre made the fuel costlier than in the world's biggest oil consumer United States, hurting local consumption. Slowing car sales in Asia's third-biggest economy has also curbed sales. The government gave state-run firms permission to fix gasoline prices on their own, while retaining control over diesel, kerosene and cooking gas to protect the poor and tame stubbornly high inflation. Still, these companies need a nod from the government to increase gasoline prices. State-run retailers get cash subsidy from the government and discount on crude and products purchased from state-run upstream firms to partly offset the losses. Indian Oil is the nation's biggest refiner controlling about a third of the 4.17 million barrels per day capacity. It is building a 300,000 bpd refinery in Paradip in the eastern state of Orissa. The company aims to spend 120-130 billion rupees next fiscal year on new projects, a large part of which will go toward the completion of the Paradip plant. It is expected to spend 148 billion rupees this fiscal year. Pardip would start by June 2013 and will operate at full capacity in 2014. The plant will help the company meet the total demand for fuel from its own refineries. Currently, the volume of fuel it sells is higher than its refining capacity, forcing the company to buy some products from private firms such as Essar Oil and Reliance Industries Ltd. For Pardip, IOC may look at buying crude from Venezuela, Mexico and Colombia. Indian Oil processes 46-47 percent of heavy crude, while the remaining is light. The company meets 75 percent of its requirement through term deals IOC exported about 4.5 million tonnes of fuel, and shipments could fall to 3.5-4 million tonnes this fiscal year as naphtha consumption at its Panipat cracker may rise. IOC's total borrowings are at about 710 billion rupees and this could rise to about 900 billion rupees by December if it did not get cash compensation from the government.
IOC buys 5 mn bbls of W Africa crude from majors
September 6, 2011. Indian Oil Corp (IOC) has bought about 5 million barrels of West African light crude, all from majors, via its tender to buy oil for November loading. India's largest refiner bought Nigerian Yoho and Equatorial Guinea's Zafiro from Shell, Nigerian Amenam and Angolan Girassol from Total and Nigerian Escravos from Chevron. IOC's tenders have been further out as the Nigerian market is still trading end-October cargoes, giving advantage to oil majors that have equities in African oil producers.
Iran says India paid all $5 bn of oil debts
September 4, 2011. India has paid off all oil debts accumulated due to a sanctions-related problem. Although the Indian side was interested in paying its debts through swap deals, the request was not accepted by Tehran. Iran is India's second biggest supplier for crude after Saudi Arabia, exporting about 400,000 barrels per day or 12 per cent of the country's needs in trade worth some $12 billion a year. India had been struggling to find ways to pay for the oil imports because various banking channels were closed due to the sanctions related to Iran's nuclear programmes.
Inadequate supply likely to hit ethanol blending programme
September 2, 2011. The government's plan to raise the level of ethanol blending in petrol to 10% from the current 5% may fail to take off because of poor supplies from sugar companies. The government had decided two years ago to implement the ethanol blending programme (EBP) up to a limit of 10%. But only 5% of ethanol is being blended in the EBP currently under implementation in 13 states and three Union territories out of the notified 20 states and four UTs. Ethanol supplies have been insufficient even for the current 5% level.
` 45 more in monthly PNG bill of households
September 1, 2011. Indraprastha Gas Ltd (IGL), the city's sole supplier of natural gas, raised the price of fuel piped to households in Delhi by ` 3 per unit, an increase of roughly 16%. The increase is estimated to push up the monthly cooking bill of a household with PNG by ` 45 or so, assuming an average consumption of half unit of gas per day. This still works out some 2.5% cheaper than a 14-kg cooking gas cylinder that costs ` 399 in the capital. Piped natural gas, or PNG as it is commonly called, in Delhi will cost ` 22 per unit against ` 18.95 earlier. This rate will be charged for up to 30 units of gas consumed in two months. Beyond this limit, IGL will charge ` 34 for each unit. Till now, consumers were being charged ` 18.95 per unit for 45 units in two months, and ` 26 per unit beyond that limit. Due to higher taxes in UP, PNG will cost ` 23.50 per unit for 30 units in two months and ` 34 per unit beyond this limit in Noida, Greater Noida and Ghaziabad. Now, PNG costs ` 20.42 and Rs 26 per unit, respectively, in these downtowns. This is the second rise in PNG price. IGL had raised PNG price by ` 2.10 per unit on January 1. The company has raised price of CNG, or gas used for fuelling cars and buses, by ` 2.30 per kg in four instalments. The steepest hike was of ` 1.25 per kg on January 1. IGL said the company is buying more and more gas imported in ships, which costs nearly three times the gas produced from domestic fields. Increased demand for the green fuel is forcing IGL to buy imported gas, especially to make up for the shortfall in supply from Reliance Industries Ltd's showcase fields off the Andhra coast. Cost of cooking and daily commuting in Delhi may rise periodically through the year since IGL was likely to raise prices some 8% as its dependence on imported fuel increases in the face of a 20% year-on-year growth in fuel demand. IGl would raise retail price of the fuel sold to buses , taxis, autos and private vehicles by over Re 1 a Kg every three months or so. By December, then, CNG price will go up by over ` 4 a Kg, or about 7%-8 %. The increase is inevitable because the quantity of gas under government control earmarked for the company is insufficient to meet the growing demand. At the same time, supplies designated from the Andhra offshore fields of Reliance Industries too have dropped. Unless the government provides more domestic gas and Reliance restores supplies to the stipulated level, IGL will have to raise retail to stay in black and keep expansion plans on track.
Govt earns 43 pc more by taxes on petro products
September 6, 2011. The government has no proposal 'at this stage' to reduce taxes on petro products even as it earned ` 1.02 lakh crore by way of taxes on these items in 2010-11. Also, there is no proposal to give additional subsidy on diesel to farmers, it was stated in the Rajya Sabha. The government realised a total revenue of ` 1.02 lakh crore by way of customs and central excise in 2010-11, showing a sharp rise of over 43 per cent over the previous year. The government has already eliminated basic customs duties on crude from 5 per cent. On petrol and diesel, the basic import duty has been reduced from 7.5 per cent to 2.5 per cent and on other petroleum products from 10 per cent to 5 per cent from June 25, 2011. Similarly, the basic excise duty on diesel has been abolished from ` 2 per litre. The government has no proposal either to give additional subsidy on diesel to farmers.
Reliance Industries hopes to profit with BP expertise, gas price revision in 2014
September 5, 2011. Reliance Industries and global oil major BP hope to significantly boost natural gas output from the country's largest gas field in the D-6 block in the next two to three years, and make handsome gains, as gas prices are due for revision in 2014. BP completed its $7.2-billion deal to acquire 30% stake in Reliance's 21 oil and gas blocks, including D-6 where natural gas output has fallen sharply as the reservoir turned out to be different from what the company had initially envisaged on the basis of surveys. Output was expected to ramp up the output to 80 million metric standard cubic meter per day (mmscmd) but it peaked at 60 mmscmd and fell below 50 mmscmd because of technical issues, sparking concerns among investors and analysts, and encouraging Reliance to bring BP as a partner to gain from the oil major's expertise in complex and deep-sea fields.
CAG criticism may hit efforts to boost oil output: RIL
September 5, 2011. Reliance Industries has reiterated its concerns about the impact of Comptroller and Auditor General of India's harsh criticism of companies that have discovered large oil and gas fields, and said that " ill-conceived reports" that are unduly critical would hamper efforts to boost output and will only help oil exporting nations. RIL has asked the government and the CAG to consider company's response before finalising the report. In June, a draft CAG audit report on performance of private energy companies, including RIL and Cairn, had criticised them for mismanaging oil and gas blocks, leading to significant erosion of companies' valuations. RIL has asked the CAG to consider India's energy security before being unduly critical of functioning of domestic energy firms RIL and Cairn who are credited with biggest gas and oil discoveries, respectively.
'Premature' plea against RIL's exploration licence rejected
September 5, 2011. Terming it a "premature petition", the Delhi High Court disposed off a plea seeking cancellation of a licence granted to RIL for exploring oil and gas in the Krishna-Godavari basin. The court allowed the petitioner to withdraw his petition with the liberty to file it later. The petitioner also sought a direction to the government to take over the control and management of the Krishna-Godavari gas project immediately from the joint venture. Even after the government auditor reported "serious violation" of rules in KG basin licence, the government was not taking any action, Re argued.
ONGC unlikely to preempt Cairn-Vedanta deal as price too high
September 4, 2011. ONGC is unlikely to exercise its preemption rights to acquire Cairn India as it finds the reduced price of ` 355 a share that Vedanta Resources is paying for the company still too high. ONGC had appointed SBI Caps to do an independent valuation of Cairn India. The report outlines Cairn India's valuation under different scenarios of production and crude oil prices. ONGC has interpreted the valuation report to conclude that Cairn India is worth much less than the Rs 355 a share price that London-listed mining group Vedanta is paying. This is despite the fact that UK's Cairn Energy, which is selling most of its 52.11 per cent stake in its Indian unit to Vedanta, has agreed to share royalty and pay oil cess on the company's lucrative Rajasthan block, making Cairn India an attractive acquisition target for the state explorer. Cairn agreeing to make the royalty that the state-owned firm pays on its 30 per cent share as well as Cairn India's 70 per cent share of production from the Rajasthan field cost-recoverable will help ONGC get back two-thirds of the payout it shouldered on its partner's behalf earlier, which had made the Rajasthan fields a losing proposition for it. Also, Cairn has agreed to absolve ONGC from the payment of a ` 2,500 per tonne cess on its 70 per cent share of production from the Rajasthan block, which will add to ONGC's profitability.
Diesel prices in Delhi likely to come down
September 1, 2011. Diesel prices are likely to come down by 37 paise a litre as Delhi government introduced a Bill in the assembly which is aimed at slashing the rate. Delhi Chief Minister Sheila Dikshit tabled the Delhi Value Added Tax (Second Amendment) Bill in the Assembly which will be considered for discussion. Following a hike in diesel prices in June, Chief Minister Sheila Dikshit had announced slashing of the diesel rate by 37 paise a litre to cushion the impact of a rise in prices of the fuel. The decision could not be implemented as certain changes were required in the VAT Act to alter the sale price of diesel. Diesel price had gone up to ` 41.12 after the hike of ` 3.37 a litre in June and it will come down to ` 40.75 if the amendment bill is passed in the House. The city government had arrived at the figure of 37 paise for cut in diesel prices by removing the 12.5 per cent VAT component on the hike of ` 3.37.
POWER
NTPC to set up first overseas project in Lanka
September 6, 2011. NTPC would set up a 500 MW coal based power station in joint venture with Ceylon Electricity Board of Sri Lanka. The project is first overseas venture of NTPC that plans to expand base to other surrounding nations. The project to be set up at Sampur, Trincomalee would go on stream by 2016 and meet growing demand for power in Sri Lanka. The project cost of about ` 4,000 crore would be shared equally by NTPC and Ceylon. Sri Lankan government would provide land on long-term lease for the project while Lanka Coal Company would import and supply coal. The power generated would be supplied to Ceylon Electricity Board through local grid system. Upon incorporation, the joint venture would sign other agreements with Ceylon Electricity Board and Board of Investment. The agreements have already been finalized NTPC has capacity to produce 34,854 MW through plants across India. In 2010-11, NTPC reported total income of ` 57,407crore and profit after tax of ` 9,103 crore. State-run Ceylon Electricity Board operates 24 power plants with aggregate installed generation capacity of 2,058 MW. The annual revenue of the board in 2010 was about $1.1 billion (about ` 5,000 crore).
NCL refuses to transfer land to Reliance Power's Sasan UMPP
September 3, 2011. Northern Coalfields Ltd (NCL) has refused to transfer land required to operate the mines attached to the proposed 4,000 MW Sasan ultra mega power project (UMPP) being built by Reliance Power. The Coal India subsidiary has argued that law forbids the transfer of coal-bearing area. Coal from the mines will fuel both the Sasan and 4,000 MW Chitrangi projects in Madhya Pradesh, which will be built with an investment of 36,000 crore.
Adra project in limbo as Railways, NTPC differ on land value
September 3, 2011. National Thermal Power Corporation's proposed project at Adra in West Bengal, which it plans to execute with the Railways, has hit a roadblock over valuation of land on which it is to be built. The power producer now plans to approach the Railway Ministry for a resolution. The 1,3200 MW thermal power plant is to be executed as a 26:74 joint venture between the two state-run entities. Over 1,300 acres of land identified for the project belongs to the Railways. NTPC and the Railways need to agree on its pricing for the project to take off. The power producer is also waiting for the go ahead from the state government for acquiring land for another proposed 1,600 MW thermal power plant at Katwa in Bardhaman district. The state government has acquired about 575 acres of land for the plant. NTPC needs another 1,000 acres to start construction.
Jindal Power looking at buyout of projects
August 31, 2011. Jindal Power said it is considering "quite a few" projects for buyout in the country, especially in the thermal power space. Jindal Power would like to buy projects which are either in the initial stages of construction or are already operational. Jindal Power was not looking beyond India for acquisitions, but the projects should have transmission facility, coal linkages and transportation facilities, among others, in place. The acquisitions might not only confine to the thermal power generation space alone, the company was open to acquire projects powered by other sources as well. The reasons for going the inorganic way to add capacity could not be immediately ascertained, but such an approach would help the company to save time on capacity addition. Jindal Power has 1,000 MW capacity and is in the process augmenting the same to over 7,000 MW. The company has also inked agreements to develop 6100 MW hydro power projects in Arunachal Pradesh. India is expected to add over 50,000 MW power generation capacity in the current Five-Year Plan ending March, 2012.
Transmission / Distribution / Trade
Reliance Infrastructure's Delhi distribution arms to settle NTPC’s dues
September 5, 2011. Reliance Infrastructure's distribution arms in Delhi have promised to settle the electricity bills of NTPC to ward off the state-run behemoth's threat to turn off power supply for non-payment of bills of about ` 900 crore. NTPC had served a notice on BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd, which cater to two-thirds of the capital's population. It said it would turn off the switch at the start of Wednesday if the bills were not settled. Power distribution in Delhi was privatised in July 2002 and handed over to three companies. BSES Rajdhani supplies power to southern and western areas such as Nehru Place, Hauz Khas, Dwarka, RK Puram and Punjabi Bagh, while BSES Yamuna caters to central and east Delhi, including Chandni Chowk, Yamuna Vihar, Daryaganj and Mayur Vihar. Northern areas of the city come under Tata Group's North Delhi Power Ltd. This utility, which controls distribution in a smaller area, has paid its dues and maintained the required letter of credit or guarantee from banks. NTPC signed Power Purchase Agreements with these distribution companies after the Delhi Electricity Regulatory Commission's order on April 1, 2007.
Policy / Performance
CAG report slams Delhi government
September 6, 2011. The Comptroller and Auditor General (CAG) has slammed the Delhi government for poor power generation in the capital, pointing out that the installed capacity actually declined between 2005 and 2010 even as demand surged. Delhi had an installed generation capacity of 994.5 MW against the peak demand of 3,558 MW at the beginning of 2005-06. At the end of 2009-10, the installed capacity had dropped to 735 MW against the peak demand of 4,464 MW, leaving a deficit of 3,729 MW. In effect, power demand rose 25.46% in this period, even as installed capacity dropped by 26.09% due to the closure of the IP power station in December 2009. The CAG report points out that generation companies could not keep pace with growing power demand in the state. The highly publicized capacity addition of 1,500 MW envisaged by November 2010 could not come up due to delay in execution of the mega power plant at Bawana which is behind schedule by eight months. On top of this, operational performance of power stations of Indraprastha Power Generation Company Ltd (IPGCL) was affected due to low plant availability, poor capacity utilization, excessive forced outages and delays in repair and maintenance. Contradicting the government's claims that there was no power shortage in Delhi, the CAG report also assessed that the shortfall has actually increased from 2005-06 to 2009-10. The CAG report finds that the failure of the government to keep pace with the city's growing power demand had increased Delhi's dependence on sourcing power from other states. The CAG report has charged the government with excess consumption of fuel for two power stations. While GTPS attributed non-availability of gas and technical reasons for high frequency as reasons for running the machinery on partial load which resulted in excess consumption, the management of Rajghat power house attributed excess consumption of heat/coal to the fact that Rajghat is an old plant. The CAG also pointed out that DERC had clearly stated that poor performance of plants due to technical problems or gas restrictions was to be mitigated by the company and not passed on to the consumers.
Cabinet decides to provide power subsidy to domestic consumers
September 3, 2011. A week after the 22 per cent hike in power tariff, Delhi government formally took a decision to provide a subsidy of ` one per unit to domestic consumers whose monthly consumption of electricity does not exceed 200 units. A meeting of the Delhi Cabinet, presided over by Chief Minister Sheila Dikshit, decided to extend the subsidy which will benefit around 34 lakh consumers out of 52 lakh consumers of the three private discoms. Power Minister Harun Yusuf, had announced in Delhi Assembly the government's in-principle decision to offer the subsidy to those domestic customers whose monthly consumption is restricted upto 200 units. The annual financial implication on the government would be around ` 180 crore. The government has been providing the subsidy for the last five years and it had lapsed in March this year. As per the new rates announced by DERC, a domestic consumer will be charged ` 3 per unit for first 200 units of power instead of the current ` 2.45. The rate for per unit of power has been increased to ` 4.80 from the current ` 3.95 per unit for usage between next 200 units to 400 units while ` 5.70 per unit will be charged instead of current ` 4.65 for usage beyond 400 unit. The issue of a proposal seeking hike in salaries of Delhi ministers and MLAs by up to 300 per cent also figured in the cabinet meeting as the Home Ministry has expressed reservations over certain provisions in it.
Anti-nuclear ampaigners join hands, to intensify protest at plant sites
September 2, 2011. Even before the nuclear industry gets its act together to build new plants, activists opposing India's atomic energy programme have joined hands for co-ordinated protests at various sites where nuclear projects are planned. Local activists are also in contact with anti-nuclear campaigners in Japan, including Kazue Suzuki of Greenpeace, who has offered to help Indian volunteers. An organised agitation is expected to mount pressure on the government, which is already facing strident protests against the proposed 10,000 MW nuclear plant at Jaitapur in Maharashtra. India plans to build 30 new reactors to add 63,000 MW of capacity in the next two decades to reduce chronic power shortages that are impeding industrial growth. India currently produces 4,780 MW of nuclear power, which is projected to rise to 7,280 mw next year and over 20,000 MW by 2020. Apart from Jaitapur, activists are leading protests at the proposed nuclear plant sites at Mithi Virdi in Gujarajt, Tarapur in Maharashtra and Fatehabad in Haryana. Activists and local representatives from these places and from Jaduguda uranium mines in Jharkhand gathered in Gujarat Vidyapith. The campaigners used a video link to interact with Greenpeace Japan's anti-nuclear campaigners.
Parliamentary panel anguished over Coal India's 233 held-up projects
September 1, 2011. A Parliamentary panel has expressed "anguish" over that the fact 233 projects of Coal India (CIL) are stuck for want of various regulatory clearances, including the environmental approvals. Suggesting the coal ministry to seek a solution by "forcefully" placing the matter before a ministerial group, the panel also asked it to hold consultations at the highest level for expediting clearances.
Tata Power asks govt to hike 'unviable' Mundra UMPP tariffs
August 31, 2011. Petitioning the Power Ministry to consider its proposal for raising tariffs under its 4,000-MW Mundra power project in Gujarat, Tata Power said that if some action is not taken in time, the project may become "unviable". Coastal Gujarat Power Limited, a special purpose vehicle set up by Tata Power to execute the project, is investing around ` 17,000 crore in the Mundra ultra-mega power project. Of this, the equity component is ` 4,250 crore and the remaining amount is being raised as debt. The Power Ministry had earlier asked Tata Power - the developer of the Mundra UMPP -- to sort out the matter with the procurer, the state of Andhra Pradesh, bilaterally. Tata Power had asked the Power Ministry to allow them to increase the tariffs of its Mundra project as the imported coal sourced from Indonesia for the project has become dearer. A new regulation in Indonesia, to be implemented from September 23, 2011, makes it mandatory for all the coal companies in the island nation to sell coal at prevailing international prices. The move is likely to impact the margins of Indian power generation companies that are securing the fuel from Indonesia. Earlier, there were no restrictions on coal pricing in Indonesia. Tata Power is executing the 4,000-MW (5x800 MW) Mundra project in Gujarat, the first 800-MW unit of which is likely to be commissioned next month. Power Finance Corporation (PFC), the nodal agency for UMPPs in the country, has so far awarded four such projects. The fifth UMPP at Bedabahal, in Orissa, for which preliminary bids were invited, received a response from 20 companies. PFC will finalise the award of the project to the successful bidder by the end of the current financial year (2011-12).
OIL & GAS
BP looks to ramp up Gulf of Mexico activity
September 6, 2011. BP Plc is looking to ramp up activity in the Gulf of Mexico and is applying for new well permits. The London-listed firm, which has failed to convince investors of its post-spill strategy, could take up to two years to increase output from a key gas field of India's Reliance Industries Ltd. The firm said in July that it hoped to restart drilling in the Gulf, as its output of 250,000 barrels a day from the region, down from 400,000 barrels a day pre-Macondo, contributed to lower-than-expected second quarter earnings. BP, the largest oil producer in the Gulf, has received one permit so far this year, allowing the company to plug and abandon a well it had drilled before the spill.
Cnooc falls after cutting output estimate
September 5, 2011. Cnooc Ltd., China’s largest offshore energy explorer, had its biggest decline in a month in Hong Kong trading after oil leaks at a field operated by partner ConocoPhillips forced the company to cut its output estimate. Cnooc, owner of 51 percent of the Penglai 19-3 field in Bohai Bay, said that a shutdown ordered by the maritime regulator will cut its output by 40,000 barrels a day, on top of a 22,000 barrel-a-day loss since the leaks started.
Exxon Mobil, Shell return workers to Gulf as Tropical storm lee moves away
September 5, 2011. Exxon Mobil Corp. and Royal Dutch Shell Plc returned workers to some oil and natural gas platforms as Tropical Storm Lee accelerated to the east-northeast, out of the Gulf of Mexico. Crews are resuming production in the western Gulf after inspecting equipment for damage.
OVL to invest $ 1.5 bn in an Iraq oil block
September 1, 2011. ONGC Videsh Ltd may invest over $ 1.5 billion in exploring for oil in a block that was awarded to it by the erstwhile Saddam Hussein regime. Block-8, located in the western desert in southern Iraq bordering Saudi Arabia and Kuwait, was awarded to OVL in November 2000 by the then Saddam Hussein government. However, the government formed after the US invasion of the oil-rich country, sought re-negotiation of the contract which has now been concluded. The post-Saddam Hussain regime had initially agreed to signing of a Production Sharing Contract (PSC), where OVL would have got ownership of the oil it produced from Block-8. But the success of post-war licensing rounds, where global majors committed to develop oilfields for a small fee, has seen Baghdad change track and offer a service contract to OVL.
Dung Quat Oil Refinery to resume full capacity
September 6, 2011. The Dung Quat Oil Refinery will again operate at full capacity on September 12 or 13, two days earlier than scheduled following maintenance. The refinery resumed operations at the end of last month and is currently running at a 70 per cent capacity. To date, this had been the first overall maintenance of the refinery, carried out over two months. Several technological problems had been successfully dealt with in the process, said the director of the Binh Son Refinery Company. A second overall maintenance of the refinery is planned to be carried out in four years time. The output of oil and gas during the first eight months of the year reached around 64 and 73 per cent of the planned yearly target, respectively, with an excess of 16 per cent in turnover. New oil fields at Dai Hung, Chim Sao and Dana, amongst other locations, are planned to be put into operation by the end of the year, Nam added.
Valero Energy to buy refinery from Murphy Oil in US
September 2, 2011. Valero Energy has entered into an agreement to acquire Murphy Oil USA's Meraux refinery and related logistics assets in the US state of Louisiana. The company will pay $325m for the refinery and related logistics assets and an additional estimated $300m for inventories. The refinery has a total throughput capacity of 135,000 barrels per day (bpd) with a 34,000bpd hydrocracker and significant hydroprocessing capacity that gives the facility the ability to process medium sour crude and produce significant yields of premium products.
Firm plans $100 mn oil refinery in Abia
September 2, 2011. A consortium of indigenous oil refinery companies known as Ozza Joint Ventures Oil Field Limited is to start refining crude oil in Umuokwo, Ukwa West of Abia State with a whopping sum of $100 million.
Enterprise, Enbridge, Anadarko plan NGL pipeline
September 6, 2011. Enterprise Products Partners L.P., Enbridge Energy Partners, L.P., and Anadarko Petroleum Corporation announced an agreement to design and construct a new natural gas liquids (NGL) pipeline that will originate from Skellytown, Texas in Carson County and extend approximately 580 miles to NGL fractionation and storage facilities in Mont Belvieu, Texas. The new Texas Express Pipeline ("TEP") will help producers in West and Central Texas, the Rocky Mountains, Southern Oklahoma and the Mid-continent maximize the value of their natural gas production by providing additional takeaway capacity and enhanced access to the Gulf Coast NGL market. Initial capacity on TEP will be approximately 280,000 barrels per day (BPD), which can be readily expanded to approximately 400,000 BPD.
Ukraine to review natural gas transit agreements with Gazprom
September 6, 2011. Russia's state monopoly Gazprom is nervously contemplating change is in its transit agreements with Ukraine for delivering its natural gas to Eastern European customers. Ukrainian Prime Minister Mykola Azarov announced that the Ministry of Fuel and Energy state company NAK Naftogaz Ukrainy, is to be liquidated and all agreements signed in its name will be reviewed. In the Ukrainian government restructuring NAK Naftogaz Ukrainy, drilling and transport companies will be separated out from it.
Libyan greenstream gas pipeline set to resume Oct 15
September 6, 2011. The Italian government confirmed it expects a key natural gas import facility from Libya operated by Eni SpA to reopen by Oct. 15, marking the first major resumption of a foreign-led petroleum operation following the ousting of Col. Moammar Gadhafi from Tripoli.
E.ON considering sale of gas transmission network
September 5, 2011. German utility company E.ON confirmed it is considering selling its gas transmission network. Speculation on E.ON's possible plan to sell the 12,000-kilometer long network emerged in mid-August, but the company declined to comment at the time.
Foreign companies apply for Czech shale gas exploration permits
September 6, 2011. Following the lead of neighboring Poland, where shale gas exploration is already under way, foreign and local companies have applied for exploration permits in the Czech Republic. Current applicants for the exploration permits include Basgas Energia Czech, a unit of the Australian-based exploration company Basgas and the Czech unit of British company Cuadrilla Morava, along with domestic oil and gas company Moravske Naftove Doly.
Libya assets unfrozen to pay Vitol $300 mn rebel fuel bill, U.S. says
September 2, 2011. The U.S. planned to release $300 million of frozen Libyan assets to Geneva-based oil trader Vitol Group for fuel provided to the rebels who ousted Muammar Qaddafi.
The funds were part of the $700 million that Secretary of State Hillary Clinton said in Paris were to be unfrozen. Vitol bought two tankers of crude oil from the National Transitional Council, the rebels’ umbrella group, while providing about 20 tankers of refined product. There remains a shortage of refined fuel in the country after months of turmoil. A tanker typically carries between 300,000 and 350,000 barrels of oil. Vitol trades over 5.5 million barrels of oil a day.
The U.K. government had set up a unit to coordinate economic sanctions against Qaddafi, ensuring he was starved of fuel while Libyan rebels were supplied. The group tracked oil tankers to facilitate a blockade against Qaddafi, while encouraging Vitol to sell to the rebels.
POWER
Generation
Uganda 600 MW Karuma power plant to be developed as public project
September 6, 2011. The Ugandan government will develop the 600MW Karuma Hydro power project as a public project, as it seeks to boost electricity generation capacity amid rising local and regional power demand. The government would raise funds for the project from its internally generated savings, grants and loans. The project is expected to cost at least $2 billion.
NextEra Energy to sell gas powered assets for $1 bn
September 2, 2011. NextEra Energy Inc, the largest U.S. renewable energy operator, said its subsidiary will sell four natural gas-based power plants for $1.05 billion to power generation and transmission company LS Power Group. The four plants, owned by the company subsidiary NextEra Energy Resources LLC, have a capacity of 2152 megawatts.
Transmission / Distribution / Trade
Saudi Electricity to start transmission Unit in 2012
September 3, 2011. Saudi Electricity Co. will start an electricity-transmission unit as part of a restructuring plan. The state-controlled power producer will also start a distribution unit and four separate power-generating units early 2013. The company announced the restructuring plan in May 2009.
Russia ready to help build power line from Central to South Asia
September 2, 2011. Russia is waiting for an invitation to participate in the construction of a power transmission system from Central Asia to South Asia, and it is ready to invest into the project hundreds of millions of dollars. The project at issue is called CASA-1000. It involves the export of electricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan. Russia is also interested in joining the project CAPI, which provides for laying an export pipeline from Central Asia through Afghanistan to Pakistan and India.
Policy / Performance
Atomic power needed to save economy: Noda
September 5, 2011. Japan’s new Prime Minister Yoshihiko Noda in his first days in office started to deliver a difficult message to a public still in shock from the Fukushima nuclear disaster: Atomic power is needed to save the economy. Nuclear power provided about 30 percent of the electricity in the world’s third biggest economy before the March 11 earthquake and tsunami. Now, about 80 percent of Japan’s 54 reactors are offline with more shutting for scheduled maintenance in the months ahead.
Tanzania aims to reduce power shortages by developing geothermal power
September 2, 2011. Tanzania, East Africa’s second- biggest economy, aims to relieve electricity shortages by promoting geothermal energy as the country looks for sources of renewable power. Drought has drained Tanzania’s main hydropower dams, resulting in power rationing amid a 264-megawatt grid deficit. Peak power demand is expected to rise to 1,994 megawatts by 2026, compared with 727 megawatts in 2005. Tanzania is situated in the East African Rift System, where splitting tectonic plates store an estimated 15,000-megawatts of geothermal potential. The country has as much as 650 megawatts of potential geothermal resources in the Mbeya region.
Renewable Energy / Climate Change Trends
GMDC to set up 5 MW solar plant in Kutch
September 3, 2011. Gujarat Mineral Development Corporation (GMDC) said it will set up a 5 MW solar plant on the reclaimed land of mined out pits at Panandhro in Kutch district. Tapping the opportunities in non convention energy sector, GMDC has set up a 100 MW wind power project during the period under review.
Reliance Power gets ` 4 bn US Exim Bank funding for solar plant
September 2, 2011. Reliance Group firm RPower has got a ` 400 crore loan from the US Emport-Import Bank for a 40-MW solar plant being set up in Rajasthan. The company is developing the country's largest solar photo voltaic (PV) project with 40-MW generation capacity, which is scheduled for commissioning by March, 2012.
Suzlon Energy plans $1.4 bn South Australian wind project
August 31, 2011. Suzlon Energy Ltd. (SUEL), the Indian company that is Asia’s third-largest maker of wind turbines, plans to develop a A$1.3 billion ($1.4 billion) wind farm in South Australia. The 600-megawatt project would produce enough electricity to power more than 200,000 homes a year. Suzlon expects to complete the 180-turbine wind farm on the Yorke Peninsula by the end of 2015.
UK Minister says India should move from coal to natural gas
August 31, 2011. British minister of state for foreign and commonwealth affairs Lord David Howell suggested that like some European countries, India too should move from coal to natural gas to reduce greenhouse emissions. Speaking at a seminar organised by Observer Research Foundation (ORF) on "Balancing Private and Public Sector Interest in Energy Sector Reforms", Lord Howell said Britain had moved from coal to natural gas and this had helped it achieve an 18 per cent reduction in greenhouse emissions while registering a two per cent growth rate in the last few years. He suggested that other countries, including India, could experiment with this method as this is an effective and affordable way to achieve low carbon growth to fight climate change. However, he admitted that India's challenge in meeting the low carbon growth is much more difficult because of the large scale of its energy demands. He appreciated India's commitment to reduce greenhouse emissions and maintained that partnerships and cooperation between countries like India and UK would help in creating a positive energy future. Lord Howell noted that both in India and the UK, state organizations like Bureau of Energy Efficiency are working with private sector organizations, and reducing energy usages by at least 25 per cent. He also explained how the world's first Green Investment Bank with a capital of 3 billion pounds will help achieve low carbon growth. He noted that natural gas is a clean energy which is 50 percent fuel efficient.
EU, Australia to discuss linking carbon trading schemes
September 5, 2011. Australia and the European Union have agreed to start talks to link carbon-emissions trading schemes, as global efforts to combat climate change struggle to make headway. The Australian government unveiled plans two months ago to impose a tax on carbon emissions from July 2012, before moving to a carbon trading system from mid-2015. Europe's emissions trading scheme, by far the world's largest carbon market, was launched in 2005 and caps the emissions of the bloc's heavy industry, forcing factories and utilities to buy carbon permits to cover their emission output.
Europe solar power to be competitive by 2020: EPIA
September 5, 2011. Power generated from solar modules in Europe may take until the end of the decade to be competitive vis-à-vis conventional forms of energy, the world's biggest solar association said. Based on a study looking at five major solar markets -- Germany, Italy, France, Spain and Britain -- Brussels-based European Photovoltaic Industry Association (EPIA) said competitiveness could be reached by 2020. The photovoltaic (PV) industry still depends on government support, so-called feed-in tariffs, giving incentives to producers of solar power that are then put on the consumers' energy bill. Governments have been cutting back on the support to force the industry to lower its costs at a faster rate, but that process has also hurt companies in the sector including Germany's Conergy, Q-Cells and Solon. The cost of PV electricity generation in Europe could decrease from a range of 0.16-0.35 euros ($0.23-0.50) per kilowatt hour (kWh) in 2010 to a range of 0.08-0.18 euros per kWh in 2020 depending on system size and irradiance level, EPIA said. This compares, for instance, with generation costs of about 0.9 euros for coal in Germany in 2010, according to data from the Organization of Economic Co-operation and Development (OECD). EPIA said competitiveness could be reached faster in some regions, singling out Italy where -- depending on the segment and size of solar system -- it would only take another 2-3 years. EPIA's more than 240 members include U.S.-based First Solar, the world's biggest solar company by market value, Germany's No.1 solar company SMA Solar and China's Suntech Power Holdings, the world's top maker of solar cells. The European Union is aiming to raise the share of renewables as part of total energy consumption to a fifth by 2020. Germany, which aims for a share of 35 percent by 2020, already derived more than a fifth of its total power requirement from renewable sources in the first six month of the year, data from energy industry association (BDEW) showed.
Debt-choked Greece seeks solar bonanza
September 5, 2011. Sun-baked and debt-choked Greece presented a plan to become Europe's solar energy powerhouse, attracting up to 20 billion euros of investment in the decades to come to lift its economy out of the doldrums. The cash-strapped country regards clean energy as one of the few advantages of its uncompetitive economy, which is going through its longest and deepest recession in decades as a result of a debt crisis.
Japan to boost renewable energy trade insurance
September 4, 2011. Japan will expand trade insurance for overseas renewable energy projects, the Nikkei newspaper reported, without saying where it got the information. Japanese companies are increasing their involvement in overseas projects and the value of insurance underwriting is forecast to double to 200 billion yen ($2.6 billion).
First Solar gets $456 mn guarantees for Canada plants
September 2, 2011. First Solar Inc. (FSLR), the world’s largest maker of thin-film solar modules, received $455.7 million of loan guarantees from the U.S. Export-Import Bank to build power projects in Canada. The company plans to build two plants with a total capacity of 90 megawatts in southern Ontario. The guarantee is the largest Ex-Im Bank has approved for U.S. solar products shipped abroad and will help President Obama reach a goal of doubling U.S. exports by 2015.
SolarWorld shuts production at U.S. plant
September 2, 2011. SolarWorld, Germany's No.2 solar company by sales, will shut down production at one of its U.S.-based solar module plants, looking to cut costs in response to falling prices, demand and tougher competition that squeeze margins. The company said that while it would retain and further strengthen sales and distribution at its site in Camarillo, California, production would be pooled at its plant in Hillsboro, Oregon.
ENN Group to invest $8 bn in U.S. clean energy
September 2, 2011. ENN Group, parent of ENN Energy Holdings Limited, plans to invest a total of $8 billion in clean energy projects in the United States over the next 10 years. Leading independent clean energy firms are actively making inroads overseas while also looking to strengthen their presence domestically as China is eager to speed up development of clean energy and reduce its dependence on traditional fossil fuels, especially coal.
Hyundai Heavy sees $300 mn annual sales from China wind-turbine plant
September 2, 2011. Hyundai Heavy Industries Co., the world’s largest shipyard, expects annual sales of as much as $300 million from a wind-turbine factory in China as it bolsters clean-energy units to pare a reliance on making vessels. The plant in Weihai in the eastern province of Shandong will open in October and may post at least $50 million of sales.
Greenergy rises most in three years on wind energy venture
September 1, 2011. Greenergy Holdings Inc. climbed the most in almost three years in Manila trading after the company said it will form a venture that will invest at least $1.3 billion in Philippine wind energy projects.
Obama stands by renewable-energy aid after panel maker Solyndra’s failure
September 1, 2011. President Barack Obama is standing by his support for renewable energy after Solyndra Inc., a maker of solar panels that received a $535 million U.S. loan guarantee, shut its doors. Solyndra suspended operations and plans to file for bankruptcy reorganization because it couldn’t compete with larger rivals. Obama had touted Solyndra as part of the U.S. effort to aid development of alternative energy sources, and its failure was cited by Republican lawmakers who say the subsidies are misguided. It’s the third U.S. solar company to go under in a month, as plunging panel prices and weak global demand drive a wave of industry consolidation.
UN’s $100 bn climate-change initiative seen to need private funding
September 1, 2011. A fund to help channel $100 billion in climate-change aid annually to developing nations should encourage private financing instead of counting mostly on money from cash-strapped industrialized countries. An international panel is working to create an endowment depending primarily on donations from governments, which is “a recipe for failure”. The Green Climate Fund was central to agreements reached by United Nations treaty negotiators in Cancun, Mexico. The world’s richest countries pledged to channel $100 billion annually by 2020, part of it through the fund, to help poorer nations reduce greenhouse-gas emissions from energy production and adapt to effects of global warming such as rising sea levels.
NRG’s New Mexico solar farm provides power to El Paso electric
September 1, 2011. NRG Energy Inc., which operates power plants with capacity to supply about 20 million homes, began delivering electricity to utility El Paso Electric Co. from a solar farm near Santa Teresa, New Mexico. The 20-megawatt Roadrunner Solar Generating Facility is NRG’s third large-scale solar project to enter operation and its first outside California. El Paso will buy Roadrunner’s power for 20 years. The plant uses thin-film photovoltaic panels supplied by First Solar Inc., which also built the plant and will be responsible for maintenance.
China to increase renewable energy use proportion
August 31, 2011. China plans to increase the proportion of renewable energy out of total energy use to 9.5 percent by 2015.
GE invests in Australian solar farm to power desalination
August 31, 2011. General Electric Co. (GE) the world’s largest maker of electricity-generation equipment, is investing in a 10-megawatt solar project in Australia that will use panels from First Solar Inc. GE and Verve Energy, a state-owned utility based in Perth, will each own half of the Greenough River Solar Farm. The plant will sell electricity to the Southern Seawater Desalination Plant that’s being built by Water Corp. The project will cost A$50 million ($53 million). The Western Australian state government requires new desalination plants to use power generated by renewable sources and will provide A$20 million for the project.
U.N. climate boss says Durban talks can deliver
August 31, 2011. A record rise in global greenhouse emissions and ever tighter economic constraints make it crucial for United Nations climate talks in South Africa in November to overcome years of deadlock and deliver a solution. Nearly two decades of U.N. climate change negotiations have so far failed to find a new binding approach to curbing the release of climate-warming gases. The world's biggest emitters, the United States and China, have never formally signed up to mandatory emissions caps and the previous head of the U.N. Framework Convention on Climate Change (UNFCCC) stepped down after 2009 talks collapsed. Hopes faded for a new global climate pact to replace the Kyoto Protocol, which expires at the end of 2012, after President Barack Obama and other leaders could not agree in Copenhagen in 2009 on a new deal for limiting global warming. Leaders of 193 countries are set to meet for the next annual U.N. climate summit in November in Durban, where talks could stall again if rich and poor nations renew squabbling over how to share out emissions cuts and whether to extend the existing protocol. Talks could also be over-shadowed by data showing that the world's carbon dioxide emissions hit their highest level ever in 2010, driven mainly by booming coal-reliant emerging economies like China. At the same time, the threat of another global economic slowdown has tightened governments' purse-strings and diverted public attention. Governments were very much "on track" to deliver on the main commitments agreed at a Mexico summit last year, related to finance, technology and adaptation measures. At the 2010 talks in Cancun, governments agreed to set up a Green Climate Fund to manage $100 billion a year by 2020 in aid to the poor nations most at risk of climate change.
Apple criticized for China supply chain pollution
August 31, 2011. Chinese environmental groups accused Apple Inc of turning a blind eye as its suppliers pollute the country, the latest criticism of the technology company's environmental record. Toxic discharges from "suspected Apple suppliers" have been encroaching on local communities and environments. Widespread environmental degradation has accompanied China's breakneck economic growth, and the government has been criticized for failing to take steps to curb pollution.
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