Energy News Monitor I Volume VIII, Issue 16

Hydro Power: Small Scale, New Context

 

NEWS BRIEF

OIL & GAS

ONGC may invite Cairn India, Vedanta Resources for signing royalty agreement

October 3, 2011. ONGC may invite Cairn India and Vedanta Resources for signing of an agreement on sharing of statutory levies on the all important Rajasthan oilfields. The ONGC board had agreed to waive its pre-emption rights and give consent to London-based miner Vedanta buying majority stake in Cairn India. But the state-owned oil explorer had added a caveat that the no-objection certificate or NOC will be issued only after Cairn and Vedanta sign a legal document agreeing to share royalty and pay cess on oil produced from Rajasthan fields. On signing of the agreement, ONGC will give NOC to the deal but the transaction will conclude only after the home ministry gives security clearance to Vedanta buying majority stake in Cairn India. Cairn India does not pay royalty on its 70%stake in the fields.

Cairn strike gas at 1^st well in offshore S Lanka

October 2, 2011. After prolific oil discoveries in India, Cairn India said it has struck natural gas reserves in the very first well it drilled in the offshore Mannar basin of Sri Lanka. Cairn had spud the well in early August and natural gas was discovered a few days back. CLPL-Dorado-91H/1z well is the first well to be drilled in Sri Lanka in 30 years and the first well to discover hydrocarbons in the country. Bombay Stock Exchange (BSE)-listed Cairn had in 2004 made India's biggest oil discovery in more than two decades in Rajasthan. It is currently producing 125,000 barrels of oil per day from the Mangala oilfield in Rajasthan. Cairn India is the target of a $9 billion takeover by London-listed mining group Vedanta Resources. Vedanta is buying 40 per cent of UK-based Cairn Energy Plc's stake in Cairn India. The Sri Lanka block is the only overseas property Cairn India current has. It has 10 oil and gas blocks in India.

GAIL to pick up 20 pc in Carizzo's Eagle Ford shale assets in US

September 29, 2011. GAIL, India's biggest gas transportation firm, has acquired its first shale gas asset in the US with an investment of $95 million. Gail has executed agreements with Carrizo Oil & Gas Inc, a NASDAQ listed company based in Houston, Texas, to enter into an unincorporated joint venture. The joint venture will have 20,200 gross acres, out of which GAIL subsidiary would have 4,040 net acres spread over four counties in Texas. Partners will spend around $300 million over a period of next five years to develop the asset. Major part of these investments would be funded by the GAIL Global.

The JV is expected to drill additional 139 wells in the acreage. Carrizo will continue to function as the operator for the joint venture. The JV will include eight wells in the acreage, which are currently producing about 2,350 net barrels of oil equivalent per day, out of which GAIL's share will be 470 barrels of oil equivalent per day.

BP opposes demand for drilling more wells at KG-D6

September 28, 2011. Europe's second biggest oil company BP Plc opposed upstream oil regulator DGH's and oil ministry's demand for drilling more wells at its partner RIL's KG-D6 block, saying bringing newer fields into production cannot alone solve the problem of sagging output.

The Directorate General of Hydrocarbons (DGH) has faulted Reliance for not drilling its committed 22 wells on Dhirubhai- 1 and 3 fields in KG-D6 block and also for gas output falling from 61 million cubic metres per day in March, 2010, to 37.5 mmscmd, instead of rising to 61.88 mmscmd as had been planned. DGH and the oil ministry want RIL to drill the two remaining wells of phase-I development of D1 and D3 fields and 9 more of phase-II by March 2012 as had been committed by the company in the $8.8 billion field development plan it got approved in 2006.

HPCL defers crude unit shutdown at Mumbai plant

September 29, 2011. Hindustan Petroleum Corp has deferred a shutdown of a crude unit at its 130,000 barrels per day (bpd) Mumbai refinery to the January-March quarter from September to meet festival demand for fuels. The refiner had plans to shut a 60,000 crude unit in Mumbai in September for at least 15 days, and a 60,000 bpd crude unit, a visbreaker unit and a fluid catalytic cracker (FCC) at its Vizag plant in November for 45 days for regular maintenance. The state-run refiner has not yet finalised firm dates for shutdown of the units at its 166,000 bpd Vizag refinery in southern Andhra Pradesh state. The refiner may shut its diesel hydro desulphurisation units at both its plants and the gasoline unit at its Vizag refinery in November for 8 to 10 days for mandatory inspection. HPCL floated a tender seeking up to 140,000 tonnes of gasoline for delivery in November.

GAIL keen to buy ADB stake in Petronet LNG for about ` 6.14 bn

October 3, 2011. The Asian Development Bank plans to sell its 5.2 per cent stake in Petronet LNG Ltd, which the state-owned gas utility GAIL India Ltd is keen to acquire and may have to pay over ` 600 crore for it. ADB has offered to sell its 39 million shares or 5.2 per cent stake in Petronet, which is valued at over ` 614 crore at trading price of ` 157.85 per share on the BSE.

BG Group inks LNG pact with GSPC for 20 years

September 30, 2011. BG has signed an initial agreement to supply up to 2.5 million tonnes a year of liquefied natural gas to state-owned Gujarat State Petroleum Corporation (GSPC) for 20 years. The two companies are likely to sign a binding agreement and start gas supply by 2014. The natural gas and LNG market in India has attracted global majors including BP, which is setting up a joint venture with Reliance Industries for gas marketing. The contract will be the second-largest LNG procurement agreement in India. Petronet LNG imports 7.5 million tonnes per annum from RasGas under a long-term contract. For its proposed Kochi terminal, Petronet has signed a 20-year deal with Exxon Mobil Corp to source 1.44 million tonnes a year. GSPC is aggressively scouting for LNG to supply industry, households and automobile users both in Gujarat and other regions. GSPC signed an MoU to procure up to 2.5 mt per annum of LNG from Gazprom Global LNG.

RIL wants $ 13 per mmBtu for CBM it plans to produce

October 3, 2011. Reliance Industries has sought approval to sell gas it plans to produce from below coal seams (coal-bed methane) at about $ 13 per million British thermal unit, more than double the rate at which domestically produced gas is sold at present. Reliance submitted to the Oil Ministry a formula for pricing of 3 million standard cubic meters per day of CBM it plans to produce from Sohagpur block in Madhya Pradesh. The formula is the same as the one at which RasGas of Qatar sells liquefied natural gas (LNG) on a long-term contract to India. According to the formula, Reliance wants 12.67 per cent of the prevailing Japanese Crude Coctail (JCC) plus 0.26 per mmBtu. JCC is now ruling around $ 100 per barrel and CBM price according to this formula comes to $ 12.67 per mmBtu plus $ 0.26 per mmBtu, totaling $ 12.93 per mmBtu. But industry observes scoffed at the price sought saying RasGas supplies gas rich in compounds like ethane (C2) and propane (C3) which are useful in manufacture of LPG and petrochemicals. Whereas, CBM is just methane (C1) and should therefore be priced at least 15-20 per cent discount to the price of rich or C2/C3 compound-rich gas. Also, LNG pricing cannot be applied for domestic gas as huge investment goes into putting a liquefication plant that turns natural gas into its liquid state by cooling it at sub-zero temperature. Reliance in the price approval letter states that the formula it is suggesting is arrived at on an arms-length basis. RasGas prices the 7.5 million tons a year (about 30 mmscmd) gas it sells to Petronet LNG Ltd at 12.67 per cent of JCC. Another $ 0.26 per mmBtu is the cost it takes for shipping the gas cooled to turn it into liquid (called LNG) in cryogenic ships. Reliance has lifted this formula and has sought pricing of its CBM in line with that. Great Eastern Energy Corp Ltd (GEECL) is selling CBM is produces from its Raniganj block in West Bengalat $ 6.79 per mmBtu while domestically produced natural gas is priced at $ 4.2 to $ 5.73 per mmBtu. The natural gas Reliance produces from its eastern offshore KG-D6 fields is priced at $ 4.205 per mmBtu for five years ending March 31, 2014. Sources said Reliance has sought expeditious approval of the CBM price so that it can sign gas sales and purchase agreements (GSPAs). The company plans to feed Sohagpur gas to state-owned GAIL's HVJ trunk pipeline for supply to customers.

Petrol price hike: Crude falls, but oil companies in no mood to cut prices

October 1, 2011. Crude oil prices have fallen 10% in September, the biggest monthly drop since May last year, but state oil firms are still debating whether or not to pass on the benefit to petrol consumers who have seen prices rise 12 times in the last 15 months. State-run companies had raised petrol prices by 3.14 a litre in Delhi.

Oil companies had also said that they would cut petrol prices as soon crude costs fall. State-run oil firms want to wait for crude oil to fall to $100 before considering a cut in petrol prices. Oil companies would also consider the value of the rupee before taking a decision. While crude has fallen, the rupee has depreciated about 5.5% since petrol prices were raised last time. The companies want to assess the net impact, and are also reluctant to cut prices because they face political obstacles in raising prices when crude costs rise.

The government controls the price of diesel, cooking gas and kerosene but petrol prices were decontrolled in June last year. The political furore over the last petrol price hike derailed the government's plan to limit the number of subsidised cylinders that can be sold to each customer every year. It also scuttled plans to provide cash subsidy to the poor instead of distributing subsidised kerosene.

Indraprastha Gas Limited hikes CNG price by   ` 2 per kg

October 1, 2011. Indraprastha Gas Limited (IGL) has raised the price of compressed natural gas (CNG) for automobiles by ` 2 per kg in Delhi and ` 2.30/kg in neighbouring Noida, Greater Noida and Ghaziabad. The price after the revision will be ` 32/kg in Delhi and ` 35.90/kg in Noida, Greater Noida and Ghaziabad. IGL said the hike would have a minor impact on the running cost of vehicles. For autos, the increase would be 6 paisa/km, for taxis it would be 10 paisa/km and in case of buses, the increase would be 57 paisa/km. Price of CNG may soon rise due to scarce domestic supply and rising cost of imported gas.

Reliance Industries Ltd, govt readying plan to ramp up output from KG-D6 block

September 28, 2011. The government and Reliance Industries are formulating a strategy to ramp up output from the KG-D6 block by 30-35 million metric standard cubic metres a day (mmscmd) by pumping natural gas from new discoveries in the deep-sea region and to develop common infrastructure across the block to optimise costs.

An independent consultant appointed by the directorate general of hydrocarbons (DGH) has also suggested ways to optimise output from the producing fields, as government authorities are keen to quickly reverse the sharp decline in output from India's largest gas field.

Reliance Industries, which discovered India's biggest gas field in decades, has seen output decline steadily to less than 45 mmscmd instead of rising to 80 mmscmd as planned because of technical issues in the deep-sea reservoir, which it is trying to resolve with the help of its partner, global oil major BP.

The decline in output has forced the government to cut supplies to non-priority customers, many of whom have imported LNG at three times the domestic price. Reliance Industries has already held initial talks with top government authorities about the new plan. The government has already approved capital expenditure of $8.8 billion for the fields already under production. Of this $5.6 billion has already been spent. An additional expenditure of $1-1.5 billion on top of the approved expenditure can develop reserves of 4-5 trillion cubic feet of gas.

Additional gas would substitute LNG imports worth $60 billion over the life of the field, and 32 mmscmd of gas is enough to meet the requirement of 8,000 MW of new gas-fired plants that are stranded because of fuel shortage. The company has been thinking of an integrated development of the entire block, which will also reduce the cost of developing the related infrastructure for gas production. The consultant appointed by the government has also suggested that if daily output from the producing gas fields remains low, the life of the field can be extended to extract the same amount of gas as envisaged in the original plan. Reliance Industries had earlier submitted a $1.52-billion plan to develop four satellite fields that can contain an estimated 1.3 trillion cubic feet of gas, which can give an output of about 10 mmscmd.

POWER

NALCO to diversify into nuclear power

September 29, 2011. National Aluminium Company Ltd. (NALCO) plans to diversify into nuclear power investing ` 11,450 crore, but may move out of Orissa for its new smelter and power project in view of uncertainty on location. NALCO had identified Kakarapar Atomic Power Station (KAPS) - 3 & 4 project for development, jointly with Nuclear Power Corporation of India Ltd at a cost of ` 11,450 crore.

RInfra commissions Parali-Solapur transmission line

October 4, 2011. Reliance Infrastructure said it has commissioned another transmission line between Parali and Solapur in Maharashtra. The 150 kilometre-long 400 kv double circuit transmission line is part of the Western Regional System Strengthening (WRSS) project, which entailed an investment of about ` 1,400 crore. RInfra said its subsidiary Reliance Power Transmission Ltd has already commissioned three transmission lines of the project, having nine lines of total length of 1,500 kilometres. RInfra is executing five transmission projects, with a total outlay of over ` 6,600 crore. The company has interests in power, roads and metro rail projects, among others.

JK power dept yet to recover over ` 13 bn due

October 2, 2011. The Power Development Department (PDD) of Jammu and Kashmir has an outstanding amount of ` 1312.34 crore with other government departments and several private consumers.

Various departments of Jammu and Kashmir government owe a whopping ` 700 crore to PDD, with Public Health Engineering (PHE) department being the biggest defaulter having an outstanding of ` 393.71 crore. The PHE department's dues are till end of August this year. ` 332.15 crore arrears are outstanding in Jammu division and ` 61.56 crore in Kashmir division.

The department uses the electricity for supplying drinking water to consumers in the state. The arrears of other state departments stand at a cumulative ` 233.07 crore. Security forces including army also have an outstanding payment of ` 21.30 crore. An amount of ` 53.71 crore is due from municipal corporations and municipal committees on account of electricity usage for public lighting. The central government institutions have to pay ` 21.20 crore towards the PDD as electricity usage arrears. Similarly, commercial and industrial units in the state have an outstanding of ` 108 crore and figures of domestic consumers stand at ` 238.15 crore. The arrears have accumulated over years as there is no provision for electricity dues in the budgeting process of various government run departments.

ADB to invest $750 mn on smart electricity transfer in India

September 30, 2011. The Asian Development Bank (ADB) will invest $750 million on power transmission systems that facilitate the bulk transfer of electricity from Chhattisgarh to areas of high demand in the North of India, including the National Capital Region. The funds will be made available to state-run transmission utility Powergrid. The funding will be in the form of a $500 million sovereign-guaranteed loan and a $250 million non-sovereign corporate loan.

The ADB board of directors has approved loan financing for the national grid improvement project, which will allow the bulk transfer of electricity (3,000 MW) from independent power producers in Chhattisgarh to areas of high demand in the North of the country.

The project is due for completion in 2017. Driven by robust growth, India's demand for electricity has exceeded supply in recent years. Though generating capacity has been increasing over the years in the country, expansion of transmission networks has not kept pace. Creating inter-regional transmission "corridors" will allow them to move surplus electricity to areas short of supply.

Karnataka power crisis worsens, to buy 300 MW from Punjab

September 30, 2011. The separate Telangana agitation has worsened the power crisis in Karnataka and the state will start buying power from Punjab. The Telangana agitation for a separate state has brought Singareni Colieries' production to a halt and also hit coal supply to Karnataka's two thermal plants, increasing the state's power shortage to 800 MW a day. This has led to unscheduled power cuts in Bangalore and across the state for the last three days. In the tech-hub, several areas go without power for up to four hours a day, each disruption lasting about an hour. The tech-hub itself needs over 1,600 MW daily. Karnataka depends heavily on hydro-power with around 65 percent of its requirement of over 7,000 MW daily met by it.

Gujarat Power Discom slaps record penalty on Essar

September 30, 2011. A Gujarat government electricity distribution company has slapped a record penalty of ` 2,300 crore on the Essar group for drawing more power than its sanctioned limit. Essar is contesting the fine and has clarified its stand to Dakshin Gujarat Vij Company, which supplies power to the group's units at Hazira in South Gujarat.

Essar refused to take queries on the penalty while state energy department could not be reached. The Ruias-controlled group has been at loggerheads with state government-owned power holding firm body Gujarat Urja Vikas Nigam over power purchase agreements signed in 1996, 2007 and 2010.

Gujarat Urja is the holding company for all state power distribution and transmission companies. Essar Power is seeking a year's extension for its 1,320 mw coal-fired Salaya-2 power project in Jamnagar district after it failed to terminate a 25-year PPA it signed with GUVNL last year for 800 MW at 2.80 per unit. Last month, it issued notice to GUVNL seeking to terminate the same PPA. However, GUVNL refused to relent and told Essar Power to honour it.

Punj Lloyd bags ` 11.9 bn contract from Calcutta Electric Supply

September 28, 2011. Punj Lloyd group said it has bagged a ` 1,195 crore turnkey contract from Calcutta Electric Supply Co for setting up a thermal power project. The project being set up by Haldia Energy Ltd, a subsidiary of Calcutta Electric Supply Co, is scheduled for commissioning by 2014. Scope of work includes setting up balance of plant, boilers and turbines for the 600 MW project. With this contract, the order backlog for the Punj Lloyd Group on a consolidated basis has gone up to ` 25,133 crore.

Coal India may invest up to ` 400 bn in 12^th Plan

October 2, 2011. Coal India Limited (CIL) said it may invest up to ` 40,000 crore in the 12th Plan Period ending 2017 towards mines' development for augmenting production. CIL said that against the company's investment target of ` 35,000 crore during the 11th Plan Period, CIL might end the five-year period with an actual investment of less than ` 25,000 crore. CIL has set a production target of 556 million tonne by 2016-17 against the country's projected demand of 965 million tonnes in the terminal year of the 12th Plan Period.

The CIL said that overseas coal assets acquisition programme of the company was not moving ahead as was expected and hence, the focus of the company in the next Plan Period would be on developing mines within the country. CIL had announced that it plans to put up 20 new washeries with a combined capacity of 111.1 MT. It has 17 such washeries now. CIL said that the 452 million tonne production target of the company for current fiscal would be met despite lower production till September, compared to the same period last year, because of excessive rains.

NTPC pays annual dividend of ` 26 bn to govt

September 30, 2011. State-owned power generator NTPC has paid a total dividend of ` 2,647.60 crore to the government for the financial year 2010-11. NTPC presented a final dividend cheque of ` 557.39 crore to Power Minister Sushil Kumar Shinde. It had given an interim dividend of ` 2,090.21 crore in February.

The power generator has paid dividend to the government for 18 consecutive years. The company has paid a total dividend of 38 per cent of its paid-up capital for financial year 2010-11, amounting to Rs 3,133.27 crore.

Cabinet approves new mining bill calling for profit sharing

September 30, 2011. The Cabinet approved a bill calling for coal miners to share a maximum 26 percent of their profits with local communities and for other miners an amount equivalent to royalties. The bill now requires parliamentary approval to become law and is seen as a major move towards reform. The bill had initially suggested all miners give 26 percent of profits to local communities. The draft law proposes the profit sharing formula in a bid to smooth land acquisition, a touchy issue in the countryside, where many oppose natural resources being carted away by outsiders.

Reliance Power to replace $2.2 bn costly debt with cheaper Chinese and US loan

September 30, 2011. Reliance Power will replace three-fourth debt raised for the ` 15,000 crore Sasan ultra mega power project with cheaper Chinese and American finance.

The company said the re-financing would significantly reduce the interest cost for the Sasan project in Madhya Pradesh. The company said it received a nod from the Reserve Bank of India to raise $2.2 billion (about ` 10,500 crore) from US Exim and Chinese banks.

Sasan Power Ltd, a wholly-owned subsidiary of Reliance Power, will receive $1.1 billion from Chinese banks including Bank of China, China Development Bank and Export Import Bank of China. The Export Import Bank of United States has approved funding $917 million to Sasan project. Reliance Power said draw down of the funds would begin over the next few weeks.

NTPC signs loan agreement of ` 23 bn with consortium of four banks led by SBI

September 28, 2011. NTPC said it has signed a loan agreement of ` 2,341 crore with a consortium of four banks led by State Bank of India. The funds would be utilised by Kanti Bijlee Utpadan Nigam Ltd, a subsidiary of NTPC, for development of a 390 MW thermal power stage-II project at Muzaffarpur in Bihar. Besides State Bank of India, Canara Bank, India Infrastructure Finance Company Ltd and United Bank of India are members of consortium.

The Loan facility was syndicated by SBI Capital Markets Ltd. Kanti Bijlee Utpadan Nigam Ltd is a joint venture owned 65% by NTPC and 35% by Bihar State Electricity Board.

The new units would be set up at a site adjacent to the existing 2x110 MW Muzaffarpur thermal power project. The joint venture has an agreement with Bharat Heavy Electricals for turnkey execution of the expansion project. Scope of the contract includes design, manufacture, supply, erection and commissioning of coal-based power units on engineering, procurement and construction basis.

Hitachi to form new JV with SFO Technologies in India

September 28, 2011. Japanese diversified conglomerate Hitachi said that it will form a new joint venture (JV) company with SFO Technologies for providing state of the art control systems for thermal power plants. The new company - Hitachi NeST Control Systems - to be established in October and be based in Bangalore, would engineer, manufacture, commission and service advanced control systems for thermal power plants. According to the Japanese conglomerate, its share in the new company would be 70 percent and that of SFO Technologies 30 percent. The new company would benefit from Hitachi's cutting-edge control technologies and SFO Technologies' highly skilled employees and nationwide sales and service network in India. The company said that it expected the JV to achieve sales worth ` 1.5 billion by 2014-15. The company's optimism in the success of its new JV is based upon its assessment that the power sector would grow by leaps and bounds in India and would be led by thermal power plants than any other energy source. The company made its foray into the power sector by making investments in BGR Energy Systems to manufacture super-critical turbines, generators and boilers in Chennai.

OIL & GAS

Leni Gas & Oil looks to boost production with latest Trinidad acquisition

October 3, 2011. Leni Gas & Oil has doubled its land holding in Trinidad by acquiring the production rights to the Goudron Field, where the production potential has been estimated to be in the range 1,000 to 4,000 barrels of oil per day. Goudron was discovered in 1927 and originally developed by Texaco. The existing producing zones have reserves of proven 1.9 million barrels of oil and estimated 3P reserves of 21.8 million barrels. Proven and Probable reserves are estimated at 8.0 million barrels. The concession covers a total of 2,875 acres. Current production comes from around 30 active wells out of a total of 152 and Leni said that the drilling of new infill wells could begin in early 2012. Recent production has ranged between 100 and over 200 bopd.

Sri Lanka announces finding natural gas in Mannar basin

October 2, 2011. Sri Lanka announced the finding of a natural gas field in the northwestern seas off Mannar for the first time. Cairn Lanka, which began oil drilling operations in the Mannar basin in August, has confirmed that it had informed the Sri Lankan authorities about the finding. Cairn has said If Sri Lanka's drilling program is successful then commercial oil production can be expected by 2014 with a billion barrels. Mannar basin has eight oil and gas exploration blocks and two of them have been granted to China and India. Russia's largest oil company, Gazprom recently visited Sri Lanka to hold discussions on oil exploration in the Mannar Basin.

Apache to develop Balnaves oil field

September 30, 2011. Apache Energy has committed to developing the Balnaves oil and gas field off Western Australia's north west coast. The Balnaves field is about 250 kilometres north-north-west of Onslow and is amongst the Brunello and Julimar fields. Apache plans to use the fields to feed gas to the new Wheatstone LNG project. Apache will spend $438 million on the project which should be pumping oil by early 2014. Apache says peak production should be 30,000 barrels of oil a day and up to 17 million barrels in total. The company says it will also extract 30 billion cubic feet of gas.

Iran building first heavy oil refinery on Qeshm Island

September 30, 2011. Iran is constructing its first refinery capable of processing heavy crude oil on its Qeshm island in the Persian Gulf. The refinery will have an output capacity of as much as 30,000 barrels a day of light oil products and will come online. The refinery's throughput will come from Iran's Soroush and Norooz fields. Iran is currently the Organization of Petroleum Exporting Countries' second-largest oil producer and began construction of the Qeshm refinery. Iran's recoverable oil reserves are currently estimated at over 150 billion barrels with the volume of recoverable heavy and super heavy crude estimated at over 70 billion barrels.

Sunrise plans on track for new LPG terminal

September 30, 2011. Sunrise Energy is in the advanced stages of its plans to build a liquefied petroleum gas (LPG) storage import terminal next to the Port of Saldanha, on the west coast of the Western Cape. Output from the project was, in addition to domestic use, necessary for security of supply of LPG to the steel plants in Saldanha and other industries in the Western Cape. The Western Cape depends on LPG from Chevron's Caltex refinery in Milnerton, Cape Town, and PetroSA's Mossel Bay gas-to-liquids refinery. Once completed, the project could also export LPG to Namibia. Sunrise intends to import between 5000 and 7000 tons of LPG a month initially and the facility can be expanded to eventually import up to 52000 tons a month of LPG.

Shell shutting down entire Singapore refinery after fire

September 29, 2011. Royal Dutch Shell Plc is shutting down its entire Singapore refinery, the company's largest, to get the fire that broke out under control. Shell is shutting more units in the vicinity of the area where the incident happened and it may take two days to complete the shutdown. The fire could have started during maintenance work.

Record U.S. gasoline cargoes seen driving 17 pc tanker-rate advance

October 4, 2011. Record U.S. exports of gasoline and other refined oil products are poised to eliminate a glut of ships hauling the fuels next year, driving freight rates to a three-year high. Shipments in the first nine months were 24 percent higher than a year earlier, led by cargoes to Latin America. Costs to hire medium-range tankers, holding enough gasoline to fill about 800,000 cars, will gain 17 percent to $14,000 a day next year. U.S. crude-oil output in the first nine months rose 1.7 percent, the highest for the period since 2003. Gasoline demand fell 3.7 percent in July to the lowest for the month in 11 years. At a time when ships hauling crude and coal are forecast to lose money for at least another two years, product tankers may break even as early as 2012.

Gazprom sees Nord stream gas pipeline launched on November 8

October 3, 2011. Russian natural gas giant Gazprom expects the Nord Stream gas pipeline to be put into operation on November 8. The construction of the first line is complete, while about 60% of the second section of the project has been also laid. With the launch of the first line, Gazprom plans to start the second stage of environmental monitoring. The volume of financing of environmental research at the project's planning and design stages amounted to 100 million euros, while investments in constant ecological monitoring have been set at 40 million euros for the first three years of the project's operation. Gazprom could consider constructing additional lines of the Nord Stream project taking into consideration a growth in natural gas consumption in Europe. Gazprom sees a trend of increasing natural gas supplies to European countries, which would require raising Russia's gas transportation capacities to deliver gas to the E.U. The Nord Stream project encompasses the construction of a 1,220-kilometer pipeline that is to carry Russian natural gas under the Baltic Sea to Germany. The Nord Stream project's annual capacity is planned at 55 billion cubic meters of gas as its two lines are launched. The second line is planned to be launched in September-November 2012.

Crude extends declines in New York after closing at one-year low

October 3, 2011. Oil extended declines in New York, after closing at a one-year low, as traders speculated that a slowing U.S. economy and Europe’s debt crisis will curb fuel demand. Futures slipped as much as 1.6 percent after dropping 17 percent since the end of June in the worst quarter for oil since 2008. Reports may show manufacturing in the U.S., the world’s biggest oil consumer, barely grew, while job growth failed to cut unemployment. European finance ministers meet in Luxembourg to weigh the threat of a Greek default. Royal Dutch Shell Plc shut units at its largest oil refinery after the worst fire at the Singapore plant in 23 years.

Enterprise, Enbridge plan pipeline from cushing to Gulf Coast

September 29, 2011. Enterprise Products Partners L.P. and Enbridge Inc. announced plans to design, construct and operate a new pipeline to transport crude oil from the oversupplied hub at Cushing, Oklahoma, to the Texas Gulf Coast refining complex. Initially, the Wrangler Pipeline will have the capacity to transport up to 800,000 barrels per day of crude oil and accommodate the constrained medium-to-light crude oil currently stranded at Cushing and priced at a substantial discount to the oil imports that account for most of the supply being used by Gulf Coast refiners. The pipeline will also have the capability to handle additional supplies of crude oil arriving at Cushing from other North American producers. In anticipation of future increases in crude oil volumes delivered to the Cushing area, the joint venture partners will design the pipeline to be easily expanded.

Canada: Pipeline decision should be based on merit, not noise

September 29, 2011. Canada to the United States says a controversial oil pipeline should go ahead and that arguments against the project have "fallen like a house of cards." The $7 billion project would carry oilsands oil from Alberta to refineries on the Gulf Coast. There has been a lot of noise about the 2,700-kilometre pipeline, which would also carry oil from the Williston Basin in western North Dakota and eastern Montana to downstream markets.

Kogas sees cost of North Korean section of pipeline from Russia at $2.5 bn

September 28, 2011. South Korea's national gas corporation Kogas estimates the cost of building the North Korean stretch of a pipeline running from Russia at $2.5 billion. Kogas has concerns as to who will be financing the construction of that section of the pipeline. If the pipeline runs the shortest route, then it would stretch for 1,100 kilometers - of which 700 km would be in North Korea. South Korea has already encountered problems associated with projects involving the North.

Shell sells Philippines LPG business to Japanese firm

September 28, 2011. Oil firm Pilipinas Shell Petroleum Corp. has moved to sell its liquified petroleum gas (LPG) business in the country to a Japanese firm in line with headquarters' plans to limit its downstream ventures. Shell said it signed a share purchase agreement with Isla Petroleum and Gas Corp., an affiliate of Itochu Corp., for the sale of Shell Gas (LPG) Philippines, Inc.

Snags lurk for Keystone XL even after U.S. approval

September 28, 2011. Winning State Department approval for the Keystone XL oil pipeline is not likely to be the last hurdle TransCanada Corp faces in its efforts to build the controversial project. Even if it gets the State Department's green light, legal and regulatory snags lurk at federal and state levels and each could mean more costly delays to the $7 billion project, which is intended to move more than half a million barrels of oil sands-derived crude oil a day to Texas from Canada.

Pennsylvania launches natural gas drilling fee

October 4, 2011. Pennsylvania announced plans for new levies and stricter rules for natural gas drilling, which has been blamed for contaminating local water supplies. Governor Tom Corbett proposes to slap a potential $160,000 "impact fee" on each well drilled, which would be used to improve infrastructure and promote the use of natural gas vehicles in the state. Each well will be subject to a fee of up to $40,000 in the first year, $30,000 in the second year, $20,000 in the third year and $10,000 in the fourth through tenth years. Pennsylvania is at the center of a U.S. natural gas drilling boom, thanks to a drilling technique called hydraulic fracturing, or fracking, which releases gas in shale rock by blasting deposits with chemical-laced water and sand. Pennsylvania is home to a large portion of the Marcellus shale, the country's largest deposit of shale gas. But the contamination of local water supplies by drilling fluids in Pennsylvania has led to calls for stricter regulations. In neighboring New York state, fracking has been banned while its effects are considered. The proposals were put forward by the Marcellus Shale Advisory Commission, which was formed by Corbett in March. Under the recommendations, the distance of drilling sites from private water wells will increase from 200 feet to 500 feet and to 1000 feet from public water systems. The required distance from streams, rivers and ponds will increase to 300 feet from a current 100 feet. The penalty for civil violations, such as spills or contaminating water supplies, will double to $50,000. Revenues from greater fines and well fees will be used in part to fund a construction of natural gas refueling stations and natural gas vehicle fleets for mass transit systems.

Iceland opens second offshore exploration round

October 3, 2011. Iceland opened a second licensing round for oil and gas exploration and production on its continental shelf, potentially opening up the country to offshore hydrocarbon exploration. The blocks on offer are in the Dreki Area, northeast of Iceland, and cover some 42,700 square km at depths ranging mostly between 800 and 2,000 metres.

France to cancel Total's shale gas permits

October 1, 2011. France plans to cancel shale gas exploration permits granted to oil major Total SA in the South of France after it banned shale gas drilling due to environmental concerns earlier this year. Total said it wanted to prospect for shale gas in France's southeast region, but stressed it would not use the banned hydraulic fracturing drilling technique.

China provides $1 bn loan for Tanzania gas pipeline

September 29, 2011. The government has signed a loan agreement of over Sh1.6 trillion ($1 billion) with the Chinese government for the construction of a gas pipeline from Mnazi Bay in Mtwara Region and Songo Songo in Kilwa District to Dar es Salaam. The deal comes in as fresh efforts to unlock the gas potential in the southern coast of Tanzania. It is anticipated that additional gas will help to alleviate power problems currently facing the nation. Construction of the 532km pipeline would start when Chinese experts will start the evaluation process. The whole project is expected to be completed by late March, 2013. The loan would also finance the construction of the two gas processing plants.

Brazil gas-tax cut may hinder investment in ethanol

September 28, 2011. Brazil’s decision to cut a tax on gasoline may discourage investment in sugar cane mills that produce ethanol. The Cide tax, charged on gasoline that state-owned oil company Petroleo Brasileiro SA sells to distributors, was reduced to 19 centavos a liter from 23 centavos. The cut may also reduce ethanol prices, which is typically 70 percent of the price of gasoline, said Paulo Luccas, commercial manager for Sao Paulo-based ethanol producer Tonon. Rising production costs and falling margins for ethanol producers have led to a dearth of investment in new cane plantations and mills.

POWER

Belarus, Russia to finalize deal on nuclear power plant construction        

October 1, 2011. The Russian Federation’s ambassador to Belarus Alekhandr Surikov said that in the Belarusian capital Minsk that a draft Belarusian-Russian interstate agreement on the construction of a new 2,400 megawatt nuclear power plant for Belarus will be ready in October. The NPP will be built by Russia’s Atomstroieksport, a subsidiary of the Russian Federation’s state nuclear corporation Rosatom and will contain two reactors, with the power plant's first generating unit expected to go online in 2017 and the second the following year.

France interested in building new nuclear power plant in Armenia

September 29, 2011. France interested in participating in the construction of a new nuclear power plant in Armenia. Armenia plans to build a new power plant with a capacity of approximately 1,000 MW. The project could cost about $5 billion. The Armenian parliament abolished the state monopoly for ownership of new nuclear power units in 2006 in order to attract foreign capital for the project. The two sides also discussed issues of cooperation with France in the field of road construction, including the North-South transport corridor. The Armenian government approved an investment program to build the North-South transport corridor, with an estimated cost of $1.5 billion, for which Armenia signed a $500 million loan agreement with the Asian Development Bank. The North-South transport corridor will enable Armenia to mitigate the effects of the blockade imposed by Azerbaijan and Turkey.

Nuclear shutdown costs mount in Germany

September 28, 2011. Germany's four operators of nuclear power stations, including E.ON and RWE, face a bill of 18 billion euros ($24.5 billion) to decommission the country's 17 reactors. However, expenses incurred storing nuclear waste produced during the facilities' lifetime are excluded from these costs. This means total costs might top the 30 billion euros or so companies have set aside for expenses relating to the shutdown. Germany decided to shut all nuclear power facilities in the next decade, reversing a plan that had extended the lifespan of the facilities well into the 2030s.

Smart-grid sales in Latin America to reach $1 bn by 2015, GE says

September 28, 2011. Sales of equipment to manage electricity consumption in Latin America may reach $1 billion by 2015, up from $100 million now, as governments require utilities to become more energy efficient, according to a General Electric Co. (GE). Half of those sales will be in Brazil, where the government is already taking steps to expedite investment in the smart-grid industry. Electricity theft and energy losses from poorly conducting cables are prompting governments in the region to require the use of smart-grid systems that may cut power consumption by as much as 20 percent. Latin American power distributors lose as much as 20 percent of their energy from people who illegally tap power from nearby lines and heat loss, and sometimes more.

China Power Investment says Myanmar hydropower dam suspension bewildering

October 4, 2011. China Power Investment Corp., an investor in Myanmar’s $3.6 billion Myitsone hydropower station, said the country’s sudden decision to halt the project is “bewildering”. All legal documents and regulatory procedures have been cleared. Myanmar said the project on the Irrawaddy River should be suspended because it’s against the “will of the people”. China, which also has oil and gas investments in the Southeast Asian nation, said the rights of Chinese companies ought to be respected and called for “friendly talks.” The European Union welcomes Myanmar’s readiness to address the ecological concerns about the project and the government’s willingness to listen to “diverse voices,” according to a statement on Sept. 30. Last year, China, Myanmar and Thailand agreed to study a $10 billion hydropower project on the Salween River that discharges into the Andaman Sea.

Japan offers consultant services for Vietnamese nuclear power plant       

October 1, 2011. Electricity of Vietnam Group and Japan Atomic Power Company signed a contract in the capital Hanoi for JAPC to consult on the construction of Vietnam’s first nuclear power plant, the Ninh Thuan 2 facility in Vietnam’s Ninh Hai district of the country’s central Ninh Thuan province. Under terms of the contract, JAPC will advise investor EVN on Ninh Thuan 2 plant project for 18 months. The $19 million consultancy is being funded by the Japanese government and disbursed by the Japanese Ministry of Economics, Trade and Industry, Vietnam. Japan has up to now financed more than $4 billion for EVN energy projects, adding that since 1996 Japan has actively supported Vietnam in supplying information, training and public relations in the field of nuclear power. The Ninh Thuan 2 nuclear power plant will be Vietnam’s first nuclear power project, coming under Vietnam’s National Electricity Development 2011-2020. As envisaged, the Ninh Thuan 2 nuclear power plant will have an annual electrical generating capacity of nearly 2,000 megawatts. The Ninh Thuan 2 nuclear power plant is Japan's most aggressive move to promote nuclear technology exports since the11 March  Fukushima Daiichi accident.

Alexandria coal plant to close within a year

October 1, 2011. The last major stumbling block to closing the Alexandria coal-burning power plant was removed after a regional power organization determined that its operation is not needed to keep the area’s electrical grid reliable. The 62-year-old Potomac River generating plant, once considered the single biggest source of air pollution in the region, is now set to close no later than Oct. 1, 2012. The city of Alexandria and the company had announced an agreement to shutter the 62-year-old coal-fired plant in late August. But the shutdown was dependent upon whether the loss of the 485 megawatts of power the plant generates would adversely affect the region’s power grid. PJM Interconnection, a regional transmission organization that coordinates the movement of electricity in the Mid-Atlantic, concluded in a letter to GenOn it would not.

U.S. lays out requirements to reopen Dominion plant

September 30, 2011. The U.S. nuclear regulator said it has sent a letter to Dominion Resources laying out the requirements for the restart of the company's quake-rattled North Anna nuclear plant. The Nuclear Regulatory Commission said Dominion will have to submit paperwork responding to the commission's questions about the safety of restarting the plant. Reactors at the North Anna station in Virginia have been shut down since a 5.8 magnitude earthquake shook the east coast of the United States in late August. It was the first time an operating U.S. nuclear plant experienced an earthquake that exceeded its design parameters, meaning the ground motion from the quake was stronger than the plant was built to withstand.

Portugal races to sell EDP, REN stakes

September 29, 2011. The government of debt-laden Portugal gave the formal go-ahead for the sale of its stakes in power utility EDP and power grid operator REN, which it wants to complete by the year end to comply with terms of a bailout. The government said it is aiming to sell the stakes, worth a total of almost 2.3 billion euros ($3.1 billion) at current prices, directly to institutional investors, which is quicker than offering shares to the public.

Southern gambles on first U.S. nuclear reactors in 30 years

September 28, 2011. Southern Co. is poised to end a three-decade freeze on nuclear development as the U.S. Nuclear Regulatory Commission considers granting it the first license to build new reactors since the Three Mile Island accident. At stake for Atlanta-based Southern is more than its bottom line and reputation.

Reliance Power's Tilaiya project gets approval for carbon credits; to earn ` 20 bn over 10 years

October 3, 2011. Reliance Power said its 3,960 MW Tilaiya ultra mega power project in Jharkhand has got approval for carbon credits from the United Nations Framework Convention on Climate Change (UNFCCC). Reliance Power's Tilaiya UMPP would earn ` 2,000 crore by trading carbon credits during the first 10 years of its operations. The Clean Development Mechanism Executive Board (CDM-EB) of UNFCCC allows the Tilaiya project - to be commissioned during the 12th Five-Year Plan period, starting next year - to earn Certified Emission Reductions (CERs). The CERs can be traded and sold and translate into direct revenues for companies such as Reliance Power. The Tilaiya UMPP will generate 21.3 million carbon credits during the initial 10 years and they are valued at over ` 2,000 crore. Jharkhand Integrated Power Ltd, the special purpose vehicle for the Tilaiya UMPP has entered into a 25-year Power Purchase Agreement (PPA) with off-takers for its entire capacity. The project would supply power to 18 off-takers in 10 states. Reliance Power has an installed capacity of 1,200 MW at its Rosa thermal power project in Uttar Pradesh. The company is also executing two more UMPPs at Sasan (Madhya Pradesh) and Krishnapatnam (Andhra Pradesh).

Suzlon Energy wins orders worth ` 2 bn

October 3, 2011. Wind power generator Suzlon Energy said it has bagged two orders worth over ` 200 crore from third party operators. Suzlon's 100 per cent subsidiary Seforge, engaged in manufacturing of large size castings and large diameter forged and machined rings, has received two-third party orders worth ` 120 crore from an independent wind turbine tower manufacturer for tower flanges, and ` 80 crore for castings. The country is witnessing a strong growth momentum not only in wind, but also in non-wind sectors like oil and gas, and particularly in markets such as North America.

India rallies 30 nations against EU Airline emission levy

September 29, 2011. India is working with more than 30 nations to draw up a strategy to counter the European Union’s plan to impose emission charges on airlines flying into the region starting next year. Measures by the 27-nation bloc to impose carbon curbs on flights to and from the region have sparked protests from China’s airline association and carriers including American Airlines and Continental Airlines. The EU plans “contravene” international law and “is an attack on sovereignty”. More than 30 members of the International Civil Aviation Organization started their meeting on the EU’s emission trading system in India’s capital.

Suzlon Energy receives shareholders' nod to raise funds

September 28, 2011. With order book to the tune of ` 13,000 crore Suzlon Energy is upbeat about markets in China, Germany and India. In a bid to undertake new projects and infuse working capital, the company is considering raising up to ` 5,000 crore through various means. Suzlon shareholders empowered the company promoters to raise funds by way of issuance of equity shares, foreign currency convertible bonds, global depository receipts, or other such equity-linked products. It may be mentioned here that China led the global capacity addition drive in 2010 with 18,928 MW of new installations within a year and accounted for more than 50% of the world market for new wind turbines. China raced ahead of USA that added 5,000 to cross 44,000 MW mark in 2010. The top five countries USA, China, Germany, Spain and India together represented 74% of the worldwide wind capacity in 2010.

U.S. Renewable Energy Lab seeks workforce reduction before budget cuts

October 4, 2011. The U.S. National Renewable Energy Laboratory is offering employees buyouts to try to cut its workforce in preparation for expected government budget cuts. The lab, funded by the U.S. Energy Department, expects to shed 100 to 150 employees, about 9 percent of its staff. The buyouts will be offered to 1,350 full- and part-time employees who’ve been at the lab for at least a year.

Phoenix Solar secures project rights for solar park in Bulgaria

October 4, 2011. Phoenix Solar AG secured project rights for a solar park with a peak power of 50 megawatts in Bulgaria. The company is currently negotiating with several investors to sell the project. The construction of the first phase will start before the end of 2011.

CO₂ standard may spur U.S. green competition

October 4, 2011. A new standard that allows companies to measure the carbon dioxide generated to make products may spur competition among manufacturers based on environmental credentials, including in the U.S. The World Resources Institute, the Washington-based environment group, and the World Business Council for Sustainable Development were among groups that developed the Greenhouse Gas Protocol Product Lifecycle Standard. The standard will help businesses cut emissions and waste in their supply chains and more confidently market the “greenness” of products without leaving themselves open to criticism. The standard will allow low greenhouse-gas content of a company’s products to be “at the heart of their competitive strategy”. The standard should make marketing claims more directly comparable.

Saudi Aramco plans solar cell output with Showa

October 4, 2011. Saudi Aramco aims to begin production of solar cells in Saudi Arabia in two to three years in a joint venture with Japanese thin-film solar cell maker Showa Shell Sekiyu KK. If Aramco can introduce Showa Shell's technology into Saudi Arabia, that would contribute a lot to the nation's main goal of industrial diversification. Saudi Arabia, one of the world's biggest crude oil exporters, hopes to reduce its use of fossil fuels, which it would rather export, by building nuclear and renewable power plants.

MEMC withdraws U.S. loan guarantee application for solar project

October 4, 2011. MEMC Electronic Materials Inc. withdrew its application for a U.S. Energy Department loan guarantee to build a 20-megawatt solar photovoltaic power plant in Nevada. The company’s SunEdison project development unit decided to drop out of the guarantee process because it wasn’t able to complete the paperwork ahead of the program’s deadline. MEMC, based in St. Peters, Missouri, acquired the solar project in its August purchase of Fotowatio Renewable Ventures Inc., the U.S. development unit of Madrid-based Fotowatio Renewable Ventures. SunEdison plans to complete the project by the end of next year using funds from private investors and some investors have already expressed interest in the project. The Fotowatio project received a conditional commitment for a $45.6 million guarantee in June. Electricity from the plant will be sold to Nevada Power Company.

Novozymes to produce cheap ethanol in brazil from cane waste

October 3, 2011. Novozymes A/S, the world’s biggest maker of industrial enzymes, will build a facility in Brazil that it says will be able to produce ethanol from sugar-cane waste that’s cheaper than fuel made from the plant’s juice. Novozymes expects to produce ethanol for 1.20 reais (64 cents) a liter in 2013 when the plant is scheduled to go into operation, about 12 percent less than current prices. Novozymes’s demonstration plant will produce more than 13 million liters of fuel a year and will probably be “bolted on” to a mill owned by one of the country’s major ethanol producers. The enzymes the company uses for ethanol have dropped 76 percent in cost in the past three years, to 24 centavos for every liter of fuel produced, he said. Ethanol production in Brazil may double if the mills convert bagasse into fuel, and the mills would still have enough of the waste material left to burn to power their facilities. Novozymes has formed partnerships with the Brazilian research institute Centro de Tecnologia Canavieira, the state- controlled oil company Petroleo Brasileiro SA and equipment provider Dedini SA Industrias De Base to develop its waste-to fuel technology. Anhydrous ethanol, which is blended with gasoline, sold for 1.37 reais a liter last week, according to the Piracicaba-based research institute Centro de Estudos Avancados em Economia Aplicada.

EU carbon costs may force refiners to relocate, close

October 3, 2011. European Union plans to make oil refiners pay for carbon emissions from 2013 could accelerate European refinery closures and encourage them to relocate outside the EU to avoid higher operating costs that could run into millions of euros a year. The UK refining industry is seen as being at particular risk due to UK government plans for a carbon floor price that may be above the level set by the market. UK companies such as Ineos are worried they will be put at a competitive disadvantage. The UK government is planning to introduce the carbon price floor at 16 pounds ($25.09) a tonne from April 1, 2013, rising each year to 30 pounds a tonne in 2020.

Dutch govt green deal excludes wind and solar

October 3, 2011. The Dutch government promised to cut red tape for biogas production, waste management and other renewable energy projects with the exception of costly wind and solar power, so that it can meet targets set by the European Union. The so-called "green deal" involves 59 public and private sector projects with an emphasis on sustainable use of raw materials, water, land, food and energy. The Netherlands produces more than 80 percent of its electricity from fossil fuels. It has committed to increase the share of renewable energy to 14 percent by 2020. That share has already slipped to 3.8 percent in 2010 from 4.2 percent in 2009.

Chevron unveils world's largest solar enhanced-oil-recovery project

October 3, 2011. Chevron Technology Ventures, a division of Chevron U.S.A., launched a unique demonstration project to test the viability of using solar energy to produce oil. The project uses over 7,600 mirrors to focus the sun's energy onto a solar boiler. The steam produced is injected into oil reservoirs to increase oil production.

BP to build 419 MW wind farm in Kansas with GE turbines

October 3, 2011. BP Plc will build a 419-megawatt wind farm in Kansas. The Flat Ridge 2 project will have 262 General Electric Co. 1.6-megawatt turbines and is expected to go into operation by the end of 2012. Associated Electric Cooperative Inc. will buy 314 megawatts of capacity from the project, and BP Wind Energy is seeking a buyer for the rest.

Airlines will try, probably fail to pass on carbon costs

October 3, 2011. Airlines will try to pass on the costs of European Union carbon allowances to customers and probably fail because there is so much price competition in the industry. The EU set benchmarks to calculate the distribution of free carbon-dioxide permits among domestic and international airlines when they join the bloc’s emissions- trading system.

Saudi Arabia inaugurates first solar power plant

October 2, 2011. Saudi Arabia inaugurated its first solar power plant as the world’s largest oil exporter seeks to diversify energy sources. Government-owned utility Saudi Electricity Co. and Showa Shell Sekiyu K.K., a Japanese energy company partly owned by Saudi Arabian Oil Co., built the plant on Farasan Island off the Red Sea coast.

Climate negotiations open in Panama with calls to extend Kyoto accord

October 2, 2011. Envoys meeting for United Nations climate talks must find a way to extend the world’s only treaty capping greenhouse gases, which is at risk of expiring, environmental groups said as sessions began in Panama City.

The future of the 1997 Kyoto protocol is the most important issue during the Panama talks that opened. Progress is needed now if an agreement on extending the pact is to be concluded during negotiations that begin Nov. 28 in Durban. Kyoto’s initial phase, ending next year, binds 35 nations and the European Union to reduce emissions by a collective 5.2 percent from 1990 levels by 2012.

Japan, Russia and Canada say they won’t take part in a second phase unless the accord is expanded to bind China, which has become the biggest emitter of greenhouse gases, and the U.S., which never ratified the agreement.

GE may lease vehicle batteries for electric cars

October 1, 2011. General Electric Co may lease costly vehicle batteries to electric-car buyers, joining other companies looking to get more people to buy alternative-energy automobiles.

The largest U.S. conglomerate is just at the "thinking stage" of such a move, said Mark Little, head of GE's research and development efforts. GE makes batteries and is one of the biggest investors in Massachusetts-based battery maker A123 Systems Inc.

U.S. finalizes loan aid for NRG-backed solar project

October 1, 2011. The U.S. Energy Department said it finalized a partial guarantee for a $1.4 billion loan to support a 752-megawatt solar panel project owned by Prologis and backed by NRG Energy Inc. The project will be the largest rooftop solar project in the United States.

U.S. closes $4.75 bn in solar loans before program deadline

October 1, 2011. The U.S. Energy Department completed $4.75 billion in loan guarantees for four solar projects, the deadline for a 2005 program funded by the stimulus act. Projects being developed by ProLogis Inc., SunPower Corp., and First Solar Inc. won U.S. backing, and First Solar and SunPower immediately sold theirs.

Abengoa gets $132.4 mn U.S. loan guarantee for Kansas biofuel plant

September 30, 2011. Abengoa SA, Spain’s largest biofuels developer, received a $132.4 million U.S. loan guarantee to build a cellulosic ethanol plant in Kansas.

The plant, in Hugoton, Kansas, will convert 300,000 tons of corn stalks and leaves into 23 million gallons (87 million liters) of ethanol a year. The plant will be powered by a 20-megawatt biomass electric generator, fueled by leftover plant material.

Solaria may cancel factory as California reconsiders tax break

September 30, 2011. Solaria Corp., a U.S. solar-panel manufacturer, may cancel plans to build a second factory in California after the state began to reconsider a program that gave bankrupt Solyndra LLC a $25.1 million tax break.

In April, Solaria opened a solar-panel manufacturing plant in Fremont, the same city where Solyndra built its now-shuttered factory. Plans to build a second panel plant may be derailed without the tax break.

Rare earths fall as Toyota develops alternatives

September 30, 2011. Rare-earth prices are set to extend their decline from records this year as buyers including Toyota Motor Corp. and General Electric Co. scale back using the materials in their cars and windmills. Prices for cerium and lanthanum, the most abundant rare- earth elements, will drop by 50 percent in 12 months.

Neodymium and praseodymium, metals used in permanent rare-earth magnets, may fall as much as 15 percent. Makers of electric cars, wind turbines and oil-refining catalysts have sought to reduce use of the metals after China, which supplies more than 90 percent of the market, said in July 2010 that it would cut exports and clamp down on the industry. That boosted prices, encouraging mining companies to develop new prospects and buyers to find alternatives.

German renewable power boom makes hedging difficult

September 29, 2011. Germany’s renewable energy boom will make hedging the power output for utilities’ coal and natural-gas plants “more and more difficult”. The country’s renewable energy output may rise to 200 terawatt-hours in 2020 from 120 terawatt-hours last year. Utilities including EON AG and RWE AG, Germany’s two biggest, sell power several years in advance to lock in prices.

Greenergy digs deeper into waste to make biodiesel

September 29, 2011. Major British independent oil firm Greenergy sees its future as an exploration company, but one that hunts for fuel in piles of stale pork pies and cakes rather than under the ground or from food crops.

The refined oil product wholesaler is still investing in the embattled European Union biodiesel sector, aiming to utilize ever more challenging waste products after abandoning, at least for now, the widely criticized use of virgin vegetable oils.

The European Union's biofuels industry has struggled to attract funds and expand during the eurozone's economic crisis, hurt not only by a challenging investment climate but also questions about the sector's environmental credentials.

Biofuels had been seen playing a central role in helping the EU achieve its target of meeting 10 percent of road transport fuel needs from renewable sources by 2020. Political support has wavered as scientists raised concerns about the environmental impact of diverting food crops to biofuel production.

Greenergy's biodiesel plant at Immingham in eastern England was built to use vegetable oils but in the last couple of years the company has built units to pre-treat and post-treat production to allow use of waste such as used cooking oil. The plant now has the capacity to produce nearly 200,000 tonnes of biodiesel from waste products.

Areva plans to build windmill plant in Le Havre

September 29, 2011. Areva SA will build a windmill plant at Le Havre, northwest France, that will employ about 1,000 workers.

Carter: Energy department is no venture capitalist

September 29, 2011. It isn’t hard to predict how the controversy over defunct solar-panel maker Solyndra LLC will end. Congressional Republicans will in due course issue a final report decrying crony capitalism and demanding an end to the federal program of loan guarantees to alternative energy companies. Democrats will respond with a dissent, concluding that no rules were broken or even bent, but proposing, just in case, the addition of a new layer of expensive bureaucratic overseers atop the program.

U.K. renewable energy supply rose 50 pc last quarter from 2010

September 29, 2011. U.K. electricity supplied from renewable sources rose 50 percent in the second quarter from the same period a year earlier as wind turbine installations and wind speeds increased.

The wind, hydropower and other renewables generated 7.9 terawatt-hours of power in the second quarter, or 9.6 percent of all electricity supplied in the U.K. Electricity from wind turbines more than doubled from a year earlier and hydropower gained 75 percent. The U.K. aims to generate 30 percent of its electricity from renewables by 2020 to help the nation meet a European Union target of deriving 15 percent of all energy needs, including heating and transportation fuels, from sources other than fossil fuels and nuclear power in that time period. An increase in the number of turbines installed also contributed to the growth in windpower. Hydropower rose due to heavy rainfall after low precipitation caused it to dip in 2010.

Europe's first biomass exchange to open in November

September 29, 2011. Europe's first exchange for trading wood pellets, used to replace coal in electricity generation, will be launched on November 3 in the port of Rotterdam. The global market of wood pellets is growing as a result of world-wide policies to cut CO₂ emissions and replace fossil fuels with renewable sources of energy.

The biomass exchange is joint project of Anglo-Dutch power and gas exchange APX-Endex and Europe's biggest port, agreed in 2010. Currently, the global wood pellet market is estimated at 10 million tonnes and it could grow sixfold by 2020. The Netherlands, Germany, Scandinavia, and Belgium are among the biggest consumers of wood pellets in Europe, with the bulk of the Dutch intake used in Essent's Amer coal-fired plant.

Solar-Panel imports from China said to face U.S. trade complaint

September 29, 2011. Solar manufacturers including a unit of SolarWorld AG are preparing a U.S. trade complaint against China, as they seek to counter low-cost, subsidized imports. The case, which would be filed at the Department of Commerce and the U.S.

International Trade Commission in Washington, would be one of the largest targeting China, with political implications as both nations race to develop clean- energy technologies. The companies say that China’s subsidies to solar companies violate global trade rules and provide those manufacturers with an unfair advantage.

Renewables face cuts as Conservatives bid for power in Ontario

September 29, 2011. Next week’s election in Ontario may come to be remembered as the day Conservatives took power in the province, and the solar and wind generation industries lost it. Opposition Conservative leader Tim Hudak wants to end a Liberal subsidy for renewable-energy projects known as a “feed- in tariff” he says is increasing household electricity bills. He also pledged to cancel a contract with Samsung C&T Corp. that would see the company invest C$7 billion ($6.8 billion) in solar and wind power.

U.S. deadline for auto fuel economy proposal to slip

September 28, 2011. The Obama administration will push back the release of the most ambitious proposal ever for automakers to improve fuel efficiency of their passenger cars, sport utility vehicles and pickups. The U.S. Transportation Department and the Environmental Protection Agency intended to put out the draft plan for model years 2017-25 for industry and public comment. But it was recently determined that more time is needed to complete the plan, so the deadline was extended.

Regulators said they now hope to finish the work and publish the proposal. Industry and environmental groups are eager to see how the administration plans to fill out a baseline agreement it struck in July with automakers and the state of California requiring the fleet to average 54.5 miles per gallon by 2025. That is equivalent to a 5 percent increase in annual efficiency.

Suntech sees China gaining from falling solar prices

September 28, 2011. Suntech Power Holdings, the world's largest solar cell maker by capacity, expects China to benefit from falling solar prices, forecasting that the country could become the largest solar market by 2015, overtaking Germany. In some parts of Germany and Italy - among the world's biggest solar markets - analysts say solar power could already be selling at grid parity, thanks to a recent decline in solar equipment prices.

NYPA pulls plug on Great Lakes offshore wind project

September 28, 2011. The state-owned New York Power Authority (NYPA) said it had ended the proposed Great Lakes Offshore Wind Project due to high costs and the weak economy. Development of a 150-megawatt Great Lakes project would have resulted in an estimated annual subsidy of between $60 million and $100 million. NYPA said it was still participating in other efforts by regional groups along the Great Lakes and in the Long Island-New York City Offshore Wind Project. On Long Island, NYPA is working with New York power company Consolidated Edison and state-owned Long Island Power Authority (LIPA) to develop a 350 to 700 MW project. One megawatt powers about 1,000 New York homes. NYPA, LIPA and Con Edison sought a lease from federal regulators for the undersea land needed to build the Long Island offshore wind farm.

The primary difference between the Great Lakes and Long Island projects was the participation of multiple utilities in the Long Island project, NYPA said. NYPA also noted the location of the Long Island project near the heavily populated New York metropolitan area, which has some of the highest power prices in the United States. NYPA said it had received responses to its requests for proposals on the Great Lakes project from Apex Offshore Wind LLC, Great Winds LLC, NRG Energy's Bluewater Wind Great Lakes LLC, Pattern Renewables Development Co LLC and RES Americas Developments Inc. It said the Great Lakes wind farm was technically feasible but the generating output of the proposed 120 to 500 MW project would have cost two to four times more than land-based wind. New York has a renewable portfolio standard requiring that 30 percent of energy come from renewable sources by 2015. To meet that goal, NYPA said the state has committed $872 million in support of the development of about 1,870 MW of new renewable capacity and plans to award another $1.85 billion through 2015 to help fund additional projects.

U.S. gives $136 mn for advanced biofuels research

September 28, 2011. U.S. university researchers will get $136 million to develop advanced biofuels, including to develop jet fuel, by using tall grasses, woody plants and energy cane. Nearly two-thirds of the money will go toward aviation biofuels projects in the Pacific Northwest, including efforts to develop a regional source of bio-jet fuel for Seattle-Tacoma International Airport.

First Solar providing panels for 130 MW California project

September 28, 2011. First Solar Inc., the world’s largest thin-film solar company, will provide panels for a 130- megawatt project that Tenaska Inc. is developing in Southern California. First Solar will be the engineering, procurement and construction contractor for the Imperial Solar Energy Center South, Omaha. Electricity produced by the project in Imperial County will be sold under a 25-year contract to Sempra Energy utility San Diego Gas & Electric Co.

China says Volkswagen to make EV in Shanghai

September 28, 2011. Volkswagen AG's car venture with SAIC Motor Corp plans to make an electric car, joining Nissan, Daimler and other automakers planning green car projects in the world's biggest auto market. Tantus, which will be produced by Shanghai Volkswagen, is already on a list of approved new vehicles. Beijing has declared the electric vehicle industry a top priority, earmarking $1.5 billion a year for the next 10 years to transform the country into one of the leading producers of clean vehicles. But customers so far remain unimpressed by the high cost, limited range and lack of charging infrastructure for the vehicles. In Shanghai, with more than 20 million people, there are only 10 registered electric cars, while the number in Hangzhou is only slightly higher at 25. Still, Daimler AG, Nissan Motor and General Motors have all committed to make and sell electric cars in partnership with their local partners.

Dear Reader,   You may have received complimentary copies of the ORF Energy News Monitor. Our objective in bringing out the newsletter is to provide a platform for focused debate on India’s energy future. You could be a partner in this effort by becoming a subscriber. You could also contribute recommendations for India’s energy future in the form of brief insightful articles.   We look forward to receiving your patronage and support.   ORF Centre for Resources Management

 

ORF ENERGY                        NEWS MONITOR   Sponsorship Form Please fill in BLOCK LETTERS

·    Commercial Sponsorship: Rs 15, 000 per annum    1 hard copy (52 issues) + soft copies by email as per list provided by  sponsor ·    Non Commercial/ Academic Sponsorship: Rs 2, 500 per annum               1 hard copy (52 issues) + soft copies by email as per list provided by  sponsor ·    Individual Sponsorship: Rs 1, 000 per annum        Soft copy only

Yes! I/we would like to receive copies of the weekly ORF Energy News Monitor for a period of ______year(s).  I/we shall be entitled to one hard copy along with the option of soft copies to a list of e-mail addresses provided by me/us for the period specified.  Name……………………………Address…………….………………………Telephone……………………Fax………………….E-mail………………… Please find enclosed cheque/Bank Draft No.........................dated …………………drawn at New Delhi for Rs.........……….favouring ‘Observer Research Foundation’ Please fill in this form and mail it with your remittance to   Mr. Vinod Kumar Tomar   ORF Centre for Resources Management  OBSERVER RESEARCH FOUNDATION 20 Rouse Avenue, New Delhi - 110 002 Phone +91.11.4352 0020 extn 2120 Mobile: 9871417327 Fax: +91.11.4352 0003 E-mail: [email protected], [email protected]

 

• Energy
• China
• India
• Hydro Power

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