Energy News Monitor I Volume VIII, Issue 17

Is The Sun Setting On The US Solar Industry?

 

NEWS BRIEF

OIL & GAS

HPCL to acquire oil & gas block in Africa

October 10, 2011. Hindustan Petroleum Corporation (HPCL) is likely to acquire a oil and gas block in Africa through its subsidiary, Prize Petroleum. The company is in talks with a local player for a discovered asset so that it can have a ready cash flow in one or two years. HPCL’s move is part of the overall attempt by oil marketing companies to venture into more lucrative oil and gas producing business. Acquisition of discovered fields helps in reducing risks with the business to some extent. HPCL ventured into the upstream sector without much experience. It created a very high risk portfolio without knowing much about the business. Prize Petroleum was set up in 1998 as a joint venture but did not meet with much success. HPCL has decided to change its exploration and production (E&P) strategy and look at its peers — Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) — who, despite being late entrants in this sector, are performing well. In the case of IOC, for instance, it has a domestic portfolio which includes 11 oil and gas blocks and two coal-bed methane blocks. IOC’s overseas portfolio includes 11 blocks spanning Libya, Iran, Gabon, Nigeria, Timor-Leste, Yemen and Venezuela. To boost E&P activities, the state-run marketer has incorporated Ind-OIL Overseas — a special purpose vehicle for acquisition of overseas E&P assets — in consortium with Oil India Ltd. IndianOil is also associated with two successful discoveries in oil exploration blocks, one each in India and Iran. Commercial appraisal of these blocks is underway. BPCL, on the other hand, through its E&P subsidiary Bharat Petro Resources (BPRL) holds participating interests in 26 exploration blocks; in a consortium with other companies. Of these, nine blocks are in India, two each in Australia and the UK, one each in Mozambique and East Timor and 10 in Brazil. During the financial year 2010-11, BPCL announced five oil and gas discoveries in Mozambique, Brazil and Indonesia, from exploration blocks where BPRL had participating interest. It is looking at Maharashtra and Karnataka to set up a land-based liquefied natural gas terminal. The terminal will have a capacity of 5-6 million tonnes. HPCL, through HP E&P, forayed into the upstream sector to have an access to equity oil to ensure energy security. HPCL, in consortium with other E&P partner companies, currently has 19 blocks in India, one block in Australia and two blocks in Egypt.

India welcome to explore oil and gas in Vietnam: Vietnam President Truong Tan Sang

October 9, 2011. Vietnam President Truong Tan Sang said India and other foreign nations were welcome to explore hydrocarbons in areas within his country's jurisdiction, as he sought to deepen strategic and defence ties with New Delhi. President Sang said the objectives of his trip are to continue to strengthen friendship between the two peoples, reinforce, deepen and add greater substance to bilateral strategic partnership. The high-level visit, which will be closely followed by Beijing, comes at a time when both countries are having their own difficulties with China. Commenting on the controversy over oil exploration by India in two Vietnamese oil blocks in the South China Sea with Chinese authorities raising objections claiming that it was their area, Sang defended Hanoi's deal with India.

Reliance buys additional 600,000 barrels of Saudi crude

October 7, 2011. Reliance Industries has bought an extra 600,000 barrels of crude from Saudi Aramco for October. Reliance, owner of the world's biggest refining complex in Gujarat, has bought additional volumes of Arab Light for lifting on October 26. The refiner normally buys about 230,000-240,000 barrels per day of Saudi oil.

Gas discovery in Mozambique holds at least 10 trillion cubic feet

October 5, 2011. Videocon Industries and Bharat Petroleum Corp said the natural gas discovery they made off Mozambique may hold at least 10 trillion cubic feet of reserves, almost the same size as Reliance Industries' world class K-G basin gas find. US-based Anadarko Petroleum Corp, the operator of the Area-1 in Rovuma basin off Mozambique where the two Indian firms are minority partners, encountered "excellent quality" 73 net meters of natural gas pay at the Camarao exploration well. The operator carried out appraisal of the discovery and has confirmed that the discovery is connected to previously announced Windjammer and Lagosta discoveries. Bharat PetroResources Ltd, a wholly-owned subsidiary of BPCL, and Videocon Hydrocarbon Holdings Ltd, a wholly-owned subsidiary of Videocon Industries, hold 10 per cent stake each in Area-1. Anadarko, which holds 36.5 per cent interest in the block, plans to put up plants to liquify the gas (liquefied natural gas or LNG) so that it can be shipped to consumption centres in cyrogenic ships. The two LNG trains will have a capacity to produce 5 million tons of liquid fuel each. Reliance had produced over 60 million standard cubic meters per day from its K-G D6 gas discoveries before technical problems led to drop in output. The output is enough to produce about 15 million tons of LNG per annum.

ONGC's gas output to rise 60 pc in 5 years: Sudhir Vasudeva

October 5, 2011. ONGC's new Chairman Sudhir Vasudeva sees the state-run firm's gas production rising 60% in five years and crude output rising 20% by 2014, ending years of stagnation as the company starts production from several new fields. The company, which gets a full-time chairman after eight months, will put in place a longterm vision, overhaul its exploration strategy, give a big push to its international operations and involve global oil majors in some offshore blocks, he said. The new chairman recalled how the company transformed over the decades from being a little-known entity to a large player that has operations in several countries and also operates a refinery through a subsidiary firm. Vasudeva promised to take the company forward in its core business area of oil and gas exploration. Apart from boosting crude oil output by 20% to 28 million tonnes a year, ONGC aims to raise natural gas output to 100 million standard cubic metres per day (mmscmd) in the next five years from the current 62 mmscmd.

RIL withdraws notice to suspend gas supply to UP plants

October 6, 2011. Reliance Industries withdrew the notice for suspension of natural gas supplies to four fertiliser plants in Uttar Pradesh saying it will work with urea manufacturers to resolve outstanding issues.

RIL had served a notice for suspension of supplies to plants of Indo Gulf Fertiliser, IFFCO, KRIBHCO Shyam Fertilisers and Tata Chemical if they failed to enhance the financial guarantees to cover for state sales tax.

The fertiliser firms, which produce about 2 million tons of urea from gas sourced from RIL, had previously opposed providing financial guarantees in form of letter of credits to cover for liability arising from levy of local sales tax on gas sales, as it would increase cost of production and subsidy payout.

RIL supplies some 4 million standard cubic meters per day of natural gas from its eastern offshore KG-D6 fields to these plants. Like elsewhere in the country, it has been charging central sales tax of 2 per cent from users in Uttar Pradesh.

However, the state government has refused to accept it as interstate sale and has demanded local sales tax of 21 per cent. Tax is a liability of consumers which had been clearly enshrined in the Gas Sales and Purchase Agreement (GSPAs) RIL had signed with fertiliser and other users.

Evidence of falling oil imports from China and India: UAE

October 5, 2011. There is evidence of falling oil imports from China and India, though it will take time to judge whether this is due to seasonal factors or a structural reason. However, Ali Obaid Al-Yabhouni -- UAE OPEC Governor and the General Manager of ADNATCO and NGSCO, the shipping arms of Abu Dhabi National Oil Company (ADNOC) -- said the oil market will not be affected by the latest chapter in the global economic crisis. Yabhouni cited recent forecasts which suggest that China's economy will grow at 9 per cent in 2011, while India's growth will slow slightly to 7.7 per cent.

ONGC says net profit to dip below ` 100 bn

October 10, 2011. State-owned Oil and Natural Gas Corp (ONGC) has said its net profit will drop by over 47 per cent to below ` 10,000 crore this fiscal if the government forces it to shell out a higher fuel subsidy. Upstream oil firms, led by ONGC, traditionally bear one-third of the actual revenue that retailers lose on selling diesel, LPG and kerosene at government-controlled prices. But this year, the share of upstream companies would not be based on the actual under-recoveries, or revenue losses, of retailers. Rather, they would be based on the projected notional under-recoveries that existed before the June fuel price increase and duty cuts.

Weak rupee is hitting revenues of state-run oil marketing firms: Jaipal Reddy

October 10, 2011. Petroleum minister Jaipal Reddy has said that depreciation rupee is hitting revenues of state-run oil marketing firms as weakening of rupee against dollar by ` 1 impacts costs of diesel, kerosene and cooking gas by ` 8,000 crore per annum.

The government is committed to protect the interests of common man and efforts are being made to minimize the impact of rising crude prices, Reddy said. The average price of the Indian basket of crude oil, which was $69.76 per barrel in 2009-10, has shot up to$111 per barrel, he said. Despite duty reduction, state-run oil marketing firms are suffering revenue losses of ` 271 crore per day.

The minister said that the under recoveries had affected companies' financial health and diminishing cash flows have reduced resource generation for expansion and modernization. Good financial health of OMCs is a pre-requisite for ensuring long-term energy security in the country, Reddy said.

RIL writes to Murli Manohar Joshi on CAG report; CAG ignored the operational and technical facts on KG-D6 block

October 9, 2011. RIL in a letter to Public Accounts Committee (PAC) Chairman Murli Manohar Joshi has said CAG did not consider its response in the report that criticised the company for violation of contract for showpiece KG-D6 block. CAG did not give us an opportunity and access to look into its comments on the draft report and finally the CAG did not consider and include the company's repines. CAG ignored the operational and technical facts and data as well.

JP Morgan sees upside risk to 2013 oil prices

October 8, 2011. JP Morgan said it sees upside price risks conducive to oil prices moving to $130 per barrel for 2013 from ongoing geopolitical issues, low spare capacity, the potential for stock building, and currency-related issues. The bank sees Brent prices for 2013 average at $121.25 per barrel and forecasts 2013 average WTI price at $114.25 per barrel. JPMorgan maintained its price projection of $115 a barrel for Brent crude oil, and $97.50 a barrel for WTI through 2012.

Andhra Pradesh to be allocated KG-D6 gas on priority

October 6, 2011. The government has allocated scarce natural gas to households and cars in Andhra Pradesh, the native state of Oil Minister Jaipal Reddy, triggering protests from companies in other states that have built infrastructure after being promised gas but have been denied supplies. The ministry has directed Gail India Ltd to divert 0.045 mmscmd of the KG-D6 gas meant for its Ankot LPG plant to Bhagyanagar Gas Ltd (BGL) at Shamirpet. It has asked the state-run firm to make up for the shortfall with LNG from spot market. The swapping arrangement, oil ministry said, would be revenue neutral for the companies. BGL, which was allocated gas for Hyderabad and Kakinada by an empowered group of ministers three years ago, will be able to start operations, unlike the Adani Group in Ahmedabad, Gail Gas Ltd in Kota, Meerut, Dewas and Sonepat, and Saumya DSM Infratech in Mathura. One of these companies is contemplating legal action.

Cash-strapped finance ministry questions oil subsidy

October 5, 2011. The government is taking a closer look at its fuel subsidy costs by questioning the low refining margins of its state-run oil firms, signalling a veiled threat of cuts that could hurt the companies' profits. Such scrutiny comes at a time when the government is struggling with a slowing economy that makes it difficult to meet a 2011/12 fiscal deficit target of 4.6 percent of GDP. Growth in revenue receipts is also expected to slow down. In response, the government is trying to tighten its spending on subsidies.

Fuel subsidy accounted for about 3.4 percent of the central government's spending in 2010/11. The finance ministry, upping the ante to cut costs, is scrutinising oil firms' subsidy claims. Privately run Reliance Industries' gross refining margins in the last fiscal averaged at $8.4 a barrel while state-run Indian Oil Corp's averaged $5.95. India's state-run oil marketing firms have estimated revenue losses of around 209 billion rupees during July-September on account of selling oil products below market price to respect government caps.

The government has promised 150 billion rupees as compensation to oil marketing companies for their first quarter revenue losses. An additional help of 490 billion rupees for the current fiscal through tax cuts was announced earlier this year. And with higher diesel and cooking gas prices and deregulated petrol prices, the oil subsidy bill was likely to be contained.

The finance ministry gave 410 billion rupees as oil subsidy in 2010/11 to state-run oil marketing firms, as its one-third share for selling oil products at lower price. Indian upstream firms compensated state-run fuel retailers for about 38.7 percent of their revenue losses on subsidised sales in the last fiscal, while oil marketing firms and finance ministry shared the remaining burden.

The finance Ministry said though refiners in Singapore and South Korea were also dependent on oil imports, their refinery margins were much higher. Indian firms were subsidised on price parity basis. The finance ministry said with the softening of crude prices, the cost of the crude oil basket could come down to around $100 a barrel for Indian firms, thus cutting down revenue losses, despite a falling rupee against the dollar.

The government could decide on the oil subsidy bill for the second quarter by November, while the subsidy for revenue losses for the fourth quarter may be deferred to the next financial year.

POWER

BHEL wins ` 40 bn contract to set up power plant

October 10, 2011. BHEL said it has bagged over ` 4,000 crore contract for setting up a thermal power plant in Andhra Pradesh from Singareni Collieries Company. BHEL will set up 2x600 MW unit for SCCL's upcoming super thermal power project at Adilabad.

The company has established the capability to deliver 15,000 MW per annum. It is being augmented to 20,000 MW. BHEL had also bagged a ` 3,800 crore order from Dainik Bhaskar Power Ltd, for setting up a 1,320-MW thermal power plant in Madhya Pradesh.

Ruias-led Essar Power to invest $8 bn in thermal power projects

October 6, 2011. Ruias-led Essar Power has earmarked an investment of $8 billion in the next three years for setting up thermal power projects in the country. Essar Power currently operates five captive power projects for providing electricity to its various steel plants and oil refinery. The company's 515 MW combined cycle plant supplies 215 MW power to Essar Steel's Hazira plant and 300 MW to Gujarat Urja Vikas Nigam. Another 500 MW gas-based plant is captive to Essar Steel's Hazira Steel Plant. A 120 MW gas-based plant at Vadinar supplies electricity to the company's oil refinery in that area. A 380 MW gas-fired power plant provides power to Essar Oil refinery Algoma, Ontario, Canada.

Another 85 MW plant is captive to Essar Steel Algoma plant. Essar Power's under execution plants include a 2,520 MW imported coal-based project at Salaya and 510 MW Vadinar plant, 270 MW Hazira plant in Gujarat. They also include 1,800 MW domestic coal-based project at Mahan in Madhya Pradesh and 1,800 MW thermal plant at Tori in Jharkhand. The company said that it is also exploring new opportunities in conventional and renewable power generation globally. Meanwhile, Essar Power, which acquired 76 per cent stake in Orissa's Navbharat Power Pvt Ltd, would also execute projects of over 2,000 MW capacity as part of the joint venture agreement.

Acute power shortage in UP due to coal supply shortfalls

October 11, 2011. A shortage of coal has led to an acute power crisis in Uttar Pradesh, with the state getting less supply than what it is normally entitled to from the central grid. There is a shortage of 2,500 MW of power in the state due to short supply of coal to thermal power stations. From central sector, the bulk of the power supply was from NTPC's thermal projects, but there was still a 1,000-MW shortfall in supply from the state-run power major. In order to ensure stability of the grid, rostering was being done. UP Power Corporation Limited said that efforts were being made to supply the maximum power from the limited resources, but the problem may continue for a few more days.

Poor coal supply forces NTPC to reduce output in Bihar, West Bengal plant

October 8, 2011. Inadequate coal dispatches have forced state-run NTPC to slash output at two of its plants in Bihar and West Bengal, affecting power supply to parts of northern, eastern and western regions during the peak festival season. Output at key plants has been falling of late because of poor coal supplies. Some 35 of India's 86 thermal stations have a coal stock position that will barely last seven days. Stocks at 26 of these plants are just enough to generate for the next four days. The installed capacity of these 86 thermal power stations is 85,477 MW. While a fault in the conveyor belt at CIL's Lalmatia mine crushers has resulted in shutdown of two 500 MW units of NTPC's Kahalgaon Thermal Generation Station in Bihar, Eastern Coal fields, a CIL arm, has cut supplies to the Farakka Thermal Power Station in West Bengal to a fifth. Kahalgaon needs seven to eight rakes of coal per day but is getting just four. As a result, even the rest of the units are running at 60-70% plant load factor, the ratio of average output to peak output. The Kahalgaon station is built in two stages. Stage 1, with an installed capacity of 840 MW, caters to Bihar, Jharkhand, Bengal and Orissa. The 1,500 MW, Stage 2 wheels 60% of its power to the north, including Delhi, and parts of western India. The shut units belong to Stage 2. CIL has been supplying only about 5-6,000 tonnes per day. The coal stock at the station has fallen to 1.4 lakh tonnes now from 3 lakh tonnes some 15 days ago.

Maharashtra to face power cuts for 11 hrs daily

October 6, 2011. Maharashtra will experience daily power cuts of 11 hours in rural and 6 hours in urban areas. Though Mumbai will not face any load shedding right away, areas like Navi Mumbai, Thane and other industrial areas in the state will see major power cuts in the festive season. Because of the Telangana agitation, the coal supply to Maharashtra power plant has been affected. Flood in Orissa has further complicated the situation.

Maharashtra State Electricity Distribution Company (MSEDC) has informed the state's power minister that it does not have fund to buy from other states too. MSEDC said due to rising demand for power in agricultural activities in the last few days, the total demand for power in the state has reached 16,500 MW while the available power in only about 10,500MW. Earlier, the distributor had sought permission from Maharashtra Electricity Regulatory Commission (MERC) to hike power tariff in order to bridge deficit of ` 5,097 crore.

However, the regulator refused to hike power tariffs. MSEDC is caught in this grave financial situation because MERC has not allowed it the reimbursement of actual expenses incurred during the last 2-3 years. The distributor is finding it difficult to meet the expenses on power purchase and its employee cost. MSEDC is required to take loans from financial institutions for running its day to day business and it has already crossed the available loan limits.

The MERC confirmed that the commission declined to entertain a petition filed by the MSEDC seeking interim relief whereby MSEDC planned to recover 'immediately' ` 4,847 crore by way of a uniform additional charge at 61 paise per unit with effect from September. MERC took the decision since public hearings on the petitions of MSEDC and two other utilities are scheduled to begin from 7 October 2011 at six revenue headquarters across Maharashtra. The public hearings will conclude on 25 October 2011.

Tata aiming for power supply from Mundra UMPP in four months

October 5, 2011. Central transmission utility PowerGrid Corporation has hooked up Tata Power's 4,000-MW ultra-mega power project at Mundra to the national grid and the first unit of the ` 20,000 crore plant is likely to commence electricity supply within the next four months. The Tata Group firm said as per the terms of the UMPP contracts, seven months' time is provided for stabilisation of electricity supply from a unit to the grid. However, the company aims to commence evacuation of power from the project within the next four months. PGCIL confirmed that it had established the transmission network for the Mundra network and that it is ready for evacuation of power. Meanwhile, some industry experts have indicated that Tata Power may be adopting a go-slow approach on the project as it is sourcing coal for the project from Indonesia. Following the introduction of new regulations in that country that make it mandatory to benchmark coal export prices to international rates, the project's viability may have decreased. However, the experts acknowledged that evacuation of electricity from a plant does take some time even after the transmission network is in place. Once commissioned, Tata Power's Mundra project would be the country's first ultra mega power project. It comprises six units of 660 MW, of which the first unit is expected to start generating power by January. Power Finance Corporation, the nodal agency for these UMPPs, has so far awarded four such projects. The other three projects -- Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) -- have been bagged by Reliance Power.

Government increases coal supply to northern power stations

October 11, 2011. The government increased coal supply to power projects in northern states that were operating at less capacity due to fuel shortage. Coal minister Sriprakash Jaiswal held an emergency meeting to take stock of coal availability at power plants of the country. The minister directed increasing coal loading to 180 rakes from the present 153 rakes. Of 180 rakes, 145 rakes would be supplied to power sector. CIL had registered a growth of 5% till July in dispatch of coal to power stations and the power stations were carrying a comfortable coal stock of 13.2 million tonnes as on August 1, 2011 as compared to 11.5 million tonnes on the same date last year.

Minister blames UP for extra pressure on Northern Grid

October 11, 2011. Power minister Haroon Yusuf blamed the Uttar Pradesh government for the power cuts that have troubled Delhi residents since last week. Yusuf said the neighbouring state has been drawing electricity beyond what has been allocated to it, thereby burdening the Northern Grid and triggering outages. He said such heavy overdrawal from the Northern Grid is punishable with heavy fines and the Delhi government will soon report the violation to the Power ministry. Yusuf said supply is expected to improve soon, as the government is trying to source more electricity.

Power Ministry may tweak bid documents for ultra mega power projects

October 10, 2011. Power Ministry may tweak the bidding documents for upcoming ultra mega power projects to cater to the possibility of future increases in raw material rates. The Power Ministry has discussed such a proposal with the Coal Ministry and Law Ministry and is awaiting their response. The current bid document for UMPPs does not have any such provision. Tata Power, which is executing the 4,000-MW ultra mega power project at Mundra, in Gujarat, and Reliance Power, which is developing the Krishnapatnam UMPP in Andhra Pradesh, had requested the Power Ministry to allow them to increase the tariffs of these projects due to a rise in international coal prices. Both these projects are imported coal-based projects. However, the Power Ministry is believed to have advised the respective developers to sort out the issue bilaterally with procurers of power from these projects. Indonesia made it mandatory for coal exports to be benchmarked to international market prices. Earlier, companies such as Tata Power would negotiate coal supplies from the island nation, which was a cheaper proposition than paying the international rates.

Government to pull up Coal India for missing production targets

October 9, 2011. CIL has blamed its failure to keep to production targets in Q1 this fiscal on rains and delays in securing green clearances, but the Coal Ministry is in no mood for excuses and has called a meeting this week on the issue, where it is likely to berate the Navratna PSU's top brass. CIL had blamed early rains and inclement weather in the eastern region for playing spoilsport in achieving its 98.7 million tonne (MT) coal production target for the first quarter. In addition, a plethora of problems like delays in the grant of green clearances for its projects hurt production by the state-run firm, which missed the April-June target by 2.4 MT. With more than double the average rainfall recorded at Eastern Coalfields Ltd (ECL), Bharat Coking Coal Ltd (BCCL) and Central Coalfields Ltd's (CCL) operating regions in June this year, Jha had said that the company could achieve only 96.3 MT of coal production in Q1. Out of the eight subsidiaries of CIL, five are situated in the eastern region, including Mahanadi Coalfields Ltd (MCL). The company had, however, exuded confidence that it would achieve the overall production target of 452 MT for the current fiscal. With more than 150 mining proposals of the company facing delays in environmental clearance, the world's largest coal miner had missed last fiscal's target by recording an output of 431.325 MT, as against the revised limit of 440.20 MT. CIL had blamed the slippage on delays in the grant of clearance to its projects. The Coal Ministry, too, has repeatedly expressed concerns over such delays, saying the green delays could result in a production loss of about 190 MT by March, 2012.

OIL & GAS

Sinopec buys Canada’s daylight for $2.1 bn to gain shale-gas assets

October 11, 2011. China Petrochemical Corp., the nation’s biggest refiner, agreed to buy Daylight Energy Ltd. for C$2.2 billion ($2.1 billion) in cash, gaining Canadian oil and shale-gas reserves in its largest acquisition. The takeover would give the Beijing-based company access to more than 300,000 acres of land in areas rich with oil and natural gas, adding to its expansion outside Asia after falling crude prices made valuations attractive. Sinopec Group and Cnooc Ltd. are among Chinese companies that have bought almost $30 billion of Canadian assets in the past five years to meet energy demand in the world’s fastest-growing major economy and gain access to drilling methods to help unlock Asian resources. The oil and gas industry accounts for the second-biggest volume of mergers worldwide this year after telecommunications, with $127 billion in transactions. Two other energy deals were announced. Superior Energy Services Inc., a U.S.-based oilfield services provider, will pay $2.6 billion in cash and stock for Complete Production Services Inc. In Australia, Everyday Mining Services Ltd. said it will merge with Hughes Drilling Pty Ltd. Daylight’s proven and probable reserves rose 46 percent to the equivalent of 174 million barrels of oil at the end of 2010. Beveridge values Daylight’s reserves at $16.70 per barrel of oil equivalent, saying Sinopec Group is paying a “fair price” for those assets. Sinopec Group will join rival China National Petroleum Corp. and Cnooc in seeking technology through partnerships as China, estimated to hold more gas trapped in shale rock than the U.S., opens new areas to exploration. The world’s biggest energy user, which currently doesn’t produce any shale gas commercially, has brought in foreign partners including Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp. to assess its potential. China has an estimated 1,275 trillion cubic feet of technically recoverable shale gas, more than the estimated reserves in the United States and Canada combined. The U.S. and Canada produced 26.2 trillion cubic feet of gas in 2009 compared with 2.9 trillion cubic feet in China.

Libya output may over 600,000 b/d by year end

October 10, 2011. Libya is now producing 400,000 barrels of oil a day, a quarter of its prewar level, a figure that may rise above 600,000 barrels by year end, as the war-torn nation boosts output faster than expected. Libya shut off most of its output after civil war erupted in February, lending upward pressure to oil prices. It only restarted significant production mid-September following the fall of Moammar Gadhafi the previous month. The National Oil Company (NOC) could ramp up to 350,000 barrels a day by the end of October. But Libya has boosted production faster than planned to 400,000 barrels a day, following a ramp up at fields from state-owned Arabian Gulf Oil Co. and a joint-venture with Italy's Eni.

Greece to invite oil exploration in January

October 6, 2011. Greece in January will invite offers for oil exploration off its western shores in the hopes of tapping reserves of some 280 million barrels. The cabinet had approved drilling in the gulf of Patras, the sea region west of Ioannina and Katakolo off the Peloponnese coast. A contractor is expected to be appointed within a year. The gulf of Patras is thought to hold some 200 million barrels of crude oil, while another 80 million barrels are believed to lie near Ioannina and another three million near Katakolo. The cash-strapped Greek state, which is struggling to escape default, could draw up to EUR14 billion over the next 15 years.

Iraq to construct two new refineries to meet domestic need

October 10, 2011. The Iraqi Oil Ministry, anxious to reduce the country's dependence on imported foreign oil refined products, intends to build two new refineries in the provinces of Karbala and Missan. The Karbala refinery will refine up to 140.000 barrels per day and the one in Missan up to 150,000 bpd. The country remains unable to produce enough oil and gas to meet indigenous demands. While Iraq produces 8 million liters of liquid gas per day, it consumes approximately 12 million liters. As regards oil, while Iraq produces 12 million liters of refined oil every day, another 12 million liters have to be imported from international markets to meet domestic demand.

Oman to increase Sohar refinery capacity

October 7, 2011. Oman plans to boost capacity at its Sohar refinery by up to 50 percent by 2016 to satisfy its own rapidly rising fuel demand. Oman could spend up to $1.5 billion on the project needed to quench the thirst for vehicle fuel, part of a wider trend of Middle Eastern oil producing countries becoming significant consumers. Oman's oil consumption has more than doubled over the last decade, thanks to energy-intensive industry growth and an expanding vehicle fleet which has driven substantial growth for fuel over the last five years. But vehicle ownership in the non-Opec oil producer remains 55-60 percent below other countries in the region, leaving plenty of room for rapid growth over the next few years. Fuel demand has been soaring in the Middle East over the last few years, thanks to a petro-dollar fuelled economic boom and fuel subsidies, which have driven a spate of refinery expansions and new plant investments from Saudi Arabia to Bahrain. Oman's Sohar refinery, operational since 2006, currently produces up to 116,000 barrels per day (bpd) of fuel while Mina Al Fahal produces some 106,000 bpd.

Shell keeps Singapore refinery shut as firefighters withdraw

October 6, 2011. Royal Dutch Shell Plc will keep its biggest refinery shut until investigations into a fire are completed. Shell shut down the Pulau Bukom plant after the fire started and suspended some fuel shipments. It is talking to customers over their supply needs. The 500,000 barrel-a-day refinery exports 90 percent of its products to the Asia-Pacific.

Crew abandon ship off N.Z., oil spill worsens

October 11, 2011. Personnel abandoned a container ship that’s stranded and leaking oil off New Zealand’s northeastern coast as the vessel was rocked by waves as high as 4 meters (13 feet). The stricken ship, carrying 1,700 metric tons of fuel oil and potentially dangerous chemicals, ran aground Oct. 5 in the Bay of Plenty near Tauranga, 100 miles (160 kilometers) southeast of Auckland. While the vessel, named Rena, is more upright after shifting on the reef, it has sustained damage and is leaking a “significant amount” of oil. New Zealand officials are seeking to determine how the vessel settled on the Astrolabe Reef after interviewing crew on duty during the accident and seizing recording and navigation equipment. The inquiry’s final analysis may not be ready until the middle of 2012.

Iran, S. Korea sign deal to build Caspian-to-Oman pipeline

October 10, 2011. Iran and a South Korean company signed a contract to construct a cross country pipeline to transport oil from Northern to Southern Iran.

The 1680-kilometer pipeline would facilitate swaps between Iran and the Caspian Sea littoral states as it will transfer crude from Iran's port of Neka on the rims of the Caspian Sea to the port of Jask in Iran's Persian Gulf coasts in the South.

Iran announced its plan for constructing such a pipeline five years ago. The proposed $3.3-3.7 billion pipeline is due to transit one million barrels of oil per day from Caspian Sea littoral states and the Caucasus region to the Persian Gulf.

Boardwalk, Southwestern reach 15 year Marcellus gathering deal

October 10, 2011. Boardwalk Pipeline Partners, LP and Southwestern Energy Company announced that their subsidiaries, Boardwalk Field Services, LLC and Southwestern Energy Production Company, have executed a 15-year definitive gas gathering agreement which will require construction of a natural gas gathering system in Susquehanna and Lackawanna Counties, Pennsylvania. Boardwalk will own and operate the gas gathering system that will support Southwestern's development of Marcellus Shale gas wells in these counties.

The gathering system is expected to cost approximately $90 million and will be comprised of approximately 26 miles of 12" high pressure gas pipeline, a low pressure in-field gathering pipeline, compression and dehydration and will interconnect with Tennessee Gas Pipeline Company in Susquehanna County, Pennsylvania. The system will be built out over several years and is expected to have a delivery capacity of 275,000 Dth/day when fully constructed.

Burmese activists seek suspension of Chinese natgas pipeline project

October 10, 2011. Following newly elected Burmese President Thein Sein's decision to halt the Myitsone dam hydroelectric project on the Irrawaddy River, Burmese activists now want him to shelve the $1.5 billion Shwe natural gas and oil pipeline project. The Shwe Gas Movement activists want a cessation to work on the Shwe natural gas pipeline, which is backed by China. The Shwe natural gas and oil pipelines, with a completion date of 2013, will transit Burmese crude oil and natural gas from Burma's Arakanese coast to China's Yunnan province.

The dual 620 mile-long oil and gas pipelines will pass through more than 20 Burmese townships. The natural gas will be produced from Burma's offshore Shwe gas fields in the Bay of Bengal, with oil to be offloaded from Middle Eastern and African tankers in Arakan port, which will then be pumped to a Chinese refinery in Kunming, the capital city of Yunnan.

The pipelines are projected to supply around 12 million metric tons of crude and 12 million cubic meters of gas annually to China. The project is a joint venture of Beijing-owned China National Petroleum Corporation and Burmese regime owned Myanmar Oil and Gas Enterprise, and if completed, is expected to produce about $1 billion in foreign-exchange annually to the Burmese government for the next three decades.

Tanker safety risks are rising following plunge in rates, ship owners say

October 10, 2011. A collapse in oil-tanker rates to the lowest level in at least 14 years is increasing the risk of spills because it may encourage some owners to spend less on safety, Tsakos Energy Navigation Inc. and BW Group Ltd. said. Rates to haul Middle East crude to Asia, the biggest trade route, fell to $674 a day from a record $289,000 in 2007 because of a glut of vessels. Daily operating costs for the very large crude carriers are $10,670.

TransCanada pipeline foes to camp out before U.S. hearing

October 7, 2011. Opponents of TransCanada Corp.’s Keystone XL pipeline said protesters will sleep outside the site in Washington of the final public hearing on the project to ensure they get a seat while a rally is held outside. TransCanada plans to build the 1,661-mile (2,673-kilometer) pipeline to transport Canadian oil from Alberta to Texas refineries.

Nabucco consortium bids for new Azeri natural gas production

October 6, 2011. Nabucco Gas Pipeline International GmbH has submitted a comprehensive transportation proposal to the consortium developing Stage 2 of Azerbaijan's offshore Caspian Shah Deniz natural gas field. Azerbaijan is currently entertaining four other bids besides Nabucco's for its increased natural gas exports from its offshore Caspian Shah Deniz field. British Petroleum is contemplating offering to build Baku a 800 mile-long alternative pipeline for the natural gas exports through Turkey onwards to the Romanian-Hungarian border. The 56-inch, 2,050-mile Nabucco pipeline, first proposed in 2002, has a cost initially estimated at $11.4 billion and rising. Interest in Nabucco has been revived following French energy giant Total's announcement last month of massive reserves in its Absheron X-2 block, less than 20 miles from Shah Deniz, which is believed to have large pockets of gas spread over a 100 square mile field, up to a total of several trillion cubic feet of gas and associated condensates.

Oil-tanker demand poised to match supply by winter 2012

October 6, 2011. Demand for oil tankers is likely match supply by the Northern Hemisphere’s next winter, lifting charter rates for the vessels. The global fleet of aframax tankers, which haul 600,000 barrels of crude, will expand 1.6 percent in 2013, compared with 7.5 percent growth for larger suezmaxes. The combined capacity of supertankers that can haul 2 million barrels of oil, known in the industry as very large crude carriers, will rise by 6 percent.

China to extend oil, gas resource tax nationwide

October 11, 2011. China will extend a value-based tax on sales of oil and natural gas nationwide starting next month to help save energy in the world’s fastest-growing major economy and boost local government revenues to develop inland provinces. The oil and gas tax, ranging from 5 to 10 percent of sales, will be levied on both domestic producers and joint ventures with overseas companies. China will apply a value-based tax on other commodities when the time is right. China, which currently levies the tax based on volume, introduced a 5 percent tax on oil and gas sales in Xinjiang on a trial basis in June to help fund development of the western province. The new regulation may crimp the earnings of companies including PetroChina Co. and China Petroleum & Chemical Corp., known as Sinopec.

LNG giant Qatar plans investment in rival Australia

October 10, 2011. Qatar is planning to tighten its grip on the liquefied natural gas supplies vital for Asian economic growth by possibly buying into an Australian export boom that poses the only serious challenge to its place as the world's top LNG exporter. Facing self-imposed production limits on its own vast gas reserves, Qatar is looking abroad to invest some of its hundreds of billions of dollars of fuel export earnings. It may well target Australia, the one country that import-dependent Asian buyers are banking on to reduce their reliance on Qatari LNG. By 2020, Australia may eclipse Qatar as the world's largest LNG exporting country. Australia is now the fourth-largest LNG exporter and is already China's biggest supplier. Close proximity to the booming east Asian market, huge reserves and a low population density have attracted most of the world's top gas companies to Australia. Nearly $216 billion of LNG export projects are under construction or planned there. The biggest LNG exporter of all, Qatar Petroleum, might join those companies in a bid to control at least some of the supply coming from the world's fastest growing producer of gas cooled to liquid form for easy and flexible transport.

China cuts retail gasoline prices for first time in 2011 as oil falls

October 9, 2011. China cut fuel prices for the first time this year after crude oil costs plunged and the government aims to tame inflation. Ex-factory gasoline and diesel prices were both reduced by 300 yuan ($47.20) a metric ton. That represents a 3.5 percent drop for gasoline and 3.9 percent for diesel. Policy makers of the world’s second-largest economy are trying to cool inflation while sustaining growth as a deepening debt crisis in Europe and faltering growth in the U.S. threaten to sap export demand. The increase in China’s consumer price index eased to 6.2 percent in August after hitting a three-year high of 6.5 percent in July. China last reduced oil-product prices in June 2010 and has increased them four times, by about 20 percent, since then. Gasoline prices were cut to 8,280 yuan ton and diesel prices were lowered to 7,430 yuan. The upper limit for retail gasoline dropped as much as 3.3 percent and diesel by 3.6 percent. Chinese refiners will face losses after the cuts and the government has told oil companies to ensure supply. Sustained fuel price cuts would help lower China’s Producer Price Index and Consumer Price Index in the winter months. China adjusts gasoline, diesel and kerosene rates when the moving average of three crude grades comprising Brent, Dubai and Cinta changes more than 4 percent over 22 working days. The government may increase the frequency of fuel price adjustments and change the global crude price benchmarks it monitors. China’s industrial output slowed in August for a second month, giving policy makers more room to pause on monetary tightening as the economy cools and a global slowdown threatens exports and jobs. China is cutting fuel prices as tightness in domestic fuel supply eases. The government reduced fuel-oil import tariffs in July. It also pressured privately held refineries to increase processingl.

OPEC likely to agree to keep output target unchanged, Iran’s Khatibi says

October 9, 2011. OPEC’s members are likely to decide to keep their output target for oil unchanged when they meet in December, Iran’s representative to the Organization of Petroleum Exporting Countries said. Producers and consumers are satisfied with the current price level for crude, Iran’s Governor to OPEC Mohammad Ali Khatibi said. OPEC is responsible for 40 percent of global oil output, and the group’s 12 members are to meet Dec. 14 in Vienna to review output policy. Iran is OPEC’s second-largest producer after Saudi Arabia. When the group last gathered on June 8, Iran and five other members rejected a Saudi proposal to raise output by 1.5 million barrels a day, and the meeting ended without agreement for the first time in at least 20 years. The basket price is calculated using one key export blend from each of the organization’s members and weighting each according to production. The OPEC price had exceeded $100 since the beginning of 2011.

Korea National Oil to boost acquisitions as industry slump cuts valuations

October 9, 2011. Korea National Oil Corp., South Korea’s most acquisitive company, plans to resume buying overseas assets after a six-month hiatus as a slump in the oil and gas industry makes valuations attractive. The state-owned energy developer needs to buy more assets to meet the government’s goal of achieving the capability of producing 300,000 barrels of oil a day by 2012. The company known as KNOC is 62,000 barrels short of that target.

Al-Naimi says world oil market is not oversupplied, demand fluctuates

October 8, 2011. Saudi Arabian Oil Minister Ali Al- Naimi said there’s no excess supply in world oil markets and that the kingdom has been adjusting output to match fluctuating demand over recent months. The country, OPEC’s biggest producer, will keep pumping at current rates even if Libyan output returns to the market this year, as long as customers are in need of the oil, the minister said. The Organization of Petroleum Exporting Countries meets next on Dec. 14 in Vienna to decide whether it needs to alter production targets. Saudi Arabia supplied 9.39 million barrels of crude oil a day to the market in September, Al-Naimi said. Corresponding figures for June, July and August were 9.8 million, 9.6 million and 9.8 million, he said.

Thailand aims to be regional energy hub, to up oil reserves

October 6, 2011. Thailand aims to revive a long-stalled plan to become an oil trading and biofuel hub in Southeast Asia, challenging Singapore's dominance. The net oil importer plans to boost its crude reserves, excluding refined oil products, to 29 days from 18 days now to improve energy security, as consumers face volatile crude prices which continue to hold above $100 a barrel.The land bridge -- a plan dating back more than 20 years to build a 180 km (112 mile) trans-peninsula rail, road and pipeline link between the Gulf of Thailand and the Andaman Sea -- would speed up the transport of crude oil from the Middle East for refining.

Saudi Aramco raises light and medium oil-price premium for Asia to record

October 6, 2011. Saudi Arabian Oil Co., the world’s largest crude exporter, set prices for two grades of crude to be sold to Asia at the highest premiums in at least 11 years and cut other for the U.S., Europe and the Mediterranean.

Saudi Aramco, increased the pricing formula for its Arab Light crude to Asia by $1.05 a barrel to $2.70 a barrel above the average price assessment for Oman and Dubai grades.

OPEC risks bear market as Libya output returns

October 5, 2011. The decline in OPEC’s oil below $100 a barrel for the first time since February is raising the likelihood the group will cut production, as Libya revives output and the global economic recovery falters.

The Organization of Petroleum Exporting Countries’ basket of crudes fell to $99.65 on Oct. 3, down 18 percent from its highest level and within 2 percentage points of the 20 percent drop that’s deemed a bear market. Brent oil tumbled 20 percent from its April high and New York crude 32 percent.

POWER

Orapa power plant to be finally launched

October 10, 2011. After several false starts and last-minute technical fine-tuning, the 90 Megawatt (MW) Orapa turbine power plant will finally be launched by the Minister of Minerals, Energy and Water Resources, Ponatshego Kedikilwe.

The P850-million power plant was initially scheduled to be launched on May 5, 2011 but this was postponed. This facility was implemented in close consultation with the Botswana Power Corporation (BPC) and the Government.

The plant is connected to the national power grid as it is expected to be handed over to the BPC at the launch. At full operation, the two turbines will consume 292, 000 litres of fuel for the eight hours per day that the plant will run. The BPC plans to convert the power station to gas-fired as soon as possible, in order to shave off operational costs. The conversion to CBM will cut 60 percent of costs at Orapa, lessening the weight on the BPC for the subsidisation of this power to consumers. Government and Debswana powered the Orapa station in order to address the country's immediate power needs, as demand continued to outstrip supply.

Alcantara Group to build P12-B power plant in Zamboanga

October 9, 2011. The Alcantara Group is poised to secure local approval for its plan to put up a P12-billion 100-megawatt coal-fired power plant in the eastern part of Zamboanga City following positive results of the initial series of public consultation by government agencies.

The initial series of consultation of the Department of Environment and Natural Resources in Zamboanga elicited no opposition to the plan of San Ramon Power Corporation, a subsidiary of the Alcantara Group, to build the 100-megawatt P12-billion coal-fired power plant in San Ramon in the eastern part of Zamboanga City.

PHCN warns against erection of buildings under transmission towers

October 10, 2011. The PHCN Transmission Company of Nigeria has said that incessant erection of buildings and sand dredging activities under electricity transmission towers are the biggest threats to the operations of the company.

The nation would witness blackouts in the near future if urgent actions were not taken to stop the illegal activities and the destruction of PHCN's transmission lines. The ongoing illegal activities under the transmission towers pose serious danger to PHCN's 330KV transmission lines across Nigeria and the company is ready to arrest and prosecute saboteurs.

Chile Xstrata power project close to deal on transmission line

October 7, 2011. Global diversified mining company Xstrata PLC's hydroelectric projects in southern Chile and the massive HidroAysen hydropower project are close to striking a deal on sharing land rights to build their respective transmission lines. The 2,750-megawatt HidroAysen project, which is being developed in a joint venture by power generators Empresa Nacional de Electricidad SA and Colbun SA, will include five generating units. HidroAysen has faced staunch opposition because of plans to dam the Baker and Pascua rivers and to lay a 1,920-kilometer transmission line, parts of which will pass through vast expanses of pristine land.

Ukraine ups electric power output 3.7 pc in Jan-Sept

October 11, 2011. The production of electric power in Ukraine's unified energy system increased 3.7% year-on-year to 140.925 billion kWt hours in January-September. Nuclear power plants increased output 1.5% to 65.245 billion kWt hours, Energy Ministry thermal power and thermal electricity stations 10% to 61.008 billion kWt hours, and communal combined heat and power plant s and block stations 4.7% to 5.753 billion kWt hours. Hydropower plants produced 17.4% less power - 8.735 billion kWt hours. The production of electricity by non-traditional sources increased 25% to 5.5 million kWt hours.

U.K. nuclear inspector to release final post-Fukushima report

October 11, 2011. The U.K.’s nuclear inspector will release a final assessment of the country’s reactors, seven months after Japan’s devastating tsunami raised questions about the safety of atomic plants worldwide. The report will be published, according to the Department of Energy and Climate Change. It follows an interim May assessment, which recommended 25 areas for review, including the layout of existing plants and emergency response arrangements. It did not propose limits on generation or closing plants.

Governments around the world called for inspections of nuclear sites after a magnitude-9 earthquake and tsunami in March led to Japan’s worst atomic accident and the most serious nuclear crisis since Chernobyl in 1986. EDF owns 15 of Britain’s 19 operating nuclear reactors, accounting for 18 percent of total power generation, and is planning to build four more. The Paris-based utility acquired all of the U.K.’s atomic plants in 2008 before selling a 20 percent stake to Centrica, along with the option to be a minority investor in new plants.

World can have power, cleaner stoves for $48 bn annually, IEA says

October 10, 2011. The world’s entire population can have electricity and cleaner stoves by 2030 if $48 billion is invested each year, the International Energy Agency said in its first estimate of the cost to end energy poverty.

The sum is about the same as the combined annual capital spend of Europe’s two biggest oil companies, Royal Dutch Shell Plc and BP Plc, and five times the $9.1 billion that was invested in 2009 to boost energy access in developing nations. There are 1.3 billion people, or 20 percent of the world population, living without electricity and 2.7 billion that lack clean cooking facilities, the IEA said. The obstacles to providing modern energy access to everyone are surmountable and national governments should publish targets and provide more seed capital to incentivize private investors.

Bangladesh, Ghana and South Africa have plans to extend electricity to all their populations by 2020, according to the IEA. Indonesia plans to connect 95 percent of its people to power supplies by 2025 while the Philippines targets 90 percent of households by 2017, according to the IEA, which is the Paris- based energy-security adviser of the Organization for Economic Cooperation and Development.

In Kenya, 84 percent of the 33 million population had no access to electricity in 2009, and 83 percent of Kenyans relied on traditional cooking facilities powered mainly by wood, agricultural and animal waste, the IEA said.

Battle over huge coal deposit highlights risks in Indonesia

October 10, 2011. Indonesia contains some of the world's richest mineral deposits, located tantalizingly close to the markets of China and India, but a court battle over a $1.8 billion coal mine highlights the risks foreign miners face in the country.

London-listed Churchill Mining Plc has been in dispute with Indonesia's Nusantara Group for three years over the right to develop the world's seventh-largest undeveloped coal asset. The case has reached Indonesia's highest court and could take years more to settle.

South Africa says ‘no decision made’ on building new nuclear power plants

October 8, 2011. South Africa’s Department of Energy said reports of a tender process being under way for six new nuclear power plants “are factually incorrect.” South Africa plans to diversify energy sources away from coal, which makes up more than 90 percent of its generation capacity of about 40,000 megawatts. It also aims to prevent a repeat of power outages in 2008 that temporarily shut most of the nation’s mines and smelters, its biggest source of foreign exchange.

The government approved plans to boost its nuclear energy capacity by 9.6 electrical gigawatt, it said. Safety concerns following the meltdown of nuclear reactors in Fukushima, Japan, prompted Peters to postpone the opening of the bids until next year.

Portugal plans to limit gains in electricity prices

October 7, 2011. Portuguese Economy Minister Alvaro Santos Pereira is preparing to put forward a plan that would limit the increase in electricity prices to about 5 percent.

Pakistan to pay $0.146628 per unit to wind power producers

October 7, 2011. Pakistan’s power regulator said the nation will pay $0.146628 a unit to wind power producers with installed capacity of as much as 250 megawatts. The new rates are applicable to companies which are able to achieve their financial closure by December next year.

UAE gifted power plant of 320 MW to start generation from next year

October 7, 2011. The Minister for Water and Power, Syed Naveed Qamar has said that the 320 MW power plant gifted by the United Arab Emirates will start generation from next year. He said this while talking to UAE Ambassador Essa Abdullah. The minister said the plant is being installed at Faisalabad and the generation from this plant will help to supply stable electricity to the industrial sector of the city. He said Pakistan is energy deficient and is looking for investment from UAE in the sector. He also thanked for the allocation of $6 million this year by UAE under Pakistan Fund. The ambassador said UAE will continue its support for Pakistan for development and welfare of the people. He informed the Minister that 46 different projects in water, sewerage and sanitation have been funded by UAE and 26 of them have been completed. He also briefed the Minister on their assistance for the flood affectees of Sindh province. UAE will extend more assistance for provision of basic facilities in the troubled and other areas of Pakistan.

Acciona completes 56 MW wind park in Tuppadahalli, India

October 11, 2011. Acciona SA completed construction of a 56-megawatt wind park in Tuppadahalli, India, making it the biggest Spanish wind developer in the country. The 58 million-euro ($79 million) facility, financed by Chennai-based Infrastructure Development Finance Co., brings Acciona’s total wind-generating capacity in India to 86 megawatts.

The power from 34 1.65-megawatt turbines will be sold to state-owned utility Mangalore Electricity Supply Co. Acciona’s portfolio of projects in India has a load factor of 37 percent compared with an average of 21 percent for wind parks in the country, the company said. All the plants are part of the United Nations’ Clean Development Mechanism that issues carbon- emission permits to projects in the developing world that reduce greenhouse-gas emissions.

Suzlon Energy bags order from Sri Lankan company

October 11, 2011. Suzlon Energy said it has received an order from Sri Lankan group Senok to supply wind turbine generators. However, the financial details were not disclosed. The order from Senok is for supplying ten units of S88 - 2.1 MW wind turbine generators, aggregating 21 MW capacity. Earlier, Suzlon had done 10 MW wind project for Senok. The new 21 MW project would come up alongside the existing one in the Puttalm district of Sri Lanka. Suzlon said REpower Systems SE has concluded a contract with France-based La Compagnie du Vent, GDF Suez Group for delivery of 23 wind turbines. Suzlon holds over 95 per cent stake in REpower.

GE to invest $115 mn with Greenko in India wind-farm project

October 10, 2011. General Electric Co. (GE), the world’s third-biggest supplier of wind turbines, announced its first investment in Indian renewable energy generation with plans to build $115 million of wind farms with Greenko Group Plc. GE Energy Financial Services will invest $50 million and Greenko $65 million to create 500 megawatts of wind projects, enough to power 875,000 Indian homes.

Suzlon Energy bags order for wind turbines from GAIL

October 5, 2011. Wind power company Suzlon Energy said it has bagged an order from GAIL for supply of wind turbines to the state-run gas distribution major's upcoming project in Karnataka. Suzlon received an order for supplying wind turbines with a combined generation capacity of 25.5 MW from GAIL India.

The order comprises 17 Suzlon wind turbines of 1.5-MW capacity each, to be commissioned in Karnataka in 2012. The power generated from this project will be sold to a local power distribution company under a long-term power purchase agreement (PPA) at a fixed, preferential feed-in tariff. GAIL is already sourcing equipment for two of its wind power projects in Gujarat from Suzlon Energy.

EU considered 30 euro floor for carbon from 2013

October 11, 2011. The European Commission considered installing a floor price in its carbon market for the third phase from 2013 to 2020 to spur clean investment. Carbon has dropped 26 percent this year, falling as low as 9.82 euros a metric ton on Oct. 4, the cheapest for more than two years.

EU lawmakers may consider tightening the region’s carbon cap to a 30 percent cut on 1990 levels by 2020 instead of the current 20 percent target because the economic recession has made it cheap to do so. The U.K. committee is exploring ways of co-operating with other nations to achieve a “fair deal” on climate protection and whether the EU, which runs the world’s biggest greenhouse gas market by traded volume, can sustain a credible carbon price without a global climate agreement.

Brazil lobby to push law requiring 20 pc biodiesel blend

October 11, 2011. A Brazilian lobbying group that says it has support from almost half the nation’s lawmakers will push to quadruple the nation’s biodiesel market.

The Parliamentary Front for the Defense of Biodiesel will press the government to issue a new regulation next year that will require diesel sold in the nation as of 2020 to be a blend of 80 percent diesel and 20 percent biodiesel. Diesel now sold in Brazil contains 5 percent biodiesel.

Solyndra rescue attempt probed by republicans after new e-mails

October 11, 2011. Republicans led by Representative Darrell Issa are turning their attention from the $535 million in U.S. loan guarantees that went to Solyndra LLC to the Obama administration’s failed effort to rescue the company. A refinancing in February that put taxpayers behind new investors providing $75 million attracted renewed attention with the release of administration e-mails showing Treasury Department officials expressed concern that the change violated the law. An Obama administration appointee at the Energy Department pressed White House analysts to sign off on a $535 million loan to Solyndra even though his wife worked for the failed solar panel maker's law firm. The emails show frequent inquiries from Steven Spinner, who was an adviser to the Energy Department on its use of economic stimulus funding to spur clean energy technology, on the Solyndra loan.

Mutant maize genes may help harness switch grass for biofuel

October 11, 2011. Mutant maize genes can be inserted into switch grasses to increase their viability as a biofuel crop, according to a study in the Proceedings of the National Academy of Sciences. Transferring the so-called CG1 corn gene into switch grass can more than triple the amount of starch stored in the plant stems and make it easier to convert into the sugars needed for biofuels.

Brazil sugar mills shutting for season, earliest in 12 years

October 11, 2011. Sugar mills in Brazil’s Sao Paulo state, which accounts for more than half the nation’s cane output, started shutting for the season in late September, the earliest in 12 years, because of a smaller crop. Mills began shutting down about 30 to 40 days earlier than expected when the harvest started in April as domestic output this year falls for the first time in six years. Brazil is the world’s largest producer and exporter of sugar. Latin America’s largest economy will produce 588.9 million tons of sugar cane this year, down from last year’s 623.9 million tons.

Australia’s Labor Party trails opposition on climate, poll shows

October 11, 2011. Australia’s opposition Liberal- National coalition leads Prime Minister Julia Gillard’s Labor government for the first time in a Newspoll survey as the party judged better able to fight climate change. Support for the Labor Party on climate change fell to 28 percent, while backing for the coalition rose to 31 percent. The opposition also holds the lead on the issue of processing asylum-seekers, with support at 44 percent, compared with 17 percent for Labor, the poll shows. Australia’s parliament this week is due to vote on the prime minister’s plan to introduce the country’s first tax on greenhouse gas emissions to reduce its reliance on coal, as well as proposed legislation on handling of asylum-seekers.

Solar installers thrive as panel costs slide

October 10, 2011. A steep drop in the price of solar panels has been a boon to the companies that install the renewable energy systems on rooftops, and it could set off a wave of consolidation in the sector. Those installers number in the hundreds across the country, focusing mostly on residential and small commercial market rooftop arrays rather than large-scale multi-megawatt systems under development in the U.S. Southwest. Photovoltaic panel prices have tumbled by more than 30 percent so far this year, making them far more affordable for consumers. Real Goods is expected to see a near 63 percent leap in its full-year sales this fiscal year to $126 million. The company hopes to approach $200 million in sales within a year of its latest deal to buy a rival. Privately held SolarCity, Mercury Solar, Sungevity, SunRun and Borrego Solar are also rapidly boosting their customer numbers. The average installed cost of photovoltaic systems, which includes installation and financing costs as well as the panels, fell about 17 percent last year and an additional 11 percent in the first half of 2011.

Trading Emissions culls dividend as carbon prices drop

October 10, 2011. British clean-energy projects developer Trading Emissions said it will scrap its dividend given the continued drop in carbon prices, which had also forced it to abandon sale talks earlier this year.

Trading Emissions trades carbon offsets in a market in which rich countries pay developing nations to cut emissions on their behalf under the U.N.-backed Kyoto Protocol.

Climate change negotiators see no major Durban deal

October 8, 2011. Global climate change negotiators concluded their last round of discussions before next month's U.N. convention in Durban, South Africa with faint hope of extending the Kyoto Protocol beyond next year. But while negotiators see no chance for a sweeping deal to control greenhouse gas emissions, they say that the talks could yet lay the groundwork for a binding climate deal that could include the world's largest greenhouse gas emitters, China and the United States.

The 1997 Kyoto Protocol, a global pact to curb greenhouse gasses, ends next year. Kyoto was meant to stem climate change but obliged only developed nations to reduce emissions. The United States never signed the deal and developing nations have since become major emitters.

Nations including Russia, Canada and Japan have said they will not sign on for another commitment period when the current one expires. The European Union is the only major emitter that has expressed willingness to continue committed to Kyoto, but EU negotiators say there is no point in signing a global agreement that would only cover around 15 percent of emissions. The United States is still unlikely to sign any agreement and major emerging nations want assurance a UNFCCC agreement on green finance is in place before committing themselves to a binding agreement. Seven days of talks in Panama were marked by assertions by developing nations that industrialized countries were blocking progress on the Green Climate Fund, envisioned as $100 billion in annual finance for poor countries to address climate change.

A draft text on long-term finance that climate discussion experts said will guide developed nations toward identifying capital for the empty fund in Durban. Before Durban, a UNFCCC committee will hold a final discussion on the fund's framework while the G20 is expected to discuss green finance plans. But there is little expectation that a binding deal on emissions will come from Durban. Backers of a post-Kyoto emissions pact including Australia and Norway -- countries that recently presented a new proposal to rescue climate talks -- seek a binding agreement by 2015.

Enbridge to expand clean energy investment as incentives wane

October 7, 2011. Enbridge Inc., known more for pipelines than solar panels, will increase investments in renewable energy, undeterred by wavering political support for wind and solar power in North America.

Enbridge, Canada’s largest pipeline operator, has a “huge number of renewable opportunities” and plans to add wind farms and other low-carbon technologies in Quebec, California and Colorado. Enbridge, based in Calgary, invested $1.5 billion in clean energy projects last year. Daniel declined to provide an investment target for this year or next.

The renewable expansion comes amid uncertainty for low- carbon power generation, which largely relies on government- mandated quotas and prices.

A new government in Canada’s largest province and a possible end to stimulus programs for renewable power in the U.S. may favor investments by large energy companies like Enbridge with their strong balance sheets.

Vestas wind systems wins 65 MW turbine order in Vermont

October 7, 2011. Vestas Wind Systems A/S said it won a U.S. order from Green Mountain Power for 21 V112-3.0 megawatt wind turbines for the Kingdom Community Wind project near Lowell, Vermont.

U.S. EPA proposes changes to air pollution rule

October 7, 2011. The U.S. Environmental Protection Agency said it has proposed changes to a rule that aims to cut smog-forming chemicals from power plants in 27 states. The changes could result in slightly more pollution, but save the measure's health benefits. The changes in the so-called Cross State Air Pollution Rule will result in the government issuing 1 percent more credits to allow industry to pollute in 10 states, which could result in 1.3 percent more of the emissions.

U.S. Colleges get more power from sun to reduce carbon emissions

October 7, 2011. The capacity of solar panels installed at U.S. colleges has more than tripled in two years as schools seek to cut their carbon emissions and energy bills. U.S. colleges and universities have 136.8 megawatts of solar panels now, up from 44.3 megawatts in 2009. There were 96.2 megawatts in use last year. Many schools installing the panels have committed to producing no net carbon emissions.

Greece expects $27 bn solar project to advance by year-end

October 7, 2011. Greece’s Energy Minister George Papaconstantinou said he expects an agreement by the end of the year that will advance a 20 billion-euro ($27 billion) solar power project, part of an initiative to boost the economy. Papaconstantinou said he plans to sign a pact with European Union officials and renewable energy companies that will help deliver Project Helios, named after the Greek god of the sun, which envisions luring foreign investors to install as many as 10 gigawatts of solar panels in Greece. Project Helios, involves multiplying Greek solar power production from 206 megawatts (MW) in 2010 to 2.2 gigawatts (GW) by 2020 and up to 10 GW by 2050. The country offers almost twice as many sunshine hours as Germany, but its solar energy output is about 80 times smaller than Germany's and red tape has crippled development. German said solar energy subsidies in Germany should be reduced, and it would make more sense to draw solar energy from places like Greece. Since announcing it will shut all nuclear power facilities in the next decade Germany is under pressure to find other sources of power. However German renewables firms dismiss the idea of Greece as an energy exporter. German solar power firm Eurosol GmbH, which has worked in Greece since 2010, said the Greek market offered good prospects. Greece also wants to promote waste management opportunities as it struggles to meet EU regulations. Many rubbish dumps in the country are illegal, and a source of pollution and forest fires. Of the 453 kilos of rubbish produced per capita in Greece each year, 77 percent lands on rubbish dumps, compared with only 1 percent in Germany, where recycling and separating rubbish is the norm. Greece issued a tender for a waste management system in Attica in August worth 430 million euros. A rubbish plant project in the area attracted violent protests from local residents however. German biogas firm EnviTec, which uses natural waste to generate gas, said biogas was another area with potential.

UK role as carbon capture leader at risk

October 7, 2011. Britain's plan to lead the global roll-out of carbon-capture and storage (CCS) is at risk as developer Iberdrola and the government disagree about how much funding the state should contribute to Britain's first project. The cost of Iberdrola's Longannet CCS plant in Scotland is estimated at 1.2 billion pounds and the technology added to Britain's second-largest coal-fired power plant was expected to start operating in 2014. CCS is still a commercially unproven technology but is widely seen as a key mechanism to fight climate change by trapping and burying greenhouse gas emissions, while maintaining stable energy supply.

The UK government had earmarked one billion pounds in funding for Britain's first CCS project, but was only willing to provide 400 million in upfront costs. The UK plans to become a world leader in clean technology, among which CCS features as a central tool to reduce carbon emissions. But tough government spending cuts to curb sovereign debt have made it difficult for the state to commit huge sums of state money to new technologies. The stalled talks could result in the government launching a review into CCS technology, pushing the roll-out into the next decade. The government remained committed to completing the next stage of its second-round CCS competition by the end of the year.

Biodiesel industry rejects EU land use impact study

October 7, 2011. Europe's biodiesel industry rejected the findings of a draft EU study showing that the cultivation of rapeseed to make road transport fuels is worse for the climate than using conventional diesel.

The European Biodiesel Board (EBB) said the study's central finding -- that the effects of indirect land use to produce most types of biodiesel cancel out any theoretical emissions savings -- was "highly debatable and unscientific." On the same day, a coalition of more than 150 international scientists warned that the indirect land impact of biofuels was significant and that current scientific understanding justified immediate action by EU policymakers.

The controversy centers on indirect land use change, a relatively new concept that the rapid expansion of biofuel production in recent years is driving up the overall demand for agricultural land. If that increased demand is met by clearing rainforest or draining peat lands, this can release enough stored carbon into the atmosphere to cancel out any theoretical emissions savings from biofuels. The Commission is currently drawing up proposals on how to account for ILUC in European renewable energy legislation, which sets a mandatory EU-wide goal for increasing the share of biofuels in road transport to about 10 percent by 2020. A series of leaked EU studies showed that biodiesel from European rapeseed, South American soy beans and Asian palm oil all have a greater overall climate impact that normal diesel. If the Commission follows the advice contained in the studies and penalizes individual biofuel crops on the basis of their estimated ILUC emissions, it could wipe out the bloc's 13 billion euro ($17.5 billion) biodiesel industry overnight. It would also give a boost to ethanol producers such as Spain's Abengoa and increase the market for fuels derived from Brazilian sugar cane as the EU seeks to fill the 80 percent gap in its biofuel market currently occupied by biodiesel. EBB said it had commissioned two scientific reports of its own, which showed that the main EU study had greatly overestimated the impact of ILUC. A panel of 19 independent scientists from the EU's own environment watchdog -- the European Environment Agency -- recently warned the Commission against any delay in addressing the indirect land use change impact of biofuels.

Italy 2011 biodiesel output seen down 18 pc

October 7, 2011. Biodiesel output in Italy, a major producer in the European Union, is expected to fall some 18 percent to about 600,000 tonnes hit by surging inflows of cheaper imports. Italian biodiesel makers, who use mostly imported raw materials including palm oil and rapeseed, have been hit hard in the past couple of years by cheap imports which sometimes cost less than the raw materials. Import of biodiesel to Italy is expected to cover 70 percent of this year's demand -- which is determined by Italy's obligatory targets for biofuels use in car fuel. Italy's obligatory share of biofuels in the car fuel mix, part of the EU fight against climate change, is set at 4.0 percent for 2011 and is due to rise to 4.5 percent in 2012 and to 5.0 percent by 2014. Biodiesel accounts for lion's share of biofuels use in Italy. Biodiesel imports to Italy covered about 50 percent of the target-driven biofuels sales in 2010, up from 29 percent in 2008. Italy produced 731,844 tonnes of biodiesel last year when it imported 639,684 tonnes of the fuel to meet a demand of about 1.3 million tonnes.

South African carbon tax plan hurts job ambitions

October 6, 2011. South Africa's carbon tax plan is running headlong into a clash with its job creation plans, putting the government in a bind ahead of hosting of a global climate summit at the end of the year as it seeks to rein in emissions without hurting growth.

Africa's biggest economy wants to cut CO₂ emissions by 34 percent over the next decade but has little flexibility to make fast changes with major employers among the top polluters and its cash-strapped power sector almost fully reliant on coal. The government has said its top priority is to cut into a chronic 25 percent unemployment rate but industry will have less money for new employees if it is forced to pay high carbon taxes and while exports flounder due to an economic slump in Europe and the United States. South Africa said it would consider sector-specific tax reductions and exemptions to protect key industries, although these would be temporary, raising fears the proposed tax will force some mining or industrial operations to close.

The government said a tax imposed directly on all measured emissions at a rate of 75 rand ($9) a tonne of CO₂ and eventually rising to around 200 rand ($25) a tonne, seemed "most appropriate," although analysts said the rates were high. The benchmark EU Allowances carbon price is at just under 11 euros ($14.6) per tonne of CO₂. Australia, a mining hub like South Africa, said it would tax its top 500 polluters at a price starting at A$23($22) per tonne that would rise about 5 percent a year before moving to a market-based emissions trading scheme in 2015. Nearly all of South Africa's power is generated by state-utility Eskom's coal-fired plants, making it impossible for companies to choose less carbon-heavy electricity. South Africa is investing heavily to diversify its energy mix away from coal and to have renewable energy and nuclear power supply a big portion of its electricity, but it may take decades until such measures materialize.

Georgia sues EPA over power-plant emission rule

October 6, 2011. Georgia has become the latest state to sue to try to block the U.S. Environmental Protection Agency's efforts for cleaner air, saying a new power-plant emission rule would have severe economic impact on consumers and businesses. The rule would cause major changes to the way electricity would be produced in the state. The rule requires Georgia and 26 other states to cap and regulate two major pollutants that come from coal-fired power plants: sulfur dioxides and nitrogen oxides. The first deadline is Jan. 1. Georgia Power got 67 percent of its electricity from coal in 2010. To comply, the utility would have to install pricey pollution-control technology on its coal plants or buy emission allowances from other states. Consumers would end up paying as part of their monthly bill, but first Georgia Power must seek state regulators' approval. The EPA said it was easing the Cross State Air Pollution Rule, released in July, for 10 states, but Georgia is not one of them. Sulfur dioxides and nitrogen oxides contribute to health problems such as asthma, bronchitis and other respiratory diseases. Among the other states suing are Alabama, Florida and South Carolina. The case is before the U.S. Court of Appeals for the District of Columbia Circuit, and the court will receive petitions until the close of business Friday.

China to meet carbon intensity goals as total emissions rise

October 5, 2011. Greenhouse-gas emissions in China are rising faster than forecast even as the level of pollution relative to its economic growth falls. An economy that’s expanding faster than projected will push China’s overall emissions about 1 gigaton higher in 2020 than previous calculations predicted. The world’s largest greenhouse-gas emitter is also keeping a promise to reduce the amount of carbon dioxide needed for increased production. Pledges to reduce emissions from China, the U.S. and other countries already fall short of what’s needed to keep the global temperature rise to less than 2 degrees Celsius (3.6 degrees Fahrenheit) from pre-industrial times. Warming above that level poses risks to ecosystems and food supplies.

BNDES lending $159 mn to Renova for Brazil wind farms

October 5, 2011. Banco Nacional de Desenvolvimento Economico e Social (BNDES), Brazil’s state development bank, will loan 297 million reais ($159 million) to Renova Energia SA for five wind farms as the country expands its investments in renewable energy.

The projects in the northeastern state of Bahia will have a total capacity of 98.8 megawatts. BNDES has approved 4.5 billion reais of loans for 70 renewable energy projects to date. The five wind farms are in the towns of Igapora and Guanambi and are among 14 Renova Energia projects that received contracts to sell electricity in a 2009 government-organized auction for new power capacity.

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