Energy News Monitor I Volume VIII, Issue 21

Inertia of Petroleum Product Prices: Cost and Consequences

 

NEWS BRIEF

OIL & GAS

Govt can’t manage daily expenses of pvt oil blocks: DGH

November 8, 2011. The government cannot micromanage day-to-day expenditure of privately-operated blocks such as Reliance's D-6 and Cairn's Rajasthan block, nor can it unilaterally amend contracts with companies, the oil ministry's technical arm- the Directorate General of Hydrocarbons-has argued in response to CAG's report. The DGH has defended the government's position on issues raised by the Comptroller and Auditor General about the oil ministry's handling of oil and gas blocks awarded to private companies. The DGH disagrees with CAG's objection that operators procured goods and services worth billions of dollars without competitive bids and said that in these blocks, the government had not made any investment and the risk was borne entirely by the operator. The oil ministry's technical arm has argued that production sharing contracts (PSCs) between the government and private energy firms outlined procurement procedures and the same could not be unilaterally amended.

ONGC approves acquisition of ADB stake in Petronet

November 7, 2011. After GAIL, IOC and BPCL, ONGC has approved acquisition of Asian Development Bank's (ADB) stake in Petronet LNG Ltd. ADB had offered to sell its 5.2 per cent stake in Petronet, in which the four state-owned oil and gas companies hold 12.5 per cent stake each. Gas utility GAIL and refiners Indian Oil Corp (IOC) and Bharat Petroleum have already informed ADB of their decision to exercise their Right of First Purchase/Refusal on the multilateral lending agencies stake.

ONGC sees $386 mn royalty recovery from Cairn

November 4, 2011. ONGC expects to get about ` 19 billion ($386 million) on account of royalty recovery from Cairn India's Rajasthan blocks. ONGC, which holds a 30-percent stake in the Cairn-operated oil and gas fields in western India, gave its nod for London-based miner Vedanta Resources' deal to buy a majority stake in Cairn India, subject to royalty payments being shared between the two partners. So far, ONGC had borne the entire royalty burden.

ONGC natural gas output likely to jump 75 pc in 5 years: Oil Ministry

November 3, 2011. Oil and Natural Gas Corp (ONGC) is likely to see a 75 per cent jump in natural gas production in the next five years when the state-owned company will bring its Krishna Godavari basin gas finds into production.

ONGC's natural gas output is projected to rise from about 52 million standard cubic meters per day during the current year to 91.09 mmscmd by 2016-17, according to the gas supply projections made by the Oil Ministry. This includes 28.72 mmscmd from block KG-DWN-98/2 which sits next to Reliance Industries' prolific KG-D6 fields off the east coast.

As per the ministry's projections, the production rate is contingent upon upstream regulator, the Directorate General of Hydrocarbons (DGH) approving commeciality of finds ONGC has made in the block. The Declaration of Commerciality (DoC), a prerequisite before gas finds can be brought to production, are pending with the regulator more than that a year now. Without the KG basin production, ONGC's output in 2016-17 would be 62.37 mmscmd. Overall, the nation's gas production would rise from about 120 mmscmd currently to 180.56 mmscmd in 2016-17.

India's natural gas demand during this period would more than double to 473 mmscmd by 2016-17 with most of incremental demand coming from power plants. As per the projections made by Oil Ministry for the 12th Five Year Plan (2012-13 to 2016-17), current gas demand of 189 mmscmd is likely to rise to 473 mmscmd. Of the 473 mmscmd demand, 207 mmscmd would be from power and another 113 mmscmd from fertiliser plants.

Power plant would need 307 mmscmd by 2021-22, while fertiliser units may not see any incremental demand during 2017 to 2022. Domestic natural gas production currently is about 120 mmscmd and another 46.3 mmscmd is imported in form of liquefied natural gas (LNG). The total availability of 164 mmscmd is short of current demand of 189 mmscmd. Besides ONGC's 52 mmscmd, Reliance Industries produces under 42 mmscmd of gas from its prolific KG-D6 fields. Oil India produces 6.6 mmscmd and another 11.9 mmscmd comes from western offshore Panna/Mukta and Tapti fields. Of the current supplies, 61.4 mmscmd goes to power sector while fertiliser plants consume 37.7 mmscmd. The remaining is used by city gas projects, refineries, petrochemical plants and sponge iron units.

IOC buys 4 mn bbls West African crude for January

November 8, 2011. IOC bought 4 million barrels of West African crude in a tender for January loading. The refiner bought 1 million barrels each of Forcados, Qua Iboe, Bonny Light and Girassol from Shell. The deal could not be confirmed. IOC is India's biggest refiner, with a total capacity of more than 1.3 million barrels per day (bpd). It tenders several times a month to buy crude oil, mostly West Africa.

IOC says petrol price hike was unavoidable

November 4, 2011. IOC said the hike was in prices unavoidable as rupee depreciation has increased crude imports costlier. India is 79 per cent dependent on imported oil for meeting its fuel needs. The dip in rupee value against the US dollar necessitated a hike of ` 2.49 per litre in petrol price, but the desired increase was moderated to ` 1.52 a litre because of some softening in oil prices. After accounting for local sales tax or VAT, the hike in Delhi came to ` 1.80 a litre.

Inspite fo more cars sold, diesel use dips due to cut in agricultural activity

November 4, 2011. Diesel consumption in the city went down in the financial year 2010-11. According to the Delhi Statistical Handbook 2011, the consumption of diesel was only 811 million tonnes in 2010-2011 as opposed to 1,098 million tonnes the year before, or 1,411 million tonnes in 2007-2008. This is in stark contrast to the rising number of new vehicle registrations in the city - private and commercial, which prompted the Delhi government to impose a hike in the registration fee of diesel vehicles in September. The handbook even goes on to say that the increase in car registrations in the same period was a substantial five lakh.

GAIL aims at 0.5-1 million tonnes LNG deal

November 8, 2011. Gas firm GAIL India Ltd hopes to finalise a deal to buy 0.5 million to 1.0 million tonnes of liquefied natural gas in one to two months. The deal duration could vary from 1-3 years. GAIL owns India's biggest gas pipeline network of about 8,700 kilometres. LNG currently accounts for a tiny amount of India's energy needs, most of which are met by coal with oil covering about a quarter of demand - making the country Asia's third-largest oil importer.

Shell, Total to expand India LNG terminal capacity in 2012

November 3, 2011. Royal Dutch Shell PLC and France's Total SA plan to expand capacity of their liquefied natural gas terminal in western India by more than a third, buoyed by strong demand for the fuel in the country. India's natural gas supply has been hit as output from Reliance Industries Ltd.'s D6 block in the Krishna Godavari basin off India's east coast has declined to 42 million standard cubic meters a day against a target of 69 mmscmd. Demand for gas is rising due to fast-expanding power stations and industries, boosting LNG imports. Credit-rating firm ICRA Ltd. last month forecast India's gas demand to rise to around 410 mmscmd by March 2010 from around 177 mmscmd in the year ended March 31, further increasing reliance on LNG. Shell and Total's expansion plans are in line with larger peer Petronet LNG Ltd., which in October said it will raise its LNG regasification capacity by one-and-a-half times to 25 million tons by 2015. India needs to fast expand its pipeline infrastructure to fully realize the potential of gas as a fuel.

Political pressures may force cut in fuel prices: HPCL

November 8, 2011. Hindustan Petroleum Corp Ltd (HPCL) is scared that political pressure might "force" it to cut petrol prices, though it has not heard from the government on potentially rolling back a recent increase in prices. The fuel price increase saw Trinamool Congress chief and West Bengal Chief Minister Mamata Banerjee coming out in the open against the Centre and threatening to withdraw support from the government. State-run oil retailers are preparing to cut petrol prices for the first time since January 2009. This reduction, expected to be around 30-50 paise, would be the first in 33 months. HPCL posted a net loss of ` 3,364.48 crore in the quarter ended September. The company raised petrol prices by ` 1.82 per litre, along with other state-run fuel retailers, the second increase in less than two months.

38 pc of new petrol price reflects central, state taxes

November 8, 2011. About 38 per cent or ` 26.22 in petrol price of ` 68.64 a litre in Delhi is because of central and state government taxes. State-owned oil firms had hiked petrol price by ` 1.80 a litre, the fifth increase this year as oil imports became costlier due to fall in rupee value. The new rate is based on a basic price of petrol, without including any taxes, refining cost or margin, of ` 41.38 per litre. The retail selling price is calculated by adding customs duty, central excise rates and VAT to the basic price which is nothing by the average of international oil rate. On ` 41.38 a litre base price, a customs duty of 2.5 per cent or ` 1.04 per litre is levied. Beyond this, the central government levies ` 6.35 per litre basic cenvat duty, ` 6 per litre special additional excise duty and ` 2 per litre additional excise duty towards highway cess. The excise duty after including education cess at the rate of 3 per cent, totals up to ` 14.78 per litre. The central taxes do not increase when the base rate is raised because these are fixed rates. However, VAT, which in Delhi is at 20 per cent, rises with every increase. Earlier, VAT on petrol was ` 10.62 per litre, but after the hike, it totals to ` 11.44 a litre. In the case of diesel, the total taxes account for only ` 7.66 of the retail price of ` 41.29 in Delhi. The taxes include ` 0.76 in customs duty, ` 2.06 in excise duty and ` 4.84 state VAT. There is no central excise duty on diesel apart from the ` 2 per litre cess for highway construction. Custom duty is 2.5 per cent.

Govt to offer Ratna to Essar if it sticks to cost-recovery plan

November 4, 2011. The government is inclined to award Ratna & R-series oil and gas field to Essar on the condition that the company sticks to its 15-year old commitment to recover costs amounting to $298.17 from the revenue of the project. Essar wants to revise the amount because costs have risen but the oil ministry, which is facing severe scrutiny from the Comptroller and Auditor General (CAG) on its dealings with private firms, wants to be cautious. When the company bid for these fields, it had offered a competitive cost recover limit, or the extent to which it would recover its expenditure from the output. The fields, discovered and partially developed by ONGC, were auctioned then awarded in 1996.

Platts ranks Cairn India world's fastest growing energy company

November 3, 2011. Cairn India has been ranked the fastest growing oil and gas exploration firm in the world, even as heavyweights like ONGC and Reliance Industries slipped in a list of top-performing energy firms globally. With a three-year compounded growth rate (CGR) of 116.5 per cent, Cairn was ranked by energy information provider Platts as the fastest growing E&P company in 2010. It was also named the fastest growing Asian company ahead of Reliance (ranked 18th in Asia) and state-owned GAIL India Ltd (ranked 20th) in the Platts Top 250 Global Energy Company Rankings. Cairn made its maiden entry at 120th rank in the overall global energy company list, which was topped by US giant Exxon Mobil Corp. For the 2011 rankings, Platts ranked listed energy firms on the basis of their financial performance in 2010.  ONGC, which was in 2010 ranked 18th in the list of the 250 top global energy firms, slipped to 21st position in the 2011 rankings. Reliance settled at 24th position in the 2011 list, down from 13th rank in the 2010 Platts Ranking. Refiner Indian Oil gained 36 positions to 42nd place in this year's list. Coal India entered the list at 51st position, while power producer NTPC slipped to 58th rank from 52nd position in 2010. GAIL was ranked 109th in the 2011 list, down from 107th position in the previous year. State refiner Hindustan Petroleum Corp Ltd (HPCL) rose from 174th rank in 2010 to 142nd in 2011, while Bharat Petroleum Corp Ltd (BPCL) settled at 143rd position, down from 94th in 2010. Other Indian firms in the top 250 list include Tata Power (190), Powergrid Corp of India (201), NHPC (216) and Reliance Infrastructure (232).

IOC seeks govt guarantee on Air India dues

November 3, 2011. Indian Oil Corporation ( IOC) has sought a comfort letter from the civil aviation ministry assuring payment of Air India's unpaid fuel bills that are a tad short of the approved credit limit, even as the government has given a 60-day leeway to the national carrier for clearing dues.

Oil minister Jaipal Reddy rules out petrol price hike for now

November 3, 2011. The ministerial panel on fuels is expected to examine the situation arising out of the rupee's fall against the dollar and recent movement of oil in international market, but an immediate increase in motor or kitchen fuel prices is not on the government's radar. Oil minister S Jaipal Reddy met finance minister Pranab Mukherjee, who heads the panel, to seek the committee's sitting in the backdrop of demand for an increase in retail prices of both motor and kitchen fuels.

Oil ministry seeks higher tax on diesel vehicles, gensets

November 3, 2011. Alarmed by the galloping growth in diesel demand even as consumers and even factories are switching to the lowpriced fuel, the oil ministry is seeking a hefty tax increase for diesel-fired generators and vehicles, and pushing for higher pump price for the fuel. The government has raised diesel prices by barely 2% since June last year while the price of petrol has climbed 30%. The oil ministry's tight control on diesel has made the fuel even cheaper than furnace oil, a low-grade industrial fuel luring factories to switch to the transportation fuel, and severely distorting India's fuel basket. Diesel demand rose nearly 10% in September. In the first half of the fiscal year, it has grown faster than petrol for the first time after six years. Indian refineries are struggling to keep pace with the change in the demand pattern as oil companies have designed their plants keeping in mind the traditional fuel use pattern, in which diesel accounted for about a third of the country's total fuel demand. The share of diesel in India's total oil consumption has soared to 43% in the current fiscal year from 35% five years ago while petrol's share has risen from 8% to 10%. In developed countries, diesel's share is 27% while petrol is 32%.

POWER

NTPC's installed capacity rises to 35,354 MW

November 7, 2011. NTPC said its installed capacity has increased to 35,354 MW with the commissioning of a 500 MW unit thermal project in Haryana. The state-run major is aiming a generation capacity of more than 1,28,000 MW by 2032. Prior to this, NTPC's installed capacity stood at 34,854 MW. The project is a joint venture between NTPC and the governments of Haryana and Delhi. It is currently working on projects with a cumulative capacity of 40,000 MW. Of this, projects to add 14,000 MW are in various stages of implementation. NTPC plants generated 220.54 Billion Units (BUs) of electricity during 2010-11, contributing more than 27 per cent of total electricity generated in India with about 18 per cent share of country's total installed capacity. The company is also inviting suggestions from its employees for improving its management practices. The company recently tied up a syndicated loan worth ` 2,341 crore from a consortium of Indian banks for its 390-MW Muzaffarpur thermal power project in Bihar. NTPC Kanti Bijlee Utpadan Nigam Limited, a subsidiary of NTPC Limited, has achieved financial closure on its Muzaffarpur thermal power project that consists of two units of 195 MW each. The company has mobilised loans worth ` 10,000 crore from State Bank of India this fiscal (2011-12). It has also secured a $ 300 million loan from Bank of Tokyo-Mitsubishi UFJ Ltd, Singapore.

Essar Energy to commission power projects by March next year

November 7, 2011. Essar Energy said it expects to complete three power projects by March next year that would increase its total generation capacity to 4,510 MW. The company, a part of Ruias-led conglomerate Essar group, is also planning to float a sponsored ADR programme this year, that would allow American investors to trade in Essar Energy shares. London-listed Essar Energy also has interests in oil and gas and owns the Vadinar oil refinery in Gujarat. The 1,200 MW Salaya I and 510 MW Vadinar P2 projects are located in Gujarat while Mahan I is in Madhya Pradesh.

MP to commission two new units at Satpura power plant in 2012

November 6, 211. The Madhya Pradesh government expects to start electricity generation from two new units with a capacity of 500 MW at the Satpura Thermal Power Station next year. The two new units -- of 250-MW capacity each -- at Satpura plant are being set up at an investment of over ` 3,000 crore. Currently, the Satpura power station, located at Sarni, in Betul district, has a generation capacity of 1,142.5 MW. The first extension unit of 250 MW is expected to start electricity generation by August, 2012, while completion of the second is anticipated by November next year.

Tata group may bid for assets of Australia's $5 billion New Hope Corp

November 5, 2011. Tata group is looking at the assets of Australia's New Hope Corp, a $5 billion coal miner that put itself up for auction, and could consider a bid in the future. Tata group firms Tata Power and Tata Steel have been on the lookout for coal assets in recent years to feed their growing raw material requirements. New Hope is considering a break-up and asset sales amid interest from global resource companies. Aditya Birla Group is considering bidding for the coal miner, while other interested players include India's JSW Steel, China's Yanzhou Coal Mining Co and London-listed Xstrata. India holds 10 per cent of the world's coal reserves but local supplies are falling short of demand as the country builds more power plants, hence domestic firms have been scouting for coal assets overseas.

Power plants' coal stocks dip below 'critical' level

November 4, 2011. Average coal stocks at India's thermal power plants have dipped below "critical" level, or are enough to last less than a week, against the norm of 22 days, mounting more pressure on electricity generating companies as they cannot afford to build stocks with imports because of low tariffs. Coal-fired power plants have been struggling with hand-to-mouth fuel supply for more than a month as floods, Telangana agitation and labour trouble choked supplies to power stations that have a capacity to generate 86,717 MW.

NTPC to invite bids for long-term coal imports in 2-3 months

November 8, 2011. To meet its rising fuel demand, the country's largest power producer NTPC plans to seek bids in next two to three months for long-term supply of imported coal of up to 20 million tonnes per annum. NTPC needs to securities imported coal, which accounts for about 10 per cent of the company's total requirements. Recently, severe coal shortages due to multiple factors had hurt power generation at various NTPC plants. State-run NTPC has an installed capacity of over 35,000 MW.

Power distribution companies face annual cash deficit of ` 700 bn

November 5, 2011. Power distribution companies face an annual cash deficit of ` 70,000 crore, adding to the gloom in the sector, which is already giving sleepless nights to bankers, equity investors and generating companies because of low tariffs and transmission losses. State utilities have already accumulated huge losses and even private firms have defaulted on payments to power producers as tariffs are low - a situation that is discouraging fresh investment in the power sector and making new capacity of 35,000 MW unviable.

Punjab Powercom signs MoU for mini hydro project

November 4, 2011. The Punjab State Power Corporation Ltd (PSPCL) signed a Power Purchase Agreement (PPA) with Sam India Hydro Power Pvt Ltd, Delhi for purchase of power from 1.2 MW Mini Hydro Project comprising two units of 0.6 MW being set up at Bowani Village in Ludhiana district. The project was being built at a cost of ` 13 crore and would generate employment in the area and facilitate harnessing of clean and renewable Energy. The project would be commissioned in December 2012.

PGCIL earmarks ` 50 bn for transmission network in Gujarat

November 3, 2011. Power Grid Corporation (PGCIL) has set aside around ` 5,000 crore for setting up transmission network in Gujarat by October next year. PGCIL's network would connect Bhachau, Morbi, Lalpar and Halvad at Gujarat's Kutch district. The company has already commissioned transmission system for two units of the Mundra Ultra Mega Power Project in Gujarat. These are part of the transmission system associated with Mundra UMPP, being implemented by Power Grid at an estimated cost of about ` 5,000 crore. The 4,000 MW Mundra project, being developed by Tata Power, would be the first UMPP to start power generation in the country. The line is ready to evacuate power from two units of Mundra UMPP (2X800 MW) in normal condition and more than 1,200 MW in the contingency. The system commissioned consists of high capacity Mundra-Bachau-Ranchodpura 400 kV Double circuit line along with 630 MVA Bachau 400/220 kV sub-station. These are part of the transmission system associated with Mundra UMPP, being implemented by Power Grid at an estimated cost of about ` 5,000 core. About 770 circuit kilometres transmission line has been commissioned in challenging conditions like passing through tough terrains in creek area of Arabian Sea, excessive water logging due to heavy rains, etc. PGCIL has planned a capital investment of ` 55,000 crore for the development of inter-state transmission system during 11th Plan of which an investment of more than ` 42,000 crore has already been made till September 2011.

Taxing power gear imports could be fatal, warn private companies

November 3, 2011. Private power producers have cautioned the government that any move to tax power equipment imports can cripple India's capacity-addition programme as companies are already struggling with high fuel costs, low tariffs and inefficient state utilities. The government is scheduled to consider the demand of state-run equipment supplier Bhel, which says it faces unfair competition from cheap imports but power producers say that protectionist measures to support the government-controlled company can severely hurt the sector. The issue will be debated by the top officials representing ministries of power, heavy industries, finance and the Planning Commission. Several top power companies, including Reliance Power, have placed orders for Chinese equipment. Apart from competitive costs, Chinese equipment is delivered in about three years, while Bhel takes four to four-and-a -half years.

NTPC plans to raise capacity to 128 GW by 2032

November 7, 2011. The country's largest power generator NTPC has chalked out ambitious plans of taking its capacity to over 1,28,000 MW by 2032. The total installed capacity of NTPC is 34,854 MW, with 15 coal-based, 7 gas-based power stations and 6 joint venture power projects located across India. It is currently working on projects with a cumulative capacity of 40,000 MW, of which 14,000 MW is in various stages of implementation. These plants generated 220.54 Billion Units (BUs) of electricity during 2010-11, contributing more than 27 per cent of total electricity generated in India with about 18 per cent share of country's total installed capacity. The company is also welcoming suggestions from its employees for improving its management practices. The company recently tied up a syndicated loan worth ` 2,341 crore from a consortium of Indian banks for its 390-MW Muzaffarpur thermal power project in Bihar. NTPC Kanti Bijlee Utpadan Nigam Limited, a subsidiary of NTPC Limited, has achieved financial closure on its Muzaffarpur thermal power project, consisting of two units of 195 MW each. The company has mobilized loans worth ` 10,000 crore from State Bank of India this fiscal (2011-12). It has also secured a 300 million loan from Bank of Tokyo-Mitsubishi UFJ Ltd, Singapore.

Will continue to auction earmarked coal to power companies: Coal Minister

November 6, 2011. The Coal Ministry has assured uninterrupted supply of coal to power plants hit by shortfalls in supply of the fuel, but while quantities will be earmarked for the generation companies, they will have to secure their requirement through competitive bidding. With around 30 power plants running with critical coal stocks, state-run Coal India had diverted an additional 10 per cent of its output, or 4 million tonnes, for e-auction to tide over a power crisis in October. That month, power companies had to buy coal meant for e-auction at a price almost 40 per cent higher than the notified price. The Power Ministry has been lobbying to stop the e-auction of coal on account of short supply to power plants. This would have impacted CIL, as the miner sells about 10-11 per cent of its coal output through the e-auction route, which accounts for between 25-30 per cent of its total annual revenue.

Tecpro Systems in talks with overseas BTG makers for partnerships

November 6, 2011. Turnkey solutions provider Tecpro Systems is in discussions with a few overseas boiler, turbine and generator (BTG) makers for partnerships to tap the growing potential of the Indian power sector. The inability to supply BTGs to power plants is the only missing link in Tecpro's ability to compete as a complete engineering, procurement and construction player. India's total installed power generation capacity at the end of September this year stood at 1,82,344 MW. The country plans to add around one lakh megawatts of capacity during the 12th Plan, ending, 2017.

India's per capita power consumption among lowest

November 5, 2011. India's per capita consumption of power is among the lowest in the world and the government wants to raise it. The Centre proposes to improve the per capita consumption of power to above 1,000 units. As per estimates, India's per capita power consumption stood at around 733 units in 2008-09, much lower than the world average of 2,800 units. The north-eastern region has been blessed with rich hydro-power potential of more than 58,000 MW, equivalent to about 40 per cent of untapped hydro opportunity in the country. Since more than 75 per cent of power is generated from coal and gas based stations, the development of hydro potential would be very important. This is due to the geological surprises which is one of the major challenges faced by many of the hydro projects, especially in the Himalayan region.

India-Canada aims to strengthen ties in energy sector

November 5, 2011. India and Canada want to triple their bilateral trade and are banking on alliances and investments in energy sector. Both countries are aiming at increasing bilateral trade to $ 15 billion by 2015 from $ 4.2 billion in 2010.

Canadian minister for international trade and the Asia Pacific Gateway Edward Fast is on visit to India to interact with local industrialists. He met representatives from Essar, Adani, Suzlon and various state ventures in Ahmedabad. The proposed agreement will result in GDP growth of close to $ 6 billion.

Uttar Pradesh to set up new power plant

November 3, 2011. Uttar Pradesh government approved setting up of 1500 kilowatt Khara hydro power project in Saharanpur district. The project would be constructed with an estimated cost of ` 9.28 crore, of which 30 per cent - ` 2.78 crore - would be contributed by the state government. UP Jal Vidyut Utpadan Nigam Limited would receive ` 2.7 crore as grant under capital subsidy scheme of Ministry of New and Renewable Energy. In case subsidy is not received, UPJVUNL would arrange the fund from its own resources or as loan from financial institutions. The project, to be completed in two years, would generate 5.28 million units per year.

Government to give level-playing to domestic power gear firms

November 3, 2011. Giving some comfort to BHEL and Larsen and Toubro, the government has broadly agreed for a "level-playing" field to the domestic power equipment manufacturers against imports, mainly from China at zero or low duty. The indigenous power equipment makers have been demanding a levy of 14 per cent duty on imported equipment, mainly arring from China, in order to provide them a cushion against the local taxes. The move for import duty is being opposed by the private sector power producers.

However companies such as BHEL, which have been lobbying for imposition of this duty, argue that the impact of import duty imposition on power tariff would be minimal and can be dealt with. Companies like L&T, BHEL, Bharat Forge and Thermax feel that the government should re-visit the import duty proposal which was put on the backburner. Currently, the projects with less than 1,000 MW generation capacity attract five per cent import duty while the rest enjoy duty free import of equipment.

OIL & GAS

Gulf Keystone boosts volumes for Kurdish Shaikan discovery

November 8, 2011. Gulf Keystone announced a major upgrade of the gross oil-in-place volumes for the Shaikan discovery in the Kurdistan Region of Iraq. The revised gross oil-in-place volumes for the Shaikan discovery, as calculated by Dynamic Global Advisors (DGA), independent Houston-based exploration consultants, are a P90 value of 8 billion barrels to a P10 value of 13.4 billion barrels of oil-in-place with a mean value of 10.5 billion barrels. This is the second very significant upgrade of the Shaikan resources estimates in 2011 and it revises the previously announced range of 4.9 to 10.8 billion barrels of gross oil-in-place with a mean value of 7.5 billion barrels. This upgrade is based on the data acquired since the last resource evaluation of the Shaikan discovery by DGA issued in April 2011 and is a third successive upward revision by DGA since the Shaikan discovery was announced in August 2009.

YPF finds 927 million barrels of shale oil in Argentina

November 7, 2011. YPF, Argentina's biggest oil and gas company, confirmed the existence of 927 million barrels of unconventional oil in Neuquen Province. The find has the potential to position Argentina among the world's leading producers of shale oil, or unconventional oil extracted from tight sands or shale rock formations. Similar discoveries in the U.S. have dramatically reversed fortunes in the country's oil and gas industry, which only a decade ago was widely expected to be in irreversible decline. YPF's find, based on output from 15 producing wells in the Loma La Lata Norte area, includes a previously announced discovery of more than 150 million barrels of high-quality shale oil in the Vaca Muerta formation. The discovery, which has yet to be certified and does not yet form part of the company's reserves, is the product of YPF's five-year oil and gas exploration program in Argentina. YPF expects to invest about $2.9 billion in exploration and production during 2011. That's the most the company has invested in any year in at least 20 years.

BP’s $7.1 billion Argentine oil sale scrapped

November 7, 2011. Cnooc Ltd.’s deal to buy BP’s $7.1 billion stake in Argentine crude producer Pan American Energy LLC collapsed, 10 days after Argentina’s president ordered oil companies to repatriate export revenue. BP will repay a $3.5 billion deposit it had received for the sale. The deal was cancelled for “legal reasons.” Bridas owns 40 percent in Pan American and the purchase of the remaining 60 percent was pending Argentine antitrust approval. The failure of the deal to buy Argentina’s biggest oil exporter means Cnooc, China’s biggest offshore energy explorer, may struggle to meet its production growth targets.

Exxon Mobil says Montana spill to cost $135 million

November 5, 2011. Exxon Mobil's response to a July oil spill into the Yellowstone River in Montana will cost a total of $135 million. Exxon Mobil said it has reached compensation agreements with over 95 percent of property owners who were affected by the spill, which released some 1,000 barrels of crude oil into the river. The leak occurred on the Silvertip pipeline, in a section that ran under the Yellowstone River and carried crude oil to refineries in Billings, Montana. The spill was handled by the Exxon Mobil Corp division Exxon Mobil Pipeline Co, which was responsible for the line.

Anadarko loss widens to $3.1 billion on spill settlement

November 2, 2011. Anadarko Petroleum Corp. (APC), the Texas Company that had a stake in the well that caused a record Gulf of Mexico oil spill, said it lost $3.1 billion in the third quarter after agreeing to a settlement with BP Plc.  Anadarko said it agreed to pay BP $4 billion to settle claims related to an explosion and oil spill at the Macondo well in the Gulf in April 2010. Anadarko said third-quarter sales volumes were at the high end of its forecast, climbing to the equivalent of 61 million barrels of oil from 58 million barrels. The company said output for the year will be 245 million to 248 million barrels of oil equivalent. An earlier forecast was for 244 million to 248 million barrels. Gross production at the project is more than 85,000 barrels a day, and the company said partners will seek to increase output once there’s a resolution. Anadarko said that Jubilee was heading for output of 120,000 barrels a day. The company has a 23.5 percent stake in the project, which is operated by Tullow Oil Plc. Anadarko has said Jubilee may hold 1.5 billion gross barrels of oil equivalent. The company said the operator’s resource estimate for Jubilee hasn’t changed. Anadarko continues to tout offshore Mozambique, where the company said it’s confident a complex holds more than 10 trillion cubic feet of recoverable gas. The estimate for Mozambique may rise further, Anadarko said. The company has opened a data room for a possible sale of its Brazilian assets. Anadarko has seen “strong interest” in those properties and a sale may happen in 2012 if pricing meets the company’s goal.

Galp said to be in talks with Sinopec to sell Brazil stake

November 2, 2011. China Petrochemical Corp., which paid $7.1 billion for Repsol YPF SA’s Brazilian unit, is in talks to buy a stake in Galp Energia SGPS SA (GALP)’s division in Latin America’s second-biggest oil producer. Galp is negotiating with Sinopec Group, as China Petrochemical is known, and at least one other party before a bidding deadline. The Chinese refiner may also bid for a share in Marathon Oil Corp.’s Angolan operations Chinese energy companies have bid more than $16 billion for overseas oil and gas assets this year to build reserves and supply the world’s largest energy consumer. Galp, which has stakes in four offshore blocks in the Santos Basin, including the Lula find, initially sought to sell a quarter of the unit, and later increased the stake on offer to as much as 40 percent. Lula is the largest crude discovery in the Americas since Mexico’s Cantarell field in 1976.

Sinopec, PetroChina rise on price speculation

November 4, 2011. China Petroleum and Chemical Corp. and PetroChina Co., the country’s biggest fuel producers, rose in Hong Kong trading on speculation that the government may allow Chinese refiners to adjust prices on their own. China, which controls fuel prices to curb inflation, may permit refiners to make “appropriate” changes. This would mark a further move toward market-oriented pricing after China introduced a system in 2008 that linked government- mandated changes to swings in benchmark crude prices. China may increase the frequency of fuel-price adjustments and change the crude benchmarks that it monitors. Losses from refining amounted to 41.5 billion yuan ($6.5 billion) for PetroChina in the first nine months, and 23.1 billion yuan for Sinopec. PetroChina said its refining loss may widen to 50 billion yuan for the full year. China raised fuel prices by about 10 percent in the first nine months in two adjustments, while crude increased by 23 percent during the same period from a year earlier.

Nansei Sekiyu seeks possible partners for Japan refinery

November 2, 2011. Petroleo Brasileiro’s Japanese refining unit is talking with possible Asian partners for its Okinawa oil processing facility. Nansei Sekiyu K.K. is seeking an associate to supply crude and buy fuel from them. The plant is processing about 80,000 barrels a day, yielding about 30 percent fuel oil that is being sold to electric utilities in Japan. Petrobras, as the Rio de Janeiro-based company is known, bought 87.5 percent of Nansei Sekiyu from Exxon Mobil Corp. in 2008 for $50 million. The plant has a total capacity of 100,000 barrels a day. Petrobras purchased the remaining 12.5 percent stake from Sumitomo Corp. in 2010 for an undisclosed amount. Petrobras is looking to sell a financial stake in Nansei Sekiyu while it focuses on developing deep water fields in Brazil.

Inspector review may delay Canada-U.S. oil pipeline

November 8, 2011. The U.S. State Department's inspector general has opened a "special review" of the department's handling of permitting for the Canada-to-Texas Keystone XL oil sands pipeline, which could delay the final decision on the line into 2012 or later. Howard Geisel, the State Department's inspector general, said in a memo sent to Senator Bernie Sanders that the review will determine to what extent the department and all other parties involved complied with federal laws and regulations relating to the permitting process on TransCanada Corp's proposed $7 billion Keystone XL pipeline.

Nebraska mulls plan to set up Keystone 'exclusionary zones'

November 4, 2011. Nebraska lawmakers offered two more proposals to regulate the Keystone XL oil pipeline, one to force a change in the route and another to set up a $500 million indemnity fund. The proposals completed the filing of draft laws during a special session of the state legislature, bringing to five the number of plans that will be debated, lawmakers said.

Sempra Energy to ask DOE for approval to build gas export facility

November 4, 2011. Sempra Energy plans to ask the Department of Energy (DOE) for approval to build a natural gas export terminal at the company's existing Gulf of Mexico gas import terminal "in the very near future". The company would not proceed with any plans to build gas liquefaction facilities needed to export U.S. gas to foreign markets unless Sempra lines up long-term contracts that would reduce risks associated with building such a facility.

Frontline to sell three crude oil tankers

November 2, 2011. Frontline Ltd., the oil tanker operator said it’s looking to sell three more 1990s-built ships as the company modernizes its fleet while earnings plunge. The Front Alfa, Front Beta and Front Delta, all built in 1992 or 1993 and capable of hauling 1 million barrels of crude, are on the market. Hamilton, Bermuda-based Frontline said that it agreed to sell the Front Hunter, another suezmax-class vessel that was built in 1996, to VTN Shipping Group, at a loss of $29.6 million. The company said it would lose $36.3 million on the sale of the Front Fighter and the Front Striver, built in 1994 and 1992 respectively.

TransCanada says delays a threat to Keystone XL

November 2, 2011. An extended delay in approving TransCanada Corp's $7 billion Keystone XL pipeline or a forced rerouting of the controversial project would lead oil shippers and refiners to abandon their support for the line. TransCanada, which reported a 12 percent rise in third-quarter operating earnings, expects the Obama administration to make a final decision on whether to approve the 700,000 barrel per day line, which would carry crude from Alberta's oil sands to Texas refineries.

Libya vets big fuel import deals in Istanbul

November 7, 2011. Top oil majors and trading houses met Libyan oil officials in Istanbul for their first chance to win multi billion dollar deals to supply fuel needed to keep the new government on its feet. Libya plans to purchase nearly three million tons of gasoline alone, worth close to $3 billion at current prices.

Canada's PM says oil pipeline still has U.S. support

November 7, 2011. Canadian Prime Minister Stephen Harper said he sees overwhelming U.S. support for TransCanada Corp's Keystone XL oil pipeline to Texas from Canada's oil sands, despite recent signs of reticence in Washington. Canada's oil industry says the pipeline will bolster U.S. energy security by providing a stable source of oil from a friendly neighbor. Environmental groups, some U.S. politicians and numerous celebrities, say the project will delay the shift to a green economy and increase the risk of oil spills in environmentally sensitive areas such as the Ogallala aquifer in the central states.

Hedge funds curb raw-material bets for first time in a month

November 7, 2011. Speculators reduced wagers on higher commodity prices for the first time in four weeks on mounting concern that Europe’s failure to contain its debt crisis will slow economic growth and demand for raw materials. Money managers cut combined net-long positions across 18 U.S. futures and options by 3.9 percent to 798,787 contracts. The Standard & Poor’s GSCI Index of 24 raw materials tumbled 14 percent since reaching a 32-month high in April.

California oil producers cheer firing of top state regulators

November 5, 2011. Representatives for California oil and natural-gas producers expressed approval for Governor Jerry Brown’s decision to fire two state regulators who they said played a role in a slowdown in permitting for new drilling projects.

Key facts and potential challenges of tight oil

November 5, 2011. Tight oil, a form of light crude oil held in shale deep below the earth's surface, could become an alternative source of energy just as some other conventional fuel sources are dwindling. Extracted with the use of hydraulic fracturing, or "fracking," using deep vertical and horizontal wells, tight oil is already transforming the energy industry in parts of the U.S. Midwest and is opening up oil provinces elsewhere, including China. Production of tight oil is now much more expensive than extraction from conventional oilfields, but analysts say costs are likely to come down as the industry develops.

Nigerian Govt begins work on Alaoji gas pipeline

November 4, 2011. The Federal Government has commenced the building of the $420 million (about N67.2 billion) gas pipeline to Alaoji power plant in Abia State to ensure that it achieves the target of steady power supply in the country soon. It also promised to step up measures to ensure safety and security, as well as stem illegal oil bunkering and pollution in oil producing areas of the country. Consequently, it said plans for a general improvement in security of lives and property was already in place.

Pennsylvania House panel approves natgas drill fee

November 3, 2011. A Pennsylvania House panel approved a bill to levy a 1 percent fee on natural gas drilling in the state as Governor Corbett looks to cash in on an energy boom and tighten regulations. House Bill 1950, which mirrors proposals put forward by Corbett, includes a drilling fee which the governor has said could raise about $120 million in its first year. Greater setbacks for drilling from water wells, streams and rivers have also been proposed in a bid to assuage fears that drilling techniques can contaminate water supplies. Pennsylvania is home to a large portion of the Marcellus Shale, the largest natural gas deposit in the country to which drillers have flocked in recent years. Heavy drilling activity has led to concerns that an extraction technique called fracking, which pumps millions of gallons of chemical-laced water to release gas in shale rock, taints water sources. Under Corbett's proposals, 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 10th years. Democratic members of the House Finance Committee have criticized the bill, saying it favors drillers and does not match drilling fees in other states. Industry-friendly Pennsylvania is currently the only state that does not tax natural gas production.

POWER

J-Power: to start building Thai gas power plant

November 7, 2011. Japan's Electric Power Development Co (J-Power) said it has obtained $1.184 billion in project financing for a gas combined cycle thermal power plant in Thailand and that it will start work on the 1,600 megawatts scheme by the end of this year. J-Power, which has developed overseas power generating projects in Thailand and five other countries, aims to start commercial power generation in 2014 at the project, in the Nong Saeng district of Saraburi Province. A local subsidiary of J-Power has reached a 25-year power purchase agreement with the Electricity Generating Authority of Thailand.

Russia to set up nuclear power plant in Bangladesh

November 2, 2011. Energy-starved Bangladesh inked a landmark nuclear cooperation deal with Russia that includes the setting up of a nuclear power plant in the country's northwestern Pabna district. The bilateral agreement opens the way for setting up Bangladesh's first nuclear power plant (NPP) to produce 2000 megawatt electricity at Rooppur, 125 km northwest of capital Dhaka. Russia would provide assistance in the setting up of two nuclear units with a capacity of 1000 megawatt each under the pact. A separate deal would be inked between the two governments for financing the nuclear power plants. Moscow would also provide training for human resource development at different levels of the project. Russia's joint stock company Atomstroyexport would perform its responsibilities as a contractor, while BAEC would perform its responsibilities as a customer. The deal would greatly help the country meet its power demands. The pact comes nearly two years after Dhaka signed a framework agreement with Moscow for the nuclear plant at Rooppur by 2017-18 at a cost of $1.5 to $2 billion.

Ayala, Trans-Asia bag P9B in loans for coal-fired plant

November 2, 2011. The Energy joint venture between Ayala Corp. and Phinma Corp. units has bagged a P9-billion loan from three banks for a coal power plant project in Batangas. South Luzon Thermal Energy Corp., jointly operated and managed by Ayala-led AC Energy Holdings, Inc. and Phinma’s Trans-Asia Oil and Energy Development Corp., signed the loan facility with lenders Banco de Oro Unibank, Inc., Security Bank Corp., and Rizal Commercial Banking Corp. for the 135-megawatt (MW) power plant in Calaca, Batangas. The P12-billion plant is expected to be funded both by borrowings and equity according to earlier reports. Construction of the circulating fluidized bed power plant began last September. Trans-Asia signed a 15-year power purchase agreement with South Luzon Thermal Energy, to eventually acquire generated output. This comes on top of Trans-Asia’s purchase of the Maibarara geothermal plant’s 20-MW generated output for a period of 20 years. The loan deal marks further progress in Ayala’s foray into the power industry. AC Energy Holdings had acquired a 50% stake in NorthWind Power Development Corp., for roughly P500 million. NorthWind owns and operates the 30-MW, 20-turbine Bangui wind farm in Ilocos Norte, the first commercial wind farm in the region. The Ayala unit had also infused an initial amount of P600 million into a joint venture with power firm Sta. Clara Power Corp. for the development of run-of-the-river hydroelectric power projects across the Philippines.

Reshma power plant only producing 5 MW of electricity

November 2, 2011. The Reshma power plant is producing only 5 MW of electricity as opposed to 200 MW. The Reshma plant had been paid ` 4 billion. The plant has already started producing electricity but if required, the company is ready to return the advance amount paid.

Balfour wins £290m Scottish power line deal

November 7, 2011. Balfour Beatty has won a £290m contract from Scottish Hydro Electric Transmission Limited to replace the power line between Beauly and Wharry Burn in Stirling. Work involves the design and installation of a 200km double circuit 400kV overhead electricity transmission line and associated civil and access works, including construction of temporary access roads and improvements to some private roads. The project will replace an existing 132kV overhead transmission line that will be dismantled during the contract period including reinstatement of the existing sites. The work is scheduled to be completed in 2015.

Russian power boost for Afghanistan, Pakistan

November 7, 2011. Russia’s Prime Minister Vladimir Putin has offered to invest “at least $500 million” in a Central Asian electricity project that will provide energy to Afghanistan and Pakistan. Under the Central Asia-South Asia Electricity Trade and Transmission Project, CASA 1000, hydropower-rich Kyrgyzstan and Tajikistan will export 1,000MW of electricity to power-deficit Afghanistan and Pakistan. CASA-1000 is one of the projects that may be undertaken by a proposed energy club of the Shanghai Cooperation Organisation. The Shanghai Cooperation Organisation comprises six full members – China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan, four observer states – India, Iran, Mongolia and Pakistan, and two dialogue partners – Belarus and Sri Lanka.

LED makers climb as China plans to ban incandescent light bulbs

November 5, 2011. A Chinese plan to phase out incandescent light bulbs is boosting companies that make energy- efficient replacements. China will ban sales of incandescent bulbs that use 100 watts or more of power starting Oct. 1, 2012. The ban will be expanded to cover any bulbs that use more than 60 watts in 2014 and to 15 watts in 2016.

Brazil government will renew energy concessions

November 4, 2011. Brazil’s government decided to renew concessions for the generation, transmission and distribution of electric energy that are due to start expiring in 2014 and 2015. The government would give details of its decision in the next 30 days.

Japan starts bailout of Tepco after Fukushima disaster causes more losses

November 4, 2011. Tokyo Electric Power Co. (Tepco) won approval for a 900 billion yen ($11.5 billion) bailout from the government after the Fukushima nuclear catastrophe to avert bankruptcy and start paying compensation for the crisis. Tepco committed to cutting 7,400 jobs and 2.5 trillion yen in costs. The utility forecast an annual loss of 600 billion yen, its second since the March earthquake and tsunami wrecked its Fukushima nuclear plant. The government of Prime Minister Yoshihiko Noda is stepping in to ensure residents, farmers, fishermen and forestry businesses are properly compensated by a utility that supplies power to 29 million customers in the political and economic heart of Japan.

Mexico scraps plans to build 10 nuclear power plants in favor of using gas

November 3, 2011. Mexico, one of three Latin American nations that uses nuclear power, is abandoning plans to build as many as 10 new reactors and will focus on natural gas-fired electricity plants after boosting discoveries of the fuel. Mexico will seek private investment of about $10 billion during five years to expand its natural gas pipeline network. Mexico is boosting estimated gas reserves after Petroleos Mexicanos discovered new deposits in deep waters of the Gulf of Mexico and shale gas in the border state of Coahuila. The country was considering nuclear power as part of plans to boost capacity by almost three-quarters to 86 gigawatts within 15 years, from about 50 gigawatts, and now prefers gas for cost reasons.

Sri Lanka's Norochcholai coal power plant not assigned to any company or country

November 3, 2011. Power and Energy Minister of Sri Lanka Patali Champika Ranawaka says the Lak Vijaya coal power plant in Norochcholai would not be handed over to any company or a country. Ranawaka has made this comment in response to claims that the Norochcholai coal power plant has been assigned to a Chinese company. The Minister has said that a temporary agreement was reached with the Chinese company that constructed the plant in order to get their technical expertise and to monitor the plants functions in the initial stages. Ranawaka has reiterated that the agreement was a short term one. Ranawaka asserted that the coal power plant in Norochcholai has not been assigned to any company or country on a permanent agreement.

SBI Macquarie invests ` 1.2 bn in Soham Renewable Energy India

November 8, 2011. Soham Renewable Energy India Pvt Ltd announced that SBI Macquarie Infrastructure Fund has invested ` 125 crore in the Bangalore-based company's renewable platforms. The investment, which is a part of a total commitment of ` 375 crore for current and future projects, will also be utilised to acquire licenses along with partly-constructed and fully-commissioned projects. SBI Macquarie's investment follows that of global investment and technology firm D.E. Shaw, which pumped $15 million in the company in 2008, the proceeds of which were utilised to fund its expansion plan over the next five years. Debt is expected to be tied up from financial institutions such as State Bank of India, ICICI, Axis Bank, IDBI and Syndicate Bank, amongst others, some of which has already been sanctioned. The company hopes to complete the projects it has on hand, and go through with its acquisitions by 2014. The company was also considering enhancing its liquidity position through an initial public offering or through a trade sale within the next three to five years. India's energy sector continues to be a favourable investment destination for risk capital players, even as demand outpaces sluggish supply in one of the world's fastest growing economies. In March 2010, a consortium of investors, led by Morgan Stanley Infrastructure Partners, purchased a 44% stake in power generation and engineering services firm Asian Genco for $425 million, the biggest private equity transaction in India in almost two years. Separately, General Electric's Energy Financial Services announced it plans of developing 500 mega watts of wind power in the country, with Greenko Group Plc - a London Stock Exchange's Alternative Investment Market-listed renewable energy company - at an estimated cost of $115 million. India has stated its goal of adding 17 GW of renewable energy between 2012 and 2017, and 100 GW in total energy capacity over the same period.

RPower to get ` 5.2 bn from ADB, US Exim Bank for solar project

November 7, 2011. Reliance Power has tied up funds for its 40 MW solar power project, with loans worth ` 525 crore coming from the Asian Development Bank and the US Exim Bank. The plant, coming up at Jaisalmer district in Rajasthan, would also be the first Indian power project to get financing from only global lenders. The project -- India's largest solar PV initiative -- entails a total capital cost of about ` 700 crore to be financed at a debt-equity ratio of 75:25. Reliance Power would pump in ` 175 crore into the project. This is the first sanction by ADB as a direct loan to a private sector solar project in India. Confirming the development, Reliance Power said this is the first solar power project to achieve the financial closure with global lenders only, resulting in substantial savings. The foreign financing route would result in significant savings for the company since overseas loans have a tenure of 18 years with lending rates of 3-4 per cent. On the other hand, loans from Indian banks generally have a tenure of 13 years and lending rate close to 13.5 per cent. The project is scheduled for commissioning in 2012. The long term Power Purchase Agreement (PPA) for PV project has been signed with Reliance Infrastructure. Solar panels for the project would be imported from US-based First Solar.

Alstom to invest 100 million Euros in French project

November 7, 2011. Power generation and transmission firm, Alstom said it is planning to establish two sites dedicated to production of components and to assembly of 6 MW offshore wind turbines in the port areas of Saint-Nazaire (Loire-Atlantique) and Cherbourg (Manche) in France. Alstom, which has formed a consortium with French-based company EDF EN to bid for the project, plans to make an initial investment of around 100 million Euros in the project. The company expects to generate up to 1,000 direct jobs and 4,000 indirect jobs through the project. If the consortium is selected, Alstom would manufacture nacelles and generators in Saint-Nazaire and move its offshore engineering center, now located in Loire-Atlantique, to the new site in Saint-Nazaire. Turbine blades would be produced in Cherbourg, in partnership with LM Wind Power, as well as a towers manufacturing facility which would be set up by Alstom's supplier, chosen subsequently. These industrial projects will allow the production of the Haliade 150, the first new generation 6 MW offshore wind turbine, each unit of which will be capable of supplying the equivalent of approximately 5,000 homes with power.

US collaborates with India in clean tech R & D

November 7, 2011. The US is collaborating with India on development of clean technologies by setting up a joint ` 125 crore research and development centre, the first by the US Energy Department with a foreign country. With an eye on increasing business potential in clean technologies in India, Sanchez is leading a high-level business delegation of CEOs of 15 top US companies, engaged in clean technologies. These include Azure Power, Serious Energy, A123 Systems, Amonix Inc, Picarro Inc and Sopogy Inc. India needs to provide a level-playing to the overseas firms in its national solar mission which denies sourcing from outside the country.

Investors seek extension for solar project commissioning

November 5, 2011. At least thirty solar project developers have decided to file a petition before the state electricity regulator to seek extension of the current tariff regime. Developers of close to 450 MW of solar projects fear of their investments of ` 6,750 crore becoming unviable as they are not in a position to commission their capacities before December, a deadline set by the Gujarat Electricity Regulatory Commission (GERC). They have already roped in a legal expert for 'mass-petitions'. Moser Baer, Lanco, Kiran Energy, GMR, Sun Edison and Emco met at Ahmedabad Management Association to decide the future course of action for the struggling solar project developers. Developers will get tariff of ` 15 per unit for the first 12 years and ` 5 per unit from 13th to 25th year for solar power units based on PV technology. Majority of the developers are expected to miss deadline in December. GUVNL will impose penalty per day on the projects to be commissioned after the deadline. Also, the late project developers will get less return in new tariff regime, which is expected to come in place from January 2012. It is learnt that developers will plead before the GERC to extend the deadline till March end and implement new tariff regime from April 1, 2012. Developers will contend that late allocation of land besides other procedural issues resulted in delays of their project. Some of the developers are claiming that they were asked to change their location twice or thrice in the state promoted Solar Park. Earlier, the government Gujarat owned Gujarat Urja Vikas Nigam Limited inked long term power purchase agreements with over 83 developers to commission 950 MW of solar projects in the state. However, only 250-300 MW of projects will be commissioned before the deadline.

Moser Baer Clean Energy invests ` 3.3 billion for Germany plant

November 4, 2011. Moser Baer Clean Energy said it commissioned a 23.8 megawatts solar farm in Germany and invested ` 3.3 billion for the same. The project is financed with long term debt from Germany's DKB Bank. Moser Baer Clean Energy, promoted by the founders of Moser Baer India Ltd got an investment of ` 3 billion from General Electric, after raising ` 13.5 billion from U.S.-based private equity firm Blackstone Group in 2010.

Rajasthan exempts entry tax on solar photovoltaic goods

November 2, 2011. The Rajasthan government has decided to fork out entry tax exemption on capital goods brought into the state for initial setting up of the solar power plants based on photovoltaic technology. Rajasthan Renewable Energy Corporation said that the state government will provide a tax exemption of 4% on entry of 43 capital goods like solar PV module, battery, inverter, lighting panels and solar monitoring stations among other goods used in solar power plants. At present, 22 solar photovoltaic power plants of 5 MW each and one 40 MW plant are under the installation stage. For solar thermal power, the state has got five projects of total 400 MW, including three projects of 100 MW each and two projects of 50 MW each. The state government has recently come out with its solar policy which aims at creating solar power generation capacity of 10,000 to 12,000 MW in the next 10-12 years. The policy, besides attracting developers for setting up solar power plants, also envisages setting up solar parks of more than 1000 MW capacity in identified areas of Jodhpur, Jaisalmer, Bikaner and Barmer. These solar parks would consist of power plants, manufacturing units, R&D units and training centers.

Health cost of 6 U.S. climate disasters: $14 billion

November 8, 2011. Deaths and health problems from floods, drought and other U.S. disasters related to climate change cost an estimated $14 billion over the last decade. The study in the journal Health Affairs looked at the cost of human suffering and loss of life due to six disasters from 2000-2009. To put this in context, 14 weather disasters in the United States so far have cost at least $14 billion.

Australia passes landmark carbon price laws

November 8, 2011. Australia passed landmark laws to impose a price on carbon emissions in one of the biggest economic reforms in a decade and injecting new impetus into December's global climate talks in South Africa. The scheme's impact will be felt right across the economy, from miners to LNG producers, airlines and steel makers and is aimed at making firms more energy efficient and push power generation towards gas and renewables. Australia accounts for just 1.5 per cent of global emissions, but is the developed world's highest emitter per capita due to a reliance on coal to generate electricity. In the United States, California starts its scheme in 2013, while China and South Korea are also working on carbon trading programs. India has a coal tax, while South Africa plans to place carbon caps on its top polluters. The scheme is a central plank in the government's fight against climate change and aims to halt the growth of the country's growing greenhouse gas emissions from a resources-led boom and age-old reliance on coal-fired power stations. It sets a fixed carbon tax of A$23 ($23.78) a tonne on the top 500 polluters from July 2012, then moves to an emissions trading scheme from July 2015. Companies involved will need a permit for every tonne of carbon they emit. Australia's carbon market is forecast to be worth as much as A$15 billion ($15.5 billion) by 2015, with sale of permits to raise A$25 billion in the first four years. Passage of the carbon price laws is expected to ensure the global market continues to expand over the next few years. The World Bank estimated the global carbon market was worth about $142 billion in 2010, with the European Union Emissions Trading Scheme accounting for 97 percent of trade. The government hopes the bill's passage will help re-ignite the push for a global agreement to curb emissions ahead of international talks in Durban in December. The laws are meant to give companies a financial incentive to curb pollution, and will help Australia reach its goal to cut emissions by 5 percent of year 2000 levels by 2020. Farmers will be exempt from the scheme but will be able to cash in by selling carbon offsets under separate laws. The package of 18 new laws sets up the carbon price as well as billions in compensation for export-exposed industries and local steel makers, as well as personal tax cuts for 90 percent of workers, worth an average A$300 a year. Export-focused industries with intensive emissions, such as aluminum, zinc refiners and steel makers, will get 94.5 percent of carbon permits for free for the first three years.

Yingli, Renesola Cut Forecasts, Take Charges in Solar Slump

November 8, 2011. Yingli Green Energy Holding Co. and Renesola Ltd. two Chinese solar companies, reduced their forecasts for shipments and cut the estimated values of their inventories. Yingli will deliver 1,580 to 1,630 megawatts of photovoltaic modules in fiscal 2011, lower than the previous forecast of 1,700 to 1,750 megawatts. Jiashan-based Renesola cut its quarterly shipment estimate to 320 megawatts to 330 megawatts, from 330 megawatts to 350 megawatts.

China solar market could rival U.S. in 2011

November 8, 2011. New subsidies implemented by Beijing and fast-declining prices for solar panels could put China on pace to match the United States's additions of the renewable energy source, according to a report issued by consultancy Solarbuzz. China is likely to install 1.8 gigawatts of solar panels on nonresidential sites, Solarbuzz said in new report, in line with forecasts for the United States, which was the world's fourth-largest solar market.

Most solar makers will disappear: Trina

November 8, 2011. Most of the biggest solar equipment makers may disappear in the next few years as plunging prices erode margins and drive the weakest out of business, according to Trina Solar Ltd. (TSL), the fifth-largest supplier of solar panels. This is the decade of mergers and acquisitions, China-based Trina, said. From now until 2015 is the first phase, when about two-thirds of the players will be shaken out. Three U.S. solar companies including Solyndra LLC have gone bankrupt this year and others led by First Solar Inc. and Yingli Green Energy Holding Co. slashed sales and margin forecasts, reflecting slower demand growth and stiffer competition. SunPower Corp. and Roth & Rau AG of Germany agreed to takeovers.

Drought-damaged U.S. corn crop pressuring global food supply

November 8, 2011. The U.S. is reaping its smallest corn harvest in three years after a drought damaged what was a record crop as recently as July, driving annual prices to an all-time high and curbing an expansion in global food supplies. The government will forecast production of 314.7 million metric tons, 27.4 million tons less than four months ago, the average estimate of 30 analysts surveyed. The cut is equal to output in Argentina, the second- biggest exporter. The U.S. Department of Agriculture already expected a third annual drop in global corn stockpiles and the first in soybean inventories in three years, offset by an expansion in wheat reserves to the largest in a decade. Corn, used mostly to make livestock feed and ethanol, is the only one of eight members of the Standard & Poor’s GSCI Agriculture Index to gain this year. At a time when global food prices tracked by the United Nations fell 9.1 percent from a record in February, U.S. consumers are paying the most ever for pork chops, ground beef, flour and cheese. World food costs are 68 percent higher than five years ago and combined corn, wheat and soybean stockpiles are dropping to a three-year low.

Australia green power drive could worry wind investors

November 8, 2011. Australia is set to unlock more than A$13 billion in government funds for clean energy that could boost investments for large solar power stations, but wind farm developers are at risk if the money disrupts an existing green scheme. The Senate passed laws supporting renewables and a national carbon price to accelerate investment in cleaner energy. Geothermal, wave power and energy efficiency projects are also likely to benefit from two independent bodies to be approved by the Senate, the A$10 billion dollars ($10.3 billion) Clean Energy Finance Corporation (CEFC) and A$3.2 billion Australian Renewable Energy Agency.

Hemlock expanding solar silicon capacity as China idles plants

November 8, 2011. The Hemlock Semiconductor Group, a polysilicon maker that received $169 million in U.S. tax credits, is increasing production capacity as other manufacturers consider cutting back amid an oversupply of the main material used in solar cells and semiconductors. The world’s largest polysilicon producer will increase capacity by 28 percent when a plant in Clarksville, Tennessee, goes into operation next year.

Softbank to build demonstration solar plants in Northern Japan

November 8, 2011. Softbank Corp. Japan’s fastest- growing mobile-phone operator by customers will build three demonstration solar power plants in Japan’s northern island of Hokkaido. Construction of a 3,000-square meter (0.3 hectare) plant with a capacity of 100 kilowatts in Obihiro city began. The company will use solar panels made by domestic and foreign producers including Kyocera Corp. and Canadian Solar Inc. Softbank plans to start work on two more plants which will together have 50 kilowatts of capacity in Tomakomai city, Hokkaido. Japan approved a bill that guarantees above- market rates for wind, solar and geothermal energy. The March 11 nuclear disaster at Tokyo Electric Power Co.’s Fukushima plant has turned public opinion against atomic energy.

China Longyuan Buys Guodian wind assets for about $236 million

November 7, 2011. China Longyuan Power Group Corp. bought stakes in wind power and biomass power businesses from its parent company, China Guodian Corp., for about 1.5 billion yuan. Guodian holds 63.68 percent of China Longyuan.

Daewoo Shipbuilding eyes wind turbine maker Bard

November 7, 2011. Daewoo Shipbuilding & Marine Engineering said on Monday that it was considering purchasing German wind turbine maker Bard, as the South Korean shipbuilder seeks new revenue sources in the fast-growing industry. Daewoo may compete with General Electric and Chinese companies to snap up Bard, which aims to close the deal by early 2012. Daewoo in 2009 bought Dewind, a wind power turbine unit of U.S. Composite Technology Corp and completed a wind turbine plant in Canada. Dutch utility HVC said in January it would buy a 15 percent stake in a 600 megawatt offshore wind park project in the North Sea to be built by Bard.

Obama banks on disappointed environmentalists returning in 2012

November 7, 2011. From alternative fuels to clean air, President Barack Obama’s record is a disappointment to environmentalists, who helped get him elected and now are threatening to sit out his re-election bid in 2012. The campaign’s confidence lies not just in the positioning of the Republican candidates, most of whom deride the idea that humans have contributed to climate change.

French nuclear pullout would cost billions, increase emissions

November 7, 2011. Curbing nuclear power in France, as proposed by the Socialist Party’s presidential candidate, would cost tens of billions of euros, raise energy prices and add to carbon emissions. Socialist candidate Francois Hollande’s proposal to reduce atomic output would cost 60 billion euros ($83 billion) in additional investment. France uses atomic energy for more than three-quarters of its needs, the most of any country. The organization examined the outcome of three scenarios in 2030 in which nuclear reactors provide 70 percent, 50 percent and 20 percent of output. Should nuclear provide the lowest proportion, French reliance on power imports would rise and investment would be required to develop renewable and hydrocarbon capacity. After the Japanese atomic disaster at Fukushima in March, opposition politicians and environmental groups have questioned French dependence on 58 nuclear reactors owned by state-run EDF. Hollande has said he favors a reduction in the proportion of atomic power to total energy generated to 50 percent by 2025.

France would need to add two further reactors assuming 70 percent of its power came from nuclear plants by 2030. EDF is developing one site in Flamanville in Normandy and has plans for another at Penly, also in northern France. Slashing dependence to 20 percent would mean halting all the current atomic generators after 40 years of operation, leaving 12 still working in 2030, and would require development of about 40 thermal plants. That would cost 112 billion euros on top of the 322 billion euros needed if atomic energy provides 70 percent of the total. EDF’s oldest nuclear generators have been in operation for about three decades. The utility is seeking regulatory approval to operate them for another decade, while preparing to invest in them to further prolong their lives for as long as 60 years. Employing nuclear for half the power supply would require an extra 60 billion euros and leave 32 reactors operating. Carbon emissions from generation would be multiplied by three should the government reduce the contribution from nuclear to 20 percent of the total. Demand is expected to rise to 555 to 625 terawatt-hours by 2030 from 488 terawatt-hours last year, depending on the level of energy savings and economic growth. The increase will be driven partly by demand from electric cars and fast trains.

China shelves U.S. solar project in trade row

November 7, 2011. China's largest solar power plant developer has put a planned $500 million U.S. project on hold over an anti-dumping trade dispute. CECEP Solar Energy Technology Co Ltd, a unit of the state-owned giant China Energy Conservation and Environmental Protection Group, said a planned installation of China-made panels to generate solar power in California, New Jersey and Texas would be made uneconomic by U.S. anti-dumping moves. Prices of solar panels in the project, which account for about 70 percent of the costs, are set to jump if Washington imposes duties on imported Chinese products that U.S. rivals say breach agreed global trade rules.

United to fly Houston-Chicago on Solazyme biofuel

November 6, 2011. United Airlines, the world's largest air carrier, will make the first U.S. commercial flight using an "advanced biofuel". The flight from Houston to Chicago will take the Boeing 737-800 from the former home city of Continental Airlines to the base of United, which took over Continental to form United Continental Holdings Inc. The Solajet fuel blend includes 60 percent petroleum-based jet fuel and 40 percent biofuel.

Polysilicon drop may halt output from 90 pc of China’s factories

November 5, 2011. China’s polysilicon factories, which supply the raw ingredient for solar panels, may suspend output this month because of a slump in prices. About 90 percent of the plants accounting for half of the output from China risk closing, forcing solar module makers to import more of the raw material from abroad.

Plummeting clean-energy shares exaggerate risk, BNP Paribas says

November 4, 2011. The performance of clean energy stocks, which have plummeted 41 percent this year, exaggerates the risks of an industry that is more likely to reward investors amid an increasingly volatile global economic climate, BNP Paribas (BNP) SA said. The S&P Global Clean Energy Index, comprised of 30 companies including the world’s biggest solar panel and wind turbine makers, has lost 35 percent since Aug. 1 amid concerns that Europe’s worsening debt crisis could stall projects. Customers can not get loans to start new plants, Renewable Energy Corp. and Canadian Solar Inc. (CSIQ).

Dutch to raise green energy subsidies in 2012

November 4, 2011. The Dutch ministry for economic affairs said it plans to raise the amount of money available for green energy to 1.7 billion euros in 2012, from 1.5 billion euros in 2011, to achieve its 2020 targets. Maxime Verhagen, the Dutch minister for economic affairs, said that the government plans to tighten conditions for giving subsidies. Renewable energy currently meets four percent of total Dutch energy consumption and if the Netherlands wants to achieve the target of 14 percent by 2020 it will need to reduce the role of fossil fuels and promote renewables. The Energy Research Center of the Netherlands (ECN), an independent institute for renewable energy, has said that the Netherlands could fall short of its targets and produce up to 12 percent of the energy from renewables in 2020, based on its current policy. The government will pass on the cost of financing renewables to consumers, through higher electricity charges, starting in 2013. In 2011 the government allocated a total of 1.5 billion euros to subsidize renewable projects and most of that money was handed out in the first round. The parliament is due to debate and approve the government plan.

LG Electronics denies report it seeks to buy Suntech Power

November 4, 2011. LG Electronics Inc. is not seeking to buy solar-cell maker Suntech Power Holdings Co. LG has held talks to buy Suntech Power, and that a 1.06 trillion won rights offering may be for funding an acquisition.

Solyndra’s refinancing would have given U.S. a 40 pc Stake

November 4, 2011. President Barack Obama’s administration considered a plan to save Solyndra LLC that would have left the U.S. with as much as 40 percent equity and two seats on the company’s board. The administration documents were sent to a Republican-led House Energy and Commerce Committee panel, which is investigating a $535 million federal loan guarantee to the California solar manufacturer that filed for bankruptcy in September. The panel voted along party lines to subpoena internal White House communications on Solyndra.

Democrats block bill to delay clean air rules

November 4, 2011. Democrats blocked the first major bill in the Senate that would have delayed the Environmental Protection Agency's clean air rules. The bill, which needed 60 votes to pass, got only 47 votes. Joe Manchin from West Virginia, who faces reelection next year, was the lone Democrat to vote for the bill. His state is rich in coal, the fuel that could see added costs from a raft of upcoming EPA rules on power plants and industry.

EU Commission says cannot delay NER300 carbon permit sales

November 4, 2011. The European Union won’t delay sales of emission allowances from a special reserve to aid innovative energy technologies amid falling carbon prices. The Commission is preparing to transfer to the European Investment Bank permits from a post-2012 reserve for new entrants to its emissions trading system.

Sharp Corp. says it developed world’s most efficient solar cell

November 4, 2011. Sharp Corp., the Japanese maker of industrial and consumer electronics, said it developed a solar cell with the world’s highest rate of turning sunlight into electricity. Using technology pioneered for satellites, the device converted 36.9 percent of the light’s energy into power.

Thrift, innovation to win from U.S.-China solar row

November 4, 2011. A row between China and the United States over imports of cheaper solar products won't be the sector's death-knell but will ultimately speed innovation and cut costs.

Seven U.S. solar manufacturers last month asked the Obama administration to impose duties of more than 100 percent on China solar imports, which they said were unfairly undercutting U.S. prices and destroying American jobs.

The controversy comes at a sensitive time in U.S.-China trade relations, which are plagued by U.S. concerns over market access in China, Beijing's treatment of intellectual property rights, and raging debate over the value of China's currency. The U.S. group that filed the complaint said aggressive dumping of solar products and huge subsidies from the Chinese government have distorted the global market and cost the U.S. industry thousands of jobs.

Bunge to prepare land for Argentina’s biggest ethanol fuel plant

November 4, 2011. ProMaiz SA, a venture between Bunge Ltd. and Aceitera General Deheza, will start clearing land for Argentina’s biggest ethanol mill as the nation struggles to cut dependence on petroleum-based transport fuels.

The $200 million plant, to be built in the central province of Cordoba, will start producing ethanol from corn in 18 months. A lack of ethanol production in Argentina has meant the country has been unable to fulfill a law requiring that 5 percent of gasoline is replaced with fuels made from crops such as sugar cane and corn.

Once running at full capacity, the plant, to be located in the town of Alejandro Roca, will be able to produce 140 million liters (36.9 million gallons) of ethanol a year. It will also generate vegetable protein for animal feed and other products for the food industry. Argentina consumed 118 million liters of fuel ethanol last year. It has 13 ethanol plants operating, none of which can produce more than 60 million liters of renewable fuel a year.

EU 30 pct CO₂ cut still on offer for climate talks

November 4, 2011. A European Union offer to deepen its 2020 emissions reduction target to 30 percent if other countries commit to similar measures will remain on the table at U.N. climate talks in South Africa.

EU governments have agreed to deepen the bloc's emissions cut target to 30 percent by 2020 from 1990 levels from the current 20 percent, but only if a strong global climate deal is reached, which would also bind major emitters to a similar goal.

As the Durban climate summit approaches, the EU has said the world might not be able to agree on a binding climate deal to replace the Kyoto Protocol until 2015. Large emitters, like the United States, look unlikely to increase their ambitions soon, but the EU's offer still stands.

Developing countries, who are most vulnerable to the impacts of climate change, have young climate policies compared with the EU and still have to implement domestic measures. After a scientific report by the Intergovernmental Panel on Climate Change is released in 2014, increased scientific knowledge about the climate might prompt more action. There is also internal debate within the 27-nation bloc about a unilateral EU move to a deeper emissions target.

Britain and Denmark urged the bloc to move without other heavy emitters to a deeper target but failed to gain enough support. Some EU states were concerned about the cost of moving to a deeper target in a time of economic slowdown and about denting EU competitiveness if a unilateral move was taken. Even though EU leaders have had to prioritize tackling the euro zone crisis in recent months, the internal debate over moving to 30 percent will continue.

China solar boom erodes technology edge backed by $5.5 billion U.S. loans

November 3, 2011. China’s success in wresting control of the solar industry is erasing an advantage for U.S. suppliers led by First Solar Inc., which use a rival technology supported with $5.5 billion in government loan guarantees.

First Solar, the largest U.S. solar maker, for 12 years has tinkered with a process that sandwiches a film of toxic cadmium telluride between panes of glass to harness the sun’s power. The Chinese in contrast recently started manufacturing the polysilicon-based cells found in 90 percent of panels sold worldwide and are best known for powering the common calculator.

EPA to release results of fracking study in 2012

November 3, 2011. The U.S. environmental regulator said it has finalized a plan to study the effects on drinking water of hydraulic fracturing, or fracking, used in natural gas drilling, and will release the initial findings by late 2012. The Environmental Protection Agency is conducting the study, which was requested by Congress. The final report will be released in 2014.

Oversupply to hurt solar PV capacity growth: IMS Research

November 3, 2011. Low demand in key solar markets and oversupply will result in slower-than-expected ramp of photovoltaic (PV) products' manufacturing capacity until the first half of 2012, IMS Research said.

Solar subsidy cuts in Germany and Italy earlier this year triggered a global glut of solar panels and drove down prices sharply, denting profits and stock prices at leading solar manufacturers.

Wafer, cell and module production capacity will expand by less than 10 percent in 2012 because of the glut and uncertain demand in major European markets, the research firm said. PV module capacity is expected to increase by 6 percent in the first half of 2012, while it grew almost five times that amount a year ago.

Europe power curve recovers with oil, carbon

November 3, 2011. Europe's power curve recovered from new 7-1/2 month lows hit in early trading as oil rallied after an unexpected European Central Bank rate cut and as carbon turned positive after its recent slump.

Tesla loses less than forecast, reports Mercedes powertrain agreement

November 3, 2011. Tesla Motors Inc., a U.S. electric carmaker, lost less in the third quarter than analysts estimated and said it has a new tentative agreement to supply batteries and motors for an electric Mercedes-Benz model. The company named for inventor Nikola Tesla said its third-quarter net loss widened to $65.1 million from $34.9 million a year ago. Excluding some items, the loss was 55 cents a share. The average of nine analysts’ estimates was for a per- share loss of 60 cents.

GE says solar-panel sales to exceed $1 billion by 2020

November 3, 2011. General Electric Co. (GE) expects sales of its solar power panels to exceed $1 billion annually by 2020.

The Fairfield, Connecticut-based company announced last month plans to build a $300 million thin-film solar factory in Colorado that will make enough panels using cadmium telluride annually for about 80,000 U.S. homes, or 400 megawatts.

UN body urges Europe to omit foreign airlines from CO₂ curbs

November 3, 2011. International airlines should be exempt from the European Union’s planned curbs on carbon-dioxide emissions, a United Nations aviation panel said in a declaration that draw together China, Russia, and the U.S.

The non-binding statement was adopted in Montreal by the governing council of the UN International Civil Aviation Organization at the urging of 26 countries, which also included Brazil, Japan and India.

The EU responded that it won’t back down from including flights to and from the region’s airports in its emission-trading system as of 2012. Governments outside Europe and international airlines are stepping up efforts to block the first expansion of the EU emissions-trading program beyond the 27-nation bloc’s borders.

The rift between Europe and non-EU countries highlights the challenge of forging a global agreement to put a price on carbon just four weeks before a UN summit on post-2012 climate- protection rules. The benchmark December EU carbon permit price sank to the lowest in 2 1/2 years in early trading this morning on London’s ICE Futures Europe exchange.

House panel to subpoena White House on Solyndra email

November 3, 2011. A House of Representatives panel voted to subpoena the White House for emails and other documents related to a $535 million loan to Solyndra, the solar panel maker that went bankrupt and was raided by the FBI. The subcommittee vote in the Republican-controlled House means the White House -- unless it invokes executive privilege -- may be asked to release a broad range of emails, including any received about Solyndra on President Barack Obama's personal BlackBerry.

Korea Midland, Posco Engineering win solar project order in U.S.

November 3, 2011. Korea Midland Power Co. and Posco Engineering Co. won a $1 billion order to build a solar-power plant in the U.S. The plant in Nevada, with 300 megawatts of capacity, will be completed by December, 2014.

Shorts still see green in battered solar sector

November 3, 2011. Short sellers who banked on a fall in the price of solar stocks this year have pocketed big returns as an oversupply of panels sent shares plummeting by more than half, but don't expect them to get out of the battered sector any time soon. Shorts have had a field day this year as prices on solar panels slumped 35 percent, dragging profits and share prices for panel makers like First Solar Inc, Suntech Power Holdings Co Ltd and others down sharply.

China to slow solar output boom as price slips

November 2, 2011. Chinese solar companies plan to run their plants below capacity in order to shed inventory and slow capital spending as the sector battles shrinking profit margins amid tepid demand and depressed panel prices. Solar makers such as JA Solar and Suntech Power Holdings Co will temporarily idle some equipment at factories to halt a build-up in inventory over the last three quarters, setting aside a long-held view that demand could return in a big way in a seasonally strong fourth quarter.

Brazil lacks sugar cane to boost ethanol exports

November 2, 2011. Brazilian sugar cane producers, which are preparing to increase ethanol exports to the U.S., don’t make enough of the renewable fuel to do so. Brazil won’t produce enough ethanol to meet increasing foreign demand unless cane companies invest in new mills and plantations. U.S. oil companies, which must comply with government mandates to blend environmentally friendly biofuels, are expected to increase their use of sugar-cane ethanol next year, and more than Brazilian mills are preparing to deliver it.

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