Energy News Monitor I Volume VIII, Issue 3

Cleansing of river Ganga & World Bank loan

Shankar Sharma, Power Policy Analyst

As per media reports Indian officials have recently signed an agreement with the World Bank (WB) to use a $1 billion loan to finance the first major new effort in more than 20 years to cleanse river Ganga.

http://www.nytimes.com/2011/06/15/world/asia/15ganges.html?emc=eta1

While the decision by the concerned authorities to cleanse river Ganga is wholly welcome, what is also essential is a holistic look at all the associated problems. It should be highly relevant here to note that a similar effort to cleanse river Ganga in the recent past at huge cost to the society has not resulted in any appreciable qualitative change in the river, basically because the primary reason for the pollution in the river was not properly addressed. In this regard it is also necessary to note what the environment minister has said recently in this regard. “Most of India’s rivers have become sewers,” said the environment minister, Jairam Ramesh. “We have to now really bring water into rivers.” In this context it is essential to emphasise that the proposed $1 billion loan can be put to maximum use only if all the attendant problems of the river in the upper reaches are also adequately addressed.

It is a well known fact that the river Ganga has been revered by Indians for thousands of years because of its purity and medicinal properties. One can notice that these two qualities of the river were not only due to copious and unhindered flow of water in the upper reaches, but also due to less amount of waste that was entering the river. While the proposed $1 billion loan may be able to ensure that the waste water entering the lower reaches of the river is free of human and industrial wastes, the fact will remain that the quantity of water flowing from the Himalayan Mountain ranges will continue to decrease drastically due to a large number of hydro-electric dams planned to be built on the river and its tributaries over next few years. The state of Uttarakhand, where river Ganga traverses its entire mountain path, is reported to be planning to build more than 100 dams on India’s most respected river and its tributaries. Even if 50% of these planned dams, if allowed to come up, will drastically reduce the amount of water entering the plains, because of which no amount of spending to clean the river in the plains will have any discernible effect on the river.

It is well known that a river is of maximum benefit to the human beings and fresh water creatures only when it is flowing freely without any sort of obstruction to its natural course. With a number of dams on its length the river water is likely to become stagnant at many stretches, because of which it’s natural ability to cleanse itself will be seriously impacted, as we have seen on all other rivers with multiple dams. Additionally, the large number of dams will also reduce the thick vegetation cover in the upper catchment areas because of which not only silt loading will increase enormously, but also the medicinal properties due to vastly reduced vegetation will make the river water much less pure.

The large number of hydel projects across the river and its tributaries will also lead to many types of effluents, such as machine lubricants and transformer oils, entering the river. The large number of human settlements which will come up on its banks in the form of townships to manage these hydel projects will add considerable pollution loading. Various activities associated with the construction of hydel projects will lead to a lot of construction related debris entering the river at different points. The construction of approach roads may lead to land slides.

It is also a well known fact that submerged vegetation drowned in the dam water gives raise to Methane, which is a highly potent Green House Gas (GHG). Since Global Warming and Climate Change are critical issues impacting the Himalayas, which is the source of the river Ganga, Methane emission form these dams should be seen as a serious threat to the overall health of the river. On the basis of intractable evidence of retreating glaciers on the upper reaches of Himalayas, the Inter Governmental Panel on Climate Change (IPCC) has already predicted a much reduced inflow to Himalayan rivers, including Ganga. With so many dams impounding water behind them, it is any body’s guess how good water flow in Ganga will be.

Taking all these and many more other well established concerns associated with the large number of dam based hydel projects of Uttarakhand into objective consideration, one can clearly visualize how ineffective will be the proposed $1 billion loan by the WB, unless corrective steps are also taken simultaneously to eliminate/ minimize the need for such hydel projects in that state.

While it is the primary duty of a country to make the best use of WB loans, it is equally important that WB itself make sure that such loans are used to create infrastructure/systems leading to sustainable benefits. This loan should be seen by the Ministry of Environment & Forests as an opportunity to prevail upon the Uttarakhand govt. through Govt. of India to reconsider its decision to harness its rivers to earn revenue by building large number of hydel projects on its rivers. It is credible to consider even dedicating a substantial portion of this loan amount to ensure steady revenue to the state of Uttarakhand to compensate for the loss of so called revenue from exploiting its rivers. Since river Ganga has huge role in the social, economic and emotional lives of the Indians, an out of the box thinking is essential to save it.

Whereas it is being projected that the state of Uttarakhand has huge limitations for industrial/agricultural development because of the fragile mountain ecosystem of the state, and that the only revenue earning option available is to tap the vast water resources for power generation, it should also be noted that the overall economic loss to the state and the country as a whole because of various issues associated with a large number of hydel projects in the state can be inestimable. An objective analysis of costs and benefits to the society of these dams will go a long way in such a decision making process.

Hence it becomes essential that the disbursal of the proposed $1 billion loan by the WB to cleanse river Ganga is linked to the clear and unambiguous condition that the state of Uttarakhand must ensure that the cumulative impact of these hydel projects is studied objectively under adequate supervision of a competent civil society team; that the number of such hydel projects should be kept to the barest minimum; and that adequate quantity of river flow is ensured at all places in the Hills. The disbursal of the proposed $1 billion loan should be possible only after WB completely satisfies itself with these requirements, and in effective consultation with the local Civil Society groups, who are the most affected parties.

Concluded

Views are those of the author

Author can be contacted at [email protected]

Interim Report of the Task Force on Direct Transfer of Subsidies on Kerosene, LPG and Fertiliser

Executive summary

One of the priorities that have emerged in recent years is the need to strengthen India’s social safety net and improve the delivery mechanisms of poverty alleviation programs. This is to ensure that vulnerable groups can withstand unforeseen shocks to income and continue to access basic goods and services at affordable prices. The 2011-12 Budget has accordingly planned for increases in expenditure to meet these goals, and also recommended direct subsidy transfers to improve the efficiency and reach of welfare benefits for the underprivileged.

This Interim Report of the Task Force for Direct Transfer of Subsidies proposes a general solution framework for the direct transfer of subsidies to beneficiaries, while also making specific recommendations for Kerosene, LPG and Fertilizers.

The proposed framework for direct transfer of subsidies is as follows:

i) A subsidy, by its very nature, introduces two or more prices for the same good, and creates incentives for pilferage and diversion. As a result, the underprivileged suffer the most. Ensuring that goods move in the supply chain at market prices can minimize the incentives for diversion.

ii) Where possible, it is best to empower beneficiaries and give them the choice to receive subsidies in the form of subsidized goods and services or as cash, based on their own preferences. Further, beneficiaries should also be offered choice to exercise their preference at any participating location, rather than restricting the service delivery point to a specific location.

iii) Creation of a Core Subsidy Management System (CSMS) for the purpose of maintaining book¬keeping information on entitlements and subsidies for all beneficiaries. The CSMS will also provide increased transparency in the movement of goods, levels of stocks, prediction and aggregation of demand, and identification of beneficiaries. It will be able to use analytics to detect fraud and diversion. It can also integrate with a contact centre for grievance handling. Beneficiaries can report malpractices to the Government directly making it possible for the Government to react in a timely manner.

iv) Just as a real-time transfer of funds takes place when people top up their mobile talk time, the Government, through the CSMS will transfer the cash component of subsidies directly and in real-time to the bank accounts of beneficiaries. Beneficiaries may then access these funds through various banking channels such as bank branches, ATMs, business correspondents, internet, and mobile banking. Achieving full financial inclusion is crucial for direct transfer of subsidies.

v) As the subsidy management systems assume same configuration under CSMS, integration of all subsidies, entitlements under one umbrella is also achievable.

The transition to direct transfer of subsidies will lead to best practices in modern retail being incorporated in public provisioning, and also to increased competition and efficiency in the manufacturing, distribution, and retailing. The use of technology makes it possible to strengthen and automate checks and balances, which will encourage participants to benefit from compliance, while simultaneously making it difficult to pilfer.

The Core Subsidy Management System (CSMS) may be implemented in-house, or through a National Information Utility. The first instance of CSMS will be implemented for fertilizer and LPG. While the CSMS automates all business processes related to direct subsidy transfer, the specific policies and business rules will continue to be framed by the policy makers in the respective Ministries. Various stakeholders can customize the CSMS for their own requirements, and extend it to integrate with their own processes. The development of the CSMS can be started immediately, as some of the policies and business rules related to the direct transfer of subsidy are being finalized.

The social programs of India are complex systems with millions of participants that have evolved over the last few decades. Hundreds of millions of beneficiaries depend upon these programs for basic sustenance. Such systems cannot be overhauled by legislation alone and neither is technology a panacea. Eventual success will hinge upon political will, good governance, incentive-compatible solution design, judicious use of technology, a structured transition plan, meticulous project management, effective supervision, audit and execution.

NEWS BRIEF

NATIONAL

OIL & GAS

Upstream

ONGC set to start production from KG basin by month end

July 5, 2011. State-run Oil and Natural Gas Corporation (ONGC) is all set to start production of natural gas and oil from its offshore blocks, G1 and GS15, in the KG basin by month end and is awaiting a nod from the PMO for formal inauguration. As this is the first offshore block of the PSU in the Krishna-Godavari basin being put into production, it is apt for Prime Minister to inaugurate the facility. With the new facility, the initial production of gas is set to touch two million standard cubic meters (SCM) and that of associated oil to 9,400 barrels per day. The oil and natural gas major, which has 24 blocks in the basin, currently produces 840 tonnes of oil per day and 3.8 MMSCD of gas from its onshore blocks. While, the G1 is located 28 kms off Amalapuram coast in water depths ranging from 135 to 500 meters, the GS 15, in shallow waters, is located at 5 kms from the coast in KGbasin. The project is almost five years behind schedule with the cost overruns following delay on part of the Australian contractor Clough Engineering who eventually quit the project. The production of the gas was originally scheduled to start from the integrated field way back in April 2006, at an estimated cost of ` 1,200 crore. Leighton India had been awarded a $17 million contract for completion of the offshore installations. Since these blocks were allotted on nomination basis, ONGC gets 60 per cent of the international price for oil and $4.2 per BTU for gas.

ONGC Cauvery Asset exceeds oil production target

July 2, 2011. Cauvery Asset (Karaikal) of ONGC has exceeded its oil production target. The Asset had produced 61,665 MT of oil in April-June quarter of the current financial year (2011-12), increase of 118% against the target. Gas production and sales also witnessed positive growth during the period. At present, 740 tonnes of oil and 3.8 million cubic metres of gas is produced from various fields per day.

Petronet LNG looking to set up liquefied natural gas terminal on east coast

June 30, 2011. India's Petronet LNG is looking to set up a liquefied natural gas terminal on the east coast to meet demand in the central and eastern parts of the country. India's current gas demand is around 179 million cubic meters a day (mcmd), while local supplies is less than 140 mcmd. India's natural gas output declined 9.6 percent to about 4.14 billion cubic metres in May from a year ago as output from the Reliance-operated D6 block in the east coast declined after touching about 60 million cubic metres per day.

Downstream

HPCL to seek extra crude from Saudi in August

July 5, 2011. India's HPCL will ask Saudi Arabia for more crude volumes in August if the kingdom has extra to offer. HPCL's annual contract with Saudi Arabia is for 1.75 million tonnes or 35,000 barrels per day (bpd) of crude.

Saudi Aramco has just announced cuts in prices of crudes to Asian customers for August. HPCL's Mumbai refinery has capacity of some 130,000 bpd and it also has a 166,000 bpd plant at Vizag. Indian refiners IOC, MRPL and privately-owned Essar together have asked Saudi Arabia for an extra 2.6-2.7 million barrels of crude in July.

May refinery output rises 4.5 pc y/y-govt

June 29, 2011. Indian refiners processed 4.5 percent more crude in May from a year ago, the sixth consecutive monthly rise, but the pace of growth slowed from April, as output at private refineries dipped. Domestic refiners processed about 1.44 million tonnes or 3.40 million barrels per day (bpd) oil in May, when combined crude throughput of private refineries was down 4.4 percent from a year ago. Reliance Industries, whose two refineries at Jamnagar in western Gujarat state account for about a third of India's refining capacity, does not report data for its 580,000 bpd export-focused plant to the government. Output at Reliance's bigger 660,000 bpd plant fell an annual 5.7 percent during the month while that of Essar Oil's 280,000 bpd Vadinar refinery, also in Gujarat, declined 1.2 percent from a year ago.

Transportation / Trade

ONGC sells September Sokol crude at lowest premiums in 5 months

July 4, 2011. Spot premium for September loading Russian Sokol crude slipped to its lowest in five months after India's state-run explorer Oil and Natural Gas Corp (ONGC) sold a cargo via tender. Premiums fell as crude supplies increased in Asia after Saudi Arabia offered more barrels and as large consumers released strategic stocks. The company sold 700,000 barrels at a premium of $7.50 a barrel above Oman/Dubai quotes for Sept. 5-8 loading.

RSMML to foray into city gas distribution

June 30, 2011. The Rajasthan government owned mining company Rajasthan State Mines and Minerals Limited (RSMML) is firming up plans to foray into city gas distribution (CGD) business. The company through its wholly owned subsidiary Rajasthan State Petroleum Corporation (RSPC) is in talks with PSUs Gail Gas and Hindustan Petroleum Corporation Limited to form a tripartite joint venture for develop city gas distribution networks at different places in Rajasthan. The new entity will supply piped gas to households, industries, commercial and transport sector. Of the three partners, GAIL Gas will provide pipeline infrastructure, HPCL will provide extensive dealer and distributor network for LPG while the state government entity would take care of land availability and better understanding of the industrial sector and its demand for gas. The promoter company of this proposed entity - GAIL Gas - is already into this business in the state. At present, it is supplying gas to around 60 households and a dozen commercial institutions in Kota. It has also laid pipelines in Bhiwadi and Neemrana industrial areas for the industrial supply. Apart from Rajasthan, GAIL is also forging partnership with various state governments like Karnataka, Kerala, Maharashtra, Andhra Pradesh, West Bengal, Orissa, and Tamil Nadu among others for CGD business. The company owns and operates more than 8,600 km of gas pipeline with a capacity of transmission of 170 million standard cubic metres of gas per day.

Petronet LNG eyes US suppliers for liquefied natural gas

June 30, 2011. India's Petronet LNG is talking to US companies including Cheniere Energy for liquefied natural gas (LNG) supplies. A new LNG terminal, planned for the east coast of India, would have capacity of up to five million tonnes a year.

Policy / Performance

Petroleum dealers urges govt to reduce diesel cess

July 5, 2011. Members of West Bengal Petroleum Dealers' Association urged the state government to reduce cess on diesel. Apart from giving a relief to the consumers from steep hike in petroleum prices, this would also help the petroleum dealers to increase their sale.

Cairn-Vedanta deal: Minority shareholders may challenge govt

July 4, 2011. The controversial Cairn-Vedanta deal, approved by the government after 11 months of twists and turns, may see more drama ahead as minority shareholders may legally challenge stringent government conditions that directly eat into the company's profit and erode the value of the deal. Cairn India is also expected to scrutinise the government conditions and assess their implications. While Cairn India's shares gained nearly 5%, responding to the deal's approval, some shareholders were not ready to accept conditions such as Cairn withdrawing arbitration proceedings over cess payment of 2,626.50 per tonne, which Cairn pays under protest. The other contentious condition is that Cairn must accept, without legal recourse, ONGC's view on the royalty payment mechanism, which in effect reduces Cairn's profit from the field. Cairn India itself is not comfortable with the conditions being imposed by the government and all directors on its board may not endorse the deal without raising concerns. However, the views of the major shareholders, Cairn and Vedanta, which have been pushing hard for the deal, are likely to eventually prevail. Minority shareholders would also have other points to contest the action of the government of India.

Hydrocarbon chain needs $600 bn investment by 2030: Assocham

July 4, 2011. India would need investments of about $600 billion across various segments of hydrocarbon chain in next two decades to take care of its energy requirements, industry chamber Assocham said. The investments would be required to increase energy supply and improve infrastructure for its distribution. The demand for coal, oil and natural gas, the major energy sources, is increasing day by day. Oil and gas consumption is growing at a compound annual growth rate of 6.5 per cent and equals over 195 million tonnes of oil equivalent. India's per capita energy consumption - 500 kg of oil equivalent (KGOE)- is still significantly lower than the global average of 1,800 KGOE.

Cairn profit share to dip $1.68 bn on govt riders

July 2, 2011. Cairn India's profit share from Rajasthan oilfields will fall by $1.68 billion in case riders imposed by the government for approving its parent Cairn Energy selling stake to Vedanta Resources are accepted. The Cabinet had approved Cairn Energy selling 40% stake in Cairn India to Vedanta subject to the buyer/seller agreeing to cost recovery of royalty in the Rajasthan fields. While Cairn India will not have to pay any royalty and state-owned ONGC will continue to pay royalty on its behalf to the state government but the levy will be added to project costs which are first deducted from oil sale revenues before profits are split between partners and the government.

Petrol rates to go up by 27 paise, diesel by 15 paise

June 30, 2011. The government hiked petrol and diesel prices by a marginal ` 0.27 a litre and ` 0.15 per litre respectively following increase in the commission paid to petrol pump dealers. The government approved raising dealer's commission paid on petrol from ` 1.218 per kilolitre to ` 1,499 per kl, resulting in a ` 0.27 per litre increase in retail price. Similarly, the dealers' commission on diesel was hiked from ` 757 per kl to ` 912 per kl, resulting in a ` 0.15 per litre increase in rates at retail level.

Government approves Cairn-Vedanta deal

June 30, 2011. More than 10 months after $9.6 billion-deal was first struck, the government gave its approval to Cairn Energy for selling its Indian unit to Vedanta Resources, subject to the new owner agreeing to share royalty and pay oil cess on mainstay Rajasthan oilfields. The Cabinet Committee on Economic Affairs (CCEA) approved the sale with the preconditions that Cairn or its successor has to treat royalty payments on Rajasthan oilfields as recoverable from oil sales. Also, Cairn India will have to withdraw the arbitration it has initiated disputing its liability to pay ` 2,500 per ton oil cess on its 70 per cent share in the fields.

Ad hoc subsidy sharing hurts profitability, cash flows: ONGC

June 30, 2011. Opposing the present ad-hoc fuel subsidy sharing mechanism, state-run Oil and Natural Gas Corp (ONGC) has said its profitability and cash flows will be seriously impacted if the government forces it to bear one-third of marketing companies' revenue loss on fuel sales. Oil and gas producers like ONGC have to make good one-third of the revenues that retailers lose on selling diesel, domestic LPG and kerosene at government-controlled rates. ONGC gives discounts to IOC, BPCL and HPCL on crude oil it sells to them to make up for losses on fuel sales. As a result, ONGC's net realisation on crude oil sales translated into just $ 38.75 per barrel, the lowest in the last eight quarters. ONGC should get a net crude price of $ 58-60 per barrel to meet its planned capital investments of ` 30,000 crore and so, the upstream companies' share should be just 25 per cent if crude oil prices rise above the $ 100 per barrel mark. Upstream firms ONGC, Oil India and GAIL India should be asked to bear one-third of under-recoveries if crude oil stays under $ 70 per barrel. But if it touches $ 75 a barrel, their share should come down to 30 per cent. This share should progressively fall to 25 per cent if crude touches $ 100. Upstream firms contributed ` 30,297 crore out of the total revenue loss of ` 78,189 crore in the 2010-11 fiscal. Of this, ONGC's share was ` 24,892 crore.

GAIL proposal after a few more meetings

June 30, 2011. GAIL India Ltd's proposal to invest in West Bengal will be submitted by the company after a few more meetings. GAIL was supposed to submit their proposal two weeks ago. The company revived their seven-year proposal to bring gas and proposes to bring Hazira-Bijapur-Jagdishpur gas pipeline to Haldia and acquire Greater Calcutta Gas Supply Corporation.

Govt should be ready to pass on crude price burden

June 29, 2011. The Indian government should be ready to pass on higher global crude oil prices to domestic consumers. India raised diesel prices about 9 percent, after months of delay, and also cut customs duty on crude and petrol products and reduced excise duty on diesel, which will result in a total revenue loss to the government of about 490 billion rupees this year.

Price hike to trim diesel demand, marginally

June 29, 2011. Higher prices at diesel pumps across India will nibble at demand rather than crush it as robust growth in Asia's third-largest economy fuels oil consumption. Before the price hike, India's oil ministry estimated its million-plus barrels a day diesel market was set to grow by 5-6 percent this fiscal year for the most popular transport fuel among its 1.2 billion population.

Pranab rules out rollback of hike in prices of LPG, diesel

June 29, 2011. Ruling out any rollback of the recent hike in prices of petroleum goods, Finance Minister Pranab Mukherjee said the decision to cut duties would not impact the fiscal deficit of the Indian government. In view of the spiraling prices of crude oil in the international market, the Indian government had increased the price of diesel by ` 3 per litre, cooking gas (LPG) by ` 50 per cylinder and kerosene by ` 2 per litre.

The government had also reduced excise and customs duties on crude oil and other goods, sacrificing annual revenue of ` 49,000 crore. The hike in prices of petroleum goods led to protests in several parts of the country and many state governments announced the withdrawal of value added tax (VAT) on petroleum products to lessen the impact of the hike on the common man.

POWER

Generation

NTPC to shut down two units in Orissa

July 5, 2011. The National Thermal Power Corporation (NTPC) is planning to shut down two more units of 500 MW each in Orissa. The power utility major has already shut down two of its 500 MW units at Kanhia, near Talcher, in the state. The shutdown comes in the wake of a closure notice on June 28, by Orissa State Pollution Control Board (OSPCB) to the central public sector unit due to its faulty fly ash management plan. The NTPC has six power generation units (500 MW) at its Talcher Super Thermal Power Station (TSTPS) near Kaniha.

Tata Power achieves full-load generation at Maithon project

July 4, 2011. Leading private power producer, Tata Power, said it has achieved full-load generation of the 525 MW unit 1 of the Maithon mega power project at Dhanbad in Jharkhand. Maithon Power Limited (MPL), the 74:26 Joint Venture between Tata Power and Damodar Valley Corporation (DVC) is implementing a 2 x 525 MW coal-fired power project power in Jharkhand. MPL has firmed up fuel supplies from Coal India Limited and its subsidiaries and has also signed a fuel supply agreement (FSA) with Bharat Coking Coal for supply of coal to the project. MPL has signed power purchase agreements (PPA) and power evacuation arrangement has been put in place by Power Grid Corporation of India. The power generated from this project will not only be supplied to DVC, but will also be exported to power deficit northern states.

NTPC to invest ` 66 bn in coal-based power project

June 30, 2011. State-run NTPC would invest around ` 6,600 crore for setting up a coal-based power project at Kanpur, on which the work is expected to start from January 2012. The proposed 1,320 MW project is likely to come up at Bilhaur, near Kanpur in Uttar Pradesh.

Alstom, HCC win ` 18.4 bn hydro power contract

June 30, 2011. Alstom-led consortium has won a contract worth over ` 1,843 crore to build India's first variable speed pumped storage hydro power plant. Alstom, in consortium with Hindustan Construction Company (HCC), has been awarded a contract worth over ` 1,843 by Tehri Hydro Development Corporation (THDC) to install a 1000 MW variable speed pumped storage hydro power plant on the river Bhagirathi in the state of Uttarakhand, India.

NHPC to soon finalise joint venture for 3 projects in Orissa

June 29, 2011. The country's largest hydro power producer NHPC will soon finalise a joint venture with the Orissa government for setting up three hydel projects having a total capacity of 300 MW in the state. The three proposed hydro power projects would come up at Sindol, near Dhenkanal.

NHPC would have a 51 per cent stake in the joint venture, while the remaining 49 per cent would be with the Orissa government. Going by estimates, Orissa has hydro power generation capacity of over 2,000 MW, with contributions from plants at Hirakud, Balimela, Rengali, Upper Kolab, Upper Indravati and Macchkund. Meanwhile, NHPC is also looking at expanding its presence into other states, including Uttarakhand. The state-run entity has an installed capacity of about 5,300 MW and is planning to add around 700 MW by commissioning five projects by March, 2012. Presently, NHPC is engaged in the construction of ten projects, having a total capacity of 4,502 MW. The upcoming projects are Chutak (44 MW), Uri-II (240 MW), Chamera-III (231 MW), the first unit of Parbati-III (130 MW) and Nimmo-Bazgo (45 MW).

CVPPL to construct 3 power projects in J&K over next six years

June 29, 2011. Chenab Valley Power Projects Limited (CVPPL), a joint venture company between Jammu and Kashmir Power Development Corporation and NHPC, will construct three power projects with a generation capacity of 2,100 MW in the state over the next six years.

The projects -- Pakaldul (1,000 MW), Kwar (520 MW) and Kiru (600 MW) -- will be constructed at a cost of ` 15,000 crore within the next six years. This project has lot of tunnels and bridges. The steel bridges would be constructed to decrease the completion period of the project from seven to six years.

The 600-MW Kiru Project would take four years to complete and work on the Kwar Project will be taken up simultaneously. CVPPL -- a joint venture company between NHPC, State Power Development Corporation and Power Trading Corporation -- came into being in 2009 to harness the power generation potential in the state.

Transmission / Distribution / Trade

Tata's before-time power unit awaits transmission lines

July 5, 2011. Power Grid Corp is racing to build transmission lines for Tata Power's ultra mega power plant in Mundra, whose first unit is ready to start generation three months ahead of the planned start-up date in the middle of September.

Power Grid normally builds transmission lines on schedule and often has to wait impatiently for the power plant to start generating electricity.

Haryana Power Utilities to buy power by banking arrangements

July 2, 2011. For the first time, Haryana Power Utilities have tied up to buy power through banking and return banking arrangements of over 1,000 megawatt. On an average, the State is receiving back about 500 MW power from other states which was given to them in the months of November, December, January and February. In addition, 500 to 600 MW power is being procured through banking arrangements which will be returned by Haryana in October onwards, when the power demand in the State declines.

PTC India Fin may exit Ind-Barath project, sell part of IEX stake

July 1, 2011. PTC India Financial Services, a unit of power trading firm PTC India, plans to sell its investment in a power project by Ind-Barath, besides selling part of its stake in Indian Energy Exchange (IEX) this fiscal. The New Delhi-based financial services firm, in which Macquarie holds 3.46 percent stake and HSBC owns 3.68 percent, expects to earn a post-tax return of 23.75 percent per annum on exiting the Ind-Barath project.

NTPC buys 5-mn tonnes coal from SCCL at extra price

June 30, 2011. State-run NTPC, which is looking for coal to produce power after the Coal Ministry cancelled five coal blocks allotted to it, is all set to buy 5 million tonnes of coal from Singareni Collieries Company (SCCL), by shelling out ` 814 extra per tonne.

GMR Energy, CLP India & BS Transco accuse Power Grid of unfair business practices

June 29, 2011. Power firms, GMR Energy, CLP India and BS Transco, have threatened to take legal action against Power Grid Corporation for alleged collusion with state utilities in getting contracts worth 45,000 crore, just two months before January 5, when the sector was thrown open for competitive bidding. Power Grid signed bulk contracts before the cut-off date to avoid competition from private players. Before January 5, almost all power transmission contracts were awarded to state-owned Power Grid.

Policy / Performance

J&K spends ` 250 bn on import of electricity into the state

July 5, 2011. Jammu and Kashmir government has said it spends ` 25,000 crore annually on import of electricity into the state. A second mini hydel power house would be constructed at Branwar in the central Kashmir.

1 GW Karcham Wangtoo hydro electric project to be commissioned in Himachal Pradesh

July 5, 2011. India's largest Hydropower Project, in the Private Sector Karcham Wangtoo (1000 MW) in Kinnaur District of Himachal Pradesh is scheduled for commissioning by August 15, this year three months ahead of schedule as against the original schedule date of Nov 17, 2011.

The construction of this 1000 Mega Watt capacity Karcham Wangtoo hydro electric project is expected at around ` 7000 crore which is built as run-of-the-river project over the river Sutlej in Kinnaur District by Jaypee Karcham Hydro Corporation Ltd, (JKHCL) a subsidiary of the prestigious Jaypee Group.

The project will utilise the head available between the tail waters of Baspa-II hydroelectric project in Kinnaur and the head waters of Nathpa- Jhakri hydroelectric project. The project's reach is between Karcham and Wangtoo villages in Kinnaur, upstream of Nathpa- Jhakri said D P Goyal M D Karcham wangtoo project.

CIL invites global bids for ` 1.5 bn expansion proposal

July 4, 2011. State-run Coal India has floated a global tender inviting financial institutions to advice it on over ` 150-crore fresh investment proposal for boosting local output.

CIL and its seven subsidiaries operate about 471 mines - both opencast and underground. It had produced 431.33 MT coal last fiscal and aims 520 MT production this fiscal. The firm hopes to achieve 664 MT production by 2016-17.

Karnataka set to add 1.6 GW power capacity in FY12

July 4, 2011. Power-starved Karnataka is planning to add 1,600 Mw of generating capacity by the end of the current financial year.

The state, which has a generating capacity of around 8,000 Mw from both public and private companies, buys around 1,000 Mw during the summer months to tide over the shortfall. The state is facing shortage of transformers and the sub-stations are 25-30 years old and need to be replaced urgently to increase the efficiency and bring down the transmission and distribution losses.

The Karnataka Power Transmission Corporation Limited would replace 167 sub-stations within the next two years in the state. The corporation has an installed capacity of 5,975.91 Mw of hydel, thermal, solar and wind energy, with 9,500 MW in the pipeline.

The company is currently executing five projects with a combined capacity of 1,973 Mw power, which will be commissioned by the end of next financial year at an estimated investment of ` 7,463 crore.

Jaypee's 1 GW Karcham Wangtoo proj to come up by Aug 15

July 3, 2011. The diversified Jaypee Group's ` 7,000 crore Karcham Wangtoo hydro power project in Himachal Pradesh is expected to be operational by August 15, much ahead of schedule.

The 1,000-MW hydro-electric project on the river Sutlej is the country's largest in the private sector. Two of the project's units -- each having a capacity of 250 MW -- have already been commissioned.

The third and fourth units are expected to be operational by July 20 and August 15, respectively. All the units of Karcham Wangtoo project in Kinnaur district of Himachal Pradesh are expected to be running by August 15, three months ahead of schedule.

80 pc of power plants at risk of default over coal issues

July 3, 2011. Warning that 80 per cent of the country's power plants face the risk of a default due to coal shortages and environmental issues, a body of power producers has petitioned the government for an expert group to review contracts awarded under through the competitive bidding route.

Coal min warns Lakshmi N Mittal of revoking Seregarha block

July 3, 2011. The prospects of the world’s biggest steelmaker ArcelorMittal in Jharkhand is getting more uncertain than ever. Already struggling to set up a 10 Million Tonne greenfield project in the state, the company has now been served an ultimatum by the coal ministry to immediately develop the Seregarha coal block failing which it risks de-allocation.

REC mulls investment in equities for higher returns

July 3, 2011. State-run Rural Electrification Corporation is planning to invest in equities that could offer returns of up to 30 per cent, as part of efforts to boost stakeholders' value.

REC, which offers financing for power sector, is also looking at the possibility of having private equity fund to make investments in projects.

THDC receives $648 mn loan from World Bank

July 1, 2011. State run THDC India Ltd has received loan of $648 million (about Rs 2,886 crore) from the World Bank for its project in Uttrakhand.

With the loan, the 444-mw Vishnugad Pipalkoti hydroelectric project has achieved full financial closure. The company has recently received environment ministry's nod for diversion of 80 hectare of forest land for the project that is expected to be completed by 2016.

THDC has a portfolio of hydro projects in Uttarakhand, Maharashtra and Bhutan with aggregate capacity of 8,868 mw. Its 1,000-mw Tehri hydro power project is operational since 2006-07.

The company's 400-mw Koteshwar hydro power project is likely to be fully commissioned by 2012. THDC is implementing 4060 mw Sankosh project in Bhutan for which a detailed report is under preparation. It is also implementing a 1,320-mw Khurja super thermal plant in Uttar Pradesh.

NTPC asked to shut down four power generation units in Orissa

June 29, 2011. Accusing it of failing to properly implement fly ash management measures, Orissa State Pollution Control Board (OSPCB) has asked NTPC to shut down its four power generation units at Talcher Super Thermal Power Station at Kaniha in Angul district.

INTERNATIONAL

OIL & GAS

Upstream

Marathon Oil to boost shale position

July 1, 2011. Marathon Oil Corp will buy more acreage in shale basins where it already has operations in order to boost its exploration business. The exploration and production company will look for small acquisitions in the Eagle Ford field in Texas, the Niobrara field in Colorado and Wyoming and the Bakken field in North Dakota. Marathon said it planned to buy oil and gas properties in the Eagle Ford shale field in South Texas for $3.5 billion. Analysts pegged the per-acre value at about $20,000, the highest price paid to date. Marathon Oil and others are snapping up acreage in North American shale fields where there is crude oil or natural gas with a high liquids content. Both can be sold at a steep premium to "dry" natural gas.

Shell wins draft U.S. air permits for oil drilling in seas off Alaska

July 1, 2011. Royal Dutch Shell Plc received draft U.S. air quality permits for oil drilling in Alaska’s Chukchi and Beaufort seas. The Environmental Protection Agency’s permits, which are subject to 30 days of public comment, were issued after the Environmental Appeals Board overturned previous approvals. The Hague-based company also needs authorization from the Bureau of Ocean Energy Management, Regulation and Enforcement to begin exploration. Shell acquired oil leases in the Beaufort Sea in 2005, and added Chukchi Sea leases in 2008. The company has said it plans to drill as many as two wells a year in the Beaufort Sea, and as many as three a year in the Chukchi Sea from 2012 through 2013.

BG doubles reserves estimate of Brazil Santos Basin raising output plans

June 30, 2011. BG Group Plc, the U.K.’s third- largest oil and gas producer, doubled its estimate of reserves and resources in the Santos Basin in Brazil, bolstering plans to increase production. BG estimates the fields hold about 6 billion barrels of oil equivalent net to the company, with potential for as much as 8 billion barrels. BG along with partners Petroleo Brasileiro SA, Galp Energia SGPS SAand Repsol YPF SA plan to pump 2.3 million barrels of oil equivalent a day by 2017 off Brazil after they committed to a $13 billion investment program.

Downstream

PetroChina, Ineos form oil refining, trading joint venture

July 4, 2011. PetroChina Co., China's largest listed oil firm by capacity, said it finished forming two joint ventures with Ineos Group Holdings PLC that will conduct crude oil refining and trading, a deal in which PetroChina is paying Ineos $1.015 billion. The joint ventures, Ineos Refining Ltd. and Ineos Refining II Ltd., will use assets at Scotland's Grangemouth refinery and France's Lavera refinery.

Iranian company builds gas terminal in Turkmenistan

July 4, 2011. A marine terminal for liquefied natural gas storage and shipment was built on the Turkmen port of Kiyanly by the Iranian company Pars Enerji. The terminal capacity is 200,000 tons of liquefied gas per year. The Turkmenbashi refinery produces a mixture of butane and propane.

Marathon Petroleum to go public with Valero-like $14 bn valuation

July 1, 2011. Marathon Petroleum Corp. is set to debut on the New York Stock Exchange as the second- largest U.S. independent oil refiner after surging gasoline prices drove a year long rise in refining stocks. Marathon Petroleum is being spun off from parent Marathon Oil Corp. (MRO) amid growing investor demand for companies that can capitalize on gasoline prices that rose at twice the rate of crude oil in the past 12 months. The refiner is valued at $14.7 billion in unofficial trading permitted by exchanges to help investors gauge demand, on par with the largest independent refiner, Valero Energy Corp., which has twice the fuel-making capacity. Marathon Petroleum is poised to capture higher margins thanks to upgrades at plants that account for half the company’s oil processing.

Matrix subsidiary wins refinery project

June 29, 2011. One of Matrix Service Co.'s subsidiaries has been awarded a contract to build a new heat recovery boiler at a ConocoPhillips refinery in New Jersey. Matrix Service Industrial Contractors Inc. will handle structural steel, equipment, piping, ducting and mechanical erection, and the project could generate about 200 jobs. The new boiler will replace a 49-year-old unit at ConocoPhillips' Bayway Refinery in Linden, N.J.

Transportation / Trade

Gazprom delegation visits North Korea

July 5, 2011. A delegation from Russia's Gazprom has visited North Korea. The trip follows a reported recent visit by Russia's spy chief to the North Korean capital to discuss economic projects involving North and South Korea, the world's second-largest liquefied natural gas (LNG) buyer after Japan.

Exxon Mobil says oil leaked into Yellowstone River

July 4, 2011. A pipeline operated by Exxon Mobil Corp leaked as many as 1,000 barrels of crude oil into the Yellowstone River in Montana and has been shut down. Exxon said there were traces of oil up to 10 miles downriver from the site of what they called a "very unusual" event, though the governor of Montana said the spill may have spread further. The U.S. oil company said it had slowed processing rates at its Billings refinery following the leak but did not expect supply disruptions in the area.

Filinvest, Aussie firms to build LNG terminal

July 4, 2011. Two Australian firms have partnered with the Filinvest group to build a liquefied natural gas terminal and distribution network in the Philippines.

Iran to keep selling oil to India after warning on payments

July 3, 2011. Iran’s oil exports to India are continuing with no plans to halt supplies after a warning to the neighboring country over delays in paying for imported crude. Indian refiners owe Iran about $2 billion over oil imports due to complications on making payments to the Persian Gulf country. Iran is under international sanctions over its nuclear program, and punitive measures include restrictions on financial transactions with the country.

Chevron begins work to double capacity at Caspian Pipeline

July 1, 2011. The Chevron-led Caspian Pipeline Consortium said it has started a $5.4 billion expansion to double capacity to 1.4 million barrels a day by 2015. The project will be implemented in three phases with capacity increasing progressively from 2012 to 2015. The pipeline, which has been operating for ten years, ships crude from the Tengiz and Karachaganak fields in Kazakhstan to Russia's Black Sea port of Novorossiysk.

Argentina, Bolivia cut ribbon on natural gas pipeline

July 1, 2011. Argentina and Bolivia have inaugurated a new natural gas pipeline geared towards sharply increasing the amount of fuel piped from Bolivia to is southern neighbor. The two governments spent almost 200 million Argentine pesos ($50 million) to build the 48-kilometer pipeline. Bolivia is currently on a big drive to attract foreign investment do develop its potentially large natural gas reserves after struggling to meet export obligations to Argentina and Brazil in recent years.

The current contract with Argentina calls for Bolivia to export 7.0 million cubic meters of natural gas a day. The contract calls for Bolivia to increase natural-gas exports to its southern neighbor to 11 million cubic meters a day, then incrementally raise that amount until it reaches 27.7 million cubic meters a day. Argentina and Brazil have frequently complained about insufficient natural gas supplies coming from Bolivia, which has struggled to ramp up production since nationalizing the hydrocarbons industry in 2006. Domestic demand for natural gas in Bolivia has risen sharply in recent years and has bumped up against the country's export obligations, which are the main source of Bolivia's export revenue and foreign-currency reserves. Bolivia needs between 8.0 million and 8.5 million cubic meters of natural gas a day to satisfy its needs at home. Bolivia's contract with Brazil calls for a maximum of 30 million cubic meters a day of gas exports.

Australia's Woodside executes land deal for Browse LNG

June 30, 2011. Australian oil and gas firm Woodside Petroleum has executed land agreement with indigenous groups that will enable it to establish its 12 million-tonne-per-year Browse liquefied natural gas project at its preferred location near James Price Point.

Iraq signs $365 mn gas pipeline deal with Iran

June 30, 2011. The Iraqi electricity ministry signed a contract worth $365 million with an Iranian company nominated by the Tehran government to build a gas pipeline to supply Iraqi power plants with Iranian gas. The pipeline would carry some 25 million cubic feet of Iranian gas a day that would be enough to generate some 2,500 megawatts.

The pipeline will pass through Iraq's Mansouriyah gas field, near the Iranian border in the restive Diyala province and will feed three power plants; one in Sadr City in northern Baghdad and the other two in the northern and southern outskirts of the capital.

Kunlun Energy aims to sell 10 million tonnes LNG per year to China by 2013

June 29, 2011. Kunlun Energy Co Ltd aims to sell 10 million tonnes of liquefied natural gas per year to the Chinese market by 2013 and to expand that volume to 15 million tonnes by 2015. Kunlun, a unit of PetroChina Co Ltd, was already building more than a dozen small gas liquefaction plants in China that would boost the country's gas consumption. Kunlun planned to buy more LNG terminals from PetroChina, but he did not give a timeline on when the asset injection would occur.

The company operates most of PetroChina's LNG terminals after a series of asset transfers over the past few years. The group's strategy is for PetroChina to focus on upstream exploration and production, while Kunlun focuses on gas sales and downstream distribution. Kunlun sold 841.11 million cubic metres of gas in 2010, up 53 percent from the previous year. The company had been aggressively expanding its LNG business, aiming to promote gas use in China, especially in the transport sector. It had built a supply network for heavy duty trucks, city buses and drilling rigs and was targeting LNG sales for vessels and railways.

Policy / Performance

Brazil states ask govt to share more oil earnings

July 5, 2011. Leaders of several Brazilian federal states have proposed the central government cut the share of royalties it earns from crude output in favor of non-oil producing states to end a bitter dispute over revenues.

Governors of oil-producing and non-oil producing states presented the idea to Energy Minister Edison Lobao, after producing states balked at legislation that would see them give up oil earnings to states with none. Brazil's Congress must settle the question of how different states will benefit from oil revenues from a vast subsalt oil find discovered in 2007 before the government will begin auctioning off subsalt blocks, enabling production to start.

France vote outlaws ‘fracking’ shale for natural gas, oil extraction

July 1, 2011. French senators voted to outlaw hydraulic fracturing, or fracking, making France the first country to pass a law banning the technique for extracting natural gas and oil. Hydraulic fracturing will be illegal and parliament would have to vote for a new law to allow research using the technique. Energy companies that plan to use fracking to produce oil and gas in France will have their permits revoked and its use could lead to fines and prison, according to the law passed by a vote of 176 in favor, 151 against by the senators in Paris. Lawmakers of the ruling UMP party voted in favor of the bill while the opposition Socialists rejected the proposal for not going far enough. Before the French vote, the ban had moved between the upper and lower houses of parliament since March.

Alaska governor, commissioner promote upcoming lease sales

June 30, 2011. Alaska's governor and natural resource commissioner promoted upcoming state oil and gas lease sales as part of a strategy to reverse the decline in production from aging North Slope fields and to boost domestic energy production.

East African energy ministers may decide on oil pipeline by October

June 29, 2011. East African energy ministers may decide by October on a proposal to build a natural gas pipeline from Tanzania to Kenya to help meet the region’s rising energy needs.

The five-nation EAC, comprising Kenya, Tanzania, Uganda, Rwanda and Burundi, is a common market of 126 million people with a combined gross domestic product of $73 billion.

POWER

Generation

Capgent in deal to build 10 power plants in Iraq

July 4, 2011. Canadian firm Capgent has signed a $1.66 billion (Dh6 billion) deal with the Iraqi electricity ministry to build 10 fuel oil-fired power plants of 100 megawatts each to help battle electricity shortages in the country.

The power plants, which will be installed in Iraq's western Anbar and the central Salaheddin provinces, will be constructed within 12 months from start of work.

The new plants are part of 50 power stations that Baghdad has decided to install as an emergency plan to offset electricity shortages in the country. Capgent, or Canadian Alliance for Power Generation Equipment, is a builder of thermal and diesel plant power plants, based in Vancouver.

2 nuclear reactors in southwestern Japan to restart

July 4, 2011. Hideo Kishimoto, mayor of Genkai, Saga Prefecture in southwestern Japan, approved the resumption of two suspended reactors at the Genkai nuclear power plant. Kishimoto conveyed his approval to Kyushu Electric Power Co. President Toshio Manabe in a meeting. It is the first time that a Japanese municipality gives the nod to restart reactors since the March 11 earthquake and tsunami crippled the Fukushima No. 1 power plant. Attention now turns to whether Saga Governor Yasushi Furukawa will also agree to the resumption. Furukawa is expected to make a decision on the issue in mid-July. Two of the Genkai plant's four reactors, the No. 2 and No. 3 units, are currently shut down for regular checks. Their restart was postponed in the wake of the nuclear crisis at the Fukushima No. 1 nuclear plant.

Bank of Tokyo leads $500 mn funding for biomass power plant

July 2, 2011. The Bank of Tokyo-Mitsubishi UFJ Ltd. led a $500 million financing round for a 100-megawatt biomass power plant under construction in Gainesville, Florida.

Bank of Tokyo was joined by French banks Natixis (KN), Credit Agricole SA (ACA) and Societe Generale (GLE) SA, and Dutch banks Rabobank Nederland and ING Groep NV to provide non-recourse debt financing for the Gainesville Renewable Energy Center. Gainesville Regional Utilities will buy power from the project, which will be fueled by wood waste from logging and construction, through a 30-year contract. Construction began in March and is expected to be completed in late 2013.

The plant will generate enough power for 70,000 homes. American Renewables is developing the similar 100-megawatt Nacogdoches Power project near Sacul, Texas. The company is a partnership between Energy Management Inc., BayCorp Holdings Ltd., Tyr Energy Inc. The Granite Falls, Minnesota-based construction company Fagen Inc., is building both plants, and some of its principles are proving equity financing, along with the developer, for the Gainesville plant.

Zambia coal power plant construction to start in 2011

July 2, 2011. Singapore's Nava Bharat Pte plans to start construction of a 300 megawatt (MW) coal-fired power plant in Zambia by the end of 2011 and complete it by 2014. The investment outlay for the first phase of the project -- a new coal mine and the power plant -- will be about $750 million. Full-scale mining and operations at Zambia's largest coal producer, Maamba Collieries, where the power plant will be built, is expected to resume in August.

Maamba Collieries, once a key supplier of coal to the country's copper mines, produced about 600,000 tonnes of coal per year in the 1980s, but production has slumped due to years of undercapitalisation and operational losses. The new mine, which is expected to produce 360,000 tonnes of coal in its first year, aims to reach a maximum output capacity of 2 million tonnes per year eventually. State-run Zambia Consolidated Copper Mines-Investment Holdings owns 35 percent of the Maamba mine.

Gazprom ready to invest in German power plants

June 30, 2011. Russia's Gazprom is ready to invest in or buy shares in German power generation companies but has yet to receive any offers from potential sellers. Gazprom said there could be opportunities for growth in Germany following its government's decision to phase out nuclear power.

Transmission / Distribution / Trade

Vietnam Electricity buys 23.1 pc more power from China

July 4, 2011. Vietnam Electricity bought 3 billion kilowatt-hours of power from China in the first half, up 23.1 percent from a year earlier. The state-owned utility’s revenue from selling electricity reached 53.35 trillion dong ($2.6 billion) in the first six months.

Russia says to halt power supplies to Belarus

June 29, 2011. Russian power producer InterRAO will halt supplies of electricity to Belarus as Minsk has not yet paid its bills. Russia's troubled western neighbor, struggling with a balance of payments crisis that has forced it to devalue its currency, ran up arrears on electricity imports that make up around 12 percent of its power needs. InterRAO has said Belarus owes Russia, its main trading partner, about 1.5 billion roubles ($53.10 million).

Policy / Performance

Japan cabinet approves $25 bn more for disaster relief

July 5, 2011. Japan's government approved a $25 billion extra budget for disaster relief after the March 11 earthquake that will not require new bond issuance, though bigger spending later this year is likely to strain stretched public finances. The extra budget follows a 4 trillion yen ($50 billion) emergency budget passed by parliament in May to cope with the world's costliest natural disaster, caused by the magnitude 9.0 earthquake and tsunami, and the subsequent nuclear crisis. The supplementary budget will be sent to parliament in mid-July.

Japan eyes first nuclear restart since quake

July 5, 2011. Japan edged closer to its first nuclear power plant restart since the March earthquake following approval from a Japanese city mayor, but concerns about summer power shortages remained as it was unclear when other plants would follow suit. Delays in reactor restarts, combined with the shutdown of tsunami-hit plants, have left Japan with only 19 of its 54 reactors still operating. Before the tsunami-triggered atomic crisis, nuclear power provided about 30 percent of Japan's electricity. Reactors at Kyushu Electric Power Co's 36-year old plant in the town of Genkai in the southern Saga prefecture are likely to be the first to return online, pending an approval from the prefecture's governor Yasushi Furukawa. The Genkai city mayor has already given his consent to the restart.

Peabody, Chinese and Russian group prelim winners for Tavan Tolgoi

July 4, 2011. U.S. miner Peabody Energy, a venture between China's Shenhua and Japan's Mitsui & Co and a Russian-led consortium have been picked as preliminary winners to jointly develop the prized Tavan Tolgoi coal deposit.

German minister: put fossil-fuel plants on old nuke sites

June 29, 2011. Germany, which plans to close all its nuclear plants by 2022, should build gas- and coal-fired power stations on those sites with fast-track authorisation for the projects. The government, which could fall short of tough mid-term targets for reducing greenhouse gases, had missed an opportunity to promote the growth of wind and solar power more aggressively. A cost benefit of the proposal was that the infrastructure needed to link such plants to the power grid was already in place. Construction of new fossil-fuel plants should be accelerated through a new fast-track planning law, and coordinated with similar projects elsewhere in Europe. Berlin permanently shut eight nuclear power plants in March immediately after the Fukushima nuclear crisis in Japan, and the government is scheduled to ratify plans to close the remaining nine in stages over the next 11 years.

Canada set to sell AECL unit to SNC-Lavalin

June 29, 2011. The Canadian government is set to announce the sale of Atomic Energy of Canada Ltd to SNC-Lavalin Group Inc. SNC-Lavalin, Canada's biggest engineering and construction firm, was the sole bidder for AECL's commercial nuclear power division and had said it was still interested in the deal despite losing its bidding partner in May. The sale of the AECL division could come as early as this week, although negotiators are still working out the final details. AECL's commercial division designs and builds Candu reactors for nuclear power stations. The government put the unit up for sale in 2009 after years of subsidies and a poor performance. It plans to retain ownership of the research business and place it under private management.

RWE says German power prices need to rise to build new plants

June 29, 2011. RWE AG, Germany’s second-largest utility, said power prices must rise to justify the construction of generators needed to plug a supply shortfall left by the government’s plan to exit nuclear energy. German Chancellor Angela Merkel wants to exit atomic energy by 2022 after shutting eight nuclear plants in March after explosions at reactors in Japan stoked safety concerns in Europe’s biggest power market. The country’s utilities must build 10 gigawatts of fossil fuel-fired power plants from 2013 to 2020 to plug the gap.

Renewable Energy / Climate Change Trends

National

Godawari Power gets financing for solar thermal plant in India

July 5, 2011. Godawari Power & Ispat Ltd., one of the seven companies that won licenses to build India’s first solar-thermal plants, has arranged funding for its project from the Bank of Baroda. The Raipur, Chhattisgarh-based developer won project financing for its planned 50-megawatt solar plant in Rajasthan state. Godawari Power said that it planned to invest 7 billion rupees ($157 million) in the project.

GE plans to grow in India, focusing on latest technology

July 5, 2011. GE India, world's leading provider of technology and equipment for power, healthcare and aviation, is betting big on the Indian power market with the opening up of new wind turbine plant in Pune.

India's first renewable energy based smart mini-grid system commissioned

July 4, 2011. India has commissioned a first of its kind Renewable Energy Based Smart Mini-Grid System at TERI Retreat in Gurgaon. A Smart Mini-Grid (SMG), or Micro-Grid, is an intelligent electricity distribution network, operating at or below 11 KV, where the energy demand is effectively and intelligently managed by diverse range of Distributed Energy Resources (DERs) such as solar PV, micro-hydro power plants, wind turbines, biomass, small conventional generators such as diesel gensets etc in combination with each other through smart control techniques.

Gujarat's wind power capacity grows 500 pc in six years

July 4, 2011. With 2,175 Mw, the state holds 15.36 per cent of India's total wind power generation capacity. In what can be called as a quantum leap for Gujarat's renewable energy sector, the wind power generation capacities have seen a sharp increase since 2006 from 338 Megawatt (Mw) to 2175.5 Mw in 2011. The share of Gujarat in the country's total wind power generation capacities has jumped from mere 6.32 per cent in 2006 to a respectable 15.36 per cent in 2011. While Gujarat has shown a growth of over 545 per cent in wind power capacities in past six years, the country's wind power generation capacities have grown by 165 per cent from 5341 Mw in 2006 to 14,158 Mw by March 2011.

Farooq Abdullah urges northeastern states to maximize use of renewable energy

July 2, 2011. Union New and Renewable Energy Minister Dr. Farooq Abdullah reviewed the implementation of renewable energy polices and programmes in the northeastern states at a meeting in New Delhi. The meeting was attended by the Chief Minister of Meghalaya and the Power Ministers of other northeastern states, senior officials from the New and Renewable Energy Ministry and the state governments. It was informed during the meeting that out of 4965 remote villages to be electrified/ illuminated through renewable energy systems in the region, 3841 villages have been provided solar lights.

KPCL launches 5 mw solar photo voltaic plant

June 30, 2011. Karnataka Power Corporation Ltd (KPCL), the state-owned power producer, launched its fourth five mw solar photo voltaic plant at Shivanasamundram in the district, which is one of the oldest hydro power stations in the country. For the first time in the country, KPCL with Bharat Heavy Electricals Limited (BHEL) as an executing company laid the foundation stone for the five MW solar photo voltaic plant under the Jawaharlal Nehru National Solar Mission at a cost of ` 65 crore.

NTPC to set up 100 MW wind power project in Karnataka with an investment of ` 6 bn

June 29, 2011. The National Thermal Power Corporation (NTPC) plans to set up a 100 MW wind power project in Bagalkot district of Karnataka with an estimated investment of ` 600 crore. The wind power project to be set up Guledagudda of Bagalkot district will be NTPC's second and largest such plant. The company also signed a power purchase agreement with five energy supply companies in Karnataka with plans to sell the power at ` 5.30 per unit. The current estimated potential for wind energy in the State is about 14,000 MW and the government has initiated steps to generate 1,766 MW. The state grid drew about 1,300 MW of wind energy as on June 28, 2011. State government was looking at more power coming NTPC's projects in Karnataka and Andhra Pradesh. The state is expected to get 600 MW from NTPC's Pudimadka power plant in Andhra Pradesh and 180 Mw from Simhadri power plant second stage in the next few months. NTPC is India's largest power company with a current capacity of 34,194 MW and plans are to become 75,000 MW company by 2017. The upcoming wind power project in Bagalkot is expected to save more than 1,50,000 tonnes of CO₂ emissions in a year.

Global

China Silicon to double polysilicon production

July 5, 2011. China Silicon Corp. expects to double output of polysilicon to 10,000 tons this year. The Chinese manufacturer has two plants in Luoyang, in the province of Henan, that produce the material used in making solar-energy cells. One has a capacity of 1,000 tons of output a year and the second will increase production to 9,000 tons by year-end. CSG Holding Co. plans to increase production by 1,000 tons to 2,500 tons in 2011.

New green farming vital to end global hunger: U.N.

July 5, 2011. A solid shift to green technologies in world farming is vital if endemic food crises are to be overcome and production boosted to support the global population, the United Nations said. And as a first step, governments and international agencies should focus on boosting small-scale agriculture in developing countries with support services like rural roads and sustainable irrigation, a report from the world body argued.

Japan opposition sets conditions for energy bill

July 5, 2011. Japan's main opposition party will support a bill promoting renewable energy on the condition that the government will clarify its impact on electricity costs. Prime Minister Naoto Kan, under fire over his response to the March 11 earthquake and subsequent nuclear crisis, has said he would resign but would stay in his post until the renewable energy law and two other bills are passed.

China commentary slams EU airline CO₂ scheme

July 5, 2011. A European Union plan to include all airlines flying to Europe in the Emissions Trading Scheme (ETS) from next year is unfair and contrary to global efforts to fight climate change. The ETS system compels polluters to buy permits for each ton of carbon dioxide they emit above a certain cap. But China has resisted, saying it is unfair for developing countries and costly. The China Air Transport Association says the scheme will cost Chinese airlines 800 million yuan ($123 million) in the first year and more than triple that by 2020.

At least 16 Chinese airlines have the rights to fly to Europe, with 11 actually operating regular services. Among the most affected will be Air China, China Southern Airlines and China Eastern. While the EU was right to address the issue of aviation emissions, this was the wrong way of doing it. The EU's step to include aviation into the bloc's $120 billion trading scheme has been deeply unpopular among global airlines, which have said the move is costly, illegal and particularly unfair on long-haul carriers. U.S. airlines will step up their campaign against the policy, with a legal challenge at Europe's highest court to their inclusion in the EU carbon market. Non-EU carriers will have to pay carbon costs based on the entire journey, something that angers Asian airlines in particular because of the long distances to Europe. While the scheme will be allocating about 80 percent of pollution permits for free to reduce costs, most of the remainder have to be bought from the market.

United Continental, American Airlines fight EU over Airline carbon curbs

July 4, 2011. United Continental Holdings Inc., AMR Corp.’s American Airlines and the Air Transport Association of America will challenge the European Union’s plans for emission curbs on aviation. In a hearing at the region’s highest court, they will dispute a law expanding the EU carbon market to encompass flights that depart from or arrive at an EU airport.

Australia to unveil carbon price scheme

July 4, 2011. An Australian carbon price scheme putting a tax on emissions and outlining a transition to emissions trading around 2015 will be unveiled later this week. The minority Labor government had agreed to set-up a multi-billion dollar fund to aid renewable energy investment under the scheme, helping counter a promised exemption for petrol opposed by the Greens.

Uncertainty over the fate of the policy, which would tax carbon emissions from next year, has begun to frustrate investment decisions, particularly in the coal-fired power industry and in renewable energy and plantation forestry.

The minority Labor government wants to impose a tax on carbon emissions from mid-2012 before transitioning to a carbon-trading system, under which the nation's 1,000 biggest polluters will need to buy carbon permits on an open market. If agreed by parliament, the emissions market would be only the second national scheme outside Europe, following the lead of neighboring New Zealand. Negotiations have been underway for months on the scheme with two independent lawmakers, who back Prime Minister Julia Gillard in the lower house, and the Greens, who control upper house Senate balance of power.

A plan to cut carbon emissions foundered in 2009 in the face of Senate opposition from the Greens, who argued a targeted emissions cut of 5 percent by 2020 from 2000 levels was too weak. Gillard, whose popularity has fallen to record lows due to public fears about a carbon cost driving up prices, promised that petrol would be exempt for most motorists, hoping to neutralize a major worry for voters.

Huge rare earth deposits found in Pacific: Japan experts

July 4, 2011. Vast deposits of rare earth minerals, crucial in making high-tech electronics products, have been found on the floor of the Pacific Ocean and can be readily extracted, Japanese scientists said. The discovery was made by a team led by Kato and including researchers from the Japan Agency for Marine-Earth Science and Technology. They found the minerals in sea mud extracted from depths of 3,500 to 6,000 meters (11,500-20,000 ft) below the ocean surface at 78 locations. One-third of the sites yielded rich contents of rare earths and the metal yttrium. The deposits are in international waters in an area stretching east and west of Hawaii, as well as east of Tahiti in French Polynesia. Rare earths contained in the deposits amounted to 80 to 100 billion metric tons, compared to global reserves currently confirmed by the U.S. Geological Survey of just 110 million tonnes that have been found mainly in China, Russia and other former Soviet countries, and the United States.

Solar developers scrapping thermal for photovoltaic

July 1, 2011. Developers of solar thermal power plants are scrapping plans to use steam technology in favor of ever-cheaper solar panels that are easier to finance and could help assuage concerns about the systems' environmental impact. So far this year, at least four California projects, representing about 1,850 megawatts of power generation, have elected to change most or all of their technology to photovoltaic solar panels, which turn sunlight directly into electricity, from concentrating solar power, or CSP, which uses heat to create steam that powers a generator.

Airlines win approval to use plant-based biofuels on commercial flights

July 1, 2011. Airlines won final approval from a U.S.-based technical-standards group to power their planes with a blend made from traditional kerosene and biofuels derived from inedible plants and organic waste. The decision of ASTM International allows airlines to fly passenger jets using derivatives of up to 50 percent biofuel made from feedstocks such as algae and woodchips. It will help carriers that account for 2 percent of global carbon dioxide emissions reduce pollution blamed for damaging the Earth’s atmosphere.

Europe and U.S. in legal clash over airline emissions

July 1, 2011. U.S. airlines will step up their campaign against European Union climate policy, with a legal challenge at Europe's highest court to their inclusion in the EU carbon market. The EU aims to lead the world in fighting climate change, and says it needs to put a price on carbon dioxide emissions to guard against future climate impacts such as crop failures, droughts or flooding. From January 2012, airlines flying to or from Europe will have to buy permits from the EU's Emissions Trading Scheme for 15 percent of the carbon emissions they produce. They join 11,000 factories and power plants already in the scheme. Airlines warn of a looming trade war, but the EU says it will not back down. The carriers say their emissions should only be tackled in United Nations bodies, such as the International Civil Aviation Organization (ICAO).

GM gives natural gas cars a boost

July 1, 2011. General Motors Corp announced plans this week to develop its first natural gas-powered engine, overcoming its long aversion to alternative fuels and joining a host of smaller players working to put natural gas in car engines.

Sony, Toyota cut electricity usage as mandatory savings start

July 1, 2011. Sony Corp. and Toyota Motor Corp. are among Japanese companies changing working hours and shifting production to weekends to save energy as the country’s first mandatory power-saving drive since the 1970s starts. Heavy users like Sony, Toyota, Panasonic Corp. and Komatsu Ltd. are required to cut electricity consumption by 15 percent to help avoid blackouts after the March 11 earthquake and tsunami knocked out power plants operated by Tokyo Electric Power Co. and Tohoku Electric Power Co. Temperatures rose to 35.1 degrees Celsius (95 Fahrenheit), the highest, increasing air conditioners use in homes and offices.

UK govt seeks to simplify carbon trade scheme

June 30, 2011. The British government outlined proposals to simplify its corporate carbon reduction scheme in response to criticism from businesses for its complexity, cost and bureaucracy. The Carbon Reduction Commitment was launched to reduce carbon emissions of businesses through energy efficiency improvements. UK businesses using more than 6,000 megawatt hours of electricity per year must monitor usage and report their emissions annually.

From 2012, they will have to estimate future emissions and buy carbon permits under the scheme. However, the CRC has been criticized for being too complex, and overlapping with the EU's emissions trading scheme and UK government policies.

Among the proposals, the government has suggested reducing the number of fuels covered by the scheme to four from 29, simplifying the organizational rules and making qualification processes easier. It also proposed establishing two carbon permit sales a year from 2014 where the price of permits is fixed, instead of setting an emissions cap and holding annual auctions.

The government is also proposing to reduce the overlap with other schemes by exempting sites which already comply with 'climate change agreements' and the EU ETS. The scheme's participants are encouraged to comment on the proposals, the government said. There will be a formal consultation on the plan next year.

China’s energy-savings sales may reach 500 bn yuan

June 30, 2011. China’s energy-savings services industry may reach sales of as much as 500 billion yuan. The government will release a plan for the energy-saving and environmental-protection industries “soon”. China has asked provinces and cities to cut energy consumption per unit of gross domestic product by 16 percent.

Survey ranks San Francisco greenest U.S. city

June 30, 2011. San Francisco is the greenest city in North America, followed by Vancouver and New York, according to the latest survey of green-city rankings. The survey, commissioned by Siemens Corp and conducted by the Economist Intelligence Unit, looked at 31 indicators, ranging from consumption of water and electricity to efficiency standards. Detroit was the least green of 27 cities ranked, just behind St. Louis, the survey said. According to the survey, cities with comprehensive plans for sustainable use of resources such as land and energy, did better in the rankings, and that the correlation between wealth and environmental performance was not as strong in North America compared with Europe and Asia.

Siemens, Statkraft SCA agree on contract for 253 wind turbines

June 30, 2011. Siemens AG has signed deal to supply as many as 253 wind turbines with a combined capacity of over 580 megawatts for onshore projects in Sweden to Statkraft SCA Vind AB, a subsidiary of Statkraft and Svenska Cellulosa Aktiebolaget SCA.

GreenVolts receives funding for concentrating solar power system

June 30, 2011. GreenVolts Inc., a closely held developer of concentrating solar power systems, received about $39 million in venture capital financing. The financing will be used to build equipment for projects that include a 1-megawatt plant at Arizona Western College.

Spain suspends subsidies to 360 solar-power installations

June 30, 2011. Spanish regulators suspended subsidies to operators of 360 solar-energy systems, bringing to 1,919 the number of rooftop and open-field projects punished for not proving they qualified for above-market prices. The National Energy Commission’s latest sanctions conclude the investigation of 8,185 power projects suspected of not meeting requirements. The owners failed to prove their photovoltaic parks and rooftop systems were capable of producing power by the Sept. 30, 2008, deadline to deserve earning the highest consumer- subsidized rate. That tariff is 47.5 euro cents (69 U.S. cents) a kilowatt-hour, or more than nine times the current spot price paid to round-the-clock operators of fossil fuel power plants. Spain’s government is trying to reduce aid for many of the nation’s renewable-energy plants as a way to lower electricity costs for businesses and homes and help the economy emerge from its worst slump in 60 years.

Amazon Deforestation rates double as Brazil weighs bill to pardon farmers

June 30, 2011. Deforestation rates in the Brazilian Amazon, the world’s biggest rain forest, more than doubled as farmers become more confident they’ll be granted amnesty for illegal logging. Almost 268 square kilometers (66,200 acres) of protected rain forest were cut down in May, up from 110 square kilometers a year ago. Brazil lawmakers are considering a bill that alters its forestry code and would forgive farmers who illegally cleared trees. The possibility that the government may ease these restrictions is encouraging more logging. That would hamper international efforts to fight global warming by protecting trees that absorb greenhouse gases. The bill was approved by Brazil’s lower house May 24 by a 410-63 vote. The Senate has not yet voted on it and President Dilma Rousseff has vowed to veto the legislation if it does pass. If the bill is approved in its current form, farmers won’t have to replant trees that were illegally cut prior to July 2008, an estimated 30 million hectares (74 million acres). That’s about the size of the Philippines. Under Brazil’s current forestry code, penalties for illegal logging include fines and a requirement to replant trees.

E.coli seen spawning biofuel in five years

June 29, 2011. The bacteria behind food poisoning worldwide, the mighty E.coli, could be turned into a commercially available biofuel in five years. Several companies are working on the technology, which has been proven in laboratories but is not yet yielding enough fuel to be commercially viable. U.S. Department of Energy's Joint BioEnergy Institute, has pioneered research in biofuels based on substances ranging from yeast to E.coli and expects E.coli fuel production to improve. Already, a similar technology is using E.coli bacteria to make plastics that are finding their way to stores in products including carpets. Although there is nothing dangerous in E.coli plastic, companies usually don't mention the unusual origins to consumers. E.coli can be dangerous, even fatal. An outbreak in Germany caused widespread illness and panic, and led to more than 30 deaths.

U.K., France, Spain lead 12 EU nations meeting CCS law deadline

June 29, 2011. Britain, France and Spain led 12 of the 27 nations in the European Union in meeting a deadline to adopt a law governing storage of carbon dioxide underground. Belgium, Denmark, Ireland, Latvia, Lithuania, Luxembourg, Austria, Romania and Finland also met the June 25 goal. The directive, a piece of EU legislation that member states must implement into national law, establishes guidance for the safe storage of CO₂underground as Europe tries to entice investors to bet on a technology that captures and stores emissions underground in a bid to fight climate change.

Areva, Iberdrola in offshore wind pact to vie for French parks

June 29, 2011. Areva SA, the world’s biggest maker of nuclear equipment, and Iberdrola Renovables SA agreed to jointly develop offshore wind projects in France, where the government is targeting 6,000 megawatts of capacity by 2020. The companies will vie for two of the five zones off the French coast offered in the initial phase of bidding set to open in July. The two sites total 1,250 megawatts: a 500-megawatt facility and a 750-megawatt park. The sites are Saint-Brieuc and Saint-Nazaire, both on the west coast. Areva, based in Paris, would be the sole supplier of wind turbines used on the projects built by Iberdrola Renovables, the largest wind energy company. It would supply its 5-megawatt M5000 model. France is seeking bids for 3,000 megawatts of wind at sea in the first round of bidding that will be launched as it tries to meet a target of sourcing 23 percent of its energy from renewables by 2020. The country currently has no offshore wind capacity.

Renewables boom could strain Germany's grid

June 29, 2011. An uncontrolled renewable power expansion in Germany could threaten the stability of energy grids. Failure to connect new capacity near demand centers or near transport grids or storage facilities would waste assets or put at risk the grids' stability. Dena assumed in 2007 studies that an additional 45,000 megawatts (MW) of new German wind power would be added by 2020. But thanks to generous subsidies -- to be enhanced by Germany's shift entirely away from nuclear -- there has been runaway growth of both wind and solar power. Dena has now learned that two northern and the eastern German states alone plan on adding possibly 50,000 MW of onshore wind power and 8,000-10,000 MW of offshore by the year 2020.

Croatia’s Agrokor to build 1 MW biogas plant near Zagreb

June 29, 2011. Agrokor d.d., Croatia’s largest privately held company, will build a 1-megawatt biogas plant northeast of the capital Zagreb. The Vrbovec facility will be built by Slovenia’s GH Holding. Croatia’s biggest food producer by revenue plans to invest 1 billion kuna ($194 million) in the next five years to build 30 megawatts of biogas projects.

China NDRC approves 8 clean energy projects for European loans

June 29, 2011. China’s National Development and Reform Commission (NDRC) approved eight clean energy projects for combined loans of 288 million euros from the European Investment Bank.

Q-Cells wants its solar panels on U.S. rooftops

June 29, 2011. German solar company Q-Cells unveiled its thin film modules in the United States as it seeks to cash in on growing demand in North America while lessening its reliance on the European market, where government support for solar is declining.

Next thing in wind energy: stealth turbines

June 29, 2011. Wind turbines that do not interfere with radar systems used by aircraft may soon become a commercially viable option for the wind energy industry, Danish turbine manufacturer Vestas said. Vestas said it successfully tested in Britain a full-scale "stealth" rotor on a turbine, paving the way for wind power plants to be located near military installations, airports and other radar systems without interfering with their operations.

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