Energy News Monitor I Volume VIII, Issue 37

Insecurity of India’s Nuclear Establishment

 

 

NEWS BRIEF

OIL & GAS

February 28, 2012. A consortium of Indian public-sector energy companies said they may join a bidding war for Africa-focused gas explorer Cove Energy, becoming the second Asian state-run group seeking to trump Shell's $1.6 billion offer. A last-minute offer from Oil and Natural Gas Corp and GAIL India would pit them against Thai oil and gas group PTT and Royal Dutch Shell Plc in a race for the London-listed company's promising gas reserves in Mozambique. Shell had hoped to make a pre-emptive move for Cove's prize among hot East Africa gas prospects by offering 195 pence per share for the company, a 70 percent premium to the share price when Cove put itself up for sale on Jan 5. But Thailand's PTT beat that with a 220 pence bid, or $1.77 billion, and while analysts had doubts about the Indian firms' prospects, their interest highlights a quickening scramble for natural resources for fast-growing Asian economies. Cove's main asset is an 8.5 percent stake in Mozambique's Rovuma Offshore Area 1, where another operator Anadarko said recoverable reserves could top 30 trillion cubic feet of natural gas, equal to nearly half of Canada's proved reserves. India's Bharat Petroleum Corp and Videocon Industries Ltd each own a 10 percent stake in the Rovuma block. ONGC Videsh Ltd, the overseas investment arm of India's biggest oil and gas producer ONGC, and GAIL said they had made no decision on whether to bid for Cove, or on any terms.

February 26, 2012. State-owned ONGC is spending ` 26,000 crore to develop 10 oil and gas clusters in western and eastern offshore, to increase crude production by up to 4 million tonnes per annum by 2013-14. Marginal field is any oil field or well that is nearing end of its commercial life and the production rates of these fields will be low and economically not viable under regular conditions. The combined production of oil and oil equivalent gas of ONGC, including ONGC Videsh Ltd and ONGC's share in PSCJVs, in FY'11 has been 62.05 million tonnes.

February 26, 2012. ONGC's Assam Asset has registered the highest ever quarterly gas sales and achieved all its targets during the third quarter of the fiscal year ending December 31, 2011. The Asset achieved the oil production target at 100.1 per cent (0.3031 MMT) against the planned figure of 0.3028 MMT on the last day of the quarter while on the gas production front it improved its earlier performance achieving a production level of 123.9 MMSCM against the planned 119.3 MMSCM during the quarter.

February 24, 2012. Bharat Petroleum Corp and consumer durables giant Videocon are riding high on a giant gas find in Mozambique, where their stakes are valued at $2 billion each, but both are keen to hang on to their holdings as the value is expected to grow, and they can ship the gas to India. With global energy companies, like Shell and India's ONGC, eyeing a slice of the pie, the value of BPCL's and Videocon's stakes in the offshore gas in Mozambique are soared. Both their stakes are now valued at $1.8-2 billion. Bharat PetroResources and Videocon Hydrocarbon, wholly owned subsidiaries of the Indian companies hold 10% each in the exploration block in Rovuma Basin, Area-1, offshore Mozambique. Videocon is already conducting an exercise to assess the value of its stake, although it has no immediate plans to sell.

February 28, 2012. Orissa High Court has allowed Indian Oil Corporation (IOC) to draw water from Mahanadi River for its proposed oil refinery at Paradeep. The division bench headed by Chief Justice V Gopala Gowda in a verdict delivered said the public sector unit could avail river water through its under-constructed intake well for Paradeep project after fulfilling certain conditions. The HC has asked IOC to draw river water after dredging the stretch of the riverbed from Naraj to Jobra, which is around 6 to 6.5 km and utilising the removed sand in strengthening Ring Road surrounding Cuttack city. The PSU also in its own cost shall demolish the old anicut at Jobra and set up a water treatment plant in Cuttack to meet the drinking water requirement of the city people.

February 28, 2012. State-controlled Ennore Port said it is in talks with oil marketing firm Indian Oil Corp for setting up a terminal at an investment of ` 4,300 crore for importing liquefied natural gas (LNG). IOC has approved an investment of ` 4,300 crore for the development of the terminal. The terminal would have berth, regassification and storage facilities. The entire investment would be done by IOC and Ennore Port would facilitate the development of the terminal. Meanwhile, Ennore Port signed a preliminary agreement with the Ministry of Shipping to increase its target of cargo handling capacity to 61.5 million tonnes by 2014-15. The investment in construction of cargo handling will be by private companies and Ennore Port would be the facilitator. Ennore Port would take up four major projects -- development of liquid terminal for ` 250 crore, common use coal terminal for ` 380 crore and iron ore export terminal for which the investment would be made in phases. An investment of ` 360 crore would be made in the first phase and in the second phase when the traffic (demand for iron ore exports) picks up. The company would also build a container terminal with a capacity of 1.5 million tonnes at an investment of ` 1,400 crore. Ennore Port is also engaged in the export of automobiles from the country and is being used by auto giants such as Nissan, Toyota, Ford etc.

February 28, 2012. Essar Oil said a tribunal had ruled against the company in a case relating to its ` 30.2 billion ($615 million) insurance claim for damages sustained by its refinery during a cyclone in 1998. Essar had drawn an insurance policy with state-run United India Insurance Co in 1996, the company said.

February 23, 2012. Adani group is evaluating the potential acquisition of BG Group Plc's stake in Gujarat Gas. BG India, a unit of the British oil and gas company, announced that it was interested in selling its 65 percent stake in Gujarat Gas, a western India-focused gas distribution company. Adani's holding company also plans to sell its real estate business, which will be taken over by the group's founding family.

February 23, 2012. Hindustan Petroleum Corp Ltd (HPCL) will double crude oil imports from Saudi Arabia next fiscal and cut purchases from Iran by over 14 per cent. HPCL in 2012-13 has proposed to buy 3.5 million tons of crude oil from Saudi Aramco of Saudi Arabia against 1.75 million tons of oil bought in current year. It will cut down purchase from Iran to 3 million tons in the year beginning April from 3.5 million tons in the current year. Indian refiners fear problems in paying for crude oil they buy from Iran after the US and European Union imposed fresh sanctions to deter the Islamic regime for its nuclear programme. The refiners are cutting imports from Iran by 10 per cent next fiscal. HPCL will keep purchases from Abu Dhabi, Kuwait, Iraq and Malaysia unchanged in next fiscal. It will buy 2.25 million tons from Abu Dhabi National Oil Corp, 2.25 million tons from State Oil Marketing Organization (SOMO) of Iraq, 1 million tons from Kuwait Petroleum Corp (KPC) and 1.25 million tons from Petronas of Malaysia. HPCL's total crude oil requirement for 2012-13 has been estimated at 18 million tons. Out of this, 14.25 million tons of crude is proposed to be imported through a combination of term and spot contracts, while the balance 3.75 million tons will be sourced from indigenous fields. Of the imported crude, 11.25 million tons will be procured from National Oil Companies (NOCs) through term contracts, while the balance 3 million tons of crude will be sourced from the Spot Market.

February 22, 2012. India's Bharat Petroleum has turned to Saudi Arabia, the world's top oil exporter, for higher supplies in 2012/13, fearing global sanctions may jeopardise trade with Iran. Saudi Arabia is the biggest oil supplier to India, the world's fourth-biggest oil consumer, and is the only oil producer with significant spare capacity to replace any fall in supply from its regional rival Iran. Iran has offered extra oil supplies to Asian buyers as it seeks to retain market share in the face of western sanctions aimed at stopping Tehran using its nuclear programme to develop weapons. Iran denies it has such an ambition. While India has said it will not implement the sanctions, it, along with China and Japan, are planning cuts of at least 10 percent in Iranian crude imports as U.S. measures make it difficult for the top Asian buyers to keep doing business with the OPEC producer. BPCL, India's second-biggest state refiner, is the third Indian company after Hindustan Petroleum and Mangalore Refinery and Petrochemicals Ltd to seek higher volumes under term deals from Saudi Arabia. It is seeking a 27 percent increase to 152,000 barrels per day (bpd) in its oil deal with Saudi Arabia for 2012/13 from the previous year. BPCL is seeking higher volumes for its plants at Mumbai and Kochi. The company plans to continue buying 70,000 bpd for its Bina refinery in central India operated by Bharat Refinery Ltd (BORL), a joint venture of Bharat Petroleum and Oman Oil Co.

February 28, 2012. ONGC is expected to produce an additional 28 million standard cubic meters per day natural gas production by 2017, which will be about 35% of its current output. ONGC's natural gas output in 2010-11 was 63.3 mmscmd from its ageing fields, the oil ministry said. ONGC also gets 6 mmscmd gas from its joint ventures with other companies. Oil minister Jaipal Reddy said the output would not be of much help in reducing India's energy dependence, which meets 80% of its crude oil requirements and 25% of gas needs through imports.

February 28, 2012. India approved selling a 5 percent equity stake in state-run Oil and Natural Gas Corp through a share auction, Oil Minister S Jaipal Reddy said. The share sale could raise as much as 121 billion rupees ($2.5 billion) at ONGC's closing price of ` 283.40 a share. The government had earlier planned to sell ONGC shares through a public offering but that plan was scrapped last October after tepid response from investors amid weak equity markets. India's stock market posted its first annual fall in three years in 2011, losing nearly 25 percent. Shares in ONGC, the second-largest listed firm in India by market value, fell 20 percent in the same period.

February 27, 2012. Energy major BP's India arm has said a predictable market-determined natural gas pricing regime is a must for developing future projects in the country and help BP-Reliance joint venture to take crucial investment decisions. BP had formally picked up 30% stake in 21 oil and gas blocks of Reliance six months ago. There was a large disparity between prices of domestic gas and imported liquefied natural gas, which acted as a disincentive for energy firms to invest in India. The government has fixed Reliance's D6 gas price at $4.20 per unit while imported gas is about four times costlier. Pricing freedom will help in attracting investments in the sector and help India's efforts towards energy security. New discoveries at D6 and NEC-25 block in the Bay of Bengal will be the "next wave" in gas production and RIL-BP joint venture is planning to develop present and future gas fields of D6 as an "integrated" project. Reliance and BP planned to submit a brand new field development plan for the entire D6 block by June to raise output and cut costs. India's pricing disparities between domestic and imported gas is "not sustainable" in the long run. India's dependence on imports to meet its gas needs would jump to 47% by 2030 and oil would grow to 91%. The nation will be 40% dependent on imports to meet its coal needs.

February 27, 2012. Petrol and possibly diesel prices are likely to be hiked by ` 2-4 per litre once Assembly Elections in five states, including Uttar Pradesh, are completed. State-owned oil companies are losing about ` 4 per litre on petrol. Oil firms had last revised petrol prices on December 1 after which rates have not been changed because of Assembly Elections. The industry has lost about ` 900 crore since the last revision which was done at international gasoline price was $ 109 per barrel. Gasoline rates have since risen to over $ 125 a barrel. Diesel rates too may be hiked before the Budget session of Parliament that begins on March 12.

February 27, 2012. A petition was moved in Supreme Court challenging the validity of the $ 8.5 billion Cairn-Vedanta deal and seeking CBI probe into the reasons for ONGC and Government in "not asserting" their legal rights in the issue. The Public Interest Litigation (PIL) also sought audit by the Comptroller and Auditor General (CAG) into several aspects of the deal and government approvals for the acquisition of the majority stake of Cairn India by Vedanta Resources on the ground that the offer in this regard should have gone first to the state-owned PSU ONGC.

February 27, 2012. The prime minister's principal secretary Pulok Chatterji has called a meeting to assess slackness and delay in exploration activity that has been marred by indecision on many issues involving top Indian and foreign companies, government said. Hundreds of issues involving oil and gas exploration have piled up in the oil ministry, awaiting action from the bureaucracy. The government said many issues in the petroleum ministry had "lingered on for months due to indecision" at a time when India's import dependence and anxiety over energy security is rising. Chatterji has been monitoring the situation in over two dozen blocks, including cases of inter-departmental disagreement over exploration rights awarded to companies such as Eni, Cairn, Santos, GeoGlobal, ONGC and BHP Billiton. The ministry has had a rocky relationship with companies in the exploration sector, including Cairn, which discovered India's biggest on-shore oilfield, and Reliance Industries, that drilled in the deep sea to discover India's largest gas field. The ministry had refused to clear the Cairn-Vedanta deal for a year until Cairn accepted tough conditions, including withdrawal of arbitration. It is also locked in many disputes with Reliance Industries, but has resisted the company's call for arbitration. Companies such as ONGC, Oil India, Reliance Industries, BP, BG, Cairn, GSPC, Hardy Oil and BHP Billiton are awaiting approvals on matters related to exploration deadlines, formalising management committee decisions, hiring rigs and amendments in contracts to include equity partners in several blocks.

February 26, 2012. Gas utility GAIL India Ltd has demanded that the government keep the marketing margin the company and other state-owned firms charge on imported liquefied natural gas (LNG) outside the regulatory purview. Oil Ministry had asked oil regulator PNGRB to determine the marketing margin on sale of natural gas on the basis of actual marketing cost so that the price becomes reasonable to the end consumer. GAIL, however, is not happy with Petroleum and Natural Gas Regulatory Board (PNGRB) being asked to regulate marketing margin on imported LNG and has shot-off a letter to the government seeking an exemption for imported-LNG. GAIL has argued that dynamics of sourcing LNG from international market and the risks and costs associated with marketing it to domestic consumers were very different from the sale of domestic natural gas. While the $ 0.135 per million British thermal unit marketing margin that Reliance Industries charges on the sale of eastern offshore KG-D6 gas has been questioned by users like fertiliser units, GAIL's $ 0.20 per mmBtu marketing margin on regassified-LNG (RLNG) has so far gone unquestioned. The company asked the government to modify its December 26 order so as to exclude the marketing margin chargeable on sale of imported gas, including the Regasified LNG (RLNG). GAIL charges a $ 0.20 per mmBtu marketing margin on gas produced from the BG Group-operated Panna/Mukta and Tapti fields in the Western Offshore. While RIL's marketing margin is fixed for the five-year period ending March 31, 2014, the margin charged by GAIL on PMT gas and LNG increases by 5 per cent every year. GAIL also charges a fixed marketing margin of $ 0.11 per mmBtu on selling gas that state-owned Oil and Natural Gas Corp (ONGC) and Oil India (OIL) produce from domestic fields.

February 24, 2012. Dashing hopes of the power sector, an Empowered Group of Ministers (EGoM) decided not to divert ONGC-produced APM gas from non-priority sectors, like petrochemical units, to electricity plants as volumes available were "very low". The EGoM felt there was only 3.84 million cubic meters per day of natural gas from state-owned ONGC's fields (called APM gas) that currently goes to non-priority sector. Of this, only 1.92 mmcmd can be diverted as users of rest cannot be switched due to reasons like low pressure.

February 24, 2012. A panel of ministers on corruption has asked the government to create an independent regulator for oil and gas fields, brushing aside strong objections from the petroleum ministry, which currently enjoys regulatory powers. A Group of Ministers (GoM) has proposed that the new regulator should take over critical functions of the Directorate General of Hydrocarbons (DGH), which reports to the oil ministry and is its technical arm for issues involving oil and gas exploration and production contracts. The DGH is currently under the scanner of investigative agencies over allegations of malpractices by the former head of the body. The Comptroller and Auditor General has criticised the DGH and the oil ministry for their handling of the contracts with private companies including Reliance Industries. The proposal, cleared by the GoM, would be forwarded to Prime Minister Manmohan Singh's office for action. The oil ministry has opposed the creation of a separate upstream regulator and argued that policies such as the New Exploration Licensing Policy and Coal-Based Methane already provided a level playing field to all companies.

February 23, 2012. India has asked Saudi Arabia to raise oil supplies by 4-5 million tonnes every year as the country is expanding its refinery capacity to meet growing consumption, Oil Minister S. Jaipal Reddy said. Tehran will supply almost similar volume of crude in the next fiscal year that starts in April. India has sought an extra 100,000 barrels per day (bpd) from Saudi Arabia, the world's biggest oil producer, for 2012/13, the Indian junior oil minister said, as a replacement for a cut in supplies from sanctions-hit Iran.

February 22, 2012. Coal bed methane (CBM), or gas trapped in coal seams, is turning out to be the next flashpoint between the government and private sector energy companies as Essar Oil plans to seek flexibility in pricing, following Reliance Industries' move to oppose the oil ministry's intervention in CBM sales. The company plans to initiate a dialogue with the government on the matter. Reliance has already told the government that the ministry's move to regulate prices would hurt the viability of its project to produce CBM, a relatively new source of energy, popular in the West. Company said CBM gas would contribute about $50-$60 million to the topline every year. CBM producers are worried as the oil ministry wants to impose restrictions on independent price-discovery by companies by insisting that operators invite price-bids only from identified customers in priority sectors. The petroleum ministry issued new guidelines for CBM, which specified that companies would now have to stick to a supplier list decided by the government.

February 22, 2012. In a move aimed at helping the debt-laden airlines bring down their costs, the government formally allowed the local airlines to import jet fuel directly. The airlines would be allowed to import aviation turbine fuel (ATF) under the so-called open-general license, enabling them to avoid sales taxes of between 12 to 23 per cent that are levied by state-governments. Jet fuel in India exceeds the global average by more than 50 per cent mostly due to local taxes. Some estimates suggest that direct imports could cut fuel costs by up to 20 per cent, but also require new spending in terms of putting up storage and logistics infrastructure.

February 22, 2012. The economic boom in countries like India and China and unrest in other parts of the globe are some of the important factors responsible for the increase in oil prices, the White House has claimed. The recent hike in global oil prices underscores the need to improve upon the alternate sources of energy. The Obama administration, has taken a number of actions in this regard from increasing domestic oil production to hiking up domestic gas production, the lease sales and made efforts to increase fuel efficiency to reduce dependence on foreign energy.

February 22, 2012. Israel engaged India on energy security reiterating Tel Aviv’s intent to share its natural gas but did not spell out any offer saying it still had to work out the policies. Israel’s Minister of National Infrastructure Uzi Landau, who also heads Energy & Water Resources, held an hour-long meeting with Petroleum & Natural Gas Minister S Jaipal Reddy citing the recent large finds in the Mediterranean Sea. Landau indicated that Israel was keen on gas exports to India in the form of LNG as well as offering participation to Indian firms but said that his country was yet to finalise the relevant policies. Landau’s visit comes two months after Israeli Finance Minister Yuval Steinitz first proposed gas exports to India. Interestingly, Israel’s recent gas finds in the Mediterranean Sea was the only issue flagged for meeting for which ONGC Videsh Ltd was instructed to be prepared to commit its participation.

POWER

February 27, 2012. National Thermal Power Corp's mega hydropower project in Himachal Pradesh is likely to be commissioned next year. The plant would generate 3,054 million units annually when it is fully operational. More than 80 percent of civil and electro mechanical works of the 800-MW Kol Dam project on the Satluj in the state's Bilaspur district had been completed, NTPC said. The reservoir filling would start in October this year and by the end of 2013, all four turbines of 200 MW each would start generating electricity.

February 22, 2012. India's nuclear operator NPCIL said it expected things to return to normal at the Kudankulam Nuclear Power Project soon, paving way for its commissioning by August. Nuclear scientists would require four months after things return to normal to commission the first 1000 MW unit of the Kudankulam Nuclear Power Project (KNPP).

February 22, 2012. The US-based GE Energy said it will supply equipment to Reliance Power's 2,400 MW gas-based power project at Samalkot in Andhra Pradesh. Reliance had selected GE's power generation technology for a 2,400 MW expansion of the Samalkot Power Plant, GE said. The fuel for the project will be natural gas, which is one of the cleaner fossil fuels used for power generation.

February 27, 2012. Alstom T&D India has bagged a ` 64.8 crore contract from Power Grid Corp for supply of high voltage circuit breakers. The contract envisages supply of 64 circuit breakers for various 765 kV sub-stations located at Dharamjaygarh, Jabalpur, Bhiwani, Satna (Extension.), Gwalior (Extension) and Rajgarh Pooling (near Kotra). Alstom T&D India has manufacturing facilities at Paddapai, Tamil nadu with capacity to produce 765kV and Ultra High Voltage 1200 kV switchgear products.

February 26, 2012. Jharkhand will spend ` 1,600 crore for laying transmission lines to transport power that would be produced in the state in the next three years. The state government has appointed PowerGrid Corporation of India Ltd (PGCIL) as a consultant for the project. Key private power companies such as Reliance Power, Abhijit group, Adhunik group and the Damodar Valley Corporation (DVC) are expected to produce around 7,000 MW in next three to four years. Reliance Power, which is setting up an ultra mega power project (UMPP) at Tilaiya in Koderma district, will produce 4,000 MW in the next 5-6 years. If transmission lines are not there, the state would not be able to use the electricity from the independent power plants. Jharkhand will get 2,550 MW as its share from the power plants in the next three to four years. If the transmission lines are not built, it will have to pay ` 325 crore every year to others to use this power. In the last 11 years, Jharkhand has done little to increase power production or improve the transmission lines in the state. When it was carved out from Bihar in 2000, Jharkhand was producing nearly 450 MW power and its requirement was only 400 MW.

February 26, 2012. To improve the precarious health of power distribution companies, a Planning Commission panel is likely to suggest financial incentives for reducing losses as well as debt restructuring with partial absorption by state governments, among others. The committee, headed by Planning Commission Member B K Chaturvedi, is looking at financial health of discoms in seven states including Tamil Nadu and Uttar Pradesh. The panel is expected to come out with its report soon. This would be the second expert group assessment on power distribution companies after the Shunglu panel report that had pegged accumulated loss of discoms at ` 82,000 crore for the 2006-10 period. The Chaturvedi-led panel is looking at various options such as providing financial incentives or grants for discoms that reduce overall losses.

February 23, 2012. Singapore-based Sembcorp Industries said its Indian joint venture, Thermal Powertech Corp, has signed an agreement with Indonesia's PT Bayan Resources for supply of about one million tonnes of coal per year for 10 years. The contract, which is for an aggregate of 10 million tonnes of coal, is expected to commence in 2014. Sembcorp owns 49% stake in Thermal Powertech Corp through its wholly-owned subsidiary, Sembcorp Utilities, while Gayatri Energy Ventures, a wholly-owned subsidiary of Gayatri Projects, owns the rest.

February 27, 2012. In a move to end the monopoly of central transmission utility PowerGrid Corporation, the government may allow private companies to set up power transmission projects within the states. The government in a meeting of state power secretaries on February 29 may discuss allowing private players to enter intra-state electricity transmission space along with the issue of implementation of the National Electricity Fund. At present, private companies can bid for inter-state transmission projects. For intra-state transmission system, power transmission projects are automatically given to PowerGrid Corp, but now the government may invite bids from private transmission firms as well.

February 24, 2012. Private power producers have raised concerns over the government's proposed move to make it compulsory to source equipment from indigenous manufacturers by companies setting up ultra mega power projects in the country. Companies are of the view that this move would further discourage power generation companies to execute ultra mega power projects in the country, which are already fighting environmental hurdles. The Ministry of Heavy Industry and Public Enetrprises has proposed to make domestic sourcing of equipment for the ultra mega power projects mandatory, a move to encourage indigenous manufacturers like BHEL and L&T.

Meanwhile, Association of Power Producers (APP), a body representing 22 private power companies in the country, feels the indigenous equipmakers have their plates full. Indian producers have lacked the capacity to supply power plant equipment at desired schedules, import of equipment for power projects has been a major contributor in the capacity addition in the current plan period. In the absence of competition to the domestic power equipment manufacturing sector, there will be a likelihood of price hike and supply timelines also reverting to 60 months as has been witnessed in the past. Meanwhile, industry sources said that BHEL has never been able to supply equipment in the stipulated timeline and are skeptical whether L&T would be able to do so.

February 24, 2012. The Indian Electrical and Electronics Manufacturers' Association (IEEMA), a trade association representing the Indian electrical & industrial electronics industry has cited extension of service tax exemption to all power projects as their main wish from the Union Budget 2012-13. In its pre-budget memorandum, the IEEMA has appealed to the Government for extending service tax exemption to all power projects, including power generation, transmission and distribution projects in line with other infrastructure projects like roads, airports, ports, railways, transport terminals, bridges, tunnels and dams.

February 24, 2012. Power Grid Corp of India (PGCIL) is likely to see a capital expenditure of about ` 37,500 crore in the next two fiscals, says a report. Power Grid is into building power transmission lines, consultancy activities and also owns more than 25,000 kilometres of telecom network. The firm is likely to see aggressive capex and capacity addition activities in next two fiscals, a report by HSBC Global Research, part of global banking major HSBC, has said. This would be driven by projects under construction and orders for high capacity power transmission corridors (HCPTC) projects, among others. According to HSBC Global Research, Power Grid is expected to see a capital expenditure of ` 51,000 crore in the 11th Plan Period (2007-12) against a target of ` 55,000 crore. Power Grid already has board approvals for investments worth about ` 70,000 crore related to 12th Plan Period (2012-17) projects.

February 22, 2012. Reliance Power (RPower) is one of the few utilities to report a stable operational performance in the quarter to December, there are a few issues that investors need to weigh. One of these relates to the availability of gas for its first unit of the 2,400-MW Samalkot project which is nearing completion. Production of gas at the KG-D6 basin is falling thereby increasing uncertainty about the availability of gas. The company is currently awaiting gas allocation. Another challenge for the company is its 4,000-MW Krishnapattinam plant, for which the company plans to source coal from its captive mines in Indonesia. The recent imposition of tax on the benchmark coal price by the Indonesian government will increase overall power generation cost, making the project unviable. The company has temporarily stopped further capital expenditure at this plant. Besides this, all its other projects are likely to be commissioned ahead of time. Its existing 600-MW plant is doing well operationally with a capacity utilisation of 75% for the December quarter, which is quite high compared to peers. Reliance Power's second unit of 300 MW was also commissioned in the December quarter and the company is likely to add another 2,000 MW by end-March.

February 22, 2012. With acute fuel shortage hurting projects, private power producers, including Reliance and Tatas, have asked the Finance Ministry to abolish five per cent duty on coal imported for power plants. Presenting a slew of proposals to be considered for the 2012-13 Budget, the Association of Power Producers (APP) has also asked for customs duty exemption for various facilities such as coal transportation required for mega power projects. The private power producers noted that there is huge shortage of non-coking coal and without imported non-coking coal it is very difficult to run the power plant. APP is a grouping of about 22 companies including Reliance Power, Tata Power, Lanco Infratech, Adani Power, Jindal Steel and Power. These entities account for over 95 per cent of power capacity in the private sector. The country's power sector, which is expected to see a capacity addition of about 80,000 MW in the 12th Five-Year Plan, is grappling with various problems including acute fuel scarcity and spiralling coal prices. A high-level delegation of executives of private power producers had met Prime Minister Manmohan Singh to apprise him of the issues faced by the sector. Following this, a Committee of Secretaries (CoS) was set up. The Prime Minister's Office (PMO) said that Coal India would sign fuel supply pacts for power projects for a period of 20 years. Meanwhile, APP has also sought waiver of withholding tax in case of External Commercial Borrowings. Further, the association has said that companies venturing into power sector should be allowed to raise funds by issuing tax-free bonds.

February 22, 2012. The country plans to have a nuclear power generation capacity of 63,000 MW in the next 20 years as atomic power is advantageous in terms of transportation and storage, Power Minister Sushilkumar Shinde said. Nuclear power generation falls under the jurisdiction of the Department of Atomic Energy, a wing of the Ministry of Science and Technology. International cooperation, including Indo-US nuclear deal, on civil nuclear collaboration is a significant move for the expansion of India's nuclear power programme. Even though hydro power is considered as a cleaner source of energy, hydro technology has problems of submergence and geological surprises, he said. The wind and solar power technologies are seriously limited by site specific and season specific nature of their availability. At present, 20 nuclear power reactors are in operation and seven reactors are under construction, including a 500 MWe fast breeder reactor. Total nuclear capacity of the country stands at about 4,800 MW.

OIL & GAS

February 27, 2012. BP Plc and plaintiffs suing over the 2010 Gulf of Mexico oil spill are discussing a $14 billion accord that would be funded with money originally set aside by the company for out-of-court settlements. BP would agree to close down its $20 billion Gulf Coast Claims Facility and shift the remaining $14 billion to plaintiffs who contend the spill harmed their businesses and properties. A deal with the plaintiffs wouldn’t include potential pollution fines. BP set up the GCCF in August 2010 to allow spill victims to receive compensation more quickly than by pursuing lawsuits. The fund has paid out about $6 billion so far.

February 23, 2012. Woodside Petroleum Ltd., Australia’s second-largest oil producer, is considering buying back Royal Dutch Shell Plc’s holding, valued at A$7.1 billion, and may fund it with cash from its Pluto liquefied natural gas venture. The A$14.9 billion ($15.8 billion) Pluto venture is due to start exporting LNG. Woodside has declined 17 percent since Shell sold 10 percent of the explorer for $3.35 billion in November 2010. Europe’s largest oil company plans to dispose its remaining 24 percent stake, and a buyback would ease concerns that the stock may slump further.

February 22, 2012. Royal Dutch Shell Plc, Europe’s largest oil company, offered to buy African explorer Cove Energy Plc for 992.4 million pounds ($1.6 billion) to gain a foothold in Mozambique. Shell is offering 195 pence for each Cove share, a 26 percent premium to the closing price of the London-based company. Cove separately said it expected to recommend the proposed acquisition. Cove put itself up for sale after reporting one of the world’s largest gas discoveries in a decade off Mozambique. Cove has an 8.5 percent stake in Rovuma Area 1, which holds 15 trillion to 30 trillion cubic feet of recoverable gas, enough to justify production of liquefied natural gas for Asian markets. The find is operated by Anadarko Petroleum Corp. Cove jumped 39.5 pence, or 26 percent, to a record 194 pence in London. Other oil and gas companies active in Africa also advanced, with Ophir Energy Plc climbing 7.3 percent and Afren Plc gaining 5.9 percent.

February 24, 2012. MDU Resources Group Inc. wants to partner up with another business to build a diesel refinery in southwest North Dakota. The company is looking at sites near Dickinson and Richardton. It hopes to have the nearly $500 million facility operating in 2014. WBI Holdings Inc., owned by MDU Resources, and Calumet Refining LLC, owned by Indiana-based Calumet Specialty Products Partners, L.P., have signed a letter of intent to explore opportunities for opening the facility. The facility will produce 20,000 barrels per day. The companies will sell the diesel primarily in the Bakken region. The remainder of the crude oil will be shipped to other Calumet facilities to be further refined into such products as gasoline, solvents, lubricants or feedstock for the chemical manufacturing industry.

February 24, 2012. Royal Dutch Shell PLC has signed a contract to hire the French refinery owned by insolvent Swiss-based refiner Petroplus Holdings AG to process crude oil for six months, French President Nicolas Sarkozy said. Industrial machinery like the refinery cannot stay idle for too long, he said during a trip to the facility, which is located in Petit-Couronne, a town on the French northern coast. Resuming operations at the refinery, which was gradually shut down in January, requires EUR50 million investment, Sarkozy said. Shell will transfer EUR20 million to the refinery in advance of future payments to the refinery. The government will finance the remaining EUR30 million, Sarkozy said.

February 22, 2012. Italy's Eni and Britain's Petrofac have drafted their own plans for building the first phase of a gas refinery at the Karachaganak field in Kazakhstan. According to Eni's proposals, the refinery would be built in 2015-2019 at a cost of $4.9 billion, and according to Petrofac's vision, it would be built in 2013-2016 at a cost of $2.5 billion. KazMunayGas has said the refinery's first train might be put into operation in 2019, and the second in 2023. It will be built in 2014-2018 after the consent of partners to the production-sharing agreement has been obtained and without harming KazMunayGas's obligations to Russia as per their agreement on cooperating in the creation of a joint venture at Orenburg Oil Refinery. KazMunayGas estimates the cost of the Karachaganak refinery at $3.7 billion.

February 28, 2012. TransCanada Corp. will proceed with building a $2.3 billion segment of its Keystone XL oil pipeline from Oklahoma to the Texas coast so that it isn’t delayed by U.S. approval for the rest of the line. The company, based in Calgary, expects the segment to begin carrying crude from the Cushing, Oklahoma, storage hub to refineries on the U.S. Gulf Coast as soon as mid-year 2013. TransCanada is separating the Cushing line from its application to President Barack Obama for approval of a Keystone expansion that will bring crude into the U.S. from Canada’s oil sands. As originally envisioned, Keystone XL would have carried as much as 830,000 barrels of oil a day from Alberta, Canada, and the Bakken Shale formation in North Dakota and Montana along a 1,661-mile (2,673-kilometer) path to Texas refineries. The full $7.6 billion Keystone pipeline needed a permit from the State Department because it crossed the U.S.-Canada border.

February 28, 2012. The largest drop in Japanese oil consumption since last year’s earthquake and tsunami may cause tanker rates to plunge 42 percent next quarter, threatening the biggest rally in shares of shipping companies since 2005. Demand in Japan, the second-largest destination for supertankers after China, will drop 19 percent in the second quarter from now. Daily rates for the 1,000-foot-long ships will average $17,000, compared with $29,280 now. Investors may profit by buying forward freight agreements, traded by brokers and used to bet on shipping costs, which anticipate $10,883.

February 27, 2012. Pirates threatened a ship at the north end of the Strait of Hormuz in the nearest-ever attack to the waterway, which handles 20 percent of the globally traded oil, according to the International Maritime Bureau (IMB). Armed private guards aboard the container vessel fired warning shots to deter pirates chasing the ship in three boats at the northern-most area of the Gulf of Oman, according to the bureau’s piracy reporting centre.

The ship identified in the report was the nearest to the Strait of Hormuz, according to a list of attacks published by the IMB over the past three years. The European Union didn’t count the event as an attack because there was no exchange of gunfire. Iran has threatened to block shipments through the strait as Western leaders ratcheted up sanctions in an effort to get the country to halt its nuclear program. About 35 percent of all crude shipped by sea and a third of the world’s liquefied natural gas passes through the strait which connects the Persian Gulf with the Gulf of Oman. About 17 million barrels a day transits the Hormuz according to the U.S. Energy Department, while 70 percent of the U.K’s imports of LNG come through the strait, according to a Jan. 6 report from Deutsche Bank AG.

February 23, 2012. Turkiye Halk Bankasi AS, the Turkish bank that handles payments for Iranian oil, will stop processing transactions for supplies into Turkish refineries from July amid tightening Western sanctions against the Persian Gulf state. Tupras Turkiye Petrol Rafinerileri AS, which operates four refineries, won’t be able to use the bank from the end of June unless it gets a U.S. waiver. State-run Halk complies with all international regulations and standard practices on Iran.

February 28, 2012. Warren Buffett, who bought about $2 billion in bonds of power company Energy Future Holdings Corp., said the investment is at risk of losing all its value after natural gas prices fell. Buffett’s Berkshire Hathaway Inc. wrote down the debt by $390 million last year, following a $1 billion impairment in 2010. The market value of the investment was $878 million at the end of December.

February 27, 2012. Bullish commodities futures rose above 1 million contracts for the first time in five months as U.S. growth prospects improved and Goldman Sachs Group Inc. predicted further price gains. Hedge funds and money managers boosted combined net-long positions across 18 U.S. futures and options by 7.3 percent to 1.03 million contracts. That’s the highest since Sept. 13. Bullish wagers on gold climbed to a five-month high, and bets on crude oil rose to the most since May.

February 26, 2012. BP Plc officials overseeing the Macondo well that spewed millions of gallons of oil into the Gulf of Mexico ignored questions about whether safety tests done hours before a fatal blast on the drilling rig were flawed. Donald Vidrine, the senior BP manager on the Deepwater Horizon rig on April 20, 2010, talked with an engineer about unsatisfactory well tests less than an hour before an explosion killed 11 workers on the rig and sent oil pouring into the waters off Louisiana. Transocean owned the rig and was drilling in a well owned by BP and other partners. While Mark Hafle, a Houston-based BP drilling engineer, warned Vidrine in a phone call that stability tests on the well might be flawed, “neither man stopped work” at the facility. The BP officials allowed crews to continue displacing drilling fluid in the well with seawater, company lawyers said in the filing. Once the fluid was removed, the lighter seawater couldn’t stop natural gas from leaking into the well, leading to the explosion.

February 25, 2012. Oil capped its longest rally since January 2010 as escalating tension with Iran threatens supplies and on signs of a global economic recovery. Futures advanced above $109 a barrel for the first time in almost 10 months as sanctions against the Persian Gulf nation make it more difficult to sell oil. Iran dismissed UN atomic inspectors’ concerns that nuclear-weapon work is occurring. U.S., French and South Korean consumer confidence gained.

February 25, 2012. Bans on natural gas drilling in two New York towns were each upheld by state judges. Middlefield, New York’s 2011 ban on gas drilling, including hydraulic fracturing, was upheld by State Supreme Court Judge. State Supreme Court Judge said the Town of Dryden’s ban on drilling wasn’t preempted by state law. The local bans target hydraulic fracturing for gas, a process in which chemically treated water is forced underground to break up rock and free trapped gas. Environmental groups say the process threatens drinking water supplies. New York placed a moratorium on the drilling process known as fracking in 2010 while state regulators developed environmental rules. Since then, about 20 towns in the state have adopted laws to ban drilling.

February 23, 2012. President Barack Obama should resist calls to combat rising gas prices with oil from U.S. reserves, which must be available in the event Iran blocks a pathway for a fifth of the crude heading to market. Gasoline prices that have climbed every day for two weeks and a nine-month high for oil spurred Democratic Representatives Ed Markey of Massachusetts, Peter Welch of Vermont and Rosa DeLauro of Connecticut, to ask Obama to use the stockpiles. The U.S. reserve holding 696 million barrels of oil, the world’s largest government-owned stockpile, was sued in July and August last year, under an International Energy Agency effort to ease shortages of Middle East supply.

February 22, 2012. Trican Well Service Ltd. rose 4.8 percent, leading Canadian companies that provide hydraulic fracturing services higher on signals that cuts to natural-gas drilling will be offset by increased oil exploration. Cuts to gas-drilling budgets announced were offset as companies shifted spending to oil and natural-gas liquids. Encana Corp., Canada’s biggest gas producer, said it would spend $1.5 billion, or 55 percent of its budget, on liquids exploration.

POWER

February 28, 2012. Hitachi Ltd and its consortium partner Daelim Industrial Co received an order to install coal-fired power generation facilities for a plant operated by Korea Western Power Co. As part of the 60 billion yen ($745.7 million) order, Hitachi will install two energy-efficient coal-fired facilities, with a generation capacity of 1.05 million kilowatt each, for Korea Western. South Korea, which currently generates about 76 gigawatts of power, plans to increase its capacity by nearly 30 percent by 2020. The greater Seoul region of South Korea suffered a major power outage during a rare September heat wave last year.

February 28, 2012. Duke Energy Indiana has issued a request for proposals (RFP) for up to 400 MW of intermediate and/or peaking power for delivery between 2014 and 2017. This RFP is one portion of its plan to respond to stricter federal environmental regulations. The resources must be operated by a Midwest Independent Transmission System Operator (MISO) regional transmission grid participant and be dispatched into the Midwest regional transmission grid. Bids should include capacity and energy for a minimum of one year. Specifically, the company is looking for purchased power in the MISO planning years of 2014-2015, 2015-2016 and 2016-2017.

February 28, 2012. Firefighters continued to battle a fire at RWE AG (RWE)’s Tilbury power station on the banks of the River Thames, 30 miles (48 kilometers) east of London. RWE, along with Drax Group Plc, International Power Plc and SSE Plc, is looking to boost the use of biomass in its power stations in the U.K. The fuel is considered to have a neutral affect on the climate as trees take in carbon dioxide when they grow and release it when burned. RWE gets a subsidy from the U.K. government for using the fuel and doesn’t have to pay for European emissions allowances.

February 28, 2012. Indonesia’s state power company PT Perusahaan Listrik Negara (PLN) plans to begin a large-scale electricity trading with Malaysia in 2014, after the construction of a transmission network connecting West Kalimantan and Sarawak in Malaysia. PLN said between 50 and 100 megawatts (MW) of electricity could be traded via the planned 275-kilovolt (kV) transmission line. Another transmission line connecting Indonesia and Malaysia would integrate coal-rich South Sumatera and Peninsular Malaysia. A 250kV subsea cable would be laid to deliver electricity from coal-fired power plants in South Sumatera.

February 28, 2012. Manila Electric Co. (Meralco) is poised to sign a deal to source energy from Aboitiz Power Corp.’s plant in Quezon. Aboitiz, Meralco sign power agreement Meralco notches 23% growth after charging higher rates Meralco service contract with Eagle Cement approved PLDT, Meralco, MPIC hit 2011 targetMeralco expects profit hike in 2012. Meralco approved a power supply agreement with Aboitiz Power’s subsidiary Therma Luzon, Inc. to provide 350-megawatts (MW) of energy which Meralco will distribute to end-users. The agreement will then be evaluated by the Energy Regulatory Commission (ERC).

February 24, 2012. The Bonneville Power Administration (BPA) celebrated the completion of a new transmission line to better incorporate wind energy into the Northwest power grid, even as questions mount about future wind energy development in the region. The line, which runs 79 miles along the Columbia River from McNary Dam to John Day Dam, is one of several planned in Washington and Oregon to get power from wind turbines east of the Cascades to urban centers on the west side.

February 28, 2012. The consortium to manage the Prai power plant will be finalised by the third week of March, said the Energy Commission. The Commission had identified 18 consortiums for pre-qualification to manage the 1,000-1,400 megawatt (MW) gas fired power plant. For the first generation independent power producers (IPPs), the government is inviting them to submit their bid for a possible extension of capacity for another 10 years. Minister of Energy, Green Technology and Water said Malaysia is fortunate to have been endowed with oil and gas resources to support its economic growth. Currently, 30 per cent of the piped natural gas supplied to peninsular Malaysia is imported from Indonesia, Thailand and Vietnam. Malaysia’s final energy demand is projected to grow at 3.4 per cent annually, reaching 92.9 million tonnes of oil equivalent in 2030, which is double the 2010 level.

February 28, 2012. South Africa plans to allocate more funds towards the construction of nuclear power plants as it aims to boost electricity supply in Africa's biggest economy. South Africa, which runs the only nuclear power plant on the continent, allocated 300 billion rand ($39.55 billion) for its nuclear build programme in its budget. South Africa's new energy resource plan, expected to be signed into law by April, has called for nuclear and renewable energy to play a bigger role in plugging the country's power gap as it seeks to halve its reliance on coal, which supplies 85 percent of the country's electricity needs. The country's power supply is just ahead of demand and authorities are scrambling to avert a repeat of blackouts in 2008 that hit the key mining sector and cost the economy billions of dollars. French utility EDF said it would make a joint bid with a Chinese partner when South Africa launches a tender to build several nuclear reactors, expected in the first half of this year.

February 28, 2012. Iraq approved a $363 million contract with Egypt's Orascom Construction to build a 1,014 megawatt gas power plant in the north of the country. The contract involves building a plant in Baiji, 180 km (112 miles) north of Baghdad, to install six gas units, each with a capacity of 169 MW, which Iraq had bought from Siemens in 2008 but which never came online.

The project is expected to be completed within 21 months. Nearly nine years since the US-led invasion that ousted Saddam Hussein, Iraq's national grid still supplies only a few hours of power each day. Intermittent electricity is one of the public's top complaints.

Iraq plans to boost the grid's capacity by about 1,500 megawatts in the next few months and to add 22,000 MW of production capacity across Iraq, except for the semi-autonomous region of Kurdistan, by the end of 2015, the electricity minister said.

Iraq's power availability has ranged between 7,000 to 8,000 megawatts but is due to increase to 9,000-9,500 MW this summer as some power projects come online and others are upgraded. Iraqi demand for electricity peaked at 15,000 megawatts last year, but the oil-producing nation managed to supply less than half of that.

February 24, 2012. Iberdrola SA (IBE) Chairman Ignacio Galan is resisting the Spanish government’s campaign to make utilities like his assume some of the 24 billion euros ($32 billion) in debt that consumers owe to electricity producers. Galan, who heads Spain’s largest power generator, presented a competing plan to close the gap between the industry’s costs and what it’s allowed to charge. He would boost consumer bills, impose a clean-power levy on fossil fuels and cut subsidies for solar generators. Only one group escapes new sacrifices under Galan’s plan: power companies like Iberdrola, which reported 2.8 billion euros in 2011 profit.

February 23, 2012. Iran’s refusal to let United Nations experts investigate allegations of illicit nuclear activities at a military base doesn’t inspire confidence for a return to negotiations with the international community. Iran’s refusal to allow access to sites where Western intelligence agencies have reported suspected nuclear weapons work “suggests that they have not changed their behavior.” The U.S. is consulting Britain, France, Germany, China and Russia -- the six nations that have labored for years in on- again, off-again talks with Iran -- over how to reengage. Iran sent a letter expressing readiness for talks at the “earliest opportunity.” President Barack Obama has said there is time for diplomacy to resolve the nuclear dispute and avoid a military confrontation.

February 22, 2012. Ofgem, the U.K.’s power and natural- gas market regulator, may force the nation’s six biggest utilities to sell 25 percent of their generated electricity in auctions to boost competition. The watchdog proposed mandatory sales of power for delivery from three months to three years ahead to help smaller companies buy and sell the contracts.

EON AG, Iberdrola SA, SSE Plc, Electricite de France SA, Centrica Plc and RWE AG, collectively known as the “big six,” supply 99 percent of the nation’s power and gas. That makes it harder for smaller companies such as Intergen NV, Drax Group Plc, First Utility Ltd. and Ovo Energy Ltd. to compete.

February 27, 2012. Alex Green Energy, a Kolkata-based developer of clean-energy plants, won the right to develop a 5- megawatt project in a solar auction in India’s eastern Odisha state, pledging to supply power at a record-low rate. Alex Green has the option to develop the remaining 20 megawatts of photovoltaic capacity from the auction before it’s offered to other bidders. Under auction rules, Alex Green must complete the project by August 2013. Its bid pledges to sell power to the state-run utility at ` 7,000 ($142) per megawatt-hour, which is about 28 percent the world average for plants using crystalline-based panels. It’s also the lowest bid seen in India to date. The price of solar power in India is closing in on the cost of electricity from coal as global prices of solar products plunge because of declining equipment costs. Solairedirect SA, France’s second-largest producer, bid ` 7,490 a megawatt- hour in India’s national auction on Dec. 2 to sell photovoltaic- based electricity, half the rate the government proposed. Odisha Renewable Energy Development is seeking approval from the state government to auction an additional 50 megawatts of solar installations. The capacity will be offered in two batches of 25 megawatts in the next few months. India has a target to install 20,000 megawatts of solar- energy capacity by 2022, 10 percent of its current generating total that included all energy sources. Less than 1 percent of its existing power is solar-based. Odisha state was known as Orissa until its name changed in November.

February 25, 2012. India has begun work to assess the country's potential to generate wind energy offshore but the industry is sceptical about the option because of high costs and cumbersome procedures. Wind energy accounts for less than 10% for India's total power generation, with installed capacity of 16,000 MW. But ambitions for the sector are big, with estimates that the capacity will be doubled within five years. While offshore turbines deliver 50% higher plant load factor than onshore farms because of higher wind speeds at sea, the capital cost of tapping offshore wind could be over Rs 30 crore a MW, five times that of onshore.

February 24, 2012. Competition watchdog CCI has approved the proposal of Tata Power to acquire remaining 51 per cent stake in Tata BP Solar from joint venture partner BP Alternative Energy Holdings. In an order, the Competition Commission of India noted that TPCL (Tata Power) and TBCL (Tata BP Solar) are not engaged in production, supply, distribution, storage, sale or trade of "similar or identical or substitutable goods or provision of services". The Commission further said that while TBSL is concentrated mainly on the manufacturing and development of solar energy related business, like solar modules and solar cells, TPCL is engaged in generation, transmission, distribution and trading of power. Tata Power had announced it would acquire the remaining 51 per cent stake in the joint venture. On completion of transaction, Tata Power will own 100 per cent of the company. Tata Power and BP have agreed that the Company will continue to enjoy access to certain BP technology until 2013.

February 28, 2012. Spain, the top-ranked renewable- energy market for investors five years ago, dropped out of the top 10 after suspending subsidies for new clean power generation. China held on to the lead position as investors looked away from Europe, where debt-burdened governments have reduced aid for solar and wind power projects. Spain tied with Australia as the 11th best place to invest. Spain exited the top 10 for the first time since the index began in 2003. The country’s government halted subsidies to renewables in January as it sought to reduce the budget deficit and rein in state-backed electricity-system borrowings that reached 24 billion euros ($32 billion). The outlook in Spain and other European economies for 2012 is “less certain” after 2011 saw record-high investment in renewables, particularly in solar power. The company ranked the U.S. in second place, followed by Germany and India. The U.K. leapfrogged Italy into fifth spot, while France, Canada, Sweden and Brazil rounded out the top 10.

February 27, 2012. The U.K. government is almost ready to open a contest for 1 billion pounds ($1.6 billion) in funds that would back carbon capture and storage technology, Energy Minister Charles Hendry said. The U.K. government is taking forward a carbon capture and storage delivery program with 1 billion pounds of capital funding to support a portfolio of commercially focused projects, Hendry said. He aims for the projects to be commercially deployed in the 2020s. The government is touting the technology as key to meeting European Union clean energy goals because it sequesters emissions from fossil fuels, allowing coal- and gas-fired plants to keep providing a baseload of electricity along with intermittent sources such as wind and solar. The International Energy Agency says 3,400 plants using CCS technology are needed by 2050 in order to meet the goal of cutting global carbon emissions in half.

February 27, 2012. The Environmental Protection Agency proposed keeping U.S. limits on permitting requirements for greenhouse-gas emissions to power plants and other sources that discharge more than 100,000 tons per year. The proposal would maintain standards established in 2010 for new or revamped plants. The rules require companies building qualifying plants to get state permits, and to use “best available” control technologies.

February 27, 2012. Copper consumption growth in China may rebound in the next few years on accelerating demand from the renewable energy sector and special industries, according to Nexans SA, the second-largest cable and wire maker. Consumption of the metal is likely to climb 6 percent to 7 percent per year in 2013-2014, compared with 4.7 percent and double-digit growth in the past decade. China is the world’s largest copper user and demand from its power sector accounts for almost half of consumption. The economy expanded 8.9 percent in the fourth quarter, the slowest since the second quarter of 2009 as Europe’s debt crisis curbed export demand and the property market weakened. The People’s Bank of China has reduced reserve requirements for banks twice in three months to sustain growth. Copper in London has climbed 11 percent this year, after declining 21 percent, on optimism that Chinese buying will pick up after imports fell two years in a row. The nation imported a record 406,937 metric tons of the metal in December. China plans to boost the share of non-fossil fuels in its primary energy consumption to 15 percent by 2020 to rely less on more polluting sources such as coal. The 2020 renewable energy capacity targets include 100 gigawatts of wind power. Submarine cable demand will accelerate 12 percent to 14 percent a year and the market may expand to as much as 2 billion euros ($2.7 billion). This compares with yearly growth of 6 percent to 7 percent in the last couple of years, which was slower than that of traditional cables. The nation’s plan to build a network of high-speed railways requires special industry cables.

February 27, 2012. Microsoft Corp. Chairman Bill Gates and former President Bill Clinton are lending their political clout to the Energy Department’s research projects just as Republicans question federal funding of the program. High-profile support from Clinton and Gates may be a poke in the eye to House Republicans, who criticize Chu’s budget and effectiveness. President Barack Obama is seeking a 27 percent bump in funding for ARPA-E, to $350 million, from last year. Since September, the department canceled six ARPA-E projects that won a combined $14.1 million for clean-energy research, though $3.7 million was returned to the Treasury. The research agency will award $30 million for projects to develop lightweight fuel tanks for natural gas-powered vehicles.

February 27, 2012. CPFL Energias Renovaveis SA, the renewable-energy venture of CPFL Energia SA and ERSA-Energias Renovaveis SA, agreed to buy four wind farms in Brazil as part of a plan to more than double its renewable energy generation. CPFL Energias Renovaveis agreed to pay 600 million reais ($351 million) for all shares in BVP SA, which is indirectly controlled by a private equity fund managed by Banco BTG Pactual SA. It will also assume 462 million reais in debt. The four wind farms have a generating capacity of 157.5 megawatts, raising CPFL Energias Renovaveis’s total capacity from hydroelectric, biomass and wind parks to 809.5 megawatts.

February 27, 2012. China’s Duan Maosheng has been appointed chairman of the United Nations Clean Development Mechanism executive board. Duan, professor at the Institute of Energy, Environment and Economy at Tsinghua University, joined the board in 2010 and served as its vice chairman in 2011. China has produced 506.5 million metric tons of emission credits since supply began in 2005, 59 percent of the total. The price has plunged 57 percent in the past year because of an oversupply in the European Union carbon market and rules limiting their use. Credits for December rose 1 cent to 5.05 euros a ton on the ICE Futures Europe exchange in London. The EU, which operates the biggest carbon market by traded volume, will also stop use of credits from projects not registered by the end of this year, unless they are located in least-developed nations, according to rules of the market.

February 27, 2012. South Korea delayed approving a cap- and-trade system to cut carbon emissions, setting back efforts to regulate factories and power plants in the fastest-growing producer of greenhouse gases among industrial democracies. The National Assembly’s Legislative and Judiciary Committee put off the vote for at least a month. The bill to establish the third cap-and- trade system in Asia by 2015 is probably to be taken up again in April when the assembly reconvenes.

February 26, 2012. Acciona SA, the Spanish renewable energy company, has joined Pacific Hydro Pty in a venture seeking Australian funds to build the Moree solar farm in New South Wales State after partner BP Plc dropped out. Acciona will provide engineering and construction services to the solar-power project, while Pacific Hydro and Fotowatio Renewable Ventures will take up the ownership stake previously held by BP, Melbourne-based Pacific Hydro (PHY) said. The venture will sign a power-supply accord with Pacific Hydro, which plans to start its own retail energy group. While the partners in the proposed A$923 million ($987 million) solar plant won government funds last year, they failed to sign a power-purchase agreement in time to reach a December financing deadline. That prompted the government to reopen the funding competition to other bidders, including AGL Energy Ltd.

February 26, 2012. Dubai’s power demand is set to grow at a rate in line with the Persian Gulf emirate’s economy, or about 4 percent, as the city develops a plan to cut emissions. The emirate plans to survey its carbon dioxide emissions from energy and industrial production in a study. Dubai will use the study to estimate a baseline figure for emissions that it will use to plan cuts in the release of the gas. The emirate may trade credits linked to emission reductions, depending on future international climate change rules.

DEWA, as the utility is known, is still evaluating bids from companies seeking to join it in a partnership to build a 1,500-megawatt natural-gas-fired power plant. Dubai has enough flexibility in natural gas import contracts to secure sufficient supply of fuel to cover current demand and the needs for the new power unit. Dubai is also expanding production of solar energy. The emirate currently has about 4.5 megawatts of generation from individually installed capacity.

The utility will build a 10-megawatt solar plant by the end of 2013 and has hired consultants to help with the project. GDF Suez SA’s Tractebel engineering unit is developing the regulations and procedures for connecting solar plants to Dubai’s power grid and ILF Consulting Engineers will help plan the plant as well as the expansion of a planned solar park with a forecast 1,000-megawatt capacity.

February 24, 2012. The German government is set to release changes to the support mechanisms for solar power companies. The government is looking to implement the next round of subsidy cuts in April, three months ahead of schedule. It looks like a hard installations cap could be avoided which was a concern for stocks like Trina Solar, Yingli Green Energy, Suntech Power and First Solar. Subsidies could be cut by almost 25 to 35% and that the frequency of introducing cuts would be increased to curtail excess solar installations. In 2011 alone, around 7 GW of solar capacity came on line in the country despite subsidy cuts as panel prices dropped faster, making solar installations an attractive investment proposition with governments guaranteeing a strong rate of return despite lower support. To avoid future occurrences of such installations rushes, voices within the cabinet had proposed an installations cap. Fortunately for solar firms, the proposal however did not receive strong backing from the government. Subsidies for large ground based plants in the country could be cut by about 30% while rooftop systems could see support cut by 20%. Large cuts could push panel prices further south with many players still stuck with large inventories. Trina Solar gets a significant portion of its revenues from sales in Germany. Industry executives are hopping that a cut in support in European markets will be countered by sales in China and the U.S.

February 23, 2012. Siemens AG, the world’s largest maker of offshore wind turbines, said it underestimated the pace of growth in the Chinese wind market and will ramp up spending to catch up as local competitors increase their lead. China led the world in installing wind-power capacity. Munich-based Siemens is working to keep pace in the country, where it’s lagging behind suppliers such as Vestas Wind Systems A/S, while competition puts pressure on prices.

February 23, 2012. Lego's parent company, Kirkbi A/S, will invest 3 billion crowns ($534 million) for a 32 percent stake in DONG Energy's 277-megawatt Borkum Riffgrund 1 wind farm, which is scheduled to be fully operational in 2015, the companies said. For DONG, which has previously sold stakes in wind farms to institutional investors like pension insurance groups, the deal represents a key widening of its investor base to include corporate groups for the first time. By investing in the project, Lego will be allowed to use a customer label certifying that it uses wind energy, Lego said. Kirkbi A/S is the Kirk Kristiansen family's holding and investment company, which owns 75 percent of Lego Group, the world's third-biggest toymaker, known for its colorful, snap-together bricks and figures. Lego said the investment would enable it to reach a target of generating enough renewable power to meet all its energy needs as the wind farm would produce more electricity than Lego would consume up to and including 2020.

February 23, 2012. Solyndra LLC, the failed solar-panel maker that got $535 million in government loan guarantees before filing for bankruptcy, won court approval to pay some of its remaining workers as much as $368,500 in bonuses. U.S. Bankruptcy Judge granted the company approval to pay the bonuses to 20 employees if they can achieve certain milestones during the bankruptcy case.

February 23, 2012. Eight big energy firms called on the European Union to hurry up and deliver binding 2030 green energy targets, saying the industry needed guidance beyond existing policy if ambitions to move towards a low-carbon economy are to be achieved. The EU has a set of 2020 goals to cut carbon by 20 percent, increase the share of renewables in the energy mix to 20 percent and improve energy efficiency by 20 percent. EU "road maps" give general indications of future direction, but no formal policy beyond 2020, which the energy firms argue hobbles decision-making, especially in a sector investing for the very long term.

February 23, 2012. Trina Solar Ltd., a Chinese maker of solar panels, said it expects to boost shipments by as much as 39 percent after lower prices resulted in a fourth- quarter loss. The fifth-biggest panel maker will ship as much as 2.1 gigawatts of photovoltaic modules compared with 1.51 gigawatts in 2011. The net loss of $65.8 million compared with a profit of $145.3 million in the year-earlier quarter.

Germany’s plans could see support for solar slashed by as much as 29 percent from March 9 with further decreases each month beginning in May. Plants larger than 10 megawatts won’t get support after July 1. Trina plans to expand capacity even after the average prices for modules almost halved last year on oversupply, driving down the shares of manufacturers. Trina has lost 69 percent of its market value in the past 12 months, compared with Suntech Power Holdings Co., which is down 66 percent, and LDK Solar Co.’s 56 percent drop.

February 22, 2012. China’s energy use rose at the fastest pace in four years in 2011 and efficiency improved, according to the National Bureau of Statistics. Consumption climbed 7 percent to 3.48 billion metric tons of standard coal equivalent. That’s the fastest rate since 2007, when it was 7.8 percent. Consumption per unit of gross domestic product fell 2.01 percent from 2010. The data underscore China’s increasing share of world energy demand even as the nation attempts to curb the cost of powering its factories and reduce pollution. The government wants to cut energy use per unit of gross domestic product by 16 percent in the five years through 2015. Demand for coal, which China relies on for about 70 percent of its energy needs, rose 9.7 percent in 2011 from a year earlier. That’s the highest growth since 2005. Crude-oil use increased 2.7 percent, natural gas gained 12 percent and electricity demand expanded 11.7 percent.

February 22, 2012. Solar-power capacity in Ukraine is forecast to double, spurred by the completion of Europe’s biggest photovoltaic plant in December and incentives a third higher than anywhere else in the region. Developers in the former Soviet republic may add panels with 300 megawatts of capacity after installing about 200 megawatts. It had just 2.5 megawatts in 2010.

February 22, 2012. Novozymes A/S, the world’s biggest maker of enzymes for biofuels, has produced an additive that may lower the price of producing ethanol from natural waste products. The enzyme, Cellic CTec3, is more concentrated than its predecessor and will save biomass-ethanol makers 5 to 10 percent in total production costs. A U.S. law signed in 2007 mandates the nation use 36 billion gallons of renewable fuels by 2022, with 16 billion being cellulosic ethanol. Ethanol produced from biomass may eventually supplant as much as 25 percent of the gasoline currently consumed in the U.S. The enzymes are added to the pulp of wheat straw, corn stalks, switchgrass and household waste to form sugar and ferment into fuel and chemicals.

February 22, 2012. Apple Inc. is installing a solar power plant and fuel-cell system at its North Carolina data center. The 20-megawatt solar energy project is being built on 100 acres (40 hectares) at its Maiden data center together with a 5- megawatt fuel cell power plant running on biogas, Cupertino, California-based Apple said in its 2012 Environmental Update facilities report. Located about 45 miles (72 kilometers) west of Charlotte, the plants will supply about 82 million kilowatt-hours of power to the data center that was completed last year and are part of Apple’s goal of achieving net zero energy use. Last year Apple used 493 million kilowatt-hours of electricity, it said in the report. The cost of the plants wasn’t disclosed.

February 22, 2012. Bunge Ltd., the world’s second- largest oilseed processor, won approval to acquire Climate Change Capital, a London fund manager that manages the world’s largest private-sector carbon fund, after C0₂ prices slumped to a record. The deal is expected to close after being cleared by the U.K.’s Financial Services Authority, the White Plains, New York-based company said. Climate Change Capital, which manages a 750 million-euro ($992 million) carbon fund, said it has “obviously been impacted” by the 57 percent plunge in United Nations Certified Emission Reduction credits in the past year. Bunge has been active as both a buyer of carbon credits and as an adviser. The carbon funds managed by Climate Change Capital have lost money and the manager probably needed capital. Bunge was interested in buying Climate Change Capital for its expertise in finding and developing emission-reduction projects in emerging markets that generate carbon credits. Climate Change Capital’s carbon finance team has committed more than 850 million euros to companies and projects generating emission reduction credits under the United Nations Clean Developments Mechanism, the world’s largest greenhouse-gas offsetting market.

• Energy
• China
• India
• NUCLEAR ENERGY

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