Energy News Monitor I Volume VIII, Issue 38

India’s energy security policy: Only in the eyes of the beholder?

 

 

 

NEWS BRIEF

OIL & GAS

March 5, 2012. Cairn India is awaiting approval of a crucial committee, where its partner ONGC is represented, for raising output from its largest oilfield in the prolific Rajasthan block. Cairn says it is ready to raise output from Mangala field in the Rajasthan block to 150,000 barrels per day from current 125,000 bpd but this needs approval of Operating Committee (OC), which comprises its representative and that of its partner ONGC. Once OC gives its approval, the proposal would then go to the block oversight panel, called the Management Committee which is headed by the oil regulator, the Directorate General of Hydrocarbons (DGH). Independent consultants have cerfified oil reserves in Mangala field support increased output as well as the adequacy of surface facilities to handle higher production. Mangala, the largest of the 25 oil and gas finds made by Cairn in Block RJ-ON-90/1 in Thar desserts of Rajasthan, began production in end August, 2009 and has been producing at the approved peak of 125,000 bpd for the past six months. Cairn had in January won approval to start production from Bhagyam, the second largest discovery in Rajasthan. While the approved field development plan for Bhagyam envisages a peak output of 40,000 bpd, the MC had for the time being given nod for production of up to 25,000 bpd from the field. Bhagyam is currently producing about 20,000 bpd and together with Mangala, the Rajasthan block is currently at 145,000 bpd. The output from Bhagyam was to increase gradually so as to test the reservior and support facilities. Cairn India, which was recently taken over by London-based mining group Vedanta, is the operator of the Rajasthan block with 70 per cent interest while the remaining 30 per cent is with ONGC. Cairn believes Bhagyam has an ultimate potential of 60,000 bpd which can be reached with after making some more investment. Aishwariya, the third largest field in the Rajasthan block, can produce 25,000 bpd, compared to 10,000 bpd that it is envisaged to produce from end 2012. Together, the Rajasthan block has a potential to reach 300,000 bpd (15 million tons) with other fields in the block contributing 65,000 bpd. At present, the approved peak output from Rajasthan is just 175,000 bpd -- made up of 125,000 bpd from Mangala, 40,000 bpd from Bhagyam and 10,000 bpd from Aishwariya.

March 2, 2012. ONGC would increase its production within next year in Tripura to supply gas to different gas based thermal power projects and industrial houses in the state. ONGC would enhance production of natural gas from 1.8 Million Metric Standard Cubic Meter (MMSCMD) per day to 5 MMSCMD per day within 2013-14 financial year. ONGC would supply 2.56 MMSCMD gas per day to gas based 726 MW power project at Palatana in South Tripura district which would be operational this year. ONGC has so far dug 159 gas wells of which 73 wells are gas bearing and added the striking rate in this case is 46 per cent when the national rate is 30 per cent. ONGC has given extensive exploration drive throughout the state and renovating its gas collection stations (GCS). ONGC which started exploration in the state since 1972 has a recoverable reserve of 32.17 Billion Cubic Meter gas. Besides ONGC, the Consortium of GAIL and Jubilant Oil and Gas Pvt. Ltd started exploration of gas in the state since 2004 and so far dug three wells and possibility of striking gas in one well was disclosed by GAIL recently. Tripura earns ` 30.62 crore per year as revenue from the exploration companies.

March 2, 2012. ONGC is close to an agreement to buy its first shale gas asset in the U.S. and plans to spend at least $1 billion on purchases. ONGC is working with various banks. The company may buy stakes in more than one shale gas asset. Shale is a sedimentary rock that can hold gas and oil. The government raised at least ` 122 billion ($2.5 billion) in an ONGC share auction, with 95 percent of the bids placed in the final 10 minutes. The target was to raise 124 billion rupees and a delay in disclosing the final results spurred speculation the sale had failed after the issue was priced at a premium. Companies that have invested in U.S. shale include Marubeni Corp., which said it agreed to buy a 35 percent stake in an acreage from Hunt Oil Co. in a $1.3 billion deal that includes future drilling costs. The deal values the fields at about $25,000 an acre. Total SA’s $2.32 billion acquisition of a stake in the Utica region in New York from Chesapeake Energy Corp. was for about $15,000 an acre. Reliance’s purchase of Eagle Ford acreages from Pioneer Natural Resources Co. in June 2010 valued the deal at $11,100 an acre. India imports more than 80 percent of its oil and 25 percent of its natural gas requirements. ONGC would look to bring gas to India from the U.S. after the shale acquisition. The U.S. produced 96 billion cubic meters of gas in 2009, overtaking Russia as the world’s biggest producer. Output surged to 142 billion cubic meters in 2010, causing prices to slump. Cheniere Energy Inc. (LNG) and Freeport LNG Development LP are among companies that plan to liquefy and export U.S. gas.

March 2, 2012. As billion-dollar bids and counter-bids stack up for LSE-listed Cove Energy, Venugopal Dhoot, chairman of Videocon Industries, a consumer electronics maker, is keeping a close watch on the frenetic action that is unfolding from his perch at Fort House in Mumbai. He is an interested party as his flagship firm, Videocon Industries, owns more stake in the blockbuster oil and gas block than what Cove Energy owns in the Rovuma basin, a prized asset off the coast of Mozambique. Cove is coveted even though it owns just 8.5% of the basin while Videocon owns 10% in the same asset.

March 6, 2012. RIL wants to buy Cairn India's Rajasthan crude oil for processing at its only- for-exports Jamnagar refinery in Gujarat and has approached the government for its approval nod for the same. RIL currently buys 80,000 barrels per day (bpd) or 4 million tonnes a year crude from Rajasthan, that it processes at its old 33 million tonnes a year domestic tariff area (DTA) refinery on the West Coast. It has now applied to the government to buy another 30,000 bpd of Cairn crude for turning it into fuel at its 29 million tonnes SEZ (Special Economic Zone) refinery adjacent to the old unit. The company's request would be considered by the Board of Approval. Any sale to a SEZ or only-for-exports unit is considered outward shipment or exports out of India. The current policy does not allow export of domestically produced crude oil. RIL's request comes just when Cairn is beginning to ramp up production from Rajasthan fields. Cairn currently produces 125,000 barrels per day from Mangala oilfield, the largest find in the Rajasthan block. Another 20,000 bpd is produced from Bhagyam fields. Mangala can go up to 150,000 bpd or 7.5 million tonnes a year anytime now while Bhagyam has an approved peak of 40,000 bpd and can go up to 60,000 bpd with more investments. Cairn currently sells 15,000-20,000 bpd to state-owned Indian Oil Corp (IOC) and another 30,000-40,000 bpd to Essar Oil.

February 29, 2012. India's imports of Iranian crude oil are expected to fall further as state refiners reduce their exposure to the country facing US sanctions, even as the shift is being officially explained as a drive to diversify the country's crude basket to avoid offending major oil suppliers such as Iran. India maintains its declared policy that it will keep buying crude from Iran and maintain friendly relations with it unless there are UN sanctions against the country. But the oil ministry is quietly nudging state refiners to explore new grades of crude oil from Africa and Latin America, which are cheaper and can improve refining margins of complex refineries.

March 6, 2012. With electioneering in five states coming to an end, state-owned oil companies are pushing for raising petrol price by over ` 5 per litre but the actual increase would depend on the government nod. Oil firms had last revised petrol prices on December 1 after which rates have not been changed because of Assembly elections in states like Uttar Pradesh. IndianOil, Bharat Petroleum and Hindustan Petroleum together have lost over ` 900 crore since the last revision which was done at international gasoline price (the benchmark for deciding domestic retail rates) of $ 109 per barrel. Gasoline rates have since risen to $ 130.71 a barrel. With Congress faring poorly in the Assembly polls, it remains to be seen if the UPA-government would give nod for an increase just ahead of the Budget session of Parliament which begins on March 12. Oil firms also want an increase in diesel and cooking gas prices but that call would have to be taken by an Empowered Group of Ministers, where key allies like Trinamool Congress and DMK are represented. Mamata Banerjee-led TMC is opposed to any fuel price hike. State-owned oil firms lose ` 13.55 per litre on diesel. They also lose ` 29.97 a litre on kerosene and ` 439 per 14.2-kg domestic LPG cylinder. Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum are losing about ` 450 crore per day on sale of diesel, domestic LPG and kerosene. The call on raising diesel prices would be taken by the EGoM as and when it meets while petrol rates would be revised by oil firms themselves. Petrol price were freed from government control in June 2010 but rates have not moved in tandem with imported cost. While petrol price were last revised on December 1 when they were cut by ` 0.78 per litre to ` 65.64 per litre in Delhi, diesel currently costs ` 40.91 a litre.

March 5, 2012. Kyong Students' Union urged the Nagaland government to finalize the modalities for exploration of oil and gas from the proven fields. The union asked the cabinet sub-committee on petroleum and natural gas to finalize the modalities for crude extraction from Changpang oil fields of Wokha district. After exploratrion and production for some years, ONGC abandoned the oil fields in 1994 after a serious law and order problem there. The government constituted a cabinet sub-committee with Planning Minister T R Zeliang as convener to prepare modalities taking into consideration the interests of all stake holders for resumption of oil production in the area and other potential places in Nagaland.

March 5, 2012. The Oil Ministry is likely to refer Reliance Industries' demand for an increase in price of natural gas it produces from eastern offshore KG-D6 fields to the Law Ministry. RIL had on January 6 written to the Oil Ministry and the Prime Minister's Office (PMO) seeking a gas price revision, saying the current $ 4.2 per million British thermal unit rate for KG-D6 gas was "sub-market" price compared with three times higher price being paid for imported gas (LNG). The PMO subsequently asked the oil ministry to legally examine if the government can allow RIL to increase the price. The government had in 2007 fixed $ 4.20 per mmBtu as the price of gas produced from KG-D6 fields for first five years of production. KG-D6 fields started production in 2009. But the Oil Ministry's letter on October 10, 2007, informing RIL of the pricing decision did not stop at this and went on to state that if the company was to realise a price higher than $ 4.20 per mmBtu, then that rate would be used for determining government's take from KG-D6 block.

March 5, 2012. An association of private and PSU oil companies has demanded a slew of tax incentives, including income tax holiday for natural gas production and extending the same for oil refineries by another five years. In a pre-Budget memorandum to the government, the Petroleum Federation of India (PetroFed), a body comprising almost all public and private sector oil companies, sought seven-year holiday for payment of income tax to all refineries that are commissioned by March 2017. Currently, the tax breaks are available only for units beginning production by March this year. PetroFed said the period of tax holiday for both exploration and refining activities should be extended to 10 years as in case of power sector.

March 5, 2012. CNG price in the national capital and adjoining towns has been increased by up to ` 1.90 per kg, as costlier LNG was being imported to make up for fall in output from Reliance Industries gas field. CNG in Delhi will cost ` 1.70 per kg more at ` 35.45 per kg. IGL hiked price of CNG sold to automobiles in Noida, Greater Noida and Ghaziabad by ` 1.90 per kg to ` 39.80 per kg. This is the sixth increase in CNG rates this year. IGL had last raised CNG prices in Delhi by ` 1.75 per kg to ` 33.75 per kg from December 31. The hike had been necessitated because IGL is buying more of imported liquefied natural gas (LNG) after supplies from RIL's KG-D6 gas fields dried up. Imported fuel costs at least three times more than $ 4.20 per million British thermal unit rate fixed for domestic gas. City gas distributors like IGL are not getting any supplies from KG-D6 since September last year, after a 40 per cent output drop forced the government to cut supplies to non-priority sectors so that requirement of power and fertiliser plants can be fully met. The proportion of costly imported LNG vis-a-vis domestic gas in the overall pool of natural gas being procured for supply as CNG has risen to around 25 per cent. The increase would have minor impact on the per km running cost of vehicles.

March 5, 2012. Ratings agency Moody's said the result of the government stake auction in ONGC has tarnished the image of the oil major. On March 1 the government had auctioned 5 per cent of its stake in ONGC. Although the issue was subscribed 98.3 per cent and fetched the government ` 12,767 crore, as much as 84 per cent of the shares on the block were bought by state-run LIC. Moody's said that one of the reasons for investors staying away from the ONGC auction was that the shares were priced higher than the market price. While the shares were trading around ` 286 a piece, the government fixed the floor price for auction at ` 290.

March 2, 2012. India's largest shipping company was forced to cancel an Iranian crude oil shipment because its European insurers refused to provide coverage for the vessel on the grounds of tightening sanctions on the OPEC member. The European Union announced new sanctions in January prohibiting European insurers from indemnifying ships that carry Iranian crude and oil products anywhere in the world. Iran is India's second-biggest supplier of oil after Saudi Arabia, with some $11 billion a year in shipments meeting about 12 percent of India's crude import needs.

February 29, 2012. India will increase imports of crude oil from Africa and Latin American countries to reduce dependence on Gulf countries, especially Iran which is facing sanctions from the US and the European countries. Crude oil imports from Africa and Latin American countries especially from Venezuela have increased sharply in the recent years. Saudi Arabia is the biggest supplier of crude oil to India followed by Iran. Although imports from Saudi Arabia has remained steady at around 27 million metric tonne per year, oil purchases from Iran have gone down in the last couple of years. Imports from Iran fell to 18.5 million metric tonnes in 2010-11 as compared to 21.19 million metric tonnes in the previous year. They are likely to drop further in the current financial year.

February 29, 2012. India may ask Iran to take responsibility for delivering crude to the South Asian nation, allowing domestic refiners to avoid arranging insurance on the shipments. The plan is one of two options being considered by the government as it seeks to maintain oil imports from Iran amid tightened international sanctions against the Persian Gulf supplier. The other option is for India to provide sovereign guarantees to domestic companies hauling crude from Iran.

POWER

March 5, 2012. Adani Enterprises signed five agreements for supplying 4 million tonnes (MT) of imported coal to power generator NTPC. The imported coal is required to meet the coal blending requirements of the NTPC power stations, it said. The company will supply one million tonne of imported coal to NTPC's Talcher power stations, one million tonne for Farakka and Kahalgaon, 0.5 MT for Simhadri and Ramagundam, 0.8 MT for Dadri, Rihand, Singrauli, Tanda, Unchchar and Vindhyachal and 0.7 MT for Korba and Sipat stations. The company is expected to mine 200 MT of coal per year in 2020. The company is also operating coal mines in India, Indonesia and Australia.

March 3, 2012. Unveiling its ambitious plan to augment generating capacity by about 4,500 MW in Odisha, NTPC said it would invest over ` 24,000 crore to set up two power projects in the state during 12th five-year plan. Both the projects were proposed to be commissioned during the 12th five-year plan, land acquisition was likely to be completed by June this year while the company ready for global tendering for procurement of equipment and machinery.

March 1, 2012. The joint venture (JV) company between Bangladesh Power Development Board and NTPC for setting up a 1,320 MW power project in the neighbouring nation is likely to be registered this month. The nearly $1.5-billion Khulna project, based on imported coal, would help in easing the power scarcity in Bangladesh. In January, state-run Bangladesh Power Development Board (BPDB) and NTPC inked the pact to build the plant. The project would be implemented by 50:50 joint venture company. Bangladesh, grappling with significant power shortages, has a generation capacity of over 7,600 MW. In a move that would help in boosting the bilateral ties, NTPC has also agreed to supply 250 MW power to Bangladesh. The transmission systems between the two nations is expected to be completed by end of July 2013. Late last year, BPDB and NTPC had signed a memorandum of understanding (MoU) for setting up two thermal power plants at Khulna and Chittagong in the neighbouring nation. Bangladesh is looking to attract foreign entities, especially from India, to make investments in that country's growing power sector.

March 6, 2012. Aggreko, a provider of temporary power and temperature control services, announced the opening of its India head office at Pune. The company had been operating with depots in Pune and Chennai for the last two years. The company decided to consolidate the country headquarters in the city due to its thriving industry, pool of highly qualified engineering and business professionals based locally, and its proximity to key business centres such as Mumbai.

March 5, 2012. Come April and households across India should prepare for an average one-third rise in electricity bills as distribution firms seek to raise tariffs to share increasing fuel cost and revenue gaps with consumers. While most proposed distribution reforms remain on paper, some consumers in Mumbai may be asked to pay as high as 11 per unit of power consumed and an average household consuming over 500 units in Andhra Pradesh may end up paying 7 in the coming year. Tamil Nadu's distribution utility has demanded a 64% rise in energy charges for 2012-13. Besides, most distribution firms have proposed to raise or modify other components of electricity bills like fixed and demand charges, analysis of tariff petitions filed with electricity regulators show. The proposals come as a double blow to consumers in states such as Rajasthan, Punjab and Delhi.

March 4, 2012. State-run Power Grid Corporation is likely to get $ 400 million (over ` 1,980 crore) funding from the International Finance Corp for undertaking electricity transmission projects in the country. The proposed funding would make up for 15 per cent of the national power transmission company's projects cost, estimated to be worth $ 2.3-3.5 billion, according to the IFC. The entity, part of World Bank group, focuses on lending to entities in developing countries. IFC would put up the $ 400 million funding proposal before its board on May 3. Power Grid Corporation of India Ltd (PGCIL) is expected to fund 70 per cent of the projects' cost through debt while the remaining 30 per cent will be from internal accruals. Apart from this loan, Power Grid has also asked for IFC's support to enter other markets. The public sector major already has board approvals for investments worth about ` 70,000 crore related to 12th Plan Period (2012-17) projects.

February 29, 2012. BGR Energy and Bharat Heavy Electricals Ltd (BHEL) have emerged as lowest bidders for ` 9,000 crore contract seeking supply of equipment for five projects of NTPC and Damodar Valley Corp (DVC). BGR Energy is likely to be awarded contract for supply of 660-MW energy-efficient boilers to three projects, while BHEL is expected to bag rest two. The equipment is being sourced for NTPC's Mouda, Solapur, Meja, Nabinagar and DVC's Raghunathpur projects.

February 29, 2012. The country's largest electricity producer NTPC will supply 250 MW power to Bangladesh, a move that will help strengthen trade ties between the two nations. NTPC will export 250 MW power to Bangladesh from the unallocated quota available with the Power Ministry. A power purchase agreement has been inked between NTPC Vidyut Vyapar Nigam Ltd (NVVN), a wholly owned subsidiary of NTPC and Bangladesh Power Development Board (BPDB).

February 29, 2012. NTPC, India's top power producer, opened the price bids for ` 160-billion equipment order. Three power equipment makers -- state-run BHEL, a joint venture between BGR Energy Systems and Hitachi Power Europe GmbH, and another JV between Larsen and Toubro and Mitsubishi Heavy Industries -- have bid for supplying supercritical boilers. The process of awarding equipment order for NTPC's nine units of 660 MW each was delayed by more than a year after utility boiler maker Ansaldo Caldaie challenged its disqualification on technical ground in the Delhi High Court. The Delhi High Court stayed opening of price bids and later ruled in favour of Ansaldo. After India's top court overturned the High Court's order, NTPC resumed the process.

March 6, 2012. Iran is keen to explore the possibility of exporting electricity to energy-hungry India after the much-touted tri-nation gas pipeline project with New Delhi slid into limbo. Iran's energy minister Majid Namjou said Iran might well export electricity to India instead of gas. Namjou said that India is one of the frontrunners in the field of generating renewable energies and Iran will prepare the ground for the development of new energies in the country in cooperation with India. The minister said India has expressed readiness to import electricity from Iran, pointing out that holding related negotiations with India has been placed on the ministry's agenda. He noted that a new power plant is under construction on Iran's border with Pakistan.

March 6, 2012. Tata Power, Reliance Power, ArcelorMittal, Jindal Steel and Power and Monnet Ispat & Energy are among 60 companies that face risk of cancellation of mining licences for being slow in exploration of coal blocks. A review committee headed by coal ministry's additional secretary Zohra Chatterjee has recommended issuing 'show-cause notices' for 58 blocks asking for reasons why mining licences should not be revoked. A coal ministry official said appropriate action would be initiated against companies that are not able to justify the delay. The companies include Hindalco Industries, Tata Sponge, Electro Steel Casting, MMTC, National Aluminium Co Ltd and power and mining utilities of Jharkhand, Orissa, Andhra Pradesh, Chhattisgarh, Madhya Pradesh and Tamil Nadu. Coal ministry's latest review found that only 29 of 195 allotted coal blocks have started production while progress at 90 blocks was found dissatisfactory as critical milestones like acquisition of land, forest clearances and execution of mining lease were not achieved for various reasons.

March 5, 2012. Tata Power has formed an equal joint venture with South Africa's Exxaro Resources to develop and operate power generation projects in the African nation. Tata Power will form the joint venture, named Cennergi (Pty) Ltd, through its unit Khopoli Investments. Cennergi will initially focus on renewable energy projects in South Africa and will later have projects in Botswana and Namibia.

March 5, 2012. Iran is likely to supply 5,000 MW of electricity to India as power exports are more cost- efficient, says an Iranian media report. India has indicated its willingness to import 5,000 MW of electricity from Iran. As per the report, India is currently producing 17,000 MW of power from renewable energy sources. Therefore, India can share its experience in the development of power plants operating on renewable energies with Iran. At present, however, there is no grid connection between India and Iran. Iran's Oil Ministry inked the first gas-to-wire contract for converting natural gas to electricity and exporting power to neighboring countries. Going by the contract, the ministry would first develop the offshore Forouz B gas field in the Persian Gulf whose natural gas would be then used to generate power. Iran is currently exchanging electricity with Afghanistan, Armenia, Azerbaijan, Iraq, Pakistan, the Republic of Nakhichevan, Turkey and Turkmenistan.

March 4, 2012. The coal ministry is likely to issue show-cause notices within a month to about 50 block holders asking them to either start production or face deallocation. The development comes close on heels of a direction from the Prime Minister's Office to the coal ministry to ensure adequate supplies of coal to power producers. The decision to issue show-cause notices to those sitting idle on captive coal blocks was taken by a panel looking into the development of reserves. Concerned over the increasing demand supply gap, the coal ministry had in January reviewed the progress of mines allocated to companies, including Tata Steel, Coal India, SAIL and NTPC for captive use.

March 4, 2012. Looking for increased co-operation with India in the energy space, Bangladesh expects Indian companies to invest $ 7-9 billion in its power sector and a few entities have already evinced interest. Bangladesh would need about $ 30 billion for its planned power capacity addition over the next five-six years and expects about 25-30 per cent of the investments for the same to come from India. Grappling with acute electricity shortage, Bangladesh is embarking on significant capacity addition plans and is in the process of inviting tenders for projects having capacity of over 5,000 MW. The country needs about $ 20 billion investment in power generation activities alone in the next five to six years. Currently, Bangladesh has an installed capacity of over 7,600 MW and is expected to go up to 21,000 MW by 2021. Many companies, including those from India have participated in tender processes for various power projects.

March 4, 2012. Expressing dismay over Puducherry government's 'silence' over the Kudankulam Nuclear power plant issue, Union Minister of State in PMO V Narayanasamy said it was intriguing as the union territory would also stand to get power from KNPP. Narayanasamy said he was really taken aback at the 'silence' of the government, which was maintaining a stand as if the issue was not its concern.

March 2, 2012. A smart grid project recommended by the Power Ministry's India Smart Grid Task force will come up on a pilot basis in the union territory, reportedly the first in the country. A Memorandum of Understanding to introduce the innovative project was inked in the presence of Chief Minister N Rangasamy between the Department of Electricity and Power Grid Corporation of India Limited (PGCIL). The Ministry proposed to set up such smart grid projects in eight cities across India and that Puducherry is the first to implement it on an experimental basis.

March 1, 2012. The government deferred a proposal to increase duty on import of power equipment and an announcement on the issue is expected in the upcoming Budget. The Cabinet Committee on Economic Affairs (CCEA) in its meeting postponed a decision on imposing higher import duty on power gear. Currently, equipment imported for projects of less than 1,000 MW capacity attract five per cent customs duty, while those above that enjoy exemption. The plan to slap higher duty on overseas power gear is aimed at providing a level-playing field for domestic manufacturers which are battling intense competition, mainly from China. Power and Commerce Ministries have suggested a total of 19 per cent levy on imported power equipment while the Heavy Industry Ministry has recommended a duty structure of 14 per cent.

March 1, 2012. Over-ruling environment minister Jayanthi Natarajan, a group of ministers decided to shift the proposed site of NTPC's 1980-MW North Karanpura power plant in Jharkhand, a move which will save six billion tonnes of coal reserves. While relocation of the NTPC's plant would save the coal bed, Natarajan opposed most of the projects that came up for discussion before the GoM citing green concerns. The group of ministers (GoM), headed by Finance Minister Pranab Mukherjee, decided that the NTPC's plant can be relocated to low coal-bearing areas in the vicinity.

OIL & GAS

March 5, 2012. Kuwait Energy and their main partner, the Egyptian General Petroleum Corporation (EGPC), announced a new oil discovery, the El Salmiya-1 well, in the Abu Sennan concession located in the Western Desert in Egypt. The company said that this is the fourth exploration success in the Abu Sennan concession following the GPZZ-4 and Al Ahmadi-1 gas and condensate wells discovered in August 2011, and the Al-Jahraa-1X oil well discovered in January 2012. Kuwait Energy is one of the fastest growing independent oil and gas exploration and production companies in the Middle East. Kuwait Energy is the operator of the concession and holds a 50 percent working interest. The remaining working interest is held by Beach Petroleum (Egypt - 22 percent working interest) and Dover Investments Limited (28 percent working interest). The new discovery brings the total number of Kuwait Energy discoveries in Egypt to 16 since the start of its operations in 2008. Egyptian operations contribute the largest share to Kuwait Energy's total working interest production, comprising 17,500 boepd as of year-end 2011. The 2011 production level excludes the discoveries made in the Abu Sennan concession۔

March 4, 2012. A Korea National Oil Corporation (KNOC)-led consortium has secured South Korea's first oil production assets in the United Arab Emirates (UAE), the Korean government said. Korea has finalized a deal with Abu Dhabi National Oil Co. (ADNOC) to take a 40 percent stake in two onshore and one offshore oil drilling areas, as part of a wider push by oil import dependent Asian countries to secure upstream assets. Under the deal, KNOC will hold 34 percent and GS Energy will hold a 6 percent stake in the projects. ADNOC will own 60 percent. The Korean consortium is expected to invest $2 billion of the estimated $5 billion total cost of developing the fields, the Korean government said. The deal gives South Korea access to fields with combined reserves of at least 570 million barrels of oil, which Seoul has previously said it would have exclusive rights over if other oil supply sources were disrupted. Oil production is expected to begin in 2014, if the development starts as planned, and could rise to 43,000 barrels per day.

March 2, 2012. Russia’s fourth-largest oil producer pumps more crude than the U.K., employs 100,000 people and trades on stock exchanges in Moscow, London and New York. What’s not disclosed is how much cash OAO Surgutneftegas (SNGSP) holds and the identity of its biggest shareholders. A law to align Russian financial reporting with international standards this year promises to lift the veil on the Siberian driller, run by General Director Vladimir Bogdanov since his Soviet-era appointment in 1984 at the age of 33. Citigroup Inc. estimates the company holds $28 billion in cash, more than double the balance of Exxon Mobil Corp.

February 29, 2012. Petroleo Brasileiro SA said it made a new oil discovery in the pre-salt area in Brazil’s Campos Basin. Petrobras said tests at the well in the BM-C-33 block indicated output of 5,000 barrels of oil and 807,000 cubic meters of gas per day. Repsol-Sinopec Brasil is the area’s operator, with a 35 percent stake, while Petrobras has 30 percent and Statoil has 35 percent of the project.

March 5, 2012. Azerbaijan and Kyrgyzstan are considering two options for the location of the oil refinery of the State Oil Company of Azerbaijan (SOCAR) in Kyrgyzstan. If the plant is built in the south, it will be possible to process Kyrgyz oil. Where Kyrgyzneftegaz is located it produces about 100,000 tons per year, whereas during the Soviet era production it was about 500,000 tons. The oil production volume at this enterprise may be increased up to one million tons per year. If the refinery is built in the country's north, oil for its processing will be delivered under the swap terms, which anticipates the transfer of Azerbaijan's oil to Kazakhstan in the Caspian Sea. Kazakhstan, in turn, will give oil at the border with Kyrgyzstan in the Zhambyl and Shymkent regions. The oil refinery is scheduled to be commissioned in late 2013. The minimum cost of the oil refinery which SOCAR plans to build in Kyrgyzstan, hits $100 million.

March 1, 2012. The U.S. exported more gasoline, diesel and other fuels than it imported in 2011 for the first time since 1949. Shipments abroad of petroleum products exceeded imports by 439,000 barrels a day. In 2010, daily net imports averaged 269,000 barrels. U.S. refiners exported record amounts of gasoline, heating oil and diesel to meet higher global fuel demand while U.S. fuel consumption sank. Oil demand in Latin America will climb 2.5 percent to 6.64 million barrels a day, while contracting 2.4 percent in Europe and 0.5 percent in North America. Mexico’s use of U.S.- made gasoline was 44 percent higher last year than in 2010. Distillate shipments rose 30 percent from a year earlier to a record 854,000 barrels a day, and daily exports of finished gasoline and blending components jumped 57 percent to 526,000 barrels in 2011. Refiners are expanding on the Gulf Coast and in the Midwest, even as unprofitable plants along the East Coast were shut. Operable capacity in the U.S. climbed 0.8 percent to 17.7 million barrels a day in December from a year earlier. U.S. refineries in the Gulf Coast, where about half of U.S. capacity is located, operated at 88.8 percent last year, up from 88.6 percent in 2010. In the fourth quarter, Valero, the largest U.S. independent refiner with 14 North American plants, exported about 5 percent of its gasoline output and 17 percent of its heating oil and diesel production. The U.S. will ship abroad 350,000 barrels a day more petroleum products that it imports in 2012 and 320,000 barrels daily in 2013. Gasoline demand in the U.S. sank 2.9 percent to 8.736 million barrels a day last year as pump prices averaged $3.521 a gallon, the highest in records dating back to 1919. Total U.S. oil product demand fell 9.5 percent to 18.8 million barrels a day last year from 20.8 million in 2005.

March 6, 2012. The richest investors in shipping are buying gasoline tankers, anticipating that fuel demand will expand faster than the fleet for the first time in nine years. Global shipments will jump 4.3 percent in 2012 as vessel capacity gains 3.7 percent. Daily rates for Medium- Range tankers, each hauling enough fuel to fill about 780,000 cars, will rise 19 percent to an average of $14,844. That’s more than the $10,999 anticipated in forward freight agreements, traded by brokers and used to bet on future rates.

March 6, 2012. Enbridge Inc. plans to resume crude deliveries on an Illinois pipeline that shut over the weekend, allowing supply to reach Chicago-area refineries run by BP Plc, Exxon Mobil Corp. and Citgo Petroleum Corp. Line 14 may start operating late on March 7 and Line 64 the following day. Lines upstream of Superior will be slowed or shutdown to manage tank levels. Enbridge halted crude deliveries on line 14/64 after two vehicles collided, starting a fire at the pumping station near New Lenox, Illinois, 36 miles (58 kilometers) southwest of Chicago.

March 1, 2012. Kinder Morgan Inc. may proceed with a $21.1 billion takeover of El Paso Corp. after a judge rejected claims that Goldman Sachs Group Inc.’s conflict of interest in the deal warranted blocking a shareholder vote. Delaware Chancery Court Judge rejected calls by some El Paso shareholders to block rival pipeline operator Kinder Morgan’s $25.91-a-share offer. El Paso didn’t negotiate a high enough price and Goldman Sachs, which owns 19 percent of Kinder Morgan, wrongfully served as adviser to El Paso on the deal and improperly influenced negotiations.

February 29, 2012. Kuo Oil Ltd., the Singapore trader that the U.S. censured last month for trading with Iran, has booked a fuel-oil shipment from the Persian Gulf nation for loading in March. Closely held Kuo Oil hired the Mire to load 80,000 tons from Bandar Mahshahr on March 12 for delivery to Singapore. The Liberian-flagged vessel is anchored in the northern Gulf of Oman near the Strait of Hormuz. Fuel oil is a residual product of refining often used for power generation and as shipping fuel. The fixture is provisional and subject to change or cancellation.

March 5, 2012. Kazakhstan intends to tap Malaysia's oil and gas expertise in an effort to develop its own oil and gas industry, especially the Kashagan oil field (Kashagan) project. The first stage of oil extraction is at the completion phase. Kazakhstan hopes Malaysia's biggest oil and gas field player Petroliam Nasional Bhd (Petronas) will participate in the subsequent developing stages of the field. Due to its size and technical complexity, the Kashagan will be developed in three phases. The first commercial production or extraction is targeted to be by the end of this year or early 2013. It is estimated that up to 50 million tonnes of oil will be extracted in the first phase, annually. Kashagan is a huge area and it provides many opportunities for Malaysian companies. Kashagan, the world's second largest oil field, has commercial reserves of up to 16 billion barrels of oil. Kazakhstan produces about 1.6 million barrels of oil a day.

March 5, 2012. BP Plc may face as much as $17.6 billion in civil pollution fines and possibly billions of dollars more in criminal penalties as its settlement with businesses and individuals harmed by the 2010 Gulf of Mexico oil spill shifts the focus to government claims. BP said it would pay an estimated $7.8 billion to resolve private plaintiffs’ claims for economic loss, property damage and injuries. The settlement, to be paid from a $20 billion trust for spill victims set up in 2010, doesn’t resolve federal and state government environmental damage claims. BP has set aside $37 billion to cover spill costs.

March 5, 2012. Saudi Arabian Oil Co., the world’s largest crude exporter, said Arab Light crude sold to Asia will be priced at a premium of $2.80 a barrel to the regional benchmark for April loading compared with $1.55 for March. Saudi Aramco, as the state-run company is known, raised the premiums for other light grades sold to Asia, as well as its Arab Medium crude, and narrowed the discount for Arab Heavy. Aramco also raised the differentials for most grades sold to U.S. customers while cutting the formulas for deliveries to Northwest Europe. Each of the three regions is priced against a different benchmark.

March 3, 2012. Canadian natural gas rose as low prices encouraged power producers to use more of the fuel. Alberta gas for April delivery gained 1.5 cents after falling 37 percent this year, making it more competitive with coal for generating electricity. Nuclear output slipped to a four-month low, raising demand for other fuels. Alberta gas for April delivery was at C$1.81 a gigajoule ($1.74 per million British thermal units). Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp.’s Alberta system. Natural gas for April delivery on the New York Mercantile Exchange rose 2.1 cents to settle at $2.484 per million Btu. Spot gas at the Alliance delivery point near Chicago fell 4.59 cents to $2.4942 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 1.5 billion cubic feet a day from western Canada. At the Kingsgate point on the border of Idaho and British Columbia, gas dropped 6.58 cents, or 2.9 percent, to $2.2145. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 14.08 cents, or 5.8 percent, at $2.2855.

March 2, 2012. Soaring oil prices have displaced Greece’s sovereign debt as a threat to global economic growth and financial markets, HSBC Holdings Plc, Europe’s largest bank by market value, said. Brent crude surged to as much as $128.40 a barrel, the highest since July 2008. Brent for April settlement slipped 1.2 percent to $124.67 on the London-based ICE Futures Europe exchange. Equity investors should “take insurance” by becoming overweight in energy stocks while foreign exchange investors should favor the currencies of oil-producing nations such as Norway, Malaysia, Brazil and Russia.

March 2, 2012. Oil in New York rose above $110 for the first time since May in electronic trading after the floor closed on the New York Mercantile Exchange. Futures in New York gained 1.7 percent in floor trading as U.S. officials escalated warnings that the nation may join Israel in attacking Iran to stop the development of nuclear weapons. The Federal Reserve said that the housing market has shown improvement.

March 1, 2012. Excluding Iran from the global oil market would increase the shortfall between worldwide supply and demand sixfold based on February production and consumption estimates, the U.S. Energy Department said. Global fuel use averaged 3 million barrels a day more than output when Iran is excluded from the calculations and 500,000 more when Iran is included, the department’s Energy Information Administration said in a report.

March 1, 2012. Commodities, led by oil, beat stocks, bonds and the dollar for the first time since July as the European Union prepared to embargo Iranian crude, the U.S. economy improved and China took steps to shore up growth. The Standard & Poor’s GSCI Total Return Index of 24 raw materials rose 6.5 percent in February, extending the previous month’s 2.2 percent gain, as Brent crude advanced 11 percent. The MSCI All-Country World Index of shares increased 4.8 percent, extending stocks’ best start to a year since 1991. Bonds of all types were little changed on average, according to Bank of America Merrill Lynch’s Global Broad Market Index. The Dollar Index slid 0.6 percent.

March 1, 2012. Thirty-eight firms have signed up as possible bidders for 15 oil and gas prospects in the Philippines, including two exploration sites which China claims as its own. This comes on top of forty-two firms that expressed interest in the auction of coal exploration sites offered up under the 4^th Philippine Energy Contracting Round. The list of prospective bidders for oil and gas sites includes giants Shell Philippines Exploration B.V., Total E&P Activities Petrolieres, Esso Exploration International Ltd., French gas and power firm GDF Suez, Spain's Repsol Exploracion S.A. and Italy's ENI. Other bidders include Nido Petroleum Philippines Pty. Ltd., Philex Petroleum Corp. and Mitra Energy. The Energy department also renewed assertions that all of the 15 areas being offered for oil and gas exploration are within Philippine territory.

POWER

March 6, 2012. James Olotu, managing director of Niger Delta Power Holding Company (NDPHC) said with enough gas the country’s power supply would increase to 10,000 megawatts by 2014. The power supply is currently put at 4,300 megawatts. Olotu said if all plants had enough gas, they could deliver 4,770 megawatts of electricity to the consumers by the end of 2013. He said that additional 3,420 megawatts would be injected to the national grid by NIPPs in December.

February 29, 2012. Dominion Virginia Power's planned $1.1 billion natural gas-fired power station in rural Southside Virginia will help make Virginia more energy independent and reduce costs for customers. The Richmond-based utility selected a site in Brunswick County over one in Chesterfield County for a new 1,300- plant, which, if approved by state regulators, would start operations in 2016. Chesterfield has given the utility approval for a new power plant that would be built adjacent to its Chesterfield Power Station at Dutch Gap. The company said Chesterfield is still in consideration for a plant that would be built in 2019, similar to the one in Brunswick. The Brunswick site provides the best alternative to replace generation Dominion Virginia Power is losing with the retirement of several coal-fired units in Hampton Roads, the company said.

March 6, 2012. Iran exported over 8,162 gigawatt hours (GWh) of electricity to the neighboring countries since the beginning of the current calendar year (March 21, 2011), showing some 29 percent rise year on year. Iran has indigenized the technology for building thermal and combined cycle power plants and is now self-sufficient in this field. The country is currently exporting technical and engineering services to different countries for building power plants. Iran is currently building seven large power plants in Syria, Oman, Iraq, and Tajikistan. A number of power plants will be also built by Iran in African states. By the end of the fifth five-year economic development plan (2015), Iran will boost its electricity generation capacity by 25 gigawatts (GW) to reach 73GW. The country’s installed power generation capacity is currently about 64GW. The country’s electricity exports would amount to $1 billion by the end of the current calendar year (March 19, 2012). Iran currently exchanges electricity with Turkey, Armenia, Turkmenistan, Azerbaijan, Pakistan, Afghanistan and Iraq.

March 5, 2012. PowerSecure International, Inc. announced it has been awarded a new contract to build electrical transmission infrastructure to support a series of new oil and gas production sites. The boom in oil and gas drilling and production activity, driven by new low-cost technologies, is driving an immediate need for new electrical infrastructure in remote areas to support these operations. PowerSecure’s work under this new contract will be performed on behalf of a major energy company, in partnership with a prominent electric utility. The award is for several million dollars of electrical transmission design and construction, the majority of which is expected to be completed by mid-2012.

February 29, 2012. The Alberta government is moving forward with the construction of two new electricity transmission lines between Edmonton and Calgary, which will be financed by current users. The recommendations of the Critical Transmission Review Committee have been accepted by the Alberta government. As a result, the government has directed the Alberta Utilities Commission (AUC) to conduct an inquiry that examines ways to reduce the cost impact of the two lines to consumers. The Alberta government appointed an independent panel of four experts to review plans for the construction of two new multibillion-dollar transmission lines, between Edmonton and Calgary. The committee reviewed the Alberta Electric System Operator’s assessment of the electricity transmission requirements in this part of the province, the selection of High Voltage Direct Current technology and the timing of the planned north-south lines.

March 6, 2012. European Union safety tests on nuclear plants should be completed by around the middle of the year as time is needed to ensure they are thorough enough, EU Energy Commissioner Guenther Oettinger said. Oettinger said stress tests would be completed "not later than summer". A June council meeting of energy ministers is expected to receive a report on the stress tests, as has long been planned. The full process might not be completed by then. Oettinger said the tests were strict and objective and sought to establish whether nuclear plants could withstand natural disasters, aircraft crashes, management failures and what systems were in place to deal with power disruptions. The EU embarked on the tests among the 14 member states which operate nuclear plants as a first stage of its response to the Fukushima tragedy. Green groups and politicians have questioned whether the EU is doing enough and Germany last year said it would phase out all its atomic plants by 2022, while Italy voted to ban nuclear power for decades. Oettinger has said the stress tests offer the potential to reassure on nuclear safety well into the future and that cooperation across the bloc on a sensitive issue was significant progress.

March 5, 2012. A group of investors announced the construction of a natural gas-fired power plant with a capacity to produce 300 megawatts, to be built next to the port near the town Pepillo Salcedo, northwestern Montecristi Province. The company North Central Energy, SRL (NEC)  said the liquefied natural gas-fired plant’s first stage will cost US$167.0 million to build, and will participate mostly U.S. but also Dominican investors.

March 5, 2012. Scotland may extend the life of the country’s two nuclear plants, which are operated by Electricite de France SA, to help the transition to producing all of its electricity from renewable sources by 2020. The Scottish government said it still plans to phase out nuclear power over time and rely on cleaner thermal energy to reduce carbon emissions. It said it was on track to meet the target in eight years time. The Scottish administration in Edinburgh, which is campaigning for independence from the rest of Britain, has the most ambitious target in the European Union for generating electricity from wind, hydro and marine energy. Its nuclear policy differs from the U.K. government, which has agreed to build more power stations as part of its strategy of meeting EU targets to cut carbon emissions. Electricite de France is planning to submit plans to extend the operating life of the Torness and Hunterston plants in Scotland by at least five years, the government said. Hunterston, which is situated on the west coast south of Glasgow, is otherwise due to close in 2016. Torness, which is east of Edinburgh, is scheduled to shut in 2023.

March 2, 2012. Japan’s failure to resume its atomic plants would be a “disaster” for the country because of its limited alternatives, said Nobuo Tanaka, the International Energy Agency’s former executive director. Japan’s diminished nuclear capacity makes it especially vulnerable to the potential loss of crude supplies if Iran disrupts shipments through the Strait of Hormuz, Tanaka said. Every one of Japan’s 54 nuclear reactors may be shut by late April for scheduled maintenance and safety tests following the radioactive leak at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant that followed the March 11 earthquake. Tanaka said he has advised government officials to integrate Japan’s electricity grid with Russia’s and South Korea’s to increase the island nation’s diversity of power sources. Blackouts following the loss of the Fukushima nuclear plant were a result of utilities’ over-reliance on a single power source and their resistance to allowing competing generation companies to access their grids, he said.

March 2, 2012. The U.S. Nuclear Regulatory Commission moved closer to imposing tougher safeguards at the nation’s reactors, a year after a disaster in Japan that triggered radiation leaks from a crippled power plant. A majority of commissioners led by Chairman Gregory Jaczko voted to issue three orders for safety steps at 104 operating reactors. The agency now will complete writing of the rules for release by March 9. Companies including Southern Co. and Exelon Corp. would have until early next year to write a plan and comply by 2016.

March 5, 2012. Bharat Heavy Electricals Ltd (BHEL) said it has commissioned 13-MW of solar power plants in various parts of the country during the current financial year. The projects commissioned by the company during the year include a 3-mw grid connected solar plant at Raichur in Karnataka, a 5-MW plant in Rajasthan, 2 plants of 2-MW each in Maharashtra and over 1-MW in Lakshadweep. All these projects have been commissioned by BHEL on engineering, procurement and construction basis. The company is further executing 7.5-MW solar power projects for various companies and they are in the final stages of commissioning, it said.

March 5, 2012. Wind turbine major Suzlon's subsidiary SEFORGE secured a contract worth ` 367 crore for supplying equipment for wind towers over a period of three years, the company said. SEFORGE signed a purchase agreement with a leading wind turbine manufacturer for the supply of equipment used for building wind towers, Suzlon said. The ` 367 crore contract covers supply of flanges (used for wind turbine towers) for projects in India and international markets, the company said.

March 1, 2012. India will encourage local manufacturers of solar power equipment and restrict imports to help domestic industry grow in the competitive environment, minister for new and renewable energy Farooq Abdullah said. The approach would be reflected in the second phase of the Jawaharlal Nehru National Solar Mission (JNNSM), he said. He said that the foreign companies must set up manufacturing facilities along with research and development centres if they want to enter India for solar power generation. The minister's comments will cheer domestic players who have been asking the government to curb foreign involvement in the solar mission as it is hitting their market. Foreign companies have recently quoted and won bids at abnormally low prices - as low as 7.18 per unit for solar power - which domestic manufacturers say was possible because Indian players get lower subsidy.

March 1, 2012. Suzlon Energy's subsidiary, REpower Systems SE has signed an agreement with a consortium of banks led by BayernLB, Commerzbank Aktiengesellschaft and Deutsche Bank AG for a syndicated loan of 750.0 million euros. Loss making-Suzlon Energy has adopted a strategy of incurring capex on a "must have" basis given the huge debt it needs to service and the poor health of the wind energy market globally. The Indian wind turbine major has put on priority REpower's capex "only for offshore and multi MW turbine manufacturing."

March 1, 2012. The Ministry of New and Renewable Energy is seeking extension of existing incentives for the wind energy sector in the upcoming Union Budget. This would ensure growth momentum in the coming years after the sector added record 10,500 megawatt in the 11th five year plan. The sector is expected to add another 15,000 MW in the next five years. In the past, wind energy has thrived even as other sectors missed targets. It was helped by generation-based incentives to independent power producers and accelerated depreciation available to captive users - both of which expire in March.

March 6, 2012. Japan said it will decide on a new emissions reduction target for 2020 this summer after a revision of its energy and environment goals prompted by the nuclear power accident at Fukushima. Japan is developing “new energy policies from scratch”. The country’s existing pledge is to cut emissions by 25 percent from 1990 levels in 2020. It will propose a new target “this spring” and set policy in the summer, after “public consideration”.

March 6, 2012. The price for wind turbines fell 4 percent to the lowest since at least 2008 because of competition from Chinese manufacturers and excess capacity to build the machines. Turbine contracts signed in the second half of 2011 for delivery in 2013 dropped to 910,000 euros ($1.2 million) a megawatt compared with the previous six months. The price was the lowest since the analyst began tracking prices in June 2008 and down from as much as 1.21 million euros a megawatt in 2009. Competition in the market for wind turbines has depressed prices worldwide, trimming profits at companies led by Vestas Wind Systems A/S, the world’s largest turbine maker. Vestas, based in Aarhus, Denmark, reported a loss four times wider than analyst estimates in February, squeezed by Chinese competition including from Sinovel Wind Group Co. and Xinjiang Goldwind Science & Technology Co.

March 6, 2012. The European Union should avoid “spoiling” its carbon market with measures to bolster emission prices by withholding permits or changing the bloc’s pollution caps, according to Poland’s Environment Minister Marcin Korolec. The 27-nation bloc’s environment ministers are scheduled to meet in Brussels on March 9 to discuss climate strategy. The EU should stick to its current target to reduce emissions by 20 percent in 2020 compared with 1990 levels and refrain from steps that would change the design of the carbon market.

March 6, 2012. The European Union needs to “reactivate” its emissions trading system after carbon prices fell to a record low earlier this year, the bloc’s energy chief said. The European Parliament’s industry committee backed an option of withholding permits in the ETS in a draft amendment to an energy efficiency law. The amendment is not “a direct instrument for our energy efficiency directive,” Oettinger said. It will be a point in our agenda in the summer this year.

March 6, 2012. Coal-seam gas explorers including AGL Energy Ltd. and Santos Ltd. that are active in Australia’s Queensland and New South Wales states face the risk of higher costs and delays because of stricter rules, Deutsche Bank said. Queensland’s Liberal National Party, expected to win the March 24 state election, proposes regulatory changes, including “full and fair” compensation to landowners, that may increase the cost of new coal-seam gas wells. The New South Wales government plans to release the results of an environmental and safety review of the coal-seam gas industry in the coming months that may lead to additional rules. The state also may remove a royalty discount for coal-seam gas companies, bringing its policy in line with other states. AGL, Santos, Dart Energy Ltd. and Arrow Energy Ltd. are among companies developing coal-seam gas projects on the east coast of Australia to meet rising demand for the fuel. Some environmental groups and politicians are concerned the projects will damage aquifers, contaminate and deplete water supplies, and diminish the capacity of food-producing land.

March 5, 2012. Natural gas, which already is edging aside coal in American electricity generation, would be one of the biggest beneficiaries of a clean-energy mandate for utilities under consideration in Congress this year. Senator Jeff Bingaman, a New Mexico Democrat and chairman of the Energy and Natural Resources Committee, introduced a measure to force electricity companies to use an increasing share of energy produced from “clean” sources over the next two decades. The bill reshapes the energy debate by calling for sources that emit less carbon than coal, a definition that includes natural gas, instead of focusing on zero-emission renewable sources such as wind and solar. While the proposal faces long odds of getting enacted this year, Bingaman’s plan may gain a powerful ally -- and new opposition from environmental groups. Bingaman’s clean-energy mandate may benefit companies like Exxon Mobil Corp. of Irving, Texas and Oklahoma City-based Chesapeake Energy Corp., the two largest producers of natural gas in the U.S.

March 5, 2012. The Scottish government plans to fit carbon capture and storage at all coal plants by 2025 and said demonstrating the technology could generate 3.5 billion pounds ($5.6 billion) in the next decade. The government plans to complete a review by 2018. All coal plant applications must demonstrate CCS on at least 300 megawatts of capacity, and from 2020, they will require CCS for all their capacity. CCS technology sequesters emissions from fossil fuels, allowing coal plants to keep delivering a baseload of electricity without releasing pollution as Scotland transitions to renewable energy sources. The nation plans to get 100 percent of its electricity from technologies including wind, wave and biomass by 2020. Successful demonstration of CCS technology in Scotland could create as many as 5,000 jobs over the decade.

March 5, 2012. Webco, a Kenyan company backed by investors from the U.K., China and Qatar, will build a 12 billion-shilling ($144.4 million) biofuel plant that will begin trial operations next year. The facility will produce ethanol from tropical sugar beet. The fuel will be sold in bulk to KenolKobil Ltd. and the state-owned National Oil Corp. for blending with gasoline and distribution in Kenya.

March 5, 2012. Dovre Group Plc, a Finnish project management services provider, bought a minority stake in Sararasa Biomass Pte. Ltd. to expand into renewable energy. Dovre will invest about 1.4 million euros ($1.9 million) in Sararasa’s first project, an Indonesian plant making pellets from wood waste materials. Stahl Capital Ltd., a financial investor, also owns the plant. Sararasa, based in Singapore, makes pellets made from waste such as sawdust or shavings for use in power plants in Asia. The waste material is compressed under high pressure to form pellets that are a “virtually carbon dioxide neutral” source of energy. The company, which had net sales of 73 million euros, is studying developing, financing and managing renewable energy projects with local developers.

March 5, 2012. Iberdrola SA, the world’s largest owner of wind parks, finished building a 304 MW station in the U.S that’s one of the world’s largest wind farms. Iberdrola has an agreement to sell electricity produced by the Blue Creek power plant in Ohio. The wind farm uses turbines made by Gamesa Corp. Tecnologica SA of Spain.

March 5, 2012. China, the world’s fastest-growing major economy, plans to cut energy use per unit of gross domestic unit by 3.5 percent after missing the same target in 2011. The government also wants to reduce carbon dioxide emissions by at least 3.5 percent and sulfur dioxide emissions by 2 percent. The government’s attempt to meet last year’s energy- conservation goal by shutting inefficient factories failed as energy use rose at the fastest pace in four years. Consumption per unit of gross domestic product fell 2.01 percent in 2011.

China’s power generation will rise 7.5 percent to 5.05 trillion kilowatt-hours this year, according to the report. Coal production will climb 3.7 percent to 3.65 billion metric tons, while crude-oil output will be unchanged at 204 million tons. Electricity generation increased 11.7 percent, while coal output rose 8.7 percent and crude production advanced 0.3 percent. China cut its economic growth target to 7.5 percent for this year after aiming for 8 percent every year since 2005.

March 5, 2012. Four times, the U.S. Energy Department offered terms to Bright Automotive Inc. for a loan the startup company was seeking to finance production of electric commercial vans. Each successive, conditional offer arrived with stiffer terms. While Energy Secretary Steven Chu says the vehicle program is evaluating applications, it hasn’t awarded new money since the bankruptcy of solar-panel maker Solyndra LLC, which won a $535 million loan guarantee through another department program. Solyndra’s bankruptcy filing put a damper on all Energy Department loans. The $25 billion vehicle-loan program, created in 2008, last made an award in March 2011.

March 5, 2012. A unit of Softbank Corp. will build a solar power plant in Japan’s central Gunma prefecture. Sharp Corp. will build the 2.4-megawatt plant, and Softbank plans to begin operations in July.

March 3, 2012. Engineering professor Donald Sadoway used an old-school chalk board at the prestigious TED gathering to write the formula for a liquid battery that could one day cut the need for new power plants. Inexpensive batteries made from liquid metal could store electricity from solar panels, wind farms, or existing generation facilities and save it for when it is most needed. That would be a major change from consume-it-now-or-lose-it systems.

Sadoway and his team of students at Massachusetts Institute of Technology were so confident in their creation that they started Liquid Metal Battery Corporation and plan to have bistro-table size models out in two years. Microsoft co-founder Bill Gates is among the company’s backers. The company plans to eventually bring to market a liquid battery the size of a 40-foot shipping container and capable of holding enough electricity to serve the daily needs of 200 typical US households. The key metals in the battery are common vanadium and magnesium, the professor explained as he chalked a basic chemical equation on the board.

March 2, 2012. Turkey’s Agaoglu Group, which has interests in construction, tourism and energy, is in final stages of talks with eight energy and private equity investors to sell 147 MW of wind plants, chairman Ali Agaoglu said. The Istanbul-based group is negotiating with four energy companies and four private equity funds, Agaoglu, the 10th richest man in Turkey.

March 2, 2012. Sugarcane-based electricity generation projects in Brazil are being blown out of the water by wind power and other lower-cost energy alternatives, slowing ambitions to expand one of Brazil's largest potential new sources of clean energy, experts said. The world's No. 1 sugar producer and No. 2 ethanol maker amasses 140 million tonnes a year of bagasse from crushed cane, some of which is burnt in high-efficiency boilers to crank generators supplying a hitherto growing share of Brazil's power. The sugarcane industry estimates bagasse could generate 15,300 megawatts (MW) of electricity by 2020, roughly the entire annual needs of Ecuador and about a fifth of its own -- but only if it can be made competitive with cheaper wind and natural gas.

March 2, 2012. IG Metall, Europe’s biggest trade union, asked the German government to soften planned cuts to solar subsidies to avoid an increase risk of bankruptcies. A plan to curb subsidies by as much as 29 percent may spread insecurity with investors and fail to reduce costs substantially, IG Metall, which represents about 3.6 million workers, said in a letter to Environment Minister Norbert Roettgen and Economy Minister Philipp Roesler. Germany, home to manufacturers including Q-Cells SE and Conergy AG, should instead provide state loans for domestic companies to help them survive the threat posed by Chinese competition, the union said.

March 2, 2012. TIAA-CREF, the manager of retirement accounts for teachers, formed a joint venture with an Alaskan Native American-owned holding company to invest in North American wind power. The venture, Capistrano Wind Partners LLC, is using $238 million from TIAA-CREF and Cook Inlet Region Inc. to acquire three operating wind farms from a unit of Edison International (EIX). Capistrano bought the 61-megawatt Mountain Wind I and 80- megawatt Mountain Wind II projects in Wyoming, and the 150- megawatt Cedro Hill project in Texas.

TIAA-CREF and Cook Inlet plan to invest a total of $460 million in the venture, which will eventually buy as many as seven Edison Mission Group wind projects with a total of 500 megawatts of capacity. That includes the 42-megawatt Crofton Bluffs and the 80-megawatt Broken Bow wind farms in Nebraska that Capistrano expects to acquire when they go into operation. Edison Mission Group owns 31 wind projects that are either in operation or under construction in 11 U.S. states with a total of 2,000 megawatts of capacity. Marathon Capital LLC advised Edison on the deal, and Gibson, Dunn & Crutcher LLP provided legal counsel.

March 2, 2012. SMA Solar Technology AG, Germany’s biggest solar-energy company by market value, slumped to its lowest value since April 2009 after it predicted declining sales and earnings because of subsidy cuts.

March 1, 2012. The U.S. Commerce Department delayed a decision on additional tariffs for Chinese solar-equipment makers until March 19. The decision, scheduled for, is being postponed because of the “extraordinarily complicated” investigation. U.S. solar-equipment manufacturers, led by SolarWorld AG’s U.S. unit, claim they are being harmed because China’s government uses cash grants, discounts on raw materials, preferential loans and tax incentives, and manipulates its currency to boost exports of solar cells.

March 1, 2012. A General Electric Co. unit bought a $100 million stake in a 127-megawatt solar project that LS Power Group is developing in Arizona. The $550 million Arlington Valley Solar Energy II project near Arlington, Arizona, is expected to be complete at the end of 2013 and will sell power to Sempra Energy’s San Diego Gas & Electric Co., Stamford, Connecticut-based GE Energy Financial Services Inc. said. GE Energy Financial Services more than doubled its investment in solar energy in the past year to more than $1.4 billion. The company has backed projects in Australia, Canada, Italy, Portugal, the U.S. and Spain valued at almost $5 billion.

March 1, 2012. Warren Buffett’s MidAmerican Energy Holdings Co. is planning a second round of bonds to finance its $2.4 billion Topaz Solar Farm in California after investors sought more of the debt than was offered in the first public issuance for a U.S. photovoltaic power project. The first Topaz bond offering, for $850 million, was oversubscribed by more than $400 million. Fitch Ratings, which gave the deal its lowest investment-grade rating of BBB-, said the second tranche will probably cover the balance of the $1.265 billion in debt MidAmerican needs to complete the 550-megawatt project.

The demand shows that renewable-energy projects, which provide reliable revenue through long-term contracts to sell power to utilities, are becoming more appealing to investors, said Chris Yonan, a project finance director at Barclays Capital, which led a group of investment banks in underwriting the debt. MidAmerican, a unit of Berkshire Hathaway Inc., has been expanding its investments in renewable energy as it adds to its portfolio of coal and natural gas. The company created a business unit in January to support investments in wind, geothermal, solar and hydroelectric projects.

March 1, 2012. Ethanol producers in Brazil will receive as much as 4.5 billion reais ($2.6 billion) of government financing to stockpile fuel as the South American nation seeks to stabilize prices. The loans will carry annual interest rates of 8.7 percent and allow mills to store 3.7 billion liters (1 billion gallons) of ethanol. The funds will help companies comply with a government regulation that requires them to store ethanol to avert a repeat of last year’s price spike in the renewable fuel.

Prices of anhydrous ethanol, which is mixed with gasoline, rose 30 percent to 2.30 reais a liter in April from December 2010, when mills in the south shut down between crops. Brazil will require mills to keep 40 days of production in stock through the harvest year as of April 2013.

February 29, 2012. Chancellor Angela Merkel’s Cabinet backed measures giving ministers authority to adjust subsidies for renewable energy in Germany, a move the industry says will destabilize its ability to finance plants. A draft from the environment and economy ministries endorsed by the Cabinet includes a clause that enables officials to change rates paid for solar power without fresh backing from parliament. It would come into force should installations exceed a government target of 2.5 gigawatts to 3.5 gigawatts a year. Germany, the world’s largest solar market, wants to cut in half the annual pace of installations after incentives for the industry pushed capacity past government targets. Merkel is encouraging renewables as a replacement for nuclear power stations that close by 2022.

February 29, 2012. Abound Solar Inc., which received a $400 million U.S. loan guarantee to build two factories, shut down production and fired 180 people after panel prices fell by half last year. Abound stopped making its first-generation solar panels and will refit its manufacturing lines to produce more efficient products. The move is a response to the same forces that drove Solyndra LLC into bankruptcy after it received a $535 million loan guarantee from the same U.S. Energy Department program. The company expects to resume full production by year-end with cadmium-telluride panels that will be able to convert 12.5 percent to 13 percent of the energy in sunlight into electricity. Its current products have conversion efficiency rates of 10.5 percent.

February 29, 2012. Yingli Green Energy Holding Co., the sixth-biggest silicon-based solar module maker, said it expects shipments to rise as much as 56 percent after a slump in the fourth quarter when the market was oversupplied. The company forecast module shipments of 2.4 gigawatts to 2.5 gigawatts, compared to 1.6 gigawatts during 2011. Shipments in the fourth quarter were down 30 percent from the third quarter as gross margins slipped to 3 percent from 10.8 percent. Yingli posted a net loss of $509.8 million for the full year even as it increased shipments by 51 percent from 2010. The industry experienced “tremendous” pressure on margins as manufacturers boosted supply while European nations that are the biggest solar markets cut incentives for the technology. Yingli, based in Baoding, increased its sales in China, the country it sees as one of the most promising markets. The company’s sales there rose to 22 percent of its output, compared to 6 percent a year ago, and are forecast to reach 35 percent.

• Energy
• China
• India
• Energy

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