MonitorsPublished on Apr 17, 2012
Energy News Monitor I Volume VIII, Issue 44
Ministry for Cyclists and Pedestrians?

Lydia Powell, Observer Research Foundation


he Delhi High Court recently ruled that the Delhi Municipal Corporation’s policy of limiting the number of cycle rickshaws in Delhi is unconstitutional. Thus far, at least in theory, the Delhi Municipal Commission has limited the number of cycle rickshaws to 100,000 and also restricted areas in which rickshaws could be used. In practice the restriction has only served as a stick to beat poor rickshaw pullers with and extract a regular rent. By some accounts there are millions of ‘illegal’ cycle rickshaws in Delhi which have to routinely bribe municipal authorities and in addition put up with verbal and physical abuse from motorized vehicle owners.

The verdict of the esteemed judges was based on the constitutional provision of the right to a livelihood but it also included strong comments that favoured non motorized transport. The court threw out the Municipal Corporation’s argument that cycle rickshaws cause congestion, saying that the municipal corporation’s policy of setting limits on the number of cycle rickshaws as arbitrary especially when it refuses to limit the number of motorized vehicles which causes more congestion. To reconcile government policy with legal ruling the court also ordered a committee to look into congestion pricing and other mechanisms to reduce the number of vehicles in the city.

The consumption of transportation per capita in India is among the lowest in the world today but it is projected to increase exponentially in the future. The underlying assumption in India’s current infrastructure policy that emphasizes building roads, multilane highways, metropolitan and national rail networks, airports and ports is that increasing per capita availability of motorized mobility would necessarily lead to access and opportunity and lead to overall growth. This is not necessarily true. Even if India 'grows' to match per capita consumption of transportation of the industrialised world, it may not actually increase opportunities accessed per unit time or per unit cost for everyone. Motorized road transport may actually price the ‘transport-poor’ in India out of access to opportunities. Demand for mobility is actually derived demand for ‘access’. If access is improved through proper urban planning, the demand for mobility will decrease.

From the perspective of transport systems behavior, there is no need for ‘growth in mobility’ if mobility is defined in terms of its purpose. Purposeful mobility measured in terms of the number of trips that have to be made by a person per day to meet particular needs is more or less a constant. Purposeful mobility needs to increase only when the number of people in a given area increases.  Second, in any transport system, increase in speed does not necessarily save time. To understand why, we need to see each ‘trip’ in terms of its origin and destination. History has shown that increase in speed moved either the origin (e.g. home) or the destination (e.g. office) with time for travel remaining the same.  In other words, speed changed physical structures rather than changing travel time. Third, freedom of choice does not increase when the number of modes of transport is increased. Freedom of choice is a question of economics. Those who cannot afford certain modes of transport do not have freedom of choice.

Motorized transport also thrives on externalization of its true costs such as energy price, pollution (noise & atmospheric) and congestion.  Motorised transport receives a substantial implicit subsidy in the form of access to publicly owned spaces at almost no cost. In Delhi private motorized transport vehicles can be parked in public places including pavements meant for pedestrians, at little or no cost. This is true even in areas where the real estate value is among the highest in the World. A level playing field for rickshaws, cycles, pedestrians and motorized vehicles should index parking charges to real estate values and take into account area occupied when parked.  It should also price congestion, and pollution.

In commercial areas the introduction of motorized transport to replace cycles and cycle rickshaws in the name of reducing congestion or improving speed actually reduces economic value of the region.  The reduction in the number of slow moving pedestrians and cycle rickshaws reduces the number of economic exchanges and thus reduces financial turnover of the region. Prof. Hermann Knoflache, a transport systems expert from the Technical University of Austria has shown that the introduction of supposedly ‘green’ motorized vehicles that displaced rickshaws in the Chadni Chowk area of Delhi reduced turnover of the area by half. On the advice of the Professor the Vienna city centre which saw over 60,000 cars per day introduced an underground public transport system in 1974 and suspended private vehicle traffic. This transformed the city from one of economic and social decline to one of thriving social interaction and growing economic activity. This can happen in Delhi but as the learned professor rightly observed, first a Ministry for Pedestrians and Cyclists may have to be created!



Auctioning New Coal Blocks Unlikely to Increase Supply

Ashish Gupta, Observer Research Foundation


apid growth in economy has led to burgeoning demand for power but coal supply has become a major issue.  Initiatives have been taken by the government for bridging the coal demand supply gap but the ultimate result is not as good as expected. The major failure on the part of the government as portrayed by the business media is that the coal block allocation policy which was meant to increase the coal supply in the country has failed. Though the step to include the private sector was good in principle, execution has left much to be desired. The recent announcement that came from the government for auctioning new coal blocks may also not serve any purpose.

The move is simply questionable on the ground that the government has not learnt from the past. Many blocks have been allocated but very few are in operation now.  So, the question here is what incentives will induce the companies to go for these new blocks when potential bidders can see how companies with the blocks allocated to them are struggling. The new coal blocks will not come into production until and unless CIL provides tapering linkage, which has also been progressing slowly. CIL has been reluctant to commit to the Fuel Supply Agreement (FSA) and diluted its penalty obligation to 0.01% from the current stipulated 10% and that too after three years from the date of signing the FSA.

The government should expedite the clearance process of non-operational coal blocks as private captive production has performed above expectation. Aspects such as land acquisition, environmental clearance, forest clearance etc need due consideration if government wants to make the auction process more robust than the allocation rounds.  The government should include those blocks which are not in expansion plan list of CIL/ SCCL and which are simply excluded because of their proximity to them. The policy states that blocks should at a “reasonable” distance from the existing mines of CIL. In the context of inadequate infrastructure associated with the captive coal blocks, it should be considered that the distance should not be at a disadvantage to the coal block developer in terms of available infrastructure and other facilities. Finally the Government should learn from best practices in Australia and Canada where allocation is done through a single window approach, consolidating procedures of three to four government agencies.  In India bidders have to take approvals from different authorities at central, state and district level with so many departments having little or no coordination amongst them.

It is unlikely that the need to move towards global bench marks will be taken seriously by the Government as both the government and CIL have shown a relatively non-committal attitude towards solving the coal supply problem. In this light it may be better for the government to expedite the process of clearing approvals for the non-operational allocated blocks. This will save lot of money and time for the nations and for the coal industry. 


No More Concrete for Ganga?

Sonali Mittra, Observer Research Foundation


hird meeting of the National Ganga River Basin Authority (NGRBA) on Tuesday, 18th April 2012, headed by Prime Minister Manmohan Singh sought more pledges and reinforced the immediate need to preserve and conserve the Ganga. Notwithstanding the usual and already known objectives of the NGRBA, the issues related to hydropower development in Ganga received attention of no consequence. Social activists, environmentalists and scholars were expecting clear assurances from the government especially after the report prepared by the Wildlife Institute of India (WII), which strongly discouraged building of 34 dams proposed earlier on the Alaknanda and Bhagirathi.

Ganga, as it is known for its holy and cultural significance, has seen an exponential increase in the development of its basin. The highly productive agricultural land, rapid urbanization has left the river under immense pressure to meet the demands for water and power. The basic problem, although not unique to Ganga River basin, remains to be efficient utilization of the water resource, its conservation and preservation. Age-old infrastructure, trivial misconceptions about engineering models of river management and increasing demands are adding no less to the dying river.

The hydro-electric potential of the Ganga basin has been assessed as 10,715 MW at 60% load factor, Out of the 142 identified schemes in the basin, 22 schemes with a total installed capacity of 2437 MW are in operation and 12 schemes with an installed capacity of about 2716 MW are in various stages of construction.

With the environmental and social impacts now being felt by the population living in the regions, the projects under construction and proposed projects are facing major delays due to social protests and disapprovals from the Ministry of Environment and Forest. The delays in projects are leading to huge cost overruns making it further an unviable source of energy production. Furthermore, the categorization of large dams under ‘renewable energy’ is being debated heavily for being virtually ‘green’. Studies have shown that methane, emitted from the reservoirs, is more potent as a greenhouse gas than carbon dioxide. Amidst, all the arguments for and against the large dams, government of India has failed to take any effective steps in countering these facts of the matter, while proposing new hydro-projects.

The debates over large hydropower between the government and the activists has been raging for over years now but the balance between economic development and environmental sustainability is far from being a reality. For states like Uttrakhand, where hydro projects are seen to be playing a pivotal role in improving the economy of the state; in Bihar and Uttar Pradesh, dams and reservoirs have contributed to the huge loss of biodiversity and ecological integrity, which is usually not quantified in economic terms. This is not to say that hydropower is not required, but to encourage the alternatives which may be more cost-effective and environment friendly.


Is the US Going to be the Next Oil Super-Power?

                                         R S Kalha*


he US an oil super-power? It may sound incredible, but if oil industry sources are to be believed there is intense speculation that this might just be so. As a result of new technology it is now possible to drill for oil where previously it was thought impossible. This new technology is referred to as hydraulic ‘fracking’ and horizontal drilling. This is a process whereby water under very high pressure is pumped into the well and which then breaks up shale and other rock formations which then releases millions of tons of oil and natural gas trapped inside.

Geologists in the United States have long known that shale basins across the United States, like the Bakken field in North Dakota, Eagle Ford and Barnett in Texas, and the Marcellus in the northeast, held tremendous oil and gas reserves. But energy companies had no economic way to collect them until new technology recently changed all that.  The results have been impressive. Production from the Bakken region alone has gone from negligible quantities to 500,000 barrels of oil a day in the last few years. Similarly oil production at Eagle Ford had been negligible and which was estimated at just about 787 barrels in 2004. Last year, its production reached 30.5 million barrels, according to local state regulators, and it is still growing. Natural gas production there went from nothing to 243 billion cubic feet in just three years. Some experts are even more bullish and have forecast that North American oil production could reach an astounding 27 million barrels a day by 2020, almost twice the rate of production of 15 million barrels a day at the end of 2011. Production from the United States could grow to 15.6 million barrels a day by 2020, up from nine million barrels a day in 2011.

As the position stands today the United States is already in a position to reduce the demand for oil imported from abroad to fulfil its domestic needs. Presently the United States consumes nearly 25% of the total world production. Imports by the United States fell from 65 percent of total domestic demand, or 13.5 million barrels a day, their peak in 2005, to 9.8 million barrels a day in 2011, or 52 percent of demand. Oil industry experts predict that US imports would keep falling, reaching 4.5 million barrels a day — or just a quarter of domestic oil demand — by 2015. By 2020, they forecast, the United States would not need to import foreign oil anymore. This very welcome situation has also developed due to better performance and less guzzling of ‘gas’ by new model automobiles and with the advent of the internet less urge to travel by Americans.

If what is predicted were to come true it would have profound political and economic repercussions. For one the dependence of the United States on Middle East oil would turn negative. Successive US Administrations over the years have made the unfettered access to Middle-East oil a point of vital national security. In fact the US has been even ready to use force if necessary to secure such access. It is not surprising therefore given the instability that persists in the Middle–East that the United States has steadily lessened its dependence on Middle East oil by importing oil from outside this area principally from Venezuela, Nigeria, Canada and Mexico. Saudi Arabia is the only Middle-East country that figures in the list of top five exporters of oil to the United States. With the dependence on Middle-East oil turning negative, the US will probably lose interest and will become even less prone to interfere in the internal affairs of the region. Certainly it will be less prone to undertake any military adventures of the type witnessed when it intervened in Iraq. As most countries, both exporters and importers of Middle-East oil, have largely traded under the security umbrella of the US; a whole new ball game might emerge.

Another far reaching development that might emerge would be that sentiment in the United States towards isolationism and neutralism would probably become more pronounced. While it is difficult to envisage a total withdrawal of interest in the affairs of the world, yet the propensity to send US troops abroad would be severely curtailed. The US would probably not fight the wars of ‘ideology’—to save the world from communism that it did in the aftermath of the Second World War. Nevertheless selective action as it does at present would probably continue; the battle against terrorism and states that provide succour to terrorists still has to be won.

Economically too there could be significant changes within the United States. Cheaper energy costs — particularly for natural gas — would benefit a variety of domestic industries, like chemicals, pharmaceuticals and fertilizers. The rise in natural gas production has already led many utility companies to shift their electrical production away from coal. With what the world witnessed as the tsunami struck Japan most people would to question the talk of a nuclear revival in the United States. It is quite possible that progress towards better technology in the fields of solar and wind power that might make them viable alternative sources might just be retarded. Some economists feel that ample gas supplies might also provide the basis for a resurgence of American manufacturing, which has been battered by high energy costs for much of the last decade.

Nevertheless it is time for national security analysts around the world to at least begin assessing the future possibilities in the light of recent new technological developments within the United States. Whatever policy the US follows will undoubtedly have world-wide repercussions! 


Views are those of the author

* The author is a former Secretary, Ministry of External Affairs.

Author can be contacted at [email protected]


Renewable Energy Scenario 2011-12: India

Akhilesh Sati, Observer Research Foundation


I. Power from renewables in MW

As on January 31, 2012

As on March 31, 2011

% increase

A. Grid Interactive Power

Wind Power




Small Hydro Power




Biomass Power




Bagasse Cogeneration




Waste to Power (Urban & Inustrial)




Solar Power (SPV)




Sub total (A)




B. Off grid/captive power

Waste to energy (urban and industrial)




Biomass (non-bagasse) cogeneration




Biomass gasifier (rural and industrial)




Aero-generators/hybrid systems




SPV systems (>1 kW)




Watermills/micro hydel (in numbers)




Sub total (B)




Total (A+B)




II. Remote Village Electrification (villages/hamlets)




III. Other renewable energy systems

Family type biogas plants (in lakh)




Solar water heating systems-collector area (million sq m)




Source: Ministry of New and Renewable Energy.






DGH wants Oil Min to decide on RIL-BP request

April 15, 2012. Upstream regulator DGH has asked the Oil Ministry to take a call on allowing RIL and its partner BP plc to invest in pre-development activities in 16 gas discoveries in KG-D6 block, most of which have not yet been proved to be commercially viable at current prices. RIL and BP Plc of UK had proposed to undertake concept validation and Front End Engineering Design (FEED) for all the 16 discoveries surrounding the currently producing Dhirubhai-1 and 3 gas fields in KG-D6 block. The Directorate General of Hydrocarbons (DGH) feels any investment which can be recovered from gas sales revenues has to be restricted to fields which have either been proved commercially viable or whose field development plan has been approved.

RIL can raise KG-D6 output with more drilling, tech

April 12, 2012. Reliance Industries (RIL) will be able to raise gas production from the D6 block with the help of additional drilling and appropriate technology but current gas prices are too low to justify more investment, a report from Bernstein Research said. Output at the D6 block has dropped sharply, creating a severe shortage of natural gas. Reliance Industries attributes the decline to geological complexities, while the Directorate General of Hydrocarbons (DGH) has accused the company of not drilling the required number of wells to produce more gas. Bernstein Research agrees with Reliance's diagnosis. Output from the field is also expected to decline further, it said. The geological complexity includes presence of sandy formations that obstruct the flow of gas within the reservoir and ingress of water and sand into the wells. This problem can be resolved, if more money is spent, it said. It said pricing reforms by the government would trigger a new wave of exploration and development in offshore regions of India, which remain vastly under-explored. Reliance itself has been able to develop only three of its offshore discoveries.


Refiners threaten to raise gasoline prices

April 17, 2012. State-run fuel retailers have threatened to raise gasoline prices sharply if the government does not compensate them for revenue losses on retail sales, Indian Oil Corp said. It said the government should 'temporarily' consider gasoline as a regulated commodity on a par with other subsidised fuels - diesel, cooking gas and kerosene - and provide cash compensation for retail sales or reduce factory gate tax on the fuel to the extent of revenue losses. IOC said state-run refiners cannot sustain the current scenario where they import crude oil at $121.29 per barrel and sell at $109.03 per barrel. The companies previously raised gasoline prices on Dec. 1. State-run oil companies have served an ultimatum to the government that they will raise petrol prices by ` 9.6 a litre if excise duty is not cut or they are not provided compensation for ` 49-crore per day loss on fuel sale. IOC, together with Hindustan Petroleum and Bharat Petroleum, is losing ` 49 crore per day on petrol sale alone. They are losing another ` 573 crore every day on selling diesel, domestic LPG and kerosene below cost. Oil PSUs in the first 15 days of April lost ` 745 crore in revenue on petrol, whose pricing was freed from the government control in June 2010. But rarely have the product prices moved in tandem with cost as oil companies bowed to government diktats. The states also levy VAT or sales tax ranging from 15 per cent to 33 per cent (` 10.30 a litre to ` 18.74 per litre), which too can be cut to avoid a price hike.

India oil refining capacity to surge 46 pc

April 16, 2012. India's oil refining capacity will exceed 6.2 million barrels per day (bpd) by March 2017 from about 4.26 million bpd. India and other emerging markets are boosting refining capacity to feed rising regional demand, while their counterparts in the United States and Europe restructure or shut plants as fuel sales slow. India's oil consumption is set to grow by over 4 percent in the next 10-15 years as compared to the global oil demand growth of only 0.8 percent.

India HPCL seeks sweet crude for June

April 16, 2012. State-owned Indian refiner Hindustan Petroleum Corp (HPCL) issued a tender seeking crude for June loading after a four-month gap. The refiner is seeking 1 million barrels of sweet crude for loading on June 18-20. Part one of the tender will close on April 18 while price offers are due on April 19. The offers will stay valid until April 20. HPCL last bought 1.95 million barrels of Nigerian Brass River and Azeri Light for January-February loading in December. India could import about 8 percent more oil or at least 260,000 barrels per day (bpd) in the next fiscal year as the Bathinda refinery is now fully functional and Essar Oil has added more capacity - even though imports from Iran will fall.

Trafigura's 1st Asia refinery investment in India; BP out

April 12, 2012. Oil trader Trafigura has made its first move into refining in Asia, investing up to $130 million for a 24 per cent stake in Nagarjuna Oil Corp Ltd's (NOCL) planned refinery in southern India and replacing BP as NOCL's crude supplier. India and other emerging markets are boosting refining capacity to feed rising regional demand, while their counterparts in the United States and Europe restructure or shut plants as fuel sales slow. This is the first direct investment in the refining business by Trafigura Pte Ltd, a unit of the world's third largest crude oil trader Trafigura Beheer B V, which has so far invested in the refining business through its unit, Puma Energy LLC.

Transportation / Trade

Petrol pumps strike on April 23

April 17, 2012. Over 40,000 petrol pumps across the country will shut their outlets for a day to press their demand for raising their commission on petrol by about 27 paise per litre and diesel by 14 paise per litre as recommended by an official panel. The association wants the government to implement the report of an official committee that recommended higher commissions and levy of user charges on services like filling up air and providing drinking water and toilets. Earlier, they were demanding a 5% commission. The government has fixed delears' commission at 1.49/litre commission on petrol and 0.91 paise/litre on diesel.

CNG supply to remain affected in South Delhi: IGL

April 12, 2012. Indraprastha Gas Limited (IGL) has said that supply of compressed natural gas (CNG) in a few areas of south Delhi would be affected due to modification processes. Supply to CNG stations located at Lado Sarai, Pushpa Bhawan, Green Park, INA, R.K. Puram, Race Course, Badarpur, Chanakya Puri, Shantipath and Bhikaji Kama Place will be affected. Supply of piped natural gas (PNG) to commercial customers located in all these areas shall also be affected. The company also said that the affected customers have also been informed about the same. The supply of PNG to the domestic kitchens in these areas would not be affected at all.

India replaces China as Iran's top oil client

April 12, 2012. India has vaulted to the top of the list of Iran's oil customers, overtaking China, in a first quarter buying surge ahead of tighter sanctions against Tehran. Direct imports to India from Iran were 433,000 barrels per day (bpd) in the first quarter compared with 256,000 bpd to China. The Indian import figure was up by around 23 percent from the 351,0000 bpd imported over the same period of 2011 and significantly above the its 2011 average of 326,000 bpd.

Policy / Performance

India mulls quadrupling strategic crude oil stockpile

April 17, 2012. India is considering quadrupling the size of strategic crude oil stockpile it is building as insurance against supply disruption. India is currently building 5.33 million tonnes of storages at Vishkhapatnam, Mangalore and Padur by 2013 and has now initiated studies to construct space to store an additional 12.5 million tonnes of strategic reserves. Additional storage of 5 million tonnes was being considered at Padur in Karnataka and 2.5 million tonnes each at Chandikhol in Odisha, Rajkot in Gujarat and Bikaner in Rajasthan. The 12.5 million tonnes of stockpile would be build would take at least 4-5 years to build. The Strategic Crude Oil Reserves are meant to take care of oil security concerns of the country and could be released to meet contingencies arising out of supply disruptions and cushion abnormal increase in prices.

Gail to set up 4 MTPA floating LNG terminal

April 17, 2012. Gail India will set up India's first 4 million tonne capacity floating liquefied natural gas terminal off the Andhra coast with an investment of about ` 2,000 crore, oil ministry and company said. The project will be implemented by Andhra Pradesh Gas Distribution Corp, a company jointly promoted by Gail Gas and Andhra Pradesh Gas Infrastructure, which has signed an agreement with GDF Suez LNG UK for jointly setting up a floating storage and regasification unit (FSRU). The project would help Andhra Pradesh which is experiencing acute gas scarcity. The oil ministry expects that the project will be commissioned by the end of 2013.

PetroMin wants govt to study auction route before OIL stake sale

April 17, 2012. The controversy surrounding the ONGC shares auction has kicked up an opposition within the government with the Petroleum Ministry refusing a 10 per cent disinvestment in Oil India Ltd (OIL) through a similar ‘offer for sale on stock exchange’ or the auction method. The ministry has suggested that the OIL disinvestment be deferred due to lack of auction experience.

RBI for hiking prices of petroleum products

April 16, 2012. Making a case for increasing prices of petroleum products and deregulating diesel prices, the Reserve Bank said these steps are necessary to contain fiscal slippages and arrest decline in growth. While petrol prices are market-linked, the government decides the rates of LPG, kerosene and diesel, which usually results in a large budgetary expenditure on subsidies. The RBI said that the imports bill will remain high unless prices of petroleum products are raised for a complete pass-through and demand for precious metals is curbed. Crude oil prices have been rising due to geo-political reasons, including the Iran situation. The prices had touched a high of USD 125 a barrel. High subsidies are putting pressure on the country's fiscal deficit, which has touched 5.9 per cent of GDP last fiscal and 5.1 per cent in 2012-13. The government targets to bring down the subsidy bill to below 2 per cent of GDP this fiscal and 1.75 per cent in the subsequent years. Government has made a provision of ` 40,000 crore towards fuel subsidy. On the current account deficit, RBI said that the government should take steps to retain it at the current levels. It said the robust demand in gold and continuing high crude oil prices could adversely affect India's trade balance.

Oil firms cut jet fuel price by ` 169.3

April 15, 2012. After three rounds of price hike, state-owned oil companies announced a reduction in jet fuel prices by a marginal ` 170 per kilolitre (kl). The price of aviation turbine fuel (ATF), or jet fuel, in Delhi was reduced by ` 169.3 per kl, or 0.25 per cent, to ` 67,631 effective from midnight tonight, Indian Oil Corp, making the announcement on behalf of the industry, said.

Free diesel prices to check fiscal deficit: Raghuram Rajan

April 15, 2012. Former chief economist of the IMF Raghuram Rajan has said the political parties need to bury the hatchet for paving the way for deregulating diesel prices to rein in runaway fiscal deficit and boost the confidence of overseas investors who are a necessity for India. State retailers, who currently sell diesel at a loss of about ` 16 per litre, are projected to lose a record ` 208,059 crore in revenues on fuel sales this fiscal and the government has to find ways to meeting this subsidy. The government proposes to bring down the fiscal deficit to 5.1 per cent of the Gross Domestic Product (GDP) in the current fiscal from 5.9 per cent a year ago. Rajan said the freeing of the diesel prices completely should be effected "as soon as possible" and there was a need to raise the prices in commensurate with the international level.

Govt to raise diesel prices once finance bill approved

April 12, 2012. India will raise retail prices of subsidised fuels, including diesel, once parliament approves the finance bill for the current fiscal year. Parliament is expected to consider the finance bill on May 7 and approve it a couple of days after that. Finance Minister Pranab Mukherjee has vowed to raise fuel prices as soon as possible to tackle a rising subsidy burden and large deficits, but the move is politically fraught for the weak coalition government, already under fire over high inflation.

Moody's downgrades ratings of ONGC, GAIL

April 12, 2012. Credit rating agency Moody's has downgraded the local currency ratings of state-owned Oil and Natural Gas Corporation (ONGC) and GAIL, as a reflection of the risks that these two entities share with the Indian government. Moody's Investors Service has downgraded the local currency rating of ONGC to Baa1 from A2 and that of GAIL to Baa2 from A3. The outlook for both the ratings is stable. However, there has not been any deterioration in the intrinsic credit quality of either ONGC or GAIL, Moody's said. Both issuers are still rated above the sovereign as a reflection of their stronger credit quality, but the gap is smaller than before, Moody's said. ONGC gets over 85 per cent of its revenue from India and GAIL gets almost 100 per cent. Besides, both the firms have a high degree of direct government ownership (69 per cent for ONGC and 57 per cent for GAIL). Domestic business concentration, banking/counterparty relationships, and government ownership and control are key channels for the transmission of credit stress, Moody's said.

IGL moves high court against tariff cut

April 12, 2012. Indraprastha Gas Ltd (IGL) has filed a petition in the high court against the oil regulator's order that slashed pipeline tariff and compression charges, but the company has not obtained a stay order against the directive. PNGRB has cut the network tariff of IGL by 63% and reduced compression charges by 59% for CNG supplied by IGL. The company also said it would also challenge the regulator in the appellate tribunal for electricity. The regulator has also asked the company to cut retail prices to reflect the reduction in the network tariff and compression charges. It has asked the company to refund the difference to its customers for the period from April 1, 2008 till the date of issuance of order. IGL said that this was against the company's policies.

Billionaire’s India strategy dims as oil deal deadlocked

April 11, 2012. Billionaire Vladimir Evtushenkov, who controls Russia’s biggest mobile phone operator, is struggling to strike deals with India and link his telecoms and energy empire with Asia’s third-biggest economy. His AFK Sistema (AFKS) investment firm had 21 Indian wireless licenses revoked Feb. 2 by the Asian nation’s highest court. Talks to sell 25 percent of Sistema’s OAO Bashneft unit, a Russian oil producer with a $10 billion market value, to Indian state-owned Oil & Natural Gas Corp. are deadlocked over price. Evtushenkov, with a $7.7 billion fortune according to Forbes, wants a bigger energy company and more phone clients among India’s 1.2 billion people. He pitched the Bashneft deal as the first step in creating a venture with India’s largest oil explorer to help double annual output to 60 million metric tons. Russian President Dmitry Medvedev broached the licensing dispute with Indian premier Manmohan Singh without a resolution, as the two countries try to build ties. Singh’s government is appealing the invalidation of Sistema’s wireless licenses.



GMDC spins power plan for spinning sector

April 13, 2012. State-owned Gujarat Mineral Development Corporation (GMDC) will set up a 200 MW lignite-based power plant near Bhavnagar to exclusively supply power to the textile industry, particularly the spinning sector. GMDC has short-listed Univision Textiles Limited, Ahmedabad Textile Processors Association, Pradeep Overseas and Suryachakra Energy & Infrastructure Limited for partnership in the ` 1,000 crore project. Lignite to the plant will be supplied from GMDC mines in Bhavnagar district at subsidised rates. Lignite mines in the vicinity of the spinning units will also ease the problems in transportation of the mineral and will ensure long term supply to the spinners. Bhavnagar has 63 million tonne lignite reserves, while the project will require 10 million tonne lignite per annum.

Cabinet approves Neyveli's proposed JV for power project in UP

April 12, 2012. The government approved the state-owned Neyveli Lignite Corporation's proposed joint venture to set up a ` 10,000 crore thermal power project in Uttar Pradesh. The Cabinet has given its approval to Neyveli for the JV to set up a 1,980 MW coal-based thermal power project at Ghatmapur in Kanpur district of Uttar Pradesh. The company has initiated the process for entering into an MoU with Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd for setting up the plant with 50:50 equity participation. The UP government has given in-principle approval to allocate 2,500 acres of land and 80 cusecs of water for the project. NLC also has plans to set up a power plant with a capacity of 1,000 MW in Madhya Pradesh, as a joint venture with Northern Coal Fields Ltd, with 50:50 equity participation.

Transmission / Distribution / Trade

New pacts unlikely to improve India coal supply: Power cos

April 17, 2012. Coal India's offer to pay a paltry penalty for missing supply obligations will not force the state-run monopoly to ramp up production quickly to meet burgeoning demand in energy-starved India. The world's biggest coal miner has been ordered by the government, which owns 90 per cent of Coal India, to sign contracts agreeing to supply at least 80 per cent of the coal requirement of utilities that have been hobbled by scarce fuel.

Japanese team to help ramp up power supply network in T.N.

April 17, 2012. Tamil Nadu has more hope for an improved power supply network, with a technical team from Japan International Cooperation Agency (JICA) visiting Chennai soon to help the Tamil Nadu Transmission Corporation (TANTRANSCO) enhance its operations. Besides offering financial support to set up power transmission lines, the team of experts will offer technical guidance to the Corporation. Finance Minister O. Panneerselvam, while presenting the budget, stated that it was programmed to strengthen the transmission network at a cost of about ` 3,573 crore to be funded by the JICA. The Agency showed willingness to support the TANTRANSCO. The proposed visit by technical experts is to help finalise the agreement, which is likely to be signed in New Delhi. The State government and the Corporation, which have agreed to accept the funding, are waiting for an approval from the Department of Economic Affairs in the Union Finance Ministry. The TANTRANSCO is also planning to outsource the erection work to an external agency. The main aim of this initiative is to improve the transmission network, putting it on a par with the power generation projects that are expected to be commissioned from this year. The improved network will help reduce the load on the transmission system. Tamil Nadu currently has over 1,350 sub-stations.

Global venture capital funding in smart grid falls

April 17, 2012. Although a number of state utilities in India are planning to invest in smart grids in their distribution areas, the global funding scene for such grids remains dull. The top venture capital (VC) deal in Q1 2012 was $30 million raised by Silver Spring Networks, a smart meter networking company, followed by $13.7 million raised by Tendril, an energy management company. Other top deals included $7.7 million raised by Varentec, a start-up focused on "power routers" that can control power flows on the grid, $4.1 million raised by Vizimax, a designer and manufacturer of automation systems for grid modernization, and $4 million raised by Smart Wire Grid, a provider of smart wire technology to control power flows on transmission lines. Eight VC investors participated in Q1, all participating in one deal each including Archangel Informal Investments, BDC Venture Capital, Braemar Energy Ventures, Hitachi, Khosla Ventures, Pasadena Angels, Tech Coast Angels and Yaletown Venture Partners.

ABB to invest ` 2.5 bn to expand power products manufacturing base in India

April 16, 2012. ABB said it would invest ` 250 crore to build new facilities in India to manufacture high-voltage power products and transformers. The company will also export products manufactured in India. The facilities will be located in Savli near Vadodara, Gujarat and produce high-voltage gas-insulated switchgear and plug and switch system hybrid switchgear as well as dry-type and oil immersed distribution transformers. The facilities are expected to be operational by the end of 2012.

Indonesian tremors spark fears of coal crisis among power cos

April 12, 2012. The massive earthquake off Indonesia rattled investors and sparked fears of a fresh crisis in coal supplies to the beleaguered domestic power sector. Some Indian power firms have coal supply agreements with Indonesian firms and investors fear that operations will be affected in case of large-scale damage. Tata Power, Adani Power and Reliance Power have bought coal assets in Indonesia to fuel their projects in India, while others like JSW Energy and Lanco Infratech have fuel supply pacts with miners and traders there. A powerful earthquake followed by an equally massive aftershock hit Indonesia, triggering tsunami warnings in 28 countries and reviving memories of the dreadful Boxing Day tsunami of 2004 which killed about 2.3 lakh people.

Govt gives nod for ad valorem rate for royalty on coal, lignite

April 12, 2012. The government approved the adoption of ad valorem regime for charging royalty on coal and lignite at 14 per cent and six per cent respectively. The move will help coal-rich states to generate an additional ` 1,000 crore in revenues a year. Royalty for coal and lignite should be charged on an ad valorem rate of 14 per cent and 6 per cent, respectively, excluding taxes and other levies. Currently, the royalty for both the minerals is calculated through a formula consisting of ad valorem plus a fixed component. While the fixed component depends on the grade of coal, ad valorem rate is calculated at basic pit-head price and has been fixed at five per cent of the invoice price, excluding taxes and other levies.

Alstom T&D bags ` 1.5 bn order from Jaypee Group

April 11, 2012. Alstom T&D India said it has received a ` 150 crore from Jaypee Group for supply of high voltage power transformers. The scope of work includes designing, manufacturing, supply, erection, testing and commissioning of 765 kV generator transformers, interconnecting transformers, lines and bus reactors.

Policy / Performance

India's power generation capacity crosses 2 lakh MW

April 17, 2012. Coal crunch and other negatives notwithstanding, India's power generation capacity has crossed another important benchmark of 2 lakh mega watt. The power ministry said that with the commissioning of a 660 MW unit of a power plant in Jhajjar, Haryana, the country's installed capacity has reached 2,00,287 MW. The capacity now comprises around 132,013 MW is coal based, 38,991 MW hydro power, 4,780 MW nuclear and 24,503 MW of renewable power. The addition to the capacity during the last fiscal year (2011-12) alone stood at 20,501 MW capacity, of which 5,482 MW was added in March alone. Power minister Sushil Kumar Shinde said that power generation capacity is a challenge to the country if it has to achieve a 8% plus growth rate and hence a lot of emphasis was placed in the 11th Plan on the timely capacity addition. The 11th Plan, saw a capacity addition of 53,122 MW, in excess of two and a half times of the 21,180 MW added during the 10th Plan.

No danger from KKNPP to Sri Lanka: India

April 16, 2012. India has clearly pointed out to the Sri Lankan government that there will be no danger from Koodankulam Nuclear Power Plant (KKNPP) to that country. The Koodankulam Plant will start production in 45 days. After the inspection by the nuclear reactor team, the trial for enrichment of uranium fuel will be initiated in 20 days and experts’ opinion will also be sought. In another 40 to 45 days, 1,000 MW of power will be produced at the first reactor and in the next two months the second reactor will also start functioning.

Demand for specialised services fuel exports of Indian nuke firms

April 16, 2012. Even as imported reactor-based atomic power projects are facing tardy progress, domestic nuclear sector firms are cashing in big-time on the demand for specialised nuclear services globally. The Heavy Water Board (HWB) has bagged a big export order for supplying 11,000 kg “high purity heavy water” from the US-based Linde Electronics and Speciality Gases, which is to use the compound as raw material in the manufacture of deuterated products. The Board is also close to wrapping up another export deal for supply of 15,000 kg heavy water to South Korea’s KHNP — a subsidiary of the Korea Electric Power Corporation that operates large nuclear and hydroelectric plants — for use in its 700 MWe (mega watt electric) Pressurised Heavy Water Reactors (PHWRs), government said.

Govt working on proposal to engage private cos for CIL mines

April 15, 2012. Facing criticism for its inability to meet the growing demand of coal, the government is working on a proposal under which CIL would engage private sector companies to undertake mining on behalf of the PSU. The proposal to involve private sector under the PPP mode, was recently discussed between Planning Commission Deputy Chairperson Montek Singh Ahluwalia and Coal Secretary Alok Perti. The Coal Ministry, they said, is considering a model agreement -- mining, development and operations (MDO) -- under which private sector entity would undertake mining operations, while the ownership and sale of coal would rest with Coal India (CIL). CIL, in which government has a majority stake, has already done some preliminary work on the new model. Ahluwalia wants the Ministry to prepare a model concession agreement which could be put up before the inter- ministerial group and the Cabinet for approval. CIL which accounts for over 80 per cent of the domestic coal production missed its revised production target as it achieved only 435.84 million tonnes (MT) of coal in fiscal 2011-12 against 447 MT. In order to meet fuel needs of power companies, the government has recently issued a Presidential directive to CIL asking it to enter into fuel supply pacts with power producers for minimum assured supply.

Trans Damodar coal mining project aims at a 1 MT coal production a year

April 14, 2012. The Trans Damodar Coal Mining Project at Barjora in West Bengal's Bankura district is aiming at an annual production of 1.0 million tonnes (MT) per year, which may increase to 1.25 million tonne per year in future. West Bengal's chief minister, Mamata Banerjee inaugurated the Trans Damodar Coal Mining Project. It is one of the six coal blocks allocated by the coal ministry to the West Bengal Mineral Development and Trading Corporation Ltd (WBMDTC), a government of West Bengal undertaking.

PCCC inks $2.4 bn India project

April 13, 2012. Power Construction Corporation of China (PCCC) said it had signed a $2.4 billion contract to build the second phase of a massive coal-fired power complex in southern India that will help meet soaring local demand for electricity. The second phase of the project for Infrastructure Leasing & Financial Services Limited (IL&FS) will include the addition of four generators each with a capacity of 660 megawatts (MW).  The deal is an EPC contract, meaning Power Construction Corp will be responsible for engineering, procurement and construction. It said the project will create more than 10,000 jobs in India and use power equipment made in China. China has been playing an active role in power project construction overseas, particularly in developing countries, taking advantage of state financing as well as experience and technology acquired through three decades of economic boom. Power Construction Corp, a sprawling enterprise under the direct supervision of China's central government, was created through a state-dictated merger of dozens of domestic survey and design institutions, power construction companies and equipment manufacturers.

Jaitapur power plant site 'safest' in world

April 13, 2012. Keen to set up 9,900 MW nuclear power plant at Jaitapur, which is facing opposition from various quarters, the Maharashtra Government said the proposed project site in Konkan region is the "safest" in the world. Although nuclear power is a contentious issue from the safety point of view, the site of proposed power plant at Jaitapur is the "safest" as it is located 20 meters above sea level, the Minister maintained. The multi-billion project, to be built in association with French nuclear engineering firm Areva, is facing opposition from Shiv Sena and various NGOs over environmental and geological issues. On measures taken by the Government to increase power supply, MahaGenco, state power utility's generation arm, would undertake capacity building at Kaparkheda Thermal Power Station near Nagpur in 15-20 days.

Gujarat offers 500 hectare of land in Junagadh for second UMPP

April 13, 2012. The government of Gujarat has identified and agreed to allocate 500 hectare of land for second 4,000 MW ultra mega power project (UMPP) in the state. After exploring Jamnagar and Kutch districts in past couple of years, the Central Electricity Authority (CEA) zeroed in on Lodhva village in Junagadh district, better known for Asiatic lions and Geer forest.

PFC may fund GVK, Videocon's coal mine acquisitions overseas

April 13, 2012. State-run Power Finance Corporation (PFC) said it is in talks with GVK and Videocon to fund their coal mine acquisitions overseas on the condition that they bring a majority portion of the coal back to India. PFC said the company would carve out a separate unit - Facilitation Group - to finance such coal mine acquisitions. The state-run lender may form a subsidiary for such proposals in the future. The company which is engaged in funding power generation, transmission and distribution projects, plans to raise ` 40,000 crore during the current financial year as part of its resource mobilisation plan.

Difficult to achieve 2020 atomic power capacity target: B K Chaturvedi

April 11, 2012. Questions raised over its viability and security will delay the capacity addition of nuclear power generation, making it difficult to achieve the targetted 20,000 MW by 2020, says a Planning Commission Member. The current nuclear power generation capacity is 4,780 MW and the government had set a target of taking this capacity to 20,000 MW by 2020. At present, 20 nuclear power reactors are in operation and seven new reactors are under construction. Asked whether fuel is a constraint, Chaturvedi said, "Fuel is not a constraint."




Argentina Seizes 51 pc of oil producer YPF to Stem imports

April 17, 2012. Argentina’s seizure of YPF SA threatens to take the country further away from its goal of energy self-sufficiency as investors weigh the increased risk of expropriation in South America’s second-biggest economy. President Cristina Fernandez de Kirchner named Planning Minister Julio De Vido to head the oil company with immediate effect and is sending a bill to Congress to take a 51 percent stake after oil imports doubled. Argentina, which wants to produce enough crude to match consumption, risks becoming “unviable” as a country because of the surge in imports, Fernandez said. The seizure of the stake from Madrid-based Repsol YPF SA comes after more than two months of government pressure on YPF because of slumping production. The country could double output within a decade after the discovery of shale oil fields in the south that will cost $25 billion a year to develop and which will require YPF to find partners to help share costs.

The country’s oil reserves fell about 18 percent between 1998 and 2010. Price caps on oil exports also made investments less attractive. Repsol is responsible for about 54 percent of the country’s decline in reserves and production since buying YPF in 1998. The company had a “predatory attitude” toward Argentina that warranted the takeover. The company said that the 30,000 square kilometer Vaca Muerta formation in southern Argentina holds at least 23 billion barrels of oil equivalent, according to an external audit that surveyed about 8,000 square kilometers of the area.

YPF has about 13 billion barrels in that area, the company said. Developing the entire 23 billion barrels will cost about $25 billion per year for a decade, the company said. The boom in shale oil and gas production in recent years has placed the U.S. to the closest it has been in almost two decades to achieving energy self-sufficiency. Global energy producers from Total SA to BHP Billiton Ltd. are investing in shale formations impervious to traditional drilling methods.

Wintershall discovers oil off Norway

April 16, 2012. German oil and gas firm Wintershall announced that it has made an oil discovery at its Skarfjell prospect in the Norwegian North Sea. The wildcat well 35/9-7, on production license 418 where Wintershall is operator, found Upper Jurassic reservoir sands of "very good quality" and that contain light oil with "a significant oil column", said the firm. So far, Wintershall added, the resource is estimated to range between 60 million and 160 million barrels of recoverable oil, although commercial viability, as well as potential further upside, will need to be confirmed through appraisal drilling. The firm aims to raises its daily production on the Norwegian and British continental shelves from a current level of around 4,000 barrels of oil equivalent per day to 50,000 boepd by 2015.

Shell confident it’s not source of Gulf of Mexico sheen

April 13, 2012. Royal Dutch Shell Plc, Europe’s largest oil company, said an oil sheen between two of its platforms in the Gulf of Mexico is dissipating, and the company is trying to determine where it came from. The sheen, estimated at about six barrels that covered 10 square miles, has broken up. Shell said that an inspection found “no sign of leaks” and “no well control issues” from its operations in the area. The company’s Mars and Ursa platforms off the coast of Louisiana are still operating. The platforms handle the equivalent of about 60,000 barrels of oil a day for Shell, about 1.8 percent of the company’s output.


Delta said to seek 10 pc fuel savings with ConocoPhillips refinery

April 12, 2012. Delta Air Lines Inc., whose daily 2011 fuel bill was $32 million, may buy a ConocoPhillips refinery to help save 10 percent on a significant portion of its fuel needs. Talks are under way about an idled ConocoPhillips facility in Trainer, Pennsylvania. Delta would get fuel from Trainer and from other refiners in exchange for products made there that Delta doesn’t use. ConocoPhillips plans to shut the Trainer operation unless it can find a buyer by the end of May as tighter profit margins squeeze East Coast refineries. For Atlanta-based Delta, a deal would help shave annual fuel costs that reached $11.8 billion for its main jet operations and regional partners, or 36 percent of all spending. Delta seeks to save 10 percent on fuel tied to the Trainer deal. Fuel from that refinery and others linked to the agreement would cover some though not all of the needs at the world’s second-largest carrier.

Transportation / Trade

China to overtake U.S. as biggest tanker user

April 16, 2012. China will pass the U.S. in 2013 as the biggest user of tankers carrying oil at sea as Asian imports travel over longer distances and fewer cargoes go to the world’s biggest economy. Tanker use based on ton-mile demand, which multiplies cargo size by voyage length, is rising for China and dropping for the U.S. Chinese tanker usage will gain 18 percent to 2.43 trillion ton-miles by 2013 as the U.S. falls 13 percent to 2.36 trillion. China will account for 25 percent of oil-tanker demand by 2015, against 19 percent for the U.S. U.S. seaborne imports of crude will decline to 7.6 million barrels a day, the lowest level since 1995, from 8.3 million.

ENOC signs up Punj Lloyd to build oil terminal

April 16, 2012. Horizon Terminals, a subsidiary of Emirates National Oil Company (ENOC) has contracted Punj Lloyd Ltd. to build an oil products terminal at Jebel Ali and lay a 60-km jet fuel line to Dubai International Airport, ENOC said. The terminal will have storage capacity of 141,000 cubic metres, or 887,000 barrels. It will initially handle jet fuel but will be used for other oil products later, ENOC said.

Open Season begins for West Texas-Nederland Oil Pipeline

April 13, 2012. Sunoco Logistics Partners L.P. announced that Sunoco Pipeline L.P., West Texas Gulf Pipe Line Company and Mobil Pipe Line Company will commence a binding Open Season for project West Texas- Nederland Access. The project is being developed to deliver crude oil from West Texas to SXL's Nederland Terminal at Nederland, Texas. The project is anticipated to have initial capacity to transport approximately 40,000 barrels per day to Nederland. The West Texas - Nederland Access project is scheduled to be operational in first quarter 2013. The project will provide West Texas producers and Gulf Coast refiners with a crude oil supply solution for West Texas Sour crude.

Kinder Morgan to expand west-coast Canada oil pipeline for $5 bn

April 12, 2012. Kinder Morgan Energy Partners L.P. said it will build a $5 billion expansion of its Trans Mountain pipeline, more than doubling the capacity of crude it can ship to Canada's west coast -the latest project aimed at moving Canada's rising oil production to markets other than the U.S. Almost all Canadian crude exports currently travel to the U.S. While Canadian oil output has been rising fast, pipeline capacity to move it from the country's biggest oil patch in landlocked Alberta to refining markets in the U.S. has been stretched. That - and climbing oil production in the U.S. itself - has depressed prices for Canadian crude. Trans Mountain already ships a small amount of crude from Alberta to Vancouver. The expansion will increase that volume to 850,000 barrels a day from 300,000 barrels a day, and would allow Asian buyers to load Canadian crude in significant volumes. The expansion is competing with other projects to bring Canadian oil to the west coast. Enbridge Inc. has proposed the Northern Gateway pipeline that would take oil from Alberta to a small, northern port in British Columbia. That line faces strong resistance from native groups. Canadian oil executives and politicians have ratcheted up support for westward-running pipelines after the U.S. blocked a key oil pipeline expansion that envisioned sending more oil from Alberta to the U.S. Gulf Coast. Last year, the White House delayed approval of the line, TransCanada Corp.'s Keystone XL, which became ensnarled in a political battle in Washington.

Policy / Performance

UK Govt gives shale gas fracking green light

April 17, 2012. The government backed the exploration of shale gas nearly one year after it temporarily banned the drilling method which triggered two earthquakes in Britain but that has also revolutionised the U.S. energy market. An expert report commissioned by the government said shale gas fracking, a process where pressurised water and chemicals are pumped underground to open shale rocks and release trapped gas, was safe to resume with tighter rules on seismic monitoring and drilling surveys. The energy ministry is inviting public comment on the report's findings, after which it will issue its final ruling on the future of UK shale gas exploration. The experts published their findings after reviewing a series of post-earthquake studies published by Cuadrilla Resources, a UK firm which was forced to halt its shale gas operations near Blackpool in northwest England after fracking triggered small earthquakes in May 2011.

Ghana signs $1 bn loan with China for natural gas project

April 16, 2012. Ghana signed a $1 billion lending agreement with China Development Bank Corp. as part of the biggest loan in the country’s history that Vice President John Dramani Mahama said would provide hundreds of thousands of jobs and develop natural gas. Ghana signed an $850 million agreement for a gas project between the Ghana National Gas Co. and China Petroleum & Chemical Corp. in Beijing and the rest for information technology projects, Mahama said. The total amount of the loan will eventually be $3 billion and Ghana will send China 13,000 barrels of oil a day that will be sold at market price on the day, he said. China is Africa’s largest trading partner and has signed agreements worth billions of dollars with governments on the continent, seeking natural resources to feed its economic growth in exchange for building roads and railways, and nurturing a market for its products. The Ghanaian oil is not being used as collateral for the loan, Mahama said. The money will not be paid off using the country’s natural resources, he said.

Argentina’s Govt postpones YPF takeover

April 15, 2012. Argentina’s government has decided to postpone a planned state takeover of YPF SA, the country’s largest oil company. The government of President Cristina Fernandez de Kirchner will wait until she returns from the Summit of the Americas to make an announcement and will negotiate with the parties involved. YPF is controlled by Repsol YPF SA, Spain’s largest energy company.

LNG export plant verges on U.S. approval amid shale glut

April 13, 2012. Cheniere Energy Inc., the natural gas importer that lost $1.2 billion in a decade, is poised to become the sole U.S. exporter of fuel from the shale bonanza that’s turned the nation into the world’s biggest gas producer. The government may decide on Cheniere’s request to build a $10 billion Louisiana plant that would be the largest in the U.S. to liquefy gas and load it onto ocean-going tankers. Regulators will discuss the project. As the only company with a 20-year Energy Department license to export continental liquefied gas to nations without U.S. free-trade agreements, Cheniere will have a near-monopoly on selling LNG to some of the biggest gas importers -- Japan and Spain -- which currently pay as much as nine times more for the fuel than it costs in U.S. markets. All rival export-license requests are on hold while the Energy Department studies the potential economic impacts of shipping abroad.

China's coalbeds spur unconventional gas supply boom

April 11, 2012. After more than a century ripping out its insides to supply coal to the rest of the country, the heavily mined and polluted province of Shanxi in northern China is in the midst of a gas boom. Under the spray of the Yellow River near the city of Jincheng, "nodding donkeys" bob in lines that stretch to the horizon, hitched up amidst precious farmland to feed on the gas streaming through the coal seams below. Gleaming white storage tanks tower over the highways and dozens of drilling rigs dot the cliffs and valleys, some near the famed ancient cave settlements of Shanxi. Gas output from the coal seams is rising fast and is set to hit 8 billion cubic metres (bcm) this year, up a half from 2011 - emerging from nowhere just six years ago to provide China with a cleaner, home-grown alternative fuel for the future. China is investing 100 billion yuan ($16 billion) to double output again by 2015. Beijing wants coal seam gas output as high as 30 bcm by 2020, which would be 15 percent of China's total gas production, up from 5 percent of the total last year.



KESC’s 560 MW combined cycle power plant starts production

April 17, 2012. The newly-built, state-of-the-art combined cycle power plant of Karachi Electric Supply Company (KESC), having the maximum power generation capacity of 560 megawatts started power generation and was expected to optimum generation capacity within the next 24 hours. The Bin Qasim Power Station II was completed at a cost of $450 million in record three-year period and with its completion and start of power production, the indigenous power generation capacity of the utility stands at over 2,000MW. The power plant has three gas-powered turbines, each having the power generation capacity of producing 125MW electricity, while a steam turbine that would be powered from the heat generated from gas turbine, would add around 185MW to the power generation capacity of the plant.

Firm freezes $1.2 bn coal-gas Australia power plant

April 17, 2012. An Australian firm has frozen development of a controversial A$1.2 billion ($1.23 billion) brown coal-gas hybrid power plant after a ruling by a tribunal effectively delayed construction, putting the future of the project in doubt. Energy technology firm HRL, one of a number of companies trying to develop clean-coal power plants, said it had frozen design and pre-construction work on a proposed 600-megawatt plant in the southern state of Victoria.

Anglo eyes power plant project in South Africa

April 11, 2012. Anglo American plans to build a 450 MW power plant in South Africa to supply electricity to its platinum subsidiary Anglo American Platinum. The plant would cost more than $1 billion and that seven parties had bid to build the plant near Witbank in eastern Mpumalanga province. The plant, which was expected to start producing electricity in 2015, would reduce Amplats' reliance of power supply from state-owned Eskom and cushion it from large price increases. South Africa has been struggling to meet demand for power as construction of new plants meant to plug the shortfall have been delayed. Supply would remain vulnerable until the first units of Eskom's new stations become operational next year.

Policy / Performance

Japan may be atomic-power free after shutdown

April 17, 2012. Japan may be without atomic- generated electricity for the first time in more than four decades next month when its last reactor still running after the Fukushima nuclear disaster shuts for maintenance. Since the crisis on March 11 last year, 53 of Japan’s 54 reactors have been shut either owing to damage from the earthquake and tsunami, government order, or mandatory maintenance. The plants provided 30 percent of the country’s electricity prior to March 11. The last one running on the northern island of Hokkaido goes offline from May 5.

Iraq agrees floating power plant deal with UAE

April 16, 2012. Iraq's Electricity Ministry has announced that it has agreed a two year contract with United Arab Emirates' Oilfield Services for the provision of 250 MW of electricity per day. The development is a move to address Iraq’s power shortages as summer approaches. Under the deal, United Arab Emirates' Oilfield Services will provide two power plants docked on ships in Basra in southern Iraq. The plants are expected to be connected by the end of July and will help offset the power shortages in the country where demand was double grid capacity at peak times. The two year deal is said to be based on a price of 7.5 cents per kilowatt hour. Iraq was aiming to increase the national grid capacity by around 1,500 MW.

Iran nuclear talks face challenges heading to May meeting

April 16, 2012. Diplomats face an uphill battle against time and precedent as they look toward the next round of talks with Iran on its nuclear program. The negotiators broke a 15-month stalemate after 10 hours of “constructive” talks in Istanbul on April 14 and agreed to reconvene in Baghdad May 23. In Israel, Prime Minister Benjamin Netanyahu criticized the outcome as giving Iran more time to continue enriching uranium, the process capable of producing fuel for a nuclear bomb. Squeezed by U.S. and EU sanctions, as well as Israeli and American threats of a military strike to prevent it from acquiring atomic weapons, Iran dropped upfront demands and the talks focused almost exclusively on its nuclear program. The negotiations risk a repeat of previous failures, as tensions contribute to a 13 percent jump in Brent crude prices. The process that led to next month’s talks in the Iraqi capital mirrors those on December 2010 in Geneva, where the parties agreed to reconvene the following month in Istanbul. The January 2011 gathering in Turkey broke down without agreement after Iran set pre-conditions including recognition of its right to enrich uranium and the lifting of sanctions to resume talks.

Pakistan agrees 'in principle' to import power from India

April 14, 2012. The Pakistan government has decided in-principle to import up to 500 MW electricity from India, with the World Bank agreeing to fund the construction of infrastructure needed for trade in energy between the two countries. Water and power minister Syed Naveed Qamar said Pakistan has made an "in-principle" decision to import electricity from India to meet its growing energy requirements. He made the remarks during a meeting with a delegation from Indian firm Global Energy that was led by Harry Dhaul, who is the founder and director general of the Independent Power Producers Association of India (IPPAI). The country may initially import up to 500 MW from India, he said. During the meeting, it was agreed that Pakistan and India will build a 45-km 220 kilovolt transmission line within six months following the signing of a formal agreement. The agreement will be valid for five years, after which it can be extended for another five years or more. Qamar has directed the power ministry, national transmission and despatch system and the Central Power Purchase Agency to finalize terms and conditions and to submit an initial report to him. The World Bank has agreed to fund the infrastructure needed for trade in electricity between India and Pakistan. The World Bank will provide $300-400 million to install a 220 kilovolt transmission line between the two countries within six months once an agreement is reached.

Japan seeks to restart some nuclear power plants

April 13, 2012. Hoping to avert potentially devastating summer power shortages, Prime Minister Yoshihiko Noda said that his government would seek to restart two nuclear reactors, in what would be a first step toward ending an almost complete shutdown of the nation’s nuclear power industry. Mr. Noda declared units No. 3 and No. 4 at the Ohi Nuclear Power Plant in western Japan to be safe based on the results of computer simulations designed to check the reactors’ tolerance of a large earthquake and tsunami like those last year that knocked out cooling systems at the Fukushima Daiichi plant. The resulting meltdowns and explosions spewed radiation across a wide area of northeastern Japan and the Pacific Ocean in the worst nuclear accident since the one at Chernobyl a quarter century earlier. Mr. Noda now faces the tricky task of convincing skeptical local leaders and voters in Fukui prefecture, where the Ohi plant is located, that it is safe to turn the reactors back on. Public concerns about safety after the Fukushima accident have prevented Japan from restarting any of its nuclear reactors as they have been gradually taken offline for legally mandated maintenance checks.

Russia says Iran needs ‘real incentives’ to resolve nuclear row

April 13, 2012. World powers should offer Iran “real incentives” to allow full monitoring of its nuclear program rather than demanding an immediate end to uranium enrichment. The first negotiations in 15 months between Iran and the five permanent members of the United Nations Security Council -- Britain, China, France, Russia and the U.S. -- plus Germany, represent an “urgent” chance to counter the threat of military action. Iran, which has faced four sets of UN Security Council sanctions, has been further squeezed by U.S. and EU financial and energy sanctions. The exact nature of the incentives would be a matter for negotiation in Istanbul, and could include international assistance in developing nuclear energy as well as security guarantees and other measures. Iran stands to benefit financially from its first nuclear reactor, the Russian-built 1,000-megawatt Bushehr plant. It will free up the equivalent of 11 million barrels of oil or 1.8 billion cubic meters of gas per year for export.



Lanco Infra completes 56 MW grid connected solar photovoltaic power plants in Gujarat

April 17, 2012. Lanco Infratech subsidiary Lanco Solar announced the completion of 56 MW grid connected solar photovoltaic power plants in Gujarat. It includes three plants of 35 MW owned by Lanco Infra and additional 21 MW built as turnkey EPC for Gujarat Power Corporation Ltd (GPCL), GSPC Pipavav Power Company Ltd, GHI Energy and Gujarat State Electricity Corporation. These Power Plants will generate upto 90 million units of green electricity annually resulting in reduction of CO2 emissions by 85757 tonnes annually. The state government will dedicate 600 MW of solar power generation capacity, including 214 MW at Gujarat Solar Park. Recently, NKG Infra also announced commissioning of 10 mw of solar project at Solar Park. Lanco Solar is claiming to be building more than 350 MW of solar farms as a developer and an EPC player. More than 90 MW solar PV is currently operational at different locations in India, Europe and USA. The company is also currently bidding and working on solar projects in Middle East and Africa.

‘Investment in green technologies will benefit India, US’

April 17, 2012. US companies investing in India's green energy market will have good prospects and it will be a "win-win" situation for both the countries, Power Minister Sushilkumar Shinde said. The Minister said that energy security is of vital economic and strategic significance for the country. India has a number of financial, technological and exploratory initiatives with the US in clean and renewable energy and energy conservation, he said.

Gurgaon to get solar thermal power plant

April 16, 2012. Haryana's first solar thermal power plant - which will work on the steam-and-turbine principle as opposed to utilizing costly solar photo-voltaic cells - is all set to come up in Gurgaon. The 1 MW power generation facility is "an experimental project" being built collaboratively by the Solar Energy Centre (SEC) and the Indian Institute of Technology, Bombay. The plant, nearing completion, will start undergoing trial runs. Solar energy is touted as the best alternative to conventional power. But the technology still has a long way to go before it can successfully replace the available modes of energy generation. Impeding its progress are two crucial factors - high costs, and low efficiency. And the minds behind Gurgaon's solar thermal plant are attempting to resolve this very cost-and-efficiency conundrum with their new project.

Bosch eyes 10 MW solar projects in India

April 15, 2012. Global supplier of technology and services Bosch, which recently forayed into the solar energy space in India, is eyeing 10 mega watt worth projects over the next few years. Bosch forayed into the solar energy space in the country last year and has jointly developed a one MW project with Gujarat government. The company is also executing up to 100 kilo watt roof top project under National Solar Mission in Karnataka. With the government target of 20 GW solar energy by 2022, there is a huge potential in India. The company is also a channel partner of Ministry of New and Renewable Energy.

Fedders Lloyd to expand wind energy equipments facility at Bharuch

April 15, 2012. Lloyd Group owned Fedders Lloyd plans to invest ` 200 crore for expanding its newly built manufacturing facility for wind turbine towers, heavy precision fabrication and machining facility in Bharuch district, Gujarat. The group commissioned first phase of the unit and it has already acquired desired land for the phased expansion. Union Minister for new and renewable energy Farooq Abdullah and Gujarat chief minister Narendra Modi inaugurated new facility of Fedders Lloyd. The plant is capable of manufacturing wind turbine powers up to 3 mw and heavy precision fabrication of components up to 80 tonne. Fedder Lloyd plans to roll out its first tower by this month end and will cater to wind-turbine makers in and outside India. Established in 1957, Fedders Lloyd is engaged in executing turnkey projects in the areas of energy, infrastructure and climatic control equipments with manufacturing facilities at Noida, Sikandrabad and now Bharuch.

R-Power gets $80 mn export financing nod from US Exim Bank

April 15, 2012. The Export-Import Bank of the US has approved a USD 80.32 million (over ` 400 crore) direct loan for Reliance Group firm R-Power's purchase of solar power technology from American companies. The technology would be purchased from companies in eight states of the US and would be used for R-Power (Reliance Power) solar energy project in Rajasthan, India. The Exim Bank said that its board has approved the loan for this project, named Rajasthan Sun Technique Energy Private Limited -- a subsidiary of R-Power and being co-financed by Asian Development Bank and Dutch development bank. The US companies involved in the transaction include AREVA Solar Inc, EI DuPont de Nemours and Co, Clifford Chance Rogers Wells LLP, 3M Company, Sika Corp, CCI Corp, Certainteed Corp, Huck International Inc and Weed Instrument Company Inc. R-Power recently commissioned the country's largest solar project, with a capacity of 40 MW, in Rajasthan and plans to add another 100 mega watt capacity in the next one year. R-Power plans to invest more than ` 6,000 crore for solar projects in Rajasthan in two years. R-Power is looking at doubling the capacity to 300 MW in the next 24 months, entailing an investment of more than ` 6,000 crore. The 40 mega watt plant has been set up at an investment of about ` 700 crore. The loan would help support jobs at the US companies. Areva Solar said the Ex-Im Bank loan is an important component in helping US companies and its subcontractors compete for and execute solar energy projects in a competitive global market while creating American jobs and economic growth. R-Power said this is the second loan approval by Ex-Im Bank in the company's renewable energy initiative.

India, US joint $125 mn fund for research in clean energy

April 14, 2012. India and the United States have announced a joint $ 125 million fund to carry out combined research in the field of clean energy. As such three institutions each from India and the US have been selected for the US-India Joint Clean Energy Research and Development Center (JCERDC), which is part of the US-India Partnership to Advance Clean Energy, announced during the November 2009 visit of US President Barack Obama to India. While National Renewable Energy Laboratory, University of Florida and Lawrence Berkeley National Laboratory have been selected from the US, three Indian institutions are the Indian Institute of Science-Bangalore, the Indian Institute of Chemical Technology-Hyderabad, and CEPT University-Ahmedabad. Consortia researchers will leverage their expertise and resources in solar technology, advanced biofuels and building efficiency to unlock the huge potential of clean energy technologies that can reduce energy use, cut dependence on foreign oil, and accelerate the deployment of renewable energy sources, the US Department of Energy said. As part of a planned five-year initiative, the Energy Department will make $5 million available in fiscal year 2012. The Department plans to make additional requests to Congress for up to $ 20 million over the next four years. India has committed to funding $ 25 million over five years that will be used to support work by Indian institutions and individuals. US and Indian consortia members have pledged over $ 75 million in matching funds, for a combined funding total of more than $ 125 million for joint research and development in solar energy, advanced biofuels and building energy efficiency. In solar energy, the consortium's research will focus on sustainable photovoltaics, multiscale concentrated solar power, and solar energy integration. The consortium will focus on development of sustainable advanced lignocellulosic biofuel systems.

NKG Infra commissions 10 MW solar project in Gujarat

April 13, 2012. NKG Infrastructure announced to commissioning of its 10 MW solar power project at an investment of ` 140 crore at Charanka in North Gujarat. The project is built on 66 acre of land leased from government of Gujarat for 30 years. Delhi based ` 3,000 crore NKG Group employs 1,600 people directly and it is engaged into roads & bridges, power stations and allied infrastructure, mining and gas pipelines, hospitals and colleges among others. The plant has been built using crystalline silicon technology. The company is planning to be the only developer in Charanka Solar Park to use string inverters instead of central inverters.

Suzlon Group wins 16 MW turbine order from Renerco

April 12, 2012. Wind turbine maker, Suzlon Group said its UK subsidiary REpower has bagged an order from Renerco to supply eight turbines for its 16.4 MW Cotton Farm wind farm in Cambridgeshire, England. REpower will be supplying eight MM92 machines having a rated output of 2.05 MW each, the company said. The construction on the Cotton Farm wind farm, which is likely to power nearly 10,000 homes annually, is scheduled to commence in October and is expected to be completed by February 2013. Since its launch in 2004, REpower UK has delivered 37 onshore wind farms in Scotland, England and Wales and two offshore wind farms.

Areva to build big Indian solar power plant for Reliance Power

April 12, 2012. The French energy group Areva said that it would build the biggest concentrated solar power installation in Asia for Reliance Power of India. Areva Solar is to construct two plants using compact linear fresnel reflector (CLFR) technology that would produce 250 MW of electricity in Rajasthan, northwestern India. That would provide energy for around 300,000 people in Europe according to a sector estimation. CLFR technology uses reflected sunlight to heat liquid-filled tubes which generate high-pressure steam that produces electricity via turbines. Financial details were not disclosed, but the statement said the installation "will become the largest in all of Asia" and would contribute to an Indian goal of adding 20,000 MW of solar energy capacity by 2022. The project, which has already begun its first phase would represent a reduction of around 557,000 tons of CO2 emissions annually compared with a coal-fired plant. It set a target date of May 2013 for the operational launch of the first plant.

India one of the top performing clean energy economies

April 12, 2012. With Indian receiving $ 10.2 billion investments in clean energy, the country has emerged as one of the top performing clean energy economies in the 21st century, an eminent American non-profit organisation said in a report. The Pew Charitable Trust, in its report, said India's clean energy sector continued to flourish in 2011, with private investment increasing 54 per cent to $ 10.2 billion, placing the country at number 6 spot among the G-20 nations. This was the second highest growth rate among the G-20 nations, The Pew Energy said. Clean energy investment, excluding research and development, has grown by 600 per cent since 2004, on the basis of effective national policies that create market certainty. India's "National Solar Mission", with a goal of 20 GW of solar power installed by 2020, helped drive the seven-fold jump in solar energy investments, to $ 4.2 billion, the report said. The country received $ 4.6 billion and an additional 2.8 GW of capacity was installed over the course of the year. India now has 22.4 gigawatts of installed clean energy generating capacity.

India says EU airline tax deal breaker for climate talks

April 11, 2012. The European Union’s move to make airlines pay for their carbon emissions is a “deal breaker” for international climate negotiations, India’s environment minister said. As of Jan. 1, all airlines using airports in the trade bloc were obliged to enter the EU’s carbon trading program, according to the European Commission’s environment arm.


Wind-power capacity to double by 2016 after U.S. dip

April 17, 2012. Wind-power capacity will more than double by 2016 as growing installations in newer markets such as India and Brazil counter weakness in the U.S., where additions are set to decline next year. World capacity will reach 493 gigawatts in 2016, from 238 gigawatts in 2011. Installations will jump 8 percent a year on average to 59 gigawatts during 2016, from 41 gigawatts in 2011. Even with the growth, the biggest wind-turbine makers such as Vestas Wind Systems A/S and Gamesa Corp. Tecnologica SA face shrinking margins because of excess world production and Chinese competition. Prices of turbines sold in the second half of 2011 fell 4 percent to $910,000 a megawatt, the lowest since at least 2008, when records began. Growth in installations will stall next year because of the possible loss of a tax credit in the U.S., the second-biggest market after China, it said. New capacity will rise more than 13 percent to 46 gigawatts this year, drop to 45.8 gigawatts in 2013 and resume gains to 49.4 gigawatts in 2014, 55.2 gigawatts in 2015, and 59.2 gigawatts in 2016.

EU should mull expanding CO2 cap-and-trade, Poland says

April 17, 2012. The European Union should consider expanding its emissions trading system to cover the region’s transport industry and shouldn’t judge the effectiveness of the program by a decline in carbon-permit prices, Poland said. The 27-nation bloc needs to modify its cap-and-trade program, the world’s largest, to make it “a landmark product” for countries taking part in global climate talks. The document, sent to other EU member states before an informal meeting of environment ministers in Denmark, is Poland’s contribution to a debate about the ETS scheduled for April 19. The talks will take place two weeks after carbon prices fell to a record low on oversupply of allowances amid a recession. The ETS is the cornerstone of EU climate policy and imposes emission curbs on more than 12,000 carbon-discharging facilities owned by power producers and manufacturers. This year the system expanded beyond the bloc’s borders for the first time since its creation in 2005, covering flights from and to European airports and triggering opposition from countries outside the region, including the U.S., Russia, China and India.

Battery prices for electric vehicles fall 14 pc

April 17, 2012. The average price of lithium-ion battery packs for electric vehicles fell 14 percent in the past year as production capacity exceeded demand. Batteries cost $689 a kilowatt-hour in the first quarter of 2012, compared with $800 a year earlier. Prices for batteries have dropped 30 percent since 2009, making electric vehicles less expensive. Electric vehicles such as Mitsubishi Motors Corp.’s i-MiEV, Nissan Motor Co.’s Leaf and Tesla Motors Inc.’s Model S require between 16 kilowatt-hours and 85 kilowatt-hours of storage, which accounts for about 25 percent of their cost. The industry has capacity to produce about 10 gigawatt- hours of battery packs more than it needs now, enough for 400,000 all-electric vehicles, and that surplus may reach 17 gigawatt-hours by the end of 2013. Battery prices may drop to about $150 a kilowatt-hour by 2030. About 43,000 electric vehicles were sold in 2011.

Electric cars cost $1,200 a year less to run

April 17, 2012. Drivers of electric vehicles such as General Motors Co.’s Chevrolet Volt and Nissan Motor Co.’s Leaf may save as much as $1,200 a year on fuel compared with a new gasoline-powered compact, a scientists’ group found. Assuming gasoline costs $3.50 a gallon, drivers who plug cars into electrical outlets would save $750 to $1,200 a year instead of buying gas for a new model that gets 27 miles (43 kilometers) a gallon when driving 11,000 miles a year.

Delay sought by environmental groups for reactors in Georgia

April 17, 2012. Nine environmental groups say they will ask a U.S. court to delay Southern Co.’s construction of two reactors in Georgia after federal regulators denied their bid to halt the $14 billion project. The Southern Alliance for Clean Energy and Friends of the Earth are among groups that said they intend to ask the U.S. Court of Appeals in Washington by April 18 to halt construction at Southern’s Vogtle plant while the court considers a previous legal challenge over the units.

Green EU needs 'credible' CO2 price, funding guidance

April 16, 2012. EU member states must have a credible carbon price, a new set of policy goals and could need clearer funding guidance or the growth of renewable energy will falter, Energy Commissioner Guenther Oettinger said. The European Union is officially on track to meet a goal for 20 percent of its energy to come from renewable sources by 2020. After that, there is no policy certainty and "abrupt changes" for instance to solar subsidies are destroying confidence among investors, the commissioner said. At the same time, the EU's Emissions Trading Scheme (ETS), meant to encourage low carbon energy has crashed to record lows, far below the level needed to be a green incentive. In times of crisis, some member states were unfairly blaming renewable spending for adding to economic problems. Oettinger was addressing the annual conference of the European Wind Energy Association in Copenhagen.

Wind adds jobs, needs greener EU policy

April 16, 2012. Wind power has bucked Europe's economic downturn to swell gross domestic product and create jobs but needs more ambitious EU green energy policy and investment in research and development to keep growing, the region's industry group said. The sector contributed 32 billion euros ($42 billion) to European Union GDP in 2010, up by a third since 2007, according to a report by the European Wind Energy Association (EWEA). It said jobs in the sector had reached nearly 240,000 by 2010, an increase of just under one third in 2007-2010, while unemployment rose by 9.6 percent. The number employed in European wind should reach 520,000 by 2020, boosted by increased use of offshore wind which is more labour-intensive than onshore, the association estimated. It forecast the wind industry's contribution to GDP would nearly triple to 94.5 billion euros by 2020.

Solar prices drop more, pressuring panel makers

April 13, 2012. Solar panels prices have kept marching lower this year, extending steep declines seen in 2011 and keeping pressure on hard-hit manufacturers who have struggled to eke out profits, industry experts said. Average selling prices for the photovoltaic modules that turn sunlight into electricity have dropped to 80 to 85 cents per watt, a decline of more than 10 percent from levels near 95 cents recorded at the end of 2011, a year that saw prices fall by about 50 percent. Those price drops have helped boost solar sales and made solar power less dependent on subsidies to compete against fossil fuels. But they also have virtually erased profits at the major manufacturers, such as China's Suntech Power Holdings, Yingli Green Energy Holding, Trina Solar Ltd and U.S.-based First Solar.

EU states say renewable goal not fair on other fuels

April 13, 2012. Renewable energy does not have more right to an EU target than other fuels, according to pro-nuclear states and coal-intensive Poland, as debate heats up over updating a 2020 goal to have a 20 percent share of green fuel in the energy mix. The comments from Britain and France, as well as Poland, have been made as part of consultations on the Energy 2050 Roadmap. It lays out routes towards a low carbon economy after the European Union's firm set of policy goals expires in 2020. Progress on taking green energy policy further has been fraught and Poland in March vetoed an attempt then to agree non-binding milestones for future carbon reductions. Apart from the 20 percent renewable goal, the EU also has objectives to cut carbon emissions by 20 percent and to improve energy savings to 20 percent, all by 2020.

Obama's "green jobs" have been slow to sprout

April 13, 2012. President Barack Obama stood in front of a sea of gleaming solar panels in Boulder City, Nevada, to celebrate his administration's efforts to promote "green energy." Stretching row upon row into the desert, the Copper Mountain Solar Project not far from Las Vegas provided an impressive backdrop for the president. Built on public land, the facility is the largest of its kind in the United States. Its 1 million solar panels provide enough energy to power 17,000 homes.

Germany expects installation ‘rally’ to beat solar cuts

April 13, 2012. Germany’s solar industry expects an installation rush over the next six months as developers try to beat planned subsidy cuts in the second-biggest market for sun power. Developers have brought forward plans to install panels on concerns that reductions in feed-in tariffs scheduled to take effect between April 1 and Sept. 30 make later investments unfeasible.

GM lithium-battery explosion sparks fire at company test lab

April 12, 2012. General Motors Co., maker of the Chevrolet Volt plug-in hybrid sedan, said a test battery exploded at a research facility near its Detroit headquarters. A lithium-ion battery exploded at GM’s technical center in Warren. An “incident” occurred about 8:45 a.m. in a laboratory conducing “extreme testing on a prototype battery” unrelated to the Volt, GM said. The battery explosion comes as GM seeks to reassure consumers about the safety of the Volt, which uses lithium-ion batteries. Volt sales were hurt after a U.S. investigation into battery fires was announced in November. The U.S. closed the probe in January, saying the Volt and other electric vehicles pose no more fire risk than other cars. One of the injured people has life-threatening injuries. The Warren center is where GM, the world’s largest automaker, developed the Volt and researches electric-vehicle batteries. The automaker aims to boost sales of the $39,000 Volt to more than 3,000 a month. The best month of U.S. sales of the Volt so far was 2,289 in March. GM said that Volt production will resume earlier than planned following March’s sales improvement. The automaker had said it would halt production in early March after selling 1,023 Volts in February and 603 in January, below the rate needed to meet Akerson’s goal of 45,000 deliveries in the U.S.

RWE may invest in PV plants on lower costs

April 12, 2012. EON AG and RWE AG, Germany’s biggest utilities, are stepping up investments in solar energy as falling prices for the technology and the country’s nuclear exit make them chase fresh revenue streams. EON plans to add 70 megawatts of photovoltaic (PV) capacity a year from 2013, compared with a total of 51 megawatts it has built since 2008. RWE, which previously has withheld support for photovoltaics, may boost investments in the technology after a decline in the cost of panels.

U.S. renewables lead over China threatened by policy

April 12, 2012. U.S. government policies are creating a “boom-and-bust” in renewable energy investment, threaten a lead the nation regained over China for the technologies. U.S. investment reached $48.1 billion in 2011, largely in wind and solar power. Those funds trumped the $45.5 billion China allocated to renewables, for lead for the U.S. since 2008. The jump to the top of the G-20 ranking followed developers' efforts to finish projects before incentives expire. With China taking on long-term renewable energy targets and an American tax-break for wind lapsing in 2012, the U.S. again risks losing its edge.

Dong to spend $795 mn turning fossil plants to wood

April 11, 2012. Dong Energy A/S, Denmark’s state- controlled utility, plans to invest about 500 million pounds ($795 million) to convert three of its coal- and gas-fired power stations to generate heat and electricity from wood pellets. The Danish plants will have a capacity of about 1 gigawatt. Denmark plans to cut its energy consumption by 12 percent by 2020 from 2006. It already gets 70 percent of its renewable-energy use from biomass such as straw, wood and waste. Lower taxes on biomass than coal and gas power generation encouraged Dong Energy to convert the plants. The decision on whether to proceed depends on securing environmental permits and long-term agreements with heating customers. Dong, which owns 17 coal and gas- fired power plants, plans to lower carbon-dioxide emissions in power and heat production per energy unit produced to 15 percent of 2006 levels by 2040, according to its website. In 2010, 14.5 percent of the company’s power output came from wind energy.

Spot polysilicon drops 4.1 pc to $24.70

April 11, 2012. The spot price of solar-grade polysilicion, the main raw material for photovoltaic panels, tumbled for a sixth straight week, according to a survey by PV Insights. Polysilicon dropped 4.1 percent to $24.70 a kilogram from the previous week, accelerating from a 2.1 percent decline over the previous seven days. Solar panels fell 1.7 percent to 87 U.S. cents a watt. Spot prices for the material have fallen by two-thirds in the past year as makers such as GCL-Poly Energy Holdings Ltd. boosted output, surpassing demand for panels and creating a glut.

Italy puts new caps on renewable energy incentives

April 11, 2012. Italy will scale back financial incentives for solar and other renewable energy that have inflated consumer power bills more than expected, and also will raise national renewable energy targets for 2020. Italy's green power industry has boomed in recent years as investors from around the world ranging from banks and private equity funds to utilities poured billions of euros into the sector, lured by generous support measures. With incentives ballooning above expected limits, Rome has decided to cut the support, which has burdened household and industrial consumers who pay for it through power bills that are among the highest in Europe. Under the new decrees approved by Industry and Environment Ministers, renewable energy incentives will be cut by about 3 billion euros a year below levels they would have reached under the current support scheme. Production incentives for solar power generation, keenly watched by investors, will be slashed by about 35 percent on average while incentives for non-solar energy sector will be cut by about 10-15 percent. Under the new support scheme for solar power generation, new spending on incentives will be capped at 500 million euros a year while a total cumulative annual incentives spending limit is set at 6.5 billion euros. Incentives for non-solar renewable energy will be capped at 5.5 billion euros. Renewable energy operators had expected more generous support. With generous incentives in place since 2007, Italy's solar market has become the world's second-biggest after Germany and was the fastest growing market in the world in 2011. It has attracted major solar module makers such as Chinese group Suntech Power Holdings, Trina Solar, Yingli Green Energy Holding and U.S. firms First Solar and SunPower Corp.

German developers plan solar parks in Spain without subsidies

April 11, 2012. Two German solar energy developers are planning to build photovoltaic plants in southern Spain that will earn a return without government subsidies. Wuerth Solar GmbH & Co. intends to build a 287-megawatt plant in the Murcia area for 277 million euros ($363 million). Gehrlicher Solar AG said it plans to develop a 250-megawatt solar park in the Extremadura region for about 250 million euros. The projects, about three times larger than any European solar plant, may be the first that don’t rely on feed-in tariffs and compete with wholesale power prices. All plants in the region so far depend on fixed premium rates for solar power, which can be several times higher than wholesale prices. Spain suspended the tariffs as part of government austerity measures, threatening the survival of the industry. Tariffs for large-scale solar were set at 121 euros per megawatt-hour. Developers now look to build plants without this support, helped by falling equipment prices.

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