MonitorsPublished on May 30, 2012
Energy News Monitor I Volume VIII, Issue 51
Rio + 20 and the Myth of Sustainable Development

Lydia Powell, Observer Research Foundation


he term ‘sustainable development’ is roughly twenty years old and is very popular but like a happy twenty five year old, it just refuses to grow up. Individuals and corporate entities declare that they are committed to ‘sustainable development’ when they want to be seen as doing the right thing, whatever it may be. The most recent high profile commitment to sustainable development was made by the UN Rio + 20 conference to be held two weeks from now in Brazil. According to the conference website, the objective of the conference is to secure renewed political commitment for ‘sustainable development’. What does sustainable development mean? What do we want to ‘sustain’ and for whom? Who will sustain whatever has to be sustained and at whose cost? No one really knows answers to these questions. 

At the 1992 Rio summit the idea of sustainable development seemed to exist only within quotation marks.  Today it is widely believed that the power of the concept lies in the discourses around it rather than any substantive and shared meaning that can be attached to the term. What do the discourses reveal? Let us consider two ‘discourses’ – one from Rio + 20 and one from India. The discourse promoted by Rio + 20 which links sustainable development to a ‘green economy’ does not sound very encouraging as far as the environment is concerned. Concealed in the rhetoric of responsibility towards the environment is the fear that the green technology industry carefully nurtured by industrial economies will be undermined by competition from developing countries such as China. The concern appears to be the competitiveness of the green industry rather than the purpose of the green industry. A substantial part of the ‘green economy’ emerged outside the UN sustainable development context. Environmental technologies or green technologies were seen as the crucial sectors for the future economic development of industrialized nations.  The 2004 Environmental Technology Action Plan for example was meant to make Europe the leader in environmental technology worldwide and not save the planet from climate change.  What industrialized nations want to sustain through Rio+20 is only their industrial competitiveness and not the environment.

The Approach Paper for the Twelfth Five Year Plan (2012-17) of India, adds the watchword ‘sustainable’ to the other two stated goals of the Eleventh Plan, namely ‘faster’ and ‘more inclusive’ growth.  The document does not define or interpret ‘sustainability’ but it liberally attaches the term to an assortment of economic, social and environmental parameters. As per the paper, the Government seeks to sustain growth, sustain the stability of its external account, sustain sanitation efforts, sustain ‘food security’, ensure environmental sustainability of urban development and achieve financial sustainability. The statement that the Government will ensure the ‘sustainability of growth’ particularly with regard to the ‘environment’ because ‘economic growth will be ‘sustainable’ only if it is pursued in a manner that protects the environment’ only adds to the confusion.  

The vagueness of the concept of sustainable development is arguably contributing to its widespread adoption for rebranding existing economic strategies. Because the concept of sustainable development stresses the interconnection of everything, it is vulnerable to distortion. The phrase appears to reconcile the seemingly divergent goals of economic growth and environmental integrity. The biggest problem with the definition is precisely that it does not address the difficult trade-offs between environment and development in the real world.  There is realization among experts now that there are plenty of cases where the two goals are not linked and yet one cannot be pursued at the expense of the other. 

The emphasis of inter-generational equity over inter-regional equity in the Bruntland definition of sustainable development was overlooked by the anxious gathering at Rio twenty years ago because the gathering wanted to present some form of optimism over preserving nature. The compromise generated euphoria among both the development and environmental camps as it was seen a win-win option that would bring the great race between development and degradation to a logical end. More than two decades later the concept has delivered little and is merely a ‘buzz-word’ devoid of content or rational meaning. Action plans for sustainable development have become sprawling documents that offer something for everyone. That way no one gets anything but an incoherent and costly wish list. Twenty years ago, the secretariat of the Rio summit estimated that implementing Agenda 21 might cost $6oo billion a year in new spending, of which $125 billion would have to come as foreign assistance from the industrialized countries. Since then, almost nothing has materialized.  And in the meantime, the international community can continue to craft dreams of sustainable development plans knowing for sure that none of the dreams will be or should be realized. 



Coal Imports from Australia: Options for India

Ashish Gupta, Observer Research Foundation


ustralia’s relationship with India has increased in line with India’s growing need for coal and natural gas. Trade links with Australia can be tracked way back to the East India Company and its first commercial export to India was surprisingly a shipment of coal in 1797. Coking coal and gold have become the major component of Australia’s trade with India today. Australian exports to India is on the rise and currently India stands at fourth biggest export market for Australia underlining our importance as major export destination for Australia.  India’s poor quality coal and increasing demand for power are pushing for more imports from Australia and there is a need to follow the Australian coal industry with reference to India’s needs.

Australian coal is generally very good in quality standards. Most of the production of coal comes from Queensland (Bowen basin), New South Wales (Hunter Valley), brown coal from Southern Australia and some production from Western Australia. Australia has coal reserves of about 39.2 bt, producing 436.5 mt (2009-10).  Almost 50% of the coal extracted is exported to different countries mainly Japan, Brazil Korea, Taiwan, China, India, European Union and others but from 2010 India’s share is increasing very rapidly. Queensland plays very active role in exports as the region has produced 206.5 mt in 2009-10 from 54 coal mines (41 Opencast & 13 UG) and has exported 186.9 mt the same year, followed by New South Wales region which produced 145.5 mt in 2009-10 from 63 Mines (30 Opencast & 33 UG) and exported 109.9 mt.  Some export can be expected from Western Australia in the near future. Coal mining operations are very costly in Australia and are major contributor to increased coal price volatility.

Queensland has a better topology as compared to New South Wales (NSW) and it has multiple locations for deep sea coal ports such as Gladstone, Abbot Point, Hay Point and Brisbane. Queensland’s railway network which is operated by QR National and Pacific National delivers coal to six export terminals located at four major ports namely Abbot Point coal terminal near Bowen, Dalrymple Bay and Hay Point Coal Terminal near Mackay, RG Tanna and Barney Point Coal Terminal at Gladstone and Fisherman Islands coal terminal at Brisbane. The NSW coal industry is largely limited to the port of New Castle and Wollongong because of mountain ranges that separate the inland Hunter Valley coal fields from the coast. Most of the coal is carried by Pacific National railway network though QR National railway has also commenced its freight business recently in the region. Railways carry coal to deliver at three major export terminals namely Carrington & Kooragang coal terminal at New Castle and Port Kemble coal terminal at Wollongong.


Exporting coal from these ports looks straightforward as they are well supported by modern fleet but due to capacity constraints over the number of fleet, coal exports can be disrupted. The port proximity to India coastal ports are also not very attractive as the voyage time is long with very high shipping cost ($ 102.5 - $ 120 Thermal & $ 200 - $ 235 Coking coal) from Eastern Australia ports. Shipping to the Indian East Coast takes 14 days whereas to Indian West Coast takes 18 days which when combined with bulk carrier freight rates increase the coal costs very substantially. Shipping coal to the west coast of India can be reduced by procuring supply from the Western Australia but the infrastructure constraint limits feasibility of this option. Lanco Infratech which had acquired Griffin coal in Western Australia may open up exporting option in the future.

Indian companies who want to acquire coal properties in Australia can explore their opportunities in the Queensland and New South Wales region as the infrastructure is in place but they must take into account the limits of transportation and shipping infratsructure. There are two new coal resource prospects proposed for the development - Surat Basin in Queensland and Galilee Basin in New South Wales and are open for companies to explore but before moving ahead for these basins, it must be kept in mind that railways infrastructure is not yet in place. This will require huge investment as the rail freight distance to port will be in the range of 200 Km – 500 Km which will increase the Freight on Board costs. The best way forward for companies is to form a consortium of companies and collectively acquire the coal properties because this will reduce the investment burden and also help in achieving economies of scale in the long run. Ample opportunities lie in the Western Australia but the major roadblock in this region is getting access to the railway infrastructure which is managed by private companies. Domestic companies sometimes resist other miners to gain access to their railway networks. Another important aspect that one has to keep in mind is that Australian exports are affected by weather related problems especially between December and May each year that limit rail speed and port loading.

The legal & regulatory framework in Australia it is not very complex. One major issue that clouds the mining sector is the new mining tax which the federal government wants to impose through Carbon Tax and Mineral Resource Rent Tax (MRRT). But as revealed in discussions with Indian companies which want to invest in the Australian mining sector this is not a major source of concern. Although the federal government declared the intent to impose the tax in the country from 1st July, 2012 it is not yet clear when it will be implemented as Australian indigenous industry is strongly opposing both the taxes. If implemented, then too MRRT will not be of much concern for the new entities as they will only be taxed once they become profitable while small miners with resource profits below $ 50 million will not be included under MRRT. Carbon Tax which will also be applicable from 1st July 2012, begin with fixed price emissions trading scheme for the initial three to five years before converting to flexible price cap and trade emissions scheme. The starting price is yet to be decided but as per an independent expert Prof. Garnaut it will be in the range of $ 20 - $ 30. This is going to be a major concern as it will reduce profitability and also increase the coal costs.

Australia is a good destination for acquiring coal properties specially coking coal mines but for thermal coal, it is not very attractive because of the domestic price constraint. There are some pros and cons while acquiring properties like there are in any country we can always learn from the experience of the Indian corporates who have already acquired some coal projects in Australia like Adnani Group’s Karmichael Coal Project, Jindal Stainless Steel’s Middlemount coal project, Gujarat NRE Coke’s Balgownie coal mine and Lanco Infratech’s Griffin coal mine. If a company wants to acquire coal properties in the Australian region it must be aware of the bottle necks, project profitability & feasibility and cost for shipping the coal before moving ahead for the coal projects. Finally it must be emphasized that India does not have any choice as far as coking coal is concerned but that is not the case with thermal coal. The industry must not see imports as a way to get away from domestic problems.


Preservation-Prosperity Dilemma of Hydropower

Sonali Mittra, Observer Research Foundation


ustainability ideas confront a phalanx of trans-global forces - pervasive human impacts on the environment, current and aspirant economic wellbeing and the pursuit of equity between nations that are conspiring to create a preservation-prosperity dilemma of epic proportions in the hydropower sector. In the context of Transboundary Rivers, geo-political equity dominates all the other forces. The recent and on-going cases of Neelum Jhelum and Kishanganga hydroelectric projects have got much attention from the geopolitical angle, neglecting the social and environmental aspects.

While Neelum Jhelum hydroelectric project is on the Pakistan Administered Kashmir, Kishanganga hydroelectric projects lies on the Indian side. In terms of design and operation, they both follow similar process of diverting the water for producing hydropower. However, there lie many differences in both the projects with respect to the technicalities and the rationale. Without going much into characteristic detail of the two projects, it is important to know that both the projects are shepherding the natural resources to maintain and extend energy derived benefits for the present population, rather than preserving the river for the future generations.

A point in consideration is the superficiality of the entire controversy on the Kishanganga project. While Pakistan claims that India has violated the Indus Waters Treaty by increasing the catchment area of the Jhelum River, India on the other hand denies it completely based on the run-of-the-river design of the project. The case is under review in The Hague’s Permanent Court of Arbitration (CoA). As of now, India has been stopped from constructing any permanent works that would inhibit restoration of the river. To argue that such issues are more political and technical and not environmental, wouldn’t be completely off the mark.

There are two major issues which have been innately neglected in the entire discourse on these hydropower projects. One, the concerns about the environmental impact of the project have been skirted aside by the dominating and more convincing ‘energy security’ narrative. The environmental fears related to the hydropower projects are not unknown. Disturbing the natural flows, altering micro-climate, threatening flora and fauna of the region, submergence, methane emissions etc. give reasons to environmentalists to question the sustainability of the project. However, the positive effects of the project have quantitatively outnumbered these concerns. Two, intensively, the view of the regional Kashmiri population has been left out in the decision making process. Most of them live in the rural areas, depending largely on forestry, livestock and agriculture for their livelihoods.  River water and natural springs are their main source of drinking water and irrigation, which might be affected severely by the proposed power projects on both sides of the border. Therefore, social developmental planning alongside these projects becomes necessary as one of the main planning components than being treated as a subsidiary aspect.

In conclusion, it is safe to argue that such conflicts can be easily managed and controlled if the focus is shifted from superficial political dramatics towards real issues that concern project affected people and their environment. Deriving long-term benefits from such projects is no longer possible by justifying only the economic rationale, the social and environmental parts have to be in equilibrium with it. The dominance of hydropolitics in decision making processes is not conducive to maintain the health of the river.



Indian Crude Imports & Prices

Akhilesh Sati, Observer Research Foundation



Import of Crude & Petroleum Products

Indian Crude Basket Price

 ($ Million)

(` Crore)


















































2010-11 (P)




2011-12 (P)






Source: Petroleum Planning & Analysis Cell & RBI Handbook on Indian Economy







ONGC may bid for $5 bn ConocoPhillips Canadian oil sands assets

June 5, 2012. Oil and Natural Gas Corp (ONGC) is considering bidding for part of ConocoPhillips Canadian oil sands holdings worth around $5 billion. The Houston-based company has been looking to sell assets in a number of countries including Nigeria as part of a global restructuring. ConocoPhillips recently completed the spin-off of its refining activities into Phillips 66, a newly created independent U.S. company. ConocoPhillips said that it is selling a stake in six Alberta properties that produce 12,000 barrels of oil a day from an estimated 30 billion barrels of bitumen. The first round of bids is due soon and there is likely to be competition from other international parties, including possible Chinese interest. Oil India is also looking to buy stakes in ConocoPhillips' oil sand assets in Canada. Of the six projects offered, only Surmont, run in a joint venture with France's Total SA, is producing oil. Lo cated south of the oil sands hub of Fort McMurray, Alberta, the steam-driven development pumps about 25,000 barrels a day. The partners are working to boost that to 136,000 bpd, starting in 2015. The other properties are the Thornbury, Clyden, Saleski, Crow Lake and McMillan Lake assets. The land totals 715,000 acres.

India eyeing Afghanistan O&G blocks sans bids

June 5, 2012. India is hoping to secure oil and gas exploration blocks in Afghanistan on the basis of its goodwill with the country, while it may also participate in the upcoming auction of six blocks to the north of Mazar-i-Sharif. An Indian delegation, including officials from Oil & Natural Gas Corp, is expected to visit Afghanistan soon on invitation from its mines minister. They were hoping to get some prospective blocks in Afghanistan without participating in the bidding process because of the goodwill that India has generated in the country. It is also expected that Indian firms will commit investments in Afghanistan to get blocks on nomination basis. India, one of the largest aid donors to war-ravaged Afghanistan, has lagged behind China in the race for acquiring oil and gas assets in the region. China bagged three energy blocks in the Amu Darya basin after promising to invest in a refinery there. New Delhi is keen on lie near the border to Turkmenistan, which has the world's fourth largest reserve of natural gas. Turkmenistan has proven gas reserves of about 265 trillion cubic feet. The oil and gas potential of Afghanistan is not fully established yet. India is also keen on joining the second round of bidding for energy blocks this time in the Afghan-Tajik-basin, having missed the first. ONGC Videsh, is considering participating in the auction of the six exploration blocks offered. The last date for submission of expression of interest is June 30.

ONGC to focus on deepwater, shale strategy to double production, triple profit by 2030

May 31, 2012. Oil & Natural Gas Corp (ONGC), India's biggest energy explorer, plans to focus on shale and deepwater areas to double production and triple profit by 2030 as it competes with China to acquire assets globally. The state-owned explorer plans to spend ` 1.25 lakh crore ($22.4 billion) to increase output in the next five years and an additional $1 billion to acquire shale assets in the US to meet demand in India. ONGC has been beaten by Chinese rivals in the quest for assets from Latin America to Africa as the world's most populous nations seek to secure energy supplies.


HPCL keen on oil refinery at Barmer in Rajasthan

June 5, 2012. With ONGC deterring from building a refinery in Rajasthan, Hindustan Petroleum (HPCL) has expressed interest in setting up a 9 million tonne unit at the site of the massive oil find at Barmer district. HPCL, which owns a refinery at Mumbai and Visakhapatnam in Andhra Pradesh and is equal partner in the just commissioned Bhatinda refinery in Punjab, is keen to take up the project. ONGC, which owns 30 per cent interest in the Barmer oilfields of Cairn India, had in 2005 committed to building the refinery but later started soft- peddling the project. HPCL has now entered the fray and has proposed to take 51 per cent stake in the project. ONGC, which originally had the authorisation from the government for processing the Barmer crude at the proposed refinery, would hold 26 per cent interest.

Essar Oil completes Optimisation Project, volumes, margins to grow

June 5, 2012. Essar Oil announced that it completed its Optimisation Project four months ahead of schedule to add 11.1% capacity to its refinery at Vadinar in Gujarat, which now stands at 20 MMTPA or 405,000 barrels per day. The scrip gained around 1.6% on the news to reach intra-day high of ` 51.30 but lost steam on overall market weakness later in the day. This optimisation project will not only add volumes growth, but also enable the company earn better margins. Vadinar Refinery now has the capability to process much heavier crude diet. The share of ultra heavy crude will go up to 60%, and as a result, the overall share of heavy and ultra heavy crude will go upto 80% of the refinery's total crude basket. Close to 80% of its production will now be of valuable light and middle distillates; and more than 50% of the production of gas oil (diesel) and gasoline (petrol) will meet Euro IV and Euro V specifications.

IOC sets new timeline for Paradip refinery project

May 31, 2012. Having missed the March 2012 deadline for completing the 15-million tonne per annum refinery project at Paradip, Odisha due to multiple factors, Indian Oil Corporation has now set a new timeline of around September next year for commissioning the project. A mix of factors such as changes in engineering design due to deferment of petrochemicals resulting in delay in submission of detailed engineering and subsequent procurement and contract lining up by project management consultant Foster Wheeler, change in sourcing of power from Tata Power-IOC joint venture to own captive power plant, delay in supply of critical equipment from vendors, local issues etc. The other factors that have led to the delay in commissioning of the project include imposition of an interim stay by Odisha HC on all construction activities at Hadia-Patha area on Mahanadi River since July 2011. When completed, the refinery will have a crude and vacuum distillation unit, a hydrocracking unit, a delayed coker unit and other secondary processing facilities. The project is being constructed over 3,344 acres with IOC having already spent nearly ` 15,000 crore on it. The refinery was originally planned to export at least 2.05 million tonnes of petrol and 124,000 tonnes of naphtha out of its yearly output of 15 million tonnes. But double-digit growth in petrol and diesel consumption has left very little for exports. Paradip refinery will produce 5.97 mt of diesel, 3.4 mt of petrol, 1.45 mt of kerosene/ATF, 536,000 tonnes of LPG, 124,000 tonnes of naphtha and 335,000 tonnes of sulphur, all of which will be sold in the domestic market.

Transportation / Trade

GSPC lowers bid for Gujarat Gas Company stake

June 4, 2012. BG is facing aggressive bargaining in the sale of 65% stake in its city gas venture, with the sole bidder, Gujarat State Petroleum Corp (GSPC), offering to pay less than its original bid, and the rupee's depreciation squeezing the returns further for the global energy firm. The currency's fall, from about 43 against the dollar last year to about 56, has also hit valuation of the stake as BG's unit, Gujarat Gas Company (GGCL), depends on import of liquefied natural gas (LNG) as domestic gas is scarce. GSPC had earlier offered to pay 300 per equity share of GGCL.

RIL relents, to sign gas supply pacts with Pragati Power, NTPC

June 3, 2012. After initially resisting, Reliance Industries Ltd (RIL) has agreed to sign agreements with Pragati Power Corp and NTPC for supply of natural gas from its eastern offshore KG-D6 fields. With output from KG-D6 continuing to decline, RIL was against signing new Gas Sale and Purchase Agreements (GSPA) as meeting new supply commitments would have meant cutting gas supplies to existing power plants. But under intense pressure from Delhi government and oil ministry, RIL has now agreed to sign GSPAs for supply of 2.16 million standard cubic meters per day to Delhi's Bawana power project and NTPC. RIL has informed the Delhi government and Pragati Power Corp of its intention to sign GSPA for supply of 0.93 mmsmcd of gas and has forwarded a draft agreement. KG-D6 fields had seen drop from 61.5 mmscmd in March, 2010, to about 32 mmscmd, forcing pro-rata cuts on customers. The new pacts would mean supplies to 25 power plants who were allocated gas from Krishna Godavari basin fields, further going down. Private power producer Lanco has already warned of power plants, which are currently operating at less than 38 per cent, shutting down if supplies are cut any further. Supplying gas to Bawana and NTPC would mean supplies would further reduce to uneconomical levels of 20-25 per cent. While the KG-D6 gas supplies dropped, the pro-rata cut was applied only to the 25 power plants which had an original allocation of 28.90 mmcmd. Fertiliser plants, which were allocated about 15 mmscmd of KG-D6 gas, did not face such a cut. Supplies to Pragati Power would mean a further drop in supplies to power plants.

GAIL sees 2012/13 capital expenditure at $1.3 bn

May 30, 2012. GAIL India plans capital expenditure of around ` 74 billion ($1.33 billion) in the current fiscal year that started on April 1. Most of the expenditure will be on pipeline projects. To fund the expenditure, the company will raise about 45 billion rupees through debt, including 5 billion rupees through local bonds, and another $300 million through external commercial borrowings.

Formalities for setting up VMC-GAIL joint venture company over

May 30, 2012. The Vadodara Municipal Corporation (VMC) and the Gas Authority of India Ltd (GAIL) have completed most of the formalities for the proposed joint venture company, which aims at providing gas at lowest rates through piped connections to people in the city. At present, there are about 75,000 piped gas connections in the city and the JV is eyeing an additional 85,000 gas connections. VMC said most of the formalities have been completed and several names are under consideration for this joint venture company. VMC and GAIL had signed a formal agreement for the gas project in New Delhi in April 2011. It was followed by an MoU between GAIL and VMC in October 2009.

Policy / Performance

Why diesel & kerosene are a drag on state oil companies' finances

June 5, 2012. Brent crude oil prices dipped below $96 a barrel, plunging to the lowest in 18 months. Petrol prices in India are higher than what was prevailing when crude oil last touched this level, even after accounting for the depreciation of the rupee. State oil companies aim to price transport fuel at a level roughly equivalent to the landed cost of notional imports. This target price is about $19 more than the cost of Brent crude in the case of petrol. Globally, petrol's premium to Brent, dropped to $10.14 a barrel in June, according to agency reports. For diesel, the global benchmark of refining profitability, called "gasoil crack" is below $15. In India, state oil marketing firms seek a much higher target price for petrol. The story is different for diesel, where current retail prices are a fraction below the cost of Brent, and higher than some grades of Middle East crude that they process. For kerosene, the retail price is dramatically lower than the cost of crude oil. Here are the details of the price components of the three liquid fuels, which show that petrol is hugely profitable while the other two liquids are a drag on the finances of state firms.

Petrol price: Pranab Mukherjee favours 25 pc cut in states taxes

June 4, 2012. Finance Minister Pranab Mukherjee made out a strong case for a 25 per reduction of taxes levied by states on petrol to bring down its price. He justified the high price of petrol because of the overall international price of crude. He said the states needed to also do their bit on reduction of petrol price. Corruption and price rise were the most important issues during the discussion at the Congress Working Committee (CWC). Kerala Pradesh Congress Committee (KPCC) attacked the petroleum companies for raising the petrol prices, especially at a time when Kerala was witnessing a by election, that put the party in trouble. He wanted the government to take back the power to decide oil prices.

Under huge financial strain: Oil marketing cos

June 3, 2012. Three state-run oil marketing companies said they are under "huge financial strain" due to selling diesel, kerosene and cooking gas at subsidised rates and would have reported a combined loss of ` 132,000 crore had the government not assisted them. The companies said that false impression is being created in some sections that the oil marketing companies have recorded huge profits in 2011-12. On the contrary, the OMCs have been incurring huge losses, Indian Oil, Hindustan Petroleum and Bharat Petroleum said. The companies incurred losses due to sale of three products - diesel, liquefied petroleum gas (LPG) and kerosene - at highly subsidised prices, it said. It is only after the assistance of ` 83,500 crore from the government and ` 55,000 crore from the upstream oil companies Oil and Natural Gas Corporation, Oil India Ltd and Gas Authority of India Ltd, totaling ` 138,500 crore, that the three public sector OMCs could declare nominal profits. The oil marketing companies together had a combined turnover of ` 833,000 crore during 2011-12. Against this, they had declared a combined profit of ` 6,177 core - 0.7 percent of their turnover.

No rollback of VAT on CNG: Dikshit

June 3, 2012. Notwithstanding strong demands by BJP and a section of the ruling Congress, Delhi Chief Minister Sheila Dikshit has made it clear that there will be no rollback of five per cent VAT on the CNG, which fuels public transport on Delhi roads. Dikshit had proposed to imposed the VAT on CNG to generate around ` 110 crore in revenue while withdrawing VAT on the increased component of the petrol. The Delhi Assembly will take up the budget for approval. The VAT will push the CNG price ` 37.20 per kg from current ` 35.45 per kg, which will be a rise of ` 1.77.

Oil companies cut petrol rates by ` 2 per litre; another price cut likely this month

June 2, 2012. State oil marketing firms have reduced petrol prices by Rs 2 a litre due to softening of international oil rates and expect another rate cut by mid-June if the trend continues, companies said. Petrol will become ` 2.02/llitre cheaper in Delhi inclusive of local taxes. Companies say the price cut is about ` 1.67/litte across India but pump rates in different cities depend on local levies. State tax on petrol in New Delhi is 20%. Average international petrol rate was $124.42 and exchange rate was ` 53.17/dollar when petrol price was sharply raised by ` 7.54 a litre. Its price was reduced because average international petrol price dropped to $115.81/barrel. But exchange rate of ` 54.96/dollar played a spoilsport, oil companies said. There could be another petrol price cut by June 16 if the decline in international crude oil and petrol rates continues. While Brent slipped below $100/barrel for the first time in eight months, benchmark gasoline was at $111.87/barrel, about $3 a barrel cheaper than the average of last fortnight. Oil companies expect that petrol prices in Delhi would drop further in next couple of days after the state government would issue official instructions to reduce state tax. After sharp hike in petrol rates by ` 6.28/ litre (without local levies) last week, Delhi chief minister Sheila Dikshit had announced that the state would not levy 20% tax on the increased amount.

PNGRB has no power to regulate tariff: HC

June 2, 2012. The Delhi high court ruled in favour of Delhi gas utility Indraprastha Gas Ltd (IGL), stating the government regulator had no jurisdiction to fix rates or regulate tariff. Riding on the favourable ruling, IGL's shares skyrocketed 29% - the most since 2003, when the company was listed - closing at 249.35. The court ruling settles, at least for the moment, the confusion surrounding the margins that gas utilities are allowed to earn. The regulator Petroleum & Natural Gas Regulator's (PNGRB's) order in April had knocked down the sector stocks over similar fears. However, the Delhi high court ruling has changed all that and city gas distributors have reasons to smile as they will now get more freedom to determine their tariff. But the role and scope of the regulator has come under cloud, especially after the ruling.

Madhya Pradesh will not reduce VAT on petrol

June 1, 2012. Madhya Pradesh Chief Minister Shivraj Singh Chouhan refused to cut Value Added Tax (VAT) on petrol any further. He said it was up to the central government to slash the recently hiked petrol prices. Chouhan pointed out that the state government had already reduced VAT on petrol by more than 2 percent during the state assembly's budget session three months ago. He said the central government was not justified in hiking petrol prices given the fact that oil prices were falling in the international market.

Oil companies deferred petrol price cut decision due to BJP-led Bharat bandh

June 1, 2012. State oil companies have deferred their decision to cut petrol rates despite softening of international prices of the fuel as the move would give "undue credit" to BJP. The political leadership would decide the timing of the price cut. BPCL confirmed that there is a downward trend in petrol rates. The three companies could not meet to decide petrol price revision. Petrol prices could be revised as early as. Petrol would have been about ` 2 a litre cheaper in New Delhi if the price revision had taken place. Indian Oil, Bharat Petroleum and Hindustan Petroleum said average international petrol rates for current fortnight had dropped to around $115/barrel from previous average of $124/barrel when prices were raised sharply to unprecedented ` 7.54 a litre, that invited political oppositions from both ruling and opposition parties.

India LNG project could spark $1 bn in gas sector investment

June 1, 2012. Royal Dutch Shell, Reliance Power and Kakinada Ports will jointly build a floating terminal off the eastern coast of Andhra Pradesh to receive imported liquefied natural gas (LNG) and convert it into gas for supply, a project that could entail investments of $1 billion in the state's gas sector. The project will start with a capacity of up to 5 million tonnes per annum (mtpa), which can be scaled up to more than 10 mtpa. It will be completed in 2014. India has only two LNG terminals in India, both of them located on the west coast. There is no LNG terminal in south India though there is a huge unmet demand for gas in the region. Gas majors like Petronet LNG, ONGC and GAIL have announced plans to set up similar LNG terminals in Andhra Pradesh, which has emerged as an attractive destination for LNG.

Iran remains India's important source of oil: Krishna

May 31, 2012. In the backdrop of US pressure to reduce oil imports from Iran, India said unilateral sanctions should not impact upon its "legitimate trade interests" with the Persian nation. After talks with visiting Iranian Foreign Minister Ali Akbar Salehi, External Affairs Minister S M Krishna made it clear that Iran remained India's important source for oil given the growing domestic demand for crude. Asked about the US sanctions on Iran and its affect on trade, Krishna said India has always abided by the United Nations Security Council resolutions on the Iran issue.

Govt appoints panel to review oil firm contracts

May 31, 2012. Government set up a panel headed by C. Rangarajan, chairman of the prime minister's economic advisory council, to review production sharing contracts in the oil and gas sector. The committee will submit its recommendations by Aug 31 this year. The six-member committee will look into "all modifications necessary for future production sharing contracts so as to enhance production of oil and gas and the government's share of this while minimising procedures for monitoring the expenditure of producers". Prime Minister Manmohan Singh has approved the constitution of the committee on the request of Petroleum and Natural Gas Minister Jaipal Reddy. The committee has been asked to review the existing production sharing contracts, including in respect of the current profit-sharing mechanism with the Pre-Tax Investment Multiple (PTIM) as the base parameter. The government has also asked the committee to suggest structure and elements of the guidelines for "determining the basis or formula for the price of domestically produced gas, and for monitoring actual price fixation". Members of the committee include B.K. Chaturvedi, member Planning Commission, Jagannadha Rao, former judge of the Supreme Court, Ramprasad Sengupta, professor at Centre for Economic Studies and Planning, JNU, J.M. Mauskar, former IAS officer, and Joeman Thomas, managing director of ONGC Videsh Ltd.



OPG Power Ventures to invest ` 30 bn to expand capacity

June 4, 2012. OPG Power Ventures PLC, a power generation company listed on the London Stock Exchange, will invest ` 3,000 crore to set up three new projects totaling 540-MW. OPG plans to increase its existing generation capacity to 750-MW by 2014. The company will set up three new thermal power plants - one 80 MW and a 160-MW in Chennai and a 300-MW project at Kutch in Gujarat. All these projects are coal-based and will start generating power by 2014, it said. The new projects are being set up near ports so that both domestic and imported coal can be used. Presently, OPG is a producer of group captive thermal power in India with an existing operating capacity of 112-mw through three existing power plants in Tamil Nadu and Gujarat. An additional unit of 77-MW will also start generating power shortly.

India’s total power generation capacity crosses 200 GW in 11th plan period

June 3, 2012. The total installed capacity of the country has crossed two 200 giga watt, with a record capacity addition of 54,964 MW in the 11th plan -- about two and half times the capacity added in the 10th plan. This was stated by power minister Sushil kumar Shinde while flagging off main plant civil works of NTPC's Solapur Super thermal Power project (2x660MW). NTPC, with a rich experience of engineering, construction and operation of around 38,000 MW of thermal generating capacity, is the largest and one of the most efficient power companies in India, having operations that match the global standards.

BHEL bags ` 11 bn contract from NTPC for power generating unit

May 31, 2012. BHEL said it has bagged a ` 1,143 crore contract from country's largest power generation utility NTPC for setting up a 500-MW power generating unit at its Vindhyachal Super Thermal Power Station in Madhya Pradesh. On commissioning of the unit, 12 million units of electricity will be added to the grid, every day, BHEL said.

Transmission / Distribution / Trade

Maharashtra will be free of power cuts by Dec’

June 5, 2012. Ninety-four divisions of the Maharashtra State Electricity Distribution Company Ltd have become free from power cuts because of low distribution and commercial losses and good performance in electricity bill collection, deputy chief minister and energy minister Ajit Pawar said. Pawar was speaking at the inauguration of a 22/11 KV sub-station at Warje. He said, divisions that have less than 34% commercial and distribution loss and regular bill paying culture would be considered for elimination of load shedding. Industries in the state were getting 24-hour uninterrupted power supply while agricultural consumers were getting supply for eight hours in the day and 10 hours in the night, Pawar said. Pawar also inaugurated the project for electrification of 11 villages in Mose valley of Mulshi taluka. He said that the government was annually giving ` 6,000 crore worth of subsidy to domestic, below poverty line consumers and agricultural consumers.

Bangladesh keen on importing power from Arunachal

June 2, 2012. Bangladesh has evinced keen interest in importing power from Arunachal Pradesh, once the ongoing hydro-electric projects in the State are commissioned. Bangladesh Prime Minister Sheikh Hasina conveyed this desire to Arunachal Pradesh Chief Minister Nabam Tuki when he along with 16 other delegates from North East, including Meghalaya Chief Minister Mukul Sangma, met her in Dhaka. A Central Power Grid is proposed to be established to transmit electricity from Arunachal to Bangladesh. Officials from Bangladesh will be visiting the State shortly for the purpose, it said.

Power Grid Corporation board approves investments worth ` 34 bn

June 1, 2012. Power Grid Corporation of India said its board has approved investment proposals worth ` 3,422.40 crore. The proposals were approved at meeting of the company's board, it said. The company would pump in ` 1,909.24 crore for certain projects in Srikakularm and the work is anticipated to be over within 36 months from the date of investment approval. Power Grid would invest ` 1,263.26 crore for system strengthening of "XVIII in South Regional Grid" and the work is expected to be completed in 29 months from the date of investment nod. The power transmission major would put in ` 174.16 crore for fibre optic communication system for central sector sub stations and generating stations in Southern region. The project is expected to be commissioned within 30 months from the investment approval date. Further, the firm would invest ` 75.74 crore related to work at its sub station for Raichur - Sholapur transmission. The same is anticipated to be completed within 21 months from date of investment approval.

Policy / Performance

Coal blocks allotment through under three models: Ministry

June 5, 2012. Amid controversies shrouding coal blocks allocation, the government said it has finalised three models - auction, tariff-based competitive bidding and government dispensation route -- for grant of mines to various categories of firms. There shall be three categories/models for allocation, the Coal Ministry has said in a letter to Chief Secretaries of all states. The ministry had earlier notified the Auction by Competitive Bidding of Coal Mines Rules, 2012 and the MMDR Act, 2010. Grant of mines to companies for specified end-uses other than power "shall be done by auction through competitive bidding process...Government companies can also participate in the process, though allotment to government companies for end- use can also be made under Government dispensation route", the letter said. On allocation of blocks for power generation through competitive bidding, it said, "The identified blocks earmarked for allocation to the power sector would be earmarked to Ministry of Power/State Government for carrying out the tariff based bidding." Besides, the allotment would be done to mining/mineral development companies in states for commercial mining on fuel supply agreement/coal linkage basis.

Coal India asks arms to sign FSA with power units coming up by 2015

June 5, 2012. Coal India has directed its subsidiaries to enter into fuel supply pacts with power units that are coming up between January 2012 and March 2015, bringing a respite to fuel-starved power companies. The development comes in the wake of Coal Ministry, directing the public sector company to enter into pacts with power units which will commission during the period. Coal India has nine subsidiaries, including Mahanadi Coalfields Ltd and Eastern Coalfields Ltd. CIL will seek advice from Prime Minister's Office (PMO) through the Coal Ministry on how to go about signing FSAs with power plants for three years. The PMO had asked CIL to sign FSAs with plants that have come up after April, 2009 and will be set up till March, 2015 by March 2012.

Energy efficiency may save thermal power stations ` 30 bn in 3 yrs

June 5, 2012. As many as 144 thermal power stations across the country will be able to save ` 3,000 crore in three years by being energy efficient and save on coal consumption as well. Under its PAT (Perform, Achieve and Trade) scheme, Bureau of Energy Efficiency (BEE) has notified these thermal power stations a target figure for fuel consumption reduction, which will make them energy efficient by March 2015. The proposed target in the PAT scheme is around 3.2 million tonnes of oil equivalent which roughly translates into 6 million tonnes of coal required to produce electricity. The implementation period for PAT cycle is three years, from April 2012 to March 2015. After completion of the first commitment period, the savings will be on an annual basis.

Power Minister Sushilkumar Shinde to meet state regulators

June 4, 2012. Power minister Sushilkumar Shinde will meet state electricity regulators to discuss measured required to minimise time taken in judicial proceedings. The Appellate Tribunal for Electricity has convened a meeting with chairman and members of central and state electricity regulatory commissions and about sixty electricity regulators from different parts are expected to attend. The meeting will focus on challenges before the electricity regulators and tariff related issues in view of poor financial condition of distribution companies. The meeting would deliberate upon making investments in infrastructure and smooth functioning of consumer grievance redressal mechanism.

NHPC gets CEA nod for Tawang projects

June 3, 2012. The National Hydro-electric Power Corporation (NHPC) has obtained concurrence of CEA (Central Electricity Authority) for 600 MW Tawang-I and 800 MW Tawang-II Projects in Arunachal Pradesh. Environment clearances have also been accorded by the Union Environment and Forest Ministry for both these projects. NHPC has reported 27.93 per cent rise in net profit at ` 2,771.77 crore during 2011-12 compared to year-ago period. It registered sales turnover of ` 5,509.65 crore against ` 4,046.59 crore, it said. The Centre has allowed NHPC to plan, promote and organise an integrated and efficient development of power through conventional and non-conventional sources in India and abroad.

` 80 bn for Uttar Pradesh's power sector

June 2, 2012. An ailing power sector got a dose of more than ` 8,000 crore in the state budget tabled by chief minister Akhilesh Yadav. While less than half of this -- ` 3429.48 crore -- will be spent on strengthening the distribution network and adding generation capacity, ` 4040 crore will go as a grant to the UP Power Corporation Limited to bail it out from an ever mounting debt. Barely a day ago, the state government lambasted the previous Mayawati government for mounting dues to the tune of ` 25,000 crore on UPPCL. Yadav said that the compensatory provision, which was 47% more than last year, has been made to ensure that the corporation provides power at concessional rates to the consumers. A major part of the state budgetary allocation has been made towards strengthening the distribution network and upgrading the existing power generation plants. The state government is of the view that though the previous regime proposed to set up power plants though the MoU route, they never came up in the absence of coal linkages. The Mayawati government had proposed to set up power plants through MoU route with a combined capacity of 15,000 MW. The agreement period is set to expire by June 10 after which the MoU would stand nullified. Chief minister Akhileh Yadav said that they intend to strengthen the power plants like Rosa and Lanco power plants, which were proposed during the previous SP government. The two power plants have been facing coal crisis for sometime for one or the other reason. While Rosa faced the coal shortage, the Lanco was not having its coal handling plant in order. The grant could therefore go a long way in putting these two crucial power plants in a better state. The state government also made budgetary allocation of ` 100 crore for the Rajiv Gandhi Rural Electrification Scheme. Likewise, the state government also proposed a sum of ` 100 crore for solar power. According to experts, the cost of production in case of solar power is to the tune of ` 13 crore per megawatt. Given this, the sanctioned amount would only suffice for less than 10 MW. A budgetary provision of ` 127.60 crore has also been proposed for lump sum payment of outstanding electricity bills of power looms weavers in a bid to provide relief to them.

Electricity tariff goes down for BPL, agriculture and residential customers

June 2, 2012. The Gujarat Electricity Regulatory Commission (GERC) directed the state utilities and private players to reduce their power tariff for the consumers of state. The development comes as at a time when power tariff is on rise in most states. The commission initiated suo motu proceedings for truing-up of FY'11 and for determination of tariff for FY'13 under the Multi-Year Tariff (MYT) framework for the state owned distribution companies, as they had not filed their tariff petitions within the time limit as required under the regulations. The regulator also passed a tariff order for Torrent Power that distributes electricity in Ahmedabad and Surat. The GERC directed all the four distribution companies to submit the audited accounts of FY'11 and other relevant details in this regard.

Assam mulls pilot hydel project with new technology

June 1, 2012. Amid widespread protests in the state over the safety of Lower Subansiri mega dam in neighbouring Arunachal Pradesh, the state government is mulling to start a pilot hydel project with a new low-cost technology called Piano Key Wier (PKW). The Piano Key Weir is a weir of particular geometry, associating to a labyrinth shape the use of overhangs to reduce the basis length. The Piano Key Weir could thus been directly placed on a dam crest. Together, with its important discharge capacity for low heads, this geometric feature makes the Piano Key Weir an interesting solution for dams rehabilitation as well as new constructions. The Piano Key Weir was first designed in 2001 and built for the first time in 2006.

Govt issues guidelines to discoms for short term power purchase

May 31, 2012. The government has notified guidelines for short-term power purchase by distribution companies. The new guidelines will promote competitive procurement of short-term power requirement by the distribution licensees and are also expected to reduce the overall cost of procurement of power leading to significant benefits for consumers. The guidelines aim at promoting competitive procurement of electricity by distribution companies, reduce power purchase bill and facilitate transparency in procurement processes. The guidelines would not be applicable for power procurement for less than 15 days to allow for contingencies. Power procured under banking mechanism and from power exchanges shall also be excluded from the scope of these guidelines.

NPCIL not affected by rupee depreciation

May 30, 2012. The rupee depreciation will not impact the Nuclear Power Corporation of India Ltd (NPCIL) as it has already imported the required quantities of uranium, the company said. Tariffs are not affected due to rise in fuel costs or rupee depreciation. The fuel cost in a nuclear power project constitutes just a fifth of generation cost. The first unit of two 1,000 MW atomic power reactor at Kudankulam Nuclear Power Project (KNPP) is expected to start power generation some time next month, while the commercial production is expected to happen this August.

TCI to file case against Coal India

May 30, 2012. The Children’s Investment Fund Management (TCI), stating that the meeting with Ministry of Coal remained inconclusive, is set to file a case in the Indian Courts in July against Coal India Limited and its board. The hedge fund said that its meeting with Alok Perti, secretary, MoC did not yield the desired result. TCI said that the ministry admitted that it is interfering in fuel supply agreement (FSA) negotiations and also agreed that Coal India Limited is free to set coal prices, but that is not enough and is vague. He added that TCI has two clear demands. One is to make a public commitment as to by when they are going to price all coal through markets and second is commitment on coal washing. Other than this the damage compensation issue also remained unresolved.




Russia exit heralds end of Browne’s BP as production dips

June 2, 2012. BP Plc’s decision to consider selling out of its Russian venture signals the end for John Browne’s vision of a British driller able to challenge Exxon Mobil Corp. as the world’s largest publicly-traded oil producer. At the helm from 1995 to 2007, the former chief executive officer forged a $100 billion series of deals that made BP Europe’s largest oil company. Already forced to shed more than $20 billion of assets to pay the costs of the Deepwater Horizon disaster in 2010, selling TNK-BP would see BP’s oil and gas production drop to less than 3 million barrels of a day for the first time since 1997, putting it behind Royal Dutch Shell Plc and Chevron Corp. Bob Dudley, the company’s first American CEO, is betting investors will back his move to create a leaner oil producer that concentrates on exploring for new reserves rather than overall production. Smaller producers have outperformed larger rivals. Shares in Exxon, France’s Total SA and ConocoPhillips as well as BP have all fallen over the past five years.

Chesapeake oil well is biggest gusher in company history

June 2, 2012. Chesapeake Energy Corp. said it drilled the largest oil gusher in the company’s 23-year history at a “significant” discovery in the Anadarko Basin of Texas and Oklahoma. The Thurman Horn 406H well in the Hogshooter formation produced 5,400 barrels of crude a day during its first eight days of operation, Chesapeake said. The output was more than twice that of some of the best performing wells in the Eagle Ford shale of south Texas, which Chesapeake counts as its most valuable holding. The discovery will accelerate the second-largest U.S. natural-gas supplier’s shift to more profitable crude production. Chesapeake shares have dropped 28 percent as gas prices hit a 10-year low and probes began of McClendon’s personal finances. Gas comprises more than 80 percent of the Oklahoma City-based company’s output. Chesapeake is seeking to sell $20.5 billion in assets by the end of 2013 to fill a cash-flow shortfall. The Hogshooter wells aren’t among the assets for sale.

OVL mulls options of staying put in Cuba

May 31, 2012. ONGC Videsh Ltd (OVL) is evaluating options of staying put in Cuba after its Spanish partner Repsol YPF failed to find oil and gas in an offshore well. Repsol, OVL and Statoil of Norway - the third partner in a grouping of six deepsea exploration block in Cuba, would meet shortly to evaluate results of the Jaguey-1 exploration well. The Jaguey-1 exploration well drilled by Repsol and partners Statoil of Norway and OVL on deepsea Block N26, in Cuba's Exclusive Economic Zone in the Gulf of Mexico, did not yield any oil and gas find. The three partners had initially been due to drill a total of two wells using the Chinese-built offshore drilling rig Scarabeo 9, which had been specially contracted so as not to contravene the US trade embargo. Repsol announced that its long-anticipated well in the Florida Straits near Havana had come up dry, which followed its first unsuccessful well in the same area in 2004. They are only offshore wells drilled in Cuba. OVL holds 30 per cent interest in an offshore exploration block in Cuba covering the six areas. Repsol holds 40 per cent in the 11,231 sq km block. Statoil Oil and Gas AS has the remaining 30 per cent interest. The Indian firm has so far spent about $ 27 million as its share of investment in the block. OVL is not abandoning deepwater Blocks 34 and 35, where it holds 100 per cent interest with operatorship. The Blocks located in Cuba's Exclusive Economic Zone cover an area of 4,300 sq km. The Production Sharing Contract for the Blocks was signed on September 10, 2006. The company has so far invested about $ 42.99 million in the blocks.

Iraq fails to entice bidders for most oil, gas blocks

May 31, 2012. Iraq failed to attract partners for most of the 12 oil and natural-gas exploration licenses offered in a two-day auction at which Asian and Russian bidders were more prominent than Western companies. The Oil Ministry awarded three blocks, two for oil and one for gas, at the auction ceremony in Baghdad. Russia’s OAO Lukoil and Inpex Corp. of Japan won a joint bid to explore for crude in southern Iraq, and Pakistan Petroleum Ltd. won rights to an eastern gas block. Kuwait Energy Co. led a group awarded rights to an oil area. The licensing comes amid an energy-industry revival that has boosted Iraq into third place among the 12 members of the Organization of Petroleum Exporting Countries, nine years after the U.S.-led invasion that toppled Saddam Hussein. In its three previous bid rounds since 2003, Iraq auctioned rights to produce at oil fields already discovered or in operation, whereas this week’s was for new exploration.

PetroChina needs time on shale gas, looks abroad

May 31, 2012. PetroChina Co. may take five years to figure out ways to unlock the world’s largest natural-gas reserves trapped in shale rock, meaning China must keep buying overseas energy assets to fuel the second-biggest economy. China, estimated to hold triple the shale reserves of the U.S., has yet to produce the fuel commercially because its drillers lack technology and face tougher geology. Explorers including Cnooc Ltd. have bid for $100 billion of energy assets from Australia to Canada since 2008, including so-called unconventional resources, to boost reserves and gain expertise.

Anadarko settles rig dispute with noble at start of trial

May 30, 2012. Anadarko Petroleum Corp. and Noble Corp. agreed to settle their $102 million legal dispute over the termination of a drilling rig lease after the 2010 Gulf of Mexico oil spill brought some U.S. offshore drilling to a halt. The accord was announced to U.S. District Judge Vanessa Gilmore in Houston as the case was about to go to trial, according to a docket entry. Settlement documents will be filed, according to the docket. Anadarko terminated its lease contract for Noble’s offshore oil rig in June 2010, after President Barack Obama announcement of a six-month ban on deep-water drilling following the BP Plc spill. Anadarko sued Noble, asking the court to rule the contract was “lawfully terminated” because the moratorium should be considered an act of God, or “force majeure,” that prevented use of the Noble Amos Runner rig as of May 28. Noble, seeking as much as $102 million in damages for lost lease payments, countersued Anadarko for breach of contract. Noble contended the moratorium wasn’t a force majeure and Anadarko could have used the rig for other operations.

Transportation / Trade

Oil tankers squeezed as rates drop to lowest since ’97

June 5, 2012. Aframaxes, already this year’s worst- performing oil tankers, are poised for the lowest annual rates in at least 15 years as Europe’s economic stagnation curbs demand, the region’s most-accurate shipping analysts said. The 800-foot vessels will make about $12,000 a day in 2012, the least since 1997, said Anders Karlsen, an analyst at Nordea Markets in Oslo. The prediction is 37 percent less than the second-half average of $18,901 anticipated in forward freight agreements, traded by brokers and used to bet on future rates, for northwest Europe, the biggest market for Aframaxes. The vessels are struggling to win cargoes on all sides of the Atlantic, with European oil demand contracting for a sixth year at a time when the U.S. push for energy independence is driving down crude imports to the lowest since 1999. That’s drawing more South American and West African supply to Asia on routes favoring very large crude carriers, displacing smaller Suezmaxes which in turn are competing with Aframaxes.

Researchers find new method to measure gas bubbles in pipelines

June 1, 2012. New research from the University of Southampton has devised a new method to more accurately measure gas bubbles in pipelines. The ability to measure gas bubbles in pipelines is vital to the manufacturing, power and petrochemical industries. In the case of harvesting petrochemicals from the seabed, warning of bubbles present in the crude that is being harvested is crucial because otherwise when these bubbles are brought up from the seabed (where pressure is very high) to the surface where the rig is, the reduction in pressure causes these bubbles to expand and causes 'blow out'. A blow out is the sudden release of oil and/or gas from a well and issues with the blow out preventer were key in Deepwater Horizon oil spill (also known as the Macondo blowout) in the Gulf of Mexico in 2010. Currently, the most popular technique for estimating the gas bubble size distribution (BSD) is to send sound waves through the bubble liquid and compare the measured attenuation of the sound wave (loss in amplitude as it propagates) with that predicted by theory.

Policy / Performance

Infrastructure, pricing to hit China gas demand-IEA

June 5, 2012. Chinese gas demand is expected to double by 2015, but the failure to establish a competitive domestic gas pricing mechanism and improving existing gas import infrastructure could choke off growth in the world's fastest growing gas market, the International Energy Agency (IEA) said. China's natural gas demand reached 130 billion cubic metres in 2011, almost 5 percent of the country's total energy demand and its latest five year plan calls for an aggressive ramp up of gas use to 8.6 of total energy demand from 2011-2015. IEA forecasts China's demand will climb to 273 billion cubic metres (bcm) by 2017, up from 130 bcm in 2011-- an increase of 13 percent per year. That would rank China as the world's third-largest gas user behind the United States and Russia, the IEA said. China, the world's second largest economy, struggles to reconcile the price it pays for gas imports with its retail prices. According to the IEA, the average price of LNG imports almost doubled between 2009 and mid-2011 to around $8 per million British thermal units (mmBtu), which is much cheaper than Japan's imports, but higher than prices when China began importing LNG. Besides creating a more efficient domestic gas pricing system, China will need to ramp up construction and development of import infrastructure if it wants to attract supplies into the country, the IEA said.

Chesapeake bends to Icahn’s demand for board overhaul

June 5, 2012. Chesapeake Energy Corp., the U.S. energy explorer battered by collapsing natural-gas prices and growing investor mistrust, will replace almost half its board under pressure from billionaire investor Carl Icahn. Four of the company’s eight non-executive directors will be replaced with nominees of the largest shareholders, Southeastern Asset Management Inc. and Icahn, Chesapeake said. Icahn triggered the overhaul by acquiring a 7.6 percent stake to rein in what he saw as Chairman and Chief Executive Officer Aubrey McClendon’s risk-taking and overspending that led to a $22 billion cash crunch and has eroded the share price by 26 percent. McClendon has been under a cloud since a series of media reports in March and April about personal loans he obtained using minority stakes in company-owned wells that he’d been allowed to gather for his private portfolio. The company announced May 1 that he will step down as chairman when a replacement is chosen.

Iran calls on OPEC to keep output ceiling

June 3, 2012. Iraq and Iran said they will take a common position on OPEC’s production policy when the Organization of Petroleum Exporting Countries meets this month. OPEC ministers plan to meet to assess markets and the group’s output ceiling on June 14 in Vienna. Iran and Iraq will adopt a unified position on OPEC’s production, and they emphasized the need for its 12 members to pump crude in line with their collective target. Iran will insist that OPEC maintain its current ceiling for crude when the ministers gather. Iran and Iraq are OPEC’s second- and third-biggest producers, respectively, after Saudi Arabia, which has boosted supplies as U.S. and European sanctions against Iran curb the Islamic republic’s exports. OPEC produced 31.62 million barrels a day in April, 5 percent more than its 30 million barrel-a-day ceiling, according to monthly estimates from the group’s secretariat. Iraq holds the organization’s presidency this year.

Chevron Phillips Chemical signs letter to study Iraq plant

June 3, 2012. Iraq and Chevron Phillips Chemical Co., a joint venture of Chevron Corp. and ConocoPhillips, signed a letter of intent to evaluate the feasibility of developing a petrochemical plant in the country. The company would examine building a new facility and upgrading an existing Iraq-owned petrochemicals factory in southern Basra province. Iraq holds the world’s fifth-largest crude reserves and the fifth-biggest natural-gas deposits in the Middle East. The government, which depends on crude sales for more than 90 percent of its official income, wants to diversify into chemicals production and other industries. Iraq’s oil output is on the rebound after stagnating for years during the rule of Saddam Hussein, ousted by a U.S.-led invasion in 2003. The nation burns off natural gas produced in association with crude because it lacks the infrastructure to use it as a fuel for electricity plants or feedstock for petrochemicals. Shell Chemicals Ltd. agreed in a separate arrangement to study the feasibility of a petrochemical plant.

Saudi output rises to highest level in at least 23 yrs

June 1, 2012. Oil output by the Organization of Petroleum Exporting Countries rose in May to the highest level since 2008 as Saudi Arabia pumped crude at the fastest pace in at least 23 years. OPEC production gained 20,000 barrels to an average 31.595 million barrels a day in May from a revised 31.575 million in April, according to the survey of oil companies, producers and analysts. Output increased to the highest level since October 2008. The April total was revised 170,000 barrels a day higher. Saudi Arabia, OPEC’s biggest producer, bolstered output by 80,000 barrels to 9.9 million barrels a day, the highest level since at least January 1989. Saudi Arabian Oil Minister Ali al-Naimi said that he wanted to see the Brent crude contract drop to $100 a barrel. Brent oil for July settlement decreased $1.60, or 1.6 percent, to $101.87 a barrel on the London-based ICE Futures Europe exchange. It was the lowest close since Oct. 4.

Obama’s aide on climate change seeking oil, gas allies

May 30, 2012. Heather Zichal spent her early days in the Obama administration pushing a climate-change bill in Congress that oil and gas companies helped to derail. Now President Barack Obama has named Zichal, his deputy assistant for energy and climate change, as a liaison to that industry, and to make sure proposed rules don’t slow the surge in U.S. natural-gas development. With energy emerging as a central topic in the 2012 presidential race, efforts by the 36-year-old Iowa native may help Obama blunt a Republican refrain that he’s abandoned cheaper traditional sources of power in favor of renewable energy such as wind and solar favored by Democrats.



Russia to build $10 bn nuclear power plant in Belarus

June 4, 2012. Russia and Belarus have signed an agreement for the construction of a nuclear power plant in Belarus, reigniting the former Soviet republic's initiative to build its first nuclear power plant, moving a major step towards the country's energy security. The agreement was signed during the recent visit of Russian president Vladimir Putin to Belarus, his first visit to a foreign country after becoming the president after a four-year stint as prime minister. The deal signed between the Belarusian government and the Russian state-owned nuclear energy corporation Rosatom envisages setting up of a nuclear power plant with two reactors with a capacity of 1,200 megawatt (MW) each. The proposed power plant will be built by Rosatom's subsidiary Atomstroyexport at Astravets in Hrodna Voblast, about 140km north west of capital Minsk, and 45km east of Vilnius, the capital of neighbouring Lithuania. The new power plant will augment Belarus' total energy capacity to approximately 8,000 MW. Russia will finance $204 million for the initial works related to the plant, including project engineering. The total cost of the power plant is estimated to be around $10 billion. The first reactor is expected to go on stream in 2017 and the second one a year later. The earlier plan to a build a nuclear power plant in Belarus in the 1980s was stalled following the devastating nuclear accident in Chernobyl in neighbouring Ukraine. Although Belarus revitalised the nuclear programme when the country became independent in 1992, the government later declared a nuclear moratorium in 1999.

Iran, Armenia reach agreement on building Meghri power plant

June 4, 2012. Iran and Armenia have reached an agreement for the construction of Meghri hydroelectric power plant over the Aras River which forms the common border between two countries. The agreement was reached during Iranian Energy Minister Majid Namjou’s one-day trip to Armenia. During the trip, Namjou conferred with his Armenia counterpart, Armen Movsisian, and the two sides agreed to begin the construction of the joint power plant on August 22, 2012. According to the agreement, the hydroelectric power plant, which will straddle the border river, will have the capacity to produce 130 MW of electricity. Construction of the power plant will begin simultaneously in Armenia’s Meghri and Iran's Qarachilar regions. During a separate meeting with Armenian President Serzh Sargsyan, Namjou submitted a letter from Iran's President Mahmoud Ahmadinejad inviting Sargsyan to take part in the 16th Non-Aligned Movement (NAM) summit from August 26 to 31 in the Iranian capital, Tehran.

Burma signs deal for new power plant to serve Rangoon

June 4, 2012. An agreement to build a new 500-megawatt gas-fired power plant has been signed by the Burmese Minister for Electric Power No-2, Khin Maung Soe. The plant could be completed in about one year. The plant will be built in Thakayta Township by the ministry in cooperation with BKB Consortium (South Korea) and Hexa International Co., Ltd by BOT/JV system. The project includes two gas turbines, two head recovery stream generators and one stream turbine. It will be able to generate 500 megawatt and distribute more electricity to Rangoon and its environs, which has suffered extreme power shortages in recent weeks. Burma currently has 18 hydropower plants, one coal-fired power plant and 10 gas-fired plants. The hydropower plants have a maximum generation capacity of 1270 MW but only 1000 MW in summer because of the low water levels in reservoirs. The gas-fired plants can generate an additional 340 MW. However, this is at least 500 MW below electricity demand, which has increased 15 percent. Peak usage during rainy season averages 1450 MW, rising to 1850MW during hot season, according to ministry figures, although large areas throughout the country still remain off the national grid.

Transmission / Distribution / Trade

Calpine Energy signs 200MW PPA with Xcel Energy

June 5, 2012. Calpine Energy Services has entered into a power purchase agreement (PPA) with Southwestern Public Services, a subsidiary of Xcel Energy to provide 200MW energy and capacity from its Oneta Energy Center located in Oklahoma, US from 1 June 2014 through 31 May 2019. Under the terms of a seven-year PPA that began on 1 January 2012, the company is also providing 200MW of capacity and energy from Oneta Energy Center to SPS. Using natural gas produced in Oklahoma, the Oneta Energy Center, a combined-cycle power plant is capable of producing 1,134 MW of electricity, the company said. Calpine Energy Services chief operating officer Thad Hill said the company is pleased to build on its customer relationship with SPS. The agreement between Calpine and SPS is subject to approval from the New Mexico Public Regulation Commission.

Policy / Performance

Candu celebrates 50 yrs of nuclear power generation in Canada and looks to the future

June 4, 2012. Candu Energy Inc. joins Atomic Energy of Canada Ltd. (AECL) and the Canadian Nuclear Association (CNA) to celebrate the 50th anniversary of nuclear power generation in Canada. On June 4th, 1962, in Rolphton, Ontario, the Nuclear Power Demonstration (NPD) reactor began supplying electricity to the Ontario grid, producing enough electricity to power 10,000 homes. CANDU® nuclear reactors supply 15 % of Canada's safe, clean, and reliable electricity, and almost 60% in Ontario alone. In the past 50 years, Canada has grown its CANDU nuclear fleet to include 20 reactors. Internationally, they are an important component of clean air energy programs on four continents with over 22,000 megawatts of installed capacity. Candu Energy continues the proud CANDU tradition by developing the newest generation of reactors. In May, the Canadian Nuclear Safety Commission (CNSC) completed Phase 2 of a Pre-Project Design Review of the Enhanced Candu 6 ® (EC6®) reactor.

China may resume nuclear plant approvals as Cabinet passes plan

June 1, 2012. China, planning to build more nuclear reactors than any other country, approved a safety framework that may help end a ban on approving new atomic plants imposed after last year’s Fukushima disaster in Japan. The State Council, or Cabinet, approved “in principle” the proposed plan on nuclear safety for the five-year period ending 2015 and long-term targets for 2020, the government said. The report didn’t specify when approvals for new plants would resume or mention capacity goals. The move follows a report that Japan is closer to resuming nuclear power generation after an earthquake and tsunami crippled the Fukushima Dai-Ichi plant and prompted a global review of atomic energy projects. Chinese nuclear power equipment makers, including Shanghai Electric Group Co., Dongfang Electric Corp. and Harbin Electric Co., had their long- term contracts frozen after the ban. China, which started its first commercial nuclear plant in 1994, is building 25 reactors on the mainland and plans to add another 27. The quality of the country’s nuclear industry, including reactor design, manufacturing, construction and operations, is “under control” according to the government report. China’s nuclear safety standards match the International Atomic Energy Agency’s specifications, it said. Some atomic plants didn’t meet new requirements for flood control and some had “weak” capabilities in evaluating and dealing with tsunami-related problems, according to the report. A few civil experimental reactors and fuel-cycle facilities fell short of new earthquake standards, it said. Corrective measures have been taken, the government said. A nationwide inspection of China’s nuclear plants started after the Fukushima accident and lasted more than nine months, according to the report. Checks were carried out at 41 reactors that were operational or being built and three that were due to start construction, it said. The government will seek the public’s opinion on the approved proposal on nuclear safety and development, according to the report.

Pak increases Atomic Energy Commission's budget

May 31, 2012. Energy-starved Pakistan has increased the budget of its Atomic Energy Commission by a whopping 78 per cent to ` 39.2 billion for the next fiscal year as part of efforts to speed up work on nuclear power plants to generate cheaper electricity. The allocation for the Pakistan Atomic Energy Commission (PAEC) is almost 11 per cent of the total federal development budget estimated at ` 360 billion for fiscal 2012-13. A major chunk of the PAEC's budget has been allocated to two nuclear power plants. An amount of ` 34.6 billion has been allocated for the third and fourth reactors at the Chashma nuclear power complex. The total cost of these two projects is ` 190 billion, and they will be partially funded by a Chinese loan of ` 136 billion. The government has so far spent ` 62.4 billion on the plants that will generate 660 MW. With Rs 34.6 billion in additional spending, the government will be able to complete almost half the work on the plants by June 2013, the report said. To meet the growing energy deficit, the PAEC has been assigned an ambitious target of generating 8,800 MW of nuclear power by 2030. Pakistan is keen to seek assistance from China and France to meet the goal. Due to inconsistency in policies, Pakistan's energy mix has drastically changed with hydro-power generation declining to a third and thermal generation increasing to two-thirds. This has resulted in expensive power generation. The two new nuclear power plants at the Chashma complex in Punjab province are being built by the Chinese. The PAEC is currently carrying out 28 projects and studies with an estimated cost of ` 237 billion. An amount of ` 35.5 million has been sanctioned to carry out survey and feasibility studies for six additional nuclear power plants sites. The total cost of the feasibility studies is ` 150 million. An amount of ` 790 million has been set aside for a joint pre-project feasibility and design study of a 1,000 MW nuclear power plant in the port city of Karachi. A sum of ` 100 million has been sanctioned for the development of a project team for site development and installation of nuclear power plants of 300 MW and 1,000 MW in Karachi. The government has also sanctioned Rs 400 million for the Pakistan Nuclear Regulatory Authority.

Iran razes buildings near suspected Parchin nuclear site

May 31, 2012. Iran razed two buildings near a suspected nuclear-trigger test site inside of its sprawling Parchin military complex, satellite images published by the Institute for Science and International Security show. International Atomic Energy Agency (IAEA) inspectors have been trying to gain access to Parchin since January as part of its oversight of suspected nuclear sites in Iran. The IAEA said that it had reached an agreement with Iranian authorities to broaden its investigation. Iran is under multiple international sanctions on concern the country is seeking a nuclear bomb, a charge Iran denies.



India Inc wants policy support to bet on wind, solar energy

June 5, 2012. India's green energy initiatives, which aim to boost solar power capacity to 20,000 MW in a decade, and expand windmills, have made rapid progress but entrepreneurs want supportive policies to sustain growth. India aims to meet 15% of its power needs, or 80,000 MW, from renewable sources by 2020, with an investment of ` 1.5 lakh crore. This has boosted investment in the sector by 54% in just one year, and solar power capacity has leaped to 905 megawatts from a negligible 8 MW three years ago, making India one of the top 10 global destinations for investments. Even as it had barely risen, the Indian solar-equipment sector has been eclipsed. S Venkataramani, who heads a grouping of 22 companies that account for 80% of India's solar-equipment capacity, counts the damages for those who make photovoltaic (PV) cells- the lifeline of a solar panel. Sometime in 2009, as countries took to solar power in bigger way, China provided an external charge to its solar-equipment industry. Solar power rates have plunged to ` 7.49 per unit. But several concerns lurk behind the phenomenal growth. Solar firms want anti-dumping duties, saying that foreign frims are selling equipment at ridiculously low prices. Wind energy has also expanded, making India one of the world leaders in the sector. The sector is craving for the accelerated depreciation scheme, that was terminated in March, but optimism remains.

India's low-carbon technology market likely to be worth $135 bn by 2020

June 5, 2012. Billions of dollars worth of investment in clean technology and green energy are eyeing India, where the market for low-carbon technology is expected to expand to $135 billion by 2020, according to industry experts, making the country one of the most lucrative destination for companies in the domain. Renewable energy has already lured stars such as Sachin Tendulkar and Aishwarya Rai and large companies such as Reliance Power and Lanco, and the flow of venture capital has increased in the sector. In addition, foreign companies involved in solar power and wind energy, as well as global funds that scout for opportunities around the globe are increasingly eyeing India for a slice of the lucrative market. The market is promising as the government strives to tame energy-guzzling factories that spew toxic fumes, and old vehicles that contaminate the air with emissions. Analysts say that the market would expand even faster after the country's economic growth bounces back from the current global slowdown.

Tribunal rejects IL&FS' plea to allow work on Cuddalore plant

June 5, 2012. The National Green Tribunal has refused to stay its order suspending the environment clearance granted to IL&FS Tamil Nadu Power Company Ltd for its 3,600 MW thermal power plant in the state's Cuddalore district. The Tribunal rejected IL&FS' fresh plea for keeping its order for suspension of the environment clearance (EC) in abeyance and to allow it to carry out construction works for the project.

The tribunal had suspended the May 31, 2010 EC, and had directed the Ministry of Environment and Forests (MoEF) to review its decision based on a cumulative impact assessment study and stipulate additional environmental conditions, if required. Infrastructure Leasing & Financial Services Ltd (IL&FS) had sought a stay on the Tribunal's May 23 order contending that preparatory civil works like construction of storm water drainage and levelling of the site must be completed before the onset of monsoon in mid September 2012.

India needs mix of green & traditional power sources: J.P. Chalasani, Reliance Power

June 5, 2012. Recently, Reliance Power commissioned India's largest solar power plant in Pokharan, close to the western periphery of Rajasthan. It has displaced over 70,000 metric tonnes of carbon dioxide emissions annually, which is roughly the equivalent of taking 25,000 cars off the road.

Rising sea level threatens India’s coastal areas

June 3, 2012. The emerald backwater stretches in Kerala and Mumbai are among several locales on the western and eastern coasts facing threat from the rising sea level effected by climate change. According to a government report, deltas of the Ganga, Krishna, Godavari, Cauvery and Mahanadi on the east coast may also be affected along with irrigated land and adjoining settlements. The report — India’s second national communication to the United Nations Framework Convention on Climate Change— was prepared by multi-disciplinary teams and other stakeholders comprising more than 220 scientists belonging to over 120 institutions. The experts who prepared the report visited some of the vulnerable areas, including the 2004 tsunami-hit Nagapattinam in Tamil Nadu, backwaters surrounding Kochi in Kerala and Paradip in Odisha, in order to make a detailed impact study of the rise in sea level. The study, using digital elevation model data (90 m resolution), digital image processing and GIS software, showed that the rise in sea level by 1.0 m and 2.0 m will result in the inundation of an estimated 4.2 sq km and 42.5 sq km land respectively in the region surrounding Nagapattinam.

Solar energy player SunEdison open for joint ventures in India

June 3, 2012. Looking to tap the "massive" opportunities in India, global solar energy firm SunEdison plans to strengthen its business activities in the country and is also open for joint venture partnerships. SunEdison is mainly into setting up projects using photovoltaic technologies. The company is part of US-based MEMC. The company would adopt a "multi-pronged" strategy to bolster its business in the country. Against the backdrop of fuel supply issues impacting conventional thermal and gas-fired plants, solar energy offers a good alternative source for the power-starved nation. SunEdison had announced that it along with Azure Power would develop a 15 MW photovoltaic solar power plant in Gujarat. The government's Jawaharlal Nehru National Solar Mission aims to have 20,000 MW of grid-connected solar power by 2022.

Solar equipment makers seek anti-dumping duty on imports from China, Malaysia, Taiwan

June 2, 2012. Indian manufacturers of solar equipment are seeking anti-dumping duty on imports from China, Malaysia, Taiwan and the US on the grounds that local industry is bleeding because of "ridiculously low" price of foreign equipment. The industry wants anti-dumping duty on imports of solar photovoltaic (PV) cells and modules, and has filed an application to the directorate general of anti-dumping and allied duties (DGAD). Globally, there's a huge capacity of solar PV cells and modules. The selling price is artificial and not at all related to the cost of the product currently, said Indian Solar Manufacturer's Association. The application was filed in January and DGAD is looking into the matter. He said Indian industry has a very low capacity and dumping of foreign products is making their condition even worse. The association believes that the recent move by the US to impose anti-dumping duty on Chinese solar equipment proves that there's a strong case. The US recently imposed 31% anti-dumping duty on Chinese solar imports, going as high as 250% for some companies. US manufacturers had alleged that Chinese products are eating their local market. While the industries bat for a level playing field, government is trying to help local industries as much as they can. In India, solar cell manufacturers use only CSi technology but it's the imported thin-film that has gained popularity among project developers, as it's cheap especially from China and Taiwan. The current ratio of CSi-based projects to those based on thin films is 45:55.

Solar RECs listed on Power Exchange for first time

May 30, 2012. In a first, as many as 100 solar renewable energy certificates (RECs) were traded on the Power Exchange of India (PXIL), out of which five were bought at a price of ` 13,000 per certificate. RECs are generation-based 'certificates' awarded (electronically, in demat form) to those generating electricity from renewable sources such as wind, biomass, hydro and solar, if they opt not to sell the electricity at a preferentially higher tariff. These certificates are tradeable on power exchanges and are bought by 'obligated entities' that are either specified consumers or electricity distribution companies. These obligated entities may be required to purchase a certain quantum of either green power or RECs. The obligations are split into non-solar and solar -- which means the obligated entities have to purchase either power from solar power projects or RECs generated by them. The RECs of M and B Switchgears, manufacturer of transformers, were traded on the exchange. M & B Switchgear, which has commissioned the first grid connected 2 MW solar power plant (Madhya Pradesh) in March, has become the first solar power producer in the country to be issued 249 solar RECs by the National Load Dispatch Centre (NLDC). PXIL is expecting another company with a capacity of 0.5 MW to commence trading on the exchange next month.


Greens shut websites to protest Canada's pro-oil stance

June 4, 2012. Hundreds of environmental and activist groups in Canada shut down their websites for a day to protest Canadian government policies that will make it easier to build pipelines to transport oil from Alberta's vast tar sands. The groups - joined by U.S.-based groups such as the Natural Resources Defense Council - say the Conservative government is also trying to silence opponents of the pipelines from the tar sands, the world's third-biggest oil reserve and the subject of much environmental concern. The Conservatives, determined to make Canada what they call an energy superpower, want to speed up reviews of resource development projects, cut back laws that protect fish habitats, strip key veto powers from the federal energy regulator, and give the government the final say on approving major pipelines. Green groups are particularly opposed to two planned pipelines: TransCanada Corp's Keystone XL, which would take tar sands oil to Texas; and Enbridge Inc's Northern Gateway, which would run from Alberta to the Pacific Coast. Critics say tar sands oil is particularly dirty since it requires more energy to extract than regular crude.

Obama’s EPA overstates pollution from gas fracking, groups say

June 4, 2012. The Obama administration overstated the greenhouse-gas emissions from unconventional natural-gas production, the American Petroleum Institute and the America’s Natural Gas Alliance said. The two industry groups, which oppose U.S. regulation of hydraulic fracturing to extract gas from shale formations, found in the study that total-gas emissions during the process are about half the level estimated by the U.S. Environmental Protection Agency. The study responds to the EPA’s greenhouse-gases inventory released in 2011, which the organizations said “substantially increased estimates of methane emissions from petroleum and natural-gas systems.” Venting methane into the air when unloading liquids at the well is about 86 percent lower than the EPA’s estimates, the study found. The EPA proposed rules that would force drillers to capture or flare methane released when fracking starts at a well. Industry groups said the requirements are too onerous, in part because they require actions many drillers are already taking.

Conergy agrees to supply Pakistan’s largest solar-energy complex

June 4, 2012. Conergy AG, a German solar-panel maker, will plan and supply Pakistan’s biggest solar-power plant as the country seeks to increase access to electricity. The 50-megawatt project at Bahawalpur in the Cholistan region is owned by DACC Power Generation Co. and the Pakistani government and will supply 30,500 households with electricity, Conergy said. Total investment will probably be about $170 million to $190 million, with Conergy’s share at about 60 million euros ($75 million) to 70 million euros. The government is seeking to spur investment, create jobs and expand access to power in a country where some areas can be without energy for as long as 18 hours a day, Conergy said. The company, working with developer Ensunt Inc., will supply 210,000 modules and 140 inverters.

Utilities more concerned about Carbon emissions: survey

June 4, 2012. Concern about carbon emissions increased last year among U.S. utility executives, who also expressed apprehension that customers won’t tolerate higher rates for power generated from renewable sources, according to a report. Carbon emissions increased to third from sixth among the top environmental concerns of 543 managers and engineers, said Black & Veatch Corp. The Overland Park, Kansas-based engineering and consulting firm conducted the survey from Feb. 22 through March 23 and posted the results on its website. Utilities produced 42 percent of their electricity from burning coal last year, the industry’s top source of carbon emissions, and the need to reduce production of greenhouse gases is outstripping their ability to cut the amount of power they get from coal. More than 52 percent of respondents said complying with regulatory and environmental mandates to reduce emissions will require them to “significantly” raise customer rates, while 40 percent expected rates to increase “slightly,” according to the report. About two-thirds of them said a rate increase of 5 percent to 10 percent would prompt customers to “object to further investment in renewables.” Carbon-emissions legislation and water supplies remained the top two concerns among survey participants.

Thin film firm files for bankruptcy in U.S. after failing to get financing

June 2, 2012. Konarka Technologies Inc., the thin- film solar panel manufacturer backed by Chevron Corp., Draper Fisher Jurvetson and New Enterprise Associates Inc., filed for bankruptcy in Massachusetts. Konarka listed $100,000 to $500,000 in assets and $10 million to $50 million in debt in its Chapter 7 filing in U.S. Bankruptcy Court in Worcester, Massachusetts. Konarka NB Holdings LLC, in a separate filing, listed $1 million to $10 million in assets and as much as $50,000 in debt. At least four other U.S. solar panel manufacturers filed for bankruptcy in the past year as the price of the panels fell 50 percent due to oversupply and production expansion in China. Konarka’s solar panels were made from a conductive polymer invented by company co-founder and Nobel Prize-winner Alan Heeger, not from silicon used in conventional solar panels. Manufacturers of thin-film solar products such as Konarka attracted venture investments as the price of polysilicon, the raw material in conventional panels, steadily increased and peaked at $475 a kilogram in 2008. The material’s average spot price has since fallen to $23.20 a kilogram.

Greece's woes mutate into energy crisis

June 1 2012. Greece's debt crisis threatened to turn into an energy crunch, with the power regulator calling an emergency meeting to avert a collapse of the country's electricity and natural gas system. Regulator RAE called the emergency meeting after receiving a letter from Greece's natural gas company DEPA and threatening to cut supplies to electricity producers if they failed to settle their arrears with the company. An energy crisis would add to the debt-stricken country's political and financial strains, threatening households and businesses with power cuts ahead the election which may decide if the country will stay within the euro. The Greek government already risks running out of cash next month if it fails to receive fresh bailout funds from its lenders. RAE has summoned DEPA and the affected companies to a meeting.

EU minister meeting to tackle carbon cuts: draft

June 1, 2012. European environment ministers are expected to reopen a difficult debate later this month on deeper EU carbon emissions cuts, but a draft text ahead of the meeting stops short of any firm targets. Previous discussion of bigger carbon cuts has been tense, with coal-reliant Poland objecting that they could damage its economy. Germany asked for the topic to be put back on the agenda. An agreement to set a more ambitious target could help revive the European Union's carbon market, which was meant to be the main driver of low carbon investment. Emission permits under the EU's carbon Emissions Trading Scheme (ETS) have collapsed to a series of record lows, making carbon-intensive coal far cheaper to burn than lower-carbon natural gas.

Australian law allows UN CO2 use through 2020: Negotiator

June 1, 2012. Australia can accept United Nations emission offsets in its planned carbon market through 2020 and potentially beyond because it’s already signed up to the 1997 Kyoto Protocol, said one of the nation’s climate negotiators. The potential extension of Kyoto targets beyond 2012 and rules governing the creation of offset credits were separate articles of the agreement. Australia’s demand for offset credits in the five years through 2020 may be about 350 million metric tons. UN Certified Emission Reduction credits for 2013 dropped to a record 3.63 euros ($4.51) a ton on May 30 on the ICE Futures Europe exchange in London on expectations of flagging demand and rising supply. The UN expects Australia to decide this year whether it will join an extension of the protocol planned for at least five years starting 2013.

Romney calls Solyndra a symbol of failure for Obama

June 1, 2012. Mitt Romney visited the closed facilities of Solyndra LLC, the solar-panel manufacturer that went bankrupt after receiving a $535 million federal loan guarantee, and called the company a symbol of failure for President Barack Obama’s administration. The presumptive Republican presidential nominee spoke outside the factory Solyndra constructed with government funds at its headquarters in Fremont, California, terming it “the Taj Mahal of corporate headquarters.” The campaign didn’t disclose the speech location until Romney arrived.

LDK Solar ‘fantasy land’ forecast belies debt, U.S. duty

June 1, 2012. LDK Solar Co., the world’s second- largest maker of solar wafers, has lost 38 percent of its market value since the U.S. announced tariffs on Chinese solar cells, as analysts cut estimates and questioned whether its balance sheet can withstand a global oversupply. The company’s American depositary receipts fell 3.7 percent to $1.81 at the close in New York. They have declined 57 percent. Chinese solar companies have fallen since the U.S. Commerce Department announced May 17 duties on solar cells imported from the country. LDK’s decline since then is the worst among the 17- member Bloomberg Global Large Solar Energy index. Investors see LDK as the solar company with the most precarious balance sheet. The company reported net debt of $2.9 billion in the fourth quarter. Sales were $420.2 million and LDK forecast sales would fall to $190 million to $230 million in the first quarter. LDK announced April 30 plans to fire more than 5,500 workers and its net loss of $588.7 million in the fourth quarter was its third straight quarterly loss and more than five times analysts’ estimates of $109.7 million.

U.S. sets duties as high as 26 pc on wind towers from China

May 31, 2012. The U.S. Commerce Department set duties from 13.74 percent to 26 percent on imports of wind towers from China used by the energy industry, siding with U.S. manufacturers including Broadwind Energy Inc. The agency released preliminary results of its investigation into a complaint from the Wind Tower Trade Coalition, which claims its members are harmed by subsidies on products from China. In addition to Broadwind of Naperville, Illinois, the group includes Otter Tail Corp.’s DMI Industries, Katana Summit LLC and a unit of Trinity Industries Inc.

ABB fuels data centre growth with DC power

May 30, 2012. Swiss engineer ABB is targeting annual growth of 20-25 percent in the expanding data centre market by using more energy efficient direct current technology. Because DC technology makes fewer power conversions than AC and less equipment and space is needed, investment costs can also be lowered by 15 percent, ABB said. Companies and technology giants are having to build enormous facilities housing servers which feed this increasing global addiction to data and multimedia. This rapid adoption of cloud computing - where data and applications are stored on or hosted by remote computers via the Internet - is driving worldwide server demand. But with one data centre consuming the same amount of energy as 25,000 U.S. households and carbon emissions from data centres expected to quadruple by 2020, there is pressure to make them more efficient, ABB said. Using direct current power rather than traditional alternative current technology in its latest project for IT service provider Green in Lupfig, north central Switzerland, ABB has reduced energy consumption by 10 percent. ABB said the DC production market is estimated to be worth up to $30 billion.

U.K. energy policy may fail to meet carbon goals, IEA says

May 30, 2012. The U.K.’s energy policies may fail to deliver nuclear power and renewables needed for the nation to meet its goals for reducing greenhouse gases, the International Energy Agency said. Britain’s new electricity generation capacity is coming mainly from natural gas fired plants, the Paris-based agency, which advises 28 nations, said in a report. The report underscores pressure on Prime Minister David Cameron’s government to overhaul the power market in a way that both stimulates investment in new generation capacity and keeps power prices from rising too quickly. The IEA said Britain needs 110 billion pounds ($173 billion) invested in in the industry by 2020 to meet electricity demand. U.K. utilities must replace 12 gigawatts of aging coal and oil-fired plants and 7 gigawatts of atomic reactors by 2020, the IEA estimated. Parliament is considering a draft energy bill that would guarantee returns for nuclear and renewable power.

Yingli sees China demand for solar growing 36 pc in 2012

May 30, 2012. Yingli Green Energy Holding Co., China’s second-biggest solar-panel maker, expects domestic sales to increase by 36 percent as the country’s subsidy program accelerates. Yingli forecast 30 percent of its 2012 revenue coming from China, up from 22 percent, the company said. China approved 1.7 gigawatts of solar projects May 3 under its Golden Sun subsidy program, which will spur sales. The program was introduced in 2009 and subsidized 689 megawatts of projects in 2011.

Spain ejects clean-power industry with Europe precedent

May 30, 2012. Spanish renewable-energy companies that once got Europe’s biggest subsidies are deserting the nation after the government shut off aid, pushing project developers and equipment-makers to work abroad or perish. From wind-turbine maker Gamesa Corp. Tecnologica SA to solar park developer T-Solar Global SA, companies are locked out of their home market for new business. These are the same suppliers that spearheaded more than $69 billion of wind and solar projects since 2004 that supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.