MonitorsPublished on Aug 20, 2013
Energy News Monitor I Volume X, Issue 10
Name Calling as Climate Strategy Lydia Powell, Observer Research Foundation


fter declaring that oil was yesterday’s fuel, the cover of the Economist pronounced that China is the world’s worst polluter.  The detailed story did point out that China is cleaning up faster than it is polluting and that it is the largest investor in green energy but unfortunately not many would take the trouble of browsing beyond the cover page. What most would conclude is that China is doing something that it could potentially avoid doing. This is not necessarily true. All countries that are in the process of industrialising pollute. All countries that industrialised in the past also polluted.  Industrialised countries started talking about cleaning up only after they industrialised and after they outsourced their pollution to other countries. By labelling China as the largest polluter or India as the largest emerging polluter developed countries (and their publications) absolve themselves of the guilt of past pollution and instil an undue sense of guilt in industrialising countries. As the South Korean economist Ha-Joon Chang pointed out in his delightful book, industrialised nations have converted the habit of kicking the ladder in to an art form and apply it indiscriminately on all issues of conflict between the ‘developed’ and the aspiring to ‘develop’ nations. Name-calling is a component of this strategy.

In his book ‘Kicking away the Ladder: Development Strategy in Historical Perspective, Ha-Joon Chang points out that industrialised nations particularly the United States and the United Kingdom used tariff protection and subsidies to develop their industries. Now they have joined other industrialised countries to launch an all-out attack on tariffs and subsidies. Subsidies, particularly energy subsidies are receiving special attention with many western think tanks dedicated to the mission of exposing the evils of fossil fuel subsidies. 

The story is even worse in the case of climate change because the ladder of fossil fuels is being pulled away even as industrialised nations continue to use the escalator of fossil fuels. They use far more fossil fuels and invest heavily in drilling up more of fossil fuels and yet they manage to call us names.  We all know that name calling originates in the insecurity of the name-caller and not in any inadequacy of his target.  The insecurity of the name-caller needs no elaboration. The developed world has seen almost all changes in the developing world as a risk to its own survival. First it was the number of people that it found threatening; this was followed by fear over lack of ‘development’ of those people and strangely now it fears the possibility of actual development of the same people! 

Having said this it must be acknowledged that decades of practice in name-calling has made it so perfect as it has succeeded in convincing even reasonable people in developing nations that their countries are wilfully taking a polluting path to growth when a non-polluting path is available. They are convinced of the story that there is a yellow brick road called low carbon path to the castle of prosperity. Even those with only passing knowledge of physics will know that this is not true. 

The gap between fossil fuels and most other alternatives in terms of utility, energy density, practicality, ease of use, versatility and most importantly energy return on energy investment is very high which means that they cannot sustain themselves without a ‘subsidy’ from fossil fuels. Solar panels cannot be made if fossil fuels do not subsidise the production process which is very energy intensive. The example of corn based ethanol is even more telling. If we use corn ethanol instead of oil, for every 12 barrels of corn ethanol that we produce 10 barrels will have to be put back into production of more ethanol which means that we only get to use 16% of the ethanol we produce. As fertilizer derived from natural gas must be used to grow corn, what we are doing essentially is converting gas to oil via corn. It would be much more efficient in terms of energy use to convert gas to oil directly if we need liquid fuels. 

Our economy is designed to use as much energy as possible through economic growth (essentially generate demand for energy using products (including solar panels) and services and this exactly what all countries including China are doing. If any part of this essentially energy wasting society is shut down we call it an economic crisis and do all we can to restart the energy consuming/wasting process. It is not very long ago that we celebrated China’s ability to continue with this process when others seemed to be slowing down. If we want to shift to a source of energy that cannot generate so many products we need a different society with different values. Until then every country will do what every other country is doing which is use a lot of energy to produce, use and sell things and services that we do not actually need. 

China is the world’s largest polluter primarily because it is the world’s largest country. It also happens to be the country that makes most of the things that we do not actually need but want anyway. The surprise is not that China is the world’s largest polluter but that it took such a long time to claim its rightful place as the largest polluter. In his book, Chang quotes Ulysses Grant, US President between 1868 and 1876, who said that the United States would adopt free trade policies of the UK in 200 years when the USA has extracted all that ‘protection’ can offer. Not surprisingly the United States became the high priest of free trade once it became an economic power after the Second World War. When China has extracted all that pollution has to offer, it will start preaching against pollution. 

Views are those of the author                    

Author can be contacted at [email protected]



Why mine coal, when you can sit-still and earn profits?

Ashish Gupta, Observer Research Foundation


oal is once again in the focus, not because of shortage but for the extent of corruption prevailing in the sector. Coal as a matter of fact is becoming gold rather than the cheap energy source of electricity it was before.  This is quite evident from the media reports. Almost 226x files are missing related to coal blocks allocation.  Out of that 157 files pertaining to private companies are said to clearly indicate how companies are benefitting through illegal channels. The missing files contained very crucial information like members of the then screening committee, documents presented by companies, questions raised by members, whether companies qualify for the blocks or not and on what basis companies got the concerned coal block. Though the Central Bureau of investigation (CBI) is investigating the matter, the current situation is taking them nowhere.  Prospects of retrieving these files are questionable. Needless to say, in India, this is how the systems work as private interest comes before national interest.

The Comptroller Auditor General of India (CAG) came out with the report in August last year with an estimate for a whooping windfall gain accrued to private companies as auction process for coal blocks allocation was not adopted. The estimated loss (` 1.86 lakh crore) was stuck in controversy as it was based upon accounting procedures and did not take into account the technical parameters. The then CAG Mr. Vinod Rai after retirement vindicated his position on loss figures in the media. He also stated that the figures can vary depending upon the organization’s approach but he stands firm on the irregularities happened during the coal blocks allocation. There is no doubt over the nexus prevailing in the coal sector under the cognizance of concerned stakeholders. Everyone knows about the same but no one wants to compromise his position by putting himself under the limelight. Though the illicit relationship between private players and policy makers is a matter of concern, it is a masterful approach of appropriating national wealth under the garb of capitalistic production.  In the ongoing discourse who is the real victim? It is the poor, who are sometimes shown as culprits rather than victims because they try to sell small quantity of coal illegally for earning their livelihood.

Even the Attorney General of India (AG) is no exception to this disappointing trend.  He is appointed by the President to give advice to the Government of India upon such legal matters, and to perform such other duties of a legal character, as may from time to time be referred or assigned to him by the President, and to discharge the functions conferred on him by or under this Constitution or any other law for the time being in force. It is very disheartening to see how a man of supreme power succumbed to the charm of the ruling government. Also the supreme investigating agency CBI is helpless in taking on big names against whom FIRs have been filed.  The news which came as a shock was when it was shown in the media that CBI Chief was asked by the AG and the then Law Minister to share the findings on the irregularities in the coal blocks allocation before submitting the same to the Supreme Court. Interestingly a very unusual reason was provided by the government for the wilful misconduct that they were checking the English.  The Supreme Court on the other hand clarified that the heart of the report was changed.  This is violation of transparent investigation and Supreme Court laws. The most worrying part is that crony lobbyism is superseding bureaucratic procedure.

In the midst of the scam and drama the Coal Minister has come to the forefront assuring transparent investigation on the matter. But the question is how and who will be the investigating agency? The CBI has already lost its prestige on faith grounds and people are highly suspicious of their findings. Another point is how the CBI will move forward when important files are missing. Allegations of misrepresentation of facts by beneficiaries and possible favours cannot be substantiated without the files. The only option for CBI is to proceed with the destruction of evidence if they receive a formal response from the ministry. Therefore the assurance reiterated by the Coal Minister that all the files will be retrieved by the help of all the ministries is not going to make any difference. Indeed it will remain as assurance only.

The fact of the matter is that corruption and influence goes side by side in the coal sector with the help of political bureaucracy. The nexus is so entrenched that it is almost impossible for any investigating agency to penetrate. The agencies have to become part of the nexus or else they will be shown the door.  The government claims that the chronic problems of the coal sector will be resolved and the wilful leakages will be stopped by taking stringent action against responsible agency/ individual. But what kind of approach will be undertaken by the government in order to realise these claims is nowhere to be seen.

Having said this, it must also be noted that all the coal blocks were given towards achieving “power for all” by passing the benefits of the cheaper coal to the consumer in the form of reduced tariffs and developing regions near the coal mines. Neither has this objective been achieved nor the ‘red-tapism’ been removed. Our coal imports are rising year by year in spite of having the fourth largest reserves putting pressure on Current Account Deficit. In this hypocritical scenario how will India move forward towards securing sustainable development by providing affordable electricity to all is only a mystery.  Coal is a natural resource belonging to the nation and must be utilized in the same spirit rather than being used as a cushion for few non-serious players. But why worry, India works like this only!

Views are those of the author                    

Author can be contacted at [email protected]


Category-wise Electricity Consumption in India: Utilities & Non- Utilities

Akhilesh Sati, Observer Research Foundation




2012-13 (E)



















All India



Misc. includes Public lighting, Public water works & sewage pumping



Source: Central Electricity Authority







OVL may block Chinese bid to buy stake in Brazil oilfield

August 19, 2013. ONGC Videsh Ltd (OVL), the overseas arm of state explorer Oil & Natural Gas Corp (ONGC), is mulling exercising its pre-emption rights to block China's Sinochem Group from buying 35 per cent interest in Brazilian oilfields for USD 1.54 billion. OVL holds 15 per cent stake in the block BC-10, known as Parque das Conchas, where Brazilian state-controlled oil firm Petroleo Brasileiro SA or Petrobras is selling its 35 per cent stake to Sinopec. The Indian firm as also Royal Dutch Shell Plc, which is the operator of BC-10 with a 50 per cent stake, holds right of first refusal or pre-emption rights. They can individually or together buy 35 per cent stake at the USD 1.54 billion price agreed between Petrobras and Sinochem. (

RIL to explore investment opportunities in Iraqi oil fields

August 16, 2013. Reliance Industries Ltd (RIL), the country's largest privately owned company, is exploring investment opportunities in the oil and gas fields of Iraq. The move comes exactly a year after the company divested its holding in two blocks in Kurdistan amid threats of blacklisting by the war-torn country. Iraq had shortlisted Reliance Industries and six other global energy firms for developing the Nasiriya oilfield and building an associated 300,000 barrels per day refinery. After beating sanction-hit Iran to become the second-largest crude oil supplier to India, Iraq is suddenly shining bright on the Indian energy radar. Petroleum minister M Veerappa Moily, who visited Iraq last month, came back with a bagful of Iraqi offers to invest in local oil and gas acreages. On top of the list were three discovered oil blocks — Kifil, West Kifil and Merjan — in the Middle Furat oilfields, which Iraq offered to Indian energy companies on a nomination basis, which means there will be no bidding for these blocks. This is the first instance in the recent past that an oil-rich Middle East nation has offered oilfields to India without mandating a formal bidding process. Reliance Industries' Dubai-based arm, Reliance Exploration and Production, had acquired 100% stake in Rovi and Sarta blocks of Kurdistan. But the then Iraqi government did not appreciate the award of contract to Reliance by the autonomous Kurdistan region and threatened to blacklist the company. Reliance sold its entire holding in the two blocks to Chevron. (

OVL eyes additional 10 pc stake in Mozambique block

August 16, 2013. ONGC Videsh Ltd, fresh after buying Videocon's 10% stake in the gas-rich Rovuma basin in Mozambique, has bid for an additional 10% stake in the basin held by US-based Anadarko Petroleum, the block's operator. Such deals are of strategic importance to India, which is trying to secure energy supplies for its growing needs. Anadarko is playing hard ball and demanding a higher valuation of close to $2.6 billion. The gas-rich Rovuma basin is one of the most coveted new energy assets in the world, as it may hold as much as 35-65 trillion cubic feet of gas resources. It has the potential of becoming one of the world's largest LNG hubs after Qatar and Australia. OVL and Oil India had jointly bought Videocon's 10% stake in the block for $2.475 billion. The two companies have cleared the last hurdle in this acquisition as none of the other consortium partners in the gas blocks exercised their pre-emptive rights on the stake holding within the given deadline. (

RIL to invest $3.18 bn in R-Series gas field

August 15, 2013. Reliance Industries plans to invest $3.18 billion in R-Series gas field in the flagging KG-D6 block as it looks to reverse the decline in output by quickly bringing in new fields on production. RIL and its partners BP plc of UK and Niko Resources, plan to produce 13-15 million standard cubic meters per day of gas for 13 years from D-34 discovery in the KG-D6 block. The planned output from D-34, which is estimated to hold an in place reserve of 2.2 Trillion cubic feet, is equivalent to the combined current production from D1&D3 gas field and MA field in the KG-D6 block. (

RIL discovers gas reserve in Cauvery basin

August 15, 2013. Reliance Industries has discovered a new gas reserve in its deepwater Cauvery block, which may produce about 15 million standard cubic meters per day, almost the same as the current output of its KG-D6 fields. RIL had hinted at the prospects of the CY-D5 block in June. The company had reported the first discovery in the Cauvery block six years ago, when it found a field that could produce 4 mmscmd of natural gas along with some crude oil. However, this was not approved as it was found commercially unviable at the prevailing gas price of $4.2 per unit. Progress in the block was also halted by disputes between Reliance Industries and the oil ministry over various technical issues. Oil Minister Veerappa Moily asked an empowered committee of secretaries (ECS) to resolve the two-year-long battle between the operator and DGH, paving the way for the latest discovery. RIL is awaiting approval of "declaration of commerciality" for its first discovery in the block, D-35, since March 2010. This approval is required before a field can be developed. The DGH found the field economically unviable at the prevailing gas price of $4.2 per unit. After the Cabinet's decision to raise gas prices, the commercial exploitation of D-35 could also become viable. The D-35 discovery, which is the first find in the basin, is relatively a smaller discovery of about 719 billion cubic feet of gas reserves - sufficient to produce about 4 mmscmd. The government recently accepted the Rangarajan Committee's formula to fix gas prices, which is expected to double the price of the fuel from April next year. (

ONGC eyeing to double Cauvery basin gas output

August 15, 2013. ONGC Cauvery Asset is planning to develop three gas fields in Tamil Nadu in a bid to double the gas production from Cauvery Basin. A meticulous action plan is being worked out to develop three gas fields - Ramnad, Periakudi and Bhuvanagiri, said Har Govind, ONGC Executive Director. Participating in the Independence Day celebrations at the ONGC Cauvery Asset headquarters, he said gas production is expected to be increased to six million cubic meters per day within the next two years. (

ONGC to intensify exploration in Tripura

August 14, 2013. Oil and Natural Gas Corporation's Tripura unit would intensify exploration for supplying natural gas to ` 5000-crore Chambal Fertilisers and Chemicals Ltd in the state. Chambal Fertilisers and Chemicals Ltd is the strategic partner for the project in North Tripura district. It is ONGC's first urea fertiliser project. Tripura has agreed to a 10 per cent stake in the project in addition to infrastructure, and water. ONGC makes urea fertiliser with gas to be supplied from gas reserves in Khubal area of the district. It was estimated that a commercial scale urea fertiliser plant having 1.3 mmtpa of urea capacity would utilise 2.4 mmscmd of gas and entail an investment of ` 5,000 crore. The striking rate and quality of gas in the state was the best in the world. The ONGC which started exploration in the state since 1972 has drilled 176 wells of which 82 are gas bearing wells. The Tripura asset was producing 3.95 million cubic metre gas per day which was likely to reach 6.35 million cubic meter in the next three years for supplying gas to the urea fertiliser factory and to the 726 MW Palatana power plant and 104 MW Monarchak power project in Tripura. (


First unit of Paradip Refinery to be ready by Dec: IOC

August 15, 2013. Indian Oil Corporation (IOC) has said the first unit of its ` 30,000-crore Paradip refinery will be ready by the end of the year. This is the 10th refinery project by the nation's largest oil refining company and is coming up on a 3,000-acre plot at Jagatsinghpur in coastal Odisha at a cost of ` 30,000 crore. The project was announced in March 2006, with an initial installed refining capacity of 9 million tonnes per annum and includes a pipeline from the refinery to Ranchi. Construction is almost over with 95 per cent of the work already completed. The 15-million tonne Paradip project will take Indian Oil's refining capacity to over 80 million tonnes per annum and will primarily cater to the Eastern market. Oil Minister Veerappa Moily had inaugurated the main control room of the refinery project. (

Transportation / Trade

GAIL India will ink pact with Pakistan firm for gas export

August 20, 2013. GAIL India will enter into contract with a Pakistani firm to export natural gas through a pipeline from Punjab, Minister of State for Petroleum and Natural Gas Panabaaka Lakshmi has said. GAIL plans to import gas in its liquid form, called liquefied natural gas (LNG), on a port in Gujarat or Maharashtra. After converting this again into gaseous state, it will transport the gas through cross-country pipeline network to Jalandhar. From Jalandhar a 110-km line is proposed to be laid to international border near Atari for delivery to Pakistan. Pakistan wants to import gas from India to meet its rising energy deficit. Initially, it wants to take 1-1.5 million tonnes of LNG (4-6 million standard cubic meters per day of gas). Pricing and other commercial agreements are being negotiated. Oil Ministry said the delivered price of gas will be up to $ 22.3 per million British thermal unit after including transportation charges and all taxes and duties. Considering imported LNG price of $ 14.50, the delivered rate would be $ 15.46 after considering shipping and import duty charges. After re-gassification and service tax, it would cost $ 17.01 per mmBtu. Further, transportation of gas through trunk pipelines would cost a further $ 1.75 exclusive of service tax. Then again, $ 0.5 would be charged for transportation of gas through a dedicated pipeline up to Indo-Pak border bringing the total cost to about $ 19.54 per mmBtu. A slew of other costs along with Value Added Tax (VAT) is expected to raise the price of gas to a final $ 22.3 per mmBtu at which it will be delivered to Pakistan. (

Hazira port's proposal to double LNG capacity moved to MoEF

August 19, 2013. Hazira Port Pvt Ltd's (HPPL) proposal to double LNG terminal capacity to 10 MMTPA has been recommended to MoEF for clearance by the Gujarat Coastal Zone Management Authority (GZMA). HPPL, is a joint venture (JV) between Shell Gas BV-(Shell) and Total Gaz Electricite Holdings France-(Total). Shell holds 74 per cent in the JV. The proposal has been recommended to the Ministry of Environment and Forests (MoEF) to grant Coastal Regulatory Zone (CRZ) clearance for proposed augmentation of existing capacity of LNG terminal from 5 mmtpa to 10 mmtpa by Hazira LNG Terminal Pvt Ltd at Hazira, in Surat district, GZMA document reads. The demand for gas is projected to grow exponentially in future. Gujarat State Petroleum Corporation Ltd (GSPC) is expected to begin producing gas from its Deen Dayal West (DDW) gas field in block KG-OSN-2001/3 by third quarter of 2013. It is expected to produce a maximum of 5.24 million standard cubic meters per day of gas from the offshore DDW gas field. The gas will land at Mallavaram, near Kakinada in Andhra Pradesh and can be ferried to customers up to Gujarat through Reliance Gas Transportation Infrastructure Ltd's East-West pipeline. (

Policy / Performance

Bumpy ride ahead for CNG cylinder makers

August 20, 2013. The compressed natural gas (CNG) cylinder makers, who commissioned and expanded their facilities banking on the ambitious plans announced by city gas distributors and the regulator, are facing road blocks in the changing scenario. India's almost a dozen cylinder makers are operating at a bare minimum capacity as vehicle owners are hesitant to install CNG kits with the fuel becoming expensive in key markets like New Delhi and Mumbai. To make the matter worse, rising fuel costs and high interest rates have resulted in decline in car sales for the past nine months. As a result, original equipment manufacturers are unable to get business from the auto makers. Those who were surviving by catering cylinders to international markets and Indian industries are unable to compete with cheaper supplies from China. India is estimated to have capacity to produce over five lakh CNG cylinders a year. Majority of this capacity came up when Petroleum and Natural Gas Regulatory Board started issuing licences to the city gas distribution (CGD) companies between 2008 and 2010. However, the regulator has not issued more than 30 licences as against much bigger projections. At the same time, India's dependence on expensive imported liquefied natural gas is on the rise in absence of adequate domestic production. Large players like Reliance and BG Group are not keen for CGD business anymore while GAIL, Adani, GSPC group and others are unable to expand in other cities due to delays in regulatory process. In this situation, many of the cylinder makers have started defaulting on payments to banks and financial institutions. Almost 90% of Indian CNG cylinders were exported to Pakistan and Iran which has virtually stopped now. Normally, a CNG cylinder has a life of 20 years, which means its makers do not have opportunity to tap the replacement market too. CNG cylinder makers are largely dependent on imported raw material, which is becoming expensive with depreciating rupee against US Dollar. Recently, a group of cylinder makers requested the commerce ministry to reduce tax on imports of raw material. They also requested the ministry to extend the timeframe from five to 10 years for units located in special economic zones to earn net foreign exchange. (

Finance Ministry questions secretary panel deciding fate of Essar oilfields

August 20, 2013. The Finance Ministry has questioned a move to ask a panel of secretaries to decide on the fate of award of Ratna and R-Series oilfields to Essar Oil. It has asked oil ministry to seek clarification from law ministry on charter or terms of reference of the Negotiating Team of Secretaries (NTS). Ratna and R-Series oilfields were awarded to Essar Oil 17 years back but a production sharing contract (PSC) could not be signed due to several reasons including oil ministry wanting revision in rate of royalty and cess the company will pay. (

Credit quality of state-run oil companies likely to weaken: Moody's

August 20, 2013. The credit quality of state-owned fuel retailers like IOC and upstream firms like ONGC is likely to weaken during rest of current fiscal if the government continues to ask them to share higher fuel subsidies, Moody's Investors Service said. Moody's said fuel retailers may end the fiscal on March 31, 2014 with a revenue loss of ` 140,000 crore to 150,000 crore on selling diesel, domestic cooking gas (LPG) and kerosene at government controlled rates. This is higher than ` 130,000 crore under-recovery or revenue loss expected in June. Of the ` 25,579 crore the retailers lost in April-June quarter, the government provided only 31 per cent or ` 8,000 crore. The rest of the losses were split between upstream firms (` 15,304 crore) and retailers (` 2,275 crore). The cash subsidy provided by finance ministry was lower than ` 11,451 crore sought by oil ministry, it was also lower than 52.78 per cent of the ` 161,029 crore revenue loss being made up through cash subsidy support of ` 85,000 crore in 2012-13 fiscal. Moody's said it expects the government will fully reimburse marketing companies by the end of FY2014 and reduce the burden on upstream companies. The April-June quarter results for oil marketing firms were negatively affected by a higher portion of the fuel subsidies, which was somewhat offset by higher refining margins. Oil marketing companies, Indian Oil Corp (IOC, Baa3 stable) and Bharat Petroleum Corp Ltd (BPCL, Baa3 stable), and the upstream Oil and Natural Gas Corp (ONGC, local currency: Baa1 stable, foreign currency: Baa2 stable) reported weak results for April-June 2013. Compared to April-June 2012, or the first quarter of FY2013, IOC's EBITDA more than tripled to ` 4,560 crore while BPCL's grew 56 per cent to ` 2,760 crore. For ONGC, after excluding one-off expenses relating to its employee benefit scheme, EBITDA fell 11 per cent from April-June 2012 to ` 9,7300 crore. (

Oil Ministry examining RIL gas supply issue

August 20, 2013. Oil Ministry is "examining" suggestions that Reliance Industries be asked to sell gas it has failed to deliver at old price of USD 4.2 million British thermal unit. Within days of Cabinet approving a gas pricing formula that will double rates to USD 8.4 when implemented in April 2014, finance ministry wrote to oil ministry with advising it "examine for appropriate action" suggestions made in media reports for putting a cap upto which rates can be raised and RIL being forced to the quantity it had committed but failed to deliver in past three years at old rate of USD 4.2. (

EGoM on gas allocation postponed third time in a month

August 19, 2013. The empowered group of ministers' (EGoM), which was scheduled to meet to determine priority supply of scarce natural gas to different sectors, has been postponed again. The meeting is expected to take place on Aug 21. The EGoM meeting, which is crucial for fuel-starved power units, has been postponed third time in a month. The oil ministry plans to squeeze some gas from non-priority consumers for the power units, which will be enough to generate 240-480 MW electricity immediately and about 2,400 MW after two years. In its last meeting on July 17, the EGoM had directed the oil ministry to rework the distribution of domestic gas without cutting supplies to the fertiliser sector, which tops the list of priority consumers. The panel had directed oil and fertiliser ministries to find more practical solutions. The Oil ministry said the problem arose after gas output from the KG-D6 block started declining from a peak of 62 mmscmd in 2010. The current output from the block is about 14 mmscmd, which is entirely consumed by the fertiliser sector. (

Petrol prices likely to be cut by more than ` 1

August 17, 2013. Oil firms plan to slash petrol prices by more than ` 1 per litre shortly because of a fall in international rates, but may've to wait till the end of monsoon session of Parliament to hike diesel prices. The companies may not be able to raise diesel prices by 50 paise this month as they had increased its rate last month, which was effective from Aug 1. But, government said the hike was effective from midnight of Aug 1, therefore, it should be counted in the current month. On Jan 17, the cabinet had allowed companies to charge market rates for bulk diesel and empowered them to raise diesel prices by 50 paise every month until pump prices are aligned with international market rates. The oil ministry is under pressure from the ruling Congress party to defer any decision of raising both diesel prices till the end of this month to avoid roadblocks for passing important legislations in the current session of Parliament. The oil companies say that a petrol price reduction at this juncture is not a prudent business decision despite a marginal fall in international petrol prices. (

Oil Minister approves appointment of 2,794 new LPG distributors

August 15, 2013. With a view to expand coverage of cooking gas, Oil Minister M Veerappa Moily has sanctioned appointment of nearly 2,800 new LPG distributors across the country. The Oil Ministry had in January put on hold appointment of new LPG agencies/distributors pending approval of new marketing discipline guidelines (MDG). Moily also approved raising the existing ceiling of refills a LPG distributor can sell by 10 per cent. Currently, a distributor is entitled to 15,000 refill every month in cities with more than 40 lakh population. The limit is 12,000 cylinders of 14.2-kg each for cities with 22 lakh to 40 lakh population and 10,000 for towns with 10 to 20 lakh population. For towns or cities with less than 10 lakh population, the refill limit is 8,000 every month. These limits have now been raised by 10 per cent. Following the approval of new MDG, oil companies will issue fresh advertisments for appointment of 2,794 LPG distributors across the country. The three oil firms--Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp-- together have about 13,000 LPG sales agencies or distributors currently. The 2,794 new distributors to be appointed would be besides the planned expansion under the Rajiv Gandhi Gramin LPG Vitrak Yojana, under which small agencies are being appointed to cater to rural demand. Apart from fanning into new and underserved markets, the plan approved involves redistribution of the customer base of some of the existing distributors. The latter was to ensure that they handled customers only up to their ceiling limit, which is prescribed in terms of the number of monthly refill sales. The oil companies had advertised for about 3,000 out of the planned 7,000 new distributors but all of it was put on hold following the ministry directive. LPG distributors have steadily risen over the past decade. The country had 6,447 LPG agencies which rose to 9,000 in 2005 and crossed 10,000 mark in 2011. The new agencies would mostly be set up in under-served areas. (

Delhi NGO moves SC seeking cancellation of govt-RIL pact for KG-D6 gas fields

August 15, 2013. A Delhi-based non-government organisation (NGO) along with some former bureaucrats and defence officers have moved the Supreme Court (SC) seeking cancellation of the production-sharing contract between the government and Reliance Industries for the KG-D6 gas fields. Former cabinet secretary TSR Subramanian, former navy chief Admiral L Ramdas and former Indian Audit and Account Service officer Ramaswamy R Iyer are the other petitioners. Reliance Industries and its minor partner NIKO Resources entered into the production-sharing contract with the National Democratic Alliance government in 2000. In the first round, RIL secured the contract for exploring the deep-water D6 block of the KG basin spread over 7,645 sq km. The petition called for a thorough investigation into the alleged collusion between the company and officials over the government's alleged failure to take action against RIL despite repeated production shortfalls, and also for more than doubling the price of gas from April 1 next year. The Public Interest Litigation (PIL) also contested retrospective tax benefits granted to RIL and the government's failure to insist on relinquishment of these areas. The PIL also sought adjustment of a $7.2 billion premium collected by RIL from British Petroleum by sale of 30% stake in the oilfield towards reduction in cost of exploration and extraction of oil and gas from the fields. (

Govt mulls one-time diesel price hike of ` 2-3 per litre

August 14, 2013. The government is mulling a one-time hike of ` 2-3 per litre in diesel prices to offset the impact of fall in rupee value but there is no proposal to raise cooking gas (LPG) and kerosene rates. The one-time hike, if approved by the Cabinet, will be over and above the 50 paisa per litre increase in rates that happen every month to cut down the difference between cost of production and retail selling price. The government had in January allowed oil companies to raise diesel rates by up to 50 paisa per month till such time that the losses on the most consumed fuel in the country are wiped out. With prices being raised regularly, the losses on diesel had come down to below ` 3 per litre in May but rupee falling by 12 per cent since April has resulted in the difference climbing to ` 9.29 per litre. Indian Oil, Bharat Petroleum and Hindustan Petroleum have suggested raising the monthly quantum to cut losses. Oil Minister M Veerappa Moily said the one-time and oil company suggestions are under consideration but no decision has been taken yet. Diesel price was last hiked on August 1 when prices in Delhi went up by 56 paisa (after including local taxes) to ` 51.40 per litre. (



BHEL project delay irks Assam Power Corp

August 17, 2013. Assam Power Generation Corporation Ltd (APGCL) has served a pre-termination notice to Bharat Heavy Electricals Ltd (BHEL) for delay in the implementation of a 100-MW Namrup replacement power project. According to an APGCL that BHEL would implement the project 100 days ahead of the scheduled date of completion. APGCL said BHEL could complete only 40% of the civil work and is asking for several months more to complete the project. Assam is looking to commission new projects as the state is facing huge power shortage. (

HPPCL to develop 1.1 GW hydro power projects by 2017

August 16, 2013. Indian state-run company Himachal Pradesh Power Corporation (HPPCL) is gearing up to develop hydropower projects portfolio of 1,111 MW energy over the next three years in the state. The new plans come on the heels of a credit facility of €201.5mn from Germany to HPPCL for its development of 191 MW Thana Plaun hydroelectric project near Mandi town under the 'Himalaya Hydropower Programme'. Construction of the Thana Plaun project is expected to be completed by 2019. The employees of the company have been advised to put in their best efforts to complete the projects on-scheduled without cost overrun. Besides Thana Plaun project, the hydro power company is currently working on the 450 MW Shongtong-Karchham hydropower project, the 100 MW Sainj, the 111 MW Sawra-Kuddu hydroelectric project and Stage I, II and III of 195 MW Kashang project. Remaining 64 MW of energy capacity is planned through micro hydro projects. (

Transmission / Distribution / Trade

Power cos may import 82 MT coal in 2013-14

August 19, 2013. Indian power producers may import 82 million tonne (MT) coal in the current fiscal to meet raw material requirements, the government said. The Central Electricity Authority has import target of 50 MT coal for 25 power utilities to meet the shortfall in the domestic availability, Minister of State for Coal Pratik Prakashbapu Patil said. 32 MT coal was assessed to be imported by power utilities for plants designed on imported coal, he said. Coal imports by Indian companies had touched a record of 137.56 MT last fiscal to meet the shortfall, despite meeting the 97 per cent domestic supply target at 557.70 MT. Recently, NTPC -- the largest domestic electricity generating company -- had floated tender to import 5 MT coal. Provisions have been made in the model fuel supply agreement (FSA) for imports, Patil said. Coal supply situation to the power plants has improved. He said that only 6 thermal power plants (TPPs) out of 99 in the country are carrying critical coal stock of less than 7 days. He said that as many as 82 FSAs, for supply of 131 MT coal, has been signed by Coal India. The agreements will serve 34,793 MW power capacity. The government recently decided that Coal India will meet 65 to 75 per cent of the coal demand during the current Five Year Plan for power plants commissioned between April, 2009 and March, 2015. Rest of the requirements for the plants, estimated to have a capacity of 78,000 MW, will be met through imports, for which Coal India may act as a facilitator. (

Connection of KNPP Unit 1 with grid likely by month-end

August 16, 2013. The first unit of the Kudankulam Nuclear Power Plant (KNPP) is likely to be connected to the grid by the end of August as Atomic Energy Regulatory Board has given its nod to increase power generation by 50 per cent upto 500 MW. The unit has to apply again for clearance for reaching 750 MW, 900 MW and full 1,000 MW bookmark. Nuclear Power Corporation of India Limited (NPCIL) is constructing two 1,000 MW units at KNPP jointly with Russia at Kudankulam in Tiruneveli district, some 650 km from Chennai. The unit attained criticality in July this year after much delay, following protests against the project by anti—nuclear activists in areas around the complex, citing safety reasons. (

Delhi power company struggles to pay dues as blackouts loom

August 16, 2013. Gopal Saxena, the chief executive of a power distribution company run by Reliance Infrastructure Ltd, faces a tough choice. He could break a mandate to supply around-the-clock electricity to 1.8 million customers in south and west Delhi, or he could wait for two power utilities to make good on threats to cut off supplies to his company unless they are paid $590 million owed in late payments. Either way, the capital of Asia's third-largest economy is facing the prospect of blackouts. His dilemma underscores the rot in India's power sector after years of rising debts, fuel supply shortages, corruption, red tape and tariffs kept artificially low by populist politics. In the sweltering summer heat last year, the country suffered a mass blackout, affecting an area where 670 million people live. Such problems have hobbled Prime Minister Manmohan Singh's efforts to fix India's chronic power shortages, which are a drain on economic growth - now at its lowest rate in a decade - and sap the competitiveness of its businesses. Reliance Infrastructure took over BSES Rajdhani Power Ltd (BRPL) in 2002 in a joint venture with the Delhi state government. It was a rare foray by a private company into the power distribution business, which is mostly controlled by India's 28 states. BRPL officials say they have helped improve electricity supplies in Delhi since the distribution business was privatised there, but at a big cost to their company. The tariffs they are permitted to charge by a state electricity regulator have risen nearly 70 percent since 2002, but the cost of buying electricity from generation companies and supplying it has shot up by more than 300 percent, Saxena said. As a result, BRPL now owes $770 million in late payments to more than a dozen power utilities. Two of these, Pragati Power Corporation Limited (PPCL) and Indraprastha Power Generation Company Limited (IPGCL), have threatened BRPL with an ultimatum to either pay up or lose the power, Saxena said. Ironically, both the generators are run by the Delhi state government. The threat means BRPL might be forced to cut power supplies by 25-30 percent for a period of four hours at peak times. (

Power Grid should not be Central Transmission Utility: FICCI

August 15, 2013. Industry body FICCI has suggested that state-run Power Grid Corp should no longer be the 'Central Transmission Utility' as its present powers can lead to arm-twisting private players. Power Grid was conferred with the title of Central Transmission Utility in 1998 with the idea that it would undertake transmission of electricity through an inter-state transmission system, discharge planning functions and provide non-discriminatory open access to the system. The industry body suggested that it would be better if a neutral entity like an independent Central Transmission Utility (CTU) becomes tariff collection agency and it is only possible when CTU tag is hived off from Power Grid. (

DPSC bags power distribution franchisee for Gaya

August 14, 2013. South Bihar Power Distribution Company (SBPDCL) has awarded power distribution franchisee to DPSC for Gaya Town and its adjoining areas. The franchisee has been awarded by the Bihar power department under the Electricity Act 2003 and regulations made thereto for supply of energy and other related matters thereto. The award was made on 12th August, 2013. Upon acceptance, DPSC enters into a distribution franchisee agreement with the concerned authorities subsequently. The license area is around 190 square km and will be handling both high and low tension consumers. The area houses some some one lakh consumers of which high tension customers are about 43%. The company will be investing between ` 150 crore and ` 200 crore for revamping the distribution network in the area which now has an AT & C loss as high as 60%. This is the third franchise that the Bihar government has awarded for power distribution in the state. Recently it has awarded SPML Infra Ltd with the power distribution franchisee license for Bihar's Bhagalpur region for a 15-year period. Bihar is plagued with high distribution losses due to poor conditions of transformers, huge pilferages, substantial billing and collection losses. Losses are as high as 68%, meaning, that much of the power supplied does not yield any returns. (

Policy / Performance

Govt to start new technology to stop power theft for ` 8.7 bn

August 19, 2013. Facing ` 900 crore annual revenue loss by Assam Power Distribution Company, the state government said it will implement Ring Fence System, a technology to prevent stealing of power at a total expenditure of ` 875 crore. The Ring Fence System will be set up in 72 towns along with the state capital under the Central government's Restructured Accelerated Power Development & Reforms Programme (R-APDRP). The project is mainly Centre-funded and Assam government will bear 10 per cent of the total cost. The government is very serious on stopping power theft and it may even consider bringing in a new law to punish the guilty. Currently, the APDCL's monthly expenditure stands at ` 300 crore, while its income is only ` 225 crore. If APDCL can bring down the power loss by just one per cent even, it will be able to save ` 9 crore a month. (

'Bandh culture' delays NTPC's project by 2 yrs: Assam Power Minister

August 19, 2013. 'Bandh culture' has hit Assam's aim to become self-sufficient in power generation with PSU firm NTPC's ambitious ` 4,720 crore Bongaigaon Thermal Power Project getting delayed by two years, state Power Minister Pradyut Bordoloi said. The project, which is being set up at Salakati in Kokrajhar district and is envisaged to generate 750 MW power, was scheduled to be commissioned by March 2012. Currently, Assam is power deficient by 200 MW, so with the Bongaigaon project coming on stream, the state will become a power-surplus one, he said. NTPC got investment approval to the project in January 2008 and the main plant award was placed within one month. The entire project is spread over an area of 964 acres. The country's largest power generation firm is constructing three units with 250 MW capacity each. All the three units were scheduled for commissioning during 11th Plan. The Unit 1 and Unit 2 boiler hydro tests have been done in January 2011 and April 2012 respectively. (

Govt's rural electrification programme in Jharkhand hit

August 19, 2013. The government's flagship rural electrification scheme in Jharkhand has been facing issues in implementation like delay in forest clearance and law and order problem including maoist violence, power minister Jyotiraditya M Scindia said. Difficult terrain and dense forest in some districts of the state are also posing challenges to the government, he said. In Jharkhand, electrification works have been completed in 96% (18,105) of un-electrified villages and 90% (5739) of partially electrified villages under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) as on June 30, 2013. Free electricity connections to 12,98,825 (88%) BPL households have also been released under the scheme. An amount of ` 2756.53 crore has been released by Rural Electrification Corporation towards subsidy as against the total revised project cost of ` 3479.30 crore in the state, he said. (

Power tariff may go up in Assam; ` 2 bn subsidy announced

August 19, 2013. Ahead of a possible power tariff hike in the state, Assam government announced a ` 200 crore subsidy package for this year, which will benefit 26 lakh customers across the state. Assam Power Minister Pradyut Bordoloi said BPL (below poverty line) families will be offered a rebate of ` 1.10 per unit up to a maximum consumption of 30 units every month, while it will be ` 0.70 a unit for up to 120 units a month for the APL (above poverty line) customers. The maximum sanctioned load of the household has to be less than 5 KW only, He said. The ` 200-crore subsidy will be provided to the Assam Power Distribution Company, which will adjust the monthly power bills accordingly, he said. Talking about the power tariff, the Minister said the regulatory body is currently evaluating the scenario and a hike is imminent considering rising production cost in the last three years. The cost of hydro power generation is less compared to the other modes, but in this case also expenses related to transportation, transmission and other factors have increased by 30 per cent in since 2010, he said. (

Private power cos oppose mandatory domestic equipment sourcing

August 19, 2013. Private power producers have termed as "retrograde and anti-competition", the proposal for a mandatory domestic equipment sourcing clause, saying this will lead to overall cost escalation and may favour only a few players. In a letter to the Finance Minister P Chidambaram, Association of Power Producers', a body representing the private power generation companies, have urged non-acceptance of the proposal. Ministry of Heavy Industries and Public Enterprises had mooted the proposal of mandatory domestic procurement of equipment for ultra mega power projects (UMPPs). The private developers have said that the international equipment manufacturers are usually backed by their export credit agency financing, which enables Indian developers to take advantage of cost effective financing. (

Parekh panel submits report on Tatas, Adani tariff issues

August 19, 2013. Deepak Parekh-headed panel to look into the issue of compensatory tariffs for imported coal- fired projects of Tata Power and Adani Power has submitted its recommendations to electricity regulator Central Electricity Regulatory Commission (CERC). With the committee finalising its recommendations, the two companies might be closer to effecting an increase tariff for electricity generated from their plants in Mundra, Gujarat. The recommendations pertain to compensatory tariffs for Tata Power's 4,000 MW plant and Adani Power's 4,620 MW project. Allowing hike in tariffs, the CERC had set up the panel to work out the compensatory tariffs to mitigate the adverse impact of higher overseas coal prices. The panel submitted its recommendations to CERC. Details of the tariff hike suggested by the committee could not be immediately ascertained. The committee, headed by well known banker and HDFC Chairman, had held meetings with the stakeholders including company representatives before finalising its views. The change in tariffs would impact consumers in Gujarat, Rajasthan and Maharashtra, among other states. CERC had allowed Tata Power and Adani Power to raise electricity tariffs for these projects as part of compensating the fallout from rise in coal costs. The watchdog's rulings came on pleas from the two firms following Indonesia's move to link coal rates to international benchmark which led to imported coal getting costlier. (

Reliance Power may petition CERC seeking higher Tilaiya tariff

August 18, 2013. Reliance Power may approach the electricity regulator seeking a higher tariff for its proposed ultra mega power project at Tilaiya due to an increase in raw material costs. The company is expected to file a petition with the CERC, seeking an upward revision in the power tariff. Reliance Power won the bid for the 4,000 MW, coal-based ultra mega power project (UMPP) at Tilaiya in Jharkhand in January 2009, quoting a tariff of ` 1.77 a unit. This would be the second project for which it has sought a price revision. The company has already filed four petitions with the CERC, seeking relief for the Sasan UMPP in Madhya Pradesh due to a rise in construction costs and depreciation in the rupee. Power Finance Corporation, the nodal agency for UMPPs, has awarded four such projects. Reliance Power has bagged three - Krishnapatnam in Andhra Pradesh, Tilaiya and Sasan. Tata Power has set up a 4,000 MW plant at Mundra in Gujarat. A UMPP is a power plant with a generation capacity of about 4,000 MW. (

Chhattisgarh govt retracts on commitment to buy 30 pc power from new plants

August 16, 2013. The Chhattisgarh government has gone back on its commitment to buy 30% of power generated from new plants, which comes as a jolt to private power producers such as GMR Infrastructure and DB Power that have invested heavily in the state. The state government's move will jeopardise the financial viability of projects being set up at a total cost of about ` 42,000 crore to generate 7,000 MW power. In 2006, the state government had sought private investment by committing to buy 5% of output at a nominal cost that would account for only cost of fuel, and another 30% of output at a tariff determined by the Central Electricity Regulatory Commission. The government signed a memorandum of understanding with power companies that would have translated into projects totalling 60,000 MW. But due to issues such as unavailability of coal, land acquisition and environment clearance, only 20,000-24,000 MW of projects actually took off.  The state, through its power trading arm Chhattisgarh State Power Trading Company (CSPTC), signed power purchase agreements (PPAs) with 21 different power companies, including GMR, DB Power, Visa Power, Moser Baer and SKS Ispat. Over the past few months, the government has been informing these companies individually that it would buy only the 5% power at nominal rate but not the balance 30% at regulated tariff. Executives from some of these companies confirmed the development but declined to comment officially. GMR, which was scheduled to commission its project in 2014, and DB Power, which starts operations in October this year, may find it difficult to find new buyers for the power produced by their units given that most of the loss-making power distribution companies are resorting to load-shedding instead of buying power. The price of long-term power on new contracts has increased almost 50-60% in the past two years to about 5 for every unit due to increased fuel prices. If these companies sell 5% power to Chhattisgarh at a nominal rate, they will have to make up for the loss incurred on it by passing on its burden to the balance output, making power more expensive and less competitive, industry experts said. India faces a power deficit of about 10%, yet power producers are finding it difficult to sell their output. Beleaguered power distribution companies are refraining from signing new PPAs and managing shortfall by load-shedding. (

Indian Supreme Court suspends hydro projects in Uttarakhand state

August 15, 2013. Indian Supreme Court has ordered federal and state governments to stop approving environmental or forest applications for hydroelectric projects in the country's northern Uttarakhand state. The panel, comprising Justices K.S. Radhakrishnan and Dipak Misra, claimed that hydropower plants might be having a negative impact on the region's environment and has directed Ministry of Environment and Forests to conduct a study. A surfeit of large-scale hydroelectric projects in Uttarakhand and its impact on the Alaknanda and Bhagirathi river basins are a cause for concern, reported HydroWorld citing the court. The environmental ministry is expected to assemble a panel including representatives from the state government, Central Electricity Authority, Central Water Commission and other experts. The study reports are expected to be submitted in the Supreme Court in the next few months. (

Govt trying to push approvals to harness hydro power potential

August 14, 2013. The government is doing all it takes to harness the full potential of hydro power in the country, Power Minister Jyotiraditya Scindia said. The Power Ministry is working with other allied ministries to bring up hydro power projects in a timely manner, Scindia said. Of the total installed generation capacity of 2,11,766 MW in the country, hydro power accounts for 39,416 MW. An Advisory Group formed by the Power Ministry in February discussed the issue of amending the Electricity Act 2003. The government is hopeful of finalising this matter soon. Possible amendments include a mechanism to pass on higher fuel costs to consumers. (

APTEL asks CERC to fix Reliance Power's Sasan UMPP commissioning date again

August 14, 2013. The power regulator has been asked by the appellate authority to take a fresh look at its order declaring that Reliance Power's Sasan Ultra Mega Power Project had not started commercial operations on March 31 this year. The Appellate Tribunal for Electricity (APTEL) ruled that the CERC had acted in haste without hearing all parties on various issues, and had violated the principles of natural justice. The order will bring relief for Reliance Power that will be able to charge 70% higher tariff from third fiscal of commercial operations from 14 utilities of seven states as per their power purchase agreements. According to the agreement, Reliance Power will charge 70 paise per unit in first two financial years and 70% higher tariff from the third year onwards. Reliance Power announced commencement of commercial operations on March 31, which was last day of fiscal 2013. It means Reliance Power had to sell electricity at lower tariff of 70 paise only for a day instead of an entire fiscal. (




Cairn reassures on new exploration planned for Africa, Ireland

August 20, 2013. Britain's Cairn Energy said new exploration in northwest Africa and Ireland, with drilling due to start in weeks, is more likely to succeed than in Greenland, where it has spent $1.2 billion without finding oil. After its primary focus on Greenland in 2010 and 2011, the company has spent the past 18 months building up a portfolio of exploration licences in Africa and Ireland. Cairn said it will drill at least five exploration wells over the next 12 months, two off the coast of Morocco, two off the coast of Senegal, and one off the west coast of Ireland, all of which have a 20 to 25 percent chance of success. The company also had access to 3-D seismic information, the latest geological technology, when it made decisions about the new drilling campaign, Watts said, which was not the case for the Greenland exploration. Spending on frontier exploration in the 2013-2014 period will come in at $510 million, Cairn said. Cairn will start drilling the first well in Morocco in September. The programme in total will target over 4 billion barrels of oil equivalent of mean un-risked gross prospective resource, it said. (

Shale grab in US stalls as falling values repel buyers

August 19, 2013. Oil companies are hitting the brakes on a U.S. shale land grab that produced an abundance of cheap natural gas -- and troubles for the industry. The spending slowdown by international companies including BHP Billiton Ltd. and Royal Dutch Shell Plc comes amid a series of write-downs of oil and gas shale assets, caused by plunging prices and disappointing wells. The companies are turning instead to developing current projects, unable to justify buying more property while fields bought during the 2009-2012 flurry remain below their purchase price. The deal-making slump, which may last for years, threatens to slow oil and gas production growth as companies that built up debt during the rush for shale acreage can’t depend on asset sales to fund drilling programs. The decline has pushed acquisitions of North American energy assets in the first-half of the year to the lowest since 2004. North American oil and gas deals, including shale assets, plunged 52 percent to $26 billion in the first six months from $54 billion in the year-ago period. During the drilling frenzy of 2009 through 2012, energy companies spent more than $461 billion buying North American oil and gas properties. (

PTTEP finds gas in Myanmar’s offshore block

August 16, 2013. Thailand-based oil and gas explorer PTT Exploration & Production (PTTEP) has discovered gas in four appraisal wells drilled in block M3, located in the Gulf of Moattama, Myanmar. The company operates the block with 80% interest, while Mitsui Oil Exploration owns the remaining 20%. The Aung Sinkha-3 well flared gas at 34.5 million standard cubic feet per day (mmscfd) and associated condensate at 195 barrels per day (bpd). Aung Sinkha-5 flowed gas at 9,000 mmscfd, while the Aung Sinkha-6 well indicated gas flow of 14,000 mmscfd and condensate of 1,820 bpd. The Aung Sinkha-4 well did not flow any gas because the equipment for acidizing limestone reservoirs could not be prepared. In 2014, the company plans additional drilling of appraisal wells to develop and produce from the Aung Sinkha field. (

PGNiG, Lotos sign agreement to jointly explore for O&G in Poland

August 15, 2013. Poland-based energy companies PGNiG and Lotos Petrobaltic have entered into an agreement to jointly explore conventional oil and gas resources within the 217km2 Kamień Pomorski license block in Szczecin province, Poland. In accordance with the agreement, which will take effect following Environment Ministry's approval, the partners have scheduled of their joint work for 2013. It includes re-processing existing 2D/3D seismic data, as well as acquiring new 3D seismic. If viable, the partners will carry out further exploration to evaluate the size of the resources and launch production. (

Statoil makes oil discovery in Norwegian Sea

August 15, 2013. The Norwegian Petroleum Directorate reported that Statoil has made a small oil discovery near its Norne field in the Norwegian Sea. Statoil is in the process of completing drilling of the wildcat well 6507/3-10 on production license 159C, where it is the operator. The well is approximately 7.5 miles south of the Norne field. The purpose of the well was to prove petroleum in reservoir rocks of the Middle and Early Jurassic Age. The well found a net oil column amounting to around 32 feet in the Middle Jurassic, while oil was also encountered in a six-to-10-foot thin sand layer. A preliminary estimate of the size of the discovery is less than 6.3 million barrels of oil. The discovery's commerciality is yet to be assessed. (

Transportation / Trade

Kenya from nowhere plans East Africa’s first oil exports

August 20, 2013. Kenya is headed to become the first oil exporter in East Africa, moving in less than five years from being a have-not nation to the regional leader in cutting reliance on energy suppliers such as Royal Dutch Shell Plc. After Tullow Oil Plc discovered oil last year, Kenya is set to start shipments in 2016, overtaking neighboring Uganda, where Tullow found crude more than seven years ago. The U.K. explorer plans to start pumping in Kenya as soon as next year. Kenya’s deposits may top 10 billion barrels, according to the company, more than three times the U.K.’s remaining reserves. Exports will underpin Kenya’s shilling currency and are being pushed by a government that wants a lead on Uganda and Democratic Republic of Congo, whose East African resources in recent years attracted explorers such as China’s Cnooc Ltd. and France’s Total SA. Most oil companies traditionally had focused on the African powerhouses of Nigeria and Angola to the west, and Libya and Egypt on the Mediterranean. Kenya imports all its fuel, almost 80,000 barrels of oil a day at a daily cost of more than $8 million, according to U.S. government data. It relies on exports such as coffee and tea to support the balance of trade in a $37 billion economy, East Africa’s largest. Tullow estimates it has found more than 300 million barrels of oil equivalent resources after making three discoveries in Kenya’s South Lokichar Basin. (

Plains All American, Keyera cease plans for NGL pipeline project in northwest Alberta

August 20, 2013. Plains All American’s subsidiary Plains Midstream Canada (PMC) and midstream operator Keyera have ceased their plans for a joint venture (JV) project to build and operate the proposed natural gas liquids (NGL) pipeline system, Western Reach. PMC said it continues to seek options to participate in the expected growth in NGL volumes in Deep Basin region, whether through other newly constructed facilities, expansion of existing ones, or both. Keyera will now pursue the initiative to develop a liquids pipeline system in northwest Alberta to NGL hub in Fort Saskatchewan. (

Saudi Arabia and Iraq cut oil exports in June

August 18, 2013. Saudi Arabia, the world’s largest oil exporter, shipped less crude in June and exports also slid in fellow Organization of Petroleum Exporting Countries (OPEC) members Iraq, Kuwait and Nigeria. The kingdom delivered 7.32 million barrels a day, down from 7.79 million in May. Daily Saudi production fell by 20,000 barrels in June to 9.64 million. Exports from Iraq, OPEC’s second-largest producer, slumped to 2.33 million barrels a day from 2.48 million in May. Kuwaiti crude shipments dropped to 2.09 million barrels a day in June from 2.23 million in the prior month. Nigeria and Angola, the West African producers in the OPEC, lowered their exports of light crude in June by 0.7 percent and 3.6 percent, respectively. Algeria, another African producer of light crude, reported an increase of 33 percent in its June shipments to 704,000 barrels a day from 529,000 in May. (

Tajikistan, Afghanistan mull construction of gas pipeline

August 16, 2013. Construction of gas pipeline from Sheberghan gas field in Afghanistan to Tajikistan was discussed at a meeting of Tajik Minister of Energy and Industry Sherali Gul and high-level government delegation headed by Afghan Minister of Finance Hazrat Omar Zakhilwal. The parties discussed various issues of cooperation in energy sector. Special attention was paid to the connecting gas distribution systems between Tajikistan's southern regions and Afghanistan's northern provinces. This project is better known as "Nowruz" in Tajikistan. Sheberghan is a town in Afghan Jowzjan province, which borders with Uzbekistan. The city is located 81 miles west of Mazar-i-Sharif, which is the administrative center of Kunduz province bordering with Tajikistan. Sheberghan is important in Afghan energy infrastructure: the oil deposits Zomrad Sai are close to the city, there is also the oil refinery factory, Djarkuduk, Hodge Gogerdak and Yatimtag gas deposits are also located near the city. In 1967, the production of natural gas in Afghan region Hodge Gogerdak 9 miles east of the city began with the help of Soviet Union. In the same year Soviet Union completed construction of 62 miles gas pipeline from Shiberghan to Kelif in USSR. Up until 1990, the natural gas was supplied through the pipeline in Uzbekistan and Tajikistan. Estimated gas reserves were 67 billion cubic meters and 77 billion cubic meters according to different sources. This volume in the medium term is sufficient to meet the needs of not only Afghanistan but also Tajikistan, said the experts." Nowruz" branch can become part of a larger project TAPI, which involves laying a gas pipeline from Turkmenistan to Pakistan and India via Afghanistan. According to preliminary estimates, the overall cost of the project can be up to $300 million. (

Pakistan: Delayed LNG import could save $1.5 bn

August 16, 2013. Pakistan could save as much as $1.5 billion by immediately initiating already delayed imports of Liquefied Natural Gas (LNG) to meet the country's power shortfall. According to a conservative estimate, this would also lower the average cost of generation by ` 2.50-3.50 per unit if diesel and furnace oil run thermal plants are fueled with LNG/local gas in next five years. The move will lead to reduction of oil imports, as well as resolve power and gas shortages and the production of unaffordable energy in a phased manner. The federal government will have to take proactive measures to remove bottlenecks in initiating LNG imports. Unlike most of other countries in the world, Pakistan has been blessed by seaports that are connected with an all-encompassing gas pipeline network. The import of LNG in low quantities for six-to-eight-months can mitigate power shortage by 15-20 per cent and plug deficit of natural gas by 5-10 per cent. In the medium-term, LNG import can resolve the ongoing power crisis by about fifty percent besides improving supplies of natural gas by up to 30 per cent for cooking, heating and industrial purposes. Presently, the depleting gas supplies could only be stabilized by importing LNG. Alternative options of thermal power generation by furnace oil & diesel are too costly and could be replaced by LNG without investing a penny. Immediate LNG import is a fairly simple remedy for a complicated and messy energy sector. (

Petronas to build two liquefaction trains for Canada project

August 14, 2013. Petroliam Nasional Bhd's (Petronas) subsidiary, Pacific Northwest LNG Ltd, will build two liquified natural gas (LNG) trains delivering 12 million tonnes per year for the national oil company's LNG project in British Columbia, Canada. Slated for completion by 2019 at the latest, the US$20 billion (RM62.95 billion) investment costs for the project includes about US$5 billion for a pipeline to be built by TransCanada Corp to supply gas to the two LNG trains. (

North Dakota oil boom seen adding costs for rail safety

August 14, 2013. Crude oil shipped by railroad from North Dakota is drawing fresh scrutiny from regulators concerned that the cargo is adding environmental and safety hazards, something that analysts say could raise costs. The U.S. Federal Railroad Administration is investigating whether chemicals used in hydraulic fracturing are corroding rail tank cars and increasing risks. Separately, three pipeline companies including Enbridge Inc. warned regulators that North Dakota oil with too much hydrogen sulfide, which is toxic and flammable, was reaching terminals and putting workers at risk. The cost of added safety measures, such as tighter rail-car specifications that would make obsolete some current models, may become an issue if oil prices fall. Such costs are less likely to slow production when is oil trading for $100 or more per barrel. Crude oil futures have traded higher than $100 a barrel since July, and are more than $90 a barrel since late April. North Dakota is the nation’s second-biggest oil-producing state, with more than 790,000 barrels a day this year up from about 150,000 barrels in 2008. Railroads move 75 percent of the state’s crude, including the load of more than 70 cars that derailed and exploded last month in Lac-Megantic, Quebec. (

Policy / Performance

Ecuador plans to tap crude from Amazon reserve as economy slows

August 16, 2013. Ecuador, where the rights of nature are recognized in the constitution, plans to develop crude deposits in an Amazon area declared a biosphere reserve by the United Nations as existing fields age and economic growth slows. President Rafael Correa will ask the country’s congress to allow drilling in the Ishpingo-Tambococha-Tiputini oil fields located in eastern Ecuador’s Yasuni National Park, he said. The decision reverses a policy to preserve nature in an area eight times bigger than Los Angeles, estimated by Correa to have 920 million barrels of crude, or about 20 percent of Ecuador’s reserves. The proposal to develop the area comes as economic growth is forecast to slow a third year. The area’s estimated oil reserves could be worth more than $18 billion, Correa said. The government needs the revenue to fight poverty and build up infrastructure, he said. Correa first presented a carbon-dioxide abatement plan to the UN in 2007, which called for blocking development of the fields known as ITT. The plan, which would prevent the emission of 407 million metric tons of carbon dioxide, sought $3.6 billion over 13 years in contributions from the international community to protect the area, according to the government. (

Mexican Govt drafting bill to reduce tax burden on Pemex

August 16, 2013. Mexico’s government will send a bill to Congress in September to improve Petroleos Mexicanos’s capacity to invest in projects by reducing the oil company’s tax burden, Finance Minister Luis Videgaray said. The bill, which comes as the government tries to give other companies access to Mexican oilfields, would lower Pemex’s royalties and license fees, Videgaray said. To partially compensate for lower fees, Pemex would start paying income taxes on its drilling and exploration operations, he said. The world’s fifth-largest crude oil producer, whose taxes fund about 34 percent of the federal budget, is headed for its ninth straight year of output declines, according to Pemex. President Enrique Pena Nieto sent a bill to Congress to arrest Mexico’s production declines by enticing private firms to develop oilfields in the country for the first time since 1938. (

Rudd gloom misses Australia’s looming natural gas surge

August 15, 2013. Prime Minister Kevin Rudd’s strategy of centering an election pitch on his ability to steer Australia through the end of a China-led minerals boom is overlooking the next big thing: natural gas. The Treasury forecast deeper budget deficits in the next three years as growth slows, unemployment rises and mining investment wanes, constraining Rudd and opposition leader Tony Abbott’s election pledges. Whoever wins a three-year term at the Sept. 7 poll may find that gloom lifts from 2015 as a surge in gas exports replenishes Australia’s coffers and propels the nation toward becoming the biggest shipper of the fuel. Ten liquefied natural gas projects across the nation -- three of which are operating and seven under construction -- will boost budget revenues by A$11 billion ($10 billion) a year from 2015 to 2025. The projects will add 2.6 percent to Australia’s gross domestic product, or A$5,500 per household each year and support 180,000 jobs. While Rudd is talking up the risk of recession should Abbott’s Liberal-National coalition win government and cut spending, the Treasury’s projections reflect a turnaround seen starting from July 2015. In its Pre-Election Economic and Fiscal Outlook released Aug. 13, the Treasury forecast the budget deficit will narrow by almost A$20 billion between fiscal 2015 and 2016. Australia’s LNG export earnings are projected to increase fivefold to A$61 billion through June 2018, according to the government’s Bureau of Resources and Energy Economics. BG Group Plc’s venture on the coast of Queensland state is due to begin in 2014, and Chevron Corp.’s A$52 billion Gorgon project on Barrow Island off northwest Australia, the largest resources development in the nation’s history, is scheduled to start delivering cargoes in early 2015. (

UK prompt gas prices rise on field outages

August 15, 2013. British prompt gas prices rose slightly as supplies fell short due to a combination of Norwegian and domestic maintenance outages, triggering withdrawals from storage. The price of gas for delivery rose 0.35 pence to 65.30 pence per therm, while gas for instant delivery gained 0.7 pence to 65.50 pence due to the drop in deliveries. Britain's gas market was undersupplied by around 1 million cubic metres/day (mcm/day) as an unplanned outage at Norway's Oseberg gas field cut all flows to Britain through the Vesterled pipeline. Demand was estimated at 134.5 mcm on the day. (

BP asks judge to deny bid for class-action investor suit

August 15, 2013. BP Plc asked a federal judge to deny U.S. investors the right to pursue a class action, or group, lawsuit claiming the company misled them before and after the 2010 Gulf of Mexico oil spill. The investors, led by the New York and Ohio pension funds, sued BP and certain officers in 2010, alleging violations of U.S. securities laws. The investors claim the company lied about the size of the worst offshore spill in U.S. history and its ability to contain a deep-water blowout to prop up its share price. Shareholders also claim BP’s senior management publicly proclaimed a commitment to safety improvement while internally cutting budgets and rejecting employees’ concerns about safety. BP has denied fraud or any lack of attention to safety in court filings. (

Iraq rules out special pricing of crude for India

August 15, 2013. Iraq, the second-largest supplier of oil to India, has ruled out offering any special price to the country because its laws don't allow it to do so. India imports about 20 million tonnes of crude oil from Iraq annually and the government is keen to increase this to meet demand from new refineries. Iraq is the second-largest oil supplier to the country, after Saudi Arabia. Iraqi Deputy Prime Minister for Energy Hussain Ibrahim Saleh al-Shahristani was responding to a query on whether his country could offer discounts to India -- considering the old ties between the two countries -- as Iraq seeks to increase crude supplies to the country and woos investments in the oil and petrochem sectors. He was delivering the Oberoi Lecture series organised by the Oberoi hotel group and the International Institute for Strategic Studies on recent trends in the global energy, oil and gas economy. India's oil demand will rise 4-5 per cent annually, Shahristani offered uninterrupted oil supplies and also sought increased investments into his country, which needs USD 500 billion to improve infrastructure after the war-time destruction. Shahristani also said Iraq is keen on joint investments in the oil sector in the country and had already evinced interest in the near-complete 15 million tonne oil refinery being set up by Indian Oil at Paradip. RIL is exploring investment opportunities in Iraq. (

Brazil Congress approves oil royalty bill

August 15, 2013. The lower house of Brazil's Congress has approved a bill that sets aside all royalties from newly discovered oil fields for education and health programs. The Chamber of Deputies approved the bill. It stipulates that 75 percent of the royalties be used for education and 25 percent for health. It was among the reforms the government proposed after widespread protests swept the country in June targeting transportation fare hikes, corruption, high taxes, and faulty public services. The proposed law says the royalties will come from drilling contracts signed after Dec.2012. President Dilma Rousseff must now sign off on the legislation, which was earlier approved by the Senate. (

China approves first floating terminal for LNG imports

August 14, 2013. China National Offshore Oil Corp (CNOOC) said it had won final government approval to build China's first floating terminal for liquefied natural gas (LNG), a type of terminal that will allow it to increase imports rapidly. China, the world's top energy consumer, aims to raise the share of natural gas in its energy mix to 8 percent by 2015 from 5 percent now to cut emissions from coal and lessen dependence on oil imports. Domestic gas production is struggling to keep up, however, and imports will need to nearly double from 2012 to around 80 billion cubic metres (bcm) by 2015 to meet the target. China's LNG imports rose 25 percent to 8.33 million tonnes in the first half of this year from the year-ago period. The first phase of the floating LNG project in the northern port of Tianjin, costing 3.3 billion yuan ($539 million), is designed to have an annual receiving capacity of 2.2 million tonnes or 3.0 bcm, CNOOC Gas & Power Group said. (

Mexico plans oil reserve sweetener to lure Exxon, Chevron

August 14, 2013. Mexico has come up with an inducement for private companies such as Exxon Mobil Corp. to bid on contracts that would end a 75-year state energy monopoly. Though the government will retain ownership of oil, President Enrique Pena Nieto plans to lift restrictions on companies registering the value of contracts with the U.S. Securities and Exchange Commission, Deputy Energy Minister Enrique Ochoa said. Allowing companies to book some reserves would increase a proposed profit-sharing model’s attractiveness by making it easier for them to raise financing. The rule change would be secondary to the government’s main proposal of changing the constitution to allow private companies to develop fields for the first time since 1938. (



Azerbaijan’s power generation at hydropower plants rises up to 7.8 pc

August 19, 2013. The State Statistics Committee reports that the hydropower plant crisis in Azerbaijan started in 2012 keeps on weakening in 2013 – it returns to its standard levels. The Committee informs that power generation at hydroelectric power plants (HPPs) for Jan-Jul 2013 reached only 950.8 million kWh that is by 29% below that for the 2012 same term. As a result, the share of hydropower, which made up 8.7% of entire generation of electricity last year, is still only 7.85%. At the same time generation of electricity at thermal power plants (TPPs) for Jan-Jul totaled 11.158 bn kW/h, that is by 2.1% more than the index for the 2012 same period. The share of TPPs in total generation of power is 92.15%. Thanks to TPPs, overall electricity generation in the country dropped only by 1.3% and amounted to 12.109 bn kWh for the reported period. (

China scraps 2 GW coal-fired power plant

August 16, 2013. China has responded to civic concerns about air pollution and decided to scrap a 2000 MW coal power plant on the coast of the South China Sea, 50 KM from the major city of Shenzhen. 43 members of the city's People's Congress petitioned the administration to cancel the project and not to allow the construction of any new coal-fired power plant anywhere within the city's borders. The administration reacted only a few weeks later, asking Shenzhen Energy Group to stop the power plant construction. This is the first project to be cancelled in China mainly on the basis of concerns about air pollution. (

Japan power utilities use less oil in July as reactors restart

August 15, 2013. Japanese power companies cut their consumption of crude and fuel oil in July from a year earlier as two nuclear reactors reduced the country’s reliance on more expensive sources to generate electricity. Japan’s 10 regional power utilities used 1.09 million kiloliters of fuel oil, 13 percent less than a year earlier. Crude demand fell 7.3 percent to about 846,000 kiloliters. Kansai Electric Power Co. restarted two 1,180 MW reactors at its Ohi plant in western Japan in July 2012, ending a two-month nuclear-free period after the Fukushima disaster in March 2011. The country, where nuclear power provided about 30 percent of electricity prior to the disaster, would have no operating reactors again next month if the two Ohi reactors are shut as scheduled for regular maintenance by September 15. (

Alstom involved in plan to build Polish power plant

August 15, 2013. Alstom and Polish builders Rafako, Polimex-Mostostal and Mostostal Warszawa are to build the Opole coal power plant for the country's top utility Polska Grupa Energetyczna (PGE). Project details have yet to be finalised for the coal-fired power plant which will be worth $3.66 bn. PGE also said that it had reached an agreement on a 20-year coal supply deal worth up to $6.95 bn with miner Kompania Weglowa. The coal, which is to be supplied over 2018-2038, is for two planned 900 MW units at PGE's Opole plant. The Opole power plant in southwestern Poland currently has an installed capacity of 1,492 MW. (

Transmission / Distribution / Trade

Siemens bags two orders of ` 1.4 bn from Bangladesh

August 19, 2013. Siemens Ltd, the flagship company of Germany-headquartered Siemens AG, said it has won two contracts worth ` 144 crore for improving power distribution in Bangladesh. The projects are funded by Japan Bank for International Cooperation Agency (JICA) and are to be delivered on a turnkey basis. The plants would be located in the Rajshahi Barisal zones in western Bangladesh. The projects involve installing new and improving existing distribution facilities in the rural region west of Jamuna river. The company aims to achieve an efficient power supply by reducing power distribution losses, strengthening and stabilising the power supply system, thereby contributing to the progress and economic development in the neighbouring nation. (

Alstom Grid launches upgraded 220kV substation in Tajikistan

August 15, 2013. Alstom Grid has launched the upgraded 220kV gas-insulated substation at the Nurek hydropower plant (HPP) in Tajikistan. The substation has replaced a 220kV air-insulated substation, following a complex €22mn upgrade project. Nurek hydropower plant has an installed generation capacity of 3GW and produces over 75% of Tajikistan's electricity. The 220kV air-insulated substation upgrade project is the first stage in the Nurek HPP program managed by Alstom Grid. The second stage of the Nurek HPP project will include the 500kV air-insulated substation upgrade. For the turnkey project, Alstom Grid will replace the existing 500kV air-insulated substation with a 500kV gas-insulated substation. Currently, on-site construction works are under way and equipment is being delivered to Tajikistan, while the 500kV substation is scheduled to be commissioned in December 2014. (

Policy / Performance

Vermont can’t shut Entergy nuclear plant, court rules

August 15, 2013. Vermont doesn’t have the authority to shut down its only nuclear power plant, operated by Entergy Corp., an appeals court said. U.S. District Judge J. Garvan Murtha in Brattleboro, Vermont, was correct in saying the decision on closing a reactor for safety reasons resides with the federal government, not the state, the U.S. Court of Appeals in Manhattan said. Murtha ruled in January 2012 that state legislators lacked the authority to deny Entergy a license to operate the Vermont Yankee reactor after March 2012. Entergy, based in New Orleans, sued Vermont Governor Peter Shumlin, Attorney General William Sorrell and members of the state’s Public Service Board in April 2011, claiming the state didn’t have the right to overrule the U.S. Nuclear Regulatory Commission. The federal agency renewed Entergy’s license to operate the power station until 2032. State action is preempted by the federal Atomic Energy Act, the company said. (

US nuclear power plants vulnerable to 9/11-style attacks: report

August 15, 2013. U.S. nuclear power plants are not adequately protected from threats, including the theft of bomb-grade material that could be used to make weapons and attacks intended to cause a reactor meltdown, a University of Texas report said. Not one of the country's 104 commercial nuclear reactors or three research reactors is protected against an attack involving multiple players such as the ones carried out by 19 airplane hijackers on 9/11, said the report by the Nuclear Proliferation Prevention Project, or NPPP, at the University of Texas, Austin. The U.S. Nuclear Regulatory Commission (NRC) only requires power plants to protect against attacks carried out by five or six people, according to the report, entitled Protecting U.S. Nuclear Facilities from Terrorist Attack. The NRC does not require plants to protect themselves against attacks from high-powered sniper rifles and rocket-propelled grenades. (

Japan studies ice wall to halt radioactive water leaks

August 14, 2013. Turning soil into virtual permafrost with refrigerated coolant piped through the earth was first used in the 1860s to shore up coal mines. One hundred and fifty years on, it’s the newest idea for containing the Fukushima nuclear disaster. At least 300 tons of water laced with radioactive particles of cesium, strontium linked to bone cancer, and tritium flow each day into the Pacific Ocean from the crippled atomic station in Japan. The plan to contain the health threat is to build an underground containment wall made of ice. After repeated failures to hold back water contaminated by the 2011 disaster, plant operator Tokyo Electric Power Co. is running out of options to deal with what was called an “urgent problem” by Prime Minister Shinzo Abe for the first time. Dealing with the water leaks is an “emergency,” the Nuclear Regulation Authority said. Japanese taxpayers already face an 11 trillion yen ($112 billion) estimated clean-up cost. Underground ice walls have been used to block radiation before, in an experiment at the former site of the Oak Ridge National Laboratory in Tennessee, which produced plutonium for atomic weapons, according to a report by Arctic Foundations Inc., an Alaska-based earth-freezing contractor. The plan at Fukushima has drawbacks: it won’t be completed until 2015, and there’s no cost estimate yet. The envisioned wall of ice would run 1.4 kilometers (0.9 mile) underground, the world’s longest continuous stretch of artificially frozen earth, according to Japan’s nuclear accident response office. Kajima Corp., the construction company that was the principal builder of the Dai-Ichi nuclear plant, has been given until March 31, 2014, to complete a feasibility study of the project. (



More than half of India’s rivers too polluted to drink

August 19, 2013. Raw sewage and industrial waste rendered water in more than half of India’s 445 rivers unfit for drinking, according to the Central Pollution Control Board. The report compared pollution levels from 1995 to 2011 including the rivers as well as 154 lakes and 78 ponds in the second-most populous nation. Water from at least a quarter of the rivers surveyed can’t even be used for bathing, it said. India will need “considerable” investments in waste management to meet demands of growing urban populations. Only 29 percent of municipal wastewater is treated by Indian cities of 38 billion liters (10 billion gallons) generated every day, according to the report. By 2050, 100 billion liters may come from Indian cities each day, it said. India’s per capita fresh water resources have fallen to 1,845 cubic meters in 2007 from 6,042 cubic meters in 1947, according to the report. This is expected to drop to 1,000 cubic meters by the end of the century, it said. Indian cities use 50 billion liters of municipal water a day, the report said. Although the nation isn’t facing immediate water scarcity issues, several river basins including the Sabarmati in western India are under severe stress, according to the report. (

GERC terminates GUVNL's plea to lower solar tariff

August 19, 2013. The Gujarat Electricity Regulatory Commission (GERC) rejected the petition by state' apex power utility Gujarat Urja Vikas Nigam Limited (GUVNL) that wanted to pay lower tariff to solar power producers. GERC disposed the GUVNL petition saying that it is not maintainable on the ground of delay. GUVNL is open to approach the Appellate Tribunal.

GUVNL approached the regulator claiming that solar project developers invested only ` 11-13 crore per MW and less than 30% equity as against the benchmark of ` 16.50 crore. It said that solar power project developers deserve tariff of ` 9 per unit instead of ` 12.54 as agreed before. GUVNL agreed to pay highest tariff in the country and signed 88 Power Purchase Agreements (PPAs) for 971.5 MW aggregate capacity in two phases with likes of Adani, Tata, Lanco, Euro Solar, Essar, Azure, Roha, Acme, Moser Baer, Welspun and Sun Clean among others. Now, GUVNL submitted a list of 10 projects where the total project cost vary between ` 11-13 crore per MW and sought reduction in tariff. (

Su-Kam to seek investor approval to hive off solar power unit

August 18, 2013. Energy solutions provider Su-Kam Power Systems will seek the approval of investors Reliance Group and Temasek Holdings for a plan to hive off its solar business unit. Reliance Group and Temasek Holdings, the investment arm of the Singapore government, have a 19.18 per cent stake in the company. Su-Kam also has plans to acquire firms and expand its solar power business. The UPS and inverter manufacturer has planned a capital expenditure of ` 35 crore during the current fiscal year. Su-Kam recently bagged a contract for installing solar projects at 35 schools in Rwanda, for which it will also provide onsite training on operations and maintenance. The company has a presence in over 70 countries and has bagged solar power projects in African countries such as Nigeria, Malawi and Gabon. (

Delhi govt plans incentive for green power

August 18, 2013. If you generate power from a rooftop solar project, the Delhi government will soon incentivize your efforts. A new solar policy upholds "production-based subsidy" which means that the government will pay you for the units of energy you save by using solar power. As of now, there is a "capital subsidy" scheme which involves a rebate of a fixed sum on installation of solar water heaters in Delhi.

While this policy can inspire consumers to invest in solar energy, the Delhi environment department say that it can be implemented only after Delhi Electricity Regulatory Commission (DERC) notifies net metering guidelines. Through a net metering system the utility can monitor how much solar energy a consumer is generating at home and if the consumer is generating more power than his requirements, then excess power is returned to the grid. The consumer is paid for the units that he generates in excess. Over and above the feed-in tariff, the Delhi government is planning to give a small subsidy to producers of solar power. The concern with solar heaters was that despite the capital subsidy people were not using it. Environmentalists are excited about the new policy because it is customer centric. The Central Electricity Regulatory Commission has prepared guidelines on net metering which will be released. The guidelines are based on net metering systems in Germany and US.

In 2012, the Delhi government had scrapped its previous solar policy. The government had felt that the scheme could be exploited on many grounds and people could produce power through cheaper means and sell it to utilities at a higher rate. But this is not possible according to experts. (

Green infra acquires majority stake in TVS Energy

August 16, 2013. Green Infra Limited (Green Infra), the renewable energy arm of IDFC acquired a majority stake in TVS Energy. Through this acquisition, Green Infra has added to its portfolio 59.75 MW of windfarms across Tamil Nadu and Maharashtra with a commitment to continue to supply power to the TVS Group. This acquisition takes Green Infra's operating capacity to 377 MW and the company is on track to reach 500 MW by March 2014. Incorporated in April 2008 by the private equity funds of IDFC Alternatives, Green Infra is one of the leading clean energy independent power producer in both solar and wind segment in the country. (

Govt to consider tax incentive for wind sector

August 14, 2013. After reinstating generation-based incentive (GBI) for the wind sector, government is likely to enforce a tax benefit scheme as well for the wind farm developers. After a hiatus of one and a half year without any subsidy or incentive scheme, cabinet approved GBI with a retrospective effect for the wind sector. No decision was however taken on accelerated depreciation (AD). Watal, secretary, ministry of new and renewable energy said that historically AD has attracted new players in the wind market. By next financial year, a new tax regime for the wind sector would be in place, said Watal. AD has been in force for the wind industry since 2003 till 2012 when its was withdrawn. 17,000 MW of wind power was added in the nation's grid during this period. (


Bangladesh’s second-biggest city gets World Bank water funding

August 19, 2013. Chittagong, the main port and second-biggest city in Bangladesh, is undergoing $185 million in water production, sewer system and infrastructure works, almost all of it financed by the World Bank. The Chittagong water and sanitation project that’s about two years from completion was undertaken because the Bay of Bengal city of 5 million suffers from inadequate water production, “only able to cater to 40 percent of the total estimated demand,” the bank said. (

Drought-induced curb on Lake Powell water is first-ever

August 17, 2013. The U.S. Bureau of Reclamation, which manages water in 17 Western states, announced its first-ever water-release reduction from Lake Powell to Lake Mead. The 9.1 percent cutback by the largest wholesale water-supplier in the U.S. amounts to that used by 1.5 million homes. It’s the lowest water release since Lake Powell, a reservoir on the Colorado River near the Utah-Arizona border, was filled in the 1960s, the agency said. Lake Mead, Las Vegas’s main water source, is projected to decline an additional eight feet in 2014 as a result of the lower Lake Powell annual release, the bureau said from Salt Lake City. Even so, Lake Mead will operate under normal conditions in 2014, the bureau said. Water releases are to be 7.48 million acre-feet for the year ending September 2014, down from usual releases of 8.23 million feet, and were curbed in response to extreme drought conditions in the region, the bureau said. An acre-foot is the volume needed to cover an acre of land one-foot deep with water. (

Australia carbon to survive Rudd-Abbott standoff

August 16, 2013. Electricity markets are showing Australia’s biggest polluters will have to pay for their carbon emissions regardless of who wins the Sept. 7 election. With Prime Minister Kevin Rudd seeking to reduce the cost of CO2 permits to an estimated A$6 ($5.48) a metric ton and his rival Tony Abbott vowing to scrap carbon prices altogether, power futures signal the cost of emissions will be about A$10 a ton by 2015, up from A$7 two months ago, according to Deutsche Bank AG and Westpac Banking Corp. While the buying and selling of United Nations carbon credits evaporates and Europe’s system founders under a glut of allowances, futures traders in Australia are betting some part of the system introduced by ex Prime Minister Julia Gillard, making polluters pay for their greenhouse gases, will survive beyond the election. Though there’s little chance the 2014 fixed price -- at A$25.40 a ton the highest in the world -- will remain, that doesn’t mean companies such as BHP Billiton Ltd. and EnergyAustralia Holdings Ltd. will end up paying nothing. (

Experts surer of manmade global warming but local predictions elusive

August 16, 2013. Climate scientists are surer than ever that human activity is causing global warming, according to leaked drafts of a major U.N. report, but they are finding it harder than expected to predict the impact in specific regions in coming decades. The uncertainty is frustrating for government planners: the report by the Intergovernmental Panel on Climate Change (IPCC) is the main guide for states weighing multi-billion-dollar shifts to renewable energy from fossil fuels, for coastal regions considering extra sea defenses or crop breeders developing heat-resistant strains. The IPCC report, the first of three to be released in 2013 and 2014, will face intense scrutiny, particularly after the panel admitted a mistake in the 2007 study which wrongly predicted that all Himalayan glaciers could melt by 2035. Experts say the error far overestimated the melt and might have been based on a misreading of 2350.

The new study will state with greater confidence than in 2007 that rising manmade greenhouse gas emissions have already meant more heatwaves. But it is likely to play down some tentative findings from 2007, such as that human activities have contributed to more droughts. Almost 200 governments have agreed to try to limit global warming to below 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times, seen as a threshold for dangerous changes including more droughts, extinctions, floods and rising seas that could swamp coastal regions and entire island nations. The report will flag a high risk that global temperatures will increase this century by more than that level, and will say that evidence of rising sea levels is now "unequivocal". (

China Sunergy signs two solar module supply agreements in Romania

August 16, 2013. China Sunergy, a solar cell and module manufacturer, has signed two solar module supply agreements with Spanish engineering, procurement and construction (EPC) company Bester Generacion in Romania. As per the contracts, the manufacturer will supply solar modules totaling 9.9 MW from its Turkey plant to Romania in September 2013. Bester Generacion will install the multi-crystalline modules in the two ground-mounted projects in Romania. Bester Generacion said that the company was delighted with the cooperation with China Sunergy and is impressed with the manufacturer's high quality, excellent service, and technical expertise. Bester Generacion has solar projects portfolio totaling around 250 MW across Europe, and currently has project pipeline all over the world. (

Florida to sue Georgia in US Supreme Court over water

August 14, 2013. Florida plans to file a U.S. Supreme Court lawsuit against Georgia, saying the state is consuming too much water that would otherwise flow to Florida, the latest battle nationally over an increasingly scarce resource. The dispute is fueled by the rapid growth of the metropolitan area surrounding Atlanta, which is demanding more water and hurting the oyster industry in Northwest Florida, Florida Governor Rick Scott, said. Scott, a Republican, said he would file suit next month after the two states couldn’t reach an agreement. For more than 20 years, Florida, Georgia and Alabama have been mired in negotiations over the distribution of water shared by the three states. The dispute is emblematic of an increasingly common challenge facing cities and states across the country: Demand for water is outpacing supply as urban development and population growth sap resources. Urban development in Georgia has led to an increased need for water, much of it pumped from a river basin that’s also relied on by Florida and Alabama. Legal disputes between states must be heard by the U.S. Supreme Court, instead of going through lower courts first, according to the Constitution. The U.S. Army Corps of Engineers is responsible for managing the water in the states’ shared river basin, which spans the Apalachicola, Chattahoochee and Flint rivers. (

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.