MonitorsPublished on Nov 14, 2006
Energy News Monitor |Volume III, Issue 21
Singapore biodiesel plant to be world's biggest

Ministry of New and Renewable Energy and Energy Security

Shankar Sharma


n view of the growing acceptance of the human cause of Global Climatic Change, and severity of Global Warming the comity of Nations have realized the need for developing new and renewable energy sources (NRES).  The recently published report by the Select Committee on Economic Affairs, House of Lords, UK, and the subsequent Stern Review final report on Economics of Climate Change have provided enough reason for the governments around the world to invest wisely in new and renewable energy sources.  In this background it is relevant to review how our own society has been viewing the reality of new and renewable energy sources.

In view of the ever growing concerns on the fast depleting fossil fuels, and the huge political, economical and environmental issues associated with the nuclear energy, the role of Ministry of New and Renewable Energy (MNRE) becomes all the more evident. But, in the opinion of many industry experts, the policies of the govt. in this regard is leaving much to be desired.  Two main problems in this regard are:

1. When we talk of new and renewable energy sources, most agencies including the govt., seem to consider those sources largely from the point of view of grid connectivity.  It is very unfortunate that our society has not yet objectively considered how crucial the NRES could be as distributed electricity generation sources of millions of homes, offices, schools, street lights, agricultural pump sets etc. Such sources can bring down the demand on the state /regional /national electricity grid by a huge margin. Conservative estimates indicate that by optimal deployment of NRES, the load on the electricity grid can be reduced by as much as 60 to 80%. This scenario has huge benefits to the society:

¨        It will eliminate the electricity deficits which have been crippling the economy since independence, paving way for accelerated development of all sections of the society;

¨        Minimise the need for additional generation capacity based on fossil fuels, thereby minimising the recurring fuel costs on a perpetual basis;

¨        Reduces the huge loss in the network in the form of AT&C losses;

¨        Minimises the environmental pollution;

¨        Minimises the additional (a) acquisition of land for power projects, (b) displacement of people, (c) requirement of other natural resources like fresh water;

¨        Revolutionise the employment scenario in rural areas;

¨        Will assist in preserving our environment;

¨        Most importantly such distributed generation sources, when entrusted to individual households, or consumers will take away the burden on the govt. to provide electricity/ energy on a permanent basis, which will lead to very high level of efficiency in energy utilisation.

¨        Bring huge direct and indirect benefits to the society as a consequence of all the above.

2. The govt. agencies always compare per unit cost of electricity/ energy generation from NRES with that of the prevailing price of conventional energy sources.  This practice is completely wrong for the following reasons:

¨        The 'administered price' of per unit electricity/ energy generated from conventional energy sources, as of today, does not correctly reflect the real cost of generation because they are heavily subsidised in many forms. Also they do not take into account the real cost to the society in the form: (a) of perpetual revenue loss from the forests they destroy, (b) the perpetual revenue/ livelihood loss from the agricultural lands they occupy, (c) the long term health costs to the society because of the atmospheric pollution, (d) the real cost of comprehensive rehabilitation of the displaced people, (e) the cost of resultant effects of forest destruction like depleted water resources, or from water logging by large dams for hydroelectric power stations, etc. 

¨        If all the factors having direct and indirect impacts to the society are objectively taken into account in the pricing analysis, the real cost of per unit of electricity/ energy generated from conventional energy sources will be many times more than what they are shown to be at present;

¨        It is conveniently omitted that the per unit cost of electricity/ energy generation from NRES will come down drastically from the present levels as more and more people start using them as happened in the case of colour TVs, Cell Phones etc.

¨        The huge savings that NRES can provide in reducing the import dependence of crude oil is not being considered;

¨        It is also very unfortunate that the society is yet to accept the harsh reality that the conventional energy sources cannot last indefinitely, whereas the NRES are renewable and perpetual by nature, and that the sooner we move over to NRES regime better it will be for the entire humanity of not only today but of the future generations also.

Looking at these two main issues, among so many other considerations, it is necessary that MNRE should get a budget allocation of at least 60-80% of that of Ministry of Power (MoP); use this massive increase in budget to popularise the use of NRES. The experience from other countries have shown that once the concept of deploying a combination of two or more NRES like solar, wind, biomass etc. (as being successfully done in much more energy intensive countries like Holland) for meeting all energy needs of smaller consumers like individual households, communities and villages, schools, streetlights etc. gets popular, the actual demand for grid quality electricity will reduce within a few years to a level of less than 40% of what it is today. In addition to these efforts if our society adopts other corrective measures like demand side management, energy efficiency and conservation through either legislation or tariff intervention the society's electricity/ energy demand can be comfortably met on a sustainable basis without the need for huge additional capacity based on conventional energy sources. India is endowed with huge potential for NRES, as the table below indicates.  It would be unwise to continue to pour thousands of crores of meager resources on conventional energy generation, when much of our energy requirements can be met by renewable energy sources at much less societal costs.

NRES potential in India



Present Installed



1. Wind energy

45,000 MW


About 5,300 MW


208 potential sites in 13 states

2. Small hydro

15,000 MW


About 1,800 MW

 4,233 potential sites

3. Solar

Over 5,000 trillion


About 66 MW

Potential is more than the total energy needs of the country

4. Bio-mass

A large Potential

Not known

Not known

Source: MNRE, Govt. of India         

The savings thus achieved in conventional energy sources can be optimally used for meeting the energy requirements of those category of loads/ uses like industries, railway traction etc. which cannot be met by smaller NRES. As and when the technology of harnessing NRES improves to the stage when they can be deployed for grid connectivity the scenario improves further. What it needs urgently is a definite conviction and clear direction of the govt. in harnessing the NRES. The sooner the govt. encourages massive use of NRES, through R&D efforts, short term subsidies and loans, required legislation, positive intervention in tariff, elimination of subsidies to conventional energy etc. better it will be for the whole society.                                                (Views are personal)

Author can be contacted at [email protected], [email protected]


Technical Details: Rawatbhata Atomic Power Stations

Fuel Clad


UO2 pellet

Pellet Height, Diameter

17.2 mm, 14.2 mm

Maximum Clad Temperature

301 deg C

Fuel Assemblies

Number of Rods per Assembly


Total Number of Assemblies


Core Configuration

Fuel Inventory

49 tHM

Average Core Power Density

8.23 kWt/liter

Peak Core Power Density

14.7 kWt/liter

Control System

Control Rod Material

Co/stainless steel/mod level

Number of Fine Control Rods


Number of Safety Rods

Moderator dump

Primary Coolant

Coolant Material



87 kg/sq cm

Core Inlet Temperature

249 deg C

Core Outlet Temperature

293 deg C

Total Mass Flow

11800 t/h


Number of Turbines


Turbine Speed

3000 rev/min

Turbine Rating

220 MWe

Vessel and Containment

Vessel Material

Stainless steel 304L

Vessel Shape


Height, Inner Diameter, Wall Thickness

5.07 m, 6.05m, 25.4 m

Containment Type

reinforced concrete/prestressed concrete

Reactor Operations

Fuel Loading

28 tHM/y

Spent Fuel Management

Original Capacity of Pool

280 tHM

Source: International Nuclear Safety Center

Wind Power in India: Myth and Reality

(Hrudanand Misra, Observer Research Foundation)

Continued from issue no. 20

Government Policies and Measures


his section try to examine the policies and measures that were implemented as well as other reasons that have allowed India to move so quickly in terms of wind energy deployment. This section will also look at the Government policies, measures and incentives that allowed wind energy to take off with such a boom.

The most relevant and important fiscal incentives was taken by Government, which really motivates the private sector to set up wind turbines and get into the renewable energy business. These were,

Fiscal and promotional incentives from Central Government

Concessional import duty of 5% on specified wind turbine parts (with effect from March 1, 2002)

1.        Wind operated electricity generators up to 30 kW and wind operated battery chargers up to 30 kW

2.        Parts of wind operated electricity generators, for manufacture or the maintenance of wind operated electricity generators, namely:

-               Special bearings,

-               Gear box,

-               Yaw components,

-               Sensors,

-               Brake hydraulics,

-               Flexible coupling,

-               Brake calipers,

-               Wind turbine controllers, (i) Parts of the goods specified at (a) to (h) above.

3.        Blades for rotor of wind operated electricity generators, for the manufacture or the maintenance of wind operated electricity generators

4.        Parts for the manufacture or the maintenance of blades for rotor of wind operated electricity generators

5.        Raw materials for the manufacture of blades for rotor of wind operated electricity generators

·          100% accelerated depreciation in first year

·          Sales tax, excise duty reliefs

·          Loans through IREDA

·          Income Tax holiday

·          Sales Tax incentives in certain states

·          7 States have introduced policies

·          MNES guidelines on Policy

-               2% wheeling charges

-               Banking up to one year

-               Third party sales at remunerative prices

-               Buy back facility at minimum price of Rs 2.25 per kWh for base year 1994-95, 5% annual escalation in tariff

The rule of 100 percent accelerated deprecation had the greatest effect on the industry. This means that if a company’s taxable income for the financial year was for instance Rs. 10,000 the company could show investments on wind energy generation to the tune of Rs. 10,000 and get away from paying tax. This is the reason that some of the India’s most prosperous businesses and industries entered in generation of wind energy. The huge capital costs of wind farm installation not attract smaller entrepreneurs. Due to this rule many Indian and International companies entered in the wind power generation in India. One of the recent examples of Essar groups entered in the generation of wind power.

With the announcement of the 100 percent accelerated depreciation rule, which is the most damaging factor for the wind industry, there can be various negative impacts such as:

·          A large company would make hasty decisions at the time of tax filling to install plants which may lead to bad sitting of machines and create low performance.

·          This rule relies on the ability of promoters of the technology to absorb the tax benefits. This will restrict the number of potential entrepreneurs to companies with huge profits such as textile and cement industries, which are big investors in the technology. Smaller entrepreneurs were not incentivized.

·          The worst impact of this rule is that there is no reward on the actual performance of wind turbines. Since this was not a package that was rewarded by tax break, simply installation of wind turbines. But it is important whether installation of wind turbines are efficient or not, was the thing that counted. This led to poor performance of the machines. 

Government has announced this rule to encourage private sector companies to investment in wind energy generation. The subsidy through the incentive of 100% accelerated depreciation is in terms of the postponement of tax receipts. To calculate this subsidy, it is assumed that the alternative to 100% depreciation benefit to wind would be allowed at the rate of 33.3%, which is applicable on other conventional power investments. The tax loss to the government through the 100% depreciation at the maximum tax rate of 43% and at a 12% discount rate, works out to be Rs. 37 lakh per 250 kW machine. Under the same conditions the depreciation rate of 33.3% on investment by the existing firm the tax loss is of Rs. 29.8 lakh (Table 5). This implied that the subsidy is of Rs. 7.5 lakh per 250 kW machine or around Rs. 30 lakh per MW. On this basis, up to March 1996, the subsidy to the wind energy program, through the accelerated depreciation benefit is estimated to be the order of Rs. 220 Crore[1].

Table.5 Subsidy at Different Depreciation Levels

Deprecation Rate

Present Value of Tax Loss (in Lakh)

Implicit Subsidy (in Lakh)













Source: Tata Energy Research Institute, 1997.

Financial assistance for demonstration project

In case of state government projects, 60% cost of the wind turbine equipment, maintenance, spares, and erection and commissioning (subject to a benchmark cost of Rs.3.5 crore/MW) will be borne by the Government of India. The state government will meet all other costs.

IREDA loans for wind power projects

IREDA loans for wind power projects are available under different schemes, namely:

¨        Project financing

¨        Equipment financing (up to 1 MW per party per financial year for grid-connected projects)

Project financing (With effect from May 29, 2002)

1.        Development of wind farms on lease basis; the applicable rate of interest is 12.75%, exclusive of interest tax.

2.        Development of wind farms on ownership basis; the applicable rate of interest is 12.5%, exclusive of interest tax.

3.        Development of wind farms by machines suppliers/manufacturers up to 10 MW/party/year on build, operate, lease and transfer (BOLT) basis, the applicable rate of interest is 12%, exclusive of interest tax.

4.        Development of wind farms/estates/with minimum capacity of 10 MW by co-operative/public/joint/private sector companies on BOLT basis, the applicable rate of interest is 11.75%, exclusive of interest tax.

5.        Minimum promoter’s contribution is 30%. Repayment period is 10 years (including moratorium period).

Equipment financing (Up to 1 MW per party per financial year for grid-connected projects)

1.        Interest is 13.5%.

2.        Minimum promoter’s contribution 25%.

3.        Loan up to 75% per cent of the cost of eligible equipment (WEG, tower, control panel, transformer and reactive power compensator).

4.        Repayment period 10 years (including moratorium period).

Source: MNES

Due to Government supports and measures the installation capacity of wind energy increased over a period of time. In Tenth and Eleventh five-year plans, the target for wind energy has been fixed as 6000 MW out of the total capacity earmarked from the renewable sector- 10,000 MW. The wind energy generation development will exceed the limit with nearly 2500 MW already installed. There are few positive developments in fostering the growth of wind energy generation. These are as follows.

1.        Increasing tower heights from 25 M to 75 M and is 78 M for a 1650 kW set in Tamil Nadu.

2.        Unit rating approaching to 1.25-1.65 MW each against an average of 220-230 MW till recently.

3.        Higher rotor diameter to conform to higher capacity rating, 82 M for a 1650 kW unit.

Wind energy has the distinction that almost whole of the capacity installation has been driven by the Government incentives and own commercial characteristics. Presently, wind energy generation has been the focus of private sector investment encouraged by the system of banking and wheeling, which will get additional boost under new provisions of the Electricity Act, 2003.


The wind energy sector has grown significantly in India over a decade. Today after facing lots of challenges, wind in India is known as the mature industry. The wind energy sector in India faces various challenges, which hinders in the development of the sector. These are:

Ø  The capacity of machine used in generating wind power is low and also low wind turbine regime.

Ø  The Government incentives and tariff policies have been encouraged energy intensive and profit making business to invest in wind power. An important attraction was the owning a wind turbine assures a profitable power supply compared to the tariff of the high voltage sector. Wind farm therefore in India consist of clusters of individually owned generators. More than 70 percent investment in the wind sector in India has come from private sector.

Ø  In India, currently accelerated depreciation is allowed on wind projects. The main aim of this incentive is that wind energy supplements power to conventional energy system. But in majority of the cases, this liberal incentive has ended merely as a tax shelter plan. This has far reaching consequences on the power by wind turbines. It is time that government should seriously consider to link depreciation benefits to generation of power, so that the wind turbines produce optimum power.

Ø  In the wind energy sector, different states have different policies for wheeling, banking, penalty for reactive power and third party sale, which is the hurdle for the sector.

Ø  There are extensive long procedures that discourage entrance into the sector. The Central Government requires 22 clearances for wind power plant installation.

Policy Recommendations

A number of reports have analysed the situation most notably and recommended various policy alternatives. From the above study there are various recommendations for the success of the wind power generation.

Ø  The incentives should be based on the performance and reliability and more attention from the actual wind farm operators.

Ø  Problem of fuel shortage, increasing deficits in power supply and pressure from the industrial sector for cheaper power are underlying factors driving for the development of wind power in India. Therefore, policy makers need to address a number of institutional factors if the development of the Indian wind power industry is to be successful.

Ø  Different states have different policies for wheeling, banking, penalty for reactive power and third party sale, which should be made uniform. Therefore, it is important that Government should concentrate on the policies and measures to boost the wind energy generation. Wind energy is viable and environmental friendly option, which will create various benefits directly and indirectly.

Ø  The fiscal incentives have attracted investors with little or no knowledge of the wind power industry. Through greater emphasis is on capital investment within wind power projects and much less on operational efficiency. Therefore, potential investors interests in wind power generation as their primary business are deterred by the terms of grid access.

Ø  Regulation should allow fair access to the grid and third party sale of power. But wind power producer may negotiate directly with consumers for sale of generation by paying a wheeling charge to the local distributor for transportation of the power. 


·          Bhattacharjee. C. R (2004) “India’s Wind Power Growth in a Decade”, eNREE, Vol. 2, Issue. 1.

·          Global wind 2005 Report,


·          IREDA brochure

·          Kumar. A (1999) “Indian Wind Energy Scenario”, Tata Energy Research Institute, New Delhi.

·          Ministry of Non-Renewable Sources

·          Renewable Energy in India: Business Opportunities. Ministry of Non-conventional Energy Sources. 2001.

·          Victor. K. Mallet (2001) “The Use of Wind Energy in India- Lessons Learned”, Term Paper, Sustainable Energy.

·          Wind Force 12: A blueprint to achieve 12% of the world's electricity from wind by 2020. European Wind Energy Association & Greenpeace.

(Views are personal)







ONGC Videsh strikes oil in Iran

November 14, 2006. A consortium led by ONGC Videsh Ltd (OVL) has struck oil at three offshore exploration wells drilled in the joint venture Farsi block in Iran. The results have been encouraging and geological testing is going on to determine the extent of the commercially recoverable oil in the block. The drilling of the three wells - BB4, BB5 and BB6 - was done by ONGC's own rig, Kedarnath. In all, four exploratory wells are to be drilled in the block. The Farsi block was awarded to the OVL-led consortium in 2002 by the National Iranian Oil Company through a bidding process. ONGC is the operator of the block with 40 per cent stake. Indian Oil Corporation holds 40 per cent in it, while Oil India holds 20 per cent. The block spans 3,500 sq km.

In view of the unfavourable demand-supply balance of hydrocarbons in the country, acquiring equity oil and gas assets overseas is being seen as one of the important components of enhancing energy security. OVL has a presence in 15 countries - Russia, Sudan, Vietnam, Iran, Libya, Syria, Myanmar, Iraq, Egypt, Qatar, Cuba, Nigeria, Sao-Tome-Principe Joint Development Zone, Colombia and Brazil. The company has a target of acquiring 20 MMTPA of oil and oil equivalent gas production by 2020. It produced 6.62 million tonnes of oil and equivalent gas in 2005-06 from its assets in Sudan, Vietnam and Russia.

Cairn to invest $90 mn in Ravva oil fields

November 14, 2006. Oil explorer Cairn Energy (CEL) will invest $90 million along with its joint venture partners over the next nine months toward drilling activity at Ravva, the offshore oil and gas field in the K-G Basin.  Cairn Energy, ONGC, Videocon and Ravva Oil, a wholly owned subsidiary of Marubeni Corporation, have 22.5 per cent, 40 per cent, 25 per cent and 12.5 per cent stakes in the Ravva field, respectively.  These joint venture partners have so far invested $700 million in the field since 1994. Exceeding expectations of 70 million barrel of oil equivalent (mmboe), the Ravva field has already produced more than 206 mmboe and is expected to produce another 100 mmboe in the days to come.  With 13 crude oil production wells and seven water injection wells, the current plateau rate of Ravva is 50,000 bopd (barrels of oil per day). The company has already started offshore drilling campaign of six infill wells and one exploration well.  The crude oil produced from the Ravva field is sold to Bongaigaon Refinery & Petro Chemicals Limited (Assam) and to Hindustan Petroleum Corporation Limited, Visakhapatnam, and gas from the field goes to Gail (India).  CEL has already committed an investment of $2 billion to develop the Mangala and Aishwariya fields in Rajasthan. 

BP to begin CBM exploration in 2007

November 13, 2006. British Petroleum will begin coal-bed methane (CBM) exploration at the Birbhum block (BB-CBM-2005/III) in West Bengal in 2007. The block was awarded to BP Exploration (Alpha) Ltd during the recently concluded CBM-III round. BP bid for two CBM blocks in the last round including one at Rajmahal in Chattisgarh, which it lost to a consortium led by Arrow.

BG to invest $1 bn in Indian assets

November 8, 2006. Global gas major British Gas will invest around $1 billion in its Indian assets over the next five years. This includes a $275 million investment in the Panna Mukta Tapti oil field in Gujarat. The oil field is owned by a consortium which includes Reliance Industries, ONGC and BG. British Gas owns 30 per cent stake in the consortium.  The three companies together are expected to invest around $750 million in the field to increase recoveries from the current 10.5 million standard cubic metre per day (mmscmd) to 17 mmscmd by mid-2007.  A similar amount may be invested in the company’s other asset, an exploration block in the Krishna-Godavari basin in which it is a partner with ONGC.  A portion of the planned investment is also being set aside for any blocks that it may be awarded under New Exploration and Licensing Policy (NELP) 6. BG has bid for six blocks in the current round of bidding, the results of which are expected in the middle of this month. The company also plans to invest around Rs 300 crore in expanding its presence in the city gas distribution business where it has obtained sanction to set up three subsidiaries in Andhra Pradesh, Karnataka and Tamil Nadu.  BG already has a joint venture, Mahanagar Gas, with the Gas Authority of India Limited (GAIL) for distributing gas in Mumbai, and sells 300 mmscmd in the city.  It also sells 2.2 mmscmd in Gujarat through its subsidiary Gujarat Gas Company Limited.


RCF to buy Kuwait petro firm pie

November 14, 2006. The government-owned Rashtriya Chemicals & Fertilizers (RCF), in its first-ever overseas acquisition plan, is eying a significant stake in a Kuwait-based oil and petrochemical major.  RCF, the country’s largest public sector player in the fertilizers and chemicals space, is likely to enter the bid to buy around 35 per cent stake in Petrochemicals Industries Company (PIC) - the petrochemical arm of Kuwait Petroleum Corporation.

Essar to begin Gujarat refinery operations soon

November 9, 2006. Essar Oil Ltd will start its 10.5 million tonnes per annum refinery in Gujarat within a fortnight. The refinery would initially start with a capacity of 7.5 million tonnes per annum, which would be ramped up to 10.5 MTPA by April 2007. When operational, this would only be the second refinery by a private sector oil company after Reliance Industries Ltd's 33 million tonnes Jamnagar refinery in Gujarat.

IOC, Kochi port in talks for LPG importing facility

November 8, 2006. Indian Oil Corporation has come out with a proposal to the Cochin Port Trust to convert the existing oil terminal at the port to handle LPG imports for the public sector company. IOC has approached the port with this request and both the parties have held a couple of discussions. With the commissioning of single point mooring by BPCL-Kochi Refinery, oil cargo handling at the port would decline substantially resulting in tangible revenue loss.

The oil company could handle LPG imports at the port and transfer it to its bottling plant at Irumpanam near here. Currently, it is importing LPG through the Mangalore port for distribution in southern States. An import facility for LPG in Kochi could be an ideal investment considering the logistical bottlenecks in sourcing it from Mangalore for catering to the Kerala market. To meet the growing domestic LPG demand, the oil companies are importing it through the Mangalore terminal and transporting bulk LPG by road to various bottling plants in Kerala, thereby, incurring huge cost. Unless BPCL-Kochi Refinery decides to increase its production capacity, the only way out is imports.

The LPG demand in Kerala is expected to grow by about 3 to 5 per cent per annum for the next five years as more and more domestic consumers are switching over to it LPG as well as increase in auto gas usage. Market demand for LPG from domestic and commercial sectors is about 38,000 tonnes per month. About 20,000 tonnes is being sourced from BPCL-Kochi Refinery and the remaining is imported through Mangalore. The per capita consumption of domestic LPG in Kerala is 7.2 kg per month.

Transportation /Trade

IndianOil starts trading on NCDEX

November 14, 2006. Indian Oil Corporation (IndianOil) has commenced trading in derivatives on the National Commodities & Derivatives Exchange (NCDEX). The company has recently acquired a trading-cum-clearing membership with NCDEX. The commencement of derivatives trading on the domestic exchanges would be an extension to hedging activities, currently undertaken by IndianOil through overseas over-the-counter markets. IndianOil would fully utilise the platform, as a vehicle for its oil price risk management activities. IndianOil is actively acquiring membership of other domestic exchanges like Multi-Commodity Exchange too.

Maharashtra now favours a natural gas grid

November 8, 2006. The Maharashtra government is now exploring the possibility of putting in place its own gas grid across the state. Maharashtra Industrial Gas Transmission Company (MIGTCL) has already received proposals from Reliance, GAIL and the Gujarat State Petroleum Corporation (GSPC) in this regard. The state government plans to float an SPV which, in turn, would strike agreements with private or public sector companies for the gas supply.

Policy / Performance

Oil India plans second coal liquefaction project

November 14, 2006. Oil India Ltd is planning to launch a second pilot project for coal liquefaction, which is a process that converts coal into petrol, diesel and other liquid fuels. Many countries are working on coal liquefaction projects as an alternative fuel technology in the light of the spiralling crude oil prices. Oil India will get down to commercial coal liquefaction only after analysing the results from the year-long second pilot project. South African petrochemical major Sasol Ltd has plans to invest $6 billion in the coal liquefaction business in India. The second pilot project would require an investment of Rs 20 crore; Hydrocarbon Technologies Inc of the US is being roped in to provide the technology. Oil India established its first pilot coal liquefaction plant at its R&D centre in Duliajan, Assam.  The second pilot plant will help in identification of a proper coal liquefaction technology that would suit the Indian scenario. Assam coal is considered to be the best for coal liquefaction due to its composition, as about 90 per cent of the coal is directly convertible into fuel. The State is estimated to have about 900 million tonnes of coal reserves.

Reliance proposes MoU with Andhra for piped gas

November 14, 2006. Reliance Industries Limited (RIL) has proposed to enter into a memorandum of understanding with the Andhra Pradesh government for the implementation of piped gas supply network for domestic households and other sectors in the state while seeking the government’s support for speedy execution of the project.  Reliance has indicated to the government that the gas flow from KG D6 discovery is expected to begin in the second quarter of the year 2008, bringing home the sense of urgency in taking up the piped gas network along the trunklines being laid by the company. 

The work on the gas terminal at Gudimoga near Kakinada is on full swing to make the facility ready before the scheduled commencement of gas production in the offshore discovery.  Reliance Gas Transmission Infrastructure Limited (RGTIL) has already started work on the 1,400-km East-West pipeline, which traverses through seven districts in Andhra covering 560 km.  The Centre has also cleared RIL’s request for authorisation to lay another pipeline from KG D6 terminal towers towards Chennai, which traverses through five districts in Andhra covering a distance of 540 km. RIL has proposed to establish a city gas network along these and other proposed trunklines.  The company has also applied for laying a pipeline from Kakinada to Kolkata, which is yet to receive the Centre’s permission. 

ONGC drops JV plan with Hindujas

November 13, 2006. State-owned Oil and Natural Gas Corporation (ONGC) has walked out of a proposed JV with the Hindujas at the last minute even though the oil major’s board had approved the deal on October 19. ONGC and the Hinduja group had planned to float a holding company on the lines of ONGC Mittal Energy Services (OMEL) to hunt for oil blocks in the Middle East region. The ONGC management changed its mind on the eve of the signing ceremony as a result of which only the JV for LNG procurement was signed. Gulf Oil is also believed to have almost firmed up a deal in Iran to bag a gas field with proven reserves of 9 mmtpa (metric million tonnes per annum). With ONGC backing out, it does not have a holding company with expertise in exploration and production (E&P) to seal the deal. 

ONGC to pick up 50.5 pct in Tripura project

November 11, 2006. Oil and Natural Gas Corporation will take 50.5 per cent stake in the company that will set up the over Rs 2,000 crore Tripura power project and the associated transmission lines.  ONGC has changed the format of the 740 mw project. While earlier it was proposed that ONGC would set up the power plant and a separate company would implement the transmission link for evacuation of power from the plant, now propose to do both the jobs through just one company.

ONGC would take 50.5 per cent stake in the company that will set up the power plant and the associated transmission lines, while IL&FS would take 26 per cent.  IL&FS would arrange investors for the remaining equity. The project is estimated to cost around Rs 2,087.6 crore and would be implemented by the end of 2009. The generated power will cater to the north-east demand and also be transmitted to Northern Grid to feed demand in north India.  Instead of the earlier proposal for separate generation and transmission companies – the generation project was meant to be on the balance sheet of ONGC whereas the transmission division was to be an independent company – the two entities would now be integrated under one company. 

Himachal moots JV with GAIL

November 10, 2006. The Himachal Pradesh government has approved the proposal for a joint venture with GAIL to meet its industrial and other needs of LPG in the upcoming industrial belt here.  The industrial towns of Baddi, Barotiwala, Una, Damtal, Kala Amb and Poanta Sahib will benefit most from the deal. The proposal was recently submitted to the state government by the state-run Himachal Pradesh State Industrial Development Corporation (HPSIDC) and was cleared by the Cabinet. If the proposed memorandum of understanding (MoU) is signed between HPSIDC and GAIL, two pipelines would be diverted from Panipat in Haryana and Pathankot in Punjab. In the first stage, the HPSIDC and GAIL will carry out a survey of the industrial and non-industrial areas to assess the gas needs of the state.

Russia keen to join tri-nation pipeline project

November 9, 2006. Russia has expressed its keenness to join the proposed Iran-Pakistan-India pipeline project. Russians have expressed their desire to be associated with the tri-nation project during the Minister of Petroleum & Natural Gas, visit to Russia. Indications are that Russia's Gazprom, the world's largest gas firm, is keen to participate in the construction of the $7.4-billion tri-nation pipeline that would bring gas from the giant South Pars fields in Iran to Pakistan and India. India, Pakistan and Iran are currently discussing modalities of building the pipeline. The report of the neutral consultant Gaffney, Cline & Associates — appointed to suggest the pricing formula for natural gas that would flow through the proposed tri-nation pipeline — is expected soon. Once the report is received, then the next round of tri-lateral meeting of top officials of the three countries would take place.



NTPC to set up 2,000 MW nuclear plant in TN

November 10, 2006. The National Thermal Power Corporation (NTPC) is planning to set up a 2,000 MW nuclear power plant in Tamil Nadu with an estimated investment of Rs 11,000 crore. The Centre has given its nod to NTPC to generate power, using nuclear plants. This is a part of the company’s 20,000 MW additional power generation plan during the current Plan period. The much-delayed 1,000 MW coal-fired Ennore power project, being promoted in joint venture with Tamil Nadu Electricity Board (TNEB), with an estimated investment of Rs 4,500 crore will get the environment clearance soon.

The Ennore project - NTPC Tamil Nadu Energy Company Ltd - is being set up in a debt/equity ratio of 70:30. Both NTPC and TNEB will hold 50% each in the equity capital and expect to commence work on the project in March 2007. The project is expected to be completed in 40-45 months.

Satpura thermal power unit to be upgraded

November 10, 2006. Madhya Pradesh Power Generation Company, an arm of the Madhya Pradesh State Electricity Board, has planned to upgrade two units of its Satpura thermal power station with an investment of Rs 2,350 crore.  Talks are on with Bharat Heavy Electrical Ltd (BHEL) for boilers, turbines, generators, control room, main power block construction and commission work including civil work on a single contract turnkey basis.

Rajasthan targets 4,500 MW by 2011-12

November 10, 2006. The Rajasthan government has decided to lay emphasis on private sector investment for the production of power.  The Rajasthan government has projected the need for an additional generating capacity of about 4,500 MW by the end of 2011-12. To achieve this, the state government has taken a decision to promote private sector investment for generation of power. In this regard, the state government has decided to ensure a single window clearance for all proposals from the Board of Infrastructure Development & Investment Promotion (BIDI).  Further, it has mandated that at least 50 per cent of the energy generated in a year from the project under the policy will be sold or used within Rajasthan. The state government has already identified potential sites.  The state government has, for the first time, decided to clear the entire waiting list of agriculture connections spanning a period of three years by releasing about 40,000 to 45,000 connections per year, which is more than double the number per year of the previous years. 

Bhusan plans 2000 MW unit in Orissa

November 10, 2006. The Bhusan group, currently engaged in setting up of a 3 million tonne integrated steel plant in Orissa, proposes to set up a 2000 MW power plant in the state.  The coal fired thermal power plant, estimated to cost about Rs 8483 crore, will come up at Angul, close to its existing steel plant site.  Bhusan Energy Pvt Ltd, the banner under which the project will be established, has recently entered into a MoU with the Orissa government in this regard. Under the guidelines issued by the state government, the project will offer 25 per cent of the power produced by it to an agency of the state government at a rate approved by Orissa Electricity Regulatory Commission (OERC). Besides, it will contribute 6 paise per unit of the energy sold outside the state to an environment management fund and make available power generated above 80 per cent PLF to the state grid at variable cost.  Meanwhile, Bhusan Steel and Strips Ltd (BSSL), which is setting up a 3.1 million tonne steel plant at Meramundali in Dhenkanal district of Orissa, proposes to expand the capacity of the unit by 6 million tonne with an additional investment of Rs 15,000 crore.   

BSSL had entered into an agreement with the Orissa government on November 3, 2005 for setting up of a 3.1 million tonne steel plant at Meramundali with an investment of Rs 5828.15 crore.  The company has already invested Rs 2000 crore on the ground and the first phase of 0.5 million tonne steel capacity is slated for commercial production by the end of this year. The company hopes to complete the installation of the entire 3 million tonne capacity by January 2008.

Suriya Jyoti to come up with hydro projects in Himachal

November 9, 2006. Suriya Jyoti Devices India (P) Ltd, a sister concern of Punjab-based Suntime Energy Ltd, will set up two mini hydro power generation projects in Himachal Pradesh on a built-operate-transfer (BOT) basis at a cost of Rs 42 crore. The two power projects, which will be set up in Kullu Manali and Kangra, will have a generation capacity of 2 MW and 4 MW, respectively. 

IL&FS to set up power units in Chhattisgarh

November 9, 2006. The Chhattisgarh government has constituted a joint venture company with the Infrastructure Leasing and Financial Services Limited (IL&FS) for setting up coal and hydel power stations in the state. The state government inked a memorandum of understanding (MoU) with the IL& FS to bring the joint venture company into shape.  Both the state government and the IL&FS will have 50 percent share each in the joint venture company. 

Transmission / Distribution / Trade

Gujarat becomes first to electrify all villages

November 13, 2006. Gujarat became the first state in the country where electricity has reached all the villages. All 18,065 villages of the state have now access to three-phase uninterrupted electric supply. The state government commissioned the network of 56,599-km-long cables and 12,621 new transformers under its ambitious Jyotigram Yojna in 30 months with an investment of about Rs 15,000 crore.

Bhilwara Energy bags hydro projects

November 9, 2006. The recently christened Bhilwara Energy Ltd (BEL), part of LNJ Bhilwara Group, signed a Memorandum of Agreement with the Government of Arunachal Pradesh (GoAP) for Development of three hydropower projects of a total capacity of 290MW. The proposed projects are to be developed on the river Nyamjung Chhu in the Tawang district of Arunachal Pradesh. The total estimated outlay for the three phases of the Nyamchung HEP are likely to cost the company Rs 1,500-1,700 crore. As per the agreement, the project has been awarded to BEL on build, operate, own and transfer basis for a period of 40 years. BEL will also provide 12 per cent of the generated power to the GoAP free of cost for the designated period. The land and site required by the company for construction, operation and maintenance of the HEPs will be provided by GoAP on 40-year lease to BEL. The company plans to furnish the detailed project report for approval to the Government in next 12-15 months and envisages commencement of work on the project by the middle of 2008. It is hopeful of delivering the project by 2011.

Policy / Performance

Coal gassification by 2011-12: MoC

November 14, 2006. The Union coal ministry is hoping that the commercial utilisation of underground coal gasification (UCG) would start from 2011-2012. It has started discussion with union finance ministry and law ministry for extending fiscal incentives to UCG projects and to amend the mining act to incorporate UCG activities.  UCG technology if successfully implemented would not only provide clean source of energy but would also help in reducing gas and oil import bill.  The coal secretary informed that government is seriously thinking of extending some fiscal incentives and tax concessions for UCG projects.  The mines act and coal mines regulations need to b amended to incorporate UCG mining activities. Other safety and policy issues in regard to underground ignition, gasification and associated activities and surface facilities for oxygen supply, power generation also need to be addressed. The ministry has already approved a pilot project for UCG as per the proposal of Neyvelli Lignite Corporation (NLC).  NLC has entered into a MOU with ONGC to make UCG studies in lignite areas of Tamilnadu and Rajasthan. ONGC is also selecting a suitable site for UCG in CIL command area. 

ONGC gassification project kickoff by 2009

November 14, 2006. Oil and Natural gas Corporation Ltd (ONGC) expects commercialisation of its underground coal gassification (UCG) projects in 2009. It is currently working on a pilot UCG project in Gujarat. UCG involves underground burning of coal which cannot be mined, to produce gas. India currently has 250 billion tonne of coal reserves (proved, indicated and inferred) of which up to 20 per are inaccessible for conventional mining, and therefore ideal for UCG. ONGC was ready to start more than one UCG project in alliance with coal mining companies like Coal India and Neyvelli Lignite Corporation. 

Centre may hand over Pakal Dul hydro project to J&K

November 14, 2006. The Jammu & Kashmir government has requested Prime Minister Manmohan Singh to look into the feasibility of transferring some central power projects in J&K to the state government. The state is facing a severe power crisis. A delegation of the J&K government, which met Singh in the Capital a few days ago, has requested that some National Hydroelectric Power Corporation projects be transferred to J&K.  During the meeting they were particularly keen on transferring the 1,000 MW Pakal Dul hydro power project in Kishtwar of Doda district to the state government.

The techno-economic appraisal has been accorded to NHPC by the Central Electricity Authority hardly a month ago.  The delegation also wanted two more power projects of medium capacity be transferred. The PMO had directed the Union power minister to see if the request could be acceded to.  And, the Prime Minister is said to have assured handing over the Pakal Dul project to J&K. This project is estimated to be constructed at Rs 5,089 crore and it will have four units of 250 MW each. 

PSU power projects to get lion’s share of coal blocks

November 14, 2006. New private power projects with capacities above 1,000 MW can forget about captive coal blocks and linkages unless these projects are set up on the basis of tariff-based competitive bidding. Guidelines for allocation of coal block and linkages by the ministry of power give Central and state sector projects the top priority while recommending for coal blocks/linkages.

Private power developers willing to set up projects of 1,000 MW or lower capacity as merchant plants, too, will be considered for coal block allocations. To ensure development of the allocated coal blocks, the guidelines propose a system of bank guarantees which can be encashed if the milestones are not met.

The power ministry’s guidelines provide a priority list for coal block allocation and linkage. The list accords highest priority to projects executed by Central and state sector public undertakings, especially expansion projects as they have shorter gestation period. Next on the priority list are joint venture projects — these could be between Centre and state or among states, or Centre/state and private developers.

Projects being developed by independent power producers (IPP), which have received tariff approval from the regulatory commission under Section 62 of the Electricity Act, come next on the list. Projects being developed through tariff-based competitive bidding, like ultra mega power projects, are next in the priority list. Greenfield projects by IPPs will be considered for coal block allocation only if these are between 500 MW and 1,000 MW and are being set up as merchant plants. Expansion of IPP projects will be considered if they are already supplying power to the grid. The ministry has also proposed some normative criteria to be eligible for coal blocks allotment, these will be applicable particularly to IPPs and merchant plants. These could relate to the net worth of companies, their internal resource generation and annual turnover.

L&T teams up with Mitsubishi

November 13, 2006. Larsen & Toubro has entered into a technological collaboration with Mitsubishi Heavy Industries for manufacture of equipment for mega power projects being planned in the country. The companies will together invest Rs 450 crore in the venture, currently registered as L&T Boilers Ltd. Under the agreement, the Japanese company will transfer technology to L&T for manufacture of supercritical boilers that can meet the requirements of the domestic mega power projects being planned. Currently, there are few Indian companies in this space, the notable player being Bharat Heavy Electricals Ltd. L&T has expressed interest in bidding for two ultra mega power projects, those at Sasan in Madhya Pradesh and Mundra in Gujarat. The company is likely to pursue other mega power projects as well. The technology from Mitsubishi would also be used for L&T's work for National Thermal Power Corporation.

L&T's facility under this venture will either be located at its existing facility at Hazira or at a location more suited to service the destination power plants of its customers. Mitsubishi will grant an exclusive licence and transfer the know-how and technical information to the Power Business Unit of L&T. The areas covered under this agreement include design, engineering, manufacture, testing, inspection, erection, installation, commissioning, operation, repair, services and retrofitting of super critical boilers, including pulverisers. The licence that is for a period of 20 years would cover output range from 300 MW to 1,000 MW for nominal super critical coal fired thermal power plants.

RIL seeks 3 coal blocks for new energy route

November 13, 2006. Reliance Industries Ltd (RIL) has applied for three coal blocks to implement an ambitious underground coal gasification (UCG) project, anticipating that the Centre will notify changes in the coal mining law to allow private sector participation in this new technology. RIL has also tied up with the consortia of Uzbek Coal Authority and Uzbek UCG Gas for technical collaboration, which may later on turn into a joint venture if it can firm up the plans. In UCG, coal is turned into a gas under the ground, and this gas is extracted and used as fuel in power plants or industry. The carbon dioxide formed remains trapped underground, and there is no need to mine the coal, so costs are much less. RIL is spending $10 million to take a decision on its UCG foray.

Govt may fail to meet 10th Plan power capacity target

November 13, 2006. The government may find it difficult to meet its target of adding 34,000MW capacity during the Tenth Plan period. Also, in the past four-and-half years of the Plan period (April ’02 to September ’06), only 17,407.60MW of new generation capacity was added. For the current fiscal and the last year of the Plan period, the target was to add 17,766MW. Of this, in the first six months (April to September) only 3,165MW have been added. Getting the remaining 14,000-odd MW capacity in place by March 31 may be too ambitious.

According to the Central Electricity Authority, of the 5,462MW power generation capacity that was to be added in the first six months of the current fiscal, only 3,166MW was added. This means a 42% shortfall in targets. Besides, as much as 3,800MW additional capacity is slotted for commissioning in March ’07, there is an understanding that some of these projects could slip to the next Plan period. The ministry of power is already anticipating slippages to the tune of 1,350MW. For the first six months of the current fiscal, which is also the terminal year of the Tenth Plan period, the state sector is largely responsible for not meeting targets.

Of the 2,001MW it was supposed to add, the state sector managed to add only 374MW capacity or 18% of the target. Both the Central and private sector had better showing. The Central sector accounted for 47% of the capacity added. The Central sector power developers added 1,500MW of their target of 2,100MW. Private sector projects accounted for 1,292MW of capacity added in the six-month period. The private sector had a six-month target for 1,360MW, it had a shortfall of 69MW. The bulk of the capacity addition in the six-month period came in the thermal power at 1,602MW, which is slightly over 50% of the new generation capacity added in the first half of ’06-07. Hydropower capacity contributed 1,024MW, or 32% of the total. 

Plan for private role in underground coal gassification

November 12, 2006. The Centre is considering a policy and legal framework to promote private sector participation in the emerging option of underground coal gassification (UCG). The framework includes extension of fiscal benefits in the line of coal bed methane (CBM) policy. The Ministry has also set 2010-11 deadline for commercial utilisation of UCG. The Union Coal Ministry would soon discuss the issues related to fiscal benefits with the Finance Ministry. Unlike development of CBM, which is governed by the Union Ministry of Petroleum and Natural Gas, both coal gassification would be monitored by the Coal Ministry.

It may be mentioned that though underground coal gassification offers an opportunity to make viable use of deeper coal seams which are otherwise unutilised, the present set of legislations does not allow use of coal blocks by private sector for any other purposes other than captive mining.

Developers of 2 ultra power to be chosen by Dec

November 11, 2006. The developers for two of the seven ultra mega projects each based at Sasan in Madhya Pradesh and Mundra in Gujarat, planned with a capacity of 4,000 MW, would be chosen by the end of the year, and for the third project at Krishnapatnam in AP by March 2007.  The Union Power Secretary, said these projects had received excellent response and Krishnapatnam had secured interest from 12 potential developers, including foreign companies. Referring to the new business model on which these projects have been based, said there has been a shift in approach to development. As opposed to cost-plus tariff, these projects would be based on competitive tariffs. The bids are out for two of the seven projects.  While one is based on domestic coal, the other is designed to be fired with imported fuel. Shell companies have been formed and the necessary regulatory clearances have been received, fuel linkages firmed, making it faster for the developer to implement the project.

UP to ink deals with REL, GVK & Lanco

November 11, 2006. The Uttar Pradesh government will sign power purchase agreements (PPAs) with Reliance Energy Ltd, GVK Group and Lanco Kondapalli. While Reliance Energy will sign the PPA for the Rosa power plant, GVK and Lanco will sign agreements for the Srinagar hydro project and Anpara C respectively. The combined capacity of the three plants is 1,930 MW and the projects are expected to be completed within four years.

The 1,000 MW Anpara C project, the first tariff-based, competitively bid power plant, was awarded to Lanco Kondapalli after it outbid Reliance Energy and Essar Group.  The NTPC has been appointed as the consultant for the project. The Rosa power plant, which was with the AV Birla group, has been taken over by Reliance Energy. The 600MW project is slated to come up in Shahjahanpur. The state implementation agreement has already been awarded for the project. 

NTPC to invest $111.8 mn to boost coal mining to 60 mt

November 10, 2006. National Thermal Power Corporation (NTPC) is all set to emerge as a coal mining major with production capacities of at least 60m tonnes (mt) in the next eight years. Investments in the short term are likely to be about Rs 500 crore ($111.8 mn). Mining is likely to commence at Pakri Barwadih block in the North Karanpura coalfields in Bihar from ’08-09. The power major’s foray into coal mining is aimed at ensuring timely availability of fuel for its stations and at controlling fuel costs, which constitutes about 50 per cent of its bulk supply tariffs.

NTPC has eight blocks in all. It has been allotted two coal blocks — Brahmini and Chichro Patsimal both in Jharkhand where coal would be extracted through a 50:50 joint ventures with CIL. The Centre has also allotted five more blocks to us. These are Kerandari and Chatti Bariatu in North Karanpura, Chhatrasal in Singrauli, Dulanga in the Ib Valley, and Talaipalli in Chhattishgarh. The company has also recently entered into an agreement with Singareni Collieries for floating a joint venture to undertake various activities in coal and power sectors including acquisition of coal mines, development and operation of integrated coal based plants and providing consultancy services. 

MP, Gujarat split on Malwa power project

November 9, 2006. Madhya Pradesh has decided to go solo on the 1,000 MW Malwa power project. Earlier it was meant to be a 2,000 MW project, to be done in collaboration with the Gujarat State Electricity Board in the village of Donagalia Purni of Khandwa district. The governments of MP and Gujarat had signed the Rs 8,000 crore power project agreement. Later Gujarat showed no interest. Now the project cost will be Rs 4,500-5,000 crore and the capacity 1,000 MW.

 Bharat Heavy Electricals Ltd is eyeing the project and will participate in the bids. The project will be completed in four years after the completion of the bidding process, which may take another six to seven months. The nearby Indira Sagar reservoir will feed the project and Southern Eastern Coalfield Ltd (SECL) will supply coal to the project, probably from Korba. 

Policy support for energy security must: IEA

November 8, 2006. Consider the following scenario that may develop over the next 25 years: Global primary energy demand increases by 53 per cent between now and 2030; over 70 per cent of this increase comes from developing countries led by China and India; imports of oil and gas in the Organisation for Economic Cooperation and Development (OECD) and developing Asia grow even faster than demand; world oil demand reaches 116 million barrels a day (mb/d) in 2030, up from 84 mb/d in 2005. 

The most of the increase in oil supply is met by a small number of major OPEC producers, while non-OPEC conventional crude oil peaks by the middle of next decade; global carbon-dioxide (CO2) emissions reach 40 Gt in 2030, a 55 per cent increase over today's level; and China overtakes the US as the world's biggest emitter of CO2 before 2010.

This is the reference scenario, which provides for a baseline vision of how energy markets are likely to evolve without new government measures to alter underlying energy trends, according to the World Energy Outlook 2006 published by International Energy Agency. The report argues that these trends would accentuate consuming countries' vulnerability to a severe supply disruption and resulting price shock, as well as amplify the magnitude of global climate change. Advocating strong policy action to move the world onto a more sustainable energy path, the report has unveiled an alternative policy scenario that demonstrates that the energy future can be substantially improved if governments around the world implement policies and measures they are currently considering.

In this scenario, global energy demand is reduced by 10 per cent in 2030 - equivalent to China's entire energy consumption today. Global CO2 emissions are reduced by 16 per cent - equivalent to current emissions in the US and Canada combined - in the same timeframe. In the OECD countries, oil imports and CO2 emissions peak by 2015 and then begin to fall. Improved efficiency of energy use contributes most to the energy savings.  Increased use of nuclear power and renewables also help reduce fossil fuel demand and emissions. The shifts in energy trends described in this scenario would serve all three of the principal goals of energy policy: greater security, more environmental protection and improved economic efficiency.Demand-side investments in more efficient electrical goods are particularly economic. On average, an additional $1 investment in more efficient electrical equipment and appliances avoids more than $2 in investment in power generation, transmission and distribution infrastructure.

Coal is now cheaper than natural gas for electricity generation, while nuclear power may, in some cases, be cheaper than both coal and gas - even where there is no penalty for emitting CO2, the report pointed out adding that biofuels can make a significant contribution to meeting future road-transport energy needs, helping promote energy diversity and reducing emissions.

GE Energy in talks with Indian cos to set up N-plants

November 8, 2006. GE Energy was looking to set up nuclear power plants in India post the deal coming through. The company said it was in talks with a few Indian equipment suppliers to explore opportunities in working together to further their nuclear energy business from a global standpoint. This could include working with GE to help build nuclear plants in countries such as the US. Eyeing the huge scope for nuclear energy in India after the nuclear co-operation agreement with the US goes through, the company was open for either setting up new plants or participating in expansion of existing facilities. GE would be able to provide new reactors with their technologies — Advanced Boiling Water Reactor (ABWR) and ESBWR.




BHP Billiton JV buys Gulf of Mexico development

November 12, 2006. Global miner BHP Billiton Ltd./Plc joint venture has acquired an oil and gas development in the Gulf of Mexico from Anadarko Petroleum Corp. for US$1.35 billion. BHP's net share of the acquisition is at $594 million. The other partners in the joint venture are U.S. refiner Hess Corporation and Spain's Repsol YPF. The Genghis Khan oil and gas development, discovered in 2005, already has two oil wells and estimated gross hydrocarbon reserves of about 65-170 million barrels of oil equivalent. The development may include up to seven wells and first oil is expected in mid 2007.

Petrobras and Petroperu to explore Peru's Amazon

November 10, 2006. Brazil's state-controlled oil company Petrobras and Peru's Petroperu will do joint exploration work in the Peruvian Amazon as part of a partnership signed this year. The oil-and-natural-gas exploration accord is due to be signed on Nov. 21. In September, the two companies pledged to work together to develop joint exploration projects, upgrade Peru's aging Talara oil refinery and spur the use of biodiesel and ethanol fuels. The Talara refinery requires an overhaul by 2010 to keep up with demand and up to $400 million in investment.

CNOOC gas discovery in Bohai Bay

November 10, 2006. China's top offshore oil and gas producer, CNOOC Ltd. its wildcat Jinzhou 31-6-1 in east China's Bohai Bay was successfully completed and it had struck natural gas. The well was tested to flow about 11.7 million cubic feet of gas per day via 11.91 mm choke. Bohai Bay is one of the company's four major offshore oil production areas.

Chevron makes gas discovery off Australia

November 9, 2006. Chevron Corp. made a significant natural gas discovery at an exploration well 90 miles offshore northwestern Australia. Chevron said it discovered 623 feet of net gas sands at its Clio-1 well, which was completed in Sept. 2006. The finding places Clio as one of the top wells in Australia in terms of total net pay, according to the company. It plans to start a 3D seismic survey program in mid-December to better determine the potential of the discovery. Chevron affiliates hold a 67 percent stake in the well. Shell Development Australia, a unit of Royal Dutch Shell Plc, holds the remaining 33 percent.

MOL gets two blocks for oil, gas exploration

November 9, 2006. The Government of Pakistan signed Petroleum Concession Agreements (PCA) with MOL Pakistan Oil & Gas for two blocks - Margalla & Margalla North - spreading over districts in Punjab, NWFP and Federal Capital Area. MOL Pakistan Oil and Gas BV is a subsidiary of MOL Group, one of the leading integrated oil and gas groups of Central and Eastern Europe. It will be allowed to work in block No. (3372-20) covering an area of 1,386.73 sq kms and Block No. 3,372-21 covering an area of 1,561.72 sq kms. Under the agreement, the company will invest in each block independently $ 2.1 million during initial period of 2 years of the license and shall carry out environmental studies, G&G studies, 2D seismic acquisition, its processing and interpretation, reprocessing of existing seismic data and drill exploratory wells based on the results of the data. The work on both the blocks will commence simultaneously. MOL Pakistan has made significant hydrocarbon discoveries in Tal block and is the operator of the block. Tal block Joint Venture is between MOL Pakistan, PPL, POL, OGDCL and GHPL. The company is already supplying 50 million cubic feet per day natural gas from its Manzalai-1 (Gurguri) well to SNGPL at Kohat. It also produces further 15 million cubic feet per day natural gas and 1500 bbl per day crude oil from Makori-I. It has recently announced successful completion of tests for the third well called Manzalai II. During the current year MOL Group will be drilling more exploratory wells in the block.

NIOC signs on development of 2 gas fields

November 8, 2006. The National Iranian Central Oil Company signed an agreement on attraction of foreign investment for development of Selkh and Southern Gesho in a meeting with Australian LNG Co. Selkh gas field is located in Qeshm area and its gas reserve amounts to 1.2 trillion cubic feet. Three million cubic meters of gas is predicted to be extracted daily from the field. The Australian LNG Co. is expected to develop this gas field and will convert the extracted gas into LNG. The capital required for development of Selkh gas field at 500 million dollars and that of Southern Gesho and its gas refinery at one billion dollars. The production of liquid natural gas will start in the first quarter of 2010.

Sasol wins Mozambique exploration licence

November 7, 2006. South Africa's Sasol, the world's biggest producer of synthetic fuel from coal, has been granted an exploration licence in Mozambique, and plans to launch gas exploration in the first quarter of 2007. Sasol had won conditional approval of an environmental impact assessment report, allowing it to explore for hydrocarbons such as gas in an area covering some 10,000 square km off the Mozambican coast. Sasol will now initiate work required to satisfy conditions set out in the EIA by the Mozambican authorities. This will lead to the commencement of exploration activities in the first quarter of 2007.

Devon Energy to explore for oil in Angola

November 7, 2006. A group led U.S.-based oil and gas producer Devon Energy Corp. which includes Portugal's Galp, will invest 30 million euros ($38.3 million) to explore for oil in the north of Angola. The consortium expects to begin exploration at an onshore block in the northern province of Cabinda by the end of the first quarter of 2007. It awaits the approval of the country's government. Cabinda's off-shore exploration produces 530,000 bpd. The group also includes state-run oil company Sonangol, Spain's Repsol and U.S. based Gulf Energy Resources.

Dalma Energy to invest $80 mn in new rigs

November 7, 2006. Dalma Energy, a subsidiary of Abu Dhabi listed Aabar Petroleum, is investing $80 million to purchase four new drilling rigs. The company currently operates 18 rigs. The purchase caps a $250 million fleet expansion plan which Dalma Energy had undertaken in October 2004.  Dalma Energy has also recently opened its offices in Libya as it seeks to expand its operations in the region. The four new land rigs for Dalma have been built in China. One of them is en route to Saudi Arabia for commissioning on a contract with Saudi Aramco. The three remaining rigs will be delivered by the first quarter of 2007.


Marathon Oil to expand Garyville, La, refinery

November 7, 2006. Marathon Oil Corp. board of directors had approved a $3.2 billion project to expand its Garyville, Louisiana, refinery's crude oil refining capacity by 180,000 barrels per day. The project, which is expected to be operational in the fourth quarter of 2009, would increase the plant's capacity to 425,000 bpd from 245,000 bpd. The capacity addition would lift Marathon's total refining capacity to 1.154 million bpd from 974,000 bpd. The company expects to fund the project internally, with a portion of the spending included in the $3.2 billion capital expenditure program for 2006. The majority of the money will come from that budget in 2008 and 2009. The project will also add a new crude and vacuum distillation unit, as well as other infrastructure, including a 44,000 bpd delayed coker, a 70,000 bpd heavy gas oil hydrocracker, a 65,000 bpd reformer and a 47,000 bpd kerosene hydrotreater. Refining experts have said companies were seeking to expand refineries before they face new anti-pollution rules that will reduce levels of benzene in gasoline in five years.

Transportation / Trade

Eni, Gazprom sign energy deal

November 14, 2006. Italy's biggest oil and gas company Eni SpA signed an agreement with Russia's OAO Gazprom to boost its own gas supplies and allow the Russian state-controlled gas giant to enter the Italian market. The deal, which comes after more than a year of talks, will allow Gazprom to sell gas directly in Italy in incremental steps starting in 2007, reaching around 3 billion cubic meters from 2010. Gazprom also agreed to extend its gas supplies from a previous deadline of 2017 to 2035. The two companies will also cooperate in long-distance gas transportation technology, with Eni technicians offering expertise and knowledge to Gazprom for the development of Russia's gas transportation system. The deal also includes a commercial side, with the two companies set to jointly acquire productive assets of oil in Russia and gas in Africa.

Halliburton wins $59 mn contract from Rosneft

November 14, 2006. Oilfield services group Halliburton Co. it had won a $59 million contract from Russian Roseneft-YNG to provide services for 327 wells in Siberia. The work, which was awarded to Halliburton's Russian arm of its international unit, is for hydraulic fracturing services on the Right Bank of the Priobskoye field and will be executed in 2007.

Enterprise Products to build gas pipeline in Texas

November 10, 2006. Enterprise Products Partners L.P. will construct a 178-mile gas pipeline in Texas with a takeaway capacity of 1.1 billion cubic feet a day at an estimated cost of $400 million. The pipeline would connect with Boardwalk Pipeline Partners L.P.'s  Gulf Crossing Expansion, the energy partnership said in a statement. The pipeline is expected to be put into service in the fourth quarter of 2008.

GCC drops oil pipeline plan

November 9, 2006. Gulf oil producers decided to drop a project to build an oil pipeline bypassing the strategically vulnerable Strait of Hormuz between Iran and Oman on the grounds it was not feasible. Nearly 20 per cent of the world's total oil supply flows through the sea channel at the mouth of the Gulf. The flow is around 16-17 million barrels of oil per day, making it the world's most important shipping chokepoint.

Oil exporting Gulf states have been studying contingency plans for any shipping blockage through both the Gulf and the Red Sea. It was agreed to accept the results of a study about the project to build a pipeline to transport Gulf oil in case the Strait of Hormuz is closed, whereby the study recommended that this project is not feasible.

Shell opens new U.S. Gulf pipeline

November 8, 2006. Shell Oil Co. had started deliveries through its new Seajack crude pipeline in the Gulf of Mexico. The 9.5-mile (15 km), 180,000-barrel-per-day link will give producers in the Southern Green Canyon area an alternate route through Shell's Amberjack system.

The 20-inch diameter segment also adds deliverability in the event hurricanes disrupt production by damaging pipelines, as Katrina and Rita did last year. The Amberjack system feeds the Mars production stream, which ends up in Louisiana. Caesar carries crude toward Texas. Crude traders were looking at the new link as possibly easing the flow of crudes to market, particularly the Mars blend, perhaps affecting prices.

First Calgary, Sonatrach in gas-marketing deal

November 7, 2006. First Calgary Petroleums Ltd. that that Sonatrach, Algeria's national oil company, has agreed to market the natural gas produced at the company's properties in the North African country. The Calgary firm, which explores for petroleum in Algeria but has no current production, Sonatrach will market all the gas produced from Block 405 bn when it is developed.

Policy / Performance

China, Russia signed energy deal

November 10, 2006. China and Russia had signed eight contracts worth $800mn. The agreements covered mining, trade, energy, vehicle production and infrastructure construction. They also planned to sign agreements on the construction of nuclear power plants, oil and gas exploration, and scientific co- operation. Russia has agreed to conduct a joint feasibility study for a branch pipeline to China, with the main pipeline ending in Russia’s far east, close to Japan.

Japan protests to China over gas field

November 9, 2006. Japan has protested to China over a disputed gas field in the East China Sea after seeing signs that could point to production having begun. The row over gas fields in the East China Sea is one of several issues that have chilled ties between the two Asian neighbors. Japan's Trade Ministry said that flames had been confirmed at a drilling platform in the Pinghu gas field earlier this month, a sign that could indicate the start of production. Japan in August protested activity around the Bajiaoting drilling platform, but China said at the time its development activities were within its sovereign rights.

Japan fears that energy-hungry China's exploration of the area could tap into resources in its exclusive economic zone. The two nations disagree on where the maritime boundary between them lies. China started pumping natural gas in the Pinghu field in 1999 and Chinese state media in April said that the new Bajiaoting platform would begin drilling in October, raising Pinghu's gas supply to Shanghai to 1.8 million cubic meters a day. Both nations had agreed to peaceful and cooperative use of the East China Sea during a visit to Beijing by Prime Minister in October. The next step would be to speed up discussions on the gas fields, of which six rounds have been held in the last two years with little progress, but was unable to say when another round might be held. The Chunxiao oil and gas field, also in the East China Sea, is similarly disputed. Japan, worried that it may be left behind, has granted test drilling rights to Teikoku Oil Co. to hunt for gas in the waters near Chunxiao, though drilling has not yet started.

EU, Azerbaijan sign energy agreement

November 8, 2006. European Commission President and Azerbaijan President signed a MoU to establish an energy partnership amid European efforts to trim its dependence on Russian energy sources. The EU-Azerbaijan memorandum's main points are firmly energy-related; gradual harmonization of legislation in the energy field, enhancing safety and security of energy supplies, development of a comprehensive energy demand management policy, technical cooperation and the exchange of expertise. British energy giant BP announced in September that it would start production at the end of the month on the massive Caspian Sea gas field Shah Deniz, which will provide Europe with an extra source of fuel.

The Shah Deniz field in Azerbaijan, whose major shareholders are Britain's BP, Norway's Statoil and the Azerbaijani state oil company SOCAR, will feed a new South Caucasus Pipeline crossing Azerbaijan and Georgia before terminating in the Turkish city of Erzerum, where it will link up with European networks to Greece and Italy. The pipeline, which is being built to supply energy-hungry Europe, will have the added effect of loosening Russia's grip on energy markets in Azerbaijan and Georgia.

Russia to cut gas supplies to Georgia if no contracts signed

November 7, 2006. Russian energy giant Gazprom will cut off natural gas supplies to Georgia, and supply gas via Georgian territory for Armenia only, if no contract is signed. It also said there will be no subsidized gas prices for members of the Commonwealth of Independent States, an alliance of former Soviet republics. Gazprom is seeking to raise gas prices for its ex-Soviet neighbors, including Georgia, Ukraine, Belarus, and Moldova, to average European levels of around $230 per 1,000 cubic meters.

Georgia might partially pay for Russian gas by selling stakes in some of its assets, and that Gazprom has informed Georgian authorities on which assets the company is interested in, but has received no answer. Gazprom had submitted to Georgian authorities all related documents on revised prices from the current $110 to $230 per 1,000 cubic meters in 2007 long time ago.

Russia, Slovakia to sign contracts on gas deliveries after 2008

November 7, 2006. Russia and Slovakia have agreed to sign new long-term contracts on Russian natural gas deliveries and gas transit via Slovakia after 2008. The agreements on Russian gas deliveries and transit via Slovak territory expire in 2008. Russian organizations are ready to get involved in modernizing and completing a number of energy facilities in Slovakia. A number of projects are already under way. Slovakia and Russia have strong prospects for cooperation in nuclear engineering.



ENDESA Inaugurates 492 MW power plant

November 10, 2006. ENDESA has inaugurated Peru's first CCGT plant (installed capacity 492 MW; investment USD 135 million). The plant, which took two years to build, is the first in the country to be fed with natural gas from the Camisea fields and the first to use CCGT technology, making it the biggest, most modern and most efficient thermal plant in Peru. With the start-up of this plant, ENDESA becomes the leading consumer of natural gas from the Camisea field.

Indonesia seeks investors to build coal steam plant

November 9, 2006. Indonesia is seeking investors to build a plant to supply coal steam to the Bontang liquefied natural gas (LNG) facility that uses natural gas to generate electricity. The move is aimed at boosting LNG production in Indonesia, the world's top LNG exporter, which has failed to meet its contractual commitments to traditional buyers such as Japan, South Korea and Taiwan because of a slump in production. About 300 million cubic feet per day of gas was burned to generate power at Bontang plants. It will open tender soon to build that coal steam. The coal steam plant will be on stream in 2009.

Centrica plans cleanest coal power plant in UK

November 9, 2006. Centrica to build Britain's cleanest coal-fired power station producing almost no carbon emissions as part of the fight against global warming and to secure the energy supply. The £1bn plant could be operating by 2011 and would provide 800MW of electricity - enough to light and heat 1m homes when the power is fed into the National Grid. Centrica plans to crush the coal and turn it into synthetic gas, which would be used to fire the turbines. The carbon dioxide would be removed in the process and sent by pipeline to the bottom of the North Sea for storage. Centrica, the owner of British Gas, is not the first utility to announce clean coal plans but boasted that its planned facility, to be located on Teesside, would be by far the cleanest yet. The new station would produce 0.15 tonnes of carbon per MW/hour compared with 0.9 for a traditional power plant and 0.45 for a traditional gas-fired facility. The company claimed new clean coal stations planned by the rival utilities E.ON and RWE would generate 0.7 tonnes per MW/hour and that its own plant was suited to run on British-mined coal, unlike those of its competitors.

Centrica is keen to diversify its power sources to reduce exposure to high gas prices. The company is building an 885MW gas-fired plant at Langage, near Plymouth in Devon, and is also pressing ahead with renewable power schemes, including a 500MW wind farm at Race Bank in the Greater Wash. Coal has been making a comeback as a fuel because of lower cost but most is imported. Domestic production continues to struggle as UK Coal is tied into long-term contracts and much of its coal is sulphurous - and thus more polluting - and costly, as it is buried deep underground.

Transmission / Distribution / Trade

Exelon sells interest in two power plants in Mexico

November 7, 2006. Exelon Corp., the largest U.S. nuclear company, on Tuesday said it will sell its minority interest in two power plants in Mexico for $95 million in cash and other adjustments. Exelon, in a U.S. Securities and Exchange Commission filing, said a subsidiary agreed on Monday to sell its 49.5 percent ownership interest in two generating facilities located in Tamun, Mexico to a subsidiary of U.S. power company AES Corp. The deal is expected to close in the first quarter of 2007.

Companies bid to supply Albania with power in 2007

November 7, 2006. Seven companies have tendered to supply Albania with electricity in 2007. Tenders were made by two Albanian companies, three Swiss ones, one German and one Czech firm. The contract is to supply electricity for the whole year of 2007, the state-owned Albanian Electro-Energy Corporation. KESH is seeking 2.2 million MWh of electricity and has total funding of €162.8 million (US$206.8 million). No companies tendered to supply the entire amount. KESH may take up to one month to decide on the bids. Airbus loses its first A380 customer Albania has suffered chronic electricity problems during the post-communist period since 1990 due to nonpayment, poor management, a poor system and lack of money.

Albania has to source electricity from outside the country, as it is unable to supply its entire needs from its own production. Most of the country's electricity is produced in the north from hydroelectric plants that suffer from lack of rain and work at less than half-capacity due to outdated technology.

Policy / Performance

Hitachi, GE in nuclear power venture

November 14, 2006. Hitachi and General Electric (GE) planned to form a joint venture in the nuclear power business in Japan and US. They planned to pool their nuclear units in a $2 billion enterprise they hope will capture more contracts as power suppliers gear up to build a new generation of plants. The companies had signed a letter of intent for a strategic tie-up on advanced boiling water reactors, they said. Hitachi would own 80 percent of the Japan-based venture, while GE would have a 20 percent stake. Hitachi would hold 40 percent in the US-based business, while GE would have a 60 percent holding.

Kumba and Eyesizwe in coal deal

November 13, 2006. Kumba Resources and Eyesizwe, soon to be joined under a large empowerment deal, have received new order mining right for their joint venture, Inyanda, an export coal project. The Inyanda mine is situated near Witbank in Mpumalanga province and will produce one million tons per annum of A-grade thermal coal for the export market, via the Richards Bay Coal Terminal (RBCT). In August, Kumba said it had given the construction of the mine the go- ahead following the RBCT announcement that it would be increasing export capacity by 19-million tons a year to 91-million tons per annum. The mine is expected to reach full production in 2008. Capital expenditure is estimated at R184-million.

Adfec, Shell sign agreement on greenhouse gas emission

November 9, 2006. Abu Dhabi Future Energy Company (Adfec), has signed an agreement with Shell to jointly develop projects to reduce greenhouse gas emissions and monetise the resulting emission reduction credits under the Clean Development Mechanism (CDM) of the Kyoto Protocol. Adfec and Shell will target CDM projects focusing on energy and industry in the Middle East, North Africa and Central Asia, drawing upon Abu Dhabi's energy legacy and Shell's technical knowledge and global networks. The agreement, which marks an important milestone for ADFEC in advancing the Masdar initiative, launched the Government of Abu Dhabi's development programme to promote clean energy and sustainability. It is also a fulfillment of the broader strategic alliance created last year between Mubadala and Shell.

Russia considers mining uranium in Bulgaria

November 8, 2006. Russia is considering mining uranium in Bulgaria after its nuclear services exporter won a tender to build a power plant outside Sofia. Russia's newly-formed uranium production company will study the issue. The TVEL company and the state-owned uranium trader Tekhsnabexport (Tenex) merged into the Uranium Mining Company on November 2 to develop uranium deposits inside and outside Russia, and import uranium.

Russia's nuclear power equipment and service export monopoly, Atomstroiexport, won a tender on October 30 to build two 1,000 MW reactors for an NPP in Belene, about 150 miles from Bulgaria's capital, Sofia. The TVEL already imported uranium from other east European countries, including the Czech Republic. TVEL's cooperation in uranium production with other countries takes various forms. Russia and Kazakhstan established a joint venture in October to enrich uranium near Irkutsk, about 5,000 kilometers (3,100 miles) east of Moscow. Russia plans to meet 60-70 per cent of its uranium demand domestically by 2015.

China and Egypt sign energy deal

November 8, 2006. China and Egypt have agreed to cooperate on the peaceful use of nuclear energy. Both nations, however, earlier announced plans to step up their nuclear energy capacity. China plans to increase its combined nuclear power capacity to 40,000 MW by 2020, which will require about two 1,000 MW nuclear power plants to be built annually for the next 15 years. Egypt, meanwhile, is reviving its nuclear program two decades after it was frozen after the Chernobyl accident, in Ukraine. It is seeking solutions to longer-term worries about energy security and hopes to acquire technological know- how from the Chinese. Egypt has made a decision to transfer to nuclear energy and build four stations.

Calif. panel advances three proposed power plants

November 8, 2006.  The California Energy Commission advanced applications to build three new natural gas-fired power plants in the state. The commission accepted license applications for 678 MW of new generation, a formality that starts the agency's 12-month review process. California experienced a record-breaking heat wave over the summer and all utilities in the state are working to add new generation to meet growing demand. The projects cited include Tierra's 115-MW Eastshore Energy Center to be built in an industrial area of Alameda County. If approved, the $140 million Eastshore plant could begin producing power in May 2009.

The agency also accepted an application for the 400 MW Panoche Energy Center, proposed by Energy Investors Funds of Boston. Panoche will be built 50 miles west of Fresno and could be in service in early 2009. The simple-cycle plant, to cost $300 million, has a 20-year contract to supply power to Pacific Gas & Electric Co. The commission will also begin to review PG&E's 163-MW Humboldt Bay Repowering Project. PG&E wants to replace an existing 105-MW plant with units that can run on gas or diesel fuel. If approved the plant could be completed by the fall of 2009 at a cost of $250 million.

NRG proposes new clean coal power plant in New York

November 7, 2006. NRG Energy Inc. has proposed to build a 680 MW clean coal-fired power plant at its Huntley facility in New York in response to the state's power authority's request for much-needed baseload generation. NRG agreed in principle with natural gas pipeline operator El Paso Corp. to explore the possible capture and sequestration of carbon dioxide emissions from the proposed Integrated Gasification Combined Cycle (IGCC) plant.

If New York Power Authority, a state-owned power company, selects the NRG project, the Princeton, New Jersey-based company said the IGCC facility could enter commercial operation in 2013. NYPA has indicated it will announce a preferred bidder by the end of the year. IGCC is a process that involves converting coal to a synthetic gas, removing the pollutants - sulfur dioxide, nitrogen oxide and mercury - as well as potentially carbon dioxide (CO2), from the synthetic gas before combustion.

Over the summer, NRG announced plans to spend about $16 billion to develop about 10,500 MW of new generation across the United States over the next decade. The new plants include two 1,350 MW nuclear units in Texas and three 752 MW gasified coal units (IGCCs) in the Northeast located at the Indian River plant in Delaware, the Montville plant in Connecticut and the Huntley plant in New York. NRG said it would build the proposed facility adjacent to the existing six-unit 816 MW Huntley coal-fired plant, which entered service in the 1940s and 1950s. The new facility, which would have the ability to capture up to 65 percent of the carbon dioxide produced, would utilize the existing plant's rail, coal handling, and water and transmission facilities.

Eskom plans new nuclear plant

November 7, 2006. Eskom would decide whether to commission a second nuclear power plant within six months, to supplement its Koeberg plant near Cape Town. The company was considering several models of light water reactor from French and US suppliers, and one type of heavy water reactor from a Canadian supplier. The new plant would be located on the South African coast, and that the company was currently looking at potential sites in Eastern and Western Cape provinces. The cost of the project would depend on the type of plant chosen.

China offers to work with Egypt on nuke power

November 7 2006. China said it was willing to work with Egypt on nuclear energy projects. China is willing to conduct cooperation with Egypt in peaceful use of nuclear energy for civilian use on the basis of equality and mutual benefit. It was not clear if there was a specific project the two were considering cooperating on, or whether Beijing was contemplating building a generator for Cairo. China began commercial nuclear generation late, after decades of channelling its energies towards nuclear weapons development under Mao Zedong.

It tested its first atomic bomb in 1964, but its first civilian reactors came online only in the 1990s, and it is still commissioning firms from abroad to build new plants, despite a heavy emphasis on developing domestic technology. Nuclear power plants are expensive to build, but are relatively cheap to run, especially in the face of rising oil and gas prices - and generate no emissions of carbon dioxide, an advantage as worries about global warming grow.

Russia to raise nuclear fuel prices for Ukraine in 2007

November 7, 2006. Russia plans to increase the price for enriched uranium it supplies for Ukraine's nuclear power plants in 2007. Since spot prices on uranium have increased several times, the price for uranium fuel for Ukrainian NPPs will be revised correspondingly. Russia is supplying uranium fuel for 15 nuclear power generating units of Ukraine's NPPs in 2006 under a contract signed in January by Russia's TVEL, one of the world's largest nuclear fuel producers and suppliers, and Ukraine's national nuclear energy generating company Energoatom.

Renewable Energy Trends


IFC to invest $13.9 mn in wind power project

November 13, 2006. The International Finance Corporation (IFC) is planning to infuse $13.9 million in Enercon India Infrastructure’s Pvt Ltd’s (EIIPL) $34.9 million-project. The investment will be spent for power evacuation from seven wind-parks in Karnataka and Rajasthan. EIIPL is a special purpose vehicle floated by Enercon India Ltd (EIL). The IFC board is expected to give its approval at its meeting scheduled to take place on January 15, 2007.

Solar power for traffic signals

November 13, 2006. States are all set to solarise traffic signals in keeping with the guidelines of the national energy policy that suggest use of renewable sources of energy. While Delhi, Karnataka and parts of Andhra Pradesh have since long implemented these guidelines, others joining the league are Maharashtra, Chhattisgarh, Uttar Pradesh, Tamil Nadu and Haryana.

Most of these states have applied to the ministry of non-conventional energy sources (MNES) for subsidies for installing solar-powered traffic signals, most of which have been sanctioned. Fifty such systems have been sanctioned for Tamil Nadu and are currently in the process of being implemented. This is the highest number for such projects so far. Most cities, however, seem to fund these projects from their own resources, while others contract companies that solarise signals and recover costs through advertisements.

Such solar-powered systems can guide traffic on cities by storing energy for a backup period of up to 72 hours, providing continuous power supply for three days. Among the governments that have already started installation of traffic signals running on solar energy, Karnataka seems to have taken the lead with over 106 of its signals solarised by Bharat Electronics (BEL) and a few by Tata BP Solar in Bangalore. BEL has also installed 12 in Hyderabad and a total of 160 in Karnataka.

Suzlon to set up wind mills in Haryana

November 8, 2006. Suzlon Energy Ltd is set to put up its wind mills in Haryana.  The state government will play the role of a facilitator and the private investors will be given incentives like exemption from electricity duty, local area development tax, and wheeling charges, and banking facilities.  Private partners are expected to invest about Rs 3,400 crore in non-conventional power generation, as compared with the total investment of Rs 50 crore made by the private sector in Haryana in non-conventional power generation till date.  The state has prepared a proposal to generate 677 MW of power through wind energy and biomass by the middle of 2008. The 21 bio-mass power generation projects with a capacity of 237 MW and four projects with a capacity of 440 MW would provide 13.5 million units per day to the state grid. 


Green Star signs contract to build 90 biodiesel reactors

November 13, 2006. Green Star Products, Inc. has signed an agreement with De Beers Fuel Limited of South Africa to build 90 biodiesel reactors. Each of the biodiesel reactors will be capable of producing 10 million gallons of biodiesel each year for a total production capacity of 900,000,000 gallons per year when operating at full capacity, which is 4 times greater than the entire U.S. output in 2006. The 2-ton reactors will be built by GSPI at their Glenns Ferry Facility in Idaho and delivered over the next 18 months. The first reactor was shipped November 8, 2006 by airfreight to South Africa.

Spanish buildings switch to solar power

November 13 2006. Solar panels are now compulsory on all new and renovated buildings in Spain as part of the country's efforts to bring its building rules up to date and curb growing demand for energy. Until now Spain's building standards have dated from the 1970s and have done little in seeking to improve energy efficiency. The code will come into force fully next March but the energy saving element was implemented on Sept. 29.

This means new homes have to be equipped with solar panels to provide between 30 and 70 percent of their hot water, depending on where the building is located and on its expected water usage. New non-residential buildings, such as shopping centres and hospitals, now have to have photovoltaic panels to generate a proportion of their electricity.

Solar power has not yet taken off in Spain, largely because subsidies have been directed at wind energy, and it provided a negligible amount of the country's electricity in 2005.Other measures in the new building code enforce the use of better insulation, improve the maintenance of heating and cooling systems and increase the use of natural light.

The new standards will bring energy savings of 30 to 40 percent for each building and a reduction of carbon dioxide (CO2) emissions from energy consumption of 40 to 55 percent. The housing ministry is trying to rein in the amount of new building, although it is Spain's local and regional governments that are responsible for planning permission. The building standards code should limit the damage of continued new construction and is the most significant legal change for the sector in the last 30 years.

Wind power plant under construction

November 10, 2006. PPM Energy said it is constructing a third wind power plant near Wasco. Klondike III is expected to be commercially operational in 2007. Located in Sherman County adjacent to PPM's existing Klondike I and Klondike II Wind Power Plants, Klondike III is expected to generate 221 MW of electricity. Typically, a wind farm of this size can provide clean, renewable electricity to more than 56,000 homes. Portland-based PPM Energy, a subsidiary of Glasgow, Scotland-based ScottishPower, is in discussions with a number of entities for the sale of energy and renewable energy credits from the project.

Singapore biodiesel plant to be world's biggest

November 8, 2006. Australia's Natural Fuel is investing $130 million in the project, one of a series of plants in Australia and the United States. The first phase of the plant will come on stream by the end of next year and will produce about 600,000 tonnes (roughly 12,000 barrels per day) of biodiesel. A second and third phase would raise output to 1.8 million tonnes of biodiesel per year. The Australian company will begin its first biodiesel production in Darwin, Australia this month. It has plans to start building two other biodiesel plants, one in Houston, Texas and another in Port Botany, Sydney, by 2007.

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[1] Report (1997) “Economics of Wind Power: Impact of Fiscal Intensives”, Tata Energy Research Institute, New Delhi, pp. 58-68.

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