Democratisation of Aspirations and Emissions!
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he unveiling of the ‘people’s car’ Nano has aroused many emotions that expose very profound but inconvenient truths. All cars irrespective of their size and price are a source of personal pleasure and public pain. They provide individual freedom of mobility but this freedom comes only at the cost of polluting the environment and causing congestion on roads. Technically, pollution and congestion are labelled externalities that are not internalised in the price of the car or the price of its use. Atmospheric air and road space are public goods that people consume when using motorised transport but do not pay for. What is special about the Nano is that it has lowered the barrier to the private pleasure of free mobility and thus increased the potential number of free licenses to cause public pain through pollution and congestion. In other words it has ‘democratised aspirations and emissions’.
Those who have so far not tasted the pleasures of personal mobility are celebrating the Indian engineering prowess reflected in the Nano and the challenge it poses to Chinese manufacturing genius; they see its egalitarian pricing that extends the right to free mobility to the aspiring millions in
But many others, especially those who already have access to personal mobility within and outside India are expressing horror over the green house gases emissions from these cars and the congestion they will cause on Indian roads. What this means is that they are horrified by the prospect of millions more aspiring to become just like them. This is in essence this century’s inconvenient paradigm: conflict between those who do not wish to give up their own well-being and those who are aspiring to it.
At the centre of this conflict is the idea of climate change or more specifically ‘global warming’ caused by Green House Gas (GHG) emissions which are directly linked to what we all consume and emit. While the hole in the ozone layer worried only the industrialised world, global warming has the great advantage of being ‘democratic’ in the sense that it dispenses guilt on both the rich and the poor world equally.
In fact there is a tendency to attribute responsibility for GHG emissions not so much on those who produce most of the emissions but on those producing the differential that transforms it into a critical mass. For those who already enjoy a comfortable lifestyle, the need to reduce GHG emissions may be an acceptable sacrifice. But for others who live wretched lives in developing countries of Asia, Africa and
At issue in both the domestic and international contexts is the question of equity: should newer and poorer consumers be excluded from the right to consume and pollute? Is there a global concern over pollution or is it just another Rich-Poor or North-South conspiracy that aims to exclude some people from privileges enjoyed by the others? Those who are losing sleep over the prospect of chocking from pollution and congestion caused by millions of cheap cars are probably as worried about their own pleasure of mobility being curtailed as they are about GHG emissions that cause pain for the entire world.
The unfortunate collision of the poor man’s improved access to privileges that were once the exclusive preserve of a few, with growing concern over environmental pollution and global warming throws up profound ethical and economic questions. The ongoing discourse on climate change enshrined in the Kyoto doctrine frames this complex social issue narrowly as a ‘management problem’ that can be solved within existing institutional arrangements on the basis of the idea that ‘pollution prevention pays’.
Essentially, it creates a mechanism for the worst GHG emitters to unload their sins on weak developing countries while also encouraging them to follow the same course of development that brought on this crisis in the first place.
The complex phenomenon of climate change is no longer a collection of facts about temperatures, clouds, winds, rainfall patterns, carbon-di-oxide and moisture levels and the like. It is now captured in a few simple words and the rhetorical flourish is used to give it enormous emotional power.
The present hegemony of the idea of ‘sustainable development’ in the environmental discourse is not a linear, progressive, value-free process of convincing actors the importance of preserving the environment. It is a struggle between various unconventional political coalitions each made up of scientists, politicians, activists and organisations.
Developing countries need to prepare alternative narratives to take on this dominant discourse that treats them as ethically and intellectually challenged as far as the environment is concerned. One starting point is perhaps to ask the question if it is logical to talk about sustainable development in a world that is stochastically evolving?
Sustainable Development of the Indian Coal Sector (part – III)
Ananth P. Chikkatur a,*, Ambuj D. Sagar b, T. L. Sankar c
Continued from Volume V, Issue No. 39…
2.2.3. Improving coal quality and transport
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he quality of Indian coal is poor and has gotten worse over the past decades. Indian coal has the general properties of the Southern Hemisphere Gondwana coal, whose seams are inter-banded with mineral sediments [29]. Run-of- mine coals typically have the high ash content (ranging from 40% to 50%), high moisture content (4–20%), low sulphur content(0.2–0.7%), and low calorific values (between 10.5 and 20.9 MJ/kg) [29].12 The low calorific value implies more coal usage to deliver the same amount of electricity.13 Indian coal, however, has lower sulphur content in comparison to other coals; it also has low chlorine and toxic trace elements [29].
The ash content in Indian coals has been increasing over the past three decades, primarily because of increased opencast mining and production of coal from inherently inferior grades of resources [11]. Nearly 65% of the non-coking coal in
While coal washing and beneficiation has been practiced for producing better quality coking coal for along time,14 there is increasing need for coal beneficiation for thermal power applications. Coal washing reduces the cost of transporting coal for a given requirement at the power plant. Washing coal also reduces the mineral content in the coal and thus improves thermal efficiency; it also reduces the potential for damage to the power plant equipment, improves plant availability factor and reduces in capital cost requirement.
In 1997, the Ministry of Environment and Forests (MoEF) mandated the use of beneficiated coals with ash content of 34% (or lower) in power plants located beyond 1000 km from their coal source, and plants located in critically polluted areas, urban areas, and ecologically sensitive areas [35]. With rising demand for better quality coals, and with the introduction of the ‘‘build-own-operate’’ policies, the private sector has taken an increasing interest in building washeries in the last few years. As a result, there have been significant additions to non-coking coal washeries and the current capacity is nearing 100 MT. The share of the private sector is about 78%, and the share of CIL (which account for about 22%) is primarily from converted coking coal washeries [11,33].
A key constraint for a rapid build up of washery capacity is the institutional structure of the coal industry. The production, transportation, and trading of coal in
Another constraint is the lack of appropriate contractual agreements between suppliers and consumers. Coal supply is not guaranteed at any particular quality (sizing, ash content, calorific value, etc.), and there is no penalty for non-compliance. Coal producers in
The current coal pricing is based on grading of coal into wide ranges of the coal’s useful heat values (UHV).16 The wide UHV bands used for pricing do not provide adequate price signals for improving coal quality. In addition, the wide bands for grades also imply that, in many cases, the washed coal may also be in the same grade as the ROM coal. Hence, pricing of coal based on narrow bands of the coal’s calorific value is essential for sustaining economic coal beneficiation.
Coal transport currently relies heavily on the railways, although road and merry-go-round systems are other key transport mechanisms. Nearly 50% of coal transport is currently handled by the railways; although, it used to handle more than three-fourths of coal movement in the mid-1970s [38]. Road transport accounts for about 20% of all coal movement, and transport by sea is also becoming important, with coal accounting for nearly 14–15% of all port traffic [38]. One of the main problems with the current transport setup is the high levels of railway tariff for coal. The high tariffs are used to offset costs of passenger transport. Hence, railway tariffs for coal should be reviewed to offer a fair price for coal transport. It is also counterproductive to load an essential commodity like coal with such a heavy cross-subsidy element. Coal transport costs can also be reduced through special railway corridors where the railways would maintain the track and rolling stock would be owned and maintained by the coal companies. Furthermore, a well thought out railway-cum-sea route to southern and western ports would help improve coal transportation [23].
Thus, liberalization of the coal sector, better pricing mechanisms, and instilling the appropriate contractual obligations are important elements of increasing better quality coal in
2.2.4. Regulations and reforms
There is significant movement in
The pricing of coal has become another contentious issue—despite the fact that the Ministry of Coal no longer directly determines coal prices, the perception is that Ministry still ‘‘guides’’ the price of coal [11]. One of the problems is that coal consumers do not directly participate in price setting, nor are there any negotiations between consumers and producers [23]. Hence, there is need to assure both producers and consumers (especially as numbers of both are likely increase at a rapid rate) that besides the Government there will be an impartial competent, regulatory and dispute resolution mechanism in place—i.e., an independent regulatory agency [23]. The regulation of prices would likely have to differentiate the coal price for power generation, since this sector now consumes 80% of the domestic production and the quality of coal it consumes is not easily salable to the steel and cement sectors [11]. Furthermore, the supply of coal in large quantities regularly for several years require the concurrent planning for the transport infrastructure needed to move coal from mine mouth to the points of consumption. Such infrastructure planning makes it imperative that the sale of coal to power sector has to be on a long-term basis with some agreed pricing formulas.
In order to determine the ‘‘market’’ price for coal, CIL introduced the ‘‘e-auction’’ scheme in 2005–06, where in a limited quantity of coal was sold by auction [40]. It was felt that the auction scheme worked good enough that the IEP report recommended that 20% of the coal produced in the country be put under the e-auction scheme [10], and the Expert Committee on Coal Sector Reforms (chaired by T.L. Sankar) suggested that an increasing proportion of non-power domestic coal be brought into the e-auction market [11]. Unfortunately, however, in December 2006, the Supreme Court put a stop to all e-auctions, as it felt that the system was unfair, as it favored big companies over small-scale industries.17 In response, a new distribution policy was put out in October 2007 and CIL has also introduced auctioning of coal with a longer term commitment.
The IEP report also suggested that most of the coal, especially to core consumers, be sold under long-term Fuel Supply and Transport Agreements (FSTAs), and that a coal regulator should review the FSTAs annually [10].18 The Expert Committee led by Sankar also recommended the creation of an Office of the Coal Governance and Regulation Authority (OCGRA) with five directorates [23]:
· coal resources management
· safety, health and employment
· prices, taxes, royalty, VAT, property tax, and salary of workers
· environment management
· policy—legal, public relations, statistics, and dispute resolution
The Committee has also recommended the setting up of an advisory body (National Coal Council) to enhance the participation of all stakeholders and help the Government periodically in understanding the state of economics, technology, environmental, and social aspects of coal production and usage.
Notes:
12 The tertiary coals in
13 On average, Indian power plants consume about 0.7kg of coal to generate a kWh [22], where as the
14 There are about 18 coking coal washeries in
15 Actually, the ability to deal with washery rejects is an important issue. As discussed above, rejects have some heat value, and yet these rejects cannot be sold or traded under the current marketing regime. Disposal of high carbon content rejects in abandoned mines could pose a hazard due to spontaneous combustion in the waste heaps [37], but they can be used in washeries to generate power using fluidized bed combustion. There are already small scale 5–10 MW fluidized bed combustion (FBC) boilers in several mines, with the electricity is mainly being used inside the collieries; however, the cost of electricity generation is high—Rs. 2.5–3.5 per kWh [34]. However, there are plans now for building larger FBC plants (~100 MW or higher) near washeries for utilizing washery rejects.
16 UHV is determined by the ash content and moisture in coal, and it correlates with the coal’s gross calorific value.
17 http://www.financialexpress.com/news/Noncore-firms-to-get-coal-at-eauction-rate/219596/.
18 In fact, the new distribution policy requires the use of fuel supply agreements (FSA—without the transport component) for core and some non-core sectors [40].
References:
[29] IEA. Coal in the energy supply of
[30] Krishna MG. Indian coal industry: past, present and future. In: Pachauri RK, editor. Energy policy for
[31] EIA. Electric power annual 2000.
[32] Nandakumar K. UCG and power generation: BHEL’s role. In: Third US–India coal working group meeting.
[33] Kanchan PK. Coal beneficiation (CMDPIL). In: Third US–India coal working group meeting.
[34] Singh VK. Coal washing and power generation from washery rejects. In: Second US–India coal working group meeting.
[35] CPCB. Parivesh—clean coal initiatives. Central Pollution Control Board, Editor, Ministry of Environment and Forests, 2000.
[36] Sethi SP. The real barriers/issues that restrict widespread use of washed coal in
[37] Sachdev RK. Beneficiation of coal—an economic option for the Indian power industry. In: 17th world energy congress,
[38] TERI. TERI energy data directory and yearbook (TEDDY) 2004–05, 2005.
[39] GoI. The Competition Act 2002. Ministry of Law and Justice, Editor, Government of
[40] Ministry of Coal. Annual report 2007–08. Ministry of Coal, Editor, Government of
to be continued…
Courtesy: Energy Journal (2009), doi:10.1016/j.energy.2008.12.014 reprinted with the permission of the author
Sustainable Hydro Power Policy for Himalayan States (part –V)
Shankar Sharma, Consultant to Electricity Industry
Continued from Volume V, Issue No. 39…
4. Alternatives to hydel projects as a revenue earner for Uttarakhand
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t becomes obvious from the above discussions that the state of Uttarakhand should be looking for a development model which will ensure equitable development opportunities for different sections of the society, which will harness its rich biodiversity on a sustainable basis, and which can bring net economic benefits to the state as a whole.
In this regard some of the alternatives to hydro-electric projects in Uttarakhand can be:
a) Increase the efficiency of the electric power sector in the state to the international level, which will make it a surplus state by a considerable margin, and earn revenue without the huge costs of additional hydro-electric projects. As mentioned in section 1, Uttarakhand’s own electricity demand will not be huge in future as compared to its existing power generating capacity, whereas its share from the central sector projects of the Northern region will keep increasing. If the state can optimize its electricity generation, distribution and utilization, it can earn substantial revenue by selling its surplus electricity to other states.
b) By efficiently managing its electricity infrastructure it can earn additional revenue by offering auxiliary services to the Northern regional power grid such as (i) peak demand support, (ii) voltage/ MVAR support, (iii) spinning reserve. In a growing and complicated power system, such as Northern Regional Power System, these services have huge significance, and can fetch a substantial increase in electricity revenue to the state.
c) Invest a part of such additional revenue to generate more electricity from renewable energy sources such as solar, wind and bio-mass, which in turn can earn additional revenue, and also reduce the risk of uncertainty for state’s own power sector associated with river flows in the future.
d) In view of the fact that Uttarakhand is experiencing power surplus during summer and deficit during winter months, it should consider the option to go for long-term Power Purchase Agreement (PPA) with coal fired stations located elsewhere than to build more hydel projects to meet its own demand, basically because of the increasing uncertainty of monsoons.
e) The rich biodiversity available in the state can be leveraged to get substantial level of economic credits both from the central government and from the international community to maintain the tropical forests, which are considered to be safe bets against Global Warming. Carbon Credits as envisaged by UNFCC can be a very good tool in this regard.
f) Forestry based and agro based industries, if carefully planned and operated, can be sustainable sources of employment to a large number of technically un-skilled populations of the state and can bring substantial revenue on a perpetual basis. These two areas would also greatly assist in the empowerment of local population than many large industries would do.
g) Since the state is the source for a number of interstate rivers, voluntary self-denial of the opportunity to build additional hydro electric projects should be leveraged to get compensation from the lower riparian states and the centre.
h) Develop the state as an educational, tourist and medical care hub for both the national and international customers. Because of its salubrious climate and scenic beauty, the state can be a very good tourist destination.
i) With service industries playing more and more important role both at the global level and the national level, IT and BT sectors can offer huge opportunities to the state. Service sector can provide more revenue and employment opportunities than the capital intensive hydro power sector. It is worth mentioning here that the contribution of services sector to Indian economy has been growing enormously over the years, and is also creating more employment opportunities. The situation of Karnataka can be a good example in this regard.
All these alternatives also can provide much more employment opportunities to the state’s people than hydro electric power projects, which are anyway becoming more and more automated to reduce the cost of manpower. Additionally, these alternatives are sustainable; people & environmental friendly; and pose minimum risks.
5. Conclusions
Being a very young and fortunate state, with rich biodiversity and natural resources, Uttarakhand has the golden opportunity to adopt a sustainable development model for the comprehensive progress of all sections of the society, and to set an example to other states of the union in balancing the human needs with that of nature. “Precautionary Principle” should be applied objectively to identify and address all the credible risks satisfactorily in the development model it chooses for itself.
Being the source of very many inter-state rivers in the country, and being one of very few states in the Union with more than 60% land covered with rich forests, the overall health of its sensitive ecosystems is crucial not only for its own people but for the entire country and probably for Bangladesh too. Hence any developmental model it adopts for itself should take these issues into objective account.
The true economic value of biodiversity in Uttarakhand deserves a special attention. It is huge and very critical for the state’s all-round development. With as many as 150 large and small hydro-electric projects planned for the state, it will not be an exaggeration to project a substantial degradation of biodiversity in the state. The state and the region cannot afford to allow degradation of such a rich biodiversity for meager financial benefits of electricity from these hydel projects.
The economic, social and environmental impact of building dam based hydro-electric power projects are so huge in a modern society that all the direct and indirect costs should be compared with the true benefits through an objective costs V/s benefits analysis before arriving at a pragmatic decision in favor of the larger interest of the society.
Though electricity is considered to be a basic infrastructural need, the issues such as how much electricity, at what cost, and to whom need to be considered carefully. The inefficiency of power sector in our country is so huge that unless we address it effectively, any number of hydel projects will be inadequate to meet the demand for electricity whereas the burden on the society will continue to mount dangerously.
Uttarakhand, having been blessed with a rich biodiversity, has many alternatives to additional hydro-electric projects to provide its people with equitable opportunities for progress on a sustainable basis while favoring the rest of the country with fresh water resources and healthy environment.
The experience and knowledge of issues surrounding the dams from around the world should be carefully considered before deciding to build more dams in the state.
In order to protect the interest of the state and of the country as a whole, the rich natural resources available in Uttarakhand should not be compromised by the large number of additional hydel projects proposed.
References: (1) Jhunjhunwala (2009), Bharat, Economics of Hydropower, Kalpaz
(2) Mountains of Concrete – Dam building in the
(3) Bio-diversity Impact of Large Dams, prepared for IUCN / UNEP / WCD
(4) WCD (2000), Dams and Development, World Commission on Dams, Earthscan,
This article is based on my presentation in a symposium organised by H.N. Bahuguna Garhwal University, Srinagar, Uttarakhand on 14-15 Feb. 2009 on "Hydroelectric Projects in Uttarakhand: Opportunities, challenges, and conflict resolution".
Concluded
Views are those of the author
Author can be contacted at [email protected]
NEWS BRIEF
NATIONAL
OIL & GAS
Upstream
RIL to charge higher margin on gas from KG-D6 fields
March 24, 2009. Reliance Industries has raised the marketing margin it will charge on selling natural gas from eastern offshore KG-D6 fields, but the revised rate is still lower than the marketing margin of state-run GAIL India. RIL, which is to begin gas production from the Krishna Godavari basin KG-D6 fields this week, has raised the marketing margin to $0.15 per mmBtu from $0.12 per mmBtu earlier. The rate, which would be charged over the $4.20 per mmBtu base gas price, is, however, lower than the $0.18 per mmBtu margin charged by state-run GAIL. Unlike RIL, GAIL has a 5 per cent escalation in the margin every year. The 12 fertiliser firms shortlisted to get KG-D6 gas on priority, have opposed the revision in the marketing margin that RIL communicated through the revised Gas Sales and Purchase Agreement.
Cairn at sea as Rajasthan block awaits buyers
March 21, 2009. Cairn
ONGC to partner with Indian Oil for
March 19, 2009. Oil & Natural Gas Corp., is reportedly said to enter in a partnership with Indian Oil Corp. for its three exploration areas in
ONGC awards offshore supply vessel contracts in record time
March 19, 2009. In a bid to tide over the acute shortage in availability of offshore supply vessels (OSVs), ONGC has, last week, finalised tenders and awarded contracts for hiring 11 vessels in a record time of about one month, as part of its preparations for the forthcoming bidding for NELP-8. The oil explorer floated tenders on February 10, inviting bids from Indian and foreign OSV owners, opened the bids on February 26 and completed awarding of the contracts last week. The vessels will be under contract with ONGC for a three-year period. ONGC had also introduced some stringent clauses in the bidding process this time, insisting that all the bidders should have their vessels ready for mobilisation. It has made it clear to the winning bidders to ensure that they mobilise their OSVs before April 30. Earlier, the oil company had faced delays in getting the vessels from the winning bidders even after awarding the contracts. Interestingly, this time Indian shipping companies totally edged out their foreign competitors, bagging all the 11 contracts for a total of $200 mn. While Great Ship
Essar Oilfield to procure two jack-up rigs for $440 mn
March 18, 2009. Essar Group company, Essar Oilfield Services (EOSL) plans to procure two jack-up rigs for $440-mn. The company was also looking at procuring other assets including offshore drilling assets, which would be in synergy with its expansion plans. EOSL, which is in the process of being brought under the fold of
OVL's Nigerian safari hits roadblock
March 18, 2009. ONGC Videsh Ltd's efforts to get back two highly prospective deep-sea oil blocks in
Reliance to run at full output after July
March 23, 2009. Reliance Industries Ltd. is to run its new 580,000 barrels a day refinery at full capacity some time in the second half of 2009. According to reports, RIL, will sell gasoline and diesel in
RIL looks for partner for fuel retailing biz
March 20, 2009. RIL, which has been struggling to get its loss-making fuel retailing business up and running again, is believed to be contemplating inducting a partner for the business. State-run oil major IOC and the Indian unit of Anglo-Dutch energy giant Royal Dutch Shell are the front-runners for buying a 50% stake in RIL's fuel retailing business. The company recently invited bids from a string of Indian and overseas oil companies, notably IOC, Shell India, BPCL and HPCL. The company could even consider selling a majority stake to the joint venture partner. RIL has invested nearly US$1.4bn to date in the fuel retailing business and has built 1,432 petrol pumps across the country. Creating a separate company for the fuel retailing business and divesting a part of its equity in it could help RIL shift losses away from its books. Separately, RIL is in talks with Essar Oil for sourcing petroleum products from the latter's refinery Vadinar in Gujarat, as it gears up to revive its fuel outlets. However, since the Essar group owns over 1,100 petrol pumps and it may be difficult for it to cater to all RIL-owned pumps.
IOC seeks 50 pc partnership for operating RIL's pumps
March 20, 2009. State-run Indian Oil Corp has sought a 50:50 partnership with Reliance Industries for operating the private firm's closed 1,432 petrol pumps. Besides IOC, Royal Dutch Shell too is believed to have evinced interest in reviving the petrol pumps. Reliance as part of a two part bid process had sought Expression of Interest (EoI) from IOC, Shell, Bharat Petroleum and Hindustan Petroleum for a possible partnership for reopening the petrol pumps. The company will set up a data room and interested parties will now do due diligence before making a firm financial proposal, based on which RIL will choose a partner. Reliance had wanted the retailers to select between 26, 50 and 74 per cent equity stake they would like in the proposed joint venture company that would be set up with the hived-off pumps, IOC had preferred equal partnership. An equity lesser than 50 per cent did not make sense for IOC as it was not looking for a portfolio investment. Also, a stake higher than 50 per cent would turn the company into a public sector company which was also not what IOC was looking for.
IOC eyes overseas funds for Paradip project
March 18, 2009. Indian Oil Corporation Ltd plans to raise almost Rs 15,000 crore from the domestic and external markets to part finance its grassroot refinery complex at Paradip, Orissa. The company’s board at a recent meeting has approved a final investment of Rs 29,777 crore for the project. The domestic funding of Rs 9,800 crore is being done by a SBI-led consortium of 20 banks and the Rs 4,000-5,000 crore will be raised through external markets. The external funding would be mainly used for buying equipment for the project, which would be sourced from the international market. IOC had to de-link the petrochemical project from the refinery project at Paradip due to cost escalation. The total project cost (refinery-cum-petrochemical) is estimated to be Rs 54,000 crore. Besides, the magnitude of work for setting up integrated infrastructure is huge. Consultants were not available who could tackle such a huge project. In phase one, the company is implementing the refinery project and would implement the petrochemical project next. Even the refinery project, which is under implementation, would be commissioned in phases. In the initial phase the primary unit of the refinery crude distillation unit and naphtha cracker, sulphur recovery unit and diesel hydro treater will be commissioned by March 2012. The complete commissioning of the refinery is expected by June 2012.
Transportation / Trade
GE Energy in gas sale deal with MacKeil Ispat
March 20, 2009. Great Eastern Energy Corporation Ltd has entered into a long term gas sale agreement with Mackeil Ispat & Forging Ltd, a steel company based in
Reliance Industries to sell fuel directly in US
Mar 18, 2009. Reliance Industries Ltd is looking at selling petrol and diesel from its twin refineries at
Policy / Performance
Govt. issues oil bonds worth Rs 10,000 crore
March 24, 2009. The government has issued oil bonds worth Rs 10,000 crore to the three oil marketing companies (OMCs) to compensate for their under-recoveries on the sale of petroleum products during the current financial year. Indian Oil Corporation has been issued oil bonds worth Rs 5,817.27 crore, while Bharat Petroleum Corporation has been issued bonds worth Rs 2,144.32 crore. Hindustan Petroleum Corporation has got bonds worth Rs 2,038.41 crore. Prior to this, bonds worth Rs 60,967 crore had already been issued. The OMCs are estimated to close the financial year 2008-09 with under-recoveries of Rs 1,03,908 crore. The value of total government bonds issued for the year now stands at Rs 70,967 crore, while another Rs 32,000 crore has been absorbed by the upstream companies.
Reliance may get to use KG basin gas
March 23, 2009. RIL may finally get to use the gas it produces. The government is likely to alter the gas utilisation policy to allow the company to use some of the gas that will start flowing from its D-6 block in Krishna-Godavari (KG) basin weeks from now.
RIL, which has the world’s largest refinery complex at
The empowered group of ministers (EGoM), meeting this week, may consider allocating some gas for RIL’s captive use. The group is empowered to take a decision on issues related to gas pricing and its utilisation. Allowing RIL to use some of its gas could set the precedent for other gas producers in future as well. RIL’s initial gas production will be 10 mmscmd. In a few months, the production would increase to 40 mmscmd. In the second phase of the field’s development, peak production is scheduled to go up to 80 mmscmd. While EGoM has listed top-priority customers for the distribution of first 40 mmscmd gas, there is a case for allowing contractor (RIL) to use some of it in the second phase.
The government’s new licensing policy for exploration blocks gives oil companies freedom to market oil and gas and sell it at market price. However, the government interfered with the contractor’s marketing freedom, and specified priority sectors for the supply of the gas due to the unprecedented demand and short supply of natural gas in the country. RIL recently abandoned a plan to put up a power plant based on its KG basin gas because it had been kept out of the list of initial customers. The company ended up canceling orders for boilers and turbines.
Oil Ministry seeks EC's nod for meet on RIL gas allocation
March 22, 2009. The Oil Ministry is believed to have sought Election Commission's nod to hold a meeting of an empowered group of ministers (EGOM) to decide on allocation of natural gas from Reliance Industries' eastern offshore KG-D6 fields to power plants. While the distribution of the gas among fuel-deficit fertiliser plants, who had been given the first right over initial output from KG-D6, had been previously decided, the same among the existing power plants could only be done by the EGOM.
EGOM is necessitated to decide on the allocation among the power plants, giving preference to the units in Andhra Pradesh and Dabhol in
The EGOM had previously decided on giving up to 18 mmscmd gas from KG-D6 to existing power units, subsequent to which Power Ministry had identified power plants of state-run NTPC as part recipient of the gas. Reliance is, however, opposed giving gas to NTPC saying the state run firm had previously declined to participate in the price discovery of KG-D6 gas and even refused to take the fuel at Dabhol citing court case with RIL.
India warns of demand-supply mismatch in oil
March 19, 2009.
The present economic and financial crisis, coupled with the prevailing level of oil prices, were causing a real risk that under investment in the industry will cause an oil-supply crunch. The slackening pace of investment in the oil sector will provoke wide disparity in demand and supplies of tomorrow when the world is out of recession.
It is important that the industry should focus on supply augmentation and avoid taking a short-sighted view. It was more than necessary that the industry is able to keep its momentum and is able to invest in future capacity build-up, otherwise sustainable future supplies will have a big question mark.
Deora for long-term oil supply agreements to check volatility
March 19, 2009. Petroleum minister, Murli Deora told oil producers and consumers to enter into long-term supply agreements to check volatility in oil prices. He also suggested the global community to set up a regulatory mechanism to restrain speculations and to have a greater transparency in the crude oil market. Stability in oil prices can be achieved provided producers and consumers commit themselves by entering into long-term supplies along with prices at which such supplies are to be made. The stability in oil market could be arrived at by balancing interests of both producers and consumers. It is essential for sustained economic development.
During a meeting, Venezuelan minister of energy & petroleum Rafael Ramirez and the Indian oil minister agreed to set up mutually beneficial projects including joint ventures by the companies of the two countries. In April 2008, government-owned ONGC Videsh Ltd set up a joint venture with
The
Govt. to redistribute IOC outlets
March 18, 2009. The Government is reportedly planning to re-allocate retail fuel outlets owned by Indian Oil Corp. (IOC) to fellow public sector oil marketing companies Bharat Petroleum Corp. (BPCL) and Hindustan Petroleum Corp. (HPCL). IOC's 17,600 outlets account for 50% of the petrol stations in the country and the proposal is being mooted in the wake of January's three-day strike by IOC officials that led to a shortage of petrol and diesel across the nation.
Supply of petrol and diesel was disrupted in many parts of the country between January 7 and January 9 due to the IOC officials' strike. Fuel retail in
RIL has approached IOC and HPCL for a tie-up to revive its fuel retail business. RIL had closed all its 1,433 retail outlets in April 2008 due to unequal competition with pumps of PSU oil companies.
POWER
Generation
PPP coal project at Talcher to start production next year
March 24, 2009. India’s first coal project being taken up on the public-private partnership (PPP) mode is expected to begin production by the middle of next year. The open cast coal project named Gopal Prasad would have a production capacity of 15 mtpa and it is being taken up at an investment of about Rs 400 crore. Mahanadi Coalfields Limited (MCL), a subsidiary of Coal India Limited (CIL), has 60 per cent equity in this coal project.
The private companies which are a part of the PPP project include JSW Steel, JSW Energy, JSL and Shyam DRI. While JSW Steel and JSW Energy would have 9 per cent stake each, JSL and Shyam DRI would have 11 per cent stake each in the project. The proposed coal project will meet the coal demand of these companies. The project consists of western part of Gopal Prasad (west) and Utkal-A block of Talcher Coalfields. Sixty per cent of coal produced from the mine will be retained by MCL while the remaining 40 per cent will be shared among the private companies as per their equity in the project.
While MCL would have the right to sell coal, the private companies will use the mines for captive purposes. Land is being acquired for the project under Central Coal Bearing Act. Notification for land acquisition has been issued under Section 4 (1) for the Utkal-A block of Talcher Coalfileds, a part of the project. The project involves displacement of people in 10 villages out of which the people in three villages- Kankerai, Kansidip and Pidhakmara have to be fully displaced.
Germany offers soft loans for Uttarakhand hydel projects
March 24, 2009. After facing opposition over executing projects in public-private partnership, Uttarakhand Jal Vidyut Nigam Limited (UJVNL) has now decided to modernise and renovate its old hydel projects by taking soft loans from
An additional grant of 3.3 mn euros from KFW would be for preparing the detailed project report of these projects. The soft loan would be at 1.95 percent interest. Similarly, Rural Electrification Corporation Limited, a public sector unit, has agreed to provide a loan of Rs 50 crore for modernising Mohamadpur (9.3 MW) and Pathri (20.4 MW) hydel projects. In July last year, the government, in a major policy decision, decided to renovate all those hydel projects, which have crossed 35 years under the PPP mode. The cabinet cleared nearly 24 hydel projects in this category, to be given on a 30 years lease. The total capacity of all these projects is 500 MW. However, UJVNL unions and some politicians opposed the move due to which the government put the PPP decision on hold. Official sources though believe the PPP decision was the best option since the state desperately needs more power. Last year, the government had to suspend the construction of two of its major hydel projects 480 MW Pala Maneri and 400 MW Bharion Ghati following opposition from environmentalist GD Agrawal, a move which also dampens the government’s bid to generate more power. UJVNL has also signed an agreement with Lamyar International, a German company, for preparing the DPR and technical feasibilities of the six hydel projects for which KFW is giving loan. The six projects are 240 MW Chibro, 120 MW Khodri, 51 MW Dhalipur, 33.75 MW Dhakrani, 30 MW Kulhal and 90 MW Tiloth.
Lack of insurance cover hits Dabhol power plant
March 23, 2009. The trouble-prone Dabhol power project of Ratnagiri Gas and Power Project Ltd (RGPPL) has hit another roadblock lapsed insurance cover. The insurance cover for Block 1 of the 2,150 MW plant has already expired, while the remaining two blocks will lose their cover in May this year. The company is ready to commission a repaired turbine for Block 1, but cannot do so. The 300 MW turbine was shipped by RGPPL earlier this year from
GE Hitachi ties up with NPCIL, BHEL
March 23, 2009. GE Hitachi Nuclear Energy (GEH) announced the signing of two agreements with the Nuclear Power Corporation of India (NPCIL) and Bharat Heavy Electricals Limited (BHEL) as the companies prepare to collaborate on building multiple GEH-designed nuclear reactors to help meet
NTPC approves Rs 50.29 crore investment for Orrisa plant
March 20, 2009. The board of state-owned National Thermal Power Corporation recently approved an investment of Rs 50.29 crore for the purchase of additional rolling stock for its Talcher Super Thermal Power station at Kaniha in Orissa. The rolling stock includes two locomotives and 55 wagons which would be used to transport coal for the 3000 MW thermal power project. The move is in line with NTPC’s plan to increase coal imports. NTPC would scale up its import of coal to 8.33% of its requirement in 2010, to produce 3,000 MW more in the next financial year. The coal imports would be mainly from
NTPC to import 12.5mn tons of coal by March ’10
March 20, 2009. NTPC Ltd is planning to increase coal imports in the year starting April, as it adds generating capacity to meet demand in
The power producer will spend Rs170bn (US$3.4 bn) to add 3,000 MW of electricity generating capacity in the next fiscal year. The report stated that the peak shortage of power in
Adani may start generating power from Mundra plant in April
March 19, 2009. Adani Power may take the first step towards power generation from its proposed 4620 MW thermal power plant at Mundra next week. The company plans to light the boiler of a 330 MW unit at Mundra on March 25. Power generation is expected to begin in April.
Once boiler is ignited the unit will start generating steam, which is used for power generation. Slated to be fully commissioned in 2011, the Rs 19,106-crore project is divided in four phases. In phase-I, the company will commission two units of 330 MW each followed by 2 X 330 MW in phase–II.
Mundra-III (2 X 660 MW) and Mundra IV (3 X 660 MW) are of super critical category and will be completed in 2011. The commissioning of both the units in phase-I may be completed by the second quarter of quarter of 2009-10. Implementation of phase-II units is in an advanced stage.
Transmission / Distribution / Trade
CERC plans step to cut power cost
March 23, 2009. The Central Electricity Regulatory Commission (CERC) plans to place a proposal on reduction of unscheduled interchange price from Rs 10 to Rs 7.35 for a unit of power by the end of this month in an effort to reduce spot price. There is a proposal to reduce the UI rate to Rs 7.35 a unit, which will be implemented from April 1, and one of the chief reasons for this move would be to bring down the spot price. Unscheduled Interchange (UI) is the difference between the actual generation and the scheduled generation from a power project for a particular period of time. This apart CERC would be examining a plan for restriction on unscheduled withdrawal of power, which might be fixed at 10-15 percent of schedules demand. If it happens then the power withdrawal from any grid would be stopped as soon as the frequency of the grid drops to 49.3 hertz (Hz), a power utility has to begin loadshedding as soon as the frequency touches 49.3 to prevent collapse of the grid. At present it happens after the frequency drops at 49 Hz. The CERC would also be considering for the first time the concept of a no load shedding tariff for customers who are willing to pay more for zero power cuts.
No change in retail power tariff in Orissa
March 23, 2009. The electricity consumers in the state can heave a sigh of relief as the retail power tariff applicable for the consumers will not change during the next fiscal starting from April 2009. The state level power regulator, the Orissa Electricity Regulatory Commission (OERC), after hearing the applications for the approval of the annual revenue requirement (ARR) and retail supply tariff (RST) of the power distribution companies in the state, has disallowed the tariff hike. This will be the 9th year in a row for which the retail power tariff in the state has not been increased. Apart from the retail tariff, the meter rent has been kept unchanged at the 2008-09 level. Besides, no meter rent shall be payable after the full cost of the meter is recovered. Similarly, the power factor incentive for HT & EHT consumers will be applicable above power factor of 97 percent from April 2009.
Special tariff has been introduced for industries of contract demand 100 MVA and above with a tariff of 237 paise per unit, maintaining a guaranteed monthly off-take of 80 percent. Prospective small consumers requiring new connection upto 3 KW load will only pay a flat charge of Rs.500 towards new connection excluding security deposit as applicable as well as processing fee of Rs.25. After hearing the ARR and RST from utilities like CESU, Nesco, Southco and Wesco and the complains made by the objectors, the Commission bluntly told the utilities that their request for increasing retail tariff can be considered only after they are able to reduce aggregate technical and commercial loss. Besides, they will have to improve standards of performance and take steps to enhance the levels of consumers satisfaction. The distribution licensees in the state namely CESU, Nesco, Southco and Wesco are carrying out the business of distribution and retail supply of electricity in their licensed areas. As a measure in that direction, the Commission has taken the initiative of putting in place a system and procedure to take feedback directly from the retail consumers including industrial consumers and various government departments.
IAEA sees
March 21, 2009. The global nuclear renaissance could potentially see a big chunk of new equipment manufacturing capabilities shifting eastwards. The International Atomic Energy Agency (IAEA) expects
Coal offtake hit by rake scarcity
March 24, 2009. CIL continues to grapple with inadequate supply of rakes by the Indian Railways which has hit the firm’s coal offtake especially during the second half of this fiscal. Due to inadequate rakes, CIL’s coal offtake has been unable to keep pace with its production as a result of which the total stockpile of coal at the pitheads of its seven subsidiaries has now gone up to 43 mt. During the second half of any fiscal especially in the last three months, CIL’s coal production goes up and we need 192 rakes per day for offtake of the raw material. However, the Indian Railways has failed to provide the required number of rakes to CIL, which has affected CIL’s offtake. The coal offtake woes can be overcome only after the proposed dedicated freight corridor becomes operational. The official pointed out that the Indian Railways could not provide the required number of rakes to CIL as its rakes were earmarked for transport of food grains and fertilisers. The problem of coal offtake was more pronounced in the Mahanadi Coalfields Limited (MCL), one of the subsidiaries of CIL. CIL’s coal production which is hit during the monsoon season picks up in the second half of any fiscal and reaches its peak during the last quarter (January-March). On an average, CIL’s coal production during January-March stands at around 1.6 mt per day out of which the coal PSU is able to secure offtake of about 1.3 mt. As CIL was scaling up its coal output target every fiscal, it needed more rakes to ensure that the coal offtake kept pace wit its rising production. CIL aimed at a production of 405 mt by the end of this fiscal compared to 380 mt in 2007-08. The coal PSU’s production target was projected at about 520 mt by the end of 2011-12.
Karnataka seeks 200 MW more power from Central government
March 22, 2009. Karnataka Chief Minister B.S. Yeddyurappa has requested Prime Minister Manmohan Singh to immediately allocate an additional 200 MW of power to the State which is currently reeling under severe power shortage.
Coal
March 22, 2009. Coal India Ltd is eyeing one more block in
Regulator to take up plea on national power exchange
March 20, 2009. CERC will hear petition filed by the promoters of National Power Exchange on March 26. The promoters of the proposed exchange, which will be third after the Indian Energy Exchange (IEX) and Power Exchange India 9PXI), include NTPC, TCS, NHPC and PFC. As per the power regulators’ directive, a company has already been incorporated in December last year. Incidentally, CERC has so far not received any objections for the setting up of a proposed power exchange.
The commissioning of National Power Exchange is expected in next six months. However, the proposed exchange will have to strive to get trading contracts as the two exchanges IEX and PXI are finding it quite difficult to trade large volumes mainly on account of rising mismatch between power demand supply. Also, a large number of utilities are favouring bilateral contracts. IEX is trading around 600 MW while PXI is manage to trade about 200 MW. IEX, which is promoted by the Financial Technologies India Ltd (FTIL) and PTC India, had started its operations in June this year. PXI however, a joint venture between National Stock Exchange of India Ltd (NSE) and National Commodities & Derivatives Exchange Ltd (NCDEX), started its operations in October 2008. TCS, part of the Tata group, holds majority stake of 50.02% in the company and the three power utilities NTPC, NHPC Ltd and PFC will pick up 16.67% equity each. Initially the four partners are planning to invest Rs 50-100 crore towards the proposed power exchange. A joint venture agreement for the incorporation of the company was signed in September this year by the four companies after filing an application with the CERC earlier last year to form the joint venture.
Forum of Regulators for selecting transmission companies
March 20, 2009. The Forum of Regulators (FoR), a forum of State Electricity Regulatory Commissions (SERCs), has recommended that state governments phase out the single-buyer model and put in place a system that offers a choice of selecting transmission companies that wheel out power from the generators. It will now have to be adopted by the State Electricity Regulatory Commission to implement it in each state. A single buyer model involves a single transmission entity generally owned by the state that buys power from generators and sells it to distribution companies. The FoR is formed by the chairman of all state electricity regulatory commissions with the chairman of Central Electricity Regulatory Commission (CERC) as the chairman of FOR. Non-impartial role of state load dispatch centres (SLDC) that are part of the transmission companies, defeated open access on several occasions in states. Conflict of interest arose mostly because of de-facto common top management of the trading licensee, transmission licensee, distribution licensee and load dispatch centre.
Power utilities in WB to register a net revenue collection of Rs 8,289.19 crore
March 20, 2009. State-owned power utilities in
Power protocol signed
March 19, 2009. Bhutan and
Mumbai tariff order Reliance Infra files petition in SC
March 18, 2009. Reliance Energy Ltd. (renamed Reliance Infrastructure) has reportedly filed petitions in the Supreme Court, challenging an order to refund additional tariffs of more than Rs2.5bn collected from shopping malls in Mumbai. Reliance Energy, controlled by Anil Ambani, filed two appeals challenging the tribunal’s January 19 order that had set aside a judgment by the Maharashtra Electricity Regulatory Commission (MERC) to charge multiplex cinemas and shopping malls a higher tariff than what is paid by the domestic consumers.
APTEL had asked Reliance Energy and rival Tata Power Co. to refund the additional amount from multiplexes and malls. Mukul Rohtagi, Reliance Energy’s attorney appealed for a stay on the recovery of dues from the company.
INTERNATIONAL
OIL & GAS
Upstream
StatoilHydro says invited to bid for
March 23, 2009. Norwegian oil and gas producer StatoilHydro has been invited by Iraqi authorities for talks on developing the Nahr Bin Umar oil field in southern
Two Canadian oil giants agree to merge
March 23, 2009. Suncor Energy will acquire Petro-Canada in an all-stock deal worth about $15 bn, combining two of the largest operators in Canadian oils sands. The companies said the merger was expected to save about 300 million Canadian dollars, or $244 mn, a year, allowing both companies to conserve cash during the current downturn.
The Canadian oils sands projects have high production costs and have become a target of environmental groups. Like everyone in the energy business, both companies have seen prices and demand drop for their oil.
Mexico has proved oil reserves for nearly 10 years
March 23, 2009. Mexico has proved oil reserves for the coming 9.9 years and potential reserves for 19.9 years. According to Pemex the reserves total 43.562 bn barrels of equivalent crude. Among them 14.307 bn barrels are proved, 14.516 bn are probable and 14.737 bn possible. The reserves assure 30 years of oil production in
The statistics were based on such indexes as the evolution of its reserves, oil exploitation and the total production in the previous year. The production in 2008 was about 1.451 bn barrels. Most of
StatoilHydro turns on taps at Alve field
March 20, 2009. The Alve gas and condensate field in the
Total, PetroVietnam ink PSC for 2 onshore blocks
March 20, 2009. Total Exploration and Production Vietnam has signed a Production Sharing Contract with Vietnam Oil and Gas Group (PetroVietnam) for the exploration blocks DBSCL-02 and DBSCL-03.
The blocks, which are located in the Mekong Delta area onshore, will be operated by Total with a 75% interest, PetroVietnam Exploration Production (PVEP) holding a 25% interest. Having created a partnership in 2007 with PVEP and the Korean company SK on offshore block 15-1/05, Total continues to develop its presence in
The exploration activities will be carried out without disruption of the community's activities and following the environmental and social framework that is being set by the Authorities. Block DBSCL-02 covers an area of nearly 14,850 square kilometers and block DBSCL-03 covers an area of almost 13,800 square kilometers. Under the terms of the agreement, the first exploration phase will cover the acquisition of 2D seismic on each block.
CNPC, Sinopec Bid for
March 20, 2009. Venezuela is evaluating bids from two Chinese state oil companies for stakes in Orinoco oil blocks that
It is unclear whether the Chinese companies have submitted joint bids for both fields or whether they are making separate approaches. CNPC had joined with
PetroChina aims to expand overseas operation, triple production output
March 19, 2009. PetroChina aims to raise its oil and gas production covering 200 mt of oil equivalents in 8-10 years, more than tripled the figure in 2008, suggesting the oil giant may step up oversea acquisition by seizing opportunities from the current global financial crisis.
PetroChina's target is almost in line with its strategy for 2009 that has listed acquisition of overseas oil and gas resources as one of its focuses. Data shows PetroChina's overseas oil and gas output for 2008 was 67.50 mt, including 62.20 mt of crude oil and 6.7 bcm of natural gas.
CNOOC starts up production at Bozhong oil field in
March 19, 2009. CNOOC's Bozhong (BZ) 28-2S oil field has successfully commenced production with 4000 barrels of oil per day via 4 wells. BZ 28-2S, located in the south of
These oil fields, adjacent to each other, are collectively named as BZ28-2S oil fields, of which BZ28-2S is the first to start production. The production is expected to ramp up an average 25,000 barrels of oil per day by 2011.
Ecopetrol submits highest competitive bids for 26 GOM blocks
March 19, 2009. The Mineral Management Services (MMS), a
Gas from WAGP due in March ’10
March 18, 2009. The long awaited West Africa Gas Pipeline Project (WAGP) is expected to be completed by January 2010, with the first free flow of natural gas from the pipeline to generate power at the Takoradi plant, to begin by March 16, 2010.
Downstream
ExxonMobil boosts global cogeneration capacity
March 23, 2009. ExxonMobil inaugurated its newest high efficiency cogeneration plant at its
Idemitsu to refine 22 pc less crude in April
March 23, 2009. Japanese oil refiner Idemitsu Kosan Co planned to refine 22 percent less crude oil in April due to slackening demand and refinery maintenance, and may import jet fuel and buy gasoline and middle distillate from the domestic market.
The nation's third-biggest refiner expects to process 2.05 mn kilolitres (430,000 barrels per day) of crude oil in April, down 570,000 kl (120,000 bpd) or 22 percent from a year earlier. The refining curb was nearly double a cut of 300,000 kl that the company expected last month.
KNPC cancels Fluor's refinery contract
March 20, 2009. Fluor Corp. has received notification from Kuwait National Petroleum Co. (KNPC) to stop work on the utilities and offsites for the al-Zour refinery. Fluor has approximately 300 employees performing engineering work on the project. The remaining contract value of approximately $2.1 bn will be removed from the company's backlog in the first quarter. Fluor Corp. designs, builds and maintains many of the world's most challenging and complex projects.
Fujian refining project likely to go into operation in May
March 19, 2009. The integrated refining and ethylene project in Southeast China's
The refining project is expected to expand the annual refining capacity of Fujian Refinery Petrochemical from 4 mt to 12 mt and greatly improve its ability of refine sour crude imported from
Meanwhile, the project will build new chemical facilities including 800,000-ton ethylene cracking unit, 650,000-ton polyethylene unit, 400,000-ton polypropylene unit and 1-mt aromatic unit.
Motiva affirms it will continue
March 18, 2009. The Motiva Enterprises refinery expansion in
Construction starts for Venezuelan-Chinese refinery
March 18, 2009. According to Venezuelan President Hugo Chavez, construction had started on the first joint Chinese-Venezuelan oil refinery. A $4 bn contribution from
The fund, which is replenished with annual infusions of cash, totals $6 bn, of which $2 bn was provided by
Transportation / Trade
Saipem wins EPC for Algeria gas plant, pipelines
March 23, 2009. Saipem has been awarded a new onshore contract in Algeria worth approximately US$ 1.8 bn. Saipem has signed the lump sum turn key contract with the joint venture between Eni and the Algerian oil company Sonatrach for the treatment facilities of natural gas extracted from the Menzel Ledjmet East field and from the future developments of the CAFC (Central Area Field Complex).
The joint venture between Eni and the Algerian oil company Sonatrach for the treatment facilities of natural gas extracted from the Menzel Ledjmet East field and from the future developments of the CAFC (Central Area Field Complex).
The contract encompasses the EPC (engineering, procurement and construction) of the natural gas gathering systems and processing plant and the related export pipelines. The facilities will provide a processing capacity of 350 mcf of gas per day and of 35,000 barrels per day of liquids and will be located in the
Indonesia's Bakrie & Brothers to build gas pipeline
March 23, 2009. Indonesia's PT Bakrie & Brothers will build a pipeline to deliver gas from an offshore field to a power plant operated by the state electricity firm in
Russia to boost Novo, Yuzhny, Primorsk oil exports
March 20, 2009. Russian pipeline monopoly Transneft will raise second-quarter deliveries of oil from the ports of Novorossiisk, Yuzhny and Primorsk.
Qatargas II project's first LNG cargo arrives at
March 20, 2009. ExxonMobil announced that the first Liquefied Natural Gas (LNG) cargo arrived at the South Hook LNG receiving terminal in Milford Haven,
South Hook LNG Terminal Company Ltd. is owned by Qatar Petroleum (67.5 percent), ExxonMobil (24.15 percent) and Total (8.35 percent). The terminal forms part of the wider Qatargas II joint venture which will supply gas to the
Energtek eyes expanding role for NG in transport sector
March 18, 2009. Energtek Inc. expects natural gas (NG) to play an increasing role in fueling transportation across the
The company noted that Obama's Energy Plan calls for a reduction in oil consumption to save more oil than it currently imports from the Middle East and
Policy / Performance
Saudi Cabinet vows to continue oil projects
March 24, 2009. The Council of Ministers announced that
In years to come, if traditional energy supplies should prove inadequate because capital expenditure was curtailed due to unsustainable prices, unreliable indication of future demand or hopes for a substitute that oil cannot deliver, such a supply crunch would be catastrophic.
Iraq to ask firms to build $2.5 bn refinery
March 23, 2009. Iraq will invite international companies to invest more than $2.5 bn in building a 150,000 barrel per day (bpd) oil refinery in the southern
The country has only this year reached a stage where it is refining enough gasoline for its own domestic transport purposes, despite sitting on the world's third largest reserves. For years since the 2003 invasion, it was forced to buy imported fuel to plug the gap.
Iraq produces 2.4 mn barrels of crude oil per day. The government will soon invite foreign companies to bid on a more than $1 bn contract to build and install a fluid catalytic cracker (FCC) at the biggest refinery, Baiji, in the north, which has a nominal capacity of 320,000 bpd.
UK
March 23, 2009. The Seven Seas gas field in the UK Southern North Sea has been given development approval by the government. First gas from the field in which Centrica holds 92.5 percent and
The development will initially comprise the subsea tie-back to the existing West Sole Alpha platform located 60 kilometers off Easington in the
POWER
Financial Close of 425 MW Nandipur power project in
March 24, 2009. A Foreign Banks Consortium comprising BNP Paribas, HSBC Bank plc, The Export-Import Bank of China here signed a Sinosure Buyer Credit Facility Agreement of USD 150.151 mn with Northern Power Generation Company Ltd for construction of 425 MW Combined Cycle Power Project at Nandipur.
The CIC France is also a part of consortium through a participation agreement with BNP Paribas. Northern Power Generation Company Ltd (NPGCL) is the biggest thermal generation company operating under the overall management of PEPCO.
Chinese power enterprises buy 4.88 mt of coal in February
March 24, 2009. Xinhua reported that
According to customs statistics,
Analysts predicted that overseas coal purchase would keep growing until
Kano targets 450 MW electricity in
March 18, 2009. Kano State Government is poised to undertake the generation of 450 MW of electricity in its efforts to revive industries closed due to epileptic power supply in the metropolis.
With steady power supply, industries can operate at near 100 per cent installed capacity; as well as offer employment to the teeming unemployed youths roaming the ancient city of
When the project is completed, irregular and unstable power supply in the commercial nerve centre would be a thing of the past; pointing out that the state government has also started networking the entire metropolis with the best of roads at a cost of over N20 bn.
Transmission / Distribution / Trade
Electricity shortfall reaches 2,500 MW in
March 24, 2009. Electricity shortfall increased to 2,500 MW partly due to shutdown of two independent power plants (IPPS) after some technical faults. Both Hubco Power Plant, which produces 300 MW, and Chasnupp Power Plant, having a capacity of 300 megawatts, have been shut down.
Thus the national grid is facing loss of 600 MW. However, both the IPPs will be back in operation within a week after the faults are fixed. At present, the demand for electricity stands at 12,000 MW whereas 8,250 MW is being generated. Thus, there is a shortfall of 2,500 MW that is being managed through load management, six hours in big cities and eight hours in small towns and rural areas.
Sonoma
March 22, 2009. Sonoma
Dewa to spend Dh13 bn in ’09
March 22, 2009. The Dubai Electricity and Water Authority (Dewa) plans to invest Dh13 bn this year in new projects as part of its Dh75-bn spending plan to build capacity to match the emirate's future economic growth. This year's spending comes despite Dewa delaying a mega power generation and water desalination plant in Jebel Ali for a year amid slower consumption growth.
Govt. sets electricity tariffs, fuel prices in
March 21, 2009. Government fixed electricity tariffs and fuel prices with Zesa seeing its average tariff reduced from US9c a kilowatt/hour to 7,53c/kWh (although this will be lower for domestic users) while petrol was set at a maximum of US95c a litre, diesel at US85c/litre and paraffin at US80c. The Minister of Energy and Power Development, said the new tariffs and prices were set after consultation with those involved and after considering prices on the international market. The average Zesa tariff of US7,53c/kWh is backdated to February 1.
Nigeria:
March 20, 2009. Russia has signed an accord with
The two countries signed a memorandum of mutual understanding in
Bushehr nuclear plant operational by August in
March 20, 2009. Iran's energy minister said the country's nuclear power plant at Bushehr will begin operating by the end of the year. Bushehr nuclear plant will begin producing at about half capacity (500 MW) by late August. It should reach its full 1,000 MW capacity by the end of March, 2010.
The full launch of the facility at Bushehr, in southern
FPL aims to raise electricity base rate by $1 bn
March 19, 2009. Florida Power & Light wants customers to pay an additional billion dollars a year in their base rates, starting January 1 and then $247 mn on top of that starting in 2011. For the residential customer using 1,000 kilowatt-hours a month, that means an increase of $12.40 in base rates in 2009. With an estimated decrease of $17.83 in 2010 fuel charges, the utility said the customer could see a $5 drop in their monthly bill. The last bid for a rate change came in 2005. FPL, the state's largest power company, started its long-anticipated bid for a rate increase by filing 41 boxes of documents with the Public Service Commission.
FPL estimated that customers will save about $5 a month overall starting January 1, but that change included anticipated declines in fuel charges. The bill of a residential customer using 1,000 kilowatt-hours a month would drop on January 1 from $109.55 to $104.63, according to that estimate. Base rate changes generally occur only once every few years. But in its filing FPL asked for the possibility for intermittent increases, as when new power plants are added to the grid.
Bill allows US state's electricity distributors to pool resources
March 19, 2009. Tennessee's electricity distributors could pool their resources to build generating plants under legislation that has been unanimously approved by a state Senate committee. This is offering them an opportunity, especially for some of the new types of energy production. The bill is being pushed by Seven States Power Corp., which is affiliated by the Tennessee Valley Public Power Association. It authorizes municipal electric companies, such as Knoxville Utilities Board, and rural electric cooperatives to form nonprofit generating and transmission corporations to finance, construct and operate electricity-generating facilities and then sell the power to their customers. Seven States already is building a pilot generation plant near
Renewable Energy Trends
National
14
March 23, 2009. To facilitate solar energy business with
Exim Bank of America is the official export credit agency of the US, it has supported over 65 projects totaling over 1.3 bn dollar in renewable energy exports from US. Energy has become a focal point of commercial strength in the US-India relationship, a new emphasis on solar and renewable energy technologies is taking that relationship to new heights.
TNERC hikes tariff for procurement of wind energy
March 22, 2009. The Tamil Nadu Electricity Regulatory Commission (TNERC), after a process of consultation spread over 10 months, has enhanced the tariff for procurement of wind energy from Rs.2.90 per unit to Rs.3.39 per unit with effect from April 1, 2009. Announcing this, the Commission, in an official release, stated that it convened a conference of experts in July 2008. A consultative paper was circulated five months later, inviting comments from stakeholders.
The State Advisory Committee considered the paper in February 2009. A public hearing was organised on March 5. The Commission determined the tariff last in May 2006. Even the enhanced tariff of Rs.3.39 per unit is lower than those of Maharashtra and Karnataka and marginally higher than those of
Numeric enters solar energy and LED segments
March 20, 2009. Chennai based UPS manufacturer Numeric power systems, announced its commercial entry into the solar energy and LED (light emitting diode) lighting segments. The Rs.500 crore company, 85% of whose revenues come from sale of UPS and 10% from servicing them, presently earns 5% of its revenues from its solar power installations. The company would sell its solar power from this plant to the TNEB at Rs.15.15 per kwh, of which Rs.12 is paid as subsidy by the ministry of new and renewable energy.
Electricity regulator to set up renewable energy exchange
March 20, 2009. The Central Electricity Regulatory Commission (CERC) has proposed to set up an exchange for renewable energy. There would be a national exchange kind of a thing where registration of renewable energy would be done. The exchange would help develop a market for renewable energy and boost its production. The CERC would give its recommendation for nuclear energy tariff within two months. The regulator had earlier recommended renewable energy certification for wind energy and solar power producers and also for small hydel power generating units, whose energy production cannot be scheduled. The effect of surplus production of renewable energy more than the prescribed quota on the tariff structure is also being studied.
Discoms may face penal action for not supplying green power
March 20, 2009. The government may make it mandatory for power distribution firms to supply power generated from renewable sources along with that generated from other sources. The Central Electricity Regulatory Commission (CERC) is working with state regulators to take penal action against distribution companies (Discoms) that fail to comply with the norm.
Economic slowdown hits renewable energy sector
March 20, 2009. The impact of the economic slowdown has affected the renewable energy sector too. The power generation from new wind power projects would come down from 1800 MW in 2007-08 to 1200 MW during 2008-09. The reasons for this range from credit squeeze to fall in corporate profits. The fall in profits would result in a reduced tax burden and hence, companies may find the tax benefits from wind power projects a less attractive option. Nevertheless, there is no cause for worry.
The renewable energy outlook 2030’, a report released by Energy Watch Group, has projected a high variant scenario of 29 per cent supply of the heat and electricity requirements from renewable sources by 2030. In fact, the future strength of the sector lies in policies intended to put a halt to factors contributing to climate change.
Global
UK national grid to cut CO2 45 pc by ’20
March 23, 2009. U.K.-based gas and electricity network operator National Grid PLC (NGG) it would cut greenhouse gas emissions across all its businesses by 45% by 2020 and implement carbon budgets from April 1. The 2020 target is an interim goal as part of a countrywide plan to reach an overall 80% cut in emissions 2050 versus a 1990 baseline.
Qatar to build $500 mn solar power plant
March 23, 2009.
The project will take two years and the hi-tech, modular plant is to be built in Europe by a leading manufacturer and put together in
Alternative-fuel vehicles from
March 23, 2009. About 60,000 alternative-fuel vehicles are expected to be on
China, as a large developing country undergoing rapid industrialisation, faced the pressures of promoting growth while saving resources and protecting the environment.
China had made saving energy, reducing emissions and using renewable energy sources as a strategic plan to achieve sustainable development.
DTE sees 280 wind turbines in Thumb's
March 23, 2009. The skyline in
TE Energy officials told
First Solar produces 1 GW of clean solar electricity
March 20, 2009. First Solar, Inc., it has produced 1 gigawatt (GW) of its advanced solar modules since beginning commercial production in early 2002. It took the Company more than six years to produce its first 500 MW and eight months to produce its second, creating 1GW total. By the end of this year, the Company has announced it will have the capacity to produce more than 1GW per year-- the equivalent of an average-sized nuclear power plant.
US Academy aims to produce its own electricity by '15
March 20, 2009. The Air Force Academy in the
Europe's energy chiefs aim for carbon-neutral electricity by ’50
March 19, 2009. The heads of 61 power groups in the EU have committed to achieving carbon-neutral electricity within an integrated power market by 2050. heir declaration, handed to Andris Piebalgs, EU energy commissioner, comes as Europe is under attack for lowering its ambitions to combat climate change, handing over leadership to the US and China and reneging on efforts to help the poorest developing countries adapt to a low-carbon economy. The chief executives, including from the four main German groups, often seen as the principal culprits of faltering progress, made energy efficiency a cornerstone of climate change policy for the first time.
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