Electricity Regulatory Commissions & Unviable Power Projects (part – II)
A Unique Case of Opposition for a Coal Power Project in Karnataka
Shankar Sharma, Consultant to Electricity Industry
Continued from Volume V, Issue No. 6…
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he losses in utilization sector in the consumer categories like agriculture, domestic, commercial, industrial etc. are known to be of the order of about 30%, which if brought down to international levels can yield substantially huge virtual additional capacity. Replacement of old and inefficient IP Sets with modern high efficiency IP sets and change to PVC pipes, if necessary through government subsidies, is certain to save substantial power. Collectively, all these measures to improve the efficiency of utilization can yield virtual additional capacity of more than 20% or about 1,300 MW.
4.9 The Demand Side Management measures like peak hour demand reduction, wide spread usage of CFLs, solar water heaters etc. can reduce both the peak demand and annual energy demand by about 10% or about 650 MW.
4.10 Credible energy conservation measures can provide savings of about 10 % of the existing installed capacity.
4.11 All these measures put together can provide virtual additional capacity of more than 40% at a cost approximately equal to 25% of the cost of additional installed capacity based on conventional generating sources. These measures have least deleterious impact on the society, very low gestation period and are people and environment-friendly. These measures will provide additional electricity needed at much lower societal cost and higher benefits than by constructing additional coal power stations.
4.12 Large scale coal power projects generally result in agricultural land acquisition and displacement of a number of rural people. Having failed to formulate & implement a comprehensive rehabilitation policy for such displaced people, society is weary of such projects, which displace large numbers of rural people who are not skilled / trained to take up other professions.
4.13 The authorities seem to be turning a blind eye to the poor economy behind coal based power stations. While it is common knowledge that even with the best technology available the conversion efficiency of coal energy to electrical energy is only about 35%, if we take the high AT&C losses and poor efficiency at the end user level into objective account, the overall efficiency of the usage of coal energy could only be less than 10%. For such poor efficiency in energy usage, compromising the economic, social and environmental health of the state cannot be a good policy.
4.14 The coal power stations need massive amounts of fresh water. The state of Karnataka, which is already the most water-stressed state in the country, can allow the setting up of additional coal power stations only at the expense of affecting the minimum water availability to its public.
4.15 In contrast to the poor efficiency of the usage of coal energy, solar PV technology has nearly 20% efficiency of conversion of sunlight into electricity. This efficiency is rapidly increasing due to advancement in material technology; and reports suggest that commercial production is soon to start with light conversion efficiency of about 40%. For a state like ours, which has plenty of sunlight throughout the year, solar PV panels are eminently suitable as distributed or decentralized sources of energy. These, when efficiently deployed on the roof top of buildings, can effectively reduce the demand for grid electricity, which will in turn reduce the need for additional large scale conventional power plants.
4.16 Similarly, the state is richly endowed with wind, bio-mass and wave energy sources, which have the potential to meet a considerable portion of our electricity needs on a sustainable basis.
4.17 Massive requirement of fresh water for the coal power stations will transform the situation of fresh water availability in the state from bad to worse. The popular protests which are being witnessed in the state opposing the land acquisition for various industrial activities, can only become worse if more lands are to be acquired for establishing coal based power stations.
4.18 Whereas the state has no known reserve of fossil fuels and the establishment of coal or diesel or gas based power stations will impose huge costs on society, the contribution of such conventional power stations to Global Warming & Climate Change are considerable and avoidable. At a time when the international community is putting pressure on India to reduce its total GHG emissions, and when Government of India has already declared that reducing the GHG emissions is a top priority, to continue to add coal power stations without first harnessing all suitable alternatives will be a huge let down not only for our own people, but also for the international community.
4.19 The harmful impact on the general environment, agricultural crops, water bodies and community health because of the emissions from coal power stations are well established as being enormous. Negative impacts on the flora and fauna is well recorded, and if unchecked will affect the food crops to a large extent. There are well-documented examples of this all over
4.20 While KPTCL and ESCOMs are reported to be making attempts to obtain Carbon Credit by the route of Clean Development Mechanism, which is basically off-setting the CO2 emission elsewhere, the electricity companies under the control of the state government are at the same time contributing to the GHG emission directly by establishing more and more fossil fuel power stations, and indirectly through inefficient operation of electricity supply services.
4.21 Taking an objective and critical view of the massive negative impacts of fossil fuel power stations on the social, economic and environmental aspects of the state, coal based power stations should be considered only as a last resort after fully harnessing all the better alternatives listed in earlier sections.
5. Prayer to KERC
The petitioner prayed for the following remedies:
a. To deliberate and seek wider public opinion on the suitability of establishing additional coal based power stations in the state by issuing a Consultative Paper on the subject.
b. To commission a detailed study by an expert group on the relative costs and benefits of establishing coal fired power stations in the state and that of suitable alternatives like efficiency improvement, energy conservation and Demand Side Management, to overcome the chronic deficit of power experienced by the people in the state.
c. To commission a detailed study by an expert group on the costs and benefits of deploying new and renewable energy sources to meet a considerable part of the additional demand in future.
d. To hold public hearing(s) on all the relevant issues including the economic, social and environmental impact of establishing coal fired power stations in the state.
e. To seek the opinion of experts with regard to the effect of coal based power projects on the environment and on global warming, and elicit their opinion on mitigation measures to be adopted, including the future electricity supply options for the state.
f. To advise the Government of Karnataka against establishment of coal based Power Generating Stations in the State until all the better alternatives as listed in section 3.2 are fully harnessed, before considering fossil fuel based power stations; and
g. To pass such other orders as the Commission may deem fit, in the facts and circumstances of the case.
6. Deliberations of KERC
KERC held three public hearings, including one at the proposed project location of Chamalapura. The members of KERC also visited the project site at Chamalapura to get a first hand impression of the local environment. Adequate opportunities were given to all those who wanted depose before the Commission. The state agencies such as energy department, Electricity Supply Companies, the state generating company, state transmission Company etc. were given adequate time to present their case.
The civil society was well represented by a number of intellectuals including local MP, a Gnana Peetha award winner, NGOs, people from the project areas etc. The arguments presented against the project proposal and the vast data submitted in support of the arguments was very impressive.
Most of the arguments were based on the localized issues such as ecologically sensitive environment, large no. of fresh water bodies, fertile agricultural lands, places of archeological and tourist importance etc., and how the concerned agencies have flouted the norms for such a proposal.
The Commission issued its order on 19th May 2008. Salient points of its order are reproduced verbatim below.
“The Commission has noted that the proposed project at Chamalapura is opposed tooth and nail by the local people and also people of the surrounding areas. It has generated lot of public unrest and has created law and order problems in the area. The proposal involves many serious matters relating to environment, agriculture, health of the local population and fear of dispossession of their lands resulting in unrest among farmers etc. Such being the case and when the public approaches the Commission and urges it to hear the petition and advise the government in the interest of the protection of the environment and its own well being, the Commission cannot shirk its responsibility to exercise the powers conferred on it by law.
Hence, after hearing both the parties, the Commission admitted this petition and decided to render advice to the State Government in exercise of its duty as conferred vide section 86(2)(IV) of EA 2003. “
“The Commission has confined its examination of the issues in respect of proposed Chamalapura thermal power project. It has not examined the issues in regard to all other proposed thermal power projects in the State in view of paucity of time and also human resource available at its command. Further the Commission has also considered that the examination of the issues relating to all other proposed thermal power projects would be very bulky and roving exercise.
The Commission expects the State Government to consider all other proposed thermal projects keeping the Commission’s advice relating to Chamalapura project in mind.”
“The petitioners and the other participants to the proceedings have strongly contended that reduction of T & D losses would go a long way in supplementing the additional energy requirement. In this regard the Commission notes that it has been fixing targets for loss reduction to KPTCL and all the ESCOMs based on the studies conducted from time to time. While MESCOM has been achieving the targets set by the Commission, the other ESCOMs have failed to achieve the targets though considerable amount of capex is being spent year on year. Reduction of Commercial and Technical losses would considerably reduce the additional requirement of power in the State. “
“The Commission, while bringing the above facts to the notice of the Government of Karnataka notes that:
i) The bidding guidelines issued by the GoI have not been complied with and replies to the Commission by PCKL are misleading. The bidding process initiated by PCKL lacks transparency and the whole process is carried out in a very casual manner. If it had been done following the guidelines of the GoI, so much of controversy would not have been generated.
ii) The issues raised during the proceedings by the petitioners and the public, which have been discussed in the relevant sections of these proceedings, should have been considered before the decision for setting up of a plant at Chamalapura was taken.”
“Having regard to the above facts, the Commission, in discharge of its functions under section 86(2)(iv) of the Electricity Act 2003, hereby advises the Government to:
i) Take a de-novo decision for establishing a thermal power plant at Chamalapura after duly considering the observations of the Commission in para XIII.
ii) Look into all the aspects involved in the project such as environment and heritage, Land Acquisition, Fuel linkage, water supply etc.
iii) Direct the PCKL to strictly comply with the bidding guidelines issued by the MoP in letter and spirit,
iv) The establishment of thermal power projects in the State and hydro power projects involving submersion of forests and displacement of local people are getting involved into environmental and other issues. Though the Commission, for the reasons stated in para X (2 and 3) above, have not consented to set up an expert committee as requested by the petitioners for a detailed study of the desirability or otherwise of establishing thermal power plants in Karnataka, it would advise the Government to set up such a committee as it falls within the domain of the Government.”
7. Conclusions
This petition by MGP has brought out the fact that there are enough mandates to the State Electricity Regulatory Commissions under the IE ACT 2003 to advise the state governments on issues concerning any aspect of electricity industry, which may have the potential to adversely affect the society. The process surrounding the above said petition also has demonstrated that no issue under the electricity sector is beyond the comprehension of a determined public. Hence the concerned government agencies would be well advised to make use of the vast experience/ expertise available amongst the public in order to make every project fully accountable to the welfare of the society.
The advise of KERC in this regard is clear, and may have far reaching consequences if taken to a logical conclusion. It is also expected that unless the concerned authorities strictly follow all the necessary procedures with due diligence in conceptualization and detailed planning of the project, there can be more and more of such petitions before various State Electricity Regulatory Commissions.
Industry observers are of the opinion that the IE ACT 2003 provides adequate provisions for the larger society to protect the socio-environmental aspects from the perils of the mismanaged electricity industry, provided the Electricity Regulatory Commissions decide to exercise the powers vested in them on a regular basis.
Concluded
Views are those of the author
Author can be contacted at
Beyond the Climate Crisis: A Critique of Climate Change Discourse (part – V)
Eileen Crist
Continued from Volume V, Issue No. 6…
Climate Change as Apocalypse and the Rise of Geoengineering Proposals
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he knowledge that biodiversity is in deep trouble has been available for at least three decades, but this momentous event has never inspired the urgency that climate change has triggered in a handful of years. This seems to be a blatant manifestation of anthropocentrism (the idée fixe that human interests, including short-term and non-vital ones, always come before all others), for climate change is perceived as threatening people directly—as the summer 2003 European heat wave, Hurricane Katrina, and other extreme weather exemplifies. The loss of life’s diversity and abundance, on the other hand, is not widely regarded as harboring a survival risk for human beings. After all, countless species, subspecies, ecosystems, populations of wild animals and plants, ancient forests, wetlands, and so on, have been eclipsed or diminished, and yet, to cite an anti-environmentalist cliché, “the sky did not fall.”
But the dominant framing of climate change—its identification as the most urgent problem that we face—all but bluntly declares that the sky is falling. The apocalyptic potential of global warming in the not-so-distant future manifests between the lines of climate-change writings far more vividly than mere subtext. The difference between such climate-change characterizations (quoted earlier) as “collapse of civilization” or “planetary emergency,” on the one hand, and the idea of apocalypse, on the other, is almost purely semantic. Climate-change works do not employ the word apocalypse, but they often imply or outright describe something that uncannily resembles what religious imagery has pictured. Ross Gelbspan, for example, in a description fairly typical of what climate change foreshadows, writes of “the world becoming a storm-battered, insect-infested breeding ground of infectious diseases,” one “of temperature extremes, of extensive drought and desperate heat.”48
The Revenge of Gaia may be the most openly apocalyptic work on global warming in print. Lovelock assesses all variables affecting climate as being in positive feedback, which indicates, in his words, that “any addition of heat from any source will be amplified.”49 Among positive feedbacks, he lists loss of albedo from the melting of polar ice, decline of carbon-dioxide-absorbing and cloud-producing plankton, and the release of land-locked and (possibly) sea-bottom methane—all consequences of increasing temperatures, which, in turn, will act to reinforce and accelerate “global heating.” Any one of these feedbacks might raise concern, but considered together an alarming picture emerges for Lovelock. He predicts runaway heating: “The evidence coming in from the watchers of the world,” he claims, “brings news of an imminent shift in our climate towards one that can easily be described as Hell: so hot, so deadly that only a handful of the teeming billions now alive will survive.”50 This forecast proceeds from the apprehension of overstepping Earth-system thresholds and unleashing consequences both deadly and uncontrollable: in the climate-change literature, exceeding such thresholds is referred to as “dangerous anthropogenic interference.”
While the specific forecast of a Hell in which billions perish is at the extreme end of climate-change predictions, the general intimation of a looming calamity for large numbers of people, and for civilization itself, is widespread in the literature. Overt or oblique, apocalyptic intimations abound in climate-change discourse. The concept of apocalypse is not just a household idea, but it is so in the air today (with fundamentalisms of all stripes and their ideas in full swing) that explicit reference to an impending apocalypse is redundant for the audience of climate-change writings. Dire warnings about the consequences of the continued use of fossil fuels, coupled with images of rising seas, soaring heat waves, raging wildfires, rampant disease, and acidified oceans, suffice to vividly evoke an end-of-the-world vision circulated for two millennia by Judeo-Christian culture. Apocalyptic thinking manifests in a three-fold narrative structure pertaining to the timing, nature, and consequences of expected events if greenhouse-gas emissions continue unabated: one, an Earth-shattering calamity is forecast (or insinuated) to arrive at a future, albeit unspecified, time; two, it is nebulously portrayed as a single monumental catastrophe (adumbrated, perhaps, by a string of interconnected lesser catastrophes) that will affect everyone and everything; and three, it is suggested that human survival and the viability of civilization are at stake, with unprecedented levels of death, suffering, and social breakdown anticipated.
Whether or not apocalyptic admonitions are tracking an immanent reality, and the world is actually headed for the hellish heat and anomie that Lovelock fears, climate change as apocalypse can be censured for playing straight into the hands of the religious fundamentalisms that are menacing the world. Indeed, the apocalyptic narratives of climate-change literature align closely with prophetic claims strewn throughout the Old and New Testaments.51 A perverse and noteworthy consequence of the alignment between climate-change and biblical imagery is that many fundamentalists (politicians, decision-makers, or citizens) may well remain undeterred and unmoved by climate-change warnings, which only resonate with their visions of death-by-fire, on the one hand, and rapture, on the other. As Derrick Jensen observes about this disturbing element at play today, “to many fundamentalists, the killing of the planet is not something to be avoided but encouraged, hastening as it does the victory of God over all things earthly.”52 Apocalyptic warnings dovetail into the day-of-reckoning fantasies of those who seem to care little about the biosphere’s destiny; and while their fantasies may not be widely held beliefs, they possess a sort of de facto credibility by virtue of their sheer cultural ubiquity.53
Narrative affinity with biblical stories is the least problematic aspect of representing the climate crisis as near-future apocalypse. The most pernicious dimension of this representation is that of occluding the reality we are (and have been) immersed in here and now—namely, the simplification-cum-homogenization of life on Earth. Climate change is not causing, but is hastening, the running down of the planet, and the technological grail that might ultimately solve the climate crisis will, more likely than not, simply allow the business-as-usual unraveling of the biosphere to proceed. Besides coddling humanity’s proclivity for self-centered concern, apocalyptic thinking directs attention toward some future Hollywood-style cataclysm, while dimming awareness of the present and real suffering of nonhumans, disempowered and impoverished people, and consumers beleaguered by clutter and malaise. Life’s ongoing devastation, and humanity’s pathological imbalance with wild nature and schisms within itself, are the predicaments that we are called to face—not the preemption of some imagined crash in some imagined future. Given the dominant framing of climate change, it is hardly surprising that schemes for what is called “geoengineering” (and, in even more Orwellian speak, “radiation management”) are increasingly aired as reasonable solutions to the climate crisis; it will be equally unsurprising if they are soon promoted as inevitable. A recent article in Nature claims that given “the need for drastic approaches to stave off the effects of rising planetary temperatures . . . curiosity about geoengineering looks likely to grow.”54 Six months earlier, an article in Wired gushed over the prospects, assuring us that “luckily, a growing number of scientists are thinking more aggressively, developing incredibly ambitious technical fixes to cool the planet.”55 In the wake of apocalyptic fears, geoengineering is easily pack-aged as an idea whose time has come; physicist Paul Crutzen’s recent attentions have imbued it with even more credibility. Crutzen received the Nobel Prize for his work on ozone depletion, and is now cautiously promoting “active scientific research” into the possibility of shooting SO2 into the stratosphere, which, by converting into sulfate particles, would mask global warming by an effect known as global dimming; Crutzen calls it “stratospheric albedo enhancement.”56 In essence, this strategy calls for countering one form of pollution with another. In a 1997 article in the Wall Street Journal, nuclear physicist Edward Teller beat the environmental mainstream to a geoengineering solution for global warming by a decade. Indeed Teller’s summons to undertake, if necessary, incredibly ambitious technical fixes to cool the planet, as a rational and economically defensible enterprise, may turn out in retrospect to have been pioneering in the realm of policy. It even seems plausible that Teller’s self-assured and dollar-quantified message (coinciding with the year of the
Notes:
48. Gelbspan, The Heat is on, p. 172.
49. Lovelock, The Revenge of Gaia, p. 34.
50. Ibid., p. 147.
51. An example from The New Testament: “And there will be strange events in the skies—signs in the sun, moon, and stars. And down here on earth the nations will be in turmoil, perplexed by the roaring seas and strange tides. The courage of many people will falter because of the fearful fate they see coming upon the earth, because the stability of the very heavens will be broken up . . . When you see the events I’ve described taking place, you can be sure that the Kingdom of God is near.” Luke 21:25–33.
52. Jensen, Endgame, p. 226.
53. This statement is not intended as a wholesale condemnation of Christianity in connection to ecological issues. A relationship of stewardship with nature has been promoted by some Christians (as the main message in the Bible), especially after historian Lynn White’s landmark essay, which lays much of the blame for the ecological crisis on Christian anthropocentrism. See White, “The Historical Roots of our Ecologic Crisis,” Science 155, no. 3767 (March 1967): 1203–7.
54. Oliver Morton, “Is This What it Takes to Save the World?” Nature 447 (May 10, 2007): 132–36.
55. David Wolman, “Rebooting the Ecosystem,” Wired, December 2006.
56. Paul J. Crutzen “Albedo Enhancement by Stratospheric Sulfur Injections: A Con-tribution to Resolve a Policy Dilemma?” Climate Change 77, nos. 3–4 (August 2006): 211–19. “To compensate for a doubling of CO2,” Crutzen notes, “the required continuous stratospheric loading would be sizeable. . . . [S]ome whitening on the sky, but also colorful sunsets and sunrises would occur” (p. 213).
57. Edward Teller, “Sunscreen for Planet Earth,” Wall Street Journal, October 17, 1997. Teller concludes his article as follows: “[I]f the politics of global warming require that ‘something must be done’ while we still don’t know whether anything really needs to be done—let alone what exactly—let us play to our uniquely American strengths in innovation and technology to offset any global warming by the least costly means possible. While scientists continue research into any global climatic effects of greenhouse gases, we ought to study ways to offset any possible ill effects. Injecting sunlight-scattering particles into the stratosphere appears to be a promising approach. Why not do that?”
to be continued…
Courtesy: TELOS
The Future of Liquid Biofuels for APEC Economies (part –VI)
Continued from Volume V, Issue No. 6…
The Future of Liquid Biofuels in APEC Economies
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he production and consumption of liquid biofuels in the APEC region has increased substantially during the past few years, in response to several factors: energy security, urban air quality, climate change, and rural development. These drivers operate with different weights within the APEC grouping. Heavily urbanized economies favor urban air quality as well as the climate change offset potential with some energy security emphasis. Agricultural economies with high levels of food security have favored the rural development and stabilization of agriculture that comes from having additional product demands. In the
Economic Drivers for Biofuels
The so-called first-generation (Gen-1) biofuels (ethanol and FAME-biodiesel) are produced from sugars derived from sugarcane, sugar beet, and cereals in the case of ethanol; and from fats, oils, and greases (FOG) for biodiesel. These first-generation biofuels are based on food and animal feed commodities, and the consumption of these for biofuel are in competition with agricultural product markets. In retrospect, it was obvious that established and well-developed crop production systems would be the first to be used for biofuels. The infrastructure, existing capital investment, and human capital were all in place. Cereals at more than 2 Gt yr-1 production represent the majority of the solar energy captured by agriculture, and have been under continuous development for centuries with particularly rapid advances in productivity since the 1950s. Oilseed crops also have had an extraordinary growth rate in the past 50 years. Their use for energy is, of course, an economic decision, which was assisted by financial subsidy policies in pursuit of one or more of the goals identified above. The relationship between crude oil prices and foodstuffs has, in fact, changed during the past 40 years. Prior to the oil crises of 1973 and 1981, it was a truism that when oil and food were compared on the basis of their energy content, the ratio of food price to oil was often > 10:1. This started to change in the 1980s, after the second of the world’s oil shocks and a ratio decrease of 2 - 4 (except for periods when food commodity prices spiked on adverse weather or policy shifts in land set-asides and subsidies). One particular commodity crop, maize, was less than double the oil price for much of the 1990s, and the absolute difference of less than 3 $ GJ-1 was surmounted by the early
Figure 13 Commodity Price Index - IMF in SDR
Source: IMF, 2008
This post-2000 change is reflected in the commodity index of the International Monetary Fund (IMF) (Figure 13), which highlights the rapid increase in almost all commodities except for agricultural raw materials including timber and wood products. The petroleum index overtook food at the end of 2005, and this meant, for the first time, that renewable carbon-based energy was priced at about the same or less than that of petroleum energy.
Figure 14 shows the evolution of crude oil prices (in dollars of the year) against that of major food commodity crops from the market prices posted in the United Nations Conference on Trade and Development (UNCTAD) database.
Figure 14 Food Commodity and Crude Oil Prices Trends
Source: UNCTAD, 2008
The recent price increases in food and feed are causing concern, especially for the rural and urban poor who are not self-sufficient and for whom food already represents most of their income. Biofuels policies are being scrutinized as a contributor to demand at a time when increasing meat consumption is diverting grains from food to feed; and after a series of crop failures due to drought in Australia have decreased the ratio of stocks to consumption to the lowest levels in several decades - since 1995, stock levels have declined by 3.5 % yr-1 (IFAD 2008). However, agriculture is facing stresses without biofuels. While the population has increased at a somewhat constant rate of 70 million per year for the past 12 years, the increase in cereal production seems only to be keeping pace; in fact, per capita cereal availability has been constant at about 340 kg. Meat production, however, has been increasing rapidly with the per capita consumption increasing at a constant rate of 550 g per person per year.
to be continued…
Courtesy: Asia-Pacific Economic Cooperation
NEWS BRIEF
NATIONAL
OIL & GAS
Upstream
ONGC, GSPC revise gas reserves estimate
August 5, 2008. ONGC says its gas reserves in its blocks in the Krishna-Godavari basin is 6.37 Trillion cubic feet (tcf). This includes smaller discoveries made in the basin. The Directorate General of Hydrocarbons (DGH), the government agency which, presides over the exploration and production sector, has already approved reserves of around 2 tcf in ONGC’s first discovery in a ultra deepwater well in the basin. GSPC has also said its gas reserves in its Deendayal block in the basin is 5.6 tcf, higher than the 1.6 tcf that the DGH has already approved. The Gujarat-based company has discovered gas in more wells in the block and has now revised its earlier estimates. This estimate, however, does not include its recent gas discovery in a new well in the Deendayal block, studies of which are currently being carried out. The revised reserves of the two companies taken together is around 14 tcf, larger than Reliance Industries’ reserve of 11.3 tcf in the D6 block in the K-G basin, the largest discovery in the country so far. The company plans to start producing gas from its deepwater block in the K-G basin from 2013, once a rig arrives in 2010 and carries out further drilling in the block. Gas availability in
China,
August 5, 2008. China Petrochemical Corp., also known as Sinopec Group, has joined the bidding for London-listed Imperial Energy Corp. Plc. Sinopec Group is launching a bid for Imperial Energy after
ONGC plans to set up offshore supply base in Andhra
August 1, 2008. To expedite development of its Oil & Gas finds off the coast of
Indian Oil to shut refinery units from September
August 4, 2008. Indian Oil Corp plans to shut half of its 240,000 barrels per day Panipat refinery for three weeks from September 18 for maintenance, cutting naphtha exports in October. Naphtha production at the plant in the northern state of Haryana was already lower as it was being processed to produce gasoline for local markets. Other than the crude unit, the firm plans to shut a 1.7 mtpa hydrocracker, a 3.5 mtpa diesel hydrotreatment unit and a 2.4 mtpa coker for maintenance. IOC has about 10 refineries spread across
Mahanagar Gas in talks to increase supplies
August 3, 2008. Mahanagar Gas (MGL), which supplies gas to households and vehicles in Mumbai, is in discussions with four prospective gas suppliers for the supply of one mcmd of gas at a price of $4-6 million British thermal unit (mBtu) as it plans to expand its network to other cities in
MRPL phase III expansion to be over by 2011
August 3, 2008. The third phase expansion project of Mangalore Refinery and Petrochemicals Ltd (MRPL) is likely to be completed by the end of 2011. The third phase of the project envisages increased capacity of crude throughput from 9.69 mtpa to 15 mtpa, addition of secondary processing unit for increasing the distillate yield by about 10 per cent, and capacity to process high tan crude. The land acquisition work is almost complete and relocation of project-affected people is in progress. This will facilitate commencement of site activities.
The Union Ministry of Environment and Forests has issued environmental clearance for the project. The Government has notified the phase three refinery project of the company eligible for income-tax exemption under Section 80 IB (9) of the Income-Tax Act, subject to fulfilling the conditions stipulated therein.
RPL to begin Euro-III grade fuel production
July 30, 2008. Reliance Petroleum Ltd (RPL) is likely to begin production of Euro-III grade fuel from its under- contruction refinery at Jamnagar by September end or early October, even as the company is scouting for oil storage facilities globally to market products. Trial runs at the 580,000 barrels per day (29 mtpa) refinery will begin in August. The refinery is also likely to start producing Euro-IV grade by end of the year. The company will buy extra crude oil from
Transportation / Trade
Indian oil imports up by 53.4 pc in June
August 1, 2008. Rising crude prices have pushed up
Oil firms to raise diesel imports
July 31, 2008. Indian Oil Corporaton (IOCL), the nation’s biggest refiner, and its state-run counterparts, BPCL and HPCL, may import 3.5 million tonnes (mt) of diesel in the year ending March 2009 to meet demand for the fuel. IOCL, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) imported 2.93 mt of diesel in the last financial year, making good the shortfall in supply created by increased exports from Reliance Industries’ Jamnagar refinery in Gujarat. IOCL will increase diesel imports to 1.2 mt in the financial year to March 2009 from 0.67 mt tonnes last year. The refiner has imported 0.20 mt of the fuel so far this year. The company does not plan to import diesel in the next two to three months as demand usually lows during the monsoon. Demand for diesel is growing at the rate of around 25 per cent, while the Indian refiners have capacities to meet the growth in demand up to 15 per cent. The higher demand and production capacity constraints necessitate increased imports. Reliance exports almost all of the 11 mt of diesel it produces from its refinery after it was given the status of an export-oriented unit early last year. Oil marketing companies sell diesel to industrial users as well as retail consumers at the same subsidised prices. This has created the jump in demand. Diesel is the largest-selling fuel in the country. The country consumed 47.64 mt of the fuel in 2007-08. Consumption is expected to be higher by around 20 per cent this year.
Policy / Performance
ONGC gets shipping relief on $8 bn offshore investment plan
August 4, 2008. The shipping ministry has granted relief to state-owned Oil and Natural Gas Corporation on the issue of the age of vessels it hires, saving the flagship explorer's $8 bn investments planned to bring new offshore fields in the west and east coasts into production during the 11th five-year plan. The shipping ministry had recently issued guidelines for hiring of vessels and barred ships over 25 years from sailing in Indian waters. This threatened to ground ONGC's offshore activities as most of the 200 vessels deployed annually by the company are over 25 years old but certified fit and seaworthy. Oil companies use different types of ships for carrying equipment, men and materials to mid-sea drilling or pumping facilities. There are also specialised barges used for construction of platforms on the sea and to lay pipelines etc. ONGC had already started work on its $8 bn offshore plan and the next 3-4 years shall see intense activity at both the coasts. The company is of the view that the availability of vessels is precarious due to increased demand which is triggered by spurt in oil prices and therefore, it will not be possible to engage new vessels even at higher prices. The company stressed that this shall seriously hamper the offshore construction works and will adversely affect oil and gas production.
Ministry seeks revival of RBI’s special liquidity window for oil companies
August 1, 2008. The Petroleum Ministry has sought resumption of the Reserve Bank of
POWER
Generation
Reliance Power to raise $594 mn from IDBI
August 5, 2008. Reliance Power (R-Power) will raise Rs 2,500 crore ($593.82 mn) from IDBI Bank for building an ultra mega power project (UMPP) at Krishnapatnam in Andhra Pradesh. The multi-tranche transaction is expected to begin immediately after signing the letter of credit. The Reserve Bank of India (RBI) had recently approved R-Power’s proposal to raise $2 bn (about Rs 8,000 crore) from foreign banks for the proposed 4,000 MW project. ABN Amro, Standard Chartered and HSBC are believed to be in talks with the company to finance the project. The coal-fired Krishnapatnam project will need Rs 16,000- 17,000 crore ($3.8 – 4 bn). Out of the total capital outlay, the company plans to tie up Rs 14,000 crore ($3.3 bn) as debt and is engaged in talks with a slew of domestic lenders including Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) for the purpose. The Krishnapatnam project is expected to begin operations in 2012-13. Similarly, R-Power is raising about Rs 7,000 crore ($1.6 bn) from a slew of Indian financiers including State Bank of India (SBI), Canara, PFC, REC, IIFCL and Hudco for another UMPP at Sasan in Madhya Pradesh. The RBI has given its clearance for external commercial borrowings worth $2 bn for the coal-fired Sasan project. About $1 bn is expected to be raised from three Chinese banks including China Exim Bank, Chinese Development Bank and China Export & Credit Insurance Corporation (Sinosure). The remaining debt will be raised from foreign banks such as ABN Amro and HSBC.
BECL to use sea water to generate power
August 5, 2008. BECL's Pithead Power Project at Padva village in
Adhunik Group to set up 1 GW power plant in Jharkhand
August 4, 2008. Adhunik Thermal and Power Ltd, a unit of Adhunik Group, would invest Rs 4,500 crore ($1.06 bn) for setting up a 1,000 MW power plant in Jharkhand. The plant, to be located at Kandra in Saraikela-Kharswan district, would come up in two phases. The company has already placed an order for a 2x135 MW unit to be set up in the company premises. The company has been allotted coal mines jointly with Tata Steel and the process of getting environmental clearances and land acquisition is underway.
Expansion plans of the Group include adding two waste heat recovery boilers of Adhunik Alloys and Power Ltd (APPL) to generate 30 MW (2x15 MW) power out of waste gases, which will save around 11,000 tons of coal per month. The boilers would help in keeping pollution levels at zero, as well as aid in keeping the steel production cost low. The 2x15 MW power project is likely to be synchronised by March-end 2009.
Torrent Power plans to generate over 8.6 GW
August 4, 2008. The city-based Torrent Power has unveiled ambitious plans to build a string of new and brown field power projects that will give it an installed generating capacity of over 8,600 MW. On completion, it stands to join a league of major power producers that includes Tata Power, National Thermal Power Corp and Reliance Power. According to the annual report of the company for 2007-08, the plans include a generation upgrade at the 1,147.5 MW gas-based combined cycle power project coming up at Sujen in
The first phase of the Sujen project, which was expected to be commissioned in the first quarter of current fiscal, is delayed. The company has tied up its entire requirement of gas for the project. Based on Sujen project's cost of nearly Rs 3 per MW, the cost of all projects could be in the region of Rs 225 bn. The next big project in south
In the first phase, it is proposed to erect a plant capable of generating 400 MW of electricity. This apart, Torrent is planning a 2,000 MW coal-based thermal power plant in Pipavav in Amreli district in the Saurashtra region. The coal will be sourced from Orissa. A new company, Torrent Pipavav Generation Ltd, has been incorporated as a subsidiary to implement the project. Yet another project on the drawing board is a 1,000 MW coal-based thermal power project in Chattisgargh. An agreement has already been signed with the state government and the Chhattisgarh State Electricity Board in this connection. All these projects will add up to 8,647 MW for Torrent qualifying it to be a member of
Tata Power's existing thermal generation capacity is 2,389 MW, which is expected to reach a total of 12,861 MW by 2013. The state owned NTPC, which currently has a generating a capacity of 27,350 MW, is planning to add another 45,000 MW by 2017. Reliance Power Limited its own and through subsidiaries is currently developing 13 medium and large sized power projects with a combined planned installed capacity of 28,200 MW.
Thermax bags order for power plant construction
August 4, 2008. Engineering firm Thermax has bagged a Rs 415 crore ($97.8 mn) order from a steel company for setting up a captive power plant. The contract is for steel company’s upcoming blast furnace complex on an Engineering Procurement and Contract basis. The captive power plant would use the waste gas from the furnace to produce power. Thermax scope includes design, engineering, manufacture and commissioning of captive power plant.
BHEL bags $47 mn HEP contract in
August 4, 2008. State-run equipment firm Bharat Heavy Electricals Ltd has bagged an order worth Rs 200 crore ($47.1 mn) for a hydro-electric power project (HEP) in
Under the contract, BHEL would be responsible for the design, engineering, manufacture, supply and supervision of installation as well as commissioning of electro-mechanical equipment. Major equipment to be supplied for the project comprises hydro turbines, generators, transformers, controls, monitoring and protection system and switchgear. The project includes two so-called Pelton type hydro-generating units of 100 MW each. It is being funded by the Government of India's Line of Credit to
Rolta
July 30, 2008. With the Indo-US nuclear deal back on track, city-based technology firm Rolta
CESC signs pact with
July 30, 2008. CESC Ltd has entered into a memorandum of understanding with the Government of Bihar to set up a 2,000-MW power plant in the State’s Bhagalpur district at an investment of Rs 10,000 crore ($2.3 bn). In the first phase, a 660-MW plant would be set up at an investment of Rs 3,250 crore ($767 mn). In the second phase, two plants of 660-MW capacity each would be set up. The Union Ministry of Coal has been approached for facilitation of coal linkages or allotment of captive mines. CESC had applied to the Jharkhand State Electricity Regulatory Commission for a power distribution licence for
Transmission / Distribution / Trade
NTPC eyes Indonesian mine
August 5, 2008. The country’s biggest power utility firm NTPC has readied a $3-bn war chest for global buyouts. The company is learnt to be in negotiations to buy at least one coal mine in
MP owes NHPC arm $141 mn
August 4, 2008. The National Hydro Power Corporation (NHPC) has said the MP government had put its subsidiary Narmada Hydroelectric Development Corporation in trouble since outstanding dues to be received from the state government have reached more than Rs 600 crore ($141.4 mn). The return on equity saved the company from becoming sick. To make repayment, the state has to float bonds. The outstanding dues crossed Rs 600 crore [$141.4 mn (as in July 2007)] because power dues were not paid and there was a gap between provisional tariffs and fixed tariffs. NHDC has two projects, the Indira Sagar project (ISP) and Omkreshwar Project (OSP) of 1,000 MW and 520 MW, respectively. As of now NHPC and the state government, which has 49 per cent in NHDC, have reached an agreement under which the state will pay EMIs of Rs 11 crore ($2.5 mn) for 49 months. So far the state government has paid Rs 44 crore ($10.3 mn). NHDC started power supply from the Indira Sagar project from 2004 at Rs 1.70 per unit, and the rate was increased to Rs 2 per unit last year. This gap created an outstanding amount of Rs 205 crore ($48.3 mn) while on account of pending bills against a supply of approximately 5 million units of power per day the combined outstanding reached Rs 600 crore ($141.4 mn).
Punjab to get power supply from M.P.
August 4, 2008.
Adani in power purchase deal with MSECL
August 1, 2008. Adani Power Ltd (APL) has received the Letter of Intent (LoI) from the Maharashtra State Electricity Company Ltd (MSECL) for supply of 1,320 MW of electricity, to be generated with domestic coal at Mundra, under competitive bidding process at Rs 2.64 a unit. The company has already signed two power purchase agreements (PPAs) with Gujarat Urja Vikas Nigam Ltd (GUVNL) for the supply of 1,000 MW of power produced from the Mundra I and II power projects, and another 1,000 MW from the Mundra III at Rs 2.89 a unit (with imported coal) and Rs 2.35 a kilo Watt hour (kWh) or an unit (domestic coal) respectively. Recently, Adani Power had received LoI for supply of 1,311 MW of power, also to be generated at Mundra, from Haryana Power Generation Corporation Ltd (HPGCL) at Rs 2.94 an unit (imported coal). With this, Adani Power has completed tie-ups of long-term PPAs of more than 4,500 MW. The company is setting up total generation capacity of about 9,900 MW and with this LoI, the long-term tie-up of nearly half of the output from its various generation plants has been achieved. The company has six coal-fired thermal power projects under various stages of development or planning, with a combined power generation capacity of 9,900 MW at a cost of around Rs 43,000 crore ($10.1 bn). It intends to sell power under a combination of long-term power purchase agreements to industrial and State-owned consumers as well as on merchant basis.
The Adanis have been able to provide competitive bids as they have presence across the entire value chain of power business. They have coal mines in
‘Indian's largest hydropower projects needs a new mandate’: MoP
August 5, 2008. According to the minister of state for Power and commerce, Jairam Ramesh, the Bhakra-Beas Management Board (BBMB) which manages the 2860 MW power generation and transmission network in the Sutlej-Beas-Ravi Basins is in urgent need of a new mandate. He emphasized that the mandate of the BBMB has to be expanded to give it a role in developing hydel projects in other states and in neighbouring countries as well (like what the public sector Sutlej Jal Vidyut Nigam Limited has achieved in Nepal). He indicated, one option would be to float a separate company owned by the four member states of BMMB—
CIL wants power units to import more coal
August 5, 2008. Coal India Ltd. (CIL), which achieved growth of 4 per cent on supplies to the power sector during the current year against the same period last year, claimed that it currently had stock of 38.5 mt of coal and could therefore meet power sector requirements across the country, but would prefers power units to imports. As per the coal major, coal import was dearer today as prices of non-coking coal had risen from $60 a ton to almost $115-$120 a ton in international markets. Price of coking coal, mostly used by steel units, rose from $140/t to over $300 a ton. Power sector was putting pressure on CIL for supply of coal as more and more power units turned critical with coal stocks drying up. CIL alleged power stations were exceeding projected generation figures and reporting high plant load factor (PLFs) to earn bonuses and incentives from the government. While making annual coal demand, the power stations project a PLF of 80 per cent but later generate at over 98 per cent PLF, requiring more coal. CIL complained to the power ministry that excess generation by power stations led to coal demand exceeding targets. Shortage of wagons and rakes was stalling coal supply to power stations.
Companies queue up for nuclear power play
August 5, 2008. It is all set to emerge as the next big rush for India Inc. Within days of the UPA government winning the trust vote on the Indo-US nuke deal and the International Atomic Energy Agency (IAEA) approving it, Indian companies seem to be making a beeline for a piece of the nuclear power business pie. Soon after the deal was voted on, JSW Steel was keen to jump into the bandwagon. Oil and gas major ONGC would start mining uranium with Uranium Corporation of India (UCIL). ONGC’s international uranium mining operations will be handled by a new joint venture company ONGC UCIL, through a 74:26 partnership. The collaboration will leverage ONGC’s expertise in exploration of hydrocarbons to commercially exploit uranium. Engineering and constructions major L&T is also hopeful of foraying into reactor manufacturing. However, private sector players are yet to be allowed an entry into nuclear power generation. It will require an amendment of the existing Atomic Energy Act. Till then, R-ADAG is also believed to be holding exploratory talks with global majors for a foray into manufacture of nuclear power reactors. Reliance Infrastructure is also exploring the possibility of the company's entry in the nuclear power and is in talks with global builders of nuclear reactor like General Electric, Russia-based Atom Story Export (ASE) and state-run Nuclear Power Corporation of India (NPCIL) for a possible JV. Reliance Power has planned an initial investment over Rs 20,000 crore ($4.7 bn) to foray into nuclear power generation. State-owned Bhel has plans to spend Rs 1,500 crore ($356.2 mn) in two years for building plants to supply components for reactors of 1,600 MW. Bhel will set up a 50-50 venture with state-run NPCIL to supply components for nuclear plants with a capacity to generate 700 MW, 1,000 MW and 1,600 MW of power.
NTPC to study impact of hydel project on Bhagirathi river
August 4, 2008. State-owned power utility NTPC Ltd has set up a committee to examine the impact its 600 MW Loharinag Pala hydropower project in Uttarakhand would have on the Bhagirathi river in the wake of allegations that the project would harm the river’s flow. The committee set up by the utility to look into issues surrounding its Loharinag Pala project in Uttarakhand will submit a report within three months. The people in the area and several sadhus have demanded that there should be sufficient flow in the river after the project is commissioned. The Loharinag Pala project will generate electricity from the natural flow of the Bhagirathi, an important tributary of the
Orissa framed policy for power quota
August 4, 2008. The orissa state government formulated policy guidelines for power generators covering all those who have already signed MoUs and those who are in the pipeline and stipulated availability of power as state shares with the quantum being linked to coal block and coal linkages. The state cabinet accorded approval to a set of guidelines recommended by a task force on power related issues. The task force had dealt with policy guidelines for future independent power producers who have not signed MoUs, review of the power purchase agreements with power producers who have already signed MoUs, guidelines for ultra mega power projects and for central public sector undertakings like NTPC. Henceforth the MoUs will have a provision entitling a nominated agency authorised by the state government to purchase 14 per cent power from a generator with coal linkage and 12 per cent power from those without coal linkage. The power purchased from the generator by the state or its authorised agency will be at variable costs determined by the OERC. For existing power producers, the same has been fixed at seven and five per cent of the generation respectively. However with regards to ultra mega power projects, the state will have a right to purchase upto 50 per cent of power from it through competitive bidding at the lowest bid price only. The government has also said that ultra mega power projects should contributed five per cent of their profit to the peripheral development fund. The MoUs and power purchase agreements signed already may be modified and the progress of existing independent power producers will be reviewed. The central sector power generators will however follow government of
Govt to set up 3 more ultra mega power projects
August 4, 2008. The government decided to set up three more ultra mega power projects, with 4,000 MW capacity each, in Tamil Nadu,
ADAG ropes in NPCIL's ex-head for N-power project
August 4, 2008. Even as the Manmohan Singh government progresses towards closing the civilian nuke deal with the
Govt approves $4 bn for power reforms
July 31, 2008. The Centre on approved an allocation Rs 17,033 crore ($4 bn) for revamping a power sector reforms programme aimed at cutting commercial and other losses of state utilities. The decision to restructure the Accelerated Power Development and Reforms Programme (APDRP) covering 571 projects in the first phase was taken by the Union Cabinet at its recent meeting. Out of the Rs 17,033 crore ($4 bn), the grant component is Rs 6,445 crore ($1.5 bn) and the loan component is Rs 2,274 crore ($535 mn). The loan will be for those who accept certain parameters both in the utility areas and project areas. In the project area the utilities have to bring down Aggregate Technical & Commercial (AT&C) losses to below 15 per cent, whereas in the utility area which is a larger area, they have to bring them down by 3 per cent or 1.5 per cent depending upon where they are. If they achieve the parameters, 50 per cent of loan will be converted as grant. The government had approved APDRP in March 2003 to accelerate distribution sector reforms. Besides reducing AT&C losses, the scheme seeks to bring commercial viability in the power sector and reduce outages and interruptions. Under the scheme, the government provides 50 per cent central assistance for strengthening and upgrading sub-transmission and distribution network. According to the Power Ministry, overall AT&C losses are around 35 per cent against about 39 per cent in 2001-02.
Andhra imports coal to tide over power crisis
July 31, 2008. The Andhra Pradesh government is importing one million tonne of coal from
Recast power reforms programme cleared
July 31, 2008. Nearly a year and half into the current Plan period, the Government has finally given its nod for the continuation of its key power reform scheme during the Eleventh Plan. The Accelerated Power Development and Reforms Programme (APDRP), in a new restructured format approved by the Centre, entails funding to the tune of Rs 51,577 crore ($12.1 bn) during the Plan period. The Cabinet Committee on Economic Affairs (CCEA) recently approved the proposal to continue the programme with revised terms and conditions. The focus of the programme shall be on establishment of base line data and fixation of accountability, and reduction of aggregate technical and commercial (AT&C) losses through strengthening of sub-transmission and distribution networks and adoption of Information Technology. Marking a departure from the APDRP in its previous avtar, the projects under the revised scheme shall be taken up in two parts. The first part (Part-A) would include the projects for establishment of baseline data and IT applications for energy accounting while the second part (Part-B) would focus on regular distribution strengthening projects. Initially, 100 per cent funds for Part-A of the scheme and 25 per cent funds for Part-B projects shall be provided through loan from the Centre. For special category States, the Central loan for the Part-B projects will be 90 per cent while the balance funds shall be raised from financial institutions. The entire amount of loan and interest for Part-A projects shall be converted into grant once the establishment of the required baseline data system is achieved and verified by an independent agency. Up to 50 per cent loan and interest of Part-B projects shall be converted into grant in five equal tranches on achieving the 15 per cent AT&C loss in the project area on a sustainable basis for a period of five years. An amount equivalent to 2 per cent of the grant for Part-B projects is proposed as incentive of utility staff in project areas where AT&C loss levels are brought below 15 per cent. Participation of the private utilities in APDRP would be reviewed after a period of two years from the date of sanction of the restructured programme. A steering committee under the Power Secretary would sanction projects and monitor the implementation of the revised Scheme.
Coal
July 31, 2008. Coal
CIL has recently located opportunities to acquire a few small non-coking coal deposits in
Once the framework is created, CIL will launch the geological due-diligence. Depending on the viability of the deposits, CIL would have to take the final approval from the Union Government for requisite investments. Considering that CIL is empowered to take investment decisions of a maximum of Rs 500 crore ($117.6 mn) which is grossly insufficient for acquisition of large assets in the current price regime the company had located smaller deposits to ensure fast acquisition of assets, if found suitable. Parallel effort is on to convince the Centre for streamlining the existing process requiring Cabinet approval for such investment decisions. Meanwhile, CIL is hoping to be awarded the Navaratna status shortly, which would remove much of its existing problems in investing abroad.
‘Power sector likely to miss 11th plan target’: AEP
July 31, 2008. To achieve the power generation targets fixed in the 11th Plan period, the government may have to revise the investment in power projects in view of 25 % rise in prices of key input materials including cement, steel, aluminum, copper and zinc over last two years, an ASSOCHAM Eco Pulse (AEP) Study has revealed. With WPI based inflation rate hovering close to 12 % and expected to be in double digits for quite some time, the proposed power projects in
The project cost of the power plants might also see a big upsurge because of rapidly rising fuel costs in the recent times. The Wholesale Price Index (WPI) for Fuel, power, light and lubricant with 14.23 % weight in WPI, consisting of key inputs for power generation like coal, gas and oil, grew much faster than the over-all WPI. The over-all WPI growth for the first six months of 2008 stood at 9.41 % while the WPI for Fuel, power, light and lubricant registered a staggering sharp rise of 12.53 %. The declining growth rate of the six core infrastructure industries with a combined weight of 26.7% in the index of industrial production (IIP) could also pose problems for the power projects. The core infrastructure industries providing major inputs for the power plants like cement, finished steel, coal, electricity have witnessed major slow-down in the growth rate for the first five months of 2008.
The growth rate of index for six core infrastructure industries has gone down considerably; the five monthly average growth rate for the six core infrastructure industries for 2008 is recorded at below 6 % level (5.92) while for the corresponding period in 2007 it was above 8 % (8.02). This significant downturn in the industrial activity may also hamper the pace of power projects in
Coal
July 29, 2008. Coal
Meanwhile, Coal
INTERNATIONAL
OIL & GAS
Upstream
StatoilHydro, Sonatrach make 5th discovery in
August 5, 2008. StatoilHydro has, together with its partner Sonatrach, made a fifth discovery in the Hassi Mouina license in the Sahara desert in
AWE JV confirms Netherby-1 as gas discovery
August 4, 2008. According to AWE JV, logging and evaluation of the Netherby-1 exploration well located in VIC/P44, approximately 4 kilometers north of the Henry-1 gas discovery, has been completed. Good quality gas-bearing Waarre A Sandstones were intersected. The well is currently being sidetracked and will be completed as a producer and tied by pipeline to Henry and Casino gas fields, as part of the Henry development currently underway. Participants in VIC/P 44 are operator Santos Limited with 50%, AWE with 25% and Mitsui E&P Australia Pty Ltd with 25%.
Sibir rides high with production of 0.07 mn bopd
July 31, 2008. According to Sibir on July 28, 2008 equity production from its upstream exceeded 70,000 bopd. A new production record was reached as Sibir's 50:50 joint venture with Shell in the Salym group of fields in
Petroecuador, ENAP to look for gas in
July 31, 2008. State-owned Petroecuador plans to create a joint venture with Chilean state energy company ENAP to explore for natural gas in the
The Ecuadorian government is looking to natural gas as a future energy source that will allow the Andean nation to shift its fuel mix away from gasoline. Petroecuador also plans to form a joint venture with Venezuelan state-owned oil giant PDVSA to explore for natural gas in a different area of the
Japex to invest Y110 bn in overseas oil, gas development
July 30, 2008. Japan Petroleum Exploration Co. (Japex) plans to spend Y110 bn on overseas oil and gas development projects from fiscal 2008 through fiscal 2012 to help spur production growth. As part of this, Japex will expand natural gas production off the east coast of the
An environmental assessment has begun at an undeveloped mine separate from the current production site, and the company will confirm the underground reserves and begin constructing facilities. It currently produces 8,000 barrels a day in
Downstream
Dominican government buys Shell's stake in refinery
August 5, 2008. The
Franklin Mining plans to build GTL plant in
August 5, 2008. Franklin Mining, Inc. signed a letter of intent to construct a gas to liquid processing plant capable of producing 20,000 barrels per day of diesel fuel, kerosene and other petroleum products. Under terms of their letter, the Provincial government will provide a daily allotment of six mcm of natural gas per day for the duration of the agreement. Franklin Mining, Inc. has mining and energy interests in the
Technip wins services contract for Horizon project
August 5, 2008. Technip has been awarded by Canadian Natural Resources Ltd. a new engineering and procurement (EP) contract for the expansion of a facility converting heavy oil into lighter synthetic crude (upgrader). It is part of Tranche 2 of the Horizon project, located north of
The contract is scheduled to be completed in third quarter of 2011. This is the fourth contract awarded to Technip by Canadian Natural Resources for the same project. Technip is one of the leading corporations in the field of oil, gas and petrochemical engineering, construction and services. The Group's main operating centers and business units are located in
Petrofac secures another gas plant project in
August 1, 2008. Petrofac, the international oil & gas facilities service provider, has secured a further award from Khalda Petroleum Company (KPC). The contract, to provide engineering and procurement (EP) services for an additional gas train should convert to a lump-sum engineering, procurement and construction (EPC) contract on a pre-agreed basis. This will be KPC's fifth gas processing facility (SGT5) to be built at Salam in the
The award will include Front End Engineering and Design (FEED), EP services and procurement of long lead items. It is anticipated that this will be converted into a full lump-sum EPC contract within the next two to four months. The initial award will facilitate fast-track execution of SGT5 by making best use of Petrofac's current mobilization in the region and as a result the new train is expected to come on stream toward the end of 2010.
The addition of SGT5 will bring KPC's total gas processing capacity in the
PetroChina to advance Pengzhou refining project
August 1, 2008. China National Petroleum Corporation (PetroChina Group) chooses
Transportation / Trade
Chavez wants to restart Venezuela-Argentina gas pipeline
August 5, 2008. Venezuelan President Hugo Chavez stated that, it is time to restart the issue of the Gas Pipeline of the South, which would link
ETP completes pipeline projects in
August 5, 2008. Energy Transfer Partners, L.P. (ETP) announced the completion of two
The expansion links an additional 600 mcf per day of capacity out of the Barnett Shale to major markets currently accessed by the Partnership's extensive pipeline network. The Paris Loop and Maypearl to Malone pipelines allow natural gas producers and shippers access to a wide range of markets and further demonstrate the Partnership's efforts to stay ahead of the rapidly expanding production in the Barnett Shale. The completion of the Paris Loop and Maypearl to Malone natural gas pipelines is an integral part of the Partnership's overall expansion efforts. The Partnership plans to bring online more than 700 miles of natural gas pipelines in 2008, with more than 500 miles of pipeline expected to be completed in
Projects expected to come online later this year include the Southern Shale,
$20 bn price tag for South Stream to link Siberian gas fields
July 30, 2008. The South Stream gas pipeline, planned to link Siberian gas fields to
Policy / Performance
ASEAN to discuss gas network expansion
August 4, 2008. Energy ministers from Association of Southeast Asian Nations (ASEAN) member countries will discuss the possibility of expanding a cross-border natural gas pipeline network as well as increasing cooperation on power grids during an annual meeting. Senior energy officials will propose to ministers a plan to promote the Natuna gas field offshore
The proposed Petroleum Security Agreement, which is aimed at helping member countries cope with shortages or oversupply of crude oil and petroleum products, will be finalized by senior ASEAN energy officials before being presented at ministerial level for signing later. Under the draft agreement, oil exporters in
Nigerian unrest spurs new developments in Sub-Saharan
August 4, 2008. Violence, corruption and unrealistic demands from foreign investors have benefited natural gas development across Sub-Saharan Africa by driving investment from
Of 260 gas fields surveyed,
There is little doubt that
OPEC July output hits 2008 high on Saudi,
August 4, 2008. OPEC production reached its highest level so far this year in July on increased barrels from
Saudi Arabia and OPEC's 11 other members with long-ignored production quotas increased output collectively by 241,000 barrels a day, or almost 1%, to 30.225 million barrels a day.
Iraq, which is not limited by OPEC agreements to how much oil it produces, pumped an additional 100,000 barrels a day to a daily rate of 2.45 mn barrels. Production in
Russia eyes Europe gas link stake at
July 30, 2008. The
POWER
Ultra Electronics in nuclear talks with British Energy
August 4, 2008. Ultra Electronics, the battlespace IT company, is in talks with British Energy to provide control systems for nuclear power stations. The company’s reactor control systems are being fitted to the Royal Navy’s Vanguard Trident nuclear submarines and will also go into the next generation of Astute subs. British Energy owns eight nuclear power stations in the
EPA grants air permit for coal plant
August 2, 2008. The Environmental Protection Agency signed off on the permit for the Desert Rock Energy Project, which will set a new standard for coal-fired plants in the
Transmission / Distribution / Trade
'Power rates could drop by P2 per kWh’: UP study
August 5, 2008. According to initial results of a study commissioned by the University of the Philippines, power rates could be reduced by as much as P2 per kilowatt-hour (kWh) if the government and the private sector will come together to do their share in reducing electricity rates. The research study had listed 10 items in the power rates that would be looked at. The paper has four parts including generation; transmission and distribution; other issues such as stranded cost, incremental currency exchange rate adjustment (ICERA), subsidies and taxes; and conclusion and summary of how to reduce the electricity rates by at least P2.0913 per kWh. Among the items in the list of possible areas that could help in the reduction of power, according to the UP research, and their corresponding savings are: Manila Electric Co. (Meralco) power cost at optimal mix (88 centavos per kWh); reduction in generation rate adjustment mechanism (GRAM)and ICERA charges of the National Power Corp. (Napocor), (30 centavos); reduction in Napocor basic average generation charge from peso appreciation (0.06 centavos); reduction in Napocor basic charge average generation charge from plants sold and removed from rate base (32 centavos); adjustment of the National Transmission Corp. (TransCo) charges from removal of appraisal increase (18 centavos); adjustment of distribution charges from removal of appraisal increase (10 centavos); cost of missionary electrification assumed by government (3.73 centavos); removal of charge for benefits to host communities (0.04 centavos); removal of value-added tax (VAT) system loss 0.6 centavos and removal of government unencumbered share of natural gas royalty (15 centavos). The reduction in electricity rates can be effected through a combination of simple adjustment in regulatory/implementing policy and amendment of the EPIRA. The study also recommended that there should be an adjustment in regulatory and other policies to auction values of Napocor’s generating assets; for proper application of the performance-based rate; and ICERA. These recommendations may also require legislative action such as the amendment of the EPIRA which include WESM; assignment of the government unencumbered share of the natural gas royalty by way of a corresponding reduction in generation charges; the removal of the universal charge for missionary electrification, stranded debts and stranded contract costs of Napocor, equalization of taxes and royalties; and environmental charge. The recommendations, however, elicited different reactions from the industry stakeholders.
Metrobank to merge two power units
August 5, 2008. The Metrobank Group of Companies is merging its power units Panay Power Corp. (PPC) and Avon River Power Holdings Corp. Both companies are owned by Claredon Towers Holdings Inc., a wholly-owned unit of the Metrobank Group’s Global Business Power Corp. (GBPC). GBPC is the largest independent power producer in the Visayas, with a total plant capacity of more than 230 MW, using coal and diesel technologies. PPC was incorporated on June 13, 1996 primarily to engage in the business of generating electric power. It owns and operates a 762 MW diesel fuel power plant in
Japanese grant for
August 4, 2008. More residents of Iganga and Bugiri districts will soon have electricity in their homes. The Japanese government has given
Electricity rates to rise for Empire District Co.
Jul 31, 2008. Customers of The Empire District Electric
Policy / Performance
Bush wants more coal-fired electricity
July 31, 2008. According to President Bush he is using his last six months in office to push new energy plans that include electricity from coal. According to him, reliable sources of electricity must be part of a strong economy, and there is no more reliable source of electricity than coal. He is of the view that coal should be part of the solution to reduce dependence on foreign oil and that the
‘Electricity supply key to development’:
July 31, 2008. According to Mozambican President, Armando Guebuza, rural electrification must be understood as a factor that drives development, and not just as a source of light. President stressed that energy is a key factor in driving economic development, and urged beneficiaries of the Changara project to make every effort to take advantage of the electricity now available. According to him, the rural areas should learn to associate the availability of electricity to the local initiatives development fund, the sum of at least 7 mn meticais (about $290,000) given from the state budget to every district every year, in order to step up the fight against absolute poverty. The expansion of the national electricity grid to Changara is part of a government programme to supply power to all district capitals, and it involved the construction of 72 kilometres of transmission lines from the substation at Matambo, to Changara town. Along this line, at least 400 families are already benefitting from the electricity produced at the Cahora Bassa dam on the
Renewable Energy Trends
National
NTPC, GE Energy, ADB in pact for renewables venture
August 5, 2008. State-owned generation major NTPC Ltd has joined hands with the Manila-based Asian Development Bank (ADB), GE Energy Financial Services, Kyushu Electric Power Co and Brookfield Renewable Power to form a joint venture firm to undertake renewable power generation. The companies signed a memorandum of understanding (MoU) to form the join venture firm, in which NTPC will initially take a 40 per cent stake while the remaining would be equally shared by other entities. The proposed venture will, over the next three years, develop “
NTPC aims to invest up to Rs 6,000 crore in creating nearly 1,000 MW of renewable energy capacity over the next 10 years. The move could potentially transform the thermal major into the country’s largest green power producer in the coming years. Besides the hydro sector, where the company plans to invest a bulk of its renewable energy resources and has already made a foray, the key thrust area would be wind energy. Other areas where NTPC is eyeing opportunities include micro-hydel projects, geo-thermal energy and small biomass projects.
YES Bank strategic adviser to Windlab
August 4, 2008. Windlab Systems of Australia has appointed YES Bank as exclusive financial and strategic advisor for developing wind projects in
China will blow away
July 31, 2008. Less than six months from now
Experts also believe
Global
Gulf Ethanol reports successful biomass preprocessor testing
August 5, 2008. Gulf Ethanol Corp. announced the first successful testing of its biomass preprocessor. The prototype unit successfully processed raw feedstocks into an extremely fine powder that reportedly will allow cellulosic ethanol producers to improve results significantly. According to the U.S. Department of Energy, the initial sizing and grinding of biomass affects efficiencies and quality of all the downstream operations. Gulf Ethanol is an alternative energy company focused on the development of technology for the cellulosic ethanol industry with a particular emphasis on
Power giants likely to miss renewable energy goal
August 4, 2008. Electricity demand outpaced the growth of renewable energy production in
Solar Power breakthrough stores energy for later use
August 4, 2008. Within 10 years, homeowners could power their homes in daylight with solar photovoltaic cells, while using excess solar energy to produce hydrogen and oxygen from water to power a household fuel cell. If the new process developed at the Massachusetts Institute of Technology finds acceptance in the marketplace, electricity-by-wire from a central source could be a thing of the past. Until now, solar power has been a daytime-only energy source, because storing extra solar energy for later use is expensive and inefficient. But inspired by the photosynthesis performed by plants, Nocera lab, have developed a new process that will allow the Sun’s energy to be used to split water into hydrogen and oxygen gases. Later, the oxygen and hydrogen can be recombined inside a fuel cell, creating carbon-free electricity to power buildings, homes or electric cars - day or night. The key component in the new process is a new catalyst that produces oxygen gas from water - another catalyst produces valuable hydrogen gas. The new catalyst consists of cobalt metal, phosphate and an electrode, placed in water. When electricity from a photovoltaic cell, a wind turbine or any other source runs through the electrode, the cobalt and phosphate form a thin film on the electrode, and oxygen gas is produced. Combined with another catalyst, such as platinum, that can produce hydrogen gas from water, the system can duplicate the water splitting reaction that occurs in plants during photosynthesis. The new catalyst works at room temperature, in neutral pH water, and is easy to set up. This is a major discovery with enormous implications for the future prosperity of humankind. This project was funded by the National Science Foundation and by the Chesonis Family Foundation, which gave MIT $10 mn this spring to launch the Solar Revolution Project, with a goal to make the large scale deployment of solar energy within 10 years.
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