Energy News Monitor | Volume X; Issue 30

 

NEWS BRIEF

OIL & GAS

January 6, 2014. Oil and Natural Gas Corp (ONGC) will invest around $9 billion in bringing to production an array of oil and gas discoveries in its prolific Krishna-Godavari basin block off the east coast by 2017-18. ONGC has made 11 oil and gas discoveries in the Block KG-DWN-98/2, which sits next to Reliance Industries Ltd (RIL)’s KG-D6 block and Gujarat State Petroleum Corp’s Deendayal gas field. The block is divided into a Northern Discovery Area (NDA) and Southern Discovery Area (SDA). ONGC plans to make that investment in producing from discoveries in NDA. NDA holds an estimated 92.3 million tonnes (mt) of oil reserves and 97.6 billion cubic metres of inplace gas reserves spread over seven fields. ONGC had submitted to the Directorate General of Hydrocarbons (DGH) a declaration of commerciality (DoC) for the oil find in NDA and a detailed field development plan would be submitted in a year. ONGC bought 90 per cent interest in Block KG-DWN-98/2 from Cairn Energy India in 2005. Cairn still holds 10 per cent in the block. Before selling most of its stake and giving away operatorship of the block, Cairn made four discoveries in the area — Padmavati, Kanakdurga, N-1 and R-1 (Annapurna). Subsequently, ONGC made six significant discoveries — E-1, A1, U1, W1, D-1 and KT-1 in NDA — and the first ultra-deepwater discovery UD-1 at a record 2,841 metres. NDA comprises discoveries such as Padmawati, Kanadurga, D, E, U, A, while the ultra deepsea UD find lies in SDA. ONGC was looking at producing oil and gas from NDA using a floating production, storage and offloading (FPSO) unit. (www.business-standard.com)  

January 4, 2014. Reliance Industries Ltd (RIL) will add about 1-3 million standard cubic meters per day (mmscmd) of gas production at its eastern offshore KG-D6 fields this month as it begins the process of reversing the trend of falling output. RIL and its partners BP plc of UK and Canada's Niko Resources have spud the seventh well on the MA oil and gas field in the KG-D6 block in Krishna Godavari basin. The well, MA-8, is likely to be put on production this month. MA-8 is projected to produce a minimum of 1 mmscmd and a maximum of 3 mmscmd. At 3 mmscmd, MA-8 will be RIL's biggest gas producer well on KG-D6 currently. Production at KG-D6 has dropped to just about 12 mmscmd and MA-8 will help reverse the falling trend of last three years. The current output is made up of about 8.5 mmscmd from D1&D3 gas field and about 3.3 mmscmd from the MA field in the same block. RIL is also repairing a third of the wells shut at its main D1&D3 gas field to boost output by March. RIL had to shut 10 out of the 18 producing wells on D1&D3 due to sand and water flooding. It had also shut two of the six wells at the MA field due to high water and sand ingress. MA-8 will be the seventh well on the field. The KG-D6 fields, which began gas production in April 2009, hit a peak output of 69.43 mmscmd in March 2010 before water and sand ingress shut down well after well. D1&D3, the largest of the 18 gas discoveries in the KG-D6 block, produced 66.35 mmscmd, while 3.07 mmscmd was the output from the MA field, the only oil discovery on the block. Besides the fall in output from D1&D3, gas production from the MA field, which had hit a peak of 6.78 mmscmd in January 2012, has dropped. Of the current gas production from KG-D6, 11.7 mmscmd was sold to urea manufacturing fertiliser plants and the remaining consumed by the pipeline that transports the KG-D6 gas. The company has so far made 18 gas and one oil discovery in the Krishna Godavari basin block in Bay of Bengal. While the lone oil find, MA went on stream in September 2008, D1&D3 were put on production in April 2009. (articles.economictimes.indiatimes.com)

January 1, 2014. Following the successful drilling of the country's first shale gas exploratory well near Jambusar, Oil and Natural Gas Corporation (ONGC) has decided to drill more wells in Cambay region of Gujarat. The data from the first well near Jambusar has given ONGC more leads for further exploration that will help the company ascertain parameters in taking up commercial productions. The results of the first exploratory well will open a new chapter in shale-gas exploration in the country. ONGC has been spending ` 2,000 crore per annum on the exploration of oil and gas in Gujarat and Rajasthan. ONGC said, India has recoverable shale gas reserves of around 90 TCF, which can satiate India's energy demand for 26 years. Shale gas is natural gas trapped within layers of shale rock and can be utilised as cooking gas and for other commercial purposes. ONGC estimates India's shale gas reserve in the range of 500 to 2000 trillion cubic meters. The corporation has already planned to dig 30 shale gas exploratory wells across the country at the cost of ` 600 crore by 2014-15 These explorations are expected to be carried out in alliance with Conoco Philips, a US-based oil company that is leader in shale gas and deep-water exploration. (economictimes.indiatimes.com)

January 7, 2014. The government has directed GAIL India to use Indian ships for importing gas worth $2.5 billion annually from the US, a model that is practiced by Chinese oil firms to encourage domestic shipping industry. GAIL will require at least five ship to bring about 5.8 million tonnes of gas every year from the US starting September 2017 and there is a strong possibility of involving Indian shipyards in building liquefied natural gas (LNG) carriers. However, GAIL is reluctant to take any risk because of huge exposure in the deal. Any delay in delivery of ship would force the company to pay billions of dollar liabilities to the seller in the US as well as gas buyers back home, the oil ministry and the company said. Petroleum Secretary Vivek Rae also said India should have capacity to build LNG tankers. GAIL wants to sign charter agreements with companies supplying LNG carriers by September this year to meet the delivery deadline, the company said. LNG tankers require sophisticated technology as natural gas is stored below -162 degree Celsius to keep it in liquid state. The liquefaction shrinks storage space by 600 times compared to the gaseous state. Shipyards of South Korea lead the market for LNG tanker building while Japan and China are catching up fast. (economictimes.indiatimes.com)

January 1, 2014. Gujarat Gas Company Ltd (GGCL) said it has signed an agreement to buy 0.65 million standard cubic meters per day of gas from Gujarat State Petroleum Corporation Ltd (GSPC) for almost 12 years. Gujarat Gas, which retails CNG to automobiles and piped cooking gas to households in some cities of Gujarat, will buy the fuel from GSPC on a long-term basis, the company said. It will buy "0.574 mmscmd (of gas) between period March 1, 2014 up to July 1, 2025, and, purchase 0.076 mmscmd between period January 01, 2014 upto July 01, 2025," the company said. Ahmedabad-headquartered Gujarat Gas was set up by BG Group of UK in 1980. But last year, the British firm sold its stake in the company to Gujarat government owned GSPC Group in June 2012 for ` 2,464 crore. GGCL and GSPC on September 3, 2013 entered into a Memorandum of Understanding (MoU) for a long-term gas supply deal. As per the MoU, GSPC agreed to supply 0.85 mmscmd of gas to GGCL from January 1, 2014 to June 30, 2025. (economictimes.indiatimes.com)

January 7, 2014. The Supreme Court (SC) will hear the petitions against the government's decision to allow Reliance Industries to raise natural gas prices on March 4. The top court also made observations which were interpreted differently by the parties involved in the matter. Former Cabinet Secretary TSR Subramanian, one of the litigants, claimed that the court had taken a "very serious note" of the decision taken by the government as there were allegations of hoarding gas and inflating costs. However, Reliance executives claimed that the court had not issued any order reversing the cabinet's latest decision on gas prices. (economictimes.indiatimes.com)

January 7, 2014. The government plans to offer exploration blocks for bidding after a long delay, with a new revenue sharing model that will end the controversial system in which companies first recover their costs before the state gets revenue. The oil ministry will profile at least 56 oil and gas blocks, which will be offered in the 10^th round of bidding, oil secretary Vivek Rae said. Rae also said the ministry was firm on its policy to curb diversion of cooking gas subsidies and it is not considering any proposal to raise the annual limit of subsidised cylinders from nine to 12. Finance minister P Chidambaram had said that chief ministers of several states were demanding raising quota of subsidised cylinders and the government would consider it. The government had capped the annual supply of subsidised cooking gas cylinders to six per household in September 2012 when Jaipal Reddy was the oil minister. Later, oil minister Veerappa Moily had raised the quota to nine cylinders per household in January last year. Commenting on the 10^th auction round of exploration blocks, Rae said that the bids would be invited in February. (economictimes.indiatimes.com)

January 6, 2014. CPI(M)-led LDF opposition staged a walkout in the Kerala Assembly accusing the UDF government of taking lightly the severe hardship caused to people by hike in LPG prices and insistence on Aadhaar-linkage of subsidised cooking gas for household consumers. Leading his colleagues out after Speaker G Karthikeyan turned down the demand for an adjournment on the issue, Opposition Leader V S Achuthanandan accused the state and central governments of colluding with petroleum companies to "plunder common man." Countering the opposition charge, Chief Minister Oommen Chandy said the state was against frequent hike in subsidised LPG and sought suspension of direct subsidy transfer for another six months as only 57% of domestic consumers had achieved 'Aadhaar-linkage' of their bank accounts. This demand had been directly conveyed to Prime Minister Manmohan Singh during his visit to the state the other day, he said. Civil supplies Minister Anoop Jacob said the disruption in delivery of LPG to domestic consumers over confusion in price had been resolved and the supply had regained normalcy.

Seeking leave for the motion at the outset, former Finance Minister T M Thomas Isaac (CPI-M) said the steep increase in non-subsidised LPG would hit common man also as hoteliers would be increasing price of eatables and autorickshaws running on LPG forced to hike fares. Isaac said frequent hike being effected in LPG and petroleum prices was part of a "clandestine strategy" of the Centre to take away the subsidy step by step. The state government was turning a blind eye to this move ignoring its adverse fallout on common man, he said. (www.business-standard.com)

January 4, 2014. Union Shipping Minister GK Vasan requested the Petroleum Ministry to 'reconsider' the hike effected in the price of non-subsidised LPG cylinders. Recently, the Centre had increased the price of non-subsidised LPG, which customers buy after consuming their quota of subsidised cylinders, was hiked by ` 220 per cylinder due to firming up of international rates. Tamil Nadu Chief Minister J Jayalalithaa had slammed the hike and demanded its roll-back saying it would add to miseries of the people. (economictimes.indiatimes.com)

January 4, 2014. Prime Minister (PM) Dr Manmohan Singh said the major buyers of LNG in Asia should come together to demand a fair pricing mechanism for gas being imported from outside Asia. Dedicating the ` 4500 crore Petronet LNG terminal at Kochi to the nation, Dr Manmohan Singh said Asia has been the driver of the global LNG demand in the recent times. To make full use of the large investment in this project, there is a need to focus on increasing the penetration of natural gas in Kerala by augmenting the pipeline network in a manner similar to what has been done in northern and western parts of the country, according to PM. (economictimes.indiatimes.com)

January 4, 2014. Union Petroleum Minister Veerappa Moily said there was no proposal before the government to increase the number of subsidised LPG cylinders from the present nine a year to 12. People will appreciate the government stand, he said. Finance Minister P Chidambaram had said in New Delhi that the government will "take a look" at the demand to raise the quota of subsidised LPG cylinders to 12 per household in a year from the current limit of nine. (economictimes.indiatimes.com)

January 2, 2014. The city government told the Delhi High Court (HC) that it apprehended rise in price of CNG due to reduction in allocation following new guidelines by Ministry of Petroleum and Natural Gas even as the Centre said that any shortfall will be met by import of the fuel. The price of CNG or compressed natural gas in the national capital was just hiked by a steep ` 4.50 per kg, the second increase in rates in three months. The guidelines, which may cause reduction in supply of CNG to Delhi, were issued by the Ministry in pursuance of a Gujarat High Court order that Ahmedabad should also get the fuel for domestic and vehicular usage at the same rate applicable to Delhi and Mumbai to enforce the right of equality. The supply of CNG is not affected in Delhi as the shortfall in domestic supply is being offset by import of CNG, the counsel for the Ministry said. (economictimes.indiatimes.com)

January 2, 2014. Amid disputes over recognition of oil and gas finds, the oil ministry has formed a panel headed by the Director General of Hydrocarbons (DGH) to codify globally recognised industry practices for adoption in India. Though Production Sharing Contracts prescribe the adoption of generally accepted international petroleum practices or standards, there have been disputes between the DGH and operators such as Reliance Industries over tests that should be carried out to confirm discoveries. Many gas finds have not been recognised and could not be put into production because the DGH insists on a test that companies such as RIL and BP Plc of UK did not conduct because it is considered unsafe globally and no longer practised. (economictimes.indiatimes.com)

January 1, 2014. Kerala Chief Minister (CM) Oommen Chandy rejected reports of hike in the prices of LPG after Petroleum Minister Veerappa Moily clarified that no increase had been effected. Moily said the Centre had only decided to implement the direct transfer of the subsidy component on the domestic LPG to bank accounts of the beneficiaries. He also said his ministry would be issuing a statement to clarify on this, Chandy said. In case of direct cash transfer, Kerala had been given a grace period of two months since the Aadhaar-linking of the bank accounts of the LPG customers had not exceeded 50 per cent, the Chandy said. (economictimes.indiatimes.com)

January 1, 2014. Jet fuel or Aviation Turbine Fuel (ATF) prices were hiked by over 2.7 per cent, the second increase in rates in one month. ATF, price at Delhi was hiked by ` 2,036.59 per kilolitre, or 2.74 per cent, to ` 76,241.33 per kl, according to Bharat Petroleum Corp Ltd (BPCL). The increase follows a marginal ` 597.48 per kl or 0.8 per cent hike in rates effected from December 1. ATF prices had touched a life time high of ` 77,089.42 per kl in October following five consecutive increases since June as rupee depreciated against the US dollar, making oil imports costlier. However, the rupee's appreciating thereafter helped trim cost, leading to a steep 4.5 per cent cut in prices in November. However, rates have been increased in subsequent month as rupee value has dipped marginally. (economictimes.indiatimes.com)

POWER

January 6, 2014. The Kudankulam nuclear power plant in Tamil Nadu, whose first 1,000 MW unit is currently in the testing stage, is equipped with state-of-the-art safety mechanisms with unique features that make them foolproof, its Russian developer says, addressing current concerns on nuclear safety issues. Denis Kolchinskiy, chief project engineer of SPbAEP, the developers of the AES 92 nuclear reactor installed at Kudankulam, said modern Russian designs have an optimised balance of active and passive safety systems that have been developed over a decade. According to Kolchinskiy, the Kudankulam plant is built with "active" and "passive" safety systems to provide two layers of protection. While the active layer requires an electrical actuator, or starter, the passive one uses natural force, like that of gravity. (economictimes.indiatimes.com)

January 5, 2014. Adani Power has fully commissioned the 1,320 MW coal-fired power project in Rajasthan taking its overall electricity generation capacity to 7,920 MW. Adani Power, part of diversified Adani Group, aims to increase its total generation capacity to 9,240 MW by end of this fiscal. The Kawai project has two super critical units, each having a generation capacity of 660 MW. While the first unit is operational since last year, the second one was commissioned this month. According to the company, Kawai project is the largest private power plant in Rajasthan and its work was completed in three years. Adani Power, the country's largest private thermal electricity producer, plans to add another 1,320 MW generation capacity in the current financial year ending March 2014. Its current capacity is 7,920 MW. (www.business-standard.com)

January 3, 2014. Lanco Infratech's received a favourable verdict on its year-long dispute with Haryana Power Generation Corporation (HPGCL) over the second unit of its Amarkantak power plant. The 300 MW second unit which was commissioned, could not start generating due to the dispute, can now start generation. The first unit of coal-based Amarkantak power, which is located in Chhattisgarh, has been generating power and earning revenues, unlike the second unit. Lanco's ` 7,700 crore debt recast was approved by its lenders. Amongst other developments, Lanco said that it has two cases pending verdicts with Appellate Tribunal for Electricity (APTEL) and that they were expecting favourable judgments. (www.business-standard.com)

January 1, 2014. ONGC Tripura Power Corporation (OTPC) has formally announced the launch of commercial operations of its first unit of the 3 MW Palatana power plant. After completion of 15 days trial run and necessary tests, the first unit was put on operation. The Ministry of Power has allocated more than 58 per cent of power from the project to the Northeast states with Assam (240 MW), Tripura (196 MW), Meghalaya (79 MW), Manipur (42 MW), Nagaland (27 MW), Arunachal Pradesh & Mizoram (22 MW each), while 98 MW is allocated to OTPC for merchant sales. (economictimes.indiatimes.com)

January 1, 2014. The Cabinet Committee on Investment (CCI) may decide whether Reliance Power's ultra mega power project at Tilaiya in Jharkhand should be exempted from providing non-forest land to compensate for the loss of forest land to be acquired for the project. At present, only the central government or public sector undertakings are exempted from the obligation to provide non-forest land. Reliance Power has won contracts to set up two other ultra mega power projects (UMPPs) - at Sasan in Madhya Pradesh and at Krishnapatnam in Andhra Pradesh. A UMPP is coal-based power plant with a capacity of about 4,000 MW built at an approximate cost of ` 20,000 crore. (economictimes.indiatimes.com)

January 7, 2014. Infrastructure major Larsen & Toubro (L&T) has secured an engineering, procurement and construction (EPC) order from a Saudi Arabian Oil Company - Saudi Aramco. The purpose of this project is to replace the existing electrical power supply system at the Abu Ali Plants and overcome existing deficiencies to meet future energy demand of Berri oil field. The project will be completed in 26 months. (www.business-standard.com)

January 6, 2014. BHEL has completed building a transmission sub-station in Karnataka, a link that connects the southern and national electricity grids. The government said that the southern grid had been linked with the national grid following the commissioning of the Raichur-Solapur transmission line. The line had been commissioned five months ahead of the May 31, 2014, deadline at a cost of about ` 815 crore. (www.business-standard.com)  

January 6, 2014. The average price of electricity sold on the Indian Energy Exchange (IEX) rose to ` 3.22 per unit in December even as volumes remained mostly flat in the same month. The day-ahead market saw trading of 2,409 million units of electricity last month almost similar to that witnessed in November 2013, according to IEX. In December, the total purchase bids stood at 3,800 million units while the sale bids touched 3,812 million units. In November, the price stood at ` 2.78 per unit of electricity. Last month, on an average 1,091 participants traded in the day ahead spot market. (economictimes.indiatimes.com)

January 6, 2014. NTPC plans to activate its idle capacity to generate some 7,000 MW of electricity to make the most of a new grid that connects power transmission systems in south India to the rest of the country. NTPC said at least 5,000 MW of power capacity was lying idle at the country's largest power company entire last year due to lack of demand from state utilities. The connection of the southern grid to the national network with effect from January 1 will help NTPC utilise this capacity as power demand from southern states have always remained high, they said. So long the southern grid was a standalone power distribution system and NTPC could not route power from its plants to the region. (economictimes.indiatimes.com)

January 6, 2014. The Indian Cabinet Committee on Economic Affairs (CCEA) has approved the proposal for construction of a 220kV transmission system from Alusteng, Srinagar, to Leh, and 66kV interconnection system for Drass, Kargil, Khalsti and Leh substations in Jammu & Kashmir (J&K), at an estimated cost of INR17.8bn ($286 mn). Implemented through Power Grid Corporation of India Limited (PGCIL) within 42 months from the date of release of the first installment of funds, the transmission project is expected to provide grid connectivity and reliable power supply to Ladakh region. (utilitiesnetwork.energy-business-review.com)

January 5, 2014. Power-starved South is set to get some succour with the region expected to gain access to additional electricity flow of about 1,500 MW once the all India national power grid becomes fully operational. In a major step, the Southern power grid was synchronised with the rest of the national grid on December 31, 2013, and it is expected to be fully-operational in a few months. In the absence of grid connectivity, the Southern region was unable to utilise excess power available in other regions. The south witnessed peak power deficit of 6.8 per cent in November last year, the highest amongst the regions. Peak power deficit refers to the shortage of electricity when demand is at the maximum. During November last, while the Southern region’s electricity demand touched 34,118 MW, the availability was only around 31,786 MW. Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Puducherry and Lakshwadeep make up the Southern region as per power sector’s planning body Central Electricity Authority (CEA). The country’s power system is operating through five regional grids. Till December 31, the Northern, Eastern, Western and North-eastern regions’ grids were connected synchronously while southern grid was connected through HVDC (High Voltage Direct Current) links. Out of the country’s total installed generation capacity of 232,164 MW, the Southern region accounted for 57,529 MW at the end of November, 2013. (www.business-standard.com)

January 5, 2014. A Central Bureau of Investigation (CBI) team from Gandhinagar in Gujarat raided premises of M/s Bhatia International Limited Indore in connection with supply of poor quality coal to NTPC-SAIL Power Corporation Ltd. (NSPCL) by the private company in connivance with some officials of the concerned power plants. Officials of NSPCL, Bhilai Power Plant are among those named in the case. The poor quality coal supply to the thermal plants had resulted in a total loss of ` 92.91 crore to the government. The CBI has registered two FIRs in this connection. (articles.timesofindia.indiatimes.com)

January 3, 2014. Power project developers in Chhattisgarh fear lower profits because of a lack of adequate transmission network that limits their ability to sell surplus electricity out of the state. Besides state utilities, private power producers such as KSK Energy, Jindal Steel & Power, RKM Powergen and Bhaskar Group are commissioning new projects in Chhattisgarh which will more than double the state's electricity generation capacity in the next couple of years from close to 9,500 MW now. Transmission network in the state, however, is not expanding at the same pace. Power Grid Corporation was to provide grid connectivity to power projects based in the state. By March 2014, Chhattisgarh will add 3,200 MW, which will increase the state's total generation capacity to more than 12,500 MW, but the capacity of transmission networks in the state by then will be just about 9,000 MW. It is projected to have 21,500 MW of generation capacity by March 2015. The lack of adequate transmission network is already hurting the state's ability to sell power on the spot market to outside consumers. According to power-trading platform Indian Energy Exchange, Chhattisgarh witnessed power price going down to ` 2.30 a unit in November from ` 2.41 in October. (economictimes.indiatimes.com)

January 2, 2014. Alstom T&D India said it has bagged an order worth ` 54.4 crore for supplying equipment to Bihar State Power Transmission Company. The state government of Bihar plans to add a number of new voltage level substations at various locations in the state in near future. The substation at Bihta is important as it is the first in the series in energy expansion plan of the state. (www.business-standard.com)

January 2, 2014. In what may give a big boost to power trading business in the country, India has finally connected the southern region with rest of the country for unhindered electricity flow, achieving the goal of a national grid after a long wait. The central transmission utility, Power Grid, has successfully commissioned the Raichur-Solapur 765-KV single-circuit transmission line, interconnecting the southern grid synchronously with the rest of the national power grid –- a move that would facilitate bulk transfer of power across regional boundaries. With this, the mission of ‘One Nation – One Grid – One Frequency’ has been successfully accomplished, the power ministry said. The national grid will help southern states, especially Andhra Pradesh, Tamil Nadu and Kerala, which are facing huge shortages, lift surplus power from other regions. In the absence of a national grid, these states were paying exorbitantly high prices for buying electricity from the open market because of uncertainty about power evacuation due to congestion in the transmission network. The Indian power system is operating through five regional grids and a Pan-India synchronous grid was envisaged for optimal utilisation of the generation resources in the country. Till now, four regional grids -- northern, eastern, western and north-eastern -- were connected synchronously and the southern region was connected to the other four grids via HVDC links. The 208-circuit-km-long transmission line and 765- and 400-KV substations at Raichur and Sholapur have been commissioned five months ahead of the contracted schedule. The project has been completed at the cost of ` 815 crore, Power Grid said. (www.financialexpress.com)

January 1, 2014. The Odisha government has directed the independent power producers (IPPs) to deliver its share of power at its own substations and transmission lines, instead of transmission network of Power Grid Corporation of India Ltd (PGCIL). As per existing practice, IPPs had plans to connect to PGCIL transmission system for sale of power throughout the country and would have used the same line to provide power to Odisha. But the state government’s new norm is likely to affect the business prospects of the private power producers to some extent, said experts. The Odisha government has signed agreements with 29 private developers with combined generation capacity of 38,000 MW power. As per the agreements, the IPPs have to sell 14 per cent of total generated power to the state network at a subsidised rate. The state government aims to get around 2,000 MW power from private power stations by 2015 and hence, has come up with large transmission network plan. The Odisha Power Transmission Corporation Limited (OTPCL) is in the process of setting up three high capacity substations with an estimated investment of ` 1,000 crore for sale of surplus power. (www.business-standard.com)

January 7, 2014. It is increasingly becoming clear that the Arvind Kejriwal-led Aam Aadmi Party (AAP) put little thought in announcing its freebies, especially in the power sector. Former Chairperson of Central Electricity Regulatory Commission (CERC) of India and the longest serving electricity regulator in the country, Dr Pramod Deo, said Delhi cannot afford to meet the subsidy burden announced by AAP. The way the Kejriwal government has managed it is by giving only Tata Power the subsidy amount and adjusting the amount due from Reliance Infra. This is contestable as the law is clear that any subsidy amount announced by a political party has to be paid upfront. The section 65 of the Electricity Act 2003 is clear on this part that if the state government announces subsidy, then they have to pay the amount upfront, says Deo. If the state government wants to give benefit to any consumer, they are free to do that but they have to pay the difference to the distribution company. The idea being that whatever the political decisions are taken they should not affect the performance/commercial operations of distribution companies, Deo pointed out. The former CERC chief made it very clear that if the state government does not give subsidy, tariff cannot be reduced. Kejriwal had said that Tata Power will be given a ` 61 crore subsidy while the amount due to Reliance will adjusted against payment dues to government owned generating and transmission companies. The Delhi government will have to pay much more than what was announced by the chief minister, Deo said, if Reliance contests the mode of subsidy payment. (www.business-standard.com)

January 7, 2014. Lieutenant-Governor Najeeb Jung on warned power distribution companies that their licences may be cancelled if they didn’t abide by rules and cooperate with the CAG audit. The Lt-Governor said the government planned to monitor financial transactions made by the discoms to check for violations. The L-G was reiterating Chief Minister Arvind Kejriwal’s decision to have the CAG audit the finances of three private power discoms. The CAG audit comes in wake of the AAP’s poll promise to reduce the power tariff by 50 per cent. However, after forming the government, Delhi Chief Minister Arvind Kejriwal put a rider on the poll promise, which allows only those up to 400 units to avail of the benefits of the scheme. Under the scheme, those who consume more than 400 units will have to pay the entire bill, without a subsidy. The announcement of subsidy on power tariff has come under criticism, especially from the Opposition BJP. The party claims that the promise to cut power tariff will fall through in the summers. (www.financialexpress.com)

January 6, 2014. Around the time Arvind Kejriwal was cobbling support to form an Aam Aadmi Party (AAP)-led government in the capital, the Delhi electricity regulator issued guidelines with a steep surcharge that virtually ends the possibility of any competition for customers seeking better services. DERC has issued an order that will require any consumer to pay an additional surcharge of up to ` 3 a unit for power sourced from another distributor under the open access regime, a key issue being pushed to improve the plight of consumers, a key AAP poll plank. While the average cost of power sold on the power exchange during the last three years is estimated at around ` 3.50 a unit, with the additional surcharge, the per unit cost of power will nearly double as wheeling and other charges will also be added. Through open access, consumers can look forward to using the services of another power distributor in case they are unhappy with the existing service provider. Discoms are seen as the biggest beneficiaries of the move, which is being seen to be against consumer interest. Currently, the open access facility is available only to large consumers, as the DERC turned down the plea for extending to facility to others. DERC's order, which follows a consultation process started a few months ago, has come under criticism with experts accusing the regulator of jumping the gun when other states are still to firm up their views on the move. So far only one state, Uttarakhand, has levied an additional surcharge. (economictimes.indiatimes.com)

January 6, 2014. Haryana discoms Dakshin Haryana Bijli Vitran Nigam (DHBVN) and Uttar Haryana Bijli Vitran Nigam (UHBVN) have not proposed any tariff hike in the state for the 2014-15 financial year. The present tariff has been revised downward by reviving the old telescopic system of tariff for the domestic sector, giving a benefit of about ` 200 per bi-monthly bill. The tariff in Haryana for domestic consumers is a minimum of ` 2.98 per unit, and a maximum ` 5.98. Now, consumers recording consumption of nil to 40 units per month in their meters will be charged a tariff of ` 2.98 per unit. The tariff for 41 to 100 units per month consumption will be ` 4.75 per unit. On consumption of units from 101 to 250, the tariff will be ` 4.90 per unit. For units between 251 to 500, the tariff will be ` 5.60 per unit. And, for units from 501 to 800 per month, the tariff will be ` 5.98 per unit. For monthly consumption above 800 units, the consumers will have to pay at the rate of 5.98 per unit for the entire consumption. (economictimes.indiatimes.com)

January 5, 2014. Electricity regulator Central Electricity Regulatory Commission (CERC) will hold a public hearing on the draft tariff regulations it has prepared for central government-owned power generation utilities on January 15. The draft regulations had stated that generation incentives should be linked to actual power produced instead of a plant's installed capacity. It proposed that incentives for thermal power projects should be based on plant load factor (PLF) and not plant availability factor (PAF). PAF, the declared generation capacity of a plant, remains the same. PLF is the actual generation and may vary depending on demand. State-run power producers had said that under normal circumstances, PAF is generally higher than PLF and therefore incentives should not be linked to PLF. NTPC, the country's largest generator of electricity, is likely to respond to the draft regulations. The CERC revises tariff regulations every five years. The existing regulations expire on March 31, 2014. (www.business-standard.com)

January 4, 2014. The industrial power tariff in Maharashtra would be reduced in two phases to bring it on a par with rates in the neighbouring states, Maharashtra Industry Minister Narayan Rane said. The revised tariff would come into effect from May this year, he said. (www.business-standard.com)

January 4, 2014. Power generators such as GMR, Essar Power, Jindal Steel and Power and Sterlite Energy are likely to benefit from the relaxations in mega power policy announced. A number of coal-fired power projects have been under stress due to non-availability of fuel and reduction in off-take and lack of payments. The mega power status allows projects to claim tax benefits that would net 10 per cent savings on carriage charge of tariffs. The power policy, which was amended in 2009, covers coal-based power projects of 1,000 MW and hydro power projects of 500 MW, above to claim tax benefits. They can import equipment duty free but to avail benefits they had to supply around 75 per cent power that they produced through competitive bidding. However, projects based in states like Chhattisgarh, Jharkhand, Madhya Pradesh and Odisha could not avail this due to host state obligations. (www.business-standard.com)

January 4, 2014. Delhi Electricity Regulatory Commission (DERC) has proposed to adopt new power regulations from next fiscal to help fix tariff. The new regulations will replace the current average revenue requirement (ARR) petitions that discoms file every year. The new accounting format has been prepared by the forum of regulators and is being slowly adopted by electricity regulators across the nation. DERC is keen to have the new regulations in place at the earliest. (economictimes.indiatimes.com)

January 3, 2014. The Rajasthan government said that 24-hour power supply would be ensured for all in the state this year, as promised in the BJP's election manifesto, Rajasthan Energy Minister Gajendra Khimsar said. Once the state achieves self-reliance in electricity generation, power would be supplied for all for 24 hours during this year, Khimsar said. (www.business-standard.com)

January 3, 2014. Constant check on electricity pilferage and upgradation of infrastructure in the state has helped Goa to drastically reduce its power losses, government said. The measures have helped the Goa government to drastically reduce its power losses since last year at 11 per cent compared to the national average of 35 per cent, State Power Minister Milind Naik claimed. The upgradation of infrastructure and constant check on the electricity pilferage has helped the department to curb power losses making Goa one of the best managed state in terms of electricity, Naik said. (www.business-standard.com)

January 2, 2014. The government approved the proposal of the Ministry of Power for operationalisation of the Power System Development Fund (PSDF). The fund will also be utilised towards installation of shunt capacitors, series compensators and other reactive energy generators for improvement of voltage profile in the grid. Installation of standard and special protection schemes, pilot and demonstrative projects, and for setting right discrepancies identified in protection audits on regional basis. Renovation and Modernisation (R&M) of transmission and distribution systems for relieving congestion and any other scheme or project in furtherance of the above objectives, such as, conducting technical studies and capacity building, etc. PSDF will be operationalised within three months. (economictimes.indiatimes.com)

January 2, 2014. A key environmental panel has recommended clearance for two hydel power projects in the Siang river valley in Arunachal Pradesh. The two projects—Simang I and II totalling 133 MW—are located on the Simang, the right bank tributary of the Siang River. Projects in the Siang river basin are viewed as strategically important on account of the border with China. Adishankar Power Pvt Ltd is the project developer. The Expert Appraisal Committee on River Valley and Hydroelectric Power Projects decided to recommend to the environment ministry that the two projects be cleared subject to requisite clearances from the National Wildlife Board, since Simang II is 6.4 km away from the Mouling National Park. (economictimes.indiatimes.com)

January 2, 2014. Close on the heels of the Aam Aadmi Party (AAP) led Delhi government's decision seeking audit of power distribution companies' (discoms) accounts by Comptroller and Auditor General (CAG), a similar demand has been raised in Uttar Pradesh (UP). A prominent state power consumers' forum filed a public interest petition before the UP Electricity Regulatory Commission (UPERC) seeking directive to power companies to get their accounts audited by CAG. The forum demanded that the Commission should also scrap the Annual Revenue Requirement (ARR) recently filed by these companies. ARR contains proposal for upward power tariff revision. UP Rajya Vidyut Upbhokta Parishad president Avadhesh Kumar Verma claimed that the power companies had been submitting ARR without audit. He claimed that these companies later 'true up' their accounts and submit audited figures to impose regulatory surcharge on consumers. Meanwhile, the Parishad also submitted a formula before UP Planning Commission for decreasing power tariff in the state. Avadhesh Kumar Verma demanded that the proposal should be put before state chief minister Akhilesh Yadav for approval, so that consumers get relief in tariff like other states, such as Delhi and Haryana. In June 2013, the state power tariffs were hiked by over 30 per cent. The fixed charge on power consumption load was also increased by ` 10 from ` 65 per kilowatt (Kw) to ` 75 per Kw for domestic consumers. The power tariff was hiked from ` 3.45 per unit to ` 4 per unit for the first 200 units of consumption. Between 201 to 500 units of consumption, the tariff was hiked from ` 3.80 per unit to ` 4.50 per unit. Beyond that, the tariff had been hiked to ` 5 per unit of consumption. (www.business-standard.com)

January 1, 2014. Tata Power welcomed Delhi Government's announcement of providing 50 per cent subsidy on power consumption up to 400 units, saying it was a "good move" which will provide relief to majority of the consumers in the city. Delivering on yet another poll promise, the Aam Aadmi government announced a 50 per cent subsidy on power consumption upto 400 units in Delhi, which will benefit around 28 lakh of the total 35 lakh consumers in the city. When asked about Government's move to order CAG scrutiny of the finances of the three private power distribution companies, TPDDL CEO Pravir Sinha chose not to comment but said Tata Power Delhi Distribution Ltd (TPDDL) will comply with the law. He, however, said TPDDL was responding to government's directive of making their stand clear on the CAG scrutiny of the companies. (economictimes.indiatimes.com)

January 1, 2014. The Cabinet Committee on Investment (CCI) at its next meeting may take up three hydro power projects that have been held up on account of environmental and forest clearances. The three hydel projects -- Tawang (800 MW) and Tato (700 MW) and Teesta (520 MW) --have been awaiting environmental clearances for a very long time. (economictimes.indiatimes.com)

OIL & GAS

January 6, 2014. Libya’s oil production is rising for the first time in 10 months after the North African country started a field in the south and smaller deposits elsewhere resumed after months of disruption. Flows from Sharara are set to reach 340,000 barrels a day. The field, near Ubari in the south, had been closed for about 90 days because of protests. Libya’s total daily output will rise to 600,000 barrels. Output from the nation, once North Africa’s biggest producer, slumped to 210,000 barrels a day in December amid protests across the country. Sharara restarting is a “good sign” and will help Libya’s government in its negotiations with rebels holding eastern ports. Libyan production rose to 1.6 million barrels in July 2012 as the country restored output following the 2011 revolt. It climbed as high as 1.8 million barrels a day in 2008. The country’s oil output will probably average 650,000 barrels a day or more this year, Goldman Sachs Group Inc. said. Protests halted oil fields and four out of nine export facilities. (www.bloomberg.com)

January 2, 2014. As Barack Obama and Vladimir Putin argue over human rights in Russia and the fate of fugitive U.S. intelligence analyst Edward Snowden, the countries’ biggest oil companies are preparing to drill for giant oil discoveries together in the Arctic Ocean. Exxon Mobil Corp. and OAO Rosneft are set to start their first Arctic well this year, targeting a deposit that may hold more oil than Norway’s North Sea. It will kick off a series of landmark projects and cement an alliance begun in 2011. They also plan to frack shale fields in Siberia, sink a deep-water well in the Black Sea and build a natural gas-export terminal in Russia’s Far East. The deepening alliance shows the two governments’ fractious relationship is no bar to America’s most valuable energy company investing billions in Russia. For Rosneft Chief Executive Officer Igor Sechin, the Irving, Texas-based company brings financial heft and the expertise needed to drill offshore in some of the world’s harshest conditions for rigs. Exxon CEO Rex Tillerson has said his company’s output will drop 1 percent this year, a third straight annual drop, putting pressure on to find new reserves. Tillerson’s decision to expand work in Russia is a switch from his predecessor’s policy. (www.bloomberg.com)

January 2, 2014. Statoil and its partner Det norske oljeselskap reported that they have made gas and oil discoveries on their Askja prospects in the North Sea. Two exploration wells – 30/11-9S and 30/11-9A – were drilled by the Ocean Vanguard (mid-water semisub) rig between the Oseberg and Frigg fields. The main wellbore (30/11-9S) tested the Askja West prospect and proved a net gas column of 295 feet in Late and Middle Jurassic rocks. The side-track well (30/11-9A) tested the Askja East prospect and proved a net oil column of 131 feet in the same geological formations. Statoil said that it estimated the total volumes in Askja West And Askja East to be in the range of 19 to 44 million barrels of recoverable oil equivalent. (www.rigzone.com)

January 7, 2014. Iraq awarded a $6.04 billion oil refinery contract to a consortium of South Korean firms led by Hyundai Engineering & Construction. The refinery will be located in Kerbala with a capacity of 140,000 barrels per day and the contract has a duration of 54 months. (www.downstreamtoday.com)

January 3, 2014. Nigeria's President Goodluck Jonathan has no plans to privatise the country's oil refineries, contradicting a government pledge to do so last month. The Bureau of Public Enterprises said that Jonathan had approved a plan to sell the refineries, which have a combined capacity of 445,000 barrels per day (bpd), but run far below capacity due to decades of mismanagement in Africa's top oil producer. Oil Minister Diezani Alison-Madueke had also suggested the government was looking into the idea, which is part of the Petroleum Industry Bill being debated in parliament since 2012. (www.downstreamtoday.com)

January 6, 2014. A surge in the number of crude tankers bound for China may signal that the second-largest importing nation is buying more cargoes before New Year holidays begin later this month, the biggest oil-tanker company said. There were 80 of the industry’s biggest tankers sailing to Chinese ports. Chinese traders may be booking more shipments in anticipation of Chinese New Year holidays, which start on Jan. 31 this year, the Frontline Management AS, said. There’s been a “definite increase” in bookings to the country in the past 12 months. Frontline is the world’s largest tanker company. (www.bloomberg.com)

January 4, 2014. U.S. crude-oil imports fell to the lowest level in almost 16 years as domestic output rose, the Energy Information Administration (EIA) reported. Shipments of foreign crude fell 1.1 percent to 7.41 million barrels a day, the fewest since January 1998, based on the four-week average through Dec. 27, according to data released by the EIA.

U.S. crude output surged to a 25-year high on rising production from shale formations. Fracking and horizontal drilling have boosted shale oil output from the Bakken formation in North Dakota and the Eagle Ford in Texas. Domestic production increased to 8.12 million barrels a day, the most since September 1988. Output surpassed imports in October for the first time since 1995, according to the EIA. (www.bloomberg.com)

January 2, 2014. Bekapai, which pumped more than 50,000 barrels a day in 1978, now flows at just 7,000 barrels, a symbol of the decline in Indonesia’s oil and gas production. Aging fields, rising exploration costs and increased fuel demand will force Southeast Asia’s most populous nation to import 90 percent of the oil it needs by 2030, according to the Agency for the Assessment and Application of Technology. Domestic consumption is the biggest factor turning the region’s largest oil producer into a net importer, said Unggul Priyanto, the deputy head of the agency known by its local acronym, BPPT. The nation withdrew from the Organization of the Petroleum Exporting Countries in December 2008. Production is forecast to drop by more than half to 124 million barrels in 2030, from 329 million in 2011, BPPT said in a report. Imports will rise almost four times to 532 million barrels, from 134 million, as output from maturing fields slows. (www.bloomberg.com)

January 2, 2014. Japan Australia LNG (MIMI) Pty. Ltd, a 50-50 joint venture between Mitsui & Co and Mitsubishi Corp, has terminated a long term sales and purchase agreement with Woodside Petroleum for liquefied natural gas (LNG) from its Browse LNG project, Woodside said. The termination of the agreement follows Woodside's decision to scrap plans for an onshore Browse LNG plant in favor of a floating LNG plant. The sales agreement, which would have supplied MIMI with 1.5 million tonnes of LNG a year, was conditional on Woodside making a final investment decision on the Browse project by the end of 2013. (www.downstreamtoday.com)

January 1, 2014. The derailment and fire that led to the evacuation of a North Dakota town has renewed the debate over whether it’s safer to ship oil by rail or pipeline as the U.S. completes a review of the Keystone XL project. Public safety officials urged more than 2,000 North Dakota residents to flee fumes from the fire that engulfed BNSF Railway Co. cars carrying oil after a collision Dec. 30 with another train about 25 miles (40 kilometers) west of Fargo. BNSF is owned by Berkshire Hathaway Inc. of Omaha. While climate change has been the focus of the fight over TransCanada Corp.’s proposed Keystone XL pipeline from Canada to the U.S. Gulf Coast, a subset in the debate has been the relative safety of pipes versus trains. The U.S. State Department, reviewing the $5.4 billion project because it would cross the U.S. border, is weighing whether the pipeline would be in the national interest. Keystone would allow about 100,000 barrels a day of crude from the Bakken formation in Montana and North Dakota onto the pipeline through a link in Baker, Montana. (www.bloomberg.com)

January 7, 2014. The Energy Information Administration (EIA) increased its forecast for 2014 U.S. gasoline demand and retail prices. Gasoline consumption will average 8.78 million barrels a day this year, up 0.5 percent from the EIA’s December outlook of 8.74 million, the EIA said. Demand in 2014 will be less than last year’s daily average of 8.79 million. Gasoline pump prices in 2014 will average $3.46 a gallon, 3 cents above last month’s estimate. Prices in 2013 averaged $3.51. Distillate demand, including diesel and heating oil, will be 3.88 million barrels a day this year, up from last month’s outlook of 3.87 million. Distillate consumption in 2013 averaged 3.83 million barrels a day. (www.bloomberg.com)

January 7, 2014. Major oil producer Kuwait appointed an Islamist lawmaker as oil minister as part of a government reshuffle triggered by political tensions, although the move is unlikely to affect energy policy. Ali Saleh al-Omair, who replaces Mustapha al-Shamali as oil minister, is part of a group of Salafi Islamist politicians who are generally cooperative with the government. He was elected as a member of parliament in July. Although it is not the first time that an MP has become oil minister in the hand-picked cabinet, it is unusual for a lawmaker to hold the position, which involves representing Kuwait at OPEC meetings. Kuwait's energy policy is set by a Supreme Petroleum Council, so frequent ministerial changes have little effect. (www.arabianbusiness.com)

January 6, 2014. Canadian Prime Minister (PM) Stephen Harper said he was confident that TransCanada Corp's controversial Keystone XL pipeline would be eventually approved by U.S. authorities. U.S. President Barack Obama is set this year to decide the fate of the northern leg of the proposed project, which would carry crude from the Alberta oil sands in Canada to the U.S. Gulf Coast. Obama is under heavy pressure from environmental activists to block the pipeline. The government backs the idea of more pipeline capacity to the Pacific coast on the grounds that Canada needs to reduce reliance on the United States, which takes around 99 percent of Canadian energy exports. Harper also said he was more optimistic about the economy in 2014 than in past years because of evidence of stronger growth in the United States and a comeback in Europe. (www.downstreamtoday.com)

January 6, 2014. Uganda, the country with sub-Saharan Africa’s fourth-largest oil reserves, received 10 production applications for 21 discoveries in the Albertine Graben region as the nation moves closer to starting output in 2017. Tullow Oil Plc, Total SA, and China National Offshore Oil Corp. all sought licenses, according to the Uganda’s Petroleum Exploration and Production Department. The government is in talks with Tullow about its eight applications, CNOOC got its first license in September, and Total’s request was made in December, the notice shows. Total may submit five more applications this year in Exploration Area 1, and one for EA 1A. Tullow has until the end of April to appraise the Waraga discovery in Exploration Area 2, where it is the operator, and is also drilling at Waraga-3, a second appraisal well, the department said. (www.bloomberg.com)

January 5, 2014. Oman is the latest Gulf state to review its fuel subsidy scheme as the sultanate tries to claw back its budget deficit. The subsidy for petroleum products, mainly petrol and diesel, is projected to reach OMR860mn ($2.23bn) in the 2014 budget, up from OMR740mn last year. It accounts for 53 percent of the total OMR1.61bn appropriation for subsidies and constitutes 10 percent of budget expenditure in 2014. Financial affairs minister Darwish bin Ismail Al Balushi foreshadowed the fuel subsidy would be reduced greatly to improve the budget bottom line. Al Balushi also noted that fuel subsidies in the country were growing in line with a surge in crude oil price in the global markets. However, a committee of Majlis Al Shura said that it would not recommend a repeal of fuel subsidies. The Oman debate comes as Bahraini MPs said they would seek a guarantee from the government that revenues raised from higher petrol prices will directly benefit citizens after it was announced subsidies would be lifted for the commodity. Diesel is the only commodity to be affected by the government’s subsidy plan, with discounts on other essential items including food to remain in place despite warnings the cheaper prices led to excessive use and put unnecessary strain on the state budget. Mohammed bin Hamad Al Rumhy, minister of oil and gas, has said subsidised petrol and electricity programmes were causing a huge waste of energy across the Gulf and threatening economies. (www.arabianbusiness.com)

January 3, 2014. BP Plc’s bid to block economic-loss payments tied to the 2010 Gulf of Mexico oil spill unless the claims can be directly linked to the disaster won fast-track consideration by an appeals court. The London-based company said that U.S. District Judge Carl Barbier in New Orleans has ignored the appellate court’s earlier decision requiring him to review causation in determining which claims should be paid. The company asked an appeals panel for immediate review while lawyers for spill victims sought a delay. (www.bloomberg.com)

January 2, 2014. Indonesia's output of liquefied natural gas is expected to rise nearly 6 percent in 2014, although exports by the world's No.5 exporter of the super-cooled fuel will hold steady, its energy regulator said. Indonesia consumes around 40 billion cubic feet of gas and demand is rising by around 10 percent a year. This could climb further as the government moves away from costly oil imports to reduce its current account deficit. Indonesian LNG, produced by companies including Total, Exxon Mobil, and BP, is shipped to Japan, Korea, the United States and China. LNG production was expected at approximately 306 cargoes (just over 17 million tonnes) or 2,735 million standard cubic feet a day (mmscfd) this year, up from an estimated output of 289 cargoes in 2013. Of that total, Indonesia will export 268 cargoes, unchanged from the previous year. In November, it had targetted to produce 314 LNG cargoes in 2013, of which 285 were to be shipped out. (www.downstreamtoday.com)

POWER

January 6, 2014. APR Energy has secured an extension for its existing 70 MW diesel power module contract in Botswana, for a further 12-month period. The company has been supporting the Botswana Power Corporation, the national electric utility, through the provision of its turnkey diesel power modules since late 2009. APR Energy said the renewal reflects the company's leading industry position in the region with 800 MW of installed power capacity on the continent. APR Energy supplies power generation solutions to customers and communities worldwide, with focus on Africa, the Americas, Asia-Pacific, and the Middle East. (fossilfuel.energy-business-review.com)

January 5, 2014. The Chairman of Ceylon Electricity Board (CEB) said the hydro power production in the country has sharply dropped due to dry weather conditions. The hydropower production was high as catchment areas received sufficient rain. The generation of hydropower was around 70 percent in the year but it has dropped to 37 percent presently. The reservoir storage has dropped down to 51.2 percent and the hydropower contribution to the total energy need was 28 percent. Thermal power contributed 70 percent to meet the need. The CEB is also providing a relief of `. 2.4 billion to the household customers and ` 2.6 billion concession to the industries. The regular breakdowns in the Lakvijaya coal power plant in Norochcholai have also contributed to the increase in power generation costs. (www.colombopage.com)

January 5, 2014. North Korea's prime minister recently inspected a power generation plant in North Pyongan Province, as the communist country moves to emphasize the greater role of the Cabinet after the execution of the uncle of the country's leader. Pak Pong-ju toured a power generation plant under construction in Hyangsan County. The communist country suffers from chronic power shortages and has been moving to build new power stations. North Korean leader Kim Jong-un has been emphasizing the importance of a stable power supply in order to rejuvenate the economy ever since he took power in late 2011. (www.globalpost.com)

January 3, 2014. Arizona Public Service (APS) has completed the acquisition of Southern California Edison (SCE)'s ownership in units 4 and 5 of the Four Corners power plant located near Farmington, New Mexico, US, for $182 mn. The purchase of SCE's 48% interest in 4 and 5 units increases APS's total Four Corners capacity from 791 MW to 970 MW, and its ownership to 63%. APS has also permanently closed the plant's older, less efficient units 1, 2 and 3, during a ceremony on January 1, 2013, as part of a plan announced in November 2010, thereby reducing the capacity from 2,100 MW to 1,540 MW. (fossilfuel.energy-business-review.com)

January 7, 2014. State Grid Corp. of China’s search for as much as $50 billion of international power assets may reveal that Duet Group and Spark Infrastructure Group are among Australia’s most attractive takeover targets. China’s biggest power distributor won regulatory approval to buy Australian assets including almost 20 percent of electricity and gas company SP AusNet. Duet, with a market value of $2.2 billion, and the $1.9 billion Spark may be the next targets because of their regulated, long-term cash flows from gas and electricity assets across Victoria, South Australia and Western Australia, said Morgans Financial Ltd. and Royal Bank of Canada. Crimped by price caps in China, State Grid is turning overseas, where it says returns from investments can be five times higher than at home. The company’s 2012 return on invested capital of 3.8 percent trails all but one major listed utility in Asia. To boost its returns, State Grid could look for acquisitions in Australia because it’s a relatively safe place to invest, said PricewaterhouseCoopers LLP. Beijing-based State Grid says it’s the world’s largest utility and that it has a workforce exceeding 1.5 million. At the end of 2012, it had $16.4 billion of cash and cash equivalents and that year generated $40.4 billion in cash from operations. The Australian government approved the SP AusNet investment, as well as the purchase of 60 percent of a closely held business that manages more than A$5 billion of Australian energy assets. (www.bloomberg.com)

January 6, 2014. The Black Hills National Forest has announced availability of the draft environmental impact statement for the Teckla-Osage-Rapid City 230kV transmission line project for public review and comment. The project proposes construction of a high-voltage electric transmission line from northeastern Wyoming to the Rapid City area in South Dakota, to help strengthen the transmission network, enhance transmission system reliability, and address future demand for electricity and economic development in the region. (utilitiesnetwork.energy-business-review.com)

January 7, 2014. The Nepalese Electricity Tariff Fixation Committee (ETFC) is considering 10 to 15% increment in the electricity rates within the next three months. The committee is giving serious consideration to the proposed tariff hike. The Nepal Electricity Authority (NEA) had requested ETFC for an average tariff hike of 20% for all customers except for households consuming less than 20 units of electricity monthly, in May 2013, to help to stabilize its financial condition. (utilitiesretail.energy-business-review.com)

January 6, 2014. The U.K. finished a preliminary study of a General Electric Co. and Hitachi Ltd.-developed nuclear reactor, bringing the technology closer to approval in Britain. The U.K. Advanced Boiling Water Reactor will begin the second of four steps in the Generic Design Assessment process to ensure the technology is safe and suitable for use, the Office for Nuclear Regulation said. Britain is pushing a new generation of nuclear plants two decades after its last atomic power station was built. In October, it reached an agreement with Electricite de France SA to pay the French utility 92.50 pounds a megawatt-hour of power from its planned atomic plant at Hinkley in southwest England. That figure is 75 percent higher than current wholesale prices. (www.bloomberg.com)

January 3, 2014. Power prices in Germany, Europe’s biggest electricity market, probably will weaken for a record fourth consecutive year as utilities add the most coal-fired capacity in more than a decade. The benchmark year-ahead electricity contract will average about 6 percent less in 2014 than in 2013. Expanding generating capacity will provide 17 percent more supply than peak demand. Wholesale power prices in Europe’s biggest economy plunged 32 percent since 2010 amid record wind and solar output and the weakest demand in four years. The cheapest coal since 2009 is spurring utilities to keep building plants burning the fuel. EON SE and RWE AG, the largest generators, will report lower profit this year. EON, RWE and Stockholm-based Vattenfall AB, the three biggest utilities operating in Germany, plan to shutter more than 16 GW of unprofitable generating capacity in central-west Europe in the four years through 2015. Power companies have permission to shut plants with a combined capacity of 826 MW in 2014. (www.bloomberg.com)

January 2, 2014. With the country facing severe power shortage, Pakistan plans to set up seven functional nuclear plants of 1,100 MW each by 2030 in addition to four units of 300 MW, producing a total of 8,900 MW of electricity. Pakistan Atomic Energy Commission (PAEC) said that nuclear power was set to become major player in the country’s power sector. PAEC said that Prime Minister Nawaz Sharif has already performed the ground-breaking ceremony of two nuclear power plants with a capacity of 1,100 MW each in Karachi. PAEC said by 2030 the commission will be operating four nuclear power plants of 325 to 340 MW and seven nuclear power plants with a capacity of 1,100 MW each. The country began its journey towards proficiency in nuclear energy in 1972. PAEC said the initial years were utilised in gaining experience in safe operation of plants, building confidence and acquiring technology. Availability of funds was not an issue for setting up more nuclear power plants, but agreed that there were no sources other than China from where the country could get reactors. China has committed $6.5 billion to finance the construction of two nuclear power plants which is being built with Chinese help and technology. Chinese Ambassador to Pakistan Sun Weidong had recently said that a number of Chinese companies have a keen interest in energy cooperation with Pakistan and they are willing to participate in water, thermal, solar, wind, and civil nuclear power generation projects. (www.thehindubusinessline.com)

January 7, 2014. Welspun Energy Limited, 100 per cent owned subsidiary of Welspun Group, is looking to invest ` 1000 crore in Punjab to for 160 MW solar power plants. A memorandum of understanding to generate around 160 MW is likely to be signed with the Punjab soon, after the land is finalised. The company has set a target to generate 1750 MW (solar and wind energy) by 2017. It is likely to commission grid based solar projects of capacity 325 MW in this financial year. Welspun had already bagged a 35 (DC) solar power plant in Pun jab in July 2013. The agreement with Punjab government is likely to come with penalty clause in case of delay in implementation of projects. Welspun Energy plans to invest around ` 12,000 to 15,000 crore in renewable projects by 2017. The company is setting up renewable power projects of capacities 500 MW in Karnataka, 700 MW in Andhra Pradesh, 100 MW in Gujarat and 100 MW in Madhya Pradesh. (economictimes.indiatimes.com)

January 7, 2014. The Supreme Court (SC) directed the government to set up within three months a national environment regulator with the power to appraise and clear projects. The regulator would be created under Section 3(3) of the Environment (Protection) Act, 1986, for appraising projects, enforcing environmental conditions and to impose penalties on polluters, the court said. The court also said that this existing mechanism of appraising projects, known as the environmental impact assessment (EIA), which is carried out by the ministry of environment and forests (MoEF) had been found lacking in case of Lafarge. It cited a Delhi IIT study to back its argument that the existing system was far from satisfactory and that the MOEF's presence in both appraisal and approval leads to a perception of conflict of interest. (economictimes.indiatimes.com)

January 6, 2014. As part of its diversification programme, the National Hydropower Corporation Ltd (NHPC) inked a deal with the Kerala government to set up an 82 MW wind farm in the state's Palakkad district. Currently, the cost for generating one MW of wind energy is estimated to cost around ` 6 crore and the total project cost of this new wind farm will come to around ` 500 crore. (economictimes.indiatimes.com)

January 6, 2014. India delayed the deadline for companies to submit bids in its next national solar auction for a second time after developers raised concerns about the ability of cash-strapped state utilities to pay for power. The deadline has been pushed back by almost a month to Jan. 20, Solar Energy Corp. of India, which will conduct the auction of 750 MW of photovoltaic capacity, said on its website. Earlier, it had delayed the deadline from Nov. 29 to Dec. 28. The auction will be the first since 2011 by India’s National Solar Mission and will also be the first to offer ` 18.75 billion ($300 million) in grants to cover as much as 30 percent of project costs. Developers will submit bids specifying the funds they’re seeking, and the lowest bidders will win. The government extended the deadline after developers asked Solar Energy Corp. for protection against default by state distribution utilities that will buy power from the projects, according to Bridge to India Energy Pvt., a New Delhi-based solar advisory. The new deadline for completing projects will be around May 2015. (www.bloomberg.com)

January 2, 2014. The World Bank is helping offset almost half of the costs of a $960 million drinking-water project to bring piped supplies to rural residents of four low-income states in India, the government said. Women and children will benefit in particular from the project in the states of Assam, Bihar, Jharkhand and Uttar Pradesh “as they currently bear most of the burden of securing daily water supplies,” India’s Cabinet Committee on Economic Affairs said. The 12^th five-year plan for rural water supplies envisions raising piped water coverage to 50 percent of India’s non-urban population with 30 percent of the rural residents having household tap connections. The national and state governments will supply almost all of the remaining project costs. The government of India will repay the $500 million extended as credit by the World Bank over a 25-year period, it said. (www.bloomberg.com)

January 7, 2014. Toyota Motor Corp., which is getting ready to sell Camry-sized sedans powered by fuel cells next year in the U.S., plans to help create a network of hydrogen stations that may include pumps at car dealers and even trash dumps. The world’s largest automaker showed its hydrogen-fueled FCV sedan, a concept version of the car Toyota will sell in the U.S. and Japan next year, at the International Consumer Electronics Show in Las Vegas. Toyota, Hyundai Motor Co. and Honda Motor Co. have announced plans to sell hydrogen cars and crossovers initially to drivers in California, where strict state rules require increasing numbers of “zero-emission” vehicles to be sold each year through 2025. Currently, the state has about 10 public hydrogen fuel pumps, though the number is set to rise from this year, with a target of 100 more within a decade. California committed to spending as much as $200 million to expand its fueling network by 2024. Toyota is working with the University of California at Irvine and state officials to identify ideal locations for future fuel pumps. Only 68 stations are needed to ensure most California drivers have a place to refuel, Carter said. (www.bloomberg.com)

January 6, 2014. Europe’s appetite for cheaper electricity is reviving mines that produce the dirtiest type of coal, threatening to boost pollution and raze villages that have survived since medieval times. Across the continent’s mining belt, from Germany to Poland and the Czech Republic, utilities such as Vattenfall AB, CEZ AS and PGE SA are expanding open-pit mines that produce lignite. The moist, brown form of the fossil fuel packs less energy and more carbon than more frequently burned hard coal. The projects go against the grain of European Union rules limiting emissions and pushing cleaner energy. Alarmed at power prices about double U.S. levels, policy makers are allowing the expansion of coal mines that were scaled back in the past two decades, stirring a backlash in the targeted communities. Lignite demand worldwide is forecast to rise as much as 5.4 percent by 2020, according to the International Energy Agency. At the same time, it estimates consumption must fall 10 percent over that period to achieve goals endorsed by EU and world leaders to hold global warming to 2 degrees Celsius by the end of this century. (www.bloomberg.com)

January 3, 2014. China, the world’s most populous nation, called on cities to scale charges for water based on consumption by the end of 2015 to conserve the vital resource. The National Development and Reform Commission (NDRC) said local governments should set at least three tiers of water prices. Areas facing water shortage should implement bigger price increases with usage, the NDRC said. Rapid urbanization in China has put pressure on resources such as water, land and oil. China’s leaders pledged at a November gathering to speed up urbanization as part of policies that represent the biggest expansion of economic freedoms since at least the 1990s. The country’s urban population surpassed that of rural areas for the first time in the country’s history in 2011. (www.bloomberg.com)

January 3, 2014. Chilean lawmakers have presented a bill that would force mining companies including Anglo American Plc and BHP Billiton Plc to run all of their copper mines in Chile using desalinated water from the Pacific Ocean. The lower chamber of deputies’ measure that was introduced last month would require mines using more than 150 liters (40 gallons) of water a second to incorporate seawater in their operations. A third of the world’s copper supply comes from Chilean mines. Mining companies competing with communities in Chile’s famously dry Atacama Desert for diminishing freshwater reserves should process treated seawater, deputies backing the bill said. Antofagasta Plc, state-owned Codelco and Freeport-McMoRan Copper & Gold Inc. already use desalinated water at their copper mines. (www.bloomberg.com)

January 2, 2014. China, the world’s biggest emitter of greenhouse gases, will assign credit ratings to companies in industries with heavy pollution or overcapacity based on their efforts to protect the environment. The rating will provide a reference to banks for reviewing credit for the companies and to authorities for arranging subsidies, the Ministry of Environmental Protection said. Companies will be ranked on a four-level color-coded scale, with green representing the best and red the worst. China is stepping up its efforts to appease public anger associated with environmental concerns, a main cause of civil unrest. The government has pledged to cut carbon emissions per unit of economic output by as much as 45 percent from 2005 levels before 2020. Under rules on the new ratings, which come into effect starting March 1, banks are advised not to offer new loans to companies with red ratings until they have them upgraded. Provincial environmental protection authorities can assign the ratings or allow some social organizations to start the evaluation. (www.bloomberg.com)

January 1, 2014. Saudi Electricity Co (SEC) has invited companies to build, own and operate Saudi Arabia's first fossil-fuel fired power plant to use solar energy to cut carbon emissions, the state utility has said. The 550 MW integrated solar combined cycle (ISCC) plant will primarily burn natural gas, but will use solar thermal energy to increase fuel efficiency at the planned facility near Tabuk on the Red Sea coast. SEC, which said the planned Duba plant must also be able to burn Arabian super light crude oil as a back-up for gas, set a January 12 deadline for companies to express interest in bidding for the project. ISCC plants reduce emissions of climate-warming carbon by increasing the amount of steam available for driving power generation turbines, without having to burn more gas or oil. SEC did not say how large the solar element of the project was expected to be. (www.arabianbusiness.com)

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