MonitorsPublished on Jan 24, 2014
Energy News Monitor | Volume X; Issue 32




Ø    RENEWABLE ENERGY: India Renewable Energy Outlook 2035

Ø    COAL/POWER: Progressive power policies will not alleviate challenges faced by black gold!


Ø     Electricity Generation from Gas based Power Plants for 2012-13

Oil & Gas: India’s Milestones        



·         RIL-BP to quadruple KG-D6 output to 50 mmscmd by 2020

·         ONGC expects more oil from east coast block

·         MRPL says aims to process Latin American crude in 2014/15

·         RIL finalises gasoil term for 2014

·         NTPC okays ` 125.3 bn investment for Odisha plant

·          HPGCL starts process of slimming power generation bills

·         Power Grid Corporation of India to invest ` 4.7 bn in two projects

·          Cnooc sets 2014 output target lower than five-year goal

·         Poland's PGNiG says oil production doubled in 2013

·         CNPC 2013 O&G output at record on overseas production

·                   Exxon to Chevron face two-year wait in Mexico oil opening

·         China’s refiners processed most crude in 11 months in December

·         Ukraine says China considering investment in new refinery

·         Shell sells stake in Australia gas project

·         Chevron is said to seek buyers for $1 bn in US assets

·         TransAlta to build gas pipeline in Western Australia

·         Ghana to get new power plant

·                   Alstom wins 275 MW hydro power contract in Ivory Coast


·         Moily wants reassessment of India's O&G potential

·         RIL to begin CBM gas production in 2015-16

·         Oil companies set benchmark price for ethanol buy

·         India may get LNG supplies from Mozambique by 2019

·         India's energy demand growth to outpace China and Russia by 2035

·         IGL to increase CNG price by 10 per kg from April

·         Sudan offers two oil blocks to ONGC: Oil Minister

·         Govt plans lifeline for stranded gas projects

·         Final price bids for Odisha, Tamil Nadu UMPP to open on Feb 26

·         Green shoots emerge in power sector: India Ratings

·         China seen retaking lead from US in oil demand growth

·         IEA sees higher oil demand on recovery in developed nations

·         Abu Dhabi Govt extends Upper Zakum Oil Field concession by 15 yrs

·         Russia eyes resolution to Europe pipeline dispute

·         Tepco may spend $25.6 bn as growth path charted

·         Norwegian Govt keen to invest in power plants in HP

·         Boston beats New York with record power price premiums

·         New Malawi power plant opens

·         India draws bids for triple solar capacity offered

·         Climate change alters land map of India

·         Central water commission eyes towards reservoirs for hydropower harnessing

·         AP to offer incentives to energy saving industries

·         Climate proofing of farms seen too slow as industry faces havoc

·         Europe energy investment seen at risk without 2030 carbon target

·         Germany’s planned clean-energy aid cuts hurt turbine makers

·         Kenya to generate over half of its electricity through solar power by 2016

·         Toyota pledges to top US push to double fuel economy by 2025

·         Clean energy support falls again to $254 bn in 2013





India Renewable Energy Outlook 2035

Lydia Powell, Observer Research Foundation


orld Energy Outlook 2013 (WEO 2013) projects an optimistic picture for non-hydro renewable energy. But if one reads carefully there is a note of caution over what it calls ‘generous’ and ‘unlimited’ subsidies and cross subsidies that underpin this optimism. Globally renewables including hydropower is expected rise almost two and a half times from 983 million tonnes of oil equivalent (mtoe) in 2011 (8% of total primary energy demand) to almost 2400 mtoe (14% of primary energy demand) in 2035 if policies for low carbon energy is implemented across the world. In power generation renewables including hydropower is expected to become the second largest source of power generation after coal before 2015 and is expected to approach the share of coal by 2035. 

In terms of countries/regions, incremental electricity generation from renewable sources in China alone is expected to account for more that in the EU, USA and Japan combined from 2011 to 2035. China’s incremental electricity generation from renewable is also expected to match total additions from India, Latin America, Africa and ASEAN combined. 

In terms of energy sources for power generation, wind power based generation capacity at 1250 GW is expected to account for the largest cumulative capacity among renewable sources by 2035 led by investments in China, the EU, USA and India.  Hydro power is expected to account for 750 GW of cumulative capacity by 2035 but hydropower is expected to remain the leading source of renewable based power generation even though its share is expected to decline from the current 80%.  Installed capacity of solar power is likely to match that of hydro power by 2035 led by investments in China, the EU, USA and India. 

In India the share of renewables including hydro-power in power generation is expected to increase from the current 183 billion units (billion kilowatt hour) or 2.3% of total generation to 850 billion units or 10.4% of total generation. Projections in India’s 12th plan present a different picture. According to projections quoted in the plan document, non-hydro renewables will account for 33% of power generation capacity by 2030 and 16% of actual generation. Unfortunately, the source for these extremely optimistic projections is not given in the plan document. Let us however test the validity of these projections against realistic possibilities. If we use long term projections for electricity demand in 2032 given in the 18th power survey of the Central Electricity Authority (CEA) of India we arrive at some astonishing figures for renewable energy capacity. According to the 18th power survey, electrical energy requirement in 2032 would be 3710 billion units.[1] If 16% of this is to come from non-hydro renewable energy sources, non-hydro renewable based electricity generation capacity would have to be at least 340 GW by 2030 assuming an average PLF of 20% for renewable energy.  Apart from staggering amount of investment this would require there is also the question of land that this extent of non-hydro renewable capacity will require.  It is not clear if all this has been taken into account in the projections featured in the 12th plan. 

WEO 2013 points out that despite increasing capacity of wind and solar their variable and uncertain generation profile mean that the need for dispatchable capacity from conventional thermal will not be reduced significantly.  Obviously this is because the share of installed wind and solar capacity that can be confidently relied upon at times of high demand is much lower than for other plants. Typical values for this ‘capacity credit’ for wind is estimated at 5-10% and for solar estimated at 0-5%. Whether this is being taken into account in India’s plans for power generation is not clear. 

Another problem pointed out for large renewable capacities integrated into the grid is that of grid stability.  When non-synchronous wind and solar generation increases monetarily it is likely to affect the stability of the grid. The solution is to keep online a share of thermal generators at all times but the commercial viability of these plants would be a challenge as they may have very low utilisation rates. Once again it is not clear if plans are in place in India to address this issue.

WEO 2013 also raises the important question as to whether ‘grid parity’ is the appropriate metric to evaluate the competitiveness of solar PV systems households or a new metric of ‘cost parity’ needs to considered. Grid parity is the point at which the levelised cost of electricity (not including subsidies) falls to average retail price of electricity.  Cost parity on the other hand is the break-even point for the costs incurred by the household which has a PV system and the cost incurred by the household (s) that are solely reliant on the grid (as a large part of the fixed cost of PV systems is recovered through a variable component on all household electricity bills in developed electricity markets). If only grid parity is considered households with PV systems that do not pay their share of the system’s fixed costs and free ride on households without PV systems can declare that they have achieved ‘grid parity’.   

This has serious implications for the long term economic viability of India’s Jawaharlal Nehru National Solar Mission (JNNSM) and the narrative of competitiveness based on the idea of grid parity that surrounds it. The fall in cost of solar panels (attributed largely to subsides in China rather than technological breakthroughs) and the consequent achievement of ‘grid parity’ has led many to conclude that renewable power is fast becoming competitive with fossil fuel based electricity. As pointed out by WEO 2013, cost parity of PV systems will be achieved only when households reliant PV systems incurs the same overall costs as it would if it is solely reliant on PV systems.  Based on calculations shown in WEO 2013, the cost of PV systems has to fall well below current notions of grid parity to make ‘economic sense’. Under JNNSM, we do not necessarily have households but we have NTPC Vidyut Vyapar Nigam (NVVN) which has the role of signing power purchase agreements with PV generators. We could possibly apply the logic of cost parity to NVVN purchases to come to a realistic conclusion on the economic viability of the solar mission.

As pointed out in WEO 2013, apart from investment in capacity based on non-hydro renewables such as solar power and wind, the attributes of variability, modularity, uncertainty and non-synchronous generation make it necessary that each kilowatt of variable capacity would require $100-$250 additional investment in transmission and distribution. So far this additional investment required for renewable energy systems does not appear in any of India’s plans. 

In India the narrative of decentralised renewable based systems meeting the needs of rural communities without any serious strain on investment with the co-benefit of low carbon emissions is often presented to counter questions over economic viability. Many in the west also have similar green dreams for India and other energy poor nations. Decentralised power generation would in theory invalidate the concerns raised earlier and pave the way for the utopian vision of communities living off decentralised clean and free solar power.  Reality seems to be unravelling in a very different way. Few, if any, decentralised schemes, even under the generous offerings of the JNNSM, seem to be living happily ever after under the sun.   

 Views are those of the author                     

Author can be contacted at [email protected]



Progressive power policies will not alleviate challenges faced by black gold!

Ashish Gupta, Observer Research Foundation


here has been some good news and some bad news for the energy sector recently.  The good news is that the Power Ministry is taking initiatives to reform the power sector. The bad news is that coal supply is likely to continue as a major challenge for power producers. Let us first elaborate on the bad news and then go to the good news. 

The Supreme Court verdict has endorsed scrapping of coal blocks allocated under controversial terms.  Indeed the verdict is acceptable in theory but it will punish genuine companies who have made reasonable progress in miming.  Another very important point in this context is that we continue to press on expanding power generating capacity while at the same time curbing coal production.  Power producers have already invested huge amount of money in new power plants and when the plant is about to come on stream, their coal blocks stands cancelled for the reasons which are beyond their control.  What about the banks that have been forced to lend money to power projects as it is a priority infrastructure sector.  They stand exposed to huge risks in the power sector.  How they will recover their money?

Interestingly we are also concerned about economic growth but at the same time we try to stifle it in every possible way.  No one has a comprehensive grasp of the situation.  Why do tax payers have to fill gaps in the cost of importing coal? Such counterproductive moves are very dangerous for the country.  It will ultimately generate more and more nonperforming assets and less and less power.  The impact of this will be huge as it will initiate collapse of financial institutions.

Now coming to the good part, the Power Ministry is taking positive steps to push the growth in power generating capacity. They have recommended changes in the policy starting from the power purchase agreements to coal blocks allocation/ linkage. The following are the positive steps:


·      The status of mega power projects can be given to the thermal power plants having capacity of 1000 MW and all benefits offered to mega power status projects will be extended to them. This move will help power producers to avail lending facility from the financial institutions more easily.

·      The benefits of the mega power benefits will also be extended to brown field expansion projects within stipulated parameters; the condition on interstate sale of power for getting mega power status has also been relaxed. 

·      Many positive steps have been taken by the ministry to boost the hydel capacity in the country; thermal capacity above 700 MW or above in the Jammu & Kashmir and north eastern states will also be given mega power project status.

·      All the mega power projects will be required to tie up the power supply with distribution utilities through long term power purchase agreements.

Coal blocks

·      The Power Ministry is urging laying down of certain normative criteria for qualifying coal blocks allocation so that past mistakes are not be repeated especially the experience with Independent Power Producers and Merchant Power Plants.

·      There is also a consensus that from now onwards, bank guarantee deposited by coal block allottees should be substantial enough to deter non serious players from getting coal blocks.

·      If satisfactory progress is not achieved with respect to financial closure within six months time the allotment may be liable for cancellation.

o    Initial processing of linkage proposals can be done through requests of developers by the Ministry of Coal and there will be no need for specific recommendation by the Ministry of Power. All the proposals will be examined by the Screening Committee in the Ministry of Coal by following the above three points.

The question is whether the progressive steps taken by the Power Ministry can provide fruitful results? Certainly not! The fact that with a single stroke of the pen, coal blocks allocated can be cancelled will ensure that all the progressive policies go in vain. The laws and regulatory instruments work badly due to lax enforcement and inadequate coordination among a multiplicity of functionaries and central and state bureaucracies.  The heat of misdeeds of certain private coal players is being felt by serious genuine players. We could say that there is a genuine need to relook at the verdict of scrapping coal allocations based upon the rationality and its impact on the power sector. But needless to say, the future of black gold lies at the mercy of the Hon’ble Court now!


Views are those of the author                    

Author can be contacted at [email protected]



Electricity Generation from Gas based Power Plants for 2012-13

Akhilesh Sati, Observer Research Foundation

Million Units


Utility Name



Utility Name




GMR Energy Ltd - Kakinada























































RVK Energy






Silk Road Sugar





LVS Power


























































































































* Provisional figures

Source: Unstarred Question No. 3861, Rajya Sabha.

Oil & Gas: India’s Milestones             

Dinesh Kumar Madhrey, Observer Research Foundation

Continued from Volume X, Issue 31......


Lanka IOC (LIOC) created history on Colombo Stock Exchange as the biggest ever equity issue in Sri Lanka. The IPO offered 25% stake and was oversubscribed 11.6 times on first day. The world's largest single train kerosene-to-LAB (Linear Alkyl Benzene) plant was commissioned at Gujarat, signalling IndianOil's entry into petrochemicals. IndianOil paid the highest-ever dividend of 200% (for fiscal 2003), amounting to ` 2453 crore, to shareholders. The concept of branded retail outlets and customer service under umbrella brand ‘XTRA” was launched. Panipat-Rewari product pipeline was commissioned.

GAIL’s Dahej - Vijaipur natural gas pipeline was commissioned. A wholly-owned subsidiary company GAIL Global (Singapore) Pte Ltd was formed in Singapore. Platts declared GAIL as the first among Global Gas Utilities based on Return on Invested Capital (ROIC) in its worldwide survey of Top 250 Energy Companies in 2004. Tripura Natural Gas Co. Ltd., a Joint Venture for city gas project in Tripura and UP Central Gas Ltd., a Joint Venture for city gas project with BPCL in Kanpur was incorporated. GAIL acquired 15% equity stake in NatGas, Egypt.


Mathura Refinery became the first Indian refinery to produce Euro-III compliant diesel with the commissioning of diesel hydrotreater. It commissioned India's first petrol quantity upgradation unit to produce Euro-III compliant petrol.


IndianOil Blending Ltd (IOBL) merged with the parent company. Panipat Refinery capacity was enhanced from 9 to 12 MMTPA. Chennai-Trichy-Madurai product pipeline was dedicated to the nation. Kandla-Bhatinda product pipeline was converted to crude oil service and renamed as Mundra-Panipat pipeline. Koyali-Dahej pipeline was commissioned for product exports. IndianOil Skytanking Ltd was incorporated as a JV company with Indian Oiltanking and Skytanking, Germany. IOC Middle East FZE incorporated in UAE as an overseas subsidiary. Suntera Nigeria 205 Ltd incorporated as a JV Company with Oil India and Suntera Resources, Cyprus. GAIL brought India’s first spot LNG cargo at Dahej.


IOC’s Panipat Refinery capacity doubled from 6 to 12 MMTPA. Facilities for handling heavy crude oil was commissioned at Mundra; branch pipeline was laid from Lasariya to Chittaurgarh on Sidhpur-Sanganer product pipeline. Concept of ‘LNG at the doorstep’ was launched for customers located away from gas pipelines. In 2006-07, IOC’s turnover crossed ` 2,00,000 crore mark – only corporate in India to do so. Brahmaputra Cracker and Polymer Limited, a Joint Venture Company led by GAIL was formed for implementing Assam Gas Cracker Project.

to be continued…






Vijay Kelkar panel bats for output-sharing regime in oil exploration projects

January 21, 2014. A high-level committee headed by Vijay Kelkar, which has made out a strong case for moving back to production sharing contracts (PSC) for oil exploration projects, says that it would lead to an extra 7 billion barrel of oil equivalent of production valued at $700 billion in comparison with the current revenue-sharing regime. The committee, which submitted its report to petroleum minister Veerappa Moily recently, has said that considering that a large part of India's undiscovered reserves lie in difficult terrain, contractual arrangements have to offer investors engaged in oil exploration and production (E&P) the ability to offer higher than the hurdle rate to compensate for the inherent risks and the right risk-reward balance to put in money. And historically, since the New Exploration Licensing Policy (NELP) was kicked off two decades ago, exploration and production contracts in India have evolved to offer a good risk-reward balance under a production-sharing contract regime, according to the committee's report. (

RIL-BP to quadruple KG-D6 output to 50 mmscmd by 2020

January 20, 2014. Having reversed the falling output at KG-D6, Reliance Industries Ltd (RIL) and its partner BP plc will quadruple production at the eastern offshore fields to around 40-45 million standard cubic meters per day (mmscmd) by 2020. With addition of a well this month jacking up output by 2.5 mmscmd to 13.7 mmscmd, RIL-BP is repairing shut wells that will help further raise output to 16 mmscmd. BP India said new fields in the KG-D6 blocks will start coming on stream from 2018. The Bay of Bengal KG-D6 fields, which began gas production in April 2009, had hit a peak of 69.43 mmscmd in March 2010 before water and sand ingress led to shutting down of more than one-third of the wells. While the company carries out remedial measures to augment production from the currently producing D1&D3 and MA fields, it plans to invest $3.155 billion in producing 20 mmscmd of gas from R-Series discoveries in the block and another $1.529 billion in four satellite fields to produce 10 mmscmd. Another $1.2 billion is planned to be invested in other discoveries in the block. (

Investments in Venezuela face high risks: ONGC

January 18, 2014. Oil & Natural Gas Corp (ONGC) has cautioned the government that India's projects of $2.5 billion in Venezuela face high "operational, fiscal and legal risks", highlighting the need to quickly sign a bilateral investment pact with the oil-rich country. Venezuela has already attracted investment from Indian state firms, which are looking for more opportunities there, while Reliance Industries Ltd (RIL) is interested in picking up an equity stake in an oilfield in the country. Oil ministry and ONGC said the matter has been raised with the Latin American country. Venezuela has the largest petroleum reserves in the world, higher than Saudi Arabia. Hence it is one of the most important investment destinations for Indian companies. India's refiners such as Indian Oil Corp (IOC) and RIL import Venezuelan crude in large quantity and recently RIL evinced interest in picking up equity stake in oilfields of the country. (

L&T Hydrocarbon bags ` 10 bn order from domestic firms

January 16, 2014. L&T Hydrocarbon, a unit of Larsen and Tubro (L&T), has secured a ` 1,000 crore order from oil and gas firms including a ` 700 crore order from BG Exploration and Production India. The scope of the project, scheduled to be completed by March, 2015, also includes installation of piggy back pipeline on the in-field pipeline from an existing PPA host complex. L&T Hydrocarbon provides complete design-to-build engineering and construction solutions for the oil and gas sector. (

ONGC expects more oil from east coast block

January 15, 2013. ONGC estimates its deepwater block off the east coast holds an additional 25 million tonnes (mt) of oil reserves, which would give a boost to India’s efforts towards energy security. The country’s largest hydrocarbon explorer also plans to award a contract for a 15,000 sq. km seismic survey off the west coast, according to company. The contract, valued at around ` 1,500 crore, will help ONGC in exploration efforts. ONGC’s KG-DWN-98/2 block, adjacent to RIL’s D6 field (KG-DWN-98/3) in the Krishna-Godavari basin in Andhra Pradesh, is estimated to hold 125 mt of oil and 3 trillion cu. ft gas. While declaration of commerciality has been submitted to the Directorate General of Hydrocarbons (DGH), the field development plan (FDP) involving an expenditure of around $9 billion is in the works. (


MRPL says aims to process Latin American crude in 2014/15

January 15, 2014. Mangalore Refinery and Petrochemicals Ltd (MRPL) aims to process as much as 40,000 bpd of Latin American grades as it is in the process of commissioning a delayed coker. MRPL also aims to continue processing about 80,000 barrels per day of Iranian oil in the next fiscal year if sanctions are eased. Latin American grades will be procured from the spot market and would help improve margins. MRPL operates a 300,000 bpd refinery at Mangalore in southern India. (

Transportation / Trade

SC orders status quo on GAIL pipeline in Tamil Nadu

January 18, 2014. The Supreme Court (SC) directed that status quo be maintained in Tamil Nadu on a proposed 310 km GAIL pipeline that would carry imported gas from Kochi to the national grid. The pipeline is being opposed by local farmers and the state government. The state government has opposed the pipeline and has instead suggested that it run parallel to a national highway along which land was available on both sides. GAIL has refused to accept the realignment. (

First oil import tender for strategic storage seen in April-June

January 17, 2014. Govt is likely to issue the first oil import tender for its 7.55 million barrels strategic storage on the east coast in the April to June quarter, the chief of the firm building the facilities said. The world's No.4 crude importer is constructing strategic storage facilities at three locations in southern India to hold a total 36.87 million barrels of oil, sufficient to meet about 15 days of the country's needs in case of supply disruption. The first facility at Vizag that can hold 9.75 million barrels will be ready by June, said Rajan K. Pillai, chief executive of Indian Strategic Petroleum Reserves Ltd (ISPRL). The Vizag facility has two compartments of 7.55 million barrels and 2.20 million barrels. The smaller compartment will be used by Hindustan Petroleum for its 166,000 barrels-per-day Vizag refinery in Andhra Pradesh, he said. ISPRL would take help from state refiners to float the tender and has sought about ` 50 billion ($812.22 million) federal help to fill the cavern, he said. The remaining two strategic storage facilities at Padur and Mangalore in southern Karnataka state that can together hold 29.3 million barrels are expected to be ready by March 2015, Pillai said. (

RIL finalises gasoil term for 2014

January 15, 2014. Reliance Industries Ltd (RIL) has finalised its 2014 term contracts to sell gasoil for January to December at lower premiums than last year. The company agreed to sell 500 parts per million (ppm) sulphur gasoil at premiums of $2.25 to $2.50 a barrel above Middle East quotes, lower than the $2.70 a barrel premium negotiated for last year. RIL also agreed to sell the 10 ppm sulphur diesel at premiums of $2.50 and $3 a barrel above Middle East quotes, also lower than 2013's premiums. (

Policy / Performance

Govt to launch sale of 5 kg LPG cylinder in the Capital

January 21, 2014. Union Petroleum and Natural Gas Minister Veerappa Moily will launch sale of 5 kg liquefied petroleum gas (LPG) cylinders at petrol pumps in the Capital. The scheme, which has already been launched in various parts of the country except Delhi, Rajasthan, Madhya Pradesh and Chhattisgarh in view of the Assembly elections in those States, will now be formally launched in the Capital. A 5 kg LPG cylinder will be sold at petrol pumps for ` 543. Cooking gas till now was sold only by 13,088 LPG distributors or dealers of State-owned firms. Now, the convenient 5-kg cylinder will also be available at 50,392 petrol pumps across the country. The scheme as a pilot was launched on October 5 last year at petrol pumps owned and operated by oil companies in Delhi, Mumbai, Kolkata, Chennai and Bangalore. Company-owned and operated outlets make up for just 3 per cent of all petrol pumps in the country. With the scheme receiving encouraging response, it was extended to all petrol pumps across the country. The scheme is considered to be a boon for the migratory population such as students, IT professionals and BPO employees, as well as people with odd work hours. It offers them the flexibility to pick up cylinders and obtain refills at the time of their choice because petrol stations are open for longer hours than LPG dealers. The first-time purchase of a 5 kg cylinder will cost ` 1,000 plus taxes, while a regulator will be available for ` 250 and taxes. The first time charge includes a security deposit for the cylinder. Subsequent refills will be sold at the prevailing market price. Traditionally, oil companies have sold LPG cylinders through their distributor networks. Customers are enrolled by collecting proof of identity and address and a deposit for the cylinder and regulator. For some consumers, the need is in small parcels or arises at odd times of the day when distributors may be closed. The initiative allows sale of 5-kg cylinders at market price to customers who provide proof of identity. (

Moily wants reassessment of India's O&G potential

January 20, 2014. With a two-decade old estimate of oil and gas reserves in India becoming outdated, Oil Minister M Veerappa Moily has set up a multi-organisational team to reassess the country's hydrocarbon resources. The Multi-Organisation Team (MOT) will reassess the potential of all 26 sedimentary basins in the country in light of the oil and gas discoveries since 2001. The previous such exercise was undertaken two decades ago, when 15 sedimentary basins were studied. That estimation put India's oil and gas resource potential at a fraction of the 206 billion barrels of oil and oil-equivalent gas assessed by the International Energy Agency (IEA) last year. MOT will comprise of exploration heads of state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd and will also have an official from the Directorate General of Hydrocarbons (DGH), the oil ministry said. (

RIL to begin CBM gas production in 2015-16

January 20, 2014. Reliance Industries Ltd (RIL) plans to start production of natural gas from coal seams, called coal-bed methane (CBM), in Madhya Pradesh from 2015-16. RIL said first gas from its Sohagpur CBM blocks in Madhya Pradesh is "targeted by FY16." It plans to produce 3.5 million standard cubic meters per day of gas from the two Sohagpur blocks. RIL holds 3 CBM blocks -- Sohagpur (East) and Sohagpur (West) in Madhya Pradesh and Sonhat in Chattisgarh. RIL has drilled over 40 crore holes on the 500 square kilometre. Sohagpur West and 495 sq km Sohagpur East blocks and tested for gas content. (

Oil companies set benchmark price for ethanol buy

January 20, 2014. State-run oil companies have set a benchmark price for procuring ethanol for blending with petrol, drawing protests from supplier sugar mills. The development threatens to further delay India's initiative to cut dependence on fossil fuels. Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum have said that they will procure ethanol only from bidders that match the benchmark price of 44 per litre. The move, however, has drawn protests from domestic sugar mill owners who are finding it hard to balance rising price of cane and a drop in global sugar prices. The government's ethanol blending programme, started in 2006, has suffered delays due to pricing issues between the oil companies and sugar mills, which produce molasses, a by-product that is the main source of ethanol in the country. The petroleum ministry confirmed that the oil companies have set 44/litre as the benchmark price. They said that the oil marketing companies (OMCs) are mulling an increase in the price. The Cabinet Committee of Economic Affairs had made 5% ethanol blending with petrol mandatory from June last year, but the order is yet to be implemented due to problems with procurement. (

India may get LNG supplies from Mozambique by 2019

January 16, 2014. India may get the first liquefied natural gas (LNG) consignment from Mozambique by 2019, the African nation’s minister for mineral resources Esperanca Bias said. Bias said her country is expected to start production from Rovuma basin in 2018. ONGC Videsh Ltd (OVL), Oil India Ltd (OIL) and Bharat Petroleum Corp. Ltd (BPCL) together hold 30% of the Rovuma area 1 offshore basin, the largest gas find off Africa’s east that is valued at $60 billion, with estimated recoverable reserves of 35-65 trillion cubic feet. US-based Anadarko Petroleum Corp. is the project operator. Other partners include Empresa Nacional de Hidrocarbonetos EP of Mozambique, Mitsui and Co. Ltd of Japan and PTT Exploration and Production Public Co. Ltd of Thailand. The final investment decision for the Mozambique project will be completed this year. The final investment decision will cover all norms for developing the project and the attached LNG terminals. According to the initial proposal, nearly 10 LNG terminals are likely to be set up in the project with each of them having five million tonnes per annum (mtpa) capacity. Each stakeholder will invest equivalent to the company’s stake in the project. (

Odisha asks Petroleum Ministry to extend DBT deadline

January 19, 2014. With a large number of people yet to get Aadhar card, Odisha government urged the Ministry of Petroleum to extend the deadline for implementation of the direct benefit transfer (DBT) scheme for transfer of subsidy on LPG to the bank account of the consumers. In a letter to Union Petroleum Secretary, state Chief Secretary JK Mohapatra requested the extension of deadline from January 31 to April 30 for seven districts in the first phase. Eight districts where Aadhar number has been made mandatory by the LPG distributors are Cuttack, Puri, Balangir, Khurdha, Bhadrak, Balasore, Sonepur and Sundargarh. (

Surat-Paradip project a chance to develop CNG corridor: Praful Patel

January 18, 2014. GAIL's proposed 1,540 km long Surat- Paradip natural gas pipeline project, which will pass through Vidarbha, will be of immense benefit to the gas Consumers in the region, Heavy Industries Praful Patel Minister said. The pipeline will pass through Dhule, Jalgaon, Akola, Amravati, Nagpur, Bhandara, Durg, Bhilai and Raipur, GAIL has said in a letter to Patel. The pipeline will fulfil the natural gas demand of various districts and regions in Gujarat, Maharashtra, Chhattisgarh and Odisha, Patel said. (

India's energy demand growth to outpace China and Russia by 2035

January 16, 2014. India's energy consumption will rise by 132 per cent by 2035, outpacing demand growth in Russia, China and Brazil, BP's Global Energy Outlook said. India's energy production will rise by 112 per cent (from 344 million tonnes oil equivalent in 2012 to 729.4 million tonnes in 2035) while consumption grows by 132 per cent. The nation, which will in seven years become the world's third largest energy consumer, will see energy demand rise from 563.5 million tonnes oil equivalent to 786.1 million tonnes by 2020. It will soar to 938.6 million tonnes by 2025 and to 1307.5 million tonnes by 2035, the report said. BP Energy Outlook said the country's oil imports will rise by 169 per cent and account for over 60 per cent of the net increase in imports, followed by increasing imports of gas (573 per cent) and coal (85 per cent). India's energy mix evolves very slowly over the next 20 years with fossil fuels accounting for 87 per cent of demand in 2035, compared to a global average of 81 per cent. This is down from 92 per cent. (

IGL to increase CNG price by 10 per kg from April

January 15, 2014. Indraprastha Gas limited (IGL) will raise the price of Compressed Natural Gas (CNG) by at least ` 10 per kg from April 1, when the domestic gas prices are also expected to double, its managing director said. The subsequent changes in the price of CNG would depend on the allocation of domestic gas under the new regime. Domestic gas prices are likely to double to about $8.4 per unit from April. IGL currently sources around 70% of its CNG requirement domestically. The rest is from imported gas, which is much more costly. CNG prices in Delhi/NCR were increased by a record high of 10% last month. The price of CNG will rise by up to ` 9 per kg in Delhi and at 12-15 per kg in Mumbai from April because of higher prices of domestic gas and domestic supply will be distributed more equitably between competing cities. (

DEA suggests O&G profit sharing with home state

January 15, 2014. The Department of Economic Affairs (DEA) has proposed that the Centre should share oil and gas profits with the state where blocks are located to get critical local support. The suggestion is based on Andhra Pradash's demand that it should have a share in output from Reliance Industries-operated KG-D6 block, off the Andhra coast. According to the current policies, a state does not get any share in profit from oil and gas resources located in its territory. States only get royalty on oil and gas output from on-land fields, but they do not get royalty for output from offshore fields. DEA, which is an important arm of the finance ministry, feels that Cabinet should consider incentivizing states while finalizing the proposed new auction regime. (

Sudan offers two oil blocks to ONGC: Oil Minister

January 15, 2014. Oil-rich Sudan has offered two exploration blocks to Oil & Natural Gas Corp (ONGC) without competitive bidding, Petroleum Minister Veerappa Moily said. ONGC Videsh Ltd (OVL) is present in the country since 2003 and involved in producing oil from three oilfields. It has stakes in blocks 1, 2 and 4 and an oil pipeline. The Indian company is pursuing with the Sudanese authorities to resolve issues related to pending payment and high charges for transporting crude oil. Moily said his meetings with visiting ministers of Uganda, Ecuador, Canada, Turkmenistan and Azerbaijan were fruitful. Azerbaijan has offered Indian oil firms to participate in their discovered fields and refinery projects, he said. (

Oil regulator PNGRB extends last date for CNG and piped cooking gas bidding

January 15, 2014. Oil regulator PNGRB has extended the last date of bidding for licences to retail CNG and piped cooking gas in 14 cities, including Bengaluru and Pune, by three months to May 12. The Petroleum and Natural Gas Regulatory Board (PNGRB) had in September last year invited bids for development of city gas distribution (CGD) networks in Eranakulam in Kerala; Rangareddy/ Medak, Nalgonda and Khammam in Andhra Pradesh; Bengaluru rural and urban districts in Karnataka; Raigarh, Pune and Thane in Maharashtra; Daman; Dadar & Nagar Haveli; Shahjahanpur in Uttar Pradesh; Guna in Madhya Pradesh; Panipat in Haryana and Amritsar in Punjab. The last date for sale of bid document has been extended from February 4 to May 5 and the last date for bidding from February 11 to May 12. Bidders have been asked to quote the tariff they will charge for the pipeline network to be laid in the city and the compression charge for dispensing CNG (compressed natural gas) over the 25 years. (

Petrol prices may come down by ` 2 a litre

January 15, 2014. After two consecutive hikes in petrol prices in many parts of the country on January 3 and January 5, which led to an increase of ` 2.25 per litre in Mumbai alone, the state-owned oil marketing firms may slash the prices by ` 1.5-2 a litre, on account of the softening international crude oil prices and the appreciation of the Indian rupee against the US dollar. Oil marketing firms Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) meet fortnightly to review petrol prices. The international crude oil price of Indian basket fell to $104.77 per barrel (bbl) compared to $108 per bbl on January 1 as Iranian supply outlook brightened after a landmark deal to curb Tehran's disputed nuclear programme takes effect on January 20. In rupee terms also, the crude oil price of Indian basket declined to ` 6,489.45 per bbl compared to ` 6,726 per bbl on January 1. This is because the rupee gained 38 paisa to close at a one-month high of 61.52 against the dollar after local stocks surged and exporters and banks sold dollars, lifting the rupee to its highest level since closing at 61.25 on December 11. (



NTPC okays ` 125.3 bn investment for Odisha plant

January 17, 2014. NTPC approved an investment of ` 12,532.44 crore for setting up 1,600 MW thermal power project in Odisha. This approval is subject to environmental clearance. This approved investment is more than the earlier estimated cost of the project due to increase in land compensation. The project requires approximately 1,600 acres of land. It is linked to the Dulanga coal mine, with seven million tonnes capacity, in Odisha. The company recently signed an initial agreement with the Geological Survey of India to set up a geothermal power project at Tattapani in Chhattisgarh. NTPC's current installed generation capacity is 42,454 MW. The company plans to add about 20,000 MW by 2017. It has about 1,500 MW of hydro power capacity under construction and operates about 4,000 MW of gas-based power plants in the country. (

KNPP second unit likely to go critical by June

January 16, 2014. The 1000 MW second unit of the Kudankulam Nuclear Power Plant (KNPP) is likely to attain criticality by June, nearly a year after the first reactor crossed the milestone, according to a top Atomic Energy Commission (AEC). The country's first 1,000 MW pressurised water reactor of the Indo-Russian joint venture project attained criticality (start of nuclear fission process) in July last year and commenced electricity generation in October. Presently it is producing over 400 MW. The commissioning of the plant was delayed considerably due to the protest spearheaded by the People's Movement against Nuclear Energy (PMANE). Union Minister V Narayanasamy had said the second unit of the KKNPP would start generating electricity from September. (

ONGC's 2nd thermal unit at Palatana to be operational by June

January 16, 2014. ONGC's second unit of gas-fired thermal power project at Palatana in Tripura will be operational in June this year, the company said. Oil and Natural Gas Corporation - Tripura Power Company (OTPC) said Palatana power project is the most sought-after gas plant in the country which can generate one unit of power at ` 3 only. If the central government decides to sell power to Bangladesh, High Voltage Direct Current (HVDC) line needs to be drawn and that is not an easy task, OTPC said. OTPC said the total project cost is ` 4,000 crore, of which ` 3,000 crore has already been spent and the annual turnover per year from the project would be around ` 1,600 crore. (

HPGCL starts process of slimming power generation bills

January 16, 2014. The Haryana Power Generation Corporation Ltd (HPGCL) informed of a slew of measures initiated to improve efficiency of its thermal power stations and bring down cost of generation. The power distribution utilities in the state were turning to non-state players due to the high variable cost. HPGCL said competition had increased after delicensing of power generation under the Electricity Act, 2003. As a result, the corporation's managing director was looking to bring down the cost of generation at Panipat, Hisar and Yamunanagar. This would ensure that its power gets scheduled by distribution companies. (

Decreased water level affects power generation at Sutlej plant

January 16, 2014. Power generation at a hydroelectric plant in Himachal Pradesh has been hit due to lowering of the river water level as a consequence of freezing weather conditions at higher altitudes. The 1500 MW Sutlej Jal Vidhut Nigam (SJVNL) power project in Shimla, supplies 547 MW of electricity to the state, Himachal Pradesh and eight other neighbouring states, including Haryana, Punjab, Rajasthan, Delhi, Uttar Pradesh, Jammu and Kashmir, Uttarakhand and Chandigarh. (

Transmission / Distribution / Trade

CAG teams visit Delhi discoms

January 21, 2014. Three teams from the office of the Comptroller and Auditor-General of India (CAG) visited the offices of the three Delhi private power distribution companies, to start a scrutiny of their financial accounts. Delhi Chief Minister Arvind Kejriwal had asked for the audit, alleging the three discoms – Reliance Infrastructure-owned BSES Yamuna, BSES Rajdhani and Tata Power Delhi Distribution – manipulate accounts to seek rate increase. The discoms have contested the charges and challenged the CAG’s authority to conduct such an audit. The discoms have disputed the government’s claim of revenue from aggregate technical and commercial loss reduction. They have also rejected the allegations of undisclosed revenue from surplus power. The audit will cover the period since 2002, when power distribution was privatised in Delhi, and could take up to six months. Kejriwal had slashed power rates for Delhi’s 2.8-million domestic consumers by half through a 50 per cent subsidy, which  would cost the Delhi government ` 260 crore in the current quarter ending March. The result of the audit could impact the subsidy handout. (

Delhi discoms offer to surrender surplus power to state govt

January 20 2014. Facing allegations of selling a surplus 1,000 MW to group companies at below-market rates to supress profits, BSES discoms have urged the Delhi government to take over management of unused power so that the controversy can come to an end. Despite the Delhi High court quashing the regulatory order that said discoms could make profit of ` 3,577 crore a year by selling surplus power alone, consumer groups continue to cite the order to bolster their case that discoms are manipulating electricity trading deals. The Delhi Electricity Regulatory Commission had arrived at the profit figure by assuming electricity price of ` 5.75 a unit in 2007. On the other hand, discoms maintain that power is surplus only during non-peak hours when prevailing market rates are low. So, prices are usually lower than rates at which power is purchased from central generating stations under long-term power purchase agreements (PPAs). Discoms have said they sell surplus electricity through transparent mechanisms like power exchanges, trading and banking arrangements and unscheduled interchange (UI), where all transactions are accounted by the state load despatch centre in compliance with the guidelines laid down by the regulator. Anyway, the discoms have further said that they cannot be held responsible for terms of the PPAs that were signed by the erstwhile Delhi Vidyut Board prior to its privatisation in 2002, and assigned to them in 2007. BSES Rajdhani Power and BSES Yamuna Power together cater to two-thirds of electricity consumers in the national capital. (

Power Grid Corporation of India to invest ` 4.7 bn in two projects

January 16, 2014. Power Grid Corporation of India will invest more than ` 472 crore in two projects. The two projects are estimated to cost ` 472.58 crore. An investment of ` 374.63 crore will be made in 'Phase-I of Unified Real Time Dynamic State Measurement (URTDSM) Project', which is expected to be completed in 27 months. Besides, the state-owned company will invest ` 97.95 crore in 'Transmission System associated with contingency plan for evacuation of power from IL&FS (2x800 MW)'. This project is expected to be commissioned within 18 months from the date of investment approval. (

Govt looking at ways to reduce smart grid tech costs

January 15, 2014. Various options are being studied to reduce the cost of smart grid technologies, which will help in bringing down overall transmission and distribution losses in the power sector, a Planning Commission member B K Chaturvedi said. Smart grid technologies would help in ensuring efficient power system and pilot projects in this regard have already been identified by the government. B K Chaturvedi said that an exercise is underway to reduce the cost of smart grid technologies. (

Policy / Performance

Govt plans lifeline for stranded gas projects

January 20, 2014. In what may provide a lifeline to gas-based power projects stuck due to want of fuel, the government is working on a proposal that will provide repayment concessions to these projects with a combined capacity of at least 8,000 MW. A decision to this effect may be taken by the cabinet committee on economic affairs (CCEA). The government’s move comes even as gas-fuelled power projects with an aggregate capacity of 8,000 MW that are close to commissioning and another 1,500 MW that have been commissioned have been stranded in the absence of gas. Another 18,000 MW capacity is operating at a plant load factor (PLF) of 20%. The power projects require 102.61 million standard cubic metres per day of gas. Gas availability has been a concern and was articulated by finance minister P. Chidambaram. Chidambaram said 24,147 MW of power generation capacity was stuck and 3.4 million tonnes of fertilizer couldn’t be produced due to lack of gas. The country has a power generation capacity of 232,164.94 MW, of which 20,380.85 MW is fuelled by gas. Gas-fuelled power plants have been operating below capacity because of declining production from Reliance Industries Ltd’s D6 block in the Krishna-Godavari basin. While the utilities can run the project on imported liquefied natural gas (LNG) the difference between the domestic gas cost and imported LNG dissuades the consumers to procure such expensive power. (

Maharashtra cuts power tariffs by 20 pc

January 20, 2013. The Maharashtra cabinet approved a 20% cut in power tariffs in the state except Mumbai, drawing criticism from experts, opposition parties and industry for introducing what they termed a populist measure. The cabinet will discuss lowering the rates in Mumbai as well. In the rest of Maharashtra, the government has put a cap of 300 units a month for domestic consumers to become eligible for a 20% cut in the power tariff through a subsidy. There is no such cap for industrial, commercial and agriculture consumers. Average power rates for industrial consumers, which is about ` 8.50 a unit, will be reduced by ` 1.70 a unit. The average rate for domestic consumers whose consumption is below 100 units per month will come down from ` 4.16 per unit to ` 3.36 per unit. For consumers whose consumption is above 100 but below 300, their per unit rate will come down from 7.42 per unit but to 6.05 per unit. (

Govt plans to offer 4 coal blocks in first tranche of auction

January 20, 2014. The centre is planning to offer four coal blocks to the power sector out of the proposed ten to be auctioned in the first lot through competitive bidding in the first tranche. The coal secretary S.K. Srivastava said that in another one month the government was hoping to concretize the roadmap for the auction. The coal ministry was learnt to have shortlisted some 29 blocks that would be put for auction through competitive bidding route. Srivastava said the government would auction the coal blocks after deciding on the sectors to be offered. It was yet to finalize the sectors for which the other six blocks would be offered in the first tranche, he said. (

CIL could have helped slash production cost by 12 pc: Power companies

January 17, 2014. Coal India Ltd (CIL) could have helped power companies save their production cost by 12%, or 35 paise a unit, if it had kept coal prices lower by using the money that it would pay as interim dividend. The state-run monopoly coal supplier declared a dividend of ` 29 a share. The central government, which holds 90% of the company, will get close to ` 20,000 crore in the form of dividend and dividend distribution tax. CIL was forced to declare the hefty dividend as the government had to abort its plan to sell a 5% stake in the company because of opposition from labour unions. The stake sale could have helped the government raise about ` 20,000 crore. (

Coal ministry says will review 61 captive coal blocks

January 16, 2014. The coal ministry said it would review the progress of 61 captive coal blocks allocated to private companies, in which either the first stage of environment clearances had not been obtained or which had not been explored or had only been partially explored at the time of allocation. The ministry listed these blocks in a notice that said all such blocks would be taken back. The notice was published on its website. The companies have been given until 5 Feb (and in some specified cases until 12 Feb) to obtain clearances and furnish documents. (

Final price bids for Odisha, Tamil Nadu UMPP to open on Feb 26

January 16, 2014. The final price bids for the two ultra mega power projects -- Odisha and Tamil Nadu -- will open on February 26, Power Minister Jyotiraditya Scindia said. The Minister said that the projects will be awarded to the successful bidders post opening of the financial bids. All the nine applicants for Odisha UMPP and eight applicants for Cheyyur UMPP (Tamil Nadu) who have applied for RFQ (Request for Qualification) have been shortlisted for issuance of Request for Proposal (RFP) or the final price bids. Power Finance Corporation is the nodal agency for UMPPs in the country. UMPP is coal-based thermal power project that have 4,000 MW of generation capacity. (

No takers for expensive gas-based power generation: Scindia

January 16, 2014. Producing costlier power from expensive gas is possible but there will be no buyers for that electricity, Power Minister Jyotiraditya Scindia said. Cabinet Committee on Investment approved the doubling of natural gas prices to $8.4 from April 1, 2014. The move is expected to result in higher power tariff, urea cost and CNG prices. Describing gas-based power generation as one of the many vexatious issues that he has had to deal with, the minister wished he could have done more on the subject. (

Green shoots emerge in power sector: India Ratings

January 15, 2014. The government's policy measures aimed at improving fuel availability and the financial health of state utilities seem to have helped revive the power sector, according to India Ratings & Research. Green shoots are emerging in the power sector due to the Indian government's FY13 and FY14 policy measures towards solving two key issues - fuel risk and poor financial health of state power utilities, the Fitch Group company said. According to the firm, the past three years (FY11-FY13) were the worst for the sector due to the weak financial health of state utilities on account of tariffs that did not reflect cost, reliance on short-term power that is usually costlier, high aggregate technical and commercial losses and delayed receipts of subsidy. (




Cnooc sets 2014 output target lower than five-year goal

January 21, 2014. Cnooc Ltd., China’s biggest offshore oil and gas producer, dropped the most in more than two years in Hong Kong as two analysts downgraded the stock after its forecast for output growth fell short of target. The Beijing-based explorer will produce 422 million to 435 million barrels of oil equivalent, or a 5.6 increase from a year earlier, it said. The company produced 412 million barrels of oil equivalent in 2013, including 61 million barrels from Canada’s Nexen Inc. (

Poland's PGNiG says oil production doubled in 2013

January 20, 2014. Polish gas monopoly PGNiG said it had doubled production of crude oil last year to about 1.1 million tonnes and raised output of natural gas to 4.6 billion cubic meters from 4.3 billion in 2012. In the fourth quarter alone, crude production amounted to 310,000 tonnes, compared with 139,000 a year earlier, it said. The jump was due to the opening of the Lubiatow oil and gas rig, the biggest in Poland, and the start of operations in Norway by PGNiG Upstream International. The company said it would release final estimates of its oil and gas output together with its financial results. (

CNPC 2013 O&G output at record on overseas production

January 17, 2014. China National Petroleum Corp. (CNPC), the nation’s largest energy producer, said oil and gas production in 2013 exceeded 300 million metric tons for the first time, as overseas output reached a record. Overseas production was 123 million tons last year, the state-owned Beijing-based company said. Total production was “more than 300 million metric tons,” it said. (

Shale’s ‘next big play’ draws US gas producer to Australia

January 17, 2014. Australia has the most attractive shale gas prospects outside North America, according to Magnum Hunter Resources Corp., a Houston-based producer that says it has scoured the world looking for deposits of the gas that has revolutionized energy supply in the U.S. The Cooper Basin, an area straddling the border of South Australia and Queensland states, has also lured investment from Chevron Corp. and BG Group Plc ahead of expected shortages of the fuel to feed more than $60 billion of liquefied natural gas projects in eastern Australia that will ship to Japan, South Korea and China. (

Exxon to Chevron face two-year wait in Mexico oil opening

January 16, 2014. Oil companies from Exxon Mobil Corp. to Chevron Corp. will have to wait another two years before investing an estimated $20 billion in Mexico’s recently opened oil and gas industry. Foreign crude producers will be allowed to bid on fields for exploration and begin developing infrastructure and operations as soon as late next year, Deputy Energy Minister Enrique Ochoa said. Prior to granting the operating licenses, the legal framework has to be determined and state oil producer Petroleos Mexicanos must select the fields it plans to continue to develop, he said. (


China’s refiners processed most crude in 11 months in December

January 20, 2014. China’s refineries processed the most crude in 11 months in December as they prepared to meet increased fuel demand over the Lunar New Year holiday. Processing rose 0.2 percent from a year earlier to about 42 million metric tons, the National Bureau of Statistics said in Beijing. That’s equivalent to an average of 9.93 million barrels a day, exceeding November’s rate of 9.81 million. Chinese refineries typically boost crude runs before the week-long New Year to build inventories and supply gasoline as holiday travel increases. For 2013, processing volumes climbed 3.3 percent to 478.58 million tons, or 9.61 million barrels a day, the statistics bureau’s data show. China’s Lunar New Year begins on Jan. 31 and ends Feb. 6 this year. (

Refiners rush to ship gasoil, diesel to freezing US

January 17, 2014. Refiners in Asia, Europe and Russia are shipping around half a million tonnes of heating oil and diesel to the United States, this month after bitterly cold weather sharply reduced oil stocks there. At least a dozen tankers have been booked so far in January to ship gasoil and diesel to the U.S. East Coast, according to traders and shipping data. The majority of the tankers, or around 300,000 tonnes of oil product, originated from the Baltic Sea and Black Sea. One tanker, the 100,000-tonne Torm Valborg, was chartered by Reliance, which operates the world's biggest refining complex in western India. (

Ukraine says China considering investment in new refinery

January 15, 2014. China is considering investing in a project to build a new oil refinery on Ukraine's Black Sea coast. Ukraine's Energy Minister Eduard Stavytsky said that the new refinery could cost up to $2 billion and would probably be built in Odessa or the Kherson region in southern Ukraine. Ukraine has six large oil refineries but only two regularly process oil. Producers have said that the current tax regime makes oil processing unprofitable. Stavytsky said that PetroChina was considering investing in construction of an oil refinery in Ukraine. (

Transportation / Trade

Iran oil exports seen little changed by IEA amid sanctions deal

January 21, 2014. Importers of Iranian crude kept purchases little changed in December, the month after world powers agreed to relax some sanctions against the Persian Gulf state as part of an accord to curb its nuclear program, the International Energy Agency (IEA) said. Buyer countries received 1.15 million barrels a day last month, compared with an upwardly revised 1.1 million barrels in November, the IEA, a Paris-based adviser to 28 nations, said. Most shipments that arrived at Asian ports in December would have left Iran in the prior month. The deal to curb some sanctions was reached in principle on Nov. 23 and took effect. (

Shell sells stake in Australia gas project

January 20, 2014. Royal Dutch Shell PLC says it has agreed to sell its stakes in an Australian liquefied natural gas project to the Kuwaiti Foreign Petroleum Exploration Company for $1.135 billion (840 million euros). Shell announced it is selling its eight percent stake in the Wheatstone-Iago joint venture and its 6.4 percent interest in the Wheatstone liquefied natural gas project. (

Chevron is said to seek buyers for $1 bn in US assets

January 17, 2014. Chevron Corp. is seeking to sell pipeline and storage operations in Texas and Louisiana that together may fetch more than $1 billion. Chevron is working with Jefferies Group LLC to find buyers for at least four natural gas and crude oil pipeline operations. The San Ramon, California-based company began sending out offering materials. Diversified energy companies have been seeking to sell or spin off transportation and storage operations to cut costs and focus on exploration. Chevron sold a pipeline business in the Northwestern U.S. last year to Tesoro Logistics LP, while Royal Dutch Shell Plc and Chesapeake Energy Corp. made similar divestitures. (

TransAlta to build gas pipeline in Western Australia

January 16, 2014. TEC Pilbara, a subsidiary of TransAlta, has formed a joint venture (JV) with DBP Development Group, a wholly owned unit of DUET Group, to build a natural gas pipeline in Western Australia. The JV, known as Fortescue River gas pipeline, will build and operate a $178 mn gas pipeline from the Dampier to Bunbury natural gas pipeline to TransAlta's 125MW dual-fuel power station at Fortescue Metals Group Solomon Hub. TransAlta said that the construction of the 270km 16-inch pipeline will begin in July 2014, while the pipeline is expected to be operational in early 2015. (

US imports of crude fall below 7 mn barrels a day

January 15, 2014. U.S. crude-oil imports dropped below 7 million barrels a day for the second time in 14 years as domestic output grew, the Energy Information Administration (EIA) said.

Shipments dropped 1.07 million barrels a day to 6.89 million, the EIA said. They reached 6.86 million on Dec. 6, the lowest level since Jan. 28, 2000. Imports averaged 9.35 million in the past 10 years. (

Policy / Performance

China seen retaking lead from US in oil demand growth

January 21, 2014. China will retake the lead over the U.S. in oil demand growth this year as its manufacturing and transportation industries expand, the International Energy Agency (IEA) said. Chinese use is forecast to expand 3.6 percent, or 369,000 barrels a day, to 10.49 million barrels a day this year, the IEA said. U.S. consumption will rise 0.4 percent, or 72,000 barrels a day, a slower pace than last year when its barrel-a-day expansion exceeded that of China. Soaring shale output in the U.S. is helping the world’s largest oil consumer achieve its highest level of energy independence in two decades. The U.S. will surpass Russia and Saudi Arabia as the world’s top producer by 2015 and be close to self-sufficiency in the next two decades, while China will become the world’s largest oil consumer by 2035, replacing the U.S., the agency predicted in November. (

IEA sees higher oil demand on recovery in developed nations

January 21, 2014. Global oil demand will increase this year more than previously forecast, the International Energy Agency (IEA) said. A ban on U.S. crude exports may crimp output growth, the IEA said. World consumption will climb by 1.3 million barrels a day, or 1.4 percent, to a record 92.5 million barrels a day, the IEA said. The increase of 90,000 barrels a day from last month follows the first year of annual demand growth in developed nations since 2010, it said. U.S. restrictions on oil exports may mean its surging domestic production hits a “crude wall” that curbs further expansion, the IEA said. (

Abu Dhabi Govt extends Upper Zakum Oil Field concession by 15 yrs

January 21, 2014. Japan's Inpex Corporation (Inpex) announced that the Government of Abu Dhabi has decided on the extension of the Concession for the Upper Zakum Oil Field, offshore Abu Dhabi, United Arab Emirates (UAE). The Concession has now been extended to Dec. 31, 2041 by adding more than 15 years to the previous term. The Upper Zakum is being jointly developed by Abu Dhabi National Oil Company (ADNOC), Exxon Mobil (EM) and an Inpex subsidiary Japan Oil Development Co., Ltd. (JODCO). The fiscal terms and conditions on the Concession for the Upper Zakum Oil Field have been revised. (

Russia eyes resolution to Europe pipeline dispute

January 17, 2014. Russia is hoping for full access by February to a connecting pipeline that is key to increasing gas sales to Europe via the underwater Nord Stream pipeline, the Energy Ministry said. Russia's top natural gas producer Gazprom, which generates over 55 percent of its gas sales in Europe, has been struggling to increase supplies via the Baltic sub-sea pipeline due to restrictions imposed by the European Commission. The Commission has also launched a cartel probe against state-controlled Gazprom, and has voiced its concern over Russia's plans to build another export pipeline to Europe via the Black Sea, called South Stream. (



Ghana to get new power plant

January 21, 2014. TAQA, an Abu Dhabi based energy company, has agreed with the government of Ghana to build an additional facility to generate 300 MW of power at the Takoradi Thermal plant. The company is also willing to support Ghana in liquefied natural gas to undertake industrial activities. The company is also expected to complete another facility at the plant that will generate 110 MW of energy at the plant by the end of 2014. (

Ukraine posts 2.3 pc fall in electricity generation in 2013

January 21, 2014. Ukraine's integrated power grids decreased electricity output by 2.3% or by 4.556 billion kilowatt-hours (kWh) year-over-year in 2013, to 193.563 billion kWh, the Energy and Coal Industry Ministry said. Nuclear power plants cut electricity output by 7.7%, to 83.209 billion kWh. The ministry's thermal power plants and combined heat and power plants cut their electricity output by 2.2%, to 86.58 billion kWh, including a decline of 0.8% in output at generating companies' thermal power plants, to 78.298 billion kWh, while combined heat and power plants cut it by 14.2%, to 8.282 billion kWh. Hydropower plants in 2013 saw a 31.2% increase in power generation, to 14.215 billion kWh, while municipally owned heat stations and district power stations increased electricity output by 4.5%, to 8.312 billion kWh. The generation of electricity from non-traditional sources almost doubled in 2013, to 1.247 billion kWh. (

Alstom wins 275 MW hydro power contract in Ivory Coast

January 17, 2014. Alstom has secured a contract from Chinese EPC contractor Sinohydro to provide electromechanical equipment and technical services to the 275 MW Soubre hydropower project in Ivory Coast. Alstom's hydro industrial site in Tianjin City, China will manufacture all the equipment for the project, which will have an average annual output of 1,100GWh. (

Toshiba to build three reactors in UK after NuGen deal

January 15, 2014. Toshiba Corp. agreed to buy 60 percent of NuGeneration Ltd., the British nuclear venture that plans to build three atomic reactors. The purchase from Iberdrola SA and GDF Suez SA totals about 100 million pounds ($164 million), the Japanese company said. As part of the agreement, Westinghouse Electric, Toshiba’s nuclear reactor arm, will provide three of its AP1000 reactors for NuGen’s Moorside site in the northwest of England. The deal is subject to regulatory approval and won’t have an impact on Toshiba’s full-year earnings forecasts, the company said. GDF Suez will continue to help NuGen operate the three power plants, which will have a combined capacity of about 3.4 GW. (

Transmission / Distribution / Trade

PREC starts PEL electrical power transmission line

January 21, 2014. Pacific Rubiales Energy (PREC) has started to use its Petroeléctrica Los Llanos (PEL) electrical power transmission line, which will supply power to its Rubiales and Quifa fields in Canada. The new 230kV line is designed to supply up to 192 MW per hour to two booster pumping stations at the Oleoducto de los Llanos Orientales (ODL) pipeline in Columbia, as well as substations at the Rubiales and Quifa oil fields. Built at a cost of $230 mn, the transmission line is 100% owned by the company and is held by its wholly-owned entity Pacific Midstream. (

Australia heatwave strains power supplies, sparks wildfires

January 16, 2014. Temperatures soared to more than 46 degrees Celsius (115 degrees Fahrenheit) in southeastern Australia as a heatwave strained electricity supplies and sparked wildfires. Extreme heat across the states of Victoria and South Australia is causing high demand for electricity and as many as 100,000 homes and businesses may be affected by power outages and reduced supply, Victorian Energy Minister Nicholas Kotsiras said. Bushfire warnings were in place across the two states and New South Wales, with high winds forecast to increase the danger, emergency authorities said. (

Policy / Performance

Tepco may spend $25.6 bn as growth path charted

January 20, 2014. Tokyo Electric Power Co. (Tepco) is considering spending about 2.67 trillion yen ($25.6 billion) on strategic investments through partnerships as it seeks to chart a path to growth beyond the Fukushima disaster. Of the planned investments, the utility known as Tepco plans to borrow 2 trillion yen in fresh loans from lenders, President Naomi Hirose said. The utility will make loan requests to banks as soon as possible, Hirose said. (

Norwegian Govt keen to invest in power plants in HP

January 19, 2014. The Norwegian government has expressed its keenness to step up investment in North-eastern state Himachal Pradesh (HP), particularly in the field of hydro-power considering its vast potential in the state. Norwegian ambassador Eivind S Homme conveyed this to Himachal Pradesh's Chief Minister Virbhadra Singh at a meeting in New Delhi, and said that Norway and India already enjoyed excellent bilateral relations based on mutual interests and values. (

Boston beats New York with record power price premiums

January 18, 2014. Electricity prices in Boston, which reached record premiums to New York costs last month, are poised to remain at all-time highs through March because of bottlenecks on natural-gas pipelines. New England’s reliance on the fuel for power generation has grown to 52 percent from about 30 percent in 2001, though there have been no new pipelines transporting gas to the six-state region in 40 years. In New York, lines from wells in the Marcellus shale deposits of Pennsylvania and West Virginia boosted deliveries by more than 1 billion cubic feet a day this winter, enough to heat about 3 million homes. Wholesale power in Boston is trading at the highest January premium to New York since at least 2005, according to grid data. Prices in New York recovered faster from a blast of arctic cold because of the increased gas supplies. The power premium may widen later this year and into 2015 as a Vermont nuclear reactor and one of the region’s largest coal plants are set to close, according to BNP Paribas SA. A new gas pipeline to New England isn’t scheduled to begin operations until 2016. The electricity supply-and-demand balance in New England “changed dramatically” as announced plant retirements create a deficit of more than 1,000 MW of generating capacity from a surplus of 2,000 MW in 2013, the grid operator said in a letter to the Federal Energy Regulatory Commission. (

New Malawi power plant opens

January 17, 2014. Malawi President Joyce Banda opened a new hydro-electric plant, which the government hopes will curb blackouts and sate a growing appetite for energy in the East African country. The 55-million-dollar Kapichira II plant in the southern district of Chikhwawa increases adds 64 to 351 MW to the national grid, against a forecast peak demand of 350 MW. (

Utilities shut 12 pc of Europe’s gas plants in 2013: Oxford study

January 17, 2014. Ten of Europe’s biggest utilities mothballed 21.3 GW of gas-fed stations last year, or 12 percent of Europe’s generation fleet, as plant margins shrank for a second year, according to an Oxford University study. Six of the utilities, including GDF Suez SA and RWE AG, reported impairment charges on their European generation assets in 2013 equivalent to 6 billion euros ($8 billion), the study shows. Negative clean-spark spreads, a measure of plant profitability, falling power demand and an increase in renewable energy contributed to the closures, the study said. (



India draws bids for triple solar capacity offered

January 20, 2014. India received bids for almost triple the 750 MW of solar capacity offered after enticing developers with grants for the first time that will cover part of the cost of the plants. The Solar Energy Corporation of India (SECI) received 58 bids for 2,170 MW in the country’s first national auction of photovoltaic licenses in two years, the Ministry of New and Renewable Energy said. The technical bids will be opened to check whether companies meet the qualifications to build plants, SECI said. The financial bids will be opened in about a month after the initial evaluation is finished, SECI said. (

Moser Baer sells solar PV worth ` 1 bn in Japan

January 20, 2014. Solar PV manufacturing firm Moser Baer Solar said it has crossed over ` 100 crore worth of photo-voltaic (PV) module sales in the Japanese market. Moser Baer Solar, a subsidiary of Moser Baer India, has crossed more than ` 100 crore PV module sales in the Japan market during April-December 2013, the company said. Moser Baer Solar has been exporting solar PV modules to Japan for last four years and the volume of shipments has increased significantly in last nine months. (

Climate change alters land map of India

January 19, 2014. The adverse effects of climate change are being felt on more than a fourth of India’s landmass over the last four decades. While some parts of the country have turned arid, others have witnessed more rainfall. A study by the Central Research Institute for Dryland Agriculture (CRIDA) at Hyderabad has revealed that about 27% of the country’s geographical area has been directly impacted by climate change, a result of increase in mean surface temperatures coupled with changes in rainfall pattern between 1971 and 2005. The study said the changes in weather have implications on agriculture, water availability, drought preparedness, and could be a possible trigger for climate-change driven disease. Scientists working on climate-resilient agriculture said the impact of climate change on crops in states is a reality. (

Central water commission eyes towards reservoirs for hydropower harnessing

January 17, 2014. As a major step to boost up nation's renewable energy resource harnessing capacity, Central Water commission is monitoring storage position vis a vis viable potential level of important water reservoirs. The small scale but multi point capacity augmentation initiative can come as a significantly 'green' contributor to the nation's 12th five year period power planning. According to the central water Commission statistics, there are around 85 important reservoirs spread all over the country. Among them, 37 are having significant hydro-power benefits with installed capacities of more than 60 MW each. The rest have almost similar potential that can be exploited. (

India's 1st climate change theatre opens at Science City

January 17, 2014. India's first climate change theatre was opened at Pushpa Gujral Science City in Kapurthala to educate people on one of the pressing developmental issue in the world. According to Science City authorities, while this theatre is India's first, it is second in the world, with the other in Canada. The 18-metre diameter theatre, inaugurated by Rajya Sabha member Naresh Gujral, has been set up in a dome-shaped building with seating capacity of 125 persons. The theatre provides a unique experience showing videos on two screens - flat and dome shaped and illuminating the static and moving objects along with special light and sound effects, as the video displays storyline of the film. The 25-minute film explores what a worst-case future might look like if humans do not take action on current or impending problems which could threaten civilization. The film starts by giving a glimpse of future - floods, droughts, earthquakes and other natural disasters. Coming back to the present, the Earth introduces itself and talks to the audience about current situation and impacts it is experiencing due to global warming. The first part of the film deals with all pertinent questions like - what is climate change and what factors affect climate of the earth? The second part of the film deals with impact of climate change. (

AP to offer incentives to energy saving industries

January 16, 2014. The Andhra Pradesh (AP) Government is working on modalities to offer incentives to industries who bring about savings in their process through energy efficiency measures. A Green Factory Code will also be shortly announced whose objective is to encourage savings in high energy consuming industrial establishments. During the Fifth State Energy Conservation Mission meeting, P.K.Mohanty, State Chief Secretary, highlighted the importance of energy saving and various measures initiated by the Government. As per the integrated energy policy of the planning commission, the electricity saving potential per year on demand side in India is about 15 per cent (15 billion units) of the total electricity demand. By improving efficiency and bringing down losses, a significant demand-supply gap could be met, he said. The State Government expects to facilitate the addition of about 1000 MW of wind energy and 500 MW of solar energy every year during the XII Plan period. The Government is planning to utilise the entire force of self help groups for creation of awareness about energy efficiency programmes. The State has about 10 lakh self help groups with 1.2 crore women members. (


Climate proofing of farms seen too slow as industry faces havoc

January 20, 2014. Climate change will play havoc with farming, and policy makers and researchers aren’t fully aware of the significance on food supply, according to the World Bank. Earth will warm by 2 degrees Celsius (3.6 degrees Fahrenheit) “in your lifetime,” Rachel Kyte, the World Bank’s vice-president for climate change, said at a meeting of agriculture ministers in Berlin. That will make farming untenable in some areas, she said. Extreme weather from China’s coldest winter in at least half a century in 2010 to a July hailstorm in Reutlingen, Germany, already started to affect food prices. In the past three years, orange juice, corn, wheat, soybean meal and sugar were five of the top eight most volatile commodities. Natural gas was first. Adapting agriculture to withstand a world with a changed climate and depleting resources isn’t happening fast enough, according to the UN’s Environment Programme. The world risks “cataclysmic changes” caused by extreme heat waves, rising sea levels and depleted food stocks, as average temperatures are headed for a 4 degree Celsius jump by 2100, the World Bank reported. Long-term climate change may have “potentially catastrophic” effects on food production in the period from 2050 to 2100, the UN’s Food & Agricuture Organization has said. Based on current climate-change models, wheat output in northern India and Pakistan will fall between 17 percent and 38 percent by 2020 because of heat stress to the crop, the International Maize and Wheat Improvement Center estimates. The center is working to develop heat-tolerant wheat for South Asia. The majority of agricultural research is focused on wheat, corn and rice, all crops which have “profound problems” in a world that’s 3 or 4 degrees Celsius warmer, according to Kyte. (

Europe energy investment seen at risk without 2030 carbon target

January 20, 2014. Europe must set a target to cut emissions by 40 percent in 2030 or risk delaying investments in much-needed energy infrastructure, a group of investors said. The Institutional Investors Group on Climate Change, which represents pension funds and asset managers, said the goal is critical if they’re to back the electricity system upgrades Europe needs. With public finances strained, national governments need private investment for the task, it said. The group with members including Aviva Plc and BlackRock Inc. is urging politicians ahead of proposals by the European Commission for future energy and climate policies, after current targets expire in 2020. Companies such as EON SE and nations including the U.K. and Germany have backed a 40 percent goal. The industry group Businesseurope wrote on Jan. 8 that the European Union should take into account 2015 talks in Paris aimed at negotiating a climate change accord before agreeing on a target. (

Germany’s planned clean-energy aid cuts hurt turbine makers

January 20, 2014. Germany’s clean-energy industry said government plans to accelerate cuts in aid to operators of wind and solar-power plants threaten to derail the country’s transition to renewable sources. Wind-turbine maker Nordex SE, which has benefited from booming installations on land, fell the most in more than a month in Frankfurt trading after weekend reports that Economy and Energy Minister Sigmar Gabriel aims to rein in subsidies. German utilities RWE AG and EON SE welcomed Gabriel’s plans. Chancellor Angela Merkel’s government intends to cut the cost of her plan to shutter Germany’s nuclear plants and move Europe’s biggest economy toward renewables. She says the top priority of her third-term government is to modernize the system of clean-energy aid after rising wind and solar costs helped send consumer power bills soaring. German household electricity costs are the second highest in the 28-nation European Union. Gabriel seeks to limit subsidies paid to operators of land-based wind turbines to no more than 9 euro cents a kilowatt-hour in 2015 and reduce the expansion to about 2,500 MW a year, according to a ministry. Developers will get the current aid if their units are authorized before Jan. 22 and enter operation this year. (

EU carbon surplus mostly already in utility hands

January 20, 2014. Most of the surplus of European Union emissions permits built up since 2009 may already be held by the bloc’s electricity industry, cutting demand from power plants in carbon auctions, according to Nomisma Energia srl. Industrial companies may have sold as many as 1.6 billion surplus EU permits out of the estimated 2 billion-metric-ton excess they accumulated by the end of 2012, according to Matteo Mazzoni, an analyst at Nomisma in Bologna, Italy. The consultant advises energy companies, governments and banks. The EU’s emissions-trading system forces western European power generators from RWE AG to Enel SpA to buy 100 percent of the emissions permits needed to offset their climate pollution each year since 2012. Industrial companies get free allowances to offset their discharges, which have declined since 2009 as the economic crisis reduced factory production and emissions. (

Hot nanotubes helping solar panels capture more sunlight

January 20, 2014. Researchers at the Massachusetts Institute of Technology (MIT) are seeking to increase the efficiency of solar cells by helping them take advantage of more of the sun’s rays. MIT scientists are testing solar cells with a layer of carbon nanotubes that “make it possible to take advantage of wavelengths of light that ordinarily go to waste,” according to the Cambridge, Massachusetts-based university. Standard polysilicon photovoltaic cells don’t “respond” to the entire spectrum of sunlight, limiting the amount of photons they’re able to convert into electricity. Scientists have said standard polysilicon has a theoretical maximum efficiency of 33.7 percent. The nanotube technology may be used to surpass that limit, according to MIT. MIT scientists combined carbon nanotubes, hollow cylinders with walls that are one-atom thick, with photonic crystals to create an “absorber-emitter.” When the nanotubes absorb concentrated sunlight, their temperature rises, heating the device to as much as 962 degrees Celsius. Just as a red-hot iron glows in a fire, the heated crystals emit light that the photovoltaic cell is able to turn into electricity. The most efficient standard cells in production convert about 22 percent of sunlight energy into electricity. (

European Commission starts group to spur Marine Energy Industry

January 20, 2014. The European Commission plans to start an Ocean Energy Forum to support the commercialization of wave and tidal technologies, which may be worth as much as 535 billion euros ($725 billion) globally by 2050. The forum will boost cooperation between stakeholders in the industry to help accelerate the development of wave and tidal devices, the commission said. The commission estimated the size of the wave and tidal energy market based on research by the U.K.’s Carbon Trust. (

Beijing, Shanghai step up rules battle against pollution

January 19, 2014. China’s capital city and the nation’s financial hub are stepping up measures to curb pollution as the meteorological agency warned of hazardous smog levels for a fourth day. In Beijing, companies, construction sites, street vendors and vehicle owners who exceed stipulated emission limits will face fines and other penalties, according to a draft plan released by the city government. Shanghai will phase out 500 polluting, hazardous and energy-intensive facilities, the city’s Mayor Yang Xiong said. President Xi Jinping has pledged to tackle pollution amid rising public concern that smog and environmental degradation are affecting the nation’s health and the economy. The Ministry of Environmental Protection this month told all provinces and municipalities to cut air pollutants by as much as one quarter. (

UK proposes onshore wind, solar capacity auctions

January 17, 2014. The U.K. plans to force onshore wind developers to compete head-to-head for the first time with solar generators when they bid for green power subsidies as the nation seeks to reduce the cost of renewable energy for consumers. Joint auctions for the most mature kinds of renewables such as energy from waste, hydropower, and landfill gas and sewage gas would start in the autumn, according to a consultation paper posted on the Department of Energy and Climate Change’s website. The U.K. is seeking 110 billion pounds ($180 billion) of power-industry investment through 2020 while trying to keep a lid on consumers’ bills. More competitive auctions would spur developers to bid for the government’s guaranteed rates at below the so-called strike prices offered for different technologies. The U.K. also grouped less established technologies like offshore wind, wave, tidal, anaerobic digestion and dedicated biomass plants into a separate group that won’t have to bid competitively for capacity. It is still considering how to deal with plants converted to biomass from coal and remote projects in the Scottish islands. (

Kenya to generate over half of its electricity through solar power by 2016

January 17, 2014. Kenya has identified nine sites to build solar power plants that could provide more than half the country's electricity by 2016. Construction of the plants, expected to cost $1.2 bn (£73mn), is set to begin this year and initial design stages are almost complete. The partnership between government and private companies will see the state contributing about 50% of the cost. The Kenya Renewable Energy Association said the move will protect the environment and bring down electricity costs. Over $500 mn had already been invested in solar projects in Kenya. The solar plan could have a dramatic impact on energy prices. The country is also planning the construction of what will be sub-Saharan Africa's largest windfarm, near Lake Turkana, which is set to be operational by 2015. Kenya ranks 22nd in Africa for the amount of electricity it generates, and 46th in the world in the generation of solar energy. But it could rank third for solar in the next four years, according to figures from the Energy Regulatory Commission, a government agency. (

Climate protection may cut world GDP 4 pc by 2030, UN says

January 17, 2014. The cost of holding rising temperatures to safe levels may reach 4 percent of economic output by 2030, according to a draft United Nations (UN) report designed to influence efforts to draft a global-warming treaty. Most scenarios that meet the 2-degree Celsius (3.6-degree Fahrenheit) cap on global warming endorsed by world leaders require a 40 percent to 70 percent reduction in heat-trapping gases by 2050 from 2010 levels, according to the third instalment of the UN’s biggest-ever study of climate change. The world would need to triple the share of renewables, nuclear power and carbon-capture and storage to meet that goal. (

Toyota pledges to top US push to double fuel economy by 2025

January 16, 2014. Toyota Motor Corp., the world’s biggest seller of hybrid-electric vehicles, vowed to surpass U.S. rules intended to double fuel economy and reduce carbon emissions. Automakers agreed in 2011 to a plan by President Barack Obama targeting an industrywide increase in Corporate Average Fuel Economy (CAFE), to 54.5 miles per gallon of gasoline by 2025. Increased sales of hybrids and other alternative-powered autos will help Toyota comply with that rule, said Bob Carter, the automaker’s U.S. senior vice president. The U.S. efficiency push has brought dozens of new hybrids, plug-in cars, electric vehicles and models powered by fuel-saving gasoline engines to the market in the past three years. (

Stalled coal-plant emission project wins US grant

January 16, 2014. A long-stalled project to capture carbon-dioxide emissions from a coal plant in Illinois will get a $1 billion grant from the U.S. Department of Energy, which the operator said will allow construction to begin this year. The full cost of the project is $1.65 billion. The Department of Energy issued its finding on the environmental review. The decision came as Republican senators criticized the U.S. Environmental Protection Agency (EPA) for proposing to require all new coal plants to install carbon-capture equipment. Technology industry advocates say that gear isn’t available yet on a commercial scale. The EPA’s proposal sets the stage for the more far-reaching set of final rules governing emissions from existing power plants, due by June. With low-cost natural gas displacing coal in many power facilities, rules on existing plants will take on heightened importance. Carbon-dioxide emissions since the Industrial Revolution have led to a warming of the Earth’s temperature in the past 50 years, worsening forest fires, drought and coastal flooding, according to the U.S. Global Change Research Program. To deal with the threat of global warming, President Barack Obama directed the EPA to cap carbon pollution from power plants, which account for 40 percent of U.S. emissions. (

Shunfeng to spend $4.1 bn on solar as China fights smog

January 16, 2014. Shunfeng Photovoltaic International Ltd plans to invest about 25 billion yuan ($4.1 billion) to develop its own solar projects this year. Shunfeng expects to install 3 GW this year as part of a plan to build 10 GW in the three years through 2016. The company currently has about 890 megawatts in operation. Most of the new projects will be ground-mounted in northwestern areas including Xinjiang, Qinghai, Gansu and Inner Mongolia. China is speeding the development of renewable energy to try to curb the country’s deadly smog. The world’s biggest carbon emitter plans to add 14 GW of solar power in 2014 compared with 10 GW scheduled last year. (

Big trees growing faster than small ones will absorb more carbon

January 15, 2014. Bigger trees grow faster than smaller ones, contradicting previous assumptions that growth rates slowed with age, according to a study in the journal Nature. That means larger trees will absorb carbon dioxide faster. Growth rates increased with size in 97 percent of tropical and temperate trees, according to a study published of more than 650,000 individual trees from 403 species. As part of photosynthesis, trees absorb greenhouse gases that cause global warming. The results may change the way researchers create climate models, said Nate Stephenson, a forest ecologist with the U.S. Geological Survey in Three Rivers, California. Under the United Nations clean development mechanism, large-scale tree planting projects in developing countries may apply for emissions credits that can be traded and sold. (

Clean energy support falls again to $254 bn in 2013

January 15, 2014. The decline in investment in renewable energy accelerated in 2013 as the cost of solar panels and wind farms fell, unsettling investor confidence in alternatives to fossil fuels. The value of deals to finance clean energy and efficiency projects fell 12 percent to $254 billion last year. That’s quicker than the 9.1 percent drop in 2012 from record level of $318 billion the year before. The findings released at a United Nations meeting in New York mark a setback for efforts to boost funding for cleaner forms of energy. Annual investment in renewables must double to $500 billion by the end of this decade and then again to $1 trillion by 2030 to limit global warming, according to Ceres, a Boston-based group advising investors on sustainability issues. The UN event gathering 500 policy makers and financial executives is aimed at urging investors to step up their support for renewable energy. Ceres along with fund managers and government officials are seeking to convince investors that renewable energy will offer long-term returns that are good for the bottom line as well as the environment. The ambition endorsed by ministers from more than 190 nations is to limit global warming to 2 degrees Celsius by the end of the century. Temperatures already have increased about 0.8 of a degree since the industrial revolution and are on track for the biggest change since the last ice age ended more than 10,000 years ago. Ceres proposed that investors allocate 5 percent of their portfolio to clean-energy and pay more attention to the potential risk that fossil-fuel companies’ reserves may become stranded assets amid a transition to a low-carbon economy. (

China joins US among biggest global warming ‘offenders’

January 15, 2014. China, India and Brazil, three of the largest developing nations, joined the U.S. in a list of the biggest historical contributors to global warming, according to a study by researchers in Canada. Seven nations between them accounted for more than 60 percent of all heat-trapping gas emissions between 1750 and 2005, researchers at Concordia University, Montreal, said. Russia, the U.K. and Germany rounded out the list. The findings are important for diplomats trying to broker a new deal by 2015 to limit fossil fuel emissions. The question of historical responsibility caused friction at talks in Warsaw in November, when richer nations blocked a Brazilian proposal that would use pollution levels dating back to the industrial revolution to help set limits on future emissions. The U.S. is the “unambiguous leader,” responsible for about 20 percent of total warming since industrialization. That’s equivalent to about 0.15 degree Celsius (0.27 degree Fahrenheit), according to the researchers. China and Russia each accounted for about 8 percent of total emissions. Brazil and India each had 7 percent apiece, and the U.K. and Germany each were responsible for 5 percent. (

RWE deepens clean-power spending cuts as division shrinks

January 15, 2014. RWE AG, the German utility expecting a slump in profit this year, plans to reduce renewable-power investments as it changes the focus of its clean-energy unit. The company’s Innogy unit will spend less than the planned 500 million euros ($681 million) in 2014. Innogy will focus on project development rather than investment. The decision to scale back spending deepens a cut announced last year, when RWE reduced its 2014 clean-energy investment budget by half from the 1 billion euros planned for 2013. German utilities are lowering costs and selling assets after power prices tumbled, making many electricity plants unprofitable. Innogy is reining in investment even as Germany expands in renewable power. The growth of wind and solar output, which now accounts for more than 20 percent of generation and takes preference on the grid, has forced prices down. RWE said that profit will drop by almost half in 2014. Innogy plans to make a final investment decision on the Nordsee 1 wind farm in the North Sea in 2014, having previously intended to decide at the turn of the year. It’s seeking to sell a majority stake in the 332 MW facility -- 40 kilometers north of Juist - and keep 25 percent. Larger German competitor EON SE said it started construction of its Amrumbank West wind farm in the North Sea. (

[1] The assumptions behind this figure are given in the previous issue of this news letter

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