Energy News Monitor | Volume X; Issue 39

 

 

 

NEWS BRIEF

OIL & GAS

March 9, 2014. The Tripura unit of Oil and Natural Gas Corporation Limited (ONGC) has intensified exploration to create a recoverable reserve of gas for at least 15 years. The unit supplies natural gas to 726 MW gas-fired thermal power project at Palatana in Gomati district. The Monarchak plant in Sipahijala district would require gas from December this year and the urea fertiliser companies being set up at Khubal in North Tripura district would be operational by 2018. The proposed 1.3 million metric tonne per annum (mmtpa) fertiliser manufacturing company would require 2.4 million metric standard cubic meters per day (mmscmd) hydro carbon per day to run the plant. ONGC is going ahead with its target to enhance the gas production from 5.75 mmscmd to 6.35 mmscmd per day by the next financial year and create a reserve of 30 billion cubic meters. (timesofindia.indiatimes.com)

March 9, 2014. The Comptroller & Auditor General (CAG) has said the oil ministry and its technical arm DGH approved notification of now flagging gas discoveries in RIL’s KG-D6 block despite the company not doing enough appraisal. RIL had found gas in the Dhirubhai-1 and 3 wells in October 2002 and were declared commercially viable finds between April 2003 and March 2004. It in May 2004 claimed the finds to hold 8.3 trillion cubic feet (Tcf) of inplace gas reserves, the CAG said in a draft audit report of KG-D6 block. The DGH approved a $2.47-billion initial development plan for the two finds by lowering the inplace reserves to 5.45 Tcf and recoverable resource to 3.81 Tcf with first gas coming in August 2006. However, before the start of commercial production, RIL in October 2006 submitted changes in the development plan by raising the capex requirement to $8.8 billion in two phases and putting recoverable reserves at 12.04 Tcf out of inplace volumes of 14.164 Tcf. A management committee, comprising representatives of the DGH, the oil ministry and the operator, in December 2006 approved the revised plan putting recoverable reserves at 10.03 Tcf and doubling of output to 80 million standard cubic metres a day.

However, the fields, which began production in April 2009, did not behave as predicted and output slumped within a year, forcing RIL and its new partner BP to restate the reserves at 2.9 Tcf. The CAG said the production sharing contract stipulates that a contractor should submit an appraisal programme to reassess the extent of the discoveries. (www.financialexpress.com)

March 7, 2014. BP, Europe’s second-largest oil company, is working with Reliance Industries Ltd. (RIL) to extend the life of producing gas fields in the Bay of Bengal KG-D6 block. BP, which bought a 30% stake in RIL’s 21 oil and gas blocks, including KG-D6, for $7.026 billion in 2011, is working with RIL to arrest the output decline in the fields. RIL is the operator of the KG-D6 block with a 60% stake while Niko Resources of Canada holds 10%.

The KG-D6 fields, which began production in April 2009, hit a peak output of 69.43 million standard cubic feet per day (mmscmd) in March 2010 before water and sand ingress led to more than a third of the wells shutting down. D1 & D3, the largest of the 18 gas discoveries in the block, produced 66.35 mmscmd, while 3.07 mmscmd came from the MA field, the only oil discovery in the block. Output dropped to about 11.7 mmscmd last year. Remedial steps helped reverse the declining trend and output rose to 13.6 mmscmd last month. RIL-BP have surrendered most of the 21 blocks they partnered in 2011 as they did not hold commercially viable oil and gas. They currently hold only six blocks.

In May, RIL and its partners announced a significant gas and condensate discovery in the KG-D6 block. In August, RIL and BP announced a new gas condensate discovery in the deepwater CYD5 block in the Cauvery basin, off the east coast. BP said its board met for the first time in India in 2013 to gain an understanding of the opportunities and challenges in the country. Board members visited the Kakinada onshore terminal which receives gas from the KG-D6 fields and discussed the geological complexities off the east coast with RIL representatives. (www.livemint.com)

March 10, 2014. Kuwait Petroleum Corp (KPC) is in talks with Indian Oil Corp (IOC) for taking a stake in the state-owned firm's ` 29,777-crore Paradip refinery and a proposed petrochemical complex. IOC, which will start commissioning the 15 million tons a year refinery at Paradip in Odisha in June, is willing to offer no more than 26 per cent stake in the project. IOC wants to closely examine conditions that Kuwait may attach for equity participation. The refinery has been built to process at least 40 per cent of toughest, heaviest and the dirtiest crudes like Maya of Mexico which are cheaper than the cleaner and easier varieties available from the Middle-East. The refinery will have a Nelson Complexity Index of 13, the highest in the world. The project will have to be spun off into a separate company if Kuwait is to participate in it. IOC plans to set up a ` 3,150 crore Polypropylene unit adjacent to the refinery in 39 months. IOC had initially planned to export some of the fuel produced at Paradip but the same will now be consumed domestically due to rising fuel demand. The refinery was originally planned to export at least 2.05 million tons of petrol and 124,000 tons of naphtha out of its yearly output of 15 million tons. But with petrol demand growing by 13-14 per cent and diesel by 8-10 per cent, there will not be any fuel left for export. The refinery will produce 5.97 million tons of diesel, 3.4 million tons of petrol, 1.45 million tons of kerosene/ATF, 536,000 tons of LPG, 124,000 tons of naphtha and 335,000 tons of sulphur, all of which will be for sale in domestic market. Some of 200,000 tons of propylene to be produced by the unit may be exported. (economictimes.indiatimes.com)

March 6, 2014. Bharat Petroleum Corp Ltd (BPCL), a rare gasoline importer, is seeking a total of 25,000 tonnes of gasoline for April as it prepares to shut a crude unit and gasoline-making unit for maintenance. The state-owned refiner is seeking 10,000 tonnes of gasoline of Euro IV standards and 15,000 tonnes of gasoline of Euro III standards through a tender closing on March 11. The cargoes are to be delivered to Mumbai on April 6 to 10. Offers are to stay valid until March 13. BPCL will shut an 80,000 barrels per day (bpd) crude distillation unit (CDU) and catalytic cracker unit (CCU) for a two-week maintenance starting in April. Its demand comes at a time when Vietnam's Saigon is also out seeking a larger-than-usual gasoline volume as the country's only refinery is shutting down from May to July for maintenance. (economictimes.indiatimes.com)

March 10, 2014. Keen to import gas from the US to meet its rising energy needs, India will ask Washington to ease restrictions on sales to countries with which it does not have a free trade agreement (FTA). Washington has till now allowed conditional export of liquefied natural gas (LNG) from five of its projects to nations with which the US does not have a free trade agreement, so-called 'non-FTA' countries. India does not have a FTA with the US till now. The issue of LNG exports to non-FTA nations will figure at the Indo-US Energy Dialogue. US Energy Secretary Ernest Moniz and Planning Commission Deputy Chairman Montek Singh Ahluwalia will lead the two sides at the talks, which were previously postponed due to row over treatment of Indian diplomat in US. Gas-surplus US at present allows exports of small amounts of natural gas. It has so far allowed only Sabine Pass, Freeport, Lake Charles Exports, Dominion Cove Point LNG and the most recently Cameron LNG LLC terminal in Louisiana to export LNG to non-FTA countries. Indian companies led by state-owned GAIL have already signed agreements with US firms to buy as much as 3.5 million tons a year of LNG. The issue of India's energy engagement with Iran is unlikely to figure during talks as New Delhi does not want US to dictate terms of its ties with third countries. (economictimes.indiatimes.com)

March 9, 2014. ONGC has finally agreed to supply natural gas to 101 MW capacity Monarchak power plant that is being set up by government-run North East Electric Power Corporation (NEEPCO) in western Tripura. The NEEPCO said that the ONGC's repeated dilly-dallying on supplying gas has delayed the corporation's second biggest thermal power project in northeast India and resulted in huge losses. The ONGC further cut the gas allocation in 2008, forcing NEEPCO to scale down the installed capacity of the project to 101 MW, whose foundation stone was laid in March 2002. (www.business-standard.com)

March 7, 2014. Indian Oil Corp. Ltd (IOC) is acquiring a 10% stake in shale gas assets on Canada’s West coast from Malaysia’s Petroliam Nasional Bhd (Petronas), which will allow it to source 1.2 million tonnes (mt) per annum of liquified natural gas (LNG) for 20 years. The transaction is valued at $1.1 billion, according to industry estimates. With domestic gas supplies unable to meet demand, Indian firms have been securing gas supplies overseas. Till date, state-owned firms such as IOC have invested ` 64,832.35 crore in overseas energy assets, according to the petroleum ministry. India imports 80% of its crude oil and 18% of its natural gas requirements. The country trails the US, China and Russia, accounting for 4.4% of global energy consumption. India has been busy tying up energy resources overseas, the latest acquisition being the Rovuma Area 1 offshore basin in Mozambique. (www.livemint.com)

March 10, 2014. The Andhra Pradesh (AP) High Court issued notices to Reliance Industries Ltd (RIL), the CBI, Andhra Pradesh government, Centre and the Directorate General of Hydrocarbons (DGH) on the issue of gas supplies from D-6 in KG-Basin. Based on a petition filed by Palem Srikanth Reddy, president of the Jana Palana Party, a division bench comprising justices G Rohini and T Sunil Chowdary issued notices and posted the matter on April 2 for further hearing. Alleging that the RIL has been hoarding the natural gas produced out of KG-Basin, the petitioner sought the court to order CBI probe into the whole issue and also requested the court to direct the Government to take appropriate steps to see that Andhra Pradesh gets gas allocation as the oil and gas field are located near the State. He said due to short supply of gas to AP-based power plants, the government is forced to purchase the electricity at the cost of the public exchequer resulting exorbitant power bills to consumers. (economictimes.indiatimes.com)

March 7, 2014. Diesel prices will certainly rise every month and stranded gas-fired power plants seeking relief may have to wait until the new government is sworn in by the end of May, but the code of conduct will not usher in another policy paralysis for environment clearances, foreign investment approvals and regulatory functions. The government is likely to continue framing detailed rules under the new companies act despite the code of conduct, while the Foreign Investment Promotion Board (FIPB) met after the poll announcement, signaling that routine investment proposals would be discussed and cleared. In many cases, the government may consult the election commission to check if a particular decision can be taken or not. The Election Commission said it has no objection to companies raising diesel price by 50 paise. Government officials say they may also consult poll authorities if they issue the notification that will allow Reliance Industries to charge the higher gas price from April 1 although the cabinet has already approved the matter and only the mechanism for its implementation is pending. Companies such as Reliance Power, Essar Power and many others that have gas-fired plants with a total capacity of 24,000 MW, were expecting to gain from a cabinet proposal that would give ` 6,000 crore subsidy to state discoms to buy costly power from such plants and sell it below cost. These plants are stranded as natural gas supply has fallen and the use of imported LNG makes their production too costly another pending proposal to help power producers is pooling of costly imported gas with the domestic gas to help plants that are shut or operating sub-optimally. The proposal sought a subsidy of over ` 24,300 crore from the government. (economictimes.indiatimes.com)

March 6, 2014. The government is likely to order oil refineries, including private sector Reliance Industries and Essar Oil, to maintain a minimum level of liquefied petroleum gas (LPG) production to ensure uninterrupted supply of cooking gas to the public. While India has surplus in petroleum products, production of LPG in the country is lower than the demand. The deficit is met through imports which have to increased if any of 20 refiners in the country produces less than projected LPG. Modern refineries have flexibility of changing product slate and often LPG production is pushed down in favour of high value petrol and diesel. Change in production profiles of refineries especially private sector units, has in the past led to LPG scarcity and the resultant delays in delivery of domestic cooking gas. To tide over this, the oil ministry sought law ministry’s opinion if the government under the Essential Commodities Act of 1955 can ask both public and private sector oil refineries to produce a certain volume. The government, the law ministry opinion said, can issue an order for LPG under Section 3(1). Against a projected demand of 16.5 million tonnes, indigenous availabilty of LPG is only 10.4 million tonnes during the current fiscal. The remaining 6.5 million tonnes is being met through imports. While petrol production by refineries has risen by a compounded annual growth rate (CAGR) of 13.9% in five years beginning 2007-08, CAGR in LPG production was only 1.5%. Diesel too has shown a CAGR of 7.2%. The government has drawn an ambitious target of increasing LPG penetration in the country to 75% of the population by releasing 5.5 crore new connections by 2015. Focus of Vision 2015 is to extend the usage of LPG for cooking purposes in rural/under- served areas so that standard of life in rural areas improves by switching from kerosene or firewood to environmental friendly fuel. To achieve this, domestic production has to increase. Presently, 16.24 crore domestic LPG connections cover about 62% of the population. (www.livemint.com)

March 6, 2014. The government will consult the Election Commission before allowing Reliance Industries Ltd (RIL) and its partners BP Plc and Niko Resources to charge higher price for natural gas from the controversial KG-D6 block. The oil ministry has not finalised the mechanism of bank guarantees, which RIL will have to furnish as a safeguard if it is proven guilty of hoarding gas in an on-going arbitration case. RIL along with BP, which has a 30% stake in KG-D6 and Niko that holds 10%, are waiting for a formal order from the oil ministry to charge new rates from gas consumers from April, but the matter is stuck the government wants to make sure that its actions do not harm its case in the ongoing arbitration in which RIL has challenged the ministry's decision to penalise the company for the fall in gas production. The cabinet approved higher gas prices for all producers but in view of the arbitration it said there would be a separate order for RIL after finalizing the mechanism and amount of the guarantees. The order has not been issued over concerns that only RIL was the party in the arbitration and not its partners, hence, the Cabinet-approved dispensation of new price against bank guarantee may not be applicable for BP and Niko. (economictimes.indiatimes.com)

March 6, 2014. India, Asia’s second-biggest energy user, is in talks with Saudi Arabia and Kuwait for better terms on oil contracts as surging U.S. output frees up supplies. Hindustan Petroleum Corp. Ltd (HPCL), India’s third-largest state refiner, is seeking to at least double the interest-free credit period for crude purchases from Saudi Arabia and Kuwait to 60 days. Mangalore Refinery & Petrochemicals Ltd. (MRPL) wants price discounts for agreeing to contracts that are more than 10 years long. A shale-oil boom in the U.S., the world’s biggest consumer, has pushed crude production to the highest in almost 26 years, leading the country to cut imports. In response, some of the biggest Middle East producers are turning to Asian nations to lock in buyers as the easing of sanctions on Iran brings more oil into the market. Indian Oil Corp., the nation’s biggest refiner, is in talks with some Middle East suppliers, including Saudi Arabia and Kuwait, to increase the credit period for crude purchases to 60 days. Iraq, the company’s biggest crude supplier, started offering 60-day credit from January. Iran currently gives Mangalore Refinery and Mumbai-based Essar Oil Ltd. 90-day credit. Indian state-run refiners sell fuels below their production cost to help the government curb inflation. While they are partly compensated by the government, subsidies are often delayed, forcing the oil processors to borrow money. (www.bloomberg.com)

March 5, 2014. With new gas price announcement being held hostage to technicalities, British energy giant BP and Niko Resources of Canada have told Oil Ministry that they are party to the arbitration initiated by Reliance Industries Ltd (RIL) on KG-D6 gas production lagging targets. A market-based gas pricing regime is to kick-in from next month but the Cabinet in December conditioned its applicability to gas being produced from the main field in KG-D6 block to RIL furnishing a bank guarantee equivalent to the incremental revenues it will get from the new rates. The bank guarantee will be encashed if it is proved in the legal proceedings, called arbitration, that RIL deliberately produced less than targeted gas from D1&D3 fields in KG-D6. RIL, which says the current D1&D3 output being a tenth of previously projected 80 million standard cubic meters per day was purely because of unanticipated geological complexities like drop in reservoir pressure and water and sand ingress, agreed to give bank guarantees. BP and Niko, which hold 30 per cent and 10 per cent interest in KG-D6 respectively, too agreed to give bank guarantees in proportion to their stake. But Oil Ministry, which had fined RIL as much as $1.8 billion for producing less than the target in the past three fiscals, says BP and Niko cannot be party to the issue as they have not "joined" the arbitration on gas output lagging targets. (economictimes.indiatimes.com)

POWER

March 11, 2014. Jindal Power, promoted by Jindal Steel & Power has achieved full load capacity for first unit of 600 MW of the 600X4 MW expansion project to its existing 1,000 MW power plant at Tamnar in Raigarh District of Chhattisgarh. The project envisages a total investment of approximately $2 billion, the company said. Jindal Power has already synchronized second unit on 22^nd February, while third unit is in the advanced stage of synchronization. Jindal Power has a vision of having installed capacity of 10,000 MW by 2020 with a unique approach of amalgamating diverse forms of power in thermal, hydro, solar and wind. (www.business-standard.com)

March 11, 2014. The three-day strike called by the officers' association of monopoly miner Coal India from March 13 is likely to impact about 40% of power generation in south India while most thermal plants in the rest of the country have sufficient stocks to last about two weeks. There are 14 power plants across the country which have stocks that will barely last for three days. A few of these plants may have to shut down or scale down their generation to avoid a total shutdown during the strike. Power plants in south India with a capacity of 7,030 MW cannot continue generation for three days without additional fuel supplies. The region has a total installed capacity of about 18,620 MW. Coal India supplies fuel to about 82% of the country's coal-fired power plants and 98 out of 100 such plants use the company's coal in varying proportions. In north India, thermal power stations at Paricha (1,140 MW), Dadri (1,820 MW) and Unchahar (1,050 MW) are likely to suffer as they do not have adequate stocks. In western India, similar is the case with Khaperkheda (1,340 MW) and Parli (1,130 MW) plants while in east India such plants include Durgapur Projects Ltd (630 MW), Kolaghat (1,260 MW) and Sagardighi. (economictimes.indiatimes.com)

March 10, 2014. The election campaign has struck a big blow to the power sector as many state distribution companies have either sought lower tariffs or not demanded a hike despite huge revenue gaps, putting at risk the Centre's bailout package for utilities with total losses of ` 2 lakh crore. For consumers, this is no cause to cheer as they are heading for a tariff shock next year as utilities will scramble to offset losses they will accumulate in the election year; and for power producers, financial weakness of distribution companies - the vital link between generating stations and customers - remains a big hurdle, industry observers say. Discoms in Gujarat, Madhya Pradesh, Odisha, West Bengal and Delhi have not sought any increase in tariff, while the regulator in Bihar has disallowed higher rates for the fiscal year that begins in April. As per the Centre's debt recast plan to these companies and an order of the Appellate Tribunal of Electricity, tariff determination exercise for a financial year should be completed before the fiscal year begins. State discoms playing poll card may give customers a tariff shock next year Former power secretary P Uma Shankar said distribution companies not filing tariff petitions before elections was a "blessing in disguise" as a delay of 3-4 months may not hurt the finances of the discom but an inadequate increase would pinch. Utilities of Shivraj Singh Chouhan-ruled Madhya Pradesh have projected a revenue gap of ` 1,267 crore but proposed to maintain last year's average tariff. The companies promised efficient management of surplus energy to recover maximum revenue through competitive sale rates. The discoms said any revenue gap would be recovered next year. The collective revenue gap of Naveen Patnaik's Odisha power distribution companies is estimated to be around ` 2,025 crore and those of Narendra Modi's four state-owned companies at about ` 1,685 crore. Delhi's two BSES electricity distribution companies have also refused price hike. The companies have proposed to recover the revenue gap during the financial year through quarterly fuel cost adjustment. Power distribution utilities of some states like Andhra Pradesh, Karnataka have, however, sought price hikes too. The Union government had approved a bailout package for state power distribution companies that had accumulated losses of over ` 1.9 lakh crore. The bailout was based on commitments by distribution utilities and state governments to improve the operational performance of utilities and reduce distribution losses. (economictimes.indiatimes.com)

March 10, 2014. Coal India Ltd (CIL) is yet to enter into fuel supply pacts with 15 power units as certain issues related to them, such as change in ownership and extension of supplies, are being considered separately. The Cabinet Committee on Investment (CCI) had earlier stated that the timelines for signing of fuel supply pacts for power projects of 78,000 MW capacity should be met. Power projects with 78,000 MW capacity have been approved for coal supplies by the Cabinet Committee on Economic Affairs (CCEA). For these projects FSAs would be signed for 172 units covering 134 Letter of Assurances (LoAs). Two deadlines set for the signing of Fuel Supply Agreements (FSAs) by CIL with the power producers could not be adhered to. The Coal Ministry had set the deadline of August 31, 2013 for signing of the FSAs, which could not be met. The second deadline was set for September. (www.business-standard.com)

March 5, 2014. Anil Ambani's Delhi electricity distribution companies (discoms) BSES Yamuna and BSES Rajadhani said they were providing documents to the CAG and surprised that the national auditor had told the Delhi High Court that they were not co-operating. The discoms said they shared the financial records of 11 years in over 10,000 pages and soft format with Comptroller and Auditor General. The companies that cater to 32 lakh consumers in Delhi said that they are regularly responding the queries from CAG. BSES discoms had initially decided not to comment when the CAG told the Delhi High Court that they and Tata Power Delhi Distribution - the three firms that supply power to the capital region - were not co-operating in the audit of their accounts. Tata Power responded immediately and said it was fully co-operating. Arvind Kejriwal asked for a CAG probe in the accounts state's discoms as soon as he became Delhi chief minister. Discoms rushed to high court to prevent the government audit in their accounts. BSES discoms claimed that they do not have funds to procure power and the city was facing darkness. In a sharp reaction, Kejriwal suggested state's electricity regulator to terminate licenses of BSES and Tata Power discoms. (economictimes.indiatimes.com)

March 11, 2014. In India, sporadic power outages have hobbled Asia’s third-largest economy for years. The government’s solution was a $31 billion bailout of utilities, whose debts were so big and cash flow so small that they can’t provide a steady flow of electricity to homes and businesses. Now that bailout is in jeopardy. A populist movement sparked by an anti-corruption crusader is forcing utilities to slash the price they charge consumers. Because most of these power retailers already lose money, this development is pushing them further into debt. They were supposed to boost rates, not cut them, under the bailout plan. NTPC threatened to stop supplying unprofitable retailers that are behind on payments. That, in turn, could interrupt service to thousands or millions of end-users. India already holds the world record for blackouts. In 2012, an estimated 600 million Indians went without power in the north and east for three days after a grid collapsed because some states drew more than their quota. The country’s supply-chain disaster is deepening with the dawn of electricity populism. Arvind Kejriwal in December rose from an anti-corruption activist working Delhi’s streets to become Delhi state’s chief minister, pledging to slash consumer power bills by 50 percent. At least two more states copied the power-rates policy. More may follow as voters go to polls in nine phases April 7 through May 12. The states are carrying forward Kejriwal’s campaign even though he resigned after 49 days in office, failing to get Delhi’s lawmakers to pass an anti-corruption bill. With Kejriwal out of power, his plan to provide cheaper electricity in Delhi through state subsidies is set to end March 31. Yet the other two provinces, Haryana and Maharashtra, both ruled by the Congress party, will go ahead with state-funded cheaper power. India’s pickle stems from trying to provide power to consumers below cost. It’s a policy goal seen in other nations, such as Indonesia and Spain. Basically, retailers, including Tamil Nadu Electricity Generation & Distribution Co. and Punjab State Power Corp., sell power at a loss, after having bought it from generators using ever increasing debt. It’s a debt spiral that Spain has failed to extinguish for more than a decade, while in India, it seems ever further from resolution. The payments crisis in India will lead to losses at generation companies. The power retailers, including units of Reliance Infrastructure Ltd. and Tata Power Co., owed ` 155 billion ($2.6 billion) to state-run generators as of Jan. 31, according to power ministry. (www.bloomberg.com)

March 11, 2014. The Ministry of Coal has asked Jindal Steel & Power Ltd (JSPL) to submit a bank guarantee (BG) of ` 68.53 crore for its Utkal B-1 coal block allocated in Odisha. The ministry has instructed the company to deposit the BG, equivalent to one year's royalty in the office of the Coal Controller, Kolkata. Imposition of BG is as per the recommendation of the inter-ministerial group (IMG) mandated to oversee status of allocated coal blocks and suggest action, including de-allocation if required. Utkal B1 block has obtained both environment and forest clearances and 95 per cent of land acquisition is completed for the coal mine. As per information furnished by JSPL, total investment made in the coal block and end-use plant is ` 17,020.62 crore. (www.business-standard.com)

March 10, 2014. India's largest power producer NTPC has challenged the electricity regulator's order on tariff norms in the Delhi High Court. The regulations issued by Central Electricity Regulatory Commission (CERC) raised concerns about the company's earnings and triggered a steep fall in NTPC's shares, prompting the state-run firm to file a writ petition. Analysts and experts said the regulator's revised tariff norms for 2014-2019 could weaken NTPC's margins. Also, with the new regulations, NTPC's not be able to claim incentives based on plant availability factor. Its incentives will be based on actual power generation of its plants, which is financially less attractive for the company. (economictimes.indiatimes.com)

March 9, 2014. After three years of hectic negotiations, India and France have agreed on the cost of power that will be generated by Jaitapur Nuclear Power Plant (JNPP), clearing a major hurdle in the path of the project. The two sides have agreed on ` 6 per unit, down from ` 9.18 per unit quoted by the French company Areva initially, which was not acceptable to India. France has also decided to provide India a loan for the project at 4.8 per cent interest rate for 25 years. The decisions were arrived at during a meeting between National Security Advisor Shivshankar Menon and Chairman of France's Commission on Atomic Energy and Alternative Energies Benard Bigot in Paris recently. The Nuclear Power Corporation of India (NPCIL) and Areva are now working out further modalities. The Jaitapur project in Ratnagiri district of Maharashtra will have 6 EPRs (European Pressurised Reactors) with each reactor producing 1650 MWs of electricity. The cost of power was a major hurdle in the forward movement on JNPP with the two sides differing on it earlier. (economictimes.indiatimes.com)

March 9, 2014. Aam Adami Party (AAP) convenor Arvind Kejriwal, who was on a four-day visit to Gujarat, tore into Narendra Modi government’s development claims while addressing a huge rally at Bapunagar in Ahmedabad. Referring to a solar park set up in Gujarat, Kejriwal said BJP leaders bought the land in advance knowing the Gujarat government’s plan to establish the solar park. Refuting the claims of 24-hour power given to farmers in Gujarat, he said he had spoken to farmers during his visit and in some regions the farmers told him that they get power for only three hours. He said that as many as 4,50,000 farmers have not received electricity connection in Gujarat  thought they had applied for the same several years back. (www.business-standard.com)

March 7, 2014. Hindalco Industries Ltd. and Essar Energy Plc’s plan to mine local coal to feed their $3.8 billion Mahan aluminum smelter and power plants has stalled after local authorities said they will seek permission from villagers again. The project in central India ran into controversy after Tribal Affairs Minister V. Kishore Chandra Deo alleged the companies used strong-arm tactics and forged signatures of local villagers to win agreement to begin mining. Hindalco, controlled by billionaire Kumar Mangalam Birla, and Essar Energy, run by billionaire brothers Shashi and Ravikant Ruia, need the coal to cut costs. Ramakant Tiwari, chief executive officer of the Hindalco-Essar mining venture Mahan Coal Ltd., has denied the minister’s claims. Mahan Coal, which secured approval from the environment ministry to mine coal, is seeking a mining lease agreement with the Madhya Pradesh government. (www.bloomberg.com)

March 7, 2014. Meghalaya, which was once a power surplus state, is facing a power deficit of 20-30% of the demand. Governor K.K. Paul said the government has taken steps to augment the generation capacity as well as the transmission network to draw additional power from the North Eastern Grid. Paul said the government is also encouraging the development of efficient and clean energy and the growth of non-conventional energy. (www.business-standard.com)

March 6, 2014. The electricity regulator's order to compensate Tata Power and Adani Power for the unexpected rise in coal costs has inspired other companies to seek higher tariffs but experts said it would be an uphill task and in some undeserving cases the government may acquire or rebid a project seeking relief. Many companies including Reliance Power, Essar Power, Aryan Coal, KVK Energy and Rajasthan Sun Technique have approached regulators for tariff hikes while many others are preparing to do the same. (economictimes.indiatimes.com)

March 6, 2014. The revised tariff norms by the central electricity regulator will have a negative impact on the margins of state-owned utilities like NTPC, Power Grid and NHPC, according to Standard & Poor's Ratings Services. However, the largest rating agency said this will not impact the ratings of these firms. CERC has shifted the incentive structure to plant load factor from plant availability factor for period FY14-FY19. The regulator has also maintained the base return on equity on transmission systems at 15.5 per cent, which is much lower than 18-20 per cent sought by companies. According to S&P, NTPC's EBITDA is likely to decline 10-12 per cent and net income to fall under the new tariff structure--all else being equal. S&P has forecast the company's ratio of funds from operations (FFO) to debt will remain 13-17 per cent in FY15 and FY16. According to the firm, NTPC's EBITDA and net income will be weaker largely because the company won't be able to enhance its return on equity as much, given that it will now have to use the 24-26 per cent effective tax rate from the 33 per cent corporate tax rate that it has been using so far, and incentives will now be based on PLF from the earlier PAF. The revised tariff norms, however, are likely to have a smaller impact on NHPC and Power Grid mainly because both the companies currently apply the minimum alternate tax, which is closer to their effective tax rate. Power Grid will continue to earn incentives linked to plant availability. Consequently, S&P said, it expects the FFO-to-debt ratio for NHPC and Power Grid to remain between 17-21 per cent and 8-10 per cent, respectively. (economictimes.indiatimes.com)

March 6, 2014. Coal India Ltd, the world’s largest coal miner, plans to set up a 1.6 GW power plant by 2015/16 near one of its mines from which coal cannot be shipped and sold due to a lack of rail connections, the company said. The company has often said its output would be 300 million tonnes more than the current figure of about 475 million given enough rail tracks to carry the fuel from new and remote mines. Insufficient connectivity is one of the reasons the company has lagged output targets for more than six straight years - leading to shortages at power producers and crippling outages. Coal India has already received some clearances and more are likely. The plant will be near a mine that produces 20 million tonnes per year in the eastern state of Odisha. (www.livemint.com)

March 5, 2014. The Power Ministry has sought coal linkages for plants of six companies, including Essar Power, stating that they meet the criteria adopted for fuel supply to projects of 4660 MW. The six firms also include Monnet Power and GVK Power. The Cabinet Committee on Economic Affairs (CCEA) had directed that coal may be supplied to power plants of 4,660 MW and other similarly placed power plants that meet criteria like having no fuel linkage but likely to be commissioned by March 31, 2015, have long-term PPAs and a high bank exposure. (economictimes.indiatimes.com)

March 5, 2014. India has approved ` 1,765 crore as the interim cost escalation for Bhutan's Punatshangchu I hydropower project. Prime Minister Manmohan Singh conveyed this to his Bhutanese counterpart Tshering Tobgay when they met on the sidelines of the 3^rd BIMSTEC Summit in Nay Pyi Taw, Myanmar. Singh also conveyed Indian government's approval of the draft Intergovernmental Agreement between Bhutan and India concerning the development of Joint Venture Hydropower Projects. Under the draft agreement - expected to be signed soon - four projects have been identified: the Kholongchhu project (600 MW), the Wangchhu (570 MW), the Chamkharchhu (770 MW) and Bunakha (180 MW). Work on the Kholongchhu project can start as soon as the Intergovernmental Joint Venture is signed between the two countries. (economictimes.indiatimes.com)

OIL & GAS

March 11, 2014. South Africa’s plans to muscle in on new oil and gas ventures threaten to derail a fledgling industry, undermining state efforts to safeguard energy security and curtail imports. Proposed changes to the 2002 Mineral and Petroleum Resources Development Act will give the government a 20 percent free stake in all new energy projects, and the right to buy an unspecified additional share at an “agreed price.” Companies including Exxon Mobil Corp., Anadarko Petroleum Corp. and Royal Dutch Shell Plc have begun prospecting in South Africa’s waters over recent years, as new technology boosts their ability to find and pump oil from deep beneath the seabed. While the country had proven reserves of 15 million barrels at the end of 2013, there is no significant production. About 70 percent of the nation’s crude needs are met through imports with the balance processed from coal and gas. (www.bloomberg.com)

March 11, 2014. Crimea’s hastily organized vote on whether to leave Ukraine to join Russia is threatening Black Sea oil and natural gas drilling prospects coveted by Exxon Mobil Corp. and Eni SpA. Before violent protests in Kiev overthrew pro-Moscow President Viktor Yanukovych and Russian troops occupied parts of Crimea, a group including Exxon and Royal Dutch Shell Plc planned to spend $735 million drilling two wells about 50 miles (80 kilometers) from the region’s southwest coast. It’s not even clear whether the government in Kiev will have the power to award oil and gas licenses in Black Sea waters around the disputed region. Exxon sought the rights to drill the Skifska license off Ukraine after discovering the Domino field in 2012 in neighboring Romania, a find large enough to offer that country the prospect of becoming a gas exporter. (www.bloomberg.com)

March 10, 2014. BP Plc, once the Pentagon’s top fuel supplier, is now the biggest loser among U.S. government vendors. A combination of no big contracts awarded and promised military work withdrawn left BP with a net loss of $654 million in federal contracts in the year that ended Sept. 30. That compared with $2.51 billion in awards in fiscal 2012. The London-based company was temporarily barred from new federal contracts and other work after the 2010 Gulf of Mexico oil spill. While BP has sued to get the suspension lifted, the U.S. has said it wants to continue the ban, which also affects oil and gas leases coveted by the supplier. The suspension cost BP the ability to win new federal work that might be worth billions of dollars. The Defense Department, by far the government’s biggest buyer of petroleum products, also withdrew obligations, or promised funding, of more than $400 million last year after one of its offices didn’t buy a minimum amount of fuel required under the contracts. BP produced more than 200,000 barrels of oil a day in the fourth quarter from its 10 rigs in the Gulf, Chief Executive Officer Robert Dudley said. It expects to eventually produce more than 300,000 barrels of oil a day in the area, he said. (www.bloomberg.com)

March 7, 2014. Brazil's state-run oil company, Petroleo Brasileiro SA, said that it had discovered new, good-quality oil deposits in the so-called sub-salt region. The company, known as Petrobras, said the discovery was made in the Florim and Iara fields in the offshore Santos basin. Petrobras expects to continue exploration around the two wells until September. (www.rigzone.com)

March 6, 2014. Italian utility Edison is in talks to buy two Israeli gas fields from U.S. explorer Noble Energy and Israel's Delek Drilling, which are estimated to hold up to 70 billion cubic metres in total. The Israeli and U.S. companies developing the massive Leviathan gas field off Israel's coast must sell their stakes in the two smaller fields to avoid being branded a cartel by the antitrust authority. (www.rigzone.com)

March 6, 2014. Jura Energy Corporation (Jura) disclosed a commercial gas discovery at the Maru East-1 exploration well in the Guddu block in Pakistan's Central Indus Basin. The Maru East-1 well was completed in the Pirkoh Limestone Formation of Eocene age. During short duration post-stimulation test on 32/64 inch choke size, the well flowed gas at a rate of 3 MMcf/d (million cubic feet per day) with wellhead flowing pressure of 450 psi (pounds per square inch) and a heating value of approximately 700 Btu/Scf (British thermal unit/standard cubic foot). (www.rigzone.com)

March 5, 2014. BHP Billiton Ltd., the world’s biggest mining company, sees international development of shale-gas resources continuing to trail the production boom in the U.S. in part because of a lack of infrastructure. Hydraulic fracturing and horizontal drilling have unlocked deposits of oil and natural gas across the U.S., and drilling efficiency has helped boost rig yields to record volumes from the Permian in Texas to North Dakota’s Bakken play. The U.S. met 86 percent of its energy needs in the first 11 months of 2013, the highest level since 1986, data from the Energy Information Administration (EIA) show. The U.S. holds the world’s second-largest amount of recoverable shale oil and the fourth-largest of shale gas, according to the EIA. Russia, China and Argentina are also rich in shale oil. China, Argentina and Algeria have the largest technically recoverable shale-gas resources. (www.bloomberg.com)

March 10, 2014. BP has agreed to acquire around 80% stake in the new mini-refinery, to be built in Houston, US. The new refinery, which is set to be built with an investment of around $360 mn, will help BP to avoid the restrictions that are imposed on exporting crude oil out of the US. BP will sell the lightly refined products that are produced in the refinery to different domestic markets. (refiningandpetrochemicals.energy-business-review.com)

March 5, 2014. Oil major BP said it entered into a joint partnership with New Zealand Refining Co Ltd and Z Energy to procure and process crude oil through New Zealand's only refinery. BP and Z Energy, the refinery's two largest customers, currently import their own cargoes of crude when required, which means the refinery has to manage production independently, and often not at optimum levels. (economictimes.indiatimes.com)

March 11, 2014. Russia's Gazprom, disregarding European Commission plans to delay talks, said it expected to sign deals this month on building its major South Stream pipeline to carry gas to central and southern Europe without crossing Ukraine. It made the announcement a day after the Commission said it would postpone talks with Gazprom over South Stream which still requires European Union legislation, including exemptions from rules that limit pipeline ownership and require access be provided to other gas firms. (www.downstreamtoday.com)

March 7, 2014. Petrovietnam Gas Corp has signed a contract to buy liquefied natural gas from a Singapore-based subsidiary of Russia's state gas monopoly Gazprom, the Vietnamese firm said. The deal with Gazprom Marketing and Trading Singapore Pte, Ltd, signed in Ho Chi Minh City, is the first LNG purchase by PV Gas, the company said. Gazprom's LNG will be delivered to PV Gas' LNG terminal in the southern province of Ba Ria-Vung Tau, which has an annual capacity of 1 million tonnes and will become operational in 2017. Vietnam's natural gas output this year could ease 2.6 percent to 9.5 billion cubic metres, Petrovietnam said. (www.downstreamtoday.com)

March 7, 2014. Energy Transfer Partners (ETP) announced plans to build a pipeline that would transport oil from the Bakken shale in North Dakota to multiple refineries in the Midwest and Gulf Coast regions. The plan follows failed attempts by other companies to build Bakken pipelines after the projects failed to attract enough shippers. Energy Transfer Partners is already developing another Bakken pipeline project that will convert segments of a 30-inch existing natural gas line, known as Trunkline, to crude oil transport. The Trunkline conversion project is designed to take up to 420,000 barrels-per-day Bakken and Canadian crude from Patoka, Illinois to Boyce, Louisiana. The Federal Energy Regulatory Commission (FERC) has approved Energy Transfer's plan to abandon segments of the natural gas line and the project will be in service by 2016 if it garners enough market interest. (www.downstreamtoday.com)

March 11, 2014. Saudi Aramco plans to produce 200 million cubic feet per day (cfd) of unconventional natural gas by 2018 to supply a new phosphate project and a power plant. OPEC member Saudi Arabia aims to develop shale gas for power generation in order to save more of its crude oil for export. Aramco is keen to increase gas output as it can fetch $100 per barrel by exporting crude oil versus around $4 if it sells it to a Saudi power plant. Oil minister Ali al-Naimi has said Saudi Arabia has estimated unconventional gas reserves of more than 600 trillion cubic feet, more than double its proven conventional reserves. (www.arabianbusiness.com)

March 10, 2014. Kazakhstan plans to get 2.5 to 3 million tons of oil from the giant Kashagan oilfield in H2 2014. Kashagan is believed to be the most challenging oil production projects in the world. Commercial production at Kashagan started September 11, 2013. However, it was suspended 2 weeks later due to a gas leakage. The production process was resumed shortly. However, another leakage was detected in October. According to Kazakhstan geologists, geological reserves of Kashagan are estimated at 4.8 billion tons of oil. According to the project's operator, the oilfield's reserves are estimated at 38 billion barrels, with 10 billion barrels being recoverable. Besides, natural gas reserves are estimated at over 1 trillion cubic meters. (www.newkerala.com)

March 7, 2014. An Energy Department advisory board recommended “full disclosure of all known constituents” in fluids used for hydraulic fracturing, according to a draft report. The “Task Force Report on FracFocus 2.0” from the Secretary of Energy Advisory Board said state and federal regulators should adopt standards for companies making trade secret claims for fracking fluid ingredients and establish a compliance process and challenge mechanism. The draft report praised the FracFocus website as a good registry for public disclosure of the chemical additives in hydraulic fracturing fluids. (www.bloomberg.com)

March 7, 2014. The effects on the economies of Gulf Cooperation Council countries would be negative to neutral under an adverse scenario in which oil prices decline to $90 per barrel by 2020, according to Moody's Investors Service. The rating agency said Oman and Bahrain would be most at risk of such a scenario while the UAE and Saudi Arabia would also face reduced "financial flexibility". (www.arabianbusiness.com)

March 7, 2014. A disruption of natural gas supplies to Europe by an escalation of Russia’s military action in Ukraine may boost LNG demand and prices in Asia and South America, according to Societe Generale SA and Morgan Stanley. OAO Gazprom, the Russian exporter of the fuel to Europe by pipelines, signaled that supplies to Ukraine may be cut off if it doesn’t pay the debt for deliveries. NAK Naftogaz Ukrainy, the state gas company, owes $1.89 billion and has almost stopped paying for deliveries, Gazprom said. Supplies to Europe through Ukraine, a major transit route, have been suspended in freezing temperatures in 2006 and in 2009 because of price disputes between Gazprom and Naftogaz. Europe could see supply threatened by an escalating conflict or if Russia decides to punish Europe for supporting Ukraine. Russia shipped 505 million cubic meters of gas to Europe, excluding Baltic countries, according to data from CDU-TEK, a unit of the country’s energy ministry (www.bloomberg.com)

March 6, 2014. Russia's oil pipeline monopoly Transneft said it plans to nearly triple exports of ultra low sulphur diesel (ULSD) from the Baltic Sea port of Primorsk after 2016 when domestic companies are expected to boost production. Transneft said it will adjust one of the crude oil links leading to Primorsk to a pipeline able to ship ULSD. (www.downstreamtoday.com)

March 6, 2014. The U.S. and European Union’s drive to give more legal security to international investors may open the way for hydraulic fracturing for oil and gas in Europe, environmental organizations said. The groups, which include the Sierra Club and self-styled “radical” think tank the Transnational Institute, oppose the inclusion of an “investor-state dispute settlement” clause in a free-trade agreement being negotiated. The measure would allow greater scope to arbitration panels to punish governments for jeopardizing projects or profits by changing rules once companies have begun investing. The issue hinges on what’s included in the final draft of the proposed Trans-Atlantic Trade and Investment Partnership, an accord to remove barriers from agriculture to manufacturing and services and create a free trade area with about $33 trillion in potential annual economic output. U.S. companies already investing in European shale projects include Chevron Corp. Mounting opposition from green groups has stalled efforts by the U.K. government to introduce fracking and led France to ban the technique and cancel exploration licenses held by companies including Total SA, the country’s biggest explorer. (www.bloomberg.com)

March 5, 2014. Northern Uganda’s return to peace following a 20-year rebellion by Joseph Kony’s Lord’s Resistance Army is spurring investment in oil exploration, electricity production and railways. The region, where 46 percent of the population live in poverty, has largely been excluded from almost three decades of economic expansion. Paris-based Total has made seven petroleum discoveries in Nwoya district, 368 kilometers (229 miles) northwest of the capital, Kampala, after drilling 37 exploration and appraisal wells since February 2012, according to the government. The company applied in December for a production license from its discoveries in the neighboring district of Buliisa at the northern section of the Lake Albertine Rift Basin, where reserves are estimated at 3.5 billion barrels. (www.bloomberg.com)

POWER

March 10, 2014. Azerbaijan will increase the number of its power plants this year. A modular power station with a 16.5 MW capacity is planned to be commissioned in the southern region of Lerik in the first half of the year, report of the Azerbaijani government for 2013 said. The power plant will be built to provide reliable and stable electricity for Azerbaijan's southern regions, the report shows. The construction work on ten small hydropower plants with a total capacity of 14.3 MW was conducted in the country in 2013. Moreover, the construction of two small hydropower plants in Goychay-1 (3.3 MW) and Ismayilli-1(1.6 MW) was completed. The second combined-cycle plant (409 MW) is planned to be commissioned in the Shimal power plant in Azerbaijan in late 2014. Azerbaijan's energy capacity grew by 12.9 percent and reached 7,100 MW last year, the report said. The power grid allows for the production of 22-24 billion kWh of electricity, and ensures the export of 2.1 billion kWh. (www.azernews.az)

March 10, 2014. Vietnam Electricity Group (EVN) has started construction of the 1,200 MW Vinh Tan 4 coal-fired thermal power plant in the country. The plant is scheduled to be built by South Korea's Doosan Heavy Industries Group & Construction, Japan's Mitsubishi, and two local Vietnamese firms, in Binh Thuan, some 230km east of Ho Chi Minh City. EVN Power Generation Company said the plant will use environmentally friendly technology thereby meeting Vietnamese and international standards on emissions. Built with a total investment of VND36.7tn ($1.7 bn), the plant is scheduled to start its first 600 MW turbine in 2017 and the second turbine in 2018. The plant is projected to generate about 7.2 billion kWh per year for the national grid, once fully operational. (fossilfuel.energy-business-review.com)

March 7, 2014. It has been nearly three years since Japan was rocked by one of the most powerful earthquakes recorded in modern times, and the country is still coping with the aftermath. Periodic reports of highly-contaminated water leaks from the Fukushima Daiichi nuclear plant continue to feed the anti-nuclear campaigners. But Prime Minister Shinzo Abe’s government aims to resume nuclear power generation to power the population and its economy. (www.channelnewsasia.com)

March 7, 2014. Pakistan’s Private Power and Infrastructure Board (PPIB) has signed a memorandum of understanding (MoU) with the Ministry of Water & Power & Arab National Construction (ANC) Holding LLC Dubai for construction of two 660 MW coal based power generation plants at Pakistan Power Park in Gadani. The agreement also covers construction of a jetty in addition to power plants, at a cost of $ 2.5 bn, over the next three years. Prime Minister Muhammad Nawaz Sharif said ANC's investment in Pakistan power sector would help the country to overcome the energy shortages. (fossilfuel.energy-business-review.com)

March 11, 2014. National Grid is set to start work on the Rhode Island segment of the interstate reliability project (IRP), a multi-million dollar program aimed at enhancing the reliability of the region’s electric transmission system, from this month. The first phase of the work will involve vegetation clearing along an existing transmission corridor or right-of-way (ROW) running through Burrillville and North Smithfiel, while the actual construction of new transmission power lines and upgrade of existing lines in ROW will start in May 2014. The Rhode Island work is part of the construction of a total of 75 miles of high-voltage power lines in Rhode Island, Massachusetts and Connecticut by National Grid and Northeast Utilities. (utilitiesnetwork.energy-business-review.com)

March 7, 2014. Eskom Holdings SOC Ltd. lifted its power emergency in South Africa after the first rolling power blackouts in six years shut shops and factories and delayed flights in the continent’s biggest economy. Power was restored to all areas, the Johannesburg-based state-owned utility said. Scheduled electricity cuts may still occur if the need arises, it said. Eskom, which produces 95 percent of the nation’s electricity, declared an emergency after heavy rains disrupted its coal supply used to generate more than 80 percent of power. The blackouts shut most shops and restaurants at the Victoria & Alfred Waterfront in Cape Town, South Africa’s most-visited tourist attraction, including those owned by Exclusive Books Group Ltd. and Mugg & Bean. Johannesburg’s main international airport was forced to use backup generators, disrupting flights. (www.bloomberg.com)

March 11, 2014. Tokyo Electric Power Co. (Tepco) is making inadequate progress in managing radioactive water at its wrecked Fukushima atomic plant, which is distracting it from other important challenges, an adviser to the company said. There’s a lack of a long-term plan for disposing of contaminated water stored in tanks at the site, Dale Klein, who chairs the utility’s Nuclear Reform Monitoring Committee, said. The company known as Tepco, which has been forced to store thousands of metric tons of radioactive water, says decommissioning the plant could take four decades and cost as much as 11 trillion yen ($106 billion). Dismantling the plant will involve the removal of molten fuel from three reactors that melted down after the plant was disabled by an earthquake and tsunami. Such a removal has never been attempted, Klein said. (www.bloomberg.com)

March 10, 2014. The Brazilian government’s pledge to help power distributors cope with the worst drought in four decades is set to fall short of their additional spending, according to data compiled by an industry association. Authorities allocated 1.2 billion reais ($512 million) for companies such as Eletropaulo Metropolitana Eletricidade de Sao Paulo SA to cover January costs as low dam levels increase the use of more expensive thermo-electric plants, sending spot prices to record highs. The Association of Electricity Distributors calculates costs rose by 1.8 billion reais. (www.bloomberg.com)

March 8, 2014. Pakistan and the US signed a USD 72 million agreement to refurbish and upgrade the Mangala dam located in the Mirpur district of Pakistan-occupied-Kashmir (PoK). The rehabilitation will improve the operating capacity of the hydroelectric plant at Mangala dam by 90 MW, enough electricity for about 200,000 Pakistani households. A total amount of USD 150 million is slated for the project, with USD 72 million allotted for this initial phase. Under the agreement, the US Agency for International Development (USAID) will fund the refurbishment of two generators and the modernisation of ancillary equipment of the power house at the dam. The new equipment will improve the reliability and efficacy of the Mangla dam for the next 40 years. In total, United States energy programmes have added 1088 MW to Pakistan's electrical power systems. (zeenews.india.com)

March 5, 2014. Chinese Ambassador Zhou Yuxiao and Zambian Finance Minister Alexander Chikwanda signed a Framework Agreement on the Provision of a Concessional Loan by China to Zambia on March 4, 2014. According to the agreement, the Export and Import Bank of China will provide the Ministry of Finance of Zambia with a concessional loan of 41 million US dollars. The term of the loan shall be 20 years with a grace period of 7 years and the interest rate shall be 2%. The loan will be utilized for construction of the 120 km power transmission line between Kariba North and Kafue West. Ambassador Zhou said that the power expansion project at the Kariba North Bank, which has been under construction by Sinohydro, is almost completed by now. Two turbines with 180 MW each have been added to the existing power station. The first one was completed and handed over to the Zambian side. The second one started its trial operation on March 25, 2014 and it can be delivered any time from now on. The above-mentioned transmission line, which is about 90% completed already, is meant to transmit the additional electricity at the Kariba North to Lusaka power grid. People in Lusaka and beyond can expect much less power cuts in the very near future. (allafrica.com)

March 11, 2014. Rural Electrification Corp (REC) is in talks with Germany's KfW for raising money to provide funding for renewable energy projects. The state-owned company is a leading lender for power projects in the country. The company is looking to raise funds from KfW, REC Chairman and Managing Director Rajeev Sharma said at the Green Energy Summit, organised by Indian Chamber of Commerce in association with the Ministry of New and Renewable Energy. Both companies are in talks regarding funds that would be utilised by REC for financing renewable energy projects. Among others, REC had earlier received about 100 million euros loan from KfW, a leading development bank based in Germany. The company recently revised its guidelines for providing loans to large renewable energy projects, Sharma said. At the event, experts emphasised on the need for promoting power generation from renewable energy sources. Power System Operation Corporation (POSOCO) said it is important for generators of renewable energy to comply with standards of power grids system. POSOCO, which ensures integrated functioning of regional and national electricity systems, is a wholly-owned subsidiary of state-run Power Grid Corp. (economictimes.indiatimes.com)

March 8, 2014. Three Canadian companies, through a consortium, have proposed to invest about $1 billion (` 6,100 crore) in Odisha for developing a 500 MW solar power plant and solar panel manufacturing unit. Data from the National Aeronautics and Space Administration of the US shows all districts in Odisha get an average solar radiation of 5.5 Kwh/sq m, with around 300 clear sunny days every year. The feasible potential for power generation in the solar photovoltaic route has been estimated at 8,000 MW by the Odisha Renewable Energy Development Agency, a state undertaking. The state is presently producing nearly 13 MW of solar power, from units set up by private companies. Recently, the government had announced an Odisha Solar Policy 2013, in line with the National Solar Mission. Firms which decide to invest are to get exemption from sales tax and electricity duty, apart from allocation within the land bank created by Green Energy Development Corporation, the nodal agency for development of solar power projects in Odisha. The latter is a subsidiary of Odisha Hydro Power Corporation. There is nearly 700 acres of surplus land with the hydro power producer and the aim is to use this for establishing solar power projects. (www.business-standard.com)

March 7, 2014. An Indian rule requiring wind farms to predict output or face fines has been temporarily suspended as the regulator reconsiders the best way to ensure stability of the grid, which suffered the world’s biggest outage in 2012. The Central Electricity Regulatory Commission said it would penalize wind farms that failed to predict their day-ahead generation within a 30 percent band. Developers including Tata Power (TPWR) Co. and Goldman Sachs Group Inc.’s ReNew Wind Power Pvt. protested the directive, saying it was impossible to comply with and that fines would wipe out profits in an industry that has drawn about $10 billion of investment since 2011. Based on feedback from the industry, the Central Electricity Regulatory Commission decided the mechanism needed review and suspended the commercial portion, the commission said. Wind farms still have to submit estimates, it said. Forecasting of wind generation, an intermittent energy source, is carried out to help stabilize the grid in some parts of the U.S. and Europe, where surging wind output has driven wholesale electricity prices below zero and forced utilities to pay consumers to take power as supply exceeded demand. In India, scheduling would allow wind power to be sold across states and help authorities prepare network upgrades to accept more clean energy in the future. The industry is asking for the rules to be modified so that a centralized, state-level load dispatcher can compile more accurate, region-wide predictions, which is how scheduling is done in Europe. In 2012, grid collapses caused by a mismanagement of power sales left nearly 360 million people in the dark for days. Hero Future Energies, a unit of Hero Group which owns India’s biggest motorcycle maker, plans to build 1,000 MW of renewable energy capacity by 2017. It will complete 111 MW of wind farms by March and won licenses to build 30 MW of solar plants in a national auction last month. (www.bloomberg.com)

March 7, 2014. Renewal energy source makes its inroads in the tea industry. Tea estates in Assam have started experiment with solar power. Tea gardens in Assam face erratic power supply from the grid. Only 60 per cent of total electricity requirement is supplied by the state run power sector utility, for the remaining 40 per cent tea estates have to rely on gensets. Vikram Solar, the manufactures photovoltaic (PV) solar modules has tied up with McLeod Russel India Limited for the execution of 100 Kw Off-Grid Solar Power Project at Attareekhat Tea Estate, Tangla, Assam. The project is expected to become operational by April this year. This solar system with battery back-up has received 30 per cent subsidy from the Ministry of New and Renewable Energy (MNRE), Government of India. The company is in talks with various tea estates in Assam and West Bengal for installing solar facility. During the rainy season, solar system in general doesn't work to its full potential. But the available solar radiation for the rest of the year is more than enough to generate adequate solar power. Power generated from gensets in the tea estates are levied 10 paise duty per unit. Assam has around 800 big tea estates around one lakh small tea growers producing roughly 618 million kgs annually. (economictimes.indiatimes.com)

March 6, 2014. India approved ` 3 billion ($49 million) in subsidies to help farmers install solar-powered water pumps to boost agricultural yields and reduce expensive diesel fuel use. The Ministry of New and Renewable Energy will provide grants to install 17,500 irrigation pumping systems to 2016 funded by a carbon tax on coal. India has 26 million groundwater pumps on farms that suffer from blackouts and volatile fuel costs. Switching those to run on solar would save about $6 billion a year in power and diesel subsidies and has drawn companies including BlackRock Inc.- backed SunEdison Inc. and Jain Irrigation Systems Ltd., Asia’s top irrigation-equipment maker. (www.bloomberg.com)

March 11, 2014. OAO Lukoil may turn to Russia for future renewable energy projects as its units in Bulgaria and Romania are hurt by subsidy reductions. The Russian energy company may start a pilot project for 10 MW of wind generation in Kaliningrad as early as next year if Russia reduces restrictions requiring equipment to be bought locally. Eastern European countries such as Romania and Bulgaria have been rolling back subsidies to limit the cost of renewable energy and curb consumer electricity bills. Both governments cut incentives for renewable energy projects last year following a surge in installations. Lukoil expects to conclude a project financing agreement in May on two current Romanian projects. (www.bloomberg.com)

March 11, 2014. The latest round of United Nations climate talks began March 10 in Bonn with a call for “concrete action” from the UN's top climate change official. Christiana Figueres, head of the UN Framework Convention on Climate Change, said during the opening plenary session that she has received support from local political leaders, nongovernmental groups, private citizens and even military officials, and she urged delegates to help put that support into action at the highest level. One of the big issues to emerge early in the talks, which run through March 14, is when proposals for national greenhouse gas reduction targets must be submitted to the UNFCCC and made available to parties. The issue was one of the most difficult at last year's climate summit in Warsaw, and the final agreement to emerge from those talks said the deadline would be in early 2015, a timeframe pushed strongly by U.S. climate envoy Todd Stern, although countries can submit their targets earlier if they choose to do so. The U.S. communication on priorities for 2014-2015 submitted Feb. 12 reiterated the early 2015 deadline, but most other submissions since then—including the one from the European Union on March 3, and from Switzerland March 4 and a group of Latin American countries March 10—called for the targets to be submitted either ahead of the Dec. 1-12 climate conference in Lima, Peru, or before the end of this year. The extra time would be used to push for the difference between initial pledges and the level of greenhouse gas emissions required to keep overall global warming to less than 2 degrees Celsius compared to pre-industrial levels by the end of the century. On March 10, the delegation of Nepal, speaking on behalf of the group of Least-Developed Countries, and Bolivia, speaking on behalf of the Group of 77 developing countries, formalized that view, called for the deadline to be changed to Dec. 31 or earlier. (www.bloomberg.com)

March 11, 2014. Thirteen years after the United Nations set up the first carbon emissions market, the global trading system’s influence is waning as it gives way to local and regional plans to combat climate change. Fewer markets are accepting UN Certified Emissions Reductions, credits created from investment in carbon-reduction programs, as nations from China to California adopt their own standards. In Europe’s $54 billion market, where lawmakers are tackling a record glut, utilities and manufacturers from EON SE to ThyssenKrupp AG may reach the limit on the CERs they can use by March 2015. (www.bloomberg.com)

March 10, 2014. On a Northern California farm where silage for animal feed once grew, Google Inc. is generating power from more than 100,000 solar panels to heat nearby homes - and double down on an area of energy many investors shun. The Galt solar farm, 20 miles south of Sacramento, is one of 15 alternative-energy projects that Google has funded since 2010 as part of a more than $1.4 billion investment in clean power production. That makes the Internet search giant the biggest backer of U.S. alternative-energy projects over that stretch, excluding financial institutions and utilities. More than half of Google’s energy projects are in solar, a market that’s cratered. Panel prices have plunged 58 percent since 2010, after Chinese manufacturers glutted the industry, sending U.S. developers Solyndra LLC and Evergreen Solar Inc. into bankruptcy. Yet Google is moving to succeed where others faltered by avoiding panel production and instead capitalizing on controversial tax incentives that can produce investment gains of more than 10 percent a year, according to analysts. While clean energy is becoming a focus for many technology companies - Facebook Inc. is developing a wind farm in Iowa and aims to generate at least a quarter of its data center power from renewable sources by 2015 - none are spending like Google. With $60 billion in cash, the company announced energy investments of almost $400 million in 2013. (www.bloomberg.com)

March 10, 2014. Yondenko Corp., a Japanese electrical engineering company, will build a 3.1 billion yen ($30 million) solar power station in Kagawa prefecture in western Japan. The 12.5 MW plant, to be built at a former factory site, will start running by March 2016, the company said. Yondenko has a 2.5 MW solar plant running in Kagawa and has plans for nine other solar projects. (www.bloomberg.com)

March 9, 2014. China will strengthen environmental-protection laws this year to ensure that polluters are held accountable for the damage they cause, the head of the nation’s legislature said. Chinese authorities have pledged greater efforts to protect the environment, with Premier Li Keqiang saying the nation was “declaring war” on pollution, as dirty air and water spark public outrage across the country. Seventy-one of 74 cities monitored by the government failed last year to meet air quality standards set for them, according to Vice Environmental Protection Minister Wu Xiaoqing. (www.bloomberg.com)

March 8, 2014. Dubai-based Petrixo Oil & Gas has announced plans to set up a bio-fuel refinery in Fujairah with investment in excess of $800 million. The company said that it has completed the preparation of studies, engineering designs and selected the required technologies for the facility. The refinery will have a design capacity of one million metric tons per year of bio-fuel products, which include bio-diesel, green-diesel, bio-jet, bio-naphtha and bio-LPG. The project will be built over about 460,000 square metres of land close to Fujairah Free zone and the Port of Fujairah. The project is in line with the directives of Sheikh Hamad Bin Mohamed Al Sharqi, Ruler of Fujairah, in support of green energy projects. (www.arabianbusiness.com)

March 7, 2014. Japan plans to reduce incentives for solar power and introduce a higher tariff for offshore wind than onshore turbines to encourage installations. The offshore wind tariff would be set at 36 yen (35 cents) a kilowatt-hour for 20 years, according to a report by a panel advising the trade ministry. Onshore wind would get a separate rate, of 22 yen, unchanged from fiscal 2013. The solar tariff would decline 11 percent to 32 yen. (www.bloomberg.com)

March 7, 2014. Suntech Power Japan Corp., a unit of China’s Wuxi Suntech Power Co., plans to expand beyond marketing solar panels to generating electricity for sale to retail customers in Japan. The company plans to build solar plants with partners. Suntech aims to start selling electricity as early as Dec. 20. The move comes as Japan plans to liberalize electricity markets in 2016, which will allow households to pick power suppliers. Currently, Japan’s 10 utilities have an effective monopoly in supplying power to homes. (www.bloomberg.com)

March 7, 2014. Future global warming could lead to a significant increase in malaria cases in densely populated regions of Africa and South America unless disease monitoring and control efforts are increased, researchers said. In a study of the mosquito-borne disease that infects around 220 million people a year, researchers from Britain and the United States found what they describe as the first hard evidence that malaria creeps to higher elevations during warmer years and back down to lower altitudes when temperatures cool. (www.theguardian.com)

March 6, 2014. Clean-energy assets in the Middle East and North Africa (MENA) will more than double in capacity by the end of next year, the Dii GmbH industry association said. Solar and wind generation capacity will rise to 3.9 GW in 2015 from more than 1.5 GW now, the Munich-based trade association known as Desertec, said. Governments are looking to clean energy to meet rising demand for power and to conserve fossil fuels for export. Oil-producing countries in the Persian Gulf plan to boost solar output, which will distribute renewable energy more evenly across the region, Van Son said. Most of the region’s green energy assets are wind plants in North Africa, Desertec said. The MENA will need more than $50 billion in investments by the end of the decade to add as much as 15,000 MW of solar-generating capacity, the Middle East Solar Industry Association and MEED Insight said. (www.bloomberg.com)

March 6, 2014. The growing risk of default by Shanghai Chaori Solar Energy Science & Technology Co. may become China’s “Bear Stearns moment,” prompting investors to reassess credit risks as they did after the U.S. securities firm was rescued in 2008, according to Bank of America Corp (BofA). The maker of solar cells said it may not be able to make an 89.8 million yuan ($14.7 million) interest payment in full by the deadline. As the subprime mortgage market began to collapse in 2007, two Bear Stearns Co. hedge funds that owned the debt sought bankruptcy protection in the beginnings of the credit crisis. The troubled bank was sold to JPMorgan Chase & Co. in March of 2008 in a deal facilitated by the U.S. Federal Reserve. Six months later, Lehman Brothers Holdings Inc. collapsed in the biggest bankruptcy in U.S. history. Chaori’s potential failure to pay investors would mark the first bond default in Asia’s largest economy, highlighting the strain in China’s $4.2 trillion bond market after a trust product issued by China Credit Trust Co. was bailed out in January. There haven’t been any defaults in China’s publicly traded domestic debt market since the central bank started regulating it in 1997, according to Moody’s Investors Service. (www.bloomberg.com)

March 6, 2014. President Obama's fiscal 2015 budget request includes $7.89 billion in funding for the Environmental Protection Agency (EPA), a cut of approximately $310 million, or 3.8 percent, compared to the agency's current funding level of $8.2 billion. The budget request proposes to increase funding for categorical grants awarded to states and tribes and provide additional funding for various other agency programs, including the hazardous substance superfund program. The overall EPA spending cut would largely be achieved through “targeted reductions” to the state clean water and drinking water revolving funds. Those funds, which provide capital for water infrastructure projects, would receive a combined total of $1.8 billion under the budget proposal, a decrease of $581 million compared to the fiscal 2014 enacted level. The White House Office of Management and Budget said the president's budget request adheres to a fiscal 2015 discretionary spending limit of $1.014 trillion, the spending cap agreed to by Congress in December. The budget proposal also includes an additional $56 billion in funding for priority programs, dubbed the “Opportunity, Growth and Security Initiative,” which will be split evenly between defense and nondefense spending and fully paid for through a combination of spending cuts and the closure of so-called tax loopholes. EPA Administrator Gina McCarthy said the fiscal 2015 budget request for the EPA takes a “strategic approach” to targeting resources toward priority activities in light of reduced budget resources. McCarthy said the trend for the EPA during the past three years has seen “zero real growth” for the EPA. McCarthy said the proposed budget would support priority work to address climate change and air quality, clean water, toxics and chemical safety and EPA work with communities. (www.bloomberg.com)

March 6, 2014. China, the biggest country by population and carbon emissions, called on developed nations to provide $490 billion of climate funding to poorer countries through 2020 to help them adapt to droughts and floods. From 2020, richer countries should give at least 1 percent a year of their gross domestic product to the Green Climate Fund based in Songdo, Korea, China said in a submission published on the website of the UN Framework Convention on Climate Change (UNFCCC). They should give annual funding of $40 billion this year, rising to $100 billion in 2020, it said. The fund is preparing to raise initial capital this year as nations struggle to meet a target to limit global warming. Humans have emitted more than half the carbon compatible with the goal to keep global temperatures from rising by 2 degrees Celsius (3.6 Fahrenheit), UN scientists said. A new climate agreement to be set by the end of 2015 is unlikely to put the Earth on the necessary path, according to Christiana Figueres, executive secretary of the UNFCCC. Developed countries should have more responsibility to provide finance as well as emission cuts than emerging nations and the 2020 deal should be struck under the existing rules of the 1992 convention, China said. (www.bloomberg.com)

March 5, 2014. Demand for U.S. solar power increased 41 percent last year driven by record growth in residential projects, according to the Solar Energy Industries Association. Developers installed 4.75 GW of photovoltaic panels in 2013, making solar the biggest source of new generating capacity after natural gas, the Washington-based trade group said. Demand next year will increase 26 percent as rooftop power plants become more common. (www.bloomberg.com)

March 5, 2014. EcoMotors Inc., backed by Bill Gates and Khosla Ventures, formed a partnership with a subsidiary of China FAW Group Corp. that will build a $200 million factory in China. The joint venture will develop, make and sell EcoMotors’ engine technology, which the Allen Park, Michigan-based company says improves fuel economy and lowers greenhouse-gas emissions. FAW Jingye Engine Co. will invest more than $200 million in the factory, which will make 100,000 engines annually in Shanxi provice from 2015. China’s leadership has said it will “declare war” on pollution and is working to shut coal furnaces and phase out 6 million vehicles that don’t meet environmental standards. Beijing and Shanghai have been covered in smog as pollution levels there exceeded levels considered safe by the World Health Organization. EcoMotors signed an agreement with another Chinese company, Zhongding Power, to manufacture engines in China’s Anhui Province. The company said it raised $32.5 million from investors led by Braemar Energy Ventures. Gates and Silicon Valley venture capital firm Khosla Ventures also participated by increasing their investment, EcoMotors said. (www.bloomberg.com)

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