MonitorsPublished on Sep 05, 2014
Energy News Monitor | Volume XI; Issue 12

[China’s Wager on Natural Gas]

                             “China is racing ahead of India and also other much larger natural gas consuming and producing nations around the world to produce and consume gas. This should not surprise those watching China’s energy and other moves. In the last few decades China has shown that it has the capacity to race past even the most formidable competitor in any field…”




·          China’s Wager on Natural Gas


·          We need ‘smart minds’ not ‘smart cities’


·          Retail Gasoline Prices in Different Countries



·          Oil Ministry delayed KG gas project: ONGC

·          ONGC approves ` 52.1 bn investment in Daman gas fields

·          Cairn India's Rajasthan oil block plan hits ONGC hurdle


·          IOC expects Paradip refinery’s margin to exceed $10 per barrel

·          RIL plans $13 bn projects, including new refinery

Transportation / Trade………………

·          IGL eyes more city gas firms for growth via acquisitions

·          RIL's July crude imports up 12.4 per cent y/y: Trade

Policy / Performance…………………

·          Petroleum reserve to cut import-shock risks: Corporate India

·          Oil Minister asks oil PSUs to buckle up for challenge as diesel nears market rate

·          Splitting subsidy with oil producers credit positive: Moody's

·          IOC cuts petrol prices by 2.6 per cent

·          Oil ministry sets up inquiry on delay in projects and missing output targets by ONGC

·          Vedanta for an independent regulator for O&G sector

·          Cairn gas at $8.4, RIL, GSPL may have to wait till September end

·          Vijay Kelkar report recommends market-linked gas pricing to Modi govt

·          LPG consumers can avail 12 cylinder quota at anytime of year



·          REC to provide ` 200 bn for Telangana power projects

·          5 GW power capacity may be hit due to acute coal shortage

·          NTPC aims at 8-9 GW capacity takeover

·          NTPC may revise Katwa power capacity to 1,980 MW

·          7.2 GW power capacity shut in western region

·         HPGCL sets new benchmark in power generation

Transmission / Distribution / Trade……

·          CERC staff paper bats for innovation in power trading business

·          India's financial hub Mumbai hit by power cuts

·          Alstom T&D bags ` 550 mn contract from Bhutan hydroelectric project

·          Bajaj Electricals unit bags orders worth ` 6 bn

·          TPDDL pays over ` 610 mn dividend to Delhi

·          GVK gets 'green nod' to import coal from South Africa for Punjab plant

·          India may face blackouts as coal shortage cuts power output

·          NTPC to import 17 million metric tonnes of coal this fiscal

Policy / Performance…………………

·          Govt turns up the heat after power outages

·          Need to address Coal India's concern about e-auction cut, says PMO

·          Five states facing power crisis to meet Goyal

·          Centre deliberately denying power to Maharashtra: CM

·          Accounting norms may affect power companies' profits

·          MAPS units renew operational licence till Dec 2015

·          Rajasthan providing more electricity than other states

·          Power regulators' body plans study on discoms' performance

·          Reliance power approaches AP govt to revive Krishnapatnam UMPP



·          Korea Gas Corp says starts commercial crude oil production in Iraq's Badra

·          Athabasca completes $1.1 bn deal with PetroChina

·          Total stands firm on Russian gas project amid Ukraine escalation

·          PetroChina vows catch up with Sinopec starting with shale

·          Fracking foes force some oil drillers to tread lightly


·          Thailand's PTT plans $20 bn Vietnam refinery, petrochemical complex

Transportation / Trade…………

·          Gunvor said to expand into spot LNG as supply increases

·          Gazprom starts oil deliveries from Badra field in Iraq

·          Russia starts work on Gazprom gas pipeline to China

·          Search for oil moves to spreadsheets as Canada trade data faces revisions

·          Nigeria activist who escaped the gallows probes oil accounts

·          Latin American oil producers mull light crude imports to cut costs

·          Moldova gets gas from Romania through new pipeline

Policy / Performance………………

·          Russia asks China to join Rosneft’s second-largest oil project

·          Thailand stops petroleum exports on military govt's request

·          Russia-Ukraine interim gas deal sought by EU amid fights

·          Guanghui wins approval to import crude as China opens Xinjiang

·          Shell submits a plan for new exploration of Alaskan arctic oil



·          Brazilian firm to invest $900 mn in 700 MW power plant

·          PLN to operate new power

·          Jacksonville-based APR Energy to build power plant in Australia

Transmission / Distribution / Trade……

·          Duke Energy unveils plan to upgrade its aging electric grid

·          Eltel, Caruna to enhance operational reliability of power distribution network

·          German power set for more spikes in winter on supply risk

·          Belgium nuclear halts boost power premium on supply risk

·          ABB commissions world's longest power transmission link in Brazil


Policy / Performance………………

·          Nudging can save Europe billions of euros on energy bills

·          Japanese public seen as biggest obstacle to nuke restart



·          Suzlon trauma ending as Modi helps double turbines: India Credit

·          Jackson sets ` 6.5 bn turnover target for solar power division

·          Farmers in Karnataka can now set up solar farms

·          Neyveli Lignite plans mega investment in renewable energy

·          Telangana turns to solar power

·          Azure Power to raise $14.3 mn loan from IFC

·          Solar plants of 715kW total capacity being installed in Delhi

·          NTPC looks ahead to PM's US visit for its geo-thermal project

·          Enrich Energy to set up 60 MW solar power project in Telangana

·          Expensive capital keeps renewable costs high in India: IEA


·          Shunfeng talks to banks with aim to become solar giant

·          US EPA may force drillers to cut methane leaks

·          Water shortages could limit shale development across globe: Report

·          United Nations' 'reports from future' predicts climate hell by 2050

·          China seeks pollution cut with national carbon market

·          Europe set for warm September after coolest Aug since ’06

·          Floating solar power hits land-squeezed Japan under Kyocera plan

·          Germany solar survivor says panel shipments reach record

·          Solar makers set for record 2014 shipments on strong demand

·          Myanmar’s solar ambitions kickstarted with $480 mn ACO pact

·          Japan, India to ink rare earths deal: report

·          UK to invest in solar sector in AP




China’s Wager on Natural Gas

Lydia Powell, Observer Research Foundation

A Chinese scholar visiting India as part of the preparations for the visit of the Chinese President asked for information on India’s energy sector. After carefully studying the reports, books and papers produced by Government agencies, Think Tanks and experts that were offered to him, he dismissed all of them as useless because ‘they only contain problems and not solutions’ as he put it.  The standard response from the Indian side that ‘we have solutions but we have difficulty in implementing them because we are a democracy and we need to consult the people’ was not to his taste. As far as he was concerned this was a weak answer to a strong question.  Should we be troubled by this observation? Perhaps not, and this is not because we are a democracy and therefore have the right to underperform. It is because having a solution does not necessarily mean it is the right one for the problem at hand. Two of China’s great solutions, the Great Wall and the One Child Policy were apparently not the right ones. The former is said to have been rendered redundant as threats to the ruling regime arose from within and not outside China and the latter is said to be contributing to China becoming old before it becomes rich. 

But these outcomes have not deterred China from its quest for solutions. The latest is its bet on natural gas as the solution to its coal problem. China is racing ahead of India and also other much larger natural gas consuming and producing nations around the world to produce and consume gas.  This should not surprise those watching China’s energy and other moves. In the last few decades China has shown that it has the capacity to race past even the most formidable competitor in any field.   

The 2014 Medium Term Gas Market Report of the IEA sums up gas developments in China in two of its captions: ‘(Demand in) Non-OECD regions: China dwarfs all other developments’ and ‘China cements it position as one of the largest natural gas producers’.  According to the report, China’s gas demand increased by 13% or 20 billion cubic meters (BCM) in 2013 putting the country in third place behind the United States and Russia.  In its projection for gas demand till 2019, the report reiterates its earlier conclusion that China will remain by far the fastest growing market even if China’s GDP growth figures fall by about 1% in the projection period. China was the 6th largest producer of gas in 2013 when production increased by 9% to 117 BCM but this increase is inadequate to meet incremental demand in the next few years.  According to the IEA report, gas production is expected to increase to 193 BCM by 2019. 

China has also joined the exclusive club of shale gas producers with a production target of 6.5 BCM for 2015.  The country’s first shale gas field operated by Sinopec is under commercial production.  Production in 2014 is expected to touch 1.2 BCM up from 200 million cubic meters in 2013.  In an interview to the National Bureau of Asian Research, Chen Weidong, Chief Energy Researcher with the Chinese Oil Company CNOOC has pointed out that production per well in China is ten times the average of US shale gas production. China has so far drilled only 300 wells compared to 100,000 in the United States and it is anyone’s guess as to which way things would go in the future. Tight gas already comprises of 38% of total gas production in China. China also has an aggressive programme to convert coal to gas. Despite these developments in domestic production, all the additional output is likely to meet only 51% of the additional demand by 2019 which means that the rest will be met by imports. In 2013, China maintained its position as the third largest importer with imports split roughly equally between LNG and pipeline gas. Imports from Central Asia (mainly Turkmenistan) account for most of the pipeline imports. Imports from Russia are expected to start from 2019. China’s aggressive push to reduce coal consumption by substituting coal with gas resulted in shortages in the peak winter season of 2013 when the National Development and Reform Council (NRDC) had to restrain consumption of gas by industrial and household consumers.  China is also implementing gas price reform that is expected to boost domestic supply.  

The IEA report attributes China’s success to the priority given to environmental goals that have led to increase of gas use in transportation, power generation and industrial sectors. The report also observes that China’s ramping up of supplies using all possible options such as increasing domestic non conventional gas production (such as shale gas and coal bed methane), coal gasification and its aggressive pursuit of pipeline and LNG options contributed to increasing the share of gas. 

These pieces of information are typical of China and are often used to beat India with. The domestic gas industry consistently looks down on Indian policy makers like it would an under-performing child and asks ‘why can you not be more like China’? The comparison is not justified partly because there are few similarities between India and China apart from the fact that both are Asian and both are roughly the same size in terms of population numbers. These similarities hardly matter in the context of policy making. 

According to the IEA report (quoted earlier) China raised its regulated price for gas for non-residential consumers from $7.7/mmbtu to $8.9/mmbtu as it had to take into account the growing volume of imported gas that was meeting demand in 2013.  China benefits from lower priced LNG from Australia, Indonesia and Malaysia which originate from years with lower oil prices, but more recent imports are proving to be expensive. The IEA reports that LNG from Qatar was available at $17.61/mmbtu, Turkmen gas at $9.6/mmbtu and Mayanmar gas at $11.8/mmbtu in 2013. These prices are high compared to both existing and possible future gas prices in India.  But one cannot come to a conclusion without looking at the nature of consumption in both countries. In China 68% of gas consumption is accounted for by industry and buildings (possibly including household heating). The substitute in these sectors is more likely to be oil than coal. Only 2% of China’s electricity comes from gas while most of the rest comes from coal available at an average price of $2-5/mmbtu.  In India roughly the same share (68%) of gas is accounted for consumption by the power and fertiliser industries. The output of these sectors is consumed (hope to be consumed in the case of electricity) directly or indirectly by some of the poorest people on the planet.  

Even in China the price of gas at the individual consumer level does not go uncontested. Chen Weidong, Chief Energy Researcher with CNOOC mentioned earlier, has observed that he would switch from gas to coal based electricity to heat his home if the price of gas increased by 1-2 yuan per cubic meter. Millions in China are likely to be more sensitive to the price of heating fuel than the Chief Economist of CNOOC. In sectors where gas competes with coal, pricing policy change is likely to be difficult even in China but perhaps not as difficult as it is in India.     

Some observers question the motives behind China’s wager on natural gas? They see China’s dash to gas as a smokescreen behind which it will continue to burn coal. A story in the Financial Times quoting IHS says that China will have 248 GW of additional capacity between now and 2020 amounting to roughly 3 coal plants each month.  If this is true China will be adding, in just 6 years, more coal based capacity than what India managed to put up in over 60 years.  Other alarmist reports say that China’s future coal plants alone can emit 10 giga tonnes of carbon di oxide (GtCo2)  a year and use up the remaining budget of 349 GtCo2 meant for the whole world (if warming is to be limited to 2°C going by climate science). Organisations such as Greenpeace quote peer reviewed academic papers to argue that China’s coal-to-gas projects would not only increase coal consumption but also increase carbon emissions. China is said to have plans for 50 coal-to-gas plants to produce about 225 BCM of synthetic gas per year in the next decade. These alone are likely to contribute over 1 GtCo2 of emissions annually. To put this in perspective this is only a little less than the whole of India’s annual emissions today.  China’s argument is that coal-to-gas projects reduce local pollution and smog. The logic is perhaps to globalise emissions and localise benefits that are far more important in the political context. On the other hand there is a Bootlegger-Baptist coalition between the gas and the climate alarm industries that promotes China’s dash for gas as a Pascalian wager with no downside risk: China will decrease the price of gas by producing more and more gas and world will be both energy secure and climate secure because China would be running on abundant gas rather than evil coal. Can anyone wish for anything better? Perhaps India can. Given the fact that Indian coal consumption is small compared to that of China, India can easily occupy a small corner of the coal space vacated by China and also benefit from cheaper gas without upsetting the Bootlegger or the Baptist.   This could be the best ever Chinese solution India could have hoped for!

Views are those of the author                    

Author can be contacted at [email protected]



We need ‘smart minds’ not ‘smart cities’

Ashish Gupta, Observer Research Foundation

The recent visit of Honourable Prime Minister to Japan has unleashed some hope for economy at a time when India is struggling with internal issues primarily on account of energy resource scams. The ‘red carpet with no red tape’ policy may cheer Japanese investors. Honourable Prime Minister Abe has, in good faith, assured India that Japan will be looking forward to invest USD 33.58 billion in India’s infrastructure projects. India must capitalise on this by putting in place an investment strategy. Creating ‘smart cities’ may not make much sense, but creating ‘smart minds’ makes a lot of sense.

There is another side of the story which is disappointing as there was no sign of consensus on civil nuclear cooperation. As things stand, the civil nuclear pacts with Japan is not going to take place in the short to mid-term period as long as Japan insists that India must be party to the Non Proliferation Treaty and India resists it.  Therefore the hope on civil nuclear power may remain just a hope. The biggest losers may be American companies as they may not be able to capture the Indian civil nuclear market without Japan in the picture.  India will get investments but not in the civil nuclear power sector. But given that the benefit from civil nuclear cooperation has been marginal, the promise of investments in other segments is good news for India!

Since the coal shortage is infrastructure related as reiterated by our Honourable Prime Minister most of the Japanese investments could be used to improve logistics in the energy sector. Interestingly, the media is projecting the bullet train which is approved for the Mumbai – Ahmadabad route as an achievement.  But irrespective of whether commuters get on to the bullet train the dedicated freight corridor planned in the same region may ease coal shortages and spur economic activity.

Japan is known for its efficiency in all sectors and not surprisingly they have one of most efficient coal based power plants in the world. This is the area where India could gain significantly either by acquiring efficient technology or by creating joint venture with Japanese companies for constructing best in class coal power plants.  Indian coal based power plant emissions are high due to inefficiency and any improvement in the same will offer win-win solutions for energy security and climate change. Toshiba is already playing an important role as equipment supplier to Indian power plants and more of such participations would add value to the entire value chain in the power sector. The agreement on setting up of super critical coal fired power plant in Meja, Uttar Pradesh and the launch of feasibility study by Japan International Cooperation Agency is a step forward in this regard. The consensus on enhancing cooperation on environment friendly clean coal technologies may also bring in much needed investment.

Many power plants in India are not designed to use imported coal. The boilers of these power plants cannot run purely on imported coal as Indonesian coal contains moisture. So even after supply from Indonesia these power plants have to wait for the Coal India supply for blending. Collaboration with Japan in this area will be fruitful for the India. The visit of the Chinese President could add to the range of collaborators in power plant design.  

Transmission is another area where Japan’s assistance could be utilised.  Once again their efficient technologies that deliver power to remote areas with minimum losses could be used in India. Since Japan is the best in technology, India can upgrade its existing transmission infrastructure using Japanese technology rather than building new transmission lines.

The Prime Minister must be applauded for becoming the business face of India like President Obama. The strategy is perhaps late but is certainly in the right direction. But more important is to sustain the ‘good business image’ for India in the longer term. Investments from overseas must be channelled into projects for energy security, food security, health security and connectivity security. India must try to build on the relationship with Japan for the longer term as Japan is looking for destinations for investment.    

Views are those of the author                    

Author can be contacted at [email protected]



Retail Gasoline Prices in Different Countries

Akhilesh Sati, Observer Research Foundation


Retail Gasoline Price (US$/Liter) for year 2012







United Kingdom








New Zealand












South Africa






Sri Lanka




















Russian Federation


United States




United Arab Emirates


















Saudi Arabia






Source: World Bank (Development Indicators)





Oil Ministry delayed KG gas project: ONGC

September 1, 2014. As Oil Ministry looks into reasons for delay in ONGC's KG basin gas development, the state-owned firm says it lost three years because the ministry and its technical arm Directorate General of Hydrocarbons (DGH) refused to approve its partnership with Norway's Statoil and Petrobras of Brazil for the block. Oil and Natural Gas Corp (ONGC) had in 2007 farmed out 15 per cent stake in the KG-DWN-98/2 or KG-D5 block, which sits next to Reliance Industries' KG-D6 block, to Brazil's state-controlled oil firm Petroleo Brasileiro SA or Petrobras. Another 10 per cent interest was given to Norway's Norsk Hydro (now Statoil Hydro). However, the ministry and DGH did not approve the equity participation of the foreign companies, leading to inordinate delays in clearing of drilling programme, ONGC. Frustrated at delays, the two firms finally walked out of the block in 2010. KG-D5 block was originally planned to start producing gas from 2014 with a peak of about 20-25 million standard cubic meters per day. Now, the block will not produce before 2018. (

ONGC approves ` 52.1 bn investment in Daman gas fields

August 28, 2014. Oil and Natural Gas Corp (ONGC) said it will invest ` 5,219 crore in bringing to production Daman gas fields in the Arabian Sea by July 2016. The project is located about 90-100 kilometer from Daman coast and includes additional development of C-24 field and monetization of B-12 marginal fields (B-12-11, B-12-13 and B-12-15). Production is expected by July 2016 with peak output of 8.35 million standard cubic meters per day of gas and 9,286 barrels of condensate per day. The project envisages installation of seven well head platforms, one riser platform with associated pipelines and drilling of 28 wells. The project is scheduled for completion by pre-monsoon 2019. (

Cairn India's Rajasthan oil block plan hits ONGC hurdle

August 27, 2014. Cairn India, which has recently announced natural gas reserves in significant quantity at its prolific oil block in Rajasthan, is unable to monetise the finds expeditiously for want of partner ONGC's consent to the $300 million Raageshwari deep gas field development plan submitted in June. Cairn India said the gas field is estimated to hold 1-3 trillion cubic feet (Tcf) of gas, of which over half can be recovered. Industry experts say that 1 Tcf gas reserve can produce 3.88 million standard cubic metres per day (mmscmd) output with 100% recovery factor for 20 years, sufficient to fire a 242 MW power plant. The government, which is making efforts to raise oil and gas output, has expressed concern over the delay. The Raageshwari field was discovered in January 2005, but the initial discovery was very small. (


IOC expects Paradip refinery’s margin to exceed $10 per barrel

August 29, 2014. Indian Oil Corp (IOC), expects that its upcoming Paradip refinery in Orissa would report robust margin of over $10 per barrel and would also lift the overall margins of the company on better efficiency. The ` 30,000 crore-Paradip refinery is scheduled for commissioning before March and will start operating at its full capacity of 15 million tonne in another 6 months. At a gross refining margin (GRM) of over $10 per barrel, the margin the unit makes on converting crude oil into petroleum product, would be higher than the current GRMs of Reliance Industries and Essar Energy.

IOC's GRMs are among the lowest in the industry since the company operates many old refineries with small capacities. In the quarter ended June, it reported GRM of $2.25, while its private sector peer Essar Oil reported $9.04/barrel, and RIL $8.70. The refinery is a modern one with nil-residue production capabilities. The company expects that upon commissioning, the unit will help the company improve overall margins due to better efficiency. (

RIL plans $13 bn projects, including new refinery

August 29, 2014. Reliance Industries Ltd (RIL) plans to invest about $13 billion in energy projects, including a 400,000 barrels per day (bpd) crude refinery at its Jamnagar complex. The refinery would process cheap, heavy crudes that are increasingly available to Asia as the shale boom has cut US demand for the grades. RIL operates the world's biggest refining complex in Gujarat, where its two adjacent plants can process about 1.4 million bpd of oil. The company sought the approval of the environment ministry to invest ` 773 billion ($12.8 billion) to build a new refinery and some polymer units, and to switch the fuel for a 450 MW power plant from gas to coal. Expanding Jamnagar would strengthen the role of Gujarat - led by Prime Minister Narendra Modi before his landslide general election victory in May - as a global supplier of fuels in addition to meeting rising local demand. The country's diesel and petrol output may lag demand by about 50 million tonnes by 2025, according to a government panel report, as the world's fourth largest oil consumer aims to powers its economic expansion through a renewed focus on manufacturing. Imports were around 320,000 tonnes in the last fiscal year. RIL also wants to improve the ability of the Jamnagar complex to produce more value-added 'light' products by processing heavier grades than competitors in China and the Middle East. Reliance said the new refinery will be supported by its five single point moorings - two for product shipments and three for crude intake. (

Transportation / Trade…………

IGL eyes more city gas firms for growth via acquisitions

August 28, 2014. Indraprastha Gas Ltd (IGL), which supplies CNG in Delhi and its neighbourhood, is looking to acquire stakes in more city gas companies to expand its footprint to newer areas through inorganic growth. Kanpur-based Central UP Gas Ltd (CUGL), a joint venture of GAIL (India) Ltd and Bharat Petroleum Corp Ltd (BPCL), will give IGL access to the Kanpur and Bareilly markets of Uttar Pradesh. IGL acquired 50 per cent stake in Maharashtra Natural Gas Ltd, which sells CNG to automobiles and piped cooking gas to households in Pune, for ` 190 crore. The Company has also plans to participate in the bidding process of PNGRB for setting up CGD business in new cities. (

RIL's July crude imports up 12.4 per cent y/y: Trade

August 28, 2014. Reliance Industries Ltd (RIL) raised oil imports by nearly 12.4 per cent in July compared with a year earlier, tanker arrival data showed. Reliance, which has a diversified crude slate and shifts purchases to maximise revenue, bought about 1.37 million barrels per day (bpd) of oil in July, an increase of about 3.9 per cent from June, the data showed. Reliance's two advanced refineries in western Gujarat state can together process 1.4 million bpd of oil, about a third of India's overall capacity. The complexity of these plants allows the refiner to diversify its crude slate continuously by testing new grades, and to improve refining margins. In the first seven months of 2014, the private refiner shipped in about 1.25 million bpd of oil, an increase of about 2.6 per cent from a year ago, the data showed. In January-July 2014, Reliance bought about 42.5 per cent of its oil needs from Latin America compared to nearly 46 per cent last year, with Venezuela maintaining its position as the top crude supplier, followed by Saudi Arabia. Qatar was the third biggest oil supplier to Reliance, replacing Neutral Zone, a border area whose production belongs to Saudi Arabia and Kuwait. The share of middle eastern crudes in Reliance's overall oil imports in the first seven months declined to 41.2 per cent from about 43.2 a year earlier, while that of African grades jumped to nearly 14.2 per cent from about 10.1 per cent a year earlier. (

Policy / Performance………

Petroleum reserve to cut import-shock risks: Corporate India

September 2, 2014. India will be ready to fill its first strategic crude oil reservoir by the end of the year, the head of the project said, advancing Prime Minister Narendra Modi’s goal to shield Asia’s second-largest energy user from supply shocks. Two more storage facilities on the west coast are likely to be finished by the second half of 2015, Rajan K. Pillai, chief executive officer of Indian Strategic Petroleum Reserves Ltd., said. The first reservoir is at Visakhapatnam in Andhra Pradesh state. India imports more than 80 percent of its crude, and the government wants to protect Asia’s third-biggest economy from supply interruptions caused by calamities or political crises abroad. The three initial depots will have a combined capacity of about 39 million barrels, equivalent to 13 days of imports, Oil Minister Dharmendra Pradhan has said. The government plans to increase that to 90 days of imports by 2020. India spent $143 billion on crude oil imports in the year ended March 31. Those purchases represented 32 percent of India’s total imports in the period, according to commerce ministry data. (

Oil Minister asks oil PSUs to buckle up for challenge as diesel nears market rate

September 2, 2014. Oil Minister Dharmendra Pradhan asked state-run fuel retailers to buckle up for private competition as the loss on diesel, the largest selling fuel, dipped to 8 paise a litre for September from ` 1.78 in August. The narrow gap between the fuel's pump price and cost has raised expectations of early lifting of government control on pricing and return of private fuel retailers such as Reliance Industries Ltd and Essar Oil. But a full picture would, however, emerge next month as price of diesel in international trading hubs has shown an uptick in the last few days, though deregulation is certain. Once diesel attains market rate, the government will have to take Cabinet approval for formally lifting pricing curbs. This is because the Cabinet decision of January 2013 allowed only a monthly increase of 50-60 paise till losses remained. But the street cheered impending deregulation with a healthy appetite for scrips of state-run retailers. IndianOil, closed 6% higher. HPCL rose 2% and BPCL 1.4%. With deregulation in sight, Pradhan drove home the challenges for state retailers by pointing out that private retailers had cornered 15% of the market in a short span of two years when pricing controls were lifted (in 2002). Deregulation will help the government by saving on cash subsidy. Subsidy on diesel, which accounts for a bulk of the government's support, is estimated at ` 47,665 crore till December 2013. For consumers, it is likely to mean revision in price like in the case of petrol. But with private competition, the periodicity — monthly for diesel and fortnightly for petrol — is bound to change too. (

Splitting subsidy with oil producers credit positive: Moody's

September 1, 2014. Global rating agency Moody's Investors Service said that the oil ministry's plan to divide fuel subsidies equally between the government and the two state-owned upstream oil and gas producers namely Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL), is credit positive for both companies. Currently, ONGC and Oil India share the fuel subsidy burden with the government on an ad-hoc basis as decided by the government and if the plan is implemented, their subsidy share would include an oil industry development levy, an existing tax based on their crude oil production, Moody's analysts said in a note. If the plan is implemented, upstream producers' 50 per cent share of fuel subsidy would be around ` 50,000 crore for this fiscal, down from ` 67,000 crore a year ago, out of which, fuel subsidies will be around ` 40,000 crore and an oil industry development levy would be around ` 10,000 crore, the note said. If the government pays half of the fuel subsidies, ONGC's revenue and operating cash flows would come down by ` 18,500-19,500 crore in the fiscal, while OIL's would rise by ` 1,000-1,800 crore, the note said. ONGC and OIL could use the increased cash flows for investments in exploration and production, the note said. ONGC and OIL sell their crude oil to downstream companies at a discount, which is their share of the fuel subsidies because the latter sell refined oil products like diesel, kerosene and cooking gas at government-set prices, which are lower than production cost. The government also takes a share of fuel subsidies by giving cash compensation to the downstream firms. (

IOC cuts petrol prices by 2.6 per cent

August 31, 2014. Indian Oil Corp (IOC) has cut retail petrol prices by about 2.6 per cent, or ` 1.82 a litre ($0.03), following a moderation in global prices, the company said. The country's biggest refiner, however, raised diesel prices by about 1 per cent effective, it said. The government allowed small increases in diesel pump prices every month to phase out mounting subsidies on the fuel. The three state-run fuel retailers - IOC, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd - tend to move their prices together. Following are the prices as charged by IOC in Delhi: Gasoline, diesel and kerosene prices are in rupees per litre, while subsidised liquefied petroleum gas (LPG) prices are per 14.2 kg cylinder. (

Oil ministry sets up inquiry on delay in projects and missing output targets by ONGC

August 29, 2014. The oil ministry has ordered an inquiry into the difficulties experienced by the Oil & Natural Gas Corp (ONGC) in executing projects, resulting in production targets being missed. Further the government plans to auction over 150 marginal oil and gas fields to private explorers who the government believes can expeditiously raise output. Oil Minister Dharmendra Pradhan is deeply concerned about ONGC's performance and has asked the company's top brass pull up their socks. ONGC alone has 165 marginal fields. (

Vedanta for an independent regulator for O&G sector

August 29, 2014. As government debates on gas price hike and a new contract for oil and gas exploration, Vedanta Resource said domestic rates should be linked to international markets and an independent regulator be set up. Vedanta chief executive Tom Albanese, however, backed the Oil Ministry move to replace the controversial Production Sharing Contracts (PSC) for oil and gas exploration with simpler revenue-sharing regime.

The new regime where companies will bid upfront the quantity of oil and gas they will share with the government, will replace PSC regime that allowed investors to recover all their cost before sharing any spoils with the government. This model was criticised by CAG which said it encouraged companies to keep raising cost so as to postpone higher share of profits with the government.

The government is currently debating a new gas pricing mechanism to replace the Rangarajan formula which would have doubled rates to $8.4 per million British thermal unit. Vedanta Group firm Cairn India is seeking extension of the contract for Rajasthan oilfields beyond their current term ending in 2019. Albanese said a simple and forward-looking policy to encourage investment that maximises domestic oil and gas production would be a key enabler for India. Adopting a strategic vision for our exploration and production sector and following through with a stable policy regime can be a game-changer for India's upstream oil and gas landscape, he said. (

Cairn gas at $8.4, RIL, GSPL may have to wait till September end

August 28, 2014. The likes of Reliance Industries Ltd (RIL) and Gujarat State Petronet Ltd (GSPL) may have to wait till September-end to learn if they can charge more than $4.20 per unit of gas, but in a little-noticed development, Cairn India has been allowed to sell gas from its Rajasthan block at about $8.40 per unit to Gujarat based firms, including a fertilizer plant, since March 2013.

The oil ministry said Cairn's production sharing contract (PSC), which was signed before the launch of the New Exploration Licensing Policy (NELP) in the late 1990s, allows pricing and marketing freedom to the company. The PSCs of RIL and GSPL — applicable to blocks awarded under NELP — stipulated a higher level of government involvement. Notably, the pricing formula for gas found in the NELP blocks has to be approved by the government. In June this year, the Cabinet deferred implementation of a gas pricing formula approved by the UPA regime that would have doubled the rate of most of the natural gas produced in the country to about $8.40 per unit from April 1 this year.

Currently, gas is sold at rates ranging between $3.5 per unit and $8.40 per unit, according to government and industry. The UPA government had decided to have a uniform gas rate based on the formula suggested by the Rangarajan committee, but implementation of this policy was vetoed by the Election Commission as the general elections were underway. According to industry estimates, Cairn's gas fields are expected to produce about 7 million standard cubic meters per day (mmscmd) of gas, which is about half of the current output from the Reliance-operated KG-D6 block.

Cairn is currently supplying 8-10 million standard cubic feet (mscf) per day of gas and plans to ramp up output from new reserves by financial year 2017, the company said. It is supplying natural gas to consumers such as Gujarat Narmada Valley Fertilizers Company, GAIL India, Gujarat Gas Company and CLP India. (

Vijay Kelkar report recommends market-linked gas pricing to Modi govt

August 28, 2014. As a secretaries panel considers the quantum of hike in natural gas price, government-appointed Kelkar Committee has advocated moving to market determined pricing with rates being fixed at the highest possible level. In a consultation paper, the Committee, which was last year formed to suggest 'Roadmap for Reduction in Import Dependency in Hydrocarbon Sector by 2030', said a cost-plus model for fixing natural gas prices as proposed by a Parliamentary Committee and some downstream industry players, may incentivise operators to gold-plate cost.

The panel submitted the consultation paper to the Oil Ministry with a request for putting it up on the ministry website for stakeholders to comment. The Ministry, however, is yet to web host it. The priority sectors may be supported by the government, which will get more taxes, royalty and profit petroleum from higher gas price, by way of transparent and targeted subsidies.

A four-member panel of secretaries from different ministries is currently holding consultations with stakeholders to work out a new gas pricing mechanism after the Rangarajan formula that doubled rates to USD 8.4 per million British thermal unit, was not acceptable to the NDA government. (

LPG consumers can avail 12 cylinder quota at anytime of year

August 27, 2014. In a relief to consumers, the Cabinet lifted the restriction of supply of only one subsidised cooking gas LPG cylinder to a household in a month, saying consumers can avail their quota of 12 bottles at anytime of the year. While raising quota of subsidised 14.2-kg LPG cylinders that a household can avail in a year to 12 from previous nine, the government had in February put a restriction of one cylinder per month. The Cabinet came to a conclusion that this system is causing problem to the people. Sometimes people do not need one, sometimes during festive season demand is more. So there was a feeling that if someone has not taken one cylinder on a given month, then in remaining months he wont get it, Telecom and Law Minister Ravi Shankar Prasad said. Briefing reporters about the decision taken by the Cabinet headed by Prime Minister Narendra Modi, he said the restriction has been done away with. After decision, consumers can avail of their quota of 12 cylinders at the rate of ` 414 each in Delhi at anytime of the year. Any requirement beyond this will have to be purchased at market price of ` 920 per 14.2-kg cylinder. Currently, the number of LPG cylinders a consumer can avail is 12. This changes the earlier decision taken on February 28 and removes the restriction imposed that ordinarily one cylinder be given to each beneficiary every month. (



REC to provide ` 200 bn for Telangana power projects

September 2, 2014. The Rural Electrification Corporation (REC) would provide funds to the tune of ` 20,000 crore for power projects of Telangana generation and transmission corporations and distribution companies. REC chairman and managing director, Rajeev Sharma, gave this assurance when he called on state chief minister, K Chandrasekhara Rao. Responding to a suggestion made by the chief minister, Sharma had also agreed to fund all the projects to be executed by the state's generation corporation (Genco).

During the meeting, which was also attended by Genco chairman and managing director D Prabhakar Rao, the chief minister emphasised the need for augmenting the available power generation capacity of less than 5,000 MW in the state through long-term, short-term and medium- term strategies. (

5 GW power capacity may be hit due to acute coal shortage

August 30, 2014. Parts of northern India are staring at a severe electricity crisis with three power plants of NTPC running out of coal supplies and face an eminent shutdown if feedstock supplies don't improve. Northern region is facing over 5,000 MW of power shortage due to coal stocks drying up. Country's largest power producer NTPC's power stations at Sipat in Chhattisgarh and Badarpur and Jhajjar in Haryana reported zero fuel stocks on August 28, as per latest data by the Central Electricity Authority (CEA).

Jhajjar power plant is a joint venture between NTPC, Delhi government and Haryana government. The situation at this plant has been deteriorating from the past 10 days. The capacity of Jhajjar plant may be brought down to one-third from 1,500 MW due to non-availability of fuel. Jhajjar plant gets coal from the Mahanadi and Northern Coalfields. The electricity from this plant is supplied to the states of Haryana, Punjab, Rajasthan, Telangana etc. NTPC's 705 MW Badarpur station in the state is also bearing the brunt of coal shortage and be asked to run at a lower capacity if fuel supply is further disrupted. The company's 2,980 MW Sipat plant which has already halted power generation from one of its unit may even be forced to shut down other units. As per CEA data, nearly one-fourth of the country's 100 thermal power stations have less than four days of fuel stocks. Of the 27 plants, six plants had nil fuel stocks. Over half of the plants have less than a week's stock. According to a report by the Northern Regional Load Despatch Centre (NRLDC), the peak power shortage in the north Indian states was 5,323 MW. The requirement of the region shot up to 50,610 MW, of which supply was to the tune of 45,287 MW, NRLDC said in a report. (

NTPC aims at 8-9 GW capacity takeover

August 29, 2014. NTPC said it is aiming at 8,000-9,000 MW capacity takeover in stressed power plants but the recent Supreme Court ruling on coal mines may have an impact on the move. NTPC is looking at power plants which have achieved financial closure or coal linkage, but were facing financial issues to start generation and cost less than greenfield power plants. NTPC had set up a sub-committee to look into the stressed power plant takeover. NTPC said projects worth 22,000 MW are under execution and another 8,000-10,000 MW under pipeline. (

NTPC may revise Katwa power capacity to 1,980 MW

August 29, 2014. NTPC remained optimistic of the super critical 1,320 MW Katwa thermal plant in West Bengal. NTPC said that it was planning to add one more unit of 660 MW capacity to the existing project given the enthusiam seen from farmers to sell their land. The state government will have give a formal approval of the land price for acquisition and resolve some formalities in case of coal block linkage it had offered for the project. NTPC said it was optamistic in generating power from Katwa thermal power plant in the next four years from first unit of 660 MW and another unit in the next six months. (

7.2 GW power capacity shut in western region

August 28, 2014. Power generation capacity of 7,250 MW was shut in the western region. While a report by the Western Regional Load Despatch Centre in Mumbai said Lanco, NTPC, MahaGenco and India Bulls, with a cumulative capacity of 4,550 MW, were unable to supply power in the western grid due to a coal shortage, Adani Power also shut 2,700 MW capacity at its Mundra plant. The shutdown of power-generation capacity could lead to a potential power crisis in Gujarat, Maharashtra, Haryana, Madhya Pradesh, Goa and Daman & Diu.

NTPC had said coal stocks at six of its power plants - Rihand, Vindhyachal, Sipat, Simhadri, Ramagundam and Singrauli, with a combined capacity of 16,840 MW - had reached critical levels. Tata Power's Mundra-based UMPP also shut two units (800 MW each). (

HPGCL sets new benchmark in power generation

August 27, 2014. The Haryana Power Generation Corporation Ltd (HPGCL) claimed it had set a new benchmark by generating 723.47 Lakh Units (LU) of electricity in a single day at a Plant Load Factor of 94.37 per cent, which is the highest ever daily generation since its formation. The previous highest ever generation of 721.54 LU in a single day was achieved by HPGCL on September 13, 2013. (

Transmission / Distribution / Trade…

CERC staff paper bats for innovation in power trading business

September 2, 2014. The Central Electricity Regulatory Commission's (CERC) staff discussion paper has made a pitch for allowing a more liberal interpretation of trading margin applied on short term transactions undertaken by traders and to incentivize traders to innovate in trading business for the larger interest of the markets and the consumers. The staff paper has proposed that a trader be allowed to buy electricity from different generators or sellers at different prices and sell it to a single distribution company (discom) or buyer at one price. Besides, the trader could be allowed to buy electricity from a single generator at one price and sell it to multiple buyers (discom, industrial consumer) at different prices. (

India's financial hub Mumbai hit by power cuts

September 2, 2014. Large parts of India's financial capital Mumbai were hit by power cuts, due to technical issues at a Tata Power Company Ltd electricity generation unit. Due to the problems, Tata Power has switched off certain feeders supplying power to some areas in Mumbai, Brihanmumbai Electric Supply & Transport Undertaking (BEST) said. The power cuts in Mumbai come amid concerns about wider blackouts in India due to a shortage of coal and underlines the challenge Prime Minister Narendra Modi faces in improving the country's creaking infrastructure. (

Alstom T&D bags ` 550 mn contract from Bhutan hydroelectric project

September 2, 2014. Alstom T&D India has secured a €7 million (` 55 crore) contract from Mangdechhu Hydroelectric Project Authority (MHPA), Bhutan, for the supply of power transformers to the 720 MW Mangdechhu hydroelectric project. Alstom said the work involves, design, supply and commissioning of the generator transformer, shunt reactor and associated equipment for the project. All equipment would be supplied from Alstom T&D India’s manufacturing facility in Naini. (

Bajaj Electricals unit bags orders worth ` 6 bn

September 1, 2014. The engineering and project business unit of Bajaj Electricals has bagged four new orders aggregating to ` 602 crore. Bajaj Electricals said that the company's engineering and project business has bagged four new orders for transmission lines in Tamil Nadu and West Bengal from Power Grid Corporation of India (PGCIL) and West Bengal State Electricity Transmission Company respectively; and rural electrification work at Bihar from North Bihar Power Distribution Company and South Bihar Power Distribution Company respectively. (

TPDDL pays over ` 610 mn dividend to Delhi

August 29, 2014. Tata Power Delhi Distribution Ltd (TPDDL) has paid a dividend of about ` 125 crore to its shareholders, Tata Power and Delhi government, at a time when most electricity distribution firms across the country have been piling up losses and surviving on subsidies and debt. The dividend is probably the highest paid by the electricity distribution company to Delhi government, which holds 49% equity in the power distributor that has 14 lakh customers in north and north-west areas of the city. Delhi government has received over ` 61 crore as dividend while the majority stakeholder Tata Power has got nearly ` 63 crore for its equity and preference shares. (

GVK gets 'green nod' to import coal from South Africa for Punjab plant

August 28, 2014. GVK Power Ltd, a subsidiary of GVK Power and Infrastructure, has got permission from the environment ministry to import coal from South Africa as a 'stop gap' arrangement in case the company fails to get coal from its captive mines in Tosikud North Sub-Block in Jharkhand. GVK is setting up a 2x270 MW Thermal Power Plant at Goindwal Sahib tehsil in Tarn Taran district of Punjab, and both the units have been synchronised to the grid.

The power project developer said they have already received tapering coal linkage from Coal India to the tune of 1.5 lakh tonnes and half of it is expected soon. The tapering coal linkage has been recommended by the Punjab government to the Ministries of Coal and Power.

The Tokisud mines have 52 million tonnes of mineable reserves and are expected to cater to the requirements of 2.32 million tonnes per annum to Goindwal Sahib project. It has also completed the construction of a bridge over Damodar river along with relief and rehabilitation colony with the commercial operations beginning, according to GVK annual report. The Ministry of Coal issued show-cause notice to GVK for not meeting the deadlines with respect to development of the mine. (

India may face blackouts as coal shortage cuts power output

August 28, 2014. A sharp fall in output at a large Indian power plant due to a coal shortage may lead to power cuts in some areas, underlining the challenge the new government faces in overhauling the sector and its creaking infrastructure. Indian utility Adani Power Ltd has reduced output at its Mundra facility in western Gujarat state by about 2,300 MW due to a shortage of coal.

As a result of the cut, India's total generation capacity was about 9,110 MW less than its potential demand at peak periods of the day. That gap was nearly twice as wide as at the beginning of the week, according to Power Grid data. India, which uses coal to generate more than two-thirds of its electricity, is struggling to provide enough power to meet rising demand. The power sector has not been able to obtain sufficient domestic coal and has become reliant on costlier imports. (

NTPC to import 17 million metric tonnes of coal this fiscal

August 27, 2014. NTPC plans to import 17 million metric tonnes (MMT) of coal this fiscal which is higher than the quantity purchased last financial year. The country's largest power producer plans to add 1,798 MW generation in the current financial year ending March 2015.

NTPC said the total coal requirement is estimated to be 177 MMT for this fiscal. During 2013-14 period, NTPC consumed 158.57 MMT of coal, with imports accounting for 10.39 MMT. Currently, the utility has an installed capacity of 43,128 MW. Last fiscal, NTPC added a generation capacity of 1,835 MW. (

Policy / Performance………….

Govt turns up the heat after power outages

September 2, 2014. The government has summoned top officials of energy departments and executives of power utilities of some states after several power plants reported outages in the past few days citing various reasons. The power ministry said officials and power utility executives from Gujarat, Haryana, Maharashtra, Rajasthan and Punjab that procure electricity from Tata Power and Adani Power have been called to Delhi. It could not be immediately confirmed if power producers too have also been called for the meeting. Tata Power and Adani Power had partially shut their Mundra-based ultra mega generation facilities claiming technical snags. This came days after the Supreme Court stayed an interim order of the Appellate Tribunal for Electricity (APTEL), effectively disallowing the two power producers from claiming compensatory tariffs from state utilities.

Following a change in Indonesia's coal-price regime in 2011, Tata Power approached the Central Electricity Regulatory Commission (CERC), saying it faced an annual loss of ` 1,873 crore over its 25-year of supply agreement with state utilities. Adani, for its part, estimated annual losses on the power it supplies at ` 1,730 crore. The two power producers announced partial shutdown of their plants at a time when some power plants of NTPC, Reliance Power, Lanco and Indiabulls were also shut due to lack of coal. (

Need to address Coal India's concern about e-auction cut, says PMO

September 2, 2014. Amid differences between the coal ministry and Coal India Ltd (CIL) over the former’s “suggestion” of a cut in e-auction sales by the state-owned miner, the Prime Minister’s Office (PMO) has asked the ministry to assess CIL’s concern on revenue loss before taking a decision on the matter. The PMO has written to Coal Secretary S K Srivastava, seeking details of the financial impact of a cut in e-auctions on CIL.

CIL sells about seven per cent of its output through e-auctions. Primarily, smaller power companies and non-power users buy coal through this route, as most electricity-generation companies don’t bid aggressively due to rate caps. (

Five states facing power crisis to meet Goyal

September 1, 2014. Power ministers and representatives of five states, which are hit by energy crisis, will meet Union Minister Piyush Goyal. The states of Maharashtra, Gujarat, Haryana, Rajasthan and Punjab are facing power crises due to shut down of some units of Mundra plants run by Tata Power and Adani Power.

Adani Power shut down about six generating units at its 4,620 MW Mundra plant in Gujarat. This plant supplies electricity to Haryana and Gujarat. Tata Power closed down two generating units at its 4,000 MW Mundra ultra mega power project on account of technical issues. Tata Mundra project supplies power to Maharashtra, Gujarat, Rajasthan, Haryana and Punjab while that of Adani gives electricity to Gujarat and Haryana. The Supreme Court had stayed the Appellate Tribunal for Electricity's interim order allowing compensatory tariffs for the two Mundra projects. These projects have been impacted by change in Indonesian coal pricing policy. (

Centre deliberately denying power to Maharashtra: CM

September 1, 2014. Maharashtra Chief Minister (CM) Prithviraj Chavan alleged that the Central government was denying power from the central grids deliberately, and blamed the BJP-led NDA government for the power crisis in the state. Chavan said he had written to Prime Minister Narendra Modi, requesting him to convene a meeting of all the Chief Ministers to discuss the power situation. Chavan said the report card of first 100 days of the Modi government was "dismal". (

Accounting norms may affect power companies' profits

September 1, 2014. The government has said that costs incurred on account of extended delay in starting a project should be shown in the profit and loss statement. The clarification, pertaining to applicability of accounting standards, comes at a time when many power projects are grappling with multiple woes including acute coal scarcity and delay in getting requisite clearances. At present, many power companies capitalise direct and indirect costs attributable to the fixed assets and borrowing costs, even in case of extended delay in capitalisation of projects, for reasons beyond the control of these companies. (

MAPS units renew operational licence till Dec 2015

August 31, 2014. The NPCIL's two power reactors at Kalpakkam have renewed their operational licence with the sectoral regulator till Dec 2015. The two units may increase their power output next year. The Nuclear Power Corporation of India Ltd (NPCIL) has two 220 MW nuclear power reactors at the Madras Atomic Power Station (MAPS) in Kalpakkam. (

Rajasthan providing more electricity than other states

August 29, 2014. The BJP-led state government said it is providing more electricity to customers than other states, including Uttar Pradesh, Maharashtra, Punjab and Haryana. Despite a few hours of power cut, the farmers were getting power for 5 hours daily, and 18 hours in domestic sector. From 7 pm to 7 am (during night) there was no power cut anywhere, the government maintained. Rajasthan was still providing and satisfying its customers to a great extent as compared to others states including Uttar Pradesh, Maharashtra, Punjab, and Haryana. Rajasthan's three power distribution companies had begun power cut from two to four hours daily in phased manner in entire state barring six Divisional Headquarters including Jaipur. Three Discom companies of Ajmer, Jaipur and Jodhpur would review the power situation every day, and will effect power cut accordingly. (

Power regulators' body plans study on discoms' performance

August 28, 2014. Forum of Regulators (FOR), a representative body of central and state electricity regulatory commissions, has proposed to carry out a comprehensive study on performance of distribution utilities by roping in consultant(s). The study has been necessitated as operational and financial performance of distribution companies (discoms) has been a major concern. Further, poor billing & collection, high level of distribution losses, increasing cash losses and poor financial management are reported to be plaguing discoms’ performance. Performance of the distribution utilities will be from FY 2009-10 to FY 2013-14. According to FOR, restoration of health of the distribution sector remains critical to success of power sector reforms.

FOR’s move comes close on the heels of the World Bank report on the present state of India’s power distribution sector. The report titled “More Power to India: The Challenge of Distribution”, was released in June and said two decades after the initiation of power sector reforms, an inefficient, loss-making distribution segment and inadequate and unreliable supply had become major constraints to India’s growth. (

Reliance power approaches AP govt to revive Krishnapatnam UMPP

August 27, 2014. Reliance Power has approached the Andhra Pradesh (AP) government seeking to revive a 4,000 MW power project proposed at Krishnapatnam on India's east coast. The proposal to revive the project comes nearly 30 months after its lead electricity procurer, AP Southern Power Distribution Company (APSPDCL), served notices on the local entity of Reliance Power, threatening to terminate power purchase agreements for defaulting on project implementation and supply of power as agreed upon. Contesting the termination notices served on 15 March 2012, Reliance Power unit Coastal Andhra Power moved the Delhi High Court as well as the Indian Arbitrator Council for arbitration, the proceedings of which are ongoing. Confirming the proposal, Reliance Power said the company was committed to developing the Krishnapatnam project. Under the proposal, Andhra Pradesh was to get 40% of the power generated by the so-called ultra-mega power project (UMPP), with Tamil Nadu, Karnataka and Maharashtra sharing the rest equally. (



Korea Gas Corp says starts commercial crude oil production in Iraq's Badra

September 1, 2014. Korea Gas Corp has started commercial crude production in Iraq's Badra oilfield as planned, the South Korean company said. Operations at the Badra field have been largely unaffected by the conflict in Iraq as it is in an area under the central government's control, the company said. The project's current output is 15,000 barrels per day (bpd), and the world's largest corporate buyer of liquefied natural gas (LNG) aims to produce 170,000 bpd within three years, the company said. (

Athabasca completes $1.1 bn deal with PetroChina

August 30, 2014. Athabasca Oil Corp. closed a C$1.18 ($1.1 billion) agreement with PetroChina Co. to sell the rest of its Dover oil-sands project, ending weeks of speculation about whether the Chinese company would pay. PetroChina’s payment includes C$600 million in cash and C$584 million in promissory notes due through August 2016, backed by guarantees from HSBC Bank Canada, Athabasca said. The original agreement was for PetroChina to pay in cash. The settlement comes two months after Calgary-based Athabasca had estimated the deal would close after triggering the sale of its 40 percent stake in Dover. Athabasca agreed to make a C$49 million payment to PetroChina, lowering the sale price, to cover for future abandonment costs for oil and natural gas wells. The Dover project contains reserves of 4.1 billion barrels at a 50 percent recovery rate, Alberta’s energy regulator said. Athabasca expects production at the site to reach 250,000 barrels a day at full capacity. (

Total stands firm on Russian gas project amid Ukraine escalation

August 29, 2014. Total SA is pushing ahead with a giant Russian natural gas project in the Arctic as escalating fighting in Ukraine raises the specter of tougher sanctions. The head of Europe’s third-biggest oil company was speaking before a key meeting on the future of the $27 billion endeavor led by OAO Novatek. Designed to produce liquefied natural gas (LNG) on the Yamal Peninsula, a province above the Arctic Circle estimated to hold enough fuel to meet global demand for five years, the project is central to Total’s plans to boost output and Russia’s bid to export more LNG. The French company and China National Petroleum Corp. are partners with 20 percent stakes alongside the Russian company, with 60 percent. (

PetroChina vows catch up with Sinopec starting with shale

August 29, 2014. PetroChina Co. plans to move out of the big shadow cast by its smaller rival. PetroChina, the country’s largest oil and natural gas producer, aims to catch up with main competitor China Petroleum & Chemical Corp., or Sinopec, in the production of shale gas, according to PetroChina. PetroChina plans to drill 154 new shale wells in Sichuan in 2014 and 2015, and produce as much as 2.6 billion cubic meters of the gas in 2015. Sinopec is targeting production of 5 billion cubic meters in 2015. PetroChina said the company’s drilling cost for every shale gas well is around 55 million yuan and could be lowered to around 50 million yuan in the near future. Sinopec said that the company’s cost is around 80 million yuan per well, with a view to lowering that to around 60 million yuan. Plans by PetroChina and its parent China National Petroleum Corp. (CNPC) to open up to private investment and market forces have been taking shape through the summer. CNPC said that the company was looking to sell stakes in oil and gas fields to local investors in the northwest province of Xinjiang. (

Fracking foes force some oil drillers to tread lightly

August 28, 2014. A fight over fracking is looming in Texas. Another stand-off is shaping up in Colorado. Yet drillers’ reactions couldn’t be more different. In Texas, drillers are doing their noisy in-your-face fracking as usual. Meanwhile, on a small farm about an hour from the Colorado Rocky Mountains, the oil industry is giving fracking a makeover, cutting back on rumbling trucks and tamping down on pollution. Oil companies in Colorado are responding to a rising tide of resentment as local communities and environmental activists vie to impose measures to ban fracking or restrict drilling. A series of ballot initiatives and other grass roots opposition around the country is seen as threatening the booming shale industry, even in oil-friendly Texas, where the U.S. energy renaissance began. (


Thailand's PTT plans $20 bn Vietnam refinery, petrochemical complex

September 1, 2014. Top Thai energy firm PTT Pcl said it would make a proposal to the Vietnamese government to build a $20 billion refinery and petrochemical complex, revised down from an earlier project discussed. State-controlled PTT will meet with Vietnam's prime minister this month to present its project proposal, PTT said. The complex has been designed to help meet Vietnam's domestic demand for oil products and boost its exports. PTT has studied the possibilities of investing in central Vietnam. The value of the project was reduced from a previous estimate of $28.7 billion after the Vietnamese government issued a licence for a new refinery in northern Vietnam. The planned capacity of PTT's oil refinery has been cut by 40 percent from an initial 660,000 barrels per day. The project, which requires investment of about 600 billion baht ($18.8 billion), now includes a 400,000 bpd refinery and olefins and aromatic petrochemical plants, PTT said. The construction of the refinery is scheduled to be completed by 2021, and most of products will serve domestic demand in Vietnam, PTT said. (

Transportation / Trade……….

Gunvor said to expand into spot LNG as supply increases

September 2, 2014. Gunvor Group Ltd., the world’s fourth-biggest oil trader, plans to expand into short-term buying and selling of liquefied natural gas as global supply rises. The Cyprus-based trading house will charter vessels for spot agreements and sell cargoes in Asia and the Atlantic basin, tapping into supply from Nigeria, Australia and Southeast Asia. Gunvor follows Vitol SA, Trafigura Beheer BV, Glencore Plc, global energy companies and utilities in competing for spot cargoes as new projects boost LNG supply, first from Australia and later from the U.S. The company, which has so far focused on long-term contracts, has an agreement to liquefy natural gas at the planned Magnolia LNG project in the U.S. as well as an accord to supply Panama with the fuel. LNG trade will rise by 40 percent to 450 billion cubic meters (16 trillion cubic feet) by 2019, the International Energy Agency said. Spot and short-term LNG contracts accounted for 27 percent of total trade last year, compared with 25 percent in 2012, according to the International Group of Liquefied Natural Gas Importers, a Paris-based lobby group. (

Gazprom starts oil deliveries from Badra field in Iraq

September 1, 2014. Gazprom Neft has begun commercial production and oil deliveries from the Badra field in Iraq, to the country’s main pipeline system for transfer to the export terminal in Basra (Persian Gulf). Currently, the company is delivering over 15,000 barrels of oil per day from Badra to the pipeline and this level will be maintained until the end of 2014. Under the service contract with the Government of Iraq, the consortium of investor companies will receive a share of the oil produced at the field following a period of 90 days upon launch of commercial supply. (

Russia starts work on Gazprom gas pipeline to China

September 1, 2014. Russian President Vladimir Putin presided over the start of construction work on a pipeline which is planned to ship 38 billion cubic metres (bcm) a year of Russian gas to China, ramping up from 2019. The 4,000 km Gazprom "Power of Siberia" pipeline is a key part of the Kremlin's energy strategy, symbolising Russia's attempts to wean itself off dependence on European markets that account for most of state-controlled Gazprom's exports. Gazprom and China National Petroleum Corp (CNPC) signed a $400 billion deal to ship nearly 40 bcm of gas to China annually over 30 years. The long-awaited deal was a diplomatic coup for the Kremlin after a decade of difficult negotiations. Gazprom said it planned to launch its Chayanda gas field at the end of 2018, aiming to ship the first gas to China in 2019. Chayanda is one of the keys to supplying China and will produce up to 25 bcm a year at its peak. With a total capacity of 61 bcm per year, the new pipeline should deliver gas both to China and to remote regions in Russia's Far East. (

Search for oil moves to spreadsheets as Canada trade data faces revisions

August 29, 2014. Canada’s trade reports suffer from a lack of timely oil industry figures, leading to multimillion dollar revisions on data that’s crucial to the Bank of Canada’s economic outlook. Partial crude price and volume figures and changing industry practices make it impossible to get accurate energy-shipment data in time for the monthly reports. After revised numbers come in, deficits can shrink by hundreds of millions of dollars and surpluses have turned into shortfalls. (

Nigeria activist who escaped the gallows probes oil accounts

August 29, 2014. Two decades ago Ledum Mitee escaped being hanged while campaigning against corruption in Nigeria’s oil industry. As head of a government transparency initiative, he says little has changed. Mitee was the only one of 10 ethnic Ogoni activists including Ken Saro-Wiwa acquitted by a military tribunal on charges of organizing the murder of four rivals. At the time he was deputy president of an organization demanding that Royal Dutch Shell Plc and the government compensate the Ogonis for despoiling their land through oil spills. Now, as chairman of the Nigeria Extractive Industries Transparency Initiative, he says the government has largely ignored his reports and hasn’t given his organization the muscle to effectively police Africa’s biggest oil industry. Though oil and gas exports account for close to 80 percent of government revenue, an average of about 240,000 barrels of crude leak in the southern Niger River delta, home to Nigeria’s hydrocarbons industry, according to the Petroleum Ministry. That’s about the same as what spilled when the Exxon Valdez tanker ran aground off Alaska in 1989. (

Latin American oil producers mull light crude imports to cut costs

August 28, 2014. At least three oil-producing Latin America countries may soon start importing cheap, light crude to replace costly purchases of refined products, ending decades of crude self-sufficiency. State-run companies in Mexico, Venezuela and Argentina have said they are considering importing light crudes. Latin American countries are scrambling to curb rising costs for fuels, used mostly for transportation and power generation, that have weighed on budgets as demand grows. (

Moldova gets gas from Romania through new pipeline

August 27, 2014. A new pipeline has been opened that will pump gas from Romania to Moldova in an attempt to reduce the former Soviet republic's dependence on Russian energy. The prime ministers of the two countries inaugurated the pipeline. The opening of the pipeline was seen as a symbolic moment and came on Moldova's national day, 23 years since it declared independence in the wake of the break-up of the Soviet Union. However, the 43-kilometer pipeline will provide only 5 percent of its gas needs and won't be enough for full independence. Moldova will continue to be reliant on Russian gas coming through Ukraine and has had cutoffs in the past. Moldova is seeking funds to build the pipeline through to the capital and get all its gas from Romania. The government signed a trade agreement with the European Union in June, angering Russia. (

Policy / Performance…………

Russia asks China to join Rosneft’s second-largest oil project

September 1, 2014. Russian President Vladimir Putin indicated OAO Rosneft offered a stake in the country’s second-biggest oil project to China. Rosneft produced about 440,000 barrels a day at the Vankor project in the second quarter, equivalent to about 4 percent of China’s demand. Russia is turning to China to spur its economy as relations sour with the U.S. and Europe over the Ukraine crisis.

Moscow-based Rosneft was added to American sanctions July 16 after the U.S. government froze Sechin’s assets abroad and slapped him with a visa ban. Rosneft pumps 40 percent of Russia’s crude. The producer is the most active among Russian companies in increasing ties with China. Last year, it signed a $270 billion, 25-year supply agreement with China National Petroleum Corp. to diversify exports to the second-biggest crude-consuming nation as European demand fell. The deal includes prepayments estimated by Putin at about $70 billion. In October, it agreed an $85 billion, 10-year oil-supply deal with China Petrochemical Corp. (

Thailand stops petroleum exports on military govt's request

August 29, 2014. Thailand's military government has asked oil and gas producers to temporarily stop exports of petroleum products, as it wants to focus on the domestic market and review the structure of the whole system, the energy ministry said. The move is part of the government's energy reform drive which includes shifting domestic fuel prices from a highly regulated system to a market-based one.

Thailand, a net oil importer, had exported 12,000 barrels of oil per day from domestic resources, but that number has dropped to zero since the junta led by General Prayuth Chan-Ocha took power in May, the ministry's Mineral Fuels Department said. The energy department is also studying details on how to open a new petroleum concession in the country. The military government revamped its domestic fuel pricing mechanism, resulting in a reduction in gasoline prices and an increase in diesel prices. (

Russia-Ukraine interim gas deal sought by EU amid fights

August 29, 2014. The European Union (EU) will prod Russia to strike a temporary deal with Ukraine to allow natural-gas flows to resume while a court reviews arbitration cases. As winter looms in Europe, EU Energy Commissioner Guenther Oettinger plans to discuss the proposal with Russian Energy Minister Alexander Novak in Moscow, he said. The temporary agreement could stay in place until an international court rules in the cases filed by OAO Gazprom and NAK Naftogaz Ukrainy, Oettinger said. The EU, which depends on Russian gas piped through Ukraine for about 15 percent of its demand, has been trying to broker a deal to maintain shipments since May. After the last round of three-way talks failed in June, Russia cut supplies to Ukraine, citing $4.5 billion in unpaid bills at the time. While transit to the EU remains unaffected, concern is growing among the bloc’s governments over a possible disruption. (

Guanghui wins approval to import crude as China opens Xinjiang

August 28, 2014. Guanghui Energy Ltd., a Shanghai-listed explorer with overseas oil assets, became the first non-state company this year to be allowed to import crude as China’s government opens resource-rich Xinjiang to private investment.

The oil unit of the Urumqi, Xinjiang-based company gained approval to import 200,000 metric tons of crude this year. Xinjiang, with about a quarter of China’s onshore crude reserves and almost 30 percent of its natural gas, may introduce policies to open resources to private and foreign investors. (

Shell submits a plan for new exploration of Alaskan arctic oil

August 28, 2014. Royal Dutch Shell submitted a plan to the federal government to try once again to explore for oil in the Alaskan Arctic, following years of legal and logistical setbacks as well as dogged opposition from environmentalists. While the plan is just a first step in the process, it reflects the energy potential in the Arctic.

Shell’s proposed programs consist of two drilling rigs working simultaneously in the Chukchi Sea, which could produce more than 400,000 barrels of oil a day. Shell emphasized that it had not made a final decision on whether to drill next summer. But it said that the filing with the Interior Department preserved its options. (



Brazilian firm to invest $900 mn in 700 MW power plant

September 1, 2014. The federal government has signed a Memorandum of Understanding (MoU) with a Brazilian firm, BENCO Energie Ltd, for the construction of a 700 MW power plant to be sited in Bayelsa State. Minister of Power, Prof. Chinedu Nebo said the current increase in nationwide electricity generation and distribution was aided by increase in gas supply to thermal generation plants in addition to relative stability in the transmission network.

He explained that the MoU with BENCO was an extension of Nigeria’s earlier agreement with Brazil to give interested Brazilian power companies an opportunity to invest and produce a minimum of 10,000 MW of power in Nigeria. The power plant is expected to be ready within three years from the day its construction will commence. BENCO said the company will commit between $800 and $900 million in the construction of the plant. (

PLN to operate new power

August 29 2014. State-owned electricity company PT PLN will soon operate new coal-fired power plant in North Sumatra, which is now near completion. The Pangkalan Susu power plant, which is currently being constructed by Chinese company Guangdong Power Engineering Corporation, is expected to begin commercial operations in October. PLN said the power plant, located in Langkat regency, successfully generated more than 100 MW of electricity during a trial launch recently.

According to PLN, the electricity supplied by the power plant will help solve a power-supply deficit in the province, which is estimated to reach 120 MW. PLN said the power would be transmitted through a 275-kilovolt grid to Binjai power substations, which would then distribute it to various regions across the province. (

Jacksonville-based APR Energy to build power plant in Australia

August 27, 2014. APR Energy announced that it has signed a contract to build a peaking, natural gas-fueled power plant in Port Hedland, Australia — in a deal that had a few bumps in the road. Contracted with Horizon Power, the plant will run for at least 30 months until the Australian TransAlta Energy develops a permanent power plant, which is estimated for early 2017. (

Transmission / Distribution / Trade…

Duke Energy unveils plan to upgrade its aging electric grid

September 1, 2014. Duke Energy Indiana has proposed a plan to upgrade the aging electric grid that delivers power to more than 800,000 Hoosier homes, businesses and industries. The $1.9 bn seven-year plan, filed with the Indiana state utility regulators, includes advanced technology and infrastructure upgrades in order to enhance service to its customers and provide better information about their energy use. The company's operations provide approximately 800,000 customers in a 23,000 square-mile service area with about 7,500 MW of owned electric capacity. (

Eltel, Caruna to enhance operational reliability of power distribution network

September 1, 2014. Eltel and Caruna have signed a frame agreement to enhance the operational reliability of power distribution network in the southwestern parts of Finland. Under the €40mn contract, improvements on the medium and low voltage networks will be conducted during the next three years. The frame agreement includes several separate network improvement projects, replacement of many of the overhead power lines with underground cables, as well as changing cabling of existing poles, and installation of hundreds of transformer stations. (

German power set for more spikes in winter on supply risk

August 29, 2014. Price swings in Germany’s intraday power market are set to increase this winter as unpredictable renewable energy makes up for lower capacity caused by closings of fossil-fuel plants, according to Danske Commodities A/S. Hourly and 15-minute power prices in Germany and France spiked above 300 euros ($395) a megawatt-hour 12 times so far this year, down from 130 times in 2013, as demand declined during Europe’s mildest winter for seven years. Falling long-term prices have led RWE AG and EON SE, Germany’s two biggest utilities, to pledge to close power plants with 16.7 GW of capacity through March 2017. One gigawatt can supply about 2 million European homes. Colder weather in winter usually encourages demand for power, pushing up short-term prices. A mild winter compounded with an economic slowdown means European power demand is set to decrease 2.9 percent this year. A drive by Germany, Europe’s biggest economy, to almost double power output from renewables by 2035 has made supply more difficult to predict. (

Belgium nuclear halts boost power premium on supply risk

August 27, 2014. Belgian power prices are soaring on concern that two nuclear reactors will remain shut into next year, potentially threatening supplies to factories. The premium for Belgian wholesale costs for the fourth quarter over those in the Netherlands closed at a record, while the spread with France widened almost sixfold in the past month. If halts at GDF Suez SA’s Doel-3 and Tihange-2 are extended into winter, the nation would be “structurally dependent” on imports, Elia System Operator SA said. (

ABB commissions world's longest power transmission link in Brazil

August 27, 2014. ABB, the leading power and automation technology group, has successfully commissioned the HVDC converter stations to the Rio Madeira High Voltage Direct Current (HVDC) link in Brazil and delivered the project to Abengoa. The approximately 1,500 mile (2,400 kilometers), 3,150 MW power connection is the longest transmission link in the world, and will bring electricity from two hydropower plants in the northwest of the country to São Paulo, Brazil's main economic center. ABB pioneered HVDC technology 60 years ago and has been awarded around 90 HVDC projects representing a total installed capacity of more than 95,000 MW – accounting for about half the global installed base. (

Policy / Performance…………

Nudging can save Europe billions of euros on energy bills

August 29, 2014. European nations can cut billions of euros from citizens’ power bills using psychology to nudge them into consuming less, says energy-management business Opower Inc. Using data and behavioral-science insights, popularized in the book “Nudge” by Richard H. Thaler and Cass R. Sunstein, utilities can cut consumption as much as 3 percent, Opower said. The reduction, across an entire population, has a greater impact than programs like those that spur use of double glazing or insulation and are only taken up by a fraction of people. Opower uses data from utilities to analyze customer habits and tailor recommendations on how to cut use. The company, with clients including EON SE and Electricite de France SA, can send households reports comparing usage with neighbors. It can also offer early warning if they’re using more energy than normal and alert customers to rewards for curbing demand at peak times. When users have smart meters that offer more detailed information, Opower can provide reports with such more details such as which appliances use the most energy. Reducing demand by customers helps utilities by curtailing the need to bring expensive plants reserved for peak demand on line. European energy consumers could save 2.4 billion euros ($3.2 billion) a year through behavioural-efficiency programs, Opower said. The company is calling on European Union governments to reward utilities for using the technology and analysis it produces, and spur energy savings. (

Japanese public seen as biggest obstacle to nuke restart

August 27, 2014. Japan is facing the toughest test yet in its effort to restore nuclear energy more than three years after the Fukushima disaster: scrutiny from a skeptical population. The Nuclear Regulation Authority (NRA) vouched for the safety of two reactors in Sendai, the first to pass inspections. Still, with Japan going through its first summer in 48 years without atomic power, JPMorgan Chase & Co. is among those predicting more delays to restarts as government approval becomes increasingly dependent on public opinion. Japan’s energy bill has ballooned as reliance on fossil fuels such as liquefied natural gas fills the power gap, contributing to record trade deficits. The focus is now on city and prefecture governments and whether they will approve the restart of the Sendai units. More than half of the population remains opposed to resuming nuclear generation after the March 2011 meltdown at the Fukushima Dai-Ichi reactors. Kyushu Electric Power Co. is among 10 companies that have applied for safety inspections on 20 reactors, according to the NRA. The Fukuoka-based utility is following procedures that will allow its Sendai units to run safely during normal operations, as well as during accidents caused by earthquakes or other outside causes. All of Japan’s 48 operable reactors are shut for safety checks or maintenance, with the last plant idled in September. (



Suzlon trauma ending as Modi helps double turbines: India Credit

September 1, 2014. Suzlon Energy Ltd, the wind turbine maker that caused India’s biggest convertible-bond default, is set to return to profit after completing its debt reorganization program by March, Chairman Tulsi Tanti said. Investors approved a $547 million convertible bond sale in July that would replace four older notes, while Suzlon’s Hamburg-based unit Senvion SE plans to market about 500 million euros ($657 million) of debt to acquire some of its parent’s assets. The turbine maker sees installations in its home market more than doubling this fiscal year, after Prime Minister Narendra Modi’s government in July restored a wind-farm tax benefit after a two-year hiatus. Suzlon is in talks with Japanese companies about forming a potential joint venture to make offshore wind turbines, said Tanti, and is planning investments in Brazil. Since first announcing plans to restructure its convertible debt in May, Suzlon has regained its position as India’s top wind-turbine supplier from Wind World (India) Ltd. It installed 403 MW of turbines, or 19.6 percent share of the market, in the year ended March 31, data compiled by the Indian Wind Turbine Manufacturers’ Association show. (

Jackson sets ` 6.5 bn turnover target for solar power division

September 1, 2014. Power solutions company ‘Jakson’ has set a target of ` 650 crore turnover by 2017 from its solar power division. At the group level, the company aims at a revenue of ` 2,500 crore in the same period. The company plans to invest ` 700 crore in setting up independent solar plants having a generation capacity of 100 MW over the next three years.  At present, the company has a small portfolio of 20 MW in the solar generation.

The company has launched a new range of solar power-based products home lighting systems, street Lights, indoor RO systems and PV modules. The company is targeting the rural areas in the country which are not connected with the grid. In the first phase, the company is targeting markets like Bihar, Uttra Pradesh, North east and Jammu & Kashmir. The second phase will include Telengana, Rajasthan and Tamil Nadu. (

Farmers in Karnataka can now set up solar farms

September 1, 2014. Karnataka launched a scheme allowing farmers to set up small solar power plants in their farms and sell power at the tariff fixed by the Karnataka Energy Regulatory Commission. It would be covered by the ‘Surya Raitha Scheme’, under which the government will also supply solar pumpsets at subsidised prices to overcome the power crisis being faced by farmers due to a huge gap in demand and supply, Energy Minister D K Shivakumar said. The Centre has allocated 100,000 pumpsets to all the states in the country, he said. Karnataka hopes to get 10,000 pumpsets. The farmers would get subsidy up to 90 per cent, out of which 30 per cent would be borne by the Union Government, Shivakumar said. The pumpsets would be useful for farmers to get assured water for their fields and be useful in places where electricity is not available, he said. The farmers will be allowed to sell surplus power generated in their farms at the rate of ` 9.56 per unit to Escoms (Electricity Supply Companies) without subsidy, the minister said. (

Neyveli Lignite plans mega investment in renewable energy

September 1, 2014. Neyveli Lignite Corporation, a government-owned lignite mining and power generating company, is planning to invest over ` 500 crore in various renewable energy projects. The company plans to set up over 80 MW of wind and solar energy projects. The board has approved the 25 MW solar power project at Neyveli, Tamil Nadu, the company informed. The company said that of the 25 MW, 10 MW will be installed in an area of about 54 acres in first phase and another 15 MW as an expansion in the second phase.

A proposal to set up a solar power plant of 10 MW capacity at Barsingsar, Rajasthan at an estimated cost of ` 92.83 crore is also under consideration, according to the company. Neyveli has also obtained approval for setting up a 51 MW wind power project at Kazhuneerkulam, Tirunelveli district at an aggregate cost of ` 347.14 crore. (

Telangana turns to solar power

August 31, 2014. The Telangana government is placing its bets on the sun to help it tide over the energy crisis. With the state enjoying nearly 300 days of sunshine each year, the Telangana southern and northern power distribution companies have decided to go ahead with a proposal to set up a 500 MW capacity solar power plant in Adilabad district. (

Azure Power to raise $14.3 mn loan from IFC

August 30, 2014. Helion Venture Partners backed Azure Power India Private Ltd (Azure) capital to raise $14.3 million from International Finance Corporation (IFC). The proposed fund raising will support company's proposed 40 MW solar photo voltaic (PV) plant in Rajasthan. According to project disclosure in IFC website, the money will support company's proposed 40 MW solar power plant in Rajasthan by Azure Power India Private Ltd, an existing IFC client, through a wholly owned subsidiary called Azure Clean Energy Private Limited. The Company has been setup for the purpose of construction, operation, and maintenance of the 40 MW project and will not have any other operations.

The Project is expected to be commissioned in April, 2015. The off-taker will be Solar Energy Corporation of India (SECI), a Government of India entity. The Company plans to sign the Engineering, Procurement and Construction (EPC) and Operations and Maintenance (O&M) agreements for the Project with Azure. This is a green field project near Hardhani and Nandia Kalan villages in the Jodhpur district of Rajasthan. The site setting is rural and the proposed project is the first solar plant that will be developed in the area. Azure has plans to develop another 60 MW capacity solar PV plant in the same area, said in the disclosure. (

Solar plants of 715kW total capacity being installed in Delhi

August 29, 2014. The solar photovoltaic plant at ISBT Kashmere Gate of 130 kilowatts peak capacity is already generating power for the city, even though it's still in trial stage. This is one the several solar projects that the lieutenant governor reviewed, which will add to Delhi's solar energy output by the end of this year. New projects with a total generation capacity of 715kWp are in various stages of installation. According to renewable energy experts, the projects together can meet the electricity demand of close to 100 households. Delhi already has a 1MWp solar project installed at Thyagaraj Stadium spread over a rooftop area of 10,500 square metres. Another 100kWp solar project at Vikas Bhawan II covering a roof area of 600 square metres is meeting the power demand of the building. (

NTPC looks ahead to PM's US visit for its geo-thermal project

August 29, 2014. NTPC is looking at Prime Minister (PM) Narendra Modi's proposed visit to the United States (US) to harness its plan for the country's first eco-thermal project. NTPC had earlier signed a MoU with the Chhattisgarh Renewable Energy Development Agency to set up the project at Tattapani. On the renewable energy front, NTPC is also giving a thrust to its solar portfolio. NTPC plans to set up 3,000 MW of solar power project over the next three to four years. (

Enrich Energy to set up 60 MW solar power project in Telangana

August 28, 2014. Enrich Energy, a Pune-based renewable energy firm, has announced setting up a 60 MW solar power plant in Telangana. The solar park will be set up under open offer to supply power to meet the state's renewable power obligations. Enrich Energy has developed and commissioned the first turnkey private solar park of India in Maharashtra at a single location with an installed capacity of 40 MW.

The company has two ongoing projects of 25 MW and 50 MW in Maharashtra and Gujarat. The company also provides innovative solutions for small retail investors for setting up private projects with the smallest 1 MW capacity. (

Expensive capital keeps renewable costs high in India: IEA

August 28, 2014. India's diverse set of targets and financial incentives support growth of renewable energy generation even as expensive capital keeps renewable costs high, Paris-based International Energy Agency (IEA) said. According to IEA, stability of the policy environment and implementation are key for determining the cost and availability of financing for renewables over the medium term. The agency's annual Medium-Term Renewable Energy Market Report comes at a time when the government is making efforts to boost renewable energy generation. Renewables account for more than 70,000 MW of the country's total installed power generation capacity of over 2,50,000 MW.

Noting that a high cost of capital acts as a factor keeping renewable costs relatively high in India, the agency said the country's interest rate environment is relatively high. Among others, the report said concessional loans from the Indian Renewable Energy Development Agency (IREDA), grants under the JNNSM and loans from international development banks, are important to enhance investments. (


Shunfeng talks to banks with aim to become solar giant

September 2, 2014. Shunfeng Photovoltaic International Ltd., which plans to become one of the world’s biggest solar cell manufacturers this year, said it’s speaking with as many as five banks about finance for expanding installations. Chairman Zhang Yi said he’s targeting installations of 3 GW this year. The company expects capacity of 2.2 GW for cell making and 2.4 GW for finished panels. That would make Shunfeng competitive with the biggest cell manufacturers, JA Solar Holdings Co., Trina Solar Ltd. and Yingli Green Energy Holding Co.

The company with a market value of HK$22.6 billion ($2.92 billion) has increased its solar-power output and shipments of cells and panels in the first half as it took control of assets it bought from LDK Solar Co. and Suntech Power Holdings Co. Those were two of the biggest Chinese solar manufacturers that ran into difficulty as plunging prices for PV equipment gutted margins across the industry. (

US EPA may force drillers to cut methane leaks

September 2, 2014. The Environmental Protection Agency (EPA) is considering rules that would force oil and gas producers to cut methane emissions, stepping up efforts to curb the most potent greenhouse gas linked to climate change. The agency will decide this year whether to issue regulations mandating emission cuts, or to rely only on voluntary steps. Methane is 21 times more potent than carbon dioxide, and climate advocates have said that without curbs on emissions from the oil and gas industry, President Barack Obama will fall short of his goal to cut climate-change emissions. The administration’s plan to cut methane, issued in March, said the EPA would decide whether to regulate the industry. Rules, if issued, would take effect in 2016, the government said. The issue has gained attention as fracking fuels a boom in gas and oil production in states such as North Dakota, Texas and Pennsylvania, leading to some air-quality woes. Critics of fracking, in which water, sand and chemicals are shot underground to free gas or oil trapped in rock, say methane leaks undercut the climate benefits of using natural gas. When it’s burned to produce electricity, natural gas emits about half the carbon dioxide, the main gas tied to global warming, as coal. If too much methane escapes during production and transport, that environmental benefit is diminished or lost. (

Water shortages could limit shale development across globe: Report

September 2, 2014. Roughly 38 percent of the world's shale resources in countries like China, Mexico and South Africa are dealing with high water stress or dry weather, according to a new report. The World Resources Institute (WRI) said in a report that water shortages could harm shale development on every continent except Antarctica. The development report ranks water stress across the 20 countries with the largest shale resources, and in 40 percent of them, future production will likely happen in dry conditions or under "high water stress," WRI said.

In China, which holds the largest commercially viable shale gas, 60 percent of its resources are in regions with high water stress or dry conditions. The WRI recommends countries conduct water risk assessments to chart local water availability and reduce business risk, increase transparency, engage with local regulators, and minimize freshwater use. (

United Nations' 'reports from future' predicts climate hell by 2050

September 2, 2014. United Nation (UN) recent initiative called 'weather reports from the future' predicted the disastrous climate change by 2050 with imagined weather forecasts. The United Nations has warned of floods, storms and searing heat from Arizona to Zambia within four decades, as part of a series of imagined weather forecasts released for a campaign publicising a UN climate summit, the Guardian reported.

The UN World Meteorological Organization, which invited well-known television presenters to make videos to be issued before the summit on 23 September, said the scenarios were imaginary but realistic for a warming world. UN secretary general, Ban Ki-moon, said that climate change has been affecting the weather everywhere and it makes it more extreme and disturbs established patterns, which means more disasters. Ki-moon has asked world leaders to make "bold pledges" to fight climate change at the meeting in New York. The summit is meant as a step towards a deal by almost 200 nations, due by the end of 2015, to slow global warming. (

China seeks pollution cut with national carbon market

September 1, 2014. China, the world’s biggest emitter of greenhouse gases, plans to start a national market for carbon trading by 2016 as it seeks to balance pollution reduction with economic growth. In preparation for the national market, China has selected seven cities and provinces, including Shanghai, Beijing and Guangdong, to set regional caps and institute pilot programs for trading rights as part of its initiative to cut the intensity of emissions by as much as 45 percent before 2020 from 2005 levels. The exchange in the southern city of Shenzhen near Hong Kong will allow foreigners to trade carbon permits. The carbon platform in Beijing, China’s capital, includes 490 companies and covers 40 percent of the city’s total emissions. Under the platform, companies that produce more than their limit of emissions can buy allowances from those that emit less.

It would be the main carbon trading hub in Asia and the Pacific, where Kazakhstan and New Zealand already operate similar markets. South Korea will start a national market on Jan. 1, 2015, while Indonesia, Thailand and Vietnam are drawing up plans for markets of their own. The Chinese market will cap carbon dioxide emissions from sources like electricity generators and manufacturers. Those that emit above their cap must buy permits in the market.

Five pilot markets that opened in China last year saw a high degree of compliance by included emitters in their first year, although data secrecy and a tendency to hand out too many permits made them inefficient in cutting emissions. The pilot programs are keen to attract professional trading companies to increase liquidity, and Shenzhen — the smallest of the pilot markets — recently allowed trades to be settled in foreign currencies in a bid to make trading easier for foreign traders. (,

Europe set for warm September after coolest Aug since ’06

September 1, 2014. Temperatures in Europe are forecast to be warmer than average this month after the coolest August in eight years, when Hurricane Bertha brought cold air. Five of seven meteorologists surveyed predict above-normal temperatures for most of Europe. High pressure is forecast to build in the region’s west from early September, leading to warmer conditions, MetraWeather says. Electricity consumption in Europe is set to decline 2.9 percent in 2014 because last winter was the region’s mildest in seven years and economies are in a slowdown. Temperatures are forecast to rise as much as 3 degrees Celsius above average through Sept. 7 in the U.K., Germany, France and Spain, while Italy will be as much as 3 degrees below average, Byron Drew, the Reading, England-based lead meteorologist at MetraWeather, said. The U.K., France and the Iberian region will be as much as 1 degree above normal in the seven days through Sept. 14, he said. (

Floating solar power hits land-squeezed Japan under Kyocera plan

August 29, 2014. With real estate in short supply, developers of solar power projects in Japan are beginning to look beyond the island nation’s land surfaces. Kyocera Corp. and Century Tokyo Leasing Corp. plan to build two solar power stations that are designed to float on the surface of reservoirs. The idea addresses a key problem in Japan constraining the development of large-scale solar projects and underscores the innovations underway to address the nation’s chronic shortage of land on which to build. (

Germany solar survivor says panel shipments reach record

August 29, 2014. The one major German solar panel manufacturer that survived a plunge in prices triggered by competition from China said it shipped near-record modules this month and seeks to keep selling at that level. Solarworld AG delivered the most modules in the company’s history in July and expects similar amounts this month, Chief Executive Officer Frank Asbeck said. Bonn-based Solarworld seeks to keep shipping at that level during the next 18 months, he said.

Germany’s biggest maker of solar panels survived a solar price war that bankrupted more than a dozen companies. Q-Cells SE, once the world’s largest cell maker, filed for insolvency in 2012 as cheap cells from China flooded world markets. Solarworld has won rulings in the U.S. and Europe against Chinese solar-panel dumping.

Customers in Europe, the U.S. and Japan are increasingly seeking solutions in which modules are combined with storage units and mechanisms that help consumers reduce consumption and costs, Asbeck said. Solarworld said it may not reach its sales target for the full year even as first-half module shipments grew 53 percent to 357 MW in the first six months compared to the same period last year. (

Solar makers set for record 2014 shipments on strong demand

August 29, 2014. Solar manufacturers are set to ship a record number of panels this year, with the largest makers expected to deliver 52 percent more panels between them than 2013. Hanwha SolarOne Co. saw “robust” volumes in the first half while maintaining its aim to sell as many as 1.6 GW of panels this year, the Qidong, China-based company said. To keep up with demand, it expects to complete its plant expansion by the end of the year.

Trina Solar Ltd., First Solar Inc., JinkoSolar Holding Co., Canadian Solar Inc., and JA Solar Holdings Co. all reported profits in the quarter. Only Hanwha and larger rival Yingli Green Energy Holding Co. cut its shipment forecasts for this year and reported losses. Solar companies are expanding as a supply glut that hurt margins is mopped up. Global installations are expected to reach a record 52 GW this year up from 40.3 GW in 2013 on falling equipment and financing costs combined with stable incentives, according to data compiled by Bloomberg. The top seven makers expect to account for about 20 GW of that. (

Myanmar’s solar ambitions kickstarted with $480 mn ACO pact

August 28, 2014. Myanmar will expand its sources of clean energy through an agreement with ACO Investment Group, a U.S.-based private-equity fund focusing on Asian emerging markets, to develop two solar-energy plants. The project, consisting of two 150 MW solar facilities, is valued at $480 million.

The plants are expected to account for 10 percent to 12 percent of Myanmar’s power generation when completed in 2016. The undertaking comes as the country begins to put a policy structure in place to encourage renewable energy. ACO expects the solar project to create 400 construction jobs in Myingyan and Meiktila districts, where the two plants are expected to be located.

ACO’s project is the first-ever solar energy development in the Mandalay region. It will help Myanmar provide stable energy because the country depends heavily on hydropower, which decreases in output during the dry season. The Asian Development Bank announced a plan to bring power to 25 off-grid villages in the country through a $2 million grant project to expand clean energy use. (

Japan, India to ink rare earths deal: report

August 28, 2014. Tokyo and New Delhi will sign an agreement that will see around 2,000 tons of rare earths imported from India, a report said, as Japan looks to diversify supply away from China. Japanese Prime Minister Shinzo Abe and his Indian counterpart Narendra Modi are expected to agree on the deal at their summit in Tokyo. Some 2,000 to 2,300 tons of rare earths -- roughly 15 % of what Japan's manufacturers use each year -- will be shipped from India to Japan, it said. China accounts for 95 % of global production of rare earths, a category of 18 metals vital for the production of smartphones, hybrid car batteries, wind turbines, steel and low-energy light bulbs, amongst other things. The country is home to 23 % of global reserves of such metals, and this month lost an appeal on a ruling by the World Trade Organization that said it had violated global trade rules by restricting exports. Beijing says its restrictions were aimed at conserving natural resources and reducing pollution caused by mining. (

UK to invest in solar sector in AP

August 27, 2014. The United Kingdom (UK) has shown interest in making investments in clean and green energy and renewable energy sector besides developing ports and infrastructure along the 970 kms of coastline in Andhra Pradesh (AP). A delegation led by UK Secretary of State for Energy and Climate Change Edward Davey called on Andhra Pradesh Chief Minister N Chandrababu Naidu said UK is interested in investing in solar and wind power projects in the state besides investments in AP's gas grid. This apart, the UK Secretary of State expressed happiness over Shell's investment in the LNG terminal coming up in the state as part of the special grant offered by the centre as part of the AP Reorganization Act. (


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Akhilesh Sati,

Ashish Gupta,

Dinesh Kumar Madhrey



About Observer Research Foundation


Observer Research Foundation was established on September 5, 1990 as non-profit public policy think-tank. It provides informed and viable inputs for the policy and decision-makers in the government and to the political and business leadership of the country by providing informed and productive inputs, in-depth research and stimulating discussions.


ORF Mission: Building partnerships for a Global India

ORF Objectives:


·        Aid and impact formulation of policies and evolve policy alternatives.

·        Create a climate conducive to effective implementation of these policies.

·        Strengthen India’s democratic institutions to enable coherent, reasoned and      consistent policy-making.

·        Provide reasoned and consensual inputs representing a broad section of opinion to improve governance, accelerate economic development, and ensure a better quality of life for all Indians.

·        Monitor strategic environment

·        Work towards achieving international peace, harmony, and co-operation.

·        Give direction to India’s long-range foreign policy objectives.

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