Energy News Monitor | Volume XI; Issue 17

[Shades of Grey: The Annals of the Indian Coal Industry (part II)]

                             “Contrary to common belief that this ‘mafia mode of production’ is one of the key barriers to reform of the coal sector, the investigative report claims that it is in reality a ‘complementary department’ of the coal industry through which the industry outsources control over low cost casual workers, strike breaking thug operations and strong integrated trade unions with political links…”

 

 

NEWS BRIEF

[NATIONAL: OIL & GAS]

October 7, 2014. Oil explorer Cairn Energy and its joint venture partners have discovered oil at a well offshore Senegal and further exploration work nearby is already planned, the company said. The companies encountered 29 metres of net oil bearing reservoir at the FAN-1 well, located around 100 km off the coastline and 1,427 metres deep. Cairn Energy has a 40 percent interest in three offshore blocks in Senegal, while ConocoPhillips has 35 percent, FAR Ltd 15 percent and Senegal's national oil company Petrosen owns 10 percent. (www.reuters.com)

October 3, 2014. The Petroleum Ministry has set up a committee headed by DGH to inquire into the reasons for delay in developing gas discoveries in ONGC's Krishna Godavari basin KG-D5 block. The panel will inquire into delay in developing fields by Oil and Natural Gas Corp (ONGC) in the block KG-DWN-98/2 or KG-D5, and submit its report by end-October. ONGC's KG-D5 sits next to Reliance Industries' eastern offshore KG-DWN-98/3 or KG-D6 block in Bay of Bengal. Both blocks were awarded in the first round of auction under New Exploration Licensing Policy (NELP) in 2000. While Reliance Industries Ltd (RIL) began oil production from its KG-D6 block in September 2008 and gas output in April 2009, ONGC, which has made 11 oil and gas discoveries in KG-D5 block, is at least four years away from first gas. The ministry wants to investigate the reasons for the delay. ONGC welcomed constitution of the committee and said the company will extend all cooperation in the investigation. ONGC said gas production from the block is planned to begin in 2018 and oil output in 2019. KG-D5 will produce up to 90,000 barrels per day (4.5 million tonnes per annum) - the largest from any field on the east coast. ONGC will produce 17 million standard cubic meters per day of gas from the block. KG-D5 is divided into a Northern Discovery Area (NDA) and Southern Discovery Area (SDA). NDA holds an estimated 92.30 million tonnes of oil reserves and 97.568 billion cubic metres of in-place gas reserves spread over seven fields. (economictimes.indiatimes.com)

October 2, 2014. Reliance Industries Ltd (RIL) may lease fuel retailing outlets to public sector oil marketing companies and is also preparing to restart some of them on hopes diesel prices will be freed from government control. RIL closed all its 1,432 fuel outlets across India by 2008 as sales declined and losses mounted because private marketers could not match the subsidised prices offered by state-owned Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation. RIL is trying to come up with a plan to optimise returns on its assets amid expectations that prices of diesel, India's most-consumed fuel, will be deregulated. Reliance is said to be waiting for more clarity on deregulation of diesel prices, which appears imminent, given the changes in the pricing regime. The government, seeking to cut its subsidy bill, allowed diesel prices to be increased by about 50 paise per litre almost every month since January 2013. In addition, global prices have softened and the rupee has appreciated against the US dollar, helping oil marketing companies (OMCs) to make a profit on the fuel. OMCs said RIL has initiated talks but they are at a very early stage and the proposals have not been considered by the companies yet. In 2002, private companies including RIL and Essar captured almost 15% of the fuel retail market. Industry players expect competition to revive with the re-entry of private players. (economictimes.indiatimes.com)

October 1, 2014. State-owned gas utility GAIL is in talks to buy an additional 2-2.5 million tons (MT) of liquefied natural gas (LNG) from the US to meet India's growing energy demand. US Federal Energy Regulatory Commission approved construction of LNG export project south of Washington which GAIL plans to use for export of gas in its liquid form to India. GAIL India Ltd has taken 40 per cent of the project's capacity to liquefy 5.75 million tons a year of natural gas for export in ships. The $3.8 billion project, being built by Dominion Resources at Cove Point, Maryland, is likely to be completed in June 2017. Petronet LNG Ltd, the nation's largest liquid gas importer, buy 7.5 million tons a year of LNG from RasGas of Qatar at 12.67 per cent of the prevailing crude oil price. At $95 a barrel oil price, RasGas LNG at loading terminal costs over $12 per million British thermal unit. GAIL already holds 20 per cent stake in Carrizo's Eagle Ford Shale acreage and has a deal with Cheniere Energy Partners to buy 3.5 million tonnes per annum of LNG from Sabine Pass Liquefaction, a subsidiary of Cheniere, from 2017-18. (economictimes.indiatimes.com)

October 6, 2014. Oil Ministry has cut natural gas supplies to small industries in south Gujarat by 60 per cent to feed CNG demand, a move that has threatened their survival and is being seen as a contravention of the stated policy. The ministry had recently decided to meet 100 per cent gas requirement for CNG and piped cooking gas supplies in cities of firms like Indraprastha Gas Ltd, from domestic production. This was to be ensured by cutting domestic gas supplies to non-priority sectors. In furtherance to this, Administered Price Mechanism (APM) gas or regulated production of ONGC/OIL to 30 small industries in South Gujarat was cut by almost 60 per cent, threatening their survival as they cannot afford imported LNG that costs four times the domestic gas price of $4.2 per million British thermal unit. In case of reduction in supplies, pro-rata cuts were to be applied on all APM consumers. South Gujarat Small Gas Consumers Association has written to Oil Minister Dharmendra Pradhan saying the 30 small glass consumers in South Gujarat including Pragati Glass, Piramal Glass, Haldyn Glass, Gujarat Borosil and Savana Ceramics are facing closure due to the cut announced by GAIL in the APM natural gas supplies. The Association said it had represented the case of small industries to Pradhan where Pradhan assured to get the matter examined. (economictimes.indiatimes.com)

October 4, 2014. The government is revamping the crude import policy to leverage the shifting sands of global oil market as new players gnaw at the existing world order of suppliers amid tepid demand. At present, Indian state-run refiners buy crude under term contract directly from national oil companies (NOCs) as well as a select band of global majors that have a share in oil from fields operated by them around the world. Crude is bought on the basis of an 'official selling price (OSP)' declared by some of the NOCs, while it is negotiated with some. The emphasis on term contracts remains as strong as ever but procedural problems have arisen as NOCs have changed the way of doing business. Many of them sell crude through subsidiaries with the aim of extracting higher price as refineries become more sensitive to various grades of oil. There has also been a shakeout among the global majors due to mergers, while some others have lost significance or have been eased out by new entrants. These changes have a direct bearing on the decision making process of the state-run refiners who face delays in seeking clarifications and approvals from the government. The policy changes propose to cut red tape and time by laying down clear criteria for qualifying a seller as an NOC or its subsidiary, swapping of a particular grade of oil between NOCs and MNCs and pricing of grades not available on OSP. The list of MNCs is also to be updated in line with current Fortune and Platts rankings. Oil ministry said the existing system for buying crude was put in place in 1979 with the establishment of an Empowered Standing Committee to approve contracts. Indian Oil was the sole importer and also supplied crude to Bharat Petroleum and Hindustan Petroleum. The committee's composition underwent changes in 1981 and in 2002 when separate panels were set up for BPCL and HPCL as crude import was deregulated. In 2003, another panel was formed for MRPL, which had by then been taken over by ONGC. These changes are now proving to be inadequate in the complex trade dynamics of the global oil market. (economictimes.indiatimes.com)

October 2, 2014. With the rates of the Indian basket of crude oil falling below $95 a barrel, the petroleum ministry said losses on diesel sales had been wiped out with the government now looking at a profit of nearly two rupees a litre on the fuel sales. The country is on the threshold of market pricing of diesel since under-recoveries, or the difference between retail price and its imported cost, have been wiped out by the monthly hikes in diesel price. Diesel prices are being raised monthly by 50 paise a litre in line with the government's January 2013 decision, while September was the first month that passed without a hike. Rates have cumulatively risen by ` 11.81 per litre in 19 instalments since January 2013. The under-recovery on High Speed Diesel (HSD) applicable for the first fortnight of September will go down to 8 paise per litre, the petroleum ministry had said on the first of the month. This is possibly the first time that retail prices in India are higher than global rates. (economictimes.indiatimes.com)

October 2, 2014. With CAG castigating state-owned fuel retailers for overcharging customers by ` 26,626 crore over 5 years, Oil Ministry has defended the PSUs saying they had absorbed ` 28,680 crore in losses on fuel sales during that period. The Comptroller and Auditor General (CAG) of India in its latest report stated that Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp overcharged customers by ` 26,626 crore from 2007-08 to 2011-12 by charging notional levies like customs duty on fuel they sold. In comments on CAG observation, the ministry defended the pricing methodology followed by the oil marketing companies (OMCs) of calculating the desired retail price in a manner as if the product was imported - adding customs duty, freight, insurance, ocean loss and wharfage charge to prevailing international price of petrol, diesel, LPG or kerosene. This they do because they import nearly 80 per cent of their raw material (crude oil) need and pay import parity price for the oil they buy from domestic producers. The retail price for diesel, LPG and kerosene has always been lower than cost and the difference has been met through subsidy support. Refining is a cyclical industry characterised by very volatile prices. Providing some level of protection and thereby adequate refining margins is necessary for encouraging investment in expansion, and more importantly in modernisation of domestic refineries. Failure on this front can impede our quest for energy security. Also, the profit margins of OMCs are only around 1 per cent of their total turnover which are the lowest as compared to the global peers -- 10 per cent of Exxon Mobil, 11.2 per cent of Chevron and 7.6 per cent of Brazil's Petrobras. Similarly, as compared to the profit margin of their PSU peers in energy sector -- NTPC (17.5 per cent), Coal India (21.9 per cent) and ONGC (26.5% per cent), the profit margin of OMCs are negligible, they said. During 2007-08, 2008-09 studies were conducted by the Cost Accounts Branch of Department of Expenditure, in Ministry of Finance to work out the amount of under-recoveries of the OMCs under the current methodology and actual refinery cost method. Similar study was also conducted for the period April- September 2010 and 2011-12. Only small differences were observed in the under-recovery amount worked out kinder both the mechanisms, they said. Currently, there is no customs duty on crude oil while a 2.5 per cent import duty is charged on inward shipment of petrol and diesel. During post part of the audit period, crude oil attracted a 5 per cent customs duty, while a 7.5 per cent import duty was levied on products. (economictimes.indiatimes.com)

 [NATIONAL: POWER]

October 7, 2014. The first 685 MW unit of GMR Chhattisgarh Energy's 1,370 MW supercritical coal-based thermal power plant at Raikheda in the state has commenced electricity generation. The unit used fuel oil to achieve this first synchronisation. The project has been implemented on multiple packages concept by Doosan of Korea. Work on the second unit of 685 MW is in progress. Since 2013, the GMR Group has commissioned two coal-based thermal power plants - the 2x300 MW EMCO Energy at Warora in Maharashtra and three units of the 4x350 MW GMR Kamalanga Energy at Kamlalanga in Odisha. The GMR group signed the Memorandum of Understanding (MoU) with the Government of Chhattisgarh for the power plant in 2008 and received environment clearance and consent to establish the same in 2011. Besides Chhattisgarh, this plant will cater to the power needs of other states in the country. (economictimes.indiatimes.com)

October 7, 2014. The cost of power generation is likely to increase about a third, according to industry estimates, as 36 coal blocks get transferred from private sector to state-run miner Coal India following a Supreme Court (SC) order. Coal India's cost of production is more than that of private firms due to higher overheads and strict adherence to the rules requiring key postings in all of its mines, said a coal expert, who has worked with the miner in the past. Rating agency ICRA has estimated that about 18 GW capacity of independent power producers will be affected by the Supreme Court order. This comprises a mix of operational projects (6.3 GW as of July) and under-construction projects (11.4 GW expected to become operational over the next two years). (economictimes.indiatimes.com)

October 6, 2014. Bharat Heavy Electricals Limited (BHEL) has already executed thermal power projects in Telangana in Bhupalapally, Singareni Colleries and Kothagudem, whose performance is above the national average in terms of plant load factor. Telangana State Power Generation Corporation (TS GENCO) and Bharat Heavy Electricals Limited (BHEL) have signed a Memorandum of Understanding (MoU) to establish thermal power plants to generate 6,000 MW of electricity in Telangana. The MoU was signed in the presence of Telangana Chief Minister K Chandrashekar Rao. TS GENCO has an installed power generating capacity of 4,364 MW and has technical capability in the area of installing, owning, operating as well as maintaining power plants.

BHEL has already executed thermal power projects in Telangana in Bhupalapally, Singareni Colleries and Kothagudem, whose performance is above the national average in terms of plant load factor. The chief minister reposed faith and confidence in BHEL, which would execute the project as the nominated engineering procurement and construction contractor within three years. (www.business-standard.com)

October 6, 2014. NMDC has put its proposal to set up a ` 3,000 crore-power plant in Gonda of Uttar Pradesh on the back burner, as it feels it is not viable. In August last year, an MoU was signed between NMDC Power Ltd, a wholly owned subsidiary of Navratna Public Sector Undertaking, NMDC Limited and IEDCL, a subsidiary of IL&FS, for setting up a 2x250 MW thermal power plant under joint venture at Gonda, with the investment outlay of over ` 3,000 crore. An Expert Appraisal Committee under the Ministry of Environment and Forest in October last year had refused to clear the proposal on the grounds that the place where the project is proposed is fertile agriculture land. (economictimes.indiatimes.com)

October 5, 2014. Power generation in Gujarat is not affected due to coal shortage and the state is meeting demand of its various consumers without imposing any restrictions, Energy Minister Saurabhbhai Patel said. The total power generation in Gujarat stands at around 12,830 MW as of now that includes power generated by the Gujarat State Electricity Corp Ltd (GSECL), state government owned IPPs (independent power producers), other power producers and central sector power projects, he said.

It also includes 202 MW of wind power generation and 566 MW of solar power generation in the state, he said. On October 1, the GSECL and National Thermal Power Corporation (NTPC) signed a Memorandum of Understanding (MoU) to swap 1 million tonne of coal, Patel said. At present, GSCEL receives its domestic supply from the Coal India Ltd (CIL) mines in Bilaspur of Chhattisgarh, whereas NTPC imports coal for its power plants located in Chhattisgarh from Gujarat-based ports. The ministry of power has permitted NTPC to swap the coal it receives through Gujarat for its thermal plant in Chhattisgarh with the fuel available at Bilaspur mines. In turn, Gujarat will utilise the imported coal for its power plants, Patel said. (www.business-standard.com)

October 3, 2014. State-run miner Neyveli Lignite Corp (NLC)'s 1,000 MW thermal power plant at Tuticorin is in advanced stages of completion, a development that will help it achieve over 4,200 MW generation capacity. The plant, which entailed an investment of ` 4,910 crore, could achieve 86% progress by August. The ignite miner plans to take its installed power generation capacity to 4,240 MW by the end of the current fiscal, on the back of ongoing power projects. It has an installed capacity of about 3,000 MW at present. NLC has plans for growth in power generation capacity. It is already in the process of setting up two power projects in Tamil Nadu and Uttar Pradesh at an estimated cost of ` 24,770 crore, to take its capacity to 11,195 MW. In Tamil Nadu, it has plans to set up a 4,000 MW coal- based power plant near Thirumullaivasal village of Sirkali taluk, Nagapattinam district. In Uttar Pradesh, it will set up a 1,980 MW (3X660 MW) plant in Ghatampur in Kanpur Nagar district at an estimated cost of ` 14,375.4 crore. It has planned to set up another new power plant in Rajasthan with a capacity of 250 MW as an extension of the existing power plant there at an investment of ` 2041.78 crore. (www.business-standard.com)

October 1, 2014. The public sector Satluj Jal Vidyut Nigam Ltd (SJVNL) has signed an agreement for commissioning of the 600 MW Kholongchu Hydro Electric Project in Bhutan, whose foundation stone was laid by Prime Minister Narendra Modi, the company said. The agreement was signed by SJVNL and Druk Green Power Corp in Bhutan. This is the first hydro electric project being developed by a joint venture company of public sector undertakings of both the governments, the SJVNL said. It will be implemented under build, own, operate and transfer (BOOT) model. Earlier, the inter-government agreement between Bhutan and Indian governments was signed April 22 for execution of four hydropower projects. The Kholongchu project is a run-of-the-river project located on the Kholongchu river. On completion, the project will generate 2,568.52 million units of energy. The project is estimated to cost ` 3,868.87 crore which will be shared in the ratio of 50:50 by the two joint venture partners. Modi laid the stone of the project June 16 where Bhutanese Prime Minister Dasho Tshering Tobgay was also present. (www.newkerala.com)

October 7, 2014. India has initiated the process to supply 100 MW of power from Tripura to Bangladesh, an Indian diplomat said. Several steps were taken about the Indian government's commitment of supplying 100 MW of power to Bangladesh from southern Tripura's Palatana power plant, Indian Deputy High Commissioner in Dhaka Sandeep Chakravorty said. He said that supplying power from Tripura to Bangladesh will be similar to the system between West Bengal's Baharampur and Bheramara in Bangladesh. India had commenced supply of 250 MW of power to Bangladesh last year after the government-run Bangladesh Power Development Board and India's NTPC Vidyut Vyapar Nigam Ltd (NVVN), a subsidiary of India's National Thermal Power Corporation (NTPC), signed a deal Feb 28, 2012 to supply 250 MW of electricity, following an agreement signed during Bangladesh Prime Minister Sheikh Hasina's visit to New Delhi in January 2010. To provide power to Bangladesh, 400 kV switching station has been set up at Baharampur in West Bengal. The cross-border inter-connection has been established between Baharampur (India) and Bheramara (Bangladesh). (economictimes.indiatimes.com)

October 7, 2014. Domestic electrical and electronics equipment makers have asked the government to cancel projects awarded to Chinese state-run firms, arguing that India's critical power distribution system could prove vulnerable and the country may face blackouts if these firms decide to manipulate and damage the national grid. According to the Indian Electrical and Electronics Manufacturers' Association (IEEMA), Chinese firms have been awarded a number of projects to install supervisory control and data acquisition (SCADA) systems for better power distribution management in 18 cities of Tamil Nadu, Rajasthan, Madhya Pradesh and Puducherry. The IEEMA wrote to the power ministry that China had reportedly mounted almost daily attacks on both government and private computer networks in India, showing its intent and capability over the past one and a half years. The association said that the data of the system was vulnerable to threat and its connectivity to transmission system could pose a threat to the national power transmission grid. Till March, the power ministry had sanctioned projects worth about ` 40,000 crore under its restructured accelerated power development and reforms programme to reduce the transmission and distribution losses. The association, which was founded in 1948 and has 800 gear makers for power sector as its members, has been opposing imports of Chinese equipment that have been making increasing inroads into the Indian market with their cost competitiveness. Cyber security experts also believe Chinese equipment poses a threat to Indian power transmission and distribution system. (economictimes.indiatimes.com)

October 6, 2014. India Power Corp Ltd (IPCL) plans to invest at least ` 33 crore as the first tranche towards beefing up power distribution infrastructure at Gaya and Bodh Gaya in Bihar. The company has submitted its plan to upgrade infrastructure and induct new power distribution technology to the Bihar Electricity Regulatory Commission (BERC) and is awaiting a formal approval to start work. In June 2014, IPCL's wholly owned subsidiary, India Power Corporation (Bodhgaya) Ltd, entered into an agreement with South Bihar Power Distribution Company Ltd for a 15-year distribution franchise for supply of power to Gaya, Bodh Gaya and Manpur areas of Bihar. The company has identified core areas which would need management and investment interventions to ensure quality service to the customers of Gaya. The company had initiated consumer awareness programmes in tandem with the requisite changes to existing infrastructure, like providing improved earthings to ensure reliability and quality of supply as well as consumer safety. It has put in place a call centre aligned with its operational control room for daily monitoring and take customer feedback and complaints. On similar lines, four customer-care centres and 130 bill collection counters have been linked across the command area for error-free billing, bill collection and to deal with other customer-related issues. (economictimes.indiatimes.com)

October 5, 2014. With transmission congestion curtailing millions of units of electricity supply every month, Indian Energy Exchange (IEX) has said there is a need to build new transmission capacities to ensure a well-functioning power market in the country. The exchange said transmission capacities are a key enabler for power market. As much as 5,300 million units of electricity remained unsold due to congestion in the transmission system in financial year 2014, according to IEX. In August alone, about 223 million units of electricity were curtailed due to unavailability of inter-regional transmission corridor. IEX sees an average daily trade of about 80,000 MWh electricity. The bourse has more than 3,000 participants. Among others, the exchange offers products in Day-Ahead and Term-Ahead markets. Under Day-Ahead Market (DAM), participants carry out trade in electricity on 15-minute block basis, a day prior to the delivery of power. Contracts under Term-Ahead Market (TAM) are for a duration of up to 11 days. (www.business-standard.com)

October 2, 2014. Cracking the whip on Adani Power, the Appellate Tribunal for Electricity (APTEL) directed the power generation company to restore power supply to Haryana, which the firm had abruptly stopped after the Supreme Court put a stay on the Tribunal's order on increase in rates. Following the stay from the apex court on the petition of Haryana power utilities, Adani Power stopped power supply on August 25, without informing the court or APTEL. The Tribunal passed an order directing Haryana utilities to make the payment to Adani Power, adding the compensatory tariff. This was later stayed by the Supreme Court on the appeal by Haryana power utilities and ruled out any increase in tariff. Thereafter, Adani Power stopped supply of 1,424 MW to Haryana. (www.business-standard.com)

October 7, 2014. Frequent and long power outages are forcing industries based in Telangana to reconsider their proposed incremental investments, expansions and greenfield projects in India's newest state. Telangana chief minister K Chandrasekhar Rao has blamed N Chandrababu Naidu, the chief minister of Andhra Pradesh, for the power woes of his state. Andhra Pradesh, from which Telangana was carved out on June 2, owns over 60% of the two states' combined power generation assets of 16,465MW in terms of location. While Rao has sought three years to fully resolve the power crisis, industry leaders say they cannot afford to miss out on the overall improvement in business sentiment in the rest of the country. The Andhra Pradesh Reorganisation Act of 2014 stipulates division of power plants among the successor states based on their geographical location. Telangana later secured nearly 54% power allocation based on the consumption track record formula through a contentious government order in April, two months after the Parliament passed the Act. At a time when Andhra Pradesh is supplying uninterrupted power across sectors, Telangana has imposed 4-12 hours of daily power cuts on farmers and domestic consumers, and four-day-amonth production holiday on industries. Against a demand of 161 million units (mu) a day, the Telangana government is able to supply only 137 mu. Besides, the state is unable to buy electricity from power-surplus states because of grid connectivity issues. The industry agrees that the decades-old power supply issue cannot be resolved overnight by a government that has been in office just for 100 days, but it wants the government to spell out mediumand long-term plans to address the problem, said K Sudheer Reddy, president of Telangana Industrialists' Federation. (economictimes.indiatimes.com)

October 6, 2014. The Coal Ministry has sought the opinion of Attorney General (AG) on whether the government needs to bring out an Ordinance to deal with the issues arising from the Supreme Court decision to de-allocate coal mines The issues that need to be resolved by the government in the coal mine case include forfeiting of bank guarantees and title deeds of the land mines purchased by the companies. Depending on the advice of the Attorney General of India, the ministry will take a view on the Ordinance so as to deal with the implications of the Supreme Court's order in the coal case. In a major blow to the corporate sector, the Supreme Court had quashed allocation of 214 out of 218 coal blocks alloted to various companies since 1993 terming the method as "fatally flawed" and allowed the Centre to take over operation of 42 such blocks which are functional. The apex court said the beneficiaries of the illegal process "must suffer" the consequences and refused to show sympathy to private companies which submitted that ` 2.87 lakh crore have been invested in 157 coal block and ` 4 lakh crores in end-use plants. It, however, saved from the "guillotine" four allocations one each to SAIL and NTPC and two blocks to Sasan Power Ltd owned by Reliance Power and also gave six months breathing time to rest of them to wind up their operations by March 31, 2015. (www.business-standard.com)

October 6, 2014. Power Finance Corporation (PFC) is looking for consultants for monitoring the ongoing electricity generation and transmission stations and for facilitating the removal of bottlenecks in project completion. A Power Project Monitoring Panel has been set up through the Power Project Progress Assessment Society to monitor the progress of power projects so as to commission them on time. There is requirement of Power Project Monitoring Consultants in the area of coal availability and logistics. The consultants will be appointed on a contract for a period of two years. The applicant should not be more than 64 years of age on the date of appointment. The primary function of the consultants will be to handle issues related to coal supply for power projects under development and in operation including any other facet considered critical.

Consultants will also have the responsibility of facilitating the identification of bottlenecks and suggest remedial measures for the requirement. For this purpose, the consultant would be needed to interact in his assigned area of function with State governments, ministries of the central government, financing institutions, regulatory agencies and other agencies involved with project implementation. PFC is engaged in providing funds for various power projects in generation, transmission, and distribution sectors. (www.business-standard.com)

October 6, 2014. Coal India has awarded contracts for construction of two washeries as part of efforts to augment its capacity to crush coal and ensure better quality of the dry fuel. The government had earlier said that comprehensive measures for enhancing domestic coal output were being put in place along with stringent mechanism for quality control and environmental protection, which includes supply of crushed coal and setting up of washeries.

Of the 16 coal washeries, six are coking coal with a capacity of 18.6 million tonnes per year and 10 non-coking coal washeries with a capacity of 82 million tonnes per year. At present, CIL operates 17 coal washeries with a total capacity of 39.4 million tonnes per year. Out of these, 13 are coking coal washeries with a total capacity of 24.90 million tonnes, while four are non-coking coal washeries with a total capacity of 14.50 million tonnes.

The Standing Committee on Coal and Steel had earlier pulled up Coal India for delays in setting up of washeries and had desired that the coal PSU prepare an action plan to expedite the work of commissioning of washeries. The committee had also observed that the washeries were not set up despite the Ministry of Environment and Forests restricting the use of coal containing more than 34 per cent ash content in power stations located 1,000 km away from pit heads. (www.thehindubusinessline.com)

October 5, 2014. Power tariff in the city may go up next month as Delhi Electricity Regulatory Commission (DERC) is all set to levy a fuel surcharge to help the private distribution companies adjust their power purchase cost. While hiking the power tariff by up to 7.5% for domestic consumers, the DERC in July had withdrawn Power Purchase Adjustment Cost (PPAC) of around 8% till October. DERC said a decision on "readjusting" the tariff will be taken by end of the month after examining the petitions of the three private discoms to review the PPAC.

The regulator had introduced PPAC in 2012 to help the private power distribution companies recover additional cost on account of increase in coal and gas prices. Delhi gets power from a number of gas and coal-based power generation plants. Power experts said the three discoms Tata Power Delhi Distribution Ltd, BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd may see a hike in the range of 6 to 8%. While hiking the power tariff by up to 7.5% for domestic consumers, the DERC in July had withdrawn PPAC of around 8% for three months. The withdrawal of the PPAC resulted in marginal decline of tariff for the consumers, whose monthly consumption does not exceed 400 units. (www.business-standard.com)

October 5, 2014. Karnataka is planning to buy 500 MW RTC (round-the-clock) power from producers to meet demand for the next eight months. The power is being bought on a short-term basis from generators, trading licensees, State utilities, captive power plants (CPPs) and co-generators within the southern region for power supply. The Power Company of Karnataka Ltd (PCKL), which has invited bids, is buying power on behalf of Government-owned distribution companies such as Bescom, Mescom, Hescom, Gescom and Cescom. (www.thehindubusinessline.com

October 4, 2014. The Teesta-III hydro power project, promoted jointly by the Sikkim government, private players and a group of private equity (PE) investors, is likely to be sailed out of rough waters by the state. If the PE investors exit the project, the state government is ready to bail out the venture, which had faced contractual delays and natural calamities. After the consortium of PE investors, under holding company Varuna Investments, had complained to the Centre about cost overruns of the project running up to ` 615 crore, the Sikkim government has expressed its desire to buy out the equity of other investors. (www.business-standard.com)

October 4, 2014. Vedanta group’s plans to become a formidable player in the power sector will suffer a major setback due to unavailability of coal after the Supreme Court (SC) judgement recently. The Supreme Court had cancelled coal blocks allocated to two group companies — Balco and Sterlite Energy — which will impact profitability of the companies. The group operates power plants in Korba, Chhattisgarh, and Jharsuguda, Odisha. Balco’s 1,200 MW power plant in Korba has been dormant due to lack of approvals. Now with its coal mine gone, the power project will keep bleeding money, said analysts. At Jharsuguda, Sesa Sterlite has two power plants — a 2,400 MW power plant with independent power producer status and a 1,200 MW captive power plant to feed the nearby aluminium smelter of 0.5 million tonnes per annum. (www.business-standard.com)

October 3, 2014. The Coal Ministry has said that with the Supreme Court clearing the air with regard to coal blocks it will make efforts to ensure that the fuel is made available for electricity generation and the crisis at power plants is eased. The coal stock position at thermal power plants is critical as more than half of the generating stations have less than a week's fuel stock. The ministry said that it is keen to move forward in the matter of allocating the coal blocks which stand reverted to the government. (economictimes.indiatimes.com)

October 2, 2014. The government plans to offer a rescue package to kickstart 16,000 MW of gasfired power plants that are idling after an investment of about ` 64,000 crore by providing fuel and subsidy to make them financially viable. This will benefit Lanco Infratech, Essar Power, Reliance Power, GVK Group, GMR Energy and other companies that had set up plants on the basis of official projections of gas availability.

The package includes a proposal that any additional gas produced in the next four years (above the current level of output) should be supplied to power stations. This should be pooled with imported liquefied natural gas (LNG). As LNG costs about $15 per unit, compared with the prevailing domestic gas rate of $4.2, the government plans to provide subsidy so that electricity is not too costly for distribution companies. The power sector will be given priority in allocation of incremental gas from blocks awarded under the National Exploration Licensing Policy (NELP) till 2018-19. The planned measures will come as a relief to the power sector which has been under stress as the shortage of coal and natural gas has affected about 35,000 MW of capacity, mostly built by the private sector. (economictimes.indiatimes.com)

October 2, 2014. Days after the Supreme Court cancelled coal block allocations to the private sector between 1993 and 2010, a committee headed by HDFC chief Deepak Parekh has pitched for public-private partnerships (PPPs) in the coal mining and power distribution segments. The committee, set up in 2010 to look at financing for infrastructure development, gave its report, after filing an interim one in July 2012. The latest report provides a plan for reviving investment in key sectors during the 12^th Plan. The 190 coal blocks allotted through the past two decades have been directed to CIL, for re-auctioning in six months. The report also recommends setting up a new public sector undertaking to award and manage PPP concessions. The power distribution segment faced losses of ` 1 a unit and was nearing a financial collapse, the committee said. (www.business-standard.com)

October 2, 2014. Blaming Samajwadi Party government's "wrong policies" for increase in power tariff in Uttar Pradesh, BJP said it will move the UP State Electricity Regulatory Commission against the hike. The state government should have increased power tariffs in such areas where electricity is supplied for 24 hours like Rampur, Etawa and Mainpuri and not in the entire state where power is supplied for only eight to ten hours. (economictimes.indiatimes.com)

October 1, 2014. Prime Minister Narendra Modi and United States (US) President Barack Obama, in their bilateral talks held at the White House, agreed to commit to the implementation of the civil nuclear agreement between the two countries. Prime Minister Modi and President Obama reaffirmed their commitment to implement fully the U.S.-India civil nuclear cooperation agreement. They established a Contact Group on advancing the implementation of civil nuclear energy cooperation in order to realize early their shared goal of delivering electricity from U.S.-built nuclear power plants in India. They looked forward to advancing the dialogue to discuss all implementation issues, including but not limited to administrative issues, liability, technical issues, and licensing to facilitate the establishment of nuclear parks, including power plants with Westinghouse and GE-Hitachi technology. (www.newkerala.com)

October 1, 2014. The Madhya Pradesh (MP) government and the Centre would jointly set up a high-power committee for collaborating with public sector energy major NTPC. The committee will be headed by Principal Secretary (Energy) on behalf of the state while Joint Secretary, Government of India, and Director (Finance) of National Thermal Power Corporation (NTPC) will be included as members. The decision in this regard was taken at a meeting between Union Power and New & Renewable Energy Minister Piyush Goyal and Chief Minister (CM) Shivraj Singh Chouhan. The committee will evaluate the thermal power plants. The objective is to increase the capacity of thermal power plants above 80 per cent.

The CM brought to Goyal's notice the requirement of power during festive seasons, which the latter justified and assured that the demand will be fulfilled and NTPC will immediately start power supply to the state. Goyal also said that additional electricity would be given to Madhya Pradesh from the Centre's unallocated quota for the Rabi season. The Chief Minister said the demand of power will increase up to 40 per cent during Rabi season. Goyal said additional 500 MW will be allocated to Madhya Pradesh for 100 days from October 15. Goyal assured all possible help from the Centre to help Madhya Pradesh increase its share up to 30 per cent in renewable energy in the state's total power generation capacity by 2017. (economictimes.indiatimes.com)

October 1, 2014. The Uttar Pradesh Electricity Regulatory Commission (UPERC) approved power tariff hike of about 12 per cent for domestic consumers. However, tariff increase for industries, commercial and agricultural connections were 7.38 per cent, 6.28 per cent and 12.20 per cent, respectively. The new rates would be effective seven days after the Uttar Pradesh Power Corporation Limited, the state-owned power utility, issues a public notice. For residential consumers, the average rate has been raised from ` 3.55 a unit to ` 3.97 a unit. Similarly, power tariff for industries has been increased from ` 7.04 a unit to ` 7.56 a unit while that for the commercial and agricultural connections are from ` 6.64 a unit to ` 7.05 a unit and from ` 3.19 a unit to ` 3.58 a unit, respectively.

Last year, power tariffs were increased by about 30 per cent in the month of June. Therefore, the aggregate hike across different consumers comes to about 8.90 per cent, with the per unit rate increasing from ` 4.97 to ` 5.41. UPERC said the tariff had been designed in such a way that the effective tariff for consumers having lower consumption would be lesser compared to consumers having a higher consumption pattern. According to UPERC, the tariff for unmetered rural agricultural consumers had not been increased. Meanwhile, Uttar Pradesh Rajya Vidyut Upbhokta Parishad, the power consumers forum, has flayed the hike saying it would only put additional burden on consumers. (www.business-standard.com)

 [INTERNATIONAL: OIL & GAS]

October 7, 2014. Russia's top natural gas producer Gazprom expects its gas output to rise by around 5 percent next year, as this year's production is poised to drop to an all time low. Gazprom expects its gas output to fall to 463 billion cubic metres (bcm) this year due to a pricing dispute with Ukraine, however some analysts believe that it would barely reach 450 bcm, a record low level since 1989, when the company was created out of the Soviet gas ministry. In January-September, Gazprom's natural gas production reached 311.6 bcm. (www.rigzone.com)

October 6, 2014. Chevron Corp agreed to sell a 30 percent stake in a venture to develop oil and natural gas from Canada’s Duvernay shale to Kuwait Petroleum Corp, giving the Mideast producer a foothold in a top North American play. Chevron, the second-largest U.S. oil and gas producer, said the $1.5 billion purchase price includes cash and an agreement to contribute to the venture’s capital costs. Chevron has drilled 16 exploration wells in the area so far, the San Ramon, California-based company said. The Duvernay area in Alberta is among the most promising shale opportunities in North America. So far, wells in the region have proven more expensive and taken longer to drill than similar shale formations in the U.S., Tudor Pickering Holt & Co. said in a research note. The Duvernay, in central Alberta, holds an estimated 443 trillion cubic feet of gas and 61.7 billion barrels of oil, according to a report last year by the Energy Resources Conservation Board. Kuwait has relied on traditional drilling while hydraulic fracturing and horizontal drilling have helped the U.S. unlock oil and gas reserves in shale plays. The Kuwait Oil Co. has identified a shale gas deposit and was planning to develop the resource soon. (www.bloomberg.com)

October 5, 2014. On the heels of selling 10 per cent stake in its Vankor oilfield to China for $ 1 billion, Russia's biggest oil company Rosneft has offered a similar stake to India's Oil and Natural Gas Corp (ONGC). Rosneft has made a formal offer to sell 10 per cent stake in the strategic oilfield in Siberia to ONGC Videsh Ltd (OVL). Vankor is the largest field to have been discovered and brought into production in Russia in the last 25 years. As of January 1, 2014 the initial recoverable reserves in the Vankor field are estimated at 500 million tons of oil and condensate, and 182 billion cubic meters of gas. OVL is doing due diligence on the proposal and will make an offer post that. Vankor will reach peak output of 500,000 barrels per day or 25 million tons a year in 2019. The field, has driven recent Russian output growth, pumped 435,000 bpd in September. Russia is the world's top oil producer with current output of 10.5 million bpd but its key producing region - West Siberia - is maturing. The field is estimated to hold 991 million barrels of oil equivalent reserves and is planned to start production in 2017. Yurubcheno-Tokhomskoye will reach a production plateau of up to 5 million tonnes a year (100,000 barrels per day) in 2019. Rosneft, Russia's biggest oil company and the world's largest listed producer by output, offered to make a management presentation along with Physical Data Room (PDR) access to OVL in Moscow. OVL is interested in expanding its presence in Russia as it looks to source one million barrels per day of oil and oil-equivalent gas from Russia. OVL already has 20 per cent stake in Sakhalin-1 oil and gas field in Far East Russia and in 2009 acquired Imperial Energy, which has fields in Siberia, for $2.1 billion. (economictimes.indiatimes.com)

October 3, 2014. Kuwait is in talks with five major oil companies to help boost crude production and develop some of its oilfields including Burgan, the world's second largest, a move that has faced fierce political opposition in the past. Kuwait has invited Britain's BP, France's Total, Royal Dutch Shell, ExxonMobil and Chevron, to bid for a so-called enhanced technical service agreement for the northern Ratqa heavy oilfield, Kuwait Oil Co (KOC) said. The plan is part of efforts to meet Kuwait's target of producing 4 million barrels of oil per day (bpd) by 2020. The OPEC member currently produces around 3 million bpd and exports around two thirds. KOC also plans to open up other oilfields such as its North Kuwait fields and areas of the giant Burgan field for foreign oil companies to develop, and will send a letter to the five majors seeking their interest in bidding. It is the first time KOC will develop such a big heavy oil reservoir and the plan is to produce 60,000 bpd from Ratqa, which lies close to the Iraqi border, by 2018-2019 in the first phase, and then ramp it up to 120,000 bpd by 2025, KOC said. North Kuwait produces around 700,000 bpd and the plan is to boost its output to 1 million bpd by 2017-2018, KOC said. KOC is also working to sustain current production potential of 1.7 million bpd from Burgan after moving ahead with a water injection project to help boost oil recovery rates. Kuwait's oil production comes mainly from a few mature fields, dominated by the Burgan field in the south of the country. Kuwait's current capacity is around 3.25 million bpd, with KOC's share at around 3 million bpd. To bring the capacity up to 4 million bpd by 2020, KOC will contribute an extra 650,000 bpd. (www.arabianbusiness.com)

October 3, 2014. Goldman Sachs Group Inc. says it’s losing confidence in its forecast that Brent crude will recover to $100 a barrel next year. While the Wall Street bank is maintaining its projection for now, it says that a lack of signs of accelerating global economic growth and uncertainty over OPEC’s production plans amid rising Libyan output are weakening its conviction. Brent, the benchmark for more than half the world’s oil, closed at $93.42 a barrel, the lowest in more than two years. Prices slumped as U.S. crude production climbed last month to the highest level since 1986 and the Organization of Petroleum Exporting Countries (OPEC) pumped the most oil in a year. The International Energy Agency cut its projections for global consumption growth through next year due to a weakening economic outlook while Saudi Arabia lowered prices, signaling the world’s biggest exporter is prepared to let them fall rather than cede market share. West Texas Intermediate (WTI), the U.S. benchmark grade, for November delivery was at $91.52 a barrel in electronic trading on the New York Mercantile Exchange, bringing its decline this year to 7 percent. WTI’s discount to Brent shrank to $2.41 based on settlement prices, the smallest since August 2013. The spread is “far too narrow given logistic economics” and needs to “widen,” Goldman said in its report. At this level, the spread will boost U.S. imports, increasing inventories on the Gulf Coast and at Cushing, Oklahoma, the delivery point for WTI, Goldman said. The bank forecasts the difference will rebound to $10 a barrel in 2015. The chance of a price recovery to Goldman’s $100 forecast for 2015 may also be capped if longer-term prices, which have risen this year, catch up with the slide in prompt contracts, the bank said. (www.bloomberg.com)

October 2, 2014. U.S. firm Stratum Energy said it would invest $150 million next year to expand its gas production business in Romania. Romanian Energy Minister Razvan Nicolescu said Stratum Energy began delivering gas to the national system a few days ago, becoming the country's third gas producer after state-owned Romgaz and Petrom, majority-controlled by Austria's OMV. The company said it was currently producing 450,000 cubic meters per day of gas and 100 cubic meters per day of a condensate and light crude mixture via two operating wells at its block in the eastern Romanian county of Bacau. Stratum said it had so far invested $70 million in Romania, including building a pipeline that connects it to the national gas grid operated by state firm Transgaz, through which it can deliver up to 4 million cubic meters per day. Its development plan will be submitted for approval to the country's agency for mineral resources this year. (in.reuters.com)

October 2, 2014. BP Oman announced that the firm has awarded two long term drilling contracts for the Khazzan project in Block 61 in Oman. KCA Deutag has been awarded more than $400 million contracts for the construction and operation of five new build land rigs for Khazzan. Oman’s Abraj Energy Service has been awarded more than $330 million contracts to supply three drilling rigs for the full field development of the Khazzan Project. (www.rigzone.com)

October 2, 2014. Exxon Mobil Corp, the world’s most valuable crude producer, signed an agreement with Petroleos Mexicanos as Mexico’s oil industry opens to private investment. Exxon and Pemex, as the state-owned producer is known, signed a three-year memorandum of understanding and cooperation to exchange academic, scientific and technical knowledge, according to the companies. The companies agreed to analyze exploration, drilling and refining opportunities, according to the Pemex. The Irving, Texas-based company joins a growing list of major oil producers to express interest in entering Mexico’s energy industry, which is ending a 76-year state oil monopoly. Congress passed legislation to allow private companies to tap the country’s 13.4 billion barrels of proven reserves, which the government estimates will bring in $50 billion of investment between 2015 and 2018. Chevron Corp, Noble Energy Inc and BHP Billiton Ltd are among companies interested in exploring for oil in Mexico. Authorities next year will auction 169 oil blocks -- 109 for exploration and 60 for production. (www.bloomberg.com)

October 2, 2014. Russian oil output rose to near a post-Soviet record last month, a sign the biggest source of revenue for President Vladimir Putin’s government has yet to be eroded by U.S. and European sanctions. The nation increased output 0.7 percent to 10.61 million barrels a day, according to preliminary data from CDU-TEK, which is part of the Energy Ministry. The figure is within 0.3 percent of the record in January and is for crude and condensates, a type of oil that yields a greater proportion of high-value fuels. The U.S. and the European Union have targeted Russia’s oil industry by banning exports of some equipment and technology, blaming Putin’s government for stoking a separatist insurgency in eastern Ukraine. Russia produced 10.64 million barrels of crude and condensate in January. It was as high as 11.48 million barrels a day in 1987, the Soviet-era peak, data from BP Plc show. Oil and oil products represented 46 percent of the nation’s budget revenues in the first eight months of this year, the biggest single contributor, government data show. (www.bloomberg.com)

October 2, 2014. Ophir Energy plc announced the Kamba-1 discovery and an update on its drilling program in Tanzania. The Kamba-1 well in Block 4 has resulted in gas discoveries of 1.03 trillion cubic feet (Tcf) in the Kamba and Fulusi prospects. BG operates the Block 4 license and Ophir holds a 20 percent interest. The Kamba-1 well encountered a 50 foot gross gas column in the Fulusi prospect and, after sidetracking to test the Kamba prospect, the Kamba-1ST well established another gas column of 459 feet with high net to gross, good quality, reservoir sands. (www.rigzone.com)

October 1, 2014. Gulf Keystone Petroleum Ltd returned all key foreign staff to Iraqi Kurdistan and will increase output after U.S. air strikes eased the militant threat that prompted a mass evacuation of expatriate oil workers. The explorer is on target to produce 40,000 barrels of oil a day at its Shaikan wells, it said. Gulf Keystone has been producing about 23,000 barrels a day since Aug. 28, the Hamilton, Bermuda-based company said. Oil companies including Chevron Corp, Marathon Oil Corp and Afren Plc evacuated staff and halted drilling in August after Islamic State seized control of a vast swath of northern Iraq and neighboring Syria. ShaMaran Petroleum Corp resumed work at its Demir Dagh field in Kurdistan and Oryx Petroleum Corp said it would boost output in the region as the security situation improves. Producers have also been caught in a dispute between the Kurdistan Regional Government and the central Iraqi government over how to share oil revenue. Regional authorities have been exporting via Turkey since the start of the year against the wishes of the government in Baghdad. Gulf Keystone is exporting about 70 percent of its output to international markets via Turkey and selling the rest locally, it said. It has exported about 4 million gross barrels so far and is in negotiations with Kurdish authorities about payment. The company sold about 220,000 barrels of oil to local customers for about $9.4 million, it said. (www.bloomberg.com)

October 6, 2014. Japanese refiner Nansei Sekiyu restarted marine berth operations at its 100,000 barrels-per-day Nishihara refinery in Okinawa. The refiner, which is wholly owned by Brazil's Petrobras, suspended sea operations ahead of the arrival of Typhoon Phanfone. The storm did not impact crude oil refining operations at the plant. (www.downstreamtoday.com)

October 6, 2014. Kuwait Petroleum International (KPI) has cancelled a planned $1.4 billion investment in its 88,000 barrel per day (bpd) Rotterdam refinery and may sell it, as Europe's refiners struggle with overcapacity and global competition. The company hoped to make a preliminary decision by spring 2015, though emphasising that talks were in early stages. The refinery would have a hard time finding a buyer, given its small size and competitive position relative to much larger refineries in the Rotterdam oil hub and elsewhere in the region. The refinery has been up for sale before, including an abortive 2007 deal in which Lukoil was the rumoured buyer. (www.arabianbusiness.com)

October 7, 2014. Canada’s pipeline construction won’t be derailed by the lengthy U.S. review of TransCanada Corp.’s Keystone XL conduit, the head of the industry’s lobby group said. Natural resource companies are planning C$650 billion ($584 billion) of natural resource developments over the next decade, including pipelines, according to the Canadian government. Pipelines can be safely built through any part of Canada, including the Arctic. Enbridge Inc., Kinder Morgan Canada, Pembina Pipeline Corp. and TransCanada, which operate 115,000 kilometers of pipelines in Canada and 13,000 kilometers in the U.S. That network handles 1.2 billion barrels of petroleum and 5.3 trillion cubic feet of natural gas a year, including exports of C$81 billion in 2013. Delays for Keystone and projects such as Enbridge’s proposed Northern Gateway, which would carry oil sands crude to the Pacific Ocean and is facing legal challenges from aboriginal groups, are costing Canada billions of dollars a year because of delays in approvals. The pipeline industry bears some of the blame for the lack of public trust over pipeline safety. (www.bloomberg.com)

October 7, 2014. U.S. Gulf crude is set to drop below international prices, after trading at a premium for the longest stretch in a year, as new pipelines bring additional supplies to the region. Enbridge Inc., Enterprise Products Partners LP and Plains All American Pipeline LP plan to start bringing oil from Canada, North Dakota and West Texas. That’s likely to push Light Louisiana Sweet, the benchmark for low-density, low-sulfur oil on the Gulf Coast, below Dated Brent, according to Turner, Mason & Co. The U.S. produced the most oil since 1986 last month as producers use horizontal drilling and hydraulic fracturing to extract crude from underground shale rock. As LLS falls below Brent, shipments to the Gulf Coast, where more than half the U.S. refining capacity is located, become less attractive. Imports from countries other than Canada sank to the lowest level in 23 years in June. Enbridge in November will begin filling the Flanagan South pipeline, which will carry crude from the Chicago area to Cushing, Oklahoma. The line will carry crude brought to the Chicago area via Enbridge systems that extend into Alberta and North Dakota. While oil stockpiles at the Cushing storage hub have fallen by 51 percent since January, inventories in the Midwest outside of Cushing are at 68 million barrels, the highest on record for this time of year, according to Energy Information Administration data. (www.bloomberg.com)

October 4, 2014. One of Russia’s prized oils, facing increased competition in Asia, is traveling to a rather unlikely destination: the U.S. West Coast. As the U.S. threatens President Vladimir Putin with further economic sanctions over the conflict in Ukraine, light Sokol oil from Russia’s Far East is showing up in California for the first time in six years. Tankers have been carrying the crude to western states from Korea since May as Asia cherry-picks supplies from a growing pool of sources, including West Africa and Latin America, shipping data show. Sokol’s emergence underscores how oversupplied markets have become with light crude as the U.S. produces record volumes from shale formations and reduces imports. The surplus has grown so large that slowing demand in China and other Asian countries mean it won’t be absorbed. While U.S. companies have been barred from helping drill in Russia’s oil plays, sanctions have so far spared exports of the country’s oil, leaving the door open for Western states. The region has benefited the least from the U.S. shale boom because it lacks pipeline connections to oil-producing regions like North Dakota. Imports to the U.S. Gulf Coast have fallen by 1.53 million barrels a day in the last five years. Those to the West are up 75,000, government data show. The U.S. had stopped importing Russian oil before the May shipment. All of the Sokol, which the U.S. Energy Information Administration describes as prized by Asian refiners for its high yield of jet fuel and kerosene, has been delivered to Tesoro Corp refineries, U.S. Customs data show. (www.bloomberg.com)

October 4, 2014. Brent crude moved closer to a bear market on speculation rising global supplies will be more than enough to meet slowing demand. West Texas Intermediate (WTI) ended below $90. Brent fell 4.9 percent, the worst performance since the five days ended April 5, 2013. Organization of Petroleum Exporting Countries (OPEC) September oil production rose to a one-year high and Saudi Arabia cut prices. U.S. output is near the most since 1986. Oil also dropped as the dollar climbed to a four-year high, reducing oil’s investment appeal. (www.bloomberg.com)

October 2, 2014. U.S. oil exports are set to surpass a record held since 1957 as traders find ways around a four-decade ban on supplies leaving the country. The U.S. sent 401,000 barrels a day abroad in July, 54,000 shy of the record set in March 1957, according to data compiled by the Energy Information Administration. While Canada accounted for 93 percent of the shipments, Italy, Singapore and Switzerland also took oil from U.S. ports. Coupled with Alaskan supplies bound for Asia, total U.S. exports will reach 1 million barrels a day by the middle of 2015, according to Citigroup Inc. Shipments abroad have quadrupled from a year ago as U.S. drillers pull record volumes of crude and natural gas out of shale formations across the middle of the country using hydraulic fracturing and horizontal drilling. Exemptions to a federal ban on crude exports allow for deliveries to Canada and permits some shipments from Alaska and California. The Commerce Department also issued rulings this year allowing processed condensate, an ultra-light crude, to be sent overseas. (www.bloomberg.com)

October 1, 2014. PTT PCL, Thailand's biggest energy company, is looking to build a third liquefied natural gas (LNG) terminal in Myanmar to help secure energy supply in the Southeast Asian country. PTT is studying a plan to build an LNG receiving terminal adjacent to a gas pipeline already linked to existing gas fields in Myanmar. The terminal, expected to have capacity of 5 million tonnes per year, will offer a more convenient location to ship LNG from suppliers in the Middle East. PTT already owns the $880 million, 5 million-tonne-per-year Map Ta Phut LNG import facility, the second-largest in Southeast Asia, and parts of cross-country pipelines running for hundreds of kilometres from Myanmar. The company is also building a second LNG terminal, with the same capacity of the first one, at Map Ta Phut in eastern province of Rayong, which is expected to be completed in 2017. (af.reuters.com)

October 7, 2014. Angola, Africa’s biggest oil producer after Nigeria, plans to increase output to 2 million barrels a day by 2017, according to Finance Minister Armando Manuel. That would be two years behind an earlier target. Angola will budget next year for oil prices from $88 to $92 a barrel, Manuel said. He has said the goal of 2 million barrels a day will be reached in 2015, helped by projects including Eni SpA’s West Hub in Block 15/06, which is scheduled to begin this year. Angola pumped 1.87 million barrels a day last month, according to a survey of producers and analysts. The development of new fields may take three years, he said. (www.bloomberg.com)

October 7, 2014. Oil prices that have plunged to a 27-month low are inflicting damage on a Russian economy already contending with escalating sanctions from the U.S. and European Union over its role in Ukraine. How an average oil price of $90 a barrel, close to where prices are now, would give Russia a budget deficit of 1.2 percent of gross domestic product next year, according to Sberbank CIB, the investment bank of Russia’s biggest lender. The right axis shows the budget balance as a percentage of GDP under different oil-price scenarios. The left axis measures spending and revenues in trillions of rubles. The U.S. and EU have targeted individuals, companies and the finance, energy and defense industries to punish Vladimir Putin’s government after Russia annexed Crimea and gave support to separatists in eastern Ukraine. While Schlumberger Ltd. and Exxon Mobil Corp. scaled back oil-related operations in September, that didn’t stop Russian production of crude and condensates from rising to near a post-Soviet era record. Russia will require an oil price of about $104 to balance its budget in 2015, Sberbank estimates. Brent crude, a benchmark for more than half the world’s oil including Urals, Russia’s main export blend, declined more than $20 since its 2014 peak in June and traded at about $92 a barrel. It closed at $92.31 on Oct. 3, the lowest since June 2012. Russia may have to cut spending if oil falls below $80 and stays there, according to Sberbank. The futures curve for Brent crude shows prices ranging from $93 to $96 a barrel next year, having averaged $107 so far in 2014. (www.bloomberg.com)

October 6, 2014. Hedge funds increased bets on rising oil prices just before crude futures tumbled to a 17-month low on signs that global supply is outstripping demand. Prices capped the biggest weekly decline in two months after money managers boosted net-long positions in West Texas Intermediate (WTI) by 4.1 percent in the seven days ended Sept. 30. Long positions climbed 2.7 percent, U.S. Commodity Futures Trading Commission data show. WTI sank below $90 on Oct. 2 after Saudi Arabia, the world’s largest oil exporter, cut its prices to Asia. U.S. production is the highest since 1986, while Organization of Petroleum Exporting Countries (OPEC) output expanded to the most in a year. The International Energy Agency reduced its projections for demand growth this year and in 2015.

Saudi Arabia reduced the price for Arab Light to Asia by $1 a barrel to a discount of $1.05 to the average of Oman and Dubai crude, the lowest since December 2008. Official selling prices are regional adjustments Aramco makes to price formulas to compete against oil from other countries. Production by the 12-member OPEC rose to 30.935 million barrels a day in September, the highest since August 2013, a survey of oil companies, producers and analysts showed. U.S. crude output reached 8.867 million barrels a day in the week ended Sept. 19, the most since March 1986. Production will climb to 9.53 million in 2015, a 45-year high, the Energy Information Administration said. (www.bloomberg.com)

October 6, 2014. Malaysian state-owned energy company Petronas said it could delay its planned $11 billion liquefied natural gas (LNG) plant on Canada's Pacific Coast by up to 15 years unless it can reach a favorable tax deal. Petronas said that the economics of the plant are marginal and without a favorable tax arrangement with the province of British Columbia and Canada's federal government, it could shelve the project for a decade or more. The company set a deadline of the end of October to reach a deal. (www.rigzone.com)

October 4, 2014. Petroleo Brasileiro SA Chief Executive Officer (CEO) Maria das Gracas Foster has told Brazil Finance Minister Guido Mantega, who chairs the state-run oil producer, that it needs at least a 10 percent increase in fuel prices. Foster said that the gasoline and diesel increase is needed to reduce the cost of subsidizing fuel imports. Foster also said a 10 percent rise wouldn’t be enough to completely eliminate subsidies or reduce the debt-to-equity ratio, or leverage, to an internal target of 35 percent by year-end. Mantega said that Petrobras should increase fuel prices and that the amount would depend on the foreign exchange rate among other variables. Petrobras said it had approved a new methodology for adjusting gasoline and diesel prices to guarantee that indebtedness and leverage ratios would return to target levels within two years. Foster told the board that the company won’t be able to meet this target before the end of 2015 if domestic fuel prices only rise 10 percent and the exchange rate remains at current levels. The company never disclosed details of the methodology and it hasn’t approved a single fuel price increase since it made the announcement last year, when it increased gasoline and diesel prices by four percent and eight percent, respectively. (www.bloomberg.com)

October 3, 2014. The Queensland Government announced that it is calling for expressions of interest to explore for petroleum and gas resources on highly prospective land in the Bowen Basin of central and south-west Queensland, Australia. The two parcels of land open for competitive tender for petroleum and gas exploration rights with a cash bid component covers approximately 135 square miles or 113 sub-blocks of land in the Rolleston and Injune areas of the Bowen Basin. This is one of the largest land releases for areas with petroleum and gas deposits in Queensland and is expected to provide significant employment and economic opportunities for the region. Areas released with a cash bid component are in established resource regions. Exploration and discovery activities on this area are well established – the Queensland Government is looking for a company with the right expertise to successfully bring these resources to market. This opportunity will grant the successful tender applicant a petroleum and gas Authority to Prospect exploration permit for an initial term of six years. (www.rigzone.com)

October 3, 2014. BP Plc asked the U.S. judge in charge of thousands of oil-spill damage lawsuits to review a ruling that exposes the company to as much as $18 billion in fines, saying it was based on evidence he said he wouldn’t consider. BP claims the Sept. 4 ruling that the company was grossly negligent in causing the 2010 Gulf of Mexico oil spill was based on expert testimony that U.S. District Judge Carl Barbier of New Orleans said he would exclude from the 2013 trial over who caused the disaster. BP asked Barbier to change his finding or grant a new trial. Barbier improperly relied on the opinion of an expert witness hired by Halliburton Co. in determining that metal pipe lining in the Macondo well buckled and ruptured near the bottom, preventing cement from sealing the well against leaks, BP said. The judge ruled that rig owner Transocean Ltd was 30 percent liable for causing the disaster and cement contractor Halliburton 3 percent liable. Barbier said neither of the subcontractors acted with willful recklessness during the drilling operation. Barbier’s gross-negligence verdict exposes BP to heightened penalties of as much as $18 billion under the U.S. Clean Water Act, depending on the size of the spill and how much harm he determines it inflicted. The Justice Department claims more than 4 million barrels of oil spewed into the gulf. Barbier has set a trial for January to calculate that fine. (www.bloomberg.com)

October 3, 2014. Crude oil is poised to extend the biggest slump in more than two years after Saudi Arabia signaled it’s ready for a price war with other OPEC members, according to Commerzbank AG and Citigroup Inc. Saudi Aramco, the state-run oil producer of the world’s biggest exporter, cut prices on Oct. 1 for all its exports, reducing those for Asia to the lowest level since 2008. The move suggests that the biggest member of the Organization of Petroleum Exporting Countries (OPEC) is prepared to let prices fall rather than cede market share by paring output to clear a supply surplus, according to Commerzbank. Saudi Arabia has acted in the past to stop a plunge in prices. It made the biggest contribution to OPEC’s production cuts of almost 5 million barrels a day in 2008 and 2009 as demand contracted amid the financial crisis. The kingdom would need to reduce output about 500,000 barrels a day to eliminate the supply glut now stemming from the highest U.S. output in three decades, Citigroup and Barclays Plc estimate. While the banks said Saudi Arabia’s strategy may weaken prices in the short-term, they forecast a recovery later. Commerzbank projects Brent will average $105 a barrel in 2015. (www.bloomberg.com)

October 2, 2014. Liquefied natural gas (LNG) projects in Africa, Canada and Australia face delays or even cancellation as global demand growth slows and U.S. output increases, according to Goldman Sachs Corp. Worldwide demand for LNG will grow 5 percent on an annual compound basis by 2020, and 4 percent by 2025, Goldman said. The bank previously forecast growth of 6 percent and 5 percent, respectively. Even the U.S., where Goldman expects final approval for more than 40 million metric tons of new gas production annually over the coming years, will not be spared from the pull-back, Goldman said. Advanced drilling techniques including hydraulic fracturing have made the U.S. the world’s largest producer. U.S. supplies will compete with cargoes from Qatar and Australia, two of the biggest exporters, shifting global movements of the super-chilled fuel. Surging U.S. gas production from shale formations including the Marcellus deposit in Appalachia has sent prices tumbling 69 percent from their peak in 2008. Factors that may slow demand for LNG include the restart of nuclear reactors in Japan, China’s success in shale-gas exploration and production, and economic conditions in the Association of Southeast Asian Nations, or ASEAN. Several projects in Canada and Australia will probably face deferrals due to uncertain production costs and price-sensitive buyers, according to Goldman. Papua New Guinea has perhaps the lowest risks as it expands LNG production, the bank said. The bank expects strong demand growth in Asia to be led by China and ASEAN nations, with modest growth from India, South Korea and Japan.

China’s government policy is driving increased gas use, especially in residential and industrial consumption, as well as transportation, according to the report. Still, gas-fired power generation capacity is not a high priority in China given the lack of competitively priced supply compared with other feedstock, Goldman said. LNG demand in Thailand, Singapore, Philippines, Indonesia, and Vietnam will continue to grow and reach a combined 42 million tons-per-year by 2025, according to Goldman. (www.bloomberg.com)

October 1, 2014. Republicans plan to put approval of the long-delayed Keystone XL oil pipeline on a fast track early next year if they win a U.S. Senate majority in November, finally forcing President Barack Obama to make a tough call on the controversial plan. The $10 billion Keystone project to connect Canadian oil sands with U.S. refineries will top the list of Republican energy priorities if they gain control of the Senate after the November 4 midterm elections. It could come as a stand-alone measure or attached to must-pass legislation such as a government spending or transportation bill, according to senators and congressional aides. Republicans, along with some Democrats, have for years pushed for a bill that would allow Congress to approve Keystone, and reduce the role of the administration. However, with Democrats in control, the closest they have gotten in the Senate was a symbolic measure expressing support for the project. (www.reuters.com)

October 1, 2014. The worst is over for global oil prices, according to UBS AG and Barclays Plc. After the biggest quarterly drop in more than two years, Brent is set to recover as Saudi Arabia cuts output and demand climbs, they said. Brent fell by the most since Jan. 2 to $94.67 a barrel. It extended a quarterly drop to 16 percent, the largest since the three months ended June 2012. The benchmark grade for more than half the world’s oil will average $105 from October to December, according to the median estimate of 15 analysts. Global demand growth slowed in the second quarter to the weakest since 2011, while U.S. output climbed to the highest in three decades, International Energy Agency (IEA) and U.S. Energy Department data show. Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries (OPEC), cut production in August by the most in 20 months. It will maintain output at a reduced level until the end of the year as demand for winter fuel increases. Brent futures slid in the third quarter on the London-based ICE Futures Europe exchange to below the $95-to-$100 range described as “fair” by Saudi Oil Minister Ali Al-Naimi at an OPEC meeting in June. Prices fell as Libya restored output to the highest in a year, China’s economic growth slowed, and crises in Iraq and Ukraine didn’t disrupt supplies. Saudi Arabia told OPEC its production fell by 408,000 barrels a day -- more than China’s demand is projected to expand this year -- to 9.6 million a day in August. The kingdom plans to keep output close to that level for the rest of the year, while the Paris-based IEA forecasts an additional 600,000 barrels a day of demand on average through December, compared with last quarter. The fourth quarter was the strongest demand period in each of the past five years, data from the IEA show. This year will be no different as consumption rises to 93.9 million barrels a day in the three months ending Dec. 31, before sliding to 92.8 million in the first quarter of 2015, it forecasts. (www.bloomberg.com)

 [INTERNATIONAL: POWER]

October 5, 2014. Nigerian President Goodluck Jonathan is billed to lay the foundation stone of the $1 billion Azura-Edo 1,000 MW gas-powered Independent Power Plant. The first phase of the project, which was conceptualized in 2010 and jointly incubated by the Edo State Government under Comrade Adams Eric Oshiomhole and Amaya Capital, the key promoters of Azura Power West Africa Ltd, is 450-500 MW to be scaled up to 1,000 MW in the second phase. The Azura-Edo IPP is expected to create the template for the successful development of IPPs in Nigeria and Edo State is playing a pioneering role in determining the future of Nigeria’s power sector. (thenewsnigeria.com.ng)

October 6, 2014. Tanzania will complete a $455 million power transmission line next year linking its power grid to Kenya and Zambia, part of plans to export electricity powered by its gas and coal reserves to neighbours, the Energy and Minerals Ministry said. Tanzania, which has found commercial quantities of gas offshore and sits on big coal deposits, aims to double its generation capacity to 3,000 MW by 2016 to meet rising domestic demand and supply the region. Power shortages are common across Africa and businesses often complain that poor or erratic supplies deter more investors and push up prices of local products, as many firms have to rely on costly generators when power is cut. The 667-km high voltage line is being built with financing from the European Investment Bank, World Bank, African Development Bank, Japan International Cooperation Agency and Korean Economic Development Cooperation Fund. Tanzania, Kenya and Zambia signed a deal in Dar es Salaam to link the three countries. Tanzania's Energy Ministry said it was in talks with Kenya to export 1,000 MW of electricity to east Africa's biggest economy. (af.reuters.com)

October 4, 2014. Spot wholesale electricity slid in Texas as demand dropped below forecasts. Power consumption on the Electric Reliability Council of Texas Inc. network was 41,381 MW, below the day-ahead forecast for 42,903 MW, according to data on the grid’s website. The high temperature in Houston may reach 85 degrees Fahrenheit (29 Celsius), 6 below, according to AccuWeather Inc. in State College, Pennsylvania. New York on-peak power traded $3.17 above Boston, compared with a discount of $4.35 and a three-month average discount of $2.43 for New York. Power plants account for 31 percent of U.S. gas demand. (www.bloomberg.com)

October 7, 2014. China has started building its largest hydropower station over the Yalong river in Tibet to tap the rich water resources in the southwest of the plateau. The hydropower station, which straddles the Yalong River in Sichuan's Ganzi Tibetan autonomous prefecture, has an installed generating capacity of three gigawatts with a total reservoir capacity of 10.8 billion cubic metres. The first generator is expected to come into service at the end of 2021 and the entire station is to be completed in 2023. China has reported to have built about 23 dams of different sizes on the same river. China also plans to construct huge dams over the Brahmaputra river in Tibet which has raised concerns in India. A subsidiary of the State Development and Investment Corporation is in charge of the construction and management of the new hydropower station over Yalong river. The hydropower station is among a string of hydroelectric installations that have been built or will be built along the Yalong River. They are planned to supply electric power to China's southwest regions as well as eastern areas. (www.firstpost.com)

October 6, 2014. New Zealand Prime Minister John Key plans an inquiry into a power failure in Auckland that affected as many as 85,000 homes, shut businesses and created early morning traffic chaos in the nation’s biggest city. The supply failure followed a fire at a suburban substation owned by Transpower New Zealand Ltd., the state owned grid operator. The fire badly damaged key cables owned by Vector Ltd, which runs the electricity network in Auckland. The companies warned some customers may be without power for as long as 48 hours. Vector was able to restore services progressively and about 18,000 homes were without power from 40,000 overnight, the company said. It estimates the last customers will be reconnected. (www.bloomberg.com)

October 2, 2014. The process to start the construction of Turkey's first nuclear power plant has accelerated, the Turkish energy minister Taner Yildiz said. Turkey has entered a new era that will clear the way for nuclear power plant construction, said Taner Yildiz. Rosatom is to build Turkey’s first nuclear plant project in Akkuyu. An environmental assessment report must first be written for construction to begin. The four-reactor plant will be located in Mersin province, on Turkey's Mediterranean coast. Construction of the reactor units is to begin in 2016, and the plant is set to be operational by 2020. Yildiz said Turkey and Russia might hold a more comprehensive and high-level meeting in November. Turkey is trying to diversify its energy sources with nuclear power as it relies heavily on foreign resources - a huge burden on current budget deficit. The imports of natural gas and oil, which make up almost half of Turkey's electricity production, cost up to $60 billion a year. (www.worldbulletin.net)

October 2, 2014. Jordan's government and Enefit Jordan Attarat Power Company (APCO), an affiliate of Estonia Enefit Corp., signed an agreement to build a shale oil power-generating station with a capacity of 470 MW. The USD 2.2 billion-worth deal was inked here by Jordanian Minister of Energy Mohammad Hamed and APCO's Chairman Andres Anijalg in the presence of Jordanian Prime Minister Abdullah Ensour. The new power project will substitute more expensive methods of electricity generation and shale oil will replace liquid fuels. (www.bna.bh)

 [RENEWABLE ENERGY / CLIMATE CHANGE TRENDS]

October 7, 2014. Rajasthan Electronics and Instruments Ltd (REIL), has agreed in principle to set up a solar panel manufacturing unit in Andhra Pradesh (AP). Disclosing this, Andhra Pradesh Energy Secretary Ajay Jain said that a high-level delegation, consisting of REIL Chairman Veenu Gupta and Managing Director A K Jain, is expected to meet Chief Minister N Chandrababu Naidu soon to discuss modalities of setting up the plant. Naidu, who recently launched a LED lighting programme in Vijayawada, is slated to inaugurate distribution of LED lamps at Vinukonda and Nagaram in Guntur district. Under this scheme, around 22 lakh LED bulbs are proposed to be distributed for 11 lakh domestic consumers in the district. Andhra Pradesh is planning to enter into agreement for procurement of additional power of 1040 MW from June, 2015 to May, 2016. (economictimes.indiatimes.com)

October 7, 2014. The average annual minimum temperature in Gujarat is increasing by 0.02 degree celsius every year, while the maximum temperature is also increasing at the same rate. This was revealed in the 'State-Level Climate Change Trends in India' report of India Meteorological Department (IMD). The report states that the annual mean maximum temperature is increasing in Gujarat and the increasing trends in the annual maximum temperature is significant over Gujarat, Andaman and Nicobar, Andhra Pradesh, Arunachal Pradesh, Assam, Goa, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Lakshadweep, Madhya Pradesh, Maharashtra, Manipur, Mizoram, Odisha, Rajasthan, Sikkim, Tamil Nadu and Uttarakhand. The report says that the average annual mean temperature is increasing every year by 0.02 degree celsius. The average annual mean minimum temperature has too shown increasing trends over Gujarat, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Delhi, Haryana and Kerala. Also the report mentions that the winter minimum temperature in Gujarat, Manipur and Tripura increased by .033 degree celsius every year. According to the report, the annual mean temperature in Gujarat has also increased substantially. The report further said that the summer rainfall trend has decreased over Andaman and Nicobar, Assam, Goa, Gujarat, Jammu and other states, while there was no substantial change in the winter rainfall. The report further said that the average annual mean maximum temperature has remained unchanged for the past 60 years, while the annual mean minimum temperature increased by 0.02 degree celsius. Also the minimum and maximum temperatures during the monsoon season increased substantially. Also there was decrease in rains in September, while there was increase in incidents of rains in October. The report states that the country is faced with the challenge of sustaining its rapid economic growth in the era of rapidly changing global climate. The problem has emanated from accumulated greenhouse gas emissions in the atmosphere. (timesofindia.indiatimes.com)

October 6, 2014. The problem of a big shortfall in the targets for purchase of power generated from renewable sources hasn't diminished over the years. Overall, the renewable power purchase obligation (RPO) was only met by half in 2013-14, for a fourth year in a row. With a few exceptions, almost no state has met its RPO target. Even the star performer for the earlier two years, Gujarat, slipped from the top slot in 2013-14, with Chandigarh and Jammu & Kashmir taking the lead. Delhi city's achievement is zero. RPO, launched in 2010, makes it obligatory for distribution companies (discoms), open-access consumers and captive power producers to meet part of their energy needs through 'green' energy. A pre-defined RPO target for all states currently ranges from three to 10 per cent of their total requirement. States or utilities unable to fulfil their RPO can buy Renewable Energy Certificates (RECs). Each of these represents 1 Mwh produced from an RE source and are tradable at power exchanges. RPO is divided into a solar and non-solar portion. No state has in the past three years met its RPO. Last year, only Gujarat and Rajasthan met their solar RPO target. Non-solar RPO compliance has been negligible overall. (www.business-standard.com)

October 6, 2014. After half a dozen state governments introduced net metering for renewable energy, Delhi took the plunge to launch a scheme where individual establishments can generate power in their premises. Although the scheme is being pitched as an environment-friendly move for promoting clean energy, doubts are being cast on the viability of the scheme for the distribution companies. On a standalone basis, the scheme has the potential to succeed but it cannot replace conventional power that is available 24x7, Tata Power Delhi Distribution said. In northern India, there are 300 days of sunlight and peak requirement of power is in the summer season. Experts, however, said rewarding high-end consumers with net metering scheme benefits only the rich and could cost the distribution companies their most viable customers. Under net metering, the consumer generates solar power for self-consumption and feed excess power to the grid. In-built in it is the system of net metering, which records net energy between export of generated energy and import of energy from the distribution company for a billing month. Besides Delhi, Andhra Pradesh, Karnataka, Bihar, Gujarat, West Bengal and Maharashtra have also made moves towards such a system. The regulations for net metering for renewable energy, notified by the Delhi Electricity Regulatory Commission, specify that the capacity of renewable energy system to be installed at the premises of any consumer should not be less than one kilowatt peak. (www.business-standard.com)

October 4, 2014. Delhi Electricity Regulatory Commission (DERC) has formulated guidelines for the minimum transformer-level capacity that must be offered by consumers for connectivity to the renewable energy system and other procedural requirements. This comes a month after DERC started the process for letting power consumers become generators of renewable energy. The commission also declared tariffs for solar power generation which will be the average power purchase costs for the whole year. The solar tariffs will be the average cost of power for the whole year that is procured from several sources, including thermal and gas. For FY 2014-15, the tariffs will be ` 4.75-` 5 per unit. With the final set of guidelines issued, consumers can now begin to become renewable energy generators. The net metering regulations outline how people can generate renewable energy on their premises and then reduce their electricity bills through the amount of power they supply to the grid. (economictimes.indiatimes.com)

October 2, 2014. With India and US committing to ramp up their efforts to combat climate change through a number of measures, Prime Minister Narendra Modi moved a step forward while accommodating US president Barack Obama's demand to discuss the contentious issue of hydro-fluorocarbons (HFCs) and find ways to eventually phase-down this climate-damaging refrigerant. India, which had been resisting discussion on the issue despite forming a joint task-force on the refrigerant, agreed to call its meeting soon to discuss "safety, cost and commercial access to new or alternative technologies to replace HFCs". Even the Indo-US joint statement, issued after Modi-Obama meet in Washington, recalled India's stated position over the issue. Both the leaders recognized the need to use the institutions and expertise of the Montreal Protocol to reduce "consumption and production of HFCs" while continuing "to report and account for the quantities reduced" under the UNFCCC which put the onus of phasing down the climate-damaging gases on rich nations. Since HFC is not the ozone depleting substance, India never agreed for its "reporting" and "accounting" under the Montreal Protocol which is uniformly applied for all countries. The US, on its part, will help India build nuclear power plants through civil nuclear cooperation agreement, increase support for renewable energy through sharing cost-effective technology and boost capacity for adapting to climate change. The joint statement enlisted many such measures. It includes providing for up to $1 billion in helping India's transition to a low-carbon and climate-resilient energy economy, launching a new US-India 'Partnership for Climate Resilience' to advance capacity for climate adaptation planning and a new programme of work on air quality aimed at delivering benefits for climate change and human health. (timesofindia.indiatimes.com)

October 1, 2014. The Ministry of New and Renewable Energy, National Institute of Wind Energy and a consortium of partners in the power sector have signed the Memorandum of Understanding (MoU) for setting up a joint venture company to undertake the first demonstration offshore wind power project in India, specifically along the coast of Gujarat. The consortium of partners to the MoU includes National Thermal Power Corporation Ltd, Power Grid Corporation of India Ltd, Indian Renewable Energy Development Agency, Power Finance Corporation, Power Trading Corporation and Gujarat Power Corporation Ltd. Describing the event as a “great opportunity” in the development of renewable energy resources in the country, Union Power and New & Renewable Energy Minister Piyush Goyal, said that Prime Minister Narendra Modi’s message in the US was loud and clear, that renewable energy was the way to go, as it dovetailed global concerns about climate change and enhanced India’s energy security. In India, onshore wind power development has reached commercial stage and is the fastest growing renewable energy option. With more than 22 GW installed onshore wind power capacity, the ministry decided to take up offshore wind power development which includes the announcement of a Draft National Offshore Wind Energy Policy and preparation of Draft Cabinet note on the policy circulated for inter-ministerial comments. The National Offshore Wind Energy Policy will provide a conducive environment for harnessing offshore wind energy including setting up a demonstration offshore wind power project to showcase technology and build investor confidence. In early 1990s, the Ministry of New and Renewable Energy had taken up onshore demonstration projects in various states. A total of 71 MW of demonstration projects in seven states had leveraged a wind power capacity of around 22,000 MW with private sector investment. Thus, the ministry decided to go in for a demonstration offshore wind power project to showcase its viability in the country. Worldwide, offshore wind power projects aggregating about 7.5 GW capacity have been installed, namely UK – 4.2 GW; Denmark – 1.2 GW; Belgium – 0.7 GW; Germany – 0.6 GW; China – 0.4 GW; the Netherlands – 0.2 GW; and Sweden – 0.2 GW. (www.projectsmonitor.com)

October 1, 2014. According to a study, a large number of species are forced to migrate because of the alarming effects of global warming. Rising temperatures are forcing a huge, untold number of species to move their homes northward or climb to higher altitudes. The findings showed that global warming and changing rainfall patterns have resulted in shifts or extensions in species' range in every terrain, region and ecosystem in India. Indicating how such shifts in the geographical location of species could affect human lives, lead study author Nagraj Adve, member of India Climate Justice Collective - a group of social movements for climate justice pointed out that major fish species, crucial to diets and incomes, are moving north off both coasts of India because the ocean waters have been getting warmer. Sea surface temperature over 1967-2007 has increased by 0.15 degrees Celsius every decade along the western coast. Oil sardines were not present at all off the south-east coast until the mid-1980s, but have spread there in a major way since the 1990s. Mackerel has become more prominent off the east coast as its range too has moved, from Andhra Pradesh to parts of waters off southern Bengal. The same northward move has also happened for mackerel off India’s west coast. The most well-known example of species creeping higher could be the case of apples in Himachal Pradesh. (zeenews.india.com)

October 1, 2014. Prime Minister Narendra Modi said that no country has the right to exploit the environment to their advantage, and this is the message that India and the US should spread, he told top American lawmakers in an interaction at the Capitol Hill. Speaker of the US House of Representatives, John Boehner, had organised a tea in honour of the Prime Minister which was attended by some 10 American lawmakers, during which they discussed a range of issues including climate change and terrorism. (www.business-standard.com)

October 7, 2014. The European Union (EU) made headway toward a deal on a strategy to shift to a low-carbon economy and boost security of energy supplies amid a natural-gas dispute between Russia and Ukraine. Energy and environment ministers from the EU’s 28 member states met in Milan to prepare ground for a compromise at the Oct. 23-24 summit, where the bloc’s leaders are expected to decide on policies for 2030. The challenge for governments is to reconcile the need for cheaper and safer energy while accelerating the pace of emissions reductions. EU nations are discussing a recommendation by the European Commission to adopt a binding goal to cut greenhouse gases by 40 percent by 2030, accelerating the pace of emissions reduction from 20 percent in 2020 compared with 1990 levels. The EU’s regulatory arm also proposed an EU-wide target to boost the share of renewables in energy consumption to 27 percent and an additional goal of increasing energy efficiency by 30 percent in the next decade. (www.bloomberg.com)

October 7, 2014. The main ruling U.K. Conservative Party has an “irrational phobia” of onshore wind power and is hampering development of a technology that’s crucial to meeting Britain’s carbon targets, Business Secretary Vince Cable said. The industry has made progress in establishing a domestic supply chain that now includes a wind turbine plant in Hull planned by Siemens AG, said Cable, a member of the junior coalition partner, the Liberal Democrats. That progress is being slowed by Conservative opposition to wind, he said.

With the U.K.’s traditional third party languishing fourth in the polls before national elections in May next year, the Liberal Democrats are striving to emphasize their differences to Prime Minister David Cameron’s Conservatives after more than four years of joint government. Energy Secretary Ed Davey, also a Liberal, said that his party pledged to phase out coal-fired power stations within a decade. Davey has pushed for the expansion of renewables in government, fighting to preserve wind subsidies in the face of demands for bigger cuts by the Conservatives. An anti-wind junior minister in his department, John Hayes, was in the post for less than year after they clashed over the technology. That hasn’t stopped the Conservatives from slowing down the installation of onshore wind farms. Communities Secretary Eric Pickles, a Tory, has intervened in 50 wind-farm applications since June 2013, sidelining projects that would have added 520 MW of wind turbines, the RenewableUK industry group said. Cable said it’s not just Conservative lawmakers who oppose onshore wind, citing “irrational” opposition to wind farms on aesthetic grounds by people in parts of Yorkshire, northern England, where the skyline is already dominated by electricity pylons connected to coal-fired power stations. Even so, about 70 percent of U.K. voters support the technology, according to Gordon MacDougall, U.K. managing director at Renewable Energy Systems Ltd., a wind-farm developer. He said with continued support, onshore wind could become cost-competitive with new gas plants within three or four years. (www.bloomberg.com)

October 7, 2014. European factories are poised to pocket a windfall of about $2.5 billion a year as utilities rush to buy emissions permits from manufacturers who get them free. Power producers from RWE AG to Vattenfall AB, Europe’s biggest greenhouse-gas emitters, will have to purchase about 200 million permits a year from plants through 2016, or about four times 2013 levels. The European Union in March cut the number of permits being sold in the world’s largest market to curb a record glut.

The EU is temporarily withholding permits to encourage utilities to switch from fossil fuels, and the higher costs may be fed through to consumers, according to Eneco Holding BV, a Dutch utility. To prevent manufacturing jobs leaving the region, the 28-member bloc is widening the range of industries that get permits for free. ArcelorMittal, the biggest steelmaker, said protection is vital. Companies whose emissions are covered by the nine-year-old market, part of an international effort to keep global average temperatures from rising 2 degrees Celsius (3.6 Fahrenheit), use allowances handed out or sold by governments to cover each ton of carbon dioxide they emit. (www.bloomberg.com)

October 7, 2014. The U.S. is helping Ukraine plan how to keep homes and businesses heated during winter as the European Union’s incoming chief diplomat warned the government in Kiev may struggle as freezing temperatures approach. Fighting continued in eastern Ukraine amid moves to establish a buffer zone to help cement a wobbly truce that went into effect a little more than a month ago between government forces and pro-Russian separatists. Ukraine is bracing for the onset of winter, when temperatures at times drop below minus 20 degrees Celsius (minus 4 degrees Fahrenheit), with Russian gas supplies shut off and energy infrastructure damaged by the fighting that’s engulfed the country’s easternmost regions. The fuel shortage has already limited access to hot water. (www.bloomberg.com)

October 7, 2014. With the sunniest desert on Earth, a windswept coast and limited fossil fuel supplies, northern Chile has become the world’s top market for renewable energy. The government of President Michelle Bachelet has approved 76 solar and wind projects since taking power March 11.

Renewable energy developers are pursuing contracts to deliver electricity to mines run by companies including Anglo American Plc and BHP Billiton Ltd, which consume a third of the country’s power. Renewable energy is now cheaper than electricity sold on Chile’s spot market, and with global demand for copper expected to increase, so will the need for power at mines in the remote Atacama desert. The wind and solar projects that have been approved will require as much as $7 billion to complete. (www.bloomberg.com)

October 7, 2014. Sweden’s Green Party has joined the government for the first time in its 33-year history and now wants to use that power to shutter the country’s aging nuclear reactors in the face of opposition from a majority of lawmakers. By imposing stricter safety rules, higher taxes and by terminating state-owned utility Vattenfall AB’s plans to replace reactors, the party plans to force a phase-out, without parliament support. That’s key, because the former ruling coalition parties and the anti-immigration Sweden Democrats support atomic energy, which provides about 43 percent of the country’s electricity, and would win a vote on the issue.

The Greens, sprung from the 1970’s anti-nuclear movement, may have auspiciously timed the ascent to cabinet. Front-year Nordic power prices have slumped 48 percent since 2010 and analysts, including those at Markedskraft AS, expect flat prices for years as investment in renewable energy leads to an unprecedented power glut of as much as 10 percent of annual demand by 2020. (www.bloomberg.com)

October 6, 2014. Governments are failing to meet goals to protect animals and plants set out in a biodiversity plan for 2020 that also aims to increase food supplies and slow climate change, a UN report showed. Many rare species face a mounting risk of extinction, forests are being cleared by farmers at an alarming rate, and pollution and over-fishing are continuing despite the UN push agreed in 2010 to reverse harmful trends for nature. Overall, the Global Biodiversity Outlook issued at the start of a biodiversity meeting in South Korea showed that only five of 53 goals set for preserving nature were on target or ahead of schedule. The other 48 were lagging. Governments were on track, for instance, towards a goal of setting set aside 17 percent of the world's land area by 2020 in protected areas for wildlife, such as parks or reserves. But they were lagging targets such as halving the rate of loss of natural habitats, or preventing extinctions of known threatened species. Urging governments to redouble efforts, UN Secretary-General Ban Ki-moon said that success in preserving life on the planet would help goals of "eliminating poverty, improving human health and providing energy, food and clean water for all". Other UN reports have estimated, for instance, that free insect pollination -- largely by bees -- is worth about $190 billion a year worldwide by securing food production. (www.firstpost.com)

October 4, 2014. Researchers have found out in a study in Japan that climate change may be held responsible for altering the ratio of human males to females that are born in some countries. Nearly 90,000 newborns and about 1,000 fetal deaths per month in Japan was recorded in the study done in recent years by M and K Health Institute in Ako. Scientists found out that the ratio of male to female babies born in the country had been decreasing. There had been fewer male babies born relative to the number of female babies born as reported by Live Science. The researchers considered fetal deaths to be those that were spontaneously aborted (or miscarried) after 12 weeks of pregnancy. However, the new study only found an association, and could not prove that the climate changes were responsible for the change in sex ratio in Japan. Other factors, such as pollution and toxins in the environment, may affect sex ratios. The study came out in an issue of the journal Fertility and Sterility. (zeenews.india.com)

October 3, 2014. The U.K. government didn’t get the best deal for consumers when it awarded 16.6 billion pounds ($26.8 billion) worth of clean-energy contracts, according to a parliamentary committee. By awarding them early, and using more than half the budget for the contracts in the process, the government has hampered price competition, reduced the opportunity to test the market and failed to defend consumer interests, the Committee of Public Accounts said. The beneficiaries include Drax Group Plc, Dong Energy A/S, SSE Plc, Statoil ASA and Statkraft AS. The Department of Energy & Climate Change awarded the so-called “Final Investment Decision Enabling for Renewables” contracts in April to ensure certainty for investors ahead of the introduction of a permanent system of contracts planned for the end of the year. The contracts guarantee a fixed price per megawatt-hour and were meant to spur investment. (www.bloomberg.com)

October 3, 2014. Iwatani Corp., Japan’s biggest supplier of hydrogen, expects sales of the fuel to rise fivefold by 2025 as carmakers including Toyota Motor Corp. and Honda Motor Co. race to introduce fuel-cell vehicles. The company’s hydrogen revenue may swell to as much as 80 billion yen ($735 million) in 10 years from about 15 billion yen now, boosted by demand for the vehicles, which emit only water vapor, the Osaka-based company, said. Iwatani supplies 60 percent of the hydrogen in Japan and is the country’s sole provider of liquid hydrogen, according to the company. Prime Minister Shinzo Abe has outlined a vision for creating a “hydrogen society,” with fuel cells also powering homes and office buildings. Toyota, the maker of Prius hybrid cars, is betting that consumers will choose fuel-cell vehicles over electric autos being promoted by Nissan Motor Co. and Tesla Motors Inc., in part because hydrogen-powered cars have greater range and shorter refueling time. Toyota plans a sticker price of about 7 million yen for its first fuel-cell model, set to go on sale before April. National and local government rebates may top a combined 3 million yen a car, which could bring the model’s cost down to about 4 million yen. Iwatani plans to raise hydrogen sales to 600 million cubic meters (21 billion cubic feet) by 2025, according to a mid-term plan announced in November. It’s building 20 hydrogen stations by March 2016. Globally, the market for fuel-cell vehicles may rise to 3.3 trillion yen by 2025 from an estimated 34 billion yen next year, with major growth happening after 2020, according to estimates by Jefferies Group LLC. In Japan, the government estimates the fuel cell-related market will expand to 1 trillion yen by 2030 and 8 trillion yen by 2050. The government-backed New Energy and Industrial Technology Development Organization aims to make the cost for fully fueling a hydrogen car equivalent to that of refueling a gasoline-electric vehicle and to have 100 hydrogen fueling stations in place by about 2015. Honda plans to introduce hydrogen cars in Japan and the U.S. next year. Nissan, Daimler AG, and Ford Motor Co. are working together to develop fuel cell vehicles the manufacturers plan to start selling in 2017. (www.bloomberg.com)

October 3, 2014. OneRoof Energy Group Inc., which provides solar-energy services in five U.S. states, is receiving as much as $16.7 million in financing. Black Coral Capital LLC and affiliates of the Hanwha Group, OneRoof’s two biggest investors, are providing credit lines for working capital and project construction, OneRoof said. Part of the financing will be used to install about 175 rooftop systems. Part of the financing includes a project credit line of $6.9 million, at 9.25 percent interest that matures Dec. 31, 2015, will help fund obligations linked to its $58 million residential solar fund. The company, based in Toronto, serves customers in California, Arizona, Hawaii, New York and Massachusetts through its San Diego subsidiary. (www.bloomberg.com)

October 2, 2014. Bolivia’s first solar farm has gone into operation, in the country’s northern Pando department. The 5 MW project cost $11 million, Bolivia’s Ministry of Energy said. Sixty percent was provided by a grant from Denmark and the rest from the Bolivian government. (www.bloomberg.com)

October 2, 2014. The government outlined plans to provide £300mn worth of support subsidies to the renewable power industry this autumn but has angered the solar industry and been accused of not providing value for money. The budget for a new auction system for green electricity schemes was expected to be a little over £200mn but has been raised using cash that was underspent in previous funding rounds. Ed Davey, the energy and climate change secretary, said his new “contract for difference” (CfD) scheme, paid for by the consumer, would help underwrite the development of renewable energy that would reduce reliance on imported gas. But the CfD auction system has been purposefully skewed towards the less established - and more expensive - sectors such as offshore wind and tidal and away from the cheaper and more mature technologies such as onshore wind and solar. A previous system of subsidy support - the renewable obligation (RO) - is being phased out in 2017 for most industries but this has been fast-forwarded for large scale solar arrays to April next year. The Department of Energy and Climate change says that the move has been made because solar is using up too much of the overall subsidy budget but the Solar Trade Association denied this. (www.theguardian.com)

October 1, 2014. Canada is poised to open the first large-scale power plant that will burn coal while cutting carbon emissions by 90 percent, part of an effort to continue the use of fossil fuels without worsening global warming. SaskPower International Inc., Saskatchewan’s province-owned utility, will officially start the C$1.35 billion ($1.2 billion) Boundary Dam power plant, the company said. The 110 MW project will cut carbon dioxide emissions by about 1 million metric tons annually, by trapping it before it enters the atmosphere and pumping it underground. Countries from China to the U.S. are seeking ways to reduce the environmental impact of burning coal for heat and power to take advantage of plentiful supplies of the fuel. Carbon capture and storage, or CCS, while operational in only a handful of countries, is expected to play a key role in meeting growing demand for power without contributing to climate change, according to the International Energy Agency. Some of the carbon dioxide from Boundary Dam near Estevan, Saskatchewan, will be purchased by oil producers and used in enhanced oil recovery or EOR, a technique to boost the amount of fuel recovered from reservoirs. The balance will be stored underground in a sandstone cavern near the power station. Fly ash from the burned coal will be used in concrete. The development of carbon capture technology has been held back by the failure of major carbon emitters such as the U.S. to put a price on CO₂. (www.bloomberg.com)

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