[Delhi’s Power Crisis: Coal, Gas or Kejriwal?]

                             “While the shortage of coal may not be a part of the affordability argument, the shortage of gas is definitely a consequence of the affordability constraint. If the clear priority of the citizens of Delhi is that of cleaner air, then gas can be procured, at least in theory, at a cost. If affordability is the clear priority of the citizens of Delhi then a compromise must be made on the shift to gas…”

 

NEWS BRIEF

[NATIONAL: OIL & GAS]

October 28, 2014. India and Vietnam will sign an agreement for oil exploration in South China Sea with the visiting Vietnamese Prime Minister Nguyen Tan Dung declaring that Indian ships would be allowed into the area despite Chinese protestations. India has decided to accept 2-3 Vietnamese oil blocks in the South China Sea based on the techno-commercial feasibility report by the ONGC Videsh Ltd (OVL) and an agreement in this regard would be inked after the talks. In addition to the current three oil blocks, Vietnam had offered India five oil blocks and the OVL was looking at them in terms of their feasibility. Recently, Vietnam had renewed India's lease of two oil blocks in the South China Sea for another year. China and Vietnam have an acrimonious relationship due to their standoff over the South China Sea, a major source of hydrocarbons. China has been objecting to India's oil exploration projects in the disputed waters. Meanwhile, ahead of his talks with Modi, the Vietnamese Prime Minister pitched for India's "active support" to peacefully resolve all disputes and sought its greater linkages across the region. (economictimes.indiatimes.com)

October 28, 2014. After scripting a turnaround at its mainstay western offshore fields, Oil and Natural Gas Corp (ONGC) plans to ramp up oil output by 23 per cent to 28-29 million tonnes by 2019/20 as it brings newer fields into production. ONGC, which has been under scrutiny of the Petroleum Ministry for falling output in past years, had in 2013-14 produced 22.24 million tonnes of crude oil from its fields. This year it is targeting 23.51 million tonnes. Next fiscal, the production is projected to rise to 24 million tonnes and will reach 28-29 million tonnes by 2019-20. Natural gas production, which was 23.2 billion cubic metres (63.5 million cubic metres per day) in 2013-14, will touch 24 billion cubic metres (bcm) this year and 90-100 bcm in 2019-20. While Mumbai High field and Neelam-Heera fields have been almost flat at 206,000 bpd, Bassein Satellite fields have seen output rise from 30,700 bpd to about 53,000 bpd. ONGC will use a floating production system to ramp up output from the Cluster-7 fields by 50 per cent to 12,000 bpd. Also, another 10,000 bpd is expected from D1 while improved oil recovery and enhanced oil recovery drilling at Mumbai High and Heera fields will help arrest the natural decline that has set in these ageing fields. WO-16 and B-127 fields also will add 15,000 bpd of production. KG-DWN-98/2 (KG-D5) is predominantly a gas rich block and sits next to Reliance Industries' KG-D6 in Bay of Bengal. On gas, ONGC's C-26 cluster project off the Mumbai coast will begin giving 203 million standard cubic meters a day (mmscmd) from 2015-16 while Daman/C-Series fields in western offshore will start producing 2 mmscmd in 2016-17 and go up to 8.5 mmscmd by 2019. A substantial 20 mmscmd of gas will come from KG-D6 by 2018-19. Discoveries in Kutch fields will give 2 mmscmd by 2021-22. (economictimes.indiatimes.com)

October 27, 2014. Oil and Natural Gas Corp (ONGC) wants to take advantage of falling oil prices to more than double its overseas output to the equivalent of 400,000 barrels per day of oil by 2018. Global oil prices hit a four-year low at below $83 a barrel, hitting valuations of oil explorers. India is the world's fourth-biggest oil consumer, importing four-fifths of its needs as its own output shrinks. The government, which is preparing to float a $3 billion stake in ONGC, wants state firms to secure energy assets abroad to reduce the exposure of the economy to supply risks. (economictimes.indiatimes.com)

October 26, 2014. A significant oil discovery has been made near Ahmedabad in the Cambay basin that by some estimates may be the biggest onland find this year. Jay Polychem (India) Ltd, a unit of city-based Jay Madhok Group, made the oil discovery in the very first well it drilled on the block CB-ONN-2009/8 in Gujarat's Cambay basin. The firm has drilled two wells and discovered huge oil pay zones in both the wells. The discovery in the well Kharenti-A has been notified to the upstream regulator DGH and the government. The discovery by Jay Polychem is huge and similar to oil being produced by ONGC in the neighbouring Padra field as also by GSPC in Ingoli field. The block is operated by Jay Polychem (India) Ltd with 87 per cent interest, while Jay Polychem Pte Ltd holds the rest. Cambay basin, which extends from Surat in the south to Sanchor in the north, covers an area of about 59,000 sq km with a hydrocarbon resource of more than 15 billion barrels. Few dozen discoveries, mostly oil, have been reported in the basin. ONGC produces oil from most of them and recently Oilex of Australia too has found tight oil. (economictimes.indiatimes.com)

October 28, 2014. Top private oil refiners are taking precautions but do not anticipate any impact on their operations from cyclone Nilofar, which is expected to hit the country's west coast. Nilofar, classified as a 'very severe cyclonic storm', is expected to weaken to a 'cyclonic storm' when it makes landfall on the northern Gujarat coast, according to the Indian Meteorological Department. Reliance Industries Ltd (RIL) operates the world's biggest refining complex in Gujarat, where its two adjacent plants can process about 1.4 million barrels per day (bpd) of oil. But that complex and Essar Oil Ltd's 400,000-barrel-per-day Vadinar refinery do not lie directly in the expected path of the cyclone, the companies said. Essar Oil said that it was taking "all due precautions" and did not expect any production outage. (economictimes.indiatimes.com)

October 28, 2014. The oil ministry has abolished the decades-old system in which domestic suppliers would win contracts even if their price bid was up to 10% higher than a competing foreign offer. The change in the policy, which was implemented to help domestic supplier grow, will have a direct bearing on planned expenditure of ` 421,229 crore on various projects of oil and gas firms between 2012 and 2017. The government thinks that the policy of "price preference" has served its purpose as domestic suppliers have had adequate exposure to international competition, and they should stand on their own feet. This move is in continuation of recent policy reforms announced in oil and gas sector to global private investments that included deregulation of diesel prices and raising the price of domestic gas. The policy of price preference was formulated in May 1984 and continued in one form or other despite stiff resistance by state oil companies. Companies, particularly ONGC, GAIL India and Oil India were against allowing price preference to domestic vendors to ensure level playing fields. (economictimes.indiatimes.com)

October 27, 2014. City gas distribution companies fear a hit of ` 500 crore in their profit margins in the remaining part of this fiscal as they find it difficult to pass on all the additional cost to their customers. The economics of city gas sale has changed after the government's decision to raise natural gas to $5.61 per unit from $4.2. They said that the companies need to maintain a gap between the price of compressed natural gas (CNG) and diesel to be competitive in the market. IGL, the sole supplier of compressed natural gas and piped natural gas in the national capital, will alone take a hit of ` 1 crore per day. Most city gas operators in the country are joint ventures of government-owned gas transporter GAIL. Even the most mature city gas market of the country, Gujarat, is mainly operated by the state government-owned GSPC. MGL and IGL distribute gas in Mumbai and Delhi and are joint ventures between GAIL and British Gas and, GAIL and BPCL, respectively. (economictimes.indiatimes.com)

October 27, 2014. Bharat Petroleum Corporation Ltd (BPCL) has automated some of its pumping stations while it has made applications for LPG only through online, the company said. According to the company, BPCL has installed automation systems at 888 retail outlets and the total network of automated retail outlets as of last financial year was 4,408. On the supply of Liquefied Petroleum Gas cylinders to households, the company said the process was mandated to be done only in the online platform so as to bring in more transparency. (economictimes.indiatimes.com)

October 27, 2014. GAIL India Ltd, the nation's largest natural gas distributor, is looking for a strategic partner for its ` 3,108 crore floating LNG import terminal at Paradip in Odisha. GAIL has floated expression of interest (EoI) to induct a strategic partner in 4 million tonnes a year floating liquefied natural gas (LNG) terminal planned off the Paradip coast. The company is seeking a LNG supplier or a major consumer of gas as strategic partner. Site selection for the project has been completed while market survey has just been commissioned. The Floating Storage Regasification Unit (FSRU) would have an initial capacity of four million tonne per annum (mtpa) in first phase, reaching a peak capacity of 4.8 mtpa, with a storage capacity of 170,000 cubic metres. The first phase of the project is to become operational by 2017. GAIL had signed a MoU with the Paradip Port Trust for setting up of the LNG import terminal. While the port would invest ` 650 crore on breakwater and dredging, GAIL would invest ` 2,458 crore. In the second phase, four mtpa capacity will be added (peak capacity- 4.8 mtpa), raising the terminal's total capacity to 8-10 mtpa. Paradip will be the fourth LNG terminal on the east coast. GAIL is already in advanced stage of planning for setting up a floating LNG receipt facility at Kakinada in Andhra Pradesh. Petronet LNG Ltd, a firm in which GAIL has 12.5 per cent stake, is setting up another 5 million tonnes a year facility at Gangavaram in Andhra Pradesh while Indian Oil Corp (IOC) is setting up a similar facility at Ennore in Tamil Nadu. India currently has four LNG terminals - Dahej and Hariza in Gujarat, Dabhol in Maharashtra and Kochi in Kerala. Of these, Kochi and Dabhol are only partially operational on account of absence of pipeline for taking gas to consumers and operational issues respectively. Gas in its liquid form (LNG) will be imported at a floating jetty (FSRU) off the Paradip coast and transported onland via pipeline. The fuel after being turned back into its gaseous state will be transported to consumers using GAIL's proposed Jagdishpur-Haldia and Surat-Paradip pipelines. (economictimes.indiatimes.com)

October 28, 2014. British Petroleum (BP) plc has written down the value of its shareholding in the eastern offshore KG-D6 block by $ 770 million dollar following a lower-than-expected gas price hike which it saw as a transition to market-based pricing. BP announced a $ 770 million write down in value of KG-D6 although it said the new gas pricing formula, as a transition to market-based pricing, was a step in the right direction. BP in 2011 bought 30 per cent interest in Reliance Industries' eastern offshore KG-D6 as well as 20 other oil and gas exploration blocks for $ 7.2 billion. Bulk of this was for the producing block of KG-D6 and gas discovery area of NEC-25. The government had approved a new formula for pricing of all domestic gas. The rate, when the formula comes into effect from November 1, would be $ 5.61 per million British thermal unit as against current $ 4.2. The price is lower than $ 8.4 approved by the previous UPA government and general expectation of a rate around $ 6.5 after some deductions from that price. Both BP and Reliance Industries Ltd (RIL) have been advocating market-linked gas pricing and had initiated an arbitration against the government for not revising rates from the due date of April 1, 2014. The $ 4.2 per million British thermal units (mmBtu) rate, fixed in 2007, was for the first five years of production from KG-D6 fields. KG-d6 fields started gas output from April 1, 2009. BP said it expects further clarity on the new pricing policy and the premium that the government has promised to pay for future deep-sea and complex gas discoveries. (economictimes.indiatimes.com)

October 24, 2014. The government has no plans to curtail supply of subsidised cooking gas (LPG) from current 12 cylinders per household in a year even as it looks to give cash subsidy to consumers across the country by June. In August, the Narendra Modi-led government gave consumers the freedom to avail their quota of 12 cylinders of 14.2-kg weight at subsidised rate during anytime of the year against the previous restriction of one per month. Oil Minister Dharmendra Pradhan said the Cabinet had modified the Direct Benefit Transfer Scheme (DBTL) for LPG to provide for cash subsidy equivalent to the difference between the current rate and the market price, in bank accounts of each consumer. But unlike the scheme launched during the previous UPA government, having an Aadhaar card for getting the cash subsidy is not mandatory, he said. Currently, the modified DBTL is being launched in 54 districts and from January 1 it will be rolled out in all the remaining districts of the country, he said. LPG consumers who have opened accounts under the Jan Dhan Yojana too would benefit from the revised scheme. Over 6 crore such accounts have been opened so far and 4 crore more are being targetted by the year end to provide for at least one bank account per household. Currently, bank accounts of LPG consumers are being seeded with their cooking gas numbers. Once that is done, cash subsidy will be transfered into the bank accounts so that the consumers can buy the LPG refills at market rates. Presently, 12 cylinders are available to consumers at a subsidised rate of ` 414 each in Delhi. Any requirement beyond this will have to be purchased at market price of ` 880 per 14.2-kg cylinder. Pradhan said the Modi government stands for protecting the interests of poor and at the same time it will ease conditions for doing business in the country.  The previous UPA government had linked DBT for LPG to the Aadhaar platform. But there were some legal issues, including some court orders, that prevented implementation of the scheme. So, the new government has decided that in addition to the Aadhaar platform, all those who have a bank account will also get the LPG subsidy in their accounts directly. He said the scheme will be implemented in a mission mode. There will be no consumer who will be denied LPG for want of Aadhaar number. Pradhan said the government is working on fixing the amount of subsidy to be given under DBTL. (economictimes.indiatimes.com)

October 24, 2014. The Assam government, in exercise of powers conferred by Section 3 of the Essential Services Maintenance (Assam) Act, 1980, prohibited strikes in the state by all those involved in the services of oil fields, gas sector or refinery. The government, through a notification, prohibited strike by officers, workmen, contract labourers, tanker drivers and 'khalasis' (helpers) involved in the services of oil fields, gas sector or refinery of any establishment or undertaking dealing with the production, supply or distribution of petroleum and petroleum products, including natural gas. The government said the order will remain in force for a period of six months from the date of issue of this notification until further orders. (economictimes.indiatimes.com)

October 23, 2014. How to work out a fair price of gas produced from domestic fields in a country such as India, which does not have a free market for gas in the real sense? That was the conundrum facing the government when it set about reviewing the formula that had been approved by the UPA government. That formula, suggested by a panel under C Rangarajan, would have doubled the price to $8.5 per unit from $4.2 at present. This would have seen a spike in cost of CNG, power and of manufacture of urea. But regional markets came with their own set of problems. Daily rates were available for the US and the UK. But they were monthly for Canada and Russia. Though Russia is not really a gas-on-gas market, it was included because it has very high consumption. Then there was the question of determining the average gas price in these markets. This was done on the basis of prices for 365 days where it was available daily and 12 months where it was monthly. The petroleum secretary Saurabh Chandra said even this was not the real price of gas since it was at hubs, which meant there was some transportation and processing costs involved. This was addressed by "deducting 0.50(cents)". Then the price of liquid gas (LNG) imports used in the Rangarajan formula's benchmarks was removed to prevent conflict of interest in case a gas producer is also an importer of liquid gas. This alone, Chandra said, knocked off $2 per unit from the price estimated according to the Rangarajan formula. Next to go was liquid gas imports by Japan, which reduced the price further by 34 cents. All the changes together helped lower the final price by $3.46 per unit. (economictimes.indiatimes.com)

October 22, 2014. The government has granted operational flexibility to help firms like Cairn India and ONGC start producing oil and gas from several discoveries that are mired in contractual disputes. Originally proposed by the then Oil Minister M Veerappa Moily a year back, the Cabinet approved a policy framework for relaxation, extensions and clarifications in timelines for development and production of oil and gas under the Production Sharing Contracts (PSC). Operational flexibility has been provided in enforcing contracts by way of relaxing some of timelines prescribed for discoveries so that exploration and production (E&P) activities do not suffer on account of excessive rigidity in decision making. The PSC between the government and the explorer has rigid timelines for each stage of exploration and actions have been initiated against firms even if deadlines are missed by a day. Chandra said 3-6 months extension in the current 18-60 month timeframe for submission of declaration of commerciality (DoC) of discoveries, a prerequisite before investment plans can be finalised, has been approved. Also, the deadline for submission of investment plan for the discoveries too would be extended by up to six months. The PSC provides for time period for submission of field development plan (FDP) for hydrocarbon discovery after DOC. There is no provision in the PSC for extension of this time period and non-acceptance of FDP due to late submission results in non-monetisation of discoveries. Also, upstream regulator DGH has been given flexibility to accept discoveries for which operators had failed to provide prior notification to the government. The Secretary said the Cabinet has also provided for reduction in committed work programme in case a block or its part is not available for exploration activities consequent to denial of permission by government agencies. (economictimes.indiatimes.com)

October 22, 2014. India's oil consumption rose nearly three per cent in September, while diesel sales fell for the second time this financial year. Consumption of oil products in the month at 12.3 million tonnes was 2.9 per cent higher than 11.95 million tonnes a year ago, petroleum ministry data said. Total sale of diesel, the most consumed fuel in the country, fell to 4.89 million tonnes during the month from 4.90 million tonnes in September 2013. In April, too, sales had dipped to 5.92 million tonnes as compared to with 6.15 million tonnes in the corresponding month last year. In 2013-14, diesel demand dipped for the first time in more than a decade as monthly price raises and increased power generation clipped consumption. Diesel, India's most consumed fuel, accounting for 43 per cent of the total petroleum product demand, has seen sales growth of six to eight per cent annually since 2003-04. (www.business-standard.com)

 [NATIONAL: POWER]

October 28, 2014. Work on restarting the first atomic power unit's turbine at Kudankulam has commenced by using the components taken from the second unit's turbine. India's atomic power plant operator Nuclear Power Corporation of India Ltd (NPCIL) is setting up two 1,000 MW Russian reactors at Kudankulam in Tirunelveli district. The total outlay for the project is over ` 17,000 crore. On Sep 26, the first unit's turbine was found to have developed some problem and its running was stopped. The first unit is expected to be back in service in six-to-eight weeks' time. The KNPP is India's first pressurised water reactor belonging to the light water reactor category. The first unit attained criticality July 2013, which is the beginning of the fission process. The unit has started power generation and has been connected to the southern grid. The unit was expected to start commercial generation soon when the turbine problem cropped up. (economictimes.indiatimes.com)

October 28, 2014. Bharat Heavy Electricals Ltd (BHEL) has received a contract worth ` 422 crore related to 444 MW Vishnugad Pipalkoti hydel power project in Uttarakhand. Located in Chamoli district, Vishnugad Pipalkoti project is on Alaknanda river. It comprises four hydro generating sets of 111 MW capacity each. The order, valued at ` 422 crore, is for setting up of hydro generating sets and associated electro-mechanical works for the Vishnugad Pipalkoti project, BHEL said. The order has been awarded by THDCIL (formerly known as Tehri Hydro Development Corp Ltd). This is the second major order bagged by BHEL for a hydro power project in Uttarakhand this year. Earlier, an order for the 2x60 MW Vyasi hydel project was received from Uttarakhand Jal Vidyut Nigam Limited (UJVNL) in March. BHEL is executing hydro power projects having capacity of about 9,500 MW. (economictimes.indiatimes.com)

October 27, 2014. London-listed Vedanta Resources said that its stalled power plant in Chhattisgarh's Korba district had hampered other projects of the company in the state. The construction of power plant was completed two years ago and since then it had been lying idle. The stalled power plant had cast shadow on company's expansion and new projects in Chhattisgarh. The project was National property and should be allowed to operate without further delay. The Vedanta Resources said the government should also ensure better linkage of coal for the industry to avoid use of imported coal. The companies had been passing through worst coal crises and hence the government should take immediate action. Reacting to the delay in getting its project approved in Chhattisgarh, Vedanta Resources said it would affect the industrial growth. (www.business-standard.com)

October 26, 2014. Navaratna company Neyveli Lignite Corporation (NLC) is expected to improve its operations gradually over the next few days after a settlement was reached between the Joint Action Council of the 10 labour unions and the NLC management. NLC's power production has dropped to around 1300 MW, as against a total generating capacity of 2740 MW. The contract labour had been on a strike for the last 52 days, which came to an end on October 24. According to union, NLC has agreed to increase the wages of unskilled labourers, adding almost ` 110 a day from ` 370 per day, and higher salaries to semi-skilled and highly skilled individuals. (www.business-standard.com)

October 28, 2014. Andhra Pradesh Transmission Corporation (APTransco) is holding a pre-application meeting with the thermal power developers for the procurement of 2,400 MW of power on a long term basis. The process involves buying of power from thermal power stations through public private partnership on design build finance operate and own basis, according to the power utility. The plants need to have Coal India linkage and has to be supplemented by imported coal and should have commercial operation date(COD) before December, 2016, it said. (www.business-standard.com)

October 28, 2014. The power tariff hike scheduled from next month may be shelved as Delhi Electricity Regulatory Commission (DERC) is first going to seek a clarification from the Election Commission (EC) due to the model code of conduct. A new power purchase adjustment charges (PPAC) surcharge is scheduled to be announced. If the EC gives a green signal, the surcharge expected to be announced will be implemented from November 1. Sources say a surcharge of 5-7 per cent could be likely. Discoms BSES Yamuna, BSES Rajdhani and Tata Power Delhi submitted their petition to the regulator for PPAC. BYPL has sought an increase of 17.1 per cent, BSES Rajdhani 7.26 per cent and Tata Power for 9 per cent due to fuel costs. The PPAC surcharge is for costs incurred by discoms between July-September 2014 and will be applicable in consumer bills from November 1 to January 31, 2015. The discoms, particularly BRPL and BYPL, have been demanding significant hike in tariff citing rise in power purchase cost. Official figures show around 80-90 per cent of total revenue of discoms goes into purchasing power from central and state government entities through long-term power purchase agreements at rates determined by the central and state regulators. DERC had introduced PPAC in 2012 to help discoms recover additional cost due to increase in coal and gas prices. (economictimes.indiatimes.com)

October 27, 2014. Empee Sugars and Chemicals Ltd, the sugar business of Chennai-based Empee Group, has decided to disinvest its power business under Empee Power Company Ltd. The company also said that while a notice was sent by Andhra Bank, Chennai, under the SARFAESI act, it is ineffectual since the Bank does not constitute a valid majority under the consortium of bankers. (www.business-standard.com)

October 24, 2014. State-run power trader Gridco Ltd said, it is at a comfortable position to earn ` 700 crore in the current fiscal by trading power on energy exchanges and selling to other states as better post monsoon rainfall has increased chances of higher hydro power production. The state has generated around 750 MW hydro power in the current month out of total 3200 MW power available from different thermal power and renewable energy generators, compared with less than 500 MW hydro power generated a month ago. Gridco usually buys around 15 per cent of its total power requirement of 3000 MW from hydro power generators. Due to ample hydro power availability, Gridco wants to keep cheaper power for the state and sell costlier thermal power outside to earn profit. However, due to poor demand and lack of transmission facility for supply of power, the trading has remained rather dull for some time. (www.business-standard.com)

October 24, 2014. The newly-born Telangana state has sought 2000 MW power from Chhattisgarh to overcome the severe crises that the state had been reeling with. Earlier, Telangana state had demanded 1000 MW power from the Chhattisgarh that had been power surplus during off peak time. The Chhattisgarh government had given its consent for the same and the senior officials of both the states had held meeting to give final shape to the power purchase deal. The state government has sent the proposal to the state-run Chhattisgarh power distribution company to examine it and send the opinion. The state government has been deliberating to provide all possible assistance to neighbouring Telangana state to deal with the power crises that has deepened forcing the authorities to extend the night-time power cuts in the rural areas to meet the deficit. The power deficit in the state is touching 1,500 MW per day while unscheduled cuts are back in parts of city, in addition to the four hours of scheduled cuts. The projects on completion will generate 4000 MW power. Under the agreement with the private power producer, Chhattisgarh will get its share from the production that it could sell. The state government would ink an agreement with the Telangana government for power deal once the power company examine the proposal and send note that it was in a position to provide power. (www.business-standard.com)

October 22, 2014. Navayuga Power, a unit of CVR Group that operates the largest private port on India's east coast, is in talks with several global power producers and equipment makers to sell a significant stake in its power assets. Navayuga is in the process of setting up a 1,980 MW coal-fired supercritical power project at Krishnapatnam, near the CVR Group's all weather, deep water port in Andhra Pradesh's Nellore district. The proposed project has already achieved key milestones such as land acquisition and public hearing for environmental clearances, besides entering into a power purchase agreement of substantial capacity with the Uttar Pradesh power utility.

Navayuga Power said that the conglomerate was looking at strategic partners but refused to divulge the names of potential partners or the exact stake it was looking to sell. The power project coming up near the Krishnapatnam port will have 1,320 MW of capacity in the first phase and add 660 MW in the second phase. It involves a total investment of ` 9,400 crore. Having tied-up with the UP power utility for 85 per cent of capacity, the company plans to sell the balance in the open market. Sasidhar said the company hopes to seal the deal for equity sale over the next 3-4 months and execute the first phase of project by 2018-19. (economictimes.indiatimes.com)

October 22, 2014. Power tariffs are set to rise in Delhi after the festive season as the three distribution firms have sought a revision citing an increase in their electricity procurement costs. To recover their higher power purchase costs, BSES Yamuna, BSES Rajdhani and Tata Power Delhi Distribution have approached the regulatory commission, which will consider the matter next month. BSES Yamuma, which distributes power to 14 lakh consumers in central and east Delhi, has sought a 17 per cent increase in tariffs as its 'power purchase adjustment charges'. Tata Power's distribution arm in New Delhi has sought 9 per cent increase for its power purchase costs while BSES Rajdhani sought 7.26 per cent rise.

Tata Power Delhi and BSES Rajdhani supply electricity to 14 lakh and 20 lakh consumers respectively. These distribution firms have been claiming that their power procurement costs are high due to their dependence on ageing and natural gas-fired power plants of NTPC and other state-owned firms. 'Power purchase adjustment charges' account for 85 per cent of the electricity bills that consumers receive in Delhi.

Delhi's distribution firms procure 80-85 per cent of their electricity from central government controlled generating companies that are governed by the Central Electricity Regulatory Commission. However, Delhi Electricity Regulatory Commission has not enabled distribution firms to recover their entire cost burden, he said, adding that the tariff hike sought by his distribution firm is as per the provisions and regulations of the Electricity Act. (economictimes.indiatimes.com)

October 28, 2014. The NDA government has finally taken the first step towards formulating a policy for hydropower projects on the Ganga — Alakananda and Bhagirathi rivers —in Uttarakhand. Water resources minister Uma Bharti informed the National Ganga River Basin Authority that a committee comprising officials of the environment and water resources ministry had been asked to review the reports of three committees dealing with hydropower projects on the two key tributaries of the Ganga in Uttarakhand.

The government had been recently pulled up by the Supreme Court for delaying a decision on the fate of the hydropower projects in the state. The expert group said that hydropower projects had played significant role in the Uttarakhand disaster, and recommended that at least 23 hydropower projects be dropped, and stressed on the urgent need to improve the environment governance of hydropower projects. Successive Uttarakhand governments have been opposed any move to restrict development of hydropower projects, arguing that it would adversely impact the state's economy. (economictimes.indiatimes.com)

October 28, 2014. Tata Power Company Ltd plans to complete work on a $1.8 billion thermal power station in Vietnam three years early, government said, as the two countries strive to showcase the economic ties between them. Vietnamese Prime Minister Nguyen Tan Dung, visiting India just a month after India's president travelled to his country, said he had met Tata group officials and that the 1,320 MW project would be completed by 2019 instead of 2022. Tata Power won the contract last year to develop the coal-fired Long Phu 2 Power Project in the southern Soc Trang province of Vietnam on a build, own and transfer basis. Indian officials also said the project had been brought forward. (economictimes.indiatimes.com)

October 27, 2014. After clarity on natural gas prices and an ordinance on coal, the government is set to decide on pooling of imported and domestic fuel prices to help stressed power stations with a combined capacity of 91,000 MW generate electricity that's badly needed as India tries to revive its economy. The Cabinet Committee on Economic Affairs is likely to decide on pooling gas and coal prices at its meeting. The proposals include a bailout package for power plants idling due to scarcity of domestic gas and a plan to meet the needs of coal-based units till 2017. Of the 24,148 MW gas-based projects set up at an investment of about ` 1,50,000 crore, those that can generate about 16,000 MW aren't running while the rest are operating at sub-optimal levels. (economictimes.indiatimes.com)

October 27, 2014. Industry body Assocham suggested the government give preference in mines auction to captive block allocatees whose end use plants were operational at the time Supreme Court quashed allocations of mines. The Supreme Court had quashed allocation of 214 out of 218 coal blocks which were alloted to various companies since 1993. The auctions should be opened for others only after coal for these projects is secured, it said. In a note submitted to the Prime Minister Office (PMO), the Chamber stated that coal blocks already allotted for end use steel projects should be auctioned only for steel projects and similarly coal block allotted for end use power projects be auctioned only for power projects, it said. (www.business-standard.com)

October 27, 2014. Private distribution companies are concerned about some of the proposed amendments to Electricity Act, 2003, such as empowering regulators in states to revoke the licence in case the distributor is unable to meet the prescribed standards, saying the changes may hurt the viability of their investments in infrastructure. According to the proposed amendments, electricity regulators will have a greater say in determination of time period for the distribution licences and selling the assets of the distributors after the term of licence is over or revoked. However, the private companies say they will not be able to make the desired investments if the tenure of the distribution licence is not specified. India has seven private licensees — two each in Delhi and Mumbai and one each in Kolkata, Surat and Ahmedabad. Tata Power, Torrent Power, Reliance Infra and RP-Sanjiv Goenka Group have improved power supply and reduced commercial losses in their respective distribution areas. (economictimes.indiatimes.com)

October 26, 2014. Country's peak power deficit in the six months ended September 2014 stood at 4.7 per cent, according to official figures. As against a peak power demand of 1,48,166 MW during April-September as much as 1,41,160 MW was met, leaving a deficit of 7,006 MW, as per the data by the Central Electricity Authority (CEA). The peak power deficit - shortfall in electricity supply when demand is at the maximum - in the same period last year (April-September 2013) stood at 4.2 per cent. North-eastern region was the worst sufferer with 11.3 per cent deficit followed by Southern region with 8.7 per cent shortage and Northern region with 8.3 per cent shortfall, during the period (April-September 2014).

The peak power requirement of the north-eastern region comprising Assam, Meghalaya, Manipur, Mizoram, Tripura, Arunachal Pradesh and Nagaland, was at 2,380 MW of which 2,112 MW was met. During the same period of last year, the region had a shortfall of 8.2 per cent, the data said. South Indian states of Andhra Pradesh, Telangana, Tamil Nadu, Kerala and Karnataka required electricity to the tune of 39,094 MW of which the supply was at 35,698 MW. Last year, the region's deficit was 12.5 per cent. North India -- Delhi, Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand -- required 51,977 MW of power during the six-month period, while it received 47,642 MW. The region's last year deficit was at 6.9 per cent. This year, country's eastern region including states of Bihar, West Bengal, Jharkhand and Odisha stood at the bottom of the list of peak power deficit regions. They reported a shortfall of 286 MW or 1.7 per cent. As against the demand of 16,628 MW, the supply stood at 16,342 MW, as per the data. CEA, the techno-economic clearance body under the Ministry of Power, is also engaged in setting generation targets and other milestones for the power utilities. (economictimes.indiatimes.com)

October 26, 2014. Amid a raging row between Andhra Pradesh and Telangana on sharing of electricity, the AP government petitioned common Governor ESL Narasimhan on the issue. AP Irrigation Minister D Umamaheswara Rao said he has explained "all the facts" to the Governor who will go through the relevant material concerning the issue. The current dispute between Andhra Pradesh and Telangana is about power generation at Srisailam (project). Andhra Pradesh wants Telangana to stop power generation at the Srisailam project as continued power generation would lead to water scarcity in AP in future. However, Telangana has refused to stop power generation in view of the prevailing acute power shortage, especially to agriculture. (www.business-standard.com)

 [INTERNATIONAL: OIL & GAS]

October 28, 2014. Royal Dutch Shell Plc is asking the Obama administration for five more years to explore for oil off Alaska’s coast, saying setbacks and legal delays may push the start of drilling past the 2017 expiration of some leases. Shell’s plans to produce oil in the Arctic were set back in late 2012 by mishaps involving a drilling rig and spill containment system, and the company has been sued by environmental groups seeking to block the Arctic exploration. The Hague-based company halted operations in 2012 to repair equipment and hasn’t resumed its maritime operations off Alaska’s northern coast. Leases issued by the government for the right to drill for oil in the Arctic expire in 10 years unless the holder can show significant progress toward development. The Interior Department temporarily stopped the clock on some of Shell’s leases due to court decisions and other delays. Shell said it needed certainty from the U.S. before investing beyond the $6 billion it’s already spent. The U.S. is revising its drilling safety regulations for the Arctic. (www.bloomberg.com)

October 28, 2014. Italy's Eni reported that it has made an important gas finding in the Merakes exploration prospect, in the East Sepinggan Block, where Eni is operator with a 100 percent stake. The Block is located in the offshore East Kalimantan (Borneo), Indonesia 105.6 miles south of the Bontang LNG Plant and 21.7 miles from the offshore Jangkrik field, also operated by Eni. Merakes is the first exploration well drilled by Eni in the East Sepinggan Block, which was assigned to the Company in 2012 following an International Bid Round. Merakes finding potential has been preliminary estimated to be 1.3 trillion cubic feet (Tcf) of gas in place. The finding has further upside that will be assessed with a delineation campaign. (www.rigzone.com)

October 28, 2014. Chevron Corp.'s subsidiary in Bangladesh commenced natural gas production from the onshore Bibiyana Expansion Project in the northeastern part of the country, the company reported. The expansion project will boost Chevron-operated natural gas production capacity in Bangladesh by more than 300 million cubic feet per day to 1.4 billion cubic feet per day, while the company-operated natural gas liquids production capacity will rise by 4,000 barrels per day to 9,000 barrels per day. Facilities for the Bibiyan Expansion Project included an expansion of the existing gas plant to process increased natural gas volumes from the Bibiyana field, additional development wells and an enhanced gas liquids recovery unit. In July 2012, Chevron revealed plans to spend around $500 million to raise production from Bangladesh's largest gas field. The firm's Bangladesh subsidiary has a 99 percent working interest in the Bibiyana development. (www.rigzone.com)

October 28, 2014. U.S. energy companies are shrugging off a 24 percent plunge in oil prices, confident they can adapt and still make money. Amid predictions that the biggest drop in crude prices since the global financial crisis six years ago will choke off cash flow and slow drilling, industry leaders are reassuring investors they still have the means to return ample profits. Improved technology is bringing down costs and most shale producers operate in multiple basins, allowing them to shift work to the most profitable sites.

The industry is used to price swings, Halliburton Co. Chairman and Chief Executive Officer David Lesar said. When prices climb above $100 a barrel, oil companies are “printing money like crazy,” he said. When prices fall below $80, the “doomsdayers start to come out. Oil futures traded in New York lost one-quarter of their value since June 20. The four-month plunge is the longest streak of consecutive monthly declines since July 2008-January 2009. The futures fell one penny to $81, after earlier touching $79.44. (www.bloomberg.com)

October 27, 2014. China National Offshore Oil Corp. Ltd. (CNOOC) announced that it has made a mid-to-large new oil and gas discovery at Jinzhou 23-2 in China's Bohai Bay. The Jinzhou 23-2 structure is located to the north of Liaodong Uplift in Bohai Bay with an average water depth of about 32.8 feet. The Jinzhou 23-2-3 well, drilled and completed at a depth of 3,599 feet, encountered oil and gas pay zones with a total thickness of 224.4 feet. Test at the well yielded around 260 barrels per day of oil.

The latest discovery comes just over a month after CNOOC announced it found gas at Lingshui 17-2 well in the northern part of the South China Sea, 94 miles south of China's southern Hainan Island, with the well drilled by Hai Yang Shi You 981. Driven by rising domestic energy consumption, China has been active in tapping its petroleum resources. In this regard, CNOOC issued an invitation for foreign companies to bid for 33 exploration blocks located offshore China, with submissions to be made by April 30, 2015. (www.rigzone.com)

October 24, 2014. BP Plc’s bid for a new trial over causes of the 2010 Gulf of Mexico oil spill should be rejected because the judge didn’t rely on excluded testimony, Halliburton Co. said. BP’s own lawyers are responsible for trial testimony that the London-based oil company complains led to an unfair gross-negligence finding against it, according to Halliburton, the cementing subcontractor on the blown-out well. U.S. District Judge Carl Barbier, who oversees consolidated spill-damages litigation against BP and its contractors, ruled that BP acted with gross negligence in drilling the Macondo well off the Louisiana coast.

The well gushed more than 4 million barrels of crude into the gulf, the worst offshore spill in U.S. history. The ruling exposes BP to potentially more than $18 billion in U.S. pollution fines. That sum would be on top of the more than $28 billion BP has already paid for spill-related response, cleanup costs and damages. (www.bloomberg.com)

October 23, 2014. Norway’s push to exploit Arctic waters for oil, already denounced by environmentalists, is under threat from the slump in crude prices. The Arctic Barents Sea off northern Norway is reckoned to contain 40 percent of the country’s undiscovered resources and seen as key to extending oil output as aging North Sea fields decline. But operating there is expensive, and even before the recent plunge in prices, state-controlled Statoil ASA’s key project in the area had been delayed twice. Arctic oil and gas projects from Greenland to Russia have faced hurdles for years, including rising costs, lawsuits, technical challenges and political opposition.

Royal Dutch Shell Plc halted drilling offshore Alaska twice in two years after investing $5 billion, and the development of OAO Gazprom’s Shtokman gas field has been shelved. Norway, where oil workers are the best paid in the world, is already one of the most expensive places to do business.

And while the Barents Sea is more hospitable than other parts of the Arctic thanks to warming currents of the Atlantic Gulf Stream, oil deposits are more expensive to develop than in the North Sea due to a lack of pipelines, platforms and terminals. No crude finds have yet been brought to production here, and Eni SpA’s Goliat field is headed for a 50 percent cost overrun when it starts producing in 2015. (www.bloomberg.com)

 

October 23, 2014. Cnooc Ltd. is sizing up the potential for oil exploration in Norway’s Arctic as China’s biggest offshore producer ignores a freeze in the two countries’ relations since the 2010 Nobel Peace Prize. The Chinese company and its Canadian subsidiary, Nexen Inc., are looking at buying seismic data covering an area of the Barents Sea where licenses will be awarded in 2016, according to the Norwegian Petroleum Directorate. China reacted with anger after the Oslo-based Nobel Committee awarded the Peace Prize to Chinese dissident Liu Xiaobo in 2010. Yet the deterioration in ties has done little to stem business interests as the world’s second-biggest economy seeks access to energy sources needed to fuel growth. Part of that plan involves establishing a foothold in the Arctic, which could hold more than 20 percent of the world’s undiscovered oil and gas resources. The company’s bid for Arctic exploration follows deals between China National Petroleum Corp. and Russian companies for oil imports and exploration. Norway’s government, which took office last year, has made improved relations with China a top foreign-policy goal. The Conservative-led administration has gone to great lengths to avoid angering China further, including snubbing Tibetan leader Dalai Lama -- another Nobel Peace prize laureate -- during his visit to Norway in May. Cnooc already has oil and gas assets in north and south America, Africa and Australia. It bought Nexen for $15.1 billion in 2013 in China’s biggest overseas acquisition, expanding into the U.K. North Sea. Nexen exited Norway before it was acquired. Statoil ASA, 67 percent owned by the Norwegian state, has an office in Beijing and has had cooperation agreements with CNPC and Cnooc since before bilateral ties worsened in 2010. Cnooc also became a partner of Norway’s fully state-owned company Petoro AS in an exploration license off Iceland’s shores last year. While its subsidiary China Oilfield Services Ltd. operates rigs off Norway, a successful bid in the 23^rd licensing round would make it the first Chinese company to obtain a production license in the Nordic country. (www.bloomberg.com)

October 22, 2014. The successor to Christophe de Margerie, the outspoken Total SA boss who died in a Moscow plane crash, will have to contend with a slump in the company’s output and the failure of its exploration strategy. Patrick Pouyanne, currently the company’s refining chief and long-touted as a potential successor, will be nominated as chief executive officer at a board meeting in Paris. The new CEO must see through a round of cost cuts as lower oil prices and weak returns from refining eat into profit at France’s largest company by sales. Total plans to sell another $10 billion of assets by 2017, adding to the $15 billion to $20 billion targeted from 2012 to this year. It has achieved $16 billion so far under that plan, with $4 billion underway, including sales of a stake in a Nigerian field and the Bostik chemicals business. (www.bloomberg.com)

October 28, 2014. Sasol Ltd. said a decision on whether to proceed with a U.S. facility to turn natural gas into transportation fuels will depend on cost overruns at an $8.1 billion chemical plant it’s building in Louisiana. Sasol will decide in 2016 whether to build a gas-to-liquids, or GTL, plant at the site of the planned ethane cracker in Lake Charles, Louisiana, Chief Executive Officer David Constable said. A decision to proceed, on what would be the first plant of its kind in the U.S., will depend on costs at the chemical project, the price of oil, diesel and gas and the health of the global economy, he said. Both projects are being proposed to capitalize on a jump in North American gas output from shale formations. The GTL project, which Constable last year estimated would cost $14 billion, would produce diesel fuel and waxes. The project is in the front-end engineering and design phase, the CEO of the Johannesburg-based company said. Sasol approved the final investment decision for the construction of the ethylene plant in Lake Charles. The GTL plant may produce 96,000 barrels of fuel a day. (www.bloomberg.com)

October 22, 2014. Trinidad & Tobago is substituting crude from Gabon with Colombian and Russian shipments amid protests by refinery workers alarmed by the outbreak of Ebola in other African countries. Energy Minister Kevin Ramnarine halted oil purchases from Gabon, the Caribbean country’s only African supplier in the past 20 months, he said. The decision follows the refusal of workers from Petrotrin, which operates Trinidad’s sole refinery, to assist with the berthing of a tanker that arrived in Trinidad waters from Gabon. (www.bloomberg.com)

October 28, 2014. Italian oil service group Saipem is in talks with the consortium that operates the giant Kashagan oil field to lay two new pipelines that will replace damaged pipes that have halted production at the field, CEO Umberto Vergine said. Saipem, which is 43 percent owned by Eni, is embroiled in judicial investigations in Italy and Algeria that claim it paid bribes to secure a series of contracts in the North African country worth $11 billion. (www.downstreamtoday.com)

October 28, 2014. OAO Rosneft, the Russian state-run oil company targeted by international sanctions, headed for a fourth monthly decline before it reports what analysts estimate will be the first drop in dollar revenue since 2009. The ruble weakened 0.8 percent to 42.28 per dollar, extending a three-month drop to 17 percent, the biggest among emerging-market currencies. Oil touched a 28-month low in New York. Rosneft’s third-quarter earnings report will show a 12 percent drop in dollar revenue from a year earlier, according to the average of 11 analyst estimates. Rosneft has been barred since July from financing debt with maturities above 90 days in U.S. markets under sanctions linked to the Ukraine conflict, in which President Vladimir Putin denies involvement. Alfa Bank cut the stock to the equivalent of hold from buy, saying the weaker currency will lead to “microscopic” earnings of 6 billion rubles ($141.9 million) because of a 130 billion-ruble loss on its mostly foreign-denominated bonds. (www.bloomberg.com)

October 28, 2014. The shale oil boom is proving far less kind to Mercedes-Benz drivers than it is to those sitting behind the wheel of a Toyota Camry or Chevrolet Impala. While regular gasoline-chugging drivers are paying just $3.04 a gallon in the U.S., the lowest in four years, those cruising around in luxury cars and demanding only the finest of grades, known as premium, have seen smaller declines. The price gap between the two grades swelled to the widest since 2008. Shale drilling is one of the main reasons behind the growing divergence. The record oil being pumped at U.S. shale formations tends to be more easily turned into low-octane gasoline. That’s helping push its price down more than the cost of premium fuel as benchmark U.S. crude oil sank below $80 a barrel for the first time since 2012. The gap between premium and regular swelled to 40 cents a gallon, according to Heathrow, Florida-based motoring club AAA. The difference was as small as 13 cents in January 2009. (www.bloomberg.com)

October 25, 2014. BNSF Railway Co. plans to apply a $1,000 surcharge for each older crude tank car, denting profits for shale drillers in North Dakota. The railroad owned by Warren Buffett’s Berkshire Hathaway Inc. is the first major U.S. operator using fees to encourage shippers to scrap the puncture-prone older cars. The charge, which goes into effect Jan. 1, would add about $1.50 a barrel to the cost of transporting oil on them. The Obama administration in July proposed phasing out thousands of the older tank cars within two years and lowering speed limits as part of new rules to reduce the risk of hauling crude by rail. The plan followed a series of fiery accidents, including the derailment and explosion of a crude train last year that killed 47 people in the Canadian town of Lac Megantic. The extraction of oil from shale fields with limited pipelines, such as in North Dakota’s Bakken, caused U.S. rail carloads of crude to surge to 415,000 last year from 9,500 in 2008, according to the Transportation Department. Tank cars typically hold about 700 barrels of oil, which means the surcharge would boost the cost of shipping in older cars by $1.50 a barrel. The cost to ship crude by train to East Coast refineries from North Dakota is $9 to $10 a barrel, San Antonio-based Tesoro Corp. said. (www.bloomberg.com)

October 25, 2014. China is finding oil supplies 14,000 miles away, aided by the global rout in prices that’s left producers vying for new markets. PetroChina Co. said it bought Colombian crude for a northern refinery for the first time because it was good value. The transaction underscores how the world’s second-biggest oil consumer is benefiting as producers from the Middle East to Latin America vie for customers in Asia. Brent oil futures tumbled to the lowest level since 2010 as the highest U.S. output in almost 30 years cuts its consumption of foreign crude. OPEC’s biggest producers are reducing prices to defend their market share. China consumed the second-biggest amount of crude on record in September and imported the largest volume ever for that time of year, customs data show. The country’s crude imports rose 7.8 percent to 27.6 million tons, or 6.74 million barrels a day, in September from last year, the data show. The number of supertankers sailing toward China’s ports surged to a nine-month high, according to IHS Fairplay vessel-tracking signals. China’s purchases of Colombian crude totaled 7.8 million metric tons from January to September, more than twice the amount a year earlier, customs data showed. Shipments from Saudi Arabia, its biggest supplier, shrank about 11 percent to 36.6 million tons, according to the data. (www.bloomberg.com)

October 24, 2014. As winter approaches, former Soviet satellite nations from Poland to Bulgaria are watching Russia and Ukraine’s stalled gas negotiations with growing trepidation. The lack of discernible progress is sending a collective shiver down the spine of Eastern Europe, which retains vivid memories of Russian energy cuts during unusually cold winters in 2006 and 2009. The ensuing shortages led to shuttered factories and a return to wood for heating and cooking in rural areas. Despite the two episodes, little has been done to diversify supplies within a region that remains highly dependent on energy delivery systems dating back to the Soviet era. If Moscow and Kiev don’t reach a compromise before winter and OAO Gazprom fails to restart supplies to its western neighbor, Ukraine may resort to siphoning off gas carried through its territory. As in 2009, that could prompt Russia to cut transit through Ukraine altogether, leaving parts of eastern Europe exposed to severe shortages.

Connected to the old Soviet pipeline system that runs through Ukraine and Moldova, the Balkan countries rely on Russia for close to 100 percent of their needs. Moreover, they’re poorly connected with their neighbors and their underground storage isn’t sufficient to cover demand for the entire winter. Part of the problem is that, instead of boosting pipeline inter-connectors with each other to improve trading, those countries pinned their hope on Gazprom’s South Stream project, designed to bypass Ukraine by joining Russia directly with Bulgaria through the Black Sea. However, the preparatory work on the 2,446-kilometer pipeline was halted under intense lobbying from the EU and the U.S. as the conflict with Ukraine flared up. (www.bloomberg.com)

October 24, 2014. U.S. oil output is buffering global crude prices and critical to the world’s supply balance amid the threat of disruptions, even as a ban on domestic exports remains in place, Energy Secretary Ernest Moniz said. A surge in the nation’s oil output comes as markets are faced with near-historic highs of unanticipated outages, Moniz said. He agreed with a government report finding U.S. gasoline prices may drop should the prohibition on crude exports be lifted. Moniz is leading the Energy Department through an unprecedented boom in U.S. fuel production. The nation’s oil output has jumped to a 28-year high and natural gas supplies have increased by so much companies are building terminals to send the fuel overseas. The surge has prompted his agency to review everything from the country’s four-decade ban on crude exports to the future of U.S. power generation.

The U.S. produced an average of 8.93 million barrels a day of oil, according to the Energy Department’s statistical arm. That’s down 0.2 percent from the prior seven days, when it reached the fastest pace since June 1985. The U.S. still imports about 7.5 million barrels of oil a day and its important to understand to what extent lifting the export ban would help increase global supplies, Moniz said. Iraq produced an estimated an 3.1 million barrels a day of oil last month according to data. That’s about 8.8 percent below its February peak this year. The Energy Department is preparing a report examining the impact of U.S. oil exports on domestic gasoline prices. By 2025, U.S. companies that are using hydraulic fracturing and horizontal drilling to pull oil and gas out of shale formations will be exporting more energy than they import, Wood Mackenzie Ltd. said. Congress passed a crude-export ban in 1975 in response to the Arab oil embargo that cut global supplies, quadrupled crude prices and created gasoline shortages as U.S. production was shrinking. Exceptions have been made for some Alaskan oil, California heavy crude and shipments to Canada. (www.bloomberg.com)

October 22, 2014. China reduced oil imports from Saudi Arabia even as the world’s largest crude exporter cuts prices to lure Asian customers amid intensifying competition from Colombia to Oman. Oil deliveries from Saudi Arabia fell 2.7 percent to 4.74 million metric tons last month from a year earlier, according to data released by the General Administration of Customs in Beijing. Shipments from Colombia surged 389.6 percent, while Russian deliveries increased by 56.8 percent. Asian consumers are benefiting from a wider choice of suppliers offering cheaper crude, from Venezuela to Alaska and Nigeria, as the highest U.S. production in almost 30 years cuts American demand. Saudi Arabia reduced prices for oil for Asia to the lowest in almost six years as it aims to maintain market share even as global benchmark prices have dropped about 25 percent from June. Crude supplies from Colombia cost on average $94.56 a barrel last month and Brazilian imports were $95.27, while Saudi shipments were at $102.30 a barrel, customs data show. PetroChina Co.’s Liaohe plant in northern China refined about 30,000 tons of Colombian crude as of Oct. 30 for the first time, its parent China National Petroleum Corp. said. (www.bloomberg.com)

October 28, 2014. Kuwait stopped issuing work permits for Saudi Arabian Chevron Inc. employees at Kuwaiti oil fields the Persian Gulf neighbors are developing together. Saudi Chevron, a subsidiary of Chevron Corp., can’t issue or renew the permits for employees at the Wafra oil fields because Kuwait’s ministry of labor and social affairs halted services to the company. A number of Saudi Chevron staff, including U.S. citizens, left Kuwait after their permits expired, and more will follow. (www.bloomberg.com)

October 28, 2014. Development of Singapore's second liquefied natural gas (LNG) terminal appeared to be some time away as the government is currently conducting a study of potential sites in the eastern part of the island-state for its location, the country's Second Minister for Trade and Industry S Iswaran said. The Jurong Island LNG terminal, operated by Singapore LNG Corp. since May 2013, currently have three tanks. Throughput capacity at the terminal will rise from 6 million tons per annum (Mtpa) to around 11 Mtpa by 2017 with the addition of a fourth tank, which has potential for a further expansion to 15 Mtpa. Prime Minister Lee Hsien Loong announced in February at the official opening of the Singapore LNG Terminal on Jurong Island that Singapore will proceed to develop a second LNG terminal. (www.downstreamtoday.com)

October 28, 2014. Huntsman Corp., the Salt Lake City-based chemical maker, said the decline in global oil prices will benefit rather than hinder its profitability. Cheaper oil will eventually cut prices of raw materials such as ethylene, propylene and methanol, Chief Executive Officer Peter Huntsman said. Huntsman is a net purchaser of those chemicals, which it converts into products such as insulation and gasoline additives, he said. The U.S. still has an “enormous” cost advantage with natural gas relative to the oil derivatives used to make chemicals in Europe and Asia, the CEO said. South Africa’s Sasol Ltd. approved construction of an $8.1 billion plant in Louisiana, a decision based in part on access to cheap U.S. gas. Crude oil has declined more than 20 percent since June, prompting Goldman Sachs Group Inc. to cut profit estimates for ethylene producers because margins from using natural gas may narrow. Oil-price volatility won’t prevent Huntsman from reaching its target of $2 billion in earnings before interest, taxes, depreciation and amortization in 2016 or 2017, the CEO said. (www.bloomberg.com)

October 27, 2014. Goldman Sachs Group Inc. cut its forecasts for Brent and West Texas Intermediate (WTI) crude prices next year on rising global supplies, predicting Organization of Petroleum Exporting Countries (OPEC) will lose influence over the oil market amid the U.S. shale boom. The bank is becoming more confident in the scale and sustainability of U.S. shale oil production and said U.S. benchmark prices need to decline to $75 a barrel for a slowdown in output growth. Brent will average $85 a barrel in the first quarter, down from a previous forecast of $100, and WTI will sell for $75 a barrel in the period, from an earlier estimate of $90, analysts including Jeffrey Currie wrote in a report. The biggest members of the OPEC are discounting supplies to defend market share rather than cutting production to boost prices that have collapsed into a bear market. The highest U.S. output in almost 30 years is helping increase stockpiles as exporters including Saudi Arabia reduce prices to stimulate demand. Any near-term OPEC production cut will be modest until there is sufficient evidence of a slowdown in U.S. shale oil production growth, according to the report. Global producers may need to cut almost 800,000 barrels a day of output next year to limit a build in inventories and ultimately balance the global oil market in 2016, Goldman said. Countries from South Korea to India are benefiting from weak prices by seeking to diversify their crude suppliers. India will seek U.S. crude if the government eases a ban on domestic crude exports, Indian Oil Minister Dharmendra Pradhan said. ConocoPhillips in September shipped its first cargo of Alaska North Slope crude to South Korea in eight years, making rare use of a Bill Clinton-era exemption to U.S. oil-export restrictions. (www.bloomberg.com)

October 27, 2014. Venezuela shelved a planned sale of about $10 billion in U.S. refineries as surging North American crude output pushes down energy prices and profit margins. The country ruled out selling its U.S.-based refining subsidiary Citgo Petroleum Corp., Finance minister Rodolfo Marco Torres said. The nation will keep investing in Citgo, he said. Citgo said that oil company Petroleos de Venezuela SA was looking for a buyer, threatening to undermine bondholders and other creditors by removing a sovereign asset that could be seized in the U.S. in the event of a default. Former oil minister Rafael Ramirez said that Citgo was worth at least $10 billion, while Barclays Plc said last month that the company’s equity value is between $7 billion and $9 billion. (www.bloomberg.com)

October 24, 2014. German Chancellor Angela Merkel said Ukraine risks losing gas supplied by its European supporters if it doesn’t reach an agreement on payments to Russia. The European Union (EU) is showing solidarity with Ukraine through reverse flow gas deliveries in its conflict with Russia, Merkel said at an EU summit in Brussels. She urged negotiators to come up with a financing agreement before the turmoil disrupts gas supplies to Europe in the winter. As winter approaches in Europe, Russia and Ukraine have failed to negotiate an agreement on natural gas prices amid their broader conflict over ties to Europe, separatist fighting with government forces in the east and Russia’s annexation of Crimea. The two former Soviet states said they’ll seek a temporary deal after EU-brokered talks stumbled. Merkel said negotiators will talk about options for bridge financing that would cover payments until an International Monetary Fund (IMF) package for Ukraine is ready by February at the latest. This will also unlock EU money. With Russia demanding payments by November and the IMF program, as well as the forming of a Ukrainian government, taking longer, Merkel said a temporary solution must be found. (www.bloomberg.com)

 [INTERNATIONAL: POWER]

October 28, 2014. Zimbabwe’s generation capacity is expected to rise by 5,000 MW by 2020 on the back of several generation projects planned over the next few years, President Robert Mugabe said. Mugabe said Zimbabwe’s generation capacity is set to leap from the current 1,000 MW to nearly 6,000 MW if all planned projects come on stream within the next six years. Mugabe said successful implementation of his government’s five-year economic blueprint hinged on the provision of adequate energy to all sectors of the economy. Some of the projects include the recently commissioned Kariba South expansion project that would add 300 MW to the national grid by 2017 and the Hwange Thermal Power Station expansion that is expected to add 600 MW of power. Zimbabwe has faced crippling power shortages wince 1999 which have largely been blamed on low investment in the energy sector and obsolete equipment at existing power plants. (en.starafrica.com)

October 23, 2014. It’s boom times in Wyoming for embattled U.S. coal companies, where the mining industry is hiring workers while shedding them in Appalachia. Alpha Natural Resources Inc., the second-largest U.S. producer, hasn’t posted a profit in three years and is closing money-losing mines in West Virginia amid plans to increase production out West by as much as 30 percent. With the U.S. coal industry in its worst decline in decades, companies including Alpha and Peabody Energy Corp. (BTU), the biggest producer, are pivoting toward pockets of future profit. No prospect is bigger than the Powder River Basin, a high, mineral-rich plain of yellow grass and sagebrush stretching from central Wyoming to southern Montana. Coal output in the Powder River Basin increased 2.6 percent in the first half from a year earlier while total U.S. production inched upward a mere 0.75 percent. Mines there are vast open holes that cost less than half to operate than those in West Virginia where workers head underground to extract the fuel. (www.bloomberg.com)

October 28, 2014. The risk of blackouts in Europe will grow in the coming winter as thermal power-generating capacity has been shuttered amid the region’s economic slump and a greater reliance on renewables, a study warned. The alert comes after utilities including GDF Suez SA have shut natural gas-fired plants in past years, citing a slump in demand, weak economic growth and competition from cheaper U.S. coal imports. Even with such cuts in capacity, European power prices have fallen, sometimes to below zero, when surplus is generated from volatile sources such as wind and solar. Three nuclear reactors in Belgium operated by GDF Suez’s Electrabel SA have been halted because of damage and safety concerns. France usually relies on Belgian power imports on cold days because of the relatively large number of homes in the larger country that are equipped with electric heating. The European Union has spent about 500 billion euros ($635 billion) on renewables in the past decade, almost half of world investment. The bloc’s share of electricity production has risen to 23.5 percent in 2012 from 14.3 percent in 2004. (www.bloomberg.com)

October 28, 2014. Ofgem has set out proposals to allow £1.1 billion funding for a new subsea link in the north of Scotland. The regulator's proposal is £173.9 million less than the funding request from Scottish Hydro Electricity Transmission (SHE Transmission) to ensure consumers pay no more than necessary. The new link will connect 1.2 GW of new renewable electricity generation following completion in 2018. This additional capacity will increase the resilience of Britain's energy infrastructure. It will connect the electricity grid on either side of the Moray Firth. The proposals are under consultation for four weeks. Final decision on funding will be made in December. (www.energy-business-review.com)

October 28, 2014. Britain has measures in place to keep the lights on this winter despite the closure of several power stations likely leading to a narrower surplus of electricity supply over demand, network operator National Grid Plc said. Power prices jumped on the report, with wholesale power prices for day-ahead delivery soaring by 22 percent to 52 pounds per megawatt hour. The average excess supply over peak demand from October to March could fall to 4.1 percent compared with 5 percent in the same period last year, due to a series of planned and unplanned power plant closures and breakdowns, National Grid's annual winter outlook report showed. National Grid data shows the margin was as high as 17 pct in the 2011/12 winter and as low as 1.5 pct in 2005/06, but the way it has calculated the figure has changed over the years so the figures may not be directly comparable. Mid-winter generation capacity is forecast to be 71.2 GW, which when taking into account the availability of power plants and historic performance, has been reduced to 58.2 GW to calculate the margin, the report said. (www.iii.co.uk)

October 27, 2014. A company claiming to have made a breakthrough in technology for electricity storage for power grids will announce plans to create thousands of jobs in the US, with contracts to supply customers in China and Turkey. Alevo, a privately held Swiss company, says it has managed to solve many of the problems usually associated with large-scale batteries, and can transform power grids by providing a cost-effective way to meet demand at peak times with lower pollution than other technologies. It is spending an initial $350 mn on its new plant in North Carolina, rising to $1 bn-plus by 2016, and hiring 500 people next year, with plans to increase staffing to 2,500 in three years. (www.ft.com)

October 28, 2014. Residents near the Sendai nuclear plant in southern Japan vote whether to resume operations at the facility, highlighting a conflict between Japanese who benefit from the largess of the industry and those who don’t. The two reactors in the town of Satsumasendai on the island of Kyushu are the first of Japan’s atomic plants in line to restart under tougher safety rules set by the Nuclear Regulation Authority, the agency created after the Fukushima disaster to restore confidence in the industry. Japan’s 48 operable reactors are idle and their future is creating a deep divide over atomic power. Nowhere is that debate more acute than in Ichikikushikino, a town of 30,000 residents south of the Sendai facility. For decades, residents of Ichikikushikino saw the plant in the neighboring town as a benign force, gently boosting their languid rural economy. While Ichikikushikino received little of the direct handouts that paid for projects including a bridge, a library and a history museum in Satsumasendai, the power station drew workers and other visitors to its stores and restaurants. That calculation changed after Fukushima illustrated the dangers posed by the Sendai reactors, which are situated less than 5.4 kilometers (3.4 miles) from the city at their closest. The municipality is now demanding a say in the fate of the two units, despite a convention limiting decision-making to a plant’s host city. Satsumasendai, which earns billions of yen a year from the government and the plant’s operator to host nuclear power, is expected to endorse the reactors’ restart. Officials from the surrounding prefecture of Kagoshima must also agree. (www.bloomberg.com)

October 27, 2014. Mongolian coal producers are “burning cash” and face pressure in the next 12 months because low prices and weak demand from China will persist, according to Moody’s Investors Service. Mongolia’s economic growth is set to cool to 6.3 percent this year versus 11.7 percent in 2013, according to World Bank forecasts. The Asian nation is becoming more dependent on volatile mining revenues amid rising government debt and foreign-currency borrowing, Moody’s said in a report. The 2017 notes of Mongolian Mining Corp., an Ulaanbaatar-based miner listed in Hong Kong, have lost 11.5 percent this year. The company had a $28 million net loss in the six months through June 30, following losses in 2013 and 2012. (www.bloomberg.com)

October 23, 2014. Power prices in Germany will probably fall for an unprecedented fourth year on signs Europe’s biggest economy is slowing and fuel costs are dropping. Electricity for next-year delivery will slide 5.5 percent by Dec. 31 from a year earlier, according to the median in a survey of 10 traders and analysts. Coal costs in Europe are also headed for a fourth annual decline, while U.K. gas costs fell 21 percent this year. The price slump is hurting profits at utilities from EON SE to RWE AG as Germany’s renewables expansion exacerbated a power glut and demand failed to recover after the 2008 financial crisis. German industrial production, which accounts for almost half of the nation’s electricity demand, fell 4 percent in August in its biggest drop since 2009. The power contract dropped 6.2 percent this year to settle at 34.25 euros ($43.36) a megawatt-hour, according to data from the European Energy Exchange AG in Leipzig, Germany. (www.bloomberg.com)

 [RENEWABLE ENERGY / CLIMATE CHANGE TRENDS]

October 28, 2014. Global solar technology manufacturer and provider of solar energy services SunEdison Inc signed an MoU with the state government of Rajasthan to establish 5,000 MW capacity of solar power in next five years. Under the project, multiple mega solar power projects will be set up on estimate 25,000 acres of land in the state. Capacity of most of the projects will be 500 MW, Pashupathy Gopalan, the company said. The company would also work with the state government to design a programme for slowly and steady shifting of electric irrigation pumps, which are around 11 lakh in the state, to solar pumps which would not only provide power to the farmers to pump water during the day time but also feeding electricity to feeder when not pumping. The government would facilitate the identification of the land suitable for the development of solar PV projects as well as allot land on a long term lease in accordance with the state policies. Additionally, the government would also create and provide the necessary electricity interconnection infrastructure. (economictimes.indiatimes.com)

October 28, 2014. India is about to witness a massive scaling up of solar power capacity to 100,000 MW, with Prime Minister Narendra Modi asking the ministry of new and renewable energy (MNRE) to prepare an action plan by November first week. Aiming to reach this target in five years, before the next general elections, the government is expediting the work by directing states to identify suitable locations across terrains - deserts, wastelands, national highways, river banks and even over canals (as was done in Gujarat). With Modi at the helm, as the chief minister of Gujarat, the state had become one of the largest contributors in the cumulative renewable energy mix of the country. At 900 MW, Gujarat is still the largest contributor to the country's total installed solar power capacity of 2,600 MW. The Bharatiya Janata Party's election manifesto has also promised a considerable push to clean energy. The target is five times the target designated under the Jawaharlal Nehru National Solar Mission (JNNSM), one of the key programmes of the earlier United Progressive Alliance government. Large solar projects similar to coal-based ultra mega power projects, solar parks, micro grids and solar rooftops - all would be a part of the project. MNRE recently announced a draft proposal on bidding for solar projects worth 3,000 Mw - double the original target in JNNSM. (www.business-standard.com)

October 28, 2014. NTPC, the country's largest power generator, plans to foray into wind energy sector with its first project in Karnataka. The company will soon float tenders for first such project with a capacity of 100 MW. The company has been in talks with the state forest department for approvals. Meanwhile, NTPC is awaiting coal allocation for the second stage of 4,000 MW super thermal power project at Kudgi in Bijapur district. The second stage will have a capacity of 1,600 MW with two units of 800 MW each. Work on the first stage with a capacity of 2400 MW (three units of 800 MW each) at a cost of ` 15,166 crore is progressing as per the schedule and will be commissioned by January 2016. Commercial operations are scheduled from May 2016 and subsequent units are to be commissioned with an interval of six months. (www.business-standard.com)

October 28, 2014. If the Centre gets states on board, it will not allow any of the 140 drains between Gangotri and Gangasagar to open into the river Ganga to discharge municipal and industrial waste water. A small step in this direction was taken when the government decided to launch a pilot project to usher in a 'zero liquid discharge' regime. The 'zero liquid discharge' (ZLD) is a concept where the entire industrial and municipal waste water can be reused after recycling without discharging a drop into any river.

At present, after being treated in different sewage treatment plants (STPs) and common effluent treatment plants (CETPs), the municipal/industrial waste water goes into drains and eventually gets discharged into river. The pilot project, between Mathura and Vrindavan in western Uttar Pradesh, will be carried out involving private companies in consultation with the state government. Water resources ministry and the Central Pollution Control Board (CPCB) will be involved at every stage of implementation. (timesofindia.indiatimes.com)

October 27, 2014. The ministry of new and renewable energy (MNRE) wants the government to back a 1-billion loan (` 7,750 crore) sought from German bank KfW to promote rooftop solar systems across the country. KfW is keen on lending 1-billion for the solar rooftop project to India but hedging cost of the loan will make it expensive for borrowers and mar the purpose of accessing funds from abroad, the MNRE said. India is scouting for funds from foreign agencies in order to spur growth in the cashstarved renewable energy sector — one of Prime Minister Narendra Modi's focus areas — and make clean energy affordable. (economictimes.indiatimes.com)

October 27, 2014. Chennai-based ReGen Powertech has come up with a made-for-India wind turbine with a capacity of 2.8 MW. The machine’s blades will sweep a circle of a diameter of 109 metres. The wind turbine has been developed by ReGen’s wholly-owned R&D subsidiary in Germany, Wind Direct GmbH, and the company intends to make the machine available for sale by the end of next year. A prototype of the turbine is currently undergoing testing at ReGen’s test site near Coimbatore. (www.thehindubusinessline.com)

October 27, 2014. As India gears up for solar projects under the recently-overhauled National Solar Mission programme, a breakthrough in polysilicon manufacturing promises to make solar energy at ₹6 or less per kilowatt-hour (kWhr) possible. Across the world, solar technologists have been grappling with the issue of converting more of sun’s energy falling on solar panels into electricity. While chasing ‘efficiency’ has been the primary means of achieving cost-reduction, a US-headquartered company, which is active in India, has achieved a technological breakthrough in the manufacture of Polysilicon, a key raw material. (www.thehindubusinessline.com)

October 26, 2014. NTPC is focusing on installing Rooftop Solar PV systems at available roof areas in power stations. The move is aimed at meeting the energy requirements of its various offices, starting with a 110kWp one that was inaugurated by Arup Roy Choudhury, CMD, NTPC at NTPC Engineering Office complex recently. This is the first model solar rooftop project by NETRA, the R&D wing of NTPC, and its features include remote & string monitoring, seasonal tilt, etc, for continuous monitoring and performance studies. As much as 1,70,000 kWh of energy is expected to be generated from this Solar PV plant every year and carbon dioxide reduction to extent of 163 tonne per year is expected. (indiatoday.intoday.in)

October 24, 2014. Centre has agreed to provide a grant of ` 500 crore towards development of 2,500 MW solar parks in Andhra Pradesh, which has received good response for plans to set up such units. Responding to the state's move for development of 500 MW grid connected solar photo-voltaic projects, 50 prospective solar developers have placed bids for 1,296 MW. The financial bids of 49 qualified bidders for the capacity of 1,291 MW were opened by AP Transco. The range of first year tariff offered by the bidders is from ` 5.25 to ` 8.08 per unit with 3 per cent escalation every year up to ten years. There is no escalation after the 11<sup>th</sup> year. With the tariff up to ` 5.99 per unit, the cumulative capacity offered by the bidders is 619 MW against the bid capacity of 500 MW. First Solar Power India Pvt Ltd offered lowest tariff of ` 5.25 per unit for capacity of 40 MW in Ananthapur district. The levelised tariff worked out to Rs 6.17 per unit, which is lower than the earlier tariff (Rs 6.49 per Unit). Solar bidders preferred Anathapur district, where bid for 580 MW was received followed by Chittoor (273 MW) and Kurnool (272 MW). For coastal Vizianagaram and Visakhapatnam, tariffs of ` 5.94 and ` 5.99 per unit were offered. Notable bidders include Welspun Renewables Energy Pvt Ltd (345 MW) and Acme Clean Tech Solutions Ltd (160 MW). (economictimes.indiatimes.com)

October 22, 2014. NHPC has signed an agreement with Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) for setting up its first solar power project in the state at a cost of ` 400 crore. Initially this joint venture company proposes to implement a 50 MW grid connected solar power project at Parason, Uttar Pradesh, for which an initial pact was signed UPNEDA and NHPC in August 2013. The estimated project cost is ` 400 crore and it will be completed by mid 2016. This is first solar power project of NHPC. (economictimes.indiatimes.com)

October 28, 2014. Emerging markets are installing renewable energy projects at almost twice the rate of developed nations, a report concluded. A study of 55 nations -- including China, Brazil, South Africa, Uruguay and Kenya -- found that they’ve installed a combined 142 GW from 2008 to 2013. The 143 percent growth in renewables in those markets compares with an 84 percent rate in wealthier nations, which installed 213 MW, according to a report released by Climatescope. The boom in renewables is often made for economic reasons, Washington-based analyst said. An island nation like Jamaica, where wholesale power costs about $300 a megawatt-hour, could generate electricity from solar panels for about half as much. Similarly, wind power in Nicaragua may be half as expensive as traditional energy. The nations included in the study increased total renewables investment to $122 billion last year, more than double the 2007 sum of $59.3 billion. The 55 nations in the Climatescope study have passed more than 450 measures linked to renewables, including South Africa’s renewables program, which awarded 17 bids for projects about a year ago. About $10 billion has been invested in that country in the past two years. The International Energy Agency said that renewable energy and hydropower will supply almost half of the generation required for growth in Africa through 2040, as the sub-Saharan economy quadruples. Energy use in that region, up 45 percent since 2000, is expected to climb 80 percent through 2040. (www.bloomberg.com)

October 28, 2014. A majority of Canadians view environmental protection as being more important than energy prices and expect businesses to carry the burden of a carbon tax, according to a recent poll. Sixty-two percent of those surveyed said protecting the environment is more important to them than the price of energy, according to a survey conducted by polling company Nanos Research for the Thousands Islands Energy Research Forum. Twenty-eight percent said energy prices were more important, while 10 percent were unsure. More than half, or 53 percent of respondents, said the government should impose a new tax on businesses based on their carbon emissions, while less than a third oppose new taxes on fossil fuels or on companies that emit greenhouse gases, the survey showed. Eleven percent favored a 5 percent tax on energy such as electricity and gasoline which would fund projects to reduce carbon emissions. Almost two-thirds of Canadians are familiar with the debate related to climate change and the use of fossil fuels. While Canada doesn’t have a national price on carbon, British Columbia taxes about 70 percent of carbon consumption and Alberta imposes a levy of $15 a ton for large emitters of greenhouse gases. Prime Minister Stephen Harper has come under international scrutiny after pulling the country out of the Kyoto Protocol, a United Nations emissions-reduction treaty. The federal government has committed to reducing emissions by 2020 by 17 percent from 2005 levels, a target that was established as part of the 2009 Copenhagen Accord. Without new emissions regulations, the country will fail to meet that goal, Environment Canada said. (www.bloomberg.com)

October 28, 2014. Jostein Eikeland, a Norwegian entrepreneur with a mixed record of success, is hoping to jolt the world of energy storage. Eikeland's latest venture, Alevo, will unveil a battery that he says will last longer and ultimately cost far less than rival technologies. The technology, which is meant to store excess electricity generated by power plants, has been developed by Eikeland in secret for a decade. Martigny, Switzerland-based Alevo Group is gearing up to start manufacturing batteries next year at a massive former cigarette plant near Charlotte, North Carolina, that it says will employ 2,500 people within three years.

Eikeland said Alevo, named for the inventor of the battery, Alessandro Volta, has $1 billion from anonymous Swiss investors and has taken no state funding or incentives. Alternately brash and self-deprecating, Eikeland did not shy away from discussing his up-and-down past. He founded software company TeleComputing Inc during the dot-com boom, helped take it public on the Oslo stock exchange, then left in 2002 after the tech bubble burst. Claims of technological breakthroughs from unfamiliar companies are common in the world of green technology. Many startups fizzle out before they achieve mass production. Among the recent high-profile flameouts: battery maker A123 and solar panel maker Solyndra.

Producing on a mass scale will make Alevo's technology cost- effective from the start, Eikeland said. The high cost of grid storage has prevented it from being deployed more widely. Eikeland plans to deliver 200 MW of batteries - roughly enough to power 100,000 homes - into the U.S. market next year and is in talks with big utilities, which he hopes will become customers. Alevo's approach stands in stark contrast to the public announcement last month of Tesla Motors Inc's planned $5 billion factory in Nevada, which will make batteries for electric cars. Tesla says its plant will employ 6,500 people by 2020. It will receive more than $1 billion of state incentives. (in.reuters.com)

October 28, 2014. Enel Green Power, Italy's biggest renewable energy group, said it had brought online a new wind farm in Mexico. The company, controlled by utility Enel, said construction of the plant had cost a total of $196 million. The plant has a total installed capacity of 100 MW, it said. (af.reuters.com)

October 28, 2014. Plans to accelerate reform of Europe's carbon market could be finalised as soon as April, building on the momentum from last week's EU deal on green energy policy, Britain's energy and climate minister said. The EU has been debating proposals to strengthen its Emissions Trading Scheme (ETS), meant to be the bloc's sharpest tool in shifting to a low carbon economy but blunted by a surplus of spare pollution permits.

The plan is to set up a mechanism known as the Market Stability Reserve (MSR) to absorb some of the excess and drive up the price of allowances to increase the cost of burning higher carbon fuels relative to cleaner energy. Davey was speaking on the sidelines of EU environment ministers' talks in Luxembourg to debate the EU's next steps in achieving a global pact to tackle climate change. The talks come ahead of a U.N. climate conference in Paris in 2015 and interim U.N. talks in Lima at the end of this year. (www.reuters.com)

October 28, 2014. EU nations have work to do to meet new green energy goals agreed, as increased fossil fuel burning last year drove up pollution in some countries, although the bloc is on track to meet its earlier targets, official data showed. The figures from the European Environment Agency (EEA) showed the European Union's overall emissions fell by 1.8 percent in 2013 versus 2012, meaning it has already met a 2020 goal to cut pollution by 20 percent versus 1990. In 2013, the continued decline coincided with a slight rise in economic activity, countering arguments from some in business that the EU's green goals are at odds with expansion and that economic collapse was the biggest cause of lower emissions.

However, German emissions rose by 1.2 percent as more fossil fuel was used for heating. Denmark also emitted 3.1 percent more greenhouse gases year-on-year, as a fall in imports from the Nordic power market drove it to use more coal, while Estonia's emissions leapt by 10 percent because of coal-burning and an increase in the amount of energy it exported generated from oil shale, the EEA said. (www.reuters.com)

October 25, 2014. A dispute about how to link greenhouse-gas emissions cuts to a promise from the wealthiest nations for $100 billion a year in climate aid emerged as a major stumbling block at UN talks on global warming. After a week of discussions in Bonn, envoys from some 190 nations deadlocked about the formula countries will use in setting out their commitments on reducing fossil-fuel pollution in time for the deal they plan to sign in Paris in 2015. That means higher-level officials will have to deal with the issue when they meet in Peru in December. The exact way in which those pledges are put on the table is the cornerstone of the pact that the United Nations is promoting as a replacement for the Kyoto Protocol, whose limits on emissions in richer countries lapse in 2020.

At the core of the matter is a promise that U.S. President Barack Obama, the European Union and other industrial nations made in 2009 to raise the value of aid for climate-related projects to $100 billion a year by the end of this decade. Developing countries would get the money in exchange for cutting emissions -- and opening their industries to scrutiny. The pledges being devised are for the period after 2020, and developing countries want industrialized nations to indicate how much climate aid they’ll incorporate into the promises. At the same time, they’re seeking more clarity on how aid will ramp up to $100 billion in 2020. (www.bloomberg.com)

October 24, 2014. Vestas Wind Systems A/S, the world’s biggest wind-turbine maker, said it won a 50 MW order in China three days after announcing a new strategy to grab a larger share of the biggest wind-power market. The order for 25 V100 2 MW turbines to be installed in Ningxia province, northwest China, is the fourth for Vestas this year from Hanas New Energy Group, the Danish manufacturer said. The machines are scheduled for installation in the second quarter of next year. Vestas Chief Executive Officer Anders Runevad said he’s pushing to grow in the Chinese market by using more components made locally and selling turbines tailored to the country’s varying wind conditions. The Aarhus-based company took less than 3 percent of the last year’s market in China, where it was the 11th largest supplier and the top foreign company, the Chinese Wind Energy Equipment Association said. Vestas delivered 434 MW of turbines in China in 2013 and said in its annual report that it’s a “challenging” market. China accounted for 16,100 MW out of the global total of 35,301 MW, according to the Global Wind Energy Council. The latest accord brings to 200 MW the total the Chinese developer has ordered from Vestas this year, and 600 megawatts since 2009. Delivery is slated to begin in March, with installation completed by mid-year. The deal includes a two-year service agreement. (www.bloomberg.com)

October 24, 2014. European Union (EU) leaders backed the most-ambitious carbon emissions goals of any major economy, in a bid to crank up pressure on the U.S. and China ahead of climate talks in December. Heads of government from the bloc’s 28 nations endorsed a binding target to cut greenhouse gases by at least 40 percent from 1990 levels by 2030 at a summit in Brussels. Meeting that goal would cost about 38 billion euros ($48 billion) a year, according to EU estimates. The EU is on track to meet its previous goal of a 20 percent reduction by 2020. The agreement on emissions ensures the EU remains the leader in the fight against global warming before the United Nations climate summit in Lima in December where delegates aim to persuade other large polluters to sign up for worldwide accord they aim to clinch in 2015 in Paris. The European accord required unanimity and overcoming differences between poorer, mostly ex-communist east European nations and richer countries in western Europe. France, Portugal and Spain reached a compromise to build more gas and power connections across the Pyrenees while the U.K. and Germany bridged their divide over an energy efficiency goal. Poland, which had threatened to veto the deal unless it addresses the country’s concerns of a surge in power prices, won assurances that its utilities will get free carbon permits under the EU emissions trading system, or ETS, after 2020 and that the country will have access to funds for modernizing coal-based plants. (www.bloomberg.com)

October 24, 2014. Using batteries to retain energy from rooftop solar systems will be too expensive for at least two years, according to industry executives. That means homeowners who add solar panels to save money on utility bills will continue to lose electricity during blackouts, even after an 80 percent decline in battery costs over the past decade. Residential solar systems typically send power to the grid, not directly to the house, and don’t run the home during a blackout. For batteries to save consumers money, stored energy must be drained daily, said Jamie Evans, who runs the U.S. Eco Solutions unit for Panasonic Corp., which supplies lithium-ion cells for Tesla Motors Inc. As residential solar become more common from California to New York, utility grids will increasingly become stressed without storage to ease supply and demand imbalances, he said. (www.bloomberg.com)

October 24, 2014. Water supply to millions of South Africans could be hampered if the development of a coal mine that will feed Eskom Holdings SOC Ltd.’s Lethabo power station goes ahead. Rand Water Services (Pty) Ltd. and local residents are opposing the proposed Panfontein colliery, on the northern bank of the Vaal River, because it may affect water and the environment through the generation of acid water. The mine will also have a negative impact on the water network system and pump station. Rand Water supplies an average of 3.7 billion liters (977 million gallons) daily to Johannesburg and several other municipalities. The Vaal runs 1,120 kilometers (695 miles) through Gauteng, Free State and North West provinces. (www.bloomberg.com)

October 23, 2014. European Union (EU) leaders face heated negotiations on a deal to toughen emission-reduction policies in the next decade and boost the security of energy supplies amid a natural-gas dispute between Russia and Ukraine. The main challenge for the 28 heads of government will be to iron out differences on a strategy that ensures cheaper and safer energy while stepping up climate-protection measures. Countries including Poland, Portugal, Spain, France and the U.K. have signaled that the outstanding issues that leaders will need to resolve at the gathering include sharing the burden of carbon cuts, the nature of energy targets and plans for power and gas interconnectors. EU leaders plan to back a binding target to cut greenhouse gases by 40 percent by 2030 from 1990 levels, accelerating the pace of reduction from 20 percent set for 2020. An agreement would ensure the bloc remains the leader in the fight against global warming before a United Nations climate summit in Lima in December and a worldwide deal expected to be clinched in 2015 in Paris, according to the European Commission, the EU’s executive arm. (www.bloomberg.com)

October 22, 2014. Prime Minister Tony Abbott’s government will negotiate with the opposition to cut Australia’s renewable energy target and exempt industries such as aluminum and copper smelting. Industry Minister Ian Macfarlane said he was “reasonably confident” the target would be reduced from the current 41,000 gigawatt hours of electricity from renewable projects to between 26,000 and 28,000. While negotiations with Labor will start, legislation is unlikely to be passed this year, Macfarlane said. A government-appointed panel recommended in August that Australia weaken or phase out the target in favor of a lower-cost approach to cutting greenhouse-gas emissions. Speculation that Australia will dismantle the RET has unsettled an industry that has seen A$20 billion ($17.6 billion) of investment since the country set goals for clean energy in 2001. Origin Energy Ltd. and other large utilities have opposed the requirement that Australia produce 41,000 gigawatt hours of electricity from large-scale renewable projects by 2020. The government says the gigawatt-hour figure, which was supposed to represent 20 percent of the market, is actually heading toward 26 percent amid shrinking electricity demand. The government doesn’t intend to stop subsidizing solar panels on rooftops, he said. (www.bloomberg.com)

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