MonitorsPublished on Dec 19, 2014
Energy News Monitor | Volume XI; Issue 27

[Lima outcome: the quiet mutation of Kyoto Protocol]

                             “Instead of an international law on climate change imposing commandments such as ‘thou shalt not emit carbon’ on Nation States, or International Carbon Markets saying ‘thou shalt pay for emitting carbon’, Nation States are now allowed to say ‘I will or will not emit carbon’. This may or may not be positive for action on climate change but it is definitely positive for sustaining the power of Nation States…”




·          Lima outcome: the quiet mutation of Kyoto Protocol


·          Facing Downside Risks –The Oil Price Slump and how it might affect Gas Prices (update) - Rangarajan Committee Gas Price meets Indian Gas Price 2.0

·          Solar Power: Fact or Fiction?


·          Renewable Energy: Grid interactive and Off-grid Systems



·          Govt runs into hurdles in recovering revenues from RIL-operated KG-D6 block

·          ONGC to use GSPC's under-sea infrastructure for KG find

·          OIL signs contract for two oil blocks in Myanmar

Transportation / Trade………………

·          RSGL to develop infrastructure for retail gas supply

·          Essar Group, Rosneft to sign 10 year oil deal

·          Oil Minister for petroleum pipeline from Siliguri to Parvatipur

Policy / Performance…………………

·          Oil Minister strives to ensure success of LPG direct cash transfer

·          No roll-back of excise duty hike on diesel, petrol: Govt

·          Only few giving up LPG subsidy voluntarily

·          O&G sector benefits from reforms: Fitch

·          Oil Ministry wants fuel conservation to be introduced in school books

·          Govt weighs revenue sharing model for basins to attract global companies

·          Govt fixes ` 48.5-49.5 price for ethanol procurement by OMCs



·          Hot run of Unit II at KNPP

·          Centre decides to form committee on Subansiri project: AASU

Transmission / Distribution / Trade……

·          Alstom T&D India bags ` 1.5 bn order from Rajasthan

·          Power sector unable to utilise full capacity due to poor transmission

·          Alstom T&D India gets ` 2.4 bn substation projects in Maharashtra

·          Coal India receives first consignment of imported coal of 1.7 lakh tonnes from Indonesia

·          CCEA clears ` 15.9 bn transmission project for Tamil Nadu

Policy / Performance…………………

·          Centre to clear stand on Uttarakhand hydropower projects in 2 months: SC

·          Coal auction may push up fuel price for power sector: ICRA

·          ` 120 bn investment to develop a coal block: West Bengal CM

·          Govt may not give free power to coal producing states: Goyal

·          Polish companies eye re-entering Indian underground coal mining

·          Coal block e-auction rules: Current mine owners to get head start over new bidders

·          Energy conservation can help save ` 500 bn: Power Minister

·          Power Ministry rules out direct regulation of tariff

·          Fitch retains stable outlook on power sector in 2015

·          India, Russia ink pact to build two nuclear reactors in Tamil Nadu

·          Uttarakhand CM vouches for hydropower projects, slams Centre's stand

·          Coal auction phase I to offer 92 mines with 350 mt reserves

·          Congress to oppose coal sector reforms

·          Plan to get clearances for 112 mines before auction: Govt

·          Bill on coal mine allocation introduced in Lok Sabha

·          Cabinet may take up Electricity (Amendment) Act soon

·          Russian, Indian funds to invest $1 bn in hydro power

·          Govt may soon rationalise coal linkages of 40 power projects



·          Shale veteran takes on Argentina’s $6 bn shortfall

·          Total delays Bulgaria exploration citing oil price tumble

·          Australia's Woodside postpones decision on Browse LNG project

·          Petrobras said to cut exploration spending in cash crunch

·          Technip abandons plan to take over seismic surveyor CGG

·          Israel's offshore Royee gas field may hold 3.2 Tcf

·          Mexico expects $14 bn spending in first oil blocks

·          Malaysia's Petronas says open to selling assets in Africa

·          Canadian crude discount widens as Kearl production increases


·          Bangchak Petroleum plans to boost refining output in 2015

·          Thai Bangchak Petroleum to invest $305 mn in 2015, boost refining output

·          Chile Aconcagua refinery back to full capacity

·          Chinese refiners pump out fuel near record pace amid oil slump

Transportation / Trade…………

·          Cameroon signs $438 mn oil pipeline partnership with consortium

·          Oil pipeline to top US senate agenda next year

·          Morocco revives $4.6 bn LNG import plan

·          US agency considers exports of oil, gas from deepwater ports

·          Libya imposes force majeure on 2 oil ports after clashes

·          Poland's LNG terminal operator in talks with North American suppliers

·          Australia backs proposed gas link seen as ‘pipeline to nowhere’

·          Record oil tankers sailing to China amid stockpiling signs

·          Turkey may suggest LNG project to Russia

·                  Why Texas is now home to bargain-hunting Japan oil buyers

Policy / Performance………………

·          Strategic oil hoarding seen driving China demand in next 2 yrs

·          Russia Energy Minister says to maintain 2014 oil output into 2015

·          Sudan to drill hundreds of wells to boost oil, gas reserves

·          Iran said to discount light crude to Asia to deepest in 14 yrs

·          UAE sees OPEC output unchanged even if oil drops to $40

·          Peru opens bidding on seven energy blocks in Amazon

·          IEA cuts global oil demand forecast for 4th time in five months

·          Halliburton cuts 1k employees as sanctions slow Russia

·          US cuts oil price forecast for 2015 to $62.75 a barrel

·          Cheap oil also means cheaper commodities amid surpluses

·          Iran sees any break in OPEC solidarity sending oil lower



·          China to help Serbia build 350 MW coal-fired power plant

·          Nigeria signs MoU with Strancton Ltd to build 1 GW power plant

Transmission / Distribution / Trade……

·          ABB, Hitachi to tie up for HVDC power grid in Japan

·          Emerson to sell power transmission business to Regal Beloit

·          Pakistan signs $248 mn loan deal with ADB

·          Abengoa nets $24.7 mn Oman power transmission deal

Policy / Performance………………

·          UK set for £2.5 bn power bill to keep lights on

·          Bangladesh proposes setting up coal-based power plant in India

·          Australia looks to sell uranium, coal to Ukraine as ties tighten

·          500 Nuclear plants across the world by 2030: Russian expert



·          World's biggest solar power station to come up in Madhya Pradesh

·          Tata Power commissions wind farm in Maharashtra

·          Govt working on new renewable energy policy: Goyal

·          Govt plans to amend national biofuel policy

·          Modi govt's big solar push: Several power projects announced

·          Tata Power and Gamesa Wind Turbine sign pacts with Russia

·          India counts climate costs above $100 bn at UN talks

·          Welspun achieves financial closure for ` 6.3 bn wind power project in Rajasthan


·          China General Nuclear unit buys stake in 3 EDF UK wind farms

·          China’s ET Solar to build 40 MW solar power plant in Israel

·          Istanbul to get Turkey’s largest wind power plant

·          Fossil-fuel limits in all nations closer after UN deal

·          South Africa plans to raise renewable energy to curb blackouts

·          Fossil-fuel exposure may need to be disclosed in UK

·          UN seeks India's support on climate change




Lima outcome: the quiet mutation of Kyoto Protocol

Lydia Powell, Observer Research Foundation


lobal institutional regimes, such as that for trade (WTO), are seen to evolve from the world of capricious politics and diplomacy to a stable world of rules and laws. Climate change regimes on the other hand appear to be moving in the opposite direction, from one of global rules and laws to that of politics and diplomacy. At least that is what the outcome at Lima indicates. What was attempted at Lima was a first shot at drafting an international climate agreement under the Ad-hoc Durban Platform that would commit all countries to specific mitigation action plans. Observers who are concerned with State interests seem to like this development. For example those from the United States who have always seen the ‘common but differentiated responsibilities’ principle enshrined in the Kyoto Protocol as discriminatory are happy that the principle has been undermined. Top US negotiator Tod Stern declared that ‘it was a good outcome that would get countries started on the way to Paris’. Observers from large developing countries such as India are also happy that their commitment of mitigation would be determined nationally and these commitments may not be subject to international verification. India’s environment Minister Prakash Javadekar declared that the ‘final text addresses all of India’s concerns and that India got what it wanted’. The question that we must ask now is why two countries labelled as the largest polluters are happy with the Lima outcome notwithstanding the fact that they are very different on most counts. For one, the former is a developed country with a per person income of over $50,000 and the other is a developing country with a per person income of less than $5000. Possible answers to the question posed above are not likely to make those who are seriously concerned over growing carbon emissions happy. 

First the emerging regime on climate action that seeks nationally determined commitments is unlikely to have a significant impact on climate change if we go by models that establish a link between the stock and flow of green house gas emissions in the atmosphere and increase in global average temperatures. According to calculations by Climate Action Tracker, commitments by the USA, EU and China for 2030 if fully implemented would reduce global temperature increase by 0.2C to 0.4C by 2100.  This means that global temperatures would still increase by more than 3C above pre-industrial levels.  

Second, the Lima Call for Climate Action draft leaves sufficient margin for countries to set their own priorities in the Intended Nationally Determined Commitments (INDCs). INDCs are expected to cover quantifiable information on the reference point such as the base year or the reference level, time frame for implementation, scope and coverage of plans (such as sectors included), assumptions and methodology for estimating and accounting for GHGs etc. But countries are not expected to put forward financial commitments as part of their INDCs and the INDCs are not subject to external scrutiny and verification. This means that the bottom-up process may not add up to much in terms of actual carbon emission reductions

Third, though the Lima Call for Climate Action draft reiterates that the new agreement should reflect the principle of ‘common but differentiated responsibilities’, very little of differentiation is preserved in what is required by way of commitments from different countries. Paragraph 11 of the Lima Call for Action offers marginal concessions for Least Developed Countries and Small Island States in that their INDCs can reflect their ‘special circumstances’. But these countries hardly matter when it comes to mitigation action and even if they were excluded from submitting INDCs it would not have made any difference to mitigation action. 

In summary, the new architecture on climate action that is being drafted amounts to a quiet mutation on Kyoto as it (a) undermines differences between countries that Kyoto had acknowledged explicitly and (b) is not legally binding on any party as opposed to Kyoto which had legally binding commitments from Annex I or developed countries. However the new architecture does not compromise on the supremacy of the State over Capitalist Markets as the ideology around rational relations of exchange on climate policy. This goes against the trend of international economic exchanges that have created an international legal space in which behaviour is regulated by international rules that are in turn decided by interests of multinational corporate that engage in international trade. Instead of an international law on climate change imposing commandments such as ‘thou shalt not emit carbon’ on Nation States, or International Carbon Markets saying ‘thou shalt pay for emitting carbon’, Nation States are now allowed to say ‘I will or will not emit carbon’. This may or may not be positive for action on climate change but it is definitely positive for sustaining the power of Nation States.                                                                             Views are those of the author                    

Author can be contacted at [email protected]


Facing Downside Risks –The Oil Price Slump and how it might affect Gas Prices (update) - Rangarajan Committee Gas Price meets Indian Gas Price 2.0

Thomas Elmar Schuppe, CIM Integrated Expert on Energy, Observer Research Foundation


eferring to recent publications this article presents an update by acknowledging the ongoing slump of oil prices and how it would have influenced a formula based gas price linked to the proposal of the Rangarajan Committee.

The mere market expectations on the future oil market in contrast with IEA's World Energy Outlook forecast are illustrated by Figure 1: five different oil future curves are plotted, with the highest (orange line) settled only five months ago at June 19th and the lowest as of Dec 18th (purple line). The curves were moving apart especially at the very front end, showing up the dramatic spread of about $ 55/bbl for the respective front month settlement, a destruction of almost half value. However, at the back end of the curve, the assessment of the market participants was less dramatic till November as the curves were converging more or less and the spread peaks off to far less than $ 10/bbl by the end of the decade. However, recent future settlement as of Dec 18th demonstrates a sharp $ 10/bbl fall at the back end, now indicating an increasing mistrust of market participants in a recovery of global oil prices. As opposed to this, the recently published World Energy Outlook 2014 from energy analyses heavyweight International Energy Agency predicts a modelled rise to about $ 130/bbl by 2020 in its central New Policy Scenario (dark blue line).

Figure 1: Brent Crude Oil Futures and WEO2014 Forecast (2014-2022)

Source: Brent future front month settlements (as of dates stated) from CME (; IEA Word Energy Outlook 2014. Compiled by author.

Since the details of the new gas price formula 2.0 are not yet known, in lieu thereof the robustness of a gas price formula like the proposal from the Rangarajan Committee (RC) against oil price volatility is illustrated hereinafter. Based on recent market assessments the domestic RC gas price formula at high/low oil prices (yellow/red line) as well as the spread between these (grey area) is shown in Figure 2 (gas price 2.0 indicated in a green sketch for its first known half-year period as a reference point US-$5.6/MMBtu). The divergence in the course of those two RC gas price curves can be largely explained by the historic Brent oil volatility during the last half year and changing Brent future curve shape. The largest exposure of more than US‑$ 3/MMBtu can be observed in the beginning of 2016, representing the large spread of the Brent crude futures at the front end of the curves (about US-$ 55/bbl) and the concomitantly arithmetic of the RC gas price formula (set up of three months time-lag and creation of twelve months average).

Figure 2: Sensitivity of Rangarajan Gas Price Formula to Crude Oil Prices Changes (2014-2020)

Source: Own assumptions and calculations based on oil and gas futures as of 18th Dec. 2014 (and 19th June, respectively).

The computed RC gas price might have fallen to about US‑$ 6/MMBtu by 2016 (Figure 2). It has therefore almost levelled with the validated gas price 2.0 that by now is only known to be at about US‑$ 5.6/MMBtu until April 2015. It can be assumed that with ongoing lower Brent crude price, ceteris paribus, the RC price formula will yield the current gas price 2.0 (US-$5.6/MMBtu). (Please see ORF Energy News Monitor Volume XI, Issue 23/24)


Views are those of the author                    

Author can be contacted at [email protected]


Solar Power: Fact or Fiction?

Praveen Kumar Kulkarni*

The Narrative from the Media


he Government of India has sanctioned ` 228 crore to subsidise solar photovoltaic projects built on tops and banks of water canals. Through this grant, the government hopes to help creation of 50 MW of canal top and 50 MW of canal bank solar projects. Canal-top solar plants have caught the fancy of people ever since American solar major, SunEdison, put the country’s first such plant, of 1 MW capacity on the Narmada canal in Gujarat in 2012. More recently, the Hyderabad-based Megha Engineering built a 10 MW plant again on another branch of the Narmada canal system, near the city of Vadodara. The Ministry of New and Renewable Energy has assumed a total cost of ` 975 crore for the 100 MW it wants to help develop – or, ` 9.75 crore a MW, compared with ` 11 crore a MW of the 10 MW that Megha Engineering built. Under the scheme, the government offers ` 3 crore per MW or 30 per cent of the project cost, whichever lower, for canal-top projects, and ` 1.5 crore a MW or 30 per cent of the project cost for canal bank projects, says ‘Guidelines for pilot-cum-demonstration project for grid-connected solar PV plants on canal tops and banks’. The idea is to encourage state power utilities or any other state government organisations or undertakings either on their own or through private sector developers. Central public sector undertakings that operate in the power sector, or have their own canal systems could also apply for the subsidy. Canal top solar projects come with some significant advantages. First, they are quick to build-SunEdison took four months to build a MW. They prevent evaporation of water, roughly 7 million tonnes a year under the shade of one MW. The water keep the solar panels cool, which is good for power generation.

This excerpt is from the Hindu Business Line article titled Centre sanctions ` 228 cr to subsidise canal top solar plants by M Ramesh dated 11 December 29014 available at

The Counter Narrative from a Solar Entrepreneur

The scheme is designed to promote Narmada Canal Authority and indirectly to lower burden on the Gujarat Government. Canal top PV projects can be promoted only when costs are clear. Canals are the Property of the State Government (i.e Public) and through the narrative of generating solar power, this loot will continue for the next few decades. The Central Government is planning to help Narmada Authority with 30% capital subsidy for an inefficient energy generation model, which is widely commented in many forums including THINK INDIA.  The CAPEX is pegged at ` 9.75 Cr/MW as per their estimate, when, other schemes can be carried out are at ` 6.5 to 7.2 Cr/MW and the land below the PV can be utilised for agriculture. 

The Central Government is aggressively pushing to help contractors of Narmada canal authorities to give them permanent repair orders, a typical Gujarat business / development model with Government support i.e without sustainability or using low cost solutions. Ultimately the costs will be paid by loyal tax payers.   

In Narmada Canal authority area and other places, lots of land (land acquired that was more than what was necessary) is available on the canal bank (again State government property) and it will be given a subsidy of ` 1.5 Cr/MW. The justification is that the subsidy is an intra government subsidy. But the sum will be sucked up by private interests through bidding process. On the one hand we hear that the Government has no business to do business; on the other the Government is promoting certain businesses at high cost (high capital subsidy and feed in tariff) in the name of captive power consumption. There are no checks and balances. The CAG may comment after 20 years i.e after the life of the Solar PV plant. 

When small solar entrepreneurs ask for 100% debt fund that would be paid back by these New Generation Entrepreneurs (unlike large corporate that do not pay despite RBI Governor's intervention) there is no response. But large grants like Capital Subsidy, Viability Gap funding and tax evasion tools like Accelerated Depreciation benefits are offered on a platter to the large corporations that are running other businesses. This will generate losses for the country and the tax payer in the name of solar power that is combating climate change.


Views are those of the author

* The author, BE (MECH), MIE, Ex- JICA /UNIDO, is a solar entrepreneur.

Author can be contacted at [email protected] /



Renewable Energy: Grid interactive and Off-grid Systems

Akhilesh Sati, Observer Research Foundation


Cumulative Installed Capacity (MW)

As on



A) Grid Interactive Power

Wind Power



Small Hydro Power



Biomass Power and Gasification



Bagasse Cogeneration



Waste to Power



Solar Power



Sub Total



B) Off-grid Captive Power

Waste to Energy



Biomass (non-bagasse) Cogenration



Biomass Gasifiers-Rural



Biomass Gasifiers-Industrial



Aero-Generators/Hybrid Systems



SPV Systems



Water Mills/Micro Hydel



Biogas-based Energy System



Sub Total



Total [A) & B)]




Source: Akshya Urja, Vol 8, Issue3 and Issue 1, Ministry of New & Renewable Energy





Govt runs into hurdles in recovering revenues from RIL-operated KG-D6 block

December 16, 2014. The government's move to recover part of a $2.4 billion penalty it has imposed on Reliance Industries Ltd (RIL) hit a roadblock after GAIL India and Chennai Petroleum Corp (CPCL) told the oil ministry that they cannot collect revenues from RIL-operated KG-D6 block as they are not buyers of oil and gas from the field. Oil Minister Dharmendra Pradhan had said that the oil ministry had directed GAIL and CPCL to remit sale proceeds of oil and gas from RIL-operated D6 block in the government's account. (

ONGC to use GSPC's under-sea infrastructure for KG find

December 14, 2014. Oil and Natural Gas Corp (ONGC) plans to use Gujarat firm GSPC's undersea infrastructure to bring gas from its KG-basin fields in Bay of Bengal to land. ONGC had signed an agreement to use Reliance Industries' under-utilised KG-D6 infrastructure to move gas from neighbouring KG-D5 block, to land. The company has now submitted plans to the government to use infrastructure of Gujarat State Petroleum Corp (GSPC), which has laid out under-sea pipelines and other systems to take gas from its block in the vicinity of Andhra Pradesh. ONGC has made 11 discoveries in KG-D5 which it plans to develop in three clusters or groups. In the first cluster, it plans to club gas finds D and E in the northern part of KG-D5 with a discovery in its adjoining G-4 block. These finds are in close proximity to the pipeline system that are to take gas from GSPC's KG-OSN-2001/3 block to on-land. So, ONGC will pump 14.5 million standard cubic meters per day of peak output envisaged from Cluster-1 to the GSPC network for onward transmission to land. Cluster-2, which is also in the northern part of KG-D5, will have two components - 91,000 barrels per day of oil which will be transported to a floating processing system from where it will be sent to refineries by tankers. About 12.5 million standard cubic metres a day (mmscmd) of gas will be transported to an onshore terminal at Odalarevu through a separate ONGC-laid sub-sea pipeline network. The third Cluster is made up of UD-1 gas discovery in the Southern part, which lies in extremely challenging water depths of 2400-3200 meters. ONGC is currently not pursuing development of this as it is yet to get a suitable technological solution. The company is targeting mid-2018 for start of natural gas production from the block and mid 2019 for oil. The block KG-D5, which sits next to RIL's KG-D6 block, is divided into the Northern Discovery Area (NDA) and Southern Discovery Area (SDA). NDA has 121 million tons of in-place oil reserves and 78 billion cubic meters (bcm) of gas while SDA has an in-place reserve of 80.9 bcm. ONGC and RIL won KG-D5 and KG-D6 block in the first round of auction under New Exploration Licensing Policy (NELP) in 2000. RIL began production from the oil discovery in KG-D6 in September 2008 and put gas find on production in April 2009. It created capacities to carry as much as 80 mmscmd of gas but current output of less than 12 mmscmd utilises only 15 per cent of this resource. (

OIL signs contract for two oil blocks in Myanmar

December 13, 2014. Oil India Ltd (OIL) has signed contract for two offshore oil and gas blocks it had bagged in Myanmar. OIL along with its consortium partners signed Production Sharing Contract (PSC) with Myanma Oil and Gas Enterprise (MOGE) for two offshore blocks M4 and YEB at Nay Pyi Taw, the company said. OIL-led consortium won these blocks under Myanmar offshore bidding round 2013 which was launched on April 11, last year. A total of 30 blocks were put on offer in this bidding round. OIL and partners bid for three offshore blocks M-4, M-8 and YEB and won two of them. OIL is the operator with 60 per cent interest in both the blocks. Other consortium partners are Mercator Petroleum Ltd (25 per cent), Oilmax Energy Pvt Ltd (10 per cent), and Oil Star Management Services Co Ltd (a local company of Myanmar with 5 per cent stake). (

Transportation / Trade…………

RSGL to develop infrastructure for retail gas supply

December 16, 2014. Rajasthan State Gas Ltd (RSGL) will lay pipelines for retail gas supply in Alwar, Baran and Jhalawar districts. RSGL is a joint venture of Rajasthan State Petroleum Corporation Ltd (RSPCL) and Gas Authority of India Ltd (GAIL). RSGL aims to provide clean, secured and green fuel to public through its own infrastructure, RSGL said. Laying pipeline for domestic and industrial consumption and gas supply was also projected to achieve RSGL's targets, RSGL said. (

Essar Group, Rosneft to sign 10 year oil deal

December 10, 2014. Essar Oil will sign a 10-year deal to import crude oil from Russia as President Vladimir Putin pushes to deepen energy ties with India to counter to US sanctions. Essar Oil's Memorandum of Understanding (MoU) with Rosneft, Russia's biggest oil producer, is among the agreements that are to be signed during Putin's two-day visit. Energy cooperation will figure prominently in talks between Prime Minister Narendra Modi and Putin. ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) are likely to sign MoUs for exploration in Arctic and Eastern Siberia. OVL and Russia's biggest oil company Rosneft had in May signed a MoU for cooperation in the Artic shelf. Putin said Russian gas monopoly Gazprom delivered two LNG shiploads last year and has signed a long-term agreement with GAIL India Ltd for supply of 2.5 million tonnes a year of LNG for 20 years. (

Oil Minister for petroleum pipeline from Siliguri to Parvatipur

December 10, 2014. Oil Minister Dharmendra Pradhan pushed for laying of a petroleum product pipeline from Siliguri to Parvatipur in Bangladesh for supply of fuel. Pradhan met Dr Tawfiq-e-Elahi Chowdhury, Energy Advisor to the Prime Minister of Bangladesh, to discuss the pipeline. Pradhan requested cooperation from Bangladesh government for materialisation of Indo-Bangla product pipeline from Siliguri to Parvatipur, which is a part of Prime Minister Narendra Modi's view that North-East is our Natural Economic Zone (NEZ). (

Policy / Performance………

Oil Minister strives to ensure success of LPG direct cash transfer

December 16, 2014. As the government prepares to roll out its biggest ever project to check subsidy diversions, Oil Minister Dharmendra Pradhan is literally burning midnight oil to ensure success of direct cash transfer on LPG. Besides holding almost daily review meetings to ensure no hickups in roll out of the programme to give cash subsidy to LPG consumers from January 1, Pradhan has been personally attending to complaints received from the 54 districts where the plan was rolled out in initial phase from November 15. He has driven the public sector oil companies to come up with a consumer-friendly portal - that provides solutions to all problems - from enrolling for the scheme, the procedure to get Aadhaar number, linking bank account to cooking gas account and checking status of subsidy transfer and tracking refil booking. The minister at a review meeting wiped out his mobile phone to dial a consumer in Ludhiana who had complained about not receiving cash subsidy. From January 1, LPG consumers across the country will have to buy cooking gas at market rates. They will get the difference between current subsidised rate and market price for 12 cylinders in a year in cash that will be transferred to their bank accounts. The Direct Benefit Transfer Scheme for LPG, which has now been renamed PAHAL, has been modified to exclude the requirement of unique identification number (Aadhaar) for availing the cash subsidy. Aadhaar is now optional but consumers should have a bank account linked to their LPG connection number. PAHAL or Pratyaksh Hanstantarit Labh has been rolled out in 54 districts from November 15 and will extend to rest of the country from January 1. Pradhan at a review meeting instructed officials to ensure that the LPG portal has Hindi as well as regional language options to help consumers. Under the scheme, LPG consumers will get cash subsidy in their bank accounts so they can buy a cooking gas cylinder at market price. Cash equivalent to the difference between the current subsidised rate and the market price is transferred to the bank account of a consumer the moment he or she makes the first booking for a cylinder after joining the scheme. The moment a consumer takes delivery of the cylinder, another advance cash subsidy is transferred to the bank account. DBT (direct benefit transfer) is designed to ensure that the subsidy meant for the genuine domestic customer reaches them directly and is not diverted. Government is looking at saving ` 10,000 crore in subsidy by curbing diversions and pilferages. In 54 districts covering 11 states, the scheme covers 2.33 crore households. Currently, the Aadhaar generation level is 95 per cent in these districts. Under the scheme, consumers will now receive SMS at every stage of enrollment in the scheme. (

No roll-back of excise duty hike on diesel, petrol: Govt

December 16, 2014. The government said it has no plans to roll-back the recent hike in excise duty on diesel and petrol. "No, Sir," Minister of State for Finance Jayant Sinha said in a written reply when asked whether the government would review and withdraw the increase in central excise duties. The government recently hiked excise duty in two tranches on diesel as well as petrol in order to garner about ` 10,500 crore in the current financial year. Sinha said the increase in the duty has been effected, inter alia, "taking into consideration the continued fall in international prices of crude". He also said that the "present circumstances" do not warrant a change in the excise duty structure on petrol and diesel. The excise duty on diesel is ` 5.96 per litre (unbranded) and ` 8.25 per litre (branded). For unbranded and branded petrol, the excise duty is ` 12.95 per litre and ` 14.10 per litre, respectively. The international crude oil price of Indian Basket was USD 60.10 (` 3,765.27) per barrel on December 15, down from USD 60.58 (3,782.62) per bbl on December 12. (

Only few giving up LPG subsidy voluntarily

December 15, 2014. Over 12,450 LPG users have so far voluntarily given up their subsidies, but this accounts for only 0.008 per cent of about 15 crore domestic cooking gas consumers in the country. The government has been since 2012 urging the rich to give up subsidies on LPG to make them available to people who deserve it. The last such call was given soon after the NDA government came to power. The oil ministry has urged ministers, MPs, MLAs, senior government officials and executives of public sector companies to give up their subsidies. Consumers are currently entitled to 12 14.2-kg cylinders or 34 5-kg bottles in a year at subsidised rates. Any requirement above that has to be procured at market price. A subsidised 14.2-kg cylinder is currently available at ` 417 per bottle in Delhi. The subsidised cooking gas is also available in 5-kg packs, costing ` 155 per such cylinder in Delhi. Any requirement beyond the subsidised quota is to be met through purchase of cooking gas at market price - ` 752 per 14.2-kg cylinder and ` 351 per 5-kg bottle. Oil Minister Dharmendra Pradhan said there was "no proposal under consideration of the government" to withdraw subsidy on LPG. (

O&G sector benefits from reforms: Fitch

December 15, 2014. The on-going reforms in India's oil and gas sector - namely the diesel deregulation and new gas pricing policy - will have a positive impact on the rated oil and gas companies, especially those engaged in oil product retailing and gas production, Fitch Ratings said in a new report. However, the rating outlook for Indian oil and gas entities remains stable in 2015. The benefits from the oil price reforms and lower global oil prices for refining and marketing companies will be offset by their large capex needs in the medium term, which will lead to negative free cash flows. The low global oil prices will hurt the cash generation of the upstream companies that have heavy exposure to oil, while the state-owned production companies will have to also cope with the still-large discounts that they have to offer to local refiners. (

Oil Ministry wants fuel conservation to be introduced in school books

December 12, 2014. Fuel conservation will soon be introduced in school books as part of the government's effort to lower consumption and wastage of fossil fuels. The ministry of petroleum and natural gas will write to the human resource development ministry in this regard, oil minister Dharmendra Pradhan said. The focus of this outreach programme will be students, homemakers, domestic helps, drivers and diesel genset users, he said. The ministry will also launch a citizens' drive to connect with the masses on the issue as part of the annual Oil and Gas Conservation Fortnight, which will be held from January 16 through 31. The Conservation Fortnight will include activities such as technical seminars, symposiums, quizzes, painting competitions and marathons. Pradhan said a national-level essay competition will be organised to propagate the message of conservation among students, while orientation programmes will be held for homemakers, domestic help and public transport drivers. (

Govt weighs revenue sharing model for basins to attract global companies

December 10, 2014. The government is working out a middle path between the existing, controversial contract regime in which oilfield operators recover their costs before sharing profit with the government, and the revenue sharing system in which the state gets a share from the first day of production, irrespective of the expenditure on the field. The oil ministry was in favour of dumping the current contractual regime, which became controversial because of stern audit notes and the requirement of the state to monitor the contractor's expenditure to protect the government's share of profit. However, after detailed discussions with domestic and global investors, the oil ministry has decided to change the system, which is attractive for explorers, only for explored basins. In September 2011, while examining product sharing contracts (PSCs) of Reliance Industries Ltd (RIL), BG and Cairn India, the Comptroller & Auditor General (CAG) of India had criticised that the contractual regime provided "inadequate incentives" for private contractors to reduce capital expenditure. Reacting to CAG's comments, the then prime minister Manmohan Singh constituted a committee under his Economic Advisory Council Chairman C Rangarajan, which recommended to scrap the PSC model and adopt a non-controversial revenue sharing model where cost-recovery was not allowed. The Narendra Modi government is upset over the dismal performance of state-run explorers such as ONGC and Oil India and wants them to expeditiously carry exploration blocks in existing blocks rather than adding more blocks to their portfolio. More than three-fourth of 254 blocks auctioned under NELP are with public sector companies, particularly ONGC and Oil India. (

Govt fixes ` 48.5-49.5 price for ethanol procurement by OMCs

December 10, 2014. The government fixed a price of ` 48.50-49.50 per litre for procurement of ethanol for blending with petrol, a rate much higher than the price oil companies presently pay to buy the sugarcane extract. In November 2012, the government had mandated compulsory 5 per cent blending of ethanol in petrol but the programme has not extended beyond certain centres because of supply and pricing issues. The procurement price of ethanol was earlier decided by oil companies and the suppliers of ethanol. The Cabinet Cabinet Committee on Economic Affairs (CCEA) fixed the delivered price of Ethanol in the range of ` 48.50 per litre to ` 49.50 per litre, depending upon the distance of sugar mill from the depot/installation of the public sector oil marketing companies (OMCs). (



Hot run of Unit II at KNPP

December 16, 2014. The 'hot run' of Unit II of Kudankulam Nuclear Power Plant (KNPP) would begin next week while preliminary work on construction of the third unit would start in March 2015. Site Director of KNPP R S Sundar said the central government had earmarked ` 39,746 crore for construction of Units III and IV. Sundar said the first unit has been maintaining its full 1000 MWe capacity and that they were expecting a nod from Nuclear Power Corp of India (NPCIL) for it to begin formal commercial production. The unit had so far generated 300 crore units, of which half was given to the Tamil Nadu power grid. Once commercial production begins, the cost of one unit would be increased from ` 1.22 to ` 4, he said. He said about two lakh people had so far been allowed to visit the KNPP site to allay apprehensions on the safety of the project. The 1000 MW capacity first unit of the Indo-Russian joint venture began power generation on October 22, 2013. Sundar handed over a cheque for ` 55 crore as KNPP's contribution to Tirunelveli District Collector M Karunakaran for construction of houses for fisherfolk of coastal villages in and around Kudankulam. (

Centre decides to form committee on Subansiri project: AASU

December 15, 2014. The Centre has decided to form an eight-member committee to review all problematic areas of the under-construction Lower Subansiri Hydroelectric Power Project (LSHEP) along the Assam-Arunachal Pradesh border. The decision was taken at a meeting of Union Power Minister Piyush Goyal, All Assam Students' Union (AASU) and 25 other organisations in New Delhi on December 11, AASU Adviser Dr Samujjal Bhattacharya said. Four members of the committee would be from Assam and the rest from outside the state to sort out the problems in the areas where construction work was stopped for about three years ago due to protests, he said. The opinions of experts and apprehensions of agitators against the 2,000 MW project were presented before the minister, he said. (

Transmission / Distribution / Trade…

Alstom T&D India bags ` 1.5 bn order from Rajasthan

December 16, 2014. Alstom T&D India has secured an order worth around € 20 million (` 151 crore) from Rajasthan Rajya Vidyut Prasaran Nigam Ltd (RRVPNL) for supplying transmission equipment. The new grid sub-station in Bhadla will help evacuate power from the Bhadla solar park and other upcoming solar parks in the area, while the expansion of the sub-station at Bikaner will facilitate the exchange of solar power generation with the national grid. Alstom T&D India will design, engineer, manufacture, install and commission the Bhadla 400/220 kV sub-station while the Bikaner expansion project includes the supply of eight 400 kV bays, transformers, circuit breakers, control and protection relays and sub-station automation system. All equipment will be manufactured and supplied from Alstom T&D India's manufacturing facilities in India. (

Power sector unable to utilise full capacity due to poor transmission

December 15, 2014. The power sector is unable to use at least 10 per cent of its capacity due to the choked transmission network in the country, hurting projects of Tata Power, Essar Power, Jindal Power, JSW Energy, CLP, DB Power, MB Power, Emco Energy, GMR and Adhunik Power. Inadequate transmission has kept about 25,000 MW of generation capacity idle, making the problem comparable to the issue of acute fuel scarcity that has hit about 30,000 MW of new capacity, industry executives say. In addition to the inadequate capacity, regulatory authorities impose strict restrictions on the utilisation of existing networks and keep a large amount of transmission capacity idle as a safeguard against grid collapse. They say new transmission capacity in key corridors is scheduled to come up after four years, making the outlook grim for many plants. Transmission problems are also hurting power trading, Indian Energy Exchange (IEX) said. Last month, no power could be imported into the southern region throughout the month either through the eastern or western corridor due to congestion, IEX said. Most power plants in western India have signed power purchase agreements with customers in the north or south because states in only these regions invited long-term PPAs. But there is no capacity in key power corridors to ship this power, making these plants idle. To compound matters for these plants, Coal India is not supplying coal to these plants because PPAs have not started operating. The Association of Power Producers says restrictions on capacity utilisation of transmission corridors often prevent generation companies from supplying power even after signing long-term power supply agreements. At least half a dozen transmission projects of various companies including Power Grid Corporation, Reliance Infra and Sterlite Grid with investments of over ` 7,000 crore are held up or delayed due to the slow speed of official clearances. Power companies say they are feeling the pinch. Southern states of Tamil Nadu, Kerala, Karnataka and Telangana would not have been facing power shortages if there was adequate transmission capacity available with generating firms in Madhya Pradesh, Odisha and Chhattisgarh. According to Central Electricity Regulatory Commission (CERC), IEX could not allow trade of close to 11 billion units of electricity in past three financial years due to congestion in transmission network. In fiscal 2012-13, almost 3.7 billion units were lost as a result of unavailability of the corridors while in 2013-14 the number went up by 41 per cent to 5.3 billion units. (

Alstom T&D India gets ` 2.4 bn substation projects in Maharashtra

December 12, 2014. Alstom T&D India has received orders worth € 32 million (` 246.2 crore) from Maharashtra State Electricity Transmission Company to build 400/220 kV grid substations at Kudus, Alkud and Kondhwain in the state. Maharashtra is building these substations to strengthen its transmission network and enhance power evacuation capacity the as part of the 12th Five Year plan. Alstom T&D India will set up 400/220kV air-insulated substations at Kudus and Alkud. This contract covers power transformers, substation automation system and other auxiliary equipment. For Kondhwa, Alstom will build a 220/22 kV gas-insulated substation. All equipment will be supplied from Alstom T&D India's manufacturing facilities. Alstom has been associated with Maharashtra State Electricity Transmission Company on a number of projects, including a contract to build twenty-six 220/132 kV substations across the state. Alstom is also building a 765 kV air-insulated substation at Aurangabad, the first 400 kV gas-insulated substation at Hinjewadi and is executing a pilot project for the utility in Mumbai on remote operation and situational awareness. (

Coal India receives first consignment of imported coal of 1.7 lakh tonnes from Indonesia

December 12, 2014. Coal India's efforts to import coal have borne fruit after nearly four years, with the first consignment of about 1.7 lakh tonnes reaching Mundra Port from Indonesia recently. The imported coal, handled by MMTC, will be supplied to Neyveli Thermal Power in Tuticorin and two independent power producers in Punjab — Talwandi Sabo Power and Nawa. The state-run monopoly miner was initially hoping to import about 5 million tonnes of coal for its consumers. However, it ended up placing an order for 0.5 million tonnes due to lack of interest among buyers. The rest of the ordered volume, about 3.3 lakh tonnes, will be imported during this financial year. Coal India has been given the responsibility of importing coal on behalf of its consumers to meet the nation's demand for the fuel. It had decided to place orders only for companies that would pay in advance. Although 40-50 companies had shown interest in the beginning, only five placed firm orders. The miner spent a couple of years trying to enter into a long-term contract with overseas coal producers in lieu of strategic stakes in these companies. However, this did not materialise as the prices quoted for the coal being supplied worked out to be more than the prevailing market price. Besides, its largest consumer NTPC backed out since it did not want to buy the coal at higher prices than prevailing market price. NTPC had earlier shown interest in sourcing 10 million tonnes of imported coal through Coal India, but it backed out when the prices quoted were higher. (

CCEA clears ` 15.9 bn transmission project for Tamil Nadu

December 11, 2014. The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi, has approved the creation of an intra-state transmission system in Tamil Nadu. The project will mainly support renewable energy, mostly wind power projects in the state, and will cost ` 1,593 crore. A 400 kV grid sub-station will be built at Thannampatty, besides augmentation of various 230 kV grid sub-stations and associated transmission systems in the state. The project is proposed to be completed within a period of three years. (

Policy / Performance………….

Centre to clear stand on Uttarakhand hydropower projects in 2 months: SC

December 16, 2014. The Centre was granted two months time by the Supreme Court (SC) to spell out its stand on future of six hydropower projects in Uttarakhand which are facing uncertainity in the aftermath of a natural disaster last year. A bench of Justices Dipak Misra and U U Lalit accepted the plea of Attorney General Mukul Rohatgi that the final picture would be cleared after considering the stand and views of all stake-holders which include PSUs like National Thermal Power Corporation (NTPC), National Hydroelectric Power Corporation (NHPC) and Tehri Hydro Development Coporation (THDC). (

Coal auction may push up fuel price for power sector: ICRA

December 16, 2014. The auction of 74 coal blocks is likely to witness an intense competition among bidding companies and the exercise may push up the fuel price for power sector, rating agency ICRA said. This in turn may put an upward pressure on cost of power generation and the retail tariff, it said. ICRA said the bidding for coal blocks may be intense due to low execution risks and their importance for both operational and under implementation projects. These blocks are from over 200 coal mines whose allocations were quashed by the Supreme Court, which termed their allotment as "arbitrary and illegal". The first round of auction involving these blocks would be completed by March 31. As a result, the auction process is expected to increase the cost of coal for the power sector, which in turn would put upward pressure on price of generation and retail tariff, it said. ICRA said that the provision for auction and allocation of coal block for mining with 'sale purpose' should be favourable for the coal mining sector in the long run. The process would enable the entry of private sector in coal mining business with better operational efficiency which would help to improve the availability of coal for the various end uses, ICRA said. (

` 120 bn investment to develop a coal block: West Bengal CM

December 15, 2014. West Bengal Chief Minister (CM) Mamata Banerjee said an investment of ` 12,000 crore in a joint venture would be made to develop a coal block in the state's Birbhum district, creating employment for a large number of people. Banerjee said Deocha-Pachami coal block in the state with a reserve of 2,200 million tonnes, which was allocated to six states and a CPSU by the Centre in 2013, would be developed in a joint venture. Development of this coal block under Md Bazar block in Birbhum district in a joint venture will expedite the development process in the entire area covering Bankura, Birbhum, Purulia, Burdwan and Murshidabad districts, Banerjee said. (

Govt may not give free power to coal producing states: Goyal

December 15, 2014. The government may not provide free power to coal producing states of Odisha, Jharkhand and Chhattisgarh on account of negative impact of industrial activity in these states. In this regard, the Planning Commission engaged TERI (The Energy and Resources Institute) to suggest a suitable methodology for compensation to the states. Thereafter, TERI submitted its report to the Planning Commission. Power Minister Piyush Goyal said that the government had already introduced in 2010 a Clean Energy Cess for which a levy of ` 100 is now imposed on every tonne of coal. The amount collected is provided to National Clean Energy Fund (NCEF) which aims to fund projects on clean energy, including the host states. (

Polish companies eye re-entering Indian underground coal mining

December 15, 2014. Polish mining technology companies are trying to re-enter Indian coal mining sector after almost four decades. At the time when India was trying to double coal production over the next five years, the Polish mining equipment and technology was trying to make inroads in the Indian coal mining sector. Polish companies were focusing at underground coal mining sector which has technology to mine coal beneath up to 1000 metres. (

Coal block e-auction rules: Current mine owners to get head start over new bidders

December 15, 2014. The captive coal mining firms in producing blocks might not lose their mines even after the deadline of March 31, 2015, set by the Supreme Court. The government's final rules for reallocation of cancelled mines through an e-auction process give the existing owners an advantage over new bidders. In Phase-I, the 74 operational ones among the 204 deallocated mines will be on the block. The successful bidder will mine coal only for captive use, for projects in the power, steel or cement sector. The detailed tender document that potential bidders have to file asks for precise details of end-use, amount of coal needed, distance of the end-use plant from the mine and the project's completion status. The Centre plans to conduct a two-stage bidding under the Coal Mines Special Provisions Ordinance, promulgated to reallocate the cancelled blocks. Power sector executives believe the government, by asking for technical bids first, has already separated the men from the boys. The bidder qualifying in the first stage will be asked to make a financial bid under e-auctioning. The rules specify the technical and financial qualification of participants in the auction. The court had cancelled 204 block allocations, made through the screening committee route over the past two decades, terming those “illegal” and “unconstitutional”. It had given the government time till March 31 to reallocate operational mines and asked mine owners to pay a fine of ` 295 per tonne of coal. (

Energy conservation can help save ` 500 bn: Power Minister

December 14, 2014. Pursuing energy efficient ways will help reduce electricity consumption and save as much as ` 50,000 crore, according to Power Minister Piyush Goyal. Emphasising the need for conserving energy, he said that within next two years government buildings throughout the country would be equipped with energy saving LED (Light Emitting Diode) bulbs. India produces about one lakh crore units of electricity and if a ten per cent saving (energy) is made that can save 10,000 crore units, Goyal said. This is equivalent to as much as "` 50,000 crore" savings which can be utilised for lighting up homes of five crore people who are without electricity, he said while speaking at the National Energy Conservation Day function. Noting that energy conservation would help in the country's economic progress, Goyal said the aim should be to save 10,000 crore units of electricity by end of 2015. As part of the function, the Minister also interacted with students from different parts of the country through video conferencing for nearly an hour. In Andhra Pradesh, the state government is distributing LED bulbs to replace incandescent ones. Goyal also said that he would take up with Human Resource Development Ministry the idea of voluntary inclusion of energy management in the school curriculum. There was another suggestion about having a toll-free number in each state, where complaints can be registered regarding wastage of power due to not switching off the street lighting system during day time. Goyal said officials would be asked to make this toll-free number operational by January 31, 2015 in all states and Union Territories besides ensuring proper management. When asked about the need for government vehicles to conserve energy, the Minister said he would look into the issue and do something. Goyal, who also holds the portfolios of Coal and New and Renewable Energy, said that all islands would be made green energy islands in the next two years. (

Power Ministry rules out direct regulation of tariff

December 12, 2014. The Ministry of Power has ruled out any direct regulation of power tariff as it will be detrimental to the efforts done by both the government and efficient power companies in streamlining the power generation, distribution and transmission. While these activities entail cost but in the long run this strategy will reduce the total cost of supply of electricity to the consumer. On one hand, the government cannot emphasise discovery of tariff through competitive  bidding  which is a parameter based on market driven efficiency and on the other hand, contemplate to put  regulate the tariff. The issue of regulating power tariff has been suggested as an internal recommendation to bring down the overall cost of power for consumers. In fact, the ministry has launched an integrated power development scheme at a total financial outlay of ` 76,623 crore for strengthening of sub transmission and distribution networks in the urban areas, metering of distribution transformers/ feeders/ consumers in the urban areas and enablement of the distribution sector through information technology. All distribution companies including private sector and state power departments will be eligible for financial assistance under this scheme. One salient feature of the scheme which differentiates it from other scheme is that the financial assistance is for both  development of distribution network for power generated from both conventional and  non conventional sources like solar panels, wind mills etc. However, if private distribution companies take financial assistance, the scheme has to be run through a state government agency or state owned companies who will own the assets to be handed over to the private company over a mutually agreed period of time. Power Finance company is the nodal agency for approval of the scheme and funds will be released in phases upon completion of agreed milestones in the agreement. The ministry is of the view that it will be too short sighted measure when the overall sector is moving towards an overhaul both in terms of fuel supply, optimization of operations, adopting new business models. In fact the ministry has decided to increase the share of renewable, in addition to the generation capacity addition target of 88,537 MW from conventional sources. While the capacity addition of about 30,000 MW has been planned from Renewable sources during 12th Five Year Plan, the cumulative installed capacity of renewable power is expected to be 55,000 MW by March 2017. (

Fitch retains stable outlook on power sector in 2015

December 12, 2014. Rating agency Fitch retained its stable outlook on India's power sector in 2015 but warned producers and grid operators will continue to face challenges by way of high capex levels and fuel shortages leading to negative free cash-flow in the medium-term. The sector faces lower profitability and possible uptick in acquisitions in the generation segment. However, rating outlook remains stable for the next year as the sector continues to have strong operating cash flows and healthy balance sheets, a Fitch report said. While the new tariff order passed in 2014 will have some negative implications for state-run power producer NTPC, there is regulatory certainty on rates until FY19, it said. The industry is likely to expand capacity by 15-18 GW in 2015 despite fuel supply shortages, but plant load factor (PLF) will be low, the rating outfit maintained. Fitch expects further consolidation in 2015, with stronger power generation companies looking to acquire smaller, distressed generation assets and coal upstream entities to improve vertical integration and fuel security. The report said credit profile of the industry remains steady with net leverage likely to peak over the next couple of years but warned NTPC and PowerGrid will continue to face regulatory issues until FY19. On the capex front, it said investments will remain high, driven largely by capacity growth. Fitch said India's gas production is also unlikely to rise in 2015 and gas power PLFs, which fell to 36 per cent in FY14 from 56 per cent in FY13, should remain stressed. (

India, Russia ink pact to build two nuclear reactors in Tamil Nadu

December 11, 2014. India and Russia signed an agreement paving the way for building the third and fourth reactors at the Kudankulam Nuclear Power Plant in Tamil Nadu, besides finalising a vision document for long-term cooperation in the atomic energy sector. The pact was signed between Nuclear Power Corporation of India Limited (NPCIL) and Russia's Atomstroyexport after Summit talks between Prime Minister Narendra Modi and Russian President Vladimir Putin. The accord will operationlise the General Framework Agreement (GFA) signed in April this year between the two sides for construction of units 3 and 4 at Kudankulam. The cost of the two units is likely to be around ` 40,000 crore and they will generate a total of 2,000 MWs of power. A separate agreement was also signed between (NPCIL) and Atomstroyexport for unit 3 and 4 of Kudankulam Nuclear Power Plant for supply of some major equipment by the Russian company. Aiming to enhance cooperation in the nuclear sector, both the countries also came out with a 'Strategic Vision for Strengthening Cooperation in Peaceful Uses of Atomic Energy' under which Russia will build at least 12 reactors in India by 2035. (

Uttarakhand CM vouches for hydropower projects, slams Centre's stand

December 11, 2014. Uttarakhand Chief Minister (CM) Harish Rawat has slammed the Centre for its stand that the hydroelectric power projects (HEPs) had caused the 2013 calamitous floods in the hill state, saying his government would move the Supreme Court shortly in support of the HEPs. Rawat said his government would shortly move the Supreme Court over the issue in the support of hydropower projects. Rawat's comments came after the Centre's stand had put the future of 24 hydel projects, with a capacity of 2,900 MW, in jeopardy. Rapping the Centre for not moving forward on hydropower projects in Uttarakhand for 18 months, the Supreme Court had asked it to find an "acceptable solution" to the problem and not to come out with a "knee-jerk" reaction. The Centre expressed reservation in allowing the projects, despite getting forest and environment clearance, which was given before the disaster hit the state last year, saying their designs were not acceptable. (

Coal auction phase I to offer 92 mines with 350 mt reserves

December 11, 2014. The government is likely to kick-start first phase of coal blocks auction on December 23 offering about 92 mines with 350 million tonne (mt) of estimated reserves to public and private firms, coal secretary Anil Swarup said. Swarup said the coal ministry is in the process of earmarking blocks for public and private firms and segregating them further for the power, steel, cement and captive power sectors. He said the ministry is expected to complete the task in the next 2-3 days. The blocks will include 42 operational mines with about 90 million tonnes of reserves and 32 soon-to-be operational mines with 120 mt coal that could begin production in the next six to eight months. Nearly 20 additional blocks with 150 mt of estimated reserves are being identified for allotment in the first phase that could start operations in the next eight to 10 months. The government targets to finish coal blocks allotment and auction process by March 16, 2015, Swarup said. He said the government will soon launch an electronic platform to address all regulatory hurdles related to coal mines on the lines of the Project Monitoring Group that led to fast-tracking over ` 6,00,000 crore infrastructure projects. The government is also working to increase output of Coal India Ltd to one billion tonnes by 2019. (

Congress to oppose coal sector reforms

December 11, 2014. The Congress may have come around to supporting the insurance reforms but it is against backing the government on the ordinance on coal allocation, a decision that is set to unnerve the Centre given its numerical deficit in the Rajya Sabha. The principal opposition has decided against the coal ordinance which is being brought to streamline the allocation process in the wake of Supreme Court's cancellation of post-1993 coal blocks. After consultations, Congress nailed the party stance on coal - oppose backdoor denationalization of the coal sector. While the party is okay with fixing the allocation process through ordinance, it is against privatization of coal. The Coal Mines (Special Provisions) Ordinance, 2014, allows private players to mine coal and sell it in the open market. Given that the socialist-branded parties are opposed to privatization of coal sector, a Congress red-flag can sink the ordinance if the threat is carried out. (

Plan to get clearances for 112 mines before auction: Govt

December 10, 2014. Government is looking at the possibility of putting in place all clearances for 112 mines before they are auctioned in the second phase, so that they fetch higher revenue for the exchequer, Coal Secretary Anil Swarup said. The cleared blocks will fetch the government more money, he said. The government had cancelled the auction of three coal blocks stating that issues related to certain clearances need to be "revisited". In the first phase, the Coal Ministry will auction or allot 92 of the 204 blocks that were cancelled by the Supreme Court in September. The sale process for these mines will start on February 11. He said that work on the 112 mines will immediately start after the government allots or allocates the 92 mines. The government is looking at coal production of 1.6 billion tonnes over the next five years. Coal India, which accounts for over 80 per cent of the domestic coal production, is expected to produce one billion tonnes by 2019, the remaining 600 million tonnes will be produced by the private sector. Out of the 92 coal blocks to be alloted and auctioned in the first lot, 57 mines would be given to the power sector, while the remaining mines would be for the sectors like steel and cement. The apex court had in September termed the allocation of 204 mines since 1993 as "arbitrary and illegal". The government had already made it clear that the number of mines a company can bid will be capped to avoid monopoly. (

Bill on coal mine allocation introduced in Lok Sabha

December 10, 2014. The government introduced a bill in the Lok Sabha to begin allocation of coal blocks that were cancelled by the Supreme Court. The Coal Mines (Special Provisions) Bill, 2014, will replace an ordinance which outlines the procedure for auction of coal blocks that were cancelled by the Supreme Court in September 2014. The bill was introduced by Power Minister Piyush Goyal. Trinamool Congress MP Saugata Roy opposed the introduction of the bill, saying it opens the doors for denationalization of coal mines. It will give over the country's energy sector to private hands and will lead to exploitation of coal miners. Goyal in his clarification said the Supreme Court has held the allocation of coal blocks through screening committee rules as arbitrary. The ordinance does not seek to denationalize coal mines. (

Cabinet may take up Electricity (Amendment) Act soon

December 10, 2014. The Cabinet may soon take up Ministry of Power's proposal to make necessary changes to the Electricity Act 2003. Power Minister Piyush Goyal said that the Electricity (Amendment) Act proposals will be out shortly. The proposed changes would include strengthening the penalty provisions, making it more stringent, more enforceable and increasing the penalty many-fold. Also as part of the proposed amendments, the consumers will soon be able to choose their power supply. These are aimed at encouraging greater competition in the distribution sector. The government is working on allowing competition at the last mile delivery so that consumers have a choice of supplier of electricity. Goyal had said the interests of stakeholders will be protected in the existing power purchase agreements and it would be done in consultation with the power regulator. He had said that the Electricity (Amendment) Act may be introduced during the current Parliament session. The proposed amendments are aimed at reducing the losses of discoms as well as improving overall electricity supply. As per the proposal, a new model where a power supplier will not manage the electricity distribution network, is being looked at. It is on the lines of existing system in the United Kingdom which has separate suppliers and electricity network providers. At present, power discoms supply as well as manage network that provides electricity for residential as well as commercial purposes. (

Russian, Indian funds to invest $1 bn in hydro power

December 10, 2014. The Russian Direct Investment Fund (RDIF) will team up with an Indian partner to invest $1 billion in hydroelectric projects in Asia's third-largest economy, RDIF head Kirill Dmitriev said. The RDIF and India's IDFC, a leading infrastructure investor, will each commit $500 million to projects under a deal to be signed during Russian President Vladimir Putin's visit to India. Prime Minister Narendra Modi wants to overcome India's chronic power shortages, and the country has vast untapped hydroelectric potential in its northern Himalayan belt. Dmitriev said the investments would back projects involving a large Russian hydro-power company but he declined to name the company. The only large Russian player in this area is state-controlled Rushydro. IDFC, which is 16 percent state owned, confirmed it would sign a partnership with RDIF but declined to comment on the details. The Russian fund was set up in 2011 with $10 billion in state funds. It can back investments as long as its partners match it at least dollar for dollar. Dmitriev said he expected to commit funds to the Indian projects next year. The RDIF has so far invested $1.3 billion of its own money along with $6 billion by outside investors, mainly sovereign wealth funds from the Middle East and Asia. Dmitriev said the RDIF had managed to turn profits on investments in a Russian telecoms company and the Moscow stock exchange despite Western sanctions, a slowing economy and sliding oil prices. (

Govt may soon rationalise coal linkages of 40 power projects

December 10, 2014. The government could soon finalise the proposal for coal linkage rationalisation and swapping arrangements of about 40 thermal power projects, a move that is expected to save up to ` 6,000 crore in logistics cost. The proposal includes swapping agreements for power projects of companies including Adani Power, Indiabulls Power and NTPC, among others. The Inter Ministerial Task Force (IMTF), which was formed to undertake a comprehensive review of existing coal sources and consider feasibility for rationalisation of linkages, has approved coal linkage rationalisation for 18-20 thermal power plants. IMTF comprises officials from the Ministries of Power, Coal, Railways and the Central Electricity Authority. Consultancy firm KPMG has listed out 20 proposals for the coal swapping arrangements. KPMG, in its report to the Ministry of Power, has stated that 20 proposals for the swapping arrangements are feasible. The swapping arrangement between NTPC for its thermal power plant in Chhattisgarh with Gujarat State Electricity Corp Ltd are estimated to save about ` 720 crore per year on the logistics front. The western Maharashtra's plants which are closer to the ports can swap domestic linkages with imports of hinterland plants in eastern Maharashtra. It estimated possible logistic saving of ` 303 crore annually. KPMG also gave a list of possible swaps including Indiabulls plant and Sterlite Energy's project in the region. Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL), which is nearly equidistant from both port and the Northern Coalfields Ltd (NCL) mines, can swap domestic linkages with imports of hinterland plants of NTPC. Similarly, thermal power projects in Haryana, Uttar Pradesh and Punjab can benefit from the swapping pacts saving close to ` 456 crore. KPMG also suggested that the generating stations of Tamil Nadu Generation and Distribution Corporation (TANGEDCO) are closer to the coast and even domestic coal is taken by the sea route to these stations. These plants can increase the coal import quantities through port arrangements. NTPC can switch its coal imports with domestic linkages providing coal to TANGECO. Approximately between ` 4,500 crore to ` 6,000 crore logistics cost can be saved through these proposals of coal linkage rationalization and swapping arrangements. (



Shale veteran takes on Argentina’s $6 bn shortfall

December 16, 2014. Argentina is depending on two things to reverse a three-year energy shortfall that’s costing $6 billion a year: a shale formation bigger than Massachusetts and Miguel Galuccio, who has worked on drilling operations from North Dakota to Poland and India. President Cristina Fernandez de Kirchner appointed Galuccio chief executive officer of YPF SA in 2012 after she seized control from Spain’s Repsol SA. Since then, Galuccio has tripled investment in the state-run oil company in an effort to reverse a decline in output that’s led to crippling energy shortages and drove Argentina’s energy imports to record highs. As oil plunges through $60 a barrel for the first time in five years and producers revise their spending, Galuccio is sticking with a strategy for the Vaca Muerta shale formation that relies on foreign partners with a long-term view. His $16 billion Loma Campana venture with Chevron Corp. is Argentina’s second-largest producer and YPF announced a $550 million partnership with Malaysia’s Petrolian Nasional Bhd. (

Total delays Bulgaria exploration citing oil price tumble

December 16, 2014. Drilling for oil and gas at an exploration block off Bulgaria's Black Sea coast will be delayed by at least six months until early 2016 following the fall in global oil prices, French oil firm Total said. Total, operator of the offshore 1-21 Han Asparuh block, has cancelled tenders for drilling services in a decision agreed with its partners in the block, Austria's OMV and Spain's Repsol. The tenders are likely to be reopened in the first quarter of 2015 with a view to the first drilling starting in the first quarter of 2016, Total said. The initial drilling date for two exploration wells was the middle of 2015. The drilling of a deep water well is estimated to cost about € 300 million ($376 million). (

Australia's Woodside postpones decision on Browse LNG project

December 16, 2014. Woodside Petroleum Ltd said it was postponing an investment decision on whether to proceed with development of the Browse floating liquefied natural gas (LNG) project off the coast of Australia due to low oil prices. Australia's top oil and gas producer had expected to make a final investment decision on the joint venture project, estimated by analysts to cost up to $40 billion, in mid 2015 but it has now postponed that decision to mid 2016.

Woodside pulled plans to build processing facilities onshore, opting to study a cheaper floating facility concept using partner Royal Dutch Shell's Prelude FLNG plant as a model. Woodside, which competes with companies like Anadarko Petroleum, BG, ConocoPhillips and Norway's Statoil, is also making a push into exploration, hunting in unexplored basins and building up oil reserves to balance its strong gas reserves. (

Petrobras said to cut exploration spending in cash crunch

December 16, 2014. Petroleo Brasileiro SA, the biggest oil producer in ultra-deep waters, is curbing refining and exploration spending in response to the collapse in prices and difficulties tapping debt markets during a corruption probe. The state-run oil company known as Petrobras plans to freeze investments in the Premium I and Premium II refineries in northeastern Brazil and sell assets to protect its cash position. The exploration cuts will focus on projects that are behind schedule.

Petrobras plans to review its fuel-price strategy and curb operating expenses to preserve cash, which stood at 62.5 billion reais ($23 billion) at the end of September. The price of crude oil plunged through $60 a barrel for the first time in five years amid a supply glut. While Petrobras is looking to contain spending in Brazil, it’s delaying a planned exit from Argentina’s petrochemical business as the graft case in Brazil slows signing of new contracts. (

Technip abandons plan to take over seismic surveyor CGG

December 15, 2014. Technip SA, Europe’s largest oil engineer, plans to expand the range of service it offers energy companies after a bid to buy French seismic surveyor CGG SA failed. The Paris-based company said that it doesn’t intend to make an offer for CGG. The end of talks with CGG won’t deter Technip from expanding into seismic surveying of oil and natural gas reservoirs, either through internal growth, acquisitions or alliances, Technip Chief Executive Officer Thierry Pilenko said. Technip’s bid for CGG is “sensitive” for the French economy, and the government is watching the potential deal closely, Economy Minister Emmanuel Macron said. Alternative scenarios being considered would have given Technip access to the business of studying images of oil and gas reserves, while allowing CGG to “keep its identity,” Pilenko said. The two companies don’t have overlapping businesses. CGG uses seismic equipment to uncover and determine the size of oil and gas reservoirs, helping explorers to improve their chances of making discoveries. Technip makes pipes and builds infrastructure including platforms and refineries. (

Israel's offshore Royee gas field may hold 3.2 Tcf

December 14, 2014. A new natural gas field off Israel's Mediterranean coast may hold an estimated 3.2 trillion cubic feet (Tcf) of gas, an exploration group said after analysing a 3D seismic survey of the area. If the estimate is accurate, reserves for the Royee prospect, located about 150 km offshore along its maritime borders with Cyprus and Egypt, would be the third largest to be discovered in Israeli waters, said Israel Opportunity, a partner in the group. The company provided a range for estimated reserves of 1.9 Tcf to 5 Tcf, with a best estimate of 3.2 Tcf. The discoveries in 2009 and 2010 of the huge Tamar and Leviathan fields nearby, which hold combined reserves of about 33 Tcf, sparked an exploration boom in the eastern Mediterranean. (

Mexico expects $14 bn spending in first oil blocks

December 12, 2014. Mexico expects a first package of offshore oil licenses to generate about $14 billion of investment as the country seeks to halt a decade-long output slide. Production-sharing contracts for 14 new shallow-water blocks will be granted for 25 years, Deputy Energy Minister Lourdes Melgar said. Together they will produce an estimated 80,000 barrels a day. Tenders for the Chicontepec onshore area northeast of Mexico City may be changed in light of crude’s 40 percent plunge this year, she said. The terms come a day after Mexico authorized bidding guidelines for the new blocks as the country prepares for investment in its newly opened energy industry. Before crude slumped below $60 a barrel for the first time in five years, Mexico had forecast private investment would bring in more than $50 billion by 2018. (

Malaysia's Petronas says open to selling assets in Africa

December 11, 2014. Petroliam Nasional Bhd (Petronas), Malaysia's state oil company, said it is ready to divest certain assets in Africa if growth prospects are limited. Petronas has one block in Mauritania producing 6,000 barrels of oil a day, and several gas assets in Cameroon. Unlisted Petronas, which accounts for most of the Malaysian government's oil and gas revenue, previously said the fall in oil prices could have a short-term impact on its projects. (

Canadian crude discount widens as Kearl production increases

December 10, 2014. Canadian heavy crude’s discount to U.S. benchmark West Texas Intermediate (WTI) grew to the widest point in almost four months as operations at Kearl oil sands advanced toward capacity after a recent shutdown. Imperial Oil Ltd is increasing production at Kearl toward 110,000 barrels a day after reaching the pre-shutdown level of 92,000. The discount to WTI of Western Canadian Select for January widened 70 cents to $18 a barrel, according to Net Energy Inc., a Calgary-based broker. The discount reached its widest since Aug. 20.

Canada produces most of its oil in the province of Alberta from oil sands, which are either pumped out of the ground or mined and upgraded into synthetic crude. U.S. Gulf Coast refiners are trying to import more heavy Canadian oil, as it’s cheaper than lighter oils imported from elsewhere. (


Bangchak Petroleum plans to boost refining output in 2015

December 16, 2014. Thai oil refiner Bangchak Petroleum is planning to develop its refiner, marketing and renewable businesses with an investment of at least THB10bn ($305 mn) in 2015, as part of its aim to diversify revenue sources. Bangchak Petroleum said that the refiner, with an annual budget of about TBH5bn ($151.7 mn), plans to branch out into new areas such as biodiesel, biomass and ethanol.

The company is also planning to acquire renewable power plants and is considering to invest in solar farms in Japan with annual capacity of 30-50 MW. The company aims to boost its refining output to more than 100,000 barrels per day (bpd) in 2015. (

Thai Bangchak Petroleum to invest $305 mn in 2015, boost refining output

December 15, 2014. Thai oil refiner Bangchak Petroleum PCL said it planned to invest at least 10 billion baht ($305 million) in 2015 to develop its refinery and marketing business. The refiner said it aimed to boost refining output to more than 100,000 barrel per day in 2015 because it has not scheduled any major shutdowns for maintenance. (

Chile Aconcagua refinery back to full capacity

December 15, 2014. The Aconcagua oil refinery, which was partially shut following a fire last month, is ramping back up to operate at full capacity this week, the central Chilean facility said. Following the Nov. 25 blaze at the Topping II distillation plant, which processes up to 40,000 barrels per day, operations there and at four other units were halted as a preventive measure. A planned maintenance stoppage has also been taking place. Aconcagua has a total capacity of 104,000 barrels per day and produces the majority of fuel consumed in the capital Santiago. Run by state oil firm ENAP, it is one of two major refineries in Chile. (

Chinese refiners pump out fuel near record pace amid oil slump

December 12, 2014. Refiners in China, the world’s second-biggest oil consumer, processed near-record volumes of crude last month as global prices slumped to the lowest level in five years amid a glut. Refiners increased crude processing by 5.5 percent from a year earlier to 42.25 million metric tons, or 10.32 million barrels a day, data from the National Bureau of Statistics in Beijing show. That’s the second-highest volume this year and 2.9 percent less than last month’s record 43.51 million. China is benefiting as the Organization of Petroleum Exporting Countries (OPEC) maintains its output quotas even as benchmark prices fell 40 percent this year. Saudi Arabia, Iraq and Kuwait, OPEC’s three biggest members, are offering deeper discounts to Asian buyers, prompting speculation they’re fighting for market share as the highest U.S. production in more than three decades exacerbates a global glut. Government statistics signaled that China resumed its emergency crude stockpiling in November as global prices slumped. The country bought 193,000 barrels a day of surplus oil last month, versus a deficit of 351,000 a day in October. The figure is calculated by subtracting the amount processed by refineries from net imports and domestic output. China bought about 440,000 barrels a day more crude than it consumed from January to September, the most since 2010, the data show. (

Transportation / Trade……….

Cameroon signs $438 mn oil pipeline partnership with consortium

December 16, 2014. Cameroon has signed an agreement worth some 230 billion CFA francs ($438 million) with a consortium and Houston-based Govind Development to build an oil pipeline from its petroleum hub Limbe to other cities, the energy ministry said. The 355 km pipeline will ease supply and bring down the cost of transporting petroleum products in the country, the ministry said. Govind will construct branches of the pipeline to the provincial capitals of Bamenda and Bafoussam in the North-West and Western Regions respectively. About 30 percent of the construction will be funded by the consortium which will manage the pipeline for 27 years. Crude oil in the relatively small oil producer in the Gulf of Guinea is refined in the coastal city of Limbe from where it is distributed mostly by trucks to the rest of the country. (

Oil pipeline to top US senate agenda next year

December 16, 2014. Senate Republican Leader Mitch McConnell says approving the Keystone XL pipeline will top the Senate agenda in January. The issue could set up an early 2015 veto confrontation with President Barack Obama. Congressional Republicans have been pushing for approval of the pipeline for years. Obama has resisted because of environmental concerns. The pipeline would carry oil from Canada into the United States and eventually to the Texas Gulf Coast. (

Morocco revives $4.6 bn LNG import plan

December 16, 2014. Morocco has launched a national plan to boost imports of liquefied natural gas (LNG), including the construction of a terminal at the industrial hub of Jorf Lasfar, worth up to $4.6 billion, its energy ministry said. The idea to build a LNG terminal was announced a few years ago but the government has given no reasons for the delay. Morocco, a net energy importer, aims to diversify energy supplies and reduce dependence on oil and coal imports. It is also developing a plan to build 4 GW of renewable energy. The plan will allow Morocco to import up to 7 billion cubic meters (bcm) of gas by 2025, the ministry said. It includes a jetty, terminal and pipelines, with estimated investments of $600 million, $800 million and $600 million respectively. Pipelines will also feed up industries in Jorf Lasfar and the most developed regions, Casablanca and Tangier. The North African kingdom is already burning 1 bcm of gas, including around 70 million produced locally, but gas is still hovering at only 5 percent of the country's energy bill. (

US agency considers exports of oil, gas from deepwater ports

December 15, 2014. A U.S. agency is considering how the country could export crude oil and natural gas from deepwater ports as the domestic drilling boom adds pressure for Washington to relax trade restrictions and approve shipments of fuel. The U.S. Maritime Administration, or MARAD, is seeking comment on a proposed policy to evaluate applications for building and operating offshore deepwater ports for exporting U.S. oil and natural gas. The agency, part of the U.S. Transportation Department, quietly issued a notice in the Federal Register in October about the rule that received little attention. Congress has banned most U.S. crude exports since the Arab oil embargo of the 1970s led to fears of petroleum shortages. As drilling for natural gas has boomed in recent years, the Obama administration has approved several projects to export liquefied natural gas, or LNG, that could start shipping in the next few years. (

Libya imposes force majeure on 2 oil ports after clashes

December 15, 2014. Libya, the holder of Africa’s largest crude reserves, halted exports from two of its biggest oil ports as rival forces battled to control the nation’s main revenue source. National Oil Corp (NOC), the state-run oil company, declared force majeure at Es Sider and Ras Lanuf, Libya’s largest and third-largest oil ports, with a combined capacity of 560,000 barrels a day. Force majeure is a legal status that protects a company from liability when it can’t fulfill a contract for reasons beyond its control. National Oil said the ports weren’t damaged and that the fighting occured at some distance from both facilities. The NOC didn’t give an estimate for Libya’s oil production after the fighting. Libya was producing about 800,000 barrels a day of crude as of Dec. 8, NOC said. Libya pumped about 1.6 million barrels a day before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule. (

Poland's LNG terminal operator in talks with North American suppliers

December 15, 2014. Gaz-System, operator of Poland's under-construction liquefied natural gas (LNG) terminal, is negotiating with three potential suppliers in North America, the company said. Scheduled to launch in 2015 at the Baltic port of Swinoujscie, the terminal will initially import gas from Qatar, reducing Poland's dependency on Russian gas. Poland plans to export the gas to neighbouring countries further south via inter-connecter pipelines. (

Australia backs proposed gas link seen as ‘pipeline to nowhere’

December 12, 2014. Australia is keen to develop a potential A$1.3 billion ($1.1 billion) natural gas project that’s been described as a “pipeline to nowhere.” APA Group, the nation’s largest gas pipeline owner, has signaled its interest in building the project linking the Northern Territory with east-coast markets. The federal government sees it as a way to ease a looming shortage. The Northern Territory is asking companies to submit proposals by Dec. 15. APA plans to lodge its interest in the project, citing forecasts for eastern gas prices to more than double. (

Record oil tankers sailing to China amid stockpiling signs

December 12, 2014. The number of supertankers sailing to China jumped to a record in ship-tracking data amid signs that the oil-price crash is spurring the Asian nation to stockpile. There were 83 very large crude carriers bound for Chinese ports, according to shipping signals from IHS Maritime compiled. The ships would transport 166 million barrels, assuming standard cargoes, the largest number in data starting in October 2011. The cost of hiring the vessels surged to the highest in almost five years, according to Baltic Exchange data. The International Energy Agency (IEA) said that China may have added to strategic crude stockpiles last month, after pausing the activity in October. Oil plunged into a bear market this year, with Saudi Arabia and other nations in the Organization of Petroleum Exporting Countries (OPEC) offering few signs they will tackle a global glut. Daily shipping rates on the tanker industry’s benchmark trade route from the Middle East to Asia jumped to $83,605, the highest since January 2010, Baltic Exchange data show. Swaps on the route, used for hedging freight costs, indicate daily earnings this month will average $77,964. (

Turkey may suggest LNG project to Russia

December 11, 2014. Turkey could propose to Russia building an LNG terminal in an energy complex on its border with Greece, as part of talks on planned new gas pipeline with its northern neighbour, Turkish Energy Minister Taner Yildiz said. He said that if the planned pipeline was built, it would not necessarily mean that Turkey would buy more gas. Yildiz said that Turkish oil refiner Tupras had begun buying shipments of Iraqi crude oil. Yildiz said Turkey will invest $300 million with Royal Dutch Shell to explore for natural gas and oil after discoveries were made in the Romanian basin. (

Why Texas is now home to bargain-hunting Japan oil buyers

December 11, 2014. As U.S. lawmakers debate whether to free up more than the tiny amount of oil output currently eligible for export, buyers from Asia are moving in. Mitsui & Co., Japan’s second-biggest trader, has doubled employees relocated to Houston to 50 over the past two years while Tokyo-based Cosmo Oil Co. opened an office in the oil hub in April and South Korea’s SK Innovation Co. is bolstering its presence in the region. They are now limited to buying a product called condensate, an ultra-light oil that accounts for about 8 percent of U.S. output, but are positioning themselves to purchase more if Congress ends export restrictions. Their move into Houston illustrates the challenge for the Organization of Petroleum Exporting Countries (OPEC) as the highest American output in more than three decades lures the group’s traditional customers and benchmark prices tumble. OPEC members are responding by offering the deepest discounts in more than a decade, sparking speculation they’re embarking on a price war as demand slows. The ban was passed by Congress in 1975 in response to the Arab oil embargo that cut global supplies, quadrupled crude prices and created gasoline shortages in the U.S. at a time when the country’s own crude production was shrinking. Now that horizontal drilling and hydraulic fracturing are unleashing record volumes of light oil from U.S. shale formations, federal policy makers are facing increasing pressure to ease the restriction and Asian buyers are circling. They’re already benefiting from regulation that allows lightly processed oil to be exported. Enterprise Products Partners LP and Pioneer Natural Resources Co. got approval earlier this year from the U.S. Commerce Department to ship some condensates overseas. BHP Billiton Ltd. is exporting without explicit approval, prompting speculation more companies will follow suit. U.S. House Representative Joe Barton, a Texas Republican, introduced a bill that would remove all restrictions on crude oil exports. Houston-based Enterprise is seeking to export 600,000 barrels a month of U.S. condensate to Asia next year. Melbourne-based BHP is offering 650,000 barrels for delivery in January. (

Policy / Performance…………

Strategic oil hoarding seen driving China demand in next 2 yrs

December 16, 2014. Strategic stockpiling will drive China’s crude demand as the world’s second-largest oil consumer takes advantage of the lowest prices in more than five years, according to Macquarie Group Ltd. More than half of the country’s incremental oil demand over the next two years will be related to building emergency reserves, Macquarie said. The government is filling stockpiles at three new sites with a combined capacity of about 60 million barrels and will probably commission another 100 million barrels of storage space at four locations, the bank estimated. Oil has slumped about 45 percent this year as the Organization of Petroleum Exporting Countries (OPEC) sought to defend market share amid a U.S. shale boom that’s exacerbating a global supply glut. OPEC decided at a Nov. 27 meeting in Vienna to keep its output unchanged, while U.S. production has risen to 9.12 million barrels a day, the most in weekly Energy Information Administration data that started in January 1983. (

Russia Energy Minister says to maintain 2014 oil output into 2015

December 16, 2014. Russia will maintain its 2014 oil output level into 2015, and will not cut production because it would then lose market share to other countries, Russian Energy Minister Alexander Novak said. He said that Russia agreed that the oil market would eventually stabilise by itself. So far, oil companies have not made any changes to ongoing projects in Russia because of oil's slide, but the possibility of them freezing some projects there cannot be ruled out, he said. (

Sudan to drill hundreds of wells to boost oil, gas reserves

December 16, 2014. Sudan's oil minister says the country will drill more than 250 wells in the coming year, aiming to boost its energy reserves by 65.4 million barrels of oil and 300 billion cubic feet of gas. When South Sudan seceded in 2011, it took with it three-quarters of the former unified country's oil wealth, estimated at 5 billion barrels of proven reserves by the U.S. Energy Information Administration (EIA). Oil exports had been the main source of the foreign currency used to support the Sudanese pound and to pay for food and other imports, and the loss of the south hit the economy hard. The 253 exploratory wells planned for 2015 could attract foreign investment and help pay down the country's high debt, Oil Minister Makkawi Mohamed Awad said. (

Iran said to discount light crude to Asia to deepest in 14 yrs

December 16, 2014. Iran is said to be offering its main crude grade to customers in Asia at the deepest discount in 14 years, taking a cue from Saudi Arabia in trimming price differentials. National Iranian Oil Co. cut its official selling price for January shipments of light crude to Asia to a discount of $1.80 a barrel below the regional benchmark as Middle Eastern producers vie to keep selling in the region. Iran cut the differential to a discount from a premium of 13 cents a barrel to the average of the Oman and Dubai benchmark crudes for December. Oil prices have collapsed since the Organization of Petroleum Exporting Countries (OPEC) decided on Nov. 27 to maintain its output target, fanning speculation that Saudi Arabia and other members are determined to make North American shale drillers and other producers share the burden of reducing oversupply. Saudi Arabia’s state oil company prompted speculation that the kingdom was seeking to preserve market share when it lowered prices for November. Expanding supplies from North American shale deposits coupled with weakening demand growth in China, the world’s second-largest oil consumer, helped push crude into a bear market this year. Middle Eastern producers are increasingly competing with cargoes from Latin America, North Africa and Russia for buyers in Asia. (

UAE sees OPEC output unchanged even if oil drops to $40

December 15, 2014. The Organization of Petroleum Exporting Countries (OPEC) will stand by its decision not to cut output even if oil prices fall as low as $40 a barrel and will wait at least three months before considering an emergency meeting, the United Arab Emirates’ energy ministry Suhail Al-Mazrouei said. OPEC isn’t planning to change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, Suhail Al-Mazrouei said. Venezuela supports an OPEC meeting given the price slide, though the country hasn’t officially requested one, Venezuela’s foreign ministry said. The group is due to meet again on June 5. OPEC’s 12 members pumped 30.56 million barrels a day in November, exceeding their target for a sixth consecutive month. Saudi Arabia, Iraq and Kuwait this month deepened discounts on shipments to Asia, feeding speculation that they’re fighting for market share amid a glut fed by surging U.S. shale production. OPEC supplies about 40 percent of the world’s oil. (

Peru opens bidding on seven energy blocks in Amazon

December 15, 2014. Peru opened international bidding on seven energy blocks in the Amazon that will require a total investment of $3.15 billion, the government said. The concessions, which include exploratory and production blocks, will be auctioned in August of next year, said state energy agency Perupetro. More than 10 oil companies from the United States, Canada, Russia, Asia and Latin America have expressed interest, said Perupetro. Perupetro awarded the rights to develop two oil blocks to the country's biggest construction company. It said Petroperu, the state energy firm, would take a minority stake in the concessions. Last year Peru produced 63,000 barrels of oil per day. (

IEA cuts global oil demand forecast for 4th time in five months

December 12, 2014. Global oil demand next year will be weaker than previously estimated and supply from non-OPEC producers will be bigger, the International Energy Agency (IEA) said. Consumption will expand by 230,000 barrels a day less than estimated in November, the IEA said. Output from nations outside of the Organization of Petroleum Exporting Countries (OPEC) will grow at a faster pace than the agency predicted last month. Production rising faster than demand could strain some nations’ ability to store by the middle of next year, it predicted. The agency cut projections because the economies of producer nations are being hurt by tumbling prices, the IEA said. Most of the reduction in next year’s estimate is attributable to Russia, where sanctions are hobbling growth, it said. The agency cut estimates for the amount of crude needed next year from OPEC by 300,000 barrels a day. The group will need to pump an average of 28.9 million barrels a day in 2015, about 1.4 million less than its 12 members produced in November. World oil consumption will increase by 900,000 barrels a day, or 1 percent, next year to average 93.3 million barrels a day, according to the report. The IEA curbed estimates for Russian oil demand in 2015 by 195,000 barrels a day to 3.4 million a day. It kept estimates for global demand growth in 2014 unchanged at 700,000 barrels a day. The agency boosted projections for supplies outside OPEC in 2015 by 200,000 barrels a day, forecasting output will expand by 1.3 million barrels a day to 57.8 million a day. Non-OPEC supply will climb by a record 1.9 million barrels a day this year, it estimated. (

Halliburton cuts 1k employees as sanctions slow Russia

December 12, 2014. Political turmoil from Russia to West Africa helped push 1,000 workers out of their jobs at the world’s largest fracking company. Halliburton Co. plans to make the job cuts immediately in the Eastern Hemisphere as it strives to cope with an industry fallout brought on by oil prices at a five-year low, the Houston-based company said. The world’s second-largest oilfield-services provider plans to take a $75 million restructuring charge in the fourth quarter as it cuts headcount and activities globally, Halliburton Chief Financial Officer Mark McCollum said. Halliburton, which employs about 80,000 globally, had planned to hire another 21,000 this year and lose an unspecified amount through attrition. Project delays in North Africa and Algeria along with curtailed deepwater activity in the North Sea and off the coast of West Africa led the company to lower its fourth-quarter guidance for the Eastern Hemisphere. Sales in the region are expected to be similar to the third quarter, McCollum said. (

US cuts oil price forecast for 2015 to $62.75 a barrel

December 10, 2014. The U.S. Energy Information Administration (EIA) cut its crude price forecasts by $15 a barrel after OPEC’s decision last month to maintain output as North American oil output increases. The agency reduced its 2015 U.S. oil production outlook for a second month. West Texas Intermediate will average $62.75 a barrel in 2015 versus the November projection of $77.75, the EIA said. The agency trimmed its Brent crude estimate for next year to $68.08 from $83.42. Prices have tumbled since the 12-nation Organization of Petroleum Exporting Countries (OPEC) decided Nov. 27 to maintain output levels, letting prices decrease to a level that may slow U.S. production growth. The decline in prices will start to affect U.S. production next year, EIA said. EIA said U.S. production will rise to 8.6 million barrels a day this year and 9.32 million in 2015, up from 7.44 million last year. The 2015 forecast is down from last month’s estimate of 9.42 million. Horizontal drilling and hydraulic fracturing, or fracking, have unlocked supplies in shale formations in North Dakota, Texas and other states. The increase in global output and slower demand growth has pushed prices down from their June highs. OPEC members will pump 35.92 million barrels a day next year, down 10,000 barrels from last month’s projection. The 12-member group will pump 35.96 million barrels a day this year, up 40,000 barrels from the November outlook. U.S. oil consumption is forecast to climb to 19.1 million barrels a day in 2015, up from 19.07 million projected in November. This year demand will average 18.96 million. Demand for gasoline in the U.S. is projected to rise to 8.86 million barrels a day next year, up from last month’s estimate of 8.83 million. Consumption of the fuel is expected to average 8.89 million in 2014, up from the previous forecast of 8.85 million. Gasoline at U.S. pumps will average $2.60 a gallon in 2015, down 34 cents from last month’s estimate of $2.94. (

Cheap oil also means cheaper commodities amid surpluses

December 10, 2014. Lower fuel prices are compounding the longest commodity slump in a generation. Because energy accounts for as much as half the cost to produce food and metals, all sorts of commodities will keep dropping, according to Societe Generale SA and Citigroup Inc. With inventories ample and slowing economies eroding demand, cheaper oil lowers the price floor for mining companies and farmers to remain profitable. Corn may drop another 3 percent, cotton 6.5 percent and gold as much as 5 percent, SocGen estimates. Costs are falling as surpluses emerge in copper and sugar and as the economy slows in China, the top consumer of energy, metals, pork and soybeans. Brent crude, gasoline and heating oil are the biggest losers as an increase in U.S. drilling led to a price war with producers in Organization of Petroleum Exporting Countries (OPEC). This year’s oil slump may have come too late to benefit U.S. farmers. Growers usually buy tractor diesel, energy-based fertilizers and pesticides well before the harvests, which started in September for the biggest crops, corn and soybeans. That means prices will need to remain lower for months to reduce farming costs for next season, Michael Swanson, a Minneapolis-based senior agricultural economist at Wells Fargo Co., the biggest U.S. farm lender, said. (

Iran sees any break in OPEC solidarity sending oil lower

December 10, 2014. Crude prices may drop to as low as $40 a barrel if there’s discord among Organization of Petroleum Exporting Countries (OPEC) members, Iranian oil ministry said, as the group seeks to defend market share amid a global supply glut. Middle East crude producers Saudi Arabia and Iraq this month increased the discounts used to set the official prices for their main crudes for buyers in Asia to the widest in more than a decade. OPEC decided unanimously on Nov. 27 to maintain its output target even as the highest U.S. production in more than three decades boosts global supplies, prompting a drop in benchmark Brent crude to less than $70 a barrel for the first time since May 2010. Crude prices have declined about 40 percent from a June peak amid the oversupply and slowing growth in consumption. Saudi Arabia led OPEC’s decision to maintain rather than cut output last month in Vienna, citing the threat U.S. shale presents to the group’s market share, Iranian Oil Minister Bijan Namdar Zanganeh said. Financially-strapped OPEC members such as Iran and Venezuela had called for a cut. Saudi Arabia, the world’s largest crude exporter, reduced its crude selling price to Asia. Iraq announced that it will sell its Basrah Light crude next month to customers in Asia at the steepest discount in at least 11 years. The two nations are the biggest producers in the OPEC. Iran pumped 2.78 million barrels a day last month. The country is negotiating with the U.S. and five other world powers toward an accord that would limit Iran’s nuclear work in exchange for an end to sanctions. (



China to help Serbia build 350 MW coal-fired power plant

December 14, 2014. Serbia and China will sign a deal worth more than $600 million to add a new unit at the Kostolac coal-fired power plant, the first major investment in more than two decades in Serbia's ageing energy infrastructure. Chinese investors are increasingly targeting energy projects in the Balkans, boosting their presence and showing a willingness to take bigger risks than European rivals in a potentially lucrative market with good links to the European Union and scope for price rises. The project will include the construction of a new 350 MW unit and expansion of nearby Drmno coal mine. It will take five years to complete. China will finance the project via a $608 million loan to be repaid over 20 years. It will include a seven year grace period and fixed annual interest of 2.5 percent. Serbia generates two thirds of its electricity from ageing coal-fired plants and the rest from hydro power. It urgently needs to upgrade its energy infrastructure to meet rising demand. (

Nigeria signs MoU with Strancton Ltd to build 1 GW power plant

December 10, 2014. Chinedu Nebo, minister of power in Nigeria signed the memorandum of understanding (MoU) and stated that the project is “highly innovative” as Strancton Limited would utilise gas from Niger to fire the plant. According to Nebo, gas can assist the economic development of the country and hoped that the reserves were fully utilised for the same. Power utility experts have stated that natural gas is a major source of energy. The project costs US$1 bn and would supply an initial 300 MW, following which it would ramp up production to 1,000 MW. In addition to a power MoU, the Nigerian government also signed an agreement with Greenville Oil and Gas Limited for the supply of LNG to the Kaduna power plant. (

Transmission / Distribution / Trade…

ABB, Hitachi to tie up for HVDC power grid in Japan

December 16, 2014. ABB and Hitachi announced an agreement to form a joint venture for high voltage direct current (HVDC) system solutions in Japan. Hitachi and ABB will take equity interests of 51% and 49%, respectively. The new entity, to be based in Tokyo, will be responsible for design, engineering, supply and after-sales services related to the DC system of HVDC projects, bringing in ABB's technologies to the Japanese market where Hitachi will be the prime contractor. The joint venture is expected to commence operations in coming months, subject to necessary approvals and statutory procedures. (

Emerson to sell power transmission business to Regal Beloit

December 15, 2014. Emerson Electric Co said it would sell its power transmission unit to Regal Beloit Corp, a maker of electric motors, for $1.44 billion as it streamlines its business.  The deal comprises $1.4 billion in cash and assumption of certain post-retirement liabilities, Emerson said. The power transmission business, housed in Emerson's industrial automation business, makes couplings, bearings and gearing components under brands such as Browning, Kop-Flex, Rollway and Sealmaster. The unit had revenue of more than $600 million in 2014 and employed more than 3,000 people, Emerson said. Regal Beloit said the business would complement the manufacturing processes for its electric motors, mechanical and electrical motion controls and power generation products. The company said it expected the deal, likely to close in the first quarter of 2015, to add between $0.40 and $0.60 per share to its earnings in 2015. (

Pakistan signs $248 mn loan deal with ADB

December 13, 2014. Pakistan has signed a loan and project agreement worth $248 million with Asian Development Bank (ADB) for power transmission enhancement investment programme. The agreement was signed by Muhammad Saleem Sethi, Secretary Economic Affairs Division (EAD) and Werner E Liepach, Country Director ADB, and it is expected to be completed by the end of 2016. The project aims at enhancement in the capacity of the transmission system by rehabilitation, extension, augmentation and expansion of existing 500 KV and 220 KV network of NTDC, to meet the growing power demand in the country. A new transmission line of 500 KV would be constructed for dispersal of power from 747 MW Power Plant at Guddu. The ADB has been providing a multi-tranche financing facility amounting to $800 million for Power Transmission Enhancement Investment Program since 2006. (

Abengoa nets $24.7 mn Oman power transmission deal

December 10, 2014. Spanish energy firm Abengoa has been awarded a €20 mn ($24.7 mn) contract from the Oman Electricity Transmission Company (OETC) for a new power transmission project. The project, which features an electrical substation and a related transmission line, will allow part of the energy consumed in Oman's south west to be delivered in a sustainable way. Abengoa will implement the project in consortium with its Omani partner Sarooj. The works are expected to be finished within 18 months. The companies will procure, build, test and commission the Al Dreez 132/33 kV electrical substation and the related 132 kV transmission line. The new 24km line will link the new substation with the existing substation in Ibri. The project is part of OETC's investment plans to strengthen and expand the electricity network in Oman. In the past ten years it has built over 25,000km of transmission lines and 270 electrical substations. (

Policy / Performance…………

UK set for £2.5 bn power bill to keep lights on

December 16, 2014. U.K. utilities will for the first time bid for government payments to keep their power plants open and avoid blackouts. Companies from EON SE to Electricite de France SA will compete to secure contracts to deliver power from the winter of 2018, with 25 percent more capacity on offer than is being sought. While payments may be as high as £ 3.65 billion ($5.7 billion) under the terms of the auction, Timera Energy, a London-based consultant, expects the bill to be £ 1.5 billion to £ 2.5 billion. The U.K.’s spare capacity, the safety buffer between electricity supplies and peak demand, may fall below 2 percent next winter, according to the nation’s energy regulator. The government seeks 48.6 GW in the auction, or about 90 percent of peak demand. It is also aiming to incentivize 20 GW of new power generation by 2030 through the contracts offered by the annual capacity mechanism auction. Almost 65 GW of power capacity has qualified for the winter 2018 sale, which can last as long as four days, according to National Grid Plc, the U.K. network operator running the auction. It opened at 9 a.m. London time at 75 pounds a kilowatt a year and will descend in 5-pound increments, with bidders dropping out as the price falls. A clearing price will be set when bids match the targeted volume. Coal-fired generation is most likely to control where the auction clears because it is the most expensive to operate, according to Credit Suisse Group AG, which forecasts a clearing price of 25 pounds a kilowatt a year if no new plants are needed. Coal plant operators will need to make a decision on whether to close their stations if the price is too low, the bank said. Sanford C. Bernstein & Co. estimates the clearing price will be 38 pounds a kilowatt a year. (

Bangladesh proposes setting up coal-based power plant in India

December 12, 2014. Bangladesh has suggested setting up of a thermal power plant through a joint venture in India. Bangladesh has proposed that a coal block could be allocated to the joint venture entity while power generated from the plant could be supplied to Bangladesh. The proposed plant would be on the lines of 1,320 MW thermal project in Rampal- being jointly developed by NTPC and Bangladesh Power Development Board (BPDB)- in the neighbouring nation. According to Tawfiq Elahi Chowdhury, who is Energy and Power Advisor to Bangladesh Prime Minister Sheikh Hasina, India is very positive about the proposal. Bangladesh, which is looking to increase its electricity supplies to meet rising demand, has an installed capacity of around 13,000 MW. When asked about the progress of the 1,320 MW Rampal plant, Chowdhury said the first 660 MW unit is expected to be ready in four years time. Project activities at the site have already started. The project is being implemented by Bangladesh-India Friendship Power Company Pvt Ltd, an equal joint venture between NTPC and BPDB. Besides, India is supplying about 500 MW of electricity to Bangladesh and plans are on the anvil to increase the same to 1,000 MW. (

Australia looks to sell uranium, coal to Ukraine as ties tighten

December 11, 2014. Australia is in talks to sell uranium and coal to Ukraine, Prime Minister Tony Abbott announced before a meeting with President Petro Poroshenko to discuss the downing of Malaysian Air’s flight 17. Poroshenko and Abbott blame Russian President Vladimir Putin for instigating the crisis in eastern Ukraine and allege his nation supplied the weapons that separatist rebels used to shoot down Malaysian Airline System Bhd. flight 17 in July, killing 298 people including 38 Australians. Concerns are growing that the government in Kiev will be unable to repay its debts as the months-long fighting in two breakaway regions takes its toll on Ukraine’s economy. Ukraine’s output shrank 5.3 percent in the third quarter from a year ago, more than the 5.1 percent preliminary estimate, according to the government statistics office. Russia on Dec. 9 began its first shipments of natural gas to Ukraine since it cut off supplies in June over unpaid bills. Australia has the world’s largest uranium resources with 31 percent of the global total, and exports the nuclear fuel to nations including the U.S., China and Japan. Coal is its second-largest export, reaping revenue of A$40 billion ($33.4 billion) in the year to June 30. (

500 Nuclear plants across the world by 2030: Russian expert

December 11, 2014. A total of 500 nuclear power units would be operated across the world by the end of 2030 as more number of countries have recognised the "necessity" of atomic energy, a senior Russian nuclear scientist claimed. Oleg Tashlykov, leading professor and reader from Russian Federal University Nuclear Energy Department, said some of the objectives of nuclear power development was to improve the country's fuel balance, increase the share of high-tech products in GDP and exports and radical solution to the problem of greenhouse gas emissions. Contending that Fukushima Dai Ichi accident had not changed the global plans for nuclear power development, he elaborated on the Russian experience with nuclear power engineering, including the specifics of certain Russian reactors. (



World's biggest solar power station to come up in Madhya Pradesh

December 16, 2014. The world's biggest 750 MW solar power station will come up in Rewa district's Gudh area, Madhya Pradesh (MP) Energy and Mining Minister Rajendra Shukla said. Shukla, who is also New and Renewable Energy Minister said that Asia's biggest solar power plant having the capacity to generate 130 MW was already functioning in MP's Neemuch district. He said Centre has granted ` 233 crore as encouragement money to the state for promoting new and renewable energy sources. The minister said 1300 MW power had been tapped in last 12 months and the government was providing round-the-clock power to households across the state. (

Tata Power commissions wind farm in Maharashtra

December 16, 2014. Tata Power announced commissioning of the remaining 8 MW of the 32 MW wind farm at Girijashankarwadi in Maharashtra. The wind farm is expected to generate approximately 62 million units (MUs) per year which will be procured by Tata Power-Distribution towards fulfilment of its Renewable Purchase Obligations (RPO). With this commissioning, Tata Power's total generation capacity stands at 8623 MW. The company has wind farms located across five states - Maharashtra, Rajasthan, Gujarat, Tamil Nadu and Karnataka. Tata Power has developed this project through its 100% subsidiary, Tata Power Renewable Energy Ltd (TPREL). TPREL also has a further 300 MW of wind capacity under development and construction in the states of Maharashtra, Gujarat and Rajasthan. (

Govt working on new renewable energy policy: Goyal

December 15, 2014. The government is working on a new renewable energy policy to facilitate speedy growth of the sector. Minister of State for Renewable Energy Piyush Goyal said the new policy is under consultation with the stakeholders. Goyal said the RBI has issued instructions to all scheduled commercial banks that the loans sanctioned by them to individuals for setting up off-grid solar and renewable energy solutions for household purpose will be covered under Priority Sector Lending. (

Govt plans to amend national biofuel policy

December 11, 2014. The government is considering a proposal to facilitate manufacturers of biodiesel to directly sell the fuel to bulk consumers such as railways. New and Renewable Energy Minister Piyush Goyal said that a bulk of biodiesel produced in the country is exported. The national policy on biofuels stipulates that the responsibility of storage, distribution and marketing of biofuels would rest with oil marketing companies. Besides, the policy states that the export of biofuels would only be permitted after meeting the domestic requirements. According to the Minister, no biodiesel has been procured by oil marketing companies in the last three years while around 92,000 tonnes biodiesel were exported during the same period. (

Modi govt's big solar push: Several power projects announced

December 11, 2014. Moving ahead on Narendra Modi government's mission to push solar power initiatives, the Cabinet approved several projects including solar parks and Ultra Mega Solar Power Projects across the country. The Cabinet approved setting up of 25 solar parks of 500 MW capacity each, as also Ultra Mega Solar Power Projects, which will require central government financial support of ` 4,050 crore. The solar parks will be set up across the country during five years, from fiscal 2014-15 to 2018-19. The solar parks will be developed in collaboration with state governments and their agencies and the choice of implementing agency for developing and maintaining the park would also be decided by the state government. The scheme will have a mandatory condition that all PV cells and modules used in solar plants set up under this scheme will be made in India. All states and Union Territories will be eligible for benefitting under the scheme, while solar parks will enable development of solar power in remote areas where land is inexpensive, the government said. To promote energy security and ecologically sustainable growth, the government also gave the green signal for installation of solar power plants in defence and paramilitary establishments by utilising available area. The Cabinet gave its approval for setting up over 300 MW of grid-connected solar PV power projects by defence establishments and paramilitary forces in the country under an ambitious solar mission of the government. The Cabinet approved provision of an amount of ` 750 crore for Ministry of New and Renewable Energy (MNRE) from the National Clean Energy Fund (NCEF) for the purpose. It also granted permission for right to use defence land by the developers chosen by defence establishments by way of lease and otherwise or for self-use of the same by defence establishments themselves, for the purpose of setting up of solar power projects and sale of excess power to distribution companies. The defence organisations will be free to own the power projects or get a developer who makes the investment and supplies power at a fixed tariff of ` 5.50 per unit. The use of domestically manufactured equipment will boost indigenous production of solar cells and modules. The defence sector will be able to get clean power at reasonable price for 25 years. (

Tata Power and Gamesa Wind Turbine sign pacts with Russia

December 11, 2014. Two private power companies Tata Power and Gamesa Wind Turbine signed agreements with Russia for greater cooperation in the electricity sector. The agreements were signed during the visit of Russian President Vladimir Putin. Tata Power signed an MoU with Russian Direct Investment Group while Gamesa Wind Turbine inked pact with ROTEK of Russia. The pact between Gamesa Wind Turbine and ROTEK will facilitate cooperation in wind power equipment. Russian Direct Investment Group (RDIF) will cooperate in identifying and targeting investment opportunities in the energy sector across Russia in order to develop mutually beneficial transactions. (

India counts climate costs above $100 bn at UN talks

December 10, 2014. India is planning to spend $100 billion or more on climate-related projects, an effort aimed at building confidence that the nation will join an international pact on global warming. India has “$3 billion in the kitty” for works that will reduce fossil-fuel emissions and there’s political backing from Prime Minister Narendra Modi to spend more, Environment Minister Prakash Javadekar said. The remarks, along with a 22-page policy document, are a signal India is prepared to join a deal on global warming that the UN intends to conclude next year. That plan will require developing nations such as India to limit fossil-fuel emissions for the first time, a step China already has said it would take. India’s position is crucial because it’s the third-biggest polluter, behind China and the U.S. To date, it has said its emissions will need to grow in the coming decades along with economic expansion necessary to combat poverty. Javadekar didn’t discuss pollution limits in a speech at the UN conference, instead emphasizing his efforts to clean up India’s energy supply. India relies on coal for about 60 percent of its electricity. Energy demand in India is set to double from now through 2040, according to the International Energy Agency (IEA), which estimates that about a quarter of the country’s population currently lacks access to electricity. A bigger appetite for energy means India is likely to displace China within the next 25 years as the world’s biggest importer of coal, the IEA said. India’s Ministry of Environment, Forests and Climate Change circulated a policy document at the conference outlining at least $62 billion in national projects related to climate change. That includes $1.4 billion for solar energy, $5.75 billion for water supply and $17 billion for sustainable agriculture. It also identified budget requirements for state climate-related programs costing ` 11.3 trillion, which it converted to $188.7 billion. It didn’t give details on what those projects would cover. India is preparing to make a pledge for next year’s UN conference that will include efforts to pare back greenhouse gases, according to the document. The bulk of the money outlined in the document was for programs that need funding, with a fraction of the total already approved by the government. As part of the UN talks, industrial nations have pledged to boost climate-related aid to developing countries including India to $100 billion a year by 2020, a sum the poorer nations say needs further detailing. With about 30 percent of its residents living in poverty, scraping by on 75 cents a day or less, India to date has been reluctant to sign up for the sort of binding cuts to greenhouse-gas emissions that Europe has already enacted as part of previous climate deals. Javadekar said India’s pollution levels will have to keep growing. India is under pressure to clarify its environmental goals after China and the U.S. jointly agreed to rein in fossil-fuel emissions. It was the first time a big developing country said it would take on a mandatory limit on pollution. Environmental groups have been pushing India to come forward with a plan similar to China’s, which would help spur other developing nations to follow. (

Welspun achieves financial closure for ` 6.3 bn wind power project in Rajasthan

December 10, 2014. Welspun Renewables Energy has closed financing for its 126 MW wind project in Rajasthan, debt component of ` 630 crore has been secured through long term funding from a consortium of financial institutions, the company said. Slated to be commissioned by June 2015, the on-ground construction work for the project has progressed well ahead of schedule. Apart from receiving backing from national institutions, Welspun Renewables has also received infusion from a major international financial institution, the company said. Welspun Renewables had conducted an extensive wind velocity study of the site for nearly three years, prior to closing in on the project location. The Pratapgarh district is one of the highest wind velocity sites in the state. Once commissioned, this project will generate an estimated 290 million units of clean energy, the company said. (


China General Nuclear unit buys stake in 3 EDF UK wind farms

December 16, 2014. A unit of China General Nuclear Power Corp. acquired an 80 percent stake in three Electricite de France SA (EDF) wind farms in the U.K. to tap Europe’s renewable-energy market. CGN Europe Energy signed an agreement to complete the deal with EDF’s renewable energy division for the wind farms in eastern England that together generate 72 MW, the Chinese parent said. China’s biggest nuclear power generator set up the unit in June to invest in and acquire offshore and land-based wind farms and solar projects in Europe. As of the end of October, China General Nuclear had more than 10 GW of non-nuclear clean energy, including hydro and wind power, of installed capacity. It operates 11.62 GW of nuclear power plants, accounting for more than 60 percent of China’s reactors. (

China’s ET Solar to build 40 MW solar power plant in Israel

December 16, 2014. China’s ET Solar is to begin work building a 40 MW solar power plant in Israel. The plant will be located in Kibbutz Ketura, using 600,000 square meters of desert land to produce 70GWh of clean energy a year. ET Solar’s subsidiary, ET Solutions, will provide engineering, procurement and construction (EPC) services for the solar power plant. ET Solar will be responsible for maintenance, and Israeli large-scale solar developer, Arava Power, will oversee the plant’s operation. Construction is also being carried out by local partners, solar installer, G-Systems and electrical contractor, Elmor. The plant is to be jointly owned by Arava Power and utility, EDF Energies Nouvelles Israel. (

Istanbul to get Turkey’s largest wind power plant

December 15, 2014. The largest wind power plant in Turkey, which will meet the demand for electricity of 280,000 residences, will be constructed in the Çatalca district of Istanbul and named the Istanbul Wind Power Plant. The plant will produce 770,800,000 kilowatt-hours annually with 88 wind turbines, with 64 of these 88 wind turbines capable of producing 2 MW, while 24 will produce 3 MW of electricity, adding up to 200 MW of installed electricity production capacity. The budget required for the foundation of the wind power plant is estimated to be around $558,245,400 and 30 employees will be assigned for the preparation and construction work and 15 for the operation of the plant.

The Istanbul Wind Power Plant should produce 770,800,000 kilowatt-hours of electricity. Considered that the monthly energy consumption of an average family is around 230 kilowatt-hours, the plant will meet the annual energy requirement of 280,000 residences. The wind turbines to be installed in the plant will be imported, and 100-meter-long and 3-meter-deep pits will be dug for the turbines. After the steel and concrete work is completed, the turbines will be erected by cranes. (

Fossil-fuel limits in all nations closer after UN deal

December 14, 2014. A plan to limit fossil-fuel pollution in all nations for the first time came a step closer as envoys from more than 190 countries agreed on the key parts of a deal they plan to adopt next year to fight global warming. After two weeks of discussions in Peru organized by the United Nations, the diplomats agreed on the detail of pledges from all nations on curbing greenhouse gases. Richer countries gave an assurance they’re on track to mobilize $100 billion a year in climate aid by 2020. The decision sets the framework for a landmark agreement the UN intends to adopt in December 2015 in Paris that will rein in the emissions damaging the atmosphere. It included last-minute concessions to some of the poorest nations in the world, who are concerned the system will impose costly and painful changes on their economies.

The talks in Lima are part of a process started three years ago to apply pollution limits in all nations instead of just the industrialized countries covered by the Kyoto Protocol. Since that treaty was signed in 1997, China surpassed the U.S. as the world’s biggest emitter, and India became third. Both are classified as developing countries exempt from restrictions. Countries agreed on what information they’ll provide to back up the goals they’ll put on paper for reining in emissions. The biggest polluters have turned the work into a mostly voluntary system -- and some such as India may be allowed to keep levels rising. The deal is an effort to broaden participation capping fossil fuels to include those with the quickest-growing emissions in the developing world. While Kyoto’s limits were legally binding, it now covers just 15 percent of the global total. The envoys want every nation to make a contribution before meeting in Paris. Efforts to install a system that will review those pledges and push for more ambitious cuts were stripped out of the Lima decision, prompting jeers from environmental groups. Temperatures are on track to rise 3.6 degrees Celsius by the end of the century, according to the International Energy Agency. A shift of that magnitude would be faster than the one that ended the last ice age and scientists say it will melt glaciers, trigger more violent storms and raise sea levels. (

South Africa plans to raise renewable energy to curb blackouts

December 11, 2014. South Africa plans to triple electricity production from renewable-energy sources to help alleviate power shortages that caused rolling blackouts throughout the country in recent weeks. Energy from biomass, wind, solar and hydropower sources will contribute 11.4 GW to the grid “in future,” Minister in the Presidency Jeff Radebe said. It’s currently procuring 3,725 MW from clean sources in a five-round program estimated at $12 billion and plans another 3,200 MW when the process is completed.

Africa’s biggest economy is under pressure as Eskom Holdings SOC Ltd., which provides more than 95 percent of the country’s electricity, struggles to meet demand for power with aging coal-fired plants. The government’s plan to address the power emergency includes helping Eskom to raise cash for diesel it needs to run emergency generators, importing gas and buying more electricity from independent producers in the sugar, paper and pulp industries, Radebe said. The government currently buys 1,390 MW of electricity from independent power producers and will extend those contracts for three years when they expire in March, Energy Minister Tina Joemat-Pettersson said. South Africa’s sugar industry proposed in July that 20.4 billion rand ($1.8 billion) be invested in 15 cane-fueled power projects that could create as much as 712 MW of capacity to help address electricity shortages. Implementation is contingent on the government agreeing to power-purchase agreements that will cover fuel and operating costs and provide for an appropriate return on capital, the South African Sugar Association said. (

Fossil-fuel exposure may need to be disclosed in UK

December 11, 2014. U.K. Energy Secretary Ed Davey called for a debate on forcing companies to disclose their exposure to fossil fuels so that investors know the risks they face as cleaner forms of energy are required. Scientists say less than a third of known fossil fuel reserves can be burned if the world is to keep climate change to manageable levels. Capping the increase in temperatures at the 2-degrees Celsius (3.6 degrees Fahrenheit) level endorsed by UN envoys would require reductions in burning oil, coal and natural gas. Those companies have $28 trillion at risk over the next two decades, according to Mark Lewis, an analyst at Kepler Cheuvreux SA in Paris. One option proposed for the UN talks is to adopt a goal to phase out fossil-fuel emissions by 2050. Davey said he wrote Bank of England Governor Mark Carney to ask for a meeting about the topic, known as “stranded assets.” Carney said that the bank’s Financial Policy Committee is examining whether there’s a risk to investors posed by the notion of “unburnable carbon.” Scientists convened by the UN estimate that total emissions since the late 19th century must be contained to 3,000 gigatons of carbon dioxide in order to stand an even chance of capping the temperature rise at 2 degrees. (

UN seeks India's support on climate change

December 11, 2014. The UN has sought India's support on climate change as the international community enters the final year of negotiations for securing a meaningful and universal agreement on the pressing global issue in Paris next year. UN Secretary General Ban Ki-moon has asked India for its support on climate change following his meeting with Prakash Javadekar, India's Minister of Environment, Forests and Climate Chang, in Lima. Ahead of the UN climate talks in the Peruvian capital, Ban had said he would like India to spell out its nationally determined commitment on reducing emissions by June next year, saying a continued 'key and constructive' role played by India will make a universal climate agreement possible in Paris. Javadekar said the new post-2020 agreement should ensure a balance between mitigation and adaptation and stressed the urgent need for adaptation to be fully reflected in the new agreement. (


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