Energy News Monitor | Volume XI; Issue 36

[Is the budget the only hope for coal & power sector?]

                             “The General Budget will be presented in the last week of February, 2015 and the industry is coming out with its wish list and coal & power sector is no exception. Both the industries are in dire need of financial help. The Minister for coal, power and renewable is hopeful that the budget will provide innovative funding for power projects. This is good news but apart from funding both the sectors need more in terms of policy reforms…”

Energy News

[GOOD]

DVCs threat to cut off power may enlighten AAP that power can be distributed only if it is generated!                                   

                                                                                              [BAD]

How many times can Mahavitaran terminate Ratnagiri power before we think of euthanasia for Dabhol?  

[UGLY]

The hype over renewable energy has the makings of a super sub-prime crisis!

NEWS BRIEF

[NATIONAL: OIL & GAS]

February 17, 2015. The Oil Ministry has used the recently granted freedom to clear development of oil and gas discoveries worth about ` 150,000 crore. The ministry has used the flexibility granted by the Cabinet in October 2014 in deciding on timelines for development of oil and gas discoveries to clear as many as 30 pending cases. This would enable early monetisation of oil and gas discoveries in two blocks each of Gujarat State Petroleum Corp (GPSC) and Oil and Natural Gas Corp (ONGC) and one of Focus Energy, according to a note by upstream regulator DGH. This is expected to result in exploitation of about 34.06 million barrels of oil and about 0.731 trillion cubic feet of gas reserves valued at about ` 35,000 crore considering oil price of $50 per barrel and gas price of $5.61 per million British thermal unit. The Cabinet had provided operational flexibility in enforcing contracts by way of relaxing some of timelines prescribed for discoveries so that exploration and production (E&P) activities do not suffer on account of excessive rigidity in decision making.

The Production Sharing Contract (PSC) between the government and the explorer has rigid timelines for each stage of exploration and actions have been initiated against firms even if deadlines are missed by a day. Three-to-six month extension in the current 18-60 month timeframe for submission of declaration of commerciality (DoC) of discoveries, a prerequisite before investment plans can be finalised, has been approved, the note said. Also, the deadline for submission of investment plan for the discoveries too would be extended by up to six months. The PSC provides for time period for submission of field development plan (FDP) for hydrocarbon discovery after DOC. There is no provision in the PSC for extension of this time period and non-acceptance of FDP due to late submission results in non-monetisation of discoveries. Also, upstream regulator DGH has been given flexibility to accept discoveries for which operators had failed to provide prior notification to the government. (www.firstpost.com)

February 16, 2015. Indian Oil Corp (IOC) said it will invest ` 7,812 crore in fuel quality upgradation projects at two key refineries as well as other expansion projects. The company approved an investment of ` 1,843 crore in upgrading the 13.7 million tons Koyali refinery in Gujarat to produce Euro-IV complaint petrol and diesel. Another, ` 1,327 crore will be spent on similar fuel quality upgradation project at Barauni refinery in Bihar, IOC said. IOC will invest another ` 890 crore in construction of a dedicated naphtha pipeline from Jaipur to Panipat along with augmentation of Koyali-Sanganer product pipeline.

The company sanctioned ` 170 crore for pre-project activities and preparation of detailed feasibility report for implementation of project for producing Euro-IV of BS-IV complaint petrol and diesel at Gujarat refinery. For Barauni refinery upgrade, ` 112 crore have been sanctioned for carrying out a detailed feasibility report. (economictimes.indiatimes.com)

February 13, 2015. Bharat Petroleum Corporation Ltd (BPCL) booked an inventory loss of ` 2,500 crore in the third quarter of 2014-15 as crude prices plummeted, denting the refining margin of the company. Despite the inventory loss, the state-run oil marketing company reported a profit of ` 551.16 crore in the December quarter as against a loss of ` 1,088.94 crore, driven by full compensation for losses on fuel sales. Its net sales declined to ` 57,914.51 in October-December from ` 64,767.62 crore earlier. BPCL earned $1.5 on converting every barrel of crude oil into fuel in the quarter as compared to gross reefing margin (GRM) of $1.7 per barrel a year ago. BPCL received ` 1,080 crore by way of cash subsidy from the government. The upstream oil producers, primarily ONGC, gave BPCL an assistance of ` 2,330 crore to compensate for the losses on selling domestic LPG and PDS kerosene at rates lower than cost. (economictimes.indiatimes.com)

February 16, 2015. Reliance Industries Ltd (RIL) imported about 1.1 percent more oil in January compared with the previous month and resumed purchases from Iraq after a gap of four months, tanker arrival data showed. Reliance, which has a diversified crude slate and shifts purchases to maximise revenue, bought about 21.8 percent more oil last month compared with a year earlier when it had cut runs at its older plants. The refiner also stepped up shipments last month to build its inventory, taking advantage of falling oil prices, traders said. It raised purchases from Latin America in January to about 49.5 percent from about 46 percent a year earlier, while that from the Middle East fell to 36.5 percent from about 38 percent, the data showed. African grades accounted for about 14 percent of the refiner's crude purchase in January compared with about 9 percent a year earlier. Reliance's two advanced refineries in Gujarat state in western India can together process 1.2 million barrels per day (bpd) of oil, or about 28 percent of the country's overall capacity. (economictimes.indiatimes.com)

February 11, 2015. With construction of the USD 10 billion TAPI pipeline stuck for want of a credible operator, India pressed Turkmenistan to relax its domestic law to help get an international firm for building the project. The four-nations to the Turkmenistan-Afghanistan- Pakistan-India gas pipeline project met in Islamabad to resolve issues so that work on the project can start this year. TAPI project has remained on the drawing board since the four nations have not been able to get an international firm to head a consortium, which will lay and operate the pipeline. French giant Total SA had initially envisaged interest in leading a consortium of national oil companies of the four nations in the TAPI project. However, it backed off after Turkmenistan refused to accept its condition of a stake in the gas field that will feed the pipeline. Since the four state-owned firms, including GAIL of India, neither have the financial muscle nor the experience of cross-country line, an international company that will build and also operate the line in hostile territories of Afghanistan and Pakistan, is needed. Turkmenistan has so far maintained that its law does not provide for giving foreign firms an equity stake in upstream gas field, without which western energy giants will not be interested to take the risk. The TAPI pipeline will have a capacity to carry 90 million standard cubic metres a day (mmscmd) gas for a 30-year period and will be operational in 2018. India and Pakistan would get 38 mmscmd each, while the remaining 14 mmscmd will be supplied to Afghanistan. TAPI will carry gas from Turkmenistan's Galkynysh field, better known by its previous name South Yoiotan Osman that holds gas reserves of 16 trillion cubic feet. From the field, the pipeline will run to Herat and Kandahar province of Afghanistan, before entering Pakistan. In Pakistan, it will reach Multan via Quetta before ending at Fazilka (Punjab) in India. Oil Minister Dharmendra Pradhan said that TAPI project will play an important role in contributing to gas infrastructure project. Oil Minister met Minister of Mines and Petroleum of Afghanistan on the sidelines of the TAPI Steering Committee meeting. He was accompanied by a high-level delegation including Oil Secretary Saurabh Chandra, High Commissioner of India in Islamabad, his ministry's Joint Secretary (International Cooperation), as well as chairmen of state gas utility GAIL India and ONGC Videsh Ltd Managing Director. (economictimes.indiatimes.com)

February 15, 2015. Canada's Niko Resources has put up for sale its stake in Reliance Industries' KG-D6 gas block saying there is uncertainty over long-term price outlook in India. Niko holds 10 percent stake in the KG-D6 block where a total of 20 oil and gas discoveries had been made and three out of them are in production. The government had announced raising natural gas price to USD 5.61 per million British thermal unit (mmBtu) from USD 4.2. The increase was lower than USD 8.4 that the industry was expecting and prevailing USD 5.71 rate applicable to gas from western offshore fields. The announced price for the period from November 2014 to March 2015 is a 33 percent increase over the price received previously, but is lower than expected. RIL is the operator of the block with 60 percent interest while the remaining 30 percent is with BP plc of UK. The partners have first right of refusal over the stake and it remains to be seen if RIL will exercise that right. Niko also holds a 10 percent interest in gas discovery block NEC-25, off the Odisha coast, with RIL and BP. While the higher gas price is applicable uniformly across fields, Dhirubhai-1 and 3 (D1&D3) gas fields in KG-D6 block will continue to get the old rate of USD 4.2 till it is settled through arbitration if the output falling by over 80 percent to about 8 million standard cubic meters per day was due to natural reasons or was a deliberate ploy. As per the pricing guidelines announced, the gas price will be determined on a semi-annual basis. Notification of the gas price for the period of April 1, 2015 to September 30, 2015 is expected to occur in mid-March 2015. Prices will be calculated based on a volume weighted average of prices in the US, Canada, Europe and Russia based on the twelve month trailing average price with a lag of three months. Niko said the guidelines state that all discoveries after the announcement of the new price, in ultra deep water areas, deep water areas and High Pressure-High Temperature areas, would get a premium. (economictimes.indiatimes.com)

February 12, 2015. Declining prices of petrol and diesel in the domestic market has become of cause of concern for the Punjab government, as these will have an impact on the revenues collected in the form of tax on the sale of oil. Value-added tax (VAT) on petrol and diesel is an important source of revenue for the states. The dwindling fuel prices have compressed the VAT base for the state exchequers. The VAT collection in Punjab stood at ` 17,760 crore and that in Haryana was ` 19,930 crore in 2014-15. Punjab is in discussions with Haryana and Chandigarh to revise VAT on fuel in tandem to check the illegal cross-border trade of fuel.

The state governments are also mulling to convert VAT on fuel to specific tax. The specific tax is charged on the quantity of the product and VAT on the value of the product. This may help insulate their tax receipts from the price volatility in the international and domestic market. The average retail sale price of petrol in Punjab is ` 63.30 a litre and that of diesel is 46.38 a litre. Petrol in Haryana is cheaper and costs ` 59.36 and diesel costs ` 46.60 a litre. VAT on Petrol in Punjab is 32.5 percent and is 26.25 percent in Haryana. VAT on diesel in Punjab is 12.36 percent and is 12.07 percent in Haryana. As the collection of VAT on fuels is hassle-free and leakage-proof, the state governments find it the easiest way to raise the revenue, the All Haryana Petroleum Dealers' Association said.

Both Punjab and Haryana have the central sales tax outstanding with the Centre and pressed under financial stress due to power subsidies and huge Plan expenditure. The estimated power subsidy in Punjab is ` 5,200 crore and is projected to be ` 5,338.5 crore in Haryana in 2014-15 With limited sources of revenue generation, and burgeoning expenditure, the lower revenue returns on account of VAT collection on fuel has pressed the states to seek higher funds allocations. (www.business-standard.com)

February 12, 2015. Oil and Natural Gas Corp (ONGC) and other state-run explorers may have to pay about ` 10,900 crore in fuel subsidy after Finance Ministry has agreed to provide only ` 5,085 crore in cash subsidy for the December quarter. Out of the ` 15,981 crore of revenue losses fuel retailers incurred on selling LPG and kerosene at government-controlled rates in October-December, the Finance Ministry has agreed to make good only less than one-third or ` 5,085 crore by way of cash subsidy. The remaining ` 10,896 crore will have to be borne by ONGC and Oil India Ltd (OIL). ONGC may have to shell out close to 80 percent of this amount (` 8,716 crore). Efforts are being made to impress on Finance Ministry to give out more as the subsidy payout for ONGC and OIL is unsustainable given that oil prices have halved to $50 per barrel. In the first half of current fiscal, fuel retailers IOC, BPCL and HPCL had together lost ` 51,110 crore in revenue on selling fuel below cost. Most of this was made good by way of ` 31,926 crore dole from upstream players and ` 17,000 crore coming from Budget as cash subsidy.

Oil Ministry had ` 22,101 crore in subsidy to cover for losses on LPG and kerosene sale in the second half of current fiscal so as to almost exempt ONGC and OIL from any payments. This was because ONGC and OIL hardly made any money at prevailing global oil prices of about $50 per barrel. The gross-realisation of ONGC during October-December was $75-76 per barrel and after accounting for subsidy payout, which are in form of discounts it will give on crude oil sold to IOC, BPCL and HPCL, the net realisation was likely at $35-36. ONGC's cost of production is around $40 per barrel. Under-recoveries, or revenue retailers' loss on selling fuel below cost, is projected at ` 74,773 crore in full 2014-15 fiscal. Out of this, ` 51,109.53 crore was in first half, which was met by ` 17,000 crore in government subsidy and ONGC paying ` 26,841 crore. OIL paid ` 4,085 crore and gas utility GAIL paid ` 1,000 crore.

The Ministry has put the under-recoveries in October-December quarter at ` 15,981.28 crore and ` 7,682 crore in the fourth quarter. The Ministry had projected that government will earn ` 75,944 crore from excise duty on petrol and diesel this fiscal and even after paying for ` 39,101 crore subsidy (` 17,000 crore of first half and ` 22,101 crore in second half), it will be left with ` 36,843 crore. (economictimes.indiatimes.com)

February 11, 2015. Falling oil prices have given policy makers enough headroom to prepare a multi-pronged roadmap, which could have a benign impact on India's fiscal prudence in medium to long term. India's fiscal health has been an issue of concern in the past few years for the international credit rating agencies and the same had led to the sovereign rating downgrade in 2012. Now, all the three top global rating agencies are keeping Indian debt at the lowest investment grade rating. With just few days left for the Narendra Modi government to table the Union Budget 2015, these agencies have been batting for fiscal consolidation-centric reforms. Recent reports also say the government is seriously looking into their concerns and might unveil a roadmap in the upcoming Budget for limiting fiscal deficit to 3 percent of GDP within 2 years despite the challenge of reviving the economy with more spending on infrastructure. As far as Current Account Deficit (CAD) is concerned, oil prices have given a huge respite but there are still concerns looming over the fiscal deficit, which has surpassed the budgeted target in just nine months (April-December) of this fiscal. The fiscal deficit in the first 9 months of this fiscal stood at ` 5.32 lakh crore or 100.2 percent of the 2014-15 estimates. However, some experts feel that the government can’t take falling oil prices for granted in the long run.

Oil prices have already been bottomed out and changing dynamics might trigger higher prices, resulting in the increasing vulnerability of balance of payment. Something seems to be happening on the same lines earlier, as the oil which had plunged last month to its six-year-low (nearly USD 45 per barrel), recovered by over 10 percent to above USD 55 per barrel in the last few trading sessions. Nonetheless, the decline in global oil prices since mid-2014 has given room to the Modi government to mop up nearly USD 3.5 billion by repeated hikes in excise duty on petrol and diesel. Since November last year, the government has raised the excise duty on fuels for no less than four times.

As per estimates, lower fuel subsidies coupled with the recent duty hike on diesel and petrol could together add almost ` 1.1 trillion (USD 18 billion) to the Budget 2015-16. It’s a major concern that the revenue realization has remained subdued continuously for the last couple of years. So the government must maintain fiscal deficit at 4.1 percent of GDP either by financing through the PSUs stake sale, cutting both plan and non-plan expenditure or enhancing excise duty on fuel. (zeenews.india.com)

 [NATIONAL: POWER]

February 17, 2015. Inox Wind has signed a ` 4,500 crore preliminary pact with Gujarat for setting up a 700 MW power plant in the state. The company said it is also setting up an integrated wind turbine manufacturing facility in Madhya Pradesh. It had an order book of 1,258 MW as of December 31. Inox's customers include Green Infra, Continuum Wind Energy, Tata Power Renewable Energy, Welspun Energy, Bhilwara Energy, ReNew Power Ventures, Hero Future Energies and a subsidiary of CESC. The MoU (Memorandum of Understanding) will be implemented over next 2 years in 3 districts of Gujarat - Rajkot, Amreli and Kutch. In Madhya Pradesh, it is setting up an integrated facility. (economictimes.indiatimes.com)

February 12, 2015. Nearly six years after it was announced, the 6,000 MW nuclear power plant at Mithivirdi, a coastal hamlet some 40 km from Bhavnagar, is close to getting the crucial coastal regulatory zone (CRZ) clearance. The project has been recommended for the clearance by the expert appraisal committee of the ministry of environment and forests (MoEF). The Nuclear Power Corporation of India, which is executing the project, has already moved to get the environmental clearance from MoEF. The project was announced following the signing of the India-US civil nuclear deal in 2008. Interestingly, the recommendation for CRZ clearance comes in the backdrop of Prime Minister Narendra Modi and US President Barack Obama finalizing the civilian nuclear deal during the latter's visit.

The proposed plant with six light water reactors of 1000 MW capacity each will be spread across 777 hectares. Out of this, 603 hectares is agricultural land. The project will be executed in three stages with 2000 MW capacity addition at each stage. The first stage is proposed to be complete in 2019-20, the second by 2021-22 and third by 2023-24. (timesofindia.indiatimes.com)

February 17, 2015. The Central Electricity Regulatory Commission (CERC) has issued orders allowing requests of KSEB Ltd for grant of a transmission corridor to Kerala. In doing so, it set aside an earlier order of Power Grid Corporation of India, which is also the notified Central Transmission Utility (CTU). Power Grid will have to reconsider applications made by the Kerala State Electricity Board Limited (KSEB) in June 2013 and issue orders for grant of transmission corridor for 400 MW for a period of three years. Power Grid is also being asked to ‘strictly follow the regulations and procedures approved by the Commission from time to time for granting medium- and long-term open access’. KSEB had challenged the denial of medium-term open access for which the applications were made by NVVN Ltd (NTPC Vidyut Vyapar Nigam Ltd) and PTC India Ltd. It requested that the denial of medium-term open access on the application made by NVVN in June and November of 2013 for the period from March 1, 2014, to February 28, 2017, may be declared as illegal and cancelled. It sought a similar treatment on the denial of access on the application made by PTC India in June and October 2013 for 100 MW from BALCO for the period from March 1, 2014, to February 28, 2017. While calculating availability of corridor in June 2014, the Commission found that the CTU had considered the available capacity as 211 MW. However, the auxiliary power consumption with reference to allocation by the Ministry of Power had not been taken into consideration while calculating the transmission margin. The Commission directed the CTU to consider the auxiliary power consumption for calculating the transmission margins. It found valid grounds to assess the application of NVVNL made in June 2013, to be considered as eligible. (www.thehindubusinessline.com)

February 16, 2015. Jyoti Structures said it has bagged orders worth ` 582 crore for transmission line projects. The projects include ` 310 crore order for 400 kv transmission line project in Sultanate of Oman, ` 32 crore 400 kv transmission line project from DEWA (Dubai Electricity and Water Authority), Dubai and ` 240 crore orders for various projects for fabrication and supply of transmission line steel structures. (economictimes.indiatimes.com)

February 16, 2015. At a time when the Aam Aadmi Party (AAP) has promised cheaper power to Delhi’s citizens, Damodar Valley Corporation (DVC) has warned the government of the national capital that it will snap power supply to the city if dues of ` 381.21 crore are not cleared. In a notice sent to the new AAP government in Delhi, the DVC said it would stop supplying power to BSES Delhi's two distribution companies – BSES Rajdhani Power Limited and BSES Yamuna Power Limited – by February 22 if the amount is not paid. DVC’s warning comes close on the heels of Prime Minister Narendra Modi wondering at a conference on renewable energy how the AAP government in Delhi could promise cheaper power when the city is dependent on electricity from outside. DVC confirmed that the notice had been sent. According to these regulations, all power bills have to be cleared within 60 days. The AAP, which recently scored a landslide victory in polls to the Delhi assembly, had promised in its election manifesto provide electricity at cheaper rates. Delhi has a demand for 5,000 MW a day and is largely dependent on nearby states to meet its needs. Officials said DVC supplies 286 MW every day to BSES’s two distribution firms in Delhi. Delhi received the notice close on the heels of a similar warning issued by the DVC to the Jharkhand government. Jharkhand has to pay over ` 8,000 crore to the DVC. The BSES, which is owned by Reliance ADAG, distributes electricity to nearly 34 lakh customers across two-thirds of Delhi. The row over dues snowballed into a controversy when the DVC began reducing power supply to seven districts of Jharkhand in June last year. Union power minister Piyush Goyal intervened in the matter by writing a letter to the Jharkhand government regarding the clearing of the DVC’s dues. After the BJP came to power in Jharkhand following elections held late last year, it cleared some of the dues of the DVC but power continues to be cut in seven districts of the state. The total arrears of the Delhi government include the pending bills of ` 94.45 crore for September and November 2014. The DVC's thermal power plants at Mejia in West Bengal and Chandrapura in Jharkhand supply 131.76 MW and 175. 69 MW respectively to Delhi every day. (www.hindustantimes.com)

February 16, 2015. With the assembly polls over, power distribution companies in the city are waiting to hear from Delhi Electricity Regulatory Commission (DERC) over reinstatement of power purchase adjustment charges (PPAC). Discoms said they have submitted all bill details to the regulatory body and have been waiting for the order, which has been on hold for the last two months due to model code of conduct being in force. The power companies submitted data required by DERC. (economictimes.indiatimes.com)

February 16, 2015. NTPC’s 500 MW coal-based power project at Sampur, Trincomalee and Power Grid Corporation’s over-sea and under-sea transmission line project connecting India and Sri Lanka are expected to get a needed push during the coming meeting between Prime Minister Narendra Modi and new Sri Lankan President Maithripala Sirisena. The project, which NTPC had proposed in June 2005, entails an investment of Rs 2,000 crore. It is yet to get various clearances from the Sri Lankan government agencies. The transmission project, proposed in 2007-08 to transfer 1,000 MW from India to Lanka, needs an investment of ` 3,000 crore. However, both the governments, Power Grid and Ceylon Electricity Board (CEB) are yet to settle various technical and other issues before a formal agreement. The two governments signed an agreement in October 2013 to develop a coal-based plant in Trincomalee as a joint venture between CEB and NTPC. The initial capacity will be 500 MW, extendable to 1,000 MW. Further, power from the Sampur plant could be exported to India. (www.business-standard.com)

February 15, 2015. In an apparent dig at AAP over its poll pledge to reduce power bills, Prime Minister Narendra Modi wondered how such promises could be made by political parties in states which are dependent on electricity supply from outside. The parties make these promises in states that rely on electricity supply from other states, he said. Arvind Kejriwal-led AAP trounced the BJP in Delhi assembly polls. The party in its election manifesto had promised to cut electricity bills by half among other freebies. Delhi has a power demand of about 5,000 MW and is largely dependent on other states to meet its requirements. Reacting to Modi's apparent dig at AAP, senior party leader and AAP's Delhi Convenor Ashutosh urged the Prime Minister to help the state government to make power affordable. AAP leader Ashish Khetan said the previous governments neither promoted solar energy nor did they have any good policy of any alternate source of energy. (www.business-standard.com)

February 13, 2015. The Maharashtra government and the Maharashtra State Electricity Distribution Company Limited (Mahavitaran) announced the power-purchase agreement (PPA) with Ratnagiri Gas and Power (former Dabhol power) has been terminated and the company was free to sell to other buyers. Both the government and the state-owner distributor said it could not afford to buy Dabhol power at ` 5.50 a unit as proposed by Ratnagiri. It was quite high when compared to the power from Maharashtra State Power Generation Company (MahaGenco) plants at ` 3.30 a unit. At a meeting, in the presence of Union Power Minister Piyush Goyal, Chief Minister Devendra Fadnavis, Ratnagiri board members, and project lenders it was decided that Mahavitaran will not pay arrears of ` 2,000 crore, claimed by the private power company, because of unilateral change in the agreement. The government and Mahavitaran said the agreement with Ratnagiri has been terminated through a letter sent. The state has put the ball in the court of the Centre and Ratnagiri to revive Dabhol project. Fadnavis also said sale of Dabhol power project to a private entity was not under consideration as it would not be a viable proposition unless adequate gas was available for its revival. He said the completion of LNG terminal by GAIL India with a total capacity 5 million tonne per annum will help Ratnagiri to mobilise an annual revenue of ` 1,200 crore. (www.business-standard.com)

February 12, 2015. The Comptroller and Auditor General of India (CAG)'s auditors claim to have made significant breakthrough in their audit of Delhi discoms, according to sources who said a report on Delhi's power distribution companies could be out as early as this summer vindicating the Aam Aadmi Party (AAP)'s suspicion of possible irregularities. During his 49-day government, Arvind Kejriwal had recommended audit of the three power distribution companies in January 2014. AAP has alleged nexus between the discoms and Congress and BJP and blamed it for the high electricity charges in Delhi. According to sources, the auditors have found that several high value customers of most of the discoms were paying their bills in cash, which is against rules. These customers had bills of lakhs of rupees every month. The second major finding of the CAG audit is anomalies in the way the Delhi government extended a few hundred crore rupees worth of assistance to the discoms. It is not clear if the questions are over the ` 3450 crore that the government provided to cover losses of distribution companies between 2002-03 and 2006-07. The three power discoms-- Tata Power Delhi Distribution Ltd, and Reliance Power subsidiaries BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd-- had challenged the CAG's right to audit their books after the then AAP government ordered the audit in January 2014. But the Delhi High Court refused to stay the Delhi government order, asking the three discoms to give their accounts for auditing by CAG. It ordered the three companies to cooperate with CAG and asked the auditor not to submit its report to the state government until March 19 this year, the date for next hearing. Indications are that the CAG could be ready with an interim report by then, and once the court gives its go ahead it would only take a few weeks for it to be submitted to the Delhi government. If the report vindicates AAP's stand, it would strengthen its arguments for closer scrutiny of discoms, and the possibility of providing electricity at cheaper rates. (economictimes.indiatimes.com)

February 11, 2015. The power distribution companies operating in Delhi, owned by the Reliance Group and the Tatas, may feel the heat after the Aam Admi Party's (AAP) landslide victory in Delhi elections. CAG officials are learnt to have visited the offices of these firms again to conduct audit, which was ordered in January 2014 by the earlier AAP government that lasted 49 days. The distribution companies saw their share prices plunge over the last five days ever since opinion and exit polls predicted an AAP victory on fears that the new government will expedite CAG audit and reduce power tariff rates by up to 50%, as promised in its election manifesto. Shares of Reliance Infrastructure that controls BSES Delhi discoms - BSES Yamuna Power and BSES Rajdhani Power - have plunge by 16% in the last five days. Similarly, Tata Power that operates in Delhi through Tata Power Delhi Distribution saw its shares tank by 11% during the period. Reliance Infra and Tata Power distribution arms have already challenged the audit order by the earlier AAP government in the Delhi high court. (economictimes.indiatimes.com)

February 17, 2015. The Uttarakhand government told the Supreme Court that the June 2013 deluge was not triggered by hydroelectric power projects (HEPs) in the state and rejected the findings of the Centre's expert panel on adverse ecological and environmental impact of such projects. Fate of all power projects in the state is hanging in balance after the Centre accepted the report of the expert body (EB). It has been considering all options including scrapping of hydroelectric power projects. The state government in its affidavit said the findings of EB, constituted by the ministry of environment and forests (MoEF), had no scientific basis. Dispelling apprehensions on ecological and environment impact of projects, it said Rishikesh and Haridwar would have been flooded in 2013 if Tehri Dam had not existed. The state government said the MoEF had completely failed to balance the need for environmental safeguards and the pressing need for clean and sustainable energy. Pleading the court to grant green signal for the projects in which crores of rupees have been invested by companies, the government said it is the most promising source of energy and even China is constructing 25,000 MW project on the same ranges. The apex court had said the Centre's U-turn on the projects has created confusion and asked it to take a holistic approach and not to scrap them in a knee-jerk reaction. The apex court, which had stayed construction of all power projects in the aftermath of the deluge, asked the government to take a fresh look on the projects of National Thermal Power Corporation (NTPC), National Hydroelectric Power Corporation (NHPC), Tehri Hydro Development Coporation (THDC) and GMR among others. (timesofindia.indiatimes.com)

February 17, 2015. Shortage of coal for e-auction at state-run monopoly miner Coal India Ltd (CIL) has pushed up prices, with those of certain grades doubling to about ` 3,000 per tonne in the past one year, while the international prices have been on the decline. Coal India sells coal to the power sector at average price of ` 1,100-` 1,200 per tonne. E-auctioned coal fetched about ` 1,500 last year on average, about a third lower than this year's figure of ` 2,000 per tonne. CIL sells various grades of coal with varying energy content. The higher the energy content the higher the price. Prices of premium grades of coal with high energy content fetched at least ` 3,000 per tonne this year, compared to ` 1,600-` 1,700 per tonne last year. Fuel supply agreements are coal supply contracts required to be signed with power companies. CIL's first priority is to supply coal to the power sector. It can offer coal on e-auction only if it has adequate volumes after meeting the power companies' requirements. Between April 2013 and January 2014, CIL sold close to 47 million tonnes through the electronic auction platform. This fiscal, the monopoly managed to make available 33 million tonnes of coal during the first 10 months. Income from coal sold through e-auction is a sizeable portion of CIL's profits, which took a hit in the third quarter of the current fiscal. (economictimes.indiatimes.com)

February 17, 2015. With aggressive bidding for coal blocks likely to continue on the fourth day, the government said that poor states would benefit from the auction. The mines on sale are Amelia (North) mine in Madhya Pradesh (power sector), Ardhagram mine in West Bengal and Chotia mine in Chhattisgarh --- non power sector. The 10 companies in the race for Amelia (North) mine are Adani Power, Bharat Aluminium Co Ltd (Balco), Essar Power M P Ltd, GMR Chhattisgarh Energy Ltd, GVK Power Goindwal Sahib Ltd, Jaiprakash Power Ventures, Jindal Power Ltd, JSW Energy Ltd, RattanIndia Power Ltd, Reliance Geothermal Power Pvt Ltd. The five companies vying for Ardhagram coal mine are Easternrange Coal Mining Pvt Ltd, Monnet Ispat and Energy Ltd, OCL Iron & Steel Ltd, SS Natural Resources Pvt Ltd and Visa Steel Ltd. The technically qualified bidders for Chotia mines are Balco, Godawari Power & Ispat Ltd, Hindalco Industries, Prakash Industries, Rungta Mines and Ultratech Cement Ltd. Amelia (North) mine has extractable reserves of 70.28 million tonnes (MT), Ardhagram has extractable reserves of 19.29 MT, Chotia mine has extractable reserves of 13.57 MT. Jai Prakash Associates, Durgapur Projects and B S Ispat -- had bagged one mine each, even as the government said that it expects more aggressive bidding for blocks as the mines were already producing. After the Supreme Court cancelled allocation of 204 mines in September, the government decided to auction the blocks. It has put 19 blocks on sale in the first tranche. The last day for the auction of first lot of mine is February 22. (economictimes.indiatimes.com)

February 16, 2015. Delhi Chief Minister Arvind Kejriwal tasked the finance and power departments with preparing proposals to halve power rates and provide free supply of water, up to 20,000 litres per month, to every household - his AAP's two key poll promises. The decision was taken in a meeting where Kejriwal asked the officials of these departments to send their proposals to slash power tariff by 50 percent till the audit by the Comptroller and Auditor General (CAG) of the private power companies is completed. In its previous 49-day government in 2013-14, the AAP had halved the electricity rates by 50 percent by providing subsidy and announced free supply of about 667 litres water everyday within 48 hours of coming to power. It had also ordered the account book of power distribution companies by the CAG. (www.business-standard.com)

February 16, 2015. India and Sri Lanka signed a civilian nuclear pact that would help the island nation meet its energy goals, a sign of improving ties as President Maithripala Sirisena looks to reduce his country’s dependence on China. Sirisena has promised to rebalance Sri Lanka’s foreign relations away from China. Officials under his predecessor, Mahinda Rajapaksa, had rankled India by suggesting that Pakistan -- whose reactors have mostly been built by Chinese companies -- may help it build nuclear power plants. Prime Minister Narendra Modi said that India and Sri Lanka would also expand defense and security ties. Sri Lanka and India began talks on a civilian nuclear cooperation pact in 2012 and held another two rounds of talks last year, according to government. India offers more than five decades of experience in atomic energy. Its industry has built 5.8 GW of capacity using mostly indigenous technology and plans to increase that to 62 GW by 2032. Modi and U.S. President Barack Obama announced a breakthrough on a long-stymied 2008 civilian nuclear agreement that could trigger an expansion of nuclear imports and projects. (www.bloomberg.com)

February 12, 2015. To boost hydel power generation and resume those small projects in the sector which have been delayed due to various reasons, the Union Power ministry is planning to design a special policy, which will also ensure that a new project is announced only after getting necessary approvals are in place. Union Power Minister Piyush Goyal said it should be ensured that no projects are announced without the necessary approvals and land clearances, and the right of way are in place. The Modi government has set an ambitious target for renewable energy over the next five years at 3,000 billion units from the present 53 billion. The overall target is to double generation to 2 trillion units. The government is also working towards reviving large hydro projects including the 1,200 MW Teesta-III project in Sikkim, which is behind schedule by over two years, the 2,000 MW Shubhamsari project in Arunachal Pradesh, which when completed will be the largest hydel plant in the country, and the 400 MW Maheshwar being put up by SKumar's group in MP. (economictimes.indiatimes.com)

February 12, 2015. The power ministry has left it to the Cabinet to decide whether to include power stations based on administered price mechanism (APM) gas in the price-pooling scheme in a fresh proposal aimed at salvaging gas-based power projects to the tune of ` 64,000 crore being run by companies such as Essar Power, Reliance Power, GMR Energy, GVK Power and Lanco Infratech. The fresh proposal comes after the oil ministry said no additional gas output is expected from domestic sources in the next three years to pool with imported gas. The new scheme seeks about ` 7,000 crore of financial support from a fund comprising penalties paid by distribution utilities and generators for grid indiscipline besides proposing various tax reliefs to the plants. As per the proposal, gas will be imported and supplied along with domestic gas at an average 'pooled' price to run the stranded plants at 40% capacity to help them recover fixed costs. The scheme is being proposed for three financial years beginning April 2015 as the oil ministry has indicated that no incremental domestic gas is available till then. The ministry has given two options to the Cabinet. The first is a pooling proposal, including more than 6,000 MW APM gas-based plants operating at less than 40 percent capacity so that enough domestic gas is available for pooling with imported LNG. The second option excludes the APM gas-based power stations from the pooling scheme. The power ministry has sought phased implementation of the scheme by giving priority to over 10,000 MW commissioned projects in the first year that have power purchase agreements with states. The power ministry has also asked for about ` 7,000 crore in financial support from the Power System Development Fund to keep the electricity tariffs to the targeted ` 5.50 per unit against ` 7.5 per unit. Fiscal benefits such as streamlining customs duty on gas imports, waiver of value added tax and central sales tax have also been sought. The ministry has sought financial relief from banks such as extending the repayment schedule to 25 years from 10 years, extending the year of commercial operation by a year and waiver of penal interest. (economictimes.indiatimes.com)

February 12, 2015. Maharashtra government has sought about ` 10,000 crore from the Centre to create infrastructure for improving efficiency in power generation and distribution. Chief Minister Devendra Fadnavis said the government had undertaken a project for feeder separation whereby electricity supply systems for agriculture consumers are not linked to non-farm supply. He said the government will review the contracts awarded for development of infrastructure for power supply. (economictimes.indiatimes.com)

February 11, 2015. Power Finance Corporation (PFC), state run apex financier for the power sector reported 4.83% increase in net profit at ` 1,541.73 crore for the third quarter ending December 31 for the fiscal 2014-15. The company attributed the rise in profit to increase in income from operations. The company's total income from operations rose to ` 6,434.65 crore in the third quarter of the current fiscal, as against ` 5,540.52 crore in the year-ago period. However, PFC's other operating income fell sharply from ` 199.66 crore to ` 88 crore. The loan assets of the leading financier the end of 9 months of the FY15 increased to ` 2,05,211 crore from ` 1,77,529 crores, an increase of 16%. The company said that net non profitable assets, as a% of loan assets stood at 0.75%. The major loans sanctioned by PFC were notably - ` 7669 crore to 1320 MW thermal power plant in of Tamil Nadu Generation and Distribution Corporation, ` 3770 crore to 660 MW thermal power station of U.P. Rajya Vidyut Utpadan Nigam Ltd, ` 3178 crore to 1000 MW hydro electric project of Chenab Valley Power Projects Pvt. It also extended ` 3008 crore as regulatory assets loan of BSES Rajdhani Power Ltd. The net worth of PFC increased by 23% to ` 29,143 crores during the same period. (www.business-standard.com)

February 11, 2015. Indian suppliers are not fully satisfied by the additional details provided by Ministry of External Affairs (MEA) on the nuclear liability act, asserting that it doesn’t provide enough clarity and requires Nuclear Power Corporation of India Limited (NPCIL) to step in and throw more light on the grey areas before the stalled train of nuclear commerce can chug forward. The MEA released as a set of 19 Frequently Asked Questions (FAQs) on the ‘understanding’ reached by India and US over the application of nuclear liability act – essentially concluding that the domestic act was in compliance with the IAEA’s Convention for Supplementary Compensation for Nuclear Damage. The ‘breakthrough’ in implementing the India-US civil nuclear deal was announced by the Indian Prime Minister Narendra Modi and US president Barack Obama standing side-by-side. The managing director and chief executive officer of Walchandnagar industries, GK Pillai said that FAQs were not enough for his company to re-start negotiations for supplying equipment to build NPCIL’s reactor. He said that there was only mention of domestic suppliers in context of concerns raised over definition of ‘supplier’, controversial section 46 and the creation of the nuclear insurance pool. Domestic suppliers were earlier exempt from liability as per the contract conditions with NPCIL, before the passage of the civil liability for nuclear damage act was passed in 2010. Since then, Walchandnagar, along with other players in the domestic nuclear industry like Larsen and Toubro and Godrej have stalled the construction of new power plants, like the Gorakhpur power project with no contracts signed under the new acts. India has ambitious plans to generate 62,000 MW from nuclear energy within 20 years, but this target is was in doubt after the passage of the 2010 act. (www.newindianexpress.com)

February 11, 2015. With the Delhi High (HC) Court asking for removal of three coal blocks from the auction list, Union Minister Piyush Goyal said the government respects the ruling and assured that the auction process would not be delayed. In a relief for Jindal Steel and Power Ltd (JSPL) and its promoter Naveen Jindal, the court directed a technical committee to review its own decision to change the end-use of two coal blocks earlier alloted to the company and removing the mines from the auction. Coal Secretary Anil Swarup said the judgement of the High Court in the Jindal Steel case will not impact the auction process of schedule II mines (producing mines) that is underway. The Delhi High Court also directed the committee, which had been set up to classify coal blocks as well as formulate criteria for their auction and allotment, to review its decision to merge Utkal B1 and B2, saying "there was no application of mind". (economictimes.indiatimes.com)

 [INTERNATIONAL: OIL & GAS]

February 16, 2015. Norwegian giant Statoil ASA proposes to advance with its plan to develop a huge oil field worth $29 billion. The offshore energy project will be the most expensive in Europe. Moreover, the field is expected to produce the world’s cheapest oil. The yield will, therefore, be profitable even after the recent price crash. The Johan Sverdrup field in the North Sea is likely to commence operations by 2019 and produce about 3 billion barrels of oil equivalents (Boe) over 5 decades. Norway’s declining oil industry is expected to be revived with the startup of Johan Sverdrup. The project is likely to break even at price levels of below $40 per barrel. Despite Brent crude’s decline to about $60 from over $100 last June, this level is anticipated to give Statoil a vast margin. The operating costs are estimated below $5 per barrel, once the project comes online. The first phase of Sverdrup is projected to develop about 2.4 billion Boe at a cost of about $15.4 billion. Lundin Petroleum and Statoil accidentally discovered Sverdrup in 2010 in a mature area that had already been largely explored. This new find has instilled confidence in smaller oil firms regarding more oil discoveries in prospects discarded by the majors. Norway had announced a 78% rebate on exploration costs 10 years ago in view of the deteriorating output. This gave the smaller explorers the financial strength to drill, as drilling wells is an expensive affair which, might cost as much as $100 million. (www.zacks.com)

February 16, 2015. Rosneft, Russia's top crude producer, reported a 154 percent hydrocarbon reserves replacement ratio in 2014 thanks to increased drilling and exploration. Rosneft, jointly with ExxonMobil, made an oil discovery at an offshore Arctic field. Since then, Exxon had suspended offshore drilling in Russia due to sanctions against Moscow over Ukraine. The company reported on reserves in its financials under Russian Accounting Standards. Rosneft's reserve life -- the amount of time they would last at current rates of production -- was 24 years with 20 years for oil and 39 for gas. It said under the Securities and Exchange Commission's methodology, its proven hydrocarbon reserves rose to almost 34 billion barrels of oil equivalent as of Dec. 31, 2014 from 33 billion a year earlier. Under Petroleum Resources Management System criteria, its proven hydrocarbon reserves stood at 43.1 billion barrels of oil equivalent, up from 41.8 billion barrels a year earlier. Rosneft became the world's top listed crude producer in 2013 when it acquired Anglo-Russian TNK-BP for more than $55 billion in a cash-and-stock deal. (www.rigzone.com)

February 16, 2015. RH Petrogas Limited reported that the Plan of Development (POD) for the North Klalin gas and condensate field in the Kepala Burung Production Sharing Contract (Basin PSC), West Papua, Indonesia, has been approved by SKK Migas. The POD was submitted following the discovery made by the North Klalin-1 well in 2011 and the successful appraisal by the North Klalin- 2 and 3 wells in subsequent years. North Klalin-1, 2 and 3 wells have since been put on production. The POD program involves the drilling of four new development wells and the construction of flow lines tying back to existing production facilities within the Basin block. The additional gas production from the North Klalin field will be used to supplement internal fuel requirement for operation as well as to meet additional demand for gas in the local markets and to support the economic development around the Sorong area in West Papua. (www.rigzone.com)

February 13, 2015. Norway's Statoil has made a minor oil discovery near the Ekofisk field in the North Sea, the Norwegian Petroleum Directorate (NPD) reported. The NPD said that Statoil, the operator of production license 146, is in the process of completing the drilling of wildcat well 2/4-22S – which is located around 13 miles north of Ekofish and 1.5 miles northeast of the 2/2-21 discovery in the southern part of the Norwegian North Sea. The primary exploration target for well 2/4-22 S was to prove petroleum in reservoir rocks in the Permian layer. The secondary exploration target was to prove petroleum in reservoir rocks in the Middle Jurassic layer. Preliminary estimates of the size of the discovery range between 4.4 million and 12.6 million barrels of recoverable oil equivalents. Further studies are needed in order to determine whether the discovery can be included as part of a future development of the area. The NPD said the well was the ninth exploration well in PL146. The license was awarded in the 12^th licensing round in 1988. (www.rigzone.com)

February 17, 2015. RT Global Resources-led consortium has been selected to build and operate a $2.5 bn crude oil refinery in Uganda. The refinery aims to process the hydrocarbon reserves in the country that were uncovered in 2006 along its border with Congo. As per the terms of the tender, the government will invest 40% in the construction of the refinery while the remaining will come from investors. Scheduled to be developed in phases, the facility will have an initial production capacity of 30,000 barrels per day and at full production, the capacity will touch 60,000 barrels per day. (refiningandpetrochemicals.energy-business-review.com)

February 17, 2015. Mexico's state-run oil company Pemex has postponed its plan to upgrade refineries, which generate low-sulfur gasoline and diesel, due to budget cuts and plunging oil prices. The budget cuts of $4.16 bn have received the approval from the company's board of directors. This development has further delayed the previously announced plans to upgrade its refineries, the company said. The company earlier announced its plan to add deep conversion coking units to three of its six refineries. Currently, Pemex is the only supplier of refined products such as gasoline, diesel and liquefied petroleum gas in Mexico. (refiningandpetrochemicals.energy-business-review.com)

February 16, 2015. China will allow more oil refiners to process imported crude, opening the door for small, independent plants known as teapots to use an alternative feedstock. Refiners investing in overseas oil exploration or capable of advanced processing and pollution-treatment technology will have priority to use imported crude, the National Development and Reform Commission (NDRC) said. To be eligible, plants must also have at least one crude distillation unit with a designed capacity of more than 2 million metric tons a year, it said. China, the world’s second-largest oil consumer, is widening access to crude supplies amid a global glut that’s driven benchmark prices to the lowest in almost six years. Teapot operators, which process mainly fuel oil, have for years sought to expand their options because it’s more profitable to process crude. China National Chemical Corp., or ChemChina, in November 2012 became the first to be allowed to import as much as 10 million tons a year to supply its teapot plants. Teapot plants, located mainly in the eastern province of Shandong, typically process fuel oil into gasoline and diesel. State oil companies dominate crude production and imports in China, which trails only the U.S. globally in oil demand. (www.bloomberg.com)

February 13, 2015. Russia's Lukoil and a consortium headed by Hyundai Engineering have signed a contract to build a gas processing plant in Uzbekistan, Lukoil said. The Kandym plant will have an annual capacity of 8.1 billion cubic meters of gas and will process sour natural gas from the Kandym group of fields in Uzbekistan to produce treated natural gas and stable gas condensate, as well as solid and granulated sulphur. (af.reuters.com)

February 17, 2015. Hungary's Prime Minister Viktor Orban says his country has reached a "political agreement" with Moscow on a new gas deal. Orban said after his meeting with Russian President Vladimir Putin that only "technical" details needed to be finalized on the deal which will replace a 20-year contract expiring in December.

Orban said "Hungary needs Russia" and it was important for Russia to be open to Hungarian products, which have been affected by Russia's ban on EU imports — a countermeasure to EU sanctions against Russia because of the Ukraine crisis. (www.downstreamtoday.com)

February 16, 2015. Cyprus and Egypt have tightened their energy cooperation with an agreement to sort out the technical details of laying an undersea pipeline that would carry offshore natural gas to Egyptian processing facilities. Egyptian petroleum minister Sherif Ismail and Cypriot Energy Minister Yiorgos Lakkotrypis agreed in Cairo to find a way to transport gas from a field off Cyprus that is estimated to hold 3.6 trillion to 6 trillion cubic feet of the fossil fuel.

The details will be examined with other companies involved in gas transport and processing and a deal is expected to be hammered out within six months. Ismail said that his country is looking to import Cypriot gas both for domestic use and for possible re-export to other countries. (www.downstreamtoday.com)

February 16, 2015. BHP Billiton has agreed to sell its Pakistan gas business to a local firm, a unit of the Hashoo Group, for an undisclosed sum, the global miner said. BHP, operator of the Zamzama gas field and processing plants, has been looking to sell its 38.5 percent stake for some time, as it works to simplify its petroleum business to focus on the United States, Australia and Trinidad and Tobago. It sold its Liverpool Bay oil and gas fields off the Irish Sea in 2013 and has been looking to sell its Algerian assets. Gas and condensate from Zamzama are sold within Pakistan. The other owners of the field are Italy's ENI SpA, Premier Oil, Kuwait's KUFPEC, and the Pakistan government. (www.rigzone.com)

February 16, 2015. Montana's governor Steve Bulloc called on the Obama administration to strengthen rules that require oil pipelines to be buried just 4 feet beneath major waterways, after two breaches that spilled a combined 93,000 gallons of crude into the Yellowstone River. River scouring due to flooding or an ice jam is being investigated as a possible cause of a spill that dumped about 30,000 gallons into the Yellowstone upstream of Glendive, temporarily contaminating the city's water supply. In 2011, an Exxon Mobil pipeline broke during flooding near Laurel and fouled dozens of miles of river bank with oil. Bullock said in a letter to Transportation Secretary Anthony Fox that he wants existing lines surveyed to determine how deeply they're buried.

The governor also asked for more federal inspectors in Montana, which has only one overseeing 3,800 miles of pipelines in the state. Federal rules that require lines to be buried at least 4 feet beneath riverbeds were last considered for changes after the Yellowstone spill. Government officials determined 4 feet was sufficient in 2013, after a two-year review. The Department of Transportation plans to hire roughly 100 more inspectors under a $27 million budget increase approved last year. That would supplement the 150 inspectors already with the agency's Office of Pipeline Safety. (www.downstreamtoday.com)

February 12, 2015. GDF Suez will end its free market natural gas retail activity in Hungary from July and sell this portfolio to Swiss-based energy trader MET Hungary, the companies said. GDF Suez said it would keep on supplying gas to customers in the universal market segment and continue its gas distribution activity in six counties through its Egaz-Degaz unit. MET Group is present in eight countries via subsidiaries, and pursues trading activities in 14 national gas markets and 13 European gas hubs.  www.reuters.com)

February 17, 2015. China may merge its state-owned oil companies to create giants that will be more efficient and capable of taking on overseas rivals like Exxon Mobil Corp. The country’s leaders have asked government economic advisers to study the possible mergers. One plan would combine the country’s largest oil companies, China National Petroleum Corp (CNPC), and China Petrochemical Corp (Sinopec). Other options include merging China National Offshore Oil Corp (Cnooc), with Sinochem Group. No timetable is set for a decision on whether or when to proceed with the mergers. China is consolidating other industries, combining the country’s two biggest train makers to boost exports of high-speed rail technology. CSR Corp. will acquire smaller competitor China CNR Corp. by issuing 1.1 new shares to CNR investors for each share they own, the two companies said. (www.bloomberg.com)

February 17, 2015. Companies across all sectors of the oil, gas and chemicals industry will need to better plan and manage projects to ensure their survival during the recent downturn in oil prices, according to a recent study by global business advisory firms AlixPartners. Oil and gas companies not only need to improve their ability to plan and manage projects, but create a “cost culture” inside of their companies.

Only 30 percent of respondents in a study of 250 high-level industry executives across the world said their companies had explicit return-on-capital targets for projects before the oil price collapse. Perhaps most surprising is that 12 percent of respondents believe their companies are any better than competitors at project execution, AlixPartners said. AlixPartners found that 19 percent of study participants from North American firms said their companies finish projects on budget, versus 29 percent of all respondents globally.

Additionally, 34 percent of the executives surveyed said they agree or strongly agree that project management is executed at the company level across all projects, which suggests that many projects are not benefiting from economics of scale and institutional knowledge. The found that only 30 percent of oil and gas drillers had a strong series of checks and balances to ensure projects were on time and on budget, compared with 39 percent of total survey respondents, while only 11 percent of respondents said they employ a stage-gated process to assess project viability at defined milestones when developing a new capital project. The survey results were influenced by the time of the study, which took place in the summer and fall of last year, AlixPartners said The fact that the industry has been on a 10-year uptick – with companies switching to oil from natural gas when gas prices dipped in 2008 – and that many working in industry are newcomers to oil price downturns – also contributed to the rush towards project activity without thorough project planning and management. (www.rigzone.com)

February 13, 2015. The Dutch government could ramp up gas production in the second half of the year after curbing output at its giant Groningen field, where earthquakes blamed on extraction have damaged buildings and triggered protests. The Dutch government imposed a new cap on production at the gas field - to 16.5 billion cubic metres (bcm) in the first half of the year from previously expected levels of around 19.7 bcm – due to concerns about the earth tremors.

The move prompted jumps in European gas prices and has reduced Dutch gas production by nearly 20 percent, analysts said. Dutch Economic Affairs Minister Henk Kamp said the government's previous full-year gas production target of 39.5 bcm can still be met, and he sees 35 bcm as the minimal level of production this year. (www.rigzone.com)

February 13, 2015. The chief executive of oilfield services company Baker Hughes is cutting jobs in response to slumping prices and a downturn in drilling activity. So the company will cuts costs, he told investors in a conference call to discuss the firm's fourth-quarter earnings and outlook for 2015. More than 100,000 layoffs have been announced across the industry worldwide since prices began to slide last summer. In recent weeks other major service companies have announced job reductions. Halliburton announced it will cut 6,400 jobs (8 percent of its global workforce) while Schlumberger will eliminate 9,000 positions (around 7 percent of its workforce). Precision Drilling, one of the largest rig contractors in North America, has idled more than 50 of the 250 rigs it had working this time last year, leaving more than 1,000 skilled operators out of work, the company said. Tens of thousands more jobs have been cut, through layoffs or retirements, across every part of the industry, ranging from self-employed drilling contractors and well-completion crews to full-service companies, seismic surveyors and of course the oil and gas producers themselves. Oil and gas production is an exceptionally capital-intensive industry. But the sector's most important and scarce resource is its workforce. The oil industry's popular image may be a roughneck in soiled overalls drinking in a strip joint, but it has an enormous demand for highly skilled and, during a boom, very well compensated workers.

Modern oil and gas production is technically complicated and dangerous work. The days of drilling wildcat wells more or less at random and allowing the well to blow out in a massive gusher are long over. Oil and gas companies have lots of experienced workers in their late 40s and 50s, and have recently succeeded in attracting more young graduates. But there is an acute shortage of mid-career professionals aged 35-45, with 10-20 years training and experience. The large number of professionals in their 50s poses a major problem as they reach the age for retirement, while recent graduates are still 10-15 years away from being ready to assume supervisory positions. The industry's uneven age profile is the legacy of the last downturn during the late 1980s and through the 1990s, when low oil prices and the squeeze on profits resulted in enormous job losses and a virtual freeze on hiring.

As a result, the cohort of workers recruited in the mid and late 1990s, who should be moving into supervisory and eventually leadership positions, is unusually small. Back in 2013, Schlumberger predicted the oil and gas industry would have a shortage of around 15,000 experienced petroleum engineers and geoscientists by 2016. The predicted shortfall of experienced petro-technical professionals (PTPs) would approach 20 percent of the total required number. The looming shortage was seen by many as the biggest single threat to increasing oil and gas supplies in the second half of the current decade and into the 2020s. Schlumberger forecast the industry would need to hire 10,000 new petro-technical professionals every year through 2020 to offset retirements and meet the need for expansion. The oil industry spent years working to encourage more college students to specialise in petroleum engineering and related disciplines. (www.reuters.com)

February 12, 2015. Junior explorer Chariot Oil & Gas said that it is in a strong position to take advantage of opportunities arising from the impact on the wider sector of the recent decline in the price of oil. The firm, which holds a diversified portfolio of what it described as "long-term, low-cost" assets, is debt free and has a strong cash position with $53.5 million on its balance sheet at the end of December. During the course of 2015, Chariot expects several wells to be drilled by its partners in Morocco, Mauritania and Namibia. It noted that 10 wells are set to be spud in the Barreirinhas Basin, Brazil, during the next three years.

Chariot said its technical team is continuing to work hard to mature assets towards drilling and has completed its interpretation of its proprietary 3D data offshore Mauritania, with four drill-ready prospects identified – each with more than 400 million barrels of gross mean prospective resources. In Morocco, following the finalized interpretation of the company's 3D data during the first half of this year, a partnering process is expected to be carried out. An audit will also be carried out on the Rabat Deep licenses, where Chariot has prepared its JP-1 prospect for a data room should Woodside choose not to elect to carry the company through the drilling of a well – a decision that is due by the end of June 2015. (www.rigzone.com)

February 12, 2015. Somalia may start producing oil and gas by 2020 after exploration work showed the potential for “huge” deposits of the resources in the Horn of Africa country, outgoing Petroleum Minister Da’ud Mohamed Omar said. He didn’t identify which oil companies are carrying out exploration work in the country. Somalia is considering its first bidding round for oil blocks since 2009 as increasing stability begins to attract more foreign investors. African Union-backed government forces have regained control of about 70 percent of the country that had fallen under the control of al-Shabaab, the al-Qaeda-linked militant group seeking to create an Islamic state in Somalia.

The government is in talks with companies including Royal Dutch Shell Plc, Exxon Mobil Corp., BP Plc and Chevron Corp. about reactivating dormant contracts in the country, according to J. Jay Park, managing director of Petroleum Regimes Advisory, who provides legal advice to the government. Oil companies haven’t operated in the country since civil war erupted in 1991 and they were forced to declare force majeure. Omar said that he expects the country to begin producing oil and gas within six years. He is being replaced by Mahamed Mukhtar Ibrahim, who was appointed as minister in a new cabinet announced by Prime Minister Omar Abdirashid Ali. (www.bloomberg.com)

February 11, 2015. Iraq and Iran joined Saudi Arabia in cutting their March crude prices for Asia to the lowest level in more than a decade, signaling the battle for a share of OPEC’s largest market is intensifying. Iraq’s Basrah Light crude will sell at $4.10 a barrel below Middle East benchmarks, the lowest since at least August 2003, the Oil Marketing Co. said. National Iranian Oil Co. lowered its official selling price for March Light crude sales to a discount of $2.10 a barrel, the lowest since at least March 2000, according to the company. The cuts come after Saudi Arabia, the largest crude exporter, reduced pricing to Asia last week to the lowest in at least 14 years.

The Organization of Petroleum Exporting Countries (OPEC) left its members’ output targets unchanged at a November meeting, choosing to compete for market share against U.S. shale producers rather than support prices. Iraq is the second-biggest producer in OPEC and Iran is fourth. Middle Eastern producers are increasingly competing with cargoes from Latin America, Africa and Russia for buyers in Asia. Oil prices have dropped about 45 percent in the past six months as production from the U.S. and OPEC surged. The International Energy Agency said that the U.S. will contribute most to global growth in oil supplies through 2020 as OPEC’s attempts to defend its market share will hurt other suppliers including Russia more. Iran’s output rose to 2.78 million barrels a day in January from 2.77 million a month earlier as Iraq boosted supply to 3.9 million from 3.7 million, according to a survey of oil companies, producers and analysts. Production in Saudi Arabia climbed 220,000 barrels a day to 9.72 million last month. Saudi Arabia won’t balance global crude markets by itself even as prices fall “too low for everybody,” Khalid Al-Falih, the chief executive officer of Saudi Arabian Oil Co., said. The kingdom’s Oil Minister Ali Al-Naimi has said producers outside of the group should trim their output first. (www.bloomberg.com)

February 11, 2015. Nigeria may have its credit rating cut as lower oil prices and political uncertainty weaken Africa’s largest economy, Standard & Poor (S&P)’s said. S&P said it is reviewing Nigeria for a possible downgrade, indicating there’s more than a 50 percent chance for the country to lose its BB- rating, or three steps below investment grade. The move came one day after it cut a group of oil producing countries including Kazakhstan, Bahrain and Venezuela and lowered the outlook for Saudi Arabia to negative. A 53 percent decline in oil prices since June is squeezing Nigeria’s economy, which relies on commodities for more than 90 percent of its exports and 70 percent of the government revenue. S&P said Nigeria’s current account, the broadest measure of trade, may turn into a deficit equal to 1.8 percent of gross domestic product between this year and 2017, from a surplus of 3.3 percent as previously expected. It cut the forecast for Brent oil prices to an average $70 a barrel by 2018, from $101 in September when it last reviewed the country. (www.bloomberg.com)

 [INTERNATIONAL: POWER]

February 16 2015. The Nigerian Electricity Regulatory Commission (NERC) has amended and separated into four different parts the statutory licence earlier granted to Zuma Energy Nigeria Ltd for the construction of a 1200 MW coal power plant at Itobe, Kogi State. NERC by the amendment assigned four different licences to four new beneficiary Special Purpose Vehicles (SPVs), which will now take up the construction of the power plants in capacities 300 MW respectively. The companies, Itobe 1, 2, 3 and 4 Coal Power Plant Limited are still under the stable of Zuma Energy, however, they will each build 300 MW capacities coal power plants within a defined timeframe and as well separately negotiate Power Purchase Agreements (PPAs) and tariff rates with the Nigerian Bulk Electricity Trading Plc and NERC. (www.thisdaylive.com)

February 13, 2015. A petition to keep the Clinton Power Station open has begun to circulate in Illinois as the fate of the nearly 30-year-old nuclear power plant remains uncertain. The petition is the first step for what state Rep. Bill Mitchell, R-Forsyth, and other local officials said will raise awareness of the importance of the plant, which provides nearly 700 jobs for Central Illinois, in addition to the hundreds of trade jobs that come through the plant. The plant generates $13 million annually in payments to local taxing districts, Mitchell said, with that money going to support the local library and school district, among others entities. Officials from the Chicago-based Exelon Nuclear said that it will be forced to close its Clinton Power Station, along with shuttering similar plants in Ogle County and Rock Island, if the state doesn't come up with policy changes to make the stations more profitable. The plants combine to produce 48 percent of the state's electricity, with the Clinton Power Station providing enough electricity to power 1 million homes, according to numbers from Exelon. (www.pantagraph.com)

February 16, 2015. Sarawak Cable Bhd (SCB) is getting a better deal with the revised electricity tariff for its first hydro power plant in north Sumatra due for completion in September 2015. SCB’s 78%-owned Indonesia unit, PT Inpola Mitra Elektrindo (IME), is developing the RM80mil plant project with generation capacity of 10MW. According to SCB, Perusahaan Listrik Negara Persero (PLN), the Indonesian utility body, had revised upwards the tariff to an average of 998 rupiah (28.5 sen) per kWh from the original average 778 rupiah per kWh under a power purchase agreement (PPA) or an increase of some 28%.

The Indonesian authorities encouraged foreign investments in power plant projects, and that SCB was the first foreign company that had made good progress in constructing a power plant project in that country. PLN had offered IME to build two more hydro plant projects, one with designed generation capacity of 80 MW and the other 10 MW, in north Sumatra where there was strong growth in power demand due to rapid development, such as the plantation sector and increase in population and living standard of the people. State-owned Sarawak Energy Bhd, which is SCB’s second largest shareholder with a 16.5% stake, is scheduled to export power to west Kalimantan, Indonesia before end-2015. The construction of transmission lines and substations on both sides of the Sarawak-west Kalimantan border are progressing well and the new interconnection system would deliver 230 MW of renewable energy to PLN. (www.thestar.com.my)

February 13, 2015. Automation and power technology provider ABB has won a $35 mn supply order for gas-insulated switchgear (GIS) and shunt reactors from electricity transmission system operator Elia in Belgium. According to the contract, ABB will design, supply, and commission 420kV gas-insulated switchgear and 130MVAr shunt reactors for three 380kV substations in the country.

The power equipment delivery is expected to stabilise and increase the capacity of Belgium's power grid, opening up room for more wind power generation. The gas-insulated switchgear is expected to control, protect, and isolate electrical equipment to increase reliability of the country's power supply. ABB's shunt reactors will be able to boost the energy efficiency of transmission through enhanced power quality and lowered transmission costs. The order for the power equipment delivery was booked in the fourth quarter of 2014. The project will ensure availability of offshore wind power on land and its transmission for the domestic market. The capacity increment is also expected to power transmission through subsea direct-current connection between the country and the UK. Once operational, the project could help Belgium's renewable power generation increase 13% by 2020. (www.power-technology.com)

February 13, 2015. The U.S. Department of Energy's Western Area Power Administration and a group of Arizona utilities celebrated the energizing of a new transmission infrastructure project that will serve the state’s growing electrical energy needs, attract renewable energy development to the area, and strengthen the transmission system in the Southwestern United States. The 109-mile Electrical District No. 5-to-Palo Verde Hub (ED5-PVH) transmission project in Arizona advances America’s energy infrastructure by eliminating system constraints and providing increased capacity access to affordable energy in the region.

Building 21^st century infrastructure is a critical component of President Obama’s effort to accelerate economic growth, expand opportunity, and improve the competitiveness of the American economy. ED5-PVH starts at the Palo Verde market hub near Wintersburg in Maricopa County, Arizona, and runs southeast to the ED5 Substation in Pinal County, Arizona. The Palo Verde market hub is a crucial energy juncture in the western U.S. that serves communities in Arizona, California, and Nevada. ED5-PVH adds up to 410 MW of bi-directional capacity to the electric grid – enough capacity to power 30,000 homes. That includes 254 MW to the market hub and 156 MW to 18 local Arizona communities, including water conservation and irrigation districts, public power districts and Native American tribes. ED5-PVH has already inspired nearby tribal nations to evaluate constructing renewable projects on their lands that could interconnect with the line. The Gila River Indian Community, Tohono O'odham Nation, and Ak-Chin Indian Community are working with Western and the Department of Energy’s Office of Indian Energy to conduct a market assessment. (www.pennenergy.com)

February 16, 2015. The Nepal Industrial Promotion Board (IPB) has approved the development of hydropower projects in the county. The proposal to develop 92% FDI-funded 65MW Kaligandaki Upper hydro project has been approved by IPB, which was chaired by Industry Minister Mahesh Basnet during a meeting. Additionally, IBP approved Excel Clean Hydropower Company to boost capital and capacity. China's Sinohydro and Nepal's Trade Link Global, through a joint venture, will be responsible for the development of the Kaligandaki Upper hydro project on the Kaligandaki River along the border of Myagdi and Parbat districts in Nepal, with an investment of NPR22bn ($218.7 mn). IPB said Sinohydro will hold 92% stake in the project. Additionally, Essel Clean Solu Hydropower, which owns license to develop a 40 MW hydropower project on Solu River in Solukhumbu, has been received approval to sign NPR13bn loan agreement with a number of foreign companies, for capital and capacity increment. Essel Clean Solu Hydropower had filed an application to expand the hydropower project capacity from current 40 MW to 82 MW. (hydro.energy-business-review.com)

February 13, 2015. Japan Nuclear Regulation Authority (NRA) has given approval to Kansai Electric Power to resume operations of 3 and 4 reactors of the Takahama nuclear power plant located in Fukui Prefecture. The move marks a step ahead for returning nuclear power to the country following the Fukushima disaster of 2011, which led to the shutdown of all nuclear facilities. The safety report has been approved by NRA as the idled reactors comply with the new and stricter safety standards for nuclear facilities. Kansai Electric Power is due to secure NRA approval on design upgrades and operational checks, followed by local authorities' approval prior to restarting the two reactors of the Takahama plant located about 400km west of Tokyo. The nuclear reactors are planned to resume operations by November, as per the plan submitted by the company to the government to increase prices of electricity. (nuclear.energy-business-review.com)

 [RENEWABLE ENERGY / CLIMATE CHANGE TRENDS]

February 17, 2015. Environment Minister Prakash Javadekar asked his Ministry officials to “impose” the green laws to protect country’s air, water and forest resources. Former Environment Minister Jairam Ramesh had said the job of the environment ministry is to protect the country’s environment and forest resources and not promote economic growth. Javadekar pulled up the green ministry officials for not strictly imposing rules particularly on plastic waste management and asked the officials to “act” on the larger interest of the people of the country. He said plastic bags measuring 40 microns and below in width are totally banned in the country but “we don’t take any action.” (www.thehindubusinessline.com)

February 17, 2015. The renewable energy ministry has sought incentives such as excise duty exemption and 10-year tax holiday in the forthcoming budget to give a boost to the solar energy sector. In its suggestions to Finance Minister Arun Jaitley, the Ministry of New and Renewable Energy (MNRE) has also pitched for 25 percent capital subsidy through the modified special incentive package scheme or NCEF for manufacturing of equipment for the solar energy sector.

The solar energy sector in the country is still in the preliminary stage when compared to other matured sectors, domestic manufacturing needs special incentives to provide the relevant push to achieve growth. Jaitley will unveil the government's first full-fledged budget on February 28. The country's renewable energy sector is looking at attracting USD 200 billion in investments. The government aims to have 1,00,000 MW of installed solar power capacity by 2022 from the present around 3,000 MW. It is also looking at rooftop solar model. (economictimes.indiatimes.com)

February 17, 2015. India's ambitious target of installing 170 GW of clean energy by 2022 may not be possible unless central and state governments take immediate measures to help the industry overcome financial and regulatory constraints, top companies in the industry say. Clean energy firms such as Suzlon, Mytrah, Vikram Solar and Mahindra & Mahindra (M&M)'s Susten listed a number of preconditions that need to be fulfilled to enable generate enough clean energy in the country.

Suzlon said that the government should mandate captive clean energy use for small and medium enterprises, giving them lower interest cost on setting up such projects. According to Mahindra & Mahindra's green energy vertical Susten, the government should take care of both land and grid infrastructure to make this target a possibility. At present, India has only 33 GW of clean energy capacity, with 22 GW from wind, approximately 3 GW from solar energy and the remaining from small hydro and biomass projects. (economictimes.indiatimes.com)

February 16, 2015. With about 300 firms committing investments in the green power space, Power Minister Piyush Goyal is confident that the country will receive over $100 billion in renewable energy sector over the next five years. An estimated ` 6 crore is needed to set up a 1 MW of solar capacity. Essel Group said it has committed ` 75,000 crore to generate 12,000 MW in the next five years.

US-based firms Sun Edison and First Solar and domestic companies Reliance Power and Welspun are among the 293 entities that have committed to generating 266 GW renewable energy in the five years under the government's ambitious RE-Invest programme. Welspun Energy targets to generate 11,000 MW renewable energy, followed by ReNew Power 11,500 MW capacity, Reliance Power 6,000 MW, Hindustan Powerprojects 10,000 MW and Sun Edison 15,000 MW. SunEdison had said that it along with Adani Enterprises would invest about ` 25,000 crore to set up a solar park in Gujarat. Country's biggest lender SBI had said it would finance 15,000 MW renewable energy over the next five years. (www.business-standard.com)

February 16 2015. India is all set to have world's largest 750 MW solar power plant in Rewa district of Madhya Pradesh (MP) that will be completed next year on Independence Day. This will pip America's much vaunted 550 MW Desert sunlight solar project in California.

The state government is setting up the plant in a joint venture with Solar Energy Corporation of India. Acquisition of 1,500 hectares of land for the ` 4000 crore project is close to completion and government agencies are likely to invite tenders from developers by April. The expected cost of power production is pegged at ` 5 per unit which would be lower than production costs in any solar project in the country, including the one at Neemuch in MP and Mehsana and Patan in Gujarat. The plant is being set up in Gurh tehsil of Rewa district and will straddle five villages of Barseta. (www.indiatvnews.com)

February 16, 2015. Tamil Nadu (TN) bagged an award for having an installed capacity of 8487.72 MW in renewable energy. The award was presented by Prime Minister Narendra Modi at the Renewable Energy Global Investors' Meet (RE-Invest) in New Delhi. Tamil Nadu Electricity Minister Natham R Viswanathan received the award. Modi gave away awards to 12 States for their outstanding contribution in the field of Renewable Energy. (economictimes.indiatimes.com)

February 15, 2015. Chhattisgarh was felicitated for emerging as one of the best performing states in the renewable energy segment. Prime Minister Narendra Modi presented the award to Principal Secretary of Chhattisgarh's Energy department, Aman Singh, during the Renewable Energy Global Investors Meet (RE-Invest) held.

The state was adjudged for the award on the basis of criteria fixed by 13^th Finance Commission. Singh said solar power is being used in 600 primary health centre, 100 community health centre, 350 police stations, 1800 tribal hostels, 27 collectorates and 1,700 villages of the state. In addition, various villages are using 3,000 solar power pumps for drinking water and 1,500 for irrigation purpose, he said. (economictimes.indiatimes.com)

February 15, 2015. Prime Minister (PM) Narendra Modi called for innovation and research to make solar and wind power affordable, even as companies like NTPC, Suzlon and Reliance Power pledged mega investments in such areas. He said India is working on building a consortium of 50 countries with abundant solar radiation, to pool research and technological advancements to improve its accessibility to the poor and in the remote areas. Inaugurating the first Renewable Energy Global Investors Meet (RE-Invest), Modi also talked about "seven horses of energy" and said the country has so far focused on thermal, gas, hydro and nuclear power and efforts should now shift to solar, wind and biogas. Way back in 2007, Modi as the then Gujarat Chief Minister had said that the state would "ride the chariot of energy which will be pulled by seven horses". On the first day of the three-day event, as many as 293 companies committed to set up plants to generate 266 GW of renewable energy in 5 years, while banking major SBI said it will finance 15000 MW renewable energy in five years. Describing India's thrust towards renewable energy production as an effort to ensure universal energy access for India's poor, Modi said India has graduated from megawatts to gigawatts in terms of renewable energy production. He suggested setting up of hybrid energy parks in areas with abundant sun radiation as well as wind potential to save on transmission and power evacuation infrastructure cost. The Prime Minister also called for developing domestic manufacturing of renewable energy equipment to create jobs. Suzlon and Welspun committed to set up 11,000 MW each, while NTPC and Hindustan Power Projects pledged to generate 10,000 MW of power each from green sources. Renew Power outlined plans for 11,500 MW and Sun Edison for 15,000 MW. Gamesa committed to setting up 7,500 MW of renewable plants. Reliance Power committed 6000 MW. Minister of State for Power, Coal and New and Renewable Energy, Piyush Goyal said India will become 'renewable energy capital of the world. Modi suggested installing solar panels over all water bodies as well as using them to power irrigation pumps, while solar photo-voltaic cells can be used on roof-tops. Goyal said this innovative idea was used in Gujarat during Modi's stint as Chief Minister. Conserving energy, Modi said, is the need of the hour. He said the cost of electricity from solar photo-voltaic cells has come down from ` 20 per unit to ` 7.50 and research and innovation can help bring it down further. In the rural areas, he stressed on the need for solar pumps to reduce input costs for farmers. Farmers can then use micro-irrigation to conserve water and enhance crop yield. He called for sustained technological research in renewable energy; and a thrust on domestic equipment manufacturing for renewable energy as part of the "Make in India" initiative. (economictimes.indiatimes.com)

February 15, 2015. State Bank of India (SBI) committed ` 75,000 crore for generation of 15,000 MW of renewable energy in the next 5 years. SBI has a loan exposure of ` 1.78 lakh crore in the power sector including conventional energy and discoms. As per RBI norms, banks have to necessarily lend 40 percent of the total loans towards priority sector category. The SBI said the RBI may look at raising the sectoral exposure limit or a separate class could be introduced for the renewable energy. (economictimes.indiatimes.com)

February 15, 2015. Andhra Pradesh (AP) inked a Memorandum of Understanding (MoU) for generation of 4,000 MW of wind power and 200 MW of hybrid power. The state government unveiled wind and solar policies and signed the MoU at the Renewable Energy Global Investors Meet and Expo, Re-invest. Andhra Pradesh Chief Minister N Chandrababu Naidu said his state was aiming at ` 8.5 billion investment in transmission and distribution and a huge investment in solar power. He assured the investors of safe journey for solar power producers as the government realised the crucial nature of the power sector for the growth of the state and added that the state has to become power surplus in the next four to five years. Assuring investors in green energy speedy clearances, several exemptions and non-stop-plan-to-execution scheme for projects in the field, he said that vast land bank, a committed bureaucracy and political will in Andhra Pradesh only meant single window clearances for the investors. The call of the Prime Minister for 'Make in India' would only be complimented by his own call for 'Make in AP', Naidu said, while giving details of his government's plans for establishing green energy environment in the state. (economictimes.indiatimes.com)

February 15, 2015. The Union Ministry of Environment, Forests and Climate Change (MoEF) has demanded enhanced budgetary allocation for the National Adaptation Fund. In 2014, the government allocated ` 100 crore to set up the Fund. The Ministry had sought concessions for pollution abatement, climate-related instrumentation and reduction in the cost of pollution-measuring equipment. Cost should not come in the way of tackling pollution. The Ministry is keen that some allocation be made in all Ministries so that climate change is integrated into planning. The government had doubled the coal cess to finance clean energy research but there is no new proposal from the ministry to increase the cess further. The National Adaptation Fund has ` 100 crore but this is way short of what is needed for adaptation programmes. While the government has embarked on ambitious adaptation plans, funds are an issue as was the case of the National Agriculture Mission which had to incorporate itself into existing government programmes with a vastly scaled down budget. There was a shortage of funds for the ambitious National Mission for Sustainable Agriculture (NMSA), which led to some goals of the mission being embedded into five existing programmes of the Agriculture and Cooperation departments. According to the Mission document in 2010, the implementation of the NMSA from 2011-2012 to the end of the 12^th five year plan would require an additional budgetary support of ` 1,08,000 crore. (www.thehindu.com)

February 14, 2015. The government aims to achieve 40,000 MW of power from rooftop solar projects by 2022, Minister for Renewable Energy Piyush Goyal said. Goyal said his ministry was in the process of setting up these projects on buildings owned by the Centre, railway stations and defence establishments. He said that out of the total 100 GW, 40% will go towards roof tops of commercial buildings, while 20,000 Mw will be distributed among unemployed graduates for solar entrepreneurship, who will be given ` 65 lakh as equity for the same. (economictimes.indiatimes.com)

February 12, 2015. CLP India, the Indian subsidiary of Hongkong-based power company CLP, said it has awarded a 100 MW wind power project in Madhya Pradesh (MP) to wind energy firm Gamesa. The project is a turnkey project to construct 100 MW wind farm in Chandigarh, Madhya Pradesh, CLP India said. The Chandgarh project is due for commissioning in December 2015. The new wind project will increase CLP India's wind power portfolio close to 1100 MW across six states - Rajasthan, Gujarat, Maharashtra, Tamil Nadu, Karnataka and Madhya Pradesh. Gamesa had commissioned 60 MW wind farm in Jath, Maharashtra in March 2014 for CLP India. This new contract puts Gamesa's 2014 Indian order intake at 850 MW. From January to September, India accounted for 27 percent of the MW sold by Gamesa. (economictimes.indiatimes.com)

February 12, 2015. NTPC Ltd., India’s largest electricity generator, invited online bids to set up four solar photovoltaic power projects in the state of Andhra Pradesh. The projects will each have a capacity of 125 MW. They will be set up at Anantapur district of the southern state. The techno-commercial bid document will be on sale from Feb. 19 to March 18 and will have to be submitted by 2:30 p.m. on April 22, local time. The bids will be opened the same day. Adani Enterprises Plans to Build India’s Largest Solar Park India to Appoint Consultant for 4.2 GW Clean Energy Park SunEdison to Develop 5 GW of Wind, Solar Projects in India. (www.bloomberg.com)

February 12, 2015. Lower crude prices usually spell trouble for renewable energy projects as both institutional investors and Big Oil lose economic incentive to go green. But not so for India, says power, coal and renewable energy minister Piyush Goyal as the Narendra Modi government moves to ramp up solar power capacity to 100,000 MW by 2021-22. Goyal said oil or gas was not the main source for generating power in India. Nearly two-thirds of the 2.5 lakh MW installed generation capacity used coal as fuel. Availability of gas was also limited.

Several global oil majors have exited or put off plans to set up renewable energy projects in recent times after oil prices plummeted by half since June 2014. But Goyal's optimism does not seem out of place, going by the response to a three-day global renewable energy investor summit his ministry is holding with industry chambers CII and Ficci in the capital. He reckons some $200 billion investments in renewable energy projects over the next several years and is putting in place policies to wean the sector away from subsidy. The policies are focusing on addressing issues of both grid-connected as well as off-grid projects. Simultaneously, funding plans are also being put in place. The pricing issue is being addressed through mandatory renewable energy procurement norms for state utilities for bundling with power from traditional sources. Power from traditional sources costs an average of ` 3 a unit, while solar power costs ` 12-15. (economictimes.indiatimes.com)

February 12, 2015. Reliance Power inked a pact with Rajasthan government to develop a 6,000 MW solar park in the state over the next 10 years. Chief Minister Vasundhara Raje also dedicated Reliance Power's 100 MW Concentrated Solar Project (CSP) located at Pokhran in Jaisalmer district to the nation. Rajasthan Sun Technique Energy, a wholly-owned subsidiary of Reliance Power, was awarded the CSP project in 2010 based on a international competitive bidding. Reliance Power claims to have the largest portfolio of power projects in the private sector based on coal, gas, hydro and renewable energy with an operating portfolio of nearly 6,000 MW. Adani Enterprises also signed a pact with the Rajasthan government to develop the country's largest solar park in the state with 10,000 MW capacity over the next 10 years at an estimated investment of about ` 40,000 crore. (www.business-standard.com)

February 11, 2015. Thanks to the proactive steps of Punjab in harnessing solar power, the state has managed to win solar power developers' confidence. The state has received proposals for setting up 337 MW, against the total capacity of 250 MW. The projects are likely to attract an investment of ` 2,000 crore. In 2013, the state had awarded projects of 250 MW to 26 developers in different parts of the state, which have either been commissioned before time or likely to be commissioned by March 2015. The solar power projects were awarded in two categories - projects which have a capacity of one to four MW and the other between five and 30 MW. In the first category, 18 companies were awarded the projects of 50 MW, while in the other one, 11 were given projects of 200 MW solar power. Among the companies which have been awarded the projects include Lanco Solar Energy, Punj Lloyd Infrastructure, Moser Baer Clean Energy, Essel Infra Projects, Asopus Infrastructure (India Bulls), Welspun Solar Punjab and Azure Urja. Currently, the total installed capacity in Punjab is 57 MW of solar photovoltaic power, which includes power projects by Azure Urja (34 MW), Madhav Solar (four MW) and International Switchgears (one MW). Further, with various projects are on various stages of construction, the total solar power generation will touch around 240 MW by March 2015. Overall, Punjab has set a target to generate 4,120 MW by 2020 power from the solar energy. (www.business-standard.com)

February 11, 2015. India's renewable energy sector is looking at attracting $ 200 billion in investments as several domestic and international firms queue up to tap the potential of green power, the government said. The government aims to have 1,00,000 MW of installed solar power capacity by 2022 from the present around 3,000 MW. Power, Coal and Renewable Energy Minister Piyush Goyal said the government is also looking at rooftop solar model. The government may even contemplate making the land owners as stakeholders in the projects so that they get annual or monthly rent. The Ministry of New and Renewable Energy is organising Renewable Energy Global Investors Meet & Expo (RE-Invest) from 15-17 February 2015 in New Delhi. The central theme of RE-Invest is to attract large scale investments for the renewable energy sector in India. At present, renewable energy contributes about 6.5 percent in the electricity mix of the country. It is proposed that this would be taken to about 12 percent in the next three years. (economictimes.indiatimes.com)

February 17, 2015. The U.K. approved an offshore wind farm with the potential to power as many as 2 million homes. SSE Plc, RWE AG, Statoil ASA and Statkraft AS got the green light from the central government to install as many as 400 wind turbines generating a total of 2,400 MW off the coast of East Riding in Yorkshire, the Department of Energy and Climate Change said. The U.K. has the largest amount of installed offshore wind capacity in Europe with 55.9 percent of the total, according to estimates from the European Wind Energy Association. That’s about 4,494 MW of capacity. The country has seen 14.5 billion pounds invested since 2010 in the onshore and offshore wind-power industry, which supports 35,400 jobs, Ed Davey, energy and climate change secretary, said. (www.bloomberg.com)

February 17, 2015. Rising global demand for energy over the next two decades is at odds with the fight against climate change, the head of BP said, as he outlined the oil giant’s forecasts showing unsustainable increases in carbon emissions. BP’s annual energy outlook predicted that the world economy would double in size in the next 20 years, resulting in demand for energy rising by almost 40%. The company said two-thirds of this demand would be met from fossil fuels – oil, gas and coal – and that this would lead to a 25% increase in carbon emissions. BP said slower growth in China and India coupled with greater energy efficiency would mean that demand would rise by 1.5% a year over the next two decades, rather than the 2.5% a year recorded during the past decade. Even so, the company said carbon emissions would be growing by 1% a year – “well above” the path recommended by scientists to keep emissions below the ceiling of 450 parts per million that would provide a 50% chance of stabilising global temperatures at 2% above pre-industrial levels. The most likely path for carbon emissions, despite current government policies, does not appear sustainable. (www.theguardian.com)

February 13, 2015. The U.S. is facing the worst drought in 1,000 years, “driven primarily” by man-made climate change. By the end of this century, researchers are predicting years-long dry spells exacerbated by higher temperatures, creating conditions worse than so-called megadroughts that have been linked to the decline of American Indian cultures in the U.S. Southwest, according to an article published in the journal Science Advances. The conclusion is further evidence that human activity is having profound, harmful and long-lasting impacts on the planet, and will continue to threaten the environment even if carbon emissions are significantly curtailed. If carbon emissions don’t start declining by 2050, the risk of a decade-long drought in the Southwest and Central Plains doubles in the second half of the century, the researchers found. The study looked at historical tree-ring patterns to evaluate past environmental conditions, combined with climate models to predict the future impact of rising temperature. Even if emissions begin tapering by mid-century, the risk of drought will remain higher than previously thought because the climate will continue to get warmer. Past megadroughts ravaged food supplies and may have contributed to Indian tribes in the Southwest migrating or dying off. California’s drought is entering its fourth year, with snowpack levels about one-quarter of historical averages. San Francisco went without rain in January for the first time in 165 years. The drought is affecting more than 64 million people in the Southwest and Southern Plains, according to NASA data. (www.bloomberg.com)

February 13 2015. Mainstream Renewable Power has announced that is has reached financial close for three wind farm projects in South Africa, which combined will provide 360 MW of capacity. The renewable energy developer said the three wind farms in the Northern Cape Province represent an investment of $760 mn. The debt for the projects was arranged and underwritten by Barclays and the Development Bank of Southern Africa, while the consortium of Murray & Roberts and Conco has been appointed as construction contractor and Siemens Wind will supply and install the wind turbines. Work on the projects - the 140 MW Khobab Wind Farm, 140 MW Loeriesfontein 2 Wind Farm, and 80 MW Noupoort Wind Farm - is now scheduled to start this month. The company said the projects further highlighted Mainstream's success in the expanding South African renewables market, after it previously completed three wind and solar projects totalling 238 MW under the first round of the South African Government's Renewable Energy Procurement Programme. (www.businessgreen.com)

February 12, 2015. The European Union (EU) should start a mechanism to curb oversupply in the carbon market by the end of 2018, sooner than 2021 as proposed by the bloc’s regulator, under a compromise plan proposed in the European Parliament. Ivo Belet, who is steering the draft measure to introduce the emissions market stability reserve through the legislature, put forward a proposal aimed at building cross-party support before a Feb. 24 vote in the assembly’s environment committee. His offer is an attempt to bridge differences between political groups on the design of the reserve, which would absorb carbon allowances if the surplus exceeds a fixed limit and release them to the market in the event of a shortage. The two largest groups in the parliament, the European People’s Party and the Socialists & Democrats, signaled support for it. The plan, which was presented after negotiations among lead lawmakers from the parliament’s environment committee, is now subject to approval by political groups.  The 28-nation EU is seeking to strengthen its cap-and-trade emissions program after the price of permits plunged almost 70 percent since 2008 to levels that fail to deter industry from burning coal, the most-polluting fossil fuel. Carbon allowances for delivery in December rose as much as 2.5 percent to a three-week high of 7.49 euros a metric ton on ICE Futures Europe in London. Under Belet’s proposal, carbon permits delayed at government auctions in 2014-16 would be placed directly in the reserve. Under the current law the 900 million backloaded permits will be sold at auctions in 2019-20, a scenario that groups including Socialists, Liberals and Greens have opposed. Allowances remaining in a special reserve for new entrants at the end of the current trading period through 2020 and allowances not allocated to emitters due to closures or under exemptions should also be transferred to the reserve, according to the draft compromise. The plan also includes a provision to make 300 million allowances available until the end of 2020 for an innovation fund. The fund will be based on backloaded and unallocated allowances and permits in the MSR, provided that their number in the reserve is higher than 400 million. Belet proposed the thresholds for transferring permits into and from the reserve stay as proposed by the commission. That means the supply of permits would be reduced if an accumulated surplus were to reach at least 833 million tons. If the surplus were to fall below 400 million tons, the EU would begin returning allowances to the market from the reserve. (www.bloomberg.com)

February 12, 2015. Royal Dutch Shell Plc will call on the oil industry to speak up about global warming as executives at the world’s second-biggest energy producer fear losing ground to environmental voices. U.S. competitors led by Exxon Mobil Corp. have acknowledged climate change poses risks to life and property while avoiding specific policy recommendations. As institutions such as the Rockefeller Brothers Fund and Stanford University divest fossil fuel holdings and nations work toward a deal to limit emissions, energy producers must inject “realism and practicality” into the debate, according to Chief Executive Officer (CEO) Ben Van Beurden’s remarks. While The Hague-based Shell, along with BP Plc of London, have led the oil industry in acknowledging climate change as a problem, the industry has avoided forums such as the annual United Nations climate talks. Shell, whose $421 billion in annual sales exceeds the economic output of entire nations such as Denmark or Taiwan, has backed carbon trading and storing captured emissions underground as a way to pare back pollution. While accepting that greenhouse gases enhance risks associated with climate change, Exxon has said carbon caps, emissions trading regimes and other measures will inflict economic pain on the poorest consumers and impede efforts to lift developing nations out of poverty. The Irving, Texas-based company, which sells more than 4 million gallons of gasoline an hour, says energy conservation, greater use of natural gas in place of coal and more research into technologies such as hybrid automobile engines are the most practical, affordable response to climate change. Environmental groups have dominated the debate over how to shape global warming policy, according to Van Beurden’s remarks. That has boosted solutions such as emissions targets over policies that encourage investors to back technologies to cut pollution. In Germany, carbon dioxide emissions have jumped because utilities are using more coal plants to back up power from the country’s rapidly expanding wind- and solar-power industry. (www.bloomberg.com)

February 12, 2015. Sumitomo Mitsui Banking Corp., NEC Capital Solutions Ltd. and Maeda Corp. plan to invest as much as 5 billion yen ($42 million) in a solar power fund set up by Sparx Group Co. Sparx, a Japanese asset manager, will invest 100 million yen for the fund, the company said. The fund will invest in about five solar stations. (www.bloomberg.com)

February 11, 2015. Apple Inc. is investing $848 million in a solar farm to harvest electricity in a partnership with First Solar Inc. Apple will receive power from 130 MW of First Solar’s California Flats Solar Project in Monterey County, California, under a 25-year power-purchase agreement, the companies said. The iPhone maker already powers all of its data centers with renewable energy. Tim Cook, Apple’s chief executive officer, has advocated taking more steps to combat climate change. The agreement is the largest in the solar industry for a single commercial customer, he said. (www.bloomberg.com)

February 11, 2015. TransCanada Corp. disputed the U.S. Environmental Protection Agency (EPA)’s conclusion that developing the oil sands for the Keystone XL pipeline will significantly boost emissions of gases tied to climate change. Chief Executive Officer Russ Girling, in a letter to the State Department released, said the EPA’s conclusion isn’t supported by the environmental review conducted for the proposed $8 billion project. The U.S. House of Representatives is scheduled to vote on legislation that would approve the pipeline. President Barack Obama has vowed to veto the bill, if it passes. White House officials said the legislation would circumvent the review now under way in the State Department. The EPA said falling oil prices may make Keystone’s impact on the climate greater than an earlier analysis suggested. (www.bloomberg.com)

February 11, 2015. European utilities shut more coal and natural gas power plants in 2014 than in any year since at least 2009 amid falling demand for electricity and tougher pollution curbs. European Union (EU) power companies turned off 63 percent more coal- and gas-fed generation than they started. Net decommissioning of 5 GW, equivalent to about five nuclear power plants, was the most in at least six years. Fossil-fuel burning fell on measures to cut particulate air pollution as well as the U.K.’s carbon price floor that sets a minimum cost on power-plant emissions. The region’s warmest year in three decades cut demand for heating, while utilities generated a record amount of electricity from renewable sources such as wind and solar. (www.bloomberg.com)

                                                                                                                                

  

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