Energy News Monitor | Volume XI; Issue 38

[Energy budget: purveying aspirations]

                             “The high cost of petrol ensures that the average Indian continues to cover most of his everyday commuting needs by foot or by bicycle. These are the biggest contributions an average Indian makes to carbon emission mitigation. This unintended and undesirable contribution that millions of unwashed masses make is almost completely forgotten in what appears to a hurriedly green washed and largely aspirational budget!…”

Energy News

[GOOD]

A white paper on Delhi’s Electricity Sector is welcome especially if it succeeds in clearing the air on power subsidies!                                   

                                                                                                    [BAD]

Why plan for new UMPPs when old plans are struggling to take off?

[UGLY]

Does it make economic sense to invest in storing oil when the world is awash with oil?

 

NEWS BRIEF

[NATIONAL: OIL & GAS]

March 3, 2015. Reliance Industries Ltd (RIL) and its foreign partner BP have reported eight oil discoveries in the Cambay basin block bagged by them in the fifth round of New Exploration Licensing Policy (NELP) auction. The discoveries in block CB-ONN-2003/1 reportedly hold oil-initially-in-place (OIIP) of 15.04 million barrels. It was not immediately known if the management committee of the block, comprising representatives from the petroleum ministry, Directorate General of Hydrocarbons (DGH) and the explorers, have given go-ahead for the declaration of commerciality (DoC) of the discoveries. It is important for RIL to bring on stream new oil and gas discoveries, as its exploration and production business contributes just 1.51% to its turnover (` 6,068 crore out of ` 4.01 lakh crore in FY14). It is less than 10% to its sum-of-the-parts valuation of ` 941 per share, analysts said. The block CB-ONN-2003/1, covering an area of 635-sq kilometre that is divided into two parts — Part A & B, is located nearly 130 km from Ahmedabad in Gujarat in the Cambay basin. RIL, as the operator, holds a 70% participating interest, while BP has remaining 30% stake. The production sharing contract (PSC) of the block was signed on September 23, 2005, and the total exploration period was spread from June 2006 till June 2013. The contractor, according to article 10.5 of the PSC, has submitted the DoC of eight discoveries — D-43, 46, 47, 48, 49, 50, 51 and 45. It is proposed to drill six development wells in the block. The estimated cost of development is pegged around $25.57 million, while operating cost of each year is expected at about $4 million. RIL had announced seventh oil discovery in the block CB–ONN–2003/1. The discoveries made in the block were witnessed by DGH representatives. After DoC is given go-ahead, it may take another two-three years to put the discoveries into commercial production. RIL has faced investors’ glare after production from its flagship project KG-D6 has dropped drastically. The gas fields in deep waters of the east coast began production in April 2009 and touched a peak of 69.43 million standard cubic meters a day (mmscmd) in March 2010. Currently, the output is around 11-12 mmscmd. Fortunes for UK-based BP’s investments in India’s oil and gas fields also did not match up market expectations. BP has written down the value of its investment in eastern offshore KG-D6 block by $830 million, following a lower-than-expected gas price hike. (www.financialexpress.com)

March 1, 2015. State-run oil firms including Oil and Natural Gas Corp (ONGC) will invest over ` 76,565 crore on the project expansion during 2015-16, up 5 percent over the previous fiscal. ONGC, the nation's most profitable company, will see its capital expenditure rise to ` 36,249.37 crore as compared with ` 34,813 crore in the current fiscal, according to the Budget 2015-16 document. Its overseas investment arm, ONGC Videsh Ltd (OVL), will invest another ` 10,402 crore in 2015-16. This, however, is lower than the investment of ` 12,387 crore in the current fiscal. Oil India Ltd (OIL) has projected its capex rising by 11 percent to ` 3,917.64 crore. Refining and marketing companies will invest ` 20,256.02 crore with Indian Oil Corp (IOC) leading the pack with 10.5 percent increase in the capex at ` 9,407.80 crore. It will invest another ` 1,000 crore in exploration and production as well as petrochemical business. Hindustan Petroleum Corp Ltd (HPCL) will see a marginal decline in its capex of ` 1,636.64 crore in 2015-16 when compared with ` 1,763.56 crore in the previous year. Bharat Petroleum Corp Ltd (BPCL) will see its refining capex go up by 11.6 percent to ` 5,101.32 crore besides another ` 1,400 crore being invested in E&P business. GAIL India Ltd will invest ` 2,704.51 crore as opposed to ` 2,131.52 crore capex in 2014-15. The Budget for 2015-16 provides for ` 30,000 crore towards domestic cooking gas (LPG) and kerosene subsidy. Of this ` 21,140 crore has been provided for transferring as direct cash subsidy to cooking gas users under the Direct Benefit Transfer for LPG (DBTL). Another ` 860 crore has been provided for subsidy payable to North Eastern Region and project management expenditure. For kerosene, it provided ` 8,000 crore subsidy. The subsidy provided compares with Rs 57,085 crore in the revised estimate for 2014-15. This was provided to state-owned oil companies to make up for losses incurred on fuel sales at government-controlled rate. The revised estimate of ` 57,085 crore compares to ` 57,335.95 crore provided in the Budget estimate of 2014-15. In 2013-14, ` 80,772 crore was provided for subsidy compensation. (economictimes.indiatimes.com)

February 26, 2015. The government would wait till crude prices stabilize at around $70 a barrel before selling 5% in ONGC, moving disinvestment in the country's most profitable company to the 2015-16 fiscal starting April 1. The ONGC selloff was initially supposed to have happened in November 2014 and was estimated to fetch some ` 14,000 crore. But falling crude prices changed the valuation template and took a toll on the company's financial health. ONGC reported a 50% decline in net profit for the December quarter as low oil prices pulled down its income and forced exploration costs to be written off. Net profit for the quarter stood at ` 3,571 crore against ` 7,126 crore during the same period of the previous year. Total income for the quarter declined 14% to ` 18,715 crore. The company wrote off ` 2,475 crore towards exploration costs, compared to a write-off of ` 1,810 crore during the same period in the previous year. Crude prices dropped to $46 a barrel early last month from a level of $111-115 in June 2014, after OPEC swing producer Saudi Arabia initiated a price war to guard its market share against rising supplies from new players such as the US shale industry and Russia. The prices have shown a mild uptick recently, climbing past $59 a barrel after Chinese manufacturing expanded and the Saudi oil minister said demand was growing. Analysts generally expect oil prices to stabilize at $70-80 by end of the year. At a price level of $60 or below, ONGC is left with very little after bearing its share of fuel subsidy. The company does this by giving discount on crude to state-run refiners. Then it has to pay royalty and cess, besides tax and dividend. Under the burden-sharing arrangement, ONGC paid a discount of $56 a barrel. Besides, it paid $10 a barrel as cess, $7 per barrel as royalty and state levies. No wonder, ONGC had found itself in a situation where it was actually losing money for producing oil. The deregulation of diesel pricing in October was considered a positive contribution towards ONGC selloff since it was expected to reduce the subsidy burden. But clearly, even this proved inadequate as oil prices fell further. Since then the government has put in place a new dispensation, according to which the government would take 85% of the crude price above $60 and till $100 a barrel. Beyond $90 a barrel crude price, ONGC would have to give up 90% to the government. (economictimes.indiatimes.com)

February 25, 2015. Essar Oil will shut its 405,000 barrels per day Vadinar refinery in western Gujarat state for about four weeks of maintenance in May-June, the company said. The company has yet to finalise the dates for the shutdown, the company said. The refiner will upgrade some of units during the maintenance shutdown. (in.reuters.com)

February 25, 2015. Oil Minister Dharmendra Pradhan said that the Government, through Indian Strategic Petroleum Reserves Limited (ISPRL), is setting up Strategic Crude Oil Reserves with storage capacity of 5.33 Million Metric Tonnes (MMT) at three locations viz. Visakhapatnam (storage capacity: 1.33 MMT), Mangalore (storage capacity: 1.5 MMT) and Padur (storage capacity: 2.5 MMT) to enhance the energy security of the country. Besides, in order to further increase the Strategic Crude Oil storage capacity, ISPRL through Engineers India Limited, has prepared a detailed feasibility study for construction of additional 12.5 MMT of strategic crude oil storages in Phase-II. The capital cost for construction of 12.5 MMT of strategic crude oil storage in Phse-II is approx. ` 13216 crore based on March, 2013 prices. The cost of filling 12.5 MMT of crude oil based on the current price of crude oil ($ 55.19 per bbl and the current exchange rate (` 62.43 / $) is ` 31570 crore. Thus the total investment required for increasing the storage in the country by 12.5 MMT in Phase-II is around ` 44786 crore. (pib.nic.in)

March 3, 2015. GAIL India, the nation's largest natural gas distributor, has dropped plans to set up a ` 3,108 crore floating LNG import terminal at Paradip in Odisha. GAIL was looking for a strategic partner for the 4 million tons a year floating liquefied natural gas (LNG) terminal off the Paradip coast. But with a partnership with Royal Dutch Shell and GdF Suez of France coming through for a similar project off Kakinada in Andhra Pradesh, the Paradip project has been axed. GAIL had announced intention to come up with an Expression of Interest (EoI) seeking strategic partner for its Floating Storage Regasification Unit (FSRU) project at Paradip. The company was seeking an LNG supplier or a major consumer of gas as strategic partner for the Paradip project for which site selection had been completed and market survey commissioned. The FSRU was to have an initial capacity of four million tonne per annum (mtpa) in first phase, reaching a peak capacity of 4.8 mtpa, with a storage capacity of 170,000 cubic metres. The first phase of the project was to become operational by 2017. GAIL signed an MoU with the Paradip Port Trust for setting up of the LNG import terminal. While the port was to invest ` 650 crore on breakwater and dredging, GAIL was to invest ` 2,458 crore. In the second phase, four mtpa capacity will be added (peak capacity- 4.8 mtpa), raising the terminal's total capacity to 8-10 mtpa. Paradip would have been the fourth LNG terminal on the east coast. Besides the Kakinada project, Petronet LNG Ltd -- a firm in which GAIL has 12.5 percent stake, is setting up another 5 million tonnes a year facility at Gangavaram in Andhra Pradesh while Indian Oil Corp (IOC) is setting up a similar facility at Ennore in Tamil Nadu. India currently has four LNG terminals - Dahej and Hariza in Gujarat, Dabhol in Maharashtra and Kochi in Kerala. Of these, Kochi and Dabhol are only partially operational on account of absence of pipeline for taking gas to consumers and operational issues respectively. (economictimes.indiatimes.com)

March 2, 2015. GAIL India is unwilling to sign any agreement with Iranian companies for sourcing of gas because of the fear of US sanctions, Oil Minister Dharmendra Pradhan said. GAIL had in 2005 signed an agreement with National Iranian Gas Export Corporation (NIGEC) for import of 7.5 million tons a year of gas in its liquid form (LNG) from Iran. It was also a signatory for receipt of gas via the proposed Iran-Pakistan-India (IPI) gas pipeline. But after US imposed sanctions on Iran over its suspected nuclear programme, Indian firms are wary of entering into pacts which may lead to them being sanctioned by Washington. Pradhan said South Asia Gas Enterprise (SAGE) is pursuing a deep-sea gas pipeline from Middle East to India for importing natural gas. It has entered into a Memorandum of Understanding with NIGEC for transportation of gas to India through deep water route. The company has a Principles of Cooperation (PoC) with SAGE since July 2009 where GAIL and SAGE have agreed to cooperate in the pipeline project. The state-owned firm has 20 percent stake in Carrizo shale gas venture in the US where it has committed to invest $300 million. Also, it has multiple agreements for sourcing of gas and use of LNG terminals for shipping it to India. The US Government Accountability Office (GAO) listed three Indian companies as having commercial activity in Iran's energy sector, potentially attracting US sanctions. Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and Indian Oil Corp (IOC) have been on the list since 2010 for having stakes in Iran's Farsi oil and gas field. Under US sanctions against Tehran, companies doing energy business in with Iran face exclusion from the US financial system. (www.firstpost.com)

March 3, 2015. The Narendra Modi government's initiative to provide cash subsidy directly to nearly 11.5 crore consumers to allow them to buy cooking gas at market price has been a success, Oil Minister Dharmendra Pradhan said. Under the Direct Benefits Transfer for LPG (DBTL) Consumers Scheme, LPG cylinders will be sold at market rates of gas while the subsidy will be deposited directly into the account of legitimate consumers to plug leakages. The exercise is expected to pave the way for other such direct transfers that should significantly reduce subsidy expenditure. The ministry as well as state-run oil marketing firms had reached out to customers with conventional advertising backed by an expansive SMS and digital campaign. A similar exercise for kerosene subsidies may take a while longer to roll out, though, since the ministry needs the states to get their act together first. Even as the government announced an increase in petrol and diesel prices in tandem with rebounding international oil prices, it may not be ready to revise excise duty any time soon. (economictimes.indiatimes.com)

March 2, 2015. The government has provided ` 24 billion in the revised budget estimates for the current fiscal year to fill its first strategic crude reserves, indicating oil could be purchased by end-March. A fall in oil prices helped Finance Minister Arun Jaitley to present a budget that loosened the reins on public spending to drive growth as the federal government could save billions of dollars in oil subsidy. India, the world's No.4 crude consumer, is building storage facilities at three locations in the south of the country to hold a total 36.87 million barrels of oil, enough to cover about 13 days of its needs in case of a supply disruption. The first underground facility at Vizag that can hold 9.75 million barrels is completed and ready for commissioning. The Vizag facility has two compartments of 7.55 million barrels and 2.20 million barrels. The smaller compartment will be used by Hindustan Petroleum for its 166,000 barrels-per-day Vizag refinery in Andhra Pradesh. With global oil prices trading at around $62.2 per barrel, it would cost around $470 million to fill the bigger compartment at Vizag. The remaining two strategic storage facilities at Padur and Mangalore in southern Karnataka state that can together hold 29.3 million barrels are expected to be ready by October. (economictimes.indiatimes.com)

March 2, 2015. The government has budgeted for petroleum subsidy to come down by a half to ` 30,000 crore in the next financial year 2015-16 from ` 60,270 crore in the current financial year aided, largely, by a historic decline in crude oil prices between June and December 2014. Also, oil firms' capital expenditure in the new financial year is seen rising 5 percent to ` 76,565 crore, Budget documents show.

The Budget for the coming year provides for ` 30,000 crore for government's burden of petroleum subsidy towards liquefied petroleum gas (LPG) and kerosene. Of this, ` 21,140 crore has been provided for transferring direct cash subsidy to cooking gas users under the direct benefits transfer for LPG (DBTL) scheme. (www.business-standard.com)

March 1, 2015. Barring duty rejig for petrol and diesel, Finance Minister Arun Jaitley did not mention the high profile oil and gas (O&G) sector in his Budget speech. This happened against the backdrop of certain inputs by the Petroleum Ministry being found among the stacks of stolen documents. Jaitley, presenting the Budget for 2015-16 in the Lok Sabha, did not mention of any initiative in the oil and gas sector other than an excise duty rejig on petrol and diesel to make available ` 40,000 crore for roads and highway construction. Petrol attracts a total excise duty of ` 17.46 per litre, including ` 2 a litre road cess. Similarly, diesel attracts ` 10.26 a litre total excise duty, including ` 2 per litre road cess. The duty incidence on petrol is made up of ` 8.95 per litre basic central excise or CENVAT, ` 6 per litre special excise duty, ` 2 per litre road cess and 3 percent education cess. This has now been changed to ` 5.46 a litre CENVAT, ` 6 per litre special excise and ` 6 road cess. Education cesses have been subsumed in the final duty. On diesel, there is a CENVAT of ` 7.96 a litre plus ` 2 road cess and 3 percent education cesses. This will now change to ` 4.26 a litre CENVAT and ` 6 a litre road cess. The total incidence of various duties of excise on petrol and diesel remains unchanged. Also, specific rates are being revised only to the extent of subsuming the quantum of education cess presently levied on them, keeping the total incidence of excise duties unchanged, he said. (economictimes.indiatimes.com)

March 1, 2015. Jet fuel price was hiked by a steep 8.2 percent while the rates of non-subsidised LPG was increased by ` 5 per cylinder on firming international oil rates. The price of aviation turbine fuel (ATF), or jet fuel, in Delhi was hiked by ` 3,849.97 per kilolitre, or 8.2 percent, to ` 50,363 per kl, oil companies announced. The rate hike follows seven consecutive monthly cuts since August, the last being by 11.27 percent (` 5,909.9 per kl) from February 1. Prior to increase, ATF price had been cut by ` 23,648.73 or 33 percent in seven reductions since August 2014. Even after hike, jet fuel rates are lowest since February 2011. Jet fuel constitutes over 40 percent of an airline's operating costs and the price increase will raise the financial burden of cash-strapped carriers. Simultaneously, the oil firms also hiked the price of non-subsidised or market-priced domestic cooking gas (LPG) by ` 5 to ` 610 per 14.2-kg cylinder in Delhi. The increase comes on back of seven straight reductions in rates of non-subsidised or market-priced LPG since August. The customers buy non-subsidised after exhausting their quota of 12 cylinders at subsidised rates. A subsidised LPG refill currently costs ` 417 in Delhi. The price of non-subsidised LPG was last cut on February 1 by ` 103.5 per 14.2-kg cylinder. In the seven monthly reductions, non-domestic LPG rates had been slashed by ` 317.50 per cylinder, bringing the price to a three-year low. State-owned fuel retailers, Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp revise jet fuel and non-subsidised LPG prices on the first of every month based on average imported cost and rupee-dollar exchange rate. (economictimes.indiatimes.com)

February 26, 2015. Gujarat has spent ` 2847.25 crore in last two years on their ambitious gas exploration project in Krishna Godawari Basin even as the production of oil or gas is yet to take off despite the spending, Energy Minister Saurabh Patel told Legislative Assembly. In his written reply to the House, Patel said the State Petroleum Corporation (GSPC) has spent ` 2847.25 crore for the project in last two years. Congress MLA and party chief whip Balwantsinh Rajput through a written query during Question Hour asked Patel to provide details about the expenses incurred for the project during the said period. He also asked government to give details about the quantity of oil or gas acquired till date from the basin. Giving the break-up, Patel stated while government spent ` 2052.31 crore during 2013-14, it spent ` 794.94 crore in 2014-15 (as on December 31, 2014). On gas and oil details, Patel admitted that production of oil or gas is yet to commence in the block KG/OSN/2001/3. (economictimes.indiatimes.com)

February 25, 2015. India should appoint energy diplomats in global oil hubs, empower the regulator and allow market prices for local gas producers to achieve energy security for the country, which imports about 80% of its oil requirements, according to a top government panel. Energy diplomats should be positioned in Moscow, Sydney, London, Calgary, Houston and Johannesburg, the panel said. These diplomats will serve as outposts of India with the objective of furthering the agenda of ensuring energy security for the country, the panel headed by former petroleum secretary Vijay Kelkar said. HDFC chairman Deepak Parekh, former Shell India CEO Vikram Mehta and former ONGC chairman RS Sharma were among the 10 members on the panel, which said the country's annual import bill could be cut by $70-80 billion by implementing the recommendations. Indian companies should bid for hydrocarbon assets in a consortium as it increases their financial strength and bargaining power and different arms of the government should come together to develop country-specific approaches while scouting for energy assets overseas, the panel proposed. It also suggested setting up a think tank to produce quality research reports on oil and gas-rich Arabian Gulf region countries and its impact on India's energy security. The panel proposed making the Directorate General of Hydrocarbons, a technical arm of the government, an independent and empowered regulator. (economictimes.indiatimes.com)

February 25, 2015. The Directorate General of Hydrocarbons (DGH) has suggested encouraging conciliation proceedings and timely appointment of arbitrators by the Government. This is to minimise cases of arbitration in the oil and gas (O&G) sector, Oil Minister Dharmendra Pradhan said.

He said that DGH has also recommended delegating powers to the upstream technical arm of the Government for creating its own panel of law firms, prior examination by multi-disciplinary team, and executive committee of DGH on potential litigations. He said that the Government has recently come out with a policy framework for relaxation, extensions and clarifications at the development and production stage under the production sharing contracts (PSC) regime. (www.thehindubusinessline.com)

February 25, 2015. Aviation Turbine Fuel (ATF), used in aircraft, costs less than petrol and diesel as the common man auto fuels attract higher excise duty levy, Oil Minister Dharmendra Pradhan said. While jet fuel (ATF) in Delhi costs ` 46,513.03 per kilolitre or ` 46.51 per litre, petrol is priced at ` 57.31 a litre. Diesel costs ` 46.62 a litre. After four duty hikes totalling ` 7.98 per litre since November, petrol now attracts the highest ever excise rate of ` 16.95 per litre. Excise duty on diesel is ` 9.96 per litre. On the other hand, ATF attracts 8 percent duty. The government has freed pricing of all three - petrol, diesel and ATF-- from its control and rates are indexed to international markets. Pradhan said deregulation of petrol and diesel has led to substantial reduction in prices. (economictimes.indiatimes.com)

 [NATIONAL: POWER]

March 3, 2015. Private power producer Tata Power has commissioned the first unit of its Dagachhu hydro power plant having a capacity of 63 MW in Bhutan. Dagachhu project is a joint venture between Tata Power and Druk Green Power Corporation, owned by Royal Government of Bhutan and National Pension and Provident Fund of Bhutan.

With the commissioning of the first unit of this plant, Tata Power's overall hydro power generation capacity now stands at 513 MW and the total at 8,684 MW. Dagachhu Hydro Power Corporation has entered into a 25-year Power Purchase Agreement with Tata Power Trading Company Ltd (TPTCL) for sale of power from the project. The power generated from the project shall be sold by TPTCL in the Indian power market. (economictimes.indiatimes.com)

March 2, 2015. Thermal Powertech Corporation India (TPCIL) said it has commenced the commercial operation of the 660 MW first phase of its 1,320 MW thermal power plant located in Krishnapatnam in Andhra Pradesh's SPSR Nellore District. TPCIL is a joint venture between Singapore-based Sembcorp and Gayatri Energy Ventures Private Limited, a wholly-owned subsidiary of Gayatri Projects. The TPCIL plant operates on a combination of domestic coal and imported coal. The power plant utilises supercritical technology that allows for enhanced efficiency, thereby reducing emissions of carbon dioxide and other pollutants. The commissioning of its first unit will help in bridging the ever-increasing gap between the demand and supply of power for the Andhra Pradesh and Telangana states, it said. TPCIL has signed a combined Power Purchase Agreement with the Andhra Pradesh and Telangana Power Distribution Companies for the supply of 500 MW of power for a period of 25 years. (economictimes.indiatimes.com)

February 26, 2015. OPGS Power Gujarat Private Limited will commission its ` 1,855 crore 300 MW coal-based power plant this month at Bhadreswar in Mundra Special Economic Zone (SEZ) in Gujarat, the company said. The work on the mega project was started three years ago and around 300 acre land was acquired from private owners in Kutch. This 300 MW power plant in Bhadreswar is the first OPG venture in Gujarat. The power player already has a plant in Tamil Nadu. The total cost of the project is ` 1855 crore with equity capital of ` 464 crores. (www.business-standard.com)

February 25, 2015. The Unit 3 and 4 of the Kudankulam Nuclear Power Project (KKNPP) with 2x1000 MW capacity is being prepared for launch in 2015-16. The Kudankulam Nuclear Power Project Unit-1 (KKNPP 1) with 1,000 MW capacity has been commissioned recently while the Kudankulam Nuclear Power Project Unit-2 (KKNPP-2) with 1,000 MW capacity is under commissioning. In December 2014, the first Unit, with 1000 MW capacity has started power generation and has been connected to the southern grid. India's atomic power plant operator Nuclear Power Corp of India Ltd (NPCIL) is setting up two 1,000 MW Russian reactors at Kudankulam village in Tirunelveli district, 650 km from here. The total outlay for the project is over ` 17,000 crore. The first unit attained criticality, which is the beginning of the fission process, in July 2013. Kudankulam Nuclear Plant said the new units will have 1,000 MW and the project cost is estimated at around ` 39,000 crore as of now, against ` 17,000 crore for Unit 1 and 2. It would take around 69 months for the projects to get completed from the time construction starts. Concrete placement will start in early 2016. The agreements, a general framework accord and contracts to order main equipment, will enable us to place orders for long manufacturing cycle equipment worth ` 10,000 crore. These would take around two-and-a-half years to design, fabricate, test and deliver at the site. These are mainly nuclear steam supply system, which will be around 320 tonnes. The Government had set a target of tripling the then existing nuclear power capacity of 4780 MW in the next ten years viz. 2024. (www.business-standard.com)

March 2, 2015. Comptroller and Auditor General of India (CAG) has found various irregularities in Assam Power Distribution Company Ltd (APDCL), resulting in revenue loss of over ` 41 crore during 2013-14. In its latest report on Public Sector Undertakings for the year ended March 31, 2014, the CAG said it observed "loss of revenue of ` 41.26 crore in six instances owning to non- compliance of rules, directives, procedures and terms and conditions of supply of electricity". CAG pointed out that there were irregularities in the management of distribution franchisee agreement of APDCL. The CAG found that the company paid ` 11.59 crore extra to its franchisee because of higher consideration of return at 15 percent instead of stipulated 10 percent. APDCL sustained a loss of ` 30.14 lakh due to failure in preferring the claim for the recovery of the inadmissible rebate within the specified time. CAG said the company failed to recover short-realisation of an amount of ` 17.30 lakh due to wrong calculations in the bills of a consumer till September 2014 despite being corrected by the Audit. (economictimes.indiatimes.com)

March 2, 2015. Larsen and Toubro (L&T) has commissioned country's first 765 KV Gas Insulated Substation (GIS) in Pune in an agreement with a Korean firm and executed 765 KV transmission line in Air Insulated Substation in Rajasthan. The project in Pune is part of the transmission system associated with the Krishnapatinam UMPP (ultra mega power project) to strengthen the grid connectivity as well as strengthen power distribution of 400 KV in western India, the company said. The company said its second completed project of 765 KV in Rajasthan is the largest in the state and will act as an interface for the national grid connection to the power grid substations in Gwalior and Bhiwani. (www.sify.com)

February 28, 2015. The setting up of a 800 KV HVDC (High Voltage Direct Current) convertor transformer plant in the city will come to the rescue of many power-starved states which can borrow electricity from the surplus in Gujarat, Chief Minister (CM) Anandiben Patel said. This HVDC transformer will help transmission of power to power-starved states, she said. Gujarat's total installed capacity of power is 22524 MW. In the past, states like Delhi facing a problem of severe capacity shortage had approached Gujarat for supplying power but it was not then in a position to do so due to non availability of HVDC for transmission of power from one state to another, the CM said. Patel said that one lakh farm connections will be given to farmers in the state for which a provision of Rs 1158 crore is made in the Gujarat budget for 2015-16. She said a sum of ` 2073 crores will be spent for laying of 2500 kms of transmission lines and setting up of 100 electric sub stations across the state for supplying qualitative power to people staying in remote areas. About ` 28 crores will be spent for giving power connections to 42700 BPL families in the state, she said. (economictimes.indiatimes.com)

February 27, 2015. Claiming that two-third of Bihar population is yet to get access to electricity, a World Bank study report has asked the state government to augment generation capacity and ramp up investment in transmission and distribution infrastructure to ensure affordable power to the consumers. Lack of access to power for a large segment of its population as well as industry coupled with an inefficient, loos-making distribution infrastructure severely constrains economic development and growth, World Bank's Economic Advisor Sheoli Pargal said.

Stating that Bihar has the lowest per capita electricity consumption at 144 kWh against national average of 917 kWh, Pargal, author of the World Bank report on power scenario in India, noted that Bihar also fared among the worst states in terms of peak deficit of power at 30 percent. Given abysmal picture, Bihar needed drastic steps to revitalise power sector by improving performance of distribution utilities with an added emphasis on financial discipline in distribution of power in the back drop of ever accumulating Aggregate Technical and Commercial (AT&T) losses which was among the highest in the country. The (AT&T) losses in power distribution in Bihar were among the highest in the country at 50 percent in 2013 while the accumulated losses of the sector stood at ` 85 billion in 2012, she said. The transmission losses at four percent in the financial year 2012-13 were also high considering the all-India average at around 2.4 percent. (economictimes.indiatimes.com)

February 26, 2015. Government is preparing action plans in partnership with states to provide 24x7 power supply besides initiating steps to address electricity shortage, Power Minister Piyush Goyal said. Increasing generation capacity, augmenting coal production and constructing of new transmission lines are among the measures being taken to meet power shortage, Goyal said. Noting that the government has received requests for allocation of power, Goyal said there was a need to expand the capacity of electricity grids in order to increase supply and added that the government was taking remedial steps to meet power shortage. Listing out the measures, Goyal said an addition of 118,537 MW generation capacity was being targeted during the 12th Five-Year Plan ending 2016-17. Among other steps, 107,440 circuit kilometres of transmission lines is to be constructed by 2016-17. (economictimes.indiatimes.com)

February 26, 2015. Telangana Chief Minister K Chandrasekhar Rao asked power officials to ensure that the agriculture sector and industries do not get affected with power supply issues. Rao reviewed the power supply situation with senior officials who told him that four to five million units of electricity is being bought from power exchange daily to overcome the deficiency of about 800 MW. The Chief Minister told them that they should explore the possibility of obtaining power from eastern power grid from Kayamkulum in Kerala. Rao told the officials to explore the possibility of improving the situation through solar power. He reviewed the progress of Damarcherla power plant in the state. The officials informed the Chief Minister that with various short term and long term plans they are able to improve the power situation and it is unlikely that it will affect the agriculture and industry. (economictimes.indiatimes.com)

February 26, 2015. Central transmission utility Power Grid Corp has sought $500 million loan assistance from the World Bank for financing projects. For funding of its other transmission projects, Power Grid has submitted a proposal to the Ministry of Power for recommending it for consideration of Finance Ministry for sovereign loan assistance of $500 million from the World Bank, the company said. Power Grid is engaged in building transmission projects across the country. It provides consultancy services in the power sector. (economictimes.indiatimes.com)

March 3, 2015. Department of Atomic Energy and its affiliated organisation Beach Sand and Offshore Investigation (BSOI) have decided to conduct awareness camps in all the schools and colleges to explain about the importance of nuclear technology and nuclear power for the development of the nation. The programme assumed significance as the Nuclear Power Corporation of India Private Limited (NPCIL) is going to establish 10,000 MW- capacity power projects in a phased manner near Kovvada of Ranasthalam mandal, Srikakulam district. As part of its campaign, the department conducted awareness camp recently in Dr. B.R. Ambedkar University for students of various colleges and students. (www.thehindu.com)

March 3, 2015. Amid protests by the opposition, the government introduced a legislation related to auction of coal blocks to replace an ordinance promulgated earlier. The Coal Mines (Special Provisions) Bill, 2015, provides for the auction and allocation of coal mines through a bidding process. Objecting to the introduction of the bill, BJD's Bhartruhari Mahtab protested against the NDA government bringing in ordinances. Mahtab also said that states were not being consulted on selection of coal blocks which was being done arbitrarily. Referring to Section 7 of the bill, Mahtab said it empowered the government to decide "subjectively". Under fire coal minister Piyush Goyal said the government was faced with a "Hobson's choice'' when the Supreme Court struck down 214 allotments as ad hoc and arbitrary. He stressed that thousands of people would have lost their jobs and there would have been a severe coal shortage affecting power supply. The minister said that none of the actions under Section 7 was done "arbitrarily''. He said a technical committee including inter-departmental officials had selected coal blocks based on "defined criteria''. (timesofindia.indiatimes.com)

March 3, 2015. Brace for a 5-10% hike in power tariffs from next month. Higher freight charges proposed in the railway budget and the doubling of the clean energy cess in the Union Budget are expected to result in a 5% rise in electricity prices, with the rest of the increase coming from other input costs such as salary and wages, components and spares. In addition, utilities that have power purchase agreements in place without the ability to pass on higher generation costs to consumers are expected to be affected, according to Arvind Mahajan, head of infrastructure and government services at KPMG. Finance minister Arun Jaitley proposed to increase the cess on coal to ` 200 per tonne to finance clean environment initiatives. Coal India passes on the cess to consumers, which means the effect will be felt by power companies that consume coal. Generation costs may rise 5-6 paise per unit due to higher rail freight charges, according to NTPC, the country's biggest power company. Along with the increased clean energy cess, the rise in cost works out to 12-14 paise per unit, which is 5% of the current cost of ` 2.80 that NTPC incurs to produce a unit of power. The cost of generating electricity for NTPC, which is allowed to pass on higher input charges, is on the lower side and the impact on the utility's consumers will be less than for customers of other power companies. Companies with older power plants have a higher cost of generation since they consume more coal to produce a unit of electricity. The effect of higher power costs will vary for customers. (economictimes.indiatimes.com)

March 2, 2015. The government is setting up a pilot project to develop an indigenous catalyst to convert coal into liquid fuel, Coal and Power Minister Piyush Goyal said. Developing the catalyst locally will eliminate dependence on a technology provider for its supply, the minister said. The coal ministry is funding the research project and the Central Institute of Mining and Fuel Research (CIMFR) is implementing it along with the Central Mine Planning & Design Institute, he said. The research project will require around 225 tonnes of coal for testing of the catalyst, he said. The minister said the production of coal in the country was constrained by land acquisition problems, environment and forest clearance, resettlement and rehabilitation and restrictions due to imposition of Central Environment Pollution Index guidelines. Coal India plans to deploy mass production technology as well as upgrade and modernise its mines to enhance production, he said. The state-run company targets produce 1 billion tonnes of coal by 2019. (economictimes.indiatimes.com)

March 2, 2015. The Karnataka Electricity Regulatory Commission (KERC) has approved revision of electricity supply tariff for all the Electricity Supply Companies (ESCOMs) in the State for the Financial Year 2015-16, by allowing an average tariff increase of 13 paise per unit for different categories of consumers. The revised tariff will come into effect for the electricity consumed from the first meter reading date falling on or after April 1, 2015, KERC said. It said as against an increase of 80 paise per unit sought by the ESCOMs uniformly for all categories of consumers, KERC has allowed an average tariff increase of 13 paise per unit (ranging from 10 paise to 20 paise) for different categories of consumers other than Irrigation Pump Sets and "BhagyaJyothi/KuteerJyothi" households. (economictimes.indiatimes.com)

March 1, 2015. State-run power PSUs including NTPC, Power Grid and NHPC will spend a total of ` 54,910 crore on capital expenditures in the 2015-16 fiscal, a surge of nearly 7 percent over the current financial year, mainly to enhance capacity. Other PSUs are Damodar Valley Corp (DVC), NEEPCO, SJVNL, and Tehri Hydro Development Corp (THDC). All these state-run firms will spend a total of ` 54,910 crore as compared to ` 51,425.84 crore spent in the financial year 2014-15, the Union Budget 2015-16 document said.

During the next financial year, NTPC has earmarked a capex of ` 23,000 crore to finance its ongoing and future projects along with meeting its capital requirements. State-run Power Grid will spend ` 20,000 crore followed by NHPC ` 4,180 crore, DVC ` 3,683 crore, THDC ` 1,580 crore, NEEPCO ` 1,292 crore and SJVNL ` 1,175 crore. Country's largest power producer NTPC recently received government approval for setting up of 15,000 MW grid-connected solar power projects under the National Solar Mission. The completion of this 15,000 MW capacity projects under the National Solar Mission would accelerate the process of achieving grid tariff parity for solar power and also help reduce consumption of kerosene and diesel, which is presently in use to meet the unmet demand. Giving a thrust to the power sector, Finance Minister Arun Jaitley in the Union Budget 2015-16 announced increasing the renewable power capacity to 1,75,000 MW and setting up of five 4,000 MW each ultra mega power projects (UMPPs). These envisaged UMPPs will entail investment of ` 1 lakh crore. These initiatives announced by the government will provide business opportunities for the companies engaged in power generation, transmission and distribution businesses. Current installed power capacity of the country is over 2,58,000 MW from all energy sources. (economictimes.indiatimes.com)

March 1, 2015. Energy Efficiency Services Limited (EESL), a joint venture of public sector undertakings of the Union power ministry, is contemplating investing around ` 1,000 crore for the implementation of energy efficiency activities in Andhra Pradesh (AP). EESL, in coordination with various departments, including the State Energy Conservation Mission (SECM), has completed the distribution of around 3.5 million LED bulbs in the domestic sector and close to 80,000 LED street lights in Greater Visakhapatnam Municipal Corporation in Phase-I, which resulted in annual energy savings of around 300 million units (mu). SECM said while emphasising the need for providing reliable power supply for the consumers, chief minister N Chandrababu Naidu had fixed targets for the completion of the demand side management (DSM)-based efficient lighting programme (DELP) in the state by 2015-16. Meanwhile, EESL has decided to organise a national-level LED manufacturing industries CEOs’ round-table conference on March 10 that will be inaugurated by state municipal administration and urban development minister P Narayana. The conference is expected to discuss the key issues and challenges associated with LED street lighting system and the DELP scheme in the domestic sector initiated by the Andhra Pradesh government. (www.business-standard.com)

March 1, 2015. The Coal Ministry received 107 applications from state-run undertakings like NTPC, SAIL and the Damodar Valley Corp for allocation of 43 coal blocks whose earlier allotments were cancelled by the apex court. The Palma II mine in Chhattisgarh got nine applications, the highest for a single block. The companies which have applied for Gare Palma II mine, in Chhattisgarh, include NTPC, Singareni Collieries, the Andhra Pradesh Power Generation Corp and the Gujarat State Electricity Corp. The block was earlier alloted to the Maharashtra State Power Generation Co and the Tamil Nadu State Electricity Board. Of the 43 mines the government is now allotting to public sector undertakings (PSUs), 42 are for the power sector and one is for the steel sector. (www.business-standard.com)

February 28, 2015. Finance Minister Arun Jaitley said his government plans to build five new ultra mega power projects (UMPPs) totalling 20,000 MW which will unlock investment of up to ` 1 lakh crore. Economists, however, seemed sceptic. The step has been planned with the aim of electrification of the remaining 20,000 villages in the country by 2020.

The minister said the second unit of the Kudankulam Nuclear Power Plant will be commissioned in 2015-16. Even as the government was moving towards enhancing the national power capacity, economists seemed sceptic. (www.business-standard.com)

February 26, 2015. Electricity tariffs may rise as Railway Minister Suresh Prabhu increased freight rates for coal by 6.3 percent, which would increase transportation cost for power producers. Coal India said that the impact of freight rate hike would be on the landed cost of coal. Leading power producer NTPC said that cost of production would rise by about 4-5 paise due to the freight rate hike. The Association of Power Producers (APP) said that the increase in freight rates would have a direct impact on power retail tariff - depending upon the distance from the mine, the power tariff would increase from about 5 paise per unit, which shouldn't be difficult to absorb.

The Railway Budget for 2015-16 proposed raising freight rates for 12 commodities that include a 6.3 percent increase for coal. Thermal power plants contribute about 70 percent of the country's total power generation, which is over 2,58,000 MW at present. Other commodities for which rail freight rates have been increased are cement (2.7 percent), iron and steel (0.8 percent), grains & pulses (10 percent), urea (10 percent), groundnut oil (2.1 percent), LPG and kerosene (0.8 percent). However, for limestone, dolomite & manganese and speed diesel oil the rates have been reduced by 0.3 percent and 1 percent respectively. (economictimes.indiatimes.com)

February 26, 2015. The nuclear liability law is the only law under which victims can claim damages in case of a nuclear accident, the government said. This assertion is significant following the understanding reached with the US on issues of liability and compensation. India clarified, and the US agreed, that the controversial Article 46 did not mean that victims could file for damages from suppliers under all other laws of India.

The government said there five reactors at various stages of construction would add another 3300 MW generating capacity. These are Kakrapar 3&4 in Gujarat, Rajasthan Atomic Power Project (RAPP 7&8), and the prototype fast breeder reactor by BHAVINI at Kalpakkam. Besides, the indigenous pressurized heavy water reactors are being scaled up from 220 MW to 700 MW, which, the government said, will bring down the cost of nuclear power.

Since 2008, when India and US signed the landmark nuclear deal, nuclear power generation in the country had gone up from 14927 million units (MU) of electricity in 2008-09 to 35333 MU in 2013-14. But this is well short of target. (timesofindia.indiatimes.com)

February 25, 2015. Aam Aadmi Party (AAP)-led Delhi government declared that it would soon release a white paper on the power situation in Delhi. The paper will focus on what AAP inherited from the previous government and what plans it has to improve the power situation in Delhi. AAP had issued a white paper on the state of the power sector before the 2015 assembly elections, which focused on the massive debt owed to discoms in Delhi, the costing of coal-based power, need for a CAG audit of the discoms and why it may be more profitable for Delhi to have its own power plant.

The Chief Minister Arvind Kejriwal said the new paper will also focus on the past 15 years when Congress was in power and the sector was privatized. Delhi has already declared its intention of setting up a coal-based power plant in another state and has been pushing to get the discoms audited. It has promised to bring down the rate of power by half till the audit is completed and then regulate tariff accordingly. (timesofindia.indiatimes.com)

 [INTERNATIONAL: OIL & GAS]

March 2, 2015. Guyana said that neighbouring Venezuela is objecting to oil exploration in contested waters off the smaller South American country's coast. Guyana's foreign affairs ministry said that Caracas objects to plans for an exploratory well to be drilled in an area it contends is within Guyana's territorial waters. A subsidiary of U.S.-based Exxon Mobil Corp plans to conduct exploratory drilling under a Guyana concession. (www.rigzone.com)

March 2, 2015. Oil fell after the first monthly gain since June as Saudi Arabia stepped up production, lifting OPEC’s output beyond its collective quota for a ninth month. Futures decreased as much as 1.1 percent in New York. The Organization of Petroleum Exporting Countries (OPEC) pumped 30.6 million barrels a day in February, according to a survey. Oil sank almost 50 percent in 2014 as Saudi Arabia led the group’s decision in November to maintain its output target at 30 million a day, exacerbating a global glut. Saudi Arabia’s output rose by 130,000 barrels a day to 9.85 million a day, the highest level since September 2013, a survey of companies, producers and analysts shows. The country pumps the most crude among the 12 nations of OPEC, which supplies about 40 percent of the world’s oil. (www.bloomberg.com)

February 27, 2015. Statoil has submitted a plan of development (PoD) for the Peregrino phase two project, offshore Brazil. The $3.5 bn project includes a new well head platform and drilling rig (Platform C). It adds around 250 million barrels in recoverable resources to Peregrino field. The plan was submitted to the National Agency of Petroleum, Natural Gas and Biofuels (ANP) in Rio de Janeiro. Phase two will include the extension of the economic life of the Peregrino field in Campos Basin. It will improve the Peregrino field's output by increasing the number of production wells from a new area (Peregrino Southwest), which is not reachable with the existing platforms. A total of 21 wells, 15 oil producers and six water injectors are proposed to be drilled in the second phase. The Peregrino field has produced over 90 million barrels of oil since April 2011. Statoil said based on the existing plan, the second phase is expected to begin production by the end of the decade. However, the company plans to make adjustments to the schedule if required. (www.offshore-technology.com)

February 26, 2015. Angola plans to increase its oil production by 20 percent by next year after suffering a "very difficult" 2014 as costs soared, prices slumped and technical problems hit output, the state oil company Sonangol said. Oil output from Africa's second largest exporter and a supplier to China averaged 1.67 million barrels per day (bpd) last year, down 2.6 percent on 2013, Sonangol said. Gas output fell 29 percent after its liquefied natural gas (LNG) plant was hit by mechanical problems, helping reduce Sonangol's net income to $710 million last year, down 77 percent from 2013. Sonangol plans to restart LNG exports by the end of this year and boost oil production to 2 million bpd by the first quarter of 2016, an ambitious plan in a year when it will slash $4 billion of costs due to lower oil and gas prices. The OPEC-member has missed its oil production target of 2 million bpd for several years due to project delays and disappointing levels of investment as oil majors scaled back exploration projects due to the global economic downturn. Sonangol has secured the promise of a $2 billion loan from China to help with oil projects this year. Angola sends about half of its oil to China and Sonangol has a joint venture with Sinopec, China's second biggest energy company. (www.rigzone.com)

February 27, 2015. Saudi Arabia's state-owned oil company Saudi Aramco is planning to commence initial operation of the new 400,000 barrels per day refinery complex in Jizan in 2017. The Jizan refinery is being developed as part of the company's $20 bn investment plan, which includes development of 4,000 MW power plant, a commercial port, and a refinery terminal in Jizan. Meanwhile, Saudi oil minister Ali al-Naimi said that the Jizan Economic City development project will not be affected by the plunging oil prices. (www.energy-business-review.com)

March 3, 2015. United States (US) shale producers are becoming the victims of outdated restrictions on the export of crude oil from the US. Export controls have ensured the most oversupplied part of the global oil market is at home in the US. The main beneficiaries are rival producers in the Middle East and elsewhere able to obtain higher international prices thanks to the export ban. US shale producers have received almost no benefit from the improvement in international oil prices since the middle of January. (www.reuters.com)

March 2, 2015. Malaysia’s Petronas expects to make a final investment decision on an US$11-billion liquefied natural gas (LNG) export terminal in British Columbia by the end of June, after postponing the decision late last year, its chief executive officer (CEO) Shamsul Azhar Abbas said. Shamsul said the state-owned company is in talks with a new Chinese buyer on a 10-12 percent stake in the Pacific NorthWest LNG project, potentially bringing a sixth partner into the joint venture. With nearly 90% of the plant’s 12 million tonnes per annum output contracted out to Chinese, Indian and Japanese importers, the company is in good shape to made a final decision on the LNG terminal, Shamsul said. Petronas delayed giving a final go-ahead on the project in December, citing high costs and other outstanding issues while plunging oil and LNG prices clouded outlooks. But Shamsul said the delay has brought unexpected benefits because falling oil prices have helped lower construction costs, improving the economics of the project, which is part of a roughly US$35-billion investment in Canadian gas. (business.financialpost.com)

March 2, 2015. Knarr, a small field offshore Norway, is expected to start delivering gas to the St Fergus terminal in Britain via a new pipeline link tied to the FLAGS pipeline this spring, gas system operator Gassco said. Knarr, a gas and oil field about 100 kilometres north of the Statfjord field in the North Sea, is operated by BG, and estimated to hold 72 million barrels of oil and 300 million cubic metres (mcm) of natural gas in recoverable reserves. Gassco said it would operate the 106 km long pipeline link which will have a capacity to deliver 1.7 mcm of gas per day. (www.rigzone.com)

March 2, 2015. Lithuania may not extend its long-term natural gas import deal with Russia's Gazprom after the current one expires at the end of 2015, as it has gained access to global LNG markets, the energy group Lietuvos Energija said. Russian pipeline gas imports to Lithuania fell to 2.5 billion cubic metres (bcm) in 2014, down from 2.7 bcm a year ago, partly due to warm weather and increasing use of biomass in heat production. But the opening of a floating liquefied natural gas (LNG) import terminal at the end of 2014, became a major game changer as Gazprom has lost its supply monopoly. Lietuvos Energija acquired a majority stake in the country's gas supplier Lietuvos Duju Tiekimas (formerly known as Lietuvos Dujos), which buys gas under a 10-year contract with Gazprom. Lietuvos Energija's subsidiary Litgas signed a five-year contract with Norway's Statoil to buy 0.54 million cubic metres (bcm) of gas per year delivered by tankers. Gas consumption in Lithuania is expected to total about 1.1 bcm in 2015, the same as in 2014, excluding supplies to nitrogen fertilizers producer Achema -- the biggest gas user in the country, which has a separate deal with Gazprom. Lietuvos Energija said that Lithuania could buy natural gas in the future from Latvia or from Poland. Lithuanian and Polish gas grid companies plan to build the first link by the end of 2019. (www.downstreamtoday.com)

March 2, 2015. Iran could begin natural gas exports to Iraq in May if security conditions improve, Iranian oil ministry said. Iran and Iraq signed an agreement in 2013 under which Tehran would start exporting gas to Iraq to feed three power plants in Baghdad and Diyala. Completion of the pipeline, which has been delayed due to security concerns in Iraq, would initially allow delivery of four million cubic metres of gas per day (mcm/d) to Iraq and that could rise to 35 mcm/d. Iran said the scheduled start of gas exports to Iraq would be delayed because of fighting between Islamic State militants and Iraqi troops. Iran has huge gas reserves and exports small quantities to Turkey, but it has been unable to increase production quickly enough to meet its own demand for the fuel. Northern Iran relies heavily on gas imports from Turkmenistan, especially for heating in winter. The OPEC oil producer is in talks with six Western powers aimed at reaching a deal to limit Tehran's nuclear programme and end sanctions on oil and gas investment and trade with Iran. (www.downstreamtoday.com)

February 26, 2015. Enterprise Products Partners, Anadarko Petroleum, DCP Midstream Partners and MarkWest Energy Partners have launched a joint venture (JV) in support of the Panola natural gas liquids (NGL) pipeline in Texas, US. Under the JV, Enterprise will allocate 45% ownership interest in its wholly owned Panola Pipeline Company, which will be equally held by Anadarko's affiliate WGR Asset Holding (WGR), DCP Midstream Partners and MarkWest. Enterprise will own the remaining 55% stake and will continue to serve as operator of the Panola Pipeline, which transports natural gas liquids (NGL) from Carthage, Texas to Mont Belvieu, Texas. Recently, Enterprise proposed deplyment of 60 miles of new pipeline, pumps and other associated equipment as part of the Panola Pipeline expansion project aimed at boosting its capacity by 50,000 barrels per day. (www.energy-business-review.com)

February 26, 2015. Indonesia's state energy firm, Pertamina, expects to import 3.6 million tonnes of liquefied petroleum gas (LPG) this year, up 600,000 tonnes from last year, the company said. Pertamina forecasts LPG consumption at around 6.9 million tonnes, said Taryono, senior vice president of non-fuel marketing. (www.downstreamtoday.com)

February 25, 2015. Destination clauses on contracts for liquefied natural gas (LNG) shipments will soon be a thing of the past because of the shale revolution in the United States, Jerome Ferrier, the president of the International Gas Union said. Japan and other buyers of LNG have long complained that the destination clauses on multiple-year term contracts place an unfair restriction on trade of the fuel. Those objections have been rebuffed by producers up until recently, but that is changing as the United States is on the verge of becoming a gas exporter.

The conversion of U.S. sites formerly planned as import terminals into liquefaction plants - after its natural gas output surged with the use horizontal hydraulic fracturing - has meant that supplies contracted for deliveries to the United States often have no market. Boston, Massachusetts, is the main destination of the few LNG cargoes still heading into the United States, which has been taking less than 2 million metric tonnes of gas a year over the last few years - versus plans to export around 50 million tonnes a year by 2018 out of projects on the U.S. Gulf Coast. Spot LNG prices are currently at about $6.70 per million British thermal units (mmBtu), less than a third of where they were a year ago. That has taken the sting out of complaints by Asian buyers that they are charged an excessive premium to other regions because of the tradition of linking LNG contracts to oil prices. But buyers including Tokyo Gas Co are still pushing for destination clauses to be removed so they can trade their contractual purchases when it would make more economic sense to sell into other markets. The standard destination clauses in most long-term LNG contracts restrict where shipments of gas can be unloaded and prevent buyers from selling on excess cargoes. In Japan, which buys about a third of global LNG shipments, all nuclear reactors have been shut down following the Fukushima disaster of 2011, pushing up its demand for the super-chilled gas over the past four years. (www.reuters.com)

March 3, 2015. Saudi Arabia's subtle change of energy policymaker line-up since the accession of new King Salman in late January appears to give the monarch's inner circle a firmer hand on the kingdom's oil strategy than previous rulers have enjoyed. The most notable change was the promotion of the king's son Prince Abdulaziz bin Salman, long a member of the No. 1 crude exporter's OPEC delegation, to the role of deputy oil minister from assistant oil minister, a post he had held for many years. On the same day, King Salman formed a new body replacing the Supreme Petroleum Council and appointed another son, Prince Mohammed bin Salman, to head the new Supreme Council for Economic Development. There are no indications that those moves will lead to changes in the fundamental way the kingdom makes its oil decisions or diminish the influence of veteran oil minister Ali al-Naimi. However, the king is clearly laying the ground for a generational shift in how Riyadh develops its energy and economic strategies. Conventional thinking is that the ruling Al Saud family views the oil minister's job as so important that giving it to a prince might upset the dynasty's delicate balance of power and risk making oil policy hostage to princely politicking. Saudi Arabia has had only four oil ministers since 1960, and none of them has been a royal. The most prominent minister before Naimi was Ahmed Zaki Yamani, who held the position from 1962 to 1986. But since Abdulaziz's promotion, some diplomatic and Saudi sources have suggested the prince's lengthy experience in the sector might overcome what has always been seen as the impossibility of appointing a royal to the post of oil minister. (www.reuters.com)

March 2, 2015. Asian spot liquefied natural gas (LNG) prices have re-established a premium over rival European benchmarks, reversing a month-long trend, as Atlantic markets sucked up more supply triggering deficits elsewhere. The Asian spot price rose to $7.65 per million British thermal units (mmBtu) on Feb. 27, while the British front-month gas contract slumped to $7.57 per mmBtu amid an influx of planned LNG arrivals. In early February, European prices topped Asia as the world's premium, establishing the biggest and most consistent premium in at least five years.

That drew more LNG from the world's biggest exporter Qatar into Atlantic markets, such as Europe and the Americas. It also prevented Atlantic-produced volumes from being diverted to Asia as in previous years, driving price rallies. The Asian premium is too marginal at present to attract supply away from the Atlantic and analysts doubt whether price gains there are sustainable, following a year-long demand slump. (www.reuters.com)

March 2, 2015. The Dutch government apologised for ignoring risks posed by earthquakes caused by production of natural gas in the northern province of Groningen. The apology follows a report by the country's independent Safety Board in February that found the government, together with Royal Shell and Exxon, had put profits before safety in exploiting the Groningen gas field, Europe's largest. (www.rigzone.com)

March 2, 2015. Thai oil refiner Star Petroleum Refining Co (SPRC) is expected to sell at least A 30 percent stake in an initial public offering (IPO) in the second quarter of 2015, the Thai energy ministry said. The ministry signed an agreement with SPRC to change some of the terms of its refinery contract, which allows state-controlled PTT PCL to dilute its 36-percent holding in SPRC, the energy ministry said. PTT, the country's largest energy company which has interests in five of the six oil refineries in Thailand, has long wanted to dilute its holding in SPRC to reduce criticism that it holds a monopoly in the domestic oil and gas business. The listing has been delayed for several years by regulation and negotiations with oil giant Chevron, which owns 64 percent of SPRC. SPRC operates a 160,000 barrel-per-day refinery in eastern Rayong province. (www.downstreamtoday.com)

February 28, 2015. Brazil will probably provide funding to Petroleo Brasileiro SA (Petrobras) if the state-controlled oil producer remains unable to borrow from banks or sell bonds amid an ongoing corruption scandal, according to Fitch Ratings. Funding could come through the country’s government-owned banks including BNDES, Joe Bormann, managing director for Latin America corporate finance at Fitch, said. He said such support underpins Petrobras’s rating from Fitch, currently at the lowest investment grade of BBB-. Moody’s Investors Service chopped Petrobras’s credit to junk on concern the corruption investigation will crimp its ability to obtain financing, triggering concern that a similar downgrade by Fitch or Standard & Poor’s could force some institutional investors to sell their holdings of the company’s bonds.

The oil producer has been unable to report audited quarterly results because of difficulties estimating the size of corruption-related write downs. The oil company is seeking loans from financial institutions and more asset sales as it grapples with a graft investigation that has temporarily shut it out of debt markets. (www.bloomberg.com)

February 27, 2015. Indonesia will hand full control over the Mahakam gas block in East Kalimantan province to Pertamina once its current operator's contract, held by Total SA, expires in 2017, the energy ministry said. The energy ministry said the regional administration in East Kalimantan may take a 10 percent participating interest in the block under the revised contract, which the government hopes to take a final decision in March. The Mahakam block is Indonesia's single-largest source of natural gas, some of which is exported in liquefied form (LNG). Total has proposed a five-year transition period in which it continues to operate the block in partnership. (www.rigzone.com)

February 25, 2015. Saudi Arabia's Oil Minister Ali al-Naimi said that oil demand is growing and markets are calm, in some of his first public comments since the price of crude rebounded from a near six-year low. Oil crashed by 60 percent between June and January to a post-2009 low of $45 a barrel, with losses accelerating after OPEC decided in November to hold output at 30 million barrels per day to try to preserve its market share.

International benchmark Brent has since recovered to around $60 a barrel as energy companies have slashed investments in future production, and as the number of drilling rigs operating in the fast-growing U.S. shale patch has fallen. The 12-country group's decision sent oil prices sinking to levels not expected even by core Gulf OPEC producers, who had blocked other members' call for a cut. But there are signs the strategy of letting prices fall is beginning to take effect.

OPEC sharply increased its forecast for demand for its crude this year, in a move some say vindicated the group's policy. Other OPEC members are still struggling with the effects of lower oil prices, however, after growing used to oil averaging more than $100 a barrel between 2011 and 2013. While many Gulf members are insulated from the price fall by large cash reserves, members including Venezuela, Nigeria and Iraq face a severe budget squeeze. Ecuador's President Rafael Correa said oil prices are "unnecessarily" low. (in.reuters.com)

 [INTERNATIONAL: POWER]

March 3, 2015. The University of Iowa (UI) wants to build a new $75 million West Campus Energy Plant to provide reliable services on the other side of the Iowa River — particularly to the UI Hospitals and Clinics, its new $292 million Children's Hospital scheduled to open in a year, and nearby research facilities.

The new plant, as proposed, would be built northwest of the Finkbine Commuter Lot, which sits southwest of Hawkins Drive by the UI's Finkbine Golf Course. The university has a total steam generating capacity of 605 kilopounds per hour, including 480 at the main power plant, 40 within the UIHC complex, and 85 at a temporary west side plant that has housed two provisional steam boilers since the 2008 flood devastated the campus. (thegazette.com)

March 3, 2015. Siemens will supply two SST5-6000 steam turbines of 660 MW each and two SGen5-3000W generators for the Balkhash coal-fired power plant in Kazakhstan, developed by the Balkhash Thermal power plant Joint Stock Company and built under an EPC contract by Samsung C&T and Samsung Engineering. The CHP project is expected to be commissioned in summer 2019 and will supply heat to the local district heating network. (www.enerdata.net)      

March 3, 2015. South African national power utility Eskom has started generating power from the first unit (Unit 6) of its 4,764 MW Medupi coal-fired power project. The group has synchronised the unit to the national grid and plans to ramp up power generation of the 794 MW unit within the next three months.

This new capacity is likely to alleviate difficult power supply in South Africa, where delays in new plants commissionings and technical problems at existing power plants are leading to rolling blackouts. The Medupi coal-fired power plant will consist of six 794 MW units that should be fully operational in 2018. (www.enerdata.net)                        

March 3, 2015. Vattenfall has commissioned the first 827 MW unit of its Moorburg coal-fired power plant in northern Germany. The ultra-supercritical (USC) unit will have an average efficiency of 46.5%. It is expected to generate 5.5 TWh/year of electricity, supplying about 1.8 million households.

The second block is also in the commissioning process and started generating electricity in January 2015. When operational, it will raise the plant's capacity to 1,654 MW. (www.enerdata.net)    

March 2, 2015. RusHydro has launched the upgraded hydropower unit 12 at the Volzhskaya hydropower plant in Russia. Till date, 13 hydro turbines and three out of 22 generators at the Volzhskaya facility have been replaced, while the remaining units will be upgraded by 2021. The equipment has been modernized as part of RusHydro Comprehensive Renovation Program. Scheduled to be carried out until 2025, the RUB58.4bn ($952.8 mn) Volzhskaya HPP Comprehensive Renovation Program includes the renewal of automatic control systems for hydropower units and 500kV outdoor switchgear equipment.

The scope of the program also includes upgrade of 220kV outdoor switchgear; and replacement of 220kV and 500kV power transformers, spillway gate and other hydromechanical equipment. The Comprehensive Renovation Program aims to boost reliability and performance of the equipment while increasing the installed capacity of Volzhskaya power plant's by 147 MW by the end of 2025. (hydro.energy-business-review.com)

March 2, 2015. Subsea technology firm Ecosse Subsea Systems (ESS) has signed a letter of intent (LOI) with ABB, for seabed clearance and trenching in support of Caithness-Moray high-voltage direct current (HVDC) power transmission link. Under the terms of the LOI, ESS will prepare the route for the 100-mile interconnector cable for the £1.2bn Caithness-Moray transmission link project. ABB is responsible for the project's undersea link. ESS will undertake boulder clearance operations and pre-lay trenching prior to the laying of the transmission cable, which will run from Spittal in Caithness to Blackhillock in Moray. Back-fill operations will be carried out thereafter to conceal and protect the cable. The Caithness-Moray cable is expected to transfer 1.2 GW of renewable energy generated in the North of Scotland to the main UK electricity transmission network. (www.energy-business-review.com)

March 3, 2015. The Federal Ministry of Environment of Australia has suspended the approval process for the A$1.2bn (US$935mn) Watermark coal project, developed by Chinese mining group Shenhua near the Liverpool Plains, in New South Wales, due to water and agricultural impact concerns.

The project had received approval by the New South Wales government in November 2014. The Watermark project is estimated to hold 268 Gt of coal reserves and is planned to produce 10 Mt/year for 30 years. This new delay in the approval process, which started in 2006, is a new blow for Shenhua. The decision on the mine is expected by 13 March 2015. (www.enerdata.net)            

March 3, 2015. Hungary’s parliament passed a law to classify for 30 years all data and contracts related to the planned €12.5 billion ($14 billion) expansion of the Paks nuclear power plant by Russia. The European Commission has been in talks with the Hungarian government on the circumstances of the agreement including an intergovernmental agreement between Russia and Hungary on financing the lion’s share, €10 billion of the development. The deal hasn’t been subject to public or EU scrutiny and opposition parties claim Hungarian taxpayers will eventually have to repay the sum; that the deal ignores competition rules, and gives Russia further dominance in Europe’s energy markets.

Hungary’s prime minister signed a secret treaty with Russia on building two new 1,000 MW plants in Paksi Atomerömü, the power plant. The government says the expansion is needed to make up for energy production at a time when many of Hungary’s old plants would be shut down, in about 20 to 30 years’ time. (www.wsj.com)

March 2, 2015. The Kuwait Fund for Arab Economic Development (KFAED) has signed an agreement to provide an additional loan of $32 mn for the construction of 969 MW Neelum Jhelum hydropower project in Pakistan. The KFAED previously agreed to provide a loan of $40 mn for the construction of the Neelum Jhelum project. The project is expected to cost $2.89 bn, of which nearly $1.6 mn would be funded by foreign investors. Foreign investors including IDB, Saudi Fund, OPEC Fund, Kuwait Fund and China Exim Bank have already guaranteed around $1 bn for the project. Located in Muzaffarabad, the Neelum-Jhelum hydropower project is being developed under run-of-the-river hydroelectric power scheme to divert Neelum River's to an outfall on the Jhelum River. The first generator of the project is planned to be commissioned in December 2015 while the complete project is scheduled to be completed in 2016. The project is expected to generate 5,150GWh of electricity annually for the county. (www.energy-business-review.com)

February 27, 2015. The South Korean nuclear regulator said it renewed the operating license of the country's second-oldest nuclear power plant until 2022, overriding the objections of residents and anti-nuclear groups. The Nuclear Safety and Security Commission said that seven of nine commissioners voted to restart the Wolsong No. 1 reactor located in Gyeongju city, 275 kilometers south of Seoul. It was the first such decision in South Korea since safety concerns about nuclear energy and older plants were raised following the meltdowns at Japan's Fukushima Daiichi reactors in 2011.

South Korea's 23 nuclear power plants mostly located in the country's southeastern coast provide about one-third of its electricity. The nuclear regulator said that it reviewed the plant's ability to withstand natural disasters and its compliance with other legal standards. South Koreans were sharply divided over the fate of the Wolsong No. 1 plant that had operated for 30 years until its license expired in 2012. Residents of Gyeongju and members of environmental groups staged protests near the nuclear watchdog's office when the commissioners discussed the restart in three meetings since January. (www.downstreamtoday.com)

 [RENEWABLE ENERGY / CLIMATE CHANGE TRENDS]

March 3, 2015. The Ramakrishna Mission in Chennai has acquired a new asset—a 100 kW rooftop solar power plant that will generate 14.8 lakh units of electricity, enough to power 90 percent of the needs of the Mission’s Students’ Home. The plant was donated to the Mission by the US-based renewable energy major, SunEdison, which has extensive operations in India. Surplus energy produced by the plant will be sold to the state electricity utility Tangedco. (www.thehindubusinessline.com)

March 3, 2015. Acknowledging that national climate change missions have not achieved "expected" progress, Union Minister Prakash Javadekar said the government is taking steps to speed up implementation of these programmes. Towards the eight national climate missions, little over ` 4,406 crore has been spent since 2011-12 till end of December 2014, Javadekar told the Lok Sabha. In the last four years, the progress "expected" in regard to implementation of national climate change missions "has not happened", he said. However, Javadekar, who is the Minister of State for Environment, Forests and Climate Change, said in the past nine months efforts have been made to speed up the activities.

There are eight missions under the National Action Plan on Climate Change (NAPCC) pertaining to the areas of solar, enhanced energy efficiency, sustainable habitat, water, sustainable agriculture, sustaining Himalayan ecosystem, green India and strategic knowledge for climate change. The total approved costs for these missions was ` 36,625 crore. In the current fiscal till December 2014, about ` 2,157.8 crore was spent, higher than the expenditure of ` 802.13 crore seen in 2013-14, he said. The expenses touched ` 701.78 crore in 2012-13 while the same stood at ` 744.76 crore in 2011-12. Three out of the eight missions, including those on solar, energy efficiency and green India, relate to mitigation of carbon emissions. (www.firstpost.com)

March 3, 2015. Turkish company Seul Holding will build a 20 MW solar plant in India. Turkish Indian Chambers of Commerce and Industry (TICCI) President Ersin Karaoglan said finer details of the project like location had not yet been firmed up. Karaoglan said clear policy guidelines for solar has helped attracting the Turkish company into this sector. He said with a stable government at the Centre, 2015 is expected to be a better year for bilateral trade, which is pegged at around USD 6 billion with balance of trade in favour on the Indian side. (zeenews.india.com)

March 2, 2015. The Centre might be pushing for more renewable energy, but Delhi's power distribution companies do not appear to be in any hurry. While Tata Power Delhi has said in its public notice for determining the 2015-16 tariff that renewable purchase obligations (RPO) should be deferred for the next four-five years, the Reliance discoms—BSES Yamuna and BSES Rajdhani—wants it to be waived off for at least two years. All three discoms said this was critical to control rising power purchase costs and keep tariffs in check. The scheme, which became a part of the tariff from the financial year 2012-13, makes it obligatory for the discoms to source a fixed percentage of the total power from renewable sources. The targets, which started with 3.4% in 2012-13, increased to 7.6% in 2015-16. However, the Delhi discoms have never met the targets, resulting in an accumulated RPO. Last year, too, they had made a similar request. According to the discoms, Delhi doesn't have adequate renewable sources. Tata Power Delhi said it would start getting solar power by 2018-19. (economictimes.indiatimes.com)

February 28, 2015. India will double the tax on coal production and promote electric vehicles and renewable-energy projects to balance out emissions from coal-fired power plants. The world’s third-biggest emitter of greenhouse gases will raise the duty on coal to ` 200 ($3.2) a ton, Finance Minister Arun Jaitley said in his budget speech. The money will be used to promote clean energy, he said, indicating India’s commitment to fight global warming. Prime Minister Narendra Modi’s government, which swept to power in May, has set itself unprecedented targets for clean energy and has increased taxes on use of fossil fuels such as coal and petroleum amid mounting international pressure to curb emissions. The higher tax on coal will encourage investments in washeries and upgrading plants to increase fuel efficiencies, said Kameswara Rao, who oversees energy, utilities and mining at PwC India. Coal fires about 60 percent of India’s electricity generation capacity and is among the cheapest sources of power in the country. The higher tax will lead to an increase of as much as 0.06 rupees in coal costs for every kilowatt hour of electricity, Rao said. India plans to add 175 GWof renewable-generation capacity by 2022, including 100 GW from solar. That will help more than double the share of renewables in the mix of fuel it consumes from the current 6 percent, Piyush Goyal, the minister for coal, power and renewable energy, said. (www.bloomberg.com)

February 28, 2015. Proposals such as creation of a national infrastructure investment fund and doubling of coal cess in the Union Budget have buoyed the renewable energy industry, which believes these steps could help solve financing challenges, thereby boosting clean energy projects. Finance Minister Arun Jaitley emphasised on achieving the 1,75,000 MW target set for clean energy installations by 2022. This would comprise 1,00,000 MW of solar power, 60,000 MW of wind power, 10,000 MW of energy from biomass and 5,000 MW from small hydroelectric projects. Currently, India's clean energy capacity is 33,000 MW. Jaitley envisioned providing electricity by 2020 to the remaining 20,000 villages that still don't have access to electricity, including through off--grid solar power. Although there weren't any sector-specific sops, industry players do not consider it as a major concern. The Budget proposed creation of a national investment and infrastructure fund and finding monies to ensure an annual flow of ` 20,000 crore into it. The money thus raised can be invested in infrastructure finance companies. Welspun's Mittal said increasing coal cess to ` 200 a tonne from ` 100 will be helpful for sustaining subsidies to clean energy projects. The minister proposed a programme for faster adoption and manufacturing of electric vehicles. Meanwhile, experts note that unlike rail and roads, tax-free bonds have not been specifically proposed for renewable energy. Given this, any funds to the sector from tax-free debt will have to come out of the general pool of infrastructure bonds. Also, proposals for the utilisation of funds from the increased coal cess are yet to be spelt out. The Economic Survey 2014-15 said India's clean energy sector was likely to generate business opportunities of $160 billion in the next five years. (economictimes.indiatimes.com)

February 26, 2015. Mytrah Energy, an independent wind energy producer, has bagged a 220 MW wind power project from the Andhra Pradesh government. The project will be installed in Kurnool district and is expected to be commissioned within next 18 months. The deal was signed at RE-Invest - India's first renewable energy global investors meet in step with the government's 'Make in India' initiative, Mytrah said Mytrah has built an operating portfolio of 543 MW across seven wind rich states in a span of four years. (economictimes.indiatimes.com)

February 25, 2015. Orient Green Power Company (OGPL) has divested the entire equity stake in its non-operative subsidiary Theta Wind Energy Private Ltd. According to company, Theta Wind Energy is a non-operating subsidiary and was holding licence to set up a 200-300 MW wind unit in Andhra Pradesh. The stake was acquired by Andhra-based Axis Energy, the company said. Renewable energy producer OGPL is backed by Bessemer Ventures Partners and Olympus Capital Holdings Asia. As of Jan 2014, its portfolio of operating projects included 510.355 MW of aggregated capacity, including 424.355 MW of wind energy and 86 MW biomass. (www.business-standard.com)

February 25, 2015. NTPC has accorded the investment approval for the Khargone Super Thermal Power Project (2 x 660 MW) in the state of Madhya Pradesh at an appraised current estimated cost of ` 9870.51 Crore subject to Environment Clearance of Ministry of Environment and Forests. NTPC has accorded approval to the proposal for NTPC's commitment to Government of India for setting up 10000 MW of Renewable Energy Projects during the next five years. (www.equitybulls.com)

February 25, 2015. The Union Cabinet green lighted the setting up of 15,000 MW of grid-connected solar power projects through NTPC and its subsidiary NTPC Vidyut Vyapar Nigam Ltd (NVVN). The scheme will be implemented in three tranches. In the first, 3,000 MW will be set up by bundling solar power with unallocated coal-based thermal power at fixed levelised tariffs. In the second tranche, 5,000 MW will be set up with government support. The final 7,000 MW will be set up without any financial support. The bundling in the first phase will be in the ratio of 2:1 where 3,000 MW of solar power will be bundled with 1,500 MW of unallocated thermal power. The bundled power will be allocated to the states that provide land for setting up the projects. States that purchase a major portion of the bundled solar power and ensure connectivity will also be prioritised. Out of 3,000 MW, it has been decided that 1,000 MW capacity will be set up on land already identified in Andhra Pradesh. The balance 2,000 MW will be allotted in other States that come forward. It is estimated that implementation of first tranche will entail total investment of over ₹ 18,000 crore, all of which will be met by project developers, mainly private. (www.thehindubusinessline.com)

March 2, 2015. Indonesia’s goal of boosting use of biodiesel made from palm oil by more than doubling subsidies is being threatened by the slump in crude prices. Consumption of subsidized palm biodiesel may miss the 1.7 million kiloliter target for 2015, according to the Indonesian Palm Oil Board. The biggest producer of palm oil would need 1.5 million metric tons to meet that goal, the Indonesian Palm Oil Board said. That compares with 800,000 tons used last year, PT Mandiri Sekuritas, a broker in Jakarta, estimates. The collapse of crude oil amid a global surplus has led a decline in fossil-fuel costs that’s cut the appeal of producing energy from plants. Indonesia’s new government led by Joko Widodo approved an increase in the biodiesel subsidy, spurring analysts including Mandiri to forecast the change would help to raise domestic palm oil use at a time of expanding output and weaker demand from buyers such as China. Indonesia has promoted biofuel usage to help absorb rising supplies of the world’s most-traded edible oil, which is used in foods and cosmetics, and to cut carbon emissions. Biodiesel is blended with regular diesel, produced from crude oil, for use as a transportation and industrial fuel. The country in 2013 boosted the mandated amount of blending in diesel to 10 percent from 7.5 percent, and in 2014 ordered power plants to mix 20 percent. The 1.7 million kiloliter target represents 10 percent of projected consumption of subsidized diesel, according to the energy ministry. Total consumption of palm biodiesel may reach 2.2 million kiloliters this year if non-subsidized usage is included, the Indonesia Biofuel Producers Association estimates. Biodiesel policies in Indonesia will help determine the direction of palm oil prices, which will climb if they are implemented in full, Godrej International Ltd said. (www.bloomberg.com)

March 2, 2015. Tidal Lagoon Power Ltd., a U.K. marine-energy developer, is planning its second project, a 2.8 GW power plant that will use the tides to generate enough electricity for every home in Wales. The company submitted an environmental impact assessment for the marine power plant that would use 90 turbines installed between Cardiff and Newport. The closely held company expects to submit a full planning application in 2017 and the project may go into operation in 2022. The company is currently awaiting final consent for its 320 MW project in Swansea Bay, in Wales. InfraRed Capital Partners Ltd. and Prudential Plc are both equity investors in the 1 billion-pound plant. Once approved, construction should start and the facility is expected to go into operation in 2018. Tidal Lagoon started early feasibility work on four other tidal-lagoon power projects in the U.K., at Newport, West Cumbria, Colwyn Bay and Bridgwater Bay. If all six planned facilities are built they could supply as much as 8 percent of the country’s electricity. (www.bloomberg.com)

March 2, 2015. Idemitsu Kosan Co., will build a 5 MW geothermal power station in the southwestern prefecture of Oita, the company said. The plant will start running in March 2017. It will be set up near a 27.5 MW geothermal power station jointly operated by Kyushu Electric Power Co. and Idemitsu. The new project will use binary technology, a type of geothermal power plant that allows lower-temperature geothermal reserves to be used than is traditionally found in power generation using underground heat. (www.bloomberg.com)

March 2, 2015. China’s coal consumption fell by 2.9% between 2013 and 2014, the country’s National Bureau of Statistics said. Energy use rose 2.2% with gas use up 8.6% and crude oil up 5.9%. Energy consumption per 10,000 yuan (US $1,598) worth of GDP fell 4.8%. Over the same time period the country’s Gross Domestic Product (GDP) grew by 7.4%, with industrial production rising 7%. Glen Peters from the Oslo-based Centre for International Climate and Environmental Research (CICERO) told RTCC this data suggested China’s CO₂ for 2014 could have fallen by 0.7%. The government figures indicate recent predictions that China is steadily weaning itself off coal in response to air pollution and the need to reduce its carbon emissions are correct. Last October Chinese president Xi Jinping said the country would target an emissions peak by 2030.

Greenpeace energy analyst Li admitted that accuracy behind China’s collation of energy statistics was a “genuine concern” but said the official figures over the past three years offered a clear picture of falling coal demand. In 2014 coal accounted for 66% of the total energy consumption, with lower carbon sources such as gas, hydropower, wind, solar and nuclear providing 16.9%. Installed wind capacity grew by 25.6% and solar by 67%. Li said the main reason behind falling coal figures was increased efficiency and lower demand for the production of iron, steel and cement. The energy consumption per tonne of copper, steel and cement fell, while the amount of coal used to produce a kilowatt hour of power generation dropped 0.67%. Analysts at the Carbon Tracker Initiative said major coal exporters like the US, Australia and Indonesia would face added pressure if this trend continues. (www.rtcc.org)

March 1, 2015. Saudi Arabia's ACWA Power is obtaining a loan of about $344 million from three banks to finance a solar energy project in Dubai, chief executive Paddy Padmanathan said. The 27-year amortising loan with an interest rate of 4 percent is being provided by Abu Dhabi's First Gulf Bank and two Saudi banks, National Commercial Bank and Samba Financial Group, he said. Padmanathan said the entire project would cost about $400 million, of which the bank financing would account for 86 percent. The solar plant, to be built by a consortium of ACWA and Spain's TSK, was ordered by Dubai Electricity and Water Authority and will have a capacity of 200 MW. ACWA is preparing bids for projects worth $7 billion in areas from from south Asia to the Middle East and North Africa and South Africa, Padmanathan said. (in.reuters.com)

February 28, 2015. California Governor Jerry Brown’s plan to cut the state’s use of petroleum for transportation in half by 2030 will be “tough” to reach, Robert Weisenmiller, chair of the California Energy Commission, said. California has been setting the pace for U.S. policy on climate change and greenhouse gases. In January, Brown outlined environmental goals aimed at reducing carbon emissions in the next 15 years, including cutting petroleum use in cars and trucks by 50 percent, doubling the efficiency of existing buildings and increasing from one-third to 50 percent the electricity delivered from renewable sources. The transportation goal would require that 6 million zero-emission vehicles be on the road in 2030, Weisenmiller said. The state already has a goal of getting 1.5 million zero-emission cars on state roads in the next decade, and it would need another “pretty big jump” to cut its petroleum use in half by 2030, Weisenmiller said. The state will encourage switching to cleaner car fuels through a combination of financial incentives, fuel-efficiency and low-carbon emission standards, he said. The increased power demand from electric cars will need to be offset by energy conservation measures including the improved efficiency of existing buildings, Weisenmiller said. A lot of buildings in the state are occupied by renters who don’t necessarily have a financial incentive to invest in energy-saving upgrades, he said. California is already making good progress on its renewable energy targets and will probably reach its goal of meeting 33 percent of demand with alternative energy sources by 2018, Weisenmiller said. The state may reach 40 percent by 2020, he said. (www.bloomberg.com)

February 26, 2015. Google Inc. is making its largest bet yet on renewable energy, a $300 million investment to support at least 25,000 SolarCity Corp rooftop power plants. Google is contributing to a SolarCity fund valued at $750 million, the largest ever created for residential solar, the San Mateo, California-based solar panel installer said. Google has committed more than $1.8 billion to renewable energy projects, including wind and solar farms on three continents. This deal, which may have a return as high as 8 percent, is a sign that technology companies can take advantage of investment formats once reserved only for banks. The Google deal is structured as a tax-equity transaction, meaning the web search developer gets tax breaks that flow from solar systems financed by the fund. First Solar Inc. and SunPower Corp. said they’d form a yieldco, a business model that channels income from operating wind and solar farms into dividends for investors. Renewable-energy projects are entitled to various tax benefits, including a credit for 30 percent of the installed cost of a solar power system. Unprofitable companies, such as SolarCity, often can’t use the credits and provide them instead to tax-equity investors Google announced a similar deal in January, agreeing to invest in the tax credits generated by a $188 million solar project in Utah being built by Scatec Solar ASA. (www.bloomberg.com)

February 25, 2015. Eight European Union (EU) member states are concerned over the possibility of an early start of a planned carbon market fix, Polish Prime Minister Ewa Kopacz said in letter to European Commission President Jean-Claude Juncker. The EU’s 28 national governments and the European Parliament are considering a proposal by the Brussels-based commission to introduce a carbon-market stability reserve to curb oversupply in the emissions-trading system, or ETS. The European Parliament’s environment committee agreed to push in talks with member states for an introduction of the fix in 2018, three years earlier than originally proposed by the commission. The next step in the legislative process on the market stability reserve is a decision by member states on their position for negotiations with the Parliament. EU nations are divided over the starting date of the fix, with Germany and the U.K. leading the push for introducing supply controls in 2017.

The governments will have two options for calculating what voting majority is needed to reach a deal on a proposed carbon market fix, according to an EU rule that took effect late last year. Under the new method, a draft measure needs the support of at least 55 percent of EU member nations representing 65 percent or more of the 28-country bloc’s total population in order to move forward. Until March 2017, any government may request the use of the previous voting system, under which the majority threshold was set at around 74 percent of government votes, with each country assigned an individual weight based on population. Under that system, Germany, France, the U.K. and Italy each had 29 votes, the highest amount, followed by Spain and Poland, with 27 apiece. Supporters of an early start of the carbon reserve have enough votes under the old method to form a blocking minority against the 2021 introduction. At the same time the eight countries that sent the letter to Juncker would succeed in blocking an early launch of the fix. (www.bloomberg.com)

February 25, 2015. A decision by the two largest U.S. solar manufacturers to form a joint venture to own and operate their power plants offers the companies more long-term cash and a low-risk opportunity for investors. First Solar Inc. and SunPower Corp. are jumping on the yieldco train, an increasingly popular business model that lets renewable-energy companies generate money over the long term by keeping their power plants instead of selling them. The move is a significant shift for the companies, which have previously sold most of their projects to power producers. The venture will be backed by decades-long contracts to sell electricity and may be worth as much as $2.8 billion. Under this model, energy developers such as SunEdison Inc. and TransAlta Corp. have created separate units, the yieldcos, to own and operate power plants. They usually retain a controlling stake in the new entity, which uses revenue from selling electricity to pay dividends and help purchase additional projects. (www.bloomberg.com)

 

 

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