Energy News Monitor | Volume XI; Issue 48

[Lack of clarity spells doom for UMPP projects]

                             “Apart from that the government decision to cancel one company’s coal block while allowing others to go ahead is raising questions over the fairness in government process. Dual approach towards companies will develop a sense of mistrust among the power developers as they will always be worried whether their coal blocks will be cancelled in the future on the basis of cartelisation. Though the fate of the government persuasion of cancelling coal blocks will be decided by the court what is certain is that all these mega projects may either be shelved or become negotiating ground for companies…”

Energy News

[GOOD]

Southern States will benefit from affordable power!                                      

                                                                                                  [BAD]

Confusion over coal auctions and allocations may call for big bailouts in the future!

[UGLY]

No takers for power at zero rupee per unit is perverse in an energy poor country! 

NEWS BRIEF

[NATIONAL: OIL & GAS]

May 11, 2015. Anticipating easing of Western sanctions against it, Iran is acting tough over giving state- owned Oil and Natural Gas Corporation (ONGC) the rights to develop the Farzad-B gas field in the Persian Gulf. Apparently upset over India not committing to invest in the ONGC-discovered field when Iran was under sanctions, the Persian Gulf nation remained non-committal on giving rights of the field to ONGC Videsh Ltd (OVL) when a high level Indian delegation visited Tehran last month. Indian officials said they haven't heard anything from Tehran on the issue and the news report may be part of Iran's attempt to put pressure on ONGC to accept its terms. Tehran also wants India to raise oil imports. A delegation, headed by Ashutosh Jindal, Joint Secretary in Ministry of Petroleum and Natural Gas, held extensive talks with Iranian officials on development rights to the Farzad-B gas field in the Farsi block. OVL had in 2008 discovered the Farzad-B gas field in its Farsi exploration block in the Persian Gulf. Iran, in February 2012, issued a one-month ultimatum to the OVL-led consortium over the development of a gas field. For more than two years, it did not carry out the threat of cancelling allocation of the Farsi block to OVL. To pressure India to act, Tehran last year put the field on the list of blocks it wants to auction in future, sources said, adding it has however not yet cancelled OVL's exploration licence for the Farsi block which gives it the right to develop the discoveries it has made. (economictimes.indiatimes.com)

May 10, 2015. As part of its effort to ensure energy security, the Centre has decided to undertake fresh appraisal over 40,000 line km including Odisha's Mahanadi basin to find out oil and natural gas reserves. Stating that though there are 26 sedimentary basins in the country, Oil Minister Dharmendra Pradhan pointed out that assessment has been done in only 15 sediments. While justifying necessity of massive explorations in the country, Pradhan said India imports 77 percent of its hydrocarbon needs from foreign countries. Oil and Natural Gas Corporation (ONGC) would carry out 2D and 3D survey across the Mahanadi basin, the minister said that the state government has already given required permission for beginning exploration in the Mahanadi basin.

Claiming that Odisha would soon emerge as the Eastern India's Hydro-Carbon hub, the minister said that new technologies need to be implemented in order to make the gas and oil commercially viable. Though the ONGC had launched exploration activities in Mahanadi basin area decades back, it abandoned the effort after finding that the discoveries of oil and gas may not be commercially viable. (economictimes.indiatimes.com)

May 7, 2015. Reliance Industries Ltd (RIL) and its partner BP plc will nearly triple natural gas production from their eastern offshore KG-D6 block by 2021-22 in anticipation of a 'right' gas price covering their exploration risk. KG-D6 block, which produced an average of 11.5 million standard cubic meters per day (mmscmd) of gas in January-March quarter, will see output rise to 30-35 mmscmd by 2021-22, according to a presentation RIL-BP gave at a meeting in Prime Minister's Office (PMO). RIL-BP as well as other operators including state-owned Oil and Natural Gas Corp (ONGC) called for remunerative natural gas price that covers their exploration risk. Operators sink in millions of dollars in exploration at their own risk and get back nothing if no discovery is made. While RIL-BP wanted government to lay a roadmap to transition to market prices, ONGC said its new discoveries are not viable at current gas price of USD 4.66 per million British thermal unit. RIL-BP plan to produce 13-15 mmscmd of gas for 13 years from D-34 or R-Series discovery in KG-DWN-98/3 or KG-D6 block. The discovery holds an estimated 2.2 trillion cubic feet of reserves and USD 3.18 billion is being spent on bringing it to production. The four satellite gas discoveries of D--2, 6, 19 and 22, which hold 617 billion cubic feet of reserves, will produce 10.36 mmscmd of gas for eight years. The partners are investing USD 1.529 billion in developing the fields. Other satellite fields of D-29, 30, 31 as well as the significant MJ-1 field will also be brought to production but field development plans detailing investment and likely production have so far not been firmed up. RIL has so far made 19 gas discoveries and 1 oil find in the KG-D6 block. Of these, D--1 and D--3 ---- the largest among the lot ---- were brought into production from April, 2009, but output has fallen sharply from 54 mmcmd in March, 2010, to 6.16 mmscmd in March. Together with 5.07 mmcmd of associated gas produced from the MA oilfield in the same area, total production from the block amounts to 11.5 mmscmd. (economictimes.indiatimes.com)

May 7, 2015. Oil and Natural Gas Corporation (ONGC) plans to spend about ` 14,000 crore on exploration this fiscal and is seeking partnerships to develop its deepwater assets at a time when low oil prices have made technology and talent cheaper, its new exploration chief said. ONGC is exploring the possibility of technology partnerships with firms that have competence in deepwater exploration. Ajay Kumar Dwivedi, director (exploration) didn't specify if a possible technology partnership could also expand to an equity partnership. Lack of technological competence and regulatory hurdles have contributed to the company's patchy record in exploration and production. The company is under tremendous pressure to step up production especially after Prime Minister Narendra Modi recently laid an aggressive roadmap for energy security of the country, asking industry to cut import dependence by 10% in seven years from 78% now. This is why ONGC's capital spending plans have remained untouched even when other oil firms, hurt by tumbling crude prices, have slashed capital spending for 2015-16. Exploration services such as seismic data acquisition, tech interpretation software and logging services have all become significantly cheaper with rates for some services falling as much as 30%, he said. (economictimes.indiatimes.com)

May 6, 2015. The government is not considering restoring to Cairn India nearly 8,000 square km the firm had surrendered in the prolific Rajasthan oil block, Oil Minister Dharmendra Pradhan said. Cairn's Barmer basin Rajasthan block, RJ-ON-90/1, originally covered an area of 11,108 sq km. According to the contractual requirement, Cairn relinquished or gave up areas where it had not found any oil or gas and retained only 3,111 sq km where it had made more than two dozen oil and gas discoveries. The company had in April 2013 written to the government seeking return of all of the 7,997 sq km it had given up, saying the area holds potential and needs to be explored. The upstream regulator, the Directorate General of Hydrocarbons (DGH), had opined that return on nomination basis of any area previously relinquished by Cairn was not legally tenable. In all Production Sharing Contracts (PSCs), in force in the country, there are no provisions for restoration of original contract area after the relinquishment and expiry of exploration period, DGH had told the ministry. Out of the relinquished area, 5 coal-bed methane (CBM) blocks have been carved out and awarded by the government, of which 2 blocks viz BS4-CBM-2005/III and BS5-CBM-2005/III are currently under operation. All the relinquished areas are offered in subsequent New Exploration Licensing Policy (NELP) bidding rounds and therefore, no hydrocarbon will remain unexplored. Granting of relinquished area to earlier contractor on nomination basis was not as per NELP, DGH had told the ministry. (www.thehindubusinessline.com)

May 10, 2015. Bharat Petroleum Corp Ltd (BPCL) has got Environment Ministry's nod for a ` 4,588 crore expansion at its refinery facility, paving way for its ambitious plans to produce some niche petrochemicals that are mostly imported into the country. According to BPCL, the proposed Propylene Derivatives Petrochemical Project (PDPP) consists of three major process units -- acrylic acid, oxo-alcohol and acrylates. The land required for the project is approximately 132 acres -- 118 acres towards plant facilities and green belt development for presently envisaged products and 14 acres for related future products. PDPP complex will be set up close to the refinery to achieve integration of feedstock supply, utilities, offsites and other facilities. The project is expected to achieve mechanical completion in the first quarter of 2018. The Refinery/Petrochemical complex will become a pacesetter in safety, environmental compliance, reliability, energy efficiency and operating cost, the company said. (economictimes.indiatimes.com)

May 6, 2015. Indian Oil Corp (IOC) said it has commissioned a propylene recovery unit at its Mathura Refinery. Propylene - also known as propene - is one of the major building blocks of the petrochemical industry. IOC inaugurated the new propylene recovery unit which is designed to process cracked LPG feed to produce 165,000 tons per annum of 99.7 percent pure, petrochemical-grade propylene product. IOC, the second largest petrochemical firm in the country, is investing ` 30,000 crore in increase its presence in the petrochemical business. (www.business-standard.com)

May 12, 2015. Indian Oil Corp (IOC) will hold 45 percent stake in the planned ` 5,150 crore liquefied natural gas (LNG) import terminal at Ennore in Tamil Nadu and offered 50 percent interest to financial institutions like ICICI and IDFC. A joint venture company is being incorporated for setting up of the project. IOC would hold 45 percent stake in the company while Tamil Nadu government enterprise, TIDCO will have 5 percent holding. Balance 50 percent will be for a strategic partner like LNG supplier. The project will be completed by 2019. Till a strategic partner is roped in, ICICI and IDFC have agreed to hold 50 percent interest. As the project activities progress, the strategic joint venture partners would be identified and inducted as equity partners. Ennore will be the third LNG terminal on the east coast with GAIL India Ltd building a facility at Kakinada in Andhra Pradesh and Petronet LNG Ltd proposing a 5 million tons facility at Gangavaram in Andhra Pradesh. India currently has four LNG import terminals, all on the west coast -- Dahej and Hazira in Gujarat, Dabhol in Maharashtra and Kochi in Kerala. LNG is a gas that is cooled down to liquid form and takes up just 1/600th of the volume in its gaseous state, thereby easing transportation by sea. IOC will lay a 1,175 km of pipelines to transport the gas imported at Ennore LNG terminal to customers. The company has made an application to sector regulator Petroleum & Natural Gas Regulatory Board (PNGRB) for laying natural gas pipeline from Ennore to Nagapattinum in Tamil Nadu with spurlines to Madurai, Tuticorin and Bengaluru. IOC is talking to half a dozen LNG suppliers including Gazprom of Russia for long-term supplies. (economictimes.indiatimes.com)

May 7, 2015. Indraprastha Gas Ltd (IGL), the sole CNG and piped natural gas retailer in national capital region, said it has provided a record 1.01 lakh domestic cooking gas connections in 2014-15. IGL, a joint venture of state-owned gas utility GAIL India and BPCL for retailing CNG to automobiles and PNG to households in Delhi, Noida, Ghaziabad and Greater Noida, said this feat was unparallelled in its 16 years history. The total number of domestic PNG connections has now risen to 560,752. IGL had added 72,771 connections during 2013-14. IGL said that it would be the endeavour of IGL to better its record in the current year by covering new colonies and increasing PNG penetration in the already covered colonies for which resources in terms of material and manpower are already in place. IGL sells clean fuel to nearly 8 lakh vehicles in NCR through a network of over 300 CNG stations. IGL is supplying PNG to over 5,60,000 households in Delhi and NCR towns. (economictimes.indiatimes.com)

May 7, 2015. France-based engineering firm GTT and a Korean company have signed a pact with Cochin Shipyard to build LNG carriers, Parliament was informed. Besides under 'Make in India', government has initiated plans to set up an International Ship Repair Facility (ISRF) in the Cochin Port Trust land, besides having a new dry dock project within the Cochin Shipyard, Minister of State for Shipping P Radhakrishnan said. The Shipping Ministry has asked the Ministry of Defence to place defence shipbuilding orders with the Cochin Shipyard Ltd (CSL) apart from placing orders with private shipyards, he said. The Minister said at the end of 2013-14, Indian ship building firms had orders of 350 ships with DWT (dead weight tonnage) of over 27.41 lakh tonnes. (www.business-standard.com)

May 12, 2015. In a move that appears to be solely aimed at bailing out the gas-based private power producers in the state, the TDP government has decided to waive the 25 percent Value Added Tax (VAT) that it currently imposes on natural gas and its allied products, including regassified liquid natural gas (RLNG). Through this VAT, the state earns a revenue of ` 1,150 crore. The Andhra Pradesh (AP) government is claiming that it is doing away with the VAT so that it can participate in the gas pooling scheme proposed by the Centre for which this is one of the pre-conditions. However, by participating in such a scheme, the state can get an allocation of only about 2 to 4 million units per day. But Andhra Pradesh does not need this power as it is already a surplus state. Lanco, GMR, GVK, Spectrum and Reliance are among the gas-based power companies that came up during AP chief minister Chandrababu Naidu's first tenure. However, these companies have been in doldrums ever since gas supplies in the Krishna-Godavari Basin dwindled. Already, despite these units not generating any power, the state is paying them a fixed cost. Now, the move to do away with VAT will literally bail out these companies. (timesofindia.indiatimes.com)

May 10, 2015. As crude oil prices have started moving upwards in the global market, the government needs to put in place a contingency plan to tackle volatility in rates, according to industry body Assocham. In dollar terms, the price of the Indian crude basket has gone up by over 9 percent between May 1, 2015 and May 7, from USD 60.30 to USD 65.81 per barrel, while in rupee terms, prices have shot up by 11 percent from ` 3,789.86 to ` 4,203.94 per barrel, the industry body said. The industry body said the volatility being witnessed in crude oil prices was not a good news for India, which is on the cusp of recovery, along with the macro factors like poor outlook of Monsoon. (economictimes.indiatimes.com)

May 10, 2015. Oil Minister Dharmendra Pradhan said the Centre will invest ` 10,000 crore in LNG (liquefied natural gas) terminal project in the state. Inaugurating the office of Oil and Natural Gas Corporation (ONGC), Pradhan said efforts are on by ONGC in collaboration with his ministry and some private stakeholders to make Odisha a petro-hydrocarbon rich state by 2022 for which ` one lakh crore has been earmarked for investment to produce petroleum and hydrocarbon. ONGC is making a new beginning in field of exploration of energy resources in the new frontiers of a resurgent State of Odisha. As per preliminary estimates, the State has significant hydrocarbon resources, especially gas reserves in the offshore area. ONGC will soon go for onshore 2D and 3D seismic survey which will establish the potential of resources in mainland Odisha. ONGC which has been striving for the nation's energy security added another chapter to its glorious journey by taking new steps in the state, he said. (www.newindianexpress.com)

May 8, 2015. The Oil Ministry is seeking to appoint a consultant that can help it in preparing a strategy and roadmap for implementing the 'Make in India' campaign -a Modi government initiative to make the country a manufacturing hub - in the oil and gas (O&G) sector. The Petroleum Planning and Analysis Cell (PPAC), a division of the oil ministry, has invited expression of interest (EOI) from the consulting agencies that can assist the steering committee set up last year to identify reasons for the current low level of investment in the manufacturing segment of the oil and gas industry and measures needed to step this up. A PPAC panel will scrutinize all EOIs, needed to be submitted by May 29, and the shortlisted bidders can then submit the price bids. (economictimes.indiatimes.com)

May 8, 2015. The government is to shortly examine if a separate brand and marketing structure is needed for commercial LPG as part of its larger exercise to prepare a "Master Plan" aimed at deepening the cooking gas usage in the next three years. The government is seeking to appoint a consultant for this. The effort will also include exploring "the feasibility and necessity of creating a separate brand and marketing structure for commercial LPG". At present, commercial LPG, sold at a higher price than domestic subsidized cylinders, share the same brand name. A separate brand and marketing structure can help curtail diversion of subsidized domestic cylinders for commercial use, a key concern that has influenced government policies lately. The government's direct cash transfer programme for LPG consumers is helping curb diversion as some 83 percent of consumers have already signed up for this. From April 1, all cylinders are being sold at market price with cash subsidy directly reaching the bank accounts of consumers. The consultant will also be expected to help devise "an appropriate marketing strategy with a view to making available cylinders of different weights-2 kg, 5 kg, 10 kg and 14.2 kg for use of domestic households and ensuring an adequate distribution points for its availability." The whole exercise will entail assessing the "effectiveness of existing distribution model and recommending an alternative distribution model or changes required in existing distribution model including changes required in distributor selection guidelines and methodology of selection of locations for putting up LPG distributorships." (economictimes.indiatimes.com)

May 8, 2015. Lower oil prices have reduced net margins of two upstream companies, Oil India Ltd (OIL) and Oil and Natural Gas Corporation (ONGC), and the Government needs to reduce the burden on them, credit rating agency Fitch said. Fitch said low energy prices would continue to moderate India’s inflation rate, which has already fallen from over 10 percent in early 2013 to below 6 percent over the past few months. Fitch said that in view of deregulation of petrol and diesel prices, Indian consumers will face a burden if the cost of global crude oil increases from the current levels. The crude oil prices, which had fallen to around $46 per barrel at the beginning of 2015, have been firming up lately and have touched $69 per barrel. The retail price of diesel in India was deregulated from Government control in 2014, while that of petrol prices has been market-linked since 2010. Fitch said India is a clear beneficiary of current lower oil prices, as oil accounts for about a third of its imports. (www.thehindubusinessline.com)

May 6, 2015. The Government said it is aware of pilferages in the petroleum sector and will come out with a marketing plan to stop it through technological intervention. Oil Minister Dharmendra Pradhan said a lot of pilferages and leakages occur in mid-stream and downstream sector. (www.thehindubusinessline.com)

May 6, 2015. The major portion of the decrease in refinery transfer price of petrol and diesel has been passed on to the consumers, Oil Minister Dharmendra Pradhan said. The Minister said the refinery transfer price of petrol and diesel has reduced by ₹ 16.69 a litre and ₹ 17.64 a litre, respectively, between July 1, 2014 and May 1, 2015. While the drop in the retail selling price of petrol and diesel during this period has been lower than the refinery transfer price, it is after considering an increase in excise duty. The retail price of petrol has come down ₹ 10.44 a litre during the period, while for diesel it has dropped by ₹ 8.27/litre. The increase in excise duty amounted to ₹ 7.98/litre on petrol and ₹ 6.70/litre on diesel. The Minister said that that the refinery transfer price of petrol and diesel constitutes for 48 percent and 68 percent, respectively, of their retail selling price. The Minister said that the Government has approved a proposal for pooling of domestic gas with imported gas to supply it at a uniform delivered cost to all the grid connected fertiliser plants for urea production. (www.thehindubusinessline.com)

 [NATIONAL: POWER]

May 10, 2015. The first 1,000 MW unit of Kudankulam Nuclear Power Project (KNPP) stopped generation after the reactor tripped, the Power System Operation Corporation Ltd. (PSOCO) said. According to PSOCO, the Kudankulam Nuclear Power Plant's first unit stopped at 6.38 p.m. on May 9 owing to "reactor trip due to transient in-steam generator level control." The unit touched the day's peak generation of 873 MW. India's atomic power plant operator Nuclear Power Corp of India Ltd (NPCIL) is setting up two 1,000 MW Russian reactors at Kudankulam in Tirunelveli district. The first unit, which is the beginning of the fission process, attained criticality in July 2013. Subsequently, it was connected to the southern power grid in October 2013 but the commercial power generation began only on December 31, 2014. The second unit is expected to start commercial generation this fiscal. (www.business-standard.com)

May 10, 2015. A high-level committee has recommended environmental clearance for state-owned NTPC's 1,320 MW Khargone power project in Madhya Pradesh (MP), but with certain riders. The country's largest power producer, NTPC, had earlier invited bids for construction of the thermal project. Infrastructure firm Larsen & Toubro had in April bagged the contract from NTPC to set up the power project. NTPC had earlier said it plans to finance the EPC (engineering, procurement and construction) package for Khargone plant through external commercial borrowings and its own resources. (www.newindianexpress.com)

May 8, 2015. Reliance Power has moved a court for a stay on encashment of its ` 800 crore bank guarantee for the Tilaiya Ultra Mega Power Project (UMPP) in Jharkhand. The case was filed after the company announced it was pulling out of the project. The 4,000 MW Tilaiya UMPP is one of three Reliance Power is setting up. Reliance Power announced its special purpose vehicle, Jharkhand Integrated Power Ltd, had terminated power purchase agreements with 18 buyers in 10 states over delayed land acquisition. Besides Jharkhand, Gujarat, Delhi, Punjab and Haryana were among the places with whom the company had signed 25-year contracts for power supply. The company said land required for the project was yet to be made available. After 25 review meetings with the Jharkhand government over five and a half years, Reliance Power said the project could not have been completed before 2023-24 at the present pace of land transfer. The Tilaiya project was awarded to Reliance Power at a levelised tariff of ` 1.77 a unit, in an auction that saw participation by NTPC, Lanco Infratech, Jindal Power and Sterlite Energy. The company had planned capital expenditure of ` 36,000 crore for the project, which comes along with the Kerandari coal block in the North Karanpura coal fields in Jharkhand. Of the 16 UMPPs the previous United Progressive Alliance government had planned, only four were awarded. Three of these at Sasan, Tilaiya and Krishnapatnam were to be set up by Reliance Power and the one at Mundra by Tata Power. Reliance Power's Sasan UMPP achieved completion last month. The Krishnapatnam project in Tamil Nadu, which will run on imported coal, is delayed by clearances. Reliance Power had bid aggressively at ` 1.29 per unit and ` 2.33 per unit for these two UMPPs. (www.business-standard.com)

May 6, 2015. Bharat Heavy Electricals Ltd (BHEL) has commissioned GVK Group's 82.5 MW greenfield hydro electric project in Uttarakhand. BHEL said that it has "successfully commissioned the first unit of 82.5 MW at the upcoming Shrinagar Hydro Electric Project (HEP) in Uttarakhand". The project is located on the Alaknanda River (near the town of Shrinagar in Pauri Garhwal District of Uttarakhand), a major tributary of the Ganga. The project is designed to utilise the waters of River Alaknanda by way of a diversion dam. BHEL said power generation from Shrinagar HEP is likely to result in reduction of greenhouse gas emissions. At present, the company is executing hydro electric projects of around 4,000 MW which are under various stages of implementation. Other hydro power projects under execution by Bhel in Uttarakhand include Lata Tapovan HEP, Tapovan Vishnugarh HEP, Vyasi HEP and Vishnugarh Pipalkoti HEP. (www.business-standard.com)

May 6, 2015. The Odisha government has urged the Centre to allot two more coal blocks to Odisha Power Thermal Power Corporation Limited (OTPCL) for its upcoming 2,400 MW power plant in Dhenkanal district. OTPCL, a joint venture between Odisha Mining Corporation (OMC) and Odisha Hydro Power Corporation (OHPC), is setting up the power plant at an estimated cost of ` 17,000 crore. Earlier, state Energy Minister Pranab Prakash Das urged the Centre to allot the coal mines for OTPCL to feed the thermal power project. Power major NTPC had proposed to the state government to partner OTPCL to develop the 2,400 MW thermal power plant since the state PSU lacked the expertise to implement the project. The Centre has already allocated Manoharpur and dip side of Manoharpur coal blocks to Odisha Coal and Power Ltd. (OPCL). OPCL, a 51:49 joint venture between Odisha Power Generation Corporation (OPGC) and Odisha Hydro Power Generation Corporation (OHPC), has been awarded the coal blocks. The same blocks were owned by OPGC before the Supreme Court de-allocated them last year. OPGC is expanding its project to 1,320 MW at Ib Valley in Jharsuguda district. OPGC runs a 420 MW (2x210) plant at the station. (www.newkerala.com)

May 11, 2015. Tata Power Company implemented "island system" for power supplied to its consumers at Haldia in West Bengal, which will ensure continuous supply of electricity the town even during grid failure, the Tata Group power utility said. The islanding system is increasingly being used by cities to ensure reliable power supply. In case of breakdowns in the grid, the islanding system automatically isolates itself from the rest of the grid and ensures that generating units continue to function. During the national grid failure in June 2012, cities across India witnessed power failure whereas Tata Power's Islanding System ensured that Mumbai had an uninterrupted supply of power, the company said. (economictimes.indiatimes.com)

May 11, 2015. It may be hard to believe in a country where blackouts are still the norm in large parts. Enough power is available in the system but there are no takers for a substantial portion of it. Power minister Piyush Goyal on April 30 told Parliament that most parts of the country have surplus power. A day before on April 29, he found there was so much surplus power at 3.30 pm that the national grid monitoring station indicated power was available at "zero rupee per unit". There were no takers for 100 million units of electricity, equivalent to 1,500 MW of coal-fired and 2,500 MW gas-based capacity, from state-run generation utility NTPC that accounts for nearly a fifth of the installed capacity in the country. Similarly, a look at the data from Indian Energy Exchange shows there were more bids for selling power than for buying in April. In the complicated power trading business, this may not be seen as an empirical proof. But, it certainly is a strong indicator of the trend. While the poor financial health of the state discoms is largely to blame, there are other factors such as fuel prices, difficulty in bill collection, etc that prevent utilities from procuring power. This has led to a fall in demand in the face of rising capacity. Simultaneously, generation capacity has been growing steadily and power generation topped the trillion unit-mark in 2014-2015 at 1,048.4 billion. This marks 8.4% growth over previous year. Most utilities buy power through long-term contracts. The fixed, or capacity, charge makes up 30% or less of the contracted tariff. The aversion can be understood better in case of gas-fired plants. These plants are idling because supply of cheap domestic gas has been snapped due to shortage. Since utilities booked the capacity of these plants on domestic gas-based tariff, they are unwilling to consider running them with imported fuel as the cost would double. Coal-fired plants too face somewhat similar situation. Many of them have to import to make up for shortfall in domestic supplies. This raises fuel and transport costs. Many utilities are also turning to power exchange to take advantage of falling rates as inter-region connectivity and transmission network's carrying capacity improves. Then there are heavily deficit states such as Tamil Nadu and Kerala that pay ` 8.5 per unit to buy power from the exchange. (timesofindia.indiatimes.com)

May 10, 2015. The Central government will, in the next six months, invest ` 1 lakh crore to increase the transmission capacity, PiyushGoyal, Union Minister of State for Power, Coal and New and Renewable Energy, said. To increase the transmission capacity, Goyal said that his Ministry had asked the Power Grid Corporation of India to expedite the ` 30,000-crore work to increase transmission capacity across India. The work was progressing at a rapid pace but the Central government needed the State governments’ help in acquiring land and granting right of way to set up the transmission lines. The Ministry would also invest ` 26,000 crore to transmit 6,000 MW of power to the southern States. Tamil Nadu, Kerala, Andhra Pradesh, Karnataka and Telangana would stand to gain. And, this work would be completed in the next two years. (www.thehindu.com)

May 8, 2015. Alstom T&D India has signed three orders worth approximately €30 million (` 2202 million) to build two 220 kV and four 132 kV air insulated substations (AIS) for Bihar State Power Transmission Company Limited (BSPTCL). This project is part of India’s 12^th Five Year Plan to strengthen Bihar’s 220 kV transmission network. Built across various locations in Bihar state, these substations aim to enhance the capacity of power evacuation systems and improve the power situation. The substations will strengthen the transmission network at 220 kV level with a potential to be further upgraded to 400 kV in future. (www.business-standard.com)

May 7, 2015. Tamil Nadu (TN) chief minister O Panneerselvam has requested Union railways minister Suresh Prabhu to ensure adequate supply of rakes in order to meet the peak summer coal requirement of NTPC Tamilnadu Energy Company Ltd (NTECL) Vallur thermal power plant. Panneerselvam said the NTECL, a joint venture company of Tamil Nadu Generation and Distribution Corporation Ltd (Tangedco) and public sector undertaking NTPC Ltd, was not able to get adequate coal supply due to inadequate railway rakes at Talcher coal mines. Augmentation of coal supply to NTECL Vallur plant would greatly help the state meet its power demand during summer, he said. The fully-operational Vallur plant is a 1,500 MW (3X500 MW) coal-based facility. Tamil Nadu has been allocated 1,045 MW from the plant. (www.business-standard.com)

May 12, 2015. Lanco, GVK, GMR, Torrent, Ratnagiri Gas and Power (erstwhile Dhabol) and State entities are among the power producers who have committed to produce over 1.17 billion units of electricity using imported gas between June and September for ₹ 6.12 to ₹ 6.14 a unit. While 14 stranded gas-based power plants participated in the e-auction called by the Power Ministry to facilitate import of gas through a subsidy scheme, 10 emerged as winners. Of the about ₹ 6 a unit quoted by the plants, ₹ 4.7 a unit will come from the power purchase agreements they sign with electricity distribution utilities and the rest will come from Power System Development Fund (PSDF) support. The government had capped the price for ₹5.5 a unit from the distribution utility and ₹0.94 a unit from the fund. It expected an outgo of ₹792 crore as PSDF support for the June to September period. For the full year, the support has been earmarked at ₹3,500 crore. The electricity generation committed by the gas-based power plants is a small fraction of the 14.92 billion units of deficit faced during the same period last year. But it could make up for the expected shortfall in hydro power generation this year. As against 59.123 billion units of hydro power generated in June-September last year, this year’s target is 57.71 billion units or about 1.3 billion units less. However, power generators still remain sceptical about the success of the scheme. To meet the demand deficit and revive the stuck projects, the government had come out with a scheme which offered premium on efficiency through financial support from PSDF. The qualified bidders were asked to quote the additional electricity to be generated at the target plant load factor. MSTC, the platform for the e-auction, calculated the required imported gas every 45 minutes. This process continued till the required imported gas reached 120 percent of the available 8.9 million standard cubic metres a day. (www.thehindubusinessline.com)

May 12, 2015. Delhi's tariff announcement for the current fiscal could be delayed. The Central Information Commission (CIC) has directed Delhi Electricity Regulatory Commission (DERC) to disclose public information on discoms' tariff petitions in simple language with analysis and explanations so that a common man may understand and respond, before inviting his objections and views. While the last date for receiving public feedback on tariff is already over, the commission might have to undertake the process all over again, as per CIC directive. The commission also directed DERC to proactively disclose information on controversial points like prudence check on electricity companies, non-submission of report on prudence check by consultant PWC, income tax issues and cost incurred by discoms in contesting cases in Supreme Court against CAG audit and CIC decision making them answerable under RTI Act. It directed DERC explain to people the impact of these factors on consumer interests vis-a-vis profits earned by discoms. (economictimes.indiatimes.com)

May 11, 2015. The process of bidding by stranded gas-based power projects for government subsidy support to purchase expensive imported liquefied natural gas (LNG) to restart stalled plants has been postponed. The e-auction will be for stranded power plants, and the same for units receiving sub-optimal domestic gas will be held on May 13. Gas-based power stations that are either shut for want of fuel or receiving some domestically produced gas and running at sub-optimal levels are eligible for government subsidy to help them buy costly imported LNG. As many as 31 power stations with a combined capacity of 14,305 MW, which are languishing, can bid for support from the Power System Development Fund (PSDF) to generate 30 percent of their installed capacity, called plant load factor, using imported LNG. Power companies seeking lowest support from PSDF, post consideration of an electricity tariff of ` 5.50 per unit, will get the first right over LNG, whose delivered price too will come down through importer and transporters taking a hair cut in marketing and operational costs. Under the scheme, LNG will be imported by GAIL India for the power plants as well as units receiving domestic gas up to a certain threshold capacity. The government will provide as much as ` 3,500 crore in financial support to the power plants this fiscal and another ` 4,000 crore in the next. Currently, of the 24,150 MW of gas-based power plants, 14,305 MW capacity projects are stranded because of limited availability of domestically produced natural gas and costly imported LNG. GAIL India and Gujarat State Petroleum Corp (GSPC) have been designated importers of LNG. The new arrangement would help 5000-5,500 MW of gas plants in southern India, particularly Andhra Pradesh and Telangana. Out of 24,150 MW gas grid-connected power generation capacity in the country, 14,305 MW has currently no supply of domestic gas and may be considered as stranded. This entails an investment of over ` 60,000 crore, which is at the threshold of becoming Non-Performing Assets (NPAs). (economictimes.indiatimes.com)

May 11, 2015. The Odisha government is confident of avoiding power cuts in the state banking on sufficient generation of hydro power during summer months. All major reservoirs of the state have comfortable water levels, much higher than MDDL or critical level at which water cannot be used for power generation purposes, according to Odisha Hydro Power Corporation (OHPC) website. Data provided by the Indian Meteorological Department (IMD) showed in the July-September monsoon period last year, Odisha had recorded 4 percent deficit than normal rainfall, versus 12 percent shortfall across the country. Major reservoirs of the state, which are located in Koraput, Malkanagiri and south of Bhawanipatna, received enough water to generate record units of power. The Southwest monsoon, which usually reaches the country's coast around June 1, takes about two weeks to advance to Odisha. The IMD said, monsoon this year will reach on time and rainfall would be less than normal, after analysing weather models. State-run power trader Gridco is currently drawing about 700 MW power from OHPC per day to meet the 24-hour average demand of 3200 MW, while the rest of the demand is met from thermal power generation. Its mix of thermal power supplies include 760 MW from state thermal generation, 640 MW from captive power producers and 850 MW from its share allocated in the Central power projects. The government hopes hydro power generation could go up to 1,400 MW this summer and assured that there may not be any power cut in the evening because of shortage of hydro power production. However, the Odisha Electricity Regulatory Commission (OERC) has already raised electricity charges for this fiscal, saying it was necessitated because of payments of old dues to NTPC and insufficient generation of cheaper hydro power. Hydro power rates are much cheaper compared with expensive coal-fired electricity generation. Gridco usually buys around 15 percent of its total power requirement from hydro power sources. (www.business-standard.com)

May 10, 2015. India has said there is "steady progress" on Indo-Russia civil nuclear energy cooperation and the second unit of the Kudankulam project is "progressing satisfactorily" towards commissioning as the two countries aim to boost their strategic ties in spheres of space and energy. President Pranab Mukherjee, in Russia on a five-day visit, held a 45-minute meeting with his Russian counterpart Vladimir Putin in a "wide-ranging review of our bilateral cooperation", the Ministry of External Affairs said. On civil nuclear energy cooperation, there has been steady progress. The Kudankulam Nuclear Project-2 (KKNP2) is progressing satisfactorily towards commissioning. Contracts for supply of equipment for KKNP3 and 4 have been concluded," the Foreign Secretary S Jaishankar said. Jaishankar said that a number of steps were being taken to boost space cooperation as well as in energy. (zeenews.india.com)

May 9, 2015. The Centre has formulated a ` 27,000 crore project for generating 6,000 MW power in another two years to provide 24x7 affordable electricity to southern states, Power Minister Piyush Goyal said. He attributed insufficient transmission facility as a reason for not being able to bring adequate electricity to South India, particularly to Tamil Nadu. Blaming the previous UPA government for not taking enough steps to create adequate power grid and transmission facilities, he said under the new scheme South India will benefit through getting uninterrupted, adequate and affordable power. To tide over the power crisis in southern state, the government proposes to provide 11 gas-based plants under which the Centre will provide gas at low cost, he said. (economictimes.indiatimes.com)

May 8, 2015. Delhi government has decided not to pay the BSES discoms money under the power subsidy scheme and will adjust it with the dues owed by them to state-run power generation and transmission firms which are facing severe financial crunch. Delhi Power Minister Satyendra Jain said the government will recover the dues from BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL) by adjusting the subsidy component. The two discoms have a pending dues of nearly ` 6,000 crore to Delhi Transco Ltd and two state-run power generation companies. The Delhi government had sent several reminders to the two discoms to clear the dues but to no avail. The BSES has been maintaining that it was going through a difficult financial condition as it has not been allowed to recover around ` 10,000 crore in losses due to increase in power purchase cost and low tariff. In February, the AAP government had announced a 50 percent subsidy on monthly power consumption of up to 400 units. The power minister also cautioned the discoms against any power cuts during the summer season. Jain said government will strictly deal with the discoms if there was long power cuts. The minister said his department has received complaints about accidents due to overhead transmission lines and promised to shift the lines underground. The Delhi Transco Limited has laid the new underground 220 KV line to connect newly established 220 KV station at Peeragarhi with the 400KV substation at Tikri Kalan. Commissioning of the new line is likely to improve power supply in West, Central and North Delhi. (economictimes.indiatimes.com)

May 8, 2015. The West Bengal government hinted at a reduction in power tariff in the next 2-3 years following new captive block regulations. The cost of coal for the state discom, West Bengal Power Development Corp Ltd (WBPDCL), may come down to ` 1,800 per tonne from the earlier ` 2,600 per tonne, State power minister Manish Gupta said. The government may not pass on the coal price benefit as it may withdraw its subsidies on retail consumption and mitigate other costs. Gupta said the final tariff will depend on other factors like freight and other costs. Meanwhile, the Bengal government is seeking a green energy fund to build two pump storage hydel power plants in Purulia -- Turga (1,000 MW) and Bandhu (900 MW). Gupta said the state is planning to set up a 1,200 MW solar power plant to support these two hydel power plants. West Bengal State Electricity Co already operates one pump storage hydel project in Purulia. (economictimes.indiatimes.com)

May 7, 2015. Government has approved National Smart Grid Mission (NSGM) for planning, monitoring and implementing policies related to smart (power) grid activities. According to the Power Minister Piyush Goyal's reply, the total outlay for NSGM activities for 12^th Plan is ` 980 crore with a budgetary support of ` 338 crore. NSGM entails implementation of a smart electrical grid based on state-of-the art technology in the fields of automation, communication and IT systems that can monitor and control power flows from points of generation to points of consumption, the minister said. NSGM has three tier structure. At the apex level, NSGM has a Governing Council headed by the Power Minister. The members of the Council are secretary level officers of concerned ministries and departments. The role of the council is to approve all policies and programme for smart grid implementation. At the second level, the NSGM has an Empowered Committee headed by the Secretary (Power). The members of the committee are Joint Secretary level officers of concerned ministries and departments. The role of the Committee is to provide policy input to the Governing Council and approve, monitor, review specific smart grid projects, guidelines/procedures etc. In a supportive role, NSGM has a Technical Committee headed by Chairperson (Central Electricity Authority). The members of this committee are Director level officers of concerned ministries and departments, representatives from industries and academia. The role of Technical Committee is to support the Empowered Committee on technical aspect, standards development, technology selection guidelines etc. For day-to-day operations, NSGM has a NSGM Project Management Unit (NPMU) headed by the Director NPMU. Director NPMU is a member of the Governing Council and Empowered Committee, and Member Secretary of Technical Committee. NPMU is the implementing agency for operationalising the Smart Grid activities in the country under the guidance of Governing Council and Empowered Committee. Grant up to 30 percent of the project cost is available from NSGM budget. For selected components such as training & capacity building, consumer engagement etc, 100 percent grant is available. Corresponding to the NSGM, State Level Mission chaired by the Power Secretary of the State has also been proposed. Support for training & capacity building to State Level Project Monitoring Units (SLPMUs) for smart grid activities is provided by NSGM. (www.deccanherald.com)

May 7, 2015. Power tariffs were revised in Haryana, effecting an average increase of about 8.5 percent, though farmers and those belonging to the Economically Weaker Sections (EWS) have been spared. The power consumers will have to pay more from April 1, 2015, as the hike in power tariff was announced by the Haryana Electricity Regulatory Commission (HERC). The power tariff for industrial consumers has also been hiked. In case of High Tension Industries, the tariff in Haryana will be ` 7.46 per unit as compared to ` 8.89 in Delhi and ` 7.81 in Punjab. In case of Low Tension industries, it will be ` 6.76 per unit in Haryana whereas it is ` 9.97 in Delhi. In case of commercial category, the effective tariff of power upto 100 units consumption in Haryana will be ` 6.20, whereas in Delhi it is ` 9.59 and in Punjab ` 6.53. The "major relief" for the farmers of Haryana has been made possible because of the commitment of the state government to provide for ` 6,200 crore on subsidy for farmers in the state. The government has also decided to release 7000 additional tubewell connections to the farmers during the current financial year. It is for the first time that a special category has been created for economically weaker sections of the society. (economictimes.indiatimes.com)

May 6, 2015. The government will decide next month the fate of thermal power projects that lost coal blocks and have so far been receiving coal supplies on ad-hoc basis from Coal India, Coal Secretary Anil Swarup said. It is estimated the affected plants, which have not been able to win any blocks through the recent e-auctions, together account for 22,000 MW of power generation with total investments of around ` 1.1 lakh crore. Coal India Ltd (CIL) will continue to supply coal to companies without power purchase agreements on an ad-hoc basis till June. These affected thermal power projects were allotted coal blocks before the Supreme Court declared them illegal. Such projects were also offered fuel supply contracts - technically termed 'tapering linkages' - which involved supplying diminishing volumes each year till the time their allotted blocks were to start production. It was assumed that a coal block can start production within four years and the coal supply from CIL was scheduled to taper down to zero by the fifth year. Following the Supreme Court's order, these projects are left with no coal blocks and no long-term fuel-supply contracts. Now, projects without fuel supply commitment do not qualify for bidding in power purchase agreements and the ones without such agreements are not on the priority list of the government for supplying coal. And banks would not want to finance them, due to lack of fuel availability. Swarup said coal was being supplied to these projects on a temporary basis on the assumption that they will mine from their coal blocks. With coal blocks being taken away, the very premise on which these plants were being supplied coal has been rendered nonexistent. (timesofindia.indiatimes.com)

May 6, 2015. Jammu and Kashmir (J&K) Chief Minister (CM) Mufti Mohammad Sayeed reviewed the pace of work on ` 640.40 crore Parnai Hydro-Electric Project (HEP), saying his government would focus on harnessing the full potential of the state in hydropower generation. He said the people are the principal beneficiaries, who expect that all developmental projects taken up by the government are completed within the stipulated timelines. Directing for completion of the project within the stipulated timeframe, the Chief Minister said the Parnai HEP has been conceived as a multi-purpose project, keeping in mind its potential to augment both the power and irrigation-related needs of Poonch district in Jammu region. The chief minister was informed that Divisional Commissioner, Jammu, is holding weekly meetings to resolve the land acquisition issues involved in the project. He said Patel Engineering Limited, the project-executing company, has been asked to accelerate the construction work by deploying required machines and manpower at all the sites. The work on the Parnai Project, which is a Run-of-the-River (RoR) scheme with installed capacity of 37.5 MW, began in April last year and was also expected to irrigate vast tracts of agricultural land after its completion in 2018. (zeenews.india.com)

 [INTERNATIONAL: OIL & GAS]

May 12, 2015. ExxonMobil Exploration and Production Malaysia Inc., a subsidiary of Exxon Mobil Corporation, announced recently the startup of natural gas production from the second phase of the Telok gas development project, the Telok B platform located off the east coast of Peninsular Malaysia. The Telok development consists of two satellite platforms – Telok A, which started up in 2013, and Telok B. Both platforms combined are capable of producing more than 450 million cubic feet per day of natural gas. The Telok development required more than 4.8 million total work hours to complete and was executed without a single lost-time injury by local contractors. Drilling operations from Telok B commenced in September 2014 and full well stream natural gas is being produced via a 15.5 mile pipeline to the existing Guntong E platform for processing. (www.rigzone.com)

May 12, 2015. Japan's Inpex Corp announced that, through its wholly owned subsidiary Inpex Alpha, Ltd., it commenced oil production from the Coniston Oil Field offshore Western Australia. The Coniston Oil Field covers an area of 17.3 square miles saddling blocks WA-35-L and WA-55-L where the water is 1,247 feet deep. The field is located 3.7 miles north of the Van Gogh Oil Field where Inpex is engaged in oil production activities. The Coniston Oil Field project is operated by Apache, which owns a participating interest of 52.501 percent. Inpex holds the remaining 47.499 percent. The partners made a final investment decision on the project in December 2011. Oil produced from the field is processed and stored at the floating production, storage and offloading (FPSO) vessel servicing the Van Gogh Oil Field. The average production rate during the first year is expected to amount to approximately 18,000 barrels of oil per day. Inpex is committed to further expanding its exploration and development activities in the Asia-Oceania region. (www.rigzone.com)

May 11, 2015. Noble Energy Inc said it would acquire Rosetta Resources Inc for about $2 billion in stock, marking the first significant deal among U.S. shale oil producers following a steep fall in global crude prices. A nearly 50 percent drop in crude prices since June highs of over $100 per barrel has for months raised expectations for a wave of mergers and acquisitions in the highly-fragmented shale oil industry. But until now buyers and sellers had been unable to agree on valuations and the outlook for future prices. With the Noble acquisition, a precedent has been set that will clear a path for other companies plotting shale deals. The deal will give Noble entry into two of the country's top producing shale fields, the Eagle Ford Shale and Permian Bain in Texas. Noble, which is also drilling for natural gas offshore Israel, is already pumping oil and gas in other fields, including in Colorado. The Houston-based company said it had identified more than 1,800 drilling locations across Rosetta's liquids-rich assets, consisting of 50,000 net acres (20,234 net hectares) in the Eagle Ford shale and 56,000 net acres in the Permian. The assets have the potential to produce about 1 billion barrels of oil equivalent and will raise company-wide production 21 percent, Noble said. Royal Dutch Shell agreed to buy BG Group for about $70 billion in a deal centered around liquefied natural gas. That deal was also seen as paving the way for mergers and acquisitions in the oil sector. (www.reuters.com)

May 11, 2015. Saudi Arabian Oil Co., the world’s largest crude exporter, boosted 2014 production of hydrocarbons close to an all-time high while adding reserves amid a supply glut that led to a drop in oil prices by almost half last year. Saudi Aramco, as the state-owned company is known, produced 9.5 million barrels a day of crude last year, up from 9.4 million barrels a day in 2013, according to the annual review the company posted on its website. Natural gas output rose to 11.3 billion standard cubic feet a day from 11 billion, it said. The company discovered five gas fields and three oil deposits in 2014. Aramco increased oil production amid a global glut that drove benchmark prices down almost 50 percent last year. Organization of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, chose in November to keep pumping crude to protect its share of the market rather than cutting output to boost prices. OPEC produced more than 31 million barrels a day last month, data show. The Saudi company’s oil reserves grew to 261.1 billion barrels in 2014 from 260.2 in 2013, while reserves of gas increased to 294 trillion standard cubic feet from 288.4 trillion, the review showed. The company said it maintains an oil-production capacity of 12 million barrels a day. Oil-refining capacity was 3.1 million barrels a day at the end of last year, Aramco said. Its refining venture with China Petroleum & Chemical Corp. in Fujian, China, raised capacity to 280,000 barrels day, while a plant in Jazan, Saudi Arabia, is set to start processing in 2017, according to the review. Aramco is seeking to upgrade three refineries in Indonesia, it said. Aramco is planning to spend between $70 billion and $80 billion on overseas acquisitions and investments during the next five years. (www.bloomberg.com)

May 6, 2015. Qatar Petroleum invited international oil and gas companies to compete for the operation and development of its offshore al-Shaheen reservoir, its biggest oil field. Maersk Oil Qatar, a unit of Copenhagen-based AP Moeller-Maersk A/S and the current operator, was among companies invited to make bids, Qatar Petroleum said. The new contract begins in mid-2017. Al-Shaheen currently produces about 300,000 barrels of oil a day, Qatar Petroleum said. Qatar produced 700,000 barrels of oil a day in April, according to data. The country is the world’s biggest exporter of liquefied natural gas. (www.bloomberg.com)

May 6, 2015. The biggest obstacle to Royal Dutch Shell Plc’s $70 billion offer for BG Group Plc probably lies in China. Shell Chief Executive Officer Ben Van Beurden visits the country to convince officials that the combination of two large oil and gas producers poses little risk for the world’s biggest energy importer. He’s not certain to succeed given the clout the enlarged company will have in the global market for liquefied natural gas, according to Gordon Kwan, Hong Kong-based head of regional oil and gas research at Nomura International. Negotiations will test Hague-based Shell’s storied relationship with China, which started with kerosene imports in 1894 and includes a global alliance with PetroChina Co., the country’s biggest oil producer. Van Beurden will be aware that China’s antitrust authorities have challenged major natural resource deals on competition before. Shell’s LNG sales will rise 80 percent by 2018 and the combined company will account for about 15 percent of the world’s traded LNG, the company said. Gas is important for China as the country battles the pollution generated by coal-burning power stations. The government has set a target of increasing the share of gas in the energy mix to more than 10 percent by 2020 from less than 6 percent in 2013. That would be more than double total gas consumption, analysts said. Van Beurden met President Dilma Rousseff as well as officials at state-run Petroleo Brasileiro SA, to brief them about the BG acquisition, which will make Shell one of the biggest foreign producers in Brazil. Responses from the government were positive, Van Beurden said. China, Australia and Kazakhstan, a country Van Beurden is also scheduled to visit, have been “positive and logical” so far, he told analysts on a conference call the same day. The antitrust process is in still in “incredibly early days,” he said. Shell doesn’t expect to complete the merger with BG until early next year. (www.bloomberg.com)

May 12, 2015. Japanese power company Hokuriku Electric Power announced it has signed contract 10-year to purchase 0.38 Mt/year (0.5 bcm) of LNG to Petronas' subsidiary Malaysia LNG. First delivery are to start in April 2018. Hokuriku Electric Power will burn LNG in the 400 MW CCGT power plant the company intends to build to replace the 500 MW coal-fired power plant at its Toyama Shinko site. (www.enerdata.net)

May 11, 2015. Russian gas giant Gazprom and Chinese oil and gas group CNPC have signed Heads of Agreement (HoA) for pipeline gas supply from Russia to China via the "western route": gas will be exported from Western Siberia's fields in Russia to China, via a proposed new gas interconnection. The project will not affect the proposed "eastern route", on which the intergovernmental agreement is already ratified: the "Power of Siberia" gas pipeline project will link the Irkutsk and Yakutia gas production centers to the Russian Far East and China.

A Sale and Purchase Agreement on the eastern route was signed in May 2014 for annual deliveries of 38 bcm over a 30-year period. The HoA was part of a series of agreements between the two countries. Gazprom and CNPC signed another Agreement of Strategic Cooperation on their cooperation in the gas sector, as the previous 10-year Agreement expired in 2014. China Three Gorges Power Corporation (CTGPC) and RusHydro decided to jointly develop a 320 MW hydropower plant on the Bureya river in eastern Russia. The Nizhne-Bureyskaya project would export power to China. (www.enerdata.net)          

May 11 2015. The US Department of Energy (DOE) has issued a final authorization for Dominion Cove Point LNG to export up to 0.77 billion cubic feet per day (bcf/d) of domestically-produced LNG to countries that do not have a Free Trade Agreement (FTA) with the United States, over a 20-year period.

The Cove Point LNG terminal is developed by Dominion and is already under construction in Calvert County, Maryland, on the site of the existing regasification terminal. It will have a capacity of 5.25 Mt/year and is expected to be commissioned in late 2017-early 2018. Cove Point LNG will be the first gas liquefaction project on the US East Coast. (www.enerdata.net)                       

May 10, 2015. Israel Electric Corp (IEC) signed a deal to purchase more natural gas from the Tamar field through 2028, the partners in Tamar said. IEC will purchase up to 87 billion cubic meters of gas from Tamar, which has an estimated 280 billion cubic meters (bcm) of reserves, they said. It had previously signed a 15-year deal to buy between 42.5 and 82.5 bcm starting in 2013, when Tamar started production, and an option to raise it to as much as 99 bcm. (www.reuters.com)

May 8, 2015. The United States (US) is encouraging Greece to move forward with a pipeline bringing natural gas from Azerbaijan to Europe via Greece, rather than setting its hopes on a different project that would pipe Russian gas through Turkey. Greece's left-wing government has expressed interest in a Moscow-backed pipeline project dubbed Turkish Stream that would bring natural gas across the Black Sea to Turkey and from there to Europe, potentially through Greece.

The U.S. has been encouraging the Trans-Adriatic Pipeline, which will take Azeri gas from the Caspian Sea to Italy. The U.S. State Department's special envoy on energy affairs, Amos Hochstein, stressed that while Russia was a major gas supplier for Europe, it was important for Greece and Europe to ensure diverse suppliers. That would also reduce the chances of energy being used for political leverage, he said. Hochstein noted the potential Turkish Stream project was still in the very early stages of planning while the pipeline carrying Azeri gas would provide much faster returns. (www.downstreamtoday.com)

May 8, 2015. Petroleo Brasileiro SA (Petrobras) has drawn interest from Mitsui & Co. in the sale of a package of natural gas pipelines. Petrobras, as the Brazilian state oil company is known, has been marketing the sale of 49 percent of its stake in the pipelines, according to the people, who asked not to be identified discussing a private process. Mitsui is seen as a natural buyer of the assets because it’s already a partner with Petrobras on gas pipelines. Still, talks between the companies are at a preliminary stage. The oil company has 9,000 kilometers (5,600 miles) of natural gas pipelines, according to its website. Mitsui, Japan’s second-biggest trading house, has been active in Latin America’s largest economy, including a deal in December to buy a stake in gas distribution company Cia. de Gas do Ceara. Petrobras plans to divest about $14 billion in assets by the end of next year to meet core investment goals and start addressing the oil industry’s biggest debt load. (www.bloomberg.com)

May 6, 2015. Egypt has issued a five-year tender to lease a second LNG Floating Storage and regasification Unit (FSRU). The state gas board is expecting responses from the eight international companies it has sent the tender within a week. The FSRU will be Egypt's second as a first one operated by Hoegh LNG moored in Egypt in April 2015. Egypt is trying to cope with surging energy demand by diversifying its energy sources. (www.enerdata.net)         

May 11, 2015. Two years after having issued draft rules, South Africa will release regulations for shale gas exploration by June 2015 announced the Ministry of Mineral Resources. The South African Government was pressed by oil & gas companies that were waiting on the regulation to decide on their investments perspectives in the country. Several companies announced reconsidering investments due to volatile oil prices and delays in awarding licenses.

Shell, Falcon Oil and Gas in partnership with Chevron, and Bundu Gas have applied for exploration licenses in the Karoo region. Environmentalists are opposing the development of shale gas exploration activity using the hydraulic fracturing technique as it could cause huge environmental damage in the water-scarce region. It is expected to take around three years of exploration to determine if the Karoo reserves in South Africa could be commercially viable, before moving into possible production. (www.enerdata.net)      

May 11, 2015. The Switzerland-based chemicals company Ineos announced it has completed a deal with IGas, including the acquisition of a 50% interest in seven shale gas licences in the North West of England, 60% interest in three Petroleum Exploration & Development Licences (PEDL’s 145, 193 and EXL273) and a 50% interest in a further four licences (PEDL’s 147, 184, 189 and 190). In Scotland, Ineos will acquire IGas’ entire interest in PEDL 133 which will give the company 100% ownership of this asset. Ineos has the option to acquire 20% in two IGas East Midland shale gas licences (PEDL’s 012 and 200). The company will assume operatorship of PEDL’s 133, 145 and 193 and EXL 273 in phases. (www.enerdata.net)                

May 9, 2015. Tanzania plans to spend 12 billion shillings ($6 million) in the next fiscal year to buy land for the planned construction of a liquefied natural gas (LNG) terminal, raising hopes it is speeding up progress of the long-delayed project. The two-train onshore LNG export terminal, which the government says could cost up to $30 billion, has run into delays mainly due to complex land acquisition procedures and an uncertain legal and regulatory framework. Along with neighbouring Mozambique, Tanzania is in a race with Russia, Australia, the United States and Canada to build LNG export plants, aiming to exploit a gap in global supply that is expected to open up by 2020.

The terminal would be built in the small southern town of Lindi, located close to an offshore deep-sea region where huge natural gas discoveries have been made. Tanzania is estimated to have more than 53.2 trillion cubic feet (tcf) of gas reserves off its southern coast, but its energy sector has long been dogged by allegations of graft and other problems. Analysts said the graft accusations, coupled with delays in passing new gas legislation, are holding back the development of the sector.

British gas company BG Group, together with partners Statoil, Exxon Mobil and Ophir Energy, plans to build an LNG export terminal, expected to start operating in the early 2020s, but a final investment decision is only set for 2016. Royal Dutch Shell agreed to buy BG Group last month for $70 billion in the first large oil merger in more than a decade, giving the Anglo-Dutch company access to BG's multi-billion dollar projects in Tanzania. (www.reuters.com)

May 6, 2015. Iran sees $70-$75 per barrel as a suitable price for crude, Oil Minister Bijan Namdar Zanganeh said, as markets show signs of a partial recovery from last year’s collapse. Iran would start to boost crude output in 10 days if international economic sanctions against it are removed, Zanganeh said. Production would climb to 3.8 million barrels a day within six months and 4 million in less than a year, he said, enough to propel Iran to second-biggest in the Organization of Petroleum Exporting Countries (OPEC). Iran pumped 2.78 million barrels a day in April, data show.

More Iranian crude may threaten a price recovery with Brent crude rising 20 percent this year after tumbling 48 percent in 2014. Iran’s exports have dropped more than 60 percent because of the sanctions imposed over its nuclear program, Zanganeh said. Iran needs $200 billion of investment in its oil industry, with $70 billion of that for petrochemicals, Zanganeh said. (www.bloomberg.com)

 [INTERNATIONAL: POWER]

May 12, 2015. China National Nuclear Corporation (CNNC) has started to build the fifth unit (1,000 MW) of the Fuqing nuclear power plant in China's Fujian province. Consequently to the re-organisation of the Chinese nuclear industry commenced in 2012, it was decided that the fifth and sixth unit at Fuqing site will use the domestically-developed Hualong One reactor design, marking its first deployment. The company plans to export the reactor design around the world. (www.enerdata.net)         

May 12, 2015. Anglesea's coal-fired power plant will close after 46 years of operation on the Surf Coast, with 85 people to lose their jobs. The plant supplied 40 percent of Alcoa's power needs at its Point Henry smelter in Geelong. After the closure of the smelter last year, Alcoa was unable to find a buyer for the 150 MW power plant. Protesters call for the closure of the Alcoa coalmine and power station in June, 2014.

Energy and Resources Minister Lily D'Ambrosio said Alcoa's decision represented a sad day for its workers. The closure of the site, scheduled for August 31, was widely anticipated after Alcoa's Australian business shut down the Point Henry smelter in Geelong last August, leaving the power plant to struggle on as an independent supplier in the power market. (www.theage.com.au)

May 11 2015. Enel Green Power has revealed its 2015-2019 Strategic Plan that includes a total capital expenditure of €9.6 bn by 2019, of which €8.8 bn dedicated to growth, representing more than 60% increase on previous plan. This should result in power generation capacity addition of 7.1 GW by 2019, which 50% higher than the company's previous plan.

Over the next five years, Enel Green Power will continue to grow in Latin America, where the bulk of new growth investment amounting to €4.7 bn will be allocated mostly in Brazil, Chile and Mexico given their current potential for growth. (www.enerdata.net)

May 6, 2015. Bangladesh has yet again generated record power in a day. Power Development Board (PDB) said the power plants fed the national grid 7,681 MW. Only a day earlier, the power plants generated 7,658 MW. PDB estimated that power generation would be 7,850 MW against a demand of 7,700 MW, including 465 MW to be imported from India.

Bangladesh’s capability to generate power has increased threefold to 11,000 MW in the six years of the Awami League’s two consecutive terms. Power generation has also nearly doubled. On Sep 19, 2008, the highest power generation was 4,036 MW. The government is working on setting up a nuclear power plant and a base load power plant to upgrade Bangladesh to a middle-income country within 2021. (bdnews24.com)

May 11, 2015. Power has been restored in areas affected by typhoon Dodong after the National Grid Corp of the Philippines (NGCP) repaired a damaged transmission facility. NGCP said the Magapit-Sta. Ana transmission line in northern Luzon was back in normal condition.

The line tripped during the passage of the typhoon, affecting transmission services in the towns of Sta. Teresita, Gonzaga, Sta. Ana and Buguey in Cagayan province. NGCP is a private firm operating, maintaining and developing the country’s transmission network since 2009. It acquired the 25-year concession of state-owned National Transmission Corp. in an auction conducted by the Power Sector Assets and Liabilities Management Corp. in 2008. (www.bworldonline.com)

May 7, 2015. Australia is prepared to supply uranium to India under very strict control and safeguards to power its economy and the two countries are negotiating a deal to make it happen, Foreign Minister Julie Bishop has said. She said Australia has significant reserves of coal, uranium and gas and wants to export this energy capacity to the world. Australia's uranium reserves are the world's largest, with 23 percent of the total. She said Australia is committed to the reduction of global greenhouse gas emissions and support countries provide energy to some of their less or least developed areas in the form of electricity. (www.business-standard.com)

May 6, 2015. Centrais Elétricas Brasileiras SA (Eletrobras), Brazil's largest power holding company, is considering selling controlling stakes in several power distribution companies to focus on generation and transmission of electricity. Eletrobras, as the state-controlled company is known, could start the sales process this year. The distribution assets, especially in the poorer, more remotely populated north and northeast parts of the country, have often been a source of losses for the cash-strapped power company.

The move, if confirmed, would underscore President Dilma Rousseff's efforts to streamline the size of state companies, whose rapid growth of recent years have put public finances under pressure. By focusing on generation and transmission, Eletrobras is likely to invest more efficiently as money-losing distribution operations in some states have drained much of its capital for years.

Celg D, a distribution company in the center-west state of Goias that was acquired by Eletrobras, should be included in the sales process. Eletrobras is willing to sell controlling stakes in companies in the states of Alagoas, Piaui, Rondonia, Acre, Amazonas and Roraima, all located in the north and northeast regions. Eletrobras said the matter is still under evaluation by its board and that there is no decision yet about the destiny of the power distribution companies it controls. (www.reuters.com)

May 6, 2015. The World Bank Group’s Board of Directors has approved $200 million support for a regional transmission network to enable electricity trade among the western African countries of The Gambia, Guinea, Guinea-Bissau and Senegal. The fund will finance the construction of transmission lines to connect the electrical networks of the four countries and ground wires equipped with fiber-optic cables to improve public communications.

The cost of electricity generation in Nigeria, The Gambia, Guinea-Bissau, and Senegal is very high as a result of the region’s high dependence on expensive oil-based thermal generation. According to the bank, the support of the OMVG Interconnection Project will help countries in West Africa to change the energy mix away from thermal generation by connecting them to more sustainable and cost-effective energy resources such as Guinea’s 6,000 MW of hydropower potential.

Many inter-connector transmission lines have been built or are under construction and OMVG is the missing link to create the transmission backbone infrastructure of the West African Power Pool (WAPP). Completion of the OMVG represents a critical step towards interconnecting the WAPP network and will improve the use of existing power generation capacity and reduce power outages from Nigeria in the eastern sector of West Africa to Senegal. (www.ngrguardiannews.com)

May 12, 2015. Vice President of Nigeria Namadi Sambo has commissioned the 330kva power generating plant in Apir, Makurdi, Benue State with the charge on the people to provide security for the project. The Vice President said the plant, which is one of the National Integrated Power Project (NIPP) of the Federal Government, executed by the Niger Delta Power Holding Company (NDPHC), to turn around the boost power supply to the state. He intimated that the NDPHC has been effectively pursuing its mandate of implementing its robust power projects across the country under the NIPP with the one in Benue being part of it. Vice President revealed that the company under its first phase of projects has completed thermal generating plants and completed a total of 265 out of 296 distribution injection substations located nationwide as well as several other power stations across the country. He said that under the Phase Two mandate, the NDPHC is vigorously pursuing the hydro-power generation plant mainly in the northern axis of the country ensure a mix grid distribution. (www.ngrguardiannews.com)

May 6, 2015. The Detroit-based energy company, DTE Energy, received approval from the US Nuclear Regulatory Commission (NRC) for a license to construct and operate a new nuclear energy facility on the site of the existing Fermi 2 Nuclear power plant in Newport, Michigan, USA. The decision by the NRC caps a comprehensive, six-year process that examined the technical, safety and environmental aspects of the potential unit. DTE Energy has referenced the 1,600 MW General Electric Hitachi ESBWR (Economic Simplified Boiling Water Reactor) as the unit that would be built on the site. The ESBWR is an advanced design that the NRC certified in November 2014. The company has not committed to building the new plant, but will keep the option open for long-term planning purposes. (www.enerdata.net)

May 6, 2015. US investment banking firm Goldman Sachs is reportedly planning to divest its coal mines in Colombia as it faces opposition from locals over environmental issues. Goldman Sachs is in talks to sell the coal mines even at a loss. The banking firm's first Colombian coal mine, La Francia, was acquired in 2010 from Canadian Coalcorp Mining. The second mine was purchased in 2012 from Vale. Goldman operated the two mines under its Colombia Natural Resources unit, which recorded revenues of $66 mn in 2010. In 2013, the unit produced about 3.5 million tonnes of coal, approximately 4% of the country's entire output. The sales of the unit tripled to $200 mn in 2011, but then losses of over $200 mn has been reported by the business. The company stopped La Francia mine operations in early 2013 following a sub-contractor's move to end its agreement. (www.energy-business-review.com)

 [RENEWABLE ENERGY / CLIMATE CHANGE TRENDS]

May 12, 2015. Vikram Solar announced that it has successfully commissioned a 40 MW solar photovoltaic (PV) plant for IL&FS Energy Development Co. The plant, spread over 260 acres of land in Madhya Pradesh (MP), was installed within six months in two phases of 20 MW each, the company said. The project was awarded to IL&FS Energy Development by the Solar Energy Corporation of India as part of the Jawaharlal Nehru National Solar Mission run by the ministry of new and renewable energy. Vikram Solar said the plant uses the company made high-efficiency polycrystalline PV modules, in line with the national solar mission's aim to promote local production of solar components. (www.business-standard.com)

May 10, 2015. Realising the potential of solar energy, the three private power distribution companies in the city have drawn up elaborate plans to encourage domestic consumers to set up rooftop solar panels and earn money by selling the electricity to them. Reliance Infra-backed two BSES discoms, which already energised six rooftop solar 'net metering' projects, have decided to aggressively promote solar power across its area of operation and appointed team of experts to work on the initiative. A study by the Tata Power Delhi Distribution Ltd (TPDDL) has found that it could support generation of more than 400 MW of rooftop solar power through the company's commercial and industrial consumers in North and North West Delhi. To promote solar energy in Delhi, TPDDL has already invited techno-commercial proposals from reputed organisations for implementation of solar projects of tentative value of ` 120 crore in the current financial year. The initiatives by the three discoms came almost six months after Delhi Electricity Regulatory Commission (DERC) had directed them to put in place infrastructure to allow domestic consumers to supply solar energy to transmission grid from their rooftop solar panels and earn money. The DERC had told the discoms to upgrade their transmission networks so that people can sell excess power to them without any difficulty. The national capital has been facing severe power shortage during peak summer months and the power regulator is of the view that solar energy can bridge the gap between the demand and supply of electricity in the city. The power demand in the city has seen an annual increase of 8-10 percent in the last few years. (www.business-standard.com)

May 10, 2015. Punjab and Germany are all set to join hands for creating 'Renewable Energy Equipment Hub' in the state. Punjab has also sought help from Germany to harness the huge potential available in rooftop solar and biomass power. Indo German Energy Programme has proposed to facilitate linkage between Punjab and German Renewable energy sector. A delegation of Indo German Energy Programme, led by its Director Winfried Damm, called on Bikram Singh Majithia, Punjab’s New and Renewable Energy Minister and apprised him about the efforts being put in facilitating technology transfer as well as investment by German companies in the renewable Energy (RE) sector to India. Damm offered to facilitate linkage between Punjab and German renewable energy industry to create RE equipment hub in Punjab besides bringing in experienced German companies to execute high standard RE project in the state. Majithia assured the delegation that the State would extend all help to German Industry. Majithia requested the delegation to help Punjab in emerging state in these sectors as Germany had a strong presence and proven track record in both the sector. (economictimes.indiatimes.com)

May 8, 2015. Competition Commission of India (CCI) has cleared billionaire Dilip Shanghvi's proposed ` 1,800 crore stake buy in wind turbine maker Suzlon Energy. The deal, announced in February this year, would see Shanghvi acquiring at least 23 percent stake in Suzlon which has been grappling with tough business conditions. Suzlon has entered into definitive agreements with Dilip Shanghvi Family and Associates (DSA) for equity investments of ` 1,800 crore in the company. Post allotment, DSA wold have 23 percent stake in the wind turbine maker while the Tanti Family would have 24 percent shareholding. When the deal was announced in February, Suzlon Group Chairman Tulsi Tanti had said that support from Shanghvi and family would help in creating a long term sustainable value for the stakeholders. (economictimes.indiatimes.com)

May 8, 2015. Power distribution companies in Haryana will soon introduce a scheme where consumers will get a chance to generate solar energy, which will be adjusted against their regular electricity bills. The discoms will soon introduce Solar Rooftop Net Metering System, which will help cut down on power bills and save money as well as electricity. (economictimes.indiatimes.com)

May 8, 2015. Four companies, including Tata Power Solar Systems Limited, have bagged the EPC contract worth ` 1,779 crore from public sector NTPC Limited for setting up a 250 MW solar photovoltaic power project in Anantapur district of Andhra Pradesh. Of the 250 MW capacity, Tata Power Solar Systems, Bengaluru, has been awarded 100 MW works while the contract for 50 MW each was given to Lanco Solar Energy Private Limited, Gurgaon, BHEL, Delhi, and Sterling and Wilson Ltd, Mumbai, according to NTPC. The plant is expected to be commissioned in 12 months. (www.business-standard.com)

May 8, 2015. US-based SunEdison announced the acquisition of two renewable energy portfolios in India totalling 140 MW for undisclosed amounts. This comes soon after SunEdison and Adani said in January that they will invest $4 billion (` 25,600 crore) to build country's largest solar facility. SunEdison is among the world's largest renewable energy development companies. The two Indian acquisitions are part of a global initiative to acquire seven renewable assets in Brazil, China, Peru, Chile, South Africa, Uruguay and India. In all, through these combined transactions, it will secure 757 MW of operating projects and 1,918 MW of third-party, right of first offer projects, the company said. SunEdison announced that it had signed a definitive agreement to acquire an operating wind power plant generating 102 MW from Spain-based FersaEnergias Renovables, SA. (economictimes.indiatimes.com)

May 7, 2015. The Ministry of New and Renewable Energy has signed memorandum of understanding (MoU) with 12 countries during the last three years to enhance cooperation in the sector. Power, Coal and Renewable Energy Ministry Piyush Goyal informed the House that joint research work has been initiated by the National Institute of Solar Energy (India) and Fraunhofer Institut fur Solary Energiesysteme (ISE), Germany, in the area of solar and wind resource mapping. He further said that a joint research work has also been initiated with Centre for Development of Industrial Technology (CDTI), Spain, on wind energy forecasting and development of monitoring system for energy reception elements in solar thermal plants. (economictimes.indiatimes.com)

May 7, 2015. The Maharashtra government has plans to generate 14400 MW power from the non-conventional sector in the next five years. The state government is expected to announce its new renewable energy policy on May 12 which is likely to give thrust to solar and wind energy. Energy Minister Chandrashekhar Bawankule said Prime Minister Narendra Modi has set a target to generate 175 GW power from conventional and non-conventional sectors. Of this, it has decided to produce 100 GW from solar power sector only. The state government had approved its previous solar policy in 2008. The policy term has ended in 2013 and since then there is no policy existing in the state for non- conventional energy. According to Bawankule, out of targeted 14400 MW power generation, highest of 7500 MW will be produced through solar and 5000 MW through windmill. Bagasse in sugar mill will produce 1000 MW power whereas 400 MW will be produced by small hydropower projects. Wastage from agriculture will produce 300 MW. The land, to be acquired for windmill project, will obtain the status of non-agriculture land. The windmill project will be exempt from No Objection Certificate (NOC) from Maharashtra Pollution Control Board (MPCB). The policy has suggested no electricity bill will be charged to the sugar mill if the mill will consume the power units generated from its own Bagasse power generation project. Small hydro projects will allow subsidy of ` 50,000 per kilo watt to a maximum of` 1 crore to attract private partners in this field. (dc.asianage.com)

May 7, 2015. Climate change and consequent warming of the oceans poses multiple threats to fisheries sector, said Vice-Chancellor of Kerala University of Fisheries and Ocean Studies B. Madhusoodana Kurup at a technical session on the impact of global warming on fisheries and aquaculture at the International Conference on Global Warming and Food Security in Ras al Khaima, the UAE. He said that recent data showed decline in availability of fish off the Indian coasts. This could be attributed to the consequences of global warming and climate change and their impact on the ocean eco system. (www.thehindu.com)

May 6, 2015. The government said its central pollution watchdog —Central Pollution Control Board (CPCB) — has not conducted any specific assessment of pollution caused by thermal power plants around their sites, but has so far asked 20 of them to comply with environment standards. Directions under Environment (Protection) Act, 1986 have been issued to 14 power plants, while concerned state pollution control boards were asked to direct six power plants to comply with the environmental standards under Air (Prevention and Control of Pollution Act), 1981 and Water (Prevention and Control of Pollution) Act, 1974, Environment Minister Prakash Javadekar said. The minister said CPCB issued directions to the plants on the basis of the findings of inspections carried out by its environmental surveillance squad (ESS). The power plants which have been issued directions include Paras and Koradi thermal power stations in Maharashtra; Patratu, Tenughat, Chandrapura power plants in Jharkhand; Kutch Lignite in Gujarat; Durgapur and Kolaghat in Bengal; Rayalseema power plant in Andhra Pradesh, and Chhabra thermal power station in Baran district of Rajasthan. The thermal plants also include the ones at Korba (East), Korba (NTPC), Korba (West), Amarkantak (Lanco Power) in Chhattisgarh; Talcher (NTPC) in Odisha, Parichha, Anpara and Obra power stations in UP, as well as, Muzaffarpur and Kahalgaon Super Thermal (NTPC) power plants in Bihar. Javadekar said the directions were in different phases of compliance. He also informed the House about various steps taken by the central government to contain pollution from the power sector. (economictimes.indiatimes.com)

May 11, 2015. Amber Rudd was named to serve as the U.K. Cabinet minister in charge of energy and climate, easing concerns that the Conservative government would quickly backtrack on pledges to reduce fossil-fuel pollution. Rudd was promoted from a junior post at the Department of Energy & Climate Change where she spoke frequently in support of the previous government’s policy backing renewables as a way to cut global warming emissions. Her appointment brings a Conservative to the leadership of the department for the first time since 1997. While David Cameron’s party extended support for solar and wind power, it also has promised to halt the spread of onshore wind farms that some members of the party see as a blight on rural landscapes. Rudd faces the triple challenge in her new role of ensuring Britain’s lights stay on while reducing carbon emissions and keeping energy bills down after the cost of electricity and heating became an electoral flash-point. She must also balance the views of her party, where some members support shale gas fracking and others worry about the impact on the countryside. On the issue of climate change, she’s firmly in the camp of those who want action to rein in emissions, a view that in November she said she traces to former Prime Minister Margaret Thatcher. (www.bloomberg.com)

May 11, 2015. Apple Inc. and the World Wildlife Fund will work together to manage as many as 1 million acres of forests across China as Chief Executive Officer Tim Cook arrives in Beijing to announce new environmental initiatives. Apple is funding the five-year project, to be managed by the global charity, to plant trees and implement environmental standards that use less land and water -- and produce less pollution -- to make paper. Solar farms in California, hydro-electric turbines in Oregon and data centers in Europe are among environmental projects announced by the world’s most valuable company. Lisa Jackson, the former U.S. Environmental Protection Agency chief who now heads Apple’s green initiatives, is pushing to power company facilities with renewable energy and reduce impact from its supply chain. Apple also named more of the local partners in its 40 MW China solar-power project. They include Leshan Electric Power Co. and Sun Power Corp. Apple plans to expand its renewable-energy projects to manufacturing plants in China. Neither the WWF nor Apple will buy forests. The fund cooperates with farm owners to develop sustainable methods for managing their land, WWF China said. The two sides aim to increase the amount of land that’s certified by the Forest Stewardship Council for following environmental and social responsibility standards, the WWF said. Paper produced from such forests bear the council’s label. (www.bloomberg.com)

May 7, 2015. German credibility is on the line in a showdown pitting government pledges to cut carbon emissions against lignite-fired power plants in Europe’s biggest economy. With Germany trailing its self-defined goal of cutting carbon dioxide emissions 40 percent by 2020, Chancellor Angela Merkel’s government plans to force lignite and coal plants to buy more emissions allowances. Energy companies and industry lobby groups are alarmed over the government’s plans. European government and industry leaders are meeting this week in Berlin to discuss energy security. Policy makers are trying to balance the pledge to cut carbon emissions and shore-up imports of lower and moderate emission gas and oil imports from Russia, the Middle East and North Africa. High emission coal and lignite are Germany’s most abundant indigenous energy resources and produce about 26 percent of the country’s power. The German government’s proposal aims to “strengthen” the EU emissions trading system, Economy Ministry documents showed in March. Power plants would be on the hook to cut an additional 22 million metric tons of carbon dioxide by 2020. (www.bloomberg.com)

May 6, 2015. The amount of heat-trapping carbon dioxide in the atmosphere averaged more than 400 parts per million globally for the first time ever in March, according to U.S. government measurements. The recording was based on air samples taken from 40 sites around the world, the National Oceanic and Atmospheric Administration said. It’s the highest level of the gas in at least a million years. Increasing CO₂ emissions are blamed for global climate change that causes stronger storms, melting Arctic ice and rising sea levels, according to scientists. This is the first time the emissions have reached that level on a global basis -- sites in the Arctic and Hawaii recorded CO₂ concentrations over 400 ppm in 2012 and 2013, respectively. Concentrations of CO₂ are rising at about 2 to 3 ppm a year. The United Nations has said that greenhouse gases should peak at no more than 450 ppm this century to maximize the chance of limiting the global temperature rise to 2 degrees Celsius. (www.bloomberg.com)

May 6, 2015. European Union (EU) negotiators reached an agreement to bring forward to 2019 a reform to help curb a surplus of permits in the world’s biggest emission market. Representatives of EU governments, the European Parliament and the European Commission decided to start a stability reserve in the EU emissions trading system two years earlier than originally proposed, according to Latvia, which holds the EU rotating presidency. The planned reserve would automatically absorb allowances in the EU cap-and-trade program if the surplus exceeds a fixed limit, and release them to the market in the event of a shortage. That would ease an excess of permits that led to a 65 percent drop in the price of emissions since 2008. The glut of allowances is above 2 billion, according to EU estimates. Under the deal, the amount corresponding to 12 percent of allowances in circulation would be deducted from auctions and placed in the reserve for 12 months starting each September until the accumulated surplus falls below 833 million. In the first year, 8 percent of allowances will be put into the reserve between January and September. If the excess drops below 400 million, the EU will return 100 million allowances. One permit gives the right to emit one metric ton of carbon dioxide. EU Climate and Energy Commissioner Miguel Arias Canete said the deal was very good and fair. The commission will now focus its efforts on preparing a post-2020 overhaul of the ETS and plans to present it before the summer break in August, he said. The starting date and scope of the reserve kept member states divided for more than a year. Germany and the U.K. were pushing for an introduction as early as 2017, while Poland headed a group of countries opposing the start of the reform before 2021. The Czech Republic and Lithuania left the Polish-led coalition, paving the way for an early start. Negotiators agreed to strengthen the reform by placing in the reserve 900 million allowances that were delayed at government auctions in 2014-2016 and permits not used by emitters before 2020, the Latvian presidency said. (www.bloomberg.com)

May 6, 2015. Prime Minister Nawaz Sharif inaugurated the country’s first solar power plant, the latest fruit of increasingly close cooperation with China and a step towards an electoral promise to end chronic power shortages. The Quaid-e-Azam Solar Park in Bahawalpur produces 100 MW of power, which will be increased by next year. The plant, owned by the Punjab government and built by China’s Tebian Electric Apparatus Stock Co Ltd, took a year to build at a cost of $190 million, government documents show. Spread over 500 acres of sun-baked Bahawalpur district, is a link in an ambitious plan for a China-Pakistan Economic Corridor, unveiled by China’s President Xi Jinping last month. The plant is the first stage of a project that will eventually cover 10,000-plus acres of the central Cholistan desert and add 1,000 MW to the national grid, making it one of the biggest solar parks in the world. Pakistan has signed investment agreements with China to build various gas, coal and solar energy projects that will generate 16,400 MW of electricity, roughly equivalent to the country’s entire current capacity. (tribune.com.pk)

May 6, 2015. Spanish renewables and engineering group Abengoa has received a $200 mn engineering, procurement and construction (EPC) contract from Fulcrum BioEnergy, to construct a biofuel refinery in Nevada, US. Planned to be built in the Tahoe-Reno Industrial Center, the Sierra BioFuels plant will adopt gasification technology to convert municipal solid waste (MSW) into renewable syncrude, which will be upgraded to more than 10 million gallons of jet fuel annually. The facility, which is planned to commence operations in the third quarter of 2017, is expected to process over 200,000 tons of garbage from the local landfill. Abengoa will manage engineering, design and construction activities in the development of the project. (www.energy-business-review.com)

 

 

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