MonitorsPublished on Aug 21, 2015
Energy News Monitor | Volume XII; Issue 10

[Looking back to move forward]

                             “The reformer’s contention is that the end-use consumer should patiently wait for ‘efficiency to trickle down’ through the ‘structural layers’, in the meantime pay heavily for the inadequate and low quality power being supplied or give up the subsidy being enjoyed, whichever may be the case. That ‘top-down’ and ‘trickle down’ methods cannot work in the Indian context, even a casual observer of the country’s economy would testify. It is more so with relation to supply of electric power because this is a commodity that is constantly required in adequate quantity and good quality to pursue even basic economic activities…”

Energy News


If stressed discoms can be turned around in 3 years it would change what could not be changed in 30 years!                                  


A green tax on coal washing will incentivise use of unwashed coal!


CAG report on Delhi Discoms endorses the suspicion that the private sector is only good at appropriating rents!    




·          Looking back to move forward


·          Subsidised & Non-subsidised Electricity Scenario in India



·          ONGC to invest $7 bn to develop KG-D5 O&G block offshore India

·          ONGC said to seek $900 mn stake in Rosneft Vankor field

·          OIL targets first LNG cargo from Mozambique block by 2020

·          Iran reassures India over development rights of gas field

Transportation / Trade………………

·          RIL sells 1st crude cargo on Platts Dubai

·          India to clear dues worth $6.5 bn to Iran in tranches: Finance Secretary

·          Cairn seeks oil swaps to get higher margins

·          India, Nepal set to sign agreement for oil pipeline: Rae

·          AAI in talks with oil companies to set up single entity for supplying fuel

Policy / Performance…………………

·          India's fuel demand rises 5.52 percent in July y/y

·          Gas prices to dip below $4.2 per unit from October 1

·          DBT scheme for LPG help save ` 150 bn in a year: PM Modi

·          India to benefit as oil prices fall more after China devalues Yuan

·          Cairn revives demand to review cess on Rajasthan oil



·          GMR begins operation of 370 MW Vemagiri power plant

·          Krishnapatnam project to be fully operational soon

Transmission / Distribution / Trade……

·          Power Grid to commission ` 120 bn Assam-Agra line

·          Discoms made money from meters: CAG

·          Siemens gets to modernise power distribution in 3 states

·          CIL yet to sign fuel supply pacts for 2.5 GW

·          DERC shows way out of costly power pacts

·          Coal auction hits troubles, 2 mines go off bidding

Policy / Performance…………………

·          India plans to resume UMPP auctions in October 2015

·          Green tax on coal washery projects

·          CESC average Electricity tariff for 2015-16 remains flat

·          India plans to sell 10 percent in coal-mining company CIL

·          Odisha govt approves scheme for providing 24x7 power supply

·          Stressed discoms to turn around in 3 yrs: Power Minister

·          India's coal bed methane output projected to quintuple by 2017-18

·          UP govt wants Centre to suspend power bundling policy

·          KSEB to revise cost estimate

·          India to have excess coal if govt hits fuel production target

·          West Bengal plans power ombudsman for each district



·          Total abandons shale gas exploration at well in Denmark

·          Brazil regulator tells Shell, partners to develop two oilfields as one

·          Oman’s daily oil output tops 1 mn barrels for first time

·          Russia's Rosneft plans to increase oil output

·          Glencore to cut $790 mn off value of oil deal last year

·          Brazil Manati field holds 13.5 bn cubic meters of gas: QGEP


·          South Africa needs to restructure refinery plan on weak PetroSA

·          US refinery outages give European gasoline late boost

·          Saipem consortium awarded $1.5 bn contract for Kuwait refinery work

Transportation / Trade…………

·          Angola to ship most crude in four years to meet Asian demand

·          Shell in framework LNG deal with private Chinese firm

·          Strong Dubai crude oil trades skew Asia price benchmark

·          Russia sales outlook worst in BRIC markets on oil, recession

·          OPEC oil supply reaches three-year high

Policy / Performance………………

·          Shell receives final permit for Arctic oil drilling

·          Cairn agrees six-well drilling plan with Senegal

·          South Africa’s ANC backs oil-law plan in economic policy review

·          Total on track to start Bulgaria offshore drill in early 2016

·          Canadian NEB approves Bear Head LNG's export license

·          Algeria calls for non-OPEC output cut to stop oil price fall

·          UAE open to meeting Indian oil demand

·          Israeli ministers approve blueprint for natural gas development

·          OPEC may boost oil output to record with Iran back amid glut

·          Britain changes rules to fast-track shale gas permits

·          Malaysia, Brunei reach agreement on overlapping blocks



·          Gilgel Gibe III hydropower project starts test operations

·          Engie said to plan sale of over $1 bn in Asian coal plants

·          ContourGlobal acquires 405 MW hydropower plant in Armenia

·          Iran, Spain firms sign power generation deal

Transmission / Distribution / Trade……

·          Duke Energy to launch Foothills transmission line route in October

·          ABB to support substations upgrade project in Saudi Arabia

·          Three Chinese consortia bid for hydropower project in Romania

Policy / Performance………………

·          South Africa’s ANC voices caution on nuclear power plan

·          Kuwait will invest US$10 bn in power projects

·          Ghana adopts Nuclear Regulatory Bill

·          Brazil's govt plans to invest US$53 bn in its power sector by 2018



·          Indraprastha power station to be converted into solar plant

·          Gujarat farmers to be roped in to tap solar energy

·          NLC plans to set up 100 MW solar power plant

·          Shell Foundation seeks partnerships in clean energy

·          GIC plans to buy assets of Greenko for ` 16.5 bn

·          CIAL all set to become India’s first green airport

·          West Bengal asks Centre to partially fund 1 GW solar power storage system

·          OMCs start bio diesel supply at select outlets

·          Govt approves MoUs with France & Mongolia on renewable energy


·          Google launches Project Sunroof to calculate rooftop solar cost in US

·          RWE commissions power-to-gas plant in Ibbenbüren, Germany

·          Trina Solar boosts forecast as profit reaches four-year high

·          SunEdison, Goldman agree to form $1 bn clean-power fund

·          BrightSource plans 810 MW solar CSP project in northwest China

·          JA Solar begins production of 60-cell double-glass solar modules

·          US EPA to propose rules to curb methane emissions from O&G sector

·          Turkey plans 2 GW wind power auction in 2016

·          Egypt seeks bidders to develop 500 MW of renewable energy projects

·          Florida leads multistate suit to block EPA air quality rules

·          Australia plans 26-28 percent cut in CO2 emissions from 2005 levels by 2030

·          SkyWolf develops integrated solar and wind turbine technology





Looking back to move forward

Following the article ‘Privatizing Power Sector NPAs’ that showed that efficiency in the sector has reduced with the increase in participation of the private sector, we are publishing an article written more than a decade ago by M.G. Devasahayam that highlights the futility of pushing reforms based on the assumption that growth in private sector participation will automatically translate into efficiency trickling down and will transform the sector. The recent revelations of the CAG on the partially privatised distribution companies of Delhi also show that efficiency automatically does not trickle down from the private sector.

Power Sector Reforms – Advocating an ‘End-Use Efficiency’ Approach

M.G. Devasahayam                                                                                                                                   (10-07-2000)                                                                                    


hen power sector reforms in India were being deliberated at the World Bank some years ago, there were two schools of thought as to the basic approach to be adopted in initiating and pursuing the reform. The issue was whether it should be ‘structural’ oriented or ‘end-use efficiency’ oriented. Managers who knew the Indian realities suggested that end-use efficiency should lead the process, supported by structural reforms. But the consultants and ‘reform specialists’ pitched in for the structural approach with end-use efficiency as an add-on. The USAID sponsored study on “The role of Planning in India’s Restructured Power Sector” and the report submitted by US consultants in mid-’96 suggested a ‘structural’ approach. The report suggested creation of ‘independent organisations’ with ‘unbundled functions’ replacing the State Electricity Boards [SEB]. These organisations would then be turned into ‘privately owned firms’ which would provide much of the growth of the power sector since “the quest for profit will motivate their activities, and they will have a greater commercial orientation than most government-owned organisations”. End-use efficiency was sought to be achieved by a ‘trickle down’ process passing through the layers of restructuring, unbundling, privatisation and tariff rationalisation.  

This report spawned the ‘management model’ approach, which the Government of India, Ministry of Power got endorsed from the Chief Minister’s Conference in late 1996. Since then the five ‘structural modules’ have become the mantra and the yardstick for appraising SEB Reforms. The extent of financial and technical assistance by multilateral development banks [World Bank, Asian Development Bank] and agencies for the reform process also depends upon the rigidity with which these modules are being adopted and implemented. In recent times (keep in mind that this refers to the early 2000s even though it is true even today) even the GOI, Ministry of Power and its organisations like Power Finance Corporation have started applying this criteria by segregating States into ‘reforming’ and ‘non-reforming’ ones!  The cardinal elements of a ‘structural’ approach to reforms are: dismantling and unbundling of SEBs to form several companies centered around regions or functions such as Generation, Transmission and Distribution; these unbundled organisations being turned into privately owned firms whose commercial orientation, driven by ‘quest for profit’, will bring about efficiency; fixing of tariff on cost-plus basis and its continuous upward revision every year and elimination of all subsidies to the farming and other sectors. In short, it was prescribed that the massive inefficiencies of SEBs will be removed through physical restructuring and these entities made viable and profitable by a free wheeling market mechanism.

As an ideal ‘model in theory’ this cannot be faulted. But in practice such a straitjacket approach is bound to flounder due to several fundamental flaws. To start with, if cost-plus tariff, upwardly revised every year, could be levied on all categories of consumers and subsidies eliminated across the board, then every SEB, including the ones who are terminally sick, could turn around and start earning the mandated 3% Rate of Return. There would then be no need for the elaborate reform process being pursued at the cost of several billion dollars. But unfortunately the ‘Indian Infrastructure reality’ with its enormous wastages and inefficiencies does not allow this to happen. The ongoing reform process cannot make much headway unless the core issues of inefficiencies and wastages in the system are addressed first and foremost. Continuing with the inefficiencies and wastages along with its perpetrators and benefactors could only result in the reform process being sabotaged from within.

This is precisely what is happening and the reasons are not far to seek. Power sector has four broad stakeholders, three positives and one negative. The positive ones are the majority end-use consumers meaning the public, the Government consisting of political and administrative decision-makers and the Utility employees. The negative stakeholders are the vested interests from among these three groups who are opposed to any reform in any form. Unfortunately, these vested interests, though in the minority, carry lot of clout because of their capacity to obfuscate, bully and bluff. With the positive stakeholders confused and unconvinced about the objectives of the reform and its benefits in the near and long term, it is a field day for the negative stakeholders to spread doubts about the very need for reforms.

It is said that in politics as in marketing ‘truth is not the truth, perception is the truth’. The perception of power sector reforms among the positive stakeholders today is one of breaking down institutions, spending massive amounts of money to reduce jobs, clamouring for continuous tariff hike and elimination of subsidy without any visible, tangible or perceivable benefits. World Bank experts who prepared the Haryana Reform document concede this lucidly, “the reform process will not lead to immediate results: efficiency improvements will come when the investment measures are implemented: reduction in losses and improvement in quality of supply will come when the physical system is rehabilitated and the distribution business is restructured and privatised”. In short, the reformer’s contention is that the end-use consumer should patiently wait for ‘efficiency to trickle down’ through the ‘structural layers’, in the meantime pay heavily for the inadequate and low quality power being supplied or give up the subsidy being enjoyed, whichever may be the case.

That ‘top-down’ and ‘trickle down’ methods cannot work in the Indian context, even a casual observer of the country’s economy would testify. It is more so with relation to supply of electric power because this is a commodity that is constantly required in adequate quantity and good quality to pursue even basic economic activities. The Industrialist, if he is to pay higher tariff, would demand copious, uninterrupted and high quality power here and now. The agriculturist, if he were to forgo his subsidies and pay a reasonable price, would insist on getting good quality power when he wants, where he wants and in the manner he wants it. Same applies to all categories of consumers whether commercial, residential and institutional. These end-use consumers are not willing to go on paying high tariff and give up benefits while waiting indefinitely for things to improve and ‘efficiency’ to trickle down. Any reform process that does not satisfy this basic requirement of the end-users will not be perceived in a positive manner, no matter what kind of sophisticated restructuring that are taking place.

The market driven reform measures with excessive emphasis on tariff increase and subsidy elimination that are being implemented now do not enjoy a positive perception in the public mind. As the Haryana Reform document concedes, “End-users and other stakeholders will be ready to accept the reforms and the consequences provided that they perceive real prospects for an improved situation”. But this is not happening and may not happen as long as ‘structural dismantling’ continue to lead the reform process with end-use efficiency remaining only as an ‘embellishment’ (those following power sector reforms will know that the author’s prediction has unfortunately come true). Even the Electricity Regulatory Commissions set up to moderate the reform implementation with a bias towards the end-user are being perceived more as ‘tariff commissions’. As long as public perception is not in favour of reforms in its present form, there could hardly be sufficient political will to implement the same since ‘politicians are but creatures of public opinion’. This is the true cause for the extreme reluctance by several states in pursuing reforms despite many incentives and the tardy progress even in states that had opted for reforms. The situation has come to such a pass as to provoke stringent criticism of “slow progress” in Indian power sector reforms recently by Mr. James Wolfensohn, President of World Bank, who had specifically mentioned “uneconomical running of power plants” and high “line losses” as the main reasons for the poor performance. Incidentally these two are the ‘monumental realities’ of ‘inefficiency and wastage’ in the Indian power sector that should have been confronted ‘first and foremost’.

It is not that the reform experts were not aware of these realities. To quote again from the Project Appraisal Document of the Haryana Power Sector Restructuring and Development Programme, “The implementation of the reform programme will face strong opposition. It will impinge on large and powerful vested interests. The reform measures will change the framework under which staff and Government officials have been operating: fears about employment generate opposition to change. The political opposition and vested interest groups have used and will continue to use measures like privatisation of distribution and tariff adjustments as points of contention”. Despite these apprehensions expressed at the very commencement of reforms, no worthwhile strategy was evolved to overcome these hurdles and package reforms in an efficiency oriented and consumer friendly manner so as to appeal to the ‘positive stakeholders’ who constitute the majority. This would have effectively checkmated the numerically smaller ‘negative vested-interests’. Instead, ‘structural reforms’ were pushed through using the lure of soft funding and grants from World Bank and multi-lateral agencies which the free spending, fund starved states could not resist.

Though the above apprehensions are still valid, even more so, and the reforms are facing rough weather everywhere, the reformers and reform implementers seem to be persisting in the same path. In this context it will be worthwhile to quote from the recent World Bank note ‘Meeting India’s future power needs’:

·         “India is moving from a publicly owned, vertically integrated, monopolistic power system with highly distorted prices for fuels and electricity to a more liberal system with market prices, competition, a greater role for the private sector, and commercial incentives”

·         “When the tariff structure is changed to reflect the economic costs of production, higher prices for electricity in the residential and agricultural sectors will dampen demand"

World Bank reformers continue to insist on agricultural consumers paying ‘economic cost’ for power obviously to bring about economic efficiency in the utilities. A necessary condition for economic efficiency is that the price of product equals its long run marginal social cost [LRMSC], which reflects the social scarcity values and also internalise the environmental costs. As per research undertaken by the Madras School of Economics for the World Research Institute, the LRMSC of electricity supplied to agriculture in India is ` 7.62 per kWh [capital cost ` 6.24 and energy cost ` 1.38]! This is due to the excessively long and inefficient T & D system with the entire attendant wastage, ‘theft and dacoity’, to quote the late Union Power Minister Rangarajan Kumaramangalam. The moot question here is “Will it ever be feasible to make farmers pay this ‘economic cost’ for electricity supplied to them when the current average price per kWh for this category across the country is only ` 0.217 which is far below even the price of ` 0.50 per kWh decided at the meeting of State Power Ministers in 1994?”                                                                                                                                           

Similarly, abolition of subsidy to agriculture is easily said than done because despite being skewed, misused and badly mismanaged, agricultural subsidies have social, historical and economic roots. Indian agriculture is a combination of 3S-Subsistence, Subsidy and Surplus. Of these subsidy is the catalyst, which has lifted Indian agriculture from subsistence level to a marginally surplus situation. Despite this, agriculture is still suffering from adverse terms of trade vis a vis other sectors of the economy. The disparity ratio between farm and non farm incomes have been continuously widening leading to a skewed economy favouring the minority industrial/trading community at the expense of agriculture dependant two third of the population. Considering all aspects, the first High Powered Committee on Agricultural Policies and Programmes set up by Government of India in 1990 made the following observation:

            “Besides other services, farmers also need ‘social support’ for their occupation, which is one of the hardest, yet most essential for survival of mankind. In India the services available to farmers are inadequate, inefficient, and ‘social support’ lacking and often negative in the sense of being exploitative”. This is as relevant today as it was a decade ago.

Under the circumstances a purely market driven reform policy will continue to flounder in the public and political platforms unless accompanied by tangible and perceivable efficiencies in end-use delivery of power. Besides, in a low performing and low efficiency situation, promoting reforms through a tariff-centered approach to private participation can erect barriers to improve services to low-income groups where the levels of service are already dismal. If the intention is to make utilities viable through a cost-based tariff mechanism, each consumer segment should be made to pay its LRMSC per unit i.e. EHT and continuous process industries ` 2.30; HT industries ` 2.90; LT industry ` 6.37; LT agriculture ` 7.62; LT domestic ` 5.96 and LT commercial ` 6.06. With the EHT and HT industries already paying saturation level tariff, there is not much scope for cross subsidisation since large industries would quit the grid and go captive if pressed too hard. Besides, enforcement of such warped and distorted tariff mechanism is neither feasible nor desirable from political, economic and social points of view.

So, what is the remedy? How does power sector become an asset to the economy instead of being a drag? How do power utilities become viable and vibrant? How do SEBs deliver adequate and good quality power to the various categories of consumers? And how does this core infrastructure attract investment and modern technology from far and near without depending on artificial props like escrow and counter-guarantee? The possible answer is to make mid-course corrections in the reform process and focus on areas that are in the backburner now:

·         End-use Efficiency should lead the reform process with major investments directed towards the various components of Energy Efficiency. The heavily subsidised high wastage agricultural and residential sectors should be targeted to achieve major energy savings through a judicious blend of Agricultural Demand Side Management [ADSM] and Residential Energy Efficiency [REE], which can be converted into Utility cash flow. 

·         The market centered mindset relying on tariff increase and subsidy elimination to achieve Utility viability need to be replaced by a ‘Tariff & Subsidy Management’ approach wherein the present Indian realities will be taken into account and factored in to realise the twin objectives of utility viability and end-use efficiency.

·         Restructuring of SEBs need to be redefined to ring-fence’ inefficiencies and wastages and convert them into opportunities instead of liabilities. For this new organisations and mechanism should be structured around ‘revenue streams’ instead of physical entities like generation, transmission and distribution. Broadly there are three categories of consumers-high tariff paying, low tariff paying and no tariff paying. Utilities could augment their cash flow by providing value-added services to the high paying category, by rationalising the tariff for the low paying category and by effecting huge energy savings in the no paying category. By capturing and selling the energy thus saved to the high paying category, utilities could substantially augment their cash flows and become commercially and financially viable while supplying quality power to end-use consumers. 

To bring this point home succinctly, let us draw on the findings of the “Andhra Pradesh Distribution Upgrade and Agricultural DSM Procurement Project”[sponsored by CIDA] and similar technical project study carried out in Haryana [sponsored by USAID] and quantify them in cash terms. These projects have established an energy saving potential of 60 to 65% by implementing ADSM projects involving four components in a specified area:

i] Conversion of low-voltage distribution system to high-voltage, single-phase supply could reduce distribution losses by roughly 65% and virtually eliminate theft of energy.

ii] Installation of automated load control equipment to continue to improve SEBs ability to control the supply of electricity in rural areas.

iii] Replacement/Upgrading, rectification and retrofitting of agricultural pumpsets could reduce pumpset electricity consumption by roughly 50%

iv] Measurement and Verification of energy savings through metering of feeders and pumpsets could quantify the energy saved for commercial review and decision-making.

In the prevailing socio-economic milieu in India any Infrastructure Reform should proceed on the twin track of structural and end-use efficiency and make real and perceivable progress on product/service delivery and quality before any major exercise is undertaken to enhance tariff or eliminate subsidies. This is particularly true of the ongoing comprehensive and high cost Reforms in the power sector where the stated objective is to make the SEBs and Utilities strong and viable enough to attract investment from far and near. The single track ‘structural route’ has failed to achieve this so far and even props like escrow have not worked since there is just not enough cash to go around. As the Chief Executive of a leading American Power Utility who is very optimistic on India said in a presentation recently, “escrow is at best a temporary comfort, not even a solution. If investment is to flow to India’s power sector the only way is to improve utility viability leading to the eventual emergence of a competitive energy market”.

End-use efficiency measures briefly described above could bring about this in the near term of 4 to 5 years. With a national average of 31.5% of total power sales supplied to agriculture there could be huge savings across the country and substantial augmentation in utility cash flow and viability. In the tariff-centered approach, even with the best of will it may not be possible to levy a tariff of more than ` 0.75 to 0.80 per kWh for agricultural consumers. But under the end-use efficiency approach the gains are much larger. More importantly this approach would be acceptable to the positive stakeholders and this can effectively counter the vested interests that will have no legs to stand. The bonus would be a boost to good water management and environmental spin-offs.

ADSM could be supplemented by an REE drive targeting the distribution transformer, load points, meter and the equipments/devices consuming electric energy. Experts feel that a well conceived and implemented REE initiative could yield about 15 to 20% energy savings and correct the power factor of consumer to 0.9 lag which will have a salutary effect on grid quality and reliability. Agriculture [31.5%] and domestic [17.5%] sectors together consume about 50% of the electricity sold in the country but the returns are very low resulting in perpetual adverse cash flow for the SEBs and Utilities. Adopting tariff increase and subsidy elimination route would take decades to make these sectors contribute positively towards utility viability. In the meantime enormous quantity of electricity generated and transported at huge cost and damage to the environment would continue to get pilfered, stolen and wasted. If this continues private investments will also dry up over a period of time since according to the American developer, “Distribution sink in India is inefficient, loss making, unaccountable, subject to political interference and into which power sector investments are disappearing. And the reform process, whose primary goal is to boost investment, is driven merely by restructuring and unbundling at the top and not integrating end-user efficiency of power delivery”.  

It is time the reformers and the decision-makers took a hard look at the realities on the ground, what the reforms have achieved in relation to these realities and in what direction it is proceeding. It is time for review and change of course to end-use efficiency and put in place appropriate institutional and financial mechanism to make it possible. The sooner it is done the better. There is no place for dogmas or fixed formats. The only consideration should be the objectives and goals of reform “to enable India’s power sector to emerge as a viable, credible, vibrant and professional entity, delivering adequate, cost effective and good quality power to it’s consumers”, and how best to achieve these.

NOTE: The author, formerly of the IAS, has the experience of working in Power and Transport Utilities. He was also a Member of the High Powered Committee on Agricultural Policies and Programmes set up by Government of India in 1990 and had anchored the core chapter in the Report. An Economist by education and training, he is a keen student of India’s Power Sector Reforms and has written extensively for ‘Hindu Business Line’, ‘Hindu Survey of Indian Industry-1999’ and ‘The Tribune’ on the subject.                                           Views are those of the author

Author can be contacted at [email protected]

For latest data, you may please refer to Data Insight given at page no. 9.


Subsidised & Non-subsidised Electricity Scenario in India

Akhilesh Sati, Observer Research Foundation

Five Year Plans

Electricity Consumption in GWh (Million Unit)



End of 1st Plan Period



End of 2nd Plan Period



End of 3rd Plan Period



End of 4th Plan Period



End of 5th Plan Period



End of 6th Plan Period



End of 7th Plan Period



End of 8th Plan Period



End of 9th Plan Period



End of 10th Plan Period



End of 11th Plan Period



2012-13 (12th Plan)



2013-14 (12th Plan)



2014-15 (12th Plan)





* - Provisional,         E - Estimated,      ^ - Projected


Note: Domestic & Agriculture Sector are taken as Subsidised

Industrial, Commercial, Traction etc. are taken as Non-subsidised sector


Source: Compiled from ‘Growth of Electricity Sector in India from 1947 to 2015’ by Central Electricity Authority                                                          




ONGC to invest $7 bn to develop KG-D5 O&G block offshore India

August 14, 2015. Oil and Natural Gas (ONGC) is planning to develop its KG-DWN-98/2 block (KG-D5) oil and gas (O&G) block in Krishna-Godavari basin off the east coast of India with an investment of up to $7 bn over the next three years. The company expects to commence gas and oil production at the block in 2018 and 2019, respectively. The company is preparing to submit the draft field development plan to the upstream regulator Directorate General of Hydrocarbons for approval. The KG-D5 block, which divided into the northern discovery area and southern discovery area, is expected to have peak oil production capacity of 77,000 barrels per day and up to 17 million cubic meters of natural gas per day. (

ONGC said to seek $900 mn stake in Rosneft Vankor field

August 13, 2015. Oil & Natural Gas Corp (ONGC) is seeking through its overseas unit to buy a stake in Russia’s second-largest oil producing development from OAO Rosneft. ONGC Videsh Ltd (OVL) is in discussions to purchase a share of the Vankor oil field in East Siberia. The New Delhi-based company is seeking to pay $900 million for the stake, which will secure about 3.5 million metric tons of oil a year (about 70,290 barrels a day), and expects to sign a deal as early as next month. Vankor, which started production in 2009, is one of the largest oil fields in Russia, with recoverable reserves estimated at about 500 million tons. Vankor pumped about 40.2 million barrels of oil in January to March (about 447,000 barrels a day), according to the company. ONGC plans to spend ` 11 trillion ($169 billion) by 2030 to add reserves in India and overseas and reverse a decline in output from aging domestic fields. OVL, which spent $6 billion in the past two years buying assets outside India, plans to more than double its output from overseas fields in four years. (

OIL targets first LNG cargo from Mozambique block by 2020

August 12, 2015. Oil India Ltd (OIL) expects to receive the first cargo of liquefied natural gas (LNG) from Mozambique's offshore Area 1 Block in the first quarter of 2020, the company said. The company has a 4 percent stake in the block. OIL said the Carabobo Basin asset in Venezuela was producing 16,000 barrels per day (bpd), and the rate could jump to 90,000 bpd by 2017. It has a 3.5 percent stake in the block. (

Iran reassures India over development rights of gas field

August 12, 2015. Iran has said the development rights for its Farzad-B gas field will be available to Indian companies after concerns in New Delhi that cash-rich European firms could clinch the contract. A consortium headed by ONGC Videsh Ltd (OVL), the overseas investment arm of Oil and Natural Gas Corp (ONGC), in 2008 discovered the Farzad-B gas field in the Farsi offshore block. The consortium, which also include Oil India Ltd (OIL) and Indian Oil Corp (IOC), has been seeking development rights for the field. An Indian delegation that went to Iran in the last week of July was told Tehran was working out a new production sharing contract, OIL said. Iran has asked Indian firms to submit a development plan for the Farzad-B gas field, OIL said. Tehran had offered a draft contract, known as the Iran Petroleum Contract (IPC), to Indian companies. The new contract for the block is a mix of production sharing and service contract, OIL said. The delegation also renewed talks over the purchase of Iranian liquefied natural gas (LNG) once sanctions against the country are lifted and Tehran sets up a liquefaction facility, Indian Oil Minister Dharmendra Pradhan said. India signed a deal with Iran in 2005 to buy 5 million tonnes a year of LNG but the contract was never implemented. (

Transportation / Trade…………

RIL sells 1st crude cargo on Platts Dubai

August 17, 2015. Reliance Industries Ltd (RIL) sold its first cargo during an Asia crude price assessment process, traders said. The Indian refiner will deliver 500,000 barrels of Upper Zakum crude to Chinaoil after completing the sale of 20 Dubai lots during the Platts Market on Close (MoC) process, they said. RIL made its first appearance on the MoC this month, selling Dubai partials alongside Unipec, the trading arm of Asia's largest refiner Sinopec, and Royal Dutch Shell. (

India to clear dues worth $6.5 bn to Iran in tranches: Finance Secretary

August 17, 2015. India will clear $6.5 billion of dues it owes to Iran for oil import in tranches, with the first installment going out as early as in a week, Finance Secretary Rajiv Mehrishi has said. Mehrishi led a high level delegation to Iran to discuss payment options, indicated that the payments can be in a combination of US dollar or euro and Indian rupees. Since February 2013, refiners like Mangalore Refinery and Petrochemicals (MRPL) and Essar Oil have been paying 45 percent of payment due on purchase of crude oil from Iran in rupees through UCO Bank, Kolkata. The remaining has been accumulating, pending finalisation of a payment route and mechanism. They had paid nearly $3 billion in six installments through a limited payment channel following start of nuclear talks between the Western world and Iran. The outstanding has since climbed to over $6.5 billion. Essar Oil owes $3.34 billion, MRPL ($2.49 billion) and Indian Oil Corp (IOC) ($581 million) to Iran. RBI will detail out the banking channels as well as payment schedule with its Iranian counterpart. HPCL-Mittal Energy Ltd (HMEL) owes $97 million and Hindustan Petroleum Corp Ltd (HPCL) another $29 million. Besides, about ` 17,000 crore was lying in Iranian account with UCO Bank. (

Cairn seeks oil swaps to get higher margins

August 16, 2015. Cairn India Ltd has proposed a swap deal to skirt an oil export ban, by selling its high-way Rajasthan crude oil to foreign firms at higher rates and in return supplying an equivalent quantity of oil. The nation's biggest onshore crude oil producer wants the government to allow refiners like those based in Singapore and Japanese utilities interested in high-wax crude to pick up the Rajasthan crude and replenish the exported volume with no loss to any of the parties.

Cairn India has sought government approval for a tripartite agreement wherein Barmer crude oil will go to the international market where it will get better price than the ones realised locally. The firm getting access to low-sulfur crude oil will supply equivalent quality of crude oil to Indian refiners. Shipping the Rajasthan oil to customers who are best equipped to process the low-sulfur crude will help Cairn India get a premium versus a 10-12 percent discount on Brent prices that local refiners, including Indian Oil Corp (IOC), Essar Oil and Reliance Industries Ltd (RIL), currently pay.

Cairn India had previously sought approval to export the oil but the government had rejected it as the nation is 80 percent import dependent to meet its oil needs. The company says it is not seeking a permission for exports but only a swap arrangement. The three-way deal would essentially mean Cairn India will export Rajasthan oil but the deficit at its local customer will be made up by sourcing the commodity from an overseas supplier. The company believes the pricing of Barmer crude oil at a discount to Brent has led to USD 1.94 billion loss to all stakeholders, including the government, on over 282 million barrels of oil produced since 2009. Most Indian refineries are designed to process cheaper, high-sulfur crude, while that produced from the Rajasthan fields has low sulfur content. The unique nature of the Barmer crude makes it difficult to optimise it in Indian refineries and so the crude is being sold at a discount. At present, Essar and RIL buy bulk of 170,000 barrels per day of output from Rajasthan. (

India, Nepal set to sign agreement for oil pipeline: Rae

August 15, 2015. India and Nepal are set to sign an agreement for the construction of the much-touted cross border oil pipeline for supplying petroleum products to the land-locked Himalayan country, India's Ambassador to Nepal Ranjit Rae said in Kathmandu. Rae said that if the two countries work together and exploit the natural resources at their disposal, economic prosperity and poverty alleviation can both be attained. The Indian government had approved signing of the agreement to lay an oil pipeline from Raxaul in Bihar to Amlekhgunj in Nepal to supply petrol, diesel and Aviation Turbine Fuel and the re-engineering of Amlekhgunj Depot and allied facilities. Indian Oil Corp (IOC) has agreed to foot the ` 200 crore cost for constructing the 41-km pipeline, about 39 km of which would lie in Nepal, in exchange for Nepal committing to buy products for at least 15 years. Nepal depends on India for meeting all of its fuel requirements. (

AAI in talks with oil companies to set up single entity for supplying fuel

August 12, 2015. The Airports Authority of India (AAI) has started discussions with state-owned oil companies to set up common infrastructure for the supply of aviation turbine fuel (ATF) at the airfields it operates. Such a facility could also be used by carriers to import fuel. Under the proposed arrangement, common storage facilities would be set up for use by oil marketing companies for a fee. Airlines will have a choice of fuel suppliers, which should spur competition and result in better prices and services. The facility is proposed to be set up by a new company, which will be 37.5% owned by Indian Oil and 25% owned by AAI. Bharat Petroleum Corporation and Hindustan Petroleum Corporation will own 18.75% each. Currently, each oil company has its own infrastructure at AAI-operated airports, while private airports such as those in New Delhi and Mumbai have a common facility for supplying fuel. According to some estimates, a shared facility could lower fuel costs by anywhere between 5% and 10%. Analysts do not share the optimism on the benefit of the initiative and want AAI to improve conditions at smaller airports. Fuel accounts for as much as 50% of an airline's operational expenses in India. Value added tax on ATF varies in each state and ranges from zero to 30%. The government's decision in February 2012 to allow airlines to import fuel hasn't taken off in the absence of infrastructure to transport ATF to airports and storage facilities. (

Policy / Performance………

India's fuel demand rises 5.52 percent in July y/y

August 17, 2015. India's fuel consumption rose an annual 5.52 percent in July, driven by higher gasoline sales which reflected a surge in passenger vehicles sales, government data showed. Fuel consumption, a proxy for oil demand, totalled 14.03 million tonnes last month, data posted on the website of the Petroleum Planning and Analysis Cell showed. India ended subsidies on diesel sales in October and since then regular changes in retail prices have narrowed the pricing gap with gasoline, boosting demand for petrol-driven cheaper vehicles. Local diesel sales last month declined to the lowest since October at 5.7 million tonnes, a fall of 0.55 percent from a year earlier, the data showed. Diesel demand also waned as market-driven prices ended its role as a substitute to fuel oil, demand for which rose 25.4 percent in July. Last month improved monsoon rains and electricity supply also dented sales of diesel, widely used by farmers for running gensets to irrigate farm lands. Sales of gasoline, widely used for transportation, surged 12.9 percent from a year earlier, depicting an 11.43 percent rise in passenger vehicle sales. Local cooking gas sales surged an annual 10.4 percent on improved supplies aimed at curbing use of kerosene, demand for which fell 2.52 percent. Naphtha consumption rose about 15.3 percent as a new plant, operated by ONGC Mangalore Petrochemicals Ltd, started operation in southern India. (

Gas prices to dip below $4.2 per unit from October 1

August 16, 2015. Natural gas prices in India may, from October 1, fall below $4.2 per unit, a rate that was used last year to devise a new pricing formula to incentivise domestic exploration. Using prevailing price in gas surplus nations like the US, Russia and Canada, the government had in October last year announced a new pricing formula that led to rates rising by about 33% to $5.61 per million British thermal unit (mmBtu) for a period up to March 31, 2015 from the long-standing price of $4.2. The rates, on net calorific value (NCV) basis, dropped to $5.05 per mmBtu for six month period beginning April 1, 2015. On gross calorific value (GCV) basis, the rate will be about $3.8 per mmBtu as compared to $4.66 currently.

The October 1 price cut will be the second reduction in rates ever - the first being on April 1. While the cut will impact the revenue of producers like Oil and Natural Gas Corp (ONGC) and Reliance Industries, it will bring gains for users in the power and fertiliser sector in the form of lower feedstock cost. As per the mechanism approved in October 2014, price of domestically produced natural gas is to be revised every six months using weighted average or rates prevalent in gas-surplus economies of US/Mexico, Canada and Russia to incentivise exploration in deep-sea that wasn't viable at $4.2 rate. Indian gas price is calculated by taking weighted average price at Henry Hub of US, National Balancing Point of UK, rates in Alberta (Canada) and Russia with a lag of one quarter.

So, the rates for April 1 to September 30 period were based on average price at the international hubs during January to December 2014. The October 1, 2015 to March 31, 2016 rate will be based on average of prices during July 1, 2014 to June 30, 2015. The current price of $5.61 per mmBtu is already among the lowest in Asia Pacific. China pays explorers $11.9 per mmBtu rate for new projects while Indonesia and the Philippines price the fuel at $11 and $10.5, respectively. Gas from offshore fields in Myanmar, where Indian firms ONGC and GAIL have stake, are sold to China for $7.72. Thailand prices gas from new projects at $8.2 per mmBtu. The only nations with lower rates than prevailing price are Vietnam ($5.2) and Malaysia ($5). (

DBT scheme for LPG help save ` 150 bn in a year: PM Modi

August 15, 2015. The programme to pay cash subsidy to cooking gas consumers directly in their bank accounts has helped save about ` 15,000 crore by stopping black marketing and diversions, Prime Minister (PM) Narendra Modi said. Modi said about 20 lakh people have voluntarily given up subsidy on LPG, helping widen the reach the scarce fuel. The Direct Benefit Transfer (DBT) on LPG, which has been recognised by the Guinness Book of World Records as the largest cash transfer programme in the world, has eliminated “middle-men and black marketers” and ensured the fuel is delivered to right people, he said. Since the launch of DBTL, now named PAHAL, domestic LPG all over the country is sold at market price. Households get cash subsidy in their bank accounts to make good the difference between old subsidised rate and market price.

Out of 15.65 crore active domestic LPG consumers, 13.8 crore have joined the DBTL and are getting subsidy in their bank accounts. The scheme was launched in 54 districts on November 15, 2014, and extended to all over the country from January 1, 2015 with a view to cut diversion and subsidised fuel being consumed by unintended segments like restaurants and other commercial establishments. LPG subsidy payout from Union Budget in 2014-15 was ` 40,591 crore as against a dole of ` 52,231 crore in 2013-14, a saving of ` 11,640 crore. Modi said he had requested the well-off people who can afford to pay market price, to voluntarily give up their subsidy to help extend its reach to the most needy. Middle class families and teachers are among the people who have left subsidy. Assuming that each of these consume an average of 8 cylinders per annum and at the average subsidy rate of ` 200 per bottle, the saving amounts to about ` 320 crore. Presently, a household is entitled to receive subsidy to buy up to 12 cylinders of 14.2-kg each every year. Cash advance is transferred into the beneficiary account on first enrollment and another installment is given the moment it is used to buy a LPG refill. (

India to benefit as oil prices fall more after China devalues Yuan

August 13, 2015. Indian consumers can expect fuel prices to decline as crude oil prices fall more tracking the devaluation of the Chinese currency even as Organization of Petroleum Exporting Countries (OPEC) continues to pump in more, helping the country save big bucks on energy imports. China, the world's second-biggest consumer of oil, devalued its currency yuan for the second consecutive day to support the slowing Chinese economy, aggravating concerns that energy demand from the country would fall more, adding to the glut in the market. While demand continues to decline, OPEC, which accounts for 40 percent of world's crude oil output, has been pumping in more oil after Iran restored output after international sanctions were lifted. Rating firm ICRA estimates that for every $1 per barrel decline in crude prices, India saved ` 6,500 crore on the import bill. Analysts said LNG prices may soften too, giving relief to Indian consumers who have long-term contracts which offer most expensive prices in Asia. While global energy majors are cutting capital expenditure, Indian state-run oil firms have lined up investments of over ` 76,565 crore on capital expenditure for 2015-16, up 5% on year. Of this, explorer ONGC alone would invest ` 36,250 crore. The fall in crude prices have improved their cash position, giving them a stronger position to invest more. (

Cairn revives demand to review cess on Rajasthan oil

August 12, 2015. Cairn India has once again demanded a review of the cess being levied on its Rajasthan oil field output. While maintaining that the production sharing contract (PSC) for Rajasthan is silent on cess, Cairn and its joint venture partner in the block ONGC, want the Government to reduce the cess to 2,500 a tonne from 4,500 a tonne. The joint venture proposes to approach the Ministry for Petroleum & Natural Gas shortly.

The Government levies cess on domestic crude oil production as a duty of excise. According to the company, the cess of 4,500 a tonne was imposed in the 2012-13 Budgets when the crude price was over $100 a barrel. But the crude price has since dropped significantly. Cairn’s net profit for the first quarter of the current fiscal was 834.98 crore and the cess paid was 691 crore. The cess will result in estimated revenue impact of $2.5 billion for the life of the field. When the Government had doubled the cess amount Cairn had approached the then Prime Minister’s Office seeking review as it was only the Rajasthan block production sharing contract which was materially affected by the increase. While the Petroleum Ministry had then agreed that it would adversely affect Cairn, it had left the private sector explorer to fight its own battle. NELP (New Exploration Licensing Policy) PSCs are exempted from cess. For most other blocks, offered before the licensing rounds and producing crude oil, like Ravva and Panna-Mukta-Tapti joint venture fields, cess is fixed at 900 a tonne. (



GMR begins operation of 370 MW Vemagiri power plant

August 13, 2015. GMR Infrastructure Ltd has commenced the operation of its 370 MW GMR Vemagiri Power Generation Ltd's gas-based project at Vemagiri in Andhra Pradesh (AP). The project commenced operation under the 'Scheme for utilisation of stranded gas-based power plants' as launched by Government of India in March 2015. The plant is operating at 95 percent plant load factor (PLF) at present thereby generating 350 MW and supplying power to AP Transco. (

Krishnapatnam project to be fully operational soon

August 13, 2015. The 1600 MW (800x2) Krishnapatnam thermal power project of AP Genco is set to be fully operational for supply of power to the grid and the necessary transmission network has also been commissioned. The commissioning of the project, backed 70 percent domestic coal and 30 percent imported, would significantly boost the power supply situation in the State, according to AP Genco. As a part of the Andhra Pradesh Government’s move to increase the generation capacity, the expansion project of 800 MW third unit at Krishnapatnam and another 800 MW unit, the eighth unit at the Vijayawada Thermal Power Station would be taken up. The tenders for these two projects are now under process for supplies and contractors, he told Business Line. Referring to the power demand-supply situation in Andhra Pradesh, the State was able to meet the demand of about 157-160 million units (MU) per day on an average. However, this has come down to about 140 MU per day due to low temperatures and lower demand now. (

Transmission / Distribution / Trade…

Power Grid to commission ` 120 bn Assam-Agra line

August 18, 2015. Public sector Power Grid said the ` 12,000 crore transmission line between Assam and Agra having 6,000 MW capacity will be commissioned by month-end. A consortium of BHEL and ABB was given the order for the supply of equipment for the transmission line. The planning of the project was started in 2006-07 and its execution took place in 2012, PGCIL said. The high capacity high voltage direct current (HDVC) corridor shall integrate the North-Eastern region with other regions of the country to facilitate smooth and reliable power transfer giving rise to stable national grid, PGCIL said. The very nature of control power flow of the HVDC interconnection provides additional flexibility in Grid operation thereby improving various grid parameters, PGCIL said. The link will act as a highway from North-Eastern region to rest of the country and will play a significant role in the hydro potential in the (North-Eastern) parts as well as lead to socio-economic development of India as a whole and the region in particular, PGCIL said. (

Discoms made money from meters: CAG

August 18, 2015. Electricity meters in Delhi homes could well capture the reality of the national capital's privatization of power distribution with the CAG audit pointing to an array of anomalies and exaggerations around these humble meters. Following complaints from consumers, Delhi Electricity Regulatory Commission (DERC) had formed a committee in 2003 to examine the quality of meters. Based on the committee's report, DERC directed discoms that meters manufactured by TTL and Elymer should be replaced on priority. The report said government schools, hospitals and other institutions were over charged by discoms. However, it is in the business of electricity meters that several bizarre twists were seen. Only meters put to use and installed at the consumers' premises should be included as fixed assets (capitalized) on which discoms are allowed returns. The CAG audit found that as on March 31, 2013, BRPL had capitalized 22.10 lakh meters while there were only 18.49 lakh consumers. The number of consumers intimated by the company to DERC differed widely from the number of consumers as per the billing data furnished to the audit. Meters removed from consumers' premises are auctioned as scrap. In the list of discarded assets produced to the audit by BRPL, it showed 9.96 lakh meters to have been discarded between 2005-06 and 2011-12. However, from the meter utilization data, the audit found that 14.41 lakh meters were actually removed from consumers' premises. Therefore, 4.45 lakh meters valued at ` 58.39 crore remained unaccounted for. In BYPL, 16.94 lakh meters were capitalized while the number of consumers was only 12.89 lakh. TPDDL showed that 11.93 lakh new meters were installed during between 2008-09 and 2012-13 while only 3.83 lakh new consumers were added during this period. The audit said in BYPL, an unwarranted burden of ` 65.24 crore was placed on consumers because of the discrepancy in meters. In BRPL, the unwanted burden on consumers because of meters was ` 63.06 crore. The audit found that the cost of replacing meters within the warranty period was borne by the discoms and capitalized. For example, ` 19.33 crore was borne by BRPL, instead of the manufacturers, and passed on to the consumers. Similarly, BYPL replaced 1.12 lakh defective meters and the cost of ` 12.09 crore was not recovered from the manufacturer but passed on to consumers. Similarly, TPDDL placed a burden of ` 27.54 crore on consumers. The audit found that the discoms delayed installation of KVA meters which were meant to improve consumption efficiency. (

Siemens gets to modernise power distribution in 3 states

August 17, 2015. Siemens said it's modernising electricity distribution network in three states - Punjab, Uttarakhand and Haryana - with Smart Grid solutions at a total cost of ` 75 crore. The objective of these projects is to improve quality and availability of power supply to residents and reduce the downtime in the event of a blackout in the entire grid. As part of the modernisation, Siemens will implement its Spectrum Power network control system and equip the grid with SCADA/DMS functions (Supervisory Control and Data Acquisition/Distribution Management System) for monitoring and control.

The company will execute the project for three utility providers -- Punjab State Power Corporation, Uttarakhand Power Corporation, and Dakshin Haryana Bijli Vitran Nigam. For Maharashtra State Electricity Distribution Company, Siemens is equipping power distribution grids of eight cities with turnkey monitoring and control systems (SCADA/DMS). This contract was also awarded as part of the Indian government's energy development programme. In Maharashtra, the SCADA/DMS systems implemented by Siemens improve availability of the grids and increase reliability of power supply. (

CIL yet to sign fuel supply pacts for 2.5 GW

August 16, 2015. Coal India Ltd (CIL) is yet to enter into fuel supply pacts with power plants for 2,560 MW generation capacity. CIL had been directed to sign supply pacts with power plants for total generation capacity of 78,535 MW to ensure fuel availability. The supply pacts could not be signed due to various reasons such as clarification of tapering linkages, approval for change of name of the company, refusal of company to sign cost plus agreement and clarification on block allocation. Tapering Linkage is short-term coal linkage provided to coal consumers.

Of the 1,08,000 MW capacity, the government had in 2013 approved signing of fuel supply agreements (FSAs) in respect of 78,535 MW capacity power plants which were already commissioned by then or were likely to be commissioned by March 31, 2015. Government is considering a policy for coal linkage auction and has sought comments from stakeholders on the draft auction methodology it has prepared. An Inter-Ministerial Committee (IMC) was set up in January to consider various models, including auctioning of coal linkages/LoAs (Letter of Assurances) through competitive bidding as the selection process and to recommend the optimal structure that would meet the requirements of all the stakeholders. (

DERC shows way out of costly power pacts

August 14, 2015. Discoms finally have a way out of purchasing "costly" electricity from central sector plants as the Delhi Electricity Regulatory Commission (DERC) has directed them not to renew power purchase agreements (PPAs) which are lapsing in the near future. Agreeing to the stand taken by Delhi government, the regulator said that they concur with the discoms that these PPAs contribute to higher tariffs. Since there is no exit clause, power companies will have to wait for the agreement to lapse. The directive could be part of the tariff order scheduled to be announced early next month. The commission is under immense pressure not to hike electricity tariffs and has already hinted that such a step may not be taken. PPAs with three central sector plants—Anta, Auraiya and Dadri—lapsed recently, but the discoms renewed them without DERC approval. This led to the commission denying adjustment of power purchase costs from these stations to the discoms in its order in June. The PPA with Rajghat power plant will lapse soon, with Singrauli to follow in the next few months. Discoms said that getting out of the PPAs is no easy task. The power ministry said that Delhi could not be allowed to surrender PPAs till alternate buyers were found. Delhi government had written to the Union power ministry saying they wanted to surrender 2200 MW from central sector stations and asked that it be re-allocated to other needy states. The ministry has not yet formally replied to the proposal. (

Coal auction hits troubles, 2 mines go off bidding

August 12, 2015. Coal auctions ran into legal tangles with the government deferring bids for one mine in Jharkhand where giants like Hindalco, Vedanta and Jindal Steel and Power Ltd (JSPL) were in the fray, while another block was withdrawn from the ongoing third round of bidding. The government deferred the auction of Chitarpur coal mine in Jharkhand because of a court case. The other coal block - Parbatpur Central Coal Mine in Jharkhand - has been withdrawn from the process on representation that it contains gas. The date of e-auction of Chitarpur Coal Mine, the notice said, will be intimated later. Companies like Hindalco, JSPL and Vedanta were in the fray for Chitarpur coal mine after qualifying technical bidding. Firms like JSW Steel, RashtriyaIspat Nigam and SAIL were in the fray for Parbatpur Central mine. (

Policy / Performance………….

India plans to resume UMPP auctions in October 2015

August 18, 2015. The central government of India plans to resume the auction of Ultra Mega Power Projects (UMPPs) in the next two months and is finalising the proposed UMPPs to be offered. Under the new norms, the proposed UMPPs will have two special purpose vehicles (SPVs), one for the land and coal blocks (leased out to the bidders for 30 years) and the other to own requisite regulatory clearances (transferred to the successful bidders). The Ministry of Coal has deallocated three coal blocks attached with the proposed Bedhabahal UMPP in Odisha, namely Meenakshi, Meenakshi-B and Dipside, that had been awarded to Odisha Integrated Power and that will be transferred to another special purpose vehicle called Odisha Infra Power, attached to the Odisha UMPP. The Ministry plans to propose five UMPPs, including the Odisha UMPP and the Cheyyur UMPP in Tamil Nadu. So far, the government has identified land in Banka (Bihar), Deogarh (Jharkhand) and Etah (Uttah Pradesh), along with two additional sites in Odisha to develop UMMPs.   (

Green tax on coal washery projects

August 17, 2015. The State Pollution Control Board (SPCB) has proposed levy of environment cess at the rate of ` 10 per tonne for standalone and pithed coal washery projects. The proceeds would go to the Odisha Environment Fund. The minimum size of a coal washery is likely to be pegged at one million tonne per annum (mtpa). All coal washery plants would be based on automation. Water levy on coal washery projects would be three times the normal water rate if the developer uses fresh surface water. Such units would not be permitted to use ground water. The state government would allow establishment of coal washery in the premises of sponge iron plants or integrated steel plants only if such plants have FBC (fluidised bed combustion) boilers or CBFC (circulating fluidised bed combustion boilers) to consume the rejects generated from the washery and use it for power generation. Since washery rejects are often dumped in the open that causes water and air pollution, it has been proposed that the washeries should mandatorily enter into an agreement with a power generator who will use 100 percent of these rejects. Establishment of coal washery plants beyond a certain distance would not be allowed. (

CESC average Electricity tariff for 2015-16 remains flat

August 17, 2015. RP Sanjiv Goenka Group flagship company CESC Ltd's average tariff for 2015-16 remains unchanged. CESC said that average tariff for 2015-16 remained same at ` 6.97 a unit as cleared by state regulator. West Bengal State Electricity Regulatory Commission has cleared the tariff for 2015-16. CESC had asked for a tariff of ` 7.55 a unit during their multi-year tariff petition filed earlier. (

India plans to sell 10 percent in coal-mining company CIL

August 17, 2015. The Indian government plans to sell a 10% stake in the country's largest coal-mining company Coal India Ltd (CIL) through a stock market auction. The state owns a 78.65% interest in the group and expects to raise US$3.7 bn from the sale of the 10% stake in CIL, as part of a broader privatisation plan expected to raise up to US$11 bn. (

Odisha govt approves scheme for providing 24x7 power supply

August 14, 2015. In an effort to provide 24x7 quality power supply to the people in and around the state capital of Bhubaneswar, the Odisha government has approved a ` 1,500 crore State Capital Region Improvement of Power System (SCRIPS) scheme to be implemented in five years. A proposal in this regard got state Cabinet's nod. The Cabinet meeting, chaired by Chief Minister Naveen Patnaik, has decided to spend the money over a five years timeframe from 2015-16 to 2019-20. (

Stressed discoms to turn around in 3 yrs: Power Minister

August 14, 2015. Power Minister Piyush Goyal has said that the government is in active dialogue with the discoms on turnaround plans and there will be a noticeable changes in the situation of stressed utilities in the next three years. The combined debt of the power distribution companies (discoms) is over ` 3 lakh crore. Faced with acute financial stress, many of these discoms are unable to buy power. He said that the Financial Restructuring Plan (FRP) which was originally introduced in April 2012 and implemented in October 2013, had actually not changed the situation on the ground. In an attempt to restore power purchasing capacity of the debt ridden discom and also to enable banks to recover their loans, the Cabinet Committee on Economic Affairs had approved the scheme for Financial Restructuring of state distribution companies (Discoms) in September 2012. (

India's coal bed methane output projected to quintuple by 2017-18

August 13, 2015. India's coal bed methane (CBM) production, currently a little over one million standard cubic meters per day (mscmd), is envisaged to reach 5.77 mscmd in 2017-18. The current level of production of CBM is 1.07 mscmd. The production of CBM is envisaged to reach 5.77 mscmd in 2017-18, Power and Coal Minister Piyush Goyal said. He said that of the 33 coal blocks offered by the petroleum ministry for CBM exploitation, 8 blocks have reached the development stage, of which only one block has started commercial production, while 4 others are producing incidental CBM. Finance Minister Arun Jaitley had in his budget 2015-16 speech said the government was preparing a note for approval by the cabinet committee on economic affairs (CCEA) that seeks to amend the CBM policy to boost production. The amendments being sought would allow exploration and exploitation from areas under coal mining leases allotted to public and private companies. Moreover, contractors would be allowed to sell gas based on price bidding, without restriction by any allocation priority. The amendments also seek put in place a mechanism for resolving the issue of overlap of CBM blocks with coal, oil or gas fields. India has 92 trillion cubic feet of CBM reserves, spread over 26,000 sq km of coal-bearing areas. (

UP govt wants Centre to suspend power bundling policy

August 13, 2015. Uttar Pradesh (UP) Chief Minister Akhilesh Yadav has requested Prime Minister Narendra Modi to suspend Union Power Ministry's decision to bundle power generated by coal-based units of NTPC with its renewable energy. In his letter, Akhilesh Yadav has said that he has come to know that to increase renewable energy the central government was installing new solar power generation units. (

KSEB to revise cost estimate

August 12, 2015. With the Expert Appraisal Committee (EAC) for River Valley and Hydroelectric Projects clearing the 163 MW Athirappilly Hydro Electric Project, the Kerala State Electricity Board (KSEB) will soon revise the project estimate. KSEB said that the proposal will be submitted to the State government for administrative sanction after revising the estimate. The question of cost overrun and the expenditure for generating power from the project could be ascertained after the revision. A member of the KSEB director board said the process of revising the estimate may take two months. The project cost was estimated as ` 570 crore when it was prepared nearly a decade ago. The board will also have to prepare a detailed project report after the revision. (

India to have excess coal if govt hits fuel production target

August 12, 2015. India is likely to see an oversupply of 400 million tonnes of coal if the government achieves its target of producing 1.5 billion tonnes of the fuel by 2020. The nation will, however, not be able to export this volume as international market for coal will be almost dead by then, experts from US-based Institute of Energy Economics and Financial Analysis (IEEFA) said. According to IEEFA's estimate, the power demand in India will rise by almost 60 percent in 2022. In absolute terms, this will be around 50 billion units, touching 131.8 billion units per annum by 2022. The government has adopted a multi-pronged approach to equate demand, including capacity addition of 175 GW of renewable energy by 2022, sustained reduction in the aggregate technical and commercial (AT&C) losses, and increased usage of energy efficient lighting systems as well as three-fold rise in coal production. IEEFA estimates that reducing AT&C losses by just 1 percent per annum could deliver 11.4 billion units of power savings, equating to a whopping 23 percent of India's required increase in net electricity generation. If energy-efficiency initiatives can deliver a net electricity savings of just 1 percent per annum, those likewise could reduce required electricity generation growth by 7.5 billion units or 15 percent of the total required. The plan to install 75 GW of solar power capacity by 2021-22 alone can deliver 11 billion units of power or 22 percent of the required electricity demand increase. (

West Bengal plans power ombudsman for each district

August 12, 2015. West Bengal Electricity Regulatory Commission (WBERC) has decided to appoint an ombudsman for each district to allow power consumers to get their grievances redressed at the local level. WBERC said that the commission, with the help of CESC and West Bengal State Electricity Distribution Company, would educate consumers on their rights in respect of power consumption. Meanwhile, West Bengal aims to generate about 100 MW from rooftop solar units over the next two to three years. (



Total abandons shale gas exploration at well in Denmark

August 18, 2015. French oil major Total has abandoned exploration work at its shale well Vendsyssel-1 in northwestern Denmark, the Danish Energy Agency said. The well, which is 80 percent owned by Total and 20 percent by Denmark's state oil company Nordsofonden, confirmed the presence of gas but the thickness of the layer was smaller than expected. (

Brazil regulator tells Shell, partners to develop two oilfields as one

August 18, 2015. Brazil's National Petroleum Agency (ANP) ruled that Royal Dutch Shell and its Qatari and Indian partners need to treat oil and gas fields in the Parque das Conchas area as a single deposit, Shell said, a move that could increase taxes on output. Shell owns 50 percent of Parque das Conchas, its main Brazilian asset. Qatar's state oil company Qatar Petroleum owns 23 percent and India's ONGC owns 27 percent. The ANP's decision to treat the fields as a single deposit applies to two of Shell's four fields in the block, also known as BC-10, for which it holds exploration and production rights. The decision comes as Shell prepares to expand production in the block that now produces 50,000 barrels per day of oil equivalent and take over the Brazilian properties of Britain's BG Group Plc, which it is buying.

Shell said the ANP has approved its development plan for the Nautilus field but also stipulated that it must be joined with the Argonauta field. The ANP previously made a similar decision with the Lula and Cernambi fields and seven other fields in the Parque das Baleias area, all operated by state oil company Petroleo Brasileiro. Petrobras ended up challenging the ANP's previous decisions, which are still tied up in court and in international arbitration. Shell's production expansion plans at Parque das Conchas is expected to boost output by 30,000 barrels a day (bpd). The company said it would not comment on the ANP's decision until its management had discussed it. The Brazilian Oil Institute said the companies operating in Brazil's oil exploration industry are very concerned about the ANP's decision. (

Oman’s daily oil output tops 1 mn barrels for first time

August 15, 2015. Oman, the biggest oil producer in the Middle East outside OPEC, said its crude and condensate production in July exceeded 1 million barrels a day for the first time. In July 2015 the Sultanate broke a new record, the Oil and Gas Ministry said in a report. Production rose 0.5 percent from June because of efficiency achieved through maintenance work. Daily crude output was 894,000 barrels and condensate -- a light oil extracted from gas -- accounted for 107,000 barrels, it said. Exports dropped 13% from a month earlier to 797,000 barrels a day as local refiner Orpic increased its intake of crude, according to the report. All shipments were to Asia, with China and Japan keeping first and second place among Oman’s customers, accounting for about 69 percent and 15 percent of sales respectively. The rest was sold to Taiwan, Singapore and Thailand. Oman started reversing an oil output decline in 2008 by making new discoveries and using technology to improve recovery of oil from aging fields, according to the U.S. Energy Information Administration. Production rose from 710,000 barrels a day in 2007 to 960,000 barrels a day in 2014, according to the International Energy Agency. (

Russia's Rosneft plans to increase oil output

August 14, 2015. Russia's Rosneft, the world's top listed oil producer by output, plans to increase production, Chief Executive Igor Sechin told Prime Minister Dmitry Medvedev, according to the government. Rosneft oil production was slightly down last year to 4.1 million barrels per day (bpd) from 4.2 million bpd in 2013, due to lower output at mature fields. Sechin said that Yuganskneftegaz, Rosneft's largest oil producing unit, could be one of the sources of growth. Sechin said that Yugansk, a former Yukos asset, was expected to produce around 66 million tonnes of oil this year. He said new wells would be added in the field which pumped 64.5 million tonnes of oil last year. According to the Russian Energy Ministry, Rosneft's oil production was down 1.2 percent in July, year-on-year. (

Glencore to cut $790 mn off value of oil deal last year

August 13, 2015. Glencore Plc is set to wipe $790 million off the value of oil and gas assets in Chad that it bought just last year, and cut planned spending in 2015 by about the same again. Glencore paid about $1.35 billion, a 61 percent premium, for Caracal Energy Inc. in the central African nation in April 2014. The mining and commodities company expects to write down the assets’ value after world oil prices slumped, it said. Crude slid back into a bear market last month amid an enduring supply glut, and slumped to a six-year low near $40 a barrel in New York. The Caracal deal has proved a headache for Glencore this year after Chad’s government sought to delay repayment of about $1.5 billion of Glencore-led loans to conserve cash as crude prices collapsed. (

Brazil Manati field holds 13.5 bn cubic meters of gas: QGEP

August 12, 2015. Queiroz Galvão Exploração e Produção SA (QGEP) said that the Manati offshore oil field in Brazil holds 13.5 billion cubic meters (477 billion cubic feet) of proven and probable, or "P2", natural gas reserves. The Manati field is 45 percent owned by QGEP. Brazil's state-run oil company Petroleo Brasileiro SA owns 35 percent and is the field operator, Brazilian-Canadian oil company Brasoil owns 10 percent and Chile's Geopark owns 10 percent. (


South Africa needs to restructure refinery plan on weak PetroSA

August 18, 2015. South Africa needs to restructure a project to build what may be the sub-Saharan region’s biggest refinery because the finances of the state-owned oil company in charge of the plan are weak, according to the government. The 300,000 barrel-a-day Mthombo “refinery is needed and the location is right, but the project needs to be restructured by the government” because PetroSA Ltd. doesn’t have the balance sheet to support it, Energy Department Deputy Director-General Tseliso Maqubela told lawmakers in Cape Town. Mthombo, which would be South Africa’s largest refinery, would raise South Africa’s total processing capacity of 703,000 barrels daily by 43 percent. PetroSA’s loss widened to about 15 billion rand last year after the biggest impairment yet recorded by a government company. PetroSA is planning the facility in Port Elizabeth with China Petroleum & Chemical Corp. as diesel and gasoline imports rose on the back of economic expansion, with demand exceeding local refinery output for the first time in 2007. (

US refinery outages give European gasoline late boost

August 13, 2015. A string of refinery outages across the United States (US) and unrelenting demand for gasoline in the country have given European gasoline a late boost to counter the traditional decline in overseas demand as summer draws to a close. About 1.7 million tonnes of gasoline have been booked for loading in August from Europe to the east coast of the United States and the Gulf Coast, ship-tracking data showed, in what traders said has been an exceptionally strong month. With oil prices more than halving over the past year, demand for gasoline in the United States has surged in recent months as motorists drive more and buy larger cars. U.S. and global demand for gasoline has been the main engine supporting refining margins in recent months. The difference between the prices of crude oil and gasoline, used to gauge the profitability of refining, has risen to about $30 a barrel, its widest in a month. The greater the spread, the more attractive it becomes for foreign producers to ship crude to the United States for refining. Though U.S. demand usually ebbs towards the end of the peak driving season, unplanned refinery breakdowns have constrained supplies and revived the market. An outage at BP'S 413,500 barrel per day (bpd) Whiting refinery in Indiana has limited supplies in the Chicago area, which has drawn fuel from the U.S. Gulf Coast inland, traders said. The 88,000 bpd fluid catalytic cracking unit at Philadelphia Energy Solutions' refinery shut after an attempt to bring it back to full rates and Marathon Petroleum Corp has shut its 212,000 bpd refinery at Robinson, Illinois, for more than two months of work. Several refinery outages in Venezuela also limited oil products supplies in the Atlantic basin, traders said. As a result, a higher than usual number of gasoline cargoes have been booked in recent days from Europe to the U.S. Gulf Coast, traders said. (

Saipem consortium awarded $1.5 bn contract for Kuwait refinery work

August 12, 2015. Kuwait has awarded a new $1.57 billion contract for work on its planned al-Zour oil refinery to a consortium made up of Italy’s Saipem and another firm. The 45-month contract, valued at 475.32 million dinars ($1.57 billion), was the lowest offer submitted in the tender, state-run Kuwait National Petroleum Co (KNPC) said. KNPC awarded 3.48 billion dinars ($11.5 billion) in contracts to build the planned 615,000 barrel-per-day refinery. That included a 454-million-dinar contract for a consortium comprising Saipem, Hyundai Engineering and Construction, and SK Engineering and Construction to build a marine export terminal. The signing of all contracts is expected to take place in early October, KNPC said. (

Transportation / Trade……….

Angola to ship most crude in four years to meet Asian demand

August 18, 2015. Angola will export the most crude in almost four years in October as the OPEC member satisfies Asian demand and offsets diminished revenue from lower oil prices. Africa’s second-largest producer plans to ship 1.83 million barrels a day in October, the most since November 2011, according to a preliminary loading program. This compares with 1.77 million barrels a day in September. Angola slashed its budget by a quarter in response to the slump in crude prices, which have lost more than 50 percent in the past year. The African nation’s bid to recapture revenues is supported by demand in China, the world’s second-biggest oil-consumer, which imported near-record levels of crude in July. The single biggest increase will be in shipments of Dalia, which will expand by more than 55,000 barrels daily to 245,000 barrels a day, according to the schedules. Total SA boosted output at Block 17 at the Dalia complex by 20,000 barrels a day in July, helping push production at the field toward 200,000 barrels a day, the International Energy Agency said. (

Shell in framework LNG deal with private Chinese firm

August 18, 2015. Royal Dutch Shell has entered a framework deal with a Chinese energy firm to jointly purchase and distribute liquefied natural gas, Shell said, a rare cooperation between a global energy company and a local private player. Shell signed the non-binding framework agreement with Guanghui Energy Co Ltd, which is building a gas receiving terminal in Qidong of Jiangsu province with a designed annual handling capacity of around 600,000 tonnes in its first phase. Chinese companies other than the country's dominant energy giants are emerging as LNG importers after Beijing started allowing third-party access to import terminals built by the majors and private investment in the sector. Instead of a previous intent to be involved in building and operating the terminal, Shell, one of China's top LNG suppliers, is now looking at only purchasing and marketing LNG, gas that is super-chilled in liquid form and transported in specialised tankers. (

Strong Dubai crude oil trades skew Asia price benchmark

August 18, 2015. Record trading of Dubai crude by two Chinese state companies this month on a decades-old oil pricing system has pushed the benchmark higher, even as other grades are being pressed lower by a global glut. The strong Dubai trade has forced Middle East producers to raise official selling prices (OSPs), driving Asian buyers to seek cheaper oil elsewhere or cut refinery runs due to low margins. Chinaoil and Unipec, trading units of PetroChina and Sinopec, respectively, traded record volumes of crude in early August on pricing agency Platts' market assessment process. This pushed up prompt physical Dubai prices against future months, creating a backwardated market structure usually associated with supply shortages.

In contrast, a global oil glut has kept Brent and West Texas Intermediate (WTI) crude futures in contango this year, and most analysts see the surplus lasting well into next year. Higher Dubai-linked crude prices and lower oil product values squeezed refining margins in July to the lowest since October 2014, forcing some Asian refiners to cut output. Critics of Platts' Market-on-Close (MoC) process for Dubai crude say the problem is that it is easier and less risky for buyers to participate in the market than it is for sellers. The MoC requires delivery of a 500,000-barrel cargo for every 20 Dubai trading lots sold to a single counterparty. That means sellers have to hold oil at one of the approved loading points to participate in the market - with the risk in any month that barrels may go unsold if no single buyer agrees to take enough partials to make up a loading.

Thus, there are often more buyers than sellers, and that can push the market higher relative to market fundamentals. Supply has also become an issue. Dubai, Oman and Upper Zakum are approved for delivery against the Dubai MoC, but this month Chinaoil bought 10 percent of the total available monthly volume in one day, giving rise to worries that prices would be pushed even higher as barrels dried up. (

Russia sales outlook worst in BRIC markets on oil, recession

August 17, 2015. Russia is the standout these days among the biggest emerging markets, but for all the wrong reasons. Beset by the country’s first recession since 2009, oil selling at half its five-year average price and international sanctions linked to the Ukraine conflict, Russian companies are poised to post the biggest drop in sales among the four so-called BRIC nations, data show. Two of the others, Brazil and India, also are projected to slump, while China is seen growing modestly.

Russia’s gross domestic product is contracting as a slide in energy prices and sanctions including international financing restrictions hammered the ruble and shook an economy that relies on oil and gas for about half its government budget revenue. Analysts have been widening their estimates for this year’s GDP slump and don’t see growth resuming until the second quarter of 2016.

The economy of the world’s largest energy exporter, which expanded an average 5.6 percent during the first decade of the 2000s, will probably contract 3.6 percent this year and grow just 0.5 percent in 2016, according to the average of 40 analyst estimates. Russia’s ruble is once again the worst performer in emerging markets, weakening 23 percent in the past three months after the best performance among major currencies earlier this year. (

OPEC oil supply reaches three-year high

August 12, 2015. The Organisation of Petroleum Exporting Countries (OPEC) oil supply recorded a three-year high in July, reaching 31.51 million barrels a day, according to its report. OPEC, accounting for over 30 percent of global oil supplies in July, increased its output by 100,700 barrels a day to 31.5 million barrels a day. The cartel group said the increase mostly comes from Iraq, Angola, Saudi Arabia and Iran, while production in Libya showed the largest drop, according to "secondary source". Iran reached a historic agreement on its nuclear issue with world major powers in July, raising the expectation of its oil production revival in the coming months. Tehran increased its output by 32,300 barrels a day in July to 2.86 million a day, also the highest since June 2012. In June 2012, western states imposed tough sanctions against Iran, including oil embargo. The cartel adjusted its forecast for global oil demand in 2016 by about 100,000 barrels a day. (

Policy / Performance…………

Shell receives final permit for Arctic oil drilling

August 18, 2015. The US government has allowed Royal Dutch Shell to drill for oil and gas in the Arctic Ocean. The company, which had got green light for drilling the top sections of two wells off the coast of Alaska in July 2015, has been authorized to drill an exploratory well into oil-bearing rock below the ocean floor. Shell has already committed about US$7 bn into the project and plans to invest a further US$1 bn, based on estimations that the Arctic could hold more than 20% of the world's undiscovered oil and gas resources. (             

Cairn agrees six-well drilling plan with Senegal

August 18, 2015. Cairn Energy plc announced that it has reached an agreement with the government of Senegal for an exploration and development plan that includes an initial program of three firm and three optional exploration and appraisal wells. Reporting its first-half results for 2015, Cairn confirmed that its Catcher and Kraken field developments in the UK North Sea remain on budget and on schedule.

As part of its deal with the government of Senegal, Cairn plans a 3D seismic data acquisition program that will start during the third quarter of 2015. The firm also plans to begin drilling offshore Senegal in the acreage around the SNE-1 discovery well in the fourth quarter. Cairn Energy discovered oil offshore Senegal at the FAN-1 and the SNE-1 wells late last year.

Cairn said that it plans to spend up to $170 million on its current program of exploration and appraisals, which will be mainly accounted for by drilling in Senegal during 2H 2015 and 1H 2016. The firm confirmed that it expects to spend $615 million on the development of the Catcher and Kraken projects in the UK North Sea. Both Catcher and Kraken are expected to produce first oil during 2017. Cairn had a total of 47.2 million barrels of oil equivalent booked as 2P (proved and probable) reserves as of June 30, 2015. (

South Africa’s ANC backs oil-law plan in economic policy review

August 17, 2015. South Africa’s ruling African National Congress (ANC) backed a plan to split legislation governing the oil and gas industry from mining laws as the party begins a review of its policies. South Africa needs a separate law to account for the specific needs of the industries as the country prepares for the “potential game-changer” of oil, gas and shale exploration, the ANC said in a document due to be discussed at its National General Council meeting in October. The ANC’s backing strengthens the hand of Mineral Resources Minister Ngoako Ramatlhodi, who won plaudits from the Chamber of Mines in January when he spearheaded the plan. Oil and gas companies are in favor of a separate law because the industries are different and require diverse rules. In the document, the ANC urged the government to take measures to improve the competitiveness of Africa’s most industrialized economy. It proposed “moderating” administered price increases, “better managing” the level and volatility of the rand and reducing “anomalous” port and freight subsidies for commodity exporters. (

Total on track to start Bulgaria offshore drill in early 2016

August 17, 2015. French oil firm Total said it was on track to start drilling for oil and gas at an exploration site off Bulgaria's Black Sea coast early next year. Total, an operator of the offshore Han Asparuh 1-21 block along with OMV and Spain's Repsol, had postponed drilling there due to the fall in oil prices. Bulgarian Prime Minister Boiko Borisov said that explorations in the continental shelf of the Black Sea off Bulgaria were expected to begin in February and help the country reduce its almost complete dependence on Russian gas. Bulgaria has opened tenders for exploratory drilling for oil and gas in two blocks and expects offers in late September. (

Canadian NEB approves Bear Head LNG's export license

August 17, 2015. Canada's energy regulator, the National Energy Board (NEB), has granted Bear Head LNG a license to export LNG from the proposed Bear Head LNG's liquefaction project site on the Strait of Canso in Nova Scotia (Canada). Bear Head LNG is a proposed 8 Mt/year liquefaction terminal developed by LNG Ltd and is expected to be commissioned in 2019 (first phase of 4 Mt/year) with expansion by 4 Mt/year in 2021 (potential third phase of 4 Mt/year in 2024). The NEB has approved exports of up to 8 Mt/year as of 2019 with expanded authority to increase production to 12 Mt/year in 2024. The export licence extends for a period of 25 years from the date of first LNG export. (

Algeria calls for non-OPEC output cut to stop oil price fall

August 17, 2015. The Organization of Petroleum Exporting Countries (OPEC) can do little to halt the oil price decline on its own and needs producers from outside the group to help in reducing global supplies, Algeria’s Energy Minister Salah Khebri said. Khebri called earlier this month for an OPEC emergency meeting because of the continued decline in oil prices, which dropped by half from a year ago amid rising production from the U.S. Oil and gas sales account for about 60 percent of Algeria’s budget revenue and 95 percent of its export income, according to the International Monetary Fund.

Algeria’s initiative to coordinate an OPEC response to tumbling crude prices had the backing of cash-strapped fellow members Libya and Venezuela. It was met with no public response from OPEC’s top producer Saudi Arabia, which engineered at the Nov. 27 meeting of the group a shift in its policy away from the historic role of managing prices by adjusting supply. Saudi Arabia instead lobbied OPEC to preserve market share in the hope that prices would recover when higher cost producers such as U.S. shale companies are forced out of the market. The group stuck to the same policy at its last meeting in June. (

UAE open to meeting Indian oil demand

August 17, 2015. The United Arab Emirates (UAE) is open to meeting any demand for oil from India, the Gulf OPEC member's economy minister Sultan bin Saeed al-Mansouri said. Mansouri was speaking after meeting with Prime Minister Narendra Modi, who is in the UAE on a two-day visit. Abu Dhabi currently provides 9 percent of India's energy needs and India is the world's fourth biggest oil consumer. Mansouri said Modi presented proposals for investments in India worth $1 trillion. The Abu Dhabi Investment Authority, one of the world's largest sovereign wealth funds, is already an investor in India and further investment will depend on what India provides, Mansouri said. Modi said he would send India's minister of commerce to the UAE shortly to discuss investment, the UAE minister said. India is in talks to lease part of its planned strategic oil storage facilities to Abu Dhabi's state oil company ADNOC. India imports about 80 percent of its oil needs and is building emergency storage capacity to hedge against energy security risks. (

Israeli ministers approve blueprint for natural gas development

August 16, 2015. The Israeli cabinet approved a regulatory blueprint for developing the country’s natural gas fields, backed by Prime Minister Benjamin Netanyahu and opposed by detractors who call it overly generous to energy companies. Ministers approved the outline by a vote of 17-1. The framework will now go for a final vote to parliament, where Netanyahu’s coalition holds a one-seat majority. The government says the arrangement will attract new investors to explore and develop offshore fields, speed exports to regional neighbours including Jordan and Egypt, and pump billions of shekels of taxes and royalties into the economy. Under the arrangement, Noble will have to reduce its stake in Tamar, Delek must sell all of its interests in the field, and both companies will have to sell off two smaller gas sites, Karish and Tanin. The framework establishes a price ceiling and an indexing mechanism to regulate gas prices, and sets milestones for the companies’ development of the fields. (

OPEC may boost oil output to record with Iran back amid glut

August 16, 2015. OPEC could potentially boost crude oil production to 33 million barrels a day, the most ever, after international sanctions are removed against Iran amid a global supply glut, according to the country’s OPEC representative. The global oil market is already in surplus by about 3 million barrels a day, with Saudi Arabia and Iraq responsible for OPEC’s oversupply in the past six months. Iran can boost output by 500,000 barrels a day after sanctions are lifted, Oil Minister Bijan Namdar Zanganeh said. Crude has lost half its value in the past year as U.S. production jumped to the highest level in more than 40 years and Saudi Arabia had record output. Prices collapsed after the Organization of Petroleum Exporting Countries (OPEC) decided on Nov. 27 to maintain production rather than sacrifice market share. (

Britain changes rules to fast-track shale gas permits

August 13, 2015. The British government will give its communities minister the power to directly approve shale gas permits, removing decision-making from local politicians who have in the past months blocked the progress of Britain's first such wells. In late June, local government officials in northwest England rejected two applications to carry out hydraulic fracturing, known as fracking, saying the projects would be too noisy and blight the landscape. New rules, applicable immediately, will allow government intervention to approve or reject permits and will also mean appeals involving shale gas projects will be given priority. Shale gas developer Cuadrilla Resources, whose applications were rejected in June, has already decided to appeal against its permit refusals. The government said it would present proposals later this year to create a sovereign wealth fund from returns generated from shale gas production. Shale developer IGas Energy said the move gave clarity on the timetable for determining planning decisions for shale oil and gas exploration. Pro-business groups also welcomed the decision, saying it would help get shale gas projects up and running. Britain is estimated to have substantial amounts of shale gas trapped in underground rocks and the government has been supportive of developing these reserves to counter declining North Sea oil and gas output. (

Malaysia, Brunei reach agreement on overlapping blocks

August 12, 2015. Malaysia and Brunei agree on the way to implement an agreement on oil and gas exploration in the overlapping area in offshore Blocks CA1 and CA2, Malaysian Prime Minister Najib Razak said in Brunei's capital Bandar Seri Begawan. The agreement was a follow up to the Exchange of Letters -- signed by both countries in 2009 to resolve the issue of overlapping area in the two blocks -- as Najib and the Sultan of Brunei Hassanal Bolkiah decided on the interpretation of its content during the 19th Malaysia-Brunei Annual Leaders' Consultation at Istana Nurul Iman. Malaysian national oil company Petroliam Nasional Berhad and Petroleum BRUNEI entered into a Production Sharing Agreement for Blocks CA1 and CA2 in 2010. (



Gilgel Gibe III hydropower project starts test operations

August 18, 2015. Ethiopian power generation company EEPCO has started test operations at its 1,870 MW Gilgel Gibe-3 hydropower project on the Omo River. The dam, whose construction started in 2008, consists of ten turbines rated 187 MW each. Three units are ready for commissioning and a fourth one is nearing completion. The project could generate 500 MW by the end of August 2015 or in September 2015. Full operation is expected in early 2016.

The Gilgel Gibe complex consists of two hydropower plants, with a cumulated capacity of 630 MW. The new plant, the largest hydropower plant in Ethiopia, will raise its capacity to 2,500 MW. Two additional projects are planned, which would add 1.45-2 GW (Gilgel Gibe-4) and 660 MW (Gilgel Gibe-5). Ethiopia aims to invest a total of US$12 bn in hydropower, and the country is developing a 6,000 MW hydropower project, the Grand Renaissance Dam on the Nile. (             

Engie said to plan sale of over $1 bn in Asian coal plants

August 18, 2015. Engie, the French utility giant formerly known as GDF Suez SA, plans to sell more than $1 billion of stakes in Asian coal-fired power plants. The company has reached out to potential buyers for its 40.5 percent holding in PT Paiton Energy, Indonesia’s largest independent power producer. It is also planning a sale of its controlling stake in the smaller Meenakshi plant in India, the people said, asking not to be identified as the process is private. Engie has shut gas plants and capped coal-fired installations as Chief Executive Officer Gerard Mestrallet steers the company toward renewable energy sources. The French government, which owns about a third of Engie, wants to “reorient” state-backed companies toward cleaner fuels, Finance Minister Michel Sapin said. The Paiton Energy venture has 2,045 MW of power generation in operation in Indonesia, Engie’s website shows. Japanese trading house Mitsui & Co., Tokyo Electric Power Co. and Indonesia’s PT Batu Hitam Perkasa own the remaining stakes. Engie owns 74 percent of the Meenakshi power project in southern India, which has 300 MW of operational capacity and another 700 MW under construction, according to the December 2013 announcement of its investment. Indian developer Meenakshi Group owns the remaining stake. Mestrallet said that Engie won’t be involved in a new coal plant in South Africa. That apparent shift in policy comes after he defended the use of coal by countries like South Africa at a shareholders’ meeting the month before. (

ContourGlobal acquires 405 MW hydropower plant in Armenia

August 14, 2015. ContourGlobal has completed the acquisition of the Vorotan Hydro Cascade, a series of three hydroelectric power plants totalling 405 MW on the Vorotan River in southern Armenia, from the government of Armenia for US$180 mn. The International Finance Corporation (IFC) has acquired a 20% stake in the plant. The transaction had been announced in January 2014. The complex consists of the 157 MW Tatev hydropower plant commissioned in 1970, the 171 MW Shamb plant (1978) and the 76 MW Spandaryan plant (1989). The Vorotan Hydro Cascade accounts for about 15% of the installed capacity of Armenia’s electricity system and provides sufficient energy to power 250,000 homes. Under the terms of the agreement, ContourGlobal will supply power to the Armenian grid under a long-term power purchase agreement. ContourGlobal will also invest €50mn over the next six years in a refurbishment program to modernize the plants and improve their operational performance, safety, reliability, and efficiency. (              

Iran, Spain firms sign power generation deal

August 12, 2015. Iranian and Spanish companies have signed a Memorandum of Understanding (MoU) to implement power generation projects worth $250 million in Chile and Mexico. The agreement signed between Iran’s electrical products company Sunir and Spanish firm Bester Generation envisages joint execution of projects in the Middle East, Africa and Latin America, Sunir Managing Director Bahman Salehi said. Iran signed a deal worth € 107 million with neighbouring Armenia to build a new transmission line which will raise their power exchange capacity to 1,000 MW. Under the MoU, Sunir and Bester will cooperate on design, construction, commissioning, operation, repair and financing of renewable energy projects as well as exchange of technology. (

Transmission / Distribution / Trade…

Duke Energy to launch Foothills transmission line route in October

August 17, 2015. Duke Energy is planning to unveil its proposed route for a 40-mile Foothills transmission line in the US in October. The transmission line will link the western Carolinas region and Duke Energy's new Asheville power plant in North Carolina to a substation, which is planned to be constructed in Campobello, South Carolina. The 230kV power line is part of the company's $1.1 bn Western Carolinas modernization project which involves replacing Asheville coal facility with a natural gas power plant. (

ABB to support substations upgrade project in Saudi Arabia

August 13, 2015. State-owned power transmission and distribution operator Saudi Electricity Company (SEC) has awarded $150 mn worth of contracts to ABB to upgrade electricity transmission capacity of five substations in the country. Three of the substations covered under the contract are in the central region, while the other two are in eastern and western regions. The project will help the country to increase its power generation capacity to 91 GW from around 60 GW by 2020, the company said. ABB earlier secured $60 mn contract with SEC to supply 65 power transformers. (

Three Chinese consortia bid for hydropower project in Romania

August 12, 2015. Three Chinese consortia, namely China Gezhouba Group, China Huadian Engineering and Huaneng Lancang River Hydropower, are competing for the construction of the 1,000 MW Tarnita-Lapustesti pumped-storage hydropower project in the Cluj county of Romania. The company are the only bidders for the project, which had attracted five preliminary bids in February 2015.

The project would consist of four reversible pump-turbines of 250 MW each and would require an investment of €1 bn. The first two turbines were expected to be commissioned in 2017 with the two remaining ones expected in 2019, but the project developer has been trying for years to attract investors. Construction is expected to start in early 2016 and will last five to seven years (2021-2023). (                

Policy / Performance…………

South Africa’s ANC voices caution on nuclear power plan

August 18, 2015. South Africa’s ruling African National Congress (ANC) called for a “full, transparent and thorough cost benefit analysis of nuclear power,” as the country prepares for a bidding process to build nuclear plants. In a document that will be discussed at its policy review conference in October, the party showed its first signs of caution as President Jacob Zuma’s government gets ready to award contracts this year to build nuclear plants that will generate 9,600 MW.

Russia’s state-owned Rosatom Corp., Areva SA, EDF SA, Toshiba Corp.’s Westinghouse Electric Corp., China Guangdong Nuclear Power Holding Corp. and Korea Electric Power Corp. have shown an interest in bidding for the project, which may cost as much as $100 billion. With South African power demand now expected to be less than previously forecast in 15 years, the country will only need more nuclear power after 2025 and could abandon it altogether if other sources of energy are sufficient, Johannesburg-based Business Day newspaper reported, citing an amendment to the government’s Integrated Resource Plan for 2010-2030, which was never published. In its policy document, the ANC called on the government to further explore the “enormous” hydropower and gas power options in the region and to improve its planning for energy generation. (

Kuwait will invest US$10 bn in power projects

August 17, 2015. The Ministry of Finance of Kuwait has approved a series of investments in infrastructures projects (power plants, desalination plants and other infrastructures) worth KWD 3bn (US$9.9 bn). As part of this programme, whose timescale was not disclosed, Kuwait plans to add a second phase of 1,800 MW to the Az-Zour North gas-fired power plant, a 1,500 MW multi-fuel thermal power project (Khairan) and a 280 MW hybrid power plant, Al Abdaliyah (60 MW of solar power and 220 MW of gas).

Kuwait, as neighbouring Gulf countries, is struggling to meet rising electricity demand and plans to boost its installed power generation capacity. The country aims to generate 15% of its power consumption with renewables by 2030. (      

Ghana adopts Nuclear Regulatory Bill

August 14, 2015. The Parliament of Ghana has adopted the Ghana Nuclear Regulatory Bill, after having ratified the Convention on Early Notification of a Nuclear Accident, Convention on Assistance in the Case of a Nuclear Accident or Radiological Emergency and the Convention on Supplementary Compensation for Nuclear Damage in February 2015. Ghana has also signed a Memorandum of Agreement with Russian nuclear group Rosatom for the development of 1,000-1,200 MW reactors to be developed in the country. Ghana is developing its nuclear sector with a draft of Radioactive Waste Management Regulations and a Radioactive Waste Management Policy and Strategy under development. (

Brazil's govt plans to invest US$53 bn in its power sector by 2018

August 13, 2015. The Brazilian government has approved its Investment Programme in Electric Power (Programa de Investimento em Energia Elétrica, PEEI), which plans to invest R$186bn (US$53 bn) in power generation and transmission by 2018. The government plans to award contracts worth R$116bn (US$33 bn) to add between 25 GW and 31.5 GW in installed power capacity, with nearly half of capacity additions in renewable energy (excepted hydropower), i.e. 10 to 14 GW of new renewable capacity. The programme will contribute to the maintenance and diversify Brazil's power mix. The government will also award contracts worth R$70bn (US$20 bn) to add 37,600 km of electricity transmission lines. (                             



Indraprastha power station to be converted into solar plant

August 18, 2015. It's a rare point of agreement for Prime Minister Narendra Modi and Delhi Chief Minister Arvind Kejriwal—renewable energy. The site of this unusual concord will be, if all goes according to plan, the defunct Indraprastha power station in the capital that was closed in 2010 after some four decades of pumping out pollutants from its 240 MW thermal units. In a little less than two months, this patch of land on Delhi's Ring Road will shine bright with the reflective brilliance of solar panels generating 1 MW of electricity. It's not much but the power will be symbolic more than anything else—the commitment of the Modi and Kejriwal governments to clean energy and addressing climate change concerns. The occasion will be the India-Africa Summit in October that will see leaders from more than 50 countries from that continent attending. While the state-of-the-art solar power station will light up the Delhi Secretariat, the summit itself will be hosted at the nearby Indira Gandhi Indoor Stadium, which for years used to be coated with soot from the chimneys of the Indraprastha power station. The Centre is supporting the Delhi government, which is in advanced discussions with the ministry of new and renewable energy (MNRE) and the Solar Energy Corporation of India (SECI), to set up a 5 MW solar plant at the site. The Delhi government is soon expected to sign a power purchase agreement with SECI for getting the new avatar of the power station up and running in time for the Africa summit. The Centre is keen on ensuring that at least a 1 MW unit is ready at the time of the summit. A solar lit Delhi Secretariat in the backdrop of the venue will be a powerful example of India's dedication to safeguard the environment. The Delhi government has already written to the urban development secretary on land lease issues and held rounds of meetings with MNRE and SECI officials. Revamping the power sector and switching to clean energy is one of the pledges made by Kejriwal's Aam Aadmi Party. The Indraprastha switchover was discussed at a meeting of the SECI board and it was agreed that if not 5 MW at least some capacity of solar power must be generated in time for the October summit. (

Gujarat farmers to be roped in to tap solar energy

August 17, 2015. Gujarat is going to become the first state in the country to launch 'Agro-Solar policy' under which farmers will be roped in to tap energy from sun which will also help them earn additional income from power generation companies, according to Gujarat Energy Research and Management Institute (GERMI). According to GERMI, farmers and power generation companies will be in a win-win situation with generation of solar energy in agricultural fields. GERMI said that the state-run companies will set up Solar Photo Voltaic (SPV) plants in different farms fields and experiments were conducted in different agricultural universities in the state. GERMI said farmers are likely to get 30 to 40 percent share from the profit of power generation companies and the solar photo voltaic plant will be set up on poles so that farmers can also grow their crops. (

NLC plans to set up 100 MW solar power plant

August 16, 2015. The Neyveli Lignite Corp (NLC) has planned to set up a 100 MW solar power plant in Neyveli and is trying to identify land for the purpose, B. Surender Mohan, its Chairman-cum-Managing Director said. Mohan said the management was in dialogue with the Tamil Nadu Government and other states to get the required land for setting up solar power plants with a capacity of 500 MW and above. The projects would be implemented based on land availability and techno economic viability of the project. NLC had already initiated steps to set up smaller solar power plants of 10/15 MW capacity in Tamil Nadu and Rajasthan. On the 1,000 MW Neyveli New Thermal Power Project, the Chairman said that its first 500 MW unit was expected to be commissioned in October 2017 and the second 500 MW unit in April 2018. The administrative sanction from the Tamil Nadu Government for the 4000 MW coal based Thermal Power project in Sirkazhi in the state was expected shortly. The Chairman said that the total power generation capacity of NLC would go up to 12,221 MW including solar and wind power projects at the end of the 13th plan with the implementation of new projects such as 250 MW Thermal power project at Bithnok, 250 MW Thermal power station expansion project at Barsingar in Rajasthan and expansion of Thermal Power Station II expansion and Restructuring of Mine I and I A at Neyveli. (

Shell Foundation seeks partnerships in clean energy

August 16, 2015. Energy access is a priority for India, and the vast potential for advanced clean energy would necessitate funds and incentives to ensure effective and timely adoption of solutions, Shell Foundation said. A multi-dimensional approach is needed to understand the issues plaguing the energy sector and its various trade-offs, the Foundation said. The Foundation is an initiative of oil major Royal Dutch Shell. The independent charity seeks to establish public private partnerships with the Indian Government in the clean energy sector, either directly or through companies that it has invested in. The Foundation has several strategic partners in India like Envirofit, which designs, produces and distributes clean cook stoves. (

GIC plans to buy assets of Greenko for ` 16.5 bn

August 15, 2015. Singapore's sovereign wealth fund GIC plans to acquire the trading activities and assets of Hyderabad-based clean energy producer Greenko for about ` 1,650 crore in one of the largest transactions in the Indian renewable energy space. The deal if completed would result in the sale of Greenko Mauritius' assets and trading activities such as the clean energy projects in India. Greenko portfolio includes wind, hydroelectricity, biomass and natural gas assets, which are mostly located in north and south India. The deal is being advised by Investec Bank, a specialist bank and asset manager, and Arden Partners. Greenko's power generation capacity is about 838 MW which is likely to rise to about 1,000 MW. (

CIAL all set to become India’s first green airport

August 14, 2015. Cochin International Airport Ltd (CIAL) is all set to become the first Indian airport and may be the first in the world as well, to operate on solar power and turn itself to a green airport. The CIAL Company has installed a 12 MW solar plant with more than 46,000 panels on 45 acres of land at an investment of ` 62 crore to accomplish this project. The project is likely to be officially inaugurated by Kerala Chief Minister Oommen Chandy on August 18. The solar power plant has been set up by Bosch Ltd, Bangalore and the entire work of the installation has been completed in a short span of six months. (

West Bengal asks Centre to partially fund 1 GW solar power storage system

August 13, 2015. West Bengal government has asked the Centre to fund a portion of a project that it has designed to store 1,000 MW of solar power that can be sent out as and when required. The state has devised its power storage system at a time when the Centre has decided to test mega-watt level storage batteries. The pumped storage system will be set up at Turga in the state's Purulia district and cost about ` 11,000 crore, state power minister Manish Gupta said. The state government has asked the Centre to fund 40 percent of this project cost from the clean energy fund, he said. Another ` 6,000 crore will be required to set up a 1,200 MW solar capacity at the same location. Gupta said pumped storage plants have been acknowledged as innovative. The state government's proposal will have to be cleared by the finance ministry for disbursal from the central funds. West Bengal already operates one pump storage project in Purulia. The clean energy fund, announced a few years ago, involves levy of a clean energy cess of ` 100 for every tonne of coal sold by Coal India Ltd (CIL). The fund has accumulated close to ` 40,000 crore and remains largely unspent. (

OMCs start bio diesel supply at select outlets

August 13, 2015. Oil marketing companies (OMCs) have started supplying bio diesel in some retail outlets in the country including at Delhi. OMCs have launched bio diesel supplies in some retail outlets at Delhi, Vijayawada, Haldia and Vizag, Minister of State for Road Transport and Highways Pon Radhakrishna said. Ethanol Blended Petrol Programme is already being implemented by public sector OMCs in the notified states and union territories as per the availability of ethanol, Radhakrishna said. The government vide its notification on June 16, 2015 had permitted use of bio-compressed natural gas (Bio-CNG) in motor vehicles, as an alternate composition of the compressed natural gas (CNG), he said. (

Govt approves MoUs with France & Mongolia on renewable energy

August 12, 2015. Cabinet gave nod for two separate agreements with France and Mongolia to encourage and promote technical bilateral cooperation on new and renewable energy issues. The signing of the Memorandum of Understanding (MoU) will help establish the basis for a cooperative institutional relationship to encourage and promote technical bilateral cooperation on the new and renewable energy issues on the basis of mutual benefit, equality and reciprocity. The MoU will help establish the basis for a cooperative institutional relationship to encourage and promote technical bilateral cooperation on the new and renewable energy on the basis of mutual benefit, equality and reciprocity. (


Google launches Project Sunroof to calculate rooftop solar cost in US

August 18, 2015. Google has launched a new online tool to help residents in San Francisco and Fresno in California, and around Boston, Massachusetts, US, determine how much amount can be saved with rooftop solar energy. Known as Project Sunroof, the new tool will utilize its mapping and computing resources to help residents assess the best way to install rooftop solar panels in order to reduce their energy bills. The tool will use information from Google Maps and other databases to initially create personalized roof analysis once the customer enters address. Based on factors like roof orientation, shade from trees and nearby buildings, and local weather patterns, the tool will determine amount of sunlight that hits the rooftop annually. The tool, which can also help connect the customer with local solar providers, will then estimate the potential amount the solar panels could save. Google Project Sunroof said that the new tool is expected to help increase the green energy use and reduce carbon emissions. The technology is planned to be made available in additional regions in the coming months. (

RWE commissions power-to-gas plant in Ibbenbüren, Germany

August 18, 2015. German utility RWE has commissioned a new power-to-gas plant in the North Rhine-Westphalia (NRW) region of Ibbenbüren. The power-to-gas plant features a proton-exchange membrane (PEM) electrolyser that converts electricity from renewable sources into hydrogen. The hydrogen is converted and stored in a natural gas network, through a gas pressure regulation station. During peak demand, the co-generation plant within the RWE district heating network in Ibbenbüren will use this stored natural gas to generate power. With a rated power output of 150kW, the new facility produces hydrogen under 14-bar pressure, and has a utilization rate of 86%. The plant is part of a new system, which integrates the local electricity supply, natural gas and district heating. Several companies across the world have recently come up with ways to generate renewable hydrogen, and take part in such projects. (

Trina Solar boosts forecast as profit reaches four-year high

August 18, 2015. Trina Solar Ltd., the biggest supplier of solar panels, posted its biggest profit in four years as surging demand prompted the company to boost its shipment forecast by as much as 16 percent. Trina is benefiting from climbing demand for carbon-free energy, especially in China, India and the U.S., coupled with efforts to reduce its production costs and boost margins. The company became the world’s biggest solar company last year by shipping 3.66 GW of panels, and said it expects to deliver as much as 5.1 GW this year, up from a May forecast of 4.4 GW to 4.6 GW . The company will probably see added benefit this year from China’s move to devalue the yuan because many customers sign contracts priced in dollars, euros and other currencies. Trina reported a net foreign currency exchange gain of $5.1 million, compared to a loss of $1.7 million in the first quarter. The company delivered 1.2 GW of panels in the quarter, beating its May forecast of 1.1 GW to 1.14 GW and up from 795 MW a year earlier. Trina is expanding production and working to reduce costs, helping boost margins to 20 percent from 15.4 percent a year earlier. Revenue climbed 39 percent to $722.9 million. Trina’s rapid expansion parallels the expected boom in demand for solar panels that’s expected to grow by almost a third this year. (

SunEdison, Goldman agree to form $1 bn clean-power fund

August 18, 2015. SunEdison Inc. is getting $1 billion in cash and loans to build and buy clean power plants. The world’s biggest renewable-energy developer is forming an investment vehicle with a Goldman Sachs Group Inc.-managed fund. The Goldman-managed fund, West Street Infrastructure Partners III, will provide $300 million in equity and a group of banks that includes Bank of America Corp. and Deutsche Bank AG will supply $700 million in debt. The deal will accelerate the developer’s global expansion effort, according to SunEdison Chief Financial Officer Brian Wuebbels. It adds to an existing $1.5 billion warehouse lending fund, and a separate $500 million fund for TerraForm Power Inc., the SunEdison-controlled company that buys and operates power plants. The new fund will help SunEdison meet its 2016 growth guidance and provide “repeatable and scalable funding for the future,” Wuebbels said. TerraForm will have the right to purchase the power plants that are developed through the new fund. (

BrightSource plans 810 MW solar CSP project in northwest China

August 17, 2015. US renewable power project developer BrightSource Energy plans to develop an 810 MW solar CSP project in the Qinghai province in northwest China. The Huanghe Qinghai Delingha solar thermal power project would consist of six CSP tower plants rated 135 MW each and would be developed in three stages. The construction of the first two towers, that would be equipped with a storage unit using molten salt to store up thermal energy for 3.5 hours of power generation, would start in 2015 and would be completed in 2017. When operational, the project would generate enough power to supply more than 452,000 average Chinese households. (

JA Solar begins production of 60-cell double-glass solar modules

August 17, 2015. China-based solar power products manufacturer JA Solar has commenced production of standard 60-cell double-glass modules. The company has recently completed the reliability tests of modules to validate its compliance with the IEC61215 and IEC61730 standards, and secured TUV SUD certifications. The multi-Si modules are covered with 2.5mm thick high strength tempered glass on both sides with a frameless design, to allow it withstand harsh environment without rapid degradation. Underpinned by performance warranty of 30 years, the modules are designed in accordance with IEC standards for 1,500V systems, the company said. (

US EPA to propose rules to curb methane emissions from O&G sector

August 17, 2015. The U.S. Environmental Protection Agency (EPA) will propose regulations aimed at cutting methane emissions from the oil and gas (O&G) sector by up to 45 percent over the next decade from 2012 levels. The regulations on methane are one part of the Obama administration's strategy to curb greenhouse gases and combat climate change and come just two weeks after the president unveiled a sweeping rule to slash carbon emissions from the country’s power plants. The proposal that will be unveiled aims to reduce O&G industry methane emissions by up to 45 percent from 2012 levels by 2025, a goal it first announced in January. The rules are intended to put the United States on course to meet its pledge to the United Nations climate change talks to cut its greenhouse gas emissions 26-28 percent below 2005 levels by 2025. EPA said that methane emissions are projected to rise by more than 25 percent by 2025 even though the industry has decreased methane emissions 16 percent since 1990. (

Turkey plans 2 GW wind power auction in 2016

August 14, 2015. The Turkish energy regulator EPDK plans to auction contracts for up to 2,000 MW of new wind power projects in 2016. Preliminary license applications will be collected in early October 2016 and the projects are expected to be commissioned in 2020. Turkey currently has more than 4 GW of installed wind power capacity (end-July 2015), from 3.6 GW at the end of 2014. This represents less than 6% of the installed capacity in Turkey (72 GW). Turkey aims to raise wind capacity to at least 20 GW and total power capacity to 110 GW by 2023. (

Egypt seeks bidders to develop 500 MW of renewable energy projects

August 14, 2015. Egypt state-owned power utilities are inviting bids from for the development of 500 MW of solar and wind power projects. The Egyptian Electricity Transmission (EETC) and the New and Renewable Energy Authority (NREA) have floated separate tenders for a 200 MW solar photovoltaic (PV), 50 MW concentrating solar power (CSP) and 250 MW of wind projects. Power purchase agreements (PPAs) will be signed with the successful bidders, which will develop the three renewable projects on a build, own and operate (BOO) basis in the West Nile Area. Potential bidders will be able to submit pre-qualification documents for the wind project by 5 October, while bids for PV and CSP projects can be filed by 2 November and 16 November, respectively. Egypt is planning to generate around 20% of its total power from renewable sources, primarily from solar, by 2022. (

Florida leads multistate suit to block EPA air quality rules

August 12, 2015. Florida sued to block a U.S. Environmental Protection Agency (EPA) rule that would require 35 states to take additional steps to cut carbon emissions from power plants. The lawsuit, filed in a federal appeals court in Washington and joined by 16 other states, presages another state battle against the Obama administration over its Clean Power initiative announced August 3. The filing follows comments made by West Virginia Attorney General Patrick Morrisey that his state will lead 15 others in combating the Clean Power plan championed by President Barack Obama to stem climate change by reducing carbon emissions 32 percent by 2030. Under those rules, states are required to submit plans for how their power utilities will cut their reliance on coal. Those state programs also require approval from the EPA. The federal Clean Air Act allots to the states responsibility for meeting EPA-established air quality standards. The lawsuit filed by Florida Attorney General Pam Bondi attacks stricter regulations for carbon dioxide emissions during power plant start-ups, shut-downs and malfunctions. Among the states challenging the rule are Arizona, Georgia, Missouri, Ohio and West Virginia. (

Australia plans 26-28 percent cut in CO2 emissions from 2005 levels by 2030

August 12, 2015. The Australian government has unveiled Australia's emissions reduction target ahead of the COP21 in December 2015. The country aims to reduce greenhouse gas (GHG) emissions by 26 to 28% by 2030, compared to 2005 levels. This target would be ambitious for Australia, which is aiming to reduce emissions by 5% by 2020 from 2000 levels. However, 2005 was an historically high year for GHG emissions, and choosing this year instead of 2000 as the reference year could be a way to soften the constraints. According to the Climate Change Authority, Australia would need to cut emissions by 40 to 60% from 2000 levels by 2030 to meet the international agreement to limit global warming to 2°C over pre-industrial levels. The country is facing criticism for his support to its coal sector and for having scrapped its carbon tax and emission trading scheme proposals. (

SkyWolf develops integrated solar and wind turbine technology

August 12, 2015. Renewable energy company SkyWolf Wind Turbine has developed the first hybrid technology that integrates wind and solar power in a single turbine. The solar hybrid diffused augmented wind turbine (DAWT) is designed to increase the efficiency and electric energy output even at lower wind speeds as low as 3 mph, by reducing the static pressure behind the rotor blades, the company said. Skywolf used its patented DAWT technology to develop the turbine that has a height of 28' and diameter of 11' of smaller swept blade area. The hybrid turbine technology holds four patents. During an initial Beta installation, the DAWT has produced between 600KwH and 800KwH a month in an average wind speed of 16-18mph. Occupying a smaller footprint, the new turbine can produce twice the power of a conventional turbine of comparable size, and features panels to capture solar energy. (


Dear Reader,

You may have received complimentary copies of the ORF Energy News Monitor. Our objective in bringing out the newsletter is to provide a platform for focused debate on India’s energy future. You could be a partner in this effort by becoming a subscriber. You could also contribute recommendations for India’s energy future in the form of brief insightful articles.

We look forward to receiving your patronage and support.

ORF Centre for Resources Management



This is a weekly publication of the ORF Centre for Resources Management that covers analysis articles as well as national and international news on energy categorised in a more useful manner. The year 2015 is the 12th continuous year of publication of the Newsletter.

ORF objective

in bringing out the newsletter is to

provide a platform for focused debate on

India’s energy future

Subscription rate (for soft copy):  ` 1000 per annum 

To subscribe please visit here       OR


SMS <ENERGY> <Your Name> <Organisation> <Mobile No.> <Email Id> to 9871417327


Registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485

Published on behalf of Observer Research Foundation, 20 Rouse Avenue, New Delhi–110 002.

Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted and edited from reliable sources. ORF does not accept any liability for errors therein. News material belongs to respective owners and is provided here for wider dissemination only. Sources will be provided on request. 


Publisher: Baljit Kapoor 

                                           Editorial Adviser: Lydia Powell


Contact: Vinod Kumar Tomar

ORF Centre for Resources Management,

20 Rouse Avenue, New Delhi - 110 002,

Phone +91.11.4352 0020, Extn 2120,

Fax: +91.11.4352 0003,

E-mail: [email protected]

                                           Editor: Akhilesh Sati

                                           Content Development:                           

                                            Ashish Gupta,                                           

                                            Dinesh Kumar Madhrey




About Observer Research Foundation


Observer Research Foundation was established on September 5, 1990 as non-profit public policy think-tank. It provides informed and viable inputs for the policy and decision-makers in the government and to the political and business leadership of the country by providing informed and productive inputs, in-depth research and stimulating discussions.


ORF Mission: Building partnerships for a Global India

ORF Objectives:


·        Aid and impact formulation of policies and evolve policy alternatives.

·        Create a climate conducive to effective implementation of these policies.

·        Strengthen India’s democratic institutions to enable coherent, reasoned and      consistent policy-making.

·        Provide reasoned and consensual inputs representing a broad section of opinion to improve governance, accelerate economic development, and ensure a better quality of life for all Indians.

·        Monitor strategic environment

·        Work towards achieving international peace, harmony, and co-operation.

·        Give direction to India’s long-range foreign policy objectives.


The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.