Energy News Monitor | Volume XII; Issue 20

[October 2015: Closing the Coal Gap]

                             “The increase in domestic coal production has broken the hearts of potential coal exporters who were led to believe that increase in domestic coal production by Coal India Limited is impossible and that India would fill the gap left by China in coal imports. What they were greeted with instead is a flood of news items that reported on the dramatic fall in coal imports by India such as the news on a 27 percent decline in coal imports in September…”

Energy News

[GOOD]

Increase in captive coal production is welcome but it may be a case of too much too late!                                   

                                                                                                     [BAD]

Pakistan stalling power imports from India will hurt Pakistan not India!     

[UGLY]

Easing VGF funding for grid connected solar will increase profit generation not solar generation!

NEWS BRIEF

[NATIONAL: OIL & GAS]

October 26, 2015. Oil and Natural Gas Corp. (ONGC) is in talks with Iranian state oil company Pars Oil and Gas Co. to return to a $10 billion gas project that it abandoned because of American pressure, Ali-Akbar Shabanpour, the managing director of Pars Oil and Gas Co. said. ONGC approached the Iranians during an energy conference in Tehran, Shabanpour said. ONGC is interested in returning to Farzad B, a giant natural gas concession in the Persian Gulf overseen by Shabanpour’s company. ONGC discovered gas in the field in 2008, but left the project after 2010 as the U.S. pressured countries to quit doing business with Iran because of its nuclear program. With the prospect of western sanctions over its nuclear program being lifted next year, Iran has been holding talks with many energy companies about how to invest again in the country’s vast natural resources. (www.wsj.com)

October 23, 2015. The Board of mining billionaire Anil Agarwal-controlled Vedanta Ltd will meet amid talks of the company being forced to sweeten its offer for absorbing its cash-rich oil subsidiary Cairn India. Vedanta has offered one share for every share of Cairn India, a deal which did not appear lucrative to minority shareholders of the oil producer particularly its erstwhile promoter Cairn Energy plc. Besides the merger ratio, the minority shareholders including Cairn Energy and Life Insurance Corp (LIC) are concerned about the company not giving guidance on utilising the ` 17,943 crore cash balance of Cairn India as of September 2015. While the deal has been approved by the two stock exchanges, it is now awaiting a nod from the High Court before it goes for a shareholder vote. Vedanta needs the deal to go through by March 2016 as otherwise it will have to repay $1.25 billion it had taken as inter-company loan couple of years back. In June, India's largest private miner Vedanta Ltd had announced it will absorb oil firm Cairn India in a $2.3 billion all-share deal to create the country's largest diversified natural resources firm. (www.dnaindia.com)

October 22, 2015. The government has rejected the Cairn India's plea to renew the contract for the prolific Rajasthan block with the existing terms and conditions, report said. Report said that the company is seeking to extend the contract to operate the oil and gas block in Barmer, Rajasthan, by 10 years after the 20-year agreement runs out in 2020. Cairn owns 70% in the joint venture that manages the Barmer block. (www.indiainfoline.com)

October 25, 2015. Rajasthan Chief Minister (CM) Vasundhara Raje said the proposed oil refinery would be established in the district and the work will begin soon. She said there was a delay in its establishment as per the terms signed by the previous Congress government, despite having a right on land, oil and money, the state had a mere 26 percent share in the project, which was too little and not right. Attacking the previous government, she said, despite getting good amount as royalty from crude oil, but that government failed to bring development. (www.business-standard.com)

October 22, 2015. Petronet LNG Ltd, India's biggest liquefied natural gas (LNG) importer, is shelling out ` 400 crore every quarter in demurrage charges for ships idling because of its PSU buyers refusing to buy expensive imported gas. The company is taking only 68 percent of the volumes it agreed to in 25 year contracts with RasGas of Qatar after a slump in global energy prices led to gas being available in spot or current market a roughly half that rate. GAIL India Ltd, Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) have committed to buy all of the 7.5 million tonne a year of LNG Petronet is to import from Qatar. But with slump in global prices, they have opted to buy gas from spot market rather than use the long-term LNG. The reduced off take by the buyers forced Petronet to cut its purchase from RasGas. This resulted in idling of three cryogenic ships it had chartered hired for ferrying gas in its liquid form at sub-zero temperatures from Qatar to its import terminal at Dahej in Gujarat. But as per charter hire conditions, Petronet continues to pay the day rates. While LNG in the spot market is available at $7-8 per million British thermal unit (mmBtu), the price of gas under the long-term contract with RasGas is close to $13 per mmBtu. Pricing of LNG under the long-term deal is linked to the previous 12-month Japan Crude Cocktail (JCC), including caps and floors based on average JCC prices of the past 60 months. Petronet had hired two LNG tankers of 138,000 cubic meters capacity and one tanker of 155,000 cubic meters capacity from a consortium of ship owners led by Mitsui OSK Lines Ltd of Japan for transportation of 7.5 million tonne per annum of LNG from Qatar to Dahej. The time-charter agreement is valid till April 30, 2028. The two 138,000 cubic meters ships were hired at a day rate of $68,900 while the bigger one charges $72,880 a day. While two LNG tanker - Disha and Raahi were pressed into service in 2004, the third tanker 'Aseem' came into service in November 2009. The hire rate per ship consists of a non-escalating element of $57,900 per day and an escalating amount of $11,000 per day to be escalated at a maximum rate of 3 percent per annum. GAIL, IOC, BPCL and Oil and Natural Gas Corp (ONGC) hold 12.5 percent stake each in Petronet, which has a 10 million tons a year import terminal at Dahej. Petronet has a 5 million tonne a year LNG import terminal at Kochi, Kerala, and is planning to set up a similar capacity terminal at Gangavaram in Andhra Pradesh. (timesofindia.indiatimes.com)

October 25, 2015. The government has issued revised energy norms under the new urea policy for existing 25 gas-based urea plants in the country, a move that is expected to save about ` 800 crore in fertiliser subsidy. As per the norms issued by the Fertiliser Ministry, all the gas-based urea manufacturing plants are divided into three groups and a specific energy norm is fixed for each plant. Fertiliser subsidy stood at about ` 70,000 crore during the last fiscal. Under the first group, plants can consume 5.5 g.Cal of gas per tonne of urea, plants under second group can consume 6.2 g.Cal of gas and those in third group can consume 6.5 g.Cal of gas. Gas constitutes of about 65-70% of the cost of production of urea and cost of gas used is reimbursed by the government in the form of subsidy. The new norms have been issued as per the new urea policy which was cleared by the Cabinet in May this year. The Policy has the objective of maximising indigenous urea production and promoting energy efficiency in urea units to reduce the subsidy burden on the Government. The Cabinet had already approved the pooling of gas to provide gas to all urea plants at a uniform price. The government had already decided in January to allow urea producers to produce neem coated urea up to 100 percent of production. Neem coated urea is required less in quantity with same plot size and gives higher crop yields. The MRP of urea for the farmers is fixed at ` 268 per bag of 50 kg, excluding local taxes. Government pays the difference between cost of production and selling price as subsidy to the companies. India produces about 22 million tonnes of urea and imports about 8-9 million tonnes to meet the domestic shortfall. (www.business-standard.com)

October 21, 2015. Cairn India reported a 70 percent fall in net profit at ` 673 crore in the second quarter (Q2) ended in September, owing to falling global oil prices. The company posted a net profit of ` 2,278 crore in the same quarter of the previous fiscal. Cairn's net revenue declined 44 percent to ` 2,242 in the quarter in question, Cairn India said. The company got $43.7 per barrel for oil it sold in the second quarter, which was 53 percent lower than the $92.1 a barrel it realised a year ago. Crude oil prices have fallen by close to 60 percent over the last one year to $45-47 per barrel, from levels of over $100. Cairn said oil production from its Rajasthan block was up by three percent at 168,126 barrels per day. (www.newkerala.com)

 [NATIONAL: POWER]

October 27, 2015. Nuclear Power Corporation of India Ltd (NPCIL) is likely to restart its first 1,000 MW unit at Kudankulam Nuclear Power Project (KNPP) only in December this year. The NPCIL is building two 1,000 MW atomic power plants with Russian equipment at an outlay of over ` 17,000 crore. The first unit was connected to the southern grid in December 2014. The unit was operating at 60 percent capacity for some time before it was shut down for annual maintenance. At the time of its shut down in June, NPCIL said the unit will restart after 60 days post annual maintenance and refuelling. According to Power System Operation Corporation Ltd (PSOC), the KNPP first unit is expected to restart power generation on October 30. But this deadline is expected to be breached again. Atomic Energy Commission Chairman Sekhar Basu said that as per current indications, the first KNPP unit is expected to restart later this year and the second unit would go on stream sometime next year. He said the restart of the first unit may happen this December. Basu said lot of checks have to be carried out as the first KNPP unit was shut down for the first time since it started generating power. Despite the unit being first of its kind in the country and that it has been shut down regularly, the Atomic Energy Regulatory Board (AERB) this year issued a five year operating licence for the plant. Normally AERB issues operating licence for a year if the plant is first of its kind in the country and based on the test reports the licence would be renewed, NPCIL said. (www.businesstoday.in)

October 27, 2015. Hindustan Powerprojects said it has successfully conducted boiler light-up test for the 600 MW second unit of Anuppur thermal power project. The test signifies the readiness of the boiler for power generation process and it has started the work for steam blowing and synchronisation of the unit well within the scheduled timeline, the company said. (www.business-standard.com)

October 25, 2015. Coal production from captive mines last fiscal witnessed a significant rise of 33.64 percent at 52.769 million tonnes (mt) over the previous year. Coal production in FY 2013-14 stood at 39.484 mt, according to provisional coal production data of the last fiscal. The government is eyeing to achieve 1.5 billion tonnes of coal production by 2020. As per the government document, out of total allocated 218 mines 80 blocks were de-allocated by the end of fiscal 2013-14. Thus at the end of 2013-14, 138 coal blocks remained allocated under the category of captive coal blocks. However, by virtue of the Supreme Court order in September last year out of 218 captive coal mines, allocation of 204 blocks was cancelled for fresh allocation. Around 42 producing coal blocks were allowed to produce coal up to March 31, 2015 and allocation of 14 mines was not cancelled. The government had earlier expressed confidence that the country will produce 1.5 billion tonnes of coal by 2020, including one billion tonnes by Coal India Ltd (CIL). CIL accounts for over 80 percent of the domestic coal output. CIL achieved an output of 229.54 mt in the first six months of the current fiscal, missing its target of 235.49 mt. Coal India's output target for the current fiscal stands at 550 mt as against the recorded figure of 494.23 mt last fiscal. According to the government provisional data in 2014-15, the total production of raw coal in India increased by 8.25 percent to 612.435 mt from 565.765 mt in 2013-14. (www.business-standard.com)

October 25, 2015. North Delhi power supplier Tata Power Delhi is using power banking arrangements extensively, a factor which the discom claims has helped them save up to ` 200 crore. According to the discom, the savings are from the period between October 2014 and March 2015, in which the utility exported approximately 400 million units of power which it got back in the summer months from May 2015 to September 2015. At an average cost of ` 5/unit, the discom said that the financial expenditure for buying this power would have been around ` 200 crore. The utility further said that it had made more such banking arrangements to save power. In the period between October 2014 and March 2015, the discom said they chose to do banking of power to keep the power purchase cost low, eventually benefiting the consumers. The discom has also written to the Delhi government for continuing the reallocation of several NTPC and Delhi government power stations because they were costly and defeated the whole purpose of reducing cost of power in the capital. (timesofindia.indiatimes.com)

October 25, 2015. Power consumers may get financial relief in Andhra Pradesh (AP) if the state government has its way. The government has decided to save at least ` 1,500 crore a year by reducing the transmission and distribution (T&D) losses. The AP government has drawn a roadmap to bring T&D losses to single digit by 2016-17. The APTransco, which topped the country by clocking the lowest losses in power supply, has launched the program to reduce T&D losses from the present 11.36 percent to 9 percent to save ` 1,500 crore every year. With 14.2 percent T&D losses, Maharashtra stands second, followed by Punjab with 14.21 and Gujarat 14.6 percent. Himachal Pradesh, Kerala, Karnataka, Uttaranchal and Tamil Nadu secured place in the top 10 power-saving states. Loss of energy at T&D network has been eating away precious resources worth thousands of crores of rupees. As per a KPMG report, in 2015-16, the estimated loss of energy due to T&D losses would be around 7,700 million units worth about ` 5,300 crore. This includes persistent pilferage by some industries and domestic consumers. Theft of energy through illegal means has been eating away electricity worth ` 540 crore every year. APTransco will set up inter-state metering devices to figure out exact losses at 400 kv and 220 kv lines. Under the program, new meters will be installed at all 132 kv, 33 kv and 11 kv sub-stations. Higher capacity conductor will be installed to reduce transmission losses and step-up transformers will be replaced with higher capacity ones. Visakhapatnam district, which has reported 5.42 percent T&D losses during last financial year, has prompted the power utilities to take up the ambitious project to reduce overall losses to international level of 9 percent. Visakhapatnam has recorded 3.34 percent transmission and 2.15 percent distribution losses, the lowest among South Indian states. Tamil Nadu, Kerala and Karnataka have reported more than 14 percent T&D losses while Andhra Pradesh reduced the loss to 13.2%. Anantapur has reported the highest loss of 13. 54 percent, followed by Ongole, Nellore, Tirupati and Kadapa towns. The new capital region consisting of Vijayawada and Guntur has reported 11.95 and 12.17 percent losses respectively. As per the estimates prepared by APTransco, ` 10 crore to ` 30 crore cross subsidy will be saved by each of the electricity circles if it achieves interruption-free power supply. (timesofindia.indiatimes.com)

October 21, 2015. Of the two key power transmission projects put up for tariff-based competitive bidding (TBCB), Power Grid Corporation of India Ltd (PGCIL) won the ` 7,032 crore Vemagiri-II transmission project, one of the costliest projects to come under the bidding route this year. PGCIL emerged the lowest bidder by quoting 16 percent lower than the next bidder. The bidders included Adani Transmission, Sterlite Grid, Essel Infraprojects, Kalpataru Power and Gayatri Projects. The project located in Andhra Pradesh is of strategic importance to the national grid as the southern region faces congestion in power network owing to demand-supply mismatch. Kalpataru Power Transmission bagged the second project — the ` 2,240 crore Bhutan inter-link. The project, based in West Bengal, would help in evacuation of power from upcoming hydro projects in Bhutan. Those in the race were PowerGrid, Sterlite Grid, Adani Transmission, and Essel Infra. Rural Electrification Corporation was the designated authority for the bidding of these two projects. These projects are part of eight lines earmarked to be awarded through TBCB. The largest project worth ` 26,000 crore was awarded to PGCIL last year on a nomination basis. Power Grid wins ` 7000 cr transmission project With Vemagiri-II, the basket of large projects with PGCIL has grown. Currently, PGCIL has close to 97 percent of India’s interstate and inter-regional electricity transmission network assets. Of the ` 1.10 lakh crore of capital expenditure for the 12<sup>th</sup> Plan, PGCIL has earmarked ` 22,500 crore for FY16. (www.business-standard.com)

October 21, 2015. Pakistan has stalled the plan to import up to 4000 MW of electricity from India due to rising extreme anti-Pakistan sentiments, Water and Power Minister Khawaja Asif said. The Minister said no progress has taken place even though M/s Adani Enterprises Ltd (AEL) had submitted a proposal of the export of 500-800 MWs, which would eventually scale up to 3500-4000 MWs. Pakistan at the present is negotiating with Tehran to import of 1000 MW, which could later increase to 3000 MW and is also planning to import electricity from Iran, Tajikistan and Kyrgyzstan. (www.newindianexpress.com)

October 25 2015. Haryana government has planned to commission 215 additional sub-stations of various capacities in the next three years to further strengthen the power transmission and distribution system in the state. As many as 418 existing sub-stations would be augmented and 3,171-km transmission and distribution lines would be laid in the next three years. The BJP government, which has completed one year of its tenure in the state with the catch line of EkVarsh, Sarvatra Harsh, had taken several initiatives to improve power supply in the state during this period. The state government had launched the MharaGaon - JagmagGaon scheme on July one, for improving power supply in rural areas and reducing the AT&C losses. Under this scheme, power supply to 83 selected feeders covering 230 villages has been increased from 12 hours to 15 hours every day. Power distribution system in the selected feeders is also being strengthened, and consumers are being motivated to pay bills regularly. (news.webindia123.com)

October 21, 2015. The state government has moved the Odisha Electricity Regulatory Commission (OERC) seeking approval to purchase power from captive generating plants (CGPs) at a higher rate. The state is going through a power crisis. The state power utility, Gridco, which has moved the regulatory commission on behalf of the government, sought approval to purchase power from the CGPs at ` 3.20 paise per unit. The CGPs, which had been supplying electricity to the state government at ` 2.75 per unit so far, are now demanding ` 3.20 paise. Gridco said a number of CGPs, including Jindal Steel and Power Ltd, Bhushan Steel Ltd, Jindal Stainless Ltd, Aditya Aluminium, Navabharat Power Ltd and other small CGP units have evinced interest to sell power. The state government is planning to purchase around 1,000 million units of power from the CGPs. It will cost the state exchequer an additional ` 300 crore. The state government has estimated a shortfall of around 2,000 million units of power from hydropower units due to decrease in water level following deficit rainfall. President of Rajya Bidyut Upobhakta Mahasangha and former finance minister Panchanan Kanungo criticized the state government's move to purchase power from CGPs at a higher rate. The state is facing a shortage of 500 MW power daily against the demand of 4,100 MW during the peak hour. (timesofindia.indiatimes.com)

 [INTERNATIONAL: OIL & GAS]

October 27, 2015. Santos Ltd., which rejected a $5.2 billion takeover offer, has received a binding bid from Quadrant Energy Pty for Australian oil and gas fields the companies jointly own. Santos is considering the offer of about A$1.5 billion ($1.1 billion) for its stakes in the fields in Western Australia state as part of a broader review of its assets. Japanese trading house Marubeni Corp. is separately in talks to buy 3.6 percent of Exxon Mobil Corp.’s Papua New Guinea liquefied natural gas plant from Santos for more than A$1 billion. The Australian energy producer is speaking to a number of parties about different sets of assets. Santos hasn’t made a final decision on which parts of its portfolio to sell or whether it needs to raise equity in addition to the divestments. Separately, both Santos and Quadrant are seeking buyers for the Stag oil field off the Western Australian coast. Santos owns 66.7 percent of the field, while Quadrant owns the rest and is the operator. (www.bloomberg.com)

October 27, 2015. Britain's Tullow Oil plans to take a final investment decision (FID) on a new oilfield project in Uganda in early 2017, later than planned, Chief Executive Aidan Heavey said. Tullow discovered oil in the East African country in 2006 and had planned to make an FID on its oilfield by the end of 2016. He said Tullow expected to obtain a production licence this year in Uganda and to start oil output there in 2020. The pipeline route to move oil from landlocked Uganda to the Indian Ocean has not yet been determined. Uganda has been pushing for an earlier production date around 2018. But previous targets have slipped. China's CNOOC is also investing in Uganda, alongside France's Total. (uk.reuters.com)

October 27, 2015. Royal Dutch Shell Plc will not continue construction of its 80,000 barrel per day Carmon Creek thermal oil sands project in northern Alberta because of the lack of infrastructure to move Canadian crude to market, the company said. Canada's oil sands hold the world's third largest crude reserves but carry some of the highest project breakeven costs globally. Western Canada struggles with market access issues due to limited export pipelines, which can lead to a glut of crude building up in Alberta and weighing on prices. Shell originally sanctioned the Carmon Creek in October 2013 but said in March that it would be delayed by two years as the company retendered some contracts and adjusted the design to take advantage of lower costs during the market downturn. The company said following a review of potential design options, updated costs, and capital priorities, it had decided the project did not rank in its portfolio at this time. Shell, which owns 100 percent of Carmon Creek, will retain the leases and preserve some equipment while continuing to study options for the project. The company expects to take net impairment, contract provision, and redundancy and restructuring charges of around C$2 billion ($1.51 billion) as a result of the decision. Shell pulled the plug on its plans to drill for oil in the Arctic, citing high costs and disappointing well results and in February shelved plans for its 200,000 bpd Pierre River oil sands mining project. (www.reuters.com)

October 26, 2015. Lundin Malaysia, a wholly owned subsidiary of Lundin Petroleum, has made a small gas discovery with the Mengkuang-1 exploration well in license PM307, offshore Malaysia. The well targeted hydrocarbons in Miocene aged sands, 75 km to the northwest of Bertam field, which is operated by Lundin Malaysia. Mengkuang-1 was drilled with the West Prospero jackup rig to a total depth of 1,259 m below mean sea level. The well encountered 9 m of gas pay in the I-35 group Miocene channel sands. The well was plugged and abandoned. Lundin Malaysia operates six blocks in Malaysia, namely PM307, PM319, PM308A, PM308B, PM328 and SB307/308. (www.worldoil.com)

October 25, 2015. China's Yantai Xinchao Industry Co Ltd has agreed to spend about 8.3 billion yuan ($1.31 billion) to buy oilfields in the U.S. state of Texas, the company said. The oilfields, in Howard and Borden counties, will be bought from Tall City Exploration LLC and Plymouth Petroleum LLC, Xinchao said. The transaction has already been approved by the U.S. Treasury's Committee on Foreign Investment, it said. (www.reuters.com)

October 27, 2015. Yasref oil refinery, a venture between Saudi Arabian Oil Co. and China Petroleum & Chemical Corp., is planning to sell shares to the public amid improving refining margins for the plant. The joint venture running the refinery on Saudi Arabia’s Red Sea coast hasn’t decided yet when to issue shares to the public. Yasref’s refining margins have improved since August even as the global industry faces a significant capacity surplus. Middle Eastern oil producers such as Saudi Arabia have been expanding refining capacity to reduce costly imports of fuel needed to meet rising domestic demand and to produce cleaner-burning diesel that fetches premium prices in other markets such as Europe. Regional fuel imports are mainly gasoline and diesel, while exports from the Middle East include jet fuel, fuel oil and naphtha. Kuwait Petroleum Corp. forecasts global refining capacity to increase by 3 million to 4 million barrels a day by 2020, with China, India and the Middle East accounting for most of the growth, the company said. Kuwait plans to start operating the 615,000 barrel-a-day Al-Zour refinery by 2020, boosting the sheikhdom’s processing capacity to 1.4 million barrels a day from 936,000 currently. Yasref has been processing crude at full capacity of 400,000 barrels a day since July and currently produces 265,000 barrels a day of low-sulfur diesel and 91,000 barrels a day of 91-octane and 95-octane gasoline. (www.bloomberg.com)

October 27, 2015. Mexico's national oil company Pemex said that an alkylation plant at its smallest refinery has been shut following detection of a gas leak, adding the refinery was operating normally. The company said that the plant at the Ciudad Madero refinery located in northern Tamaulipas state has been isolated to attend to the leak, and that nearby storage tanks have also been closed down as a preventative measure. It was not clear of the leak has affected output at the refinery, Pemex's smallest with a capacity to process 190,000 barrels per day. (uk.reuters.com)

October 26, 2015. China has granted another two independent refineries licences to import crude oil, the country's commerce ministry said. The two firms are Baota Petrochemical Group and Dongying Yatong Petrochemical, the ministry said. (in.reuters.com)

October 27, 2015. Lithuania wants to cut Russian gas imports more after opening a liquefied natural gas (LNG) terminal, while overall demand is seen falling due to conversion to biomass in central heating, its energy minister Rokas Masiulis said. Lithuania is still negotiating with Russia's Gazprom and other suppliers, including U.S. LNG company Cheniere Energy Inc, Masiulis said. The Baltic state's long-term gas supply contract with Gazprom expires in December, but it still has unused quantities of gas, equivalent to about 1 to 1-and-a-half years of consumption, which it can roll over to next year. Lithuania's LNG importer Litgas also plans to import 540 million cubic metres of gas from Norway under a five-year deal with Statoil. Its gas consumption is expected to fall to between 2 and 2.5 billion cubic metres in 2016, down at least a third from two years ago as it moves to increased use of biomass for central heating. With production of heat from biomass being 30 percent cheaper than natural gas despite lower gas prices, biomass now makes up 70 percent of heating industry, Masiulis said. As domestic gas demand is declining, Litgas asked the government to allow it to re-export some LNG cargoes contracted from Statoil, and parliament expects to decide on this in December. The LNG terminal, opened last year, will still have to import at least from 400 to 500 million cubic metres per year, Masiulis said. It has a maximum capacity to import up to 4 billion cubic metres of gas per year, enough to meet about 80 percent of all the needs of the three Baltic states, including Latvia and Estonia. (uk.reuters.com)

October 27, 2015. Duke Energy has signed an agreement to acquire US-based natural gas distributor, Piedmont Natural Gas for approximately $4.9 bn in cash. Under the terms of the deal, shareholders of Piedmont will receive $60 in cash for each share of Piedmont Natural Gas common stock. Additionally, the utility will assume approximately $1.8 bn existing net debt of Piedmont Natural Gas. This represents approximately $6.7 bn of total enterprise value. Duke expects the acquisition to add one million gas customers in the Carolinas and Tennessee to its 500,000 existing gas customers in Ohio and Kentucky. The two firms are key partners in the $5 bn Atlantic Coast Pipeline, a 564-mile interstate natural gas transmission pipeline from West Virginia to North Carolina, US. Dominion has 45% stake in the project while Duke Energy holds 40%, Piedmont has 10% and AGL Resources has 5%. Upon completion of the deal by the end of 2016, Duke Energy will have an increased stake of 50% in the pipeline project while Piedmont Natural Gas will be operated as a business unit of Duke Energy. (transportationandstorage.energy-business-review.com)

October 23, 2015. Japanese utility Chubu Electric Power Co has signed a basic agreement to sell natural gas equivalent to roughly 300,000 tonnes of liquefied natural gas (LNG) per year to Tohoku Electric Power Co for 20 years from June 2023, the companies said. The deal would secure enough gas for Tohoku's new 572 MW Joetsu No.1 gas-fired unit, which is scheduled to start operations in June 2023, Tohoku Electric said. Natural gas will be supplied to the gas-fired unit via pipeline, Tohoku Electric said. (af.reuters.com)

October 23, 2015. Indonesia's Pertamina expects domestic sales of liquid petroleum gas (LPG) to increase 15 percent to 8 million tonnes in 2016 from an estimated 6.98 million tonnes this year, the company said. LPG imports will also increase next year because our domestic supply is relatively stagnant at 2.5 million tonnes, the company said. (af.reuters.com)

October 22, 2015. Polish No.1 refiner PKN Orlen's Chief Executive Jacek Krawiec said that he expects the first delivery of Saudi Arabia spot oil at the start of November. He said that the delivery may be a first step towards PKN's more intensified cooperation with this country. The head of Russia's biggest oil company Rosneft said that Saudi Arabia had started supplying crude oil to Poland, a market traditionally dominated by Russia. (af.reuters.com)

October 21, 2015. BP Plc agreed to supply liquefied natural gas to China Huadian Corp. in a deal worth as much as $10 billion over two decades. The London-based company will supply as much as 1 million metric tons of LNG annually to the Beijing-based company that operates power stations. BP and China National Petroleum Corp. (CNPC) agreed to jointly explore and produce shale gas in China’s Sichuan basin and retail fuels in the nation. The agreements are part of a host of deals signed during Chinese President Xi Jinping’s visit to London. Prime Minister David Cameron said Xi would bring more than 30 billion pounds ($46 billion) in deals and investment on his visit. BP and CNPC agreed to explore oil and LNG trading opportunities globally, work together on carbon emissions trading, and share knowledge around technology and management practices, according to BP. The LNG supply agreement with China Huadian builds on BP’s agreement with Cnooc Ltd. last year to supply 1.5 million tons a year of the chilled gas for two decades starting 2019 -- a deal valued at $20 billion at the time. BP and its peers including Royal Dutch Shell Plc and Total SA, are targeting higher gas production and sales as a way to counter declining oil prices. BP supplies LNG from several countries including the Tangguh project in Indonesia, in which it has a 37 percent holding. The company also has a stake of more than 17 percent in the planned Browse project in Western Australia, operated by Woodside Petroleum Ltd. (www.bloomberg.com)

October 21, 2015. Russia supplied a record amount of crude oil to China in September, surpassing Saudi Arabia for the second time as the top seller to the Asian giant, customs data showed, boosted by demand from independent refiners. In an unprecedented reform to its previously state-dominated oil market, China has since July allowed in half a dozen new crude oil buyers, mostly independents. Chinese buyers have scooped up Russian crude cargoes in September and October loadings, also attracted by spot premiums at multi-year lows. The Chinese customs data showed the country bought 4.042 million tonnes of crude oil from Russia last month, or about 983,590 barrels per day (bpd), up 42 percent from a year earlier. Imports from Saudi Arabia were down 16.5 percent on year at about 961,710 bpd. Traders attributed the fall to a hike in the Saudi official selling prices and as several large Chinese refineries were shut for planned overhauls. Though this is the second month Russia has surpassed Saudi shipments, analysts said the Middle Eastern nation would retain its top spot in annual totals. Russian volumes last beat Saudi Arabia in May. For the first nine months of 2015, China's Russian oil imports grew 30 percent on year to about 810,000 bpd, which compared to Saudi supplies at an average of 1.03 million bpd, the data showed. China's September crude oil imports from Iran fell 17 percent from a year earlier to 416,450 bpd. Supplies for the first three quarters dropped nearly 2 percent to about 559,020 bpd, the data showed. That is below an annual contractual amount of roughly 600,000 bpd as one regular buyer, an independent petrochemical plant, Dragon Aromatics, remained shut after a fire in April. (www.reuters.com)

October 27, 2015. Russia's Natural Resources Ministry supports the idea of giving Gazprom a tax break for an offshore oil and gas field in the Far East after Western sanctions over Ukraine hit its development prospects. Gazprom considers the development of the Yuzhno-Kirinskoye field as essential for the expansion of its Sakhalin-2 liquefied natural gas (LNG) plant, Russia's sole LNG plant. Alexei Miller, chief executive of Gazprom, the world's top gas producer, asked for tax breaks for the field near the Pacific island of Sakhalin. He said the ministry's position that Gazprom could have a discounted rate on mineral extraction tax (MET) for the field had been sent to the Finance Ministry for consideration. The proposal would also need to be approved by the government and the president to come into effect. (in.reuters.com)

October 27, 2015. Kazakhstan’s government is considering levying a penalty on a venture led by BG Group Plc and Eni SpA that operates the nation’s second-biggest producing oil and gas field as the state seeks extra revenue to bolster its finances. The fine on the Karachaganak project could be as much as $2 billion. That would be roughly in line with penalties the government threatened to impose in a 2010 dispute that ended with the state taking a 10 percent stake in the project. The Central Asia nation is studying the possibility of imposing the fine because the companies haven’t fulfilled certain contractual obligations. The penalty may be a precursor to the government increasing its stake in Karachaganak. Kazakhstan, which depends on energy products for about three quarters of its exports, needs additional funds to balance its budget after the collapse in crude oil reduced state revenue and weakened the currency by about 45 percent against the dollar since the beginning of last year. The government of President Nursultan Nazarbayev has in the past forced its oil company KazMunaiGaz National Co. into projects to increase state control over operations. BG and Eni each own 29.25 percent of Karachaganak, which yields natural gas and a light oil called condensate. Chevron Corp. has 18 percent, OAO Lukoil 13.5 percent and KazMunaiGaz 10 percent. The Karachaganak field has gross reserves of more than 2.4 billion barrels of condensate and 16 trillion cubic feet of natural gas, according to BG. It accounts for 45 percent of the country’s total gas output and 16 percent of liquids. (www.bloomberg.com)

October 26, 2015. Countries should not bank on oil prices remaining low when formulating their energy policies, as supplies could tighten from mid-2016 due to a drop in investment and falling U.S. output. Global oil prices have more than halved since June 2014 on rising U.S. shale oil output and as members of the Organization of the Petroleum Exporting Countries (OPEC) decided to defend market share rather than cut production. If prices continued at current levels, oil investment was likely to decline again in 2016, mainly in high-cost regions, after sliding this year by more than a fifth, Fatih Birol, executive director of the International Energy Agency (IEA), said. U.S. production of light tight oil production had peaked and was expected to decline by 400,000 barrels per day (bpd) in 2016, he said. Birol said geopolitical risks in the Middle East that could disrupt supplies remained, although a lifting of sanctions on Iran could boost production by 400,000-600,000 barrels per day (bpd) within a year. Still, he said that oil supplies were ample until at least mid-2016 and the IEA did not expect a strong price rebound in the short term. The IEA was set up in 1974 by oil-importing nations as a counter to OPEC and is a leading forecaster for opaque energy markets, although major energy consumers China and India are not members. On liquefied natural gas (LNG), Birol said supplies would be ample as the market will expand to 500 billion cubic meters around 2020 with new production in Australia and the United States. Most of the investment in renewables would be in emerging economies led by China and India, a shift away from OECD countries, Birol said. (www.reuters.com)

October 26, 2015. Crude oil prices could drop sharply lower as refined product storage sites come close to maximum capacity, further adding to a glut that has already seen crude prices fall by more than half since June 2014, Goldman Sachs said. Although "tank tops" - a term referring to storage capacities hitting their maximum - were unlikely, Goldman said that inventories were already "too close for comfort", bearing the potential for a sharp fall in crude prices. Crude oil prices have fallen by almost 60 percent since June last year, with production from producers in the Middle East, Russia and North America consistently above global demand. As a result, Goldman said it did not expect oil markets to re-balance next year, a term used to describe a market in which supplies and demand are at similar levels. (www.reuters.com)

October 25, 2015. British oil major BP will begin gas production at its north Alexandria concession in early 2017 rather than mid-2017, Egypt's Petroleum Minister Tarek El Molla said. The offshore concession's output will be roughly 450 million cubic feet per day in 2017 and reach 1.2 billion cubic feet per day by the end of 2019, El Molla said. These volumes will mean a significant boost to gas production in Egypt, a country that has been searching for ways to plug acute energy shortages that have slowed production at many of the country's energy-intensive industries. Egyptian authorities have in recent months worked to improve terms for foreign oil and gas businesses in the hope that more competitive pricing will encourage investment in the energy-hungry country. Once an energy exporter, falling oil and gas production coupled with rising consumption have forced Egypt to divert supplies to the domestic market and it is now a net energy importer. (af.reuters.com)

October 25, 2015. Oil at $50 a barrel is a “gift to the world” as prices should be low enough to spur economic growth, Ali Al Mansoori, the head of Abu Dhabi’s Department of Economic Development, said. Prices will probably be at $60 next year, after hitting bottom at $45, Al Mansoori said. Oil demand growth will climb to a five-year high of 1.8 million barrels a day this year before slowing next year amid a weaker outlook for the world economy, the International Energy Agency forecast in its October market report. The market will probably remain oversupplied through 2016 as Iran exports more crude, should international sanctions be eased, it said. Oil at $50 to $60 a barrel is a “win-win situation” because it benefits consumers and producers alike, Al Mansoori said. Declining oil prices will mean Abu Dhabi’s gross domestic product growth will be little changed next year, Al Mansoori said. (www.bloomberg.com)

October 25, 2015. Israel’s oil and gas explorers jumped to the highest in almost two months on speculation the nation’s natural gas policy will be approved after a cabinet reshuffle by Prime Minister Benjamin Netanyahu. Economy Minister Aryeh Deri said that he is prepared to leave the ministry to make way for a replacement willing to endorse the plan, which would unlock development of Israel’s largest offshore field. While Deri said he won’t overrule the antitrust regulator, he also doesn’t wish to halt adoption of the framework. Deri’s departure would remove a major regulatory obstacle blocking the development of the reserves in which U.S.-based Noble Energy Inc. and Israel’s Delek Group Ltd. hold stakes. Netanyahu was planning a ministerial reshuffle to secure approval. Minister of National Infrastructures, Energy and Water Resources, Yuval Steinitz, said the prime minister is committed to the gas policy and it would be in place in coming weeks. (www.bloomberg.com)

October 23, 2015. Gazprom PJSC, the world’s biggest natural gas exporter, is planning for the lowest price for its fuel in its main European market for more than a decade. The state-run exporter is drafting its budget for 2016 with preliminary estimates for gas prices outside the former Soviet Union of about $200 per 1,000 cubic meters ($5.45 a million British thermal units). That compares with the company’s estimate of an average price for the region, which covers Turkey and Europe outside the Baltic States, in 2015 of about $238 per 1,000 cubic meters and $349 last year. Gazprom, which supplies about a third of Europe’s gas and relies on exports of the fuel for 40 percent of its annual revenue of more than $100 billion, is facing declining prices abroad as most of its contracts are linked to oil with a time lag of six to nine months. Brent crude has lost 16 percent this year after a 48 percent drop in 2014. The company is also facing increased competition as the U.S. prepares to export its first liquefied natural gas from the Gulf Coast. (www.bloomberg.com)

 [INTERNATIONAL: POWER]

October 27, 2015. The much delayed 525 MW Nandipur Power Plant which went out of order soon after its inauguration in May this year has again resumed its generation by supplying 430 MW to the national grid system. The power plant was being run on furnace oil. The plant would generate 525 MW after being run on gas and the conversion would take around five months. Nandipur power plant was the second most efficient thermal power plant after 747 MW Guddu power plant. The National Electric Power Regulatory Authority had approved ` 11.3 per unit tariff for the Nandipur Power Project for generation of electricity from furnace oil. (www.dailytimes.com.pk)

October 27, 2015. Power generation has dropped from 813 MW to 660 MW at the Egbin Power Plant in Lagos State. The plant, the nation’s biggest power generating outfit, has the capacity to contribute about 1,000 MW to the national grid.  The plant was advised by the Nigerian Gas Company (NGC) to step down its generation due to the ongoing repairs at its lines. The development may also affect the general power generation output on the stations which receive gas from NGC. Transmission Company of Nigeria confirmed that the national power generation output now stood at 4, 274 MW. (www.informationng.com)

October 26, 2015. A Japanese trading house, Sumitomo Corp, said that it has won a $300 million order to build a 400 MW gas-fired power plant in Turkmenistan. The contract is part of a package of deals announced during a visit to Turkmenistan by Japanese Prime Minister Shinzo Abe. Japan and Turkmenistan signed deals worth more than $18 billion in the energy-rich former Soviet republic, which has become an important supplier of natural gas to China. Sumitomo said it aims to complete the construction of the simple-cycle gas-fired power plant in 2018. It said the main equipment, such as a gas turbine and power generator, would be procured from Mitsubishi Hitachi Power Systems Ltd. Japan’s prime minister started a tour of all five former Soviet republics in Central Asia, where Russia and China are vying for economic and geopolitical clout. (www.rferl.org)

October 23, 2015. Japanese trading firm Marubeni Corp said it and its four partners will build a $2 billion one gigawatt coal-fired power plant in Cirebon, Indonesia, to meet growing electricity demand. Marubeni, Indonesia's PT Indika Energy Tbk, South Korea's Samtan Co and Korea Midland Power Co, and Japanese utility Chubu Electric Power, have signed a 25-year contract with Indonesia's state utility PT Perusahaan Listrik Negara (PLN) to sell electricity from the plant. The new power plant which aims to start operation in 2020 is the latest in a series of overseas power generation projects by Japanese trading houses. Marubeni, which has been operating a 660 MW coal-fired power station in Cirebon since 2012, plans to construct the new plant next to the existing one. The land for the new station has been secured, the company said. (www.reuters.com)

October 22, 2015. China's Dongfang Electric Corporation Ltd has been chosen to finance and build a 350 MW coal-fired power plant in central Bosnia, the government said. The formal contract with Dongfang is expected to be signed by the end of this year, after the regional parliament and the Banovici coal mine assembly approve a draft agreement, the company said. (af.reuters.com)

October 26, 2015. The first circuit of the new 500 kV transmission line between Ancoa (Colbun) and Alto Jahuel (Buin) in Chile has been completed and inaugurated. The US$250 mn project is being built by Spanish company Elecnor, through its subsidiary Celeo Redes, which won the construction tender organised in 2009. The 255-km long line will cross three regions and 18 municipalities. The second circuit is expected to come into operation in early 2016. Once the entire project is completed, the new transmission line will strengthen the efficiency, flexibility and energy security of the country and the national grid will provide an additional capacity of 1,500 MVA, totalling 3,000 MVA. (www.enerdata.net)

October 26, 2015. Brazil and Uruguay are conducting final tests on their second power interconnection line, connecting San Carlos (near Punta del Este in Uruguay) and Candiota, in the south of Rio Grande do Sul state. The 360 km long, 500 MW project is expected to be commissioned in November 2015 and will improve power exchanges between the two countries. There is currently one 70 MW interconnection line, between Rivera and Livramento, that was commissioned in 2001. The capacity of the new line, which required an investment of US$350 mn, could be doubled to 1 GW in ten years. (www.enerdata.net)

October 26, 2015. Unit 1 of the Fangchenggang nuclear power plant in China's Guangxi province was connected to the electricity grid. The unit is expected to start up by the end of this year. The CPR-1000 pressurized water reactor (PWR) was connected to the grid at 5.15 pm on 25 October, China General Nuclear (CGN) announced. The company said a series of tests would now be conducted at Fangchenggang 1, including a load test run, after which the reactor will enter commercial operation once it has successfully completed a test run lasting 168 hours. Construction of the first two units at the Fangchenggang plant began in July 2010. The reactor pressure vessel of unit 1 was put in place in August 2013, while that for unit 2 followed in September 2014. The loading of 157 fuel assemblies into the core of unit 1 was completed on 6 September and it achieved first criticality on 13 October. Units 1 and 2 are scheduled to begin operation this year and next year, respectively. A total of six reactors are planned to operate there. Units 1 and 2 are both CPR-1000s, units 3 and 4 are planned to be based on Hualong One reactors, and units 5 and 6 are to be AP1000s. All of these are models of large PWRs. The Fangchenggang plant is 39% owned by Guangxi Investment Group and 61% owned by CGN. China National Nuclear Corporation has already started construction of unit 5 of its Fuqing nuclear power plant in Fujian province based on its version of the Hualong One design. CGN said its plans to start construction of Fangchenggang units 3 and 4 - for which its own version of the reactor design has already been approved - later this year. (www.world-nuclear-news.org)

October 27, 2015. Australian Prime Minister (PM) Malcolm Turnbull dismissed calls for a moratorium on new coal mines urged by influential citizens and Pacific leaders who say they contribute to global warming. Sixty-one prominent Australians, including rugby union's David Pocock and Nobel Prize-winning scientist Peter Doherty, wrote an open letter to world leaders calling for coal exports to be on the agenda at upcoming UN climate talks in Paris. The letter comes after the president of the Pacific state of Kiribati, Anote Tong, urged a global moratorium on new coal mines and coal mine expansions to keep global warming below dangerous levels. Australia is a leading coal exporter with huge reserves of the mineral, which it plans to export to India and elsewhere with dozens of new coal projects under consideration. Turnbull dismissed the prospect that it would scale back its industry. Turnbull replaced coal advocate Tony Abbott in a conservative party coup in September, but has said there will be no change to Australia's climate policy. With its heavy use of coal-fired power, Australia is considered one of the world's worst per capita greenhouse gas polluters and the proposed emissions reduction targets it is taking to Paris have been criticised as inadequate. Turnbull, who plans to attend the Paris talks, said coal plays a large role in global energy production and would likely do so for a long time, but he stressed the importance of having all energy options open. (www.business-standard.com)

October 26, 2015. The US Nuclear Regulatory Commission (NRC) has issued the Tennessee Valley Authority (TVA) a 40-year operating license for the second unit of the Watts Bar nuclear power plant in south-eastern Tennessee. The Watts Bar Nuclear Plant Unit 2 (WBN-2) is a 1,165 MW nuclear power plant, currently under construction on the site of the existing Watts Bar reactor in Tennessee that was commissioned in 1996. Construction had started for both units in 1973 but the construction of the second unit was suspended in 1985, when it was 55% complete. Construction works resumed in 2007 and TVA updated its operating licence application in March 2009. The project, worth US$4-4.5 bn, is expected to start commercial operations in early 2016. It will be allowed to operate until 22 October 2055. (www.enerdata.net)

October 24, 2015. German utilities RWE, Vattenfall and Mibrag will start reducing their coal-fired power output at the start of winter 2016, shifting this capacity instead to the country's power reserve as part of a plan to cut carbon emissions, the government said. Germany in July abandoned plans for a levy on coal-fired power plants and instead said it would pay companies to shift capacity to a coal-fired reserve to safeguard its target to cut emissions by 12.5 million tons by 2020. Some 2.7 GW of power generation from brown coal, equivalent to the output of five power plants, will be set aside in case of emergency and then shut down after four years.

The lignite-fired units will be taken off grid over the four years 2016-2019 and used only as facilities of last resort. Eventually, the reserve will remove some 13 percent of brown coal capacity from the market. RWE said it would shift about 15 percent of its total lignite capacity of about 10,000 MW to the reserve. RWE said it would shift capacity from two units at Frimmersdorf, in North Rhine-Westphalia, in October 2017, followed by two more at Niederaussem in 2018 and one at Neurath in 2019. After four years, they would all be shut down for good. Vattenfall, which has total brown coal capacity of 8,000 MW in Germany, said it would move capacity from two 500 MW units in Jaenschwalde in Brandenburg to the reserve in 2018 and 2019. (www.reuters.com)

 [RENEWABLE ENERGY / CLIMATE CHANGE TRENDS]

October 27, 2015. The Government has decided to ease norms for releasing viability gap funding (VGF) under a scheme for setting up 1,000 MW grid-connected solar projects by central public sector undertakings and other government organisations. Now, half of the VGF will be released at the time of getting letter of intent and starting work, while remaining assistance will be released at completion of the project, according to an amendment posted on the website of the Ministry of New and Renewable Energy. As per earlier norms, half of the VGF was released on completion of a project and remaining was paid after one year of its successful operation. According to the amendment, the changes will come into force with immediate effect. The government launched this scheme in January this year to promote installation of grid-connected solar PV power projects by CPSUs and other government organisations. Under the National Solar Mission, government aims to achieve about 100 GW of solar power generation capacity by 2022. (indiatoday.intoday.in)

October 27, 2015. Tesla founder Elon Musk has said the company might set up a Gigafactory in India to make lithium ion batteries. The plan, if it materialises, will give a boost to Prime Minister Narendra Modi’s push to get Tesla to share battery technology for powering homes in rural India. During his visit to the Tesla campus in Silicon Valley last month, Modi had discussed with Musk the potential of setting up a battery-making facility, as well as initiatives in other renewable energy technologies, to address India’s power woes. Modi has set an ambitious target of generating 100 GW of solar power by 2022. As of October 22, India had commissioned solar power plants with an overall capacity of 4.57 GW. The country has the potential to generate 759 GW of solar power, according to a study by Deloitte and the Confederation of Indian Industry. Tesla manufactures a power storage device, the PowerWall. But its cost is high and production capabilities relatively low. Still, with India pushing renewable energy technologies such as solar, it is imperative to support such initiatives with low-cost and efficient power storage. A Gigafactory, which will produce more batteries than the world’s overall production this year, is being built in Nevada in the US. The lithium-ion batteries to be produced there will power Tesla cars, as well as PowerWalls. (www.business-standard.com)

October 27, 2015. The Central government is reviving the gas-fired thermal power plants to supplement renewable energy generation in the country. It has introduced a gas pooling mechanism, which has already increased the generation from 10% to 50%. Union energy minister Piyush Goyal said that the biggest disadvantage with renewable energy plants was that sources like solar power was not available at night. Most of the gas-fired power plants are lying idle or are generating at very low capacity due to shortage of domestic natural gas and high cost of imported gas. Reduction in gas prices abroad and pooling it with domestic gas has brought down the effective price. The aim of the government is to run the gas plants at full load. Goyal said that the government would formulate policies to promote renewable energy. (timesofindia.indiatimes.com)

October 27, 2015. The World Health Organization (WHO) has called for urgent action to avoid climate change by reducing emissions of black carbon, ozone and methane as well as carbon dioxide. This is the first time that the agency has recommended actions that countries must take to reduce emissions that account for more than seven million premature deaths annually. The suggested measures include encouraging people to eat plant-based foods and reduce methane emissions associated with some animal sourced food. Besides, WHO's recommendations include reduction of vehicle emission, increased investment and policy measures along with providing alternative cooking fuel to low income households who are dependent primarily on wood, dung and other solid fuels for heating and cooking. The suggestions are part of a new report by the United Nations' health agency. The report called for fast track actions to reduce global warming and highlighted health risks associated with air pollution. (timesofindia.indiatimes.com)

October 26, 2015. Solar module manufacturer Vikram Solar said it has concluded an agreement with British Solar Renewables to supply modules with a total output of 30 MW. Macquarie Bank has agreed to provide the financial backing for the projects, it said. Before signing the supply agreement, British Solar Renewables conducted due diligence on both Vikram Solar and the Eldora Ultima modules, it said. Vikram Solar’s tier 1 status, the financial stability of the Vikram Group and the technical quality of the products were among the decisive criteria in favour of the collaboration, it said. The supplementary reinsurance from solar will cover replacement modules as needed. (www.thehindubusinessline.com)

October 26, 2015. India has not shied away from coming forward with "generous commitments" to combat climate change even as developed nations have fallen short of their obligation to provide finance as well as technologies for mitigation, NITI Aayog Vice Chairman Arvind Panagariya said. He said that the responsibility for arresting the climate change phenomenon rests principally with the developed countries. Panagariya said that commitments by India are more ambitious than even much publicised offers by China. Under the Intended Nationally Determined Contributions (INDICs) to combat climate change, India would cut its emissions per-unit of GDP (gross domestic product) by 33 percent to 35 percent by 2030 over those in 2005. Also, it would raise the installed electric capacity from non-fossil-fuel-based energy sources to 40 percent and create new carbon sink of 2.5 to 3 billion tonnes of carbon dioxide equivalent through expansion of the forest cover by 2030. Panagariya's post comes ahead of the 21^st Conference of the Parties (COP 21) under the United Nations Framework Convention on Climate Change to be held during November 30 to December 11, 2015, in Paris. Prime Minister Narendra Modi has said that though India did not create the climate change problem, it would not shy away from contributing to its solution. The United States, Europe, Russia, Japan and Canada jointly contributed 40.6 percent of the flow emissions in 2012, Panagariya said. (timesofindia.indiatimes.com)

October 25, 2015. Welspun Group plans to increase its revenue to $5 billion by 2020 from the present $3 billion, with its flagship textile business contributing half of its income. It posted a revenue of $3 billion in the year ending March 2015, one-third of which came from the home textile business driven by Welspun India. The long line-pipe business under Welspun Corp contributed $1.5 billion. Currently, the solar power business revenue is around $200 million. On the solar energy business under Welspun Projects, the group will have an installed capacity of 1,300 MW by June next and 2,000 MW by March 2017. At present, its installed capacity is nearly 450 MW spread across Gujarat, Rajasthan, MP and Andhra, making it the largest independent solar power producer in the country. (www.business-standard.com)

October 23, 2015. The government will hold an online panel discussion seeking views from people and experts on climate change and various proposals which India has recently submitted to cut green house gases ahead of crucial UN climate change conference in Paris later this year. Environment Minister Prakash Javadekar will hold a 45 minute discussion "MyGov Talk" on October 26 which will be conducted in collaboration with Google. The discussion will seek views on how the country should go ahead with sustainable lifestyle, cleaner economic development, reduction of emission intensity, enhancing forests and adaptation which has been laid down in India's climate action plan or INDCs. Contributors from MyGov, climate change experts, senior journalists and social media influencers will join the online panel discussion with the Minister. With India's Intended Nationally Determined Contribution (INDC) or voluntary emission cuts, the country is keen to attempt to work towards a low carbon emission pathway while simultaneously endeavouring to meet all developmental challenges that it faces today. People have also been invited to share their ideas and inputs on India's role in COP21 and on proposals laid down in the country's INDC including sustainable lifestyles, cleaner economic development, reduction of emission intensity of GDP, increase the share of non-fossil fuel-based electricity, enhancing forests, adaptation, mobilising finance and technology transfer. Javadekar will also mention the names and ideas which will be selected during the talk. INDCs are voluntary pledges that countries are making to cut carbon pollution ahead of the UN climate meet. India has pledged to curb its greenhouse gas emissions by up to 35 percent from the 2005 level. COP21 will, for the first time in over 20 years of UN negotiations, aim to achieve a legally binding and universal agreement on climate, with the aim of keeping global warming below 2°C. (zeenews.india.com)

October 22, 2015. Indian real estate developer Embassy Group plans to diversify its business operations by developing some 1,000 MW of wind and solar parks across the country within the next five years. To that end, the company will establish a new unit, called Embassy Energy. The latter will handle all projects of the kind as an independent power producer (IPP). Embassy Group will soon make its debut in the domestic renewable energy segment with a 200 MW photovoltaic (PV) plant in Karnataka state, possibly followed by another in Pune, Maharashtra. It will invest about INR 14 billion (USD 215mn/EUR 190mn) in the pilot project. At present, Embassy Group is working on obtaining all relevant governmental permits and approvals for the PV plant. The capacity will be installed in two phases by 2017. (renewables.seenews.com)

October 22, 2015. Wind turbine maker Gamesa India said it has signed a 100 MW wind power project order with Hero Future Energies (HFE), a part of the Hero group. Gamesa India said it will supply and erect 50 units of G97-2.0 MW turbines with a tower height of 104 metres at Dhar site in Madhya Pradesh. The commissioning is scheduled for completion by March 2016. (www.business-standard.com)

October 22, 2015. Sembcorp Industries, one of Southeast Asia's biggest utilities companies, plans to roughly triple its renewable energy portfolio over the next five years, targetting India and China for growth, company said. Sembcorp expects renewable energy to account for 20 percent of its total power capacity in five years, up from 13 percent at present. Sembcorp, which plans to focus on wind and solar energy, where costs are expected to drop further by 2020, has total power capacity of about 8,800 MW. India and China make up the bulk of its renewables capacity, with wind power assets in China of about 450 MW. In India, it jointly owns and operates wind and solar power assets with a total power capacity of 750 MW after buying a majority stake in Indian renewable energy firm Green Infra in February, this year. A boom in clean energy projects is expected in India after it hiked its solar energy target to 100 GW by 2022, a 33-fold rise from current levels. In China, Sembcorp is also jointly building a coal-fired power plant near coal mines in Chongqing. Sembcorp is also looking towards Bangladesh and Myanmar where it is developing gas-fired power plants. (timesofindia.indiatimes.com)

October 21, 2015. Ahead of next month's Paris summit on climate change, India has underlined the need for long term low-cost funding to keep energy cost affordable considering the development needs of its fast growing economy. Participating in a panel discussion on 'Unlocking Investment in Developing Countries' at the State Department in Washington, Energy Minister Piyush Goyal said in the next five to six years, India needs huge capital investment around USD 250 billion to meet its renewable energy goals. Observing that India's renewable energy potential is vast and holds a great promise, he said it provides ample opportunities for trade and investment to set up manufacturing, leapfrog technologies and create volumes. He announced that a fund focusing on renewable energy within the National Infrastructure Investment Fund is under active consideration of the Government. (www.ndtv.com)

October 27, 2015. Italy’s biggest utility is evaluating a plan to acquire the 30 percent it doesn’t already own of its renewable energy unit, a deal that may be worth as much as € 3 billion ($3.3 billion). Enel SpA sold the stake in Enel Green Power SpA in an initial public offering in 2010, and the companies are now considering a “corporate integration,” the Rome-based utility said. The deal would be the second time in a week that a company reacquired a minority stake in a clean energy unit. Terra Firma Capital Partners announced a deal to buy back the shares it didn’t own of U.K. renewables firm Infinis Energy Plc for 555 million pounds ($848 million), two years after listing it. The renewables developer is considered to be the growth engine of the company, according to an Enel spokesman. As clean energy technologies mature and become more mainstream, it makes sense for the utility to bring Enel Green Power into the center of the group. The renewables operation will receive half of Enel’s growth capital expenditure. (www.bloomberg.com)

October 27, 2015. Insurers are unprepared for the costs of climate change, the top United Nations (UN) climate diplomat said as world leaders make final preparations for a deal on global warming. The agreement, which the UN expects to seal in Paris in December, won’t solve climate change because of the greenhouse gases already in the atmosphere, UN Framework Convention on Climate Change Executive Secretary Christiana Figueres said in a speech at the Association of British Insurers in London. That means businesses, including insurers, should expect the planet to continue to heat up, which will affect commerce around the world. Insurance companies are paying close attention to climate change, and recognizes that it’s in their interest to address the threat, said Matt Cullen, ABI’s head of strategy. Figueres’s warning follows a similar one by Bank of England Governor Mark Carney who said that investors need to wake up to the potential dangers that will be triggered by rising temperatures. (www.bloomberg.com)

October 27, 2015. According to the American Wind Energy Association (AWEA), 1,602 MW of wind power capacity were added in the United States (US) in the third quarter of 2015, with most capacity installed in Texas (771 MW), Oklahoma (398 MW), Kansas (201 MW) and Illinois (175 MW). Since the start of 2015, 3,596 MW have been installed, which is more than double the installations over the same period of 2014 (1,254 MW). At the end of September 2015, the US wind power capacity reached 69,471 MW. Texas accounts for more than 1/5 of the US wind capacity with more than 16 GW, followed by Oklahoma (over 4 GW) and Kansas (over 3 GW). (www.enerdata.net)               

October 27, 2015. UK based water utility United Utilities has started construction of a 3 MW floating solar power system on a reservoir in Godley, Manchester, as part of its carbon reduction strategy. United Utilities plans to test and commission the 12-week project before Christmas 2015. Featuring 12,000 panels, spread across an area of 45,500m², the facility has been designed to reduce energy costs, and also to reduce maintain water bills for customers in future. The company intends to use the 2.7 GWh per year of renewable, zero carbon electricity generated from the new facility to power the site. United Utilities expects the Godley reservoir to provide approximately 33% of its energy requirements to the water treatment works. In 2014, Green energy developer Floating Solar UK launched the UK's first floating solar panel system at Sheeplands farm in Berkshire. Earlier this year, the UK government announced its plan to close or reduce subsidies to cut subsidies of the solar and biomass power plants in order to lower energy bills. (solar.energy-business-review.com)

October 27, 2015. The Philippine government is working on a new energy plan it hopes the next administration will adopt to curb the expanding share of coal in its fuel mix for power generation. The plan could see the Philippines generating a third of its electricity each from natural gas, coal and renewables between 2016 and 2040, Loreta G. Ayson, undersecretary at the Department of Energy said. Ayson said the energy department was finalizing a fuel mix policy that pushed for an increased share of cleaner fuels, hoping the successor of President Benigno Aquino, who will step down next June, will support it. Investments in power generation from clean fuels such as gas and renewables have lagged coal as the latter is cheaper and quicker to build to meet growing electricity demand in the Philippines. About a quarter of Philippines' power comes from natural gas produced at the giant Malampaya field and 26 percent comes from renewable sources geothermal and hydro energy. The country is the second largest geothermal power producer in the world after the United States. (www.reuters.com)

October 23, 2015. The Obama administration released details of its Clean Power Plan that sets state-by-state regulations to reduce power plants' carbon emissions by nearly a third from 2005 levels, but nearly half of the states immediately challenged the new rules. Environmentalists hailed the regulations in the plan, which was first announced in August. The rules give states until 2022 to begin showing reductions, with the aim of cutting the nation's overall emissions from power plants by 32 percent by 2030. The Environmental Protection Agency (EPA), which is overseeing the plan, said that it "has the authority to implement a federal plan" if a state fails to submit a program to reduce its carbon emissions, or if it submits an unapproved plan. 24 states challenged the new rules by petitioning the U.S. Court of Appeals, D.C. Circuit. West Virginia is heading the group of states, which also includes Virginia, Texas, Alabama and New Jersey. The dissenting states argue that the new regulations amount to federal overreach and will result in higher bills and an unreliable electrical grid. Supporters of the plan said the EPA had worked hard to make sure that the goals were achievable for every state. (america.aljazeera.com)

October 23, 2015. The Ministry of Environment and the State Environmental Fund of the Czech Republic have launched a new incentive scheme for energy efficiency and green savings, named New Green Agreement, focused on residential buildings. The Czech Republic plans to invest CZK 520 mn (€19 mn) in 2015 and CZK 2.85 bn (€105 mn) in 2016 in the green savings programme. A new support scheme for small solar PV systems will be introduced, to allow grants of up to CZK 100,000 (€3,700) for solar water heaters and small PV installations generating power for own consumption. Grants will cover up to 50% of total expenditures for the replacement of heat pumps, windows, doors, solar systems, heat pumps and building insulation. The first Green Savings programme was announced in 2009. (www.enerdata.net)

October 23, 2015. Apple Inc. has announced the completion of construction on 40 MW of solar projects in the Sichuan Province. These solar installations produce more than the total amount of electricity used by Apple's offices and retail stores in China, making Apple's operations carbon neutral in China. The company has announced two new programs aimed at reducing the carbon footprint of its manufacturing partners in China. The programs will avoid over 20 million metric tons of greenhouse gas pollution in the country between now and 2020, equivalent to taking nearly 4 million passenger vehicles off the road for one year. First, Apple is significantly expanding its clean-energy investments in China. Apple plans to build more than 200 MW of solar projects in the northern, eastern and southern grid regions of China, which will produce the equivalent of the energy used by more by than 265,000 Chinese homes in a year and will begin to offset the energy used in Apple's supply chain. Second, Apple is launching a new initiative to drive its manufacturing partners to become more energy efficient and to use clean energy for their manufacturing operations. Apple will partner with suppliers in China to install more than 2 GW of new clean energy in the coming years. Apple also will share best practices in procuring clean energy and building high-quality renewable energy projects, and provide hands-on assistance to some suppliers in areas like energy efficiency audits, regulatory guidance and building strong partnerships to bring new clean energy projects to China. As part of Apple's industry-leading program, Foxconn will construct 400 MW of solar, starting in the Henan Province, by 2018. Foxconn has committed to generate as much clean energy as its Zhengzhou factory consumes in final production of iPhone. Apple has taken significant steps to protect the environment by transitioning from fossil fuels to clean energy. The company is powering 100 percent of its operations in China and the US, and more than 87 percent of its worldwide operations, with renewable energy. (www.renewablesbiz.com)

October 22, 2015. The U.K. can cut three quarters of the carbon emissions it’s producing from making electricity without driving up bills too much by deploying more clean-energy technologies, the government’s climate change adviser said. Investments that are planned in the power industry in the next five years already are sufficient to reduce the so-called carbon intensity of electricity to 200-250 grams of carbon dioxide per kilowatt-hour, from 450 grams, the Committee on Climate Change said. Emissions below 100 grams are “an appropriate aim for 2030,” the committee said. The findings are important because they’ll inform the committee’s advice next month to the government on its fifth carbon budget -- an absolute limit on Britain’s CO₂ output for the five years from 2028 through 2032. The government isn’t obliged to follow that advice, but if it fails to do so, it legally required to explain why. Britain has already committed to cut its emissions in half from 1990 levels during its fourth carbon budget, running from 2023 through 2027. It’s aiming for an 80-percent cut by 2050. Prime Minister David Cameron’s government has announced cuts to subsidies for wind, solar and biomass plants since coming to power in May, shaking investor confidence in renewables and leading to job cuts in the solar industry. Energy Secretary Amber Rudd has said the reductions are necessary to cut costs to consumers, who fund the assistance through their energy bills. The committee said the government should boost the cap to about 9 billion pounds in 2025, assuming the price of carbon is 42 pounds per metric ton. If the carbon price is half that, support would need to rise to 9.8 billion pounds, it said. In the first half of the 2020s, onshore wind and ground-mounted solar panels will already represent “good value investments,” the panel said. Offshore wind, nuclear power and potentially coal plants equipped with carbon capture and storage units would become competitive in the second half of the decade, according to the committee. Low carbon forms of power would compete without subsidy if gas-fired power plants were required to pay the full cost their pollution and the cost of emitting carbon rises to 78 pounds a ton in 2030, the panel said. (www.bloomberg.com)

October 22, 2015. OPEC members Iran and Saudi Arabia, the top greenhouse gas emitters yet to submit national strategies for tackling climate change, say they will do so before a U.N. summit in December in a sign of widening participation even by oil producers. More than 150 governments of almost 200 nations worldwide have issued plans to curb greenhouse gas emissions - mainly from fossil fuels - and adapt to changes such as more heatwaves, floods, or storms, meant as the building blocks for a deal at the summit in Paris from Nov. 30-Dec. 11. At a final round of U.N. talks in Germany to prepare the deal, delegates from OPEC members Iran, Saudi Arabia and Nigeria, as well as other outsiders including Pakistan and Egypt, said they would all submit plans before the Paris meeting. Those submissions would push the global total of emissions covered by national plans to more than 90 percent from 87 percent by an informal U.N. deadline of Oct. 1, and calm concern that OPEC will stay on the sidelines of a plan that threatens fossil fuel use. Even so, many national plans for action beyond 2030 are vague. The United Arab Emirates became the third OPEC member, after Algeria and Ecuador, to submit a plan, saying it would initially raise the share of nuclear and renewables in its energy mix to 24 percent by 2021 from 0.2 percent in 2014. Iran, the world's number 10 greenhouse gas emitter and the biggest not to have submitted, said it would be able to do far more to curb emissions if Western powers quickly lift sanctions imposed over its nuclear program. (uk.reuters.com)

October 22, 2015. The Massachusetts Institute of Technology (MIT) rejected demands from a student-led group to divest its $13.5 billion endowment of fossil-fuel investments, joining universities such as Harvard and Yale. MIT said that it will instead remain engaged with energy companies and introduced a five-year plan to combat climate change that includes bolstering research and cutting carbon emissions on its campus in Cambridge, Massachusetts. About 5 percent of MIT’s endowment is invested in fossil-fuel companies. The advocacy group 350.org is leading a campaign that has spread to 400 college campuses worldwide, calling on schools to banish 200 publicly traded companies from their investment portfolios. The companies, such as BP Plc and Exxon Mobil Corp., have large reserves of fossil fuels which contribute to global warming. MIT has had a partnership with energy and other companies that donate $50 million a year to the school to study clean and efficient power. (www.bloomberg.com)

October 22, 2015. Thailand's private and public sectors are estimated to spend 690 billion baht ($19.4 billion) over the next three to five years on expanding capacity of petroleum, electricity and renewables to secure energy supplies, the energy ministry said. About 342 billion baht will be used for petroleum development, including expanding natural gas pipelines, building the second receiving terminal of liquefied natural gas (LNG) and others, the ministry said. Some 121 billion baht will be spent on the electricity sector, with 102 billion baht for renewable energy and 126 billion baht for energy saving measures, the ministry said. The projection was based on Thailand's new energy plan, which aimed to boost the proportion of renewables to 20 percent of total fuel mix by 2036 from 8 percent in 2014, the ministry said. (www.reuters.com)

October 21, 2015. South Africa is forging ahead with plans to impose a carbon tax to help reduce emissions, boosting costs for the nation’s biggest polluters such as Eskom Holdings SOC Ltd. and Sasol Ltd. Finance Minister Nhlanhla Nene will publish a bill for comment later this month on the carbon levy, he said in his mid-term budget speech in Cape Town. The carbon tax has been repeatedly delayed since it was first mooted in 2010. The government’s initial plans were based on a charge of 120 rand ($8.94) on every ton of carbon emitted above a 60 percent threshold. The government pledged in 2009 to reduce its emissions by 34 percent by 2020 and cut them by 42 percent by 2025, on the condition that richer countries provide financial and technical assistance. (www.bloomberg.com)

October 21, 2015. Mexico is planning to quadruple its wind-power capacity as part of President Enrique Pena Nieto’s effort to transform the country’s energy industry. The country expects to have about 10 GW of turbines in operation within three years spread across almost every region, up from 2.5 GW in 2014, part of a government plan to add 20 GW of clean energy by 2030, according to Mexico’s Wind Energy Association. A total of 22 GW of wind power will be added over the next 25 years, requiring $46 billion in investment. The wind push is due to two converging trends: Mexico’s historic shift from a state-controlled energy monopoly, and its efforts to transform a grid that relies on fossil fuels for three-fourths of the nation’s electricity. Mexico is Latin America’s largest crude producer and the world’s No. 10 producer of greenhouse-gas emissions. It was the first developing country to submit its plan to reduce carbon emissions before a United Nations conference in Paris in December where almost 200 countries are expected to sign a deal to fight global warming. Mexico pledged to reduce 22 percent of its greenhouse gas emissions by 2030. Wider use of renewable energy will reduce fossil-fuel based power generation to 45 percent. Mexico’s economy will expand 2.4 percent this year, according to a survey. The government expects energy demand to increase 4 percent annually over the next decade. That growth will be fueled by the shift toward renewables, which will jump to 51 percent of total installed capacity by 2040, from 14 percent now. Most of that will come from wind, in part because import taxes drive up costs for solar power. To facilitate that transition, the government plans to hold annual energy auctions, with the first set for March. Power producers will receive certificates for every megawatt-hour of clean energy they generate, and will sell 20-year certificates through the auctions to large electricity users. Large consumers must get 5 percent of their power from clean sources by 2018. The government also set a mandate in 2012 to get 35 percent of the country’s energy from non-fossil fuel sources by 2024, up from 21 percent now. Power companies are keen to jump into Mexico’s clean-energy market as soon as new rules for the auctions and certificates are finalized, according to Mexico’s Wind Energy Association. Gauss Energia, a Mexico City-based company that owns Mexico’s largest solar farm, is planning to register 100 MW of power projects for the March auction. (www.bloomberg.com)

 

 

 

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 12^th 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

  

 

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 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.

    

• Energy
• India
• climate change
• coal
• Energy News Monitor
• greenhouse gas emissions
• MONITORS

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.