MonitorsPublished on Jan 30, 2016
Energy News Monitor | Volume XII; Issue 33

[January 2016: The Long Shadow of Falling Oil Prices]

                             “When it comes to oil, no net oil importing country, including the United States allows the export of oil for strategic reasons. India cannot be expected to be an exception to this rule as domestic production meets less than a third of oil demand. The prospect of revenue generation will not trump national security concerns…”


Coal should remain dominant source of power in India as long as the world remains under the power of predatory and unforgiving economic competition!                                   


Unless the new tariff policy confers the right to high quality supply on the consumer it cannot confer the right to high tariff on the supplier! 


The growth rates of subsidies for solar projects exceed the growth rates of solar power generation! 




·          January 2016: The Long Shadow of Falling Oil Prices


·          14th Petro India 2016 Conference


·          India’s Declining Coal Imports and Increasing Coal Production


·          Indian basket oil price stays below $30 per barrel



·          ONGC gets green nod for ` 530 bn KG basin infra project

·          Cairn India bets big on Rajasthan

·          RIL may start coal gas production in MP shortly


·          HPCL, GAIL likely to take equal stake in JV to build ` 300 bn petrochemicals complex in AP

·          Paradip Refinery to boost IOC net profit by 30 percent

·          Indian state oil refiners plan 1.2 mn bpd plant on west coast

Transportation / Trade………………

·          Adani-IOC, GAIL, Gujarat Gas vie for CNG licence

·          IOC doubles crude oil buy from Nigeria on term contract

Policy / Performance…………………

·          NGT orders inspection of petrol pumps across Delhi-NCR

·          Oil Ministry plans new LPG connections on EMIs

·          Moody's places ONGC, Oil India on review for downgrade

·          Oil Minister pitches for priority lending to boost ethanol output

·          Africa to be major energy source for India: Oil Minister



·          Unit 2 of Kudankulam Nuclear plant to be commissioned shortly

·          Reliance Power seeks to exit Krishnapatnam project

·          NTPC asked to shift Kayamkulam plant to other location

·          Adani may buy L&T's Punjab power plant

Transmission / Distribution / Trade……

·          Reallocation of power to Telangana to provide relief to Delhi consumers

·          KPTL bags orders worth ` 12.9 bn

·          EESL to distribute energy efficient fans at ` 995 per piece

Policy / Performance…………………

·          Govt asks CIL to meet 550 mt target for current fiscal

·          EDF signs preliminary deal to build six nuclear plants in India

·          CESU seeks hike in power tariff

·          LED bulbs procurement price falls 10 percent more to ` 64.41 per unit

·          Coal to remain dominant fuel for India's power sector

·          Cabinet nod for power tariff policy

·          Indian Power sector at turning point: WEF

·          CIL to adopt ERP system



·          Lukoil signs oil exploration agreement with Iran

·          CNPC, Chevron commence production at Chuandongbei Gas Project in Sichuan

·          Brazil oil rules block $120 bn in investment

·          Schlumberger sees no pickup in oilfield activity before 2017

·          Woodside sees up to $1.2 bn in writedowns amid oil rout

·          Citigroup cuts 2016 Brent crude oil forecast to $40 per barrel


·          Iran signs oil deal with European refiner as sanctions end

·          ERC to start output at country's largest refinery in Q1 2017

·          Russia's Novokuibyshev oil refinery halts CDU

Transportation / Trade…………

·          Dutch gas exports cannot be cut before 2024: Economy Minister

·          AfDB lends €49 mn for gas distribution in north-western Tunisia

·          Taiwan to expand oil imports from Iran as sanctions gone

·          China to grant four non-major crude oil refineries import licences

·          Russian gas exports to Germany via Nord Stream rise 10 percent in 2015

·          Greece to restart crude oil purchases from Iran

·          Mitsubishi bolsters American LNG link with gas marketer purchase

·          Nigeria's NNPC shuts refineries after pipeline attacks

Policy / Performance………………

·          Standard & Poor's downgrades Asia-Pacific energy firms as oil prices tumble

·          World Bank slashes 2016 oil price forecast

·          Hess to cut capital spending 40 percent on low oil, gas prices

·          China's NDRC introduces new oil pricing mechanism

·          Saudi Arabia presents plan to move beyond oil

·          Russia to prepare for hedging against oil price risk: Finance Ministry

·          OVL, Equatorial Guinea govt sign MoU for oil, gas cooperation

·          Oil's plunge drags Gazprom's gas price in Europe down by 37 percent



·          South Korea's power generation capacity could reach 108 GW in 2016

·          Dongfang signs EPC agreement for 2 GW USC coal-fired project in Egypt

·          Slight increase in Italian power generation in 2015

·          ACWA Power will invest in 1.2 GW Nam Dinh 1 power project in Vietnam

·          Chile upholds approval of Cuervo 640 MW hydropower project

Transmission / Distribution / Trade……

·          Chubu Electric and INPEX will supply power around Tokyo

Policy / Performance………………

·          Pakistan to set up first mega nuclear power plant

·          Iran to build $11 bn nuclear power plants

·          China to allocate $4.6 bn to shut 4,300 coal mines



·          AP set to complete phase I of green energy corridor

·          Solar panels for 10k houses cleared in Tamil Nadu

·          India's 1st solar mission to help address some problems in solar physics

·          India, France to work towards implementation of CoP21 goals

·          Jakson Group eyes ` 10 bn revenue from solar biz in FY17

·          India submits first BUR to UNFCCC

·          Govt to soon launch new policy for solar zones

·          Maharashtra govt to unveil off grid policy, big push to solar energy

·          JBM Solar to commission power plant in Haryana by April

·          Govt approves ` 50.5 bn funding to push solar projects

·          NLC invites global firms for solar power projects


·          Alberta will introduce a net-metering scheme for solar

·          New York Governor pledges $5 bn for clean energy fund

·          China plans to include eight industries in carbon trading market

·          Cheap oil seen by EU as good time to cut fossil-fuel subsidies

·          Egypt's EFG Hermes targets renewable energy investments

·          Obama to force oil, gas companies to pare potent methane leaks

·          China emissions from coal power likely fell 2 percent in 2015

·          'Great Green Fleet' using biofuels deployed by US Navy

·          Iran's sanctions relief opens way for bigger pollution cuts

·          Gulf countries savings put at $87 bn with renewable energy



India monthly energy briefing

January 2016: The Long Shadow of Falling Oil Prices

Lydia Powell and Ashish Gupta, Observer Research Foundation

Climate Change


he fall in oil prices along with the economic uncertainty over China appeared to be killing the euphoria over the Paris Agreement rather prematurely in January. There was very little news on how man had conquered the complex problem of climate change in a 12 page agreement. On the other hand there was news of falling investment in the solar sector and companies such as Suzlon joining the queue for solar give-aways. The French President’s presence at India’s republic day parade made it necessary that the Paris climate pledges are re-affirmed and hopeful sounding promises are made on a solar alliance led by India and France. These are were in line with what the domestic and international audience hoped to hear but whether it will actually make any difference to the course of climate promises is uncertain. A poor economic climate is not necessarily the best climate for implementing climate pledges.     

Conventional Fuels

Oil & Gas

The impact of low oil prices on ONGC started making it to the headlines of business newspapers in January.  ONGC was reported to reduced capital spending by roughly ` 48 billion and also embarking on sweeping cost cutting measures. The Government for its turn increased excise duty on petrol and diesel to sustain the revenue from petroleum products. The government was also reported to be considering to ease the burden on oil producers. On the other hand news from the downstream players remained positive.  IOC was reported to have begun petrol production from its Paradip refinery.  HPCL was reported to have got environmental approval for its Vizag refinery.  The government also announced plans to add 10,000 new LPG dealers in 2016. While this may improve access to modern cooking fuels outside urban areas, other support schemes may be required to increase access to cooking fuels among poor rural households. Supply may not create its own demand as per Say’s law. Demand for energy is a function of the economic circumstances of the household. There was also news that the Government lost ` 14 billion in revenue because Cairn was not allowed to export oil. When it comes to oil, no net oil importing country, including the United States allows the export of oil for strategic reasons. India cannot be expected to be an exception to this rule as domestic production meets less than a third of oil demand. The prospect of revenue generation will not trump national security concerns. It was reported that the Indian refining segment would need an investment of at least $ 4.5 billion to produce Euro VI fuel by 2020. Low oil prices may have a say in such investments and it is probably too early to conclude that India’s petroleum is getting cleaner.         


In a meeting held earlier this month the Coal Ministry asked Coal India Ltd (CIL) to ensure that it meets the target of 550 million tonnes (mt) for the current fiscal. CIL was also asked to prepare a roadmap for enhancing coal production by 2020 including the capacity addition from new projects, use of mass production technologies and identification of existing ongoing projects with growth potential. The ministry assured help with environment & forest clearances and also offered assistance with State Government for land acquisition and coordinated efforts with Railways for movement of coal.

CIL achieved a 9.8 percent growth in production in January but this achievement has become a problem for CIL. It does not have adequate space for coal stocks but cola off take is less than expected.

CIL currently has a stockpile of 40 mt. In addition to this, another 34 mt is lying with power plants which takes the inventory to 74 mt. Selling off the additional stock is the only viable solution but unfortunately most of the power plants with contracts with CIL have full inventories and they cannot stock additional volumes. Warmer than expected winter and slow demand growth for power is adding to CILs troubles. 

Lower coal prices may not be of help as it will not be able to push the demand instantly. The only option left with CIL is to offer higher volumes through e-auctions but consumers with no dedicated contracts who participate in e-auctions do not generally seek huge volumes. CIL can revise coal production targets downwards but this will invite criticism. 


The news on power was not inspiring. Demand for power is slow and distribution companies re bleeding.  On the other hand, distribution companies accounting for over 90% of accumulated losses were reported to have signed up to the restructuring package. One can only hope that this will be the beginning of the end to continued financial deterioration of the sector.   

Views are those of the authors                    

Authors can be contacted at [email protected], [email protected]


14th Petro India 2016 Conference

“Oil Price Volatility: Consequences & Policy Responses”

to be held on 2 February 2016, 8:30 AM To 6:00 PM, at Hotel Shangri La, New Delhi

to confirm participation please contact

Mr. Akhilesh Sati

Observer Research Foundation, 20, Rouse Avenue, New Delhi- 110 002

Tel: 011-4352 0020 Extn. 2102, Fax: 011-4352 0003

Email: [email protected]


India’s Declining Coal Imports and Increasing Coal Production

Akhilesh Sati, Observer Research Foundation

Coal Production by CIL

Million Tonnes




% growth 2014

































Total (April to November)




 Declining Coal Imports by India

Source: Press Information Bureau


Indian basket oil price stays below $30 per barrel

Neeraj Tiwari, Observer Research Foundation

Text Box: What is Oil Supply Security Risk Index?
The Oil Supply Security Index aims to capture oil security of India using a simple quantitative methodology and represent the outcome (oil security index) in the form of a single number.  
The index aims to offer a simple gauge of India’s access to oil measured in terms of physical, financial, environmental, political and other parameters.
The index used here can take values from 0 to 100. Higher the score higher is the risk.
The quantitative risk index does not claim high degree of accuracy. As qualitative factors such as geopolitical risk are captured in quantitative form there is an element of simplification and generalisation that compromises on accuracy. The fact that only secondary sources of data are used also compromises on the level of accuracy. The simplified quantitative index is designed to serve only as a reference to judge shifts or changes in risk.

Text Box:  






ONGC gets green nod for ` 530 bn KG basin infra project

January 24, 2016. Oil and Natural Gas Corporation (ONGC) has got environmental clearance for drilling 45 development wells and other related infrastructure involving a cost of over ` 53,000 crore in the Krishna-Godavari basin in Andhra Pradesh. It is expected that the proposed development drilling and subsequent development of fields would lead to production of 51.33 billion cubic meters of gas over a period of 16 years and 26.71 million cubic meters of oil in 12 years. Among specific conditions, ONGC has been asked to obtain CRZ (coastal regulation zone) clearance, approval from Directorate General of Shipping for commencement of drilling, and comply with all recommendations and conditions specified by Andhra Pradesh Coastal Zone Management Authority. ONGC's proposal is to drill 45 development wells, set up a FPSO (Floating Production Storage and Offloading) facility, offshore fixed platform, subsea production systems and subsea pipelines connecting landfall point to existing onshore terminal for custody transfer to GAIL. The proposed project, which would cost ` 53,058 crore, will be implemented in the northern discovery area of NELP-I offshore block KG-DW N-98/2 that covers an area of 7,294.6 sq km and is located within 25-80 km from nearest coast. The block is divided into Northern Discovery Area (NDA) having deep waters with depth of upto 1,800 meters and the other one is Southern Discovery Area (SDA) which has ultra-deep waters having depth of upto 3,100 meters. NDA has two clusters -- Cluster 1 predominately has gas and Cluster 2 mixture of oil and gas. The operational area in KG Basin, Rajahmundry, covers an area of 28,000 sq km onland and 1,45,000 sq km offshore, including deep waters. This is a unique basin in the sense that hydrocarbons have been discovered both in onland and offshore parts of the basin. (

Cairn India bets big on Rajasthan

January 21, 2016. Cairn India, which is seeking a 10-year contract extension for its onshore block (RJ-ON-90/1) in Rajasthan, is betting big on tight oil potential in the block to boost its hydrocarbon output. Cairn India is leveraging latest technologies from North America to unlock the tight oil potential of its Rajasthan block. This has lead to average production of 5,500 barrels of oil per day (bopd) from tight oil reservoir in the Barmer Hill and satellite fields in the block. However, analysts said the lower crude oil prices coupled with higher tax regime could potentially spoil the explorer’s programme. Of the 2 billion barrels of in-place resources in Barmer Hill (an area in the Barmer block), recovery of 10-15% is expected across the various fields, starting with Mangala and Aishwariya. However, the challenge is exploiting tight oil could be about $8-10/barrel expensive than taking out conventional hydrocarbon. During FY2015 the company successfully completed the appraisal phase of the Barmer Hill development. In this appraisal phase of the project, initial well productivity rates lie within a range of 800 bopd to 1,000 bopd, which is very encouraging. The Vedanta group company drilled eight horizontal and four vertical wells during the phase, while three wells were brought online during the first quarter of FY16. The company managed to reduce well costs by nearly 15% and realised better cost efficiency for drilling and completion of well at Barmer Hill tight reservoir formation over one year. (

RIL may start coal gas production in MP shortly

January 20, 2016. Reliance Industries Ltd (RIL) will start production of natural gas from coal seams, called coal-bed methane (CBM), in Madhya Pradesh (MP) shortly. It plans to produce 3.5 million standard cubic meters per day of gas from the two Sohagpur blocks in the state. RIL holds 3 CBM blocks -- 495 square kilometer Sohagpur (East) and 500 sq km Sohagpur (West) in Madhya Pradesh and Sonhat in Chattisgarh. Phase-1 development envisages drilling and completion of 229 wells and installation of 2 gas gathering stations (GGS). RIL, through its subsidiary Reliance Gas Pipelines Ltd, is laying a 312-kilometre pipeline to transport coal gas (CBM) produced from Shahdol in Madhya Pradesh to Phulpur near Allahabad in Uttar Pradesh. The pipeline will have a capacity to transport 4.3 million standard cubic metres per day (mmscmd) of gas, including 0.875 mmscmd capacity that will be available for any third party for open access on non-discriminatory basis. The pipeline will travel from Shahdol to JaysingNagar- Beohari-Gurh and culminate at Phulpur. (


HPCL, GAIL likely to take equal stake in JV to build ` 300 bn petrochemicals complex in AP

January 26, 2016. Hindustan Petroleum Corporation Ltd (HPCL) and GAIL are likely to take an equal stake in a joint venture (JV) that will build a petrochemicals complex in Andhra Pradesh (AP) at an estimated cost of ` 30,000 crore. The plan to set up a refinery-cum-petrochemicals complex in Andhra Pradesh could not take off for several years due to lack of interest from foreign players expected to fund it. Recently, the Indian firms junked the plan to build refinery and decided to go ahead with just the petrochemicals complex. The capacity at HPCL's refinery in Vizag, Andhra Pradesh is being doubled, giving the firm little incentive to add one more refinery in the region. A refinery-cum-petrochemicals complex would have cost nearly triple the amount needed to build just the petrochemicals unit. Engineers India Ltd has undertaken a feasibility study of the project and is expected to submit its report in six months. It is likely to be a gas-based petrochemicals manufacturing facility, something state-run gas marketer GAIL already has experience in operating. The facility may also become a big customer for GAIL. Indian Oil Corp (IOC) is setting up a petrochemicals facility at Paradip in Odisha. The company plans to spend about ` 30,000 crore on setting up new petrochemicals facilities by 2022. (

Paradip Refinery to boost IOC net profit by 30 percent

January 26, 2016. The Paradip Refinery of Indian Oil Corp (IOC), which is set to be dedicated to the nation on February 7, will massively boost the bottomline of the largest oil marketeer to the tune of 20-30 percent, thanks to the latest technologies deployed at the facility that's coming up after a delay of 14 long years. The massive delay in completing the project has led to a cost escalation of over ` 3,500 crore at ` 34,555 crore and an interest payout of ` 7,500 crore, the company said. The commissioning of Paradip Refinery by Prime Minister Narendra Modi on February 7, will take the total number of IOC refineries to 11. Its last greenfield refinery was commissioned in 1998 at Panipat which has an annual capacity of 15 million metric tonne. Paradip is also the first greenfield coastal refinery of IOC. IOC hopes to procure the crudes from Latin America and Angola for Paradip, which are mostly heavy crudes. IOC will use the output serve Odisha, Jharkhand, MP, Chhattisgarh and Andhra markets apart from export to Southeast Asian countries. The refinery will turn 15 million metric tonne of crude per annum into petrol, diesel, cooking gas, kerosene, aviation fuel and naptha. (

Indian state oil refiners plan 1.2 mn bpd plant on west coast

January 25, 2016. Three Indian state-run oil refiners will jointly build a 60 million tonnes a year, or 1.2 million barrels per day (bpd), refinery on the country's west coast, Oil Minister Dharmendra Pradhan said. The investment for the first phase of the refinery could exceed ` 1 trillion ($14.8 billion). Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) along with another state-run company, Engineers India Ltd, will design for an 800,000 bpd capacity in the first phase of the refinery in Maharashtra state, Pradhan said. India is seen as the most important driver of energy demand growth in the world in the years to come with its oil consumption seen rising by 6 million bpd to about 10 million bpd by 2040, according to the International Energy Agency. Reliance Industries Ltd (RIL) currently operates the world's biggest single-location refinery complex, in the western Gujarat state, with a capacity to process about 1.2 million bpd of crude. The planned refinery will produce gasoline, diesel and other products as well as feedstock for petrochemical plants, Pradhan said. The oil ministry would work with the provincial government for early identification of land and finalising project details. The minister did not give a timeline for setting up the refinery. (

Transportation / Trade…………

Adani­IOC, GAIL, Gujarat Gas vie for CNG licence

January 24, 2016. Adani Gas­Indian Oil combine, GAIL Gas, Gujarat Gas and BPCL are among 18 companies that have bid for licence to retail CNG to automobiles in 20 cities like North Goa and Bhatinda. Of the 34 cities that Petroleum and Natural Gas Regulatory Board (PNGRB) had offered in the sixth round of bidding, 56 bids from 18 companies were received for 20 cities. As many as 14 cities including Raebareli, Mainpuri, Etawah, Baghpat and Amethi in Uttar Pradesh, Shahdol and Rewa in Madhya Pradesh and Nainital in Uttarakhand did not receive any bid. Of the 20 cities bid for, six cities got single bids ­­ Bharat Petroleum Corp Ltd's bid for Saharanpur in Uttar Pradesh, Central UP Gas Ltd for Ramabai Nagar in UP, Unison Enviro Pvt Ltd for Ratnagiri in Maharashtra, Gujarat State Petronet Ltd for Bhatinda in Punjab, Perigon Infratech for Dhar in Madhya Pradesh and Mahesh Resources bid for Ahmednagar in Maharashtra. Gujarat Gas bid for the most number of cities, putting in bid for all the eight cities in Gujarat on offer. These included Dahod, Patan, Banashantha, Amreli, Dahej­Vagra taluka, Ahmedabad, Anand and Panchmahal. A consortium led by Mahesh Resources Ltd bid for 7 cities while Gujarat State Petronet Ltd bid for six cities, most of them in Gujarat. The Indian Oil­Adani Gas bid for Revari, North Goa, Fatehgarh Sahib in Punjab and Rohtak in Haryana while Adani Gas on its own bid for two cities of Dahej and Ahmedabad. (

IOC doubles crude oil buy from Nigeria on term contract

January 21, 2016. Indian Oil Corp (IOC) has nearly doubled the crude oil it buys from Nigeria on a term or fixed contract as it looks to diversify sources of supplies. IOC buys some 8 million tons a year of crude oil from Nigeria. Most of it is bought from spot or current markets where prices are subject to extreme volatility. IOC is the only Asian company to have been offered a term contract by the new government in Nigeria which last month overhauled oil contracts, choosing to sell directly to international refineries, trading houses and local downstream firms. For 2016, Nigeria signed term contracts for 991,000 barrels per day (bpd) of oil or half of its around 2 million bpd of production. IOC was among the firms chosen for the contract alongside refiners like Spain's Cepsa, Italy's Saras, and ENOC of the United Arab Emirates. IOC said Nigeria choose the companies from their track records and trading experience to ensure that its crude cargoes are not left unsold. In 2015, Nigeria had sold term crude oil to 43 companies. For 2016, 278 companies had submitted bids for crude oil contracts. Nigerian crude, Oil Minister Dharmendra Pradhan said, is low sulphur and suits Indian refineries. Nigeria is India's third biggest oil supplier, selling 11.59 million tons in first half of current fiscal. It was behind only Saudi Arabia (19.56 million tons) and Iraq (17.01 million tons) in terms of supplies. (

Policy / Performance………

NGT orders inspection of petrol pumps across Delhi-NCR

January 25, 2016. Adulteration of petrol and diesel at fuel stations has caught the attention of the National Green Tribunal (NGT), which directed inspection of petrol pumps across Delhi-NCR. A bench headed by NGT Chairperson Justice Swatanter Kumar constituted a committee comprising officials from Central Pollution Control Board (CPCB), Ministry of Petroleum and Gas and concerned state pollution control boards to conduct joint inspection at any 10 petrol pumps. The green panel also directed authorities to carry out surprise inspection of 50 two and four-wheelers in Delhi-NCR to ascertain their emission levels. (

Oil Ministry plans new LPG connections on EMIs

January 24, 2016. Targeting to add 10 crore new LPG connections in next three years, Oil Minister Dharmendra Pradhan said oil marketing companies (OMCs) are mulling to sell new cooking gas on an EMI basis, just like for other consumer durables. He said till now, consumer durable items have been sold using the EMI (earnest monthly installment) facility and making such a facility available will incentivise more people to switch over to the cleaner liquefied petroleum gas (LPG). Pradhan, the minister of state with an independent charge, said at present below poverty line families get 50 percent rebate on the new connections and the EMI will be helpful for those who are not covered under it. He said a slew of efforts are being undertaken to make people switch to LPG and also announced that the ministry is targeting to add 10 crore new connections by December 2018 to the existing 16.5 crore connections. In 2016, the ministry aims to appoint 10,000 new LPG distributors, he said. Plans are also underway to install touch screen devices at prominent locations like airports, railway stations etc where consumers can book for their LPG refills, he said. (

Moody's places ONGC, Oil India on review for downgrade

January 22, 2016. Rating agency Moody's placed Oil and Natural Gas Corporation (ONGC), ONGC Videsh and Oil India on review for downgrade as petroleum industry grapples with weaker fundamentals on sharp fall in oil prices. A big oil prices has put oil exploration and production (E&P) companies and integrated oil companies world-over in a tight spot. Moody's said the review for downgrade considers that much weaker industry fundamentals have potential to warrant rating changes. While this review focuses on companies rated in the range from A1 to B3, Moody's is also re-evaluating higher and lower rated companies in the context of industry conditions. The ratings placed for downgrade are ONGC’s Local Currency Rating - Baa1 and Foreign Currency Rating - Baa2; ONGC Videsh Ltd Unsecured bonds - Baa2; and Oil India Ltd's issuer rating and unsecured bonds - - Baa2. The higher rated companies on average are somewhat more resilient to low oil prices and Moody's has recently downgraded many of the lower rated companies. Lower oil prices will further weaken cash flows for E&P companies and the upstream portion of integrated oil and gas companies. Moody's said current industry conditions also reduce the value of assets offered for sale and have made accessing capital markets more expensive for some companies and unavailable for others. While integrated oil and gas companies benefit from the profitability of their downstream operations, the upstream operations represent a much larger part of the capital employed and cash flow for most of these companies. Oil prices have deteriorated substantially in the past few weeks and have reached nominal price lows not seen in more than a decade. The agency adjusted its view downward for the likely range of prices. Even under a scenario with a modest recovery from current prices, producing companies and the drillers and service companies that support them will experience rising financial stress with much lower cash flows, it said. (

Oil Minister pitches for priority lending to boost ethanol output

January 22, 2016. Aiming to achieve 10 percent ethanol blending with petrol, Oil Minister Dharmendra Pradhan favoured inclusion of ethanol in priority sector lending of banks to boost production and said he would take up this issue with the Finance Ministry. Pradhan said the country is likely to achieve 5 percent ethanol blending with petrol this year and the government is ready to create additional storage capacity to achieve the target of 10 per cent blending. The Minister also asked the sugar industry to transfer cane payments directly into farmers' bank account. More investments are required for setting up new distilleries and expanding ethanol manufacturing capacity from the current level of 224 crore litres, he said. Besides increasing ethanol production, the Minister said there is a need to increase storage capacity as at present oil marketing companies have space to keep ethanol required for five per cent blending. For achieving 10 percent blending, the minister said there is a need to create awareness among states about the programme in view of higher state taxes and inter-state movement curbs imposed by various state governments. Even Prime Minister Narendra Modi has asked state governments to end the "license raj" to make the ethanol blending programme a big success, he said. The Minister also made it clear that the NDA government is promoting ethanol blending, keeping farmers' interest in mind, even as ethanol buying by oil marketing companies (OMCs) has become a costlier affair in the wake of fall in global crude oil prices. The government has fixed ethanol price at ` 48.50-49.50 per litre (ex-factory), without linking it to crude oil price, and removed excise duty on ethanol. The government is utilising the existing crude oil stocks, which were purchased at old price of USD 35-40 per barrel, he said. (

Africa to be major energy source for India: Oil Minister

January 21, 2016. Africa is likely to be a significant source of meeting India’s hydrocarbon needs in the years to come, Oil Minister Dharmendra Pradhan said. In 2014, India imported 32 million tonnes of crude, 16% of its consumption that year, from Africa. This is expected to increase in the near future. African imports play a significant role in meeting the demands of India and Nigeria stood as the second largest supplier of oil to India in June, 2015. The fourth India Africa Hydrocarbon Conference (IAHC) aims to explore opportunities, bridge boundaries and boost bilateral trade between India and Africa. The conference will bring together leaders in the worlds of energy to network with other influential peers, gaining new perspective by hearing distinguished CEOs from India and abroad, exchange expert insights, and develop strategies for the next big steps towards enhanced energy cooperation. The conference will provide a global forum for energy ministers and delegates of African countries to share their vision and chart out the road map for extended energy cooperation in the coming days.  Twenty-two African nations are taking part in the conference. Nine of them will be represented by their ministers. These countries are Algeria, Morocco, Mauritius, Liberia, Sudan, South Sudan, Tunisia, Senegal and Equatorial Guinea. In the third Indo-African Summit held in New Delhi in October, 2015, the key areas were outlined in which India and Africa will work together. Energy security stands as one of the major focus area of the bilateral ties. Africa with its huge hydrocarbon resources and India with its rapidly rising demand of huge human resource, experience, technology and ability to invest capital are natural partners, poised for future growth. Owing to rich natural resources in Africa, there are opportunities at various levels to be partners in growth with India which is also visible in Indian Government Policies, with a push to the Indian national oil companies to enhance their partnerships with African nations. Pradhan will also have bilateral meetings with the ministers representing the African countries.  (



Unit 2 of Kudankulam Nuclear plant to be commissioned shortly

January 26, 2016. Unit 2 of Kudankulam Nuclear Power Plant would be commissioned shortly, while site excavation clearance has been received from Atomic Energy Regulatory Board (AERB) for the third and fourth units. The clearance from AERB for Units 3 and 4 would enhance construction activities of these units. In the next step, scientists would increase the reactor power in "phases" to generate 1,000 MW of power. (

Reliance Power seeks to exit Krishnapatnam project

January 26, 2016. Reliance Power has written to the Andhra Pradesh government seeking to exit the stalled 4,000 MW Ultra Mega Power Project in Krishnapatnam. Reliance had won the ` 17,500 crore project in November 2007, quoting a uniform tariff of ` 2.33 a unit for 25 years. The project was supposed to supply 1,600 MW to Andhra Pradesh, and 800 MW each to Tamil Nadu, Karnataka and Maharashtra. However, in 2011, Reliance Power sought a renegotiation of the power purchase agreements following changes in mining regulations in Indonesia, from where it proposed to bring coal for the plants. Seeing no progress in the project, Andhra Pradesh Central Power Distribution Company, in 2012, sent a notice to Reliance saying that it would invoke the bank guarantee. Reliance Power approached the Delhi High Court and got an order which restrained the discom from taking any coercive steps. The court, however, allowed the power procurers to slap a penalty on Reliance Power. While the company had so far maintained that it is in discussion with the Andhra Pradesh government to get the project back on track, now, according to sources in the know, Reliance Power has suggested that the dispute could be resolved on the lines of Tilaiya UMPP in Jharkhand. Last year, the Anil Ambani group company exited the 3,960 MW Tilaiya Ultra Mega Power Project citing non-availability of land and issues related to forest clearances for cancelling the power purchase agreement signed with 18 power companies across 10 States. Under the settlement, Reliance Power got ` 114 crore in compensation and bank guarantees of ` 800 crore. (

NTPC asked to shift Kayamkulam plant to other location

January 24, 2016. Government has asked country's largest power producer NTPC to carry out a feasibility study for shifting its 360 MW naptha-based Kayamkulam power plant in Kerala to some other location. The Kerala government recently requested the Centre to shift the plant to somewhere else. The Centre accepted its request and asked NTPC for carrying out the techno-economic feasibility study on the same. The state wants to shift the plant, which is fuelled by naphtha, to a place well connected with a gas pipeline. According to an NTPC, the plant had been facing problem over the past as power cost from this plant is high and there are not enough buyers for the energy generated at the plant. The power plant is located at Choolatheruvu in Alappuzha district of Kerala. NTPC has a total installed capacity of 45,548 MW, including 39,352 MW through directly owned units and 6,196 MW through subsidiaries and joint ventures. (

Adani may buy L&T's Punjab power plant

January 22, 2016. Larsen & Toubro (L&T) is in talks with the Ahmedabad-based Adani group to sell its power plant in Punjab at an estimated value of around ` 3,000 crore. If the deal gets through, it will be Adani's third acquisition of a power project in 17 months. The acquisition will play an important role in Gautam Adani's plan to become India's biggest power producer and port operator in India. Adani may buy L&T's Punjab power plant Nabha Power Ltd, a subsidiary of L&T, has investments in two units of 700 MW each of coal-fired power plants in Rajpura, Punjab.

The plant turned fully operational in FY15. Last year, L&T had said in his annual address to the shareholders that the company was looking for selective value monetisation in Nabha Power. It will be a good acquisition for the Adani group as the entire power produced by the L&T plant is currently sold to Punjab State Power Corporation and the power purchase agreement is valid for the next 25 years. The plant - built on super-critical technology of Japanese company Mitsubishi - sources its fuel from south-eastern coalfields under a 20 year fuel supply agreement. The power plant has been running successfully for over a year with a technical availability of over 90 percent in the first year of operations. (

Transmission / Distribution / Trade…

Reallocation of power to Telangana to provide relief to Delhi consumers

January 22, 2016. Power-starved Telangana has come as a saviour for electricity consumers in Delhi as the southern state has told public-sector NTPC that it was willing to buy the PSU’s capacity rendered redundant by the city state. This would lead to elimination of fixed cost payable by Delhi residents, translating into a savings of 70-80 paise per unit for them. Over the course of the past year, the three privately-run power distribution companies of Delhi stopped buying power from NTPC-run thermal power plants in Dadri and Jhajjar on account of high cost and availability of cheaper power. However, under the terms of power purchase agreements (PPAs), the discoms have continued to foot the fixed cost associated with these plants and recover it from the consumers. Last year in November, the Telangana government wrote to NTPC showing its willingness to buy the surrendered capacity amounting to 1,993 MW, with 926 MW from Dadri and 1,067 MW from Jhajjar. Telangana wants to procure power on a short-term basis for a year, starting April this year. (

KPTL bags orders worth ` 12.9 bn

January 21, 2016. Kalpataru Power Transmission Ltd (KPTL) has secured new orders/notification of award of approximately ` 1,295 crore. The company has received order for establishment of Transmission system strengthening for transfer of power from New Hydro-electric power projects in Bhutan to India. The 400 KV transmission line project to be constructed in West Bengal and Bihar worth approximately ` 864 crore has been awarded by the company's 100% subsidiary Alipurduar Transmission. The company has bagged Turnkey transmission line project in Nepal worth approximately ` 238 crore from Nepal Electricity Authority. The company has also secured order for construction of 380 KV overhead transmission lines in Saudi Arabia worth approximately ` 146 crore. The project is implemented by Kalpataru IBN Omairah, a joint venture between IBN Omairah Contracting Company and KPTL, where KPTL owns 65% equity stake. The company has bagged Transmission tower supply project worth approximately ` 47 crore from Power Grid Warora Transmission (a wholly owned subsidiary of Power Grid Corporation of India). (

EESL to distribute energy efficient fans at ` 995 per piece

January 21, 2016. After LED lights, five­star­rated fans will soon be available at half the market rate, offering consumers an opportunity to reduce electricity bills by 45%. Energy Efficient Services Ltd (EESL) will next month start distributing the energy-efficient fans at ` 955 a piece. Experts say average households can reduce their electricity bills by close to half if inefficient fans and lamps are replaced by fivestar fans and LED bulbs. EESL said the tender received interest from six companies, of which four qualified under the technical parameters. The price bids were opened and the companies quoted bids in the range of ` 955­1,050 apiece. Five-starrated branded fans are available in the market for ` 1,900 apiece and consume 45 watts against 75 watts by conventional fans. The pilot fan distribution programme will be launched by EESL in Andhra Pradesh with a two year installment scheme. Consumers will have to pay ` 100 upfront to enrol and the rest will be recovered in 24 monthly installments that could be as low as ` 50. India is the largest consumer of ceiling fans in the world but demand for energy­efficient fans or super­efficient fans is very low due to price variations and lack of awareness. EESL said household electricity consumption is largely for refrigerators, lighting, fans and air conditioners. Shifting to LED lights and five­star fans can enable average households to reduce their power bills by 45%. EESL has distributed close to five crore LED lamps in various states through a similar distribution programme. The company procures LED lamps through competitive tenders and distributes them in EMI schemes. The firm has also launched a distribution programme for star­rated agricultural pumps. The company is also helping state governments float contracts for retrofitting LED street lights and maintaining them for several years, creating a market for energy service companies (ESCOs), a concept prevalent in the west. After the success of the LED lamps distribution scheme, the government has revised its estimate for energy efficient electrical equipment to ` 1.5 lakh crore from ` 74,000 crore about six years ago, EESL said. (

Policy / Performance………….

Govt asks CIL to meet 550 mt target for current fiscal

January 26, 2016. Buoyed by the output growth of 9 percent by Coal India Ltd (CIL), the government has asked the world's largest coal miner to ensure that it meets the target of 550 million tonnes for the current fiscal. CIL, which accounts for over 80% of the domestic coal production is eyeing an output of one billion tonnes by 2020. The government appreciated the CIL for an output of 373.45 million tonnes (mt) in the April-December period of fiscal 2016, registering an increase of 9% over 342.39 mt produced in the same period of the previous fiscal. Coal Secretary Anil Swarup had earlier said the state-run miner is set for a record production of 550 mt this fiscal. He had said the coal behemoth, which could hardly manage an increase of 31 mt of coal between 2010 and 2014, recorded an increase of about 32 mt in the last fiscal. Apart from increased production, increased offtake could also be possible with availability of higher number of rakes, which went to 204 per day in the current fiscal as against 182 in the last fiscal, Swarup had said. (

EDF signs preliminary deal to build six nuclear plants in India

January 26, 2016. French utility EDF said it had signed a memorandum of understanding with Nuclear Power Corp of India Ltd (NPCIL) for the construction of six EPR nuclear reactors at Jaitapur, in the west of India. With this agreement, EDF takes over the long-delayed project from French nuclear group Areva, which will sell its reactor arm to EDF. The Jaitapur project is at the preliminary technical studies stage after getting initial environmental clearance in 2010, EDF said. A contract for pre-engineering studies was signed by Areva and NPCIL last April. EDF said that in the next few months it would continue work started by Areva and NPCIL to secure certification for the EPR reactor in India and to finalise the economic and financial conditions, and technical specifications of the project, supervised by Indian atomic organisation DAE. (

CESU seeks hike in power tariff

January 25, 2016. Projecting a revenue deficit of ` 1065.92 crore during 2015-16, the Central Electricity Supply Utility (CESU) has demanded hike in retail supply tariff to recover the cost. In its annual revenue requirement (ARR) application for the ensuing financial year, the power distribution utility has estimated the revenue requirement at ` 4071.84 crore. Assuming average eight per cent distribution loss at high tension level and 29.90 per cent techno-commercial loss at low transmission level, the distribution licensee has estimated bulk power purchase of 8904.87 million unit and sale of 6085.94 million unit for their retail business for 2016-17. CESU has demanded the wheeling tariff be raised to 87.63 paise for unit while deciding the tariff for next fiscal. The revenue requirement of CESU for the retail supply business in the financial year 2016-17 is estimated at ` 3471.26 crore with the prevailing bulk supply tariff. Demanding State Government subsidy to compensate the tariff loss for providing subsidised power to different categories of consumers including BPL households, CESU has requested the Odisha Electricity Regulatory Commission to approve the annual revenue requirement as proposed for next year. (

LED bulbs procurement price falls 10 percent more to ` 64.41 per unit

January 24, 2016. The procurement price of LED bulbs has fallen further to ` 64.41 from ` 73 per unit under a government programme which could make the energy­efficient lighting more affordable. The development follows government achieving the milestone of distributing over five crore energy­efficient LED bulbs under the domestic lighting programme. The Energy Efficiency Services Limited (EESL) has through a combination of aggregation and transparent procurement achieved a rapid decline in LED prices making it affordable to the common man. The Government has also emphasised on the need to deliver quality and has ensured that the quality of LED bulbs is not compromised. Power Minister Piyush Goyal had said in November the price of LED bulbs will be brought down to ` 44 per unit in coming days. (

Coal to remain dominant fuel for India's power sector

January 21, 2016. Coal will remain the dominant fuel for India's power sector over 10-year forecast period to 2025 despite growth in alternative sources, including renewables, BMI Research, Fitch Group company, has said. India is facing growing pressure to reduce its emissions profile and diversify its coal-heavy power mix to incorporate cleaner sources. Although coal production has picked up in India, power producers will still turn to coal imports to meet rising domestic demand, particularly from power plants along the coast as transport infrastructure deficits limit domestic coal usage in these areas. (

Cabinet nod for power tariff policy

January 21, 2016. The Union Cabinet has approved several amendments to the national power tariff policy with a view to promote renewable energy and improve the ease of doing business for developers in the sector. In a major shift, power companies are allowed to pass costs on to consumers arising out of any changes in taxes, cesses and levies levied on them. The policy also seeks to “create a win-win between the generator, utilities and consumers” by allowing power generators to sell their surplus power on the power exchange and sharing the proceeds with the state government. The amended tariff policy also imposes a renewable energy obligation on new coal or lignite-based thermal plants, requiring them to establish or purchase renewable capacity alongside their own generation units. The new policy also mandates that no inter-state transmission charges will be levied until a time to be specified by the government. Further, the tariffs for multi-state power projects will be determined by the Central Electricity Regulatory Commission, thereby removing a major point of uncertainty to do with such projects. The amended policy said that the power regulator has to come up with a clear action plan to ensure 24x7 power supply to all consumers by 2021-22 or earlier. Towards the power for all initiative, the policy enables the creation of micro-grids in remote villages as yet unconnected to the grid, and also says that these micro-grids can sell their surplus power to the grid when it reaches those areas. (

Indian Power sector at turning point: WEF

January 20, 2016. India's power sector is at an "inflection", or turning, point, while most of its electricity consumed in the next two decades will come from burning fossil fuels, the World Economic Forum (WEF) said. The WEF said non-Organisation of Economic Cooperation and Development (OECD) countries would have to double their annual investments in electricity from about $240 billion to $495 billion between 2015 and 2040, which would amount to a requirement of $13 trillion to meet energy policy objectives. In this connection, Hindustan Power projects chairman Ratul Puri said India will take the centre stage at the World Economic Forum that is slated to start. (

CIL to adopt ERP system

January 20, 2016. Coal India Ltd (CIL) has decided to implement an enterprise resource planning (ERP) system that will help it monitor and optimise performance on a real-time basis and save money as the company targets production of 1 billion tonnes by 2019­20. CIL will save ` 1,000 crore every year on better resource and inventory management once the ERP system is fully implemented. The advantages of an ERP system for CIL would include improved revenue and financial management, introduction to International Financial Reporting Standards­based accounting, optimisation of coal production and its movement by rail, road and other modes of transport, sampling, reduction in spare parts inventory and breakdown maintenance, improved governance, regulatory and environmental compliances, enhanced manpower productivity and innovation. Coal India extracted 494 million tonnes in 2014­15, accounting for over 80% of the country's production of coal. MDI, an autonomous non­profit organisation set up by IFCI and the finance ministry, has been tasked with evaluating the existing IT system in CIL and its subsidiaries and how to seamlessly transfer and migrate to ERP. (



Lukoil signs oil exploration agreement with Iran

January 26, 2016. The National Iranian Oil Company (NIOC) has signed an agreement with Russian oil company Lukoil over two oil exploration projects in the south-western Khouzestan province. Under the US$6 mn contract, Lukoil will search for hydrocarbon reserves in Dasht-e Abadan and in the northern parts of the Persian Gulf. In 2003, a consortium of Lukoil (25%) and Statoil (Norway, 75%) won an agreement to start exploration in the Anaran block in western Iran and discovered oil in the Azar and Changuleh fields in 2005. The consortium had to stop operations in 2011, when the United States and the European Union intensified sanctions on Iran. Lukoil is now discussing the prospects to develop again the Azar oil field. (      

CNPC, Chevron commence production at Chuandongbei Gas Project in Sichuan

January 26, 2016. China National Petroleum Corp. (CNPC) reported that the Chuandongbei Sour Gas Project developed by the company and Chevron Corp. has become operational, with commercial gas produced from the Luojiazhai Gas Field processing plant in Sichuan Basin in southwest China. The Chuandongbei project, occupies an area of over 309 square miles (800 square kilometers), consists of several gas fields including the Luojiazhai, Tieshanpo, and Dukouhe-Qilibei gas fields. The Luojiazhai Gas Field, designed to produce 109.53 billion cubic feet (bcf) or 3 billion cubic meters (bcm) per annum, currently has a daily production of 346 million cubic feet (9.8 million cubic meters). CNPC saidthat several facilities related to the project have been completed, including a 109.53 bcf (3 bcm) per annum purification plant, a 400 kilotons per annum sulfur plant, a gas gathering station, and an 18 mile (29 kilometer) -long gas collection pipelines. The Chinese state-owned company holds a 51 percent interest in the project, while Unocal East China Sea Limited (UECSL) – a wholly owned by Chevron – has a 49 percent operating interest in the Chuandongbei project. Both companies signed an agreement to develop the Luojiazhai Gas Field in 2009. (

Brazil oil rules block $120 bn in investment

January 25, 2016. Brazil's lack of clear rules for the unitization of oilfields is delaying the development of as many as 10 billion barrels of oil and gas and about $120 billion of investment, Jorge Camargo, head of Brazil's oil industry association, IBP, said. Unitization, the process of joining different or competing oil rights in an oilfield into a single unit, is required under Brazilian law. But existing regulations have complicated or prevented unitization, stopping development in some areas, Camargo said. Camargo, who met with Brazilian President Dilma Rousseff in Brasilia earlier, said he is optimistic she plans soon to fix the unitization rules and present a stimulus package for the industry, which is struggling with low prices and a corruption scandal at state-led oil company Petroleo Brasileiro SA. Camargo said Rousseff gave him the impression she plans to extend the Repetro special customs regime for the oil industry, which reduces the potential tax bill on the importation of equipment and construction of equipment in Brazil for oil exploration and production. Energy Minister Eduard Braga said that the government was considering a variety of stimulus plans for the country's oil industry but that it was not considering the use of tax exemptions or subsidies. (

Schlumberger sees no pickup in oilfield activity before 2017

January 22, 2016. Schlumberger Ltd Chief Executive Paal Kibsgaard said a "significant" recovery in oilfield activity was not expected until 2017, and he indicated that the company might struggle to meet analysts' estimates for its current-quarter profit. Shares of the world's largest oilfield services provider, which reported a better-than-expected profit, rose as much as 8 percent. Demand for services provided by Schlumberger and its rivals is waning as oil companies tighten their belts in response to a 73 percent slide in global crude prices since June 2014. It would be "tough" to keep profit margins at current levels, Chief Financial Officer Simon Ayat said. The company, which also unveiled a $10 billion share buyback program, expects investment in exploration and production to fall for the second straight year in 2016. Although North American oil companies have scaled back spending, their output remains high as they steer drilling rigs to the most prolific shale spots and frack wells more intensely. Production in North America and outside of OPEC is resilient because oil companies, looking to maximize cash flow, are keeping "taps wide open," Kibsgaard said. (

Woodside sees up to $1.2 bn in writedowns amid oil rout

January 21, 2016. Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, expects writedowns of as much as $1.2 billion for 2015 after the slide in energy prices. The charges will be finalized when it reports earnings next month, Perth-based Woodside said in its fourth-quarter production report. Sales in the quarter fell 37 percent to $1.11 billion from $1.76 billion a year earlier. Woodside is among energy companies coping with worsening market conditions and oil prices that have fallen to the lowest levels since 2003. With a relatively strong balance sheet and new projects across the industry in doubt, Woodside may seek acquisitions after abandoning its pursuit of Oil Search Ltd. last month, according to Morgans Financial Ltd. The Australian producer is weathering oil’s slump better than competitors, its shares sinking 22 percent in Sydney trading over the past year compared with a 33 percent slide in the MSCI AC Asia Pacific Energy Index and a 60 percent tumble for rival Santos Ltd. Investment this year will total about $1.96 billion and production is forecast at between 86 million and 93 million barrels of oil equivalent. Output in 2015 fell 3 percent to 92.2 million barrels. BHP Billiton Ltd. said it expects to take a writedown of $4.9 billion on the value of its U.S. shale assets due to the tumble in oil prices. (

Citigroup cuts 2016 Brent crude oil forecast to $40 per barrel

January 20, 2016. Citigroup has cut its Brent crude oil price forecast for 2016 to $40 per barrel from $51, a note from the bank showed. Citi said that while the oil price slump was triggered by oversupply, demand was also becoming a factor in the sell-off. Citi's downgrade of its forecast follows that of many other banks which are scrambling to keep up with oil's plunge to well below $30 per barrel from above $100 as recently as September 2014. (


Iran signs oil deal with European refiner as sanctions end

January 22, 2016. Iran signed an agreement to supply crude oil with Hellenic Petroleum SA, a Greek oil refinery, in what may be the Persian Gulf producer’s first such deal with a European company since the removal of international sanctions this month. Deliveries will begin immediately, Hellenic Petroleum said. The agreement also includes an adjustment for a financial backlog owed to Iran’s state oil company after sanctions imposed four years ago. The oil market is bracing itself for a ramp up in supplies from Iran amid a global supply glut that pushed prices down to a 12-year low. Oil analysts surveyed anticipate the nation will ship 100,000 barrels a day more crude within a month of sanctions ending, and four times that within half a year. Iran says it will boost exports by 500,000 barrels a day right away. Europe had been Iran’s second-biggest oil customer before sanctions were introduced, purchasing nearly 600,000 barrels a day from the Middle East nation in 2011, according to the U.S. Energy Information Administration. Greece was one of the biggest European importers, buying about 120,000 barrels a day in 2011, data from the International Energy Agency shows. (

ERC to start output at country's largest refinery in Q1 2017

January 21, 2016. The Egyptian Refining Company (ERC), a subsidiary of one of Egypt's largest investment companies Qalaa Holdings, will start production at its $3.7 billion oil refinery in the first quarter of 2017, managing director Mohammed Saad said. The refinery, which has a capacity to produce 4.2 million tons of refined products annually, the largest in Egypt, will start trial production by the end of 2016, Saad said. Qalaa owns 19 percent of the ERC, which will convert lowest value fuel oil into middle and light distillates that Egypt needs for its domestic consumption. The firm is set to produce 2.3 million tons of diesel, 800 thousand tons of high-octane gasoline and 60 thousand tons of jet fuel in addition to unspecified amounts of butane gas and other products. (

Russia's Novokuibyshev oil refinery halts CDU

January 21, 2016. The Novokuibyshev oil refinery, controlled by Russia's top oil producer, halted a crude distillation unit (CDU), Energy Ministry data showed. The data showed that the plant listed the CDU-11 unit as "in reserve" until the end of the month. A two-week pause in the unit's work could lead to 275,000 tonnes of crude oil being unused, calculations show. (

Transportation / Trade……….

Dutch gas exports cannot be cut before 2024: Economy Minister

January 26, 2016. Dutch gas exports to neighbouring countries cannot be cut before 2024 because technical adjustments need to be made so those countries can use gas from other sources, Economy Minister Henk Kamp said. The remarks came after the Labour party, the junior partner in the coalition government, called for a faster reduction of gas exports to Germany, France and Belgium. The call for reduced exports comes as Netherlands struggles to meet its own energy demand. Output has fallen at its Groningen gas field and the Dutch are trying to reduce reliance on Russian imports. Production at the Groningen gas field, which supplies roughly 10 percent of the European Union's gas requirements, is being cut back to reduce the risk of small earthquakes. Labour Member of Parliament Frank Vos said the party would prefer exports were reduced in 2018-2020, before the government's target of 2024, so the gas can be used to power Dutch businesses and homes. Gas grid operator Gasunie is building a facility to convert gas from Norway or Russia to make it suitable for homes supplied by Groningen gas, which has a different chemical composition. Conversions in Germany, Belgium and France will be completed by 2024, Kamp said. In December, the Dutch government set production at the Groningen gas field at 27 billion cubic meters (bcm) through October 2016, down from an initial 39.4 bcm, in line with a court order to limit the risk of earthquakes. (

AfDB lends €49 mn for gas distribution in north-western Tunisia

January 25, 2016. The Tunisian Parliament has approved a DT115 mn (€49 mn) loan from the African Development Bank (AfDB) to national energy utility Société tunisienne de l’électricité et du gaz (STEG) for the extension of the gas distribution network in north-western Tunisia. The company will develop 720 km of gas transmission network and 404 km of distribution network. (               

Taiwan to expand oil imports from Iran as sanctions gone

January 25, 2016. Taiwan's refiners will increase crude imports from Iran this year, the company said, paving the way for the sanctions-hit OPEC producer to regain its market share in Asia. The companies are likely to be among the first in Asia to restart trade relations with Iran after the lifting of international sanctions. Refiners CPC Corp and Formosa Petrochemical will resume imports, bringing them back to contractual volumes that had been previously agreed with the National Iranian Oil Company (NIOC). Prior to the sanctions, Taiwan imported close to 60,000 barrels per day (bpd) of Iranian crude in 2010, but the volume dwindled to an all-time low of 3,600 bpd in 2014. Last year, the two Taiwanese refiners imported just 2 million barrels each, customs data showed. Saudi Arabia, Kuwait and Oman are the top three crude suppliers to Taiwan. (

China to grant four non-major crude oil refineries import licences

January 25, 2016. China is set to grant another four non-major oil refineries licences to import crude, the country's commerce ministry said. The four firms are Shandong Huifeng Petrochemical Group, Tianhong Chemical, and Shandong Chambroad Petrochemicals Co., Shandong Shouguang Luqing Petrochemical Co., the ministry said. The four have already obtained quotas to use imported crude oil from the country's economic planning commission. (

Russian gas exports to Germany via Nord Stream rise 10 percent in 2015

January 22, 2016. Russia raised its natural gas exports to Germany via the Nord Stream twin pipelines that cross the Baltic Sea by 10 percent in 2015, its operator said. The rise came despite a call by the European Commission for EU member states to reduce dependence on Russian energy imports but at 39.1 billion cubic metres (bcm) volumes remained well below Nord Stream's capacity of 55 bcm. Russian gas exporter Gazprom owns a 51 percent stake in the Nord Stream consortium. The consortium has plans to double Nord Stream's capacity with the construction of a third and fourth pipeline but some EU governments have spoken out against the plan. EU relations with Moscow have deteriorated following Russia's March 2014 annexation of Ukraine's Crimea region. Late that year Russia shelved plans for a pipeline across the Black Sea to Bulgaria after EU opposition to the project which was designed to bypass Ukraine. Europe relies on Russia for about a third of its gas, almost half of which is piped across Ukraine. (

Greece to restart crude oil purchases from Iran

January 22, 2016. Greece's biggest oil refiner Hellenic Petroleum agreed to buy crude oil from the National Iranian Oil Company (NIOC), the first European refiner to restart trade relations with Iran after the lifting of international sanctions. Hellenic Petroleum was a major buyer of Iranian crude, which accounted for about 20 percent of the southeast European country's annual crude oil imports before sanctions were imposed on Tehran in 2011. The agreement came after Iran's Deputy Oil Minister Amir Hossein Zamaninia and his Greek counterpart Panos Skourletis met in Athens. Under the deal, the refiner will start buying oil from Iran immediately and will settle its multi-million euro outstanding debt to NIOC, Hellenic Petroleum said in a bourse filing. Hellenic Petroleum is estimated to owe Iran around $550-600 million for oil it bought before the sanctions but was unable to pay when the international embargo was imposed. Iran used to sell as much as 800,000 barrels per day (bpd) to European refiners in Italy, Spain and Greece before the sanctions over its nuclear program were imposed. Tehran ordered a 500,000-bpd increase in its oil output, of which 200,000 bpd will go to Europe, after the sanctions were lifted. But European companies and trading houses are not rushing to buy the oil because of legal uncertainties over the lifting of sanctions that are likely to take weeks to clarify. (

Mitsubishi bolsters American LNG link with gas marketer purchase

January 20, 2016. Japan’s Mitsubishi Corp. bolstered access to natural gas supplies for its North American export projects by taking full ownership of oil and gas marketer Cima Energy Ltd. Mitsubishi, which already held 34 percent of Cima, took control of the Houston-based company, it said, without providing a value for the transaction. Mitsubishi will use Cima to secure supplies for liquefied natural gas export projects it holds stakes in, which include Cameron LNG in Louisiana and LNG Canada in British Columbia. Cima trades about 1 billion cubic feet of gas a day, according to Mitsubishi. Mitsubishi originally bought a piece of Cima in 2008 to market natural gas supplied from LNG imports. The subsequent U.S. shale boom upended those plans, turning many of the prospective U.S. LNG import terminals into export projects. Mitsubishi’s move comes as LNG prices are pacing a collapse in oil amid a global supply glut and tepid demand from utilities amid cheaper alternative fuels. New LNG projects coming online in the U.S and Australia, the gradual restart of nuclear reactors in Japan, the world’s biggest buyer, and low coal prices are driving prices lower, analysts at Citigroup Inc. said in a report. The spot price for LNG shipped to northeast Asia has tumbled to $6.45, matching the lowest in data going back to 2010, according to New York-based Energy Intelligence Group. (

Nigeria's NNPC shuts refineries after pipeline attacks

January 20, 2016. Nigeria's state oil company said it had shut down two of its four refineries due to crude supply problems after recent pipeline attacks. The Nigerian National Petroleum Corporation (NNPC) carried out an "operational shutdown" of the refineries in the northern city of Kaduna and Port Harcourt, in the southern Niger Delta, it said. It was unclear how long the refineries would be shut. A spokesman declined to give details. The shutdown follows a weekend of attacks on pipelines in the Niger Delta, the oil hub in Africa's top crude producer. The attacks follow years of relative calm in the country's oil-producing region after a 2009 amnesty halted a spate of attacks on oil installations and kidnappings of expatriate workers. Despite being Africa's largest crude exporter, Nigeria imports almost all of its gasoline. Officials had hoped newly revamped national refineries would produce up to 30 percent of its gasoline needs in the first quarter of this year. Nigeria, an OPEC member that relies on oil exports for around 95 percent of its foreign earnings, is facing its worst economic crisis in years and dwindling foreign reserves as a result of the nosedive in global crude prices. (

Policy / Performance…………

Standard & Poor's downgrades Asia-Pacific energy firms as oil prices tumble

January 26, 2016. Rating agency Standard and Poor's (S&P) downgraded several oil and gas companies in the Asia-Pacific region as a lower oil price forecast undermines the sector's revenue and credit outlook. In one of history's steepest price falls, crude has tumbled more than 70 percent since mid-2014 to under $30 a barrel, pulling down the share prices of energy firms, as producers pump 1 million to 2 million barrels of oil each day in excess of demand, in a war of discounts for market share. S&P said that it had taken various rating actions on oil and gas companies in the Asia-Pacific region, including China and Australia, after it cut its Brent crude oil price assumptions for this year and 2017 to $40 and $45 per barrel, respectively. The company said it had therefore lowered its credit profile for companies, including China Petroleum & Chemical Corp and China National Offshore Oil Corp. (CNOOC) in China and for Woodside Petroleum and Santos in Australia. However, S&P said the revised oil price outlook had no impact on the ratings and outlooks on national oil companies in South and Southeast Asia, such as Indonesia's PT Pertamina, Malaysia's Petroliam Nasional (Petronas), Thailand's PTT Public or India's Oil and Natural Gas Corp. (ONGC). The Standard & Poor’s reviews come days after competing rating agency Moody’s put 175 commodity firms, including in Asia, on review over a bleak outlook. (

World Bank slashes 2016 oil price forecast

January 26, 2016. The World Bank has slashed its forecast for crude oil prices by $14 to $37 per barrel for 2016, it said, amid growing supply and weak demand prospects from emerging markets. In its annual Commodity Markets Outlook, the World Bank lowered its price forecast for 37 of 46 commodities, including oil, saying that weak demand from emerging economies is likely to continue. World Bank economists said weak demand would continue even as oil supply grows with the resumption of Iranian exports, continued U.S. production and a mild Northern Hemisphere winter. Oil prices should decline another 27 percent in 2016 after plummeting by 47 percent last year, according to the outlook. The World Bank uses an average of Brent, Dubai and West Texas Intermediate oil, equally weighted. World Bank economists said they expect a gradual recovery in oil prices over the course of 2016 but the rebound will be smaller than in previous years that followed sharp declines, including 2008, 1998 and 1986. A poll in January showed that crude oil prices were unlikely to rally much in 2016 because of subdued demand and rising supply, even though non-OPEC output was expected to moderate. The Organization of the Petroleum Exporting Countries (OPEC) said the oil market was poised to start rebalancing itself. (

Hess to cut capital spending 40 percent on low oil, gas prices

January 26, 2016. Hess Corp. will cut spending by 40 percent this year, leading almost $5 billion in reductions announced amid a prolonged slump in oil prices. The updated guidance from Hess cuts spending to $2.4 billion from a year ago and compares with an October spending forecast of between $2.9 billion and $3.1 billion this year. Since then, oil in New York has fallen by about 29 percent. Hess kicks off earnings season for independent U.S. oil explorers and analysts expect a net loss of $1.6 billion for 2015, for its worst annual performance in at least 28 years as the crude downturn extends into its 20th month. Noble cut its dividend to 10 cents a share from 18 cents, with capital spending expected to be down 50 percent to about $1.5 billion from a year ago. Meanwhile, Continental reduced its capital budget 66 percent, to $920 million, from 2015. Hess also affirmed a production forecast between 330,000 barrels of oil equivalent a day and 350,000 barrels for 2016. Analysts expected 341,418 barrels. (

China's NDRC introduces new oil pricing mechanism

January 25, 2016. The National Development and Reform Commission (NDRC) of China has introduced a new pricing mechanism for refined oil products, effective immediately and setting a minimum price level of US$40/bbl for oil products sold by Chinese refiners. This new price mechanism is likely to be neutral for refiners in a context of falling global crude oil prices (currently below US$30/bbl). The NDRC, which previously allowed refiners to charge higher prices on their oil products after upgrading their facilities to higher quality products, aimed at avoiding excessively low refined product prices, that would boost oil product demand and aggravate pollution. Under the new pricing mechanism, Chinese refiners will have to direct the incremental profit margin (when global crude oil price fall below US$40/bbl) to a special risk reserve, which will allocate funds to oil product upgrade, security of oil supply, energy conservation and emission reduction. (             

Saudi Arabia presents plan to move beyond oil

January 25, 2016. Saudi Arabia outlined ambitious plans to move into industries ranging from information technology to health care and tourism, as it sought to convince international investors it can cope with an era of cheap oil. Top Saudi officials said they would reduce the kingdom's dependence on oil and public sector employment. Growth and job creation would shift to the private sector, with state spending helping to jump-start industries in the initial stage. Khalid al-Falih, chairman of national oil giant Saudi Aramco said that in addition to using its spending to start industries such as shipbuilding, Saudi Aramco would use its extensive educational and vocational training program to help create the human capital needed for the transformation. (

Russia to prepare for hedging against oil price risk: Finance Ministry

January 22, 2016. Russia must make all necessary preparations this year to introduce hedging to protect the country's oil earnings against price drops, Deputy Finance Minister Maxim Oreshkin said. Russia has collected its oil revenues in sovereign funds, but with current low crude prices cutting deep into government income, much of the savings are at risk of disappearing by the end of 2017. Mexico, another big oil producer, introduced hedging via the futures market in the early 1990s. It hedged its crude exports at an average price of $49 per barrel for this year. Russia's budget for 2016 is based on the assumption of oil selling at $50 per barrel. (

OVL, Equatorial Guinea govt sign MoU for oil, gas cooperation

January 21, 2016. ONGC Videsh Ltd. (OVL) and Equatorial Guinea signed a Memorandum of Understanding (MoU) to cooperate in the latter's oil and gas industry, the West African country's Ministry of Mines, Industry and Energy (MMIE) announced. OVL, the overseas arm of Oil and Natural Gas Corp. Ltd. (ONGC) focused on the upstream sector, has made investments in Africa a top priority of its 2016 agenda. The Indian company intends to double its spending on Africa to $16 billion over the next few years as it evaluates multiple exploration opportunities. (

Oil's plunge drags Gazprom's gas price in Europe down by 37 percent

January 20, 2016. Russia’s natural gas prices in Europe will probably slump 37 percent this quarter to levels not seen since 2005 because of the rout in oil. The first-quarter price may drop to about $180 per 1,000 cubic meters ($5.10 per 1,000 cubic feet) compared with $284 a year ago, Gazprom PJSC chairman Viktor Zubkov said. The state-controlled exporter meets about 30 percent of the European Union’s gas demand. Russia is still committed to oil-linked pricing in its long-term gas contracts even as crude hovers near its lowest since 2003, according to Zubkov. Gazprom in October forecast that its prices in Europe may drop to about $200 per 1,000 cubic meter in 2016, the lowest level in 11 years. That estimate was based on crude averaging $50 a barrel set in the nation’s budget. So far this year, Brent has averaged $32 a barrel. The government in Moscow is now considering changes to the budget, possibly using $40, according to the Finance Ministry. Gazprom gas prices in Europe may then average $177 a thousand cubic meters in 2016, the country’s Economy Ministry said. That estimate would mean the company’s European price would be the lowest in 12 years, with export revenue shrinking by more than a quarter in dollar terms to about $28 billion, Gazprom data show. (



South Korea's power generation capacity could reach 108 GW in 2016

January 26, 2016. South Korea expects to exceed 100 GW of installed power capacity by the end of 2016, from 93.7 GW in 2014 and 97.6 GW in 2015 (first estimates). In 2015, LNG-fired power capacity reached 32.2 GW, followed by coal-fired power plants (27.3 GW), nuclear power (21.7 GW) and renewables (7.4 GW). In 2016, total power capacity in the country could increase by more than 100 GW, reaching 108.7 GW, with the start of the 1,340 MW Shin-Kori-3 nuclear power plant and of several coal-fired power projects, including two 1,000 MW units at the Dangjin power plant. (          

Dongfang signs EPC agreement for 2 GW USC coal-fired project in Egypt

January 25, 2016. The Ministry of Power of Egypt has signed an EPC agreement with Chinese engineering group Dongfang Electric Corporation on the construction of the 1,980 MW Hamrawein ultra-supercritical thermal power project (phase I). The coal-fired power project, consisting of three 660 MW units, will be financed by a loan from the Industrial and Commercial Bank of China. (               

Slight increase in Italian power generation in 2015

January 25, 2016. According to preliminary estimates released by Italian power transmission network operator Terna, net power generation in Italy rose by only 0.6% in 2015. A 25% fall in hydropower generation (from 59 TWh to 45 TWh) contributed to an 8.3% increase in thermal power generation, which had been falling since 2010.               (

ACWA Power will invest in 1.2 GW Nam Dinh 1 power project in Vietnam

January 21, 2016. ACWA Power, the largest private water and power company in Saudi Arabia, and Taekwang Power have signed a joint development agreement to develop the 1,200 MW Nam Dinh 1 IPP coal-fired power project (first phase), located in Hai Hau District, Nam Dinh Province in Vietnam. Nam Dinh 1 is a US$2.2 bn Independent Power Project (IPP) to be developed on a 25-year Build, Own, Transfer basis. The plant is to be equipped with Circulating Fluidized Bed Combustion as an alternative to Pulverized Coal Combustion for power generation with the coal supplied by Vinacomin, a government owned coal mined company. (

Chile upholds approval of Cuervo 640 MW hydropower project

January 21, 2016. A Ministerial Committee has upheld the environmental permit for the 640 MW Cuervo hydropower project in the Aysen regio of Chile. The US$733 mn project received approval from the Aysén Environmental Evaluation Commission in September 2013 but was blocked by the Coyhaique court of appeals to weigh environmental appeals. The appeal court upheld the project, which was backed by the Supreme Court in August 2014. The project is developed by Energia Austral, a joint venture between mining group Glencore and Australian power producer Origin Energy. The plant will consist of two dams with a total installed capacity of 640 MW and will be the second largest hydropower project in Chile behind the proposed HidroAysén project. Rio Cuervo is part of the Energía Austral energy complex, which also includes the 360 MW Blanco and 54 MW Condor power projects. (              

Transmission / Distribution / Trade…

Chubu Electric and INPEX will supply power around Tokyo

January 25, 2016. Japanese energy companies Chubu Electric and INPEX have entered joint business agreements with nine city gas companies in the Tokyo metropolitan area on the supply of wholesale electricity, ahead of the liberalization of the retail electricity and gas markets. Chubu Electric and INPEX will have access to a market of up to 300,000 households in the area; they will aim to supply electricity to 20,000 households in fiscal year 2016. These agreements are part based on a heads of agreement (HoA) between Chubu Electric and INPEX signed in July 2015 to roll out a joint plan on the supply of electricity to city gas companies that supply natural gas procured from INPEX. (        

Policy / Performance…………

Pakistan to set up first mega nuclear power plant

January 26, 2016. A mega nuclear power plant is to be set up in Pakistan, the first in the country’s history, Minister for Planning and Development Ahsan Iqbal said. Iqbal said that Thar is enriched with natural coal deposits and the government is committed to utilising the resources for producing electricity, to overcome the power shortage in the country. Despite many difficulties, Pakistan has steadily continued its nuclear energy programme. Prime Minister Nawaz Sharif has also vowed to bring an end to the country-wide issue of load-shedding during the tenure of his government. (

Iran to build $11 bn nuclear power plants

January 25, 2016. Iran will start work on the second nuclear power plant at Bushehr this March followed by its third power unit in the next two years at a total investment of $11 billion. The capacity of each new Bushehr power unit will stand at 1,050 MW. The first Bushehr Nuclear Power Plant was built by Russian organisations in accordance with the 1995 contract with Iran. The second and third power units at the Bushehr NPP will be constructed together with Russia’s Rosatom State Nuclear Energy Corporation in accordance with the contract signed in Moscow in November 2014, Atomic Energy Organisation said. (

China to allocate $4.6 bn to shut 4,300 coal mines

January 21, 2016. China will allocate 30 billion yuan ($4.56 billion) in funds over the next three years to support the closure of small and inefficient coal mines and redeploy around 1 million workers. The Chinese government is determined to reduce the share of coal in its overall energy mix as part of efforts to cut smog and greenhouse gas emissions, but it also looking to secure a soft landing for a sector that employs around 6 million people. Total raw coal output fell 3.5 percent to 3.68 billion tonnes last year, according to data. Prices fell by about a third during the year, causing heavy losses in the industry. China will aim to close 4,300 mines and cut annual production capacity by 700 million tonnes over the next three years. The central government will also ban new mine approvals for the next three years, but the move is unlikely to make much of a dent in a production capacity surplus said to amount to more than 2 billion tonnes a year, over half the country's total output. China still had around 11,000 coal mines in operation by the end of 2015, with a total capacity of 5.7 billion tonnes. Analysts said that the funds required to tackle overcapacity in the coal and steel sectors could reach 200 billion yuan, 70 percent of which would be needed for coal. According to the National Energy Administration, coal consumption amounted to 64.4 percent of China's total energy mix in 2015, down 1.7 percentage points compared to the previous year. China aims to cut the rate to 62.6 percent this year. (



AP set to complete phase I of green energy corridor

January 26, 2016. Andhra Pradesh (AP) is set to complete phase one of the ` 2000 crore Green Energy Corridor, by March 2016, aimed at strengthening the evacuation network for renewable energy projects. To facilitate wind power transmission of 3150 MW, a Green Energy Corridor is being developed. In the phase one, a Corridor to support 2000 MW is being set up with an outlay of ` 2,085.4 crore. The project is funded by Rural Electrification Corporation. Providing a big thrust on renewable energy projects, the State has taken up three major solar parks with a total capacity of 3,500 MW and 2,000 MW of wind energy power generation. While the present installed capacity of solar projects is 150 MW, the State expects to take this up to 5000 MW within four years. (

Solar panels for 10k houses cleared in Tamil Nadu

January 26, 2016. To bring down pollution levels and make cities clean and green, the Ministry of Urban Development cleared the installation of solar panels on the rooftops of 10,000 houses in Tamil Nadu. The beneficiaries of this program would be those houses that qualify the parameters of what the ministry perceives as “economically weaker sections”. With an estimated cost of ` 253 crore under Prime Minister's Awas Yojana, the proposal for such an infrastructural up gradation had come from the Tamil Nadu government and it has been approved by an Inter-Ministerial Central Sanctioning and Monitoring Committee (CSMC). (

India's 1st solar mission to help address some problems in solar physics

January 26, 2016. India's first mission to study the Sun, Aditya - L1, will help address some of the outstanding problems in solar physics, Indian Space Research Organisation (ISRO) said. Expected to be launched during 2019-20, it will enable a comprehensive understanding of the dynamic processes of the sun, it said. The mission was first conceived as Aditya-1 mission as a 400 kg class satellite carrying one payload, the Visible Emission Line Coronagraph (VELC).  It was planned for launch in an 800 km low earth orbit. The satellite will be inserted in a halo orbit around the L1, which is 1.5 million km from Earth, ISRO said. Aditya - L1 will be launched on board launch vehicle PSLV-XL from the spaceport at Sriharikota in Andhra Pradesh. (

India, France to work towards implementation of CoP21 goals

January 25, 2016. After successful conclusion of the Paris climate change summit, India and France agreed to work towards the realization of the agreement's goals and carry out its implementation by collaborating in the field of sustainable development and energy. Prime Minister Narendra Modi congratulated French President Francois Hollande for his "sustained" diplomatic efforts that paved way for adoption of the Paris agreement which was based on the principle of "climate justice" and fostering climate resilience and low greenhouse gas emissions development. The universal agreements, which were reached at Conference of Parties (CoP21), aims to keep the global temperature rise well below 2 degrees Celsius this century and to drive efforts to limit the temperature increase further to 1.5 degrees Celsius above pre-industrial levels. President Hollande also thanked India and Modi for playing an "important and proactive" role in the negotiations. The two countries wish to carry out the implementation Paris agreement goals by promoting collaboration in sustainable development and energy between governments, regions, cities and also companies. India had hailed as "historic" the adoption of a legally-binding pact in Paris but said the deal could have been more ambitious had developed nations shouldered more historical responsibilities. (

Jakson Group eyes ` 10 bn revenue from solar biz in FY17

January 24, 2016. Riding high on initiatives taken by the government to promote solar energy, power solutions provider Jakson Group is eyeing nearly ` 1,000 crore revenue from this segment alone in FY17. The company is eyeing ` 2,500 crore revenue in financial year 2016-17, out of which it expects the solar business, which includes solar power generation, manufacturing of panels, products and rooftop EPC projects, to contribute around ` 1,000 crore. Jakson Group manufactures diesel and gas gensets, other solar products like solar panels, street lights, purifiers, gensets and also undertakes EPC electrical contracting works. The company made its foray into solar power generation with the commissioning of 30 MW project. It hopes to close this fiscal with revenues of around ` 1500 crore, out of which its core business of gensets is expected to contribute ` 1,000 crore, ` 300 crore from solar EPC contracts, sale of panels and other solar products, ` 50 crore from solar IPP (30 MW) and ` 150 crore from electrical EPC contracts. The firm expects many EPC contracts in the solar space from both the public and private sectors. It also plans to increase its solar panels manufacturing capacity from 75 MW currently to 250 MW over the next 2 years. The company is also looking at joint ventures especially for technology transfer for setting up panel manufacturing plants to expand the capacity to 250 MW. It is considering the port areas in states like Gujarat and Telangana and plans to invest ` 300 crore for setting up such facilities. (

India submits first BUR to UNFCCC

January 22, 2016. India submitted its first Biennial Update Report (BUR), to the United Nations Framework Convention on Climate Change (UNFCCC), towards fulfillment of the reporting obligation under the Convention. As per the provisions of the Convention, countries need to periodically provide information in the form of their National Communication. As per BUR, India emitted 2,136.84 million tonnes of CO2 equivalent greenhouse gases in 2010. Energy sector was the prime contributor to emissions and with 71% of total emissions in 2010. Energy sector includes - electricity production, fuel combustion in industries, transport and fugitive emissions. Industrial processes and product use contributed 8%; agriculture and waste sectors contributed 18% and 3% respectively to the national GHG inventory. About 12% of emissions were offset by carbon sink action of forests and croplands, considering which the national GHG emissions are arrived at a total of 1,884.31 million tonnes of CO2 equivalent. India’s per capita GHG emission in 2010 was 1.56 tCO2 equivalent, which is less than one- third of the world’s per capita emissions and far below than many developed and developing countries. A reduction of emission intensity of GDP by about 12% between 2005 and 2010 has been achieved against our voluntary pledge to reduce the emission intensity of its GDP by 20–25 per cent by 2020, compared with the 2005 level. BUR showcases a range of climate-friendly measures initiated through eight National Missions under National Action Plan on Climate Change and other programs such as Integrated Power Development Scheme, Renewable Purchase Obligations, enhancement of cess on coal, Perform Achieve and Trade Scheme and National Program for LED based lighting. At the national level, 137 and at state level 286 policies and measures relevant to climate change have been mapped in the report on non-exhaustive basis. (

Govt to soon launch new policy for solar zones

January 21, 2016. The government will soon come out with a new policy for setting up solar zones in the country to give a fillip to renewable energy projects and manufacturing of equipment. Each solar zone will be spread over 100 sq kms and 25 percent of the area will be reserved for the small and medium industries. India has set an ambitious target of achieving 100 GW of solar power generation capacity by 2022 under the Jawaharlal Nehru National Solar Mission. New and Renewable Energy Secretary Upendra Tripathy said these zones will not be confined to promoting solar energy only as the area will have wind potential as well. The 25 per cent area will be for small and medium size industries to put up plants with capacities such as 3, 5 and 10 MW. They will not require any permission and respective state governments can guide them, Tripathy said. Under the solar zone, another 25 per cent of area will be kept for manufacturing facilities. The bidding for this space will be limited to manufacturers in India who are already into it or planning to start production. On the remaining half of the solar zone area, he said it will be open for all types of players for setting up solar power projects. He said that the government has planned to float tender for up to 18,000 MW of solar capacity by March 31 as the Centre is targetting 12,000 MW solar power generation capacity addition in 2016-17. (

Maharashtra govt to unveil off grid policy, big push to solar energy

January 21, 2016. Maharashtra government will soon bring in an off grid energy policy that will promote rooftop solar power generation and provide subsidy to cooperative housing societies and government buildings to encourage electricity generation through the nonconventional method. Minister for Energy and Renewable Energy Chandrashekhar Bawankule said state government is also trying to promote solar power pumps for water distribution scheme in rural areas and use of solar energy at government hostels to cook food. According to the policy, Maharashtra will set a target of five years to generate 200 MW power from roof top solar panels, install 10,000 solar pumps for small and medium water distribution scheme, generate 4,000 kilo Watt power from biogas and operate micro­grid pilot project in two villages during upcoming five years span. Once the state cabinet approves the policy, Energy department will install solar heaters having capacity of 318.75 lakh litres in government hostels. It will be made mandatory for District Planning Development Council (DPDC) to reserve 3 per cent funds and the state will allocate ` 300 crore from its annual plan every year to implement the policy, he said. Government offices, cooperative societies and apartments, hospitals and educational trusts will be eligible for a subsidy of ` 20 per Watt or 20 percent of the project cost whichever is lesser. (

JBM Solar to commission power plant in Haryana by April

January 21, 2016. JBM Solar Pvt Ltd, part of the Gurgaon-based conglomerate JBM Group, will commission the "largest" solar power plant in Haryana by April 2016. With a total investment of ` 120 crore, the solar power plant once commissioned, would have a capacity to produce 20 MW electricity. The project was awarded to the company by the Haryana government in June last year with an aim to increase the share of renewable power in its total energy consumption. JBM Group laid the foundation stone of the solar power plant at Barwas village in Bhiwani, Haryana. This is the second solar power plant of JBM Group. Last year, the group had commissioned a 250 KW solar plant at the rooftop of India Habitat Center, New Delhi. JBM Group forayed into solar power generation in 2015 with plans to invest ` 1,600 crore through its new entity JBM Solar Pvt Ltd. The company expects to have an installed capacity of 300 MW by 2018. JBM Solar is an independent power producer focusing on on-ground as well as rooftop projects. (

Govt approves ` 50.5 bn funding to push solar projects

January 20, 2016. The government approved a 'viability gap funding' (VGF) of ` 5,050 crore for setting up over 5,000 MW of grid linked solar power projects under the Jawaharlal Nehru National Solar Mission. The total investments expected under this scheme is about ` 30,000 crore. The upper limit for VGF will be ` 1 crore per MW. In case there is savings in the total VGF requirement, quantum of capacity of 5000 MW can be enhanced. Under the scheme 500 MW capacity will be created this fiscal while during four financial year from 2016­17 to 2019­20, solar power generation capacity of 1,125 each year will be set up. The scheme will be implemented on build, own and operate basis through competitive bidding to provide solar power at a pre­defined tariff of ` 4.93 per kWh (unit) for first year. The Scheme will be implemented by SECI as per Ministry of New and Renewable Energy (MNRE) Guidelines. SECI shall prepare necessary bidding documents for inviting the proposals for setting up of projects on a competitive bidding through e­bidding. SECI will enter into Power Purchase Agreement (PPA) with the selected developers and the Power Sale Agreement (PSA) with the buying entities. Requisite funds for provision of the VGF support will be made available to MNRE from the National Clean Energy Fund (NCEF), operated by Ministry of Finance. Out of 5,000 MW, some capacity in each tranche, will be developed with mandatory condition of solar PV cells and Modules made in India. This will be called the Domestic Content Requirement (DCR) category and remaining will be in open category. (

NLC invites global firms for solar power projects

January 20, 2016. Neyveli Lignite Corporation (NLC) has invited bids from international firms for setting up solar power projects having total capacity of 260 MW in Tamil Nadu and Rajasthan. The scope of work for each block includes design, engineering, manufacture, operation and maintenance for five years including one year warranty period, it said. According to the company, it is setting up a 25 MW Barsingsar Solar PV Project at a cost of ` 167.29 crore. The country has set a target of 175 GW of renewable energy capacity by 2022 which includes 100 GW of solar power. (


Alberta will introduce a net-metering scheme for solar

January 26, 2016. The government of the province of Alberta plans to change the regulations for small renewable power generators and to introduce a net-metering scheme for solar installation. Since 2009, the owners of micro-generation (1 MW or less) solar or wind facilities can credit any excess of electricity generated by their installation on their electricity bill but can't sell their power generation. Under the proposed new regulation, micro-generation facilities would be allowed to sell their excess electricity to the power grid. (

New York Governor pledges $5 bn for clean energy fund

January 22, 2016. New York will invest $5 billion in clean energy over a decade under a plan Governor Andrew Cuomo announced. The funding approved by the New York State Public Service Commission will help attract as much as $29 billion in additional private sector financing. Consumers already pay a surcharge for clean energy investment, and that will decrease as part of the new commitment, according to the New York State Energy Research and Development Authority, which will administer the fund. The investments in solar and wind power, energy efficiency and grid modernization will help the state reach Cuomo’s goal of getting half its electricity from renewable sources by 2030 as well as reducing carbon dioxide emissions by as much as 133 million tons, or the equivalent of removing 1.8 million cars from the road. (

China plans to include eight industries in carbon trading market

January 22, 2016. China’s planned national carbon-trading program will cover eight industries when it starts up in 2017, the National Development and Reform Commission (NDRC) said. The petrochemical and power industries will be included, along with chemicals, construction material, nonferrous metals, steel, papermaking and aviation, it said. The start of a national pollution-trading system is part of a larger push by China to cut global-warming emissions for its most polluting industries. The country has previously committed to bringing emissions to a peak around 2030. Additionally, the world’s most-populous nation has aggressively pushed solar and wind power development. The nationwide carbon market will be developed using a cap-and-trade system, which provides a mechanism for the biggest corporate polluters to buy credits from those that don’t pollute as much. The idea is that the emissions-trading system prompts companies to cut their emissions so they can sell their unused allocations. China already has seven pilot programs running around the country. The market will cover companies in the eight industries with combined energy consumption of at least 10,000 metric tons of standard coal in any year between 2013 and 2015, it said. The NDRC has asked China’s Civil Aviation Administration, industry associations and local authorities to report companies that can be included in the trading system by the end of February. It will issue plans clarifying emission quotas later this year. (

Cheap oil seen by EU as good time to cut fossil-fuel subsidies

January 22, 2016. A global collapse in crude oil prices is a window of opportunity for governments to cut subsidies for fossil fuels, the most polluting sources of energy, The European Commission, the EU’s regulatory arm, said. Oil prices tumbled about 70 percent over the past 18 months as turbulence in global markets added to concern over brimming stockpiles. While crude was heading toward the lowest levels since 2003, almost 200 nations, including the biggest producers of the fuel, agreed in Paris last December to a landmark pact to rein in the greenhouse-gas emissions that are blamed for global warming. The International Energy Agency estimates that annual subsidies on fossil-fuel consumption totaled $493 billion in 2014, even after G-20 nations pledged in 2009 to phase out “inefficient” subsidies. The assistance prolongs the use of polluting coal, oil and gas, whose carbon emissions contribute to global warming, and slow down the development of renewables. Scrapping subsidies for fossil fuels in 20 nations would cut national carbon-dioxide emissions by an average of 11 percent within five years, according to a study last year by the International Institute for Sustainable Development in Winnipeg, Canada, and the Nordic Council of Ministers in Copenhagen. China remained the biggest market for renewables, increasing investment 17 percent to $110.5 billion. Europe suffered an 18 percent drop to $58.5 billion, recording its weakest year since 2006, in part because of slower activity in Germany after the government cut subsidies and revealed plans for a new auctioning system next year. The drop in oil prices is unlikely to derail efforts by the 28-nation EU to tighten cooperation between its member states under the energy union strategy, the European Commission. The European Commission is planning to present next month a proposal to improve the bloc’s security of gas supplies and a strategy on liquefied natural gas. (

Egypt's EFG Hermes targets renewable energy investments

January 21, 2016. EFG Hermes Holding SAE, the largest independent Arab investment bank, plans to build a portfolio of renewable-energy investments in Europe and the Middle East over the next five years as utilities in those regions add cost-competitive solar and wind operations. The bank is targeting about 1,000 MW of wind and solar assets in Europe over three years, the Egypt-based bank said. The company paid $208 million for 132 MW of a French wind-energy business in 2014, its first investment outside the Middle East and North Africa, the bank said. European countries have embraced renewable energy to reduce carbon emissions and replace or supplement power supplies from coal and nuclear plants. Subsidies and other incentives have spurred developments in renewables technology in some countries, and long-term power purchase agreements and tariffs support their plants. The French wind-farm purchase is EFG Hermes’ second green-energy investment, after it invested in a fund financing a wind farm in Jordan. The bank will expand its renewables portfolio in the Middle East, where countries are diversifying energy supplies away from oil and natural gas, and the bank is targeting a regional portfolio of 500 MW within five years, the bank said. (

Obama to force oil, gas companies to pare potent methane leaks

January 21, 2016. A massive natural gas leak in southern California that has forced thousands of residents from their homes is giving momentum to the Obama administration’s plan to clamp down on methane emissions from oil and natural gas wells. The proposal, set to be unveiled by the Interior Department within days, takes aim at wells on federal and tribal lands, with the goal of plugging unintentional methane leaks at the sites and stopping energy companies from intentionally flaring or venting the gas. The Interior initiative will be the first federal regulation of methane emissions from existing wells. The primary component of natural gas, methane is a short-lived but potent greenhouse gas that is 84 times more powerful than carbon dioxide at warming the atmosphere over 20 years. The Obama administration has pledged to pare the oil and gas sector’s methane emissions by 40 to 45 percent from 2012 levels by 2025. (

China emissions from coal power likely fell 2 percent in 2015

January 20, 2016. China’s emissions of climate-warming carbon dioxide produced from burning coal probably fell 2 percent in 2015 as a result of the reduced use of the fossil fuel in the power sector. That equates to 144.9 million metric tons of carbon emissions that didn’t enter the atmosphere because of the retreat from coal, according to analysis of data from the China Electricity Council and the National Energy Administration. China has pledged to cap its emissions around 2030. The nation is seeking to cut coal’s share of its energy consumption, while boosting renewable energy. Thermal power generation fell 2.8 percent in 2015 from the previous year, indicating a 77 million metric-ton reduction in how much of the fossil fuel was used, according to the analysis. (

'Great Green Fleet' using biofuels deployed by US Navy

January 20, 2016. The U.S. Navy formally deployed its "Great Green Fleet", sending warships powered by alternative energy to conduct operations in the Pacific three years after controversy over the price of developing new fuels provoked a fight in Congress. The Navy's focus on developing alternative fuel sources comes despite a 70 percent drop in oil prices since it first tested its Great Green Fleet in exercises in 2012. The Defense Department uses about 14 million gallons of fuel a day, with the Navy responsible for about a quarter of that, according to figures from the Defense Logistics Agency. When the Navy first tested biofuel versions of marine diesel and jet fuel in 2012, it spent eye-popping sums for small amounts. In one case, it paid $424 a gallon for 20,055 gallons of biofuel based on algae oil. To test the Great Green Fleet in the summer of 2012, it spent nearly $27 a gallon for 450,000 gallons of biofuel, later mixed into a 50-50 blend. The $15-per gallon-cost was four times that of conventional fuel. The fuel for the Great Green Fleet deployment over the next year is a competitively priced blend of 90 percent diesel and 10 percent biofuel made from beef fat. The Navy pays $2.05 a gallon, thanks in part to a subsidy of 15 cents a gallon from the Commodity Credit Corp, a government-owned enterprise that supports farm products. To boost production of alternative fuels, the Navy has awarded $210 million to help three firms build refineries to make biofuels using woody biomass, municipal waste and used cooking grease and oil. The U.S. Department of Agriculture is providing an additional $161 million in crop supports. The refineries are expected to begin operations this year, with full production not likely until 2017. (

Iran's sanctions relief opens way for bigger pollution cuts

January 20, 2016. Lifting nuclear sanctions against Iran will boost the nation’s efforts to curb fossil-fuel emissions, even as the Islamic Republic plans to unleash an extra 1 million barrels of oil a day onto global markets. Without the crippling economic restrictions on trade, Iran should be able to boost access to wind and solar power and technology to curb greenhouse gases from power plants, homes and factories, said Vice President Massoumeh Ebtekar, who is head of the country’s Department of the Environment. Iran is the world’s 11th biggest emitter of the pollution blamed for global warming. It joined 194 other nations in Paris in December in agreeing to a new international deal to fight climate change, requiring all countries for the first time to limit their greenhouse gases. The Islamic Republic said in a submission to the United Nations that it could triple its efforts if sanctions were removed. (

Gulf countries savings put at $87 bn with renewable energy

January 20, 2016. Gulf countries stand to save as much as $87 billion from lower oil and natural gas consumption if they achieve goals for renewables use by 2030, according to the International Renewable Energy Agency. Meeting Gulf Cooperation Council targets for solar and other renewable energy could also create an average of 140,000 jobs a year, with 207,000 people employed in 2030, the Abu Dhabi-based Irena said in a report. The goals may already be pushed back, with Saudi Arabia, the largest of the GCC’s six member countries, delaying its target completion date for renewables by eight years to 2040. Oil prices dropped almost 70 percent the past three years, prompting some Gulf countries to plan spending cuts or eliminate fuel subsidies. Renewable energy is taking on focus in the Gulf region as some GCC states can’t meet their own needs from traditional fuels because of growing demand, with the United Arab Emirates turning to natural-gas imports, according to the report. The savings of $55 billion to $87 billion by 2030 is equal to 2.5 billion barrels of oil equivalent, the Irena report showed. Carbon emissions could also be reduced by 1 gigaton by 2030, resulting in an 8 percent cut in the region’s per capita carbon footprint, it said. GCC countries Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates comprise the world’s largest hydrocarbon-producing region, with about 30 percent of its proven crude reserves and 22 percent of gas, according to the report. Solar would account for 85 percent of renewables jobs in 2030, with waste-to-energy at 14 percent, Irena said. (


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