MonitorsPublished on Aug 23, 2016
Energy News Monitor | Volume XIII, Issue 10

The problem of plenty haunts coal


Just a decade ago, India was told by serious analysts from outside India that it is at the brink of a severe shortage of coal. India was cautioned that its coal resources were overestimated and that it had just 10 or less years before it ran out of coal, especially thermal coal for power generation. The recommendation was for India to repent and embrace alternative sources of energy.

Reality appears to be playing out very differently as we can see in news items reported this month. India now seems to have so much coal that it is looking to export 2-3 MT of coal to neighbouring countries. Indonesia, which was the primary source of India’s coal imports not only faces the threat of falling imports of coal by India but also the grim prospect of India capturing potential alternative markets such as Bangladesh and Sri Lanka.

In FY16 CIL increased output by 8.5% which reduced imports by 34 MT. India’s coal imports are expected to touch only 160 MT in FY16 much lower than over 250 MT predicted earlier. Those of us analysts who instantly become cheer leaders of Western views such as the impending scarcity of coal need to be cautious in the future. Any view originating from the West seems to have their interest embedded in them (such as reducing India’s coal use to contain carbon emissions for example) rather than India’s interest.

Lower import of coal have resulted in broader economic gains. NTPC is reported to have achieved a savings of about ₹0.30/kWh totalling a saving of about $80 million in a month. The use of higher quality coal on account of greater availability and lower prices has also resulted in the added benefit of specific coal consumption (coal consumption per kWh) falling by over 2.5%.

Indian coal is slowly moving towards having a bath before it embarks on burning itself. MCL has reportedly secured approvals for setting up a 10 MTPA washery in Talcher Orissa. The plant is expected to have zero liquid discharge to meet environment norms and also establish a pit head plant that will use rejects.

CIL, the world’s largest coal producer was also reported to be making gains in terms of quantity and quality. CIL has stated that from October 2018, it will supply 100% washed coal of grade 10 to meet environmental guidelines.


The problem of plenty seems to have domestic consequences as well. Both Chhattisgarh and Odisha are pressing the central Government to increase Royalties on coal so as to maximise their take. The problem is that the effective tax rate (ETR) on coal mining at over 60% is now the highest among all coal producing countries. Any addition to existing tax and levies may reduce the competitiveness of the Indian mining industry.

On the other hand it is true that coal producing States in India are among the poorest. They are asking for a bigger share of the resource rent so that they can work their way out of the ‘resource curse’. The problem of resource curse is generally understood as a problem of poor governance that results from Dictators depending on resource rents rather than tax revenue to sustain power. Dictators are not answerable to the people and so they are badly governed. The Indian resource curse does not follow this script. Moreover, there is little evidence to show that the lack of resource rents is among key reasons for the poor economic status of coal bearing States. Higher royalties may not flow to the people as the rulers of these States claim. A better idea would be for these States to consider options that would create more opportunities for value addition using coal and other resources (such as low cost pit head power generation and industries that need low cost power) within the States.  This will create opportunities for employment and investment in infrastructure that are more sustainable in the long term.

CIL has also reported progress in the coal linkage e-auction for captive power plants. 12.95 MT out of 13.43 MT of coal linkages auctioned secured bookings at good premiums over notice price. A total of 18 MT coal linkage is expected to be auctioned. The interest in domestic coal seems to have increased this month as the price of imported coal is increasing. Though the much hyped coal block auctions did not structurally alter circumstances for miners as expected the Government seems to proving that it was right. The verdict of the courts announced this month went in favour of the Government as it said that the provisions of the e-auctions that allowed multiple bids in the first two rounds was fair. 31 of the 40 cases filed against the Government were either dismissed or decided against the petitioners.

Rest of the world

Global coal prices had crashed by 70% between 2011 and 2015 and many had written off coal as a source for power generation. But there were signs of a second coming for coal this month as the price of Australian thermal coal increased over 35% since mid-June almost $70/tonne. Mine closures in Australia, USA and Indonesia and policy changes in China were said to be driving up prices. China is said to have reduced its mining operating days by 16% to reduce it coal production by 250 MT. Indonesian coal producers expect to sell coal at $50/tonne which is at least $2/tonne higher than their earlier target. Rains caused by La Nina also reduced production in China. Prices for Australian Coal is expected to increase to $90/tonne on account of lower production due to continuation of unfavourable weather conditions. Some analysts dismiss the price rally as a short term phenomena but it may be too early to take a call.

China is reportedly setting up an asset management company to reduce excess capacity. China Shenhua Group, China National Coal Group Corp, China Reform Holdings Corp and China Chengtong Holdings Group have jointly set up the firm.

Moving to the anti-coal parts of the world we have the surprising news from the UK that the Banks group had secured permission to open a surface mine in 2018 to fill the gap in domestic supply left by the closure of UKs last deep coal mine. It is expected to produce 3 MT per year. UKs demand for coal stood at 37 MT in 2015 down by 40% since 2006. It met 65% of demand from imported coal. Coal backers in USA that included senators from the Republican as well as the democratic parties are said to be pushing a new legislation to expand US tax credit for carbon capture and sequestration (CCS) activities known as 45Q. The existing provision in the law enacted in 2008 advanced investment in CCS projects in the USA but incentives in the existing law are seen to be inadequate to push widespread investment in the technology. It looks like the Sun is yet to set on coal!




Ernst & Young to re-evaluate GSPC onshore blocks

August 16: Gujarat State Petroleum Corp (GSPC) has hired consulting firm EY to re-evaluate onshore exploration and production assets held by the company, GSPC said. GSPC holds a participating interest in 24 blocks of which 20 are onshore while four are offshore. Of the 24 blocks, it is an operator in six blocks and a non-operating partner in 18. Of the 20 blocks, 17 onshore blocks are producing properties. GSPC is the flagship company of the GSPC Group, involved in exploration and production (E&P) of oil and gas. GSPC has already approached Oil and Natural Gas Corp (ONGC) to sell a stake in its primary asset, the Deen Dayal field in the Krishna-Godavari basin (KG basin), located off the east coast of Andhra Pradesh. GSPC is the operator of the block with 80% participating interest. The firm clarified this block is not included in the evaluation exercise, as it is an offshore asset. In fiscal 2016 GSPC incurred a net loss of ₹804.42 crore, as it wrote off exploration expenditure. It recorded income from operations of ₹10,607.30 crore on a stand-alone basis, compared with ₹10,946,30 crore in the previous year.

Source: Livemint

ONGC to invest 8.2 billion for CBM gas development

August 14: Oil and Natural Gas Corp (ONGC) and its partners will invest ₹823 crore to produce coal-bed methane (CBM) gas from Bokaro, Jharkhand, ONGC Chairman Dinesh K. Sarraf said. ONGC operates the Bokaro CBM Block BK-CBM-2001/1 with an 80 percent stake while the remaining 20 percent is with Indian Oil Corp (IOC). The project envisages CBM gas production of 4.068 billion cubic metres in 20 years with a peak of 0.9 million metric standard cubic metres per day (mmscmd), Sarraf said. The project envisages drilling of 141 wells with multilayer hydro-fracturing and installation of three production facilities. ONGC produces 0.007 mmscmd of gas from its Jharia CBM block in Jharkhand where the output is projected to touch 0.05 mmscmd by 2017-18. ONGC holds 85 percent interest in the Jharia block while state miner Coal India holds the remaining 26 percent. ONGC operates North Karanpura block and Raniganj North CBM block in West Bengal. On the occasion of its diamond jubilee year, the explorer also announced the launch of a ₹100 crore start-up fund incubate and foster new ideas for the oil and gas sector development. As part of the initiative called “ONGC Start-up”, the company will provide the entire support chain for start-ups including seed capital, hand-holding, mentoring market linkage and follow-ups. ONGC is setting up a dedicated website to take this initiative forward, it said. Sarraf said that the initiative will promote entrepreneurship among younger Indians by creating an ecosystem that is conducive for growth of start-ups in the oil and gas sector.

Source: The Financial Express

ONGC Tripura Asset expedites oil exploration in state

August 14: Tripura Asset of ONGC has expedited exploration of gas in the state which will be supplied to a proposed fertiliser industry at Khobal in North Tripura district and gas-based thermal power project in Gomati. At present, Tripura Asset has production capacity of 4.95 million metric standard cubic metres per day (mmscmd) per day which would rise to 6.25 mmscmd a day by the next year, Tripura Asset of ONGC Manager S. C. Soni said. The North East Electric Power Corp has set up 101 MW gas based thermal power project at Monarchak in Sipahijala district which remained closed due to non supply of gas by ONGC. He said, at present 20,000 households are connected through city gas distribution for using gas as fuel in kitchen and 10,000 new households are planned to be connected by next year. Soni also said, as part of ‘Hydrocarbon Vision 2030’, a 230-km long LPG pipeline would be laid from Chittagong in Bangladesh to Agartala through Sabroom, the southernmost town of the state.

Source: Business Standard

GE and L&T sign MoU to manufacture sub-sea oil and gas equipment in India

August 10: GE and L&T Hydrocarbon Engineering Ltd have entered into an exclusive Memorandum of Understanding (MoU) for manufacturing of sub-sea manifolds (pipelines) which would be used for future deepwater projects in the Krishna-Godavari basin on the east coast of India. Apart from the MoU for sub-sea manifolds, L&T Infotech also joined the GE Digital Alliance Program.

Source: The Hindu Business line


Numaligarh Refinery plans $3 billion expansion to treble capacity

August 11: Numaligarh Refinery Ltd (NRL) plans a $3 billion expansion of its 60,000 barrels per day (bpd) refinery in Assam, its managing director P Padmanabhan said. He said his firm is awaiting a response from the oil ministry on the plan to treble the refinery capacity to 180,000 bpd. NRL, with some refineries of Indian Oil Corp, meets the fuel demand for the northeastern part of the country. The company plans to shut the refinery for two-three weeks in September for maintenance, catalyst change at a hydrocracker and hooking up a diesel hydrotreater with the existing unit, he said. NRL is majority owned by refiner Bharat Petroleum Corp. He said other refineries in the region are not planning a maintenance shutdown of units and will ensure availability of fuels in the region.

Source: Reuters

India refiner with Iranian investment plans $3 billion expansion

August 10: India’s state-run Chennai Petroleum Corp, in which Iran has a stake, plans to spend about ₹200 billion ($3 billion) for a ninefold capacity boost at one of its refineries to quench the South Asian nation’s increasing thirst for fuel. The unit of the nation’s biggest refiner, Indian Oil Corp, seeks to expand capacity at the Nagapattinam plant in the southern state of Tamil Nadu to as much as 180,000 barrels a day from the current 20,000 barrels, according to the Chennai Petroleum. Chennai Petroleum along with its parent Indian Oil, and peers such as Hindustan Petroleum Corp and Bharat Petroleum Corp, are racing to add refining capacity amid rising fuel consumption that is expected to outstrip all other nations in the decades ahead. The country’s 23 plants have a total capacity of 230 million metric tons a year, while total fuel demand was 183.5 million tons during the financial year that ended March 31, according to the oil ministry. India has formed a group comprising refiners and government officials to assess the nation’s primary energy requirement by 2040 and prepare a roadmap for expanding plants to meet the rising demand. Indian Oil will spend $6 billion to boost capacity by almost 30 percent in the next six years. Chennai Petroleum operates a bigger refinery at Manali near the city of Chennai, with capacity to process 10.5 million metric tons of crude annually, or about 210,000 barrels a day.

Source: Bloomberg

Transportation and trade

India-Bangladesh gas pipeline on the anvil: Pradhan

August 14: India is planning to build an oil and gas pipeline with Bangladesh for boosting mutual cooperation in the energy sector, Oil Minister Dharmendra Pradhan said. Pradhan said he had a very fruitful discussion on energy cooperation with Bangladesh Prime Minister Sheikh Hasina during his recent visit to the neighbouring country. The Petroleum and Natural Gas Regulatory Board (PNGRB) has started the process for a pipeline from Contai in West Bengal via Haldia to Duttapulia on the India-Bangladesh border for supplying oil and natural gas, Pradhan said.

Source: Business Standard

GAIL may face loss on US contract owing to price mismatch

August 10: Shares of GAIL (India) Ltd have increased by over 25 percent in the past five months on hopes that the country’s largest gas transmission company will report better earnings in the future following an increase in pipeline tariffs. While this is true, investors also need to consider the possible loss that the company will bear on its US gas contracts if the current sharp mismatch between the contract price and the spot price of gas persists in the future. GAIL had signed two long-term contracts to procure total 5.8 million metric tonnes per annum of gas with supply starting 2018. At the current level of Henry Hub price, a benchmark for the US gas price, the landed cost of the gas will be at 75 percent premium to the spot gas rate. If this difference persists when the gas is delivered two years later, it will be difficult for GAIL to sell costlier gas to domestic clients because they may prefer to source cheaper gas from other suppliers. The final gas pricing will be a function of several factors including the difference between the benchmark price and spot rate as well as trend in crude oil price. However, the risk is high since GAIL has not secured customer tie-ups for US contracts. Credit Suisse estimates that GAIL may have to take a haircut of $1 per million British thermal units (mmBtu) to sell US LNG into Asia, resulting in a $300 million (₹2000 crore) annual loss.

Source: The Economic Times

RIL eyes LPG customers who have surrendered subsidy

August 10: Reliance Industries Ltd (RIL) is looking to lure away many of the one crore cooking gas consumers who have surrendered subsidy from state oil companies in a bid to challenge the near total dominance of state firms in cooking gas distribution. RIL currently has a minuscule consumer base for cooking gas, or liquefied petroleum gas (LPG), mainly because the government currently provides subsidy only to customers of state firms such as Indian Oil, Bharat Petroleum and Hindustan Petroleum. The government has been encouraging well-off people to give up cooking gas subsidy, resulting in about 1.04 crore consumers giving up their subsidy claim in a little more than a year. More people are expected to opt for this. India has about 17 crore cooking gas consumers, mostly being served by state-run distributors. RIL currently distributes 15-kg LPG cylinders to 10 lakh domestic customers mostly in Gujarat and Maharashtra, and also in Madhya Pradesh and Rajasthan. The subsidy most cooking gas consumers in the country receive from the government has prevented private cooking gas distributors from building any significant presence. But the expanding base of non-subsidised consumers as well as fast shrinking subsidy amount, which is down to ₹64 per 14-kg cylinder from ₹168 in just a year, have boosted private players’ chance. Instead of selling the LPG its produces at its Gujarat refinery to state companies, RIL would like to distribute it directly to consumers. The company has also recently sought the government support for distributing subsidised cooking gas. The government is evaluating RIL’s proposal, the oil ministry said. At present, the state companies first recover full price for the cooking gas from consumers and then within days transfer the subsidy amount to the customers’ bank account. Within a month, the government reimburses companies for the total subsidy transferred. Meanwhile, the government is also squeezing the LPG subsidy by allowing state companies to raise the price by ₹2 per cylinder every month for the past two months. Besides, the government is also working on a plan to enhance private sector’s presence in LPG bottling from which state players can source refills as the country aims to add 10 crore new LPG consumers in three years.

Source: The Economic Times

Policy and performance

Oil ministry slaps $250 million profit petroleum penalty on RIL

August 16: The oil ministry has slapped a penalty of nearly $250 million on Reliance Industries Ltd (RIL) to make good the government’s loss of “profit petroleum” owing to the firm’s inability to meet the natural gas production targets from the Krishna-Godavari (KG) D-6 block. The KG-D6 fields started production in April 2009. The current production of around 8 million metric standard cubic metres per day (mmscmd) is a far cry from the peak of over 69 mmscmd achieved in early 2010. The block was envisaged to produce more than 80 mmscmd of the fuel. Profit petroleum is the main source of revenue for the government from a hydrocarbon block. It is calculated using what is called an investment multiple that denotes how many times the earnings are to the investment.

Source: The Financial Express

Petrol price slashed by 1 per litre, diesel by 2

August 16: Price of petrol was cut by ₹1 a litre and diesel by ₹2 per litre, the fourth reduction in rates since July. Petrol will now cost ₹60.09 a litre in Delhi from midnight as compared to ₹61.09 a litre currently, Indian Oil Corp (IOC) said. The price of diesel will cost ₹50.27 per litre as against ₹52.27. The price was last cut by ₹1.42 a litre in case of petrol and by ₹2.01 per litre for diesel on August 1. The movement of prices in the international oil market and rupee-USD exchange rate shall continue to be monitored closely and developing trends of the market will be reflected in future price changes, IOC said.

Source: The Times of India

India to save 200 billion from new gas import deal with Qatar: PM Modi

August 15: India will save as much as ₹20,000 crore as it has renegotiated a long-term gas import deal with Qatar, Prime Minister Narendra Modi said. India buys 7.5 million tons a year of liquefied natural gas (LNG) per annum from Qatar. The price formula for this was fixed 13 years back and the rate went out of sync when global energy prices slumped last year. In the changed world economic scenario, the Qatar LNG price posed a huge burden on Indian economy, he said. India used its foreign policy to reopen the price.

Source: The Times of India

Government aims to provide 50 million LPG connections within 3 years: PM Modi

Arun Jaitley
Source: PTI

August 15: About 50 lakh free cooking gas (LPG) connections have been provided to poor households in the last 100 days and the target of five crore is expected to be achieved well before the three-year schedule, Prime Minister Narendra Modi said. He said the government’s focus on providing cleaner, efficient and cheaper cooking fuel to households has led to issuing of an unprecedented number of LPG connections ever since the BJP-led government came to power in May 2014. For the below poverty line (BPL) households, particularly in the rural areas, the government on May 1 launched a ₹8,000-crore scheme to provide 5-crore free LPG connections in name of women members of poor households in three years. Under the scheme, the government pays oil companies ₹1600 for each LPG connection they provide to BPL households. This is to cover for the cost of a new connection and LPG cylinder. The country currently has 16.64 crore active LPG consumers. Modi said the use of LPG will help reduce serious health hazards associated with cooking based on unclean fuels. According to WHO estimates, about 5 lakh deaths occur in India alone due to unclean cooking fuels. Experts say having an open fire in the kitchen is like burning 400 cigarettes an hour. Providing LPG connections to BPL households will ensure universal coverage of cooking gas in the country and this will empower women and protect their health, he said. Finance Minister Arun Jaitley had in his Budget for 2016-17 provided ₹2000 crore to provide deposit free LPG connections to 1.5 crore women belonging to BPL families. Further, the Budget announced that the scheme will be continued for two more years to cover five crore households.

Source: Jagran Post

Kolkata to have piped natural gas in 3 years: Oil Minister

August 14: The oil ministry has drawn up plans to provide piped natural gas in and around Kolkata over the next three years for which a ₹12,000 crore investment has been earmarked, Oil Minister Dharmendra Pradhan said. He said that 40 percent of the cost would be borne by the union government and the rest 60 percent by GAIL (India) Ltd. He said that laying of the 2000 km pipeline from Jagdishpur to Haldia would help in the industrial development of West Bengal. The proposed pipeline would help the fertiliser plants in states through which it would pass, namely Uttar Pradesh, Bihar, Jharkhand and West Bengal. India was also setting up an LNG terminal at Dhamra in Odisha for proposed supplies to Bangladesh. To meet the domestic requirement of LNG, he said that bookings had been already made from the US, Australia, Mozambique, Iran, Qatar and British Columbia.

Source: NDTV

Oil ministry dispatches petrol to Tripura to mitigate fuel crisis

August 11: Oil ministry has dispatched loaded trucks on open wagons to Tripura to mitigate fuel crisis caused due to heavy rains and washing away of the Highway — NH 44, leading to the state. Reaching fuel to the rain ravaged state has become a herculean task after a large portion of the road had been washed away. Oil ministry, after a thorough review on the availability of Petroleum, Oil, and Lubricants (POL) products in the state, has paved the way for movement of petroleum products by rail to mitigate the impending crisis. Oil ministry in deliberations with the Railways ministry has organized the transportation of POL products through RORO (Roll On Roll Off), wherein the trucks carrying bulk products and LPG cylinders are loaded on open railway wagons for fuel movement. The rake carrying Indian oil trucks was flagged off from Bhanga, Assam to reach Chraibari, Tripura.

Source: The Economic Times

Oil Minister to launch LPG scheme for BPL households in West Bengal

August 11: Oil Minister Dharmendra Pradhan would launch Pradhan Mantri Ujjwala Yojana (PMUY) in West Bengal on August 14, targeting 1.06 crore BPL households of the state. West Bengal, where LPG penetration is lower than national average at 52%, would be the next destination for the launch of PMUY scheme covering all 20 districts, Indian Oil Corp (IOC) said. Announced in the Budget for 2016-17, PMUY scheme entailed providing free connection to women of BPL households based on Socio Economic Caste Census data of 2011. The government had earmarked ₹8,000 crore for its rollout across the country. To meet additional demand for LPG refill post the roll out of PMUY in the state, the three oil marketing companies – IOC, BPCL and HPCL would invest around ₹540 crore in adding to the bottling capacity, IOC said.

Source: Business Standard

Shah panel to submit report on RIL-ONGC gas dispute on August 31

August 10: Oil Minister Dharmendra Pradhan said the Centre has extended the term of the A. P. Shah Committee, which is looking into the dispute between Reliance Industries Ltd (RIL) and Oil and Natural Gas Corp (ONGC) over natural gas migration, to end of this month. The Committee will submit its report by August 31, the minister said. He said the terms of references (TORs) to the committee includes looking into the issue of gas migration and give its recommendations in this regard. He said the committee has conducted hearings and has taken written submission from all stakeholders.

Source: Business Standard

Government to align ethanol price with global market

August 10: After paying a fixed price for ethanol used for doping in petrol, the government said it will move towards ‘market dynamic’ pricing system where rates would move in tandem with international trend. In a bid to boost agrarian economy, the government had in December 2014 fixed a price of ₹48.50-49.50 per litre for ethanol public sector oil companies were to buy from sugar mills for blending with petrol. This rate is about 20 percent more than the current cost of producing petrol. Oil Minister Dharmendra Pradhan said at present 10 percent sugarcane extracted ethanol is being mixed with petrol and sold in eight sugarcane producing states of Uttar Pradesh, Karnataka, Maharashtra, Andhra Pradesh, Telangana, Haryana, Delhi and Bihar. At the remaining places, five percent ethanol is being mixed in petrol. Also, doping of non-edible oil, called bio-diesel, in diesel will begin this fiscal with 11 crore litres being contracted, he said. He said with India’s fuel demand slated to rise exponentially, ethanol and bio-diesel market of ₹6500 crore can jump to ₹1 lakh crore in next few years.

Source: The Economic Times

National: Power


NLC aims to become fuel-sufficient power generation firm by 2025

August 16: Neyveli Lignite Corp (NLC) is aiming to become a 19,831 MW fuel sufficient power generation company by 2025. NLC said the PSU had already doubled its mining capacity by adding 31.5 million tonnes per annum from coal mine sources in Odisha and Jharkhand. NLC has established a new identity with business diversification and geographical expansion. With Pan Indian presence and its business activities ranging from mining of lignite and coal, lignite and coal-based power generation and power generation from solar and wind, NLC is now NLC India Ltd, NLC said.

Source: The Hindu

Madhya Pradesh working to generate 22 GW power by 2022: CM

August 15: Madhya Pradesh has set an ambitious target of generating 22,000 MW power by 2022 and plans to invest nearly ₹9000 crore in strengthening the power infrastructure in the next three years. Chief Minister Shivraj Singh Chouhan said Madhya Pradesh is already a power surplus state with availability of 17,169 MW power. The state is providing 24-hour uninterrupted power to non-agriculture sector and is making efforts for supplying 10-hour dedicated electricity for agriculture purpose. He said that subsidised LED bulbs are being given in the state at ₹85 each and so far 50 lakh such lamps have been made available to the people for use, resulting in power saving worth ₹1.5 crore daily.

Source: The Economic Times

Kundankulam unit 3, 4 civil work to begin soon

August 15: After the successful commissioning and synchronisation of the first two 1000 MWe VVER reactors of Kudankulam Nuclear Power Project (KKNPP), pre-project work on the third and the fourth units has gathered momentum with six lakh cubic metre of soil excavated since February, preparing the ground for early commencement of construction work. Site Director R. S. Sundar said the first reactor of KKNPP, performing exceptionally well since February 22 last, had generated 10,900 million units of electricity since its synchronisation with Southern Grid following the reactor’s criticality on July 13, 2013. The second unit that attained criticality on July 10 cleared all mandatory tests and hence the Atomic Energy Regulatory Board gave its go ahead for its synchronisation with the grid. The “First Pour of Concrete”, a major milestone in the construction of Units 3 and 4, would take place before the start of next fiscal.

Source: The Hindu

Bihar to get 179 MW more power from Nabinagar plant

August 14: Bihar will get additional 179 MW power from the 1,980 MW Nabinagar thermal plant being set up in Aurangabad district of the state. Earlier, the Centre had allocated 69 percent i.e. 1374 MW of power to the state from 1980 MW of Stage I of the power plant. With the additional allocation, the state will get a total 1553 MW of power from Stage I, whose first unit of 660 MW is expected to start generation from March 2017 while other two units of 660 MW each by September 2017 and March 2018. The Nabinagar Super Thermal Power Station being developed by Nabinagar Power Generating Company Ltd in the Aurangabad district. Each of the three units of 660 MW is being developed under Stage I of the plant. The Centre later gave its principle nod for setting up a sixth unit of 660 MW taking the total project capacity to generate 3960 MW.

Source: Business Standard

Transmission, distribution and trade

Come October, Uttar Pradesh to have 24X7 power supply

August 15: Minister for Labour and Employment Shahid Manzoor said that the state government is planning to provide 24X7 electricity supply in all districts of the state by October 2. He said that the government is in the process of installing power stations in different districts for power generation. Uttar Pradesh Power Corp Ltd said that Noida already has 24X7 power supply.  At present, the rural areas of Gautam Budh Nagar get 10-14 hours of electricity supply.

Source: The Times of India

India to get cross-border electricity trade policy soon

August 11: India has taken the lead in integrating the electricity grids of countries in South Asia, as in the case of European and South African nations. The government is finalising a draft cross-border electricity trade policy to enable Indian producers seamlessly exchange power with neighbouring nations. Once finalised, it will be sent to the Union Cabinet for approval. The move follows a meeting of SAARC energy ministers in September 2014 that decided to set up a cross-border transmission interconnection for the member countries. As per the draft policy, Indian developers of overseas projects will require a one-time single-window clearance for trade of electricity between SAARC nations. Power plants of Tata Power, GMR Energy and Satluj Jal Vidyut Nigam totaling 5000 MW are under construction in neighbouring countries. India expects to be power surplus this year. The policy will help Indian power plants sell excess generation to other SAARC nations.

Source: The Economic Times

Tata Power Delhi inks pact with 30 companies, institutions for tech innovation

August 11: Tata Power Delhi Distribution Ltd is collaborating with 30 companies, institutions and funding agencies for technology innovation to introduce energy efficiency measures. The company plans to launch a mobile app for android phone users that will enable its consumers to control electrical applications when they are away from home, Praveer Sinha, chief executive of Tata Power Delhi Distribution said. The pilot phase of the app will cover subscribers consuming at least 1,200 units per month, he said.

Source: The Economic Times

Madhya Pradesh, Puducherry join UDAY scheme to revive discoms

August 10: Madhya Pradesh formally joined Centre’s UDAY scheme meant for revival of debt-ridden power discoms and the move will save the state ₹17,515 crore during the period of turnaround. Besides, Puducherry signed an MoU under the UDAY scheme and became the first union territory to formally join the scheme, the power ministry said.

Source: Business Standard

Policy and performance

Odisha to get two coal blocks

August 15: The state government is in the process of getting two more coal blocks from the Centre after state energy minister Pranab Prakash Das recently had a discussion with Union coal minister Piyush Goyal in New Delhi. The Centre has agreed to allocate a coal block to the Odisha Thermal Power Corp Ltd for its proposed coal-based power plant at Kamakhyanagar in Dhenkanal district. The state government’s demand for two more blocks is despite the Centre having already announced to allocate the Baitarani West block for a PSU in Odisha.

Source: The Economic Times

LED bulbs can help save 1.25 lakh crore in energy cost: PM

August 15: Price of energy-efficient LED bulbs has dropped to ₹50 from previous ₹350 following government intervention, said Prime Minister (PM) Narendra Modi as he targeted saving ₹1.25 lakh crore in energy cost through installation of 77 crore such lighting devices. He said light-emitting diode (LED) bulbs not just save electricity but also reduce CO2 emissions and contribute to the environment and the economy. Use of LEDs in households and public lighting could reduce energy consumption by 50% to 90%. So far, the government has distributed more than 13 crore LED bulbs, and is aiming to distribute more than 70 crore bulbs through bulk orders within the next three years.

Source: Business Standard

Power costs may reduce by 50 paisa per unit on coastal movement of coal

August 14: Coastal movement of coal could cut power costs by 50 paisa per unit for power plants besides saving ₹17,000 crore annually, a report under government’s ambitious Sagarmala project has said. More than 90 percent of the rail routes relevant to coal are running at over 100 percent utilisation. It carried out a logistics cost comparison for all modal mix combinations for India’s 400 thermal power plants. The report said that by using right infrastructure power costs to power plants could be cut by 50 paisa.

Source: The Times of India


Goa Electricity Department wasted 4.5 crore on energy meters: CAG

August 14: The Goa Electricity Department (GED) has wasted 4.52 crore procuring energy meters from the open market at an inflated rate without considering the prevailing director general of supplies and disposal rates, the CAG has stated in its latest report.

Source: The Economic Times

CIL targets 71.7 million tonnes of coking coal production by 2019-20

August 12: Coal India Ltd (CIL) has targeted to produce 71.77 million tonnes of coking coal of the total production of 1,000 mt by 2019-20. Coking coal production stood at 53.8 mt in 2015-16. The enhancement in domestic production of coking coal is envisaged to reduce coking coal imports. However reduction of coking coal imports totally would not be possible due to the constraint of availability of metallurgical grade coal from domestic sources.

Source: Livemint

Hike in coal royalty may make power costlier by 10-12 paisa per kWh

August 11: States’ demand to hike royality rates on coal to 30 percent, if accepted, would push up the cost of electricity by 7 percent or 10-12 paisa per kilowatt hour (kWh), a report has said. The government has constituted a study group to consider the revision in the royalty rates based on the request from Chhattisgarh for a royalty hike to 30 percent from the existing 14 percent ad-valorem, India Ratings and Research (Ind-Ra) said. Ind-Ra estimates that the increase in royalty upto 30 percent for the top three states could result in additional income between ₹5 billion to ₹39 billion, depending on the final royalty rate.

Source: Business Standard

Electricity in 18,000 villages in 1000 days: PM

August 10: Prime Minister Narendra Modi said that his government has set a target to provide electricity connection in 18,000 villages across the country in just 1000 days. He said he was appalled to see that even after 70 years of Independence, people were forced to lead the life of 18th century in the 21st century. He also lauded the Jammu and Kashmir government for launching a solar energy campaign from Ladakh.

Source: The Economic Times


Gujarat to host maiden ‘India Power Week’

August 10: In a first ‘India Power Week’, a global expo of Gujarat will be held at the Sardar Vallabhbhai Patel International Expo Centre, in Vadodara, between October 6 and 10, 2016 with power ministers of over 100 countries attending it. Promoted by Government of Gujarat, Switch Global Expo is promoted to be one of the largest electrical expos in the country.

Source: The Times of India

International: Oil and gas


US shale output drop seen for tenth straight month in September: EIA

August 15: US shale oil production is expected to fall for a tenth consecutive month in September, according to a US government forecast released, as low oil prices continue to weigh on production. Total output is expected to drop 85,000 bpd to 4.47 million bpd, according to the US Energy Information Administration (EIA)’s drilling productivity report. Bakken production from North Dakota is expected to fall 26,000 bpd, while production from the Eagle Ford formation is expected to drop 53,000 bpd.

Source: Reuters

GPK expects to hit 10k bopd at Shewashan in 2017

August 15: Gas Plus Khalakan (GPK) expects total production at the Shewashan field in the Kurdistan Region of Iraq to hit 10,000 barrels of oil per day (bopd) early next year when the Shewashan-4 field comes on stream.

Source: Rigzone

North Dakota oil output seen falling below one million barrel per day mark

August 12: North Dakota’s daily oil production will soon drop below one million barrels if it has not already done so, a level not seen since the summer of 2014, and a recovery would take at least a year, state regulators said. Daily oil output fell 2 percent in June to 1.03 million barrels of oil per day, according to the state’s Department of Mineral Resources. North Dakota first produced more than 1 million barrels per day of oil in the summer of 2014, a milestone that was celebrated statewide.

Source: Reuters

Italian ruling set to reopen Eni’s Val d’Agri oil field

August 10: An Italian judge lifted a seizure order on plant at Eni’s main domestic oil field, paving the way for the company to restart production. The treatment plant for the Val d’Agri field in the southern region of Basilicata, was seized earlier this year in an investigation into suspected illegal waste trafficking. Closure of the field, which was producing around 75,000 barrels per day of oil, had a material impact on Eni’s second-quarter results. However, the company said it expected production to resume in August.

Source: Reuters

Egypt government approves five oil and gas exploration deals

August 10: Egypt’s government has approved five oil and gas drilling and exploration agreements with foreign companies, Petroleum Minister Tarek El Molla said. Four of the deals are offshore Mediterranean gas exploration and drilling agreements between Egypt’s state gas board EGAS and BP, Eni, Total, and Edison. The fifth deal, which is an oil drilling deal in the Gulf of Suez, is between state petroleum board EGPC and local company Trident Petroleum.

Source: Reuters


Ghana state oil firm ready to sell to local refinery

August 16: Ghana’s state oil firm is prepared to sell crude from its new the TEN (Tweneboa, Enyenra and Ntomme) field to the country’s under-supplied refinery, instead of shipping it all offshore as it currently does. Ghana National Petroleum Corp holds a 15 percent stake in addition to government royalties in the TEN offshore field, which is due to produce its first oil and aims for average production of 80,000 barrels per day. Oil output at Ghana’s pioneering Jubilee field, which like TEN is operated by Tullow Oil, is around 100,000 barrels per day. Yet all of it goes to foreign buyers, mostly China, while its domestic refinery struggles to bring in enough crude to run at full capacity.

Source: Reuters

PPL begins gas plant operations at Gambat South’s Shahdadpur field in Sindh

August 15: Pakistan Petroleum Ltd (PPL) reported that it has commenced operations at the company’s second gas processing facility at Sharf X-1 well in Shahdadpur field in Gambat South Block in Sindh, Pakistan. Pakistan Petroleum said the processing plant, upon reaching its maximum design capacity, will produce 500 to 600 barrels per day of condensate and 2 to 10 metric tons of liquid petroleum gas in addition to 33 million standard cubic feet per day of sales gas.

Source: Rigzone

Iraq starts natural gas processing plant in southeast region

Iraq, oil, pipeline

August 14: Iraq started operating a new natural gas processing plant for oil fields in the southeastern region as part of a plan to use gas that was previously flared to generate electricity, the oil ministry said. The plant located in Misan province, on the border with Iran, will process gas associated with crude pumped at the Fakka and Bazargan fields, it said.

Source: Reuters

Singapore refinery profits crash to two-year low as naphtha joins glut

August 10: Singapore’s oil refining profits dropped to two-year lows, in the latest sign that the industry is pumping out too much fuel for the market to absorb. The glut was triggered by an oversupply of gasoline and diesel, but it has since spread to naphtha, a light distillate product mainly used as a petrochemical feedstock but which can also be blended into gasoline supplies. As a result of the glut, Singapore’s light distillate inventories have swollen by over 2 million barrels since late June to 15.1 million currently, a near record level, as refiners put unsold fuel into storage.

Source: Reuters

Global glut of oil products threatens crude recovery

August 10: Gasoline and diesel stockpiles have swollen to record highs across the globe, leaving refiners and traders few places to dump excess supplies and threatening large-scale production cuts that could derail an oil price recovery. Typically, US and European refiners deal with excess regional inventories by exporting extra supplies to markets where margins for diesel, gasoline, or other oil products remains strong.

Source: Reuters

Transportation and trade

Global oil market faces less Venezuela supply in 2017: Columbia University

August 16, 2016. Venezuela, traditionally a prominent oil exporter, will make a sharply smaller contribution to the global oil market in 2017 as an acute political and economic crisis affects its crude production, Columbia University said in a report. Global oversupply of 1 million to 2 million barrels per day (bpd) since 2014 has caused the worst oil price crash in a generation. Prices have languished around $45 a barrel, although the market has started to rebalance as some exporters have reduced shipments.

Source: Reuters

Iran says gas exports to Iraq to start in next month after delay

August 15: Iran, holder of the world’s biggest natural gas reserves, says it will start exports to Iraq in the next month, more than a year later than it originally planned. Shipments will start at seven million cubic meters a day to supply a power plant in Baghdad, the National Iranian Gas Co., said. A second route to Basra will be opened in 2017, with shipments eventually reaching 70 million cubic meters a day.

Source: Bloomberg

Santos flags one billion USD Gladstone LNG charge on gas supply

August 15: Santos Ltd will take a $1.05 billion writedown on its Gladstone LNG project due to rising prices for third-party gas supplies and slower-than-expected ramp up of its own equity output to feed the export project. The non-cash charge on the liquefied natural gas development in Queensland, which is $1.5 billion before taxes, will be recorded in its half-year results, the Adelaide-based company said.

Source: Bloomberg

Gazprom’s gas exports to Europe up 10.4 percent January 1 to August 15

August 15: Russia’s natural gas producer Gazprom said it had increased its gas exports to Europe by 10.4 percent between January 1 and August 15, year-on-year. Gas exports to Europe rose by 9.9 billion cubic meters during that period, Gazprom said.

Source: Reuters

CNPC starts laying fourth Shaanxi-Beijing gas pipeline

August 12: China National Petroleum Corp (CNPC) said it has started laying the fourth Shaanxi-Beijing gas pipeline, a major project that will help increase natural gas supply to China’s north-eastern region, and help tackle choking smog in cities. The pipeline, which runs 1114 kilometres, will start operations before October 2017, the company said.

Source: Reuters

Poland’s PGNiG may stop buying Gazprom’s gas in future

August 12: Poland’s dominant gas firm PGNiG may stop buying gas from Russian’s Gazprom in the future, as a result of supplies diversification, the company said.

Source: Reuters

Big Dakota pipeline to upend oil delivery in US

August 12: It may seem odd that the opening of one pipeline crossing through four US Midwest states could upend the movement of oil throughout the country, but the Dakota Access line may do just that. At the moment, crude oil moving out of North Dakota’s prolific Bakken shale to “refinery row” in the US Gulf must travel a circuitous route through the Rocky Mountains or the Midwest and into Oklahoma, before heading south to the Gulf of Mexico. The 450,000 barrel-per-day Dakota Access line, when it opens in the fourth quarter, will change that by providing US Gulf refiners another option for crude supply.

Source: Reuters

A new trade route for natural gas opens in Panama

Panama canal

August 10: When the Panama Canal’s expanded locks slid open in late June, perhaps no one was happier than executives in the US shale industry. With the goal of making the US a global powerhouse for natural gas exports, these frackers have their sights on Asia. Now they have a more direct route that could significantly benefit their bottom line. For natural gas suppliers, the expansion comes at a pivotal moment. It coincides with a big increase in US shale production and the construction of several Gulf Coast export terminals designed to help American gas muscle its way onto the world market. The canal’s deeper channels can accommodate the kind of football-field-size tankers that transport liquefied natural gas (LNG), shaving 11 days and one-third the cost of the typical round trip to Asia. In July, the US Department of Energy predicted 550 tankers could be crossing each year by 2021.

Source: Bloomberg

EU allocates $209.7 million for Finnish-Estonian gas link

August 10: The European Commission has allocated €187.5 million ($209.7 million) for building a gas pipeline, the Balticconnector, between Finland and Estonia, the Commission said. The pipeline across the Gulf of Finland would link the Finnish gas grid to the Baltic States, and further to Poland, helping to create a regional gas market and ending the Nordic country’s dependence on gas imports from Russia. The European Union (EU) financial support to the project corresponds to 75 percent of needed funding, the maximum possible share. The 144 kilometre pipeline, including an 80 kilometres offshore section, is expected to be operational by the end of 2019, when the Polish-Lithuanian link is also expected to come online.

Source: Reuters

Peru detects fresh oil spill from decades-old Amazon pipeline

August 10: A fresh oil spill in the Peruvian Amazon was detected from the country’s four-decades-old pipeline, operator Petroperu said, bringing the number of leaks this year to four. The new energy and mines minister, Gonzalo Tamayo, said that the pipeline would likely remain shuttered for at least a year. Peru’s relatively small oil production has dropped to about 37,000 barrels per day since the pipeline closed, as output from oil blocks 192 and 67 has stopped completely.

Source: Reuters

Heatwaves and low prices tighten US gas market

August 10: Unusually hot weather coupled with cheap fuel prices caused US power producers to burn a record volume of gas last month to meet soaring demand for electricity for air-conditioning. April and May were cooler than normal across the continental United States, depressing air-conditioning demand, but June and July were both much hotter than usual. The result is that power producers’ gas consumption has surged during June and July and the volume of gas put into storage has been much lower than usual for the time of year. According to the US Energy Information Administration, US power producers generated 4,950 gigawatt-hours from gas-fired units in July, an increase of 9 percent from the previous record set in July 2015.

Source: Reuters

Policy and performance

Iran says new oil contracts need more amendments

August 16: Iran’s new oil and gas contracts will need amendments, its oil minister said. The new contracts will not be sent to the assembly for final approval. Iran’s top authority, Supreme Leader Ayatollah Ali Khamenei, said that no new oil and gas contracts for international companies would be awarded without necessary reforms. Iran’s cabinet approved an amended draft for the Iran Petroleum Contract (IPC) and sent it to the parliament.

Source: Reuters

Venezuela’s President says $70 oil would be balanced price

August 16: Venezuela’s President Nicolas Maduro said oil at $70 per barrel would be a balanced price and help the global financial situation. Venezuela’s foreign minister and oil minister are currently on tour of OPEC and non-OPEC oil producers seeking a global cut in production to boost prices. Cheap oil in recent years has hit the economy of high-spending Venezuela very hard.

Source: Reuters

Russia orders surprise delay in Bashneft oil firm sale

August 16: Russian Prime Minister Dmitry Medvedev has postponed the privatization of mid-sized oil producer Bashneft. The privatization of Bashneft was meant to help plug gaps in Russia’s budget caused by an oil price slump and Western sanctions imposed over the country’s actions in Ukraine.

Source: Reuters

Iraq Oil Minister sees end to Kurd dispute as war hurts output

August 15: Jabbar al-Luaibi, the former head of Iraq’s biggest crude producer who was appointed oil minister, said that he sees ways to resolve the energy dispute with the self-governed Kurds in the north of OPEC’s No. 2 producer. More than 13 years after the US-led invasion that ousted former President Saddam Hussein, Iraq’s finances are being drained by the oil-price plunge and the political bickering that has delayed efforts to tackle graft and sectarian divisions. He said that Iraq will seek local investment to develop its natural gas industry.

Source: Bloomberg

Turkey wants to buy more gas from Iran, resolve price dispute: Foreign Minister

August 12: Turkey wants to buy more natural gas from Iran and has discussed pricing issues, Foreign Minister Mevlut Cavusoglu said. Ankara and Tehran should resolve a dispute on gas prices without arbitration.

Source: Reuters

Japan’s Jera plans 42 percent cut in long-term LNG contracts by 2030

August 11: Japan’s Jera Co., the world’s biggest importer of liquefied natural gas (LNG), is planning to cut the amount of gas it buys under long-term contracts by 42 percent by 2030 from current levels, the company said. The company buys 34.5 million tonnes per annum (mtpa) of LNG under contracts for 10 years or longer. By 2030, that will drop to about 20 million mtpa.

Source: Reuters

Iran expects $25 billion oil contracts signed within two years

August 10: Iran expects foreign oil companies to sign deals valued at $25 billion over the next one to two years under the terms of a new contract model approved, the National Iranian Oil Co. (NIOC) said. The state energy producer plans to tender contracts over a period of six months to a year to develop several oil and gas fields. NIOC has identified 34 foreign companies as suitable bidders, he said. NIOC is also seeking investments under existing models, NIOC said. Iran approved the new contract model in a push to bring foreign investment and technology to rebuild its energy industry, the largest sector of the economy. The government hopes foreign companies will invest as much as $50 billion a year in Iran’s oil industry. Oil Minister Bijan Namdar Zanganeh said Iran’s priorities would be jointly owned oil and gas fields, and producing assets where recovery rates could be improved.

Source: Bloomberg

OPEC points to 2017 oil surplus as Saudi output hits record

August 10: Top oil exporter Saudi Arabia boosted its oil output to a record high in July, it told the Organisation of the Petroleum Exporting Countries (OPEC), in a sign key members remain focused on market share rather than tackling a supply glut by curbing production. The monthly report from the OPEC said output from the 14-member group hit a new high last month, indicating excess global supply may persist into next year. Saudi Arabia pumped 10.67 million barrels per day of crude in July, according to figures it provided to OPEC. That is up from 10.55 million bpd in June and above the previous record of 10.56 million bpd achieved in June 2015. OPEC expects demand for its crude in 2017 to average 33.01 million bpd, suggesting a supply surplus of 100,000 bpd if OPEC keeps output steady. In the report, OPEC made no significant change to its global demand outlook, predicting average demand growth of 1.15 million bpd in 2017.

Source: Reuters

Oman says to change Iran gas pipeline route to avoid UAE

August 10: Oman and Iran have agreed to change the route and design of a planned undersea natural gas pipeline to avoid waters controlled by the United Arab Emirates (UAE), Oman’s Minister of Oil and Gas Mohammed bin Hamad al-Rumhy said. Rumhy said Oman and Iran were at an advanced stage of designing the pipeline and had agreed on a deeper option than originally envisaged to avoid crossing any third country’s borders.

Source: Reuters

With gas policy set, Israel opens waters for new exploration

August 10: Israel is preparing to tender 24 offshore exploration blocks as it looks to bolster its oil and gas industry after a four-year lull sparked by regulatory uncertainty and stock-price volatility. Their proximity to a number of large and proven gas deposits in the eastern Mediterranean should make the tenders attractive. Nearly 2,200 billion cubic meters (bcm) of natural gas is waiting to be found in Israeli waters, more than double the amount already discovered, Energy Minister Yuval Steinitz said, basing the estimate on a third-party geological study. The study points to a potential 6.6 billion barrels of oil. Israel entered the world of hydrocarbon exploration seven years ago when some of the largest offshore gas fields of the decade were found off its coast. But things got off to a rough start.

Source: Reuters

International: Power


Shikoku Electric restarts Ikata-3 nuclear power plant

August 16: Japanese power utility Shikoku Electric has restarted the third reactor of its Ikata nuclear power plant in Ehime prefecture, after having been stopped for more than five years. The 846 MW reactor, commissioned in 1994, was idled in 2011 after the Fukushima disaster. Shikoku Electric received a positive signal to restart the reactor when the Nuclear Regulation Authority (NRA) declared in July 2015 that the reactor met strengthened safety standards. In October 2015, the Ehime Prefecture in Japan gave its approval for the restart of Ikata-3 and Shikoku Electric submitted its construction plant to the NRA, which identified a number of revisions required for the application review.

Source: Enerdata

China missing its coal production capacity cut target

August 16: According to the National Development and Reform Commission (NDRC) of China, China has reduced its coal production capacity by 95 million tonnes (mt) between January and the end of July 2016, i.e. only 38% of its 2016 capacity reduction target of 250 mt.

Source: Enerdata

Iran’s power generation capacity tops 75 GW

August, 15: With the connection of the gas unit of a power plant in southern Iran to the national grid, the country’s nominal capacity to produce electricity reached 75,365 MW. After the gas unit of Gol Gohar Power Plant, a natural gas-fueled power plant in the southern province of Kerman, was connected to the national grid, the country’s nominal capacity to produce electricity reached 75,365 MW. With the connection of the gas unit, the overall nominal capacity of the country’s gas units to generate electricity has also reached 26,594 MW.

Source: Tasnim News Agency

Transmission, distribution and trade

NR Electric commissions 1000 kV Ximeng-Shandong power line in China

August 16: Chinese T&D equipment provider NR Electric has put the 1000 kV Ximeng — Shandong UHVAC transmission project in China into commercial service, after 72 hours’ commissioning operation.

Source: Enerdata

Australia blocks foreign bids for electricity supplier Ausgrid

August 11: Australia made a preliminary decision to reject bids for its Ausgrid electricity network from Hong Kong billionaire Li Ka-shing and State Grid Corp of China amid growing opposition to selling infrastructure assets to overseas investors. Treasurer Scott Morrison said it would be contrary to national security to allow the sale to proceed in its current form.

Source: Bloomberg

Policy and performance

US coal regulator boosts campaign to fix ‘outdated’ cleanup rules

August 16: A leading US coal regulator announced plans to toughen what it called “out-of-date” rules for guaranteeing mine cleanups. Three of the four largest U.S. coal companies, including global leader Peabody Energy Corp, have filed for bankruptcy in the past year with more than $2 billion in self-bonds for future mine cleanups across several states.

Source: Reuters

Russia plans to build 11 new nuclear reactors by 2030

August 16: The Russian government has approved a decree indicating that Russia aimed at building 11 new nuclear reactors by 2030, on top of those already under construction (namely Kaliningrad, Leningrad, Novovoronezh, Rostov and floating nuclear reactor Academician Lomonosov).

Source: Enerdata

Renewable energy and climate change trends


India gauges auctions for wind power to maximise investment

August 16: India’s preparing to tender 10 GW of wind power by 2019 in auctions intended to help meet Prime Minister Narendra Modi’s ambitious clean-energy targets. The first 1 GW tender is planned for October, Varsha Joshi, joint secretary at Ministry of New and Renewable Energy, said. India will encourage bids by increasing the quota for clean energy that utilities are required to purchase, according to Joshi. The government is working to raise the share of green power from all the states’ grids over the next three years. The quota, requiring states to source a percentage of energy consumption with clean sources, is called the Renewable Purchase Obligation (RPO). It may be increased to 17 percent by 2019, up from 5 percent to 7 percent currently, according to one of the joint secretaries at the ministry, Tarun Kapoor, said. The auction format being developed will allow wind-poor states to source clean energy from windier ones, Joshi said. The Indian wind industry is banking on auctions to maintain growth after state utilities put investments at risk by holding back millions of dollars in payments for nearly a year. According to India’s Wind Independent Power Producers Association, most of India’s seven states have slowed power-purchase agreements, a sign they’re expecting auctions to reduce tariffs paid for power.

Source: Bloomberg

Tata Power Solar commissions 100 MW project in Andhra Pradesh

August 16: Tata Power Solar said it has commissioned a 100 MW solar project for NTPC in Anantapur, Andhra Pradesh, the biggest solar project commissioned using domestically manufactured solar cells and modules. Tata Power Solar said it delivered the project in record 80 percent of stipulated timelines, and nearly three months ahead of the stringent schedule. Built over a 500-acre site, the land contained natural streams and hillocks which were untouched by the plant to maintain the natural ecosystem. As one of the largest solar manufacturers in India, Tata Power Solar operates manufacturing unit in Bangalore, with a production capacity of 300 MW of modules and 180 MW of cells. It has completed more than 250 MW of ground-mount utility scale and 112 MW of rooftop and distributed generation projects across the country till date.

Source: Business Standard

Renewable energy companies worried about GST impact on cost

August 16: While the passing of the Goods and Services Tax (GST) bill has been hailed as a giant step forward in tax reforms, renewable energy developers are deeply worried about its implications. Although taxes on generation and sale of electricity have been kept outside the purview of the GST regime, capital goods and services used for setting up renewable energy projects have been included. Currently, such goods and services enjoy numerous tax concessions and exemptions, both at the Central level and in specific states, which want to encourage renewable energy use. All these are likely to end once GST is implemented, since one of the avowed purposes of GST is to do away with exemptions and concessions.

Source: The Economic Times


BHEL bags ₹1.6 billion order for 30 MW solar power plants in West Bengal

August 16: West Bengal State Electricity Distribution Corp Ltd (WBSEDCL) has awarded a contract worth ₹169 crore to Bharat Heavy Electricals Ltd (BHEL) for  setting up 30 MW (3×10 MW) of solar photovoltaic (SPV) power plants on engineering, procurement and construction (EPC) basis. The SPV plants of 10 MW each are to be set up at Mejia (Bankura), Santaldih (Purulia) and Chharrah (Purulia) in West Bengal. BHEL manufactures solar cells and modules at its electronics division unit in Bengaluru, while space-grade solar panels using high efficiency cells and space-grade battery panels are manufactured at its electronic systems division, also in Bengaluru.

Source: Business Standard

Renewable energy company Greenko reprices high-yield India

August 16: Indian renewable energy company Greenko has taken advantage of its Singapore ownership and surging demand for Indian credit to price $500 million of Single B rated bonds below 5%.

Source: The Economic Times

Okaya Power plans to invest 10 billion on expansion in three years

August 14: Battery maker Okaya Power plans to invest over ₹1000 crore in the next three years to expand business and to create a network of around 200 warehouses across the country. Okaya, which is aiming to be the largest tubular batteries company by the year 2020, is expanding its production capacity besides product portfolio. Okaya Power, which is aiming to be a ₹5000 crore company by 2020-21 is focussing on inverters, automotives, e-rickshaws, solar applications and SMF battery segment. At present, the company gets around 80% revenue from tubular batteries, which is used by inverters and solar power and rest 20% from SMF batteries and automotive batteries.

Source: Business Standard

1.3 GW solar power generation capacity added between April and July

August 11: India has added around 1300 MW of solar power generation capacity in the April-July period this fiscal. According to the New & Renewable Energy Minister Piyush Goyal, India’s solar power generation capacity was 6762.85 MW at the end of last fiscal i.e. March 31, 2016. Thus the country added roughly 1,300 MW of solar power generation capacity till July-end this fiscal taking the cumulative capacity to 8062 MW. The minister said that the 3018.88 MW solar power generation capacity has been added during the last fiscal compared to 1112.07 MW in 2014-15. The minister said that the trend from the last few years has shown fall in prices of solar photovolatic modules in the country. The cost of solar PV modules per MW as per the Central Electricity Regulatory Commission’s order for the determination of benchmark capital cost has come down to ₹3.28 crore for the current fiscal from ₹3.65 crore and ₹3.32 crore in 2014-15 and 2015-16, respectively. The minister said that tenders for solar projects worth 20,766 MW have been issued so far, out of which power purchase agreements have been signed for 8482 MW. Out of the 20,766 MW capacity, letter of intent has been issued for 3,392 MW while financial bids have been opened for 1930 MW. Presently, tenders have been floated for 6,962 MW for which bids are yet to be opened. Government is hopeful of adding around 10,500 MW solar power generation capacity during the current fiscal.

Source: The Times of India

Shipping ministry plans renewable energy projects at ports

August 11: The shipping ministry said it is planning 160.64 MW renewable energy projects at major ports of the country by 2017. The ministry aims to set up 90.64 MW of solar energy capacity at 12 major ports and 70 MW of Wind Energy Capacity at four Major Ports by 2017. According to the ministry, the projects are a part of the Green Port Initiative launched by the shipping ministry.

Source: Business Standard

Gamesa bags 40 MW order for Andhra Pradesh wind farm

August 11: Wind turbine maker Gamesa has bagged an order worth 40 MW project from KCT Renewable Energy to be set up in Andhra Pradesh, the company said. Gamesa will supply 20 turbines of 2 MW each which use technology for low wind sites. The project, located at Molagavalli, will be commissioned by March 2017. The Spanish company Gamesa entered India in 2009 and has so far installed over 3000 MW and services close to 2800 MW under operation and management agreements.

Source: The Economic Times

Govt may get 239.4 billion from clean environment cess in FY17

August 11: Government is likely to get an estimated ₹23,944.4 crore from clean environment cess in the ongoing fiscal. Clean environment cess is collected from the customers and then deposited with the government, hence, levying of the will have no impact either on the revenue or the cost of production of coal by Coal India Ltd, Coal and Power Minister Piyush Goyal said. At present the rate of Clean Environment Cess is ₹400 per tonne.

Source: The Times of India

India mulls green power exchange to spur Modi’s renewable target

August 10: As loss-laden power distribution companies delay millions of dollars in payments for clean-energy capacity, India is looking to create a dedicated green energy trading platform in a bid to give the renewable sector more selling options. The country’s largest power exchange, Indian Energy Exchange Ltd, is looking to roll out a dedicated platform for the trade of clean electricity in the next six months. The push for a better way to buy and sell clean electricity comes as India anticipates an influx of renewable energy spurred on by government support. Indian Prime Minister Narendra Modi aims to install 100 GW of solar, 60 GW of wind and 15 GW of other types of clean energy by 2022 at an estimated cost of $200 billion.

Source: Bloomberg

Government pitches for international clean energy data grid

August 10: The government pitched for establishing an international clean energy data grid and asserted that information related to green and unclean energy should be put in public domain. Noting that it is essential for the common man to realise that the energy being used is unclean, for the world to shift to clean energy, Environment Minister Anil Madhav Dave said such a shift will come only through data that is stored and analysed properly. Dave asserted that the world will have to understand the difference between clean and unclean energy. Lauding Prime Minister Narendra Modi’s initiative to establish an International Solar Alliance (ISA), the Environment Minister emphasised that solar energy is the answer to energy requirements of the future.

Source: Business Standard

Large potential of growth for bio-fuels in the country: Oil Minister

August 10: Oil Minister Dharmendra Pradhan has said that there is a large potential of Bio-Fuel business in India to grow from present ₹6500 crore to ₹1 lakh crore in the next 10 years. He said that the Prime Minister has set a target of 10% import reduction in crude by 2022 and bio-fuels can play an important role in achieving the target. Shifting the fuel consumption profile to bio-fuels derived from domestic feed stocks would lead to decrease in this dependence on crude oil imports. He said in the last 2 years, lot of work has been done in Ethanol Blending Programme, Bio-Diesel as well as using the Bio-waste for converting to energy but more needs to be done speedily. He said India’s energy consumption is increasing very fast and it has become the third largest consumer in the world. He said the Government is willing to provide conducive policy environment to support development of Bio-fuel but import of raw material or waste for this purpose cannot be allowed.

Source: Business Standard

First Solar’s 130 MW solar power to light 227,500 homes

August 10: First Solar has connected 130 MW solar power utility to the national grid, it announced. The company announced commercial operations of two of its units at Andhra Pradesh (80 MW) and Telangana (50 MW). These projects are part of the 260 MW project portfolio wholly owned by First Solar in India. The 130 MW plants collectively will produce enough energy to power approximately 227,500 average homes in India, and will displace over 204,000 metric tons of carbon dioxide per year.

Source: The Economic Times

Inox Wind secures repeat order from Surya Vidyut for 50 MW wind project in India

August 10: Inox Wind has bagged a repeat order from SuryaVidyut Ltd (SVL) for the installation of 50 MW wind power project at Rojmal, in the Indian state of Gujarat. SVL is a wholly owned subsidiary of CESC Ltd. CESC Ltd is India’s first fully integrated power utility engaged in the generation and distribution of electricity. The order which will be executed on turnkey basis is scheduled to be commissioned by December 2016.

Source: Energy Business Review


NV Energy seeks regulatory approval to build 100 MW solar project in Nevada

August 16: US utility NV Energy is seeking approval from the Public Utilities Commission of Nevada (PUC) for the construction of a 100 MW solar power project. The single-axis solar photovoltaic project, which is in development phase in Eldorado Valley, is subject to regulatory approval. It is planned to be commissioned in the fourth quarter of 2018. Power generated from the solar project will be sold to Techren Solar under a 25-year power purchase agreement. In its Emissions Reduction and Capacity Replacement second amendment filing with the PUC, the utility has also requested approval for the closure of the remaining 257 MW unit at the Reid Gardner coal-fired power station earlier than planned. The firm plans to prepone the power plant retire date from 31 December 2017 to 18 February of the same year, as it shifts its focus towards a cleaner and more balanced generation portfolio. NV Energy expects the decision from the PUC by the end of this year.

Source: Energy Business Review

Mexico announces launch of cap-and-trade pilot program

August 15: Mexico will launch a year-long simulation of a cap-and-trade program in November, Mexican officials said, in a test run for a national carbon market expected to launch in 2018. The pilot program will involve the voluntary participation of up to 60 companies, giving them a chance to adapt to a forthcoming carbon credit system in which polluters will be obligated to offset emissions with tradeable certificates. Cap-and-trade systems put limits on companies’ greenhouse gas emissions. Firms that produce emissions below their cap are able to sell their excess allowances to other businesses polluting above their limit. Mexico said it would implement measures to reduce greenhouse gas emissions by 22 percent by 2030 as part of the Paris climate agreement. Additionally, the country, a major oil producer, aims to generate 50 percent of its energy from clean sources by 2025.

Source: Reuters

New Zealand study reveal changes to earth’s ecosystems

August 15: New Zealand scientists have developed a new system to map the world’s vegetation, which might help track the progress of climate change in future, University of Otago researchers said. The system used satellite observations of the timing and intensity of activity in large-scale vegetation formations — known as biomes — and how it relates to temperature and soil moisture to classify the world’s vegetation into 24 biome types.

Source: New Kerala

Icahn urges EPA to change renewable fuel credit market

August 15: Billionaire investor Carl Icahn has called on the top US environmental regulator to make changes to a market for renewable fuel credits or else risk “the mother of all short squeezes” that could bankrupt refiners. In a letter to Environmental Protection Agency (EPA) administrators, Icahn said “a number” of refiners could go bankrupt if the playing field is not leveled to stop disfavoring independent refiners such as CVR Energy Inc, in which Icahn owns an 82 percent stake. Icahn expressed worries about the market for renewable identification number (RIN) credits, which the EPA calls the “currency” of a renewable fuel standard program designed to reduce reliance on imported oil and the emission of greenhouse gases. Oil refiners and importers are required to prove compliance with the renewable fuel mandate by either blending biofuels or buying RIN credits from companies that are in compliance. But the cost of the credits has risen this year as supply fell, while the EPA set more ambitious targets for blending. This can hurt refiners that do not have blending or retail outlets and need to buy RINs.

Source: Reuters

Solar manufacturers pivoting away from big US utility projects

August 11, 2016. The top two US solar manufacturers are shifting away from the biggest domestic market because utilities aren’t signing as many deals to buy electricity from their giant power plants. SunPower Corp the No. 2 US panel maker, said it’s turning its attention to rooftop power, while First Solar Inc., the biggest producer, now expects more of its growth to come from selling panels to other companies. The two companies built some of the biggest solar farms in the world, projects that would never have been completed unless utilities had agreed to buy the power.

Source: Bloomberg

Australia approves 375 MW Port Augusta wind and solar power plant

August 11, 2016. The government of the Australian state of South Australia has given its approval to the development of a hybrid renewable project developed by DP Energy at Port Augusta. The 375 MW wind and solar complex will include 59 wind turbines with a combined capacity of 195 MW and 180 MW of solar PV arrays spread over almost 400 hectares.

Source: Enerdata

ION Engineering to further validate CO2 capture technology in Norway

August 10: ION Engineering has signed a test agreement with Technology Centre Mongstad (TCM) in Norway to further scale-up and validate ION’s CO2 capture technology. Located at Statoil’s Mongstad refinery in western Norway, TCM is claimed to be the world’s largest and most advanced carbon capture test facility. ION Engineering is working on a CO2 capture technology, which aims to make the gas capture more viable option to mitigate greenhouse gas while reducing overall costs. ION will continue multi-year cooperative funding agreement with the US Department of Energy’s National Energy Technology Laboratory (NETL). The company, which is expected to receive $16 mn in funding from NETL, has successfully completed pilot scale testing of the technology at the National Carbon Capture Center (NCCC) in 2015. In partnership with TCM and NETL, ION will now test the liquid absorbent system at TCM’s existing 12 MWe test facility, which makes use of industrial flue gases to simulate coal-fired conditions. The test program, which is scheduled to commence in October 2016, will further assess the ION’s solvent and process technology for commercial scale deployment including at natural gas and coal-fired power plants. Upon successful testing at Technology Centre Mongstad, ION intends to undertake commercial demonstration of the technology starting in 2017.

Source: Energy Business Review

Ellomay, Ludan Engineering to develop $220 million waste-to-energy projects in Netherlands

August 10: Israeli company Ellomay Capital has signed an agreement with Ludan Engineering to develop €200 mn ($220 mn) waste-to-energy projects in Netherlands. As part of the deal, Ellomay will acquire at least 51% interest in each project while Ludan will hold the remaining 49% stake. The deal is part of Ellomay’s efforts to boost its operations in the renewable and clean energy market while exploiting investment opportunities.

Source: Energy Business Review


Captive Coal Blocks Scenario in India

Distribution of 204 De-allocated Captive Blocks/Mines

Production from captive blocks

Source: Compiled from various Starred/Unstarred Questions of Lok Sabha & Provisional Coal Statistics, CCO, Ministry of Coal


Publisher: Baljit Kapoor

Editorial advisor: Lydia Powell

Editor: Akhilesh Sati

Content development: Ashish Gupta, Vinod Kumar Tomar and Dinesh Kumar Madhrey

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