Published on Sep 03, 2016
Energy News Monitor | Volume XIII; Issue 11

Elections pushing electrons

India

As the elections in Uttar Pradesh draw near, politicians start pushing electrons into the wires of homes in rural India with the hope that this will transform into votes. Parties currently ruing UP and those that aspire to rule over UP have announced schemes that would supposedly ensure 24 hour power supply to households. One of the surprising remarks of the concerned minister of the government of UP is that his government was in the process of installing power stations in different districts for power generation. First, this remark makes installing power stations sound like a trivial task that takes just a few months. Second, the lack of power stations was not the primary reasons why people in UP do not have 24 hour power supply.

For its part, the Indian PM announced that 18,000 villages in India that are not connected with electricity will see light within the next 1000 days to a gathering of non-resident Indians in London. It is easy to convince the Non Resident Indians (NRIs) of the visionary powers of the PM that will pull India out of the dark ages as they are naive enough to believe that the PM is on a mission to make India great again. NRIs rarely worry about realities on the ground that they have abandoned. Electrification of the rural households in India proceeded at its fastest pace only during the green revolution when energising pump sets for irrigation was of strategic concern. At that time electricity distribution was just a department within the State Government and it was a simple task to inject money to move electrons right up to the last village. Now the market has taken over. India has followed the World Bank script of unbundling and privatisation for profit maximisation. Electrons now respond to money and not to politicians making pronouncements. But grand pronouncements will be made because all that those making them are looking for more ‘likes’ on their Facebook pages.

State power distribution companies are reportedly looking at a net loss of $1 billion in FY16 from power purchase agreements (PPAs) as they contracted power purchase in excess of demand. Discoms are expected to surrender PPAs with the highest variable cost but they still have to pay the fixed cost which will worsen their health. More than 18 states are expected to have surplus power in FY17 and when they surrender power their financial position will worsen. Many states that had earlier become protective of power generation within the state are now looking to sell power outside the state. They are not in a position to buy power available at exchanges at ₹2.5/kWh which includes both fixed and variable charges but they have to pay fixed charge in the range of ₹1.25-1.75/kWh for power purchases committed through contracts. As CEA projects surplus to persist in FY17 it appears that they are unlikely to get any relief.

Quick-Fact

The news on States signing up to the UDAY (Ujwal Discom Assurance Yojana) scheme kept flowing.  Madhya Pradesh, Telangana, Tamil Nadu and Puducherry are the latest reported this month. So far 16 states have reportedly joined the scheme. Though many are hailing UDAY as a game changer in India’s power sector, the idea of moral hazard from text book economics suggests that the scheme may be treated as an insurance for accumulating more losses in the future. India has had restructuring schemes in the past but none have succeeded. Among many reasons one is that UDAY and many of its cousins in the past address the symptoms but the disease remains and festers.

It was not surprising that the news that India’s total installed power generation capacity had crossed the 300 GW mark was hardly noticed amidst the grim news of surplus generation and bankrupt discoms. Yet another achievement that was lost in the din was that that over 97% of the target for power generation capacity addition for the 12th plan period has been achieved with more than seven months to spare. Moving away from the tragedy of too much, there was news of Neyveli Lignite Corporation (NLC) aiming to become an integrated power company with about 20 GW power generation capacity by 2025. NLC has reportedly entered into a joint venture with Damodar Valley Corporations for acquiring its 1200 MW power station.  It is not clear whether a mining company can also become a successful power generating company. The strategy of power companies becoming mining companies under the captive coal block allocation scheme has not succeeded and it is not clear if mining companies will succeed as power companies.

The request from the Central Government that power generators should offer power at fixed rates of ₹4-5/kWh on long term contracts is a positive idea worth exploring.  Not only will it spur industrial activity but also boost demand for power and alleviate the burden of distribution companies.

It was reported that the fate of SPVs set up for four Ultra-Mega Power Projects (UMPPs) in Maharashtra, Odisha, Karnataka and Chhattisgarh continues to hang in balance.  The UMPPs in these states have failed to take off on account of many reasons including that of poor demand prospects.  Meanwhile it appears that the wrath of the Comptroller and Auditor General (CAG) cannot be unleashed on to discoms in Maharashtra that are completely owned by private companies.

The Centre was reportedly seeking state support for the proposed amendment in the 2003 Electricity Act to allow multiple power delivery utilities to compete in the same area to increase competition and thus decrease prices. The idea is good in theory but it is unlikely to find favour with state governments. They are already burdened with debts of their discoms under the UDAY schemes and it is unlikely that they will sign up for the demise of discoms.

Rest of the world

Iran was reported to have increased its power generation capacity to 75,365 MW following the connection of the gas unit of a power plant in southern Iran to the national grid. Iran has the largest power generation capacity in the Middle East. It appears that the green shoots of Iran have already grown into trees.

Bharat Heavy Electricals Ltd (BHEL) and the Bangladesh-India Friendship Power Company Ltd (BIFPCL) have reportedly signed an agreement for the 2x 660 MW Maitree Super Thermal Power Plant at Rampal in Bagherhat amidst protest from environmental activists groups.   Despite the fact that the joint company has been named Bangladesh-India friendship Power Company it has become the source of discount among many in Bangladesh. The fact that the power plant is located too close to the Sundarbans is among key reasons for the protests.  Supporters of the plant say that the chosen site is thinly populated and hence will not involve any serious displacement of populations in addition to being close enough for the import of coal. The ideal economic solution would be to simply import power from India but this too may not be accepted by those who are threatened by India.  India is already transmitting power to Bangladesh on the Behrampore-Bheramara line and also from Agartala, India, to Comilla in Bangladesh and given the surplus capacity for power generation in India Bangladesh would gain from import of power from India.

India’s original plan to build coal based power plant in Sri Lanka is under review as Sri Lanka is reportedly switching to LNG on account of its superior environmental credentials.  Sri Lanka is supposed to have offered India the opportunity to build the LNG based power plant but there is no firm commitment yet. As always the story becomes more interesting when China is thrown in to the game.  China is also reportedly planning a 500 MW LNG plant in Hambantota in Southern Sri Lanka with potential to be expanded to 1000 MW. Sri Lanka is a ‘Silk Road Station’ on China’s One Belt One Road initiative which is based on an ancient Silk Road from Europe to Asia.

Quick-gw

NATIONAL: OIL AND GAS

Upstream

ONGC signs pact with GE for exploratory drilling support over three years

August 23: Oil and Natural Gas Corp (ONGC) has awarded a multi-million dollar Frame Agreement to GE Oil & Gas, under which the US-based giant will support the state firm’s entire exploratory drilling campaign in shallow to medium waters for the next three years. GE will provide an estimated 55 subsea wellheads (SG5) over three years for the operator’s offshore drilling campaign, GE said. GE has supplied ONGC with subsea production equipment for more than 30 years, including large-sized conductors, subsea wellheads and subsea trees for its offshore drilling and completion projects, the company said. Last year, GE had received a contract to supply subsea production systems to ONGC’s Vashishta (VA) and S-1 fields in the KG Basin. ONGC is planning to make a capital spending of ₹29,000 crore in 2016-17. The company has firmed up a $5 billion plan to develop its deep sea assets in the KG basin off the eastern coast.

Source: The Economic Times

OVL gets one year extension for exploring Vietnamese oil block

August 23: ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation (ONGC), has received one-year extension to explore a Vietnamese oil block in the contested waters of the South China Sea. This is the fourth extension for OVL to explore Block-128, the license for which is now valid till June 15, 2017. OVL had in May applied to the Vietnamese authorities for a fourth extension of the exploration licence for the deepsea block to maintain India’s strategic interest in the South China Sea. Vietnam’s national oil company PetroVietnam has granted the extension. OVL had signed Production Sharing Contract (PSC) for the 7,058 square km Block 128 in offshore PhuKhanh Basin, Vietnam on May 24, 2006. Ministry of Planning & Investment (MPI), Vietnam issued investment licence for the block on June 16, 2006, being effective date of the PSC. The company has not found any hydrocarbon in the block but is continuing to stay invested. OVL first took a two-year extension of the exploration period till June 2014 and then another one year. A third extension was granted on May 28, 2015 and now a fourth extension has been granted. The company has so far invested $50.88 million in the block. The block lies in the part of South China Sea over which China claims sovereignty. In 2011, Beijing had warned OVL that its exploration activities off the Vietnam coast were illegal and violated China’s sovereignty, but the company continued exploring for oil and gas. OVL forayed into Vietnam as early as 1988, when it bagged the exploration licence for Block 6.1. The company got two exploration blocks – Block 127 and Block 128 – in 2006. However, Block 127 was relinquished due to poor prospectives, the other Block was retained. The first extension followed China putting the area under Block 128 for global bidding. China claims sovereignty over most of the South China Sea where the two Blocks are located and had warned the Indian arm from drilling in the region.

Source: Business Standard

UNSW Australia to lend expertise in ONGC wells

August 22: The University of New South Wales (UNSW Australia), which claims a research breakthrough in increasing gas yields from coal seams manifold, will partner TERI to develop industrial application of the phenomenon in coal seams gas wells operated by Oil and Natural Gas Corporation (ONGC). According to UNSW Australia, in its recent funding round, the Australia India Strategic Research Fund announced a new grant of Australian Dollar one million to support the project. UNSW’s researchers have already replicated the extraordinary gains in gas volumes outside the laboratory, in tests in coal seams west of Sydney. However, Indian trials will enable a battery of industrial scale tests factoring in critical variables such as coal seam pressure and temperature, as well as enabling the development of new technologies to precisely introduce the dye.

Source: The Economic Times

Downstream

HPCL Q1 net profit up 30 percent to  20.9 billion

August 22: Hindustan Petroleum Corporation Ltd (HPCL) has posted a 30 percent increase in its net profit for the first quarter (Q1) of the current financial year (FY) to ₹2,098.38 crore, against ₹1,614.13 crore during the same period of the last FY. On the other hand, the company’s net revenue fell 5.7 percent to ₹51,661.04 crore, compared to ₹54,822 crore during the Q1 of the previous FY. However, the company’s average gross refining margin during the quarter ended June 30,2016 was $6.83 per barrel, compared to $8.56 per barrel against Q1 of the previous FY. Petrol sales increased 7.9 percent, diesel by 3.7 percent, aviation turbine fuel by 9.8 percent, lubes by 21.5 percent and that of bitumen by 27.1 percent over previous FY’s Q1 volumes. The company has approved the Visakh refinery’s expansion project at a capital cost of ₹20,928 crore, increasing the capacity from 8.33 million metric tonne per annum (MMTPA) to 15 MMTPA. The company said the Vizag project will be completed by 2020. The company is also in the process of expanding its capacity in Mumbai refinery from 7.5 MMTPA to 9.5 MMTPA at a investment of ₹4000 crore, which will be completed by 2019.

Source: Business Standard

Panel defers green nod to IOC’s 5.9 billion Panipat Styrene project

August 19: Centre’s green panel has deferred its decision on granting environment clearance to Indian Oil Corporation (IOC)’s ₹593 crore Styrene and Ethylene project at Panipat, in Haryana, for want of more information. IOC has proposed setting up of Styrene and Ethylene recovery units at the existing Panipat Naphtha Cracker Complex (PNCC) at a cost of ₹593 crore. The expert appraisal committee (EAC) has asked IOC to provide reasons for high carbon monoxide in ambient air and measure sulphur dioxide (SO2) emissions from the existing unit and any additional SO2 emission from the proposed unit. The PNCC processes naphtha to produce ethylene and propylene streams for polymer units and Pyrolysis gasoline stream as by-product. Pyrolysis Gasoline is a feedstock for production of high purity Styrene. According to the proposal, IOCL will set up a standalone unit at PNCC with a capacity to recover 20 kilo tonnes per annum Styrene using Pyrolysis Gasoline as a feedstock. Panipat Refinery, which was set up in 1998, is the seventh refinery belonging to IOC and is one of South East Asia’s largest integrated petrochemical plants.

Source: Business Standard

Transportation and trade

IGL extends rally on strong Q1 results

August 23: Indraprastha Gas Ltd (IGL) has moved higher to its all-time high of ₹781, up 7%, extending its 4% gain on the BSE, after the company reported a healthy 44% jump in its June quarter on the back of strong operational performance. IGL, the sole retailer of compressed natural gas (CNG) in national capital region, has posted a net profit of ₹148 crore for the quarter ended June 30, 2016 (Q1FY17), against ₹102 crore in the same quarter year ago. Product wise, CNG recorded sales volume growth of 10%, while piped natural gas recorded sales volume growth of 17% in the quarter as compared to last year, it said. The lower growth in sales turnover is due to reduction in selling prices of both CNG and piped natural gas during the year in view of lower gas cost, it said. Analysts on an average had expected profit of ₹121 crore on sales of ₹888 crore for the quarter.

Source: Business Standard

Essar Oil eyes foray into LPG distribution biz

August 23: Essar Oil Ltd wants to enter the liquefied petroleum gas (LPG) distribution business in the country. The company was open to both subsidised and non-subsidised LPG distribution business in the country. At present, Essar produces about one million tonnes of LPG. In the non-subsidied LPG distribution business, Essar Oil looks to target those earning more than ₹10 lakh a year, and not receiving subsidy on purchase of LPG cylinders. The company expects better margins by selling LPG directly to customers, than to state oil marketing companies. At present, Essar Oil sells its LPG to oil marketing companies and does not have any presence in the distribution business. Reliance Industries Ltd (RIL) is the only private oil refiner in India with exposure to non-subsidised LPG business in India. Rules do not allow private companies to distribute subsidised LPG to households. Essar Oil is increasing its presence in petrol and diesel retailing by adding outlets.

Source: Business Standard

Qc-Good

Policy and performance

Relief for ONGC, OIL, GAIL as govt to foot entire food subsidy bill

August 23: Starting this fiscal, the government will bear the entire fuel subsidy burden, doing away with the practice of shifting part of it to upstream oil companies. The move, enabled by the steep decline in under-recoveries since FY15 due to the global oil price decline, the decontrol of petrol and diesel and cut in LPG subsidy, would boost the bottom lines of Oil and Natural Gas Corporation (ONGC), Oil India Ltd (OIL) and GAIL (India) Ltd, and make them more attractive to investors. After freeing of prices of petrol in FY11 and diesel in FY15, the Centre picked up the entire subsidy on domestic cooking gas from FY16. Starting this year, it will also bear the entire public distribution system (PDS) kerosene subsidy burden, freeing oil producers from the onus. Upstream oil companies’ subsidy burden had seen a huge decline from 56% in FY15 to 7% FY16. Budget FY17 provides ₹26,947 crore for fuel subsidy in the current fiscal: ₹19,803 crore for LPG and ₹7,144 crore for kerosene. States get about 87 lakh kilolitres of kerosene annually under PDS, 20 lakh kilolitres more than required as per National Sample Survey Organisation (NSSO) 2011-12 data. By aligning NSSO data to kerosene consumption and PDS demand, states could be allocated PDS kerosene depending on actual consumption. The savings on account of plugging of leakages would be shared with the states. States will get 75% of the savings in the first two years (from FY17), 50% in the third year and 25% in the fourth year.

Source: The Financial Express

RIL may drop arbitration proceedings on government’s authority to fix gas prices

August 23: Reliance Industries Ltd (RIL) will consider next year dropping the arbitration against the government on the latter’s authority to fix gas prices. RIL must withdraw the arbitration if it wants to charge a higher price for its deep sea gas, according to a recently announced government policy that has more than doubled prices available to gas from difficult fields. Following the policy announcement, RIL hasn’t clearly said if it wants to withdraw the arbitration but has initiated the process of developing its deep sea fields in the KG Basin. RIL and its partners, BP Plc and Niko Resources, have sought contractors for concept engineering and design for deep water field development. The new policy on gas prices can potentially benefit RIL’s eight discoveries with reserves of 2.53 trillion cubic feet of gas. The maximum price available to gas from difficult fields in India is $6.61 per unit currently, according to the government formula, which compares favourably with the global spot liquefied natural gas (LNG) rates hovering between $5 and $6 per unit these days. The price available to domestic natural gas from other fields is $3.06 per unit. The price of gas from difficult fields has been linked with alternative fuels.

Source: The Economic Times

Delhi HC issues notice to AAP govt in RIL plea to quash FIR

August 23: Reliance Industries Ltd (RIL) approached the Delhi high court (HC) seeking to quash a first information report (FIR) filed against it by Delhi’s Anti-Corruption Branch (ACB) in relation to the Krishna Godavari (KG) basin. RIL based its plea on a 4 August decision from a high court two-judge bench which backed a Union government notification that ACB wouldn’t have the power to probe central government officials. The FIR in question dates back to Aam Aadmi Party (AAP)’s 49-day stint at the government in 2014, when the ACB named Ambani and two Union ministers at the time—M. Veerappa Moily and Murli Deora—in relation to the issue of the price of gas extracted from the KG basin. Lawyer Harish Salve, representing RIL, told the court that the high court decision settled the question about the ACB not having the jurisdiction to investigate central government officials under the Prevention of Corruption Act.

Source: Livemint

Users of 24 Pahal cylinders up 260 percent, diversion likely

August 19: An audit scrutiny has revealed a significant jump in consumers using more than 24 LPG cylinders a year following the introduction of direct benefit transfer (DBTL) for cooking gas, leading the federal auditor to suspect diversion of non-subsidised cylinders for commercial use. The national average consumption of domestic LPG cylinders is 6.27 a year. However, after the implementation of ₹Pahal’ or the DBTL scheme, the number of domestic consumers exhausting more than 24 LPG cylinders in first seven months of 2015-16 increased by 260% compared to the total offtake of non-subsidised cylinders in 2014-15. The whole of 2014-15 saw 3,070 domestic consumers availing more than 24 cylinders. But just the seven months between April and October of 2015-16, saw 8,023 domestic consumers use more than 24 cylinders. The comptroller and auditor general (CAG), which has carried out scrutiny of 12 crore LPG consumers, has asked the government to check the possibility of “diversion of non-subsidised domestic LPG for commercial use”. The price differential between non-subsidised cylinder and commercial cylinder is ₹233 per cylinder. It has observerd the risk of diversion is highest in cylinders distributed by Indian Oil. The government introduced the DBTL scheme in November 2014. The scheme involves 16.17 crore LPG consumers serviced by 16,781 LPG distributers by three oil marketing companies–Indian Oil, Hindustan Petroleum and Bharat Petroleum. A domestic consumer is entitled to receive subsidy on 12 cylinders per annum under the DBTL scheme. Any excess consumption would result in payment of the market price. The federal auditor highlighted the risk associated with higher consumption of domestic non-subsidised LPG cylinders since there is a significant price difference between the price of commercial and domestic non-subsidised LPG on account of additional duties and levies. The duty differential on an equivalent 14.2 kg LPG cylinder would cost ₹233.20 higher for the non-subsidised cylinder compared to commercial LPG cylinder. The number of domestic consumers consuming more than 24 cylinders in the first seven months of 2015-16 was 2.6 times that of the entire year of 2014-15.

Source: The Times of India

Qc-bad

Oil Minister distributes free LPG stoves under ‘Ujjwala’ scheme

August 19: Oil Minister Dharmendra Pradhan distributed around 3,000 free LPG stoves under the free cooking gas scheme titled the “Ujjwala Yojana’ and expressed hope that the Centre would be able to cover the entire megapolis in over two years.

Launching the scheme with distributing free cooking gas connection with a stove, lighter and a cylinder trolley, costing a little over ₹6,000 per connection, he said though the city has only 18 lakh households, there are 22 lakh LPG connections and 6 lakh PNG connections, indicating that many households still have multiple connections.

Source: Business Standard

National: Power

Generation

NTPC net up four percent in Q1 on higher power generation

August 23: State-owned power producer NTPC reported a 4% year-on-year increase in its standalone net profit at ₹2,369.53 crore during the April-June quarter on account of higher power production and better utilisation of coal-based power plants. NTPC recorded a 10% growth in power generation. For the first quarter ended June 30, the company generated 64.5 billion units of energy. NTPC’s installed capacity rose by nearly 5% to 47,178 NW in the first quarter while the plant load factor, a measure of utilisation, for its coal-based units increased to 81% from 78% in the corresponding quarter a year ago.

Source: The Financial Express

Punjab paid extra to private firms for power: Jakhar

August 22: Congress chief spokesperson Sunil Jakhar has said that the SAD-BJP government in Punjab had paid ₹2,935 crore extra to private generation units for making the state power surplus. The Congress leader demanded an explanation on the issue from deputy Chief Minister Sukhbir Badal. Jakhar said the international price of coal was US $ 26 per tonne in India in July 2015, but “anticipating an increase” in coal prices, the tariff order of the Punjab State Power Corporation Limited fixed the rates for private players at higher rates.

Source: The Economic Times

Sundargarh worried about Chhattisgarh power project

August 22: The possibility of a water crisis in Sundargarh and Jharsuguda district due to the proposed barrage construction on Ib river by Chhattisgarh government has further magnified after it was learnt that another hydro-power project over Ib river at Gulu village in Chhattisgarh is under construction. The residents of Sundargarh have demanded intervention of the state government. The proposed hydropower project in Gulu will utilize water from river Ib river to generate about 24 KW electricity. The project, which was conceived in 2007, received clearance from the state and central government. However, it faced delay due to protests by locals over fear that their villages will be submerged under water. The residents of Sundargarh are worried that the project will further affect the water flow of Ib river, which is the lifeline for thousands of farmers of Sundargarh and Jharsuguda district.

Source: The Times of India

CEA gives nod to 1 GW Turga hydel project

August 20: The Central Electricity Authority (CEA) has conditionally approved the ₹4,500 crore Turga pump storage hydroelectric project of 1,000 MW in Purulia district of West Bengal. The state is yet to receive the official communication from the CEA. State Power Minister Sobhandeb Chattopadhay said the state had sought relaxation in 25 MW restriction on the solar power project to get access to the fund.

Source: Business Standard

Indigenous challenge to Adani’s Carmichael coal mine dismissed

August 19: In a relief to India’s energy major Adani, an Australian court dismissed a Queensland Indigenous group’s application challenging the mining leases granted to its controversial 21 billion dollar Carmichael coal mine project, one of the world’s largest. The application was filed by the Members of Wangan and Jagalingou (W&J) community who argued that a determination made in April 2015 by National Native Title Tribunal, relating to the proposal of granting of two mining leases, was not correct. Welcoming the decision, Adani said it would continue to work with the W&J traditional owners to help ensure the benefits of the mine, rail and port project were realised.

Source: The Economic Times

Transmission, distribution and trade

JSPL secures long-term coal supply for Chhattisgarh captive power plants

August 22: Jindal Steel and Power Ltd (JSPL) said it has secured long-term coal supply of 1.18 million tonne per annum from Coal India Ltd (CIL) for its captive power generation plants in Dongamahua and Raigarh in Chhattisgarh. The long-term coal linkage for a period of five years has been secured during the recent coal linkage auctions. The linkage will ensure fuel security for the power plants.

Source: The Economic Times

‘Surplus’ CIL running after clients to take coal: Coal Secretary

August 22: Emphasising that PSUs can also do wonders given the “right environment”, Coal Secretary Anil Swarup said Coal India Ltd (CIL) has become a surplus supplier running after clients to take the dry fuel. He also highlighted the need for the public private partnership and added that public sector ought to work in tandem with the private sector.

Source: The Economic Times

CIL workers call for pan-India stir on September 2

August 20: Coal India Ltd (CIL) workers will go on a nation-wide strike on September 2 to mark their protest against further divestment and strategic sale in the sector. In September last year, a majority of about 4 lakh coal workers across the country had gone on strike called by trade unions, which hit the production level in a big way. The strike call was given by major trade unions like INTUC, AITUC and CITU to pitch for their demands that included opposition to any further stake sale in CIL.

Source: Business Standard

PGCIL may form JVs with states for transmission projects

Aug 18: Power Grid Corporation of India Ltd (PGCIL) is looking to participate in intra-state projects, a deviation from its traditional role as the central power transmission utility that has been prompted by the reforms in state-run power distribution companies. The firm plans to expand its consultancy services in states but it is more keen to participate in projects as a joint venture (JV) partner to different states and even take up projects on ownership basis as a developer. The power ministry has said that there are orders totalling 3 lakh crore in the pipeline over the next four years for the power transmission sector. So far, the corporation has executed transmission projects connecting states, but now it wants to tap into the opportunity in projects within states.

Source: The Economic Times

No electricity in 1200 villages of Assam

August 17: More than 1,193 villages in the state are yet to be electrified, official records revealed. Chief Minister Sarbananda Sonowal took stock of the status of the Deen Dayal Upadhyaya Gram Jyoti Yojana in the state and asked the implementing agency to complete execution on a priority basis. According to official records, of the total 25,372 inhabited villages (as per the Census 2011) in the state, 24,179 villages (95.2%) have been electrified so far. Sonowal said subsidiary companies of the Assam State Electricity Board should come up with innovative ways to make Assam a power-surplus state. Sonowal also asked the power department to establish itself as a credible department by ensuring quality of work.

Source: The Economic Times

Policy and performance

Railways rationalises coal tariff

August 23: Facing shortfall in freight loading, Railways rationalised coal tariff by reducing the rate for long-distance transportation and increasing it for short distance while imposing ₹55 per ton coal terminal surcharge at loading and unloading for distance beyond 100 km. However, Railway Board Member (Traffic) Mohd Jamshed said the rate has been hiked by 7 percent to 13 percent for transportation between between 200 km and 700 km distance. There will be no change for transportation up to 200 km. As per the new rate, coal loading would cost ₹712 per ton for transportation upto 497 km now as against ₹702. It will be ₹2,138 per ton for 1,807 km transportation now as against the existing rate of ₹2,348. Coal loading witnessed a decline in the last four months. While the coal loading target was 200 million tons for April- July period, Railways has carried only 177 million tonnes (MT) during this period.  He said the levy of coal terminal surcharge at the rate of ₹55 per ton at both loading and unloading terminals would be applicable for the distance beyond 100 km.

Source: Business Standard

IAS officers collect fund to help ex-coal secretary pay legal fees

August 23: Around 100 serving and retired IAS officers from UP and other states have contributed ₹10,000 each to provide financial assistance to former coal secretary HC Gupta, who is facing trial in the coal block allocation case and has said that he had no money to pay legal fees. Gupta has reportedly agreed to consider the appeal of senior bureaucrats to take legal aid to defend his case. The central IAS officers association had decided to seek a meeting with Prime Minister Narendra Modi to push the need to protect honest and well-meaning officials.

Source: The Economic Times

Odisha CM seeks PM’s intervention for people affected by power

August 23: Odisha Chief Minister (CM) Naveen Patnaik urged the Prime Minister (PM) to instruct NTPC to address the concerns of 27 villages in Jharsuguda district to be adversely hit by a 1600 MW super thermal power project being set up in Chhattisgarh. Twenty-seven villages of Kandeikela, Remata, Kanaktora, Charpali, Pithinda and Badimal gram panchayats of Lakhanpur block in the said disrict will be adversely affected by the project, he said.

Source: The Economic Times

Jharkhand will become power hub by 2019: CM

August 22: Jharkhand Chief Minister (CM) Raghubar Das said the state will become a power hub by 2019 and provide energy to the country in the days to come. The power sub-station will be ready in the next six months. The villages of the block will be electrified within six months of completion of the sub-station, Das said. He claimed that Jharkhand is moving forward to become self-reliant in energy sector. The Chief Minister admitted that the Gudri block is deprived of basic amenities such as water, education, and 87 villages out of 88 did not have electricity and assured that the state government will electrify the villages at any cost.

Source: The Economic Times

Coal cess in West Bengal Bengal high: Goyal

August 22: Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal Piyush Goyal suggested that the West Bengal government form a five-member committee to look at the high 25 percent cess being imposed on coal by the state. Goyal said he believes West Bengal would be better off imposing 14 percent royalty rather than the 25 percent cess.

Source: The Economic Times

Electrification of 1,450 UP villages under lens, power ministry to seek CAG audit

August 22: The Centre is carrying out an on field verification in all 1,450 villages declared as electrified by Uttar Pradesh to probe if funds sanctioned for rural electrification by it have been pilfered. If found to be true, the power ministry will approach the Comptroller and Auditor General (CAG) seeking an audit, the power ministry said. The power ministry has asked rural electrification engineers called as Gram Vidyut Abhiyantas (GVAs) to carry out cross-verification of village electrification claims of the state. BJP president for Uttar Pradesh Keshav Prasad Maurya will also go to villages to ascertain whether power infrastructure and supply position is in line with the information available with the central government.

Source: The Economic Times

CEA working on 13th electricity plan

August 21: The Central Electricity Authority (CEA) is working on the 13th National Electricity Plan and the draft is expected in a month. The plan will try to gauge power demand in the country and highlight policy enablers to achieve the same. CEA will map some 78 distribution companies of the country in the process. The 12th plan (2012-17) had estimated a capacity addition of about 76,000 MW to meet the demand projections of the country, of which 63,000 MW would be coal based.

Source: Business Standard

50 percent basic schools in Agra without electricity

August 20: Around 50% basic schools in Agra are functioning without electricity connection. There are 2,086 primary schools and 871 junior high schools under the Basic Shiksha Parishad in the district, of which is 1,409 are yet to get electricity connection. On the orders of Uttar Pradesh government chief secretary, Deepak Singhal, Basic Shiksha Adhikari (BSA) prepared a list of schools in the district, which are without electricity.

Source: The Economic Times

APERC treads with caution on power tariff hike

August 20: Justice G. Bhavani Prasad, chairman of Andhra Pradesh Electricity Regulatory Commission (APERC), has remained non-committal on the prospects of revision of power tariff. In his capacity as chairman of APERC, he chaired the seventh state advisory committee meeting of APERC. Justice Prasad claimed that power utilities in the state were ranked first in minimising distribution losses. The commission effected a 4 percent hike, subjecting only 8 percent of consumers to the burden in 2014-15 and 2 percent covering only 4 percent of consumers in the next year, he explained. When drawn his attention to the opinion of the industry on the higher tariff structure in the state which had resulted in migration of investments to the neighbouring states where power charges are relatively lower, he said that there was no truth in such claims.

Source: The Economic Times

24×7 power for all, a humongous but achievable feat: PwC

August 20: Unrealistic power demand forecasting, lack of information on existing power assets, inadequate planning without systematic system studies, delays in approvals and competencies of electricity utility staff are some of the roadblocks that would heavily come in the way of government’s aim to provide power 24×7, a joint study by PwC and CII said. At present the Indian power sector is facing key challenges in the form of lower output from generation units and higher losses. As of May 2016, the national average plant capacity utilisation was 62.24%, which has significant scope for improvement.

Source: The Economic Times

India keen on developing coal fields, ore mines in Russia

August 18: India has expressed interest in jointly developing coal fields and iron ore mines in Russia to bolster bilateral trade and economic ties. An India-Russia working group on industrial cooperation and modernisation during its meeting identified fields such as technology for production of CRGO steel in India, modernisation of steel manufacturing facilities in India and pharmaceutical industry for enhancing cooperation. The Indian side expressed interest in joint development of coal fields and iron ore mines in Russia.

Source: The Economic Times

Apex court seeks DERC response on Tata plea

August 18: The Supreme Court sought response from the Delhi Electricity Regulatory Commission (DERC) on an appeal by Tata Power Delhi Distribution (TPDDL) challenging the regulator order that disallowed cost of procurement of power from the Anta, Auraiya and Dadri gas power stations of NTPC. The regulatory commission had disallowed procurement cost from the three generating stations on the ground that the discoms had not taken its prior approval before signing the power procurement order with NTPC and this was against the licence conditions. According to the Tata firm, DERC lost sight of the fact that the purported ground of not having prior approval of the commission for scheduling power from these stations existed even on the date of the tariff order. However, despite no such prior approval purportedly being in existence, the commission did allow the base power purchase cost of the power plant in the tariff order, it said.

Source: The Financial Express

International: Oil and gas

Upstream

Indonesia’s Pertamina to invest $1.5 billion in Mahakam in 2017

August 23: Indonesia’s Pertamina plans to invest around $1.5 billion in the Mahakam gas block in 2017. Pertamina will officially take over operation of the Mahakam block, Indonesia’s biggest source of natural gas, in 2018 from French oil major Total and Japan’s Inpex.

Source: Reuters

BP says first half oil output at Azeri projects up to 16 million tonnes

August 22: Oil output from BP-led (BP.L) oilfields in Azerbaijan in the first half of 2016 rose year-on-year to 16 million tonnes (655,000 barrels per day) from 641,000 barrels per day in the same period last year, BP-Azerbaijan said. January-June natural gas production stood at 5.4 billion cubic metres and condensate output was 1.3 million tonnes.

Source: Reuters

LGO starts production from new interval following workover at Goudron Field

August 22: LGO Energy plc revealed that production has now commenced from a new oil pay interval in well GY-277, following heavy work-overs at the Goudron Field in Trinidad. As LGO anticipated, this interval in the shallow Mayaro Sandstone formation did not flow naturally to surface and was placed on pump production. The well is still cleaning up and is currently producing at a rate of 34 barrels of oil per day.

Source: Rigzone

Statoil submits development plan for North Sea Byrding discovery

August 19: Statoil has submitted a plan for the development and operation of the Byrding oil and gas discovery in the North Sea to government authorities. Capital expenditures for the project are estimated at approximately $121 million, reduced from an initial estimation of $425 million, with recoverable volumes projected at around 11 million barrels of oil equivalent. The Byrding development includes a duo-lateral well drilled from the existing Fram H-Nord subsea template through which oil and gas from Byrding will flow to Troll C. Oil and gas will be piped from there through existing pipelines to Mongstad and Kollsnes, respectively. The field is scheduled to come on stream in the third quarter of 2017 and will remain online for between eight and ten years, according to Statoil.

Source: Rigzone

Chevron says no plan to exit Thailand, may keep stake in Myanmar gas field

August 19: Chevron is committed to its Thailand investments despite job cuts that have spurred rumours of the US oil major’s exit, and may keep a Myanmar gas field stake if no attractive offer is made for the asset. The US oil major – the country’s largest oil and gas producer, supplying more than one-third of its natural gas demand – operates several exploration and production blocks in the Gulf of Thailand. Its main concessions at the Erawan gas field and nearby blocks are due to expire in 2022, with the Thai military government planning to put them up for auction next year. The government decided to put up for auction oil and gas contracts expiring in 2022-2023 after activists had protested a proposal to extend the concessions with existing operators.

Source: Reuters

Ghana pumps first oil from second offshore TEN field

August 18: Ghana began pumping crude from a second offshore field operated by British company Tullow Oil, hoping the additional revenue will boost its flagging economy. The Tweneboa, Enyenra and Ntomme (TEN) field expects to average around 23,000 barrels per day (bpd) in 2016, eventually reaching 80,000 bpd along with associated gas to be harnessed to ease a domestic power deficit. President John Dramani Mahama opened the valves on the $1 billion Floating Production, Storage and Offloading vessel, the Prof John Evans Atta Mills, named after Ghana’s former president who died in 2012. TEN, with estimated reserves of 240 million barrels of oil and associated gas of 60 million barrels equivalent, is Ghana’s second oilfield after the country’s flagship Jubilee project, also operated by Tullow, which began in late 2010.

Source: Reuters

Delek sells gas fields to Greece’s Energean for $148.5 million

August 17: Israel’s Delek Group Ltd removed another regulatory hurdle to developing its prized Leviathan natural gas field after agreeing to sell two smaller reserves to Greece’s Energean Oil & Gas SA. The Greek explorer will pay $148.5 million and 7.5 percent of future pretax revenue for the offshore Karish and Tanin fields.

Source: Bloomberg

Norway records highest monthly output in five years

August 17: Norway recorded its largest monthly oil production volume in five years in July, according to preliminary production figures from the Norwegian Petroleum Directorate (NPD). Oil output was 1.72 million barrels, which is the largest figure since March 2011. Norway’s average daily production in July hit 2.13 million barrels of oil, NGL and condensate. ​The month’s oil production is ten percent above the oil output in July last year and nine percent above the NPD’s prognosis for July 2016. It is an increase of 322,000 barrels of oil per day, around 18 percent, compared to June.

Source: Rigzone

Downstream

BP Whiting refinery returns to normal operations

August 22: BP Plc’s 413,500 barrel per day Whiting, Indiana refinery returned to normal production for the first time since late July. The refinery has been running at reduced production levels since the weekend of July 30-31, when a malfunctioning wastewater plant forced BP to cut production to prevent releasing sediment beyond permitted levels into Lake Michigan.

Source: Reuters

Motiva’s Convent HCU partial return expected by year end

August 22: Motiva Enterprises’ 235,000 barrel per day (bpd) Convent, Louisiana refinery plans a partial restart of the heavy oil hydrocracking unit (HCU) by year-end, but full production is not expected to return before fall 2017 as repairs are made from an August 11 fire. Prior to the fire, Motiva had planned to shut the H-Oil unit on February 1, 2017, for the revamp that will enable it to run a wider slate of feedstocks. The H-Oil unit simultaneously runs two processes for producing diesel and jet fuel from gas oil.

Source: Reuters

Exxon Mobil defends handling of Torrance refinery outage

August 19: Exxon Mobil has defended its handling of an outage at its Los Angeles refinery following a blast in February 2015 after a prominent trading company told a state commission that the process had lacked transparency. The explosion at Exxon Mobil’s 149,500 barrel-per-day Torrance refinery, which provides about 10 percent of California’s gasoline supply, knocked a gasoline-producing unit offline for more than a year.

Source: Reuters

Transportation and trade

Enbridge plans 18-hour Ozark crude pipeline outage for Aug 30

August 22: Enbridge Inc has planned an 18-hour outage for its 215,000 barrel per day Ozark crude pipeline from Cushing, Oklahoma to Wood River, Illinois, for August 30 to replace the Niangua River pipe, according to a shipper notice. The work is part of larger maintenance, including integrity digs done earlier in the month, which will impact 21,450 barrels per day for the month of August, according to the notice.

Source: Reuters

China diesel exports rise to record as flooding damps demand

August 21: China’s diesel exports rebounded to a record in July as severe flooding in some parts of the country curbed domestic fuel demand. The world’s largest energy consumer exported 1.53 million tons of diesel last month, a 39 percent jump from June and beating the previous record in May, according to the General Administration of Customs data.

Source: Bloomberg

Iraq to raise flows on Turkey pipeline to 150k bpd

August 19: Iraq plans to double the volume of crude it pumps via a pipeline to Turkey to its normal rate of 150,000 barrels per day (bpd) next week, the North Oil Company said. The company, which reports to the oil ministry in Baghdad, resumed pumping oil from fields it operates in Kirkuk via the pipeline, which is controlled by the Kurdistan Regional Government in northern Iraq.

Source: Reuters

US natural gas market rebalances on hot weather, low prices

August 19: US stocks of natural gas are rising much more slowly than normal for this time of year as a long, hot summer spurs record air-conditioning demand and gas burn by power generators. Natural gas stocks exhibit strong seasonal behavior, increasing between April and October, then drawing down during winter between November and March. But working gas stocks increased by just 22 billion cubic feet (bcf), which was less than half the average increase of 55 bcf at the same time of year between 2011 and 2015.

Source: Reuters

TransCanada offers 42 percent gas pipeline toll cut on long-term contracts

August 19: TransCanada Corp is offering tolls as low as 82 Canadian cents per gigajoule on its natural gas mainline from western Canada if enough producers sign up to long-term contracts. TransCanada said cheaper tolls are crucial if companies in areas like the Montney and Duvernay shale plays are to compete with US gas producers in eastern markets.

Source: Reuters

Thailand’s PTT to boost LNG imports in 2017 as local fields fade

August 18: Thailand’s largest energy firm PTT Pcl plans to import at least five million tonnes of liquefied natural gas (LNG) in 2017, up from 3 million tonnes this year as local gas production fades. PTT expects to conclude in September talks with several suppliers including Royal Dutch Shell and BP to buy LNG under long-term contracts. Thailand has become increasingly reliant on LNG imports as its own domestic gas fields are slowly being depleted.

Source: Reuters

Freight recovery offers hope for US diesel demand in 2017

August 18: US freight shipments are showing tentative signs of a recovery which could underpin faster growth in diesel demand in 2017. Freight movements increased by 0.6 percent in June, building on gains of 0.1 percent in May and 1.5 percent in April. Monthly shipments are still down by more than 1 percent from their peak at the end of 2014, according to the US Bureau of Transportation Statistics.

Source: Reuters

Iran’s crude oil exports above 2.1 million bpd in July

August 17: Iran’s crude oil exports in July were more than 2.1 million barrels per day (bpd). The National Iranian Oil Company said the total amount of crude and gas condensate exports by Iran reached 2.740 million bpd in July. NIOC said 600,000 bpd out of that figure were condensate exports.

Source: Reuters

China’s draft pipeline guidelines seen boosting gas demand

August 17: China’s latest attempts at reforming the country’s extensive pipeline network are aimed at lowering prices for end users and boosting gas demand, analysts said after the country released draft guidelines. The National Development and Reform Commission proposed setting gas transmission fees for companies rather than for individual pipelines. Owners should also create conditions for equal access to pipelines for all customers, according to the draft.

Source: Bloomberg

Policy and performance

Saudi Arabia to discuss energy cooperation with China, Japan

August 22: Saudi Arabia, the world’s top oil exporter, plans to discuss energy cooperation agreements with China and Japan, the Saudi cabinet said. Discussions with Japan for a Memorandum of Understanding (MoU) for cooperating in the energy sector were also approved by the cabinet. Saudi Arabia has traditionally accounted for most of the crude imports by Asia, the world’s biggest oil-consuming region. The kingdom has responded by pumping and shipping more oil, and with knockdown prices in Asia from state oil giant Saudi Aramco. In 2015, Asia accounted for 65 percent of Saudi Aramco’s oil exports; an increase from 62.3 percent a year earlier. Aramco has been in talks with China’s CNPC and Sinopec for investment opportunities in refining, marketing and petrochemicals, Saudi Energy Minister Khalid al-Falih said.

Source: Reuters

Iraq’s new Oil Minister sticks by demand to review foreign contracts

August 22: Iraq wants to review contracts with oil companies to cut the fees that the firms receive when crude prices are low, Oil Minister Jabar Ali Al-Luaibi said. The minister discussed increasing oil and gas output from BP’s giant Rumaila field in southern Iraq. Iraq generates 95 percent of its public budget from oil sales. It has service agreements with companies including CNPC, BP, Shell, Eni, Exxon Mobil and Lukoil, which get paid for the extra barrels produced at fields awarded to them through a bidding process. Current service agreements with oil companies are straining Iraq’s budget as the government pays them a fixed fee for increasing production at ageing fields. Its own revenue dropped as oil prices have more than halved compared to 2014.

Source: Reuters

US gasoline use reaches record in July as pump price dips

August 19: US gasoline consumption climbed in July to a record as low retail prices encouraged Americans to hit the highways. Demand for gasoline rose 2.4 percent from a year earlier to 9.67 million barrels a day, the American Petroleum Institute (API) said. Total fuel deliveries, a measure of consumption, climbed 0.8 percent to the highest July total since 2007. The average price of regular gasoline at the pump nationwide was $2.135 a gallon, down 20 percent from a year earlier, according to data from Heathrow, Florida-based AAA, a national federation of motor clubs. Refineries maximized gasoline production at the expense of other fuels. Gasoline output averaged a record 10.2 million barrels a day in July, up 1.9 percent from a year earlier, the API.

Source: Bloomberg

Woodside first-half profit falls 50 percent on decline in energy prices

August 19: Woodside Petroleum Ltd, Australia’s largest oil and gas producer, posted a 50 percent drop in first-half profit after a decline in energy prices. Net income fell to $340 million from $679 million a year ago, the Perth-based company said. The company’s $8 billion bid for rival Oil Search Ltd. was rejected last year. Woodside, which operates the Pluto and North West Shelf LNG projects in Western Australia, saw its sales fall by 24 percent to $19.3 billion as low oil prices offset a 9 percent lift in production.

Source: Bloomberg

Argentina’s Supreme Court orders rollback on gas subsidies

August 18: Argentine President Mauricio Macri’s plans to close the largest fiscal deficit in two decades and revitalize a sagging energy sector were dealt a blow after the Supreme Court upheld a lower court ruling on gas tariffs. The Supreme Court ordered the government to reinstate subsidies, reversing gas price increases for residential clients back to March 31 levels until it carries out public hearings to discuss how the tariffs are calculated. The government will obey the ruling and plans to hold hearings within three weeks, cabinet chief Marcos Pena said. The amount of money involved in rolling back the increases is about 25 percent of the subsidy cuts, he said. Argentina will cut public spending plans to make sure it meets its fiscal deficit target, he said. Energy and Mining Minister Aranguren has said prices now need to rise to boost investment by energy companies. Argentina’s Vaca Muerta field is the world’s second-largest deposit of shale gas and the fourth-largest deposit of shale oil, yet the country currently imports 25 percent of the gas it consumes.

Source: Bloomberg

Abadi LNG remains a priority project: Indonesian Acting Energy Minister

August 18: Indonesia’s Acting Energy and Mineral Resources Minister Luhut Binsar Pandjaitan said the government continues to view Japan’s Inpex Corp.-operated Abadi liquefied natural gas (LNG) development in the Masela Production Sharing Contract (PSC) in the Arafuru Sea in eastern Indonesia as a priority project despite the dismissal of Arcandra Tahar as the minister. Luhut said that he would monitor all priority projects, including Abadi and the producing Mahakam gas project in east Kalimantan, until a new energy and mineral resources minister has been appointed.

Source: Downstream Today

OPEC cuts unlikely, Algeria meeting could help price: Nigerian Oil Minister

August 18: Nigerian Oil Minister Emmanuel Ibe Kachikwu said that while a cut in OPEC production is unlikely, there is hope a meeting of producers in Algeria next month could help shore up crude prices. Kachikwu said that his country’s oil output had fallen to 1.56 million barrels per day (bpd) as persistent militant attacks took out some 700,000 bpd. But he cast doubt on any plans by members of the Organization of the Petroleum Exporting Countries (OPEC) to voluntarily reduce their output at the meeting in Algeria. Kachikwu said it was too early to say when Nigeria could increase output as security in its oil hub, the Niger Delta, needed to improve first. The government of President Muhammadu Buhari was continuing talks with militants, he said. Kachikwu said the violence had also slashed domestic gas supply this year from 1,400 million standard cubic feet (mmscf) to 550 mmscf.

Source: Reuters

Pacific Exploration says creditors approve restructuring plan

August 17: Canadian oil producer Pacific Exploration & Production Corp said it a majority of its creditors approved a restructuring plan, which will help it emerge from bankruptcy. The company had filed for creditor protection in Canada in April as it grappled with a prolonged slump in oil prices. Pacific Exploration said the restructuring plan was approved by 98.4 percent of the affected creditors including Catalyst Capital Group, which represented 97.2 percent in value of the eligible voting claims. The company said it expects to implement and complete the restructuring transaction late in the third quarter or early in the fourth quarter of 2016.

Source: Reuters

China set to be the world’s second largest shale gas producer by 2040

August 17: China is poised to be the world’s second largest shale gas producer after the US by 2040, when it would account for more than 40 percent of the country’s total natural gas production, the US Energy Administration (EIA) said. The Asian economic giant, who has been among the first countries outside North America to develop shale resources, has drilled more than 600 shale gas wells in the last 5 years, producing 0.5 billion cubic feet per day of shale gas as of 2015, according to the EIA. China is progressing development of its shale gas resources through joint venture with international oil and gas companies.

Source: Rigzone

International: Power

Generation

Nuclear developers have big plans for pint-sized power plants in UK

August 22: A range of mini-nuclear power plants could help solve Britain’s looming power crunch, rather than the $24 billion Hinkley project snarled up in delays, companies developing the technology say.

Source: Reuters

Beloyarsk-4 nuclear power project in Russia reaches full power

August 19: Beloyarsk-4, a 789 MWe fast-neutron reactor of the BN-800 design, has started operating at full power, after having reached criticality in June 2014 and having been connected to the Russian grid by Rosenergoatom in December 2015.

Source: Enerdata

Transmission, distribution and trade

Macedonia launches upgraded Skopje-Tetovo power transmission line

August 22: Macedonia’s electricity transmission system operator MEPSO said it has launched an upgraded 110 kV long power transmission line, whose reconstruction cost about €4 million ($4.5 million).

Source: SeeNews

Britain’s National Grid cancels emergency power reserve tender

August 22, 2016. Britain’s power grid operator National Grid has cancelled a tender in which companies vie to be paid not to use electricity at peak times in the coming winter so power can be diverted to households.

Source: Reuters

Sonatrel plans $1.7 billion power transmission grid upgrade in Cameroon

August 19: Cameroon’s power transmission network operator, Société nationale de transport de l’électricité (Sonatrel), plans to invest FCFA 940 bn (US$1.7 billion) to upgrade the transmission network in the country.

Source: Enerdata

Policy and performance

Brazil to reschedule power transmission lines auction to attract bidders

August 22: The Brazilian government has decided to postpone the transmission lines auction scheduled for September 2 to try to avoid a failure due to lack of bidders.

Source: Reuters

China power glut seen lingering five years on slower growth

August 22: China’s electricity overcapacity will continue for another five years as demand growth slows and new projects come online, according to IHS Market Inc.

Source: Bloomberg

EDF should face penalty for Hinkley delay: UK Ex-Minister

August 18: Electricite de France SA (EDF) should receive lower payments for the power generated by its planned nuclear reactors in southwest England if the project is delayed beyond 2025, a former Conservative minister who now lobbies for the nuclear industry said.

Source: Bloomberg

Australia’s Whitehaven Coal beats forecasts with a FY16 $15.7 million profit

August 17: Australia’s Whitehaven Coal Ltd posted a fiscal 2016 net profit of A$20.5 million ($15.69 million), beating analysts’ forecasts. The producer of coal used in power generation and to make steel, whose customers are predominantly in Japan and India, was forecast by analysts to show a profit of around A$14.6 million, according to data.

Source: Reuters

Renewable energy and climate change trends

National

Working to develop framework for solarising agriculture pumps: Goyal

August 23: The government is working on developing a framework for solarising agriculture pumps in order to reduce power consumption by farmers, Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal said. It has already embarked on a plan to provide energy efficient agriculture pumps to farmers and has launched National Energy Efficient Agriculture Pumps Programme in this regard. Under the programme, farmers can replace their inefficient pumps free of cost with the new BEE star-rated energy efficient agricultural pump-sets.

Source: The Economic Times

‘High GST may hurt solar heater makers’

August 23: Manufacturers of solar water heaters are worried that high GST rates may edge them out of competition. Already they have to pay 5% VAT in Gujarat, while manufacturers in states like Maharashtra and Karnataka do not have to pay any VAT at all. With cheap solar water heaters from China flooding the market Gujarat-based solar water heater manufacturers are hard pressed already, and now the uncertainty of GST is affecting them. Solar Thermal Federation of India (STFI) feels that that the relatively small solar thermal sector has a strong case for exemption from GST. Currently, solar water heaters are exempted from excise duty. Domestic manufacturers are finding it tough to compete with solar geysers from China as the neighbouring country offers 17% incentive to its exporters on completely-built systems. The market for solar water heating systems in India is estimated to be ₹1,000 crore.

Source: The Economic Times

India readies plan to improve renewable power storage

August 22: As lithium-ion batteries take centre-stage in the global pursuit for efficient energy storage systems, India has quietly readied a plan aimed at creating systems that can store up to 10,000 MW of intermittently-generated renewable power at a fraction of the cost the West will bear. The about 80,000 crore plan entails setting up hydel pump storage systems in several states over the next five to six years, the Central Electricity Authority (CEA) said. These ‘pumped’ storage systems can store 1,000 MW or more of power for any duration at a fraction of the cost entailed using lithium-ion batteries. Solar energy can be generated only during the day. If this power is stored in lithium ion batteries and supplied at night, the process will entail an additional cost of 10 per unit – the storage cost. In contrast, pumped storage power will entail an additional cost of 30-40 paise per unit, according to CEA. The country has a potential of setting up 90,000 MW of pumped storage system.

Source: The Economic Times

National Green Tribunal asks Alaknanda Hydro Power to pay  92.6 million

August 22: The National Green Tribunal (NGT) has held Alaknanda Hydro Power Co. Ltd – GVK liable for payment of compensation for lack of proper care in storing muck from a construction project, which allowed the material to flow during the floods in Srinagar, District Pauri, Uttarakhand in June 2013. The tribunal’s 19 August adjudication comes on an application filed against Alaknanda by Srinagar Bandh Aapda Sangharsh Samiti (the Samiti), a body formed to take up issues related to compensations for people affected by the 2013 floods that devastated the area. The Samiti had approached the green tribunal claiming damages against Alaknanda for dumping large amounts of muck around the site of its 330 MW Srinagar Hydroelectric Project without proper precautionary measures to secure the debris from flowing in the event of a flood. Before the tribunal, Alaknanda reiterated its former stance and maintained that it was the cloudburst that had caused the Alaknanda River to change course and overflow, leading to the disbursement of muck in the region and even cited a Supreme Court adjudication along these lines. The Supreme Court had earlier termed the floods as a natural tragedy in a 2013 petition challenging environmental clearance norms and disaster management policies of the Uttarakhand government. During the proceedings, the company also took an additional defense that the NGT could not adjudicate compensation on the occurrence as the incident did not fall under the definition of an ‘accident’, as per Section 2 of the Environment (Protection) Act, 1986 as it did not involve a ‘hazardous substance’, as contemplated by the law. The tribunal has made an order asking the State of Uttarakhand to issue a direction in this regard, while also determining additional sums of Rs 1 lakh each, to be paid to the Samiti and Bharat Jhunjhunwala (a respondent and resident of the area who joined the petition).

Source: Business Standard

Qc-ugly

Installed capacity of renewable energy has crossed 44 GW: NITI Aayog

August 22: The cumulative installed capacity of renewable energy has crossed 44 GW and “phenomenal progress” has been made in other key infrastructure sectors like aviation and railways, a meeting chaired by Prime Minister Narendra Modi was told. At the meeting held to review the functioning of the key infrastructure sectors, NITI Aayog made a presentation. The meeting was told that in the new and renewable energy sector, the cumulative installed capacity has crossed 44 GW. Targets have been met for various components, and various projects under Centre and state policies. The Prime Minister was briefed on plans and strategies to further ramp up solar energy production, including through rooftop generation.

Source: The Economic Times

Tamil Nadu hits top slot in solar power capacity addition as south surges ahead

August 22: Tamil Nadu has now reached Number One position in solar power capacity addition. India’s total installed solar capacity has grown by over 80 percent in the last 12 months to reach 8,100 MW. The State now ranks No.1 for commissioned capacity in both wind and solar. Presently, those six States account for 80 percent of the solar capacity added in India. The remaining 23 States including some of the largest power consuming states like Maharashtra, Karnataka and Uttar Pradesh, account for just 20 percent of the installed capacity. In the initial phase of solar sector development in India, until 2014, bulk of solar capacity addition came up in Rajasthan, Gujarat and Madhya Pradesh (about 57 percent). But, the Southern states have taken a decisive lead in the last year, driven primarily by their growing power needs. Tamil Nadu has proposed to increase the solar power further to 5,000 MW in a phased manner in the next five years. It plans to add about 1,200 MW of solar units in this fiscal alone, according to a document of state energy department. The State’s total renewable power capacity is close to 10,000 MW with wind accounting for about 79 percent of it.

Source: The Hindu Business Line

GAIL, Bloom Energy join hands to bring clean energy to India

August 22: GAIL (India) Ltd and US-based Bloom Energy inked a pact to deploy natural gas-based fuel cell technology to generate electricity with lower emission levels. The technology is being used by over 100 of the Fortune 500 companies that are diversified majors in FMCG, IT, telecom, retailing and e-commerce. Oil Minister Dharmendra Pradhan said he would soon send a proposal to Lok Sabha Speaker to do a pilot project in Parliament building where human and other biowaste would be converted into gas or fuel. The minister said initially this technology will help in providing cleaner power in the urban areas.

Source: The Economic Times

UNSW to supercharge India’s greener power ambitions

August 22: Ambitious targets of the Indian Government for renewable energy generation by 2022 and improved energy efficiency in other areas, are being realised by world class University of South West Australia (UNSW), through a number of initiatives. The Australia India Strategic Research Fund (AISRF) recently announced a new grant of AUD 1 million to support the potential of the microbe technology, identified by Piyush Goyal, Minister for Power, Coal, New and Renewable Energy and Mines. Indian student at UNSW’s School of Chemistry, Dr. Neeraj Sharma is developing rechargeable batteries that run on seawater to provide India and the entire world with cheaper, sustainable electricity. Pollinate Energy, a social business founded and run by UNSW alumni Ben Merven and Monique Alfris, is working to achieve the Prime Minister Modi’s goal to bring affordable access to electricity to all of the population by 2019.

Source: The Economic Times

Work on Pavagada solar park in Karnataka to begin soon: Energy Minister

August 21: Energy minister D. K. Shivakumar said work on the proposed 5,000 MW capacity solar park at Pavagada in Tumakuru district will start soon. He said the plant is tipped to be the largest in the world. Shivakumar said that his department is mulling setting up mini-solar power plants with capacity of 20 MW each in 80 taluks. The department is making alternative arrangements for electrification of villages which are in deep forests of Karwar.

Source: The Economic Times

MNRE to hold stakeholders’ meet on 1 GW wind power auction

August 21: Ministry of New and Renewable Energy (MNRE) has invited stakeholders for consultation to firm up norms for auction of 1,000 MW grid connected wind power capacity. The Solar Energy Corporation of India (SECI), which is the nodal agency for implementing the scheme, would float tenders next month for setting up wind projects with cumulative capacity of 1,000 MW to supply power to non-windy states. The ministry had sanctioned the scheme on June 14, 2016 and prepared a draft guideline for its implementation. These were placed on the ministry website for comments/suggestions/views of the stakeholders. A committee was constituted to examine the comments and suggest changes in the guidelines. Explaining further, he said this would be tariff based competitive bidding and will be awarded to bidders quoting lowest price (power tariff) bid. At present, the rate of wind power ranges between ₹3.9 per unit (lowest in Tamil Nadu) and ₹5.5 per unit in other states. This bidding may result in drop in prices of wind power as happened in the case of solar power. Globally, India is at 4th position in terms of wind power installed capacity after China, the US and Germany. The Centre has set an ambitious target of achieving 175 GW power capacity from renewable energy resources by 2022 and out of this 60 GW has to come from wind power.

Source: The Economic Times

Lucknow gets UP’s first solar-powered collectorate

August 20: On August 1, the district collectorate in Lucknow became the first solar powered collectorate in the state. The ₹98 lakh solar power plant is capable of supplying enough energy to power all of its 49-strong rooms. With the solar power plant in place, the district collectorate is likely to save more than ₹15 lakh in electricity bills. According to the district administration, the solar-powered plant can produce 1.89 lakh units of electricity per year or about 500 units per day. The power plant contains 438 solar plates and four grid- connected solar inverters. The solar grid would produce energy for the next 25 years. The power plant also has a bi-directional meter which can return unused power to the grid. The Lucknow district collectorate building has 49 rooms, including courts, chambers, accounts and other departments. Every chamber of the magistrate is equipped with 1.5- 2.0 tonne capacity of air-conditioners, besides fans and LED lights, along with extra electronic devices.

Source: The Times of India

CSE report on 5-star ACs, refrigerators confusing: RAMA

August 20: Criticising CSE’s report that 5-star rated ACs and refrigerators become ‘energy inefficient’ when temperature soars over 40 degrees Celsius, Refrigeration and Airconditioning Manufacturers’ Association (RAMA) said this will create confusion in the minds of the customers since it furnishes skewed information. According to a latest report released by the Centre for Science and Environment (CSE), 5-star air conditioners become energy inefficient, worse than 1-star rates as they consume 28 percent more power when temperature soars above 40 degrees. This is in contrast to the claims by Bureau of Energy Efficiency (BEE) which says a 5-star AC is supposed to save 22 percent energy as compared to its 1-star counterpart.

Source: Business Standard

Govt ready with policy to promote electric 2-wheelers: Sinha

August 19: The government is almost ready with policies to promote electric two-wheelers, Minister of State for Civil Aviation Jayant Sinha said. The government is facilitating equity capital for investors under various mechanism including India Aspiration Fund, he said, while calling upon the big industries to invest in the electric two-wheelers sector. From policy perspective, government is really driving towards making electric vehicles more economical, practical and feasible for Indian conditions, he said. He said batteries for electric two-wheelers is big problem area. He emphasised on using rooftop solar energy for recharging electric two-wheelers and called for more innovation from scientific community.

Source: Business Standard

India air pollution death rate to outpace China: Researcher

August 18: The increase in people dying in India from air pollution will outpace the rate of such deaths in China, as India drags its heels over environmental rules while opening more coal mines, the head of a US research group said. India’s situation is getting worse at a much faster speed than China, Dan Greenbaum, president of Boston-based Health Effects Institute (HEI), said. HEI and a group of Chinese and Indian universities recently said that over half of world’s air pollution-related deaths were in China and India. In China, coal-fired plants have been the worst source of pollution. But India has lagged behind in implementing stringent environment policies for coal emission. From now until 2020, China aims to cut coal output by 500 million tonnes, or about 19 percent of its current annual output, and reduce emission of major pollutants in the power sector by 60 percent. By contrast, India has just only launched an emission standard for coal-fired power plants this year. India is also ramping up coal production as Prime Minister Narendra Modi races to meet election promises to provide electricity to a population of 1.3 billion. Indian Coal Secretary Anil Swarup did not immediately respond to a request for comment. He has previously said India is setting a higher target for renewable energy and growing more trees than are being uprooted by coal mining. Research from HEI and Tsinghua University in Beijing released shows coal burning caused 366,000 premature deaths in China in 2013, out of a population of 1.35 billion. Comparable HEI data for India is due out next year.

Source: Reuters

NTPC plans to become biggest renewable energy company in 10 years

August 18: NTPC is tweaking its expansion plan to become the biggest renewable energy company in the next 10 years. The company’s ₹5 lakh crore capital expenditure plan will be skewed towards adding renewable energy capacity instead of setting up more thermal units. NTPC has targeted generation capacity of 128,000 MW by 2030 from the present level of over 47,000 MW. The utility had earlier decided to set up renewable energy capacity of about 10,000 MW in the next four years. This figure is likely to be revised upwards as part of the plan to enhance renewable power generation. Its current renewable energy portfolio consists of nine solar power plants with 360 MW of capacity. NTPC’s decision to reduce the share of thermal power and increase renewable energy generation is to align itself with global trends of reducing greenhouse gas emissions and developing clean sources of energy. India has set a renewable power deployment target of 175 GW by 2022, which includes 100 GW from solar and 60 GW from wind energy. Of the 10,000 MW of renewable energy capacity planned, NTPC has commissioned 250 MW and has started work on developing 3,010 MW of projects. It also plans to set up about 800 MW of solar plants on water reservoirs at thermal power plants.

Source: The Economic Times

Solar power plants at NLC from 2017

August 18: NLC India Ltd, formerly Neyveli Lignite Corporation (NLC), commenced construction activities for its third solar power plant with a capacity of 65 MW at an estimated cost of ₹350 crore in Neyveli. The power plant, which will be constructed on an area of 325 acres, will be tentatively commissioned on June 4, 2017. Bharat Heavy Electrical Ltd (BHEL) is the engineering, procurement and commissioning contractor of the project. The plant will include approximately 2.38 lakh solar photo voltaic modules (solar panels) each with power generating capacity between 280 and 310 watt. NLC commissioned its maiden solar power plant with a capacity of 10 MW at a cost of ₹74.6 crore in September last year. The project established in an area of 54 acres includes 48,000 solar photo voltaic modules each with power generating capacity of 240 watt. NLC has proposed to commission solar power projects to generate 4,000 MW power as a part of the national solar mission evolved by the Union government to generate one lakh MW of solar power by 2022.

Source: The Economic Times

MSME Min exploring tech to operate charkha on solar energy

August 17: Union Minister Giriraj Singh said the MSME Ministry is exploring the possibility of using solar power for operating charkha. Singh said in Khadi industries charkha has attained extreme importance and it is being extensively used.

Source: The Economic Times

Haryana govt to install 3,050 solar water pumps

August 17: In order to encourage farmers to use renewable energy, Haryana government announced that 3,050 solar water pumps will be installed in current financial year in the state with 90 percent subsidy. Minister of State New and Renewable Energy Banwari Lal said the state government is committed to promote renewable energy in line with the national goal of 1.75 lakh MW capacity addition by year 2022. Director, New and Renewable Energy, Ashima Brar said during the current financial year, the state government would spend an amount of about ₹27 crore on renewable energy and energy conservation programmes. She said the department has set a target of installation of rooftop solar power projects of 70 MW in the state with 30 percent subsidy with maximum limit of ₹20,000 per kilowatt.

Source: The New Indian Express

Global

British Columbia presents incentives for GHG emissions cut

August 23: The Ministry of Natural Gas Development of the Canadian province of British Columbia has presented its Climate Leadership Plan, aiming at reducing net annual greenhouse gas (GHG) emissions by up to 25 million tonnes below current forecasts by 2050. The province aims to achieve an 80% reduction in emissions from 2007 levels by 2050. The plan’s initial 21 action items include making electric vehicles more affordable and buildings more energy efficient. Government is also targeting sequestration opportunities in forests and emission reductions in natural gas production and processing.

Source: Enerdata

Obama rule could take wind out of renewable power on public land

August 22: It was supposed to be the largest wind farm in North America, with 1,000 turbines spinning above 320,000 acres of southern Wyoming. But after investing more than $50 million and nearly a decade seeking approval to build a wind farm on public lands, the Power Company of Wyoming’s landmark project is still tied up in required scrutiny of its environmental impact. The Wyoming project is hardly an outlier. Although the Obama administration has given initial approvals to 46 wind and solar projects on 216,356 acres of public lands since 2009, just 15 are in operation. Others have been abandoned, are still being built or are undergoing years of required environmental analysis.

Source: Bloomberg

France may struggle to meet 2020 renewable targets

August 22: According to statistics released by the Commissariat général au développement durable (CGDD), France has succeeded in raising the share of renewable energies in its final energy consumption, from an average 9.2% in 2005 to 14.9% in 2015. However, the country may have difficulties to meet its 2020 renewable targets, lagging behind its 2015 mid-term targets.

Source: Enerdata

BP to drill fewer wells in revised Great Australian Bight environment plan

August 22: Australia’s National Offshore Petroleum Safety and Environmental Management Authority indicated that BP Developments Australia Pty Ltd. (BP) reduced the number of exploration wells it intends to drill in the Great Australian Bight off the coast of Southern Australia in its second environment plan submission for the project. BP would now drill 2 of the 4 wells that it originally proposed in the first Great Australian Bight Exploration Drilling Program environment plan.

Source: Rigzone

China turns to free markets to tame fossil-fuel pollution

August 22: There are at least three good reasons why China is likely to succeed in starting the world’s biggest carbon-trading market when its efforts to limit pollution kick in next year. The government wants to put a cost on emissions of toxic smog to control pollution in industrial cities, starting with Beijing. The market may trade as much as 408 billion yuan ($61 billion) of certificates a year, a step toward making the economy more transparent to outsiders. Regardless of the motivation, China’s move marks the biggest yet to use a market-based approach to control pollution, exceeding the scale of Europe’s $55 billion a year system. In Europe, the cost of a metric ton of carbon offsets has fallen about 80 percent from its peak in 2008 to an average €5.52 ($6.25) this year as politicians failed to mop up a surplus created when industrial output and pollution plunged.

Source: Bloomberg

IFC and partners to invest $161 million in three biomass plants in Philippines

August 19: International Finance Corp (IFC), the Government of Canada and the Clean Technology Fund will provide $161 mn to build three biomass power plants in the Philippines. The biomass power plants will be built in Negros Occidental, the Visayan island with a combined power generation capacity of 70 MW. The plants will not only generate clean renewable energy but also help in reducing air pollution as currently sugarcane waste is burned in the fields. After construction, the three plants are expected to qualify for the biomass feed-in-tariff of the Philippine Energy Regulatory Commission.

Source: Energy Business Review

UK plan for smart meter in every home suffers fresh setback

August 18, 2016. UK government plans to install smart meters in every home and business to measure gas and electricity use suffered a setback after a key piece of infrastructure for the system was delayed by another month. Communications systems that link smart meters to utilities, run by the Data Communications Co., a unit of Capita Plc, will not be ready until the end of September, missing the deadline to complete it, according to the government. Britain plans to install 53 million smart meters in homes and businesses by 2020 to cut electricity use and lower carbon emissions.

Source: Bloomberg

DATA INSIGHT

Renewable Energy Scenario: Electricity Capacity, Generation & Cost of Generation

Table1

Per Unit Cost of Renewable Electricity (CERC order dated 29/04/2016)

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Source: Various Questions of Lok Sabha & Rajya Sabha

Fact-File

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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