MonitorsPublished on Oct 17, 2016
Energy News Monitor | Volume XIII; Issue 18

Oil news commentary: September–October 2016


This newsletter commented in June 2016 that India was taking off, but only on a motor bike rather than a car as presumed by many in the market (Energy News Monitor, Volume XII, Issue 52). At that time, the international press was consumed by the idea that India will take over from China as the main growth market for oil. The fact that oil demand growth in India was 400,000 bpd higher year on year representing nearly 30 percent of global increase in the first quarter of 2016 along with the fact that it was petrol rather than diesel that was fuelling growth was behind this enthusiasm. Rich consumers were thought to be buying cars to drive into prosperity.

Since then opinion seems to have shifted to the Indian growth story moving on two rather than four wheels. India’s petrol consumption is reported to have increased by 550,000 bpd between June and August, an increase of nearly 15 percent from 480,000 bpd a year earlier. Petrol consumption reportedly hit a new record of 600,000 bpd in August. The number of registered vehicles hit 182 million in 2013 but the majority of this were motorcycles (133 million) with a much smaller number of cars, jeeps and taxis (25 million) and goods vehicles (nine million).

Motorcycles were reported to have accounted for more than 60 percent of all petrol sales in 2013. Motorcycle sales were reportedly growing at seven percent per year since FY11 and were reported to have hit a record 16.5 million in FY16. This is low compared to car sales growth of just over two percent per year which reached 2.8 million in FY16. It would be of interest to understand what is driving the demand for two wheelers. The common view is that it is driven by higher incomes and improved social status that a private vehicle brings. This may have been true two decades ago when few had two wheelers. Now most people even in city slums and villages have one. It is possible that the growth in e-commerce has something to do with it. Growth in e-commerce has propelled demand for delivery services and this is probably behind the spurt in demand for two wheelers and petrol. Speculatively one may even say that two wheelers are the ticket to employment for many of India’s educated youngsters who have no real prospects for regular jobs that pay decent wages.


The other important news that is likely to make a difference was on LPG. The lack of Aadhar card or the failure to register an Aadhar card with a bank account by the end of September will reportedly delink 25 million domestic LPG consumers from accessing subsidies for LPG. Subsidy payments to some 50 million consumers were put on hold since July but only half have reportedly registered their cards. It is to be noted that the recent news quoted 180 million households (As of 31 March 2015 Domestic LPG connections of IOC), 88.77 million plus (of BPCL), 45.82 million plus (of HPCL) 47.31 million) have LPG connections out of which over 90 percent receive a subsidy but as per figures quoted by the Census 2011 and 68th round of NSSO number of households using LPG as cooking fuel are close to 70 million and 78 million respectively. 30 million connections were reportedly eliminated as they were found to be non-domestic consumers but an equal number of new consumers were supposedly added keeping the total number intact. The budget for FY16 allocated about ₹270 billion (or about four billion USD) for fuel subsidy out of which roughly 73 percent is for LPG and about 26 percent for kerosene. If the number LPG consumers receiving a subsidy is reduced it could substantially reduce the subsidy burden on the government.

Rest of the world

The biggest news on oil was that its price touched $50 per bbl this month thanks to Russia joining hands with the OPEC to limit production. At the moment, Russia is the largest oil producer in the world with over 11 mbpd of production. Opinion is divided on the sustainability of the efforts by oil producers to limit production and boost prices. In the recent past the impact of such acts have been short lived. Though oil producers want higher prices, none of them, not even Saudi Arabia or Russia want to reduce production. Lower production levels could potentially have a negative impact on market share as well as revenue.

IEA’s oil market report for October said that demand continues to be subdued as demand growth had fallen in China. The IEA has lowered oil demand growth for 2016 to 1.2 mbpd from 1.3 mbpd in September and 1.4 mbd in August. According to the IEA oversupply is expected to continue through the first half of 2017. But the IEA also suggested rather optimistically that if OPEC stuck to its new target, the market may rebalance faster. OPEC’s oil output was reported to have risen by 160,000 bpd in September to an all-time high of 33.64 mbd on account of increased production from Iraq, Libya, Iran and the Gulf States. According to experts, OPEC would have to reduce production by 600,000 bpd to reach the upper end of the range (32.5-33.0 mbpd) that it has supposedly committed to.

Few expect such a large reduction in production to actually materialise. According to one expert, Saudi Arabia’s decision to cut production was driven by the fact that it paid a price for not agreeing to cut production in the last two years. The country’s financial reserves have fallen by 20 percent, and the budget deficit in 2015 was $98 billion, over 15 percent of GDP. The deficit for 2016 is projected to be $87 billion. Meanwhile Saudi Arabia revealed in its bond issue prospectus that it expects its 266.5 billion barrels of oil reserves to last another 70 years. This is not necessarily new information but it will not make the anti-fossil fuel groups very happy.


Centre to invest ₹150 billion to expand Panipat refinery

October 11: The Union government will invest ₹15,000 crore to increase the capacity of Panipat oil refinery in Haryana from existing 15 million tonnes (MT) to 25 MT to raise quality of fuel and create more employment opportunities. Also, an ethanol plant would be set up at a cost of ₹500 crore by the Indian Oil Corp (IOC) in Panipat to generate alternative fuel from agricultural residue that would boost the farm sector. Oil Minister Dharmendra Pradhan said the expansion of the refinery would raise specifications of fuel quality from BS-4 to BS-6. As per scientific research, he said, ethanol made from crop residue can produce fuel or energy upto 72%. Pradhan said that efforts were being made to have downstream of petro-chemical hub in Haryana to attract maximum investment in the state.

Source: The Times of India

Karnataka petro dealers plan protest

October 11: The Karnataka State Federation of Petroleum Dealers will stage protest by stopping supply of petroleum products for 15 minutes on 19 and 26 October, urging the government to fulfil their demands. K. Vishwas Shenoy, general secretary of the federation, said that one of their demands was the revision of dealers’ commission. A decision was taken at a meeting between oil marketing companies (OMCs) and the All India Petroleum Dealers’ Association to revise the dealers’ commission every six months. He said that the industry representatives, who made presentations on the dealers’ margin, have not taken into account the additional expenses mentioned in the Apoorva Chandra Committee report while fixing this. Those expenses should also be taken into consideration during the revision, he said.

Source: The Hindu Business Line

Oil companies’ losses on subsidised sales to fall 30 percent to ₹191 billion in current fiscal

October 7: The Gross Under Recoveries of Oil Marketing Companies (OMCs) on subsidised sales of petroleum products is likely to fall 30 percent to ₹19,100 crore in the current financial year from ₹27,570 crore last fiscal. The estimated reduction in losses is based on an average Indian basket crude oil price of $45 per barrel and a Rupee-Dollar exchange rate of 68 for the full financial year 2016-17. The centre has directed OMCs to increase the retail prices of subsidised kerosene by 25 paisa per litre every fortnight up to April 2017, post the price hike of 25 paisa every month in July and August 2016. As per estimates, subsidy on kerosene was expected to be in the range of ₹9000 crore and ₹12,500 crore per annum, assuming crude oil price to be in the range of $40-50 per barrel. The move to increase retail prices of subsidised kerosene would lead to the overall reduction in gross under-recoveries on kerosene by ₹30,000 crore in 2017-18.

Source: The Economic Times

Oil Minister launches LPG scheme PMUY in Maharashtra

October 7: Oil Minister Dharmendra Pradhan launched the Pradhan Mantri Ujjwala Yojana (PMUY) in Maharashtra to provide free LPG connections to BPL households. The move will benefit ninety one lakh households living below the poverty line in Maharashtra over the next three years. Chief Minister Devendra Fadnavis who was also present gave away free LPG connections to 10 women from BPL families. Pradhan said a target of 10 lakh connections has been set under PMUY for Maharashtra in 2016-17 out of which one lakh connections are to be provided in Mumbai. Fadnavis said he will work on updating the social economic caste census (SECC) data. The identification of BPL families is done through 2011 SECC data. More than one crore people in the country have given up LPG subsidies and are buying cooking gas at market price now. As of April 2016, Maharashtra tops the list with 16.44 lakh consumers giving up subsidies, followed by Uttar Pradesh where nearly 13 lakh users gave up subsidies and Delhi with 7.26 lakh people giving up subsidies. Prime Minister Narendra Modi’s home state Gujarat was down the list with just 4.2 lakh giving up subsidies. In Odisha, around 1.3 lakh people gave up subsidies. Consumers are currently entitled to 12 cylinders of 14.2 kg each or 34 bottles of 5 kg each in a year at subsidised rates. PMUY scheme provides subsidy of Rs 1,600 to the women beneficiaries, comprising security deposit of 14.2 kg cylinder, domestic pressure regulator, domestic gas consumer card and administration charges, among others.

Source: Business Standard

Oil Minister pitches for subsidy withdrawal on petro products

October 6: Oil Minister Dharmendra Pradhan said the market price of petroleum products should commensurate with production rate to augment output and subsidies on such items must be for poor households only. The minister was also of the view that freeing price of petroleum products is necessary to boost the investors confidence and increase private players participation in energy sector. He suggested that the without removing subsidies India cannot augment production of petroleum products in the country. At present, the government still provides subsidy on kerosene and cooking gas (LPG). Government has been trying to persuade consumers to give up their LPG subsidy so that it could be provided to deserving below poverty line or poor families.

Source: Business Standard


BP to set up 3,500 fuel stations in India

October 6: Global oil major BP will set up 3,500 fuel stations in India, becoming the second overseas firm drawn to the rising demand for gasoil and gasoline in the world’s fastest growing major economy. India is replacing China as the driver of global oil demand growth and there is enormous scope for fuel demand to increase over the next decade as the Indian economy expands and a rising middle class obtain access to motor vehicles. India’s oil consumption is seen rising by 6 million barrels per day (bpd) to about 10 million bpd by 2040, according to the International Energy Agency. BP had sought the Indian government’s approval to sell petrol and diesel. India’s fuel demand rose by 11.6 percent in 2015/16, its highest rate in at least 16 years. European oil major Royal Dutch Shell has 82 fuel stations in India, a retail market dominated by state refiners that own 93 percent of the 56,190 outlets in the country. Oil Minister Dharmendra Pradhan said global oil majors including Saudi Aramco and Total plan to tap the retail fuel market in India. Indian fuel markets could be a lucrative prize for BP, which reported a 45 percent drop in second-quarter earnings. It has also received an Indian licence for jet fuel sales. It is not clear from where BP will source fuels for local sales. India’s pricing formula gives higher profits to retailers with refining plants or domestic supply sources. BP in 2011 acquired a 30 percent stake from Reliance Industries Ltd (RIL) in some exploration blocks and formed a gas sourcing and marketing tie-up with the Indian conglomerate. RIL currently has a small share in the local fuel market.

Source: Reuters

India closes $3.1 billion stake purchase in Russian oilfields

October 5: A consortium of Indian state-owned oil and gas companies closed a combined purchase of stakes in two of Russia’s prolific oilfields in a deal worth $3.14 billion. The three firms — largest fuel retailer Indian Oil Corp (IOC), Oil India Ltd (OIL) and Bharat PetroResources Ltd (BPRL) — completed two separate transactions through a joint venture company floated by their wholly-owned subsidiaries in Singapore. The OIL-led consortium closed the first transaction for $2.02 billion that involves buying 23.9 percent of the charter capital of JSC Vankorneft — a company organised under the laws of the Russian Federation and the owner of Vankor and North Vankor Field licenses — from Rosneft Oil Company. The second deal worth $1.12 billion is for buying 29.9 percent of the participatory share in the charter capital of LLC Taas Yuryakh Neftegazdobycha from LLC RN Razvedka I Dobychya, a wholly-owned subsidiary of Rosneft.

Source: The Economic Times


GAIL places order for 345 km pipeline laying job

October 11: GAIL (India) Ltd has placed orders for laying work of a 345 km section of the Jagadishpur-Haldia-Bokaro-Dhamra gas pipeline, helping expedite the ₹13,000 crore project. The cost of the 345 km stretch would be ₹306 crore and contracts have been placed on JSIW Infrastructure Pvt Ltd and IL&FS Engineering & Construction Co Ltd. Laying work would commence by the end of October and is targeted to be completed by December 2018, the company said. The government is supporting the project by providing 40 percent of the project cost or ₹5,176 crore as capital grant over a five year period. The project will cost ₹12,940 crore. The first phase at a project cost of ₹3,200 crore and will span 755 km to cover Phulpur, Mani, Gorakhpur, Varanasi, Dobhi, Silao, Patna and Barauni. Pipeline construction is already under progress along Gaya-Barauni-Patna section. The 2,539 km long Jagadishpur-Haldia-Bokaro-Dhamra natural gas pipeline (JHBDPL) is scheduled for completion by December 2020 and will connect major cities and towns enroute for commencing piped natural gas to homes across Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha in addition to supplying feed gas to anchor fertiliser units at Gorakhpur, Barauni and Sindri. Previously, GAIL had placed pipeline supply orders on Jindal Saw Ltd, MAN Industries (India) Ltd, Essar Steel India Ltd and China’s Zhongyou BSS (Qinhuangdao) Petro pipe Co Ltd.

Source: The Economic Times

Cairn O&G output drops four percent in Q2

October 10: Cairn India reported a four percent drop in its oil and gas (O&G) production during the second quarter (Q2) ended September 30 after eastern offshore Ravva field output dipped by more than a quarter. Daily production of O&G in July-September averaged 2,06,230 barrels per day, down 3.7 percent from 2,14,247 barrels of oil and oil equivalent gas in the same period a year ago, the company said. Its mainstay Rajasthan block output was marginally lower at 1,67,699 barrels of oil and oil equivalent gas in the second quarter as compared to 168,126 barrels of oil equivalent per day (boepd) a year ago. Krishna Godavari basin Ravva oil and gas field saw output dip 28 percent to 18,823 boepd while its Cambay block production was down 11.5 percent at 9,877 boepd. While Rajasthan production was flat as compared to output in the first quarter of 2016-17 fiscal, Ravva and Cambay output was down four percent quarter-on-quarter (q-o-q). Cairn, which is being absorbed by its parent Vedanta Ltd, has three producing oil and gas assets — Rajasthan block, Cambay block off the Gujarat coast and Ravva in Bay of Bengal. It said Ravva and Cambay have delivered stable performance with combined gross production of 28,700 boepd, lower by 4.1 percent q-o-q. Production from Cambay was at 9,877 boepd as effective reservoir management practices and production optimization measures helped in reducing the impact of natural decline, the company said. Cairn said a strong performance by enhanced oil recovery scheme at Mangala — the largest oilfield in the Rajasthan block, helped in maintaining production from Rajasthan.

Source: Business Standard

OIL gets green nod for ₹2.2 billion drilling project in Jaisalmer

October 9: Oil India Ltd (OIL) has received environment clearance for ₹220 crore development drilling project in Jaisalmer district of Rajasthan. The company received the green nod for development drilling of 20 wells in Baghewala mining lease block in Jaisalmer district. OIL had discovered natural gas in Jaisalmer sub-basin of Tanot fields and heavy oil in the Bikaner-Nagaur sub-basin in early nineties. Now, the company has proposed to undertake development drilling of 20 wells in the Baghewala mining lease block. OIL has over one lakh sq km of petroleum exploration licence/mining lease areas, most of it is in North Eastern parts of India, which accounts for its majority of crude oil and gas production. Rajasthan is the other major gas producing area, contributing to 10 percent of its total gas production.

Source: Business Standard

ONGC signs pact to buy stake in GSPC’s KG basin block

October 9: Oil and Natural Gas Corp (ONGC) has signed a preliminary agreement to take an operating stake in Gujarat government firm Gujarat State Petroleum Corp (GSPC)’s KG basin gas block. The Memorandum of Understanding signed has a dispute resolution mechanism set out wherein any differences over issues like valuation or natural gas reserves would be referred to a three-member committee of outside experts. GSPC began trial production of a very small volume of gas from 4 August 2014 but has not yet reached commercial production. ONGC initially was not keen to buy stake in the block as it felt the block had reserves far less than what GSPC was claiming and the asking price for the stake was not commensurate with the returns. But it has relented lately. GSPC was to begin gas production from the block in 2013, but after sinking in $3.6 billion it was found that gas reserves are one-tenth of 20 trillion cubic feet claimed in 2005 and that too is technically difficult to produce.

Source: Livemint

India to set up LNG terminal, CGD network in Sri Lanka

October 6: India is working on a slew of proposals aimed at strengthening bilateral energy engagement with Sri Lanka including setting up an Liquefied Natural Gas (LNG) terminal and a dedicated City Gas Distribution (CGD) network in the neighbouring nation. Oil Minister Dharmendra Pradhan met his Sri Lankan counterpart Chandima Weerakkody and discussed the Indian proposals, the oil ministry said. Pradhan said the Indian oil ministry has offered to work with the Lankan government for developing gas infrastructure there. He said the Indian companies had engaged a reputed consultant for assessing LNG demand and are developing related infrastructure in Sri Lanka. Pradhan discussed Lanka IOC (LIOC) activities in Sri Lanka including increasing the number of its retail outlets and bunkering operations and granting license to LIOC for marketing Aviation Turbine Fuel (ATF) and LPG. Both the sides also discussed refurbishment of Sapugaskanda refinery and possibility of setting up of a refinery in Sri Lanka as a joint venture to address the local needs. India also offered to assist Sri Lanka in building oil and gas pipeline networks. During the meeting, the two ministers also exchanged notes on the exploration and production activities in the Sri Lankan Mannar basin. Pradhan said ONGC Videsh Ltd (OVL) and its parent company ONGC had the expertise and knowledge of the geological conditions that exist in the Cauvery basin.

Source: The Economic Times

VGL reduces prices of CNG, PNG

October 5: Vadodara Gas Ltd (VGL), a joint venture company formed by the Vadodara Municipal Corp (VMC) and GAIL Gas Ltd, has reduced piped natural gas (PNG) prices for domestic use and compressed natural gas (CNG) for automobiles. VGL will provide PNG to domestic users at a rate of ₹22.90 per cubic meter against the previous rate of ₹23.50 per cubic meter. The new prices have become effective from October 1. The price of CNG has been revised to ₹42.50 per kg against ₹44 per kg earlier. VGL took the decision following an intimation from the Petroleum Planning and Analysis Cell (PPAC) of the union ministry of petroleum and natural gas. The PPAC had informed VMC regarding a reduction in the basic price of natural gas provided under the administrative price mechanism. VGL caters to around 79,000 domestic gas consumers and around 40,000 vehicle owners in the city.

Source: The Times of India


Gujarat to save one billion Rupees every year on coal rationalisation

October 8: Gujarat will save ₹100 crore every year thanks to coal rationalisation, Power & Coal Minister Piyush Goyal said. The state government had requested the centre to transfer coal linkages for Gujarat State Electricity Corp Ltd. from South Eastern Coalfields Ltd. to Western Coalfields Ltd.

Source: The Economic Times

Goyal urges states, companies to stop coal imports

October 7: The Union government has urged power generating companies to stop importing coal in view of the accumulated coal stocks at Coal India Ltd (CIL) pitheads. The coal ministry is working very actively on coal imports substitution and many states and government companies are on board, Power & Coal, Minister Piyush Goyal said. CIL can make available highest grades of coal to substitute coal imports, he said.

Source: The Economic Times


Coal dispatch by CIL to power sector dips 13 percent in August

October 6: In view of weak demand for power in the country, the dispatch of coal by Coal India Ltd (CIL) to power sector declined by 12.7 percent to 26.4 million tonnes (MT) in August this year. CIL, which accounts for over 80 percent of domestic coal production, dispatched 30.25 MT of coal in the same month last fiscal, according to government data. Company’s supply to power sector in the first five months of the current fiscal also dropped by two percent to 157 MT, against 160 MT in the corresponding period of previous fiscal. Coal dispatch by Singareni Collieries Company Ltd, declined by 9.4 percent to 3.6 MT in August 2016.

Source: The Times of India

Coal ministry to go ‘totally digital’ from October 16

October 5: The coal ministry has advanced the date for going “totally digital” from 1 November to 16 October. In line with the Centre’s ambitious ‘Digital India’ initiative, the coal ministry had earlier announced that it has decided to move all papers and documents in digital format from 1 November onwards, a move aimed at bringing more efficiency and transparency.

Source: The Economic Times

Misuse of coal mines leads to loss of revenue: Delhi HC

October 5: The Delhi High Court (HC) observed that the misuse of coal blocks leads to loss of public revenue and upheld a PSU’s decision to reject the bid of a private firm to develop Dulanga coal mine in Odisha. Montecarlo Ltd had approached the HC challenging the NTPC communication, arguing that it was unreasonable and contrary to the terms of tender papers. It said NTPC issued separate invitations for bids for development and operation of three coal mines Dulanga coal block, Chhati Bariatu and Talaipalli in Odisha.

Source: The Economic Times

National: Power

MSEDCL to get state subsidy of ₹9.9 billion for five years

October 10: The state government has signed a tripartite agreement with Maharashtra State Electricity Distribution Company Ltd (MSEDCL) power utility firm and Central government for the Ujwal Discom Assurance Yojna. Under the scheme, MSECDL will get state subsidy of around ₹992 crore to improve its infrastructure for next five years.

Source: The Times of India

BHEL commissions another 660 MW thermal unit in UP

October 10: Bharat Heavy Electricals Ltd (BHEL) said it has commissioned yet another 660 MW coal-based supercritical thermal power unit in Uttar Pradesh (UP). The unit has been commissioned at the 3×660 MW Prayagraj super thermal power project, located in Bara tehsil in Allahabad district of UP. The project is owned by Prayagraj Power Generation Company Ltd (PPGCL), a subsidiary company of Jaiprakash Power Ventures Ltd. This is the second unit of the project to be commissioned. The first unit was commissioned earlier by BHEL in December 2015 and the third unit of the project is also in an advanced stage of construction.

Source: Business Standard

Govt aims to achieve 100 percent power connectivity: Goyal

October 7: Stating that government’s aim is to provide electricity for all citizens irrespective of Below Poverty Line (BPL) or Above Poverty Line (APL) criterion, Power Minister Piyush Goyal said states are free to use any data they want for implementing rural electrification project. Goyal stressed that there is no need to focus only on BPL or APL criterion when it comes to providing power connections in villages. Goyal expressed hope that this “new approach” will also bring down corruption.

Source: Business Standard

Goa Lokayukta stays power contracts worth ₹3.3 billion

October 7: Goa Lokayukta ordered a stay on contracts worth ₹332 crore being planned to be executed by Electricity Department after opposition Congress complained of “irregularities” in tendering process. Lokayukta Justice (Retd) P.K. Misra issued notices to the state Power Minister, the Chief Secretary, the Secretaries of Departments of Finance and Power and Chief Electrical Engineer, asking them to remain present before it on October 17. While issuing the notice, Lokayukta asked the Chief Electrical Engineer and the Power Secretary “not to award the contracts as indicated in the complaint.”

Source: Business Standard

Centre offers soft loan to discoms to provide power connections for ₹100 per month

October 7: The Centre has offered long-term soft loans to states to provide electricity connections in easy monthly installments to households to meet its power-for-all commitment, Power Minister Piyush Goyal said. Rural Electrification Corp will offer 10-15 year loans at low interest rates to power distribution companies to finance capital expenditure incurred by states in offering electricity connections to households at installments of ₹100 per month, Goyal said. Currently, consumers have to pay ₹4,000-5,000 to get an electricity connection. The NDA government has committed to provide electricity to all by March 2019.

Source: The Economic Times

Power company brings in mobile app for meter reading

October 7: The Kolhapur zone of the Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has started using a mobile app developed by the power company to bring in transparency in meter-reading. The application, equipped with meter tampering system and Global Positioning System (GPS), aims to remove lacunas like human errors in the billing process. Kolhapur zone comprises Kolhapur and Sangli districts and has around 18 lakh customers. The app is available on Google store, window store, and apple store. MSEDCL has 16 distributions zones in the state.

Source: The Economic Times

RInfra to sell power transmission bid to ATL for over ₹20 billion

October 6: Reliance Infrastructure (RInfra) said that it has signed a binding term sheet with Adani Transmission Ltd (ATL) for sale of 100% stake in the company’s transmission assets. The company did not disclose the financial details of the deal, however, it will be over ₹2,000 crore.

Source: The Financial Express

Tripura government yet to clear power dues

October 5: Tripura State Electricity Corp Ltd (TSECL) will have a tough time ensuring uninterrupted power supply during Durga Puja as the state government and many individual consumers have not cleared their power bills yet. Forty government departments have not cleared electricity bills amounting to more than ₹23 crore between February and July this year, TSECL said.

Source: The Times of India


Kerala to tap renewable energy to increase power production

October 11: Annually spending a whopping ₹6,000 crore to purchase power from outside, Kerala has decided to step up power generation through renewable energy sources like solar and windmill, a state Electricity Minister Kadakampally Surendran has announced. Surendran said in three years the state will generate 600 MW power through solar projects. He said from October onwards all new applications for power connection can be made online.

Source: Business Standard

NLC India abandons solar project plans in Rajasthan

October 10: NLC India Ltd has abandoned plans to set up solar projects in Rajasthan as the state’s power distribution companies have refused to buy solar power at the rate it had estimated. NLC had in January invited global tenders to set up four blocks of solar projects of 65 MW each through the engineering, procurement and construction (EPC) route. Two of these projects were planned at Neyveli in Tamil Nadu and the other two at Barsingsar in Rajasthan. The projects were to be commissioned by the end of the current financial year. In both cases, bids were received and contracts awarded.

Source: The Economic Times

New nuclear reactor to be commissioned next year

October 9: A technical problem, which has delayed the country’s first indigenous prototype fast breeder reactor (PFBR) built in Kalpakkam from attaining criticality, is being sorted out and the nuclear reactor will be commissioned next year, Sekhar Basu, chairman, Atomic Energy Commission said. The reactor is awaiting clearance from the Atomic Energy Regulatory Board (AERB) for operations. PFBR, fuelled by a blend of plutonium and uranium oxide, has the capacity to generate 500 MW electricity. The reactor breeds more material for nuclear fission reactions than it consumes. While other reactors use water as a coolant, PFBR uses sodium. Basu said two more reactors with a capacity of 600 MW each would be built in Kalpakkam while four more reactors have been planned upon finalising a location.

Source: The Times of India

Can switch to cleaner energy sources if world helps: PM Modi

October 9: Days after India ratifying the Paris Climate Agreement, Prime Minister Narendra Modi has said the country can switch over to cleaner energy sources from coal if the world provides the technology and resources. However, he said until the country got the required resources and technology, he would think of an “alternative” to meet its rising energy demand. As per the Paris agreement, India has committed to ensuring that at least 40 percent of its electricity will be generated from “non-fossil” sources by 2030. The country is the world’s third biggest carbon emitter.

Source: The Indian Express

Government to come up with pro-active hydro power policy: Goyal

October 8: The government is planning to formulate a policy to push stalled projects and extend the benefits for renewable sources like wind and solar to hydro projects beyond 25 MW capacity. According to a proposal of the Power ministry, projects with capacities of up to 25 MW have been categorised as small hydro power projects and would get the benefits as extended to other renewable energy projects. Hydro power potential in the country has been estimated at about 150 GW, with 50 GW coming from Arunachal Pradesh alone. The power ministry had earlier mentioned that the planned hydro power generation capacity addition of 4,371 MW out of the total target of 10,897 MW in the 12th Plan will not be complete. Goyal said that it is only in India where hydro-projects below 25 MW are considered renewable and those above it are categorised as non-renewable.

Source: India Today

IOC floats ₹300 million revolving fund for startups

October 7: Indian Oil Corp (IOC) has launched a scheme with a revolving corpus of ₹30 crore to promote start-ups and nurture an ecosystem for innovation in the oil sector. IOC is the second oil company to begin an incubation fund for startups. Oil and Natural Gas Corp (ONGC) was the first off the block among the state-run companies with a ₹100 crore start-up fund. Driven by IOC’s Research and Development Centre based at Faridabad near Delhi, the startup scheme will support innovative ideas in the sphere of technology and business process re-engineering that have significant business potential, social relevance and focussed on environment protection.

Source: The Times of India

India to take up with China blocking of Brahmaputra tributary

Photo: Hasan Iqbal via Flickr

October 7: India will take up with China the issue of its blocking a tributary of Brahmaputra in Tibet to facilitate construction of Beijing’s “most expensive” hydro-power project, External Affairs Ministry said. China has blocked a tributary of the Brahmaputra river in Tibet as part of the construction of its hydro project, which is causing concern in India as it may impact the water flow into the country, including states like Assam. The Lalho project on Xiabuqu river, a tributary of the Brahmaputra in Tibet’s Xigaze, is being constructed with an investment of 4.95 billion yuan ($740 million), making it the most expensive project in China. The construction work on the project began in June, 2014 and is scheduled to be completed in 2019.

Source: NDTV


India can’t stop using fossil fuels totally: Goyal

October 7: India cannot stop the use of fossil fuels completely from its energy basket as it has development imperatives in the near future, Power, Coal, Renewable Energy and Mines Minister Piyush Goyal has said. He was of the view that it is important to strike a balance between the conventional and renewable sources of energy and rapid societal development and environmental concerns. The government has raised the solar power target five times to 100 GW by 2022, he said. The prices of solar energy have come down by 40 percent in just 18 months. Moreover, he said, concentrating on other sources of renewable energy, this year has been dedicated to hydro and wind energy and talks with international gas suppliers are on.

Source: The Economic Times

Prices of solar energy down by 40 percent: Goyal

October 6: Power, Coal, Renewable Energy and Mines Minister Piyush Goyal said that by consistent efforts made by the government the prices of solar energy have come down by 40% in just 18 months. Goyal said that India has its own developmental imperatives in the near future, hence it cannot shun the use of fossil fuels completely from its energy basket. It is important to strike a balance between the conventional and renewable sources of energy and rapid societal development & environmental concerns, he said.

Source: The Economic Times

Railways working to run fully solar-powered trains: Prabhu

October 5: Union Minister for Railways Suresh Prabhu said Indian Railways is working to run fully solar-powered trains in the future. Prabhu said this after flagging-off the first freight train which featured a newly developed guard van, which uses solar power to run fans and lights. The minister said that powering fans and lights in the newly-developed guards van through solar panel-produced power will help in reducing the carbon footprint of the railways.

Source: NDTV

International: Oil 

Saudi Arabia sees its oil reserves lasting another seventy years

October 11: Saudi Arabia, the biggest oil exporter, sees its crude reserves of 266.5 billion barrels lasting 70 more years and hasn’t sought an independent consultant to review the figures, according to a bond prospectus. The nation’s wealth is based mainly on oil, with crude sales accounting for 75 percent of total export earnings, according to the prospectus. Saudi Arabia plans to sell at least $10 billion in bonds maturing in five, 10 and 30 years, and it disclosed plans to hold investor meetings in London, Los Angeles, Boston and New York.

Source: Bloomberg

Oil market may rebalance faster if OPEC sticks to target: IEA

October 11: Global oil supply could fall in line with demand more quickly if OPEC (Organization of the Petroleum Exporting Countries) and Russia agree to a steep enough cut in production, but it is unclear how rapidly this might happen, the International Energy Agency (IEA) said. OPEC, led by Saudi Arabia, agreed last month to cut production to around 32.5 to 33 million barrels per day (bpd) and Russia has signaled it is ready to join in any effort to temper supply and shrink a stubborn global surplus of unwanted crude. Oversupply helped send oil prices from $115 a barrel in June 2014 to as low as $27 in January this year. Crude has since recovered to around $50 on expectations of a production cut.

Source: Reuters

Britain’s motorists should brace for higher petrol prices

October 11: British motorists should brace themselves for more expensive petrol and diesel as the price of fuel is hit by a double shock from rising oil prices and a weakening exchange rate. The initial impact of the Brexit vote on the cost of filling up was masked by the sharp drop in oil prices, priced in dollars, between the middle of June and the middle of September. The relationship between international oil prices and pump prices is complicated because of the impact of refinery and retail margins and but most of all because of the effect of taxes. The government imposes a flat rate excise duty of 57.95 pence per liter on both petrol and diesel sales and then a 20 percent value-added tax on the whole sale price. Unless oil prices fall, or sterling recovers, Britain’s motorists face a significant increase in pump prices over the next few weeks. The price of fuel, currently around 112 pence per liter for petrol and 114 pence per liter for diesel, is likely to rise closer to 120 pence per liter for both fuels.

Source: Reuters

Repsol and PDVSA invest USD 1.2 billion to boost oil production in Venezuela

October 11: Spanish energy group Repsol has approved a USD 1.2 billion investment in Petroquiriquire, its joint venture with Venezuela’s state-owned oil and gas company PDVSA (60%, with 40% owned by Repsol), to boost oil production in the Latin American country. Petroquiriquire operates three oil fields in the states of Zulia, Trujillo, and Monagas, with an average oil production of 41,600 barrels (bbl) per day. Current production level stands at around 30,000 bbl per day and Repsol’s investment is expected to help raise production to 60,000 bbl per day. PDVSA has signed an agreement with Domegas for gas distribution in the greater Caracas area and in the center of the country.

Source: Enerdata

BP boss Dudley sees oil prices at $55-$70 for rest of the decade

October 11: BP Chief Executive Robert Dudley said he expects global oil prices to stabilise at around $55-$70 per barrel for the rest of the decade. Dudley was speaking at the World Energy Congress in Istanbul.

Source: Reuters

Goldman sees lower chance of oil market rebalancing in 2017

October 10: Goldman Sachs said a planned oil output cut by producer cartel OPEC and other exporters like Russia has become a “greater possibility”, but warned that any reduction likely won’t be deep enough to re-balance markets in 2017. Any failure to reach such a deal, however, would push prices sharply lower to $43 per barrel as the global oil market will still have surplus crude in the fourth quarter. OPEC’s top producer Saudi Arabia said that a global deal to cut supplies could be reached at the group’s next formal meeting in November, when non-OPEC nations such as Russia could be invited to join in the pact. Russian President Vladimir Putin said that Russia was ready to join a proposed cap on oil output by OPEC members. Goldman said even if OPEC producers and Russia implemented strict cuts, higher prices would allow U.S. shale drillers to raise output.

Source: Reuters

Caelus Energy announces major oil discovery in Alaska

October 10: United States (US) independent exploration and production company Caelus Energy has announced a significant light oil discovery on its Smith Bay state leases on the North Slope of Alaska. Caelus is currently planning an appraisal program which will include drilling an additional appraisal well to confirm reservoir continuity, optimise future drilling locations, and ultimately increase reserves.

Source: Enerdata

Petrobras sees oil output cap outside OPEC unlikely

October 7: Oil producers outside the Organization of Petroleum Exporting Countries (OPEC) are unlikely to agree to any suggestion from the group to limit production, Brazilian state-controlled oil company Petróleo Brasileiro SA (Petrobras) said. Petrobras accounts for around 80 percent of Brazil’s oil production. OPEC Secretary General Mohammad Barkindo said in Washington the group was planning consultations with non-members on efforts to manage global oil output. Brazil’s oil and natural gas production increased by 25 percent from the end of 2010 to last August to 3.29 million barrels of oil equivalent per day (boed), as the country progresses with works in the subsalt area off the coast of Rio de Janeiro.

Source: Reuters

US oil rig count extends recovery amid crude rally: Baker Hughes

October 7: The number of rigs drilling for oil in the United States (US) rose, extending one of its best recoveries with no cuts for 15 straight weeks, with analysts expecting more additions after crude prices climbed back over $50 a barrel. Drillers added three oil rigs in the week to October 7, bringing the total count up to 428, the most since February, but still below the 605 rigs seen a year ago, according to energy services firm Baker Hughes Inc.

Source: Reuters

Venezuela oil production remains stable in September

October 5: Venezuela production was roughly stable at 2.429 million barrels of crude oil and condensates in September compared to the previous month, according to the country’s oil ministry. The rise of 0.27 percent was down to higher output in the OPEC nation’s Orinoco Belt, according to the ministry. Oil accounts for 94 percent of Venezuela’s export revenue and its fall in price is partly behind the country’s economic crisis, with shortages of basic goods and inflation in triple digits.

Source: Reuters

PIRA Energy expects oil surplus to be gone by second half of 2017

October 5: The surplus in crude oil supply that has led to a two-year price rout has been eroding since the second quarter and will be “gone” by the beginning of the second half of 2017, PIRA Energy Group founder Gary Ross said. A massive glut in oil brought crude prices crashing from the $100 a barrel range in mid-2014 to as low as about $27 early this year. Organization of Petroleum Exporting Countries (OPEC) agreed to modest oil output cuts in the first such deal since 2008, limiting production to a range of 32.5 million-33.0 million barrels per day.

Source: Reuters

International: GAS

Turkey will work to start construction of second pipeline in TurkStream: Foreign Minister

October 11: Turkey will work to start the construction of the second pipeline on the TurkStream project if there is sufficient demand from European markets, Turkish Foreign Minister Cavusoglu said. Turkey and Russia signed a bilateral agreement to build the TurkStream undersea gas pipeline, which will allow Moscow to strengthen its position in the European gas market and cut energy supplies via Ukraine. Cavusoglu said that normalisation with Russia following the downing of the Russian fighter jet was continuing, and that visas would be lifted gradually.

Source: Reuters

Algeria’s Sonatrach awards JGC USD 1.4 billion deal for Hassi Rmel gasfield

October 11: Algeria’s state energy company Sonatrach has awarded Japanese firm JGC Corp a USD 1.4 billion contract to boost production at its largest gas field in Hassi Rmel, according to an internal Sonatrach document. It was the second contract for JGC in 2016, the first one included boosting output at Algeria’s biggest oil field Hassi Messaoud, awarded in March for USD 339 million.

Source: Reuters

Origin Energy’s APLNG second train starts producing LNG

October 11: Australia Pacific LNG (APLNG) has started liquefying gas from the second train of its liquefied natural gas (LNG) plant on Curtis Island near Gladstone (Queensland) in Australia. APLNG is a joint venture of ConocoPhillips (37.5%), Origin Energy Limited (37.5%) and Sinopec (25%) and processes gas from the Surat and Bowen basins, operated by Origin Energy. The first 4.5 million tonnes (MT) per year train started producing gas in December 2015 and the whole project was officially commissioned in March 2016. With LNG production from the second train, Australia pacific LNG reaches its nominal capacity of 9 MT per year.

Source: Enerdata

Iraq’s Oil Minister wants country to increase output in 2017

October 10: Iraq’s Oil Minister Jabar al-Luaibi has urged oil and natural gas producers operating in the country to continue increasing output next year, the oil ministry said. The ministry aims to increase associated gas output by adding 350 to 450 million cubic feet a day to the nation’s production in 2017, Luaibi said. Natural gas output levels in Iraq’s southern region are tied to crude production levels as the two are produced from the same reservoirs.

Source: Reuters

Argentina announces 300 to 500 percent gas price increases

October 10: The government of Argentina has announced significant gas price increases. In August 2016, the Supreme Court of Argentina had overturned cuts in home-heating gas subsidies that were introduced in early 2016 by the new President, considering that the government had to hold public hearings before reducing home heating gas subsidies. Prices will then increase between 300% and 400% for home-heating gas and up to 500% for companies, which is expected to fuel inflation (40% on an annual basis). Protests prompted the President to announce a 400% cap on heating gas price increase.

Source: Enerdata

Russia, Turkey resume gas price talks: Russian Energy Minister

October 9: Moscow and Ankara have resumed talks on the price of Russian gas for Ankara, Russian Energy Minister Alexander Novak said. A gas price dispute between Turkish pipeline operator Botas and Russia’s state gas producer Gazprom led to Botas launching international arbitration proceedings against Gazprom in October 2015. The row had led to talks on their joint Turkish Stream natural gas pipeline project to be suspended earlier that year. In November 2015, most contact between Russia and Turkey were halted after the downing of a Russian fighter jet by Turkish military, although since then Moscow and Ankara have made significant progress towards restoring relations.

Source: Reuters

Pennsylvania adopts new fracking regulations

October 7: New regulations governing the extraction of natural gas through fracking will go into effect in Pennsylvania, the first overhaul since the industry took off in the state more than 10 years ago. The new rules allow the state’s department of environmental protection to require additional measures if fracking is taking place near public resources, and requires drillers to restore water supply that is degraded or damaged through fracking. Environmental groups hailed the new rules. An oil and gas industry group blasted the regulations, with a spokesman saying he expected legal challenges. The rules have been in development since 2011, and faced opposition from the oil and gas industry and their allies in the state legislature, where the regulations were rejected earlier this year. Since then, Democratic Governor Tom Wolf has reached a compromise that gave traditional oil and gas wells different rules than “unconventional” wells developed through fracking. Hydraulic fracturing, or fracking, involves injecting water, sand and chemicals at high pressure into rock to extract natural gas or other products. Opposition has mounted as the run-off from fracking has been blamed for polluting water supplies in parts of the United States.

Source: Reuters

Forward US gas prices rise to highest for over a year as market tightens

October 7: Deferred United States (US) natural gas prices have risen to their highest level for more than a year as the market rebalances and starts to anticipate a possible deficit in 2017. The price for gas delivered to Henry Hub in July 2017, the height of the air-conditioning season, rose to $3.147 per million British thermal units, the highest since July-August 2015. Futures prices for July 2017 have increased by almost 31 percent since hitting a low of just $2.41 in late February. The reasons are not hard to find as the market has digested the surplus left over from last year and starts to focus on the possibility of shortfalls next year. Domestic gas production has been turning down since March as low prices have cut the number of rigs drilling gas-rich formations to less than 100 across the entire country. At the same time, gas consumption has been surging as exceptionally high temperatures all summer long have coupled with cheap gas prices to encourage record gas burn by power producers. The result is that gas stocks have risen by less than the five-year seasonal average for 22 consecutive weeks, according to data from the US Energy Information Administration.

Source: Reuters

Cuadrilla wins two-year fight to frack for gas in Britain

October 6: Cuadrilla Resources Ltd. won government permission to hydraulically fracture for natural gas in northern England, ending a two-and-a-half-year battle that veered into debates about the legacy, prosperity and stewardship of Britain’s countryside. Cuadrilla said approval will give the country a better sense of its shale gas resource base and may quell opposition to the practice if the wells are drilled without incident.

Source: Bloomberg

International: Coal

China appears to push back on US bid to choke North Korea coal exports

October 11: China appears to have pushed back on a United States (US) bid to close a United Nations (UN) loophole that allows North Korea to export coal for “livelihood purposes,” saying the well-being of North Koreans is a priority in negotiations on possible new UN sanctions on Pyongyang. Since North Korea’s fifth and largest nuclear test four weeks ago, the United States and China, a close ally of North Korea, have been negotiating a new draft Security Council resolution to punish Pyongyang. China’s imports of coal from neighbouring North Korea reached 1.53 million tonnes in April, down 35 percent on the previous month when the latest UN sanctions were adopted, but by August imports from North Korea had risen to 2.47 million tonnes. China imported $1 billion worth of North Korean coal in 2015 and $73 million of iron ore, according to Chinese customs data. Chinese Foreign Ministry said that China supported a further response by the Security Council but that it should focus directly on North Korea’s nuclear program.

Source: Reuters

South Africa selects two private coal-fired power projects

October 11: The Minister of Energy of South Africa has selected two successful bidders in the first coal-based Independent Power Producer Programme, that was launched in December 2014 to allow private companies to develop coal-fired power plants in the country. The preferred bidders of the first bid window coal base-load programme are the Thabametsi and Khanyisa consortia, which will develop more than 863 MW of new coal-fired capacity. The Khanyisa consortium is expected to commission the first plant, rated 600 MW, in December 2020, while the Thabametsi consortium will commission the second plant in March 2021.

Source: Enerdata

PSEG will retire 1.2 GW of coal-fired capacity in June 2017

October 7: United States (US) power utility PSEG has decided to retire two coal-fired power plants in New Jersey on 1 June 2017. PSEG will thus retire its 620 MW Hudson power plant in Jersey City, which had been commissioned in 1968, and its 632 MW Mercer power plant in Hamilton Township in mid-2017.

Source: Enerdata

Australia boosts iron ore, coal price forecasts on China demand

October 6: Australia raised its 2016 average price forecasts for its two highest grossing exports, iron ore and coal, citing a surprise upturn in demand from steelmakers in China. Australia’s Department of Industry, Innovation and Science boosted its forecast for iron ore by 10 percent to an average $48.50 a tonne this year, while metallurgical coal was increased 16 percent to $99.40 a tonne. The rise reflects a recent surge in the prices of both commodities, with iron ore currently trading around $55 a tonne and metallurgical coal at $200 a tonne, underscoring an unforeseen resurgence in China’s industrial sector, the main buyer of Australian commodities. Australia expects the average metallurgical coal price to rise in 2017 to $108 a tonne, but said iron ore prices were set to decline later in 2016. It forecast prices at an average 6 percent lower in 2017 at $45 a tonne, reflecting rising supply.

Source: Reuters

Australia watchdog cites concerns on bids for Glencore coal rail arm

October 5: Australia’s competition watchdog raised concerns about bids from the nation’s two biggest coal haulers for Glencore Plc’s coal rail business and said it would decide by December whether to allow them to go ahead. Glencore has attracted several bids for its GRail business, the third-largest coal haulage business in Australia, which could fetch as much as A$1.5 billion ($1.1 billion), including from top coal hauler Aurizon Holdings, its arch rival Pacific National and US company Genesee & Wyoming Inc. The Australian Competition and Consumer Commission said the sale of GRail was a rare opportunity to boost competition in the rail business in the Hunter Valley, Australia’s top coal-exporting region. The commission said market participants had raised concern that if Aurizon or Pacific National, which is the biggest coal hauler in the Hunter Valley, were to take over GRail, it would lessen competition in the region.

Source: Reuters

International: Power

JICA and AfDB lend $ 259 million for Tanzania-Kenya power interconnection

October 11: The African Development Bank (AfDB) and the Japan International Cooperation Agency (JICA) have approved a US$259 mn loan to Tanzania’s national power company TANESCO for the development of a 400 kV electricity interconnection project with Kenya. Kenya will invest US$50 mn in construction works on its territory. The new 400 kV line will connect Singida, Arusha and Namanga border (414 km) on the Tanzanian side to Isinya (96 km) on the Kenyan side.

Source: Enerdata

Mexico opens landmark power transmission tender

October 10: Mexico’s state-owned utility CFE launched a tender for a $1.2 billion electricity transmission line that will be the country’s first high voltage direct current line and the first line to be built and operated by the private sector. The 3,000 MW line will run 600 km between the Tehuantepec isthmus in Oaxaca and Yautepec, Morelos state in central Mexico where electricity demand is highest, the CFE said. The high voltage direct current (HDVC) line is expected to reduce electricity losses by around 8pc compared to an alternating current line and is particularly suited to transmitting renewable, intermittent energy sources such as wind and solar over long distances, the CFE said. The energy ministry will accept comments on the bid terms until November, when the final bid terms will be published. Offers are due in February 2017, with awards to be issued in April 2017. The winning bidder will receive a 25 year Build, Operate and Transfer contract and the line is scheduled to be operational by 2020. The transmission auction is the fruit of a 2014 energy reform that broke up the monopoly of the CFE and paved the way for the launch of two long-term power auctions and the creation of a spot market.

Source: Argus Media

Australia to launch independent review into state-wide blackout

October 7: Australia will conduct an independent review into a blackout across South Australia state, although a meeting between state and federal energy ministers failed to resolve their differences over renewable energy targets. South Australia state, a major wine producer and traditional manufacturing hub, had no power for nearly 24 hours after a series of severe storms and lighting strikes. Australia’s Prime Minister Malcolm Turnbull — leader of the country’s ruling conservative government, which supports traditional coal and natural gas power generation — has blamed South Australia’s high dependence on renewables for the outage.

Source: Reuters


China developing world’s smallest Nuclear reactor for South China Sea islands

October 11: China is developing the world’s smallest nuclear power plant which could be installed in one of the islands in the disputed South China Sea (SCS) to supply power to households and is capable of running for up to decades without refueling, a report said. The report said China will soon start assembling floating maritime nuclear power platforms. China National Nuclear Cooperation (CNNC) as saying that China plans to build 20 floating nuclear power to beef up the power and water supplies on the SCS islands. China has been building infrastructure in the disputed islands as it consolidated its hold on the area after an international tribunal quashed its claims over almost all of the SCS. The strategic waters through which over $5 trillion of goods pass annually has rival claims over it by the Philippines, Vietnam, Malaysia, Brunei and Taiwan. The floating nuclear power plants were aimed at providing power to the remote islands as power cannot be supplied from Chinese mainland. The smallest lead-cooled reactor could be placed inside a shipping container measuring about 6.1 metres long and 2.6 metres high but would be able to generate 10 MW of heat, which, if converted into electricity, would be enough to power some 50,000 households, the report said.

Source: The Indian Express

German cabinet to agree on nuclear storage deal on October 19

October 11: The German cabinet is due to take a decision on final funding from Germany’s top utilities in return for handing over responsibility for the storage of nuclear waste on October 19. The country’s top four energy groups — E.ON, RWE, EnBW and Vattenfall — are in final talks with Berlin to nail down the details of a deal proposed by a government-appointed commission in April. Under the plan, the utilities are to transfer €23.3 billion ($26.10 billion) in funds to the state, along with responsibility and liability for storing their nuclear waste. Provided the cabinet gives the green light to the deal on 19 October, it is likely that the new law will only take effect at the start of 2017 once it has been approved by parliament.

Source: Reuters

European Commission clears Slovenian state aid scheme to renewables

October 11: The European Commission has approved the amended Slovenian support scheme for renewable energy and high-efficiency cogeneration (CHP), considering that the amended scheme would increase renewable energy production in line with European Union (EU) energy objectives without unduly distorting competition. Slovenia aims to achieve 25% of renewable energy sources in its gross electricity consumption by 2020 and reached 21% in late 2014. In May 2015, Slovenia notified plans to amend their existing support scheme for renewable energy and high-efficiency CHP to make it more cost-effective and improve the integration of renewable electricity into the market, in order to allow the 25% target to be reached.

Source: Enerdata

Andritz wins order for 670 MW Nam Theun-1 hydro project in Laos

October 11: Phonesack Group has awarded an order to Andritz Hydro to supply electromechanical equipment for the Nam Theun 1 hydropower project in Laos. The scope of supply includes three vertical Francis turbines with a total output of around 670 MW, generators, main transformer, medium and low-voltage switchgears, power and control cables, 500kV GIS (Gas Insulated Switchgear) and commissioning among other. The Nam Theun 1 dam project will be commissioned by the end of 2020 and will supply power to Laos and Thailand.

Source: Enerdata

BHP to test solar for remote mine sites as renewable costs fall

October 10: BHP Billiton Ltd, which forecasts wind and solar energy can achieve price parity with rival sources within a decade, is partnering in a battery-storage project to test technology that could be adopted at its remote sites. The world’s biggest miner is participating with partners, including Origin Energy Ltd., in the A$42.5 million ($32 million) Lakeland Solar and Storage Project in Australia’s Queensland-state, to test a 13 MW solar photo-voltaic installation and grid-scale storage, BHP said. Mining companies including Barrick Gold Corp and Rio Tinto Group are installing or testing the use of solar power to reduce costs and emissions. In markets including Chile and Morocco, renewable energy sources already compete with non-renewable fuels on cost and will achieve global parity on a new-build, unsubsidised basis within a decade, BHP said. Non-hydro renewable power will grow at more than nine percent a year through 2025, according to BHP, which said its view is more bullish than peers. Sandfire Resources NL, which completed installation this year of a 10.6 MW solar farm at its copper mine in Australia, forecasts it may cut fuel costs by half compared with diesel-generated power. The Paris climate accord negotiated last year, which seeks to limit temperature increases from pre-industrial levels to well below 2 degrees Celsius, is “more substantial and ambitious,” than expected, BHP said. The scale and pace of global cooperation on climate policy and links between carbon markets may be threatened by any rise in protectionism or constraints on free trade, BHP said.

Source: Bloomberg

EU climate laws helped lead to Brexit: Environment lobbyist

October 10: The European Union (EU) rules on 2020 climate and energy goals helped feed the negative sentiment that led to a decision by British voters to leave the bloc, according to environmental lobbyist Bryony Worthington. The European 2008 package, without realising that, contributed to and fostered some of the conditions that led to Brexit, Worthington said. EU policy makers approved eight years ago a set of laws to reduce greenhouse gas emissions by 20 percent in 2020 compared with 1990 levels, boost energy efficiency by a fifth and increase the share of renewables in energy consumption by 20 percent. To meet the goals, European member states had to translate the rules into domestic legislation and enact policies to promote the transition to low-carbon economy. The EU is currently discussing a climate and energy package for the next decade after the bloc’s leaders agreed in 2014 to tighten the carbon-cut goal to at least 40 percent by 2030.

Source: Bloomberg

US researches develop new process to turn brewery wastewater into energy storage cells

October 10: Researchers from University of Colorado in Boulder, United States have developed an innovative bio-manufacturing process which turns brewery wastewater into carbon-based materials which are used in making energy storage cells. The new process uses a biological organism, which is cultivated in brewery wastewater to produce materials required for energy storage cells. The research is funded by the Office of Naval Research. The engineers expect the pairing of breweries and batteries could help set up a win-win opportunity for the concerned. While the process reduces wastewater treatment costs for beer makers, the manufacturers could benefit from cost-effective means of creating renewable, naturally-derived fuel cell technologies.

Source: Energy Business Review

Philippines to cancel environmental permit of nickel miner as crackdown continues

October 10: The Philippines will cancel the environmental permit of a nickel miner that began operations this year, as the government intensifies a campaign to punish mineral producers harming natural resources. The Southeast Asian country is the world’s top nickel ore supplier and an environmental crackdown that has halted a quarter of its 41 mines, and the risk that 20 more maybe shuttered has spurred a rally in global nickel prices.

Source: Reuters

Argentina expects $1.8 billion investment from renewable energy auction

October 8: Argentina expects investment of $1.8 billion from 17 renewable energy projects awarded in an auction to generate 1,109 MW of power. Argentine and international companies are among the winners, with Spanish companies Isolux Corsan SA and FieldFare earning a solar contract and China’s Envision Energy winning four wind contracts. The projects are meant to increase the percentage of national power production from renewable sources to eight percent of the total next year from 1.8 percent currently. Several Latin American countries are turning their attention to renewable energy. In August neighbouring Chile awarded contracts to supply power for two decades from the 2020s.

Source: Reuters

France to finalise carbon floor price mechanism plan

October 7: France’s plan to introduce a carbon floor price mechanism will involve either charging coal-fired power plants a flat rate for emissions or imposing a flat tax on power facilities. The plan will target only coal power plants initially. France said it will unilaterally set a carbon floor price for electricity producers, a move aimed at curbing coal-fired power generation and boosting renewables in the absence of a concerted European effort to strengthen carbon pricing.

Source: Reuters

French nuclear woes push power prices in Europe to record

October 7: The lowest French nuclear availability for the time of year since at least 2009 and a drop off in expected supply from German reactors this winter are helping extend a bull market for European electricity. German power for the three months to March rose 28 percent since the start of September while the French equivalent gained 63 percent, according to broker data. Prices could rise even further as France will have to import more power next month during times of high demand, according to Pira Energy.

Source: Bloomberg

Airline pollution deal hinges on complex world of carbon offsets

October 7: The United Nations (UN) aviation climate accord hinges on a creating a system requiring companies to spend billions of dollars to protect forests, build solar farms and more. The trick will be ensuring those projects are legitimate. The agreement finalised in Montreal calls for airlines to compensate for their emissions growth beyond 2020 by buying credits to back eco-friendly initiatives. The idea is that as airlines add new routes, they’ll help finance projects to counteract the additional pollution. Think of it as planting trees to absorb every new ounce of carbon dioxide. Yet what types of credits, or carbon offsets, will be eligible and how the UN will verify their ecological integrity remains unresolved. The quality of these offsets varies. Last year, the research group Stockholm Environment Institute said about 75 percent of offsets offered through the UN’s second-biggest program had dubious environmental value, including claims that some Russian factories were boosting emissions solely to sell offsets generated by later cutting them. Ultimately, the Montreal accord’s success depends on ensuring offsets bought by airlines are authentic.

Source: Bloomberg

Japan to sign global climate pact ‘as soon as possible’

October 7: Japan will seek to ratify the 2015 Paris Climate Change Agreement to cut emissions and prevent climate change as soon as possible, after support from European nations sent the accord over an important threshold. Backing for the accord from several European nations, Canada, Bolivia and Nepal pushed the agreement past the 55 percent of emitters limit needed for implementation, with US President Barack Obama calling for other nations to sign up “as soon as possible.” The agreement is meant to cut global greenhouse gas emissions, mainly from burning fossil fuels, to limit floods, droughts, more powerful storms and rising ocean levels. Japanese Environment Minister Koichi Yamamoto denied there would be any substantial impact from non-ratification as of 4 November on Japan’s ability to influence the Morocco negotiations.

Source: Reuters

Paris deal to fight climate change taking effect: US President

October 6: The Paris climate accord negotiated last year has been ratified by enough countries to go into force, a step that will help reduce worldwide carbon pollution and stave off global warming, United States President Barack Obama said. The Paris accord is the capstone for Obama’s campaign to reduce carbon emissions, blamed for rising global temperatures that are causing environmental damage worldwide. The agreement seeks to limit temperature increases from pre-industrial levels to “well below” two degrees Celsius, and it entered into force after hitting a threshold of ratification by 55 countries accounting for 55 percent of global emissions. The European Union, with 28 nations accounting for 12 percent of global emissions, approved the deal. The deal takes effect 30 days after meeting the ratification threshold. Obama and Chinese President Xi Jinping, whose countries are the world’s two largest emitters of carbon pollution, ratified the Paris climate agreement. China and the US together account for about 38 percent of global emissions. Because the accord is not a treaty, US ratification did not require a vote by the Senate, where Republicans mostly oppose the agreement. More than 190 parties joined the agreement when it was first signed in December, but it wasn’t clear how quickly each country would ratify the deal.

Source: Bloomberg

Arresting global warming doesn’t mean more money

October 6: Curbing global warming doesn’t necessarily mean increasing infrastructure spending, according to a key commission created to avert dangerous climate change. The world is expected to invest $90 trillion on all infrastructure in the next 15 years which is more than the present value of all existing infrastructure combined, according to a report released by the former president of Mexico, Felipe Calderon, who’s the chairman of the Global Commission on the Economy and Climate. The money will be spent on projects like road, grid and bridge replacements in advanced economies along with new infrastructure in developing regions. Calderon’s commission works with other groups including the International Monetary Fund and International Energy Agency to create tools turning climate ambition into action.

Source: Bloomberg

Shippers brace for new rules to cut deadly sulfur emissions

October 5: The global shipping industry is bracing for a key regulatory decision that could mark a milestone in reducing maritime pollution, but which could nearly double fuel costs in a sector already reeling from its worst downturn in decades. The shipping industry is by far the world’s biggest emitter of sulfur, with the sulfur dioxide (SOx) content in heavy fuel oil up to 3,500 times higher than the latest European diesel standards for vehicles. To combat such pollution, the International Maritime Organization (IMO)’s Marine Environment Protection Committee will meet in London on October 24 to 28 to decide whether to impose a global cap on SOx emissions from 2020 or 2025, which would see sulfur emissions fall from the current maximum of 3.5 percent of fuel content to 0.5 percent. The IMO meeting comes as the International Chamber of Shipping (ICS), a global trade association of shipowners, said the IMO should firm up details of a commitment to cut carbon dioxide (CO2) emissions from the shipping industry as soon as possible. The goal is to build on the substantial CO2 reductions already achieved by shipping and the mandatory IMO CO2 reduction regime which is already in force worldwide, the ICS said.

Source: Reuters


Coal washeries and washed coal production in India

Name of Owner of Coal Washery Washed Coal Production (in Lakh Tonnes)
Public Sector
BCCL 22.03
CCL 117.57
NCL 31.15
WCL 1.38
Sub total 172.13
Private Sector
Aryan Coal Benefication Pvt Ltd 143.44
Aryan Energy Pvt Ltd 8.29
Global Coal & Mining Pvt Ltd 18.17
Jindal Power Ltd 2.60
Kartikay Coal Washeries Pvt Ltd 0.00
Spectrum Coal & Power Ltd 84.39
Tata Steel Ltd 34.60
IISCO 5.81
Sub total 297.29
Total 469.42

Number of coal washeries by sector and coal type


Source: Compiled from Lok Sabha, Un-starred Q. No. 552, Starred Q. No. 268


Publisher: Baljit Kapoor
Editorial adviser: Lydia Powell
Editor: Akhilesh Sati
Content development: Vinod Kumar Tomar

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