MonitorsPublished on Dec 13, 2016
Energy News Monitor | Volume XIII; Issue 26

Power News Commentary: November 2016


One of the interesting developments in the Indian power sector this month was the observation from ICRA that power bills for households consuming between 300-500 kWh/month would increase by Rs500-1300/year from 2017. According to ICRA, meeting new emission norms for power generation would require spending of over Rs1 trillion in the next 2-3 years. As this cost is expected to be passed on to rate payers their bills will go up by Rs0.13-0.22/kWh.  This is because there is provision for increase in tariff on account of ‘change of law’. The MOEF&CC issued new emission norms for power plants depending on their vintage. The newer the plant the more stringent the emission norm. According to ICRA 187 GW of operational power generation capacity and 74 GW of capacity under development will come under these regulations. ICRA calculations say that this is likely to increase capital cost by about Rs10 million/MW which is roughly an increase of 20 percent. This is an interesting development as it opens the door for gas to compete with domestic coal as fuel for power generation. Power generators have not been able to use cleaner fuels such as natural gas for power generation as it was believed that the consequent increase in tariff cannot be passed through to final consumers particularly households.

Main emissions from coal and lignite based thermal power plants in India are CO2, NOX and SOX and air-borne inorganic particles such as fly ash, carbonaceous material (soot), SPM and other trace gas species. Thermal power plants are among the LPS accounting for 50 percent of CO2 and SOX and about 20 percent of NOX emissions in 2013.

It is not clear how the issue of increase in tariff will play out when it moves to the context of political economy.  People, particularly the urban, affluent and articulate people have been clamouring for clean air but perhaps under the inaccurate assumption that clean air if free.


Clearly clean air is not free. Only time will tell if the urban elite that has been clamouring for clean air will endorse its stand with its purse.

Staying with power tariff, the observation by the CEO of Niti Aayog that Indian discoms must either reform or perish at a conference organised by the India Energy Forum is interesting. Death of discoms or increase in power tariff may to be easy to state from a conference platform but not so easy to carry out in India’s political and social platform. Many brave politicians have tried in the past but they have succumbed at the altar of electoral politics.

However there appears to be a silver lining. The ratings agency Fitch expects the persistent problem of low power generation capacity utilisation to continue in 2017 which means that tariff levels will be low and so a small increase in tariff could be accommodated. For inadequate capacity utilisation, new generation capacity coming online is listed as part of the problem but slow recovery of discoms is also among reasons noted by Fitch.  Fitch expects most of the investments in the next few years to come under the traditional cost­plus model, providing companies with greater security on returns. Overall Fitch does not appear to be very optimistic on big changes in the power sector in the near term.

Coming to the power problems of the poor, the call by the CM of Delhi to provide power connections to unauthorised colonies in Delhi to discourage use of diesel generators is not unreasonable. Out of over 600 unauthorised colonies in Delhi, many have been electrified but some in the fringes remain un-electrified. The households in these colonies either resort to theft or to diesel sets. While the CM had reportedly remarked that connecting these households to the grid would not amount to authorisation of the colony, a similar situation in Brazil suggests otherwise. Unauthorised settlers in Urban Brazil were apparently offered bottled propane cooking gas at a discount, an unexpected positive outcome after the Hindenburg tragedy. This not only increased the penetration of cooking gas use in poor Brazilian households but also gave them a document on consumption of cooking gas which doubled as proof of address.

There was news of e-rickshaws, emerging as illegal or informal consumers of electricity according to an internal assessment by a private power distribution company. As per the claims of the company, this results in a loss of Rs2 billion every year.  This would mean a loss of revenue for just under 2 percent of electricity consumption in Delhi. As per media reports, a fully charged e-rickshaw, operating on four 900 V batteries is expected to run for 80 km to 100 km per charge. Rather than going after the poor owners of e-rickshaws, the discom should set up charging stations at convenient locations and increase consumption of electricity.

Rest of the World

Reports on problems with Chinese power plants are not new. The latest is Botswana which was apparently wanting to sell a 600 MW Chinese-built power plant after persistent technical problems since it was commissioned in 2012.  Botswana’s Morupule B coal-fired power station, built by the China National Electric Equipment Corporation at a cost of $970 million, was reported to have broken down often, leading to a reliance on diesel generators and imports from South Africa. According to the BPC, Morupule B has proven to be costly to maintain and operate due to construction defects rendering the plant unreliable. A joint venture between Japan’s Marubeni Corp and South Korea’s Posco Energy won an $800 million tender earlier this year to expand the Morupule B plant by 300 MW. BPC has been running at a loss for 8 years and is implementing a turnaround strategy after posting a $180 million operating loss this year. It also received over $200 million in government subsidies. The other country from which a similar problem was reported is Sri Lanka. This is an opportunity for Indian power generators who have an impeccable record in building and operating affordable power plants.

Renewable energy appears to be generating cracks in the European power market. According to international news reports, Austrian electricity utility Verbund and customer industries were reported to be seeking compensation from European energy watchdog ACER if it allows the Austrian and German power markets to be separated as this is expected to increase power tariff.   The reason for the split is an oversupply from northern German wind parks, whose power flows into the Austrian, Polish and Czech grids in a development known as loop flows that destabilises the grids of these countries.

Closer to home, Saudi Arabia is reported to be on the verge of privatising the first of four companies to be created from Saudi Electricity Company’s generating business. The Saudi Electricity Company is dividing this business into four separate companies – each of which will be privatised and compete for customers across the kingdom. Existing capacity of about 60 GW is expected to be split into four with 15-20 GW in each.  Although Saudi Electricity Company is expected to retain control over electricity transmission and distribution, it is expected that once the four generating companies have been brought to market, there could be some private sector involvement in distribution in the future. Electricity supply in Saudi Arabia has been growing at a rate of about 7 percent a year and demand currently stands at about 62 GW. Demand is expected to increase to more than 120 GW by 2030. Population growth is said to be adding 500,000 new customers per year and that per capita growth is increasing because of demand from industry.


Petrol, diesel prices may jump 5-8 percent next quarter on OPEC cuts

December 6, 2016. Oil cartel OPEC (Organization of Petroleum Exporting Countries)’s decision to cut production from next month may lead to a 5-8% spike in retail prices of fuel over the next 3-4 months and massively boost the margins of state-run refiners, the Crisil report said. The price of petrol may rise 5-8% and that of diesel by 6-8% over the next 3-4 months following the production cut and the resultant spike in crude prices, the report said. It also sees a near doubling of gross refining margins (GRMs) of public sector refiners in the December quarter to $6-7 per barrel levels from $3.8 in the second quarter as the oil companies average prices for December delivery will be lower at $46 as was seen in November. OPEC had decided to finally to cut crude production by 1.2 million barrels a day. In Mumbai, that would mean petrol price can top Rs75 per litre compared to Rs72 now, and diesel more than Rs64 from Rs60 at present, the report said, as the Brent crude may jump top $50-55 a barrel by March 2017, and if it surges to $60, the price of petrol may touch $80 and diesel Rs68.

Source: Livemint

Sudan holds up licence extension for ONGC’s overseas arm

December 6, 2016. Sudan is holding up extending ONGC Videsh Ltd (OVL)’s licence over an oil field as the government seeks higher royalties, tax and profit petroleum even as it delays paying nearly $300 million in oil dues. The licence for Block 2B expired and an automatic 5-year extension is available, but Sudan, whose revenues have been hit with a drop in oil prices, wants higher taxes and royalties before it agrees to the same. OVL, the overseas arm of the Oil and Natural Gas Corp (ONGC), in 2003 had bought a 25 percent stake in Greater Nile Oil Project (GNOP) comprising Block 1, 2 and 4 in the undivided Sudan. It lies in the prolific Muglad basin, about 780 kilometres in the South-West of Khartoum, the capital of Sudan. The project produces about 50,000 barrels of oil per day (bpd). Upon secession of South Sudan from Sudan in July 2011, the contract areas of blocks 1, 2 and 4, spread over both areas, were split with a major share of production and reserves now situated in South Sudan. Blocks 2A, 2B and 4N are in Sudan, and blocks 1A, 1B as well as 4S are in South Sudan. Block 2B produces 50,000 bpd of oil, while Block 4 is in the exploration phase. The crude oil produced from oil field of GNOP is transported through a 1,504 km pipeline to Port Sudan on the Red Sea. OVL, along with Oil India, had constructed and financed a 741-km multi-product pipeline from Khartoum refinery to Port Sudan for $194 million. OVL’s share of the project cost was 90 percent.

Source: Business Standard

Cairn India lines up Rs300 bn to add 1 lakh bpd of oil

December 5, 2016. Cairn India will invest Rs30,000 crore in the next three years to produce an additional 1,00,000 barrels per day (bpd) of oil and oil equivalent gas, primarily from its prolific Rajasthan fields. The merger of the cash-rich Cairn with its parent Vedanta Ltd is likely to be completed by March-end. Cairn produced 2,06,230 bpd of oil equivalent in the second quarter ended September. Bulk of the production came from its Rajasthan block that gave 1,67,699 barrels of oil equivalent per day (boepd). The Ravva field in the Bay of Bengal produced 18,823 boepd and Cambay another 9,877 boepd. Cairn India has been operating for more than 20 years playing an active role in developing India’s oil and gas resources. Till date, Cairn India has opened 4 frontier basins with numerous discoveries, 37 in Rajasthan alone.

Source: Business Standard

‘India’s oil demand to more than double to 10 mbpd by 2040’

December 5, 2016. India’s oil demand will more than double to 10 million barrels per day (mbpd) by 2040, oil producers’ cartel OPEC Secretary General Mohammad Sanusi Barkindo said as he saw the world’s third largest energy consumer playing an important role in oil market stability. The growth is being generated by the country’s transition to modern fuels in households, as well as rising demand in the transportation sector and in the petrochemical industry. Also, India is home to one of the most important single consumers of crude oil, Reliance Industries Ltd (RIL), which operates the world’s largest oil refinery at Jamnagar in Gujarat with an annual processing capacity of about 1.2 million barrels per day (bpd). In India alone, oil demand is projected to rise to more than 10 million bpd by 2040 compared to 4.1 million bpd in 2015, he said. Roughly 85 percent of crude and 90 percent of gas going to India are sourced from OPEC Member Countries. He said oil markets in recent years have been characterised by a sustained drop in crude prices, accompanied by volatility. The low oil price environment of the 1980s and 1990s had dramatically choked off investments, reduced research and development spending and led to drastic cost-cutting strategies.

Source: Business Standard

PM Modi invites foreign firms to invest in oil, gas exploration

December 5, 2016. Prime Minister (PM) Narendra Modi invited foreign companies to invest in the Indian oil and gas sector, saying the country’s economy was expected to grow five-fold by 2040. Modi said the government plans to reduce oil imports by 10 percent in 2022, and that efforts should be made to move towards a gas-based economy. Oil Minister Dharmendra Pradhan said that with India becoming the world’s third largest oil consumer, the bi-annual Petrotech international conference will play a key role in preparing a roadmap to meet the country’s future energy needs.

Source: The Economic Times

MRPL readies Rs110 bn to hit 25 mt refining capacity

December 5, 2016. Mangalore Refinery and Petrochemicals Ltd (MRPL) is readying plans to invest Rs11,000 crore to raise refining capacity to 25 million tonnes (mt) instead of the previously planned 21 mt as part of its ambitious target of clocking Rs5,000 crore profit by 2022. The company is also looking at scaling up its petrochemical production capacity to clock larger margins. MRPL is ready to produce Euro-VI fuel and the planned expansion is part of its Vision 2022 with a target of Rs5,000 crore net profit and local sales of 5 mt. It had reported a net profit of Rs1,148.16 crore on a turnover of Rs39,647.44 crore in 2015-16. Engineers India Ltd will study if the crude distillation unit (CDU) of 6 mt or 10 mt should be set up.

Source: The Indian Express

Bhutan in talks with IOC, BPCL to ramp up fuel availability

December 5, 2016. Bhutan is in talks with Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) to make petroleum products easily available in the country, Lyonpolekey Dorji, Minister of Economic Affairs, Bhutan, said. Dorji was talking at the 12th International Oil and Gas Conference Petrotech. He said that the country was also in talks with principal oil and gas companies of India to standardise fuel usage in Bhutan. Bhutan as a country has no natural petroleum or natural gas reserves. He did not specify the details of the cooperation the country is planning with the Indian oil and gas majors.

Source: The Economic Times

ONGC to begin operations at Ratna, R-series oilfield in 2019

December 5, 2016. Oil and Natural Gas Corp (ONGC) will begin producing oil from the Ratna and R-Series oilfield in Mumbai offshore in 2019, which it won back after the government cancelled the award to Essar Oil. Production form the fields is targeted to start in 2019 with an output of 10,000 barrels per day initially, ONGC said. The cabinet committee on economic affairs (CCEA), headed by Prime Minister Narendra Modi, had in March decided to return the fields to its original licensee after contract with Essar could not be concluded even after 20 years.

Source: Livemint

Govt unlikely to implement DBT in kerosene

December 4, 2016. Unlike liquefied petroleum gas (LPG), the government may not push for the implementation of Direct Benefit Transfer (DBT) in kerosene as the benefit on the fuel will prove to be a “dying subsidy” thanks to small doses of monthly rate hikes bridging price gap with market. Also, savings on account of DBT to be made by sending subsidy into bank accounts will not be commensurate with the cost involved, the finance ministry said. Transferring subsidy in cash to a ration card holder’s bank account to enable him to buy kerosene from PDS (public distribution system) shop at market price instead of current subsidised rates would involve a massive upgradation of the PDS. Besides, the government raised price of PDS kerosene by 25 paise per litre every fortnight between September 1, 2016 and January 31, 2017 and further hiked by 23 paise on February 1, 2017 to close the gap between the highly subsidised retail rate and the market price. The gap, which currently is borne by the government by way of subsidy payout from the budget, has come down to just Rs10.51 a litre currently.

Source: The Indian Express

Govt oil subsidy burden seen within budgetary allocation current fiscal despite oil price rise: ICRA

December 3, 2016. With crude oil prices of $50-60 for the balanced months in FY2017, government oil subsidy burden to be around Rs170-190 billion for FY2017, which would be well within budget allocation of around Rs270 billion for the current fiscal, ICRA said. The gross under-recoveries on subsidised domestic liquefied petroleum gas (LPG) and public distribution system (PDS) kerosene are expected to increase by around Rs12-15 billion for FY2017 with every $5 per barrel (bbl) sustained increase in crude oil prices for the rest of FY2017. The impact of higher crude oil prices on the government fiscal may be limited in FY2018 as well because gross under recoveries would not increase significantly up to crude oil prices of $60-65 per bbl due to ongoing regular small hike in prices of subsidised LPG and kerosene on a fortnightly/monthly basis. In terms of impact on foreign exchange outgo, the rise in crude oil prices along with recent depreciation in rupee against US dollar are expected to increase net crude oil and petroleum products import bill of the country by around $4 billion for crude oil prices of $55 per bbl for the rest four months in FY2017.

Source: The Economic Times

No subsidy on LPG without Aadhaar-linked account

December 2, 2016. Cooking gas consumers who are yet to get their Aadhaar number seeded with their bank accounts won’t be getting the LPG subsidy from December. A circular from the oil ministry has already reached the IOC regional office in Kolkata. The oil ministry has been extending the deadline, which ended on November 30. As on date, Bengal has a 1.28 crore LPG customer base, of which 63% is already linked to banks. According to the estimates given by the IOC regional office, about 43 lakh customers are going to lose their subsidy unless they feed the Aadhaar card number into their respective bank accounts.

Source: The Times of India

Consumers can use old Rs500 notes to buy LPG post December 2, but not petrol, diesel

December 2, 2016. The government has said that the old Rs500 notes can no longer be used to buy petrol, diesel and air tickets from the midnight of December 2. Toll exemptions at national highways will also end on the midnight of December 2. But you can still use old Rs500 notes to buy cooking gas cylinder as liquefied petroleum gas (LPG) continues to be in the exempted category. The Centre said that other exempted categories such as government hospitals and pharmacies that had earlier been notified will continue to accept old Rs500 notes. It said the outlets of oil and gas marketing companies are better equipped to accept payments through digital means and therefore it has been decided not to extend the exemption. The government was withdrawing the facility to use old Rs500 notes at petrol pumps.

Source: The Economic Times

LPG hiked by Rs2.07 per cylinder, jet fuel price cut by 3.7 percent

December 1, 2016. Oil Marketing Companies (OMCs) hiked the price of subsidised cooking gas, or LPG, by Rs2.07 per cylinder, while that of aviation turbine fuel (ATF) was cut by 3.7 percent. OMCs revise rates of liquefied petroleum gas (LPG) and ATF on the first of every month, based on global oil prices and the foreign exchange rate. With this seventh increase in rates in six months, a subsidised 14.2 kg cylinder now costs Rs432.71 in Delhi, as against Rs430.64 earlier. In a move to reduce its LPG subsidy outgo, the government, in July, had decided on small hikes of around Rs2 per cylinder every month. The price of non-subsidised LPG, which consumers buy after exhausting their quota of 12 cylinders in a year, was also hiked by Rs54.5 to Rs584. Meanwhile, the price of ATF, or jet fuel, was cut by 3.7 percent to Rs48,379.63 per kl in Delhi. Prices vary at airports depending on local taxes. Amid the continuing fluctuation in global oil prices, petrol has been hiked by 13 paise a litre, while diesel price has been cut by 12 paise at Delhi, with corresponding changes in other states.

Source: Business Standard

India invites global bids for filling strategic oil storage

November 30, 2016. India has invited bids from global oil firms and traders to lease out capacity in the newly built underground strategic oil storage at Padur in Karnataka. India, which is 80 percent dependent on imports to meet its crude oil needs, has built three underground oil storages at Vishakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka as insurance against supply disruptions. Indian Strategic Petroleum Reserves Ltd, under the administrative jurisdiction of Ministry of Petroleum and Natural Gas, Government of India, has built strategic storages at three locations. The four compartments at Padur provide a total storage capacity of 19.4 million barrels. The underground rock cavern storages at Visakhapatnam and Mangalore have already been commissioned. Padur facility is expected to be ready for crude filling in the first quarter of 2017. Oil Minister Dharmendra Pradhan had said that Abu Dhabi National Oil Company, Saudi Aramco of Saudi Arabia and Royal Dutch Shell have evinced interest in hiring strategic oil storages at Mangalore.

Source: Business Standard


India gas demand growth stymied by slow infrastructure development

December 6, 2016. India, the world’s third-biggest energy consumer, is striving to grow its natural gas use and shift away from oil and coal for power and industry, but its lack of gas import infrastructure is stymieing faster adoption of the cleaner-burning fuel. And while India is the world’s fourth-biggest importer of liquefied natural gas (LNG) – behind Japan, South Korea and China – and is seen as a market on the rise, growth in consumption of the fuel is still far outpaced by oil and coal. Consultancy KPMG said in a presentation to the Petrotech conference in New Delhi the lagging development of natural gas infrastructure has helped to cut its portion of India’s energy basket in half from a high of 12 percent five years ago. India’s LNG imports from RasGas represent around 10 percent of the Middle Eastern nation’s overall annual output. RasGas has a big presence in India through its 25-year contract with top importer of the fuel, Petronet LNG, and provides more than 50 percent of the country’s LNG shipments. Prime Minister Narendra Modi, addressing the conference, called natural gas the “next-generation fossil fuel, cheaper and less polluting.” But he acknowledged the need to improve India’s gas import infrastructure to meet demand. Modi said his government planned to extend piped gas to 10 million houses over the next five years; double the length of the national pipeline network to 30,000 km; and build a new gas line to the underdeveloped eastern region. India’s oil ministry is planning to invest up to $15 billion in developing pipelines and setting up LNG terminals over the next five years. State-owned consultancy Engineers India Ltd has signed an agreement with Gazprom to study the construction of a gas pipeline to India from Russia, the Indian government said. India renegotiated a long-term LNG supply deal with RasGas last year, nearly halving the price and avoiding a $1.5 billion penalty fee for lifting less gas than agreed as customers there preferred cheaper spot supplies.

Source: Reuters


IGL revises CNG, PNG prices in Noida, Ghaziabad

December 4, 2016. The Indraprastha Gas Ltd (IGL) has announced revision in selling prices of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in Noida, Greater Noida and Ghaziabad due to increase in its input gas cost affected by the gas suppliers as a result of reduction of input tax credit to them. This revision will result in an increase of Rs1.85 per kg in the consumer price of CNG in Delhi and Rs2.15 per kg in the consumer price of CNG in Noida, Greater Noida and Ghaziabad. The new consumer price of Rs37.30 per kg in Delhi and Rs42.75 per kg in Noida, Greater Noida and Ghaziabad. IGL will continue to offer a discount of Rs1.50 per kg in the selling prices of CNG for filling between 12.30 a.m. and 5.30 a.m. at select outlets. Thus, the consumer price of CNG will be Rs35.80 per kg in Delhi and Rs41.25 per kg in Noida, Greater Noida and Ghaziabad during 12.30 a.m. to 5.30 a.m. at select CNG stations across the region.

Source: The Hindu

India presses Iran to award Farzad-B gas field to OVL

December 4, 2016. India has nudged Iran to quickly award rights to develop the coveted Farzad-B gas field in the Persian Gulf to Oil and Natural Gas Corp (ONGC) Videsh Ltd (OVL) by wrapping up negotiations that have been dragging on for months. Oil Minister Dharmendra Pradhan met Iranian Foreign Minister Mohammad Javad Zarif to press for award of rights to develop the field, which was discovered by OVL, at the earliest. In October, the two nations had pushed back the timelines for concluding a deal on Farzad-B field to February from November agreed previously. OVL is preparing a Master Development Plan for the gas field while also working on a gas pricing formula keeping in view of the global gas price scenario. Gas produced from the field can either be converted into LNG by freezing at sub-zero temperature and shipping in cryogenic ships to India or transported through a pipeline—via overland passing through Pakistan or sub-sea.

Source: Livemint

India keen to invest in energy sector in Qatar: PM Modi

December 3, 2016. Prime Minister (PM) Narendra Modi expressed India’s keenness to invest in hydrocarbon projects in Qatar during talks with his counterpart Sheikh Abdullah bin Nasser bin Khalifa Al Thani on key issues of energy, trade and security. Not only an important trading partner for India in the Gulf region, Qatar is also the largest supplier of liquefied natural gas (LNG) to it, accounting for 66 percent of the total imports in 2015-16.

Source: The Indian Express

India to invest $20 bn in gas fields in next 5-7 ys: Oil Minister

November 30, 2016. India will see an investment of about $20 billion in gas field development in the next 5-7 years and is looking to boost usage of the green fuel and double consumption, Oil Minister Dharmendra Pradhan said. The investment will be primarily in developing natural gas discoveries by ONGC and Reliance Industries Ltd (RIL)-BP joint venture off the east coast, Pradhan said. ONGC is lining up $5.07 billion to produce over 16 million standard cubic metres per day of natural gas from a set of discoveries in its Krishna Godavari basin KG-DWN-98/2 block. RIL-BP has several discoveries in the adjacent KG-DWN- 98/3 or KG-D6 block and NEC-25 off the Odisha coast. Natural gas makes up for 6 percent of the primary energy basket in India as against a global average of more than 24 percent.

Source: The Indian Express


‘Bangladesh not looking at importing coal from India at present’

December 5, 2016. Bangladesh is not looking to import coal from Indian miner Coal India ltd (CIL), Bangladesh’s Energy Minister Tawfiq-e-Elahi Chowdhury said. Earlier, former Coal Secretary Anil Swarup had said India was in deep consultation with Bangladesh to export coal. Tawfiq said though the Bangladesh government was looking to import coal but it wasn’t looking to buy it from India. Tawfiq said Bangladesh was more interested in coal from South Africa. India had earlier talked about exporting coal to neighbouring countries due to lack of demand in the domestic market. As on September, nearly 50 million tonne was lying unused at pitheads and power plants. The secretary had said exports to Bangladesh would help CIL in increasing sales in the context of a deal signed in July by India with Bangladesh to construct a 1,320 MW coal-fired power plant – the biggest project under bilateral cooperation. CIL’s production saw a spurt last year after the government set a target of 1 billion tonne production by 2020. However, demand in the country failed to pick up leading to increase in coal stocks.

Source: The Economic Times


Adani secures milestone in planned $16 bn Australian coal project

December 5, 2016. India’s Adani Enterprises Ltd reached a milestone in its bid to build a controversial $16 billion coal project in northern Australia, winning approval for part of a rail link to service the planned mine. The Carmichael mine has faced years of legal delays and rollercoaster coal prices, amid strident opposition from environmentalists opposed to coal mining and concerned at the impact the mine will have on the Great Barrier Reef. Adani said in October it was preparing to start construction of the mine in 2017, although it still faces several court challenges and appeals. The mine would be twice the size of Australia’s current largest coal mine and would yield as much as 60 million tonnes of coal per year from the site for 60 years.

Source: Reuters

CBI registers fresh case against Prakash Industries in coal

December 4, 2016. Four years after registering a preliminary enquiry, Central Bureau of Investigation (CBI) has registered a fresh case in coal scam against Prakash Industries alleging cheating in the allocation of Chotia coal block during the National Democratic Alliance (NDA) government’s tenure in 2003. The FIR registered says coal ministry had issued allocation letter to Prakash Industries on September 4, 2003 for the allocation of Chotia Coal Block for expansion of its sponge iron plant in Champa, Madhya Pradesh (now in Chhattisgarh) with certain conditions. The agency alleged the company made “false claims” about production figures of its sponge iron plant in several of its communications to the Coal Ministry while applying for the block. The company had first applied in 1993. The CBI had earlier lodged an FIR against Prakash Industries Ltd and various others in connection with alleged irregularities in allocation of Chhattisgarh’s Fatehpur coal block but it was closed following lack of prosecutable evidence against it. According to CBI, the Fatehpur coal block was allocated jointly to Prakash Industries Ltd and one other company by the 35th screening committee.

Source: Business Standard

Odisha to get Rs700 bn revenue from coal blocks: Goyal

December 2, 2016. Coal Minister Piyush Goyal said that Odisha will get Rs70,000 crore as 12 coal blocks in the state have already been allocated. Goyal said that every village of Odisha would be electrified by May 2018. He said that the Central government will support the initiative of the state government’s ‘Make in Odisha’ campaign as it is directly parallel with Prime Minister Narendra Modi’s ‘Make in India’ theme.

Source: Business Standard

No benefit in splitting CIL: Goyal

December 2, 2016. Coal Minister Piyush Goyal reiterated that there were no plans to split the Coal India Ltd (CIL) as it would not benefit the company. CIL, which accounts for over 80 percent of the domestic coal production, is eyeing 598 million tonne production in 2016-17 and targeting to produce a billion tonnes of the fossil fuel by 2020. Even as the government has increased the minimum wages by 42 percent, unfortunately, people on the ground are yet to see the benefit of it, he said.

Source: Business Standard

Govt caps coal output from Reliance Power blocks to Sasan UMPP

December 1, 2016. The government has restricted coal production from Reliance Power’s Moher and Moher Amlohri extension blocks attached to the Sasan Ultra Mega Power Project (UMPP) in Madhya Pradesh. The coal ministry has decided to restrict production from the two coal blocks to 16 million tonne per annum (mtpa) depending on the base requirement of the project. The coal production could be allowed to be raised to up to 17 mtpa in case the plant load factor of the project rises beyond 100%, he said. Sasan UMPP may have to restrict power generation at around 80% level, Reliance Power said. The coal ministry had in May last year directed Sasan UMPP to limit annual coal production to 16 mtpa from 20 mtpa approved earlier and cancelled a third mine — Chhatrasal —attached to the project, terming it to be surplus. Reliance Power’s subsidiary Sasan Power had filed a writ petition in July last year in the Delhi High Court against the decision.

Source: The Economic Times

CIL production grows 5.3 percent in November

December 1, 2016. Coal India Ltd (CIL) said that its coal production grew by 5.3 percent to 50 million tonnes (mt) in November as compared to 47.47 mt of coal produced in the corresponding month last fiscal. CIL, which produces 84 percent of the country’s coal production, was targeting 53.85 mt of coal production during the month. According to provisional data, the miner produced 323.57 mt in April to November period, achieving 90 percent of the target of producing 360.84 mt. During the current fiscal, the coal production target has been pegged at 598.61 mt and production is expected to be 660.7 mt in 2017-18. The company envisaged production of 908.10 mt in 2019-20 with a CAGR (Compound Annual Growth Rate) of 12.98 percent with respect to 2014-15. CIL said it would invest Rs7,765 crore as capital expenditure and Rs5,069 crore in various other projects in 2016-17.

Source: Business Standard

National: Power

Electricity staff unions in Telangana call off strike

December 6, 2016. Telangana Chief Minister (CM) K Chandrasekhar Rao was addressing state electricity employees, who called on him to thank for announcing regularisation of outsourced employees. The electricity unions told the CM that they would call off their proposed strike from December 9. While appreciating the work of employees, the CM cautioned them against doing anything that would hamper the development of Telangana state.

Source: The Economic Times

Consumers to get 20 watt LED tube lights at Rs230: Goyal

December 5, 2016. At present, the retail price of LED (light emitting diode) tube lights of 20 watt ranges between Rs700-800 per unit. The consumers would get these lights at one-fourth of the market price and that too without any subsidy. Energy Efficiency Services Ltd (EESL) plans to distribute LED tube lights of 20 watts to consumers at an upfront cost of Rs230 per unit, Power Minister Piyush Goyal said. Earlier in August this year, EESL received bids as low as Rs140 per unit for supply of these tube lights. The economy of scale helps EESL reduce procurement price of energy efficient appliances. As per estimates of EESL, the replacement of conventional tube lights with LED ones will result in annual average saving of around Rs350. Thus, a consumer would be able to recover the cost within 7-8 months. ESSL has already brought down the retail price of 9 watt LED bulbs under UJALA scheme to as low as Rs65 per unit to encourage consumers to opt for these energy efficient lights. The aggregation of demand and bulk procurement have resulted in reduction of 88 percent in procurement prices of LED bulbs from Rs310 per piece (in February 2015) to Rs38 (in August 2016). Retail price of LED bulbs has been reduced to Rs65 from Rs550 during the same period.

Source: India Today

Demonetisation positive for power sector: Mercom

December 5, 2016. Demonetisation has turned out to be a positive event for the power sector with distribution companies recovering pending power bills from their customers, Mercom Capital Group said. The consulting firm said that the power sector could also benefit from relaxed lending and lower rates, among other things. The government has mandated that the old notes of Rs500 and Rs1,000 denominations can be used to pay pending utility bills which will help distribution companies (discoms) due to their huge backlog of unpaid bills. Discoms are expecting a substantial influx of payments prior to the December 31 deadline after which these currency notes will become invalid. For cash-strapped discoms this is unexpected good news, it said.

Source: The Financial Express

Power tariff revision likely in 2017-18

December 4, 2016. The North Bihar Power Distribution Company and the South Bihar Power Distribution Company of the state energy department will move the Bihar Electricity Regulatory Authority (BERC), seeking tariff revision for the financial year 2017-18. The energy department is likely to reduce the number of tariff slabs to simplify the tariff structure. The subsidy structure may also be modified to ensure optimal cost coverage. The power companies are under immense financial burden as tariffs have not been raised for the last three years, except a marginal increase of 2.43% for 2015-16. The consumer base of the two companies went up from 20 lakh to 80 lakh in the last four years.

Source: The Times of India

Moody’s upgrades India’s power sector outlook to stable

December 1, 2016. Moody’s has upgraded the outlook for India’s power sector to stable from negative in view of surge in domestic coal production and likely improvement in distribution companies (discoms) financial health due to UDAY scheme. Moody’s Investors Service said the stable outlook for the power sector in Asia Pacific over the next 12-18 months is mainly underpinned by consistent regulatory returns and its expectation of manageable increases in fuel costs over the same period, as well as the absence of significant changes to regulatory environments.

Source: India Today

CERC proposes up to 35 percent hike in power transmission fees

November 30, 2016. Central Electricity Regulatory Commission (CERC) has proposed raising transmission charges on short-term and medium-term electricity transactions by up to 35%, a move seen by industry as detrimental to the sector. The move will hurt large industrial consumers the most as they will not be able to source cheaper power from spot markets or through other short-term arrangements.

Source: The Economic Times

MP power distribution company to go cashless, install swiping machines

November 30, 2016. In a move to go cashless, the Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd will install card swiping machines to allow its consumers to pay their electricity bills through credit or debit cards. The company said that the work for installation of these swiping machines has already begun and the facility is expected to begin from next month. After the demonetisation move, hundreds of consumers had wished to pay their bills through credit or debit cards.

Source: The Economic Times


India’s emission intensity of GDP reduced by 12 percent between 2005 & 2010

December 6, 2016. India’s emission intensity of gross domestic product (GDP) has reduced by 12 percent between 2005 and 2010, according to the country’s first biennial update report submitted at the crucial United Nations (UN) climate summit recently. Environment Minister Anil Madhav Dave said that India in 2009 had pledged to reduce the emission intensity of its GDP by 20 to 25 percent by 2020 over 2005 levels despite having no binding obligations under UN Framework Convention on Climate Change. He said that as per the Nationally Determined Contributions (NDCs) submitted by India to United Nations Framework Convention on Climate Change (UNFCCCC) in October last year, India is committed to reduce greenhouse gas (GHG) emission intensity of its GDP by 33-35 percent by 2030 from 2005 levels.

Source: The Economic Times


Inox Wind bags 50 MW wind power project from SJVN in Gujarat

December 6, 2016. Inox Wind said it has bagged 50 MW wind power project order from hydroelectric firm SJVN Ltd in Gujarat. Inox Wind said it has bagged an order for 50 MW wind power project to be deployed in the state of Gujarat from SJVN Ltd. The project is scheduled to be commissioned by November 2017 and will be executed on turnkey basis, it said.

Source: The Economic Times

India explains plan to expand nuclear power capacity

December 5, 2016. As it continues in its attempt for membership in the Nuclear Suppliers Group, India explained how it will expand its nuclear energy capacity to 60 GW. Minister of State for External Affairs M.J. Akbar asserted that India was party to all the 13 universal instruments accepted as benchmarks for a state’s commitments to combat international terrorism, and welcomed the entry into force of the 2005 Amendment to the Convention on the Physical Protection of Nuclear Materials this year.

Source: New Kerala

NGT notice to IOC, BPCL

December 5, 2016. The National Green Tribunal (NGT) has issued notice to public sector oil companies Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL), asking them if they use any diesel vehicle that are over 10-year-old. The companies have been asked to file their replies by January 9. The direction came while hearing of a batch of petitions filed by various contractors seeking registration of the new BS-IV compliant diesel vehicles purchased for transport of petrol from company depots to identified petrol pumps in Delhi-NCR. The contractors had moved NGT after the green court had last year passed an order banning registration of new diesel vehicles as well as re-registration after 10 years.

Source: The Hindu

India, Russia to sign GFA on Kudankulam units 5 & 6 this month

December 4, 2016. India and Russia are likely to sign the General Framework Agreement (GFA) on Kudankulam units 5 and 6 by this month. The two countries will try to complete the GFA by the end of the year. Negotiations for the contract are still on and details are being worked out by Nuclear Power Corp of India and Rosatom, nuclear power agency of Russia. Work on the ground breaking ceremony for unit 3 and 4 was held early this year. The agreement for the project was inked by former Prime Minister Rajiv Gandhi and then Soviet Union President Mikhail Gorbachev in 1988, but the actual work started only in 1997. The unit 1 and 2 of Kudankulam plant were built at a cost of Rs20,962 crore. A major share of power generated in the plant goes to Tamil Nadu, followed by Karnataka, Kerala and Puducherry. Unit 1 was started in October 2013, while the second unit was connected to grid in August this year. Unit 3 and 4 of the Kudankulam are expected to be commissioned by 2022-23.

Source: Business Standard

‘Only solar energy can fulfil energy requirements of India’

December 3, 2016. Only solar energy can fulfil the energy requirements of the country as all other sources have limited production, Chetan Singh Solanki, professor at IIT Bombay and chairman of kWatt Solutions Pvt Ltd (KSPL), said. If subsidy is given by the Government, every roof top can have a solar panel and people will be too willing to spend some from their pockets also. Also the excess power generated can be given to the state Government. Solanki explained that most parts of the country receive high solar radiation, in the range of 5-7 kW/m2/day.

Source: The Times of India

Rooftop solar plant to make Jaipur Metro stations self sufficient

December 3, 2016. Going green in its second year of operations, Jaipur Metro Rail Corp (JMRC) has decided to set up rooftop solar panels at eight elevated stations on its 9.25 km long corridor between Mansarovar and Chandpole. The power generated by 2,500-kwp ‘Rooftop Solar Power Plant’ will be used to meet all the requirements at the stations in day time and would reduce its dependence on non-renewable sources. This will be the biggest solar plant, which will be installed on any of the government building. Earlier, the JMRC has proposed to install 1,000-kwp ‘Rooftop Solar Power Plant’. However, proposal was recently forwarded by JMRC to the Centre to install the solar plant of higher capacity. The Solar Energy Corporation of India Ltd will finalise a firm which will sign a power purchase agreement with JMRC. The appointed firm will install the rooftop solar panels which will maintain it for next 25 years. The expenditure cost of the plant will be Rs16 crore and it will be borne by the appointed firm. The plant will be set up under Renewable Energy Service Company model. As per the model for the rooftop plant, the developer invests, owns and operates the plant while JMRC purchases the electricity generated through a power purchase agreement. The Jaipur Metro would be the first department in the state to install rooftop solar panels under Centre government’s ambitious scheme. Central government has set a target for installation of one lakh MW solar power plants by 2022. Out of this, about 40,000 MW has to come from grid connected solar rooftops systems. Centre wants Rajasthan to play an active role in installing solar rooftops systems.

Source: The Times of India

Kolkata receives best cities award for tackling climate change

December 2, 2016. Kolkata, along with 10 other cities from across the globe, has been honoured with the best cities of 2016 award in recognition of its inspiring and innovative programme with regard to solid waste management. Kolkata Solid Waste Management Improvement Project has achieved 60-80 percent (depending on site) segregation of waste at its source, with further waste segregation occurring at transfer stations. Kolkata is the only Indian city to receive the prestigious award. It received the award during the C40 Mayors Summit held in Mexico City. The project involved 100 percent door to door collection of solid waste, segregation and recycling by way of compositing which is sold in the market, Kolkata Municipal Development Authority said. Other cities that won the award are Addis Adaba, Copenhagen, Curitiba, Sydney and Malborne, Paris, Portland, Seoul Shenzhen, and Yokohama.

Source: Business Standard

Suzlon wins maiden 63 MW power project from THDCIL

December 1, 2016. Pune-based Suzlon Group announced it has won its first order for a 63 MW wind power project from Tehri Hydro Development Corp India Ltd (THDCIL). India’s largest wind turbine manufacturer will install 30 units of it’s 2.1 MW Hybrid Tower at sites in Kandorna and Bhanwad in Gujarat. The project will provide power to over 35,000 households and will help in offsetting 0.13 million tonne of carbon dioxide emissions per year, according to the company. The project will executed on a turnkey basis and Suzlon will be responsible for development, construction and commissioning of the project by March 2016. The private wind turbine manufacturer will also be responsible for operation, maintenance and services of the project for an initial period of 10 years and thereafter for a mutually agreed period, the company said.

Source: The Economic Times

Surana Solar bags Rs154 mn order to provide solar modules for Aryavaan Renewable

December 1, 2016. Surana Solar Ltd, a part of the Hyderabad based Surana Telecom and Power Ltd, announced it has won an order to supply solar modules for a value of Rs15.4 crore to Aryavaan Renewable Energy. The solar module manufacturer will provide solar modules for a 5 MW solar power plant situated in Hamirpur, according to the company. The solar power plant being set up in Hamirpur is a part of the central government’s move to promote the switch to renewable energy in the country.

Source: The Economic Times

Uttarakhand overcomes power evacuation problems, a sub-station at a time

December 1, 2016. The growing hydroelectric power sector in Uttarakhand is seeing increasing integration with the national power grid, apart from increasing the amount of electricity available to the hitherto electricity-starved state. The state is raising the profile of its connectivity and contribution to the National Power Grid, through the construction of new sub-stations in challenging terrain. One such sub-station that was commissioned recently was in the Khandukhal. This structure proved symptomatic of the engineering innovation and operational challenges of putting in place the infrastructure necessary for the evacuation of electricity from the hydel power generation facilities. Uttarakhand has seen a steady increase in the number of hydel power projects over the past decade.

Source: The Times of India

Jharkhand close to signing PPAs for 1.1 GW of solar after delay

November 30, 2016. Jharkhand may sign power purchase agreements (PPAs) for a total of 1.1 GW solar projects by the third week of December 2016. These solar projects, were originally auctioned during early 2016 but were stalled due to differences between the state power distribution company and developers over the quoted tariff.

Source: The Economic Times

World’s largest solar power plant unveiled in India’s Kamuthi

November 30, 2016. India now boasts of the world’s largest solar power plant with the completion of its new facility in the southern India state of Tamil Nadu. India’s new solar power plant in Kamuthi town has a capacity of 648 MW, spread over 10 square kilometers. The area it covers has allowed it to surpass the Topaz Solar Farm in California — which has a capacity of 550 MW — taking the title of the world’s largest solar power plant at a single location. Funded by Adani Green Energy, a part of India’s leading business house Adani Group, the solar power plant in Kamuthi entailed an investment of Rs4,550 crore ($679 million). Built in an impressive time frame of eight months, the plant is cleaned every day by a robotic system and charged with its own solar panels. It is expected to power 150,000 homes. By 2022, India is aiming at powering 60 million homes through solar energy as a part of the government’s 2030 goal to produce 40 percent of its power from non-fossil fuels. While the efforts are being lauded by environmental groups, the country still needs to increase the emphasis on solar panels to be able to achieve the big targets set by the government.

Source: International Business Times

International: Oil 

Kuwait to seek OPEC output cut monitoring meeting in February or March

December 6, 2016. Kuwait will request that an OPEC committee responsible for monitoring compliance with a global oil output reduction agreement meet in February or March next year, Acting Oil Minister Anas al-Saleh said. OPEC agreed to reduce output by around 1.2 million barrels per day (bpd) beginning in January in a bid to reduce global oversupply and prop up prices. It hopes non-OPEC countries will cut an additional 600,000 bpd of output. Russia has said it will reduce output by around 300,000 bpd.

Source: Reuters

Saudi Arabia cuts January oil price to Asia to 4 month low to keep market share

December 6, 2016. Saudi Aramco has cut the January price for its Arab Light crude for Asian customers to the lowest in four months as it holds to a strategy of preserving market share in the world’s fastest-growing demand center. The price cuts are meant to ensure that Aramco can still sell more oil into Asia even after going along with the OPEC-Russia deal to cut output. The Saudis have been struggling over the last two years to fight off increased competition from other producers in the Middle East, Russia and the Atlantic Basin. Saudi Aramco said it cut the price of Arab Light crude sales to Asia by $1.20 a barrel versus December to a discount of $0.75 a barrel to the Oman/Dubai average.

Source: Reuters

Saudi, Kuwait expect to restart Neutral Zone oilfields soon

December 5, 2016. Saudi Arabia and Kuwait are expected to agree this month to resume oil production from the jointly operated oilfields in the Neutral Zone that lies between both countries. The closure of the Neutral Zone’s fields, mainly Khafji and Wafra, has become a political sticking point between the two Gulf OPEC allies and senior officials have been trying to resolve the issue for months. Khafji was shut in October 2014 for environmental reasons and Wafra has been shut since May 2015 due to operating difficulties. The restart would come at a sensitive time for the oil markets after OPEC agreed to reduce output by around 1.2 million barrels per day (bpd) from January in a bid to reduce global oversupply and prop up prices. The Khafji field had been producing 280,000 to 300,000 barrels per day (bpd) until its closure. The Wafra field has an output capacity of about 220,000 bpd of Arabian Heavy crude.

Source: Reuters

Brazil court blocks sale of Petrobras fuels distribution unit

December 5, 2016. A Brazilian federal court issued an injunction to block the sale of the fuels distribution unit of state oil company Petroleo Brasileiro SA (Petrobras) after a request by workers, according to the court. Petrobras is looking to sell a stake in BR Distribuidora, Brazil’s largest fuel distribution company, as part of a divestment program that aims to raise cash to reduce its large debt load. BR Distribuidora is one of the most coveted assets put up for sale by Petrobras. It operates more than 7,000 filling stations across Brazil.

Source: Reuters

Mexico eyes 3 more oil auctions before end of 2018: Energy Minister

December 5, 2016. Mexico expects to hold three more oil and gas auctions before the end of 2018 for shallow waters, deep waters and onshore fields, Energy Minister Pedro Joaquin Coldwell said following a historic deep water auction. Joaquin Coldwell said it was very likely for non-conventional fields to be auctioned for the first time as well.

Source: Reuters

Iran aims for oil, gas fields tender after January

December 5, 2016. Iran will launch after January 2017 its first new-style tender to develop oil and gas fields since the lifting of sanctions. The deadline to submit pre-qualification documents has been extended until December 10. OPEC’s third largest oil producer hopes its new Iran Petroleum Contracts (IPC), part of an effort to sweeten the terms it offers on oil development deals, will attract foreign companies and boost production after years of under-investment. The National Iranian Oil Company (NIOC) said that 50 international oil companies have submitted their documents for the tender so far. Some analysts said Iran’s IPCs do not seem attractive enough to raise billions of dollars in foreign direct investment at a time of low oil prices, especially when compared with neighbouring Iraq’s new oil contracts that enabled it to boost its output.

Source: Reuters

Delta Air to sell gasoline and diesel as losses at its refinery climb

December 2, 2016. Delta Air Lines Inc is preparing to market gasoline from a refinery it owns outside Philadelphia, signaling a shift in strategy toward managing the plant as a commercial refiner rather than a dedicated jet fuel supplier. Delta became the first airline to own a refinery when it bought the shuttered plant in 2012, hoping to turn the facility into its own jet fuel supplier and capitalize on cheap oil supplies from a boom in United States (US) shale output. Instead of marketing the gasoline and diesel from the 185,000 barrels per day Monroe Energy plant, until now Delta has swapped the billions of dollars of motor fuel for jet fuel under a contract with Phillips 66 that is set to expire next year.

Source: Reuters

Vietnam seeks $1.2 bn in overseas loans to expand refinery

December 1, 2016. Vietnam is seeking about $1.2 billion in overseas loans for its only oil refinery before a share sale in 2017, to increase output and meet demand in one of Southeast Asia’s fastest growing economies. When completed in 2021, the expanded Dung Quat Refinery will be able to meet half of Vietnam’s fuel needs, rising from about one-third now with its current capacity of 148,000 barrels a day, Nguyen Hoai Giang, chairman of Binh Son Refining & PetroChemical Co., Giang said.

Source: Bloomberg

OPEC deal expected to tighten oil market in 2017

December 1, 2016. The Organization of the Petroleum Exporting Countries (OPEC) has reached an agreement to cut its oil output by almost 1.2 million barrels per day (bpd) and been rewarded with an increase in nearby futures prices of around $5 per barrel. Saudi Arabia is likely to provide around half of the real cuts, and its Gulf allies most of the rest, with a high degree of expected non-compliance by other OPEC and non-OPEC countries. Past experience shows Saudi Arabia and its allies have usually done almost all the real cutting while other OPEC and non-OPEC members have been left to produce as much as they can. Nevertheless, the deal has enabled the Saudis to claim they are not shouldering all the burden of rebalancing the market on their own. Saudi Arabia’s output will return to levels similar to the start of 2016, before the kingdom raised its production over the summer. The deal will probably cut production by between 750,000 and 1 million bpd, accelerating the rebalancing process, though to have a big impact the cuts will need to be extended into the second half of 2017.

Source: Reuters

US state budgets to face low energy prices for years to come: Fitch

December 1, 2016. Low oil, natural gas and coal prices will continue to put downward fiscal pressure on states that rely on those resources to fund their budgets, ratings agency Fitch said. While OPEC’s agreement to implement production quotas boosted oil prices, Fitch’s long-term base case price forecast remains $45 a barrel in 2017, $55 a barrel in 2018 and $65 a barrel in 2019, Fitch said. United States (US) crude oil prices are hovering around $50 per barrel compared with over $100 a few years ago. The plunge in oil, natural gas and coal prices during the past two years has prompted Fitch in 2016 to downgrade Alaska to ‘AA+’ from ‘AAA’; Louisiana to ‘AA-‘ from ‘AA’; and West Virginia to ‘AA’ from ‘AA+’. Oil production will rise over the next two years, but that increased production will add to excess inventories until demand accelerates, which will keep prices below the 2014 highs, Fitch said.

Source: Reuters

International: GAS

Ukraine ready to join trilateral gas talks in Brussels

December 5, 2016. Ukraine is ready to join trilateral talks to discuss gas issues with Russia on December 9 in Brussels, Ukraine state energy company Naftogaz said. The former Soviet republic has not bought gas directly from Russia since November 2015, following a breakdown in relations after Russia’s annexation of Crimea and support for pro-Russian separatism in Ukraine’s war-torn east. Naftogaz did not say who will take part in talks that Russian Energy Minister Alexander Novak has said he hoped would take place in the first 10 days of December. The European Union relies on Russia for about a third of its gas. More than half of that arrives via Ukraine, but since ties between Russia and Ukraine hit rock bottom, the potential for disputes over pricing and other issues has accelerated. European Commission Vice President Maros Sefcovic acts as an intermediary between Russia and Ukraine in the gas dispute, trying to minimize the risk of gas supply interruptions to Europe, especially in winter.

Source: VOA News

Engie and Statoil renegotiate price of Norwegian gas sold to France

December 5, 2016. French energy group Engie and Norwegian oil and gas producer Statoil have reached an agreement on the renegotiation of their long-term gas supply contracts, making contract prices fully market reflective and indexed on the French PEG hub. In April 2016, Engie and Russian giant Gazprom Export had also reached an agreement to adapt the price of long-term gas supply contracts.

Source: Enerdata

EU nations near compromise on how to counter Russian gas supply risks

December 5, 2016. European Union (EU) nations are edging toward a compromise on a proposal to guard against gas supply disruptions, agreeing to share details on contracts and cooperate across borders, the Slovak presidency said. Cuts in gas supplies from Russia in 2006 and 2009 exposed the bloc’s vulnerability – particularly in eastern Europe – in relying on Russian gas export monopoly Gazprom for around one third of its needs. But the European Commission’s bid for greater oversight and to mandate more regional cooperation has raised the hackles of big EU states, wary of it overreaching.

Source: Reuters

Chesapeake to sell Haynesville asset for $450 mn to Indigo Minerals LLC

December 5, 2016. Chesapeake Energy Corp, the second largest United States (US) producer of natural gas, said that it would sell a part of its acreage in the Haynesville Shale area for $450 million to a private company, which revealed as Indigo Minerals LLC, a competing natural gas producer. Indigo Minerals LLC, the 10th largest U.S. producer of natural gas, is using an affiliate called Indigo Haynesville LLC for the acquisition. Chesapeake said that the asset, located in northern Louisiana, includes about 78,000 net acres, 40,000 of which is core acreage. The sale also includes 250 wells with a current net production of about 30 million cubic feet of gas per day. Chesapeake said it planned to sell about 126,000 net acres in the Haynesville Shale field in Louisiana. The company said it was still marketing another 50,000 net acres in that field.

Source: Reuters

BP acquires Repsol’s stake in Tangguh LNG project

December 5, 2016. British oil company BP has acquired Spanish group Repsol’s 3.06 percent stake in the Tangguh liquefied natural gas (LNG) project in Indonesia for $313 million dollars, BP said. The purchase lifts operator BP’s stake in the plant to a little more than 40 percent. The Tangguh plant processes 7.6 million tonnes of LNG a year. In June BP gave the go-ahead for the $8 billion expansion of Tangguh’s third LNG train, one of only a handful of major investment decisions in the sector this year as companies trim spending in response to a protracted slump in oil prices.

Source: Reuters

Nigeria and Morocco sign gas pipeline deal to link Africa to Europe

December 4, 2016. Nigeria and Morocco have signed a joint venture to construct a gas pipeline that will connect the two nations as well as some other African countries to Europe, Nigeria’s Minister of Foreign Affairs Geoffrey Onyema said. The agreement was reached during a visit by the Morocco’s King Mohammed to the Nigerian capital Abuja, Onyema said. Onyema said the project aimed to create a competitive regional electricity market with the potential to be connected to the European energy markets. No timeline was given for when the pipeline construction work will start and how much it will cost. Nigeria is rich in hydrocarbons but produces little electricity, making its industries uncompetitive. Its economy now faces a recession caused by a plunge in crude prices. Militants in its oil producing heartland of the Niger Delta have also blown up pipelines in a quest for a bigger share of Nigeria’s oil wealth, which has cut crude output this year.

Source: Reuters

Papua New Guinea seeks higher tax take for ExxonMobil gas expansion

December 4, 2016. Papua New Guinea is preparing to negotiate new fiscal terms for a $10 billion expansion of ExxonMobil’s liquefied natural gas (LNG) project in the Pacific nation in a push to boost revenue, PNG Treasurer Patrick Pruaitch said. The bid comes amid rising concern among rural landowners that they have yet to see the full benefits of the $19 billion PNG LNG project after more than two years of operation. ExxonMobil now wants to add a third production unit. PNG has been hit hard by a slump in oil and gas prices and a drought which crippled farming and brought production to a halt at its largest copper mine to a standstill. Pruaitch said the government aims to reach a deal with ExxonMobil over new tax terms for expansion of the PNG LNG project in 2017, to ensure it goes ahead in time for an expected upturn in the LNG market early in the next decade. It is important to negotiate better terms for the country on what is expected to be a $10 billion project, he said.

Source: Reuters

Gas producer Santos needs to impress as China’s ENN eyes strategy

December 3, 2016. China’s ENN Group, the top shareholder in Santos Ltd, will be watching closely when the Australian gas producer outlines its strategy to pay down debt and cope with weak oil and gas prices. ENN Ecological Holdings, a unit of ENN, bought an 11.7 percent stake in Santos from Chinese private equity firm Hony Capital for $750 million in March, but its stake is now worth 9 percent less, even though oil prices have jumped by a third since then.

Source: Reuters

Samsung Heavy says $776.8 mn order for LNG facility cancelled

December 2, 2016. Samsung Heavy Industries Co Ltd said that a 907.6 billion won ($776.8 million) order for a substructure for a liquefied natural gas (LNG) floating production, storage and offloading (FPSO) unit has been cancelled. The South Korean shipbuilder said that the order, which came from an unspecified European firm, was cancelled as the firm did not issue a work order by a deadline agreed upon.

Source: Reuters

Global LNG prices hit 2016 high as OPEC agrees oil output cut

December 2, 2016. Asian spot prices for liquefied natural gas (LNG) rose to their highest for 2016 so far, lifted by OPEC’s announcement it would cut crude oil production in cooperation with Russia and by a tightening regional gas market. Spot prices for Asian LNG rose 30 cents from last week to around $7.40 per million British thermal units (mmBtu). The main price driver was an agreement reached by the OPEC and non-OPEC oil production giant Russia to cut crude output in order to rein in global oversupply that has dogged markets for more than two years. The announcement led to a more than 10 percent rise in oil prices to above $53 per barrel. With 80 percent of Asian LNG supply contracts linked to the price of crude, and oil playing a key role in shipping costs, the spot LNG market was also affected, traders said, pushing prices to their highest since November 2015. However, because the price link with oil in supply contracts is stronger than oil’s influence in spot markets, analysts warned OPEC’s output cut could yield a growing price disparity between more expensive term supplies and cheaper spot cargoes. On the demand side, cold weather in the biggest LNG importing countries is also lifting prices as many traders expect utilities in Japan, South Korea and also China to turn to the spot market to buy cargoes to meet strong heating demand.

Source: Reuters

California expects to complete Aliso Canyon natural gas review in early 2017

December 1, 2016. California agencies expect to complete their safety review of Southern California Gas’ (SoCalGas) Aliso Canyon in early 2017, preventing the utility from injecting natural gas into the Los Angeles storage facility for at least the first half of winter. SoCalGas shut the facility in October 2015 after a massive leak forced the evacuation of thousands in the Porter Ranch area of Los Angeles. Several local groups have called on the state to shut the facility, claiming it is not safe to operate. California agencies have said in a report that SoCalGas could have a tough time meeting a forecast peak demand of 5.2 billion cubic feet per day (bcfd) on the coldest days this winter without Aliso Canyon.

Source: Reuters

OPEC deal is bad news for US gas and good news for LNG

November 30, 2016. It’s bad news for the United States (US) gas bulls enjoying a rally that has propelled prices to the highest in two years. Crude explorers have more incentive to drill with oil futures surging on the promised cuts by the Organization of Petroleum Exporting Countries (OPEC). And with every barrel of oil they pull out of the ground, they’ll inevitably pull out gas, a byproduct that threatens to add to a US supply glut that’s already hit a record. While the potential flood of so-called associated gas threatens to derail the rally in US gas prices, it also stands to be a boon for the liquefied natural gas market. A large share of LNG contracts are linked to benchmark oil futures. And a drop in US gas prices will allow the nation’s LNG exporters to offer supplies to the world at a deeper discount.

Source: Bloomberg

Australia takes aim at O&G industry in tax review

November 30, 2016. Australia is targeting the oil and gas (O&G) industry for a tax review ahead of next year’s budget, in a push to boost revenue after a sharp slump over the past three years and collect more from multinational giants. Treasurer Scott Morrison said that takings from the nation’s petroleum resource rent tax had halved to A$800 million ($600 million) since 2013, while revenue from crude oil excise taxes had more than halved due to a collapse in oil and gas prices and falling output. The drive comes as Australia is not expected to reap as much as hoped from a more than $200 billion investment spree over the past few years that will make it the world’s biggest exporter of liquefied natural gas (LNG) by around 2019.

Source: Reuters

CNPC to split natural gas sales arm from transportation business

November 30, 2016. China National Petroleum Corp (CNPC) will separate its natural gas sales and transportation arms, the company said. A stand-alone gas transportation business under CNPC, which supplies nearly 80 percent of the country’s gas market, will provide for greater third-party access to the country’s gas grids, industry observers have said. Beijing wants gas to supply about 15 percent of its total energy needs by 2030, up from just 6 percent presently. The government has over the past month or so taken sweeping measures to encourage investment in gas infrastructures and make the cost of transportation more transparent. Under the current plan, CNPC will set up a separate gas sales subsidiary, which will oversee five regional branches, CNPC said.

Source: Reuters

International: Coal

Coking coal surge may extend if China cracks down on North Korea

December 5, 2016. The already elevated price of coking coal could be boosted further if China decides to crack down on coal imports from its nuclear-armed neighbour North Korea. The United Nations Security Council imposed fresh sanctions on North Korea, limiting its annual coal exports to 7.5 million tonnes, or a value of $400.9 million, after the isolated communist regime conducted a fifth nuclear weapons test. Chinese customs data show that China imported 18.517 million tonnes of North Korean coal in the first 10 months of the year, a gain of 12.8 percent on the same period last year. The jump in imports from North Korea this year came in spite of earlier Chinese commitments to ban the coal trade with Pyongyang. Certainly Chinese coal traders will be happy to be allowed to continue buying from North Korea once the new measures are put in place in January. China is believed to be the only country that buys North Korean coal, which is the biggest export earner for the dynastic communist dictatorship. Chinese customs data classifies North Korean coal as anthracite, which is a grade of coal high in energy content, making it ideal for use in the steel blast furnaces and ceramic factories in the northeast provinces close to North Korea.

Source: Reuters

Beijing to quit coal mining by 2020

December 2, 2016. Beijing will close its last three coal mines in the next four years and entirely quit coal mining by 2020, ending an 800-year-old practice in a bid to curb alarming air pollution. China is the world’s top coal consumer but demand has been on the wane as economic growth slows and the country shifts away from fossil fuels in order to curb pollution. In 2016, Beijing closed two coal mines with a total annual production capacity of 1.8 million tonnes, Li Bin, deputy director of the coal management office Beijing Municipal Commission of Development and Reform said. By 2020, Beijing will completely bid farewell to the coal mining industry, Li said. Pollution levels in Beijing goes up high especially during the winter as the city operates numerous coal fired heating plants to provide heating for residences in the city. Beijing has a coal mining history of nearly 800 years.

Source: The Economic Times

International: Power

West Australia will sell 51 percent stake in power company Western Power

December 5, 2016. The state government of Western Australia has confirmed plans to sell a 51% stake in state-owned power utility, Western Power, if re-elected for a third term in March 2017. The sale could raise A$11 bn (US$8.1 bn), which would help the government reduce its debt by A$8 bn and create a A$3 bn infrastructure fund. The government would retain 49% in the company. The government announced the potential sale of a stake in Western Power and in electricity transmission and distribution network operator Horizon Power in May 2016.

Source: Enerdata

Power generation at Egbin drops by 84 percent to 172 MW

November 30, 2016. The nation’s electricity woes have worsened as generation from its biggest power station, Egbin, plunged to a record low of 172 MW, down from 1,085 MW on March 15. Eight of the nation’s 26 power plants were idle, according to industry data. Generation from Egbin, which is located in Lagos, with an installed capacity of 1,320 MW, was said to have been limited to 172 MW largely due to gas supply shortages. The nation recorded a total system collapse, November 24, the second time this month and the 20th time this year, the data showed. The total national power generation fell to 3,224 MW, down from 3,574.2 MW. Eight of the nation’s power generating plants, including Olorunsogo II in Ogun State and Ibom Power in Cross River, were completely idle.

Source: The Punch


Hydro-Quebec eyes more green power sales in US Northeast

December 6, 2016. Hydro-Quebec, Canada’s biggest electricity utility, wants to expand power sales to United States (US) Northeast states hungry for green energy to meet climate change goals. The power supplier can generate as many as 3,000 additional megawatts that could be shipped south of the border without having to build a new dam, Chief Executive Officer Eric Martel said. It has an annual generating capacity of about 37,000 MW. Martel wants to double revenue by 2030, targeting takeovers in the Americas and Europe while increasing sales of hydro-generated power to the US Hydro-Quebec hopes to win long-term contracts from states like Massachusetts and New York that want to lower emissions of heat-trapping carbon dioxide. By 2030, power exports and acquisitions could propel annual revenue to about C$27 billion, with annual profit of about C$5.2 billion, Martel said.

Source: Bloomberg

Indonesia takes new step to combat loss of forests, fires

December 6, 2016. Indonesia has strengthened its moratorium on converting peat swamps to plantations in a move a conservation research group says will help prevent annual fires and substantially cut the country’s carbon emissions if properly implemented. President Joko “Jokowi” Widodo’s amendment to the moratorium regulation, which was issued, expands it to cover peatlands of any depth and orders companies to restore areas they’ve degraded. Draining of peat swamps by palm oil and pulp wood companies is a big contributor to destruction of tropical forests in Indonesia and the country’s greenhouse gas emissions. The land conversion worsens annual dry season fires that release huge amounts of carbon stored in the peat. Many of the fires are deliberately set to clear land of its natural vegetation. Indonesia has made major commitments to reduce greenhouse gas emissions and protect its tropical forests, which are home to critically endangered species, but deforestation has continued largely unabated. A study in the journal Nature Climate Change estimated that by 2012, Indonesia was clearing 840,000 hectares (2 million acres) of forests a year, more than any other country. The environment ministry said that one of the main causes of last year’s fires was corporate mismanagement of peatlands, which in turn led to the beefed up regulations.

Source: Bloomberg

Norwegian oil firm Statoil makes first investment in solar technology

December 6, 2016. Norwegian oil major Statoil has made its first investment in solar power technology, stepping up efforts to gradually complement its petroleum portfolio with renewable assets, the company said. Oxford PV, a solar technology company, said it had received investments totalling 8.1 million pounds ($10.33 million) from three investors including Statoil. The unit has previously made larger investments in wind power. Statoil also considers making bigger investments in solar projects or farms.

Source: Reuters

Japan’s CO2 emissions drop 3 percent to 5 year low in FY2015

December 5, 2016. Japan’s greenhouse gas emissions fell 3 percent to a five-year low in the financial year through March due to lower power demand, growing renewable energy and the restart of nuclear power plants, government figures showed. Emissions fell for a second straight year to 1.321 billion metric tonnes of CO2 equivalent, hitting the lowest since fiscal 2010, according to Ministry of Environment preliminary data. The world’s fifth-biggest carbon emitter, Japan, has set a goal to cut its emissions by 26 percent from 2013 levels by 2030, and last month ratified the 2015 Paris Climate Change Agreement to prevent climate change.

Source: Reuters

Australia researchers set new record for perovskite solar cell efficiency

December 5, 2016. Researchers from the University of New South Wales (UNSW) in Australia has achieved an efficiency record of 12.1% for a 16 cm2 perovskite solar cell, the largest cell of its kind. Confirmed by the international testing centre Newport in Bozeman, Montana, the result sets a new world efficiency record for the perovskite photovoltaic cell certified with the highest energy conversion efficiency. The cell is said to be 10 times larger than the current certified high-efficiency perovskite cells on record. The team is currently working to increase the efficiency of the perovskite solar cell efficiency to 26%. UNSW said that the research is supported by $3.6 mn funding through the Australian Renewable Energy Agency’s ‘solar excellence’ initiative.

Source: Energy Business Review

Tsunamis threaten Britain’s nuclear power plants

December 5, 2016. Britain’s nuclear power stations are at risk from tsunamis caused by undersea landslides, scientists have warned. Marine geologists at Durham University found that the British Isles have been hit by more tsunamis than previously believed, including one wave which reached a height of 60 feet. Scientists are urging the government to take the threat of tsunamis seriously, warning that they could damage critical infrastructure on the coast, such as nuclear power stations, ports, and oil terminals. Researchers are urging the government to take steps to protect nuclear and other key installations from tsunamis, which are likely to occur more than once every 10,000 years.

Source: RT

European Union blames China for WTO environmental trade talks collapse

December 4, 2016. Europe’s trade negotiator blamed China for scuppering a global environmental trade deal by submitting impossible late demands at World Trade Organization (WTO) talks aimed at scrapping import tariffs on exports worth more than $1 trillion. The change of United States (US) president also puts a big question mark over the future prospects for a deal. European Trade Commissioner Cecilia Malmstrom said she had no idea what US President-elect Donald Trump thought about environmental matters, but she hoped the US would be “on board”.

Source: Reuters

China’s control on deal cash flows could tangle solar industry

December 2, 2016. The $1.5 billion privatizations of two of China’s biggest solar companies have been thrown into doubt because of concerns they may run afoul of a government effort to keep more of the nation’s money supply at home. China’s solar manufacturers, including Trina and JA Solar, raised more than $5 billion from Wall Street investors starting in 2006 to expand factories.

Source: Bloomberg

Pakistan to set up world’s largest solar park: Zahid

November 30, 2016. The Minister for Climate Change Zahid Hamid said that Pakistan was setting up the world’s largest solar park (1 GW) – as part of its plans to promote renewable energy. He said that the world community was informed at an international conference that Pakistan’s contribution to global warming is minimal – less than 1% of total annual global greenhouse gas emissions – but the country still makes the list of ‘top ten countries most vulnerable to climate change’. Pakistan faces several major risks relating to climate change including glacial melt, variable monsoons, recurrent floods, rise in sea level, higher average temperatures and higher frequency of droughts, he said. He said that the launch of Prime Minister Nawaz Sharif’s Rs2 billion ‘Green Pakistan Programme’ is to be implemented across the country but other initiatives like the Pakistan Climate Change Bill aim to establish a high-level, policy-making council – along with Pakistan Climate Change Authority – to prepare, adapt and mitigate projects in various sectors.

Source: Daily Times


Scenario of Wind Power in India


Total Wind power potential at 100 meter above ground level



Capacity Addition


Andhra Pradesh 44229 400.1
Gujarat 84431 392.4
Karnataka 55857 230.9
Kerala 1700 8.4
Madhya Pradesh 10484 1261.4
Maharashtra 45394 207.85
Rajasthan 18770 685.5
Tamil Nadu 33800 158.8
Telangana 4244 77.7
Others 3342
Total 302251 3423.05

Wind Power Potential: Utililised & Remaining


Source: Ministry of New and Renewable Energy & Lok Sabha Un-starred Question No. 3153

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

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