MonitorsPublished on Jan 16, 2017
Energy News Monitor | Volume XIII: Issue 31

Power News Commentary: December 2016 – January 2017


The fact that average monthly spot market price of electricity remained unchanged at Rs 2.32/kWh on the Indian Energy Exchange in December compared to November raised concerns this month. One would have hoped that with the onset of winter and fog in Northern India increase in demand for power for heating would perk up prices.  The fact that demand for power has been far below projections is a concern that has failed to get the attention that it deserves.

Those who have put some thought into the issue have attributed low demand for power to growth in generation from renewable energy but this appears to be a lazy explanation that is rooted in ideological faith in renewable energy rather than in factual analysis. Data on generation from renewable energy is not as systematic and established as it is for generation from traditional sources. While the CEA reports that data is collected from renewable energy generators and the respective SLDCs, there is a built in incentive for over-reporting renewable energy generation as the financial rewards are tied to the extent of generation.


The power market received another blow from the CERC which has proposed to increase the short and medium-term transmission corridor charges for open access by 35 percent and 25 percent, respectively, from the current levels. While the regulator has comforted the market stating that this would compel participants to move towards long-term access which is critical for efficient planning of transmission networks, stake holders such as power exchanges, private transmission companies and generators are worried. Though the volume of power traded at power exchanges has increased, the price of traded power has fallen dramatically and stakeholders are concerned that further increase in access charges will serve as a disincentive for market participants.

Demand for power generating capacity is estimated at 200 GW by 2017 but current demand is reportedly lower at 150 GW. But this glut in power generation capacity does not mean that lack of access to electricity is eliminated. 60 percent of schools and 40 percent of homes in Odisha were reported to be without power.  This contradiction has a simple explanation. After functioning as a provider of a social good for over five decades, power distribution companies and other players in the power sector value chain are all now expected to function as providers of a private good mediated by the market. Schools and households in Odisha and elsewhere in India cannot demand this private good unless they have the ability to pay for the good.

The central government has policies for increasing energy access (electricity as a public social good) as well as policies for decreasing power sector losses (electricity as a private good) such as the UDAY scheme which states are expected to embrace. If the central government purchases the surplus electricity in the market and distributes it to schools in Odisha it will be meeting both objectives-that of increasing electricity access and increasing profitability of state electricity boards (as the electricity will be paid for). The scheme may not only stimulate the economy but also prove to be a vote winner in this election season!

Rest of the World

Low electricity prices in the USA was the most interesting piece of news in the international press this month.  Cheap natural gas, subsidised wind and solar are all blamed. Industrial slowdown and increase in efficiency of energy use are also blamed. Price in the most actively traded region was reportedly at $28.78/MWh which is said to be the same price of power more than a decade ago. At current exchange rates this is just over Rs 1.9/kWh which means that power in USA is cheaper than power traded on Indian exchanges.

Moving on, China’s investments in the power sector of various countries continued to stream in this month with news of Chinese investments in the power sectors of Ivory Coast, Greece, Tajikistan, Brazil and Pakistan. China Energy Engineering Corp is said to be leading construction of the €500 million 372 MW Songon power station (gas and coal) in Ivory Coast. Greece’s state controlled power company PPC is also reported to be selling a stake in the country’s electricity grid operator to China’s State Grid in a €320 million deal. A Chinese firm has reportedly completed a power plant worth $350 million in Tajikistan’s capital Dushanbe. The State Grid Corp of China is reported to have asked the Brazilian government and regulators to speed up environmental licensing of a planned power line connecting to the Belo Monte dam in the Amazon forest. State Grid, the world’s biggest utility is said to be worried that it may have to delay construction of the line, possibly forcing the third-largest hydroelectric power dam to begin operating in 2019 below full capacity. State Grid of China is also said to be helping Pakistan build a 4,000 MW power transmission line in a project valued at $1.5 billion. The high-capacity transmission line would be the first of its kind in Pakistan and will link Matiari town in the south, near a new power station, to Lahore.  Last but not the least China’s Shanghai Electric is said to have plans to spend $9 billion overhauling electricity infrastructure in Karachi. China is said to be steeping up investment in Pakistan as part of a $46 billion project that will link its far-western Xinjiang region to Gwadar port with a series of infrastructure, power and transport upgrades.

Accusations of hacking between Russia and USA touched the power sector when a US utility reportedly found a malware code on a laptop that the FBI and DHS had touted as associated with Russian hackers. It was not clear if this is fake news or real news.


India’s 2016 fuel sales growth highest in at least 16 yrs

January 10, 2017. India’s fuel demand in 2016 grew at its highest pace in at least 16 years as low oil prices for most of the year boosted demand for gasoline and aviation fuels. Consumption of fuels, a proxy for oil demand, surged 10.7 percent to 196.48 million tonnes in 2016, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed. India’s refined fuel demand grew at 4.3 percent in December, its slowest pace in three months, but use of diesel-fired generator sets and vehicles by political parties for canvassing in state polls could result in higher demand this quarter. Gasoline demand rose 12.2 percent in 2016 on top of strong growth in 2015, with diesel demand rising 5.6 percent, its fastest in four years, driven by a surge in domestic automobile sales. Cooking gas or liquefied petroleum gas (LPG) sales rose 11.3 percent to 21.19 million tonnes.

Source: Reuters

Petrol pumps will accept cards for now as govt steps in

January 9, 2017. Petrol pumps across the country have decided to postpone till at least January 13 their protest against the banks’ decision to levy an extra charge on credit and debit card transactions. The petrol dealers had announced earlier that they would not accept the debit and credit cards of banks that would levy the extra charge. The government has assured the dealers that the merchant discount rate (MDR) fee won’t be applied till January 13. The intervention came after the petroleum dealers’ association had written to Finance Minister Arun Jaitley, informing him about the sudden decision by the banks to levy the transaction charge and their resolution to refuse card payments. The decision by fuel dealers could have hit the consumers as well the government’s efforts to push cashless transactions amid a nationwide cash shortage following the scrapping of Rs 500 and Rs 1,000 notes. Cashless transactions have gone up at petrol pumps since the government’s demonetisation move announced on November 8.  To promote cash-less transactions, the government had waived the Merchant Discount Rate (MDR) on fuel purchase post demonetisation for consumers. But after the expiry of the 50-day window, the banks have decided to levy MDR on petrol pump owners. In their letter to Jaitley, the All India Petroleum Dealers’ Association said since there has been no word of passing the charge to consumers, the dealers will sustain a loss. The pumps have been notified that 1% charge will be levied on all credit card transactions and between 0.25% and 1% on all debit card transactions from January 9, 2017. The banks have quoted a circular issued by the Reserve Bank on December 16 as the reason for the extra charges, the letter said.

Source: NDTV

ONGC close to solution for $800 mn projects stuck post swiber crash

January 9, 2017. Oil and Natural Gas Corp (ONGC) is close to finalising ways to complete its $800 million projects stuck midway after the contractor, Singapore’s Swiber Holdings Ltd, collapsed last year following an oil slump. ONGC’s three projects off the western coast faced delays after Swiber, the offshore construction and support services provider for oil and gas field development, filed for liquidation in Singapore following deep financial trouble. A final decision will be taken by mid-January, ONGC said. ONGC is considering using subcontractors to complete the C-26 cluster development project, which is about 90 percent done. Terms and conditions for subcontractors will remain the same as before. Swiber was supposed to provide sub-sea pipelines and carry out platform modifications in this. ONGC has in the past used subcontractors to finish when the contractor left a project midway. Wells have already been drilled in the C-26 cluster and completion will unlock about 2.5 million metric standard cubic meters a day (mmscmd) of natural gas, helping enhance India’s domestic output falling for years. About 60 percent of the project at Daman is complete, where five platforms and associated pipelines were to be built by Swiber. A pipeline replacement project at Bombay High is also stuck. ONGC may issue limited tenders for the completion of these projects. ONGC had earlier attempted to invoke Swiber’s performance bank guarantees but following the Singapore firm’s objection and a judicial intervention, it agreed to use the money to finish the projects.

Source: The Economic Times

India’s oil demand growth will outpace China’s for the third year in a row

January 6, 2017. Platts Analytics has predicted a 7% rise to 4.13 million barrels per day in Indian oil demand in 2017, compared with a 3% rise in Chinese oil demand to 11.50 million barrels per day. Platts expects China and India to boost their imports of liquefied natural gas (LNG) respectively by 28% and 38%. The first OPEC-led global production cut in 15 years underpins an emerging but fragile recovery, with 2017 set to see a huge stock overhang disappear by the third quarter. The oil market will move from over-supply to a more balanced supply-demand situation, according to Platts Analytics.

Source: The Economic Times


Moody’s Investor Service retains rating on all three Indian OMCs

January 6, 2017. Moody’s Investor Service retained its Baa3 rating for all three state-run Indian Oil Marketing Companies (OMCs) — Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp on the basis of continued improvement in their credit metrics. Baa3 rating indicates moderate credit risk. Moreover, OMCs’ earnings have improved as the commissioning of new capacity and higher marketing margins have more than offset weaker refining margins, Moody’s said.

Source: The Economic Times

RIL pumps offer diesel at lower price than PSUs to regain market share

January 4, 2017. Reliance Industries Ltd (RIL) has slashed the price of fuel to snatch back market share lost to state pumps in the days after demonetisation, when the latter accepted old notes for some time and currently offer a discount on digital purchases. Filling stations run by RIL have begun offering diesel to customers at 1 discount to the price offered by pumps run by state companies such as Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp. State-run pumps are already feeling the heat in a little more than a week since RIL’s diesel price discount began. The All India Petroleum Dealers Association will discuss, among other things, ways to neutralise RIL’s move. To be sure, RIL operates just 1,100 filling stations, mostly in Gujarat and some in southern states. But in the business of fuel sales, the slightest discount per litre can effectively wean away customers from a rival pump as the overall gains can be significant due to big volume play. Diesel sales are about three times that of petrol in the country.

Source: The Economic Times

ONGC, Cairn India demand lowering of cess on crude ahead of Union Budget

January 4, 2017. Ahead of the Budget, state-owned oil producer Oil and Natural Gas Corp (ONGC) and private sector Cairn India have asked the government to cut cess on crude oil saying the switchover from fixed to ad valorem rates had turned things from bad to worse. The producers want the government to cut the cess to 8 percent of the price they realise on sale of domestically produced crude oil. In the previous Budget, Finance Minister Arun Jaitley had converted Rs 4,500 per tonne fixed cess on crude oil to 20 percent ad valorem. The Oil Industry (Development) Act, 1974 provides for collection of cess as a duty of excise on indigenous crude oil. Cess incurred by producers is not recoverable from refineries and thus forms part of cost of production of crude oil. The cess was levied at Rs 60 per tonne in July 1974 and subsequently revised from time to time.

Source: The Economic Times


ONGC gets price guarantee from GSPC in $1 bn KG Basin deal

January 10, 2017. Gujarat State Petroleum Corp (GSPC) will buy entire output at a predetermined price from the Krishna-Godavari (KG) Basin gas field that it has agreed to sell to Oil and Natural Gas Corp (ONGC) for $1billion, a key provision that addressed gas pricing concerns of India’s largest crude producer and helped seal the deal. ONGC agreed to acquire the entire 80% participating interest of GSPC along with the operatorship in the Deen Dayal West field where geological challenges have delayed the commercial production by several years while mounting the Gujarat firm’s development cost and overall debt. ONGC said the agreement provides for GSPC buying gas for the field’s lifetime at a price linked to forward prices, which are available for next five years. The forward prices for the fifth year have been taken for the remaining life of the field. The government publishes the maximum price producers can charge for gas from difficult fields such as Deen Dayal West twice a year. If government prices were to slide below the forward prices, GSPC will compensate ONGC for the deficit. Price of gas and the reserves GSPC’s field held were the two prickly issues between the two companies. The government ceiling for the gas price is $5.30 per unit.

Source: The Economic Times

Global companies offer ONGC deepsea drilling rigs for KG gas find

January 5, 2017. As many as 10 international offshore drilling contractors including Transocean Inc have offered best-in-class deepsea drilling rigs to Oil and Natural Gas Corp (ONGC) for its KG-D5 gas field developments. ONGC had floated a tender to charter hire two deepwater drilling rigs and one anchor moored rig for bringing gas in Bay of Bengal block KG-DWN-98/2 or KG-D5, which sits next to Reliance Industries’ flagging KG-D6 fields, to production. ONGC is among the very few explorers around the world who are actually going ahead with the development campaign despite low oil prices. ONGC is investing $5.07 billion for developing Cluster-II discoveries in KG-D5 block to flow natural gas from June 2019 and oil by March 2020. The 7,294.6-sq-km deepsea KG-D5 block has been broadly categorised into Northern Discovery Area (NDA — 3,800.6 sq km) and Southern Discovery Area (SDA — 3,494 sq km). The NDA has 11 oil and gas discoveries while SDA has the nation’s only ultra-deepsea gas find of UD-1. These finds have been clubbed in three groups — Cluster-1, Cluster-II and Cluster-III. Gas discovery in Cluster-I is to be tied up with finds in neighbouring G-4 block for production but this is not being taken up currently because of a dispute with Industries Ltd (RIL) over migration of gas from ONGC blocks. From Cluster-II, a peak oil output of 77,305 barrels per day is envisaged within two years of start of production. Gas output is slated to peak to 16.56 million standard cubic meters per day (mmscmd) by end-2021. Cluster-2A mainly comprises of oil finds of A2, P1, M3, M1 and G-2-2 in NDA, which can produce 77,305 barrels per day (3.86 million tonnes per annum) and 3.81 mmscmd of gas. Cluster-2B, which is made up of four gas finds – R1, U3, U1, and A1 in NDA – envisages a peak output of 12.75 mmscmd of gas. Cluster-III is the UD-1 gas discovery in SDA in ultra- deepsea that poses technological challenges.

Source: The Economic Times

ASSOCHAM plea to revoke notification vis-a-vis input tax credit withdrawal on natural gas by Gujarat govt

January 4, 2017. In the larger interest of industries, ASSOCHAM has urged the Centre to immediately revoke the notification vis-a-vis withdrawal of input tax credit on inter-state sale/branch transfer of natural gas issued by Finance Department of Gujarat government on November 28 last year. Considering that many industries are stuck with long-term supply agreements with PSU distributors of costly regasified liquefied natural gas (RLNG) and, therefore, cannot switch over to cheaper alternate source of energy due to “take or pay” clause in said agreements.

Source: Business Standard


Bihar, Jharkhand may face power outages with NTPC Kahalgaon facing coal issues

January 9, 2017. Bihar and Jharkhand are likely to face major power cuts soon, as their main power supplier is facing the possibility of a total shutdown in the next three days as it isn’t getting coal to run the plant since the Rajmahal mine accident. The 2,100 MW Kahalgaon Thermal Power Plant of NTPC supplies the bulk of power to the two eastern states and its source of fuel is Coal India’s Rajmahal mine. Since the December 29 accident that killed several miners, it hasn’t received any coal and the stock is depleting steadily. NTPC has already shut one of the plant’s 500 MW units. It is now running at 60 percent capacity — 20 percent less than on normal days.

Source: The Economic Times

CIL’s 2017/18 production seen at 660 mt: Coal Secretary

January 6, 2017. Coal India Ltd (CIL), the world’s largest coal miner, is expected to raise its production to 660 million tonnes (mt) in 2017/18 fiscal year, the Coal Secretary Susheel Kumar said. The miner is expected to achieve its 2016/17 production target of 575 million tonnes and aims to raise output to 1 billion tonnes by 2020, Kumar said. With coal accounting for about 70 percent of India’s power generation, the country is the world’s third-biggest producer and importer of the fuel, and government wants to boost domestic output to cut imports. During April-December, CIL produced 378 million tonnes, lagging behind its target for this financial year ending in March.

Source: Reuters

SCCL’s global expansion on hold due to dip in coal prices: Telangana CM

January 5, 2017. Sliding coal prices have dampened Singareni Collieries Company Ltd (SCCL)’s plans to expand its footprints globally, Telangana Chief Minister (CM) K Chandrasekhar Rao said. Singareni which is now excavating coal in Telangana is now expanding to other states. The company has started operations in the block allocated by the Centre at Naini Mines in Odisha. The company also made attempts to expand its activities in other countries too. The state government is making plans for expanding and strengthening the Singareni and in the next five year, 20 more Opencast mines and 11 Underground mines will be executed, he said. The state government holds 51 percent stake in SCCL while the Centre has 49 percent. The production of target of the Singareni by 2020-2021 will be about 900 lakh tonnes per year. With this all the thermal power stations in the state as well as a several industries will get coal supply. About 11,621 more jobs will be created, he hoped. Telangana has about 10,528 million tonnes of coal deposits in the region. Under Singareni about 1249 million tonnes of coal is excavated. There are adequate coal deposits to excavate them for the next century. The coal produced by the Singareni, besides Telangana, is supplied to Thermal power plants in Andhra Pradesh, Maharashtra, Karnataka and Tamil Nadu states. About 60 million tonnes of coal is produced by Singareni every year. As on date, Singareni has 46 mines, of which, 30 are underground and 16 are open cast mines. About 56,866 people are working in Singareni. Of this, 34,764 are working in the Underground mines and 10,427 are working in the Open Cast mines.

Source: The Economic Times

Higher coal prices to help Tata Power offset losses

January 4, 2017. Tata Power, which holds a stake in Indonesian mines, will benefit from the rising global coal prices, which have shot up by 58% in the past six months. The benefit will be reflected in its performance in the coming quarters as the contracts are medium to long term in nature. Most annual contracts are negotiated in the December quarter and hence, do not reflect entirely in the September quarter numbers. Considering Tata Power’s 30% stake in the mines, over 25 million tonne (mt) of sales is attributed to the company out of estimated total 83 mt sales from the mines for FY17. This is expected to more than compensate for the loss in its Mundra plant on account of tax imposed by the Indonesian government on exported coal. In the 12 months to September 2016, Tata Power reported consolidated net profit of Rs 978 crore on sales of Rs 36,350 crore. The low profitability can be attributed to its loss-making Mundra plant. The reason is after the company signed long-term sales agreements with state electricity boards, the Indonesian government levied a steep 40% tax on coal exports. The Mundra plant consumes over 10 mt of coal, annually. After adjusting for this, Tata Power is in a position to get the benefit of higher coal prices on the remaining 15 mt of coal from Indonesian mines, which is sold to other customers. As per estimates, a $10 rise in coal price adds around Rs 350-400 crore to Tata Power’s consolidated earnings.

Source: The Economic Times

Coal Minister not keen on revising coal production target

January 4, 2017. Coal Minister Piyush Goyal is not keen on revising the coal production target of 1.5 billion tonnes by 2022 despite a Central Electricity Authority (CEA) draft report saying no new fossil fuel-based power plant is required till the said year. The CEA draft report is based on the fact that some 70,000 MW of thermal power projects are already under various stages of construction or are in the process of adding to generation, Goyal said. The government is aiming at one billion tonne coal production by Coal India Ltd (CIL) and another 500 million tonne by the private sector by 2022.

Source: India Today


National: Power

Electricity should be included in GST regime: IEEMA

January 10, 2017. The Indian Electrical and Electronics Manufacturers Association (IEEMA) in the upcoming budget has sought for inclusion of electricity with the Goods and Services Tax (GST) regime, lowering of Minimum Alternate Tax (MAT), duty free imports of electricity meter parts among others. IEEMA has presented its pre-budget memorandum to the finance ministry for consideration and has made suggestions on numerous issues related the electrical equipment industry. The association said as per model GST Law, electricity has been kept outside the ambit of GST and the state would continue to levy electricity duty on sale of electricity. The association said the MAT rate should be restricted to 50 percent of the normal tax rate. At present corporate tax rate for Indian companies is 34.61 percent. MAT rate for Indian companies is 21.34 percent.

Source: The Economic Times

ABB wins Rs 43.5 bn mega deal for long distance power transmission link in India

January 10, 2017. ABB said it has teamed up with Power Grid Corp of India Ltd (PGCIL) in a mega project worth over Rs 4,350 crore to deliver a transmission link that will have the capacity to bring reliable electricity to more than 80 million people. The Raigarh-Pugalur 800 kilovolt (kV) ultrahigh-voltage direct current (UHVDC) system will connect Raigarh in Central India to Pugalur in the southern state of Tamil Nadu, ABB said. The 1,830 km link will be among the longest in the world. With a capacity of 6,000 MW – the equivalent of more than six large power plants – it will be enough to meet the electricity needs of over 80 million people in India. The total project value is worth more than Rs 5,700 crore and the balance will be executed by ABB’s consortium partner BHEL (Bharat Heavy Electricals Ltd). The order was booked in the fourth quarter of 2016. This mega project is expected to be completed in 2019. The two-way link will integrate thermal and wind energy for transmission of power to high consumption centers located thousands of kilometers away, supporting electricity demands in the south, when wind strength is low, and transmitting clean energy to the north, when there is excess wind power. Raigarh-Pugalur is ABB’s sixth HVDC project in India and the second UHVDC installation, following the multi-terminal North-East Agra link, which has been already partially energized and is in the final phase of completion. HVDC transmission links help to conserve land as they occupy only one third of the space compared to the alternative. In this case that amounts to a saving of approximately 244 square kilometers of space – around one third the area of Bangalore or the entire city of Kuala Lumpur. The mega project will also feature technologies selected to minimize the footprint of the transmission stations.

Source: The Economic Times

World’s largest LED street light replacement project launched

January 10, 2017. Power Minister Piyush Goyal launched the “world’s largest” light emitting diode (LED) street light replacement project completed by SDMC (South Delhi Municipal Corp) in south Delhi wherein two lakh conventional street lights have been replaced with energy efficient LEDs. Goyal launched the second phase of the project for installation of 75,000 more LED lights in the SDMC area with special focus on the installation of LED light in parks, dark spots and high mast lights. The initiative under the Street Lighting National Programme (SLNP) being implemented by the Energy Efficiency Services Ltd of power ministry, will save 6.10 crore units of electricity per year thus reducing the electricity bill by 54 percent. Goyal said that the SLNP programme is being presently implemented in 14 states including Delhi. Delhi has also crossed the target of 50 percent saving in the expenditure on street lighting as mandated in the SLNP launched by Prime Minister Narendra Modi on January 5, 2015, he said. SDMC said that the eco-friendly LEDs will help curb release of carbon dioxide gas in the atmosphere by 44,000 tonne per year.

Source: NDTV

Tata Power Delhi Distribution commissions new substation in Delhi

January 9, 2017. Tata Power Delhi Distribution Ltd commissioned a 66/11 kV AIS Grid Substation at Dheerpur, Delhi. The newly commissioned substation will benefit over 56,500 existing and new customers in Dheerpur, Indravihar, Burari, Jahangirpuri, Mukherjee Nagar, Wazirabad Water Works and adjoining areas. The substation will further improve the reliability of power supply and facilitate the load growth in these areas. The newly commissioned Grid Substation has an installed capacity of 50 MVA, with 16 outgoing feeders at 11 kV level. The substation has an incoming supply from four 66 kV composite circuits emanating two Lines from 220KV DTL Gopalpur Grid and two Lines from 66KV TPDDL Jahangirpuri Grid. This Grid is built on 100% pipe foundation and is equipped with two Power Transformers of 25 MVA capacity each and Nitrogen Injection Fire Prevention and Extinction System power transformers along with auto-switched capacitor bank to ensure safe and quality power supply.

Source: The Economic Times

Tariff relief for affected power projects a positive but implementation timeline unclear: ICRA

January 9, 2017. Lower imported coal dependence and tariff relief for affected projects are a positive for the power sector but timeline for implementation of tariff relief still unclear, research firm ICRA said in a report. It said the order issued by the Central Electricity Regulatory Commission was positive where it approved tariff relief under ‘force majeure’ for the imported coal-based power projects of Adani Power and Coastal Gujarat Power (Tata Power), affected by the change in regulations in Indonesia. The report said while energy demand growth has been moderated at 3 to 5 percent since 2014, it is likely to recover gradually over the next 2-3 year period with expected improvement in the financial position of the state-owned distribution utilities following the implementation of Ujwal Discom Assurance Yojna (UDAY) and in turn, leading to an improved off-take and reduction in load shedding. On the regulatory front, ICRA highlights that state-owned distribution companies in only nine out of 29 states have filed tariff petition for FY 2018 so far, implying a less than satisfactory progress in filing of tariff petitions, given that the petitions are required to be filed by November 30, 2016 as per the tariff regulations.

Source: The Economic Times

In Goa, work starts on replacing 166k CFL street lights with LED lights

January 9, 2017. The electricity department, through Energy Efficiency Services Ltd (EESL), a joint venture company of the power ministry, has begun replacing existing street compact fluorescent lights (CFLs) and high pressure sodium vapour (HPSV) lamps with LED bulbs throughout the state. Of the existing 1.66 lakh streetlight fixtures, 35,000 have already been replaced with light emitting diode (LED) lights. This move is expected to help the state save nearly 128 crore. The department plans to start selling LED bulbs in the upcoming months 75. These bulbs are currently being distributed free of cost under the ‘Jyotirmay Goa’ scheme. They also plan to encourage the use of LED tube lights and fans.

Source: The Economic Times

SC issues notice to Punjab for giving free power to farmers

January 7, 2017. The Supreme Court (SC) agreed to hear a plea seeking direction to the Punjab government not to provide free electricity to farmers, which had allegedly led to over-exploitation of the groundwater for irrigation purposes. The apex issued notice to the Punjab government and the Central Ground Water Board (CGWB) on a plea filed NGO, Safal Bharat Guru Parampara, against grant of tubewell connections with free electricity. The NGO had moved SC the National Green Tribunal (NGT) dismissed its original application.

Source: The Times of India

Delhi power discoms meet government over e-rickshaws

January 7, 2017. With over a lakh e-rickshaws in the capital yet to be regularised, distribution companies (discoms) have submitted a host of suggestions to Delhi government. These seek to address wide-ranging issues, from safety to charging of batteries. While discoms allow consumers to charge e-rickshaws through energy meters installed at their homes, they allege that organised groups are illegally tapping electricity directly through poles. Power companies plan to approach Delhi Electricity Regulatory Commission (DERC) to declare a special tariff for consumers who allow others to charge e-rickshaws from their homes at a cost. Discoms proposed special smart cards to e-rickshaw drivers for charging at designated places.

Source: The Economic Times

Jaipur family shocked with Rs 1.89 lakh power bill

January 6, 2017. It was a shocker for a middle-class family in the city when they received electricity bill over Rs 1.89 lakh. Bhanwarlal Jangid, a small wood trader, and his family were left bamboozled when they received the inflated power bill. They have to pay the bill before the deadline– which is 16th of this month. Prior to this, the family never received dues in excess of Rs 4,000 for their 60 sq yard residence in Ganga Vihar colony of the city. Jaipur Vidyut Vitran Nigam Ltd said they have not received any compliant from the consumer.

Source: The New Indian Express

Incentives to states progressing under UDAY: Goyal

January 4, 2017. The government will consider incentives for states whose power distribution utilities are progressing well under Ujwal Discom Assurance Yojna (UDAY). Power Minister Piyush Goyal asked power ministry to launch two-three schemes to laud efforts of states that have joined UDAY and been able to revive their power distribution utilities losses. Assam and Telangana joined UDAY, taking the count of states that are part of the discom revival scheme to 20. Tamil Nadu, with Discom losses of Rs 50000 crore, is likely to join UDAY. Telangana is likely to reap net benefit of Rs 6116 crore to and Assam at Rs 1663 crore through UDAY.

Source: The Economic Times

‘Pay your water, electricity bills before you stand for election’

January 4, 2017. The Election Commission of India said that the candidates will have to submit a ‘No Demand Certificate’ from agencies providing amenities and government accommodation. Chief Election Commissioner Nasim Zaidi said that the candidates will be required to file a no demand certificate and this certificate will come from agencies dealing with electricity, water, telephone and also the rent certificate of the government accommodation which these candidates may have occupied in past ten years.

Source: The Times of India

Power connection is just a click away!

January 4, 2017. In a New Year bonanza to the common man, power distribution companies (discoms) in the state will provide new electricity connections to consumers on the click of a mouse. No more people will be required to make round of discoms for getting a connection. Till now, online application for new power connection was available only to industrial consumers. This service will now be extended to all domestic and low tension consumers in the state. Power discoms are working on a project that once complete, will allow consumers to apply for new connections online, besides allowing changes in address and contact details online. Once the consumer applies for new connection, the power discom officials will reach out to the consumer and do the needful. Internal work is going on and most probably by the middle of this year the consumers will be able to avail this benefits, the Madhya Pradesh Power Management Company said.

Source: The Economic Times

Power demand up 18 percent, but no cuts in Tamil Nadu

January 4, 2017. Power plants in the state have been cranked up to meet the 13,600 MW demand — 18% more than last year — in the state. Though the demand is likely to touch an all-time high in summer, power managers are confident that they have enough reserves to crank up if needed. Further, wind power will kick in during summer, which would make the summer a smooth sailing, they said. The present demand has gone up despite several industries in Chennai and other cities in the state not working to full capacity due to demonetisation. The total demand increased this year mostly because of the use of air conditioners due to increasing temperature and humidity. On the supply side, Tamil Nadu Generation and Distribution Corp Ltd (TANGEDCO) is able to meet the demand without any power cut in any area. Out of the two units with 1,000 MW capacity each at Kudankulam Nuclear Plant, Tangedco is getting around 300MW to 400MW from Unit 2. Unit 1 has been shut down for maintenance.

Source: The Economic Times


Make use of solar rooftops for houses mandatory: CSE

January 10, 2017. Centre for Science and Environment (CSE) has called for installation of solar rooftops to be made mandatory for all upcoming residential societies and sought a ban on use of diesel generator sets in highly-polluted urban areas like the national capital. The solar rooftop can also reduce monthly power bill of the consumers. In a survey conducted in five residential societies across Delhi, Haryana, Uttar Pradesh and Rajasthan it was found that “size of the diesel generator was often not connected to outage” but was sometimes linked to the “status” of a particular society. As per CSE, this partial load can be easily met by solar rooftop for individual flats.

Source: The Economic Times

Power ministry to give major thrust to hydro power: Goyal

January 10, 2017. There will be a major thrust on hydro sector by different ways to bring down cost of electricity from this renewable source, Power Minister Piyush Goyal said. In the present scenario, the small hydro projects up to 25 MW are treated as renewable energy while others do not get incentives being provided by the government for encouraging clean energy. India has set an ambitious target of adding 175 GW of renewable energy capacity by 2022 which includes 100 GW of solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power (up to 25 MW capacity each). Of the 310 GW installed power generation capacity, 43 GW comes from large hydro projects (above 25 MW) and 46 GW from other renewable power generation capacities.

Source: The Economic Times

India, Portugal sign agreements in renewable energy

January 8, 2017. India and Portugal have signed a slew of agreements in various fields, including defence cooperation, agriculture, renewable energy and marine research. The MoUs (Memorandum of Understanding) were signed after bilateral meeting between Prime Minister Narendra Modi and his Portuguese counterpart Antonio Costa. The Prime Minister said that India’s experiences of creating an ecosystem for start-ups could be an exciting area of bilateral engagement.

Source: The Economic Times

Wind power tariff may nose down to Rs 4-4.5 per unit in the latest 1 GW auction

January 8, 2017. Wind tariff is likely to come in between Rs 4 and Rs 4.5 per unit — below the average of around Rs 5 — in the auction being conducted by Solar Energy Corp of India (SECI) to set up 1,000 MW capacities for supply of power to non-windy states. SECI is likely to complete the bidding of the wind projects by the month end. Later last year, SECI had floated tenders for total wind power capacity of 1,000 MW. The competitive bidding is tariff based and will be awarded to those quoting the lowest price (power tariff). SECI will tie up long-term power purchase agreements of developers with non-windy states to whom power will be supplied through the central transmission utility. Under the scheme, the government will not acquire land or equipment as developers will have to do that on their own. They would also run and maintain their plants. According to the scheme, the project capacity will be determined by SECI for each tender, but will not be less than 25 MW for a single project developer at one site. The wind power deployment in the country started in early 1990s. The current wind power installed capacity is nearly 28.08 GW, accounting for around 9 percent of the total installed capacity of 310 GW. Globally, India is at 4th position, after China, the US and Germany, in terms of wind capacity installation. The Centre has set an ambitious target of 175 GW power from renewable energy resources by 2022 and out of this, 60 GW has to come from wind power.

Source: The Economic Times

‘Disputed hydel projects don’t violate IWT’

January 7, 2017. World Bank held talks with India over the disputed Kishenganga and Ratle hydropower projects in Jammu and Kashmir (J&K). While the external affairs ministry chose not to make any comment on the talks, Indian officials again conveyed to World Bank that these projects did not in any way violate the Indus Waters Treaty (IWT) as alleged by Pakistan. While the Kishenganga hydropower station is being built on the Jhelum river, Ratle is on Chenab. Announcing the move to stall the simultaneous processes in December, World Bank noted that its decision was meant to protect the IWT and to help India and Pakistan consider alternative approaches to resolving conflicting interests under the treaty and its application to two hydroelectric power plants.

Source: The Economic Times


As Modi govt looks to cut fuel import bill, HPCL set to build 3 more ethanol bio-refineries

January 7, 2017. After laying the foundation stone for the second generation ethanol blending bio-refinery in Bhatinda, Punjab, in December, state-run Hindustan Petroleum Corp Ltd (HPCL) plans to start work on three other such refineries in the next three months. The other three refineries will be set up in Uttar Pradesh, Bihar and Andhra Pradesh by the company, HPCL said. The National Democratic Alliance government is pursuing the ethanol blending programme wherein it has allowed 10% of ethanol being blended with petrol which will help in reducing the overall fuel import bill of the country. As per the Petroleum Planning and Analysis Cell under the oil ministry of petroleum and natural gas, the country imported 202.85 million tonne of crude oil in financial year 2015-16 at a cost of Rs 4.16 lakh crore. The government has fixed a price of Rs 39 per litre of ethanol for the current financial year. However, the Oil Marketing Companies (OMCs) have been struggling to achieve a target of 5% ethanol blending in the current financial year. In total, 12 such refineries three-four each will be set up by HPCL, Bharat Petroleum Corp and Indian Oil Corp. According to consultancy firm Deloitte India, supply is the biggest challenge that bio refineries face. The Bhatinda plant is expected to produce 3.2 crore litres of ethanol per year which will be sufficient to meet 26% of Punjab’s requirement. It will also help the environment as farmers, who otherwise burn paddy waste, will now be utilised by the plant. The other states which have been identified to have ethanol refineries include Haryana, Madhya Pradesh, Assam, Odisha, Gujarat, Maharashtra and Karnataka at a combined estimated cost of Rs 10,000 crore.

Source: The Financial Express

Jan Shatabdi fitted with solar panels flagged off

January 7, 2017. A solar-panel powered coach, the first of its kind in Jan Shatabdi in Southern Railway, was flagged off. The 4.8 kW solar PV panels have been mounted on a specially designed metallic structure to withstand wind velocity, vibration and shock of the trains. The solar panels will help the Railways in saving about 1,700 litres of diesel per annum per coach. The Southern Railway spent Rs 3.9 lakhs for fitting the 16 numbers of 300 watts solar photovoltaic (PV) panels on the roof of the coach. The solar panels will back up 34 fans and 56 lights in each coach. The Railways will have to replace the existing conventional lights in the coach into light emitting diode (LED) lights before going ahead with the green initiative. The successful performance of this coach will later pave way for having a full train with solar-panel powered coaches.

Source: The Hindu

Varanasi moots biogas-based power plants at 5 places

January 6, 2017. One of the essential features of the Smart City proposals (SCP) is uninterrupted electric supply with at least 10% of the city’s requirements coming from solar energy. With Varanasi’s inclusion in the third list of smart cities, the civic body is also making efforts to make a smart move to utilize solar power and reduce its power bills. The corporation plans to set up biogas-based power plants at five places across the city to generate electricity and reduce load on non-renewable energy (thermal power). Before initiating efforts to switch to renewable sources of energy and install solar panels, Varanasi Municipal Corp (VMC) has roped in Delhi-based Energy Efficiency Services Ltd (EESL), a Central public sector undertaking, to conduct the process of energy audit in premises of corporation head office and its units to cut down on avoidable energy losses.

Source: The Economic Times

US forces India at WTO to open up $1 bn solar power market

January 6, 2017. The United States (US) successfully challenged India’s local content conditions in its solar policy at the World Trade Organisation (WTO) which sent a message to the rest of the world that it would not tolerate “new form of protectionism”, outgoing American Trade Representative Mike Froman has said. Further, this also helped the US to get India to open up its market worth $1 billion, Froman said.

Source: The Economic Times

IIT Madras gets funding from REC for 2 MW rooftop solar panel on campus

January 6, 2017. Rural Electrification Corp (REC) has extended a financial assistance of Rs 1,450 lakhs under Corporate Social Responsibility (CSR) initiative to Indian Institute of Technology Madras (IIT Madras) for the project installation of 2 MW rooftop solar panel (SPV) in its academic zone and hostel building. The main objective of the project is installation of 2 MW roof-top solar PV system in the academic and hostel zone of IIT Madras for power generation in order to reduce peak demand from the grid in the campus and also carbon footprint and dependency on non-renewable energy sources. The energy generated by the solar panels will go to a centralised grid from where it will be distributed across campus. The installation of the solar panel is expected to take around 15 months. IIT Madras currently has CSR activities supported by over 20 companies.

Source: The Economic Times

Suzlon secures 105 MW maiden order from Axis Energy Group

January 6, 2017. Suzlon said it has won a 105 MW wind power project from Hyderabad based Axis Energy Group. Axis Energy Ventures India Pvt Ltd is the flag ship company of the Axis Energy Group and the project is being undertaken by a Special Purpose Vehicle – Axis Wind Farms (Anantapur) Pvt Ltd. The project consists of 50 units of S111 90m tubular tower with rated capacity of 2.1 MW. Located in Anantapur district of Andhra Pradesh, the project is scheduled for completion in two phases; first phase will be completed in March 2017 and the second phase will be completed in June 2017. Suzlon will also be responsible for operation and maintenance services with dedicated Life cycle asset management services for an initial period of 10 years. The project has the potential to provide power to over 50,000 households and reduce 0.22 million tonnes of CO2 emissions per annum. Andhra Pradesh state government’s focus on promoting non-conventional sources of energy has catapulted Andhra Pradesh as a forerunner in the development of renewable energy.

Source: The Economic Times

IFC invests in Hero Future Energies to significantly scale up renewable capacity in India

January 5, 2017. IFC, a member of the World Bank Group, is picking up equity stake in Hero Future Energies, the renewable energy arm of the Hero Group. The investment will help the company expand its renewable energy capacity, provide jobs and facilitate private sector development in renewable energy, IFC said. IFC, together with IFC Global Infrastructure Fund, a private equity fund managed by IFC Asset Management Company, will invest $125 million in equity, enabling the company to set up 1 GW of greenfield solar and wind plants in the next 12 months across India. At present, Hero Future Energies has presence in 12 states in India with a capacity of over 360 MW having solar, wind, and rooftop installations. Over 40% of India’s population lacks access to reliable electricity. The country’s growing energy sector will require $250 billion in investments over the next five years, most of which will have to come from the private sector. With 80% of the country’s energy needs still being met through thermal power, renewable energy is increasingly seen as the solution for bringing universal energy access. In 2014, the Indian government announced a plan of setting up 175 GW of solar and wind energy by 2022.

Source: The Economic Times

Vadodara to host international conference on solar cookers

January 5, 2017. Rural women and experts from across the globe will share their expertise in cooking with free, renewable energy at the sixth Solar Cookers International (SCI) World Conference which will be held for the first time in the country between January 16 and January 18. World’s most influential solar cooking experts including scientists, entrepreneurs, policy makers, educators, field project managers from more than 25 countries will share their work at Muni Seva Ashram in Goraj. More than 40 presenters from 19 countries will present their innovative discoveries in solar cooking work during the three days conference. SCI actively advocates for solar cooking to be included in national-level discussions at the United Nations (UN). Decisions and actions solidified at the 6th SCI World Conference will drive SCI’s advocacy efforts at the UN, solar cooker projects in refugee and internally displaced person camps and research protocols that will be used around the world to evaluate solar cooker quality.

Source: The Economic Times

Azure Power commissions its largest solar project in North India

January 4, 2017. Solar power producer Azure Power announced commissioning of a 150 MW solar power project in Punjab last month which is its largest in North India. For this project, Azure Power had signed a solar power implementation agreement with Punjab Energy Development Agency (PEDA) under its Solar Policy Phase III, the company said. According to the company, the 150 MW solar power plant represents a portfolio of three projects of 50 MW each. The weighted average tariff on these projects is Rs 5.63 per kWh or unit and the company will supply power to Punjab State Power Corp for 25 years. The solar power plant will help in electrifying the nearby areas and create an estimated 1,000 jobs in the locality. Starting with the 2 MW project in 2009, Azure Power now has a total solar portfolio of 225 MW in the state, currently making it the largest owner and operator of solar power plants in Punjab.

Source: Business Standard

India needs to prepare itself to face 2017 environment disasters

January 4, 2017. While environment diplomacy at the UN climate change conference in Marrakech last November became uncertain after Donald Trump, a climate change sceptic, won the US presidential elections, experts have suggested that India must tread its own path and start investing to prepare for the future. Over 330 million people in India were affected by one of the worst droughts that spilled over to neighbouring Sri Lanka, Bangladesh and Nepal as well. A study released at the 22nd Conference of the Parties to the UN Framework Convention on Climate Change (COP22) at Marrakech, Morocco, said that natural disasters annually force about 26 million people into poverty. According to the World Meteorological Organisation, the global temperature is 1.2 degrees Celsius above the pre-industrial level, making 2016 the warmest year followed by 2015 and 2014. The Island Nations now fear of their existence. India at COP22 was praised for its commitments and initiatives in clean energy and coal dependency reduction and it was said that the country is set to “over-achieve” its emission intensity targets. The Government approved the negotiating position adopted by India at the 28th Meeting of the Parties to the Montreal Protocol held last year in October at Kigali in Rwanda. The Montreal protocol aims to phase out the ozone depleting substances. Meanwhile, Environment Minister Anil Madhav Dave also hinted at India’s preparedness as 2016 ended.

Source: Business Standard

International: Oil 

Asia’s diesel profit may rise for first time since 2013

January 10, 2017. Asian refiners’ profit margins from producing diesel in 2017 may rise for the first time in four years as demand for the fuel improves in the infrastructure, construction, mining and oil and gas exploration sectors. A return to normal winter conditions after last year’s warmer-than-average temperatures along with a recovery in crude oil prices that will stabilize the finances in some producer countries will also spur higher margins, analysts and traders said. Diesel is used to fuel heavy vehicles in industry and construction as well as mining equipment and also as a heating fuel in Europe. Globally, diesel demand is expected to rise by 500,000 barrels per day (bpd) in 2017, following a decline of 50,000 bpd in 2016, boosted by a pick-up in drilling activity in North America and an uptick in mining activity in China, Energy Aspects said. Spring refinery maintenance in Asia is expected to be the heaviest since 2014, with 1 million bpd more capacity shut in March and April this year than during the same time in 2016, which will significantly draw down diesel stocks, Energy Aspects said. Still, with Asian refinery capacity expansions expected to exceed 1 million bpd in 2017, mainly in China, Vietnam and India, diesel could come under pressure again in the second half of the year, Energy Aspects said.

Source: Reuters

Oil discoveries seen recovering after crashing to 65-year low

January 10, 2017. The amount of oil discovered last year was the lowest since the 1950s as explorers slashed spending amid the worst downturn in a generation, according to Wood Mackenzie. Oil companies found only 3.7 billion barrels of so-called conventional crude in 2016, 14 percent less than the previous year and the lowest amount since 1952, according to the Edinburgh-based consultant. The results for both 2016 and 2015 are better than forecast a few months ago, but still put discovered oil volumes at little more than a tenth of the yearly average since 1950. Spending on exploration has been gutted since oil prices started falling in 2014 and may drop further this year, Wood Mackenzie said. Total expenditure on exploration could rise to $40 billion to $45 billion in 2018 and further in 2019 if the oil price recovery endures, Wood Mackenzie said. Even as more exploration yields additional discoveries in the years ahead, the recent dismal results will have an effect on global oil supplies in five to 10 years, Wood Mackenzie said. If exploration remained at current levels, the world could see a supply shortfall of 4.5 million barrels a day by 2035, Wood Mackenzie estimates.

Source: Bloomberg

Iraq cuts oil production by 160k bpd under OPEC deal

January 10, 2017. Iraq has cut oil production by 160,000 barrels per day (bpd) since the beginning of January in line with an OPEC (Organization of the Petroleum Exporting Countries) decision to lower output, the oil ministry said. Oil Minister Jabar Ali al-Luaibi said he hoped that by the end of the month production would be cut by 210,000 bpd, in line with the OPEC-agreed cap for Iraq, according to the statement. Iraq said exports from its southern oil ports had reached a record 3.51 million bpd, but it was nonetheless lowering nationwide production. OPEC agreed in November to cut output by 1.2 million bpd from January 2017 to support prices.

Source: Reuters

Oil prices fall as Iran’s exports surge, US adds more rigs

January 9, 2017. Oil prices fell as increased exports from Iran undermined efforts by other oil producers to curb a global fuel supply overhang and as United States (US) drillers increased activity for a 10th straight week. US West Texas Intermediate (WTI) crude futures CLc1 were trading at $53.59 per barrel, down 40 cents, or 0.74 percent. The lower prices were a result of rising exports from Iran that come just as other members of the Organization of the Petroleum Exporting Countries cut supplies in an effort to end a global glut. US energy companies added oil rigs for a tenth week in a row, extending a recovery in activity into an eighth month as crude prices remained at levels at which many drillers can operate profitably.

Source: Reuters

Azeri oil exports via Turkey pipeline rise 1.3 percent in 2016

January 9, 2017. Azeri oil exports through the Baku-Tbilisi-Ceyhan (BTC) pipeline via Georgia and Turkey rose 1.3 percent last year to total 28.86 million tonnes, state energy company SOCAR said. Oil exports through the BTC in 2015 had totalled 28.5 million tonnes, up 1.2 percent. Azerbaijan exports oil via the pipeline from the Azeri, Chirag and Guneshli (ACG) oil fields operated by BP. It also exports oil via Russia, through the Baku-Novorossiisk pipeline and via Georgia by rail and through the Baku-Supsa pipeline. Oil from Kazakhstan and Turkmenistan is also exported through the BTC.

Source: Reuters

Caspian pipeline oil exports up 4 percent in 2016

January 9, 2017. Oil exports via the Caspian Pipeline rose 3.6 percent to 44.3 million tonnes in 2016, data from the Caspian Pipeline Consortium (CPC) showed. Exports are expected to jump by around 40 percent this year as CPC wraps up a five-year expansion plan. The pipeline connects the Tengiz field in Kazakhstan, and a number of other fields, to the sea terminal near Novorossiisk in Russia.

Source: Reuters

DNO makes oil find in Kurdistan region of Iraq

January 9, 2017. Norwegian oil and gas company DNO ASA announced that the Peshkabir-2 well, located in the Kurdistan region of Iraq, has discovered oil in the Cretaceous horizon in the southern flank of the Peshkabir field. Peshkabir-2 was spudded in October 2016 to explore the Cretaceous horizon and appraise the previously tested deeper Jurassic reservoir on a 2012 discovery 11 miles to the west of the company’s flagship Tawke field. DNO operates and holds a 55 percent working interest in the Tawke license which holds the Peshkabir field. Genel Energy plc and the Kurdistan Regional Government hold a 25 percent and 20 percent interest, respectively.

Source: Rigzone

Iraq December oil exports from Basra at record 3.51 million bpd

January 9, 2017. Oil exports from Iraq’s southern Basra ports reached a record high of 3.51 million barrels per day (bpd) in December, the oil ministry said. Iraq’s Oil Minister Jabar Ali al-Luaibi said the unprecedentedly high exports from the south would not affect Iraq’s decision to lower production in January in line with an OPEC agreement, however, according to the ministry. Luaibi welcomed what he said were “improved prices” of oil resulting from the Organization of the Petroleum Exporting Countries (OPEC) decision. The OPEC agreed in November to cut output by 1.2 million barrels per day from January 2017 to support prices. Iraq said it would reduce output by 200,000 bpd to 4.351 million bpd. However, it increased Basra crude supplies for January to its customers in Asia after cutting prices to three-month lows, traders have said, meaning it would have to cut exports from the north to comply with the OPEC agreement. Iraqi crude exports hit an all-time high of 4.051 million bpd in November with production at near record levels of 4.8 million bpd. Reliant on oil sales for most of its income, Iraq had resisted production cuts, saying it needed revenue to fund a war against Islamic State militants who seized a third of the country’s territory in 2014. But it accepted a lower production reference level as part of the OPEC deal that estimated its output at 4.561 million bpd.

Source: Reuters

Russia cuts oil output by 100k bpd in early January

January 9, 2017. Russia cut its oil production in early January by around 100,000 barrels per day (bpd) from the previous month after an agreement with OPEC (Organization of the Petroleum Exporting Countries) to cap global crude output. Russia’s oil and gas condensate output averaged 11.1 million barrels per day (bpd) in the period from January 1 to January 8. This was down from 11.21 million bpd in December and October’s level of 11.247 million bpd, a starting point for output reduction agreed with the OPEC. Russian Energy Minister Alexander Novak had said the targeted level of Russian output was 10.947 million bpd after the production cut deal. He said that Russia plans to reduce oil output by 200,000 bpd in the first quarter and reach the cuts of 300,000 bpd thereafter, as agreed with OPEC last month. Some other countries, including Saudi Arabia, the world’s top oil exporter and biggest OPEC producer, have also reduced their output. Saudi Arabia cut oil output in January by at least 486,000 bpd to 10.058 million bpd, fully implementing OPEC’s agreement to reduce output. Many analysts still expect Russian oil production to grow in 2017 overall and reach a record high due to new fields coming on line.

Source: Reuters

Oil companies may boost E&P spending after 2 yrs of declines: Barclays

January 9, 2017. Global oil and gas companies are expected to raise exploration and production (E&P) spending in 2017 by 7 percent, marking the first increase in three years, Barclays said. Oil prices have recovered after a more than two-year slump caused by a glut due to United States (US) shale oil flooding the market. Prices have risen about 21 percent since the OPEC, which accounts for a third of global oil output, signed an agreement in November to curb supply. Barclays said it expects North American oil companies to lead the spending growth with a 27 percent jump. Production, however, is expected to fall as higher service costs are likely to dilute the effect of a larger budget, the brokerage said. International spending is expected to increase 2 percent, according to Barclays’ survey of 215 global oil and gas companies. Spending on offshore projects is expected to fall 20-25 percent in 2017, compared with estimates of a 34 percent fall in 2016.

Source: Reuters

Argentina to lift 15-year-old duty on oil exports

January 8, 2017. The center-right government of Argentine President Mauricio Macri has decided to lift a 15-year-old export duty on oil and oil products. Macri has been trying to spur energy investments to boost lagging production as the economy is mired in a prolonged recession.

Source: Reuters

Angola cuts oil production after OPEC agreement

January 7, 2017. Angolan state oil company Sonangol has cut output by 78,000 barrels per day to (bpd) to 1.673 million bpd as part of an OPEC (Organization of the Petroleum Exporting Countries) agreement to lower supply from January 1, it said.

Source: Reuters

China extends tax waivers for oil, gas drilling equipment

January 6, 2017. China is extending tax waivers for importing key drilling and production equipment for both onshore and offshore oil and gas development, the finance ministry said. The waivers for both import tariffs and value-added tax apply for the period between January 1, 2016, and the end of 2020, the ministry said. The ministry announced in an earlier statement a tax waiver for drilling equipment used in 20 onshore oil and gas fields in western China in order to boost oil production. The tax waiver applies to oil blocks and natural gas reserves in four regions including Xinjiang, Inner Mongolia, Tibet and Qinghai province, the ministry said.

Source: Reuters

Shell battles Nigerian communities in high-stakes London lawsuit

January 6, 2017. A court in London will decide in coming weeks whether Royal Dutch Shell can face trial in the United Kingdom (UK) over oil spill allegations in Nigeria, a decision some legal experts predict could attract more cases against multinationals in Britain. The High Court will judge whether members from two communities, Bille and Ogale in Nigeria’s oil-rich Delta region, can sue the Anglo-Dutch company in British courts. The communities say Nigerian courts are unfit to hear the case against Shell subsidiary Shell Petroleum Development Company of Nigeria (SPDC). Shell also denies responsibility for the spills, which it says were due to sabotage and illegal refining. Shell said 92 percent of all oil spilled from SPDC facilities in 2009-13 was a result of theft, sabotage or illegal refining.

Source: Reuters

Statoil may stop drilling in US Gulf of Mexico

January 6, 2017. Norway’s Statoil is considering whether to end its costly search for oil and gas in the United States (US) Gulf of Mexico, the company said. Statoil has been part of several discoveries in the region as a junior licence partner, but the company has failed to strike oil in the drilling campaigns it has operated, despite spending billions of dollars. Statoil’s latest well in the region was drilled some 18 months ago and the company will not spud any in 2017.

Source: Reuters

Iran in talks to export 4 mn barrels of oil per month to Philippines

January 6, 2017. National Iranian Oil Company (NIOC) is negotiating with the Philippines over exporting four million barrels of crude per month to the country. The NIOC is in talks with Philippines’ National Oil Company (PNOC) to export 4 million barrels per month. PNOC is one of the 11 companies in a consortium of international companies, known as Pergas, which has signed a non-disclosure agreement (NDA) with the National Iranian South Oil Company (NISOC) for carrying out studies over two oilfields in Iran. Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), won an exemption from the group’s production cuts agreed on November 30 and may raise output slightly. Iran exports more than 500,000 barrels per day of refined products, mainly fuel oil, petroleum gas and naphtha to Asian markets, according to OPEC

Source: Reuters

Indonesia lowers sulphur content of subsidised diesel

January 5, 2017. Indonesia has lowered the sulphur content of its subsidised diesel in line with a global shift to move towards using cleaner fuel to curb pollution. State-owned Pertamina reduced the sulphur in its diesel to 2,500 parts per million (ppm) from the current 3,500 ppm from this January. Indonesia remains one of the few countries in Asia to still use diesel with a high sulphur content, traders said. This is the first time in at least 10 years that the country has lowered the sulphur content of the fuel, mainly used to drive trucks and buses in the country. Pertamina’s overall diesel imports have been falling in the past two years due to a hike in domestic retail prices and a higher local biodiesel mandate keeping a lid on demand, though demand for diesel use in the mining sector has increased. The country’s diesel demand fell to 480,000 barrels per day in 2016, from 483,000 bpd in 2015, said Nah. Imports of the fuel fell to 110,000 bpd in 2016 from 140,000 bpd. While Indonesia’s imports of diesel are expected to be stable this year, shipments of higher quality diesel are expected to increase.

Source: Downstream Today

Myanmar’s breakneck growth bring surge in fuel oil shipping from Singapore

January 5, 2017. Myanmar’s oil imports are surging to fuel a fast-growing economy and rebuild rotting infrastructure, creating a small but profitable route for ships making a beeline for the emerging southeast Asian nation from the regional hub of Singapore. Servicing growth that could top 8 percent this year is a clutch of small tankers ferrying gasoil and diesel from Singapore 2,000 kilometers north to Myanmar. Shipping data shows that around 20 small tankers with a combined capacity of around 220,000 deadweight tonnes (DWT) are currently shipping refined products into Myanmar, virtually all from Singapore. That’s about twice as many vessels as were on that route around a year ago, according to one shipper. Myanmar’s diesel demand rose to 110,000 barrels per day (bpd) over September to October 2016, from 80,000 to 90,000 bpd over the same period in 2015, according to Energy Aspects. Its gasoil imports are expected to hit 37,250 to 50,000 bpd in 2017, up from just around 17,400 to 19,900 bpd in previous years, according to involved trading sources.

Source: Reuters

International: GAS

Russia’s Gazprom reports record gas exports as Europe shivers

January 7, 2017. Russia’s Gazprom said its daily supplies of natural gas to countries outside of the former Soviet Union have reached a record high due to cold weather in Europe. Gazprom pumped 615.5 million cubic metres of gas to countries outside the former USSR borders, beating its previous record hit by nearly 1 million cubic metres. Gazprom delivers around a third of EU’s gas, and the recent spike in European demand boosted Gazprom’s supplies through Nord Stream pipeline to an all-time high of 165.2 million cubic metres in the past few days, up from 160.75 million cubic metres. Gazprom said. The current volumes of gas supply, if extrapolated throughout the year, exceed the Nord Stream’s projected volumes by 10 percent, Gazprom said.

Source: Reuters

Global LNG-Prices edge higher as returning production weighs

January 7, 2017. Asian spot liquefied natural gas (LNG) prices were buoyed by new purchases and tenders but stayed below recent two-year highs this week as two outage-hit plants resumed output. The price of LNG for February delivery rose to $9.75 per million British thermal units (mmBtu), 25 cents above last week’s levels, traders said. Though Japanese and Chinese demand cooled, traders said Korea Gas Corp was open to possible purchases despite having secured a recent shipment from Angola and contracted for winter cargoes in December via a tender. Traders took this as a sign of slack demand in a market that has so far proven surprisingly resilient to rising Asian prices, up 137 percent since mid-April. Turkey and France accounted for the biggest share of Atlantic LNG demand. Since embarking on a LNG buying spree in December to meet higher gas consumption due to cold weather, Turkey continues to be an attractive market for Atlantic producers, traders said.

Source: The Economic Times

ExxonMobil introduces new technology to dehydrate natural gas

January 6, 2017. ExxonMobil has introduced a new technology designed to dehydrate natural gas, eliminating the need for conventional dehydration tower technology. The cMIST technology uses patented absorption system inside pipes to dehydrate natural gas, making it ideal for deployment at both land-based and offshore natural gas production operations. The company said that the technology represents a step-change in efficiency and significantly reduces operational footprint.

Source: Energy Business Review

JERA imports Japan’s first liquefied shale gas cargo from US

January 6, 2017. Japan’s JERA Co said it imported the country’s first liquefied shale gas cargo from the United States (US) as part of efforts to diversify its supply. This also marks Japan’s first import of liquefied natural gas (LNG) produced in the contiguous United States. Japan previously had imported US LNG only from Alaska. JERA said the vessel Oak Spirit, which passed through the Panama Canal, arrived at Chubu Electric’s Joetsu LNG terminal facing the Sea of Japan. JERA is the world’s biggest importer of LNG. The Tokyo-based firm bought the LNG from Cheniere Marketing International LLP. The 70,000-tonne cargo was produced at the Sabine Pass LNG Terminal in Louisiana and was loaded. The import was part of a short-term contract between the two firms in which JERA is to take delivery of 700,000 tonnes of U.S. LNG by January 2018.

Source: Reuters

US set to become energy exporter by 2026: EIA

January 5, 2017. The United States (US) is projected to become a net energy exporter over the next decade due to rising natural gas exports and falling petroleum product imports, the US Energy Information Administration (EIA) said. While the US has been a net energy importer since 1953, declining energy imports and growing exports that started over the past year will allow that trend to switch by 2026, the EIA said. In late 2015, the U.S. government lifted a decades-old ban on U.S. crude exports, while natural gas exports from the Lower 48 began in 2016.

Source: Reuters

International: Coal

US coal production fell by 17 percent in 2016, its lowest level since 1978

January 10, 2017. According to the United States (US) Energy Information Administration (EIA), coal production in the US contracted by 17% in 2016 compared to 2015, continuing an eight-year decline from a peak in 2008. In 2016, US coal output reached its lowest level since 1978 at 743 million tonnes (mt). Production in the five major coal regions fell by at least 15% (from 16% to 26%) in the Northern and Central Appalachian basins, the Rocky Mountain region, and the Illinois Basin. Coal production in the Powder River Basin fell by 17%. The share of coal in power generation continued to decline in 2016 and was even surpassed by gas. US coal exports declined by 23% to 57 mt, due to a lower demand from Europe and South Korea.

Source: Enerdata

China top coal province sets out consolidation plan

January 8, 2017. China’s Shanxi province, the country’s top coal producer, plans to cap output and consolidate the industry around big producers over the next four years in a bid to boost efficiency, according to the provincial government. The province’s annual coal output would be capped by 2020 at 1 billion tonnes and capacity at 1.2 billion tonnes annually by 2020. Shanxi produced nearly 1 billion tonnes of coal in 2015. Shanxi, in the country’s north, accounts for about a quarter of coal production in China, which has been working to curb overcapacity and a supply glut of the fossil fuel as part of a longer term plan to shift to cleaner fuels. For thermal coal, which is used in power generation, Datong Coal Mining Group and China Coal Pingshuo Group will become the top hubs, each with an annual capacity of 100 million tonnes, the province said. Shanxi’s central region was expected to become a coking coal base. Shanxi Coking Coal would be the top producer, operating 107 mines with an annual capacity of 181 million tonnes. It also has coal washing capacity of 120 million tonnes. The province currently supplies coking coal to China’s top steel mills and also exports to Japan and Korea.

Source: Reuters

International: Power

Power generation cost may rise this year: Pangilinan

January 10 2017. Power generation costs could rise this year due to higher prices of fuel and coal, Manila Electric Company (Meralco) Chairman Manuel Pangilinan said. Pangilinan refused to say whether this would result to higher electricity bills for consumers. He said Meralco is required by law to buy power at the lowest possible cost. He said sales volume would likely grow by 3 to 4 percent this year, as electricity demand mirrors robust economic growth.

Source: ABS-CBN News

Turkey does not see gas, power price hikes in 2017 despite cost increases: Energy Minister

January 6, 2017. Turkey does not envisage electricity and gas price hikes in 2017 despite recent cost increases, Energy Minister Berat Albayrak said. Albayrak said Turkey had taken steps in the last two days to increase security around critical power and natural gas infrastructure after recent power cuts.

Source: Reuters


Paks-3 nuclear plant’s lifetime extended to 2036

January 10, 2017. Hungarian power utility MVM has been allowed by the Hungarian National Atomic Energy Office (OAH) to extend the operating licence of the third reactor of the Paks nuclear power plant by another 20 years. The 473 MW VVER-440 PWR unit was commissioned in 1986 and its operating licensed was due to expire on 31 December 2016. With this license extension, the unit will continue operations until the end of 2036. A similar application has been submitted to extend the lifetime of the fourth reactor until 31 December 2037; units 1 and 2 have already been allowed to operate until 2032 and 2034, respectively. MVM also aims to add two new 1,200 MW Russian-built VVER-1200 reactors on the site of the existing nuclear facility. Construction of the Paks expansion is expected to start in 2018 (pending approval by the European Commission), with commissioning scheduled in 2025-2026.

Source: Enerdata

China’s solar panel manufacturers target Middle East market

January 9, 2017. Chinese solar panel manufacturers are targeting the Middle East, North Africa, and South Asia markets, with large-scale investment in renewable energy expected to drive a rapid increase in demand for imported technology. Local demand has underpinned the rise of China’s solar energy industry, but faced by a slowdown in domestic solar energy projects and reduced subsidies, manufacturers are looking to increase their already large export trade as the key to future growth. Emerging markets offer some of the strongest opportunities, particularly in regions with high levels of solar intensity.

Source: Energy Business Review

CGN kickoff construction of Fangchenggang-4 nuclear project

January 9, 2017. China General Nuclear Power Corp (CGNPC) has started construction of Fangchenggang nuclear power plant unit 4 in the Guangxi Autonomous Region of China in end December. The 1000 MW Hualong One reactor is planned to be commissioned in 2020. CGNPC wants the Fangchenggang, using Hualong One reactor, to be used as a reference plant for CGNPC’s Bradwell B Project in the UK.

Source: Enerdata

France’s DCNS creates new marine renewable energies unit

January 9, 2017. French naval and defense firm DCNS, in partnership with Société de Projets Industriels (SPI fund), has established an offshore renewables business unit, DCNS Energies. The new unit, which will focus on marine renewable energies, is also owned by Technip Group and BNP Paribas Development. DCNS will focus on development and commercialize three technologies for the production of electricity from marine renewable energies (MRE) prior to moving on to the industrial phase in the near future. The technologies include tidal turbine power that uses the kinetic energy of sea currents, Ocean Thermal Energy Conversion (OTEC) and offshore wind energy via semi-submersible floats.

Source: Energy Business Review

TerraForm Power to sell 365 MW of UK solar projects to Vortex

January 9, 2017. TerraForm Power has agreed to sell 365 MW of operational solar plants in the United Kingdom (UK) to Vortex, a renewable energy platform managed by EFG Hermes’ private equity arm, in a deal worth £470 mn ($582 mn). As part of the deal, Vortex will acquire 24 operating solar projects in the UK. The portfolio, which was assembled by TerraForm Power in 2014 and 2015, is said to be one of the largest portfolios of solar projects in the country. After the deal’s completion, TerraForm will continue to own an 11 MW operating plant. The company will sign new contracts with Lightsource Renewable Energy for operations and maintenance, and management services.

Source: Energy Business Review

UAE nuclear power plant 75 percent complete

January 7, 2017. The United Arab Emirates (UAE) first nuclear energy complex is 75 percent complete, Emirates Nuclear Energy Corp (ENEC) said. The government controlled ENEC in Abu Dhabi said that units three and four of the nuclear energy complex are half complete, marking the 75 percent completion of the total complex. All four units will deliver safe, clean, reliable and efficient nuclear energy to the UAE grid, pending regulatory reviews and licensing, the ENEC said. The Barakah nuclear energy plant, in the UAE’s southwestern region Al-Gharbia, is scheduled for completion in 2020. With four reactors online, the facility will deliver up to a quarter of the electricity needs of the UAE. The Gulf Arab state, a major oil supplier, aims to save up to 12 million tons in carbon emissions every year through the nuclear plant which will be the first in the Arab world.

Source: Business Standard

Indian Point nuclear power plant to close by 2021

January 6, 2017. The Indian Point nuclear plant will shut down by April 2021 under an agreement New York State reached with Entergy, the utility company that owns the facility in Westchester County. Under the terms of the agreement, one of the two nuclear reactors at Indian Point will permanently cease operations by April 2020, while the other must be closed by April 2021. Despite the political opposition to Indian Point, which is perched on the edge of the Hudson River in Buchanan, New York, the plant is an important supplier of inexpensive power to the metropolitan area. It has the capacity to generate more than 2,000 MW, or about one-fourth of the power consumed in New York City and Westchester County. The agreement also provides for flexibility if the state cannot find a replacement for Indian Point’s energy: The deadlines in 2020 and 2021 can be pushed to 2024 and 2025 if both the state and Entergy agree.

Source: The New York Times

US EPA seeks to ban Genscape from verifying renewable fuel credits

January 4, 2017. The United States (US) Environmental Protection Agency (EPA) wants to revoke Genscape’s ability to verify biofuels compliance credits after regulators say it failed to detect a massive fraud perpetrated by companies it was monitoring. The announcement, made, will likely bolster calls to reform the US biofuels programs from critics such as investor Carl Icahn, who was recently named as a special adviser to President-elect Donald Trump. Genscape has 60 days to oppose the EPA notice, and the company can continue to verify credits until the agency issues it final order. The EPA action comes after regulators discovered Kentucky-based Genscape verified millions of renewable fuel compliance credits that were fraudulently generated in 2013 and 2014 by two companies, Gen-X Energy Group Inc and Southern Resources and Commodities LLC. The EPA requires U.S. refiners to either blend biofuels such as ethanol into gasoline or buy credits – known as Renewable Identification Numbers (RINs) – from biofuel producers or blenders that are generated for every gallon of renewable produced. Independent US refiners have called the plan overly burdensome and misguided, while supporters say it has achieved its goal of boosting volumes of renewable fuel in the United States.

Source: Reuters


Growth in Consumption of Petroleum Products in India

Major Petroleum Products 2014-15 2015-16 Growth (%)
LPG 18.00 19.62 9
Naphtha 11.08 13.27 19.8
MS 19.08 21.85 14.5
ATF 5.72 6.26 9.4
SKO 7.09 6.83 -3.7
HSD 69.42 74.65 7.5
All Petroleum Products 165.52 184.67 11.6

Trends in Consumption Growth of Petroleum Products


Source: Petroleum Planning & Analysis Cell


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

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