MonitorsPublished on Feb 13, 2017
Energy News Monitor | Volume XIII: Issue 35

Indian Coal Imports lose Steam

Coal News Commentary: January 2017


Since last year India has been hailed as the leader of imported coal demand growth rates but this month it was reported that the title had reverted back to China. India’s coal imports in 2016 totalled 194.93 MT according to Thomson Reuters. This was 5.4 percent lower than the 206.6 MT recorded for 2015, and also less than the 255.5 MT imported by China in 2016 according to Reuters.  Reuters also reported that despite the fall India was still importing nearly four times as much as it did a decade ago, and almost double the amount from five years back.  CIL has a target for production of 575 MT of coal for FY17 but there is doubt if this target would be met.  Output for the period April to December was 378 MT a rate that if maintained for the final three months of the financial year would see production closer to 504 MT.  The Coal Ministry is reported to be optimistic that CIL would raise output to 660 MT in FY18 and to 1 BT by FY20.  This raises questions over prospects for imported thermal coal in India.  Given that demand for power is sluggish, domestic coal production alone may be sufficient to meet demand growth in the future.  Coalswarm which tracks coal power plant installation, reports that India’s pre-construction pipeline of coal-fired power generation dropped by 40 GW in 2016. Some analysts have interpreted this as a consequence of the growth in solar power generation. But industry insiders think that there is unexplained decline in the demand for power.

This month saw some reports on growing concerns over the price of coking coal. Worried over domestic coking coal price hike SAIL was reported to be in negotiations with CIL for possible reduction in price.  CIL arms BCCL and CCL increased the price of coking coal by about 20 percent recently. The price of various grades of coking coal of CIL is between Rs 2,400 and Rs 5,050/tonne. SAIL has existing captive coking coal production of nearly 0.5 MTPA. According to the Indian Steel Association the global coking coal price which was at $80/tonne (Rs 5355/tonne @ Rs 66.94/$) in January last year rose to $283/tonne (Rs 18944/tonne) in December. Currently it is at $193/tonne (Rs 12919/tonne).


Staying with the price of coal, Chhattisgarh’s request for a revision in royalty rates on coal to 30 percent from the existing 14 percent ad-valorem, is expected to push up the cost of electricity by 7 percent or 10-12 paisa/kWh according to India Ratings. The state government has constituted a study group to consider the revision in the royalty rates based on the request. According to India Ratings, assuming a pithead price of Rs 720/tonne of coal, the royalty increase would lead to a higher contribution towards DMF at 30 percent of royalty and NMET at 2 percent of royalty, which translates into a higher cost of electricity generation by 10-12 paisa/kWh.  Since January 2015, coal consumers have been hit by rising prices due to the imposition of DMF and NMET (effective January 2015), taking the effective royalty rate up to 18.48 percent from 14 percent. Additionally, if the royalty rates were to increase to 30 percent, the effective royalty rate would be 39.6 percent including DMF and NMET contribution. Furthermore, the clean energy cess increased to Rs 400/tonne from Rs 200/tonne in the Union Budget 2016. During May 2016, Coal India Ltd (CIL) increased the ROM prices for the most widely supplied grades of coal to the power sector by an average of 16 percent. Similarly from 1 April 2015, freight charges for coal were hiked by 6.3 percent. Therefore, the variable cost of generation for a plant situated 500 km from the mine which used to receive grade G13 coal, has increased by 24 percent to Rs 1.69/kWh. However on the positive side, coal linkage rationalisation for companies has reportedly led to a decline in the transportation costs.  Industrial power rates are a critical pre-investment consideration for manufacturers and given that bulk of the coal-based capacity in India is on a cost pass-through basis, the ultimate impact of such hikes is passed on to consumers. Such regular hikes in one form or the other are not a healthy sign for thermal power generators.

Even after the hike, the coal supplied domestically by CIL continues to be cheaper than the imported coal. Coal has seen a change in royalty rate in 2012, with the royalty being changed to the ad valorem basis at 14 percent from the earlier system of tonnage based and ad-valorem with royalty on Grade D/E coal being Rs 70/tonne plus 5 percent of CIL run of the mine price.  Increase in royalty up to 30 percent for the top three states could result in an additional income between Rs 5 billion to Rs 39 billion, depending on the final royalty rate according to India Ratings.

Rest of the World

The expectation that Obama penalties on coal production and use in the USA would be reversed by Trump were proved correct as Congressional Republicans were reportedly moving swiftly to repeal Obama administration regulations aimed at better protecting streams from coal mining debris. Legislation to block the rules, which would supposedly kill jobs in the coal industry, which is reeling from competition from cleaner-burning natural gas have been prepared in such a way that it is immune to filibusters by Senate Democrats. The Stream Protection Rule that the legislation targets is the latest in a series of overreaching Obama-era regulations that have targeted America’s coal industry.  The stream protection rules would be the first of several recent Obama administration regulations to be targeted by using the fast-track procedures. While in power Obama easily repelled such moves with vetoes. The regulations would have tightened exceptions to a rule that requires a 100-foot buffer between coal mining and streams. It also would require coal companies to restore streams and return mined areas to conditions similar to those before mining took place.

Environmental groups such as the Sierra Club support the rules, saying they would protect people in coal regions from health risks from pollutants like mercury.

The first part of the commentary reported that India had lost its position as the number one coal importer to China.  If this is true then the news that China’s energy regulator had ordered 11 provinces to stop more than 100 coal-fired power projects, some of which are under construction, with a combined installed capacity of more than 100 GW is surprising.

NEA had reportedly suspended coal projects already under construction in some provinces and autonomous regions including Xinjiang, Inner Mongolia, Shanxi, Gansu, Ningxia, Qinghai, Shaanxi and other north western regions worth about $62.30 billion. The move was reportedly in line with the government’s prolonged effort to produce power from renewable sources such as solar and wind, and wean the country off coal, which accounts for the majority of the nation’s power supply. Closure of coal based power plants are generally reported as victory for renewable energy but this perspective overlooks the impact of a stagnant economy and an aging population on power demand.


Plugging LPG subsidy leaks leads to Rs 210 bn savings

February 7, 2017. As many as 3.3 crore fake, ghost and duplicate liquefied petroleum gas (LPG) connections have been blocked, leading to saving of Rs 21,000 crore in subsidies, Oil Minister Dharmendra Pradhan said. As a result, poorest of the poor never had access to LPG. In 2014, almost half of Indian households didn’t have LG connections. He said the Direct Benefit Transfer (DBT) of LPG was launched in 2014 wherein subsidy was directly paid into the bank accounts of the beneficiaries. The scheme is benefiting over 176 million consumers and over Rs 40,000 crore or $6.5 billion of subsidy has been transferred directly to the beneficiaries bank accounts in the last two years. He said an intensive exercise was also carried out for identifying duplicate, fake, ghost and inactive domestic LPG connections. As on April 1, 2015, 33.4 million connections were identified and blocked, saving Rs 21,000 crore subsidy in 2014-15 and 2015-16.

Source: The Times of India

Crude processing to edge up in 2017/18: IOC

February 7, 2017. Indian Oil Corp (IOC) expects its crude processing to inch up in 2017/18 despite planned maintenance at some plants. The company said that “high runs” at one of its biggest plants, on the east coast, would offset the impact of maintenance work at other facilities. IOC, which accounts for over a third of India’s 4.6 million barrels per day (bpd) of refining capacity, is likely to process 1.4 million bpd in the fiscal year that starts in April. That would be up from 1.34-1.36 million bpd in the current year. IOC plans to completely shut its 160,000 bpd Mathura refinery in northern India for a month for planned maintenance in 2017/18. It also expects to carry out maintenance on units at its 120,000 bpd Barauni refinery in the eastern state of Bihar and Koyali facility in the western state of Gujarat, which can refine 274,000 bpd. IOC currently processes small amounts of heavy grades from Latin America, with the Middle East meeting the bulk of its demand. The company has renewed a deal with Iraq to buy about 312,000 bpd oil for 2017. For 2016/17 it has a deal to purchase 114,000 bpd from Saudi Aramco, and 100,000 bpd each from Kuwait and Iran. It has a term deal with the United Arab Emirates to buy 50,000 bpd oil. The company will invest about Rs 40 billion ($594 million) on installing an isomerisation and hydrogent unit at Paradip to produce Euro VI compliant fuels from April 2020. It plans to raise Paradip’s capacity to about 400,000 bpd by 2021-22.

Source: Reuters

NGT to continue hearing on Chennai oil spill

February 7, 2017. The National Green Tribunal (NGT) will continue the hearing on the plea on oil spill off Tamil Nadu coastline. Earlier, the NGT had sought a report on the Chennai oil spill within 24 hours. The tribunal asked the Centre to present the facts of the oil spill and the measures being taken to clean up the sludge. Ten days after the oil spill, close to 5,000 volunteers are struggling to clean up the Chennai coastline of the sludge. The development came after a petition, which has also sought constitution of an expert committee to oversee and monitor the entire clean-up process and assess the damage caused to the environment.

Source: The Economic Times


IOC may move court if Odisha ends tax sops to refinery

February 7, 2017. Indian Oil Corp (IOC) may go to court if the Odisha government carries out its threat to withdraw tax incentive to its Paradip refinery, in a confrontation that could dent the state’s credibility as an investment destination. IOC has rejected all arguments by the state and said it was “not fair” to withdraw tax incentive now. Odisha offered incentives in 2004 to lure IOC to build a refinery in the state that could generate jobs and boost economic activity.

Source: The Economic Times

Spot crude buying time cut to two hours by IOC to boost margins

February 6, 2017. Indian Oil Corp (IOC) has brought down the buying time for some of its spot cargoes to two hours, sharply shrinking from 30 hours just one and a half years ago, a move that would help the country’s largest refiner bring down crude cost and boost margin. IOC picks 30% of its crude from the spot market, a share that went up from 20% in the past two years as state refiners tried to take advantage of the falling crude prices. Last year, the state refiners were also unshackled by the government to decide on their spot purchasing mechanism, which has now helped IOC drastically reduce purchase time. For the past few months, the company has undertaken a pilot in which it calls for pre-specified crude from pre-specified sellers within a price band, the company said. Each transaction has taken about two hours and the company has been able to purchase a few cargoes so far, the company said. IOC plans to import 50.3 million tonnes of crude oil in 2017-18, about 0.9 million tonne higher than in the current year. The increase in supply will likely be absorbed by the 15 million tonnes Paradip refinery expected to reach 100% capacity utilisation next fiscal year from about 80-85% now. With 15.6 million tonne, Iraq is the biggest supplier to IOC. Saudi Arab comes second with 5.7 million tonnes. West Asia remains a big source of supplies to IOC, which controls about a third of the Indian refining capacity, and has been diversifying its supply bases to multiple regions. A global collapse in oil prices in the past two years has boosted the bargaining power of big crude importers like India with respect to the oil producers.

Source: The Economic Times

Merged PSU energy giant to have global edge: IOC Chairman

February 6, 2017. The merger of state-run energy companies will provide India the muscle to acquire assets abroad and negotiate better, but the business model of the new entity thus created will be key to its success, Indian Oil Corp (IOC) Chairman B Ashok said. Finance Minister Arun Jaitley in the Union Budget announced a proposal to merge public sector undertaking (PSU) oil companies to create an integrated oil behemoth, which could potentially top $100 billion in market value and enter the league of global oil heavyweights. IOC is the top-ranking Indian company on the ‘Fortune 500’ list for 2016 at 161, with the other two state-run oil marketing companies also making it to the list. The merged entity would be catapulted to the league of global majors such as BP, which has a market value of $115 billion. On concerns that the merged entity may have to cut down on staff to reduce duplication and redundancies, Ashok said the government will have to work on a model that works best to leverage the strengths of these companies.

Source: The Economic Times

Govt to build two strategic crude oil storages in Odisha, Rajasthan

February 1, 2017. In a bid to insulate the country from volatility in global oil market, the government will build two more underground crude oil storages in Odisha and Rajasthan. Announcing the two new facilities at Chandikhol in Odisha and Bikaner in Rajasthan, Finance Minister Arun Jaitley in his Budget for 2017-18 also exempted income of foreign company, which books a capacity in the strategic storages, from sale of leftover stock. India has already built underground storages in rock caverns at Visakhapatnam, Mangalore and Padur. The storage at Chandikhol will be an underground rock cavern while the one at Bikaner will be an underground salt caverns. Phase-II storage will have a total capacity of 10 million tonnes (MT), which includes 4.4 MT storage capacity at Chandikhol and 5.6 MT at Bikaner. Abu Dhabi National Oil Company (ADNOC) signed an agreement to hire half of the capacity of India’s maiden strategic oil storage at Mangalore. India is 81 percent dependent on imports to meet its crude oil needs. ADNOC will hire half of the 1.5 MT Mangalore facility.

Source: The Economic Times

India’s 2016 Iran oil imports hit record high

February 1, 2017. India’s annual oil imports from Iran surged to a record high in 2016 as some refiners resumed purchases after the lifting of sanctions against Tehran, according to ship tracking data and a report. The sharp increase propelled Iran into fourth place among India’s suppliers in 2016, up from seventh position in 2015. It used to be India’s second-biggest supplier before sanctions. For the year, the world’s third biggest oil consumer bought about 473,000 barrels per day (bpd) of oil from Iran to feed expanding refining capacity, up from 208,300 bpd in 2015, the data showed. In December, imports from Iran more than doubled from a year earlier to about 546,600 bpd. In 2015 refiners had slowed purchases due to sanctions which choked payment routes, insurance and halved Iran’s exports. Indian refiners Reliance Industries, Hindustan Petroleum, Bharat Petroleum and HPCL-Mittal Energy Ltd (HMEL) last year resumed imports from Tehran, attracted by the discount offered by Iran. In April-December, the first nine months of this fiscal year, Iranian supplies to India averaged a record 530,300 bpd, up from about 400,000 bpd before sanctions tightened against Tehran. India’s 2016 Iranian oil imports were the highest in at least six years, according to the data. Government data going back over a longer period shows the average was the highest since the 2001-02 fiscal year. Overall, India imported 4.3 million bpd oil in 2016, up 7.4 percent from the previous year. Rising imports from Iran and Iraq lifted the Middle Eastern share in India’s crude diet to 64 percent in 2016, reversing a declines in recent years, partly due to rising prices for Atlantic Basin oil tied to Brent. The average premium for Brent jumped against Dubai crude to more than $3 a barrel in 2016 from around $1.80 in 2015. Iran’s share of Indian oil imports surged to 11 percent in 2016 from 5 percent in 2015. Saudi Arabia remained the top supplier to India last year followed by Iraq and Venezuela

Source: Reuters

India looks at creating oil giant to take on global rivals

February 1, 2017. India plans to create a giant oil company by combining state-owned firms, Finance Minister Arun Jaitley said, as the world’s third largest oil consumer looks to better compete with global majors in acquiring foreign assets. New Delhi is struggling to raise local oil production and imports about 80 percent of its oil. Prime Minister Narendra Modi in 2015 set a goal of cutting that to 67 percent by 2020. India is replacing China as the driver of global oil demand growth and the International Energy Agency expects it to account for a quarter of global energy use by 2040. India has about a dozen state-run oil and gas companies – including Indian Oil Corp (IOC), Oil and Natural Gas Corp (ONGC), Hindustan Petroleum Corp (HPCL). But alone they do not have the financial power to rival global oil majors in bids for overseas oil assets.

Source: Reuters


BP sees new output from eastern offshore KG-D6 block after 2020

February 7, 2017. UK-based oil and gas major BP Plc said new natural gas production from the flagging eastern offshore KG-D6 block will start after 2020, at least three years later than previously planned schedule. BP said Satellite, R-Series and D-55 discoveries will start production “beyond 2020.” The company holds 30 percent interest in Reliance Industries Ltd (RIL)-operated KG-DWN-98/3 or KG-D6 block in the Bay of Bengal. The discoveries, it said, are currently in “design” stage, implying project engineering work was in progress and construction is yet to begin. RIL holds 60 percent interest in the block while the remaining 10 percent is with Niko Resources of Canada. RIL-BP currently produce gas from Dhirubhai-1 and 3 field and oil and gas from MA field, three of the over one-and-half dozen discoveries made in KG-D6 block. The fields, which began gas production in April 2009, hit a peak output of 69.43 million standard cubic meters per day in March 2010 before water and sand ingress shut down well after well. The block currently produces around 8.7 million metric standard cubic meter per day (mmscmd). Work for developing R-Series and satellite discoveries has begun. A field development plan (FDP) approved in August 2013 envisages $3.18 billion investment in R-Series or D-34 gas field to produce 13-15 mmscmd of gas for 13 years. RIL-BP recently submitted FDP for two other discoveries D-29 and 30, which formed part of R-Culster. Besides, another FDP of $1.529 billion for four satellite gas discoveries – D-2, 6, 19 and 22, was approved in 2012. The four fields can produce 10.36 mmscmd. Both of these productions were to start by 2017. The two partners have also submitted a FDP of D-55 or MJ find. It will take 36-42 months to build and install new facilities on these fields and to drill new wells and hook them up. BP said it had a net impairment reversal in the fourth quarter of $442 million, comprising impairment charges of $339 million offset by impairment reversals of $781 million. BP said the $319 million reversal relates to Block KG D6.

Source: The Economic Times

ONGC’s $11.5 bn AP venture may stress cash flows: Moody’s

February 6, 2017. Oil and Natural Gas Corp (ONGC)’s decision to invest $11.5 billion in Andhra Pradesh (AP), at a time when gas prices in India are falling, may put its cash flow under pressure, US rating agency Moody’s said. In January, ONGC signed a Memorandum of Understanding with the AP government to invest $5.07 billion in bringing to production 10 oil and gas discoveries in the Bay of Bengal block KG-DWN-98/2. Prices of domestically produced natural gas were revised down from October 1, 2016, to $2.5 per million British thermal unit (mBtu) on gross calorific value (GCV) basis, from the earlier $3.06 mBtu. The revised prices are effective till March 31, 2017. For natural gas produced from difficult deep water and ultra-deep water areas, prices are capped at $5.3 mBtu, which is among the lowest in Asia, the report said.

Source: The Economic Times

FM halves import duty on LNG to 2.5 percent: Budget 2017

February 2, 2017. In a bid to promote gas-based economy, Finance Minister (FM) Arun Jaitley halved the import duty on liquefied natural gas (LNG) to 2.5 percent, a move that will help cut cost of power and fertiliser production. The move will result in cheaper import of fuel, which makes up for roughly 40 percent of the gas consumed in the country, resulting in lower cost of power generation, urea and petrochemical production. Oil Minister Dharmendra Pradhan said the move is in line with the vision of the government to make India a gas-based economy by cutting reliance on polluting liquid fuels and increasing use of cleaner fuel.

Source: The Economic Times


CIL plans to acquire coking coal assets abroad with India facing shortage of viable reserves

February 6, 2017. Coal India Ltd (CIL) is exploring coking coal assets overseas as the country is faced with constraints of techno-commercially viable domestic metallurgical coal reserves. The recent spurt in global coal prices, particularly for coking coal, is expected to create an encouraging scenario for such acquisition process, Coal Minister Piyush Goyal said. Since CIL, at present does not have any asset abroad, the comparative analysis between coal mines in India and coal mines abroad can not be ascertained, he said. CIL is looking to appoint a merchant banker to assist it in acquiring assets overseas so as to enhance the nation’s energy security.

Source: The Economic Times

Coal block allocation matter adjourned till February 20

February 6, 2017. A Delhi court adjourned the hearing in the coal block allocation matter till February 20. The investigation agencies told the court that the new director hasn’t yet given the go ahead to probe the matter and hence the final report hasn’t been prepared. The court gave two weeks more time to file a report in this regard. The Supreme Court turned down an oral plea by former CBI director Ranjit Sinha to reconsider its order on probing his role over his private meetings with the accused in the coal block allocation scam on the basis of a visitor’s logbook. The order had already been passed in the matter and that the investigators will look into everything.

Source: The Economic Times

CIL production grows 5.5 percent in January

February 3, 2017. Coal India Ltd (CIL) reported that its production grew by 5.5 percent to 55.99 million tonnes (MT) in January as compared to 52.86 MT in the corresponding month last fiscal, but the production during April 2016 to January 2017 remained flat. According to provisional data, the production stood at 433.76 MT, up by a meagre 1.7 percent during the first ten months of the current fiscal (2016-17). It achieved 91 percent of the target which was set at 478.57 MT for the period. CIL, which produces 84 percent of the country’s coal production, was targeting 61.04 MT during the last month of the current fiscal, achieving 92 percent of the target. It also reported that its off-take during this period was up by a marginal 1.3 percent at 443.13 MT as against a target of 489.71 MT. Its off-take for January stood at 51.35 MT achieving 92 percent of the target. In 2015-16, the state miner produced 538.75 MT of coal against a target of 550 MT and its off-take was at 534.5 MT. During the current fiscal, the coal production target has been pegged at 598.61 MT is expected to be 660.7 MT in 2017-18. The company envisaged production of 908.10 MT in 2019-20 with a Compound Annual Growth Rate (CAGR) of 12.98 percent with respect to 2014-15.

Source: The Economic Times

Govt to auction 23 new coal mines next financial year: Coal Secretary

February 2, 2017. Coal Secretary Susheel Kumar said the government would auction 23 coal mines and allocate two coal mines through government dispensation route in the next financial year 2017-18. He said that the government would also keep aside four coal blocks for commercial mining. He said a discussion paper has been prepared to set the guidelines of commercial coal mining which will be put up for public comments soon. The Coal Mines Special Provisions Act 2015 provides for the policy of opening up of the Coal sector for private companies for commercial mining. At present, companies in India who have end-user plants are allowed to mine coal for captive purposes.

Source: The Economic Times

Govt expects to net Rs 297 bn from coal cess in 2017-18

February 2, 2017. The government expects to net Rs 29,700 crore from cess levied on domestic coal production in the next financial year. It expects to generate Rs 28,500 crore from the same in the current financial year ending March 31, Budget documents show. The estimates for the current year have been raised from the earlier Rs 26148 crore. The government did not announce change in the cess in Budget proposed. Last year, Finance Minister Arun Jaitley had doubled the cess on coal production to Rs 400 per tonne from Rs 200 per tonne and renamed it as clean environment cess from clean energy cess.

Source: The Economic Times


CIL to invest Rs 80 bn next financial year: Budget 2017

February 2, 2017. Coal India Ltd (CIL) is budgeting for an investment of Rs 8,000 crore next financial year, a mere 3 percent jump over the revised estimate of the current fiscal (2016-17), the Union Budget shows. However, lignite miner Neyveli Lignite Corp and Hyderabad-based Singareni Collieries are expecting investments to be lower than last year’s levels. The Budget documents show Singareni Collieries will invest Rs 1,600 crore in 2017-18 as against Rs 2,300 crore budgeted this financial year. For Neyveli Lignite, the investment is seen dropping to Rs 8,948 crore from Rs 9,437 crore this fiscal. The government, in the budget document, said provision is for the various stowing and conservation measures to stabilize the mines after extraction of coal and development of road and rail transport infrastructure in the coal field areas.

Source: The Economic Times


Average power price at IEX up 8 percent at Rs 2.5 per unit in January

February 7, 2017. The average price of power at Indian Energy Exchange (IEX) was Rs 2.5 per unit in January this year, a tad higher than Rs 2.32 a unit in December 2016. According to IEX, the average area clearing price — the price at which settlement takes place — varied from Rs 2.05 per unit to Rs 3.96 per unit. At 125 million units (MUs), the average buy bids increased slightly over 119 MUs (in December) while the average daily sell bids at 224 MUs (in January) were almost at par with 229 MUs in December 2016. In December 2016, 136 MUs were lost on overall basis and daily average loss was 4.4 MUs. The northern import was congested 41 percent of the time during the month while the southern import was congested about 55 percent of the time.

Source: Business Standard

India lost 15 BUs of electricity generation last quarter owing to gas shortage

February 7, 2017. India lost 15 billion units (BUs) of power generation in the quarter ended December due to short supply of natural gas to run power plants, according to power ministry data. The loss amounted to more than 5 percent of the planned quarterly power production of 295 BUs from conventional sources. According to fresh data released by Central Electricity Authority (CEA), the power ministry’s technical and planning wing, power plants received only 28.6 percent of the total allocated gas in October. The supply dropped to 27.1 percent in November and 26.6 percent in December. The government had allotted gas supply of 9,527 million metric standard cubic meter per day (mmscmd) to gas-based projects for the three months period ended December but supply stood at a mere 2,609 mmscmd or 28 percent. The projects which suffered the highest level of loss belonged to the private sector. The cumulative generation loss from private companies and Independent Power Producers during the quarter stood at 13 BUs. Experts said the development highlights difficult days for gas-based power generation companies.

Source: The Economic Times

Over a third of UP voters cite power cuts as top election issue

February 6, 2017. Almost a third of voters polled said power cuts were the biggest problem in Uttar Pradesh (UP), according to a new survey conducted by by FourthLion Technologies, a data analytics and public opinion polling firm, for IndiaSpend. Elections in Uttar Pradesh, with 138 million voters, greater than the population of Mexico, start February 11. FourthLion conducted 2,513 telephone interviews in Hindi of registered voters in the state, and said their sample is representative of its urban and rural voters as well as socioeconomic, age, gender and caste make-up. The survey was conducted between January 24 and January 31. About 28 percent of the voters interviewed said power cuts were the biggest issue in the state, 20 percent said jobs, the economy and development were the biggest issues, while 10 percent said a shortage of clean water was the biggest issue. Few voters said the roads, food, the currency ban, crime, corruption, agriculture, sanitation, health and education were the biggest issues. The percentage of households that used electricity as the main source of energy grew from 31.9 percent in 2001 to 36.8 percent in 2011, according to census data, with a stark difference between urban and rural areas. While 81.4 percent of urban households used electricity as the main source of energy in 2011, as few as 23.7 percent did so in rural areas, data show. By the end of 2016, in rural Uttar Pradesh, 177,000 rural households were unelectrified, down from 185,900 households in March 2014, government data show. But even households that have electricity face power cuts, the FourthLion-IndiaSpend survey shows. As many as 38 percent of those surveyed said they faced power cuts every day, while 16 percent said they faced power cuts every week but not every day. Women, who are likely to stay at home more, and rural voters, are more likely to face power cuts than men and urban voters, respectively.

Source: The Economic Times


NTPC to shut down old power plants with capacity of 11 GW

February 6, 2017. NTPC has decided to shut down old polluting power plants of capacity totalling roughly 11 GW and replace those with new ones which are highly efficient, Power Minister Piyush Goyal said. Goyal said there is no proposal to discontinue thermal power plants and the older plants should be gradually phased out, and new ones should be set up.

Source: The Economic Times

Kalpataru Power wins new orders worth Rs 8.2 bn

February 6, 2017. Kalpataru Power Transmission said it has secured new orders worth Rs 823 cores. The company said it has won an order worth Rs 737 crores which involves setting up transmission lines in West Africa and another order worth Rs 86 crore for construction of 220 kv GIS substation project for Haryana Vidyut prasaran Nigam Ltd. The company is currently executing several contracts in India, Africa, Middle East, Australia, CIS, SAARC, North America and Far East.

Source: The Economic Times

CESC bags power distribution contract in Bikaner

February 6, 2017. Calcutta Electric Supply Corp (CESC) said it has won a franchise contract for power distribution for Bikaner, Rajasthan. The Bikaner city appointment is based on a competitive bidding and a distribution agreement for a period of 20 years and is expected to be signed shortly, CESC said. CESC is contemplating restructuring of the company engaged in generation, distribution and retail and an announcement is expected in near future.

Source: The Economic Times

35 open access companies return to MSEDCL’s fold

February 5, 2017. Altogether 35 firms drawing power for their units have decided to become consumers of the Maharashtra State Electricity Distribution Company Ltd (MSEDCL) again. The 35 companies were among 130 firms in the Konkan region of the state power utility and had been buying power from private producers as part of the open access system introduced last year. These consumers are known for prompt and huge payments, as they buy power in bulk. The companies had opted for the open access system. It allows the firms to buy power from independent producers located anywhere by paying some duty and the wheeling (carrying) charges to the electricity company. What came as a boon for MSEDCL is that the state energy regulator, Maharashtra Energy Regulatory Commission (MERC), in November 2016 tariff order allowed it to increase the wheeling charges and duty for consumers buying power from other producers, which use its network to supply to its consumers.

Source: The Economic Times

MPKVVCL to introduce high-tech meters to control power theft and loss

February 5, 2017. Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd (MPKVVCL) plans to start its energy audit system to curb power thefts and reduce loss. Officials have been installing the new metering system in all distribution transformers that will start functioning soon. They were also in process to install high tech energy meters that would help them calculate losses. Initially, the company is focusing on consumers having a 10kv connection, and after this, these meters will be installed for 5kv connection. There is around 5.7 lakh consumer in the division, and of them around 22,000 consumers has 10kv connection, while the rest has 5kv or 3 kv connection. Officials said that they were in the process to evaluate feeder-wise losses and for this they need a high tech metering system for domestic consumers as well. Now, the distribution company will implement energy audit system in feeder and transformers. Besides this, the company has also decided to install high tech energy meters with a modem facility.

Source: The Economic Times

Over 60k consumers fail to clear electricity dues in Maharashtra

February 4, 2017. The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has launched a drive to recover dues worth crores of rupees from over 60,000 consumers who have not made the payments in the past three months in Aurangabad zone comprising Jalna and Aurangabad districts. The company has disconnected over 600 connections since February 1, when the drive was launched, MSEDCL said. Out of the 7,79,827 consumers in Aurangabad district, 50,970 have failed to pay their dues amounting to Rs 115.77 crore. In Jalna district, out of the 2,47,736 consumers, 967 have not paid a total sum of Rs 4.02 crore, MSEDCL said. The MSEDCL has decided to launch an aggressive campaign against the defaulters. The MSEDCL had time and again pleaded with consumers to pay dues in time.

Source: The Times of India

Power tariffs may rise marginally as tax holiday expires: Budget 2017

February 2, 2017. Power tariffs for plants set up after March 2017 could increase by 5-10 paise per unit as a tax holiday on infrastructure projects, including power, has been discontinued. In its Finance Bill, the government said the 80-IA tax holiday will be discontinued from April 2017, disappointing a segment of solar power developers who were expecting extension of this clause.

Source: The Economic Times


India’s solar power capacity crosses 9 GW with TN leading the pack

February 6, 2017. Country’s solar power generation capacity stood at over 9 GW as on December 31, 2016 with Tamil Nadu (TN) having the largest output capability followed by Rajasthan and Gujarat. Total power generation capacity was 9,012 MW as on December 31, 2016. Tamil Nadu led the chart followed by Rajasthan and Gujarat, Power, Coal, Renewable Energy and Mines Minister Piyush Goyal said. Goyal said solar power development varies from state to state depending on solar irradiance, availability of conducive state policy for the sector, availability of land, cost of financing and business environment such as willingness of distribution companies to purchase the solar power, power evacuation infrastructure, etc. He said that the tariff determined by the Central Electricity Regulatory Commission (CERC) in case of solar photovoltaic projects is Rs 5.68 per kWh and Rs 5.09 per kWh without and with accelerated depreciation benefit, respectively. He said that in Rajasthan, the tariff after bidding came to Rs 4.34 per kWh. The government is promoting solar energy through fiscal and promotional incentives such as capital and/or interest subsidy, tax holiday on the earnings for 10 years, generation- based incentive, accelerated depreciation, viability gap funding (VGF), financing solar rooftop systems as part of home loan, concessional excise and custom duties, preferential tariff for power generation from renewables, and foreign investment up to 100 percent under the automatic route, etc.

Source: The Economic Times

Tata Power Solar’s module exports cross 1 GW

February 6, 2017. Tata Power Solar, India’s largest integrated solar company, said it has shipped 1,000 MW solar modules worldwide. The company has witnessed a rise in the number of modules in the past 27 years, with over 60% of their modules shipped over the last five years. A pioneer in the Indian solar manufacturing industry, the company has shipped modules worldwide to over 30 countries including Europe, USA, Canada and Australia.

Source: The Economic Times

BHEL bags 3.6 MW solar rooftop order from Surat Municipal Corp

February 6, 2017. State-run power equipment maker BHEL said that it has secured order for the installation of Solar PhotoVoltaic (PV) rooftop systems totalling 3.6 MW from Surat Municipal Corp. While all the 10 identified areas of installation would be within the municipal limits of the city; 1MW energy will be required for Surat Smart City, BHEL said. BHEL manufactures solar cells and modules at its Electronics Division in Bengaluru, while space-grade solar panels using high efficiency cells and space-grade Battery panels are manufactured at its Electronic Systems Division, also in Bengaluru. The company has enhanced its annual manufacturing capacity of Solar Cells to 105 MW and Solar Modules to 226 MW. BHEL is one of the few companies in India whose solar business is backed by a dedicated R&D team at the company s Amorphous Silicon Solar Cell Plant in Gurugram.

Source: The Economic Times

Rosatom supplies electric heaters for Kudankulam nuclear power plants

February 5, 2017. Russian nuclear energy group Rosatom has completed supply of three electric heaters for the first and second 1,000 MW nuclear power units at Kudankulam in Tamil Nadu ahead of schedule, the company said. JSC SverdNIIchimmash – part of the machine building division of Rosatom – Atomenergomash – has completed supply of three electric heaters of hydrogen combustion system for the first and second units at Kudankulam in Tamil Nadu, owned by Nuclear Power Corp of India Ltd. Rosatom said the electric heaters were supplied four months ahead of schedule in compliance with NPCIL’s demand. The hydrogen combustion system is designed for cleaning waste gases from nuclear power reactors.

Source: The Economic Times

Spanish firm to facilitate 2.5 GW renewable power in AP

February 5, 2017. Spanish wind turbine-maker Gamesa will facilitate around Rs 17,500 crore investment in Andhra Pradesh (AP) in wind, solar and wind-solar hybrid power projects. Gamesa will identify the land and take care of the other work. Around 2,500 MW renewal energy capacity comprising of wind, solar and wind-solar hybrid could be set up.

Source: The Economic Times

Teesta hydropower plant to start generating 1.2 GW power by April: Goyal

February 3, 2017. Power, Coal, Renewable Energy and Mines Minister Piyush Goyal said the Teesta Hydro power project in Sikkim will start generating 1,200 MW power in the next two months. Goyal had said in September last year the government will very soon resolve the issues related to Teesta power project where investment worth around Rs 9,000 crore was stuck. The power project, commonly known as Teesta III, is being set up by Teesta Urja Ltd. The company is developing the 1,200 MW project on Teesta River in North District of Sikkim. This power plant is part of the overall development of Teesta basin being undertaken by Sikkim Government. The project is designed to generate 5,214 Million units of power annually. The first unit of the project was to be commissioned in 2013 but the project got delayed.

Source: The Economic Times

GHMC plans solar plants on rooftops to cut power bills

February 3, 2017. To reduce power consumption charges to be paid to power utilities, the Greater Hyderabad Municipal Corp (GHMC) has decided to install rooftop solar-powered plants to be connected to grids in a phased manner. To begin with, 44 of 942 buildings owned by the GHMC have been identified for these installations. The corporation expects to supplement nearly 47% of its total energy consumption through solar power. GHMC decided to open outlets in the next couple of days for selling LED bulbs at a discounted rates in all zonal and circle offices.

Source: The Times of India

Budget 2017 gives big boost to renewable energy with duty reductions, new capacity

February 2, 2017. The Budget has given a boost to renewable energy, announcing another 20,000 MW of solar park development in phase II and a slew of duty reductions on components for fuel cell-based power generating and biogas systems, as well as wind energy equipment. The Budget announced solar power supply at about 7,000 railway stations in the medium term but a beginning has already been made at 300 stations, Finance Minister Arun Jaitley said. Power, Coal, Renewable Energy and Mines Minister Piyush Goyal was pleased with the proposals.

Source: The Economic Times

After 16 attempts, a cheaper method for carbon capture at work in India

February 2, 2017. As students at the prestigious Indian Institute of Technology in Kharagpur in eastern India, Aniruddha Sharma and Prateek Bumb had one obsession: finding a cheaper, more efficient way to capture carbon emissions to combat climate change. They began working on the problem in 2009, while still at university. The eureka moment came after numerous trials and errors that required re-starting the process 16 times. With no help from the Indian government, Sharma and Bumb tapped private investors. They also won prize money of 3.6 million pounds ($4.5 million) in a UK competition, giving them access to scientists and academics in the field. India is the world’s fourth largest emitter of greenhouse gases. As a signatory to the Paris Agreement on climate change, it has committed to ensuring at least 40 percent of its electricity is generated from non-fossil fuel sources by 2030. However, India – and other nations – also are looking for ways to reduce climate-changing emissions from burning fossil fuels. Worldwide, technology to capture carbon dioxide emissions and store them underground has struggled to find traction. India offers no subsidies for carbon capture and instead focuses on increasing its renewables capacity to cut emissions.

Source: Reuters

DAE seeks nod for 12 more atomic power projects

February 2, 2017. The Department of Atomic Energy (DAE) has prepared a proposal for building 12 nuclear reactors to ramp up power generation in the country. Jitendra Singh, Minister of State in the Prime Minister’s Office said, of the 12, 10 reactors will be indigenous Pressurised Heavy Water Reactors while the other two will be Light Water Reactors of Kundakulam units 5 and 6 of 1,000 MW each. In reference to Kavali in Andhra Pradesh, the proposed site of a nuclear power park earmarked for Russian companies, Singh said some sections of locals and certain groups have expressed apprehensions about safety of the nuclear power plants and loss of their traditional means of livelihood. He said, an extensive public outreach programme to spread awareness about the nuclear power has been instituted.

Source: The Economic Times

Okhla waste-to-energy plant to remain operational: NGT

February 2, 2017. Okhla waste-to-energy plant here was allowed to function by the National Green Tribunal (NGT) which said it need not be shut down or shifted as it is non-polluting now but directed it to pay an environmental compensation of Rs 25 lakh for its deficient operation earlier. A bench headed by NGT Chairperson Swatanter Kumar while passing a slew of directions in the “interest of public health and environment”, said environmental compensation (EC) be paid to the Central Pollution Control Board and the Delhi Pollution Control Committee in equal shares for utilising for prevention and control of air pollution in the area. The bench said the Okhla plant should not be directed to either shut down or shifted to another site as there is definite evidence before it to arrive at a finding that the project proponent is compliant and non-polluting. The bench directed the Delhi government and other local authorities to make it mandatory for all construction projects, be it public or private, to use the bricks manufactured from fly ash in their construction activities. It also directed the Centre, the Delhi government and other local authorities to make contribution to ensure establishment of more waste-to-energy plants at appropriate sites. It also directed the plant owner to improve the green belt by planting trees all around the site. The bench noted that Delhi is generating 14,100 metric tonnes of mixed waste every day, which indicates the magnitude of problems related to handling and disposal of municipal solid waste in the national capital.

Source: The Indian Express

Budget 2017 brings lower indirect levies for clean energy equipment

February 1, 2017. Giving a boost to clean energy programme, Finance Minister Arun Jaitley proposed massive cuts in excise and customs duties on materials used in solar and wind plants, and also announced the second phase of solar park development for 20 GW capacity. He has proposed zero basic customs duty (BCD) on solar tempered glass for use in manufacture of solar cells/panels/modules. At present BCD on those is 5 percent. Similarly, he proposed to reduce countervailing duty (CVD) on parts/raw materials for manufacture of solar tempered glass for use in solar photovoltaic cells/modules, solar power generating equipment or systems, flat plate solar collector, solar photovoltaic module and panel for water pumping and other applications, to 6 percent from existing 12.5 percent. The budget has proposed to reduce excise duty on these materials to 6 percent from existing 12.5 percent. It is also proposed to reduce the BCD, CVD and SAD (Special Additional Duty) of 24 percent on resin and catalyst for manufacture of cast components for Wind Operated Energy Generators to 5 percent. Budget has proposed zero excise duty on these materials from existing 12.5 percent. India has set an ambitious target of adding 175 GW of renewable energy by 2022 which includes 100 GW of solar, 60 GW of wind, 10 GW from biomass and 5 GW from small hydroelectric projects (upto 25 MW each).

Source: The Economic Times


US EIA cuts 2017 world oil demand growth forecast

February 7, 2017. The United States (US) Energy Information Administration (EIA) cut its 2017 world oil demand growth forecast by 10,000 barrels per day (bpd) to 1.62 million bpd. In its monthly forecast, the agency cut its oil demand growth estimate for 2018 by 50,000 bpd to 1.46 million bpd.

Source: Reuters

China’s oil demand growth at 3 year low in 2016

February 7, 2017. China’s 2016 oil demand grew at the slowest pace in at least three years, data showed, the latest indication that demand from the world’s largest energy consumer has diminished. China’s implied oil demand growth eased to 2.5 percent in 2016, down from 3.1 percent in 2015 and 3.8 percent in 2014, data showed, led by a sharp drop in diesel consumption and as gasoline usage eased from double-digit growth. The slowing occurred as the economy expanded by only 6.7 percent in 2016, the slowest pace in 26 years. Gasoline consumption was 3.6 percent higher than 2015. That compared with growth of 9.1 percent in 2015 and a 13 percent gain in 2014, data showed. Liquefied petroleum gas (LPG) usage expanded 24 percent, while kerosene demand gained 9 percent from a year ago. Crude oil demand growth also eased despite a record pace of imports in 2016.

Source: Reuters

Norwegian firms to create offshore oil industry supply vessels giant

February 6, 2017. The pace of consolidation in the crisis-hit shipping industry accelerated after three of Norway’s biggest offshore oil industry service vessel (OSV) operators announced plans to merge to create one of the biggest fleets in the sector. The three-way merger between Farstad, Solstad and Deep Sea Supply will create a newly named company, Solstad Farstad, which will have a combined fleet of 154 ships, making it the biggest owner of large vessels in the supply, anchor handling and construction support segments of the OSV market worldwide.

Source: Reuters

US gasoline stocks are rising much faster than usual

February 6, 2017. The United States (US) gasoline stocks are rising much faster than normal at the start of the year, threatening to leave refiners struggling to clear an overhang of motor fuel later in the year. Gasoline stockpiles rose by almost 21 million barrels during the first 27 days of 2017, compared with an average increase of less than 12 million barrels at the same time of year during the previous decade. Stocks are rising faster than normal across the eastern United States but especially on the East Coast and in the Midwest. East Coast stocks have risen by more than 8 million barrels since the start of the year, almost double the average increase of 4.7 million barrels. Midwest stocks are also up by 8 million barrels, more than double the average increase of 3 million barrels at this time of year.

Source: Reuters

Trading giant Glencore extends major Libyan oil deal

February 6, 2017. Swiss-based commodities giant Glencore has extended a deal with Libya’s state oil firm to be the sole marketer of one third of the country’s current crude oil production. The deal extends Glencore’s dominance over rivals such as Vitol and Trafigura in handling barrels from the North African country for a second year running. With a dwindling revenue stream, National Oil Corp (NOC) needed an intermediary that was comfortable managing the risks, able to market the oil globally and pay cash upfront for the cargoes. Glencore snapped up the opportunity in September 2015 to resell the only relatively stable onshore output – from the Sarir and Mesla oilfields loaded at the country’s easternmost Marsa el-Hariga port. Libya’s small offshore production also continued. Since 2015, the trader has been the only company able to buy Sarir and Mesla crude output directly from Libya’s NOC and is expected to continue as NOC has largely finalised its 2017 allocations.

Source: Reuters

US sanctions stop American oil firms taking part in projects: Iran

February 6, 2017. Iran has imposed no restrictions on US (United States) oil firms willing to participate in energy projects in the country but American sanctions make such cooperation impossible, Iran’s Deputy Oil Minister Amir Hossein Zamaninia said. Iran said that it will hold the country’s first tender in mid-February since the lifting of international sanctions to develop oil and natural gas fields. President Donald Trump’s new US administration imposed fresh sanctions on Iran, which it said were just initial steps. Anglo-Dutch oil firm Royal Dutch Shell signed a provisional deal in December to develop Iranian oil and gas fields South Azadegan, Yadavaran and Kish.

Source: Reuters

China’s West African oil buying spree hits record in February

February 4, 2017. China’s red-hot crude oil buying will push its February loadings of West African crude to their highest in at least 13 years, a survey of traders and shipping data showed. Buying for China, led by state-run Unipec and Sinochem but joined by some trading houses supplying the independent refineries, hit a total of 40 cargoes for February loading. At a level of 1.36 million barrels per day (bpd), this is the highest since Reuters began tracking the shipments in 2004. The purchases boosted overall shipments to Asia from West Africa to 2.31 million bpd, their highest since April 2015, and 28 percent above the previous month on a bpd basis.

Source: The Economic Times

Hammer could fall on Europe’s vulnerable refineries from 2018

February 3, 2017. Strong residual demand for oil products and the emergence of only a handful of new refineries will protect the profits of Europe’s long struggling operations this year, but experts expect the hammer to fall on the weakest from 2018. State-of-the art new refineries in Asia and the Middle East have sharply increased the amount of oil products flowing into global markets and threaten the existence of Europe’s aging and less sophisticated units. However, meteoric fuel demand, driven by low oil prices, has given many a reprieve over the past two years, protecting thousands of workers in Mediterranean countries such as France, Greece and Italy.

Source: Reuters

US energy jobs rise as higher prices boost oil drilling

February 3, 2017. The United States (US) oil and natural gas producers added jobs in December and January as drillers continued to return to the well pad with crude prices holding near 18 month highs, according to US jobs data. Oil and gas extraction jobs increased by 100 to 177,400 in January, while support services jobs increased by 600 to 195,200 in December, its second increase in a row, according to US Bureau of Labor Statistics (BLS) data. The BLS only has support services jobs data through December, while oil and gas extraction data is available through January. Energy firms cut more than 165,000 jobs over the past two years as they slashed the number of rigs drilling for oil from a peak of 1,609 in October 2014 to a six-year low of 316 in May, according to statistics from Labor and energy logistics firm Baker Hughes Inc..

Source: Reuters

OPEC, Russia spare Asia oil supply cuts in fight to hold market share

February 2, 2017. OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC producer Russia are shielding Asia from supply cuts agreed in a landmark deal last year as they fight to protect their share of the world’s biggest and fastest growing oil market. Instead, they have reduced deliveries to Europe and the Americas as they implement a coordinated agreement to cut supply by about 1.8 million barrels per day (bpd), seeking to reduce a global supply glut and lift oil prices. Under a deal agreed last November, OPEC pledged to cut production by around 1.2 million bpd in the first half of 2017. Other producers, including Russia, pledged to cut another 600,000 bpd. While the OPEC and Russian cuts should eventually rebalance the market after a three-year glut, it will be slower in Asia unless regional demand picks up. Asia has been the main source of global oil demand growth for the past two decades as consumption in economically developed nations has stagnated.

Source: Reuters

Saudi Arabia may raise US oil investments: Energy Minister

February 1, 2017. Saudi Arabia may increase its oil investments in the United States (US) due to a more fossil fuel-oriented energy policy by the US administration of President Donald Trump, the kingdom’s Energy Minister Khalid al-Falih said. Trump had campaigned on a promise that Washington should boost US energy independence from oil cartels such as OPEC, of which Saudi Arabia is its de facto leader and by far the group’s biggest producer. Last year Saudi Arabia unveiled sweeping plans aiming to end the kingdom’s “addiction” to oil and transform it into a global investment power through a broad reform plan dubbed Vision 2030.

Source: Reuters


Europe gas use down this decade but market must plan for longer term

February 7, 2017. Natural gas usage will struggle against cheaper coal in European power generation up to 2020 due to its pricing mechanisms, but the market should still plan for import growth from the next decade, experts at a German industry meeting said. Current gas fundamentals in the region are bearish again after a brief resurgence of gas-fired power last year, but with Europe’s domestic production declining quickly, there should be no let-up in building infrastructure, they said. Gas made some inroads into power generation in fourth quarter 2016, having declined in the past five years, both for gas arriving via pipelines and increasingly, liquefied natural gas (LNG) arriving on board ships. Data from German industry group BDEW showed that gas edged up to 12 percent of German power generation in mainland Europe’s single biggest gas market, a gain of 2 percentage points.

Source: Reuters

US FERC approves Atlantic Sunrise gas pipeline expansion project

February 7, 2017. The United States (US) Federal Energy Regulatory Commission (FERC) has issued a certificate of public convenience and necessity authorizing the Atlantic Sunrise expansion project developed by Williams Partners. The project will consist of approximately 322 km of pipelines, including 298 km of new gas pipelines in Pennsylvania. Total investment is estimated at nearly $3 bn.

Source: Enerdata

BP may ‘incrementally’ increase US shale portfolio: CEO

February 7, 2017. BP is looking at ways to incrementally increase its footprint in US (United States) shale oil and gas production, its Chief Executive Officer (CEO) Bob Dudley said. Dudley said the company will use “a lot of discipline” in investments in the sector as asset prices are high. Dudley said the British oil and gas company was considering giving the green light to several projects around the world, including in Oman, Trinidad and Tobago and India.

Source: Reuters

Qatar Petroleum joins consortium to develop Pakistan LNG project

February 7, 2017. Qatar Petroleum has joined an international consortium of major US (United States), European and Japanese energy companies to develop a liquefied natural gas (LNG) import project in Pakistan. The consortium, which includes US ExxonMobil, France’s Total, Japan’s Mitsubishi, and Norway’s Hoegh, will develop a project that includes a floating storage and regasification Unit, a jetty and a pipeline to shore to provide natural gas supply to Pakistan, Qatar Petroleum said.

Source: Reuters

Egypt to import LNG with an eye on self-sufficiency in 2018

February 6, 2017. Egypt plans to import as many as 108 cargoes of liquefied natural gas (LNG) this year as the country prepares to start producing at two gas fields and move closer to its goal of self-sufficiency and even exports by 2019. The North African nation will import 100 to 108 LNG shipments this year, including 43 to 45 cargoes in government-to-government contracts from Oman, Russia’s Rosneft PJSC and France’s Engie SA. The remaining imports will be arranged through a tender to be announced in November. Imports may be reduced in 2018 as BP Plc’s North Alexandria concession works to start gas production in April and Eni SpA’s giant Zohr field plans to produce by the end of the year. Egypt started to export limited amounts of LNG from the Idku plant in September to keep equipment at the terminal running, and it plans to run the facility on the Mediterranean coast at full capacity for export in 2020 or 2021.

Source: Bloomberg

Proposed US border tax could weigh on natural gas prices: BofA

February 6, 2017. Bank of America (BofA) Merrill Lynch said the enactment of a prospective US (United States) border adjustment tax could lash US natural gas prices if Mexico retaliates. A similar border tax scheme, if implemented by Mexico, could spark “a wider trade war,” the investment bank said. The Henry Hub, which is located in Louisiana, sets the benchmark price for US natural gas trading. The US currently sends 5 percent of its annual gas production via pipelines to Mexico, and the country is the biggest buyer of US liquefied natural gas, according to the bank. Goldman Sachs had earlier noted that US tax reforms could see a 25 percent jump in US crude futures prices in comparison with the global benchmark, triggering large-scale domestic production.

Source: Reuters

Williams gets US approval for $3 bn shale gas line

February 4, 2017. Williams Companies won US (United States) approval to build its $3 billion Atlantic Sunrise natural gas pipeline expansion in the Northeast, ending a review that ran almost two years and forced delays in the project. The 200-mile (322-kilometer) pipeline will expand shipments from shale formations by enough to serve 7 million homes, according to Williams. The company said it plans to start construction on the main portion of the project in mid-2017, establishing a path for more gas to flow to markets along the Eastern Seaboard in time for the 2017-2018 winter heating season.

Source: Bloomberg

Statoil makes gas discovery within North Sea Valemon Field

February 3, 2017. Statoil has made a new gas discovery on the Valemon field, called Valemon West, two years after the asset came on stream. The discovery is estimated to contain between 20 and 50 million barrels of oil equivalent, according to Statoil.

Source: Rigzone

Global LNG-Asia prices hit parity with British gas benchmark

February 3, 2017. Asian spot prices for liquefied natural gas (LNG) delivery in March fell to parity with European gas benchmarks, while importers in India, Thailand and Mexico finalised purchases amid healthy supply. Traders said Asian prices for March delivery fell 25 cents to about $7.50 per million metric British thermal units (mmBtu), matching the UK’s National Balancing Point trading hub levels. Traders said they had heard GAIL (India) had bought supplies in the low $8 per mmBtu range, while Thailand’s PTT bought a cargo in the high $7 per mmBtu level, possibly from Chevron. Mexico purchased two cargoes for February delivery. Steady cargo demand was seen coming from Spain.

Source: Reuters

Energean selects TechnipFMC for development of $1.3 bn Israeli offshore gas fields

February 3, 2017. TechnipFMC has been selected by Greece’s Energean Oil & Gas as the concept and front end engineering design contractor for the Karish and Tanin development program offshore Israel. The contract calls for planning and development for the floating production, storage and offloading vessel and a subsea pipeline required to bring the gas produced from the Energean’s recently acquired fields to Israel. Energean is planning to invest approximately $1.3 bn-1.5 bn for the development of the two offshore oil and gas fields over the next few years. Final development plan is planned to be submitted to the Israeli authorities in mid-2017. The plan initially involves development of the Karish field to support the Israel’s efforts to bring cheaper gas to the market by the end of the decade, followed by the Tanin field development thereafter.

Source: Energy Business Review

Japan considers buying more US energy as Abe prepares to meet Trump

February 2, 2017. Japanese Prime Minister Shinzo Abe is considering increasing energy imports from the United States (US). Japan is putting together a package of plans for Japanese companies to invest in infrastructure and job-creation projects in the US for Abe to take to the February 10 meeting with President Donald Trump in Washington. Another idea is to offer to increase liquid natural gas (LNG) imports from the US. Another option, if Abe determines that Trump is most concerned about the trade gap, is to increase imports of US shale oil or gas on top of the investment package. Utilities would be resistant to buying more US shale gas because they have already committed to buying large amounts and Japan’s demand for energy is falling. Japan is the world’s biggest buyer of the gas cooled to liquid form for transport on ships and takes in nearly a third of global shipments. Japan took in its first shipment of shale gas in liquid form this month and more shipments are likely to come as more export terminals start shipments this year and next.

Source: Reuters

Wraps up talks with Total-led venture for offshore gas drilling: Greece

February 1, 2017. Greece has concluded talks with a consortium led by France’s Total for deep sea gas exploration in one block in western Greece, its Energy Minister Giorgos Stathakis said. In October, Greece named a consortium of France’s Total, its biggest oil refiner Hellenic Petroleum, and Italy’s Edison as the preferred bidder for the offshore gas drilling block in the Ionian Sea. The Total-led consortium has bid for one block in the Ionian. Hellenic Petroleum has bid independently for two other blocks in the same region.

Source: Reuters

TAP gas pipeline can gauge customer interest in capacity

February 1, 2017. The Trans-Adriatic Pipeline (TAP) that will take gas from Azerbaijan to Europe is in a position to offer capacity on the line via so-called “open seasons” to gauge interest among potential customers. The 870 km (540 mile) pipeline will link Azerbaijan’s Shah Deniz II field with Italy, crossing through Georgia, Turkey, Greece, Albania and the Adriatic Sea. It is the largest attempt so far to bring new supply sources to European consumers. Around 10 billion cubic meters per year of Azeri gas should reach Europe by 2020 through TAP as well as the South Caucasus Pipeline through Georgia and the Trans-Anatolian Pipeline (TANAP) through Turkey.

Source: Reuters

Gazprom cuts flows via Opal gas pipeline after Polish challenge upheld

February 1, 2017. Russian gas deliveries to Germany via the Opal pipeline fell by around 30 percent after Poland successfully blocked a deal giving Gazprom a bigger share of the pipeline’s capacity. Gazprom sends gas through the Nord Stream pipeline which runs along the Baltic seabed and links up with Opal in Germany but the Russian gas exporter faces curbs imposed by the European Union (EU) on how much of Opal it can use. Some 80 percent of Nord Stream’s 55 billion cubic meters per year capacity was used in 2016, data shows. But the European Court of Justice in December suspended the EU approval to give Gazprom as Opal’s co-owner more of the pipeline’s capacity, which had been granted in November, after an appeal from Poland. Poland imports most of its gas from Russia and is a key transit state for Gazprom’s Yamal-Europe pipeline.

Source: Reuters


Indonesia’s Bukit Asam to raise 2017 coal output by 26 percent: CEO

February 7, 2017. Indonesia’s PT Bukit Asam plans to increase coal production 26 percent in 2017 to 24 million tonnes, the Chief Executive Officer (CEO) Arviyan Arifin said. Arifin said he hoped prices remained stable at around $80 per tonne, noting that 2017 was off to a good start compared with the first quarter of 2016 when prices were around $50 per tonne. Last year Bukit Asam produced 19 million tonnes of coal. Other mines were also benefiting from better coal prices, Arifin said. Bukit Asam is working to transform itself into an energy company and hopes to develop seven power stations around Indonesia with a combined coal consumption of more than 30 million tonnes, among other initiatives to diversify its core business.

Source: Reuters

Australian govt supports public funding for ‘clean coal’

February 4, 2017. Australia’s Resources Minister Matthew Canavan said the government is considering providing public funds for the construction of new “clean coal” power stations in the country’s north. Matthew Canavan said he was open to using some of the A$5 billion ($3.84 billion) Northern Australia Infrastructure Fund (NAIF) to help build new high-efficiency coal-fired power plants in the state of Queensland and had already received interest from a number of parties, including from abroad. Prime Minister Malcolm Turnbull has flagged energy security as a primary focus for 2017 and said Australia’s energy policy should be “technology agnostic”.

Source: Reuters

US coal miners applaud Republican axing of stream protections

February 2, 2017. The battered United States (US) coal industry rejoiced after the Senate voted to repeal a rule that limited companies from dumping mining waste in streams, saying the move could halt the sector’s decline. The Senate, approving a resolution passed by the House of Representatives, overturned the Stream Protection Rule as part of a broader move by Republicans to reverse what they see as overregulation by former President Barack Obama’s administration on energy development. The coal industry hopes the move is the first step toward a recovery under President Donald Trump, who has vowed to clear away regulation to support more mining. Coal advocates are hoping his administration will overturn a moratorium the Obama administration placed on new coal leases on federal lands, and scrap regulations on carbon dioxide emissions. The coal waste rule was intended to protect 6,000 miles (9,700 km) of streams and large areas of forests over the next two decades, the Interior Department said when it issued the rule in December. It argued the rule would protect drinking water without undermining the economy or energy supply. The coal industry countered that the rule could have reduced the number of direct mining jobs by 30 percent and made 60 percent of its existing reservoirs uneconomic to produce. Coal companies such as Arch Coal Inc and Peabody Energy Corp – two of the nation’s biggest miners – experienced recent bankruptcies because of a surge in production of natural gas and new regulations curbing carbon dioxide emissions.

Source: Reuters

Japan’s Kansai Electric cancels plans to switch oil-fired power station to coal

February 1, 2017. Japan’s Kansai Electric Power has cancelled plans to switch a 1,200 MW oil-fired power station to coal as demand for electricity fell amid a push to cut the country’s emissions after it signed up to a global climate change accord. Based in western Japan, Japan’s second-biggest utility had said in March 2015 it would convert its Ako power station, which has two 600 MW units, to coal from fuel oil and crude oil. Operations were scheduled to restart as early as 2020. Japan has come under criticism for a big push into coal after the Fukushima nuclear disaster led to the shutdown of most of its reactors. The utility decided converting Ako to coal would not help Japan reach emissions targets.

Source: Reuters


Denmark approves 1 GW power interconnection project to Germany

February 7, 2017. The Denmark’s energy ministry has approved the development of a new power interconnection between Kassø in Jutland (Denmark) to Dollern near Hamburg (Germany). The project will raise the capacity of the existing interconnection (1,500 MW to Denmark and 1,780 MW to Germany) to 2,500 MW. The existing 220 kV lines between Kassø and the German border at Frøslev will be replaced with 400 kV lines by 2025.

Source: Enerdata

Tanzania will need $46 bn in power investments by 2040

February 7, 2017. According to the Power System Master Plan (PSMP 2016 – 2040) released by the Tanzania energy ministry, the eastern African country will need to invest US$46.2 bn over the next 20 years to revamp its energy infrastructures and meet rising electricity demand. Most of the costs are related to power generation investments, as the country aims to use its vast coal and gas reserves to boost installed capacity from around 1,500 MW in 2014 to 10,000 MW over the next decade. The remainder will be invested in power transmission and distribution, to raise the electrification rate from around 40% to 90% by 2035.

Source: Enerdata

Thalnova Power Thar awarded power generation licence

February 2, 2017. Thalnova Power Thar (Pvt) Ltd has been awarded a power generation licence for its half-a-billion dollar, 330 MW coal-fired power plant at Thar coal mine mouth, Sindh, the National Electric Power Regulatory Authority (NEPRA) said. NEPRA said the plant is scheduled to start production latest by December 31, 2019. Two Thar coal-based power projects approved. The plant is being set up at a cost of $498.30 million. The amount includes the capital cost of $408.2 million, custom duties and cess, financing fees and charges, interest during construction, and Chinese debt serving charges. Earlier, the regulator approved an unconditional acceptance of the upfront (fixed) tariff by Thalnova. Accordingly, the company would sell power at Rs 3.67 per kilowatt per hour in the first 10 years of its operations. The tariff would reduce to Rs 1.91 per kilowatt per hour for the next 20 years. The tariff comprises a return on investment at 38% and debt servicing at 48%. The debt on the project would be paid off completely in the first 10 years of operations. The tariff falls in the category of Thar coal mine mouth projects on foreign financing. The generation licence is granted for a period of 30 years. The electric power from the plant will be dispersed to the National Grid.

Source: The Express Tribune

Argentina will raise electricity tariffs by 60-90 percent in March 2017

February 2, 2017. The Argentina’s energy ministry has announced a dramatic increase in electricity tariffs for most consumers in March 2017. The changes will apply to millions of consumers supplied by Edenor and Edesur in the Buenos Aires area. In 2016, Argentina started removing generous subsidies for residential electricity and home-heating gas, reducing the state budget, but contributing to inflation. The most vulnerable consumers will continue to benefit from subsidies and their electricity bill will slightly increase.

Source: Enerdata

Nigeria’s power generation improves to 3.5 GW

February 1, 2017. The Transmission Company of Nigeria (TCN) said that the nation’s power generation improved slightly to 3,528.90 MW on February 1 from 2,662 MW on January 22. The Nigerian Electricity Supply Industry (NESI), operational report said the power sector dropped to 2,662.20 MW on January 22 because of low water levels and challenge of accessing gas by Generating Companies (GENCOs). The GENCOs inability to pay up the debts they owed the gas company also contributed to the drop in power generation on January 22.

Source: Premium Times


Russia may fund 100 percent of the Paks nuclear project in Hungary

February 7, 2017. As part of bilateral discussions between Hungary and Russia, Russia is ready to finance the entire Paks II nuclear project in Hungary. The Paks nuclear expansion project aims to add two new 1,200 MW Russian-built VVER-1200 reactors on the site of the existing nuclear facility. In January 2014, Hungary signed an agreement with Russia, which would finance up to 80% of the project, build two 1,200 MW reactors on a turnkey basis and supply nuclear fuel over a 20-year period while handling and storing spent fuel elements in Russia. Construction of the Paks expansion is expected to start in 2018, with commissioning scheduled in 2025-2026.

Source: Enerdata

China will launch renewable power green certificates in July 2017

February 6, 2017. The National Development and Reform Commission (NDRC) of China will launch green certificates for wind and solar power as of 1 July 2017, to reduce government subsidies to the renewable sector. The pilot scheme will be launched in July 2017 and could be expanded as a mandatory green certificate scheme in 2018. China is seeking to cut the cost of renewable subsidies, to reflect decreasing costs and ease the burden of state investment in the sector. As of 1 January 2017, feed-in tariffs for new large solar power plants and onshore wind parks have been cut.

Source: Enerdata

Sweden plans to phase out GHG emissions by 2045

February 6, 2017. The members of the Swedish Parliament have agreed to pass a law in the coming months to force the government to reduce fossil fuel use through tougher targets revised every four year, in order to completely phase out greenhouse gas (GHG) emissions by 2045. Sweden plans to cut its domestic GHG emissions by at least 85% by 2045, compared to 1990 levels. Remaining emissions would be offset by compensation actions, such as planting forests (carbon sinks) or investing in GHG emission cut measures abroad. The European Union as a whole has already approved an 80-95% reduction target in GHG emissions by 2050.

Source: Enerdata

China’s solar power capacity more than doubles in 2016

February 4, 2017. China’s installed photovoltaic (PV) capacity more than doubled last year, turning the country into the world’s biggest producer of solar energy by capacity, the National Energy Administration (NEA) said. Installed PV capacity rose to 77.42 GW at the end of 2016, with the addition of 34.54 GW over the course of the year, data from the energy agency showed. China will add more than 110 GW of capacity in the 2016-2020 period, according to the NEA’s solar power development plan. Solar plants generated 66.2 billion kilowatt-hours of power last year, accounting for 1 percent of China’s total power generation, the NEA said. The country aims to boost the mix of non-fossil fuel generated power to 20 percent by 2030 from 11 percent. China plans to plough 2.5 trillion yuan ($364 billion) into renewable power generation by 2020.

Source: Reuters

Cube Hydro acquires Yadkin hydroelectric power plants from Alcoa

February 3, 2017. Cube Hydro Carolinas has completed acquisition of the Yadkin hydroelectric project from Alcoa Corporation in North Carolina, US for an undisclosed price. The Yadkin Hydroelectric project bought by the Cube Hydro Partners comprises four hydroelectric power plants located along the Yadkin River which have a combined capacity of 215 MW. Named as High Rock, Tuckertown, Falls and Narrows, the power plants are likely to generate around 800,000 MWh of clean energy annually. Following the addition of the hydroelectric power plants along Yadkin, Cube Hydro Partners has increased its portfolio to 19 plants on 10 rivers spread across New York, Pennsylvania, Virginia, North Carolina and West Virginia. Put together, the plants have combined capacity of over 373 MW, with a yearly generation capacity of 1.4 million MWh which is equivalent to the electricity required for about 140,000 homes with renewable energy. In August 2016, another affiliate of Cube Hydro Partners, Glen Park Hydro purchased a 33MW hydro power generation plant along the Black River near Watertown, New York.

Source: Energy Business Review

Eskom’s Ingula hydropower project fully operational

February 2, 2017. South Africa’s state-owned power utility Eskom has commissioned the last unit (unit-3), rated 333 MW, of its Ingula pumped-storage hydropower plant. The four units of the project are now in commercial operation and can generate up to 1 332 MW. The R25 bn (US$1.65 bn) peaking hydropower project was built between Ladysmith and Harrismith in the Little Drakensberg.

Source: Enerdata

EU countries on track to meet their 20 percent renewable target by 2020

February 2, 2017. According to a new report released by the European Commission, the European Union (EU) is on track to reach its 20% renewable target by 2020, having covered 16% of its final energy consumption with renewables in 2014. However, member states will have to continue their efforts to reach their national goals. In 2014 all EU countries – except the Netherlands – showed a renewable energy share which was equal to or higher than their indicative pathway. In 2015, 25 Member States exceeded their indicative pathways, with some even surpassing their 2020 targets. By 2030, the EU has set a target of at least 27% of renewables in energy consumption. Reaching this target would help reduce greenhouse gas (GHG) emissions to meet the EU target of at least 40% GHG reduction by 2030.

Source: Enerdata

Saudi to invite bids for new renewable energy projects in April: Energy Minister

February 1, 2017. Saudi Arabia will invite international and domestic companies to bid for renewable energy projects in April, Energy Minister Khalid al-Falih said. He said the projects would include two new solar and wind power plants with a capacity to produce 700 MW of power. The projects are part of a major renewable energy supply program which is expected to involve investments of between $30 billion and $50 billion by 2023.

Source: Reuters

Cheaper renewables to halt coal and oil demand growth from 2020

February 1, 2017. The falling cost of electric vehicle and solar technology will halt demand growth for oil and coal from 2020, according to research published, posing a threat to fossil fuel companies unprepared for the transition. The Grantham Institute at Imperial College London and independent think tank Carbon Tracker Initiative analysed cost forecasts for electric vehicle (EV) and solar photovoltaic (PV) technology, government policies and the impact on road transport and power markets, which account for half of global fossil fuel consumption. Growth in the number of electric vehicles could lead to 2 million barrels per day (bpd) of oil demand being displaced by 2025, the report estimates. That would be similar to the volume of oversupply that led to the 2014/15 collapse in oil prices. By 2040, 16 million bpd could be displaced, rising to 25 million bpd by 2050, it said. The International Energy Agency has said that 2 million bpd of oil could be displaced by electric vehicles by 2040.

Source: Reuters


Power Generation from Renewable Energy in India

Billion Units (BUs)

Year Generation from Renewables % share in Total Generation of Country
2014-15 61.78 5.56
2015-16 65.78 5.60
2016-17 (till Sept 2016) 47.62 7.54


Renewable Capacity Target & Achievement for 2016-17


Source: Various Questions of Lok Sabha & Rajya Sabha

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

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.