MonitorsPublished on Aug 21, 2017
Energy News Monitor | Volume XIV; Issue 10


Non-Fossil Fuels News Commentary: July – August 2017


As reports of the border stand-off between India and China continue to hog headlines, one of the concerns raised is whether this would have a bearing on the solar sector in India because local project developers are dependent on solar cells and modules imported from China. Of the $2.34 billion worth of solar equipment brought into India in 2015-16, a staggering $1.96 billion (83.61 percent) worth of solar cells and modules were produced in China. India imported solar and photovoltaic cells worth about $826 million from China during the April-September period of 2016-17. Hero Future Energies believes that irrespective of the tensions, imports had to be impacted since the Indian government is already working on an anti-dumping duty petition filed by domestic manufacturers. MNRE said that the capacity of solar modules in India is 8,000 MW, while for cells it is 1,500 MW and this is not sufficient to achieve the government’s aims. Experts said that without cheap imported solar panels from China many of the projects that had bid down tariff for solar power in recent auctions would not be viable. India has already installed more solar capacity in the first six months of 2017 than in the entire 2016, according to a report by Mercom Capital Group, which tracks the Indian solar sector. Around 4,800 MW has already been commissioned in calendar year 2017, against 4,038 MW in 2016. The report expected an addition of 10,500 MW through the year, which will be another record, almost twice the 5,525 MW added in financial year 2016-17. But 2018 is likely to be a different story because of confusion over applicability of the GST on solar products, the report warned. The MNRE is urging the finance ministry to stick to the earlier 5% for all solar equipment, but a decision has yet to be announced. The sharp fall in solar tariffs at the last auctions held in May this year has also become a dampener, according to the report.

The Haryana government has waived intra-state wheeling charges, cross subsidy charges, transmission and distribution charges on the electricity generated from solar power plants in the state. Any investor, who installs a solar power plant at any place in the state, can sell this power to any private entity within the state at mutually agreed tariff without paying these charges. The solar power produced may be purchased by the Haryana Power Purchase Centre on the tariff finalized by inviting the tenders on competitive bids. The MNRE had raised the solar renewable purchase obligation targets for the obligated entities including distribution companies to 8 percent from the current level of 3 percent of power consumption.

The flag bearer of headline renewable energy growth, Madhya Pradesh, in a latest amendment has suggested taking away the “must-run” status of renewable and co-generation power projects. In the latest order by the MPERC, it has asked the “the generation from co-generation and renewable sources of energy to be subject to ‘scheduling’ and ‘merit order dispatch principles’ as decided by the commission from time to time.” The order pertains to the amendment in the MPERC (Cogeneration and Generation of Electricity from Renewable Sources of Energy) (Revision-I) Regulations, 2010. Sector and legal experts said this would harm the renewable energy projects, as the state would now have the freedom to back down from these whenever it wished to. Renewable power enjoys a “must-run” status across the country to ensure its integration in the grid and better returns to the developers.  Legal experts said no Indian state has till yet removed the must-run status of renewable energy and this would set wrong precedent. Observers were of the opinion that solar power should compete with other sources of power to earn the title of having achieved cost parity (not just grid parity) with other sources of power.

Solar power tariff in the country has fallen by 80 percent since 2010. The maximum tariff for solar power was seen in December 2010 when 150 MW was sold at ₹ 12.76/kWh under the Jawaharlal Nehru Solar Mission. Since then, the tariff has fallen steadily with the lowest tariff of ₹ 2.44/kWh for 500 MW in Rajasthan. The solar power tariff has been falling only when the states or agencies go through the bid mode. Tamil Nadu which followed the power purchase agreement does not figure in the list of states that took advantage of falling solar power tariff until 2015. Solar power tariff across the country started falling from ₹ 6.88/kWh to ₹ 4.63/kWh in nine months of 2015. Compared to several sunshine countries, India’s solar power tariff is still high.

A plea seeking a ban on the manufacture, use and import of solar panels containing antimony, a heavy metal, has prompted the NGT to seek the reply from the Centre and the pollution control board. A bench headed by NGT Chairperson issued notice to the MNRE, the Ministry of Commerce and the CPCB and sought their response. Solar panels are used to convert sunlight into electricity. The plea said with increasing use of solar modules and panels under the National Solar Mission, the scientific disposal of antimony posed several problems for the environment. The petition claimed that antimony was at present being dumped in landfill sites along the solar panels which were crushed after use. It sought a direction to the CPCB to amend the E-Waste Rules, 2016 and bring antimony within scope of Rules 16 pertaining to hazardous substances. The plea said that the CPCB should pass a direction to permit import of only those solar modules that do not contain antimony. It also sought random sampling of the solar modules in the collaboration of an IIT to verify the existence of hazardous substances, including antimony. The petition asked for a direction to the respondents and the environment monitoring agencies to immediately undertake remedial measures to limit the damage caused to the environment by submitting an action plan showing how to deal with future disposal of solar and solar panels.

NTPC said ₹ 3-3.20/kWh tariff for solar power may be the new normal and can be achieved without the support of “cheap funds or cheap panels”, which have been a concern for the industry. Solar and wind energy units generate less than 10 percent of the global electricity output and have remained on the side-lines historically as these projects were taken up to fulfill a social responsibility towards clean energy. But these green energy sources have seen a decline in prices making them comparable to conventional energy and causing a disruption in the power sector. India too has rapidly scaled up its renewable energy capacity, led by solar power in the last few years. But the steep fall in tariff has triggered concerns over project viability. NTPC has commissioned 847 MW or renewable energy capacity, has 73 MW under execution and another 1,275 MW under tendering process. The company’s target is to develop 10 GW of renewable energy as a commitment to the government. It is also developing another 15 GW under National Solar Mission (Phase 2).

In the next two years, solar power will be cheaper than the electricity grid in the residential sector, says solar energy provider SunSource Energy which successfully implemented the first two phases of a 100 MW solar project in South East Asia. Stating that while the solar energy in India has already reached ‘grid parity’ in commercial, industrial and utility sectors, soon this would be achieved in residential sector as well. At present, India has installed capacity of 327 GW (One GW is equal to 1000 MW), of which about 40 GW is Solar (12 GW) and Wind energy (27 GW) combined. About 70 percent of power comes from coal-based power plants and the remaining from hydro and other sources like biogas. The solar company has designed and built over 100 solar projects across 18 states in India, with a focus on decentralised power projects. It is currently involved in nearly over 150 MW of solar projects in India and overseas.

Cautioning that India’s performance in renewable energy areas like solar, small hydro, biogas is not so encouraging, a parliamentary standing committee said that the government should not act as bystander and adopt more proactive approach to arrange finances for solar power projects. It also said that 40,000 MW target of grid connected rooftop solar by 2022 is “unrealistic” and it is “highly unlikely that this target will be achieved”. It suggested that government should give it a “serious relook” at it otherwise it will derail the National Solar Mission target of 100,000 MW by 2022. It also pressed upon government to “urgently formulate” a dedicated programme to establish India as a solar manufacturing hub. Prior to Paris Climate Summit in December 2015, the NDA government announced an ambitious renewable power programme of 175,000 MW which includes 100,000 MW solar power and 60,000 MW wind power. At present, India has a total of 58,303.35 MW of renewable power of which 32,508.17 MW comes from wind power alone, while solar energy accounts for 13,114.85 MW.

The infrastructure fund of multi-asset manager IDFC Alternatives is set to make its biggest acquisition till date by taking over the entire 200 MW of First Solar’s operational portfolio of solar power projects in India for around $300 million as consolidation picks up momentum in the renewable energy sector. These projects — seven in all — are located in Telangana and Andhra Pradesh. Arizona-headquartered First Solar is an American PV manufacturer of rigid thin film modules, or solar panels, and a provider of utility-scale PV power plants and supporting services like finance, construction, maintenance and end-of-life panel recycling. In India, it has supplied over 1 GW worth of panels while globally its supplies are worth over 17 GWs, according to the company. The First Solar acquisition will be carried out by a platform company wholly owned by IDFC’s infrastructure fund called Vector Green. Vector Green in the past has acquired a 24 MW wind asset from Naveen Jindal’s Jindal Steel and Power and another 40 MW solar project from Punj Lloyd. This would be its most ambitious takeover. The next 12 months will be interesting for wind and solar sectors from a regulatory and competitive intensity standpoint, IDFC said.

The National Association of Street Vendors of India estimates that there are around 30,000 street vendors in Bengaluru. Small businesses like these face innumerable challenges, given their make-shift existence. The Selco Foundation has been finding sustainable solutions for marginalised communities. It called for entries to build sustainable, cost-effective energy kiosks that can be used by street vendors and marginalised immigrant communities for their daily energy needs through the competition Design + Build 2017 in May. The pilot, to be built at a cost of ₹ 600,000, is to be set up at the Clarence School bus stop in Richards Town. Using solar power, it would be able to charge 60 lights, which would be rented out at ₹ 10 per light to vendors and community members on the street. Selco Foundation said the cost of power from these kiosks would be cheaper than kerosene lamps. In the long term, these kiosks could help in rural areas, for migrant or low-income communities and in disaster and relief situations.

A new report by HEAL, an European environmental non-profit has assessed the spending of seven economically powerful countries on fossil fuel subsidies and health costs associated with fossil fuel subsidies. India, according to the report spent as much as $16.9 billion on oil, gas and coal subsidies in 2013 and 2014 but health costs to meet the burden of air pollution linked diseases is eight times the fossil fuel subsidies at 140.7 billion dollars. The report ‘Hidden Price Tags’, highlights that India can provide 375 million households with solar lamps or train nearly 32,000 extra doctors for rural areas with the fossil fuel subsidy spending of $16.9 billion annually. This is assessed considering that each solar lamp costs about $22.5, and AIIMS recent estimates suggest a cost of  ₹ 17 million to educate a doctor. The subsidy amount could even fund 24% of the total money needed to implement health care coverage for all Indians, the report suggests. On India’s spending on fossil fuel subsidies, researchers from the PHFI who drafted the India chapter noted that two-thirds of electricity in India continues to be generated from coal, one of the biggest contributors of air pollution. LPG and Kerosene are also subsidized. The report said not all fossil fuels are bad, in fact LPG has significant health benefits when its used to substitute biomass or coal as cooking fuel.

The UP government issued notice to six private companies, including Adani Green Energy, for delay in setting up solar power plants in UP. The decision was taken after the companies did not set up solar power plants, despite entering into an agreement for it, two years ago. UPPCL issued the ‘Procure Preliminary Default’ notice to six companies, namely Adani Green Energy Ltd, Pinnacle Air Pvt Ltd, Awadh Rubber Prop, Madras Ilastomar Ltd, Sudhakar Infratech Private Ltd and Shastradhara Energy Private Ltd, seeking cancellation of their agreement with the New Energy Development Authority. UPPCL said the state government got into an agreement with 15 companies in 2015 under the solar power policy of 2013. Of these, nine installed solar power plants with a total capacity of 135 MW but six companies did not honour the agreement to install power plants with an aggregate capacity of 80 MW each. As per the agreement, the units were to supply solar power at the cost of ₹ 7.02 to ₹ 8.60/kWh. According to UPPCL, cost of solar panels reduced over time. UPPCL said cost of solar power fell to ₹ 2.44/kWh because of reduction in prices of solar panels. Under such circumstances, the companies may not be allowed to set up power plants as per the previous arrangement, UPPCL said. Union ministry of new energy, through its letter, had asked the state government not to extend the deadline for installation of solar power projects.

Bengal’s Department of Power and Non-Conventional Energy Sources has proposed providing access to solar power to the small islands in the state, with 30 to 50 families on each, in the Sundarbans Delta and other rivers. There are two major hindrances to providing power to these small islands from the conventional electrical grid. Firstly, it is a costly proposition, and secondly, the electrical poles are often uprooted due to floods and storms, which these islands in the Sundarbans are prone to. Solar panels would be fitted on the roofs of homes, and these would provide captive power for use by the household members. Initially, a private agency, to be chosen through a bidding process, is going to be given the responsibility of maintenance, which would then be passed on to the gram panchayats.

The MNRE has clarified that a guideline for procurement of renewable power through competitive bidding would be notified shortly by the Centre.  Till then, projects may be set up under existing provisions of the Electricity Act, 2003 under section 62 wherein the State Regulatory Commission is to be approached for fixation of tariff, the government said. HAREDA said that after the notification, any project developer may set up a project for generation of renewable energy as per the bidding guideline if it qualifies for the same. HAREDA said that in the renewable energy policy of the Haryana government, there is a provision for setting up of renewable power projects by independent power producers on the site identified by them. For this, they have to submit their proposal along with DPR to HAREDA. After approval of the DPR, they have to file a petition before the HERC for fixation of tariff for their projects for sale of power to the state grid.

With the steep fall in solar tariffs in the last two years, the MNRE has written to all states to ensure that solar developers do not get “undue benefits” from the development by insisting that solar projects meet the deadlines initially set for them without any extensions. The fall is largely due to the lowering of prices of solar cells and modules in the global market, especially in China, which has seen considerable overproduction. The MNRE is concerned that developers who signed PPAs at fairly high tariffs while solar equipment prices were also high, could earn a windfall over the next 25 years – most solar PPAs are for 25 years – if they delayed buying their requirements and did so after prices had dropped. Low solar power tariffs discovered in recent rounds of bidding for solar power projects has raised questions on the viability of projects.

NHPC Ltd has shut down its hydel power plant at Ramdi in Darjeeling hills after a mob of over 600 people began agitation outside the plant site. NHPC will resume power generation at Ramdi plant once it gets assurance of security of the unit. NHPC has another unit Teesta Low dam IV of 160 MW in Darjeeling hills.

A total of 41 under-construction hydro electric projects (above 25 MW) with a combined capacity of 11,792.5 MW are running behind schedule, Parliament was informed. The projects are lagging on account of natural calamities, delays in forest clearances and land acquisition and law and order problems. NHPC is scheduled to generate 4458.69 million units additional power from two of its under- construction projects – Parbati-II (800 MW) in Himachal Pradesh and Kishanganga hydro electric project (330 MW) in Jammu & Kashmir. While Parbati-II is scheduled to be commissioned in October 2018, Kishanganga is scheduled to begin in January 2018.

Wind energy companies have moved the Madras High Court against the Tamil Nadu electricity distribution company’s move to auction wind energy projects with a new base price, and the sector regulator’s decision to allow the auction. IWEA has moved the high court, challenging a TNERC order to allow Tamil Nadu Generation and Distribution Corp Ltd hold a wind auction for 500 MW with the base price set at ₹ 3.46/kWh, a record low tariff found in the first and only wind auction in the country held in February. IWEA in its petition called TNERC’s order issued on June 2 “arbitrary, illegal, unjust and deserving to be quashed”. It argued that since an earlier tariff order of the regulator was valid till April 1, 2018, any fresh tariff related order could only be passed after this period had expired. TNERC had passed a comprehensive tariff order on wind energy, applicable for two years starting April 1, 2016, setting the wind power tariff at ₹ 4.16/kWh. Wind energy tariffs so far had been set by state regulators and mostly varied between ₹ 4/kWh and ₹ 6/kWh.  The first wind auction was held in February by Solar Energy Corp of India Ltd. It saw wind energy tariffs fall sharply to ₹ 3.46/kWh. The petition also said that the final guidelines for states choosing to hold wind auctions had not yet been issued by the Centre, though draft guidelines had been circulated.

India and Russia have signed contracts for priority design works and supply of main equipment for units 5 and 6 of the KNPP in Tamil Nadu, two months after the main framework agreement for these units were signed. Three main contracts were signed between NPCIL and Russia’s JSC Atomstroyexport for priority design works, working design and supply of the main equipment for stage III of KNPP, the Russian company said. JSC Atomstroyexport is a key foreign trade engineering company of State Corporation “Rosatom” for construction of nuclear power facilities abroad. After overcoming initial hurdles, India and Russia signed the GFA and credit protocol for Units 5 and 6 of the KNPP on June 1. The KNPP was the outcome of an inter-governmental agreement between the erstwhile Soviet Union and India in 1988. It is the single largest nuclear power station in India. The power station was envisaged to have six units with total capacity to generate 6,000 MW of electricity (1,000 MW each).

A French firm, which is to build six atomic reactors at Jaitapur, has submitted a fresh plan to the NPCIL proposing to share a larger role in the engineering aspect of the project, the company said. The firm, EDF, and the NPCIL have also resolved to sign the GFA for the JNPP by the end of the year. The EDF is to build six reactors, each with a capacity of 1650 MW each. When operational, the proposed plant, some 500 km south of Mumbai, will be the largest nuclear power generation park in the country. A construction of a nuclear plant is usually discussed in terms of the EPC. The EDF has proposed to take care of the engineering part and a large chunk of the procurement of equipment which have to be sourced from abroad. This position has been different from what Areva, which has been taken over by EDF, had proposed when the negotiations had initially begun. However, the EDF insists that the NPCIL should take care of the construction part as it has an experience of building the Kudankulam Nuclear Power Plant.

Rest of the World

China’s solar industry is expected to produce 25 percent more panels in 2017 than last year, supported by domestic sales and demand from the US and emerging markets. China was expected to produce solar panels with a combined capacity of 60 GW this year. China produced panels with capacity of 48 GW in 2016. Despite growing global demand, China’s solar industry faced challenges ranging from possible tariffs abroad to inadequate grid connections at home. The US has told the World Trade Organization it was considering putting emergency “safeguard” tariffs on imported solar cells, a move aimed at shielding its industry from a damaging, unforeseen surge in imports. In China, solar generation has been hindered by wastage or curtailment, in which inadequate grid connections mean not all capacity is utilized. Environment group Greenpeace said solar curtailment rates across China rose 50 percent in 2015 and 2016, with more than 30 percent of available power in north-western province Gansu and Xinjiang failing to reach the grid. China had a total of 101.82 GW installed solar capacity by June, after adding 24.4 GW in the first six months of 2017, the industry association said. It will soon reach 110 GW, the target Beijing had aimed to achieved by 2020.

Top oil exporter Saudi Arabia has asked companies to qualify to bid for its first utility-scale wind power project at Dumat al-Jandal. Requests to qualify for the 400 MW wind project in the north of the kingdom will close on August 10, and proposals will be received from August 29. Bidding closes in January next year, the ministry’s REPDO said. The ministry had earlier said the Sakaka 300 MW solar PV plant and a 400 MW wind project in Midyan were part of the first round of projects. Saudi Arabia aims to generate 9.5 GW of electricity from renewable energy annually by 2023 involving 60 projects. The renewables initiative involves investment estimated between $30 billion and $50 billion. The ministry has said the first round will be to generate 700 MW of renewable energy followed by 1.02 GW in the second round which will be split into 620 MW solar and 400 MW wind whose bidding could happen between the fourth quarter of this year and first quarter of 2018.

Scientists have designed new ‘smart’ solar glasses incorporated with coloured, semi-transparent organic solar cells that can generate electric power enough to operate devices such as hearing aids or step counters. Organic solar cells are flexible, transparent, and light-weight – and can be manufactured in arbitrary shapes or colours, researchers from Karlsruher Institut fur Technologie (KIT) in Germany said. They are suitable for a variety of applications that cannot be realised with conventional silicon solar cells. Researchers designed sunglasses with coloured, semitransparent solar cells applied onto lenses that supply a microprocessor and two displays with electric power. This paves the way for other future applications such as the integration of organic solar cells into windows or overhead glazing, researchers said.

Germany connected 626 MW of newly built offshore wind capacity to power grids in the first six months of this year and expects to see total installations of 900 MW in the full year, five industry groups, engineering body VDMA, wind energy group BWE, wind energy agency wab, the Offshore Windenergie Foundation and Group for Offshore Wind, said. The installed total is now 4,729 MW and if 900 MW were achieved, it would exceed the 818 MW added in 2016. The rate of expansion could mean the industry will beat government targets of 6,500 MW for 2020, they said. The wind power industry is moving away from an era of costly subsidies and is trying to become more commercially viable and to bring down costs for consumers. The industry groups said that latest bids by companies to build and run turbines at zero subsidy costs in the next decade offered encouragement and reason to expand. Germany’s network regulator in April approved 1,490 MW of offshore wind capacity on the German North Sea to be built in the middle of the next decade at costs well below expectations to utilities EnBW and Denmark’s DONG Energy.

MHI has agreed to acquire a 19.5% stake for an undisclosed sum in a new company that will be formed through the reorganization of Areva Group. In November 2016, EDF had agreed to buy Areva’s nuclear reactors business, a transaction which had been approved by the European Commission recently. According to MHI, the stake acquisition will expand its ties with EDF. It is also expected to bolster the relationship between Japan and France in the nuclear power sector based on the close ties of cooperation of MHI with the Areva Group and French utility EDF. MHI said that it will continue to work closely with EDF and the Areva Group for the completion of the transaction. It said that all processes regarding the same are scheduled to be done with by the year end.

State agencies have been ordered to review the economic viability of Dominion Energy Inc’s Millstone nuclear power plant, which critics want shut down in the face of cheaper energy sources. Since 2013, six reactors, including Dominion’s Kewaunee in Wisconsin, have shut for economic reasons. Another six are expected to shut over the next five years. Connecticut is among several states exploring rules to keep reactors in service to preserve carbon-free energy, jobs, taxes and a more diverse power pool. Other states looking at similar rules are Ohio, Pennsylvania and New Jersey. New York and Illinois adopted rules to subsidize some of their reactors in 2016. Dominion Energy Inc said it would keep fighting to get the Connecticut legislature to include power from the company’s Millstone nuclear plant included in a state energy procurement plan. But NRG Energy Inc vowed to fight Dominion’s proposal, calling it “a cynical scheme that should not be rewarded.” The state has solicited power from renewable sources of generation to support environmental programs. Dominion has said including nuclear power in this program will help cut the state’s electricity costs, which are among the highest in the country. Millstone is among several nuclear plants in the United States Northeast and Midwest that could close before their licenses expire, as low wholesale power prices have squeezed profits. The ISO said Dominion had already committed to generate power through May 2021, but noted it could retire the reactors so long as the company provides energy from another source. Connecticut is one of several states exploring ways to keep reactors in service to preserve carbon-free energy, jobs, taxes and a more diverse power pool. In 2016, New York and Illinois adopted rules to subsidize some reactors that were in danger of closing due to generators run on cheap natural gas. Ohio, Pennsylvania and New Jersey have also considered proposals to protect their reactors.

France will define a clear roadmap to fulfill its pledge to cut the share of nuclear power in its electricity generation to 50 percent by 2025. A 2015 law requires France to reduce in eight years the share of atomic power generation to 50 percent from over 75 percent currently, and include more renewable wind and solar generation. For France to meet that target, it might have to shut down up to 17 of its 58 nuclear reactors operated by state-controlled utility EDF. Newly elected French President has maintained the target of cutting French nuclear production by 2025. Since the 2015 law was passed, little had been done and there was no clear strategy on how France would meet the 50 percent target. The closure of the nuclear plants is a hot-button issue in France with trade unions and some political parties saying the plan would cripple the French nuclear sector.

Brazil is planning to lower the estimated capacity of several older hydroelectric dams before they are privatized by state-controlled power holding company Eletrobras. The revisions will reduce the amount of energy that the dams can legally offer to the market – part of an effort to create a more robust and predictable power grid as the government seeks more private investment for the sector. Earlier this year, a government study suggested that hydroelectric capacity estimates could be lowered by about 845 MW with nearly two-thirds of that coming from the massive Itaipu dam shared with neighbouring Paraguay. The proposed capacity revisions would not affect the hydro dams’ obligations, but would reduce their potential to generate revenue. By making them before Eletrobras puts the operations up for sale, the government is aiming to reduce uncertainty and bring more bidders to the table for the upcoming privatizations.

Democratic Republic of Congo has decided to more than double the size of its planned Inga 3 hydroelectric plant to make it more economical, after the $14 billion project was hit by financing problems. Inga 3 is part of a $50 billion-$80 billion project to expand hydroelectric dams along the Congo River, but the project has repeatedly been delayed by red tape and disagreements between Congo and its partners on the project. The plant would be built to produce between 10,000 and 12,000 MW of power, more than double the originally planned capacity of 4,800 MW.


Oil Minister wants kerosene use to be phased out in Goa in favour of LPG

August 14, 2017. Oil Minister Dharmendra Pradhan asked state-owned oil and gas distribution companies and senior government officials to phase out the use of kerosene in the state. In line with the union government’s push to adopt greener fuels and discourage kerosene, Pradhan wants liquefied petroleum gas (LPG) and piped compressed natural gas (CNG) to reach the doorstep of all households in the state. The central government is reducing kerosene supply by 5% a quarter which, along with additional voluntary cuts by some states, small increases in retail prices, and roll out of direct cash transfer for beneficiaries, is estimated to reduce sales and subsidy on kerosene by 25% by the end. With an increase in LPG gas subscribers and given that electrification of Goa’s villages is near total, the government plans to reduce the supply of kerosene, an inefficient and polluting fuel that is often used to adulterate diesel. Goa has around 12,000 kerosene users who avail of the subsidized kerosene for cooking and other purposes. The government has been aggressively discouraging the use of kerosene for a long time and the civil supplies department already has a plan in place to reduce the sale of kerosene. Goa has to be completely covered by LPG gas and piped cooking gas and the state government authorities must ensure that every household has a gas connection, Pradhan said.

Source: The Times of India

India’s fuel demand grows 1 percent in July on higher petrol, diesel consumption

August 14, 2017. The country’s fuel demand grew by over 1 percent in July as consumption of diesel and petrol rose, government data showed. Fuel consumption in July totalled 15.8 million tonnes as compared to 15.63 million tonnes in the same month of last year, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed. The growth was higher than the 0.4 percent recorded in June when consumption of industrial fuel had dipped. Oil demand has been erratic this fiscal — growing by 6.1 percent in May and 2.4 percent in April. For July, diesel sales were up 8.5 percent at 6.3 million tonnes while petrol consumption was up 11.6 percent at 2.14 million tonnes. With a record number of free cooking gas connections being doled out, LPG (liquefied petroleum gas) sales were up 12.5 percent to 1.92 million tonnes. Since launch of the scheme to provide free LPG connections to women of poor households in May last year, more than 2.6 crore connections have been given. Naphtha sales fell 30 percent to 833,000 tonnes. Consumption of bitumen, used for making roads, also dipped 8 percent to 255,000 tonnes. Oil demand had plunged 5.9 percent in January, the most in 13 years, after the shock demonetisation of high-value currency notes in November. Demand fell 3.1 percent in February and 0.7 percent in March before rebounding in April.

Source: The Economic Times

IOC buys first shale oil from US

August 13, 2017. Indian Oil Corp (IOC) has bought the country’s first shale oil from the United States (US) and is looking to step up imports from America as part of its crude diversification strategy. IOC bought 1.9 million barrels of US crude in its second import tender seeking oil from the Americas, company Director (Finance) A K Sharma said. IOC had last month sealed a deal to import 1.6 million barrels of Mars crude from the US and 400,000 barrels of Western Canadian Select oil for delivery at its Paradip refinery in Odisha — the first ever such purchase of US crude by an Indian state-run refiner. The first cargo was loaded on ships on August 7 and would after a 40-day journey reach Paradip sometime around September 20, he said. Sharma said IOC has received government nod for buying one cargo (or shipload) of US oil every month till March 2018. India allows import of crude oil only on Indian carriers but US oil can be imported only on foreign vessels. So a special permission is needed for using foreign-flagged ships for ferrying the oil. As per present policy, when a domestic refiner tenders to buy a crude from foreign nation, Indian shipping lines get the first right of refusal by virtue of they being allowed to match any lowest bidder for transportation of crude oil. Only when they waive their right can the oil firms use a foreign line. Transporting US crude needs very large crude carriers and can be done only by foreign shipping lines. And to do that, oil companies have to obtain permission of the shipping ministry. Bharat Petroleum Corp Ltd (BPCL) has bought two of the US cargoes. A few days ago it bought 1 million barrels of US West Texas Intermediate (WTI) Midland sweet crude for delivery in October – its first purchase of the sweet variety from the US. In July, it bought 500,000 barrels each of Mars and Poseidon varieties of medium-to-high-sulphur crude for delivery to its Kochi refinery between September 26 and October 15. Hindustan Petroleum Corp Ltd (HPCL) is also looking at buying US crude oil. Sharma said buying US crude has become attractive for Indian refiners after the differential between Brent (the benchmark crude or marker crude that serves as a reference price for buyers in western world) and Dubai (which serves as a benchmark for countries in the east) has narrowed. Even after including the shipping cost, buying US crude is cost competitive to Indian refiners, he said. The deals by IOC and BPCL came within weeks of Prime Minister Narendra Modi’s visit to the US when President Donald Trump talked of his country looking to export more energy products to India.

Source: The Times of India

MP government not in favour of bringing petroleum products under GST

August 13, 2017. The Madhya Pradesh (MP) government made it clear that it can not give consent to the GST Council to bring the petroleum products under the purview of the Goods and Services Tax (GST). However, the finance minister Jayant Mallaiya, who admitted that the rate of tax (VAT and entry tax) on petroleum products in the state is on the higher side also gave a justification for it. Mallaiya said in 2016-17, a total of Rs 29,500 crore commercial tax was collected in the state which means an increase of 14.5 percent per year.

Source: The Economic Times

India’s refiners bet big on petrochemicals as industry reshapes

August 11, 2017. India’s state oil refiners – long focused on churning out transport and cooking fuels – are planning a $35 billion push into petrochemicals to meet an expected surge in demand for goods ranging from plastics to paints and adhesives. The drive comes as the government seeks to promote durable, cheaper materials in industries such as farming and food packaging, while refiners eye long-term threats to their business from renewable energy and a shift to electric vehicles. Oil Minister Dharmendra Pradhan said the government wants to set up petrochemical clusters in the eastern, western and southern regions around refineries. The government is still formulating a national policy for petrochemicals after a white paper that proposed a fund to boost investment and encouraging the use of plastics in areas like packaging and farming wasn’t taken forward. However, India’s big three state refiners, Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), already plan to spend about $35 billion to boost their petrochemicals business.

Source: Reuters


ONGC eyes doubling natural gas production to 100 mmscmd in 5-6 yrs

August 15, 2017. Oil and Natural Gas Corp (ONGC) said it plans to double gas production to over 100 million metric standard cubic meter per day (mmscmd) in the next 5-6 years. ONGC said despite tumbling oil prices in the last three years, it not only sustained production from existing fields through incremental inputs but has also taken large meaningful and calculated investment decisions to ensure sustained volumes and financial growth. Government is targeting increase in share of gas in the energy basket from 6.5 percent to 15 percent in the next few years. ONGC said 17 projects with a combined capex of Rs 76,000 crore have been approved in the last three years. Its flagship project includes Cluster-II in Bay of Bengal block KG-DWN-98/2 (KG-D5). The project would produce about 25 million tonnes of oil and 50 billion cubic meters (bcm) of gas over the life of the project with peak production of 4 million tonnes of oil and 5.5 bcm of gas. This would be equivalent to 17 percent and 24 percent of ONGC’s current standalone oil and gas production, respectively. During the last three years, ONGC completed 15 production related projects (including 8 brownfield and 7 greenfield) with capital investment of Rs 54,000 crore.

Source: The Economic Times

IGL expects Rs 1.5 bn annual revenue from Gurgaon city gas services

August 15, 2017. Indraprastha Gas Ltd (IGL) is expecting a revenue of Rs 150 crore annually from its planned city gas services in Gurgaon for which it has just received license from the Haryana government. The state government has permitted IGL to operate in an area that is about a quarter of Gurgaon and houses 10-15% of the satellite city’s population, and given it a target to set up 10 compressed natural gas (CNG) stations for fueling vehicles and connect 10,000 homes with piped gas. IGL plans to set up all 10 CNG stations and other related infrastructure in a year after it receives the regulatory clearances. The rest of the Gurgaon will continue to be served by Haryana City Gas Distribution, another private city gas operator, which had received license from Haryana government to operate gas network in the city in 2005. Just a year earlier, in 2004, IGL had received the mandate for Gurgaon from the Central government. This had resulted in a legal dispute that is yet to be finally settled. But the state government last month permitted IGL to roll out services in a part of Gurgaon and promised land for CNG stations. As of March 2017, Haryana City Gas operated 16 CNG stations and serviced 15,000 piped gas consumers in Gurgaon. That IGL has license to operate in Delhi and satellites Noida, Ghaziabad and Rewari in Haryana would be an advantage in executing project in Gurgaon. The company would offer households the facility of equated monthly installments (EMI) to pay the initial cost of Rs 6,000 to encourage them to switch to piped gas from using cooking gas cylinders that can be obtained cheaply but match piped gas in recurring expense. IGL has got about 30,000 new subscribers availing the EMI payment scheme in the past 8 months.

Source: The Economic Times

Leak in ONGC underground gas pipeline in Tamil Nadu

August 14, 2017. A leak occurred in an ONGC (Oil and Natural Gas Corp) underground gas pipeline at a village near here causing anxiety to the local residents. After the leak was noticed at Mathirimangalam, ONGC shut the gas well that feeds the line and the leak was rectified by tonight. Villagers expressed concern over the leak in the gas pipeline. Police personnel have been posted at the village as a precautionary measure, police said. When contacted, a local ONGC official said there was not “much leak.”  The ONGC’s gas extraction well is in operation for a long time and located close to Mathirimangalam. The pipeline that developed leak was carrying gas from this well through Mathirimangalam village to the ONGC Gas Collection Station at Kuthalam. Asked what could have caused the leak, the official said there “may have been some defect.”

Source: The Economic Times

RIL, BP to submit revised investment plan for KG-D6 gas finds

August 14, 2017. Reliance Industries Ltd (RIL) and its partner BP Plc of UK will by year end submit a revised investment plan for the four satellite gas discoveries in the flagging KG-D6 block by integrating their development with two other nearby finds. Four deepsea satellite gas discoveries — D–2, 6, 19 and 22 are planned to be developed together with D29 and D30 finds in the Krishna Godavari basin of KG-D6 block. The four satellites and the other two finds (D29 and D30), R-Series and MJ gas discoveries, are the ones on which RIL and BP had in mid-June this year announced investing Rs 40,000 crore to reserve the flagging production from KG-D6 block. Development of the six satellite finds are being taken up together while D-34 or R-Series and D-55 (MJ) would have separate development plans. The government had in 2012 approved a $1.529 billion plan to produce 10.36 million standard cubic meters per day of gas from four satellite fields of block KG-DWN-98/3 (KG–D6) by 2016-17. The four fields have 617 billion cubic feet of reserves and can produce gas for eight years. However, the companies did not begin the investment citing uncertainty over gas pricing. Now that the government has allowed a higher gas price of $5.56 per million metric British thermal (mmBtu) unit for yet-to-be- developed gas finds in difficult areas like the deep sea, RIL and BP have decided to take up their development. This rate is comparable with $2.48 per mmBtu for currently producing fields.

Source: The Times of India

GSL mulling use of CNG as fuel for naval warships

August 13, 2017. Goa Shipyard Ltd (GSL), in collaboration with Inland Waterways Authority of India (IWAI) and the oil ministry plans to use natural gas as fuel for next generation naval warships. The project, currently in the proposal stage, will be undertaken as a pilot study through an agreement with the key stakeholders. ICGS Shaurya is an offshore patrol vessel that will be stationed along the western coast and is tasked with protecting India’s off-shore assets and the exclusive economic zone. The offshore patrol vessel is the fifth, in a series of six offshore patrol vessels, that the Coast Guard had tasked GSL to build. GAIL (India) Ltd is the largest state-owned natural gas processing and distribution company, and has a 175 km long compressed natural gas (CNG) pipeline that terminates at Vasco. Oil Minister Dharmendra Pradhan Pradhan wants to utilize this pipeline to provide fuel for warships that GSL builds for the Indian Navy and the Coast Guard. GSL said that the shipyard had already commenced discussions with the inland waterways authority to explore how CNG or LNG (liquefied natural gas) can be used as a fuel.

Source: The Economic Times


CIL plans to shut around 100 unprofitable mines over 2-3 yrs

August 10, 2017. Coal India Ltd (CIL) will shut nearly 100 unprofitable mines over the next two-three years. Of this, 37 will close operations this year. Last year, CIL closed down over 15 mines. A recent study showed that about 15 mines are highly profitable and 90 others can be made profitable. The company said opening new mines and shutting unviable ones is a continuous process. CIL began with 750 mines but now has 394. Low grade coal extracted from mines that produce less than one million tonnes a year are generally considered unprofitable as the scale of operation in them do not support the cost involved visà-vis the price its coal fetches. CIL has also been recently hit because the Coal Controller of India downgraded 50% of its 394 mines, meaning they are fetching lower prices for the coal produced compared to what they were fetching in 2016-17. CIL expects a hit of about Rs 10,000 crore annually as a result of downgrading.

Source: The Economic Times

India’s wild energy trends raise doubts over coal’s future

August 9, 2017. Within the wild energy market of the world’s second-most populous nation, predictions are proving tricky. India had been projected to become a carbon-belching behemoth, fueled by thermal power plants demanding ever more coal for decades to come. Now, some analysts are saying that may not happen. In the last two years, coal consumption has slowed to its lowest level in two decades, even with the economy growing at a steamy 7% annual pace. India is the world’s third-largest carbon emitter and relies on coal-fired power plants to produce most of its energy. With a population of 1.3 billion and a fast-industrializing economy, those energy needs had been forecast to soar. So signs that the country’s appetite for burning more coal may be close to sated would be welcome news, given fears of a looming escalation in climate-warming carbon emissions. The rate of increase in coal consumption in India is now the slowest it’s been since 2000, apart from an anomalous 1% rate of growth in 2011. Last year, it dropped to 1.5% from the decade’s average of 6%. This year, it’s slightly higher at 2.8%. Tim Buckley, the Asia

energy finance director for the Cleveland-based Institute for Energy Economics and Financial Analysis, lays out a scenario where India’s coal consumption might come close to peaking within the next decade, if not sooner. By washing coal before it’s burned, India’s power plants now burn less to produce the same amount of power. India is also now policing rail shipments more rigorously to reduce coal theft. And new plants are required to use so-called supercritical technology that further raises the efficiency of coal burned while also reducing pollution. Thanks to such efficiency boosting measures, the amount of coal needed to deliver a 6% rate of growth in electricity demand will drop even further, and may be near flat, Buckley said.

Source: Livemint


Adani Transmission acquires Hadoti Power Transmission Services

August 15, 2017. Adani Transmission said it has acquired 100 percent share capital of Hadoti Power Transmission Services Ltd from Rajasthan Rajya Vidyut Prasaran Nigam Ltd (RVPN). The company was incorporated by RVPN in May 2016 for development of 220 kilovolt (KV) and 132 KV grid sub-station, along with associated transmission lines and schemes and works in public private partnership mode, Adani Transmission said. Adani Transmission acquired the company through a competitive bidding process.

Source: The Economic Times

Downward power tariff revision may lead to more bad loans: IBA

August 14, 2017. Indian Bank’s Association (IBA) has sought the power ministry’s intervention to ensure that electricity tariffs are not renegotiated as that would hurt economic viability of projects and may lead to rise in bad loans. It draws attention toward states-owned power distribution companies (discoms) which are looking to cancel or renegotiate the power purchase agreements (PPAs) with coal based and renewable energy developers on the ground that tariffs contracted earlier were very high. It said that Uttar Pradesh has recently cancelled a few PPAs and also there were instances in the past where the developers were asked to voluntarily offered discount over the quoted tariff to facilitate of offtake from their plant. It further said the risk related to such tariff revision in the renewable sector is much higher and pointed out that in the recent auction for wind power projects some states have started renegotiating for downward revision of tariffs. The IBA has asked the power ministry to take up issues concerning power sector with the state government and discom and ensure that PPAs are neither cancelled nor renegotiated. States, IBA said, should be asked to honour commitments to renewable projects implemented under the state policy by executing PPAs/procuring power in a timely manner. It said that developers should not be pressurised to voluntarily offer reduction in tariff as it affects loan repayments decided on the basis of agreed price.

Source: The Financial Express

Farmers to get land compensation for power transmission lines

August 13, 2017. Farmers whose agricultural land is acquired for erecting high-tension power transmission towers will now get compensation. Uttar Pradesh Electricity Regulatory Commission (UPERC) has recently issued a direction in this effect. Currently, only crop compensation is awarded to farmers on whose land power transmission towers are erected. However, no land compensation is awarded in the state. This is despite the fact that the land which is covered by the tower base of an electric tower cannot be used for any useful purpose. The Commission’s directive is in concurrence with the already laid down guidelines issued by the Union power ministry with regard to “reasonable and appropriate” compensation to landowners as they suffer on account of such erection of high-tension power lines on their land. The directive was issued in the wake of several petitions in favour of land compensation due to erection of transmission lines. While states such as Odisha, Maharashtra, Uttarakhand, Punjab, West Bengal, Bihar, Karnataka, Kerala, Jharkhand have already adopted these guidelines of the Union government, Uttar Pradesh is yet to implement the same.

Source: The Times of India

Declare village electrified if all families get power: Parliamentary panel

August 10, 2017. A parliamentary panel has recommended that a village should be declared electrified only after providing power connections to all households. At present, all those villages with 10 percent families with electricity connection can be declared electrified under the government’s rural electrification programme. The Centre has electrified 14,125 villages out of 18,452 identified electrified villages in the country under the rural electrification programme so far, as per its web portal. The panel said that a village should not get a tag of being electrified in any case when the household coverage is less than 80 percent. The panel also pitched for segregation of commercial and technical losses to reduce quantum of aggregate technical and commercial losses.

Source: The Times of India

After UP, Jharkhand manages to renegotiate solar tariffs

August 9, 2017. Solar power developers who won the mega auction of 1,200 MW of projects in Jharkhand 16 months ago have agreed to reduce tariffs, which will help them sign power purchase agreements. Jharkhand is the second state after Uttar Pradesh (UP) to renegotiate solar tariffs arrived at through an auction. But while UP went back on signed power purchase agreements (PPAs), Jharkhand has not actually signed any because the state distribution company found it too costly. Developers had offered a tariff of Rs 4.99 per unit of power to the Jharkhand Renewable Energy Development Agency (JREDA). Among projects offered at 45 different locations in the state, winning bids ranged from Rs 5.08 to Rs 7.95, depending on size and location of the project.

Source: The Economic Times


MCL exploring use of OB dump for solar power

August 15, 2017. Union Coal Secretary Susheel Kumar said Mahanadi Coalfield Ltd (MCL) has been exploring the idea to use the stabilized over burden (OB) dump to install solar panels and generate solar power.

Source: The Economic Times

India’s solar capacity reaches 13.6 GW

August 14, 2017. According to the ministry of power, coal & new and renewable energy and mines of India, the installed solar capacity in India reached 13,652 MW at the end of July 2017.

Source: Enerdata

India should calibrate investment in green energy: Economic Survey

August 13, 2017. Investment in renewable energy should be made in a calibrated manner as social costs are high in promoting green energy, the Economic Survey has observed. The mid-year Survey, introduced for the first time, has also taken a cautious stand on the impact of encouraging green energy on the banking sector which is struggling to deal with bad loans in stranded power sector projects. It found that social costs of renewables was around 3 times of coal at Rs 11 per kilowatt hour (kWh). However, it said that since the first goal for India is to provide 100 percent energy access to its population and bridge the ‘development deficit gap’, all cleaner energy sources needed to be tapped.

Source: The Hindu Business Line

Goyal rules out review of 5 percent GST on solar equipment

August 13, 2017. Amidst reports that there is still lack of clarity on the 5 percent Goods and Services Tax (GST) levy on solar equipment, Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal has reiterated that there is no ambiguity as the government is very clear on the issue.

Source: The Times of India

Amplus installs 2 MW solar rooftop project at Greater Noida Expo Centre

August 13, 2017. Amplus Energy Solutions said it has completed construction of 2 MW solar rooftop plant for India Expo Centre Mart at Greater Noida. The project was completed in around 8 months and was declared for commercial use on May 31, 2017.

Source: The Economic Times

Maharashtra government will take up pilot project of separate solar feeders

August 13, 2017. Maharashtra Energy Minister Chandrashekhar Bawankule said the state government will take up a pilot project in which 40 lakh solar feeders for agriculture sector will be set up in the state. He also informed that solar power will also be provided to all zilla parishad schools in the state.

Source: The Economic Times

India to add 7 GW nuclear power capacity: Goyal

August 13, 2017. The Centre is looking at doubling the nuclear power generation capacity to about 14,000 MW, Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal said even as he ruled out its becoming the main source of energy for the country. At present, India generates about 6,800 MW of nuclear energy.

Source: The Economic Times

HCC wins hydro power contract worth Rs 8.1 bn in J&K

August 10, 2017. Hindustan Construction Company (HCC) said it has bagged a contract worth Rs 810 crore from Jammu and Kashmir (J&K) State Power Development Corp. The contract is for construction of 93 MW (3×31 MW) New Ganderbal hydro power project on Sind River in central Kashmir on EPC basis.

Source: The Economic Times


Oil traders expect Asia to import more Venezuelan crude if US sanctions kick in

August 15, 2017. Asia would be the biggest beneficiary of any potential sanctions by the United States (US) on Venezuela’s oil sector, traders and analysts said, as exports from the South American OPEC (Organization of Petroleum Exporting Countries) member could be redirected to the region, filling a vacuum left by producer supply cuts. An embargo against Venezuelan crude could block imports of about 740,000 barrels per day (bpd) to the US. Asian refiners would welcome the so-called heavy, or higher density, crude since production cuts by the OPEC have mainly curtailed this type of oil. At the same time, the start-up of new refining capacity is boosting demand. China and India, the two biggest buyers of Venezuelan crude after the US, have room to increase imports while other north Asian refiners, with equipment sophisticated enough to handle heavy Venezuelan oil, are seeking opportunities to tap this supply, analysts and traders said. In the first quarter of 2017, Venezuela delivered to Chinese companies about 485,000 bpd of crude and oil products to repay loans extended since 2007, according to internal documents from state-run oil company PDVSA. Russian oil firms Rosneft and Lukoil are also receiving about 250,000 bpd to repay loans, according to the PDVSA. PDVSA has cut sales to US refining unit Citgo Petroleum since May to increase its supply to Rosneft in order to catch up on overdue Russian deliveries.

Source: Reuters

Kuwait to finish cleaning up oil spill

August 13, 2017. Kuwait will finish cleaning up a crude oil spill in the country’s southern waters in the Gulf. Kuwait Oil Minister Essam al-Marzouq said that no more patches of oil have been found and that Kuwait was working on clearing up those near the shore. He did not give a reason for the spill. Kuwait said various services were investigating the incident but did not give the magnitude of the spill near Kuwait’s southern Ras al-Zour area nor its cause. Ras al-Zour is where Kuwait National Petroleum Company (KNPC) is building the Middle East’s largest oil refinery, with a processing capacity of 615,000 barrels per day and $11.5 billion worth of contracts. Saudi Arabia and Kuwait jointly operate fields in a shared area known as the Neutral Zone. The Khajfi Joint Operations (KJO), which is a joint venture between Kuwait Gulf Oil Co and AGOC, a subsidiary of Saudi state firm Saudi Aramco added that it put an emergency plan into effect to deal with the spill and it will conduct an aerial survey of the area to make sure the facilities and beaches were safe.

Source: Reuters

North Dakota oil production slips about 1 percent in June

August 12, 2017. North Dakota’s oil output slipped about 1 percent in June but should remain above 1 million barrels per day for the foreseeable future. The optimistic outlook comes as the state’s shale producers have found a way to survive low oil prices with new technology and process improvements. North Dakota, the No. 2 US (United States) oil-producing state, has largely taken a back seat in the past year as companies in the Permian Basin of Texas and New Mexico – the largest US oilfield – battle with the Organization of the Petroleum Exporting Countries (OPEC) for global energy market dominance. North Dakota’s drilling rig count, a closely watched barometer of the state’s oil industry’s health, has been steadily rising. On Friday the count stood at 57, about 4 percent higher than in June.

Source: Reuters

Strong oil demand growth helping market rebalance: IEA

August 11, 2017. World oil demand will grow more than expected this year, helping to ease a global glut despite rising production from North America and weak OPEC (Organization of the Petroleum Exporting Countries) compliance with output cuts, the International Energy Agency (IEA) said. The agency raised its 2017 demand growth forecast to 1.5 million barrels per day (bpd) from 1.4 million bpd in its previous monthly report and said it expected demand to expand by a further 1.4 million bpd next year. The OPEC is curbing output by about 1.2 million bpd, while Russia and other non-OPEC producers are cutting a further 600,000 bpd until March 2018 to help support oil prices. The IEA said OPEC’s compliance with the cuts in July had fallen to 75 percent, the lowest since the cuts began in January. The IEA also revised historic demand data for 2015-2016 for developing countries, cutting it by 0.2-0.4 million bpd. As a result of those historic revisions, the IEA cut baseline demand figures for 2017-2018 by around 0.3-0.4 million bpd and hence lowered demand for OPEC crude by the same amount.

Source: Reuters

Iraq wants to reopen old Saudi crude exports pipeline: Former Iraqi Oil Minister

August 10, 2017. Former Iraqi Oil Minister Ibrahim Bahr Al Olum said it was necessary for Iraq to regain an old pipeline that used to export Iraqi crude through Saudi Arabia. He expected that Riyadh would have a more “positive response” towards this issue given an improved political environment between the two major OPEC producers. Current Iraqi Oil Minister Jabar Luaibi is now on an official visit to Saudi Arabia and is due to hold bilateral talks with Saudi Minister of Energy Khalid al-Falih. The Iraqi Pipeline in Saudi Arabia (IPSA) has not carried Iraqi crude since Saddam Hussein invaded Kuwait in 1990. The pipeline was confiscated by Saudi Arabia in 2001 as compensation for debts owed by Baghdad. Saudi Arabia had used the IPSA pipeline to transport gas to power plants in the west of the country for years before test opening it in 2012, giving Riyadh scope to export more of its crude should Iran try to block the Strait of Hormuz.

Source: Reuters

LPG once again being stored in tankers off Singapore

August 9, 2017. Tankers carrying liquefied petroleum gas (LPG) are floating off Singapore for the first time this year as traders wait for opportunities to offload the fuel at more lucrative prices. At least one Very Large Gas Carrier (VLGC), the Pacific Binzhou, is anchored in Singapore carrying LPG, shipping data showed. The ship docked more than five days ago. One other VLGC had recently left for China after anchoring off Singapore for some time, but this could not be independently verified. LPG supply is not as excessive as last year, trade sources said, due to demand from India and China this year. In August last year, more than 10 ships were holding LPG – whose uses include heating, cooking and petrochemicals production – off Singapore for months before they could find buyers in winter. There is less incentives to store LPG this year as the contango is not more than $2 versus last year when it was more than $15, traders said.

Source: Reuters


Petronas expects balance in oversupplied LNG market in 2023

August 15, 2017. Malaysian state energy company Petroliam Nasional Berhad (Petronas) expects the global liquefied natural gas (LNG) market to remain oversupplied until as late as 2023, its Chief Executive Officer Wan Zulkiflee Wan Ariffin said. Rising LNG production over the last two years, mainly from Australia and the United States, has exceeded demand and depressed prices. Asian spot LNG prices LNG-AS are now down by around 70 percent from early 2014. Petronas is the sole manager of Malaysia’s oil and gas reserves, making it the world’s third-biggest LNG exporter after Qatar and Australia. The company is now looking for new buyers for its LNG output, beyond its long-time customers in Japan and South Korea, he said. South Asia is emerging as the new hot spot for LNG, with Pakistan and Bangladesh set to join India as major consumers, helping to eat away some of the global oversupply. Petronas started up Train 9 at its Bintulu export terminal this year and commissioned the world’s first floating LNG unit, bringing Malaysia’s annual LNG capacity to 32 million tonnes. Petronas is budgeting for an oil price of $45 a barrel for this year, expecting a slight higher budget assumption in 2018, he said. Earlier this year, Petronas said it maintained a “conservative” outlook for 2017 and that it will continue to pursue lower costs as oil prices are likely to remain uncertain.

Source: Reuters

China to build new shale gas bases, offer more O&G block tenders

August 15, 2017. China is likely to build two shale gas bases in the south of the country and open up tenders for more oil and gas (O&G) exploration blocks in the world’s biggest energy producer, the ministry of land resources said. The ministry said China is likely to start commercial production of shale gas in southern city of Anye in Guizhou province and Yichang in Hubei province. The ministry did not give a timetable for the start date. The steps come as China ramps up its exploration efforts as crude oil production from ageing wells drops. Beijing is also on a mission to lift natural gas consumption to help combat smog. In the north of the country alone, China’s crude oil and gas exploration efforts cover a vast 500,000 square kilometers, with new natural gas and light crude reserves having already been discovered there, the ministry said. In the shale gas expansion, China is seeking to encourage private firms to take part in a tender for shale gas exploration right in Guizhou. The ministry said it will also consider more auctions of shale gas blocks outside Guizhou.

Source: Reuters

Australia’s $180 bn LNG megaproject boom enters final stretch

August 14, 2017. The last massive component of Australia’s $180 billion liquefied natural gas (LNG) construction boom arrived, stepping up a race between Anglo-Dutch giant Shell and Japan’s Inpex to start chilling gas for export in 2018. Company reputations are at stake, as well as first access to overlapping gas fields and Australia leapfrogging Qatar as the world’s largest exporter of LNG. The Ichthys Venturer, a floating production, storage and offloading facility, travelled 5,600 km (3,500 miles) from a South Korean shipyard and will be moored 220 km off Western Australia to handle condensate from the Ichthys field. Japan’s top oil and gas explorer, Inpex Corp, is running Ichthys, both the country’s biggest overseas investment and first LNG megaproject. First production, due by March 2018, will be more than a year behind target. Costs have ballooned more than 10 percent to $37 billion since the project’s approval in 2012. Nearby, Royal Dutch Shell’s $12.6 billion Prelude project – the world’s largest floating LNG (FLNG) facility – is also behind schedule. Shell lost out on becoming the first producer of FLNG when Malaysia’s Petronas started up a smaller FLNG facility this year.

Source: Reuters

Gas starts flowing from BP’s new fields offshore Trinidad and Australia

August 14, 2017. BP has started producing gas from two new projects offshore Trinidad and Tobago and Australia, the company said, further boosting output that is helping the company to turn a corner after a bruising market downturn. Gas has started flowing via BP’s $2 billion Juniper gas platform offshore Trinidad and Tobago that is expected to produce around 590 million cubic feet a day (mmcfd) from the Corallita and Lantana fields, BP said. Offshore Australia, gas started flowing from the Persephone field, a project developed by Woodside Energy and of which BP owns nearly 17 percent. The field is set to contribute around 48 mmcfd net to BP, the company said.

Source: Reuters

Egypt to reduce imports of LNG to 80 cargoes in 2017/18 year

August 13, 2017. Egypt is planning to import 80 cargoes of liquefied natural gas (LNG) during the 2017-18 financial year that began in July, Petroleum Minister Tarek El Molla said, down from the 118 cargoes imported last year. Egypt has been trying to speed up the development of recent gas discoveries with a view to halting imports by 2019. Egypt expects to increase its LNG production by 1 billion cubic feet per day by the end of the current financial year to reach 6.2 billion cubic feet per day. Gas production will get a big boost from Italian national oil company Eni’s Zohr field, discovered in 2015 with an estimated 30 trillion cubic feet of gas in place. That field is expected to come into production at the end of 2017 and will save Egypt billions of dollars in hard currency that would otherwise be spent on imports.

Source: Reuters

Brazil authorizes Petrobras to export idle LNG cargoes

August 9, 2017. Brazil’s Petroleo Brasileiro SA (Petrobras) has been authorized to export idle liquefied natural gas (LNG) in the spot market. Petrobras has been given the green light to export up to 6.6 million cubic meters, assuming this would not result in supply problems for the domestic market. Petrobras operates three regasification terminals in Brazil, which were built in a time when the country was seeing high economic growth rates and natural gas consumption was strong. But demand fell in the last two years while Brazil went through its deepest recession on record, and local production continued to grow.

Source: Reuters


Indonesia’s coal output from major concessions totals 139 mt in the first half of 2017

August 10, 2017. Output from major coal mine concession holders in Indonesia reached 139 million tonnes (mt) in the first half of 2017, the mining ministry said. Output from major coal concessions, so-called Coal Contracts of Work (CCOWs), represents at least 80 percent of output in Indonesia, the world’s top thermal coal exporter. Bambang Gatot, the ministry’s director general of coal and minerals, said that 108.2 mt of Indonesia’s coal output from CCOWs was exported in the first half, while the rest was set aside for the domestic market. Indonesia’s total full year coal production target is 477 million tonnes this year, Gatot said.

Source: The Economic Times

Poland’s PGE expects coal prices to rise next year

August 10, 2017. Poland’s biggest power producer PGE expects coal prices to rise next year due to declining supplies, the company’s Chief Financial Officer Emil Wojtowicz said. PGE generates most of its electricity from lignite and thermal coal. It produces lignite in its own mines and buys thermal coal mostly from Poland’s biggest miner PGG, which it helped to bail out last year. In the second quarter of 2017 thermal coal prices rose by 3 percent year on year, PGE said. PGE said the group sees no problems with coal supplies from PGG. PGE’s lignite coal resources in Belchatow, central Poland, where its 858 MW lignite-fuelled power plant is, will run out by 2035 and the company will have to decide on investment in new pitches around 2025.

Source: The Economic Times


Zambia reduces power supply to First Quantum Minerals copper mines

August 15, 2017. Zambia’s state power company reduced electricity supply to two First Quantum Minerals copper mines, after a dispute over new, higher prices, Energy Minister David Mabumba said. First Quantum had failed to pay the new flat electricity tariff of 9 cents/kilowatt hour agreed by power utility Zesco and mining companies, Mabumba said. Mabumba said supply to First Quantum’s Sentinel mine was cut from 155 MW to 110 MW while that at Kansanshi mine reduced from 187 MW to 133 MW. Copperbelt Energy Corp (CEC), which buys power from Zesco and sells to the mines, had also slashed supply to Glencore’s Mopani Copper Mines from 190 MW to 94 MW, Mabumba said. Mopani Copper Mines said it had halted all output at its operations in Kitwe and Mufurila after Copperbelt Energy Corp. reduced power supply to the mining firm.

Source: Reuters


Germany awards licenses to increase onshore wind capacity by 1 GW

August 15, 2017. Germany will increase its onshore wind energy capacity by more than 1 GW, equal to that of a nuclear plant, under new licenses awarded, its network regulator Bundesnetzagentur (BnetzA) said. The regulator introduced an auction system this year to award licenses, aiming to intensify competition among project developers in order to lower costs and wean renewable energy away from subsidies. In the second auction under the new system, the regulator said it accepted 67 applications, mostly from citizens’ cooperatives, for a combined volume of 1,013 MW. Overall, 281 bids with a joint capacity of 2,927 MW had been submitted. Renewables accounted for nearly 32 percent of Germany’s power consumption in 2016, with onshore wind the biggest source at 11 percent, according to industry group BDEW. Germany aims for renewables to generate 40-45 percent of its energy by 2025.

Source: Reuters

Natcore negotiating technology license for Ghana solar farm

August 15, 2017. PSECC Solar Farms, a climate change mitigation company and developer of solar farms, has turned to Natcore Technology to help restore financial viability to a 20 MW Ghanaian project that was threatened by a 29% reduction in feed-in tariffs. A feed-in tariff (FIT) is an economic policy created to promote active investment in and production of renewable energy sources. Feed-in tariffs typically make use of long-term agreements and pricing tied to costs of production for renewable energy producers. In practice, feed-in tariffs may be payments to ordinary energy users for the renewable electricity they generate. The previous Ghanaian government had set the feed-in-tariff at about $0.137 per kilowatt hour (kWh), but the government appointed late in December 2016 has recently said that the signing of new power purchase agreements (PPA) can have a maximum FIT payment no greater than $0.10 per kWh. PSECC had gained a Provisional License in December 2016 for the 20 MW solar farm at Simbrofo in Ghana. Two additional 20 MW farms are planned for that venue. A commitment for financing the projects has been obtained from a Polish bank via the European Central Bank. The estimated build cost of the first 20 MW solar farm at Simbrofo will be $28.776 million. By licensing Natcore’s technology in Ghana, PSECC would also gain exclusive access, on a regional basis, to Natcore’s newest advances, including laser-processed, back-contact foil cell technology, black silicon and others as they come on line. Natcore and PSECC signed a Memorandum of Understanding (MoU) under which PSECC would engage Natcore to develop solar projects within the United States.

Source: Energy Business Review

Bulgaria to launch tender to sell Belene nuclear project next year

August 15, 2017. Bulgaria plans to launch a tender to sell its abandoned 2,000 MW nuclear power project Belene in early 2018, Energy Minister Temenuzhka Petkova said. The previous government cancelled the Belene project in 2012 after failing to find foreign investors and under pressure from Brussels and Washington to limit its energy dependence on Russia. The current government renewed the search for private investors to build the plant on the Danube River after an arbitration court ruled last June Bulgaria had to pay more than €600 million ($704.46 million) in compensation to Russian state nuclear company Rosatom when it cancelled the project.

Source: Reuters

US EPA erred in denying renewable fuel hardship exemption

August 15, 2017. The United States (US) Environmental Protection Agency (EPA) used too strict of a test when it denied Sinclair Oil Corp’s request for an exemption from the country’s biofuel regulations, a US appeals court ruled. The ruling could broaden the rules governing such exemptions and force the EPA to grant more of them under the Renewable Fuel Standard program, which requires that refiners blend biofuels like ethanol into their fuel pool or buy credits from those who do. Refiners of all sizes have complained for years that the program was too costly and threatened the viability of US plants. The EPA ruled that Sinclair did not qualify for a hardship waiver for small refiners, with capacity of less than 75,000 barrels per day, as the Salt Lake City, Utah-based company’s two Wyoming plants were profitable and would not be forced to close if they were in the program. US President Donald Trump has promised to cut down burdensome regulations, providing refiners hope that he would overhaul the US renewable fuels program. But the White House is set to reject a key request from refiners to shift the blending obligation away from them.

Source: Reuters

China approves plan to promote unified nuclear reactor brand

August 14, 2017. China has approved a plan from its two state nuclear developers to promote a single integrated nuclear reactor brand that will help speed up construction and strengthen their ability to compete in markets overseas. China is in the middle of an ambitious nuclear program that could bring total capacity to as much as 200 GW by 2030, and it also aims to win more projects abroad. But approvals have been slow with a variety of new advanced reactors subject to repeated delays. The China National Nuclear Corp (CNNC) and the China General Nuclear Project Corp (CGN) have been jointly developing an advanced model known as the “Hualong One”, but despite government pressure, they have continued to work separately on their own designs. In a plan approved by regulators, the two companies agreed to use integrated technical standards when building Hualong reactors. With China aiming to become a dominant global nuclear player, the government told CNNC and CGN in 2011 to pool technology instead of competing for the same projects. The aim is for the Hualong One to compete with advanced models such as the Westinghouse AP1000 or the European Pressurised Reactor designed by France’s Areva. But despite establishing a joint venture, CGN and CNNC have launched separate projects under the Hualong One banner. CNNC is building its own version at Fuqing in the eastern coastal province of Fujian, with the first scheduled to launch in 2019. It expects to finish a Hualong unit at Pakistan’s Chashma nuclear complex by 2020, the first overseas, and start work on another in Argentina by 2020. Meanwhile, CGN is constructing its first Hualong One in Fangchenggang, a city on the southwest coast. It will serve as a “reference” plant for a proposed project at Bradwell in England, with the technology currently being assessed by British regulators.

Source: Reuters

Fresh off wind farm deal, Ireland’s Mainstream bullish on Chilean renewables

August 10, 2017. Ireland’s Mainstream Renewable Power is confident it will be able to maintain a steady pipeline of power projects in Chile, even as some firms have soured on the country’s renewable sector in recent years. Aela Energia, a joint venture between Mainstream and British private equity firm Actis, announced it had sealed $410 million in bank financing to construct two wind farms with total capacity of 299 MW in the South American nation. The financial close on the farms, known as Sarco and Aurora, marks one of the biggest wind power deals in Chile, which has seen a wind and solar energy boom in recent years due to a steady regulatory framework and near-perfect conditions for such sources of power. But it also comes as falling energy prices, transmission grid issues and sluggish demand from the nation’s key mining sector begin to sow doubts among some investors.

Source: Reuters


All India Piped Natural Gas Scenario

Name of the State


No. of Connections (as on June 1, 2017)
Domestic Commercial Industrial*
Haryana 60,471 185 240
Andhra Pradesh 4275 41 0
Telangana 3345 5 5
Assam 30,214 1,012 400
Gujarat 16,73,817 17,216 4,256
Madhya Pradesh 16,106 69 88
Maharashtra 10,26,641 3,438 185
Delhi/NCR 7,51,970 1,953 946
Rajasthan 187 2 16
Tripura 29,736 366 50
Karnataka 2,842 21 3
Uttar Pradesh 53,830 287 498
Dadar & Nagar Haveli 92 2 0
Chandigarh 3,529 0
Kerala 595 2
All India 36,57,650 24,602 6,687

*Industrial PNG Connections are as on Mar 31, 2017

Trends in Domestic PNG Connections

Source: Compiled from Rajya Sabha Unstarred Questions

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

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