MonitorsPublished on Sep 11, 2017
Energy News Monitor | Volume XIV; Issue 13


Coal News Commentary: August 2017


Though most of the news on coal was negative BMI Research, a unit of Fitch Group lightened the mood with optimistic projections. According to BMI, coal will remain the foremost fuel preference for India’s power sector and is expected to account for around 68 percent of the total power mix by 2026. It said India’s power sector will expand rapidly over the coming decade, driven by underlying economic growth, electrification efforts and power sector reform implemented by the government. The report said overall, reform in the mining sector since 2015 has drastically improved the availability of coal for the power sector. However, feedstock volatility will remain a downside risk to coal-fired power generation over the coming years.

On the other hand, academics suggested grim prospects for coal. In the last two years, coal consumption has slowed to its lowest level in two decades. 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.  India is the world’s third-largest carbon emitter and relies on coal-fired power plants to produce most of its energy. 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 is slightly higher at 2.8%. 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.

Things are not looking good on the import front as well. China’s imports of coal from the seaborne market surged again in July, providing a stark contrast to a fourth consecutive monthly decline for India. India, which gave back the title of the world’s top coal importer to China last year, has a stated policy of reducing coal imports to zero and is boosting domestic production and efficiency of distribution toward that end. It’s further likely that much of the reduction in India’s imports have been for lower-quality Indonesian coal, which would struggle to find buyers elsewhere. This makes watching China’s imports key for the outlook for prices, since this appears to be driving the market more than India’s slumping appetite for coal. Import of coal saw a decline of 6.37 percent to 191.95 mt in 2016-17 on higher production CIL that saw the country move to a regime of surplus coal. Comparatively, in 2015-16 fiscal, coal imports stood at 203.95 mt, as per official data by the government. As against the demand of 884.87 mt of coal, the total domestic production stood at 659.27 mt. The ongoing fiscal also shows a declining trend, especially of thermal coal. Thermal and steam coal imports have fallen 17.37 percent at the top 12 major ports to 29.82 mt during April-July this fiscal, according to the IPA. The ports, under the control of the Centre, had handled 36.09 mt of thermal and steam coal during the same period of the previous fiscal. Handling of coking coal, used mainly in steel-making, has also dipped 4.45 percent to 16.51 mt, as per the latest data released by the IPA. These ports had handled 17.27 mt of coking coal in April-July period of 2016-17. Together, they handled 46.33 mt coal during April-July this fiscal as against 53.36 mt in the same period of the previous year. India is the third-largest producer of coal after China and the US and has 299 bt of resources and 123 bt of proven reserves, which may last for over 100 years. The country has 12 major ports – Kandla, Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Ennore, V.O. Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia) which handle approximately 65 percent of the country’s total cargo traffic.

Taking not of the decline in demand growth, CIL has decided to 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 1 mtpa 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 ₹ 100 billion annually as a result of downgrading.

The Centre’s programme of ensuring coal for stressed power units has failed to generate much interest on the part of power developers. Not a single bid was put in in the first tender called by Gujarat to provide the cheap coal earmarked for the state. Private developers who buy this coal have to sell power at ₹ 2.82/kWh or less. They will get coal after they bid for a discount on the notified rate. The reverse auction was held for procuring 1,000 MW. The aim is to reduce the cost of fuel for ailing distribution companies and effectively distribute domestic coal.

Extending the deadline for submitting bids by 20 days did not change the outcome. It is believed that the cap on tariff was not viable. In May last year, the Cabinet had approved the proposal for allowing flexibility in utilising domestic coal among power-generating stations. Under the new policy, the coal requirements of a state will be clubbed and assigned to the respective state/state-nominated agencies. The state will award coal linkage in accordance with the need, efficiency, and the cost of power to power plants in its jurisdiction. The policy also allowed for coal swaps between inefficient and efficient plants and from plants situated away from coal mines to the pit head to minimise the cost of coal transportation, leading to reduction in the cost of power. For the centrally owned power plants, coal linkages of CGS will be clubbed and assigned to the company owning the CGS. In the case of state/central generating plants, the deciding criteria will be plant efficiency, coal transportation cost, transmission charges, and the cost of power. IPPs have to bid for coal linkages. The basis of bidding would be the source of coal, quantity, the amount of power generated, and the delivery point for the receipt of power.

According to data from the CEA, coal-powered GSECL plants’ power sale price range between ₹2.92–₹5.42/kWh. In the first quarter of FY18, the average plant load factor of thermal power plants of GSECL was 45.4% only. They produced 585 million units of power in the period against the target of 6,055 million units. To meet the state’s demand of about 8,000 MW, the state imports about 1,600 MW from other sources, while the rest is generated from within the state. The state has also opened tenders to purchase 500 MW of power between September 16 and October 15. It has also invited bidders for 500 MW each of wind and solar power. Gujarat will sign 25-year power purchase agreements with the lowest bidders in the respective renewable segments.

The government has annulled the fifth round of coal mines auction due to poor response from bidders. According to the government, the fifth round of coal blocks auction has been annulled as there was not good response from the bidders because the steel industry is in a bad shape. Six coking coal blocks were to go under the hammer in the fifth round, five of which are in Jharkhand and one in Madhya Pradesh. The six coal mines are: Brahmadih, Choritand Tiliaya, Jogeshwar and Khas Jogeshwar, Rabodih OCP and Rohne in Jharkhand, and Urtan North in Madhya Pradesh. In December 2015, the government annulled the fourth round of coal mine auctions planned for January 2016 on account of tepid response from bidders in sectors such as steel besides depressed commodity prices and adverse market conditions. The Centre earlier announced that it would auction six coking coal mines. CIL which produced 55.22 mt of coking coal last fiscal is eyeing 59.77 mt of metallurgical coal in the ongoing financial year. CIL, which accounts for over 80 percent of the domestic coal production, is eyeing 63.55 mt coking coal in the next fiscal and 72.30 mt in 2019-20. In FY16, India imported 43.51 mt of coking coal and 43.71 mt of fuel used in steel-making in FY15.

UP has sought the Centre’s help so that some private and state-owned power plants can come out of critical coal-stock scenario. UP has requested the centre to increase the quantum of coal supply to private power plants such as 1,980 MW Lalitpur plant and 1,200 MW Roja plant and state utility-owned generating stations such as 665 MW Harduaganj plant and 1,140 MW Parichha power plant. It has also asked the CEA to include IPPs in the state in the ‘critical’ category. This would make CIL supply sufficient coal to such plant so that they have comfortable fuel stock, just the way CEA has included some state utility and NTPC Ltd plants in the list.

Coal supplies are expected to improve significantly beginning 2018, riding on the completion of key rail projects in Odisha, Chhattisgarh, Madhya Pradesh, UP and Jharkhand. In Odisha, the CIL financed 53.5 km Jharsuguda-Barapali rail link is expected to be ready by December; paving the way for moving nearly 80 mt of additional fuel from the vast Ib Valley reserves in Sundergarh district. The Railways is on course to resuming work on the 30 km Talcher-Angul loopline to pace up supplies from the Talcher coalfields. The project has been stalled the last five years due to land acquisition issues for a 3 km stretch. The Railways has finally made some headway in land acquisition. The project is now expected to be completed next year. The loopline will help circular movement of rakes, thereby increasing the pace of evacuation from Talcher by 50-60 percent. CIL now despatches 30-35 rakes a day from Talcher. The loopline is expected to increase this to 50 rakes a day. According to CIL, construction is apace and should link up the opencast mines at Chhal and Baroud by next year, adding approximately 20 mt to the miner’s annual throughput. This line is to be extended to the prolific Gare Palma coalfields. The coal ministry has asked the Railways to double the 25 km single-line connectivity between Shakti Nagar in UP and Karela in MP. Karela is located on the Katni-Chopan line connecting eastern India with the North. This will help improve supplies by approximately 30 mt annually from Northern Coalfields, a subsidiary of CIL.

CIL said that 62 coal projects, out of 120 ongoing projects, were not running on schedule mainly due to delay in obtaining forest clearances, acquiring land and issues related to rehabilitation and resettlement. Out of 71 non mining projects, 27 are delayed. As many as eight coal mining projects for an ultimate capacity of 56.25 mtpa and a total capital investment of Rs 89.31 billion have been sanctioned by CIL board during the last financial year.

CIL is looking to offer tentatively close to 138 mt of coal through various e-auction schemes in the current fiscal, according to miner’s e-auction calendar from 2017-18. The e-auction schemes include spot, special forward for power and exclusive for non-power sector. The miner’s seven fully owned subsidiaries ECL, BCCL, CCL, NCL, WCL, SECL and MCL, have given their “tentative” and “provisional” offer for the schemes during the current financial year, which may be revised in accordance to the bidding of coal and as per demand. Of the total tentative amount, SECL would likely offer close to 30 mt while CCL plans to offer around 46 mt. Similarly, WCL is expected to offer around 19.54 mt, MCL to offer about 16.77 mt and NCL to 12.75 mt. BCCL and ECL are expected to offer around 6.36 mt and 7.3 mt respectively. SECL in its offer said that it had already offered 14.3 mt in the first quarter of FY 18 for various e-auction schemes. It also said out of the total offering in the year, it would likely to offer 18.3 mt for spot e-auction, 8.6 mt for special forward for power sector and 3.2 mt for exclusive e-auction for non-power sector. Similarly, CCL said it would tentatively offer 16 mt for special forward, 10 mt for exclusive, 4 mt for special spot and 16 mt for spot e-auctions during August 2017 to March 2018 period.

Rest of the World

China’s state planner, NDRC said it will force power companies to beef up stockpiles of coal during peak demand seasons as part of draft rules setting out the government’s new inventory system. During winter and summer, power companies’ coal inventories must be five to 10 days above normal levels, the NDRC said as it outlined the draft policy. The policy is the latest effort by Beijing to ensure sufficient supplies of coal during periods of high demand, and comes after the government had to scramble last year to avert a national power crisis following government-enforced cutbacks in coal output. The NDRC will now seek feedback from the industry until September 10.

China Shenhua Energy Company Ltd has suspended operations at two large open-pit coal mines in northern China, it said, a move that could benefit producers across the border in Mongolia. Shenhua Energy, the listed unit of the state-owned Shenhua Group, China’s biggest coal producer, announced that the Ha’erwusu and Baorixile mines in Inner Mongolia had been temporarily suspended as a result of “land requisition” delays. The two mines produced more than 50 mt of coal in 2016 and over 30 mt from January to July this year, the firm said. Coal is Mongolia’s biggest export product. The country’s total coal earnings rose fourfold to $1.28 billion over the first half of 2017 because of China’s ban on North Korean imports and port restrictions. Mongolia’s largest coal producer, the state-owned Erdenes Tavan Tolgoi, said that it produced 5.9 mt in the first seven months of the year, or 4.6 times more than the same period of 2016.

China’s trade with North Korea fell in July from a month earlier, as a ban on coal purchases from its isolated neighbour slowed imports amid growing pressure from the United States to rein in Pyongyang’s missile program. The world’s second-largest economy imported and exported goods worth $456 million in July, down from $489 million in June, according to data from China’s General Administration of Customs. The data indicates that China’s move to halt North Korean coal imports in February has crimped Pyongyang’s ability to raise hard currency through exports.

Glencore said it was looking to sell a second Australian coal mine, part of the Swiss-based resource giant’s rethink on how it deploys capital as its reins in debt and commodities prices rise. Together with its Japanese joint venture partners, Itochu Corp and Sumitomo Corp, Glencore said it would start a “sales process” for its Rolleston mine, which produces thermal coal used for making electricity. The mine, though, is geographically removed from Glencore’s main collieries, leaving it less economic from a shipping standpoint. Merrill Lynch has been appointed as sole financial adviser on any deal, Glencore said. In May, Glencore also put its wholly-owned Tahmoor coking coal mine in Australia up for sale, citing a desire to concentrate on mining thermal coal. Glencore isn’t the only Australia seller of coal mines.

Net profit at Polish coal mines increased in the first half of the year compared to a year earlier amid higher coal prices and restructuring. Coal stocks put aside at the mines declined to 1.9 mt from 5.2 mt a year earlier, the agency said. Coal output fell to 32.7 mt in the first six months of 2017 from 34.3 mt last year. The ruling Law and Justice party (PiS) has simplified the structure of Poland’s biggest coal miner PGG, formerly known as Kompania Weglowa, and bailed it out with the help of state-run utilities, including the biggest power producer PGE. As a result, the number of employees in the Polish coal mining industry fell by 3,000 people since the start of 2016 to 81,700 as of end June 2017.

Colombia’s coal output fell 6.95 percent to 21.4 mt in the second quarter from a year earlier, the national mining agency said. The Andean nation, the world’s fifth-largest coal exporter, produced 23.07 mt in the second quarter of 2016. The sector is seeking to produce 95 mt this year. The biggest players in Colombia’s coal industry are Drummond Co, Glencore Plc, Murray Energy Corp’s Colombia Natural Resources and Cerrejon, which is jointly owned by BHP Billiton, Anglo American PLC and Glencore.

Burning coal for power looks set to remain the backbone of Germany’s energy supply for decades yet, an apparent contrast to Chancellor Angela Merkel’s ambitions for Europe’s biggest economy to be a role model in tackling climate change. Merkel is avoiding the sensitive subject of phasing out coal, which could hit tens of thousands of jobs, in the campaign for the September 24 election, in which she hopes to win a fourth term. Although well over €20 billion are spent each year to boost Germany’s green energy sector, coal still accounts for 40 percent of energy generation, down just 10 points from 2000. To avoid disruption in the power and manufacturing sectors, coal imports and mines must keep running, say industry lobbies, despite the switch to fossil-free energy. He also stressed it was crucial for steel manufacturing in Germany, the seventh biggest producer in the world, that use a quarter of the country’s coal imports. Utilities such as RWE, Uniper and EnBW with coal generation on their books fire back by saying their output is covered by them holding carbon emissions rights.


India’s petrol and diesel prices among Southeast Asia’s costliest

September 5, 2017. Petrol and diesel were selling at Rs 69.26 and Rs 57.13 a litre on September 1, 2017, prices much higher than what prevailed on the same day in Southeast Asian nations such as Malaysia and Indonesia and neighbouring countries like Pakistan, Nepal, Sri Lanka, Bhutan. The difference between the petrol and diesel prices of India and Malaysia is mind boggling. Petrol price of Rs 32.19 a litre in Malaysia was less than half what prevailed in India. The diesel price in the Southeast Asian country at Rs 31.59 a litre was 44% lower compared to India. On the same day, petrol and diesel were available in Indonesia at prices that were 41% and 24% lower compared to India. The difference in auto fuel prices in India and countries within the subcontinent is also no less surprising. For example, on the same day petrol was available at Rs 42.14 a litre at fuel retail outlets in Pakistan, a price that is nearly 40% lower compared to India. Similarly, diesel was cheaper by 17% there. Petrol and diesel were selling at Rs 53.47 and Rs 39.69 a litre in Sri Lanka, nearly 23% and 30% lower compared to India. In Nepal, retail prices of petrol and diesel were 12% and 19% lower than prevailing rates of auto fuels in India on the same day. In Bhutan, the selling price of petrol was nearly 10% lower compared to India, though difference in diesel price was less pronounced at 1%. While the retail price of petrol in Bangladesh was nearly at the same level as in India on that day, diesel price was 10% lower. The high prices of fuel in India are confusing, especially when considering international crude oil prices are currently ruling at less than half their 2012-13 and 2013-14 levels. Petrol and diesel prices ruled at Rs 68.31-73.16 and Rs 48.63-55.48 a litre respectively in 2013-14 when the price of Indian crude basket averaged at the staggeringly high level of $105.52 a barrel (bbl). However, retail fuel prices still remain at the same level, though the price of Indian crude basket has fallen to below $47.86/bbl since then. However, the reason for India’s high fuel prices is quite clear. Taxes constitute 45%-52% of the retail price of auto fuels, far higher than what would be the incidence if petrol and diesel are brought under introduced Goods and Services Tax (GST) and the highest tax rate of 28% is levied. The UPA government had decontrolled petrol prices in June 2010. Diesel pricing was deregulated by the NDA government in October 2014. The economic logic was that market forces should determine fuel prices and not the government. But the NDA government has taken away benefits of low oil prices from consumers, acting against the very logic propounded for the deregulation of the retail auto fuel market.

Source: Business Standard

Daily petrol, diesel price revision to continue: Oil Minister

September 4, 2017. Oil Minister Dharmendra Pradhan said the daily revision in petrol and diesel prices will continue despite petrol prices spiking by Rs 6.6 per litre in two months. Pradhan, who was elevated as Cabinet minister and given additional charge of Ministry of Skill Development and Entrepreneurship, said the daily revision immediately passes on the benefit of any reduction in international oil prices to consumers and avoids sharp spikes by spreading them in small doses. State-owned oil companies in June dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost. Rates during the first fortnight dropped but have been on the rise since July 3. While petrol prices have increased by Rs 6.6 to reach Rs 69.66 a litre in Delhi, the highest since August 2014, diesel rates have risen by Rs 4.02 to Rs 57.38. Daily revision, he said, results in any drop in international oil rates being passed on to consumers immediately rather than having to wait for 15 days. In the reverse scenario when international oil rates rise, pump prices are hiked by few paise per day. The rate changes are being done on a transparent basis and city-wise prices are available through SMS, he said. The daily price change model best reflects the happenings in the market. Pradhan said his ministry is seeking approval of the safety organisations for starting home delivery of fuel.

Source: The Hindu

NRL dispatches first diesel consignment to Myanmar

September 4, 2017. In a step that could further promote collaboration in the oil and gas sector between India and Myanmar, Indian Oil Corp’s Assam based subsidary Numaligarh Refinery Ltd (NRL) dispatched the first consignment of High Speed Diesel (HSD) by land route, the oil ministry said. NRL has entered into an agreement with Parami Energy Group of Companies of Myanmar for the supply of diesel and collaboration in the retail petroleum sector of Myanmar. Under which NRL dispatched 30 million tonne (mt) of HSD through NH 37 across the Moreh custom check point on the Indian side and Tamu custom check point on the Myanmar side. Oil Minister Dharmendra Pradhan visited Myanmar in February this year during which he discussed opportunities for collaboration in the oil and gas sector including setting up of LNG terminal, retail marketing, refurbishment of refineries, participation in upstream sector and capacity building. ONGC Videsh Ltd (OVL), GAIL (India) Ltd and Oil India Ltd (OIL) have assets in the upstream sector as well as pipelines in Myanmar. In their effort to strengthen the oil and gas engagement, more Indian companies are planning to set up their offices in Myanmar soon. OVL alreday has an office in Yangon.

Source: The Economic Times

LPG price hiked by Rs 7 per cylinder, ATF by 4 percent

September 1, 2017. Subsidised cooking gas or liquefied petroleum gas (LPG) price was raised by over Rs 7 per cylinder, in line with the government’s decision to hike prices every month so that all subsidises are eliminated by this fiscal-end. A subsidised 14.2 kg LPG cylinder now costs Rs 487.18 in Delhi as against Rs 479.77 previously, according to Indian Oil Corp (IOC). Oil Minister Dharmendra Pradhan had said that the government had asked state-owned oil companies to raise subsidised cooking gas (LPG) prices by Rs 4 per cylinder every month to eliminate all the subsidies by March next year. Rates were, however, raised by Rs 2.31 per cylinder on the previous due date on August 1 and the oil companies have effected a larger hike to equalise that. Since the implementation of the policy of monthly increases of Rs 2 from July last year, subsidised LPG rates have gone up by over Rs 68 per cylinder. A 14.2 kg LPG cylinder was priced at Rs 419.18 in June 2016. The government had previously asked IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) to raise rates of subsidised domestic LPG (liquefied petroleum gas) by Rs 2 per 14.2 kg cylinder per month (excluding VAT). The quantum has now been doubled so as to bring down the subsidy to nil. Every household is entitled to 12 cylinders of 14.2 kg each at subsidised rates in a year. Any requirement beyond that is to be purchased at market price. The price of non-subsidised LPG or market-priced cooking gas has also been hiked by Rs 73.5 to Rs 597.50 per bottle. Rates were at the last revision cut by Rs 40. Simultaneously, the oil companies also raised prices of aviation turbine fuel (ATF) by 4 percent, in keeping with rising global rates. ATF, or jet fuel, now costs Rs 50,020 per kilolitre, Rs 1,910 more than Rs 48,110 previously. This hike comes on the back of a 2.3 percent increase effected from August 1. Also, price of kerosene sold through public distribution system (PDS) was hiked by about 25 paise per litre. The government is adopting the same policy as in LPG for eliminating subsidy on kerosene. Since July 1 last year, rates have been been hiked by 25 paise per litre each fortnight. While Delhi has been declared a kerosene-free state, the fuel now costs Rs 22.27 per litre in Mumbai compared to Rs 22 previously. Kerosene was on July 1, 2016, priced at Rs 15.02 per litre in Mumbai.

Source: The Economic Times

French energy giant Total to expand LPG infrastructure in India

September 1, 2017. French oil and gas company Total SA plans to invest in expanding liquefied petroleum gas (LPG) infrastructure in India, including boosting storage capacity, import terminals and distribution network, its chief executive officer Patrick Pouyanne said. The firm sells lubricants and LPG in India. It had in 1998 commissioned a fully integrated LPG import terminal at Mangalore. It also has a minority stake in liquefied natural gas (LNG) import terminal at Hazira in Gujarat. Pouyanne, who met Oil Minister Dharmendra Pradhan, said India’s growing energy market, especially LPG, LNG and renewables, were attractive for investments for Total. He said he encouraged Total to invest in infrastructure, gas pipelines, LNG terminals and petrochemicals business in India. Asked if Total would be interested in fuel retailing in India, Pouyanne indicated the French company would not in any near future start selling petrol and diesel.

Source: The Economic Times

Royal Dutch Shell eyes 1.5k petrol pumps in 10 yrs in India

September 1, 2017. Royal Dutch Shell said it plans to scale up number of petrol pumps in the country to 1,500 in next 10 years as the company looks to expand in world’s third largest oil consuming nation. The company owns 85 out of the country’s 59,595 petrol pumps. Shell is the only foreign player in the fuel retailing business dominated by public sector firms in the country. Reliance Industries Ltd (RIL) owns 1,400 outlets and Essar Oil, now acquired by Rosneft of Russia, has 3,499 pumps.

Source: The Economic Times

IOC mulling Rs 1.8k bn investment over 5-7 yrs

August 30, 2017. Indian Oil Corp (IOC) has plans to invest around Rs 1.8 lakh crore over the next five to seven years in asset creation, up-gradation of refineries and its petrochemical projects, Sanjiv Singh, Chairman and Managing Director said. Singh said that the company is looking at expanding and upgrading Barauni, Gujarat, Panipat and Paradip refineries to achieve significant savings and energy efficiency. Also, the company is looking at installing large-size single crude unit to replace the several existing small units at the refineries for efficient operations. The company announced that the commissioning of Jharsuguda-Khunti section of Paradip-Raipur-Ranchi product pipeline had led to the company achieving 13,000 km of pipeline network across the country, propelling IOC’s throughput capacity to 93.7 million tonnes per annum (mmtpa) for liquid fuel and 9.5 million metric standard cubic meter per day (mmscmd) for natural gas. Singh also announced that IOC will expand its pipeline network to over 20,000 km by 2020-21, achieving a throughput capacity of over 118 mmtpa for liquid fuel and capacity of 50 mmscmd for transporting natural gas. With the petrochemical segment contributing to approximately a quarter of the company’s profit, IOC plans on investing around Rs 32,000 crore more in its petrochemical projects, of which Rs 3,150 crore will be invested in the Polypropylene unit being set up at its Paradip refinery. According to data available with Petroleum Planning and Analysis Cell (PPAC), the statistical arm of the oil ministry, IOC plans to invest Rs 20,162 crore in the present financial year of which the company has already invested Rs 5,479 crore up to July.

Source: The Economic Times


India to bid for Israel O&G exploration blocks: Indian Oil Minister

September 4, 2017. Indian state-run Oil and Natural Gas Corp (ONGC) plans to bid for Israeli offshore oil and gas (O&G) exploration blocks, Indian Oil Minister Dharmendra Pradhan said, the first major deal between the two countries since a groundbreaking trip by Prime Minister Narendra Modi in July. India and Israel have deep defense ties but Modi and his right wing ruling group are pushing to expand the relationship into other sectors such as energy and technology with a country they see as a natural ally against terrorism. A high-ranking delegation from India, the world’s third-biggest oil consumer, visited Israel to discuss taking part in the tender for blocks in the Mediterranean Sea and Israeli officials said they were pleased with the visit. India wants to participate in the upcoming auction to explore and develop gas fields off the coast of Lebanon, Pradhan said. ONGC is India’s biggest energy exploration firm and a source at its overseas investment arm ONGC Videsh Ltd (OVL) said the firm would not bid for any block in areas disputed by Israel and Lebanon. Another state-run explorer, Oil India Ltd (OIL), has not yet decided to bid in Israel’s licensing round. India’s decision to bid for blocks off Israel and Lebanon comes after a setback in getting development rights for a giant gas field in Iran.

Source: Reuters

IOC’s first domestic exploration asset commences production in Assam

August 30, 2017. Indian Oil Corp (IOC) announced it has commenced production of gas and condensate from its Pre-New Exploration Licensing Policy (NELP) Dirok field in Assam this month, marking its first domestic exploration asset maturing from exploration stage to become a producing asset. The government had in May 2015 approved the $82 million field development plan (FDP) for Dirok. The FDP envisaged re-entry and completion of three existing wells and drilling of an additional well along with a 25-km pipeline and a gas processing plant. IOC holds 29.03 percent participating interest in the block located near Digboi in Assam along with operator Hindustan Oil Exploration Company (HOEC)’s 26.88 percent and Licensee Oil India Ltd (OIL)’s 44.08 percent stake. HOEC said the gas field has a production profile of 15 years and the added facilities being developed will lead to doubling the production estimated in FDP. With addition of Dirok production, IOC now holds a portfolio of six producing assets, including five overseas and one domestic, out of 17 active Exploration and Production (E&P) assets.

Source: The Economic Times


No need to merge ministries of coal, mines: Mines Minister

September 5, 2017. Mines Minister Narendra Singh Tomar has said he is not in favour of merging his ministry with that of coal as both are different and functioning properly. Tomar got back the charge of the mines ministry after Cabinet reshuffle in which his predecessor Piyush Goyal has been made the Railways Minister. At that time, he had said that the government has merged the Ministry of Overseas Indian Affairs with the External Affairs Ministry in sync with its broad principle of ‘minimum government, maximum governance’. Tomar, while taking charge, stressed on the need to expedite the process of auction of mineral blocks and said that a road map for the mining sector will be prepared soon. In his earlier stint, Tomar held the mines portfolio from May 2014 to July 2016.

Source: The Indian Express

NTPC blamed as coal stocks fall to critical levels, particularly at private companies

September 4, 2017. Coal stocks at thermal power plants across the country have dropped to alarmingly low levels. Private power companies are the worst-hit, as state-run NTPC, under government patronage, is getting out-of-turn supplies. According to power companies, the shortage of fuel supply is primarily due to reduced production by Coal India Ltd (CIL) and its failure to open new mines and commission new railway sidings for seamlessly transporting the dual power plants. Adding to the woes is Jharia coalfield underground fire which led to closure of the critical Dhanbad-Chandrapura railway line in December 2016, badly affecting the railway’s network planning. The coal ministry had said in May that NTPC’s Kahalgaon and Farakka plants (both pithead), which source coal from CIL’s Rajmahal open-cast mine, would not face any coal shortage issues after CIL reportedly faced troubles while acquiring land for the expansion of the mine. Recently, an official note sent by the Central Coalfield Ltd (CCL), a CIL subsidiary, to the railways urged the latter to prioritise six NTPC plants for coal supply. This led to coal stocks at some private thermal power plants which receive the fuel from CCL to reach precarious levels. As of now, 36 plants including GMR’s 1,050 MW Kamalanga unit, Hindustan Power’s 1,200 MW Anuppur unit and Reliance’s 1,200 Rosa plant have coal stock of less than 4 days. Unavailability of adequate coal in the sidings has increased the time taken to load railway rakes. Some sidings of CIL subsidiaries are taking up to 7-8 hours to load coal instead of the standard 3 hours, due to lack of coal at loading sites. At one of the sites of the Bharat Coking Coal Ltd, which is affected by the closure of the Chandrapura rail line, it is taking up to 12 hours against 9 hours to load a rake. In August, Uttar Pradesh’s Energy Minister Srikant Sharma sought coal minister Piyush Goyal help rescue some private and state-owned power plants out of the critical-coal-stock scenario. Sharma requested Goyal to increase the quantum of coal supply to private power plants such as 1,980 Lalitpur plant and 1,200 MW Roja plant and state utility-owned generating stations such as 665 MW Harduaganj plant and 1,140 MW Parichha power plant.

Source: The Financial Express

Jindal, others granted bail by special court in coal scam case

September 4, 2017. Industrialist Naveen Jindal and others were granted bail by a special court in a case related to the allocation of a coal block in Madhya Pradesh. Special Judge Bharat Parashar granted the relief to them on a personal bond of Rs 1 lakh each and one surety of like amount. The court has now posted the matter for further hearing on October 31. Besides Jindal, others who got the relief include Jindal Steel and Power Ltd (JSPL)’s former Director Sushil Maroo, former Deputy MD Anand Goyal and CEO Vikrant Gujral. The accused were summoned for alleged offences of cheating and criminal conspiracy in the allocation of Urtan North coal block in Madhya Pradesh. In its charge sheet, the CBI has alleged that JSPL misrepresented the equipment purchase orders and misled the coal ministry. Jindal is also facing trial in a case pertaining to the allocation of Amarkonda Murgadangal coal block in Jharkhand.

Source: The Economic Times

Adani at odds over royalty negotiations for Australian coal mine

September 3, 2017. Adani Enterprises appears to be at odds with the state of Queensland over royalties for its Carmichael coal project, just days after the Indian company said it would soon break ground on the Australian mine. Adani announced it would start work in October on the project using A$400 million ($319 million) of its own funds, even as it looks to lock in financing for the controversial mine. Previously it had said it needed to borrow under A$2 billion to get the project off the ground. The company said it would target first shipments from March 2020 for the first stage of the project which has been trimmed back to a cost of A$4 billion. The project relies on a A$900 million concessional loan to help Adani build a rail line linking the mine with a shipping port. The government is assessing whether to give Adani the loan through its Northern Australia Infrastructure Facility program aimed at encouraging economic development in rural regions. Adani had originally planned to develop the mine, rail and port infrastructure at a cost of A$16.5 billion, before last year downsizing the first stage and trimming the cost.

Source: Reuters

CIL gives nod for Rs 600 mn technology development projects from Australia

August 31, 2017. State-run miner Coal India Ltd (CIL) has approved around Rs 60 crore for technology development projects taken up by IIT Indian School of Mines (ISM) in association with Australian institutes. Indian School of Mines professor VMSR Murthy said collaboration with Australia was part of an announcement by Prime Minister Narendra Modi for greater collaboration with Australia for technology. He said the Centre would have a simulated virtual reality mine to provide training. This simulator will cost Rs 14.5 crore and will be funded by the CIL. The other proposals include segregation blasting technology, mineral, beneficiation coal to coke and gas and dust blasting labs. These projects will be executed in tie-ups with the different Australian universities and institutes.

Source: The Economic Times


Tata Power distribution firm rolls out mega smart metering drive for consumers

September 4, 2017. Tata Power Delhi Distribution Ltd (TPDDL), the Tata Power subsidiary that distributes power in Delhi, launched a mega drive to rollout smart metering services for its consumers. The firm is rolling out 250,000 smart meters in the first phase of its Advanced Metering Infrastructure (AMI) project. A smart meter enables two-way communication between the meter and the central system giving consumers greater control over use of electricity by providing detailed information about usage and consumption patterns helping them in planning expenses better. The meters also help in faster outage detection and restoration of service. Smart meters also help pave the way for a smart grid which will act as a backbone for the Smart City Mission. The first phase of the project is being implemented in partnership with the global energy management firm Landis+Gyr. The Phase will include putting up 50,000 Three Phase Meters and 200,000 Single Phase Meters. Its rollout will happen between March 2018 and March 2019. TPDDL is also planning a second phase which will have 500,000 Single Phase and 50,000 Three Phase Meters, due to get started from April 2019. The total replacement and completion of 1.8 million smart meters will be done by 2025.

Source: The Economic Times

SC orders Mahavitaran to return Rs 8 bn to consumers

September 3, 2017. The Supreme Court (SC) has ordered the state owned power distribution company Mahavitaran Ltd to return the amount it has taken from customers towards infrastructure development. According to a consumer activist, the amount is around Rs 800 crore, however Mahavitaran claims the amount is around Rs 377 crore. Mahavitaran supplies power to Mumbai’s eastern suburbs Kanjur, Bhandup, Mulund and rest of Maharashtra, which includes, Navi Mumbai and Thane. In 2006, the newly formed Maharashtra Electricity Regulatory Commission (MERC) issued a schedule of charges, which prohibits Mahavitaran from charging consumers for infrastructure development such as laying lines, erecting poles, installing meters, etc. However, Mahavitaran continued to charge the amount for infrastructure development from consumers. Consumer organisations move a petition against this with the MERC and MERC in 2007 ruled that Mahavitaran should stop this practice of charging these amounts to consumers towards infrastructure development and return the amount it has already collected, with interest, to consumers.

Source: The Economic Times

Power generation grew 12.5 percent in August: NTPC

September 2, 2017. NTPC Ltd, India’s largest power generator, said its generation grew 12.5 percent to 22.3 billion units in August as compared to 19.8 billion units in the same month last year. The company said generation in the monsoon months is generally low but attributed the higher growth in August to two factors — higher generation from Koldam hydro power project and a three times jump in solar power output. NTPC has an approved hydro generation capacity of 1,519 MW including the 800 MW Koldam HEPP in Himachal Pradesh, the only commissioned hydro project of NTPC. The state-owned firm has a total installed base of power generation capacity of 51,676 MW comprising 48 generating stations across India. The company is working on a plan to add 5,400 MW capacity in the current financial year ending March 2018 that involves a capital expenditure of around Rs 28,000 crore including spending on under-construction projects of over 21,000 MW capacity.

Source: The Economic Times

PSPCL moves regulator for levying additional surcharge from open access consumers

September 2, 2017. Reeling under accumulated debts with an obligation to pay fixed charges to the independent power producers (IPPs) in the state, the Punjab State Power Corp Ltd (PSPCL) has moved the Punjab State Electricity Regulatory Commission (PSERC), seeking permission to levy additional surcharge on the open access consumers who buy electricity from other sources. In its petition before the regulator, the PSPCL has sought that additional surcharge be made applicable on to the open access consumers for the period between October 1, 2017 to March 31, 2018. The PSPCL has also produced relevant data before the commission for computation of the surcharge. The PSERC has admitted the petition and asked the power corporation to publish a public notice inviting suggestions and objections from the general public and stakeholders on the issue. The PSPCL has contended that it has adequate generating capacities to meet the entire power demand, including the open access consumers, during the said period. In October 2016-March 2017 period, the PSPCL had to pay Rs 4,198.59 crore as fixed cost. The corporation submitted that as per the Section 8.5 of the National Tariff Policy the surcharge was applicable under the existing circumstances.

Source: The Times of India

Delhi hikes ‘fixed charge’ for hi-end electricity users

September 1, 2017. The Delhi Electricity Regulatory Commission (DERC) announced a hike in the “fixed charge” component of the electricity tariff for hi-end users, while maintaining that the usage charges will remain same as before. The electricity tariff is constituted of two components — fixed charge and energy charge. The fixed charge remains constant irrespective of the energy consumed, while energy charge varies according to the usage. The electricity regulator reduced the fixed charge for the low-end users having an electricity connection of 1 KW. Such users will now have to pay Rs 20, instead of the earlier charge of Rs 40 earlier, it said. There is no change in the fixed charge being paid by users with 2 KW connection, who will continue to pay Rs 40 as before. All the changes are meant for domestic connections and not commercial ones.

Source: The Economic Times

AAP government pats its back for ‘no tariff hike in 3 yrs’

September 1, 2017. The new power tariffs are a reiteration of the Aam Aadmi Party (AAP) government’s commitment towards not increasing the rates in all categories, Deputy Chief Minister Manish Sisodia said. Describing the pension surcharge of 1-3% as “nominal”, Sisodia said the money would be used to pay pension to 22,000 electricity workers. Power Minister Satyendar Jain said that the increase in the range of agricultural connection from 10 KW to 20 KW will help farmers install bigger motors. The process for getting a connection in non-electrified areas has also been simplified and the payment can be made over a year at very low rates, Jain said. However, both BJP and Congress hit out at the government for increasing the fixed charge. Delhi Congress chief Ajay Maken claimed that the restructuring would lead to an additional burden of Rs 1,057 crore on consumers.

Source: The Economic Times

Mizoram becomes third power-surplus state in the northeast

September 1, 2017. Over two decades after it was conceptualised, the first unit of a 60 MW power plant in Mizoram began generating electricity — making it the third power-surplus state in northeastern India after Sikkim and Tripura. With a population of just 1.1 million, Mizoram’s current demand of electricity is only 110 MW to 115 MW during peak hours and is being met by the state’s few mini power projects and availability of its share of power from regional and central sector projects. Mizoram Chief Minister Lal Thanhawla said that four more mini power plants are expected to be completed during 2018-19 financial year. Since March last year, Tripura has been supplying 160 MW of power to Bangladesh and is ready to provide an additional 40 MW if the central government permits it to do so.

Source: The Economic Times

Power tariff may go up in Punjab as state regulator calls for consultations

August 30, 2017. After a relief of over two years for consumers, the Punjab State Electricity Regulatory Commission (PSERC) has started the process to hike power tariffs. Revision of tariffs is likely in view of the poor financial health of the Punjab State Power Corp Ltd (PSPCL), which is reeling under a debt of over Rs 25,000 crore. The PSPCL has already filed a petition seeking a hike of around 20% in power tariff. The deferring of tariff hike has added to the financial burden on the PSPCL. The income from the sale of electricity was the main source of revenue for the corporation and the authorities had almost run out of other options. As per the multi-year tariff petition (MYTP), there is a total revenue deficit of Rs 11,575 crore, including Rs 5,998 crore carried forward from the previous years, which had been mentioned as a major reason for seeking the tariff hike. In the MYTP, the corporation has shown a deficit of Rs 6,130 crore for 2018-2019 and Rs 6,406 for 2019-20. Last year, the PSPCL had sought a tariff hike of 19.72% amounting to Rs 1.56 per unit to bridge the revenue gap. The corporation had estimated revenue receipts of Rs 26,121 crore against the estimated expenditure of Rs 31,262 crore. However, the tariff hike was denied by the state government. With the Chief Minister Amarinder Singh announcing power to industries at Rs 5 per unit, the PSERC will work out the cost of the electricity supply and ask the government to pay the subsidy for the gap. Last year the average cost of supply had been worked out at Rs 5.97 per unit.

Source: The Economic Times

Jharkhand CM lays foundation stone for power transmission line

August 30, 2017. Jharkhand Chief Minister (CM) Raghubar Das laid the foundation stone for 220/132 kilovolt (kV) and 132/33 kV grid sub-station’s transmission line at Bhagodih village of Ramna block in Garwha district. Das said that within 1000 days of his government formation seven lakh households have got electricity while only 38 lakh of the 68 lakh households had electricity earlier. He said his government made a goal to provide electricity to every household by 2018. Das said that five substations in Palamau and 257 substations in the state were underway. The government is working on power transmission and distribution so that by 2019 Jharkhand could be developed as a power hub, he said.

Source: The Economic Times


Major breakthrough in Sawra-Kuddu hydropower project in Shimla

September 5, 2017. Sawra-Kuddu hydroelectric project (111 MW) made a major breakthrough as it linked the two ends of 11.365 kilometres long underground tunnel, from the barrage to the power house. The river project is being constructed on river Pabbar, a tributary of Yamuna in Shimla district. This project comprises a diversion barrage on river Pabbar near Hatkoti and underground power house on the left bank of river Pabbar near village Snail. The project will generate 386 million units per annum in a 90 percent dependable year. It has 11.365 km long with 5 m finished diameter headrace tunnel and three 37 MW francis turbines (3 X 37 MW).

Source: The Economic Times

Air pollution shrouds India’s solar success: New research

September 4, 2017. Air pollution is diminishing India’s capacity to harness power from the sun, experts said, undermining billions being invested in renewables as the energy-hungry giant emerges as a solar superpower. New research has found the smog and dust that sickens millions across India every year is also sapping solar power generation by more than 25 percent, far beyond levels previously thought. In the first study of its kind, US (United States) and Indian scientists measured how manmade particles floating in the air and deposited as grime on solar panels combined to seriously impair sunlight from converting to energy. This interference causes steep drops in power generation, they found. At present levels in India, it could amount to roughly 3,900 MW of lost energy — six times the capacity of its largest solar farm, a gigantic field of 2.5 million panels. India, the world’s third-largest polluter, is banking on solar to electrify homes for hundreds of millions of its poorest citizens without adding to its sizeable carbon footprint. At the Paris climate summit in 2015, India pledged cuts to its future emissions and vowed to source at least 40 percent of its energy from renewables by 2030 — a target it is well on track to exceed. Dust has long been a menace for solar projects in desert states like Rajasthan and Gujarat, where robotic wipers are deployed to ensure panels are cleaned after sandstorms. But the new research confirmed what solar installers had long suspected — that choking smog from cars, coal plants, crop burning and trash fires was particularly adept at bleeding energy.

Source: The Economic Times

PM calls on BRICS nations to work closely with ISA

September 4, 2017. Asserting that affordable and sustainable access to energy is crucial for the growth of the BRICS nations, Prime Minister (PM) Narendra Modi called on the member countries to work closely with the International Solar Alliance (ISA) to strengthen the solar energy agenda. In his intervention at the plenary session of the 9th BRICS Summit in Xiamen, Modi noted that climate resilient development calls upon the nations to utilise all available resource streams. The ISA was launched by India and France in November 2015 and aims to bring together a coalition of 121 countries for mutual gains through enhanced solar energy utilisation. Modi said the New Development Bank under the BRICS grouping can also establish an effective link with ISA to support such cooperation.

Source: Business Standard

Government extending top priority to exploring hydropower potential: HP CM

September 2, 2017. Himachal Pradesh (HP) Chief Minister Virbhadra Singh said that state government is extending top priority for expeditious exploitation of hydropower potential which is very important resource for economic development of the state. He said this while presiding over a seminar organized jointly by Himachal Pradesh Power Corp Ltd and Forum of Hydro Power Producers and other stakeholders in various river basins of the state in Shimla. Singh termed it as an imperative initiative to deliberate on the important issue of hydropower sector development and required policy changes in the hydropower policy to harness the potential of the state as early as possible. He said that state government is fully aware of this fact and is according top priority to the hydropower sector and it will ensure development in the remotest parts and act as major resource for revenue of the state. He said that though hydropower sector has witnessed declining trends in past few years, but there is no need for worry as every sector passes through such phase. He assured that state government would provide every possible assistance to give boost to this vital sector, which is also a major source of the economy. He said that Himachal Pradesh has the distinction of providing reliable and quality supply to all consumers in the state where hundred percent revenue villages were electrified long ago. Not only this, the consumers in the State enjoy one of the lowest tariffs in the country, he said. He said that to embark upon ambitious programme in the hydel generation the state government in 2006 formulated its own hydropower policy in 2006. He said that state government has set up a committee to take effective measures for revival of the hydropower sector. The government has also offered a number of incentives to facilitate the power producers.

Source: The Times of India

Hydro generation grew 2.14 percent in July as reservoir storage levels dip to 51 percent

September 1, 2017. India’s hydro power generation grew 2.14 percent to 15.41 billion units in the month of July as compared to 15.08 billion units in the corresponding month last year, fresh data from Central Electricity Authority (CEA) shows. Hydro generation saw a growth of only 1.73 percent in July 2016 as compared with the growth of 8.2 percent in July 2015. According to Central Water Commission (CWC) data, the current live storage of the country’s 91 reservoirs for the week ended 24 August stood at 79.925 billion cubic metre, 51 percent of the total storage capacity. This compares with last year’s storage of 65 percent and the last ten-year’s average storage of 63 percent of total capacity. Former Power Secretary P Umashankar said low hydropower generation cannot be directly correlated with water reservoir levels. According to Abhishek Poddar, Partner at consulting firm A T Kearney Ltd, hydro power is typically used during peak summer months to cater to additional power demand which has remained tepid this year. India has a current installed hydro power generation capacity of 44,600 MW, 13 percent of the total installed generation capacity of 3,30,000 MW at the end of July 2017.

Source: The Economic Times

Centre aiming to install 175 GW renewable power by 2022

September 1, 2017. Minister of Science & Technology, Environment, Forest and Climate Change Dr. Harsh Vardhan said the government is aiming to install 175 GW of renewable power capacity by the end of 2022. Vardhan revealed that the government is also exploring other initiatives, including distribution of energy efficient appliances and provision of free cooking gas connections to women below the poverty line. Through missions such as AMRUT and Smart Cities Mission, the government aims to transform cities to make them efficient and climate resilient, he said. Echoing Prime Minister Narendra Modi’s opinion on sustainability, Vardhan said the developed world that has attained its current lifestyle through fossil fuel-induced industrialisation needs to realise that even with the use of less natural resources, it was possible to have better living conditions. With regards to tackling climate change, Vardhan said the private sector was an integral part of India’s action on it. The voluntary actions embarked upon by Indian industry include the carbon disclosure programmes whereby the private players report their carbon management strategy and Green House Gas (GHG) emissions. He said that India was also planning to establish a voluntary carbon market with World Bank assistance with focus on uncovered areas.

Source: The Economic Times

Technology and renewables transition reduced India’s carbon footprint: Environment Secretary

September 1, 2017. India has cut down its carbon footprint substantially with the help of technology in fossil fuel plants and rapid transition to renewables apart from improved forest cover, Environment Secretary Ajay Narayan Jha said. India has been at the forefront of developing institutional mechanism and framework for climate change and had initiated a plan of action to achieve the goals of India’s Intended Nationally Determined Contributions (INDCs), Jha said. TERI Director General Ajay Mathur said India’s energy consumption is very low and there is a huge opportunity for technology leapfrogging to reduce emissions.

Source: The Economic Times

AP bets big on renewable energy

September 1, 2017. Andhra Pradesh (AP), which is leading in renewable energy generation in the country, has added as much as 5,000 MW of installed capacity in the past three years after the division of the State in 2014, according to Ajay Jain, the Principal Secretary, Energy. Jain said the State was leading in solar power generation, with a 1,000 MW solar park established in Kurnool district. Kamalakar Babu, Vice-Chairman and Managing Director of New and Renewable Energy Development Corporation of AP, said the Centre had set the target of 175 GW (100 GW of solar power, 60 GW of wind power, and 15 GW from hydel and other sources) by 2021-22.

Source: The Hindu Business Line

ABB India wins order to install solar inverters at 750 railway stations

August 31, 2017. ABB India, the local arm of the Swedish-Swiss engineering giant ABB, announced it will provide solar inverters to 750 railway stations in north India to reduce dependence on traditional sources of energy. The stations are located in the busy northern Indian part of the network, one of the most used railway corridors in the world.  Indian Railways carries more than 8 billion passengers annually. The transporter moves over 12,500 trains and 23 million passengers daily, equivalent to the population of Australia. The company operates more than 8,000 stations across the country and is looking at building solar plants to supply clean power for their operations. ABB set up its solar inverter manufacturing facility in India in 2012 and claims it contributes to approximately 40 percent of the country’s solar installations. ABB solar inverters are in use in the transportation sector. Tropical northern India receives abundant sunlight with 300 sunny days and solar power is a natural alternative to conventional electricity, much of which is generated using coal. The Indian Railways is working on a “net zero energy concept” where power is generated and consumed within the operations. As per reports, the Indian Railways has a current renewable energy generation capacity of 36 MW and plans to ramp it up to 1,000 MW.

Source: The Economic Times

Chinese solar module prices on the upswing

August 31, 2017. Chinese solar modules are seeing a hardening of prices for the first time in years, with the average selling price (ASP) going up in India on a quarterly basis, Mercom India said. According to the clean energy communications and consulting firm, this has posed a significant challenge to India’s solar industry. Developers not just in India, but across the world have been modelling their auction bidding strategies based on the assumed perpetual decline of Chinese module prices. The uptick in price has come after a decline of nearly 5 percent in the second quarter of 2017.  Short-term fluctuations do not usually make a huge difference, the firm acknowledged, but cautioned that if module prices continue to rise or even stay flat for a couple of quarters, it will start hurting developers who cannot waitindefinitely to procure the lowest priced panel. High Chinese demand generally firmed up module prices in June before feed-in tariff deadline at the end of the month, it said.

Source: India Today

Visaka in talks with 3 state governments to sell integrated solar panel roofs

August 31, 2017. Hyderabad-based Visaka Industries, one of country’s largest manufacturers of fibre cement boards, is in talks with several state governments for usage of its integrated solar panel with a concrete base as roofs in their affordable housing projects and is setting up a manufacturing unit in Telangana for the same. The company is in talks with state governments of Telangana, Delhi and West Bengal currently. The company is investing Rs 10 crore in their new plant in Miryalguda for their product named Atum and the plant will be operational in the next three months.

Source: The Economic Times

India issues new specifications for solar power modules

August 31, 2017. India’s Ministry of New and Renewable Energy (MNRE) has issued an order for new set of standard specifications for solar photovoltaic (PV) modules which will come into force after one year from the date of their notification. As per the order, under the Bureau of Indian Standards (BIS) Act of 1986, any manufacturer who manufactures, stores for sale, sells or distributes solar photovoltaics systems, devices or components will make an application to the bureau for obtaining registration for use of the ‘standard mark’ in respect of the Indian standard.

Source: The Economic Times

India bars states from independently exiting, modifying solar projects

August 30, 2017. India has barred state authorities from unilaterally cancelling or modifying solar power purchase agreements (PPAs) after six state governments in last two months pushed developers to lower tariffs, threatening to derail projects worth $7.5 billion. Narendra Modi’s government aims to raise solar power generation capacity nearly 30 times to 100 GW by 2022. The capacity has already more than tripled in three years to more than 12 GW. The government said it will impose a minimum penalty of 50 percent of the tariff if the purchase agreement is arbitrarily scrapped by the state or the developer. Over the last four months, debt-laden power distribution companies in Gujarat, Andhra Pradesh, Uttar Pradesh, Tamil Nadu, Karnataka and Jharkhand were pushing developers to renegotiate signed or previously agreed upon PPAs, risking closure of 7 GW of solar projects, a report from ratings agency CRISIL noted. Indian states and developers had clashed in May after the solar tariff for the 500 MW Bhadla solar power park in the western state of Rajasthan slumped to a record low of 2.44 rupees a unit for 200 MW. However, the southern state of Andhra Pradesh, which accounts for the highest number of solar projects in the country, is not looking to sign new PPAs in the near term.

Source: Reuters

Inox Wind bags 100 MW project from Adani Green Energy

August 30, 2017. Wind turbine maker Inox Wind said it had bagged an order from Adani Green Energy to develop a 100 MW wind power project in Gujarat. Inox Wind said as part of the order it will supply, erect and commission 50 units of its 2 MW wind turbine generators.

Source: The Economic Times


Japan proposes oil refiners must raise fuel oil processing capacity at plants: METI

September 5, 2017. Japan is proposing its oil refineries increase the amount of residual fuel oil processed at the plants in a third round of directives to streamline the nation’s refining sector. Japan’s refiners want the overall nationwide average volume of residual fuel oil processed to 7.5 percent of the volume of crude oil that they refine in the year starting in April 2021, according to the Ministry of Economy, Trade and Industry (METI). Japan, the world’s fourth-largest oil user, has cut back its refining capacity since 2015 as falling domestic fuel demand created idled capacity. The government wants to increase efficiency in the industry to help them compete against regional refiners.

Source: Reuters

China’s independent oil refiners plan to integrate production in new consortium

September 4, 2017. Independent oil refiners in China’s Shandong province are planning to form a consortium to integrate their production of oil products and petrochemicals, according to a planning document. Since late 2015, China has allowed 31 mostly privately-owned oil refineries to import crude oil, the majority of them based in Shandong province. With a combined capacity to import about 2 million barrels per day, their demand has upset oil trading flows in Asia and in the wider global crude market. Shandong Dongming Petrochemical Group and Shandong Qingyuan Group Co, both independent, or teapot, refineries in the province, will be among the key investors of the proposed group, according to the document that Shandong provincial authorities approved on September 1.

Source: Reuters

US average retail gasoline price rises again: AAA

September 3, 2017. Average retail US gasoline prices rose by a further 1 percent to $2.621 a gallon, even as several oil refineries began to recover operations after being knocked out by Hurricane Harvey, according to motorists advocacy group AAA. Retail prices are now more than 20 cents higher than they were before the storm struck the nation’s oil hub in the US Gulf, taking out a quarter of refining capacity. While the national average was 10.9 percent higher, states such as Georgia and South Carolina notched even larger increases of roughly 18 percent and 19 percent respectively.

Source: Reuters

About 6 percent of US Gulf oil output remains shut from Harvey: BSEE

September 2, 2017. About 6.1 percent of US (United States) Gulf of Mexico oil production is offline due to Tropical Storm Harvey, the US Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) said. Output has been recovering this week after Harvey tore through the Gulf, sending roughly 25 percent of the area’s oil production offline at its peak. About 10.5 percent of Gulf natural gas production remains offline following Harvey, BSEE said.

Source: Reuters

US halts LPG shipments to Asia amid storm havoc

August 31, 2017. Shipments of liquefied petroleum gas (LPG) from the United States(US) have been held up by the havoc wrought by tropical storm Harvey, but Asian buyers are betting the situation will improve before supplies are critically squeezed. At least 300,000 tonnes in LPG shipments to Asia have been delayed after US Gulf ports were shut, based on the estimates from four sources who buy mainly US cargoes. Asia is short of LPG, which in the form of butane or propane is used for transportation, heating, cooking and petrochemical production. Based on IHS Markit data, Asia imported close to 53 million tonnes of LPG in 2016, with about 66 percent coming from the Middle East and 22 percent from the US. Japan, South Korea and China are Asia’s top consumers of LPG.

Source: Reuters

Mexico’s next deepwater oil JV seen requiring $10.7 bn

August 31, 2017. A coveted deepwater oil project that Mexico’s state oil company Pemex wants to develop with a partner will require some $10.7 billion in investment and could eventually add 174,000 barrels of new output per day, top oil sector regulator Juan Carlos Zepeda said. Zepeda said that the auction to pick a partner for Pemex’s Nobilis-Maximino deepwater project will likely coincide with a previously scheduled deepwater auction set for January 31. The first commercial barrels from Nobilis-Maximino are seen by 2024, with peak output of 174,000 barrels of oil equivalent (boe) and 265 million cubic feet of natural gas per day coming online in 2026. A sweeping energy reform finalized in 2014 ended Pemex’s decades-long production monopoly while simultaneously allowing the company to enter into first-ever joint venture (JV) partnerships in a bid to attract more investment and reverse a 13-year output slump. Estimated reserves in Nobilis-Maximino are about 502 million boe compared with 485 million boe in Trion.

Source: Reuters


Senex wins Australia gas field, aims to start producing in 2019

September 5, 2017. Australian oil and gas explorer Senex Energy said it had won the right to develop a new gas field in the state of Queensland and aimed to make its first delivery from the site within two years, racing to supply a tight local market. Queensland offered the acreage in the Surat Basin for free earlier this year on condition it is used to supply the Australian east coast market, which faces a potential shortage from 2019 due to a tripling in gas demand for three liquefied natural gas export plants.

Source: Reuters

Angola LNG strikes multi-year sales deal with Vitol

September 4, 2017. Angola’s sole liquefied natural gas (LNG) export facility will begin delivering shipments to commodity trader Vitol later this year under a deal announced. Angola LNG, which has steadied output following lengthy outages in recent years, has guaranteed Vitol access to supply for the first time, part of a wider shift in which trading companies are taking a greater share of the LNG market. In a global first, LNG from Angola has been entirely sold via competitive tenders into the spot market, partly because the plant’s original plan of shipping LNG to the United States fell through following that country’s shale gas boom. Concerns over the plant’s reliability as well as limitations on feed gas supplies from offshore fields also prevented the Chevron-led project from locking-in a mid-term LNG sales deal immediately. Output from Angola LNG stabilised this year with production on track to hit up to 3.5 million tonnes in 2017 compared with 0.77 million tonnes in 2016. Though improved, it will still fall short of the plant’s 5 million tonnes/year design capacity. Vitol could use its new-found Angolan volumes to help cover a 10-year obligation to supply South Korea’s Korea Midland Power Co. with 400,000 tonnes of LNG annually, or to grow its share of the spot market. A 70-percent drop in spot LNG prices LNG-AS since April 2017 and a growing supply overhang has given trading houses room to manoeuvre as established players from producers to oil majors turned to traders as a flexible source of demand.

Source: Reuters

Linde wins $1.1 bn contract extension from Total in Germany

September 4, 2017. German industrial gases group Linde has won a €billion ($1.19 billion), 15-year extension of a contract to supply gas to Total in Germany, it said. French oil and gas group Total is Linde’s biggest customer in Germany. Linde has been supplying it since 1997 with hydrogen, oxygen and nitrogen.

Source: Reuters

Iraq’s Kurdistan poised for bumper gas growth

September 4, 2017. Iraq’s Kurdistan is poised for a major increase in gas output following the settlement of a court case with developers who are now looking to unlock the full potential of the region’s large resources, investor Dana Gas said. The semi-autonomous region settled a case with the Pearl Consortium by paying $1 billion to its members – Dana, Dana’s biggest shareholder Crescent Petroleum, Austria’s OMV, Hungary’s MOL and Germany’s RWE. The consortium has a 10-year-old deal with Kurdistan’s government to develop the Khor Mor and Chemchemal fields – one of the largest gas deposits in Iraq, with reserves of 17 trillion cubic feet – enough to supply the whole of Europe for one year – and estimated resources of as much as 75 trillion. Pearl had been claiming against the government of Kurdistan for underpaying for gas liquids production, as well as delays to field development, but reached the settlement after the long-running case in London. Production will be raised from the current 330 million cubic feet a day to 800 million, or 8 billion cubic metres a year. That volume would be enough to supply the annual gas needs of a country the size of Austria.

Source: Reuters

US seeks faster approval of small-scale exports of natural gas

September 2, 2017. The United States (US) is proposing to speed up approval of small-scale exports of natural gas, including liquefied natural gas (LNG), the US Department of Energy said. The Energy Department said the proposed rule would “expedite the review and approval of applications to export small amounts of natural gas in the emerging small-scale LNG export market,” which it said includes the Caribbean, Central America and South America. To date, most applications for export approval have been for larger-scale natural gas exports, but Central and South American markets require smaller volumes, the Energy Department said.

Source: Reuters

Saudi Aramco uses new technology to re-explore vast Empty Quarter

August 31, 2017. Oil giant Saudi Aramco is using new technology to re-explore areas of the vast Arabian desert known as the Empty Quarter, which could help to bolster its proven reserves of oil and gas before the company offers its shares to the public. A team of about 900 people is using advanced seismic technology developed over the last few years to explore 15,400 square kilometers (5,950 square miles) around Turayqa in Saudi Arabia, Aramco said. Turayqa, discovered in 2013, is an onshore conventional gas field that contains no oil. Part of the area was previously explored by joint ventures involving Aramco and foreign companies, Aramco said.

Source: Reuters

US gas prices will rise in Storm Harvey’s wake: Energy Secretary

August 31, 2017. US (United States) Energy Secretary Rick Perry said that gasoline prices are going to rise in the wake of Tropical Storm Harvey and he warned that state attorney generals would be on the watch against price gouging at fuel pumps, according to a White House press pool report. Perry said he did not know when refineries that have been shut by Harvey would come back on line.

Source: Reuters

US lower 48 states’ gross natural gas output rises in June: EIA

August 31, 2017. US (United States) gross natural gas output in the lower 48 states rose by nearly 0.8 billion cubic feet per day (bcfd) to a high for 2017 of 81.4 bcfd in June, the US Energy Information Administration (EIA) said. The rise was led by gains in Texas, the largest gas-producing state, Oklahoma, Louisiana and Ohio. Output in Texas increased by almost 0.1 bcfd in June to 21.9 bcfd. Production, however, is likely to fall sharply in the coming weeks, as about one-fifth of offshore production has been shut in due to Tropical Storm Harvey. Texas’s Eagle Ford shale region, which has seen substantial growth in recent years thanks to the shale boom, has also seen production shut in due to the storm, and it may be some time before activity resumes. Production in Pennsylvania, the second largest producer, slipped to 14.77 bcfd from 14.82 bcfd. However, Louisiana showed a 7 percent increase in output to 5.7 bcfd, the largest percentage increase, while Oklahoma’s output rose to 6.9 bcfd, a 1 percent gain. The seven biggest US shale fields produce more than 60 percent of the nation’s gas, while the Gulf of Mexico accounts for around 4 percent of the total.

Source: Reuters


Coal crunch sees China’s rustbelt exposed to risk of winter power, heat cuts

September 5, 2017. China’s northeastern industrial heartland may face winter power and heating cuts after authorities in Beijing spurned requests from provincial providers for help securing coal supplies after two major mines were forced to halt output, utilities warned. Coal-dependent power in the major manufacturing province of Heilongjiang issued their plea to the National Development and Reform Commission (NDRC) via the state power grid after authorities suspended work at mines in neighbouring Inner Mongolia last month, according to documents posted on the website of coal publication The mines halt is part of concerted efforts by China to tame increasingly severe winter smog in industrial centres. But it also shows Being’s war on pollution can roil key industries while sending coal prices sharply higher, both in China and across Asia. In its response to the request, the NDRC acknowledged the coal shortage but did not offer more supplies, the documents showed, instead calling on the provincial government to ramp up clean fuel output while cutting coal-fired generation from inland power plants.

Source: Reuters

Australia faces heightened blackout risks next summer: AEMO

September 5, 2017. Australia faces more blackouts over the coming southern hemisphere summer following the closure of a major coal-fired power station and even as the world’s biggest battery is in place, the Australian Energy Market Operator (AEMO) warned. Blackout risks are expected to pick up again after 2022, following AGL Energy’s planned closure of its Liddell coal-fired power station in New South Wales state, AEMO said.

Source: Reuters

Coal production up in Montana but still lower than past output

September 5, 2017. Montana coal production is more than 2 million tons (1.8 million metric tons) ahead of where it was this time last year, but analysts said the future is far from bright for the fossil fuel. Last year was the nation’s lowest coal production year since 1978, and although this year is looking up, the first seven months of 2017 still trail 2015 production by about 6 million tons (5.4 million metric tons). The Montana Coal Council compiles the production numbers. Most of the state’s coal production is mined from Spring Creek, a Cloud Peak Energy mine in southeast Montana. Cloud Peak Energy said the company experienced a large increase in sales to Asia customers from last year to this year.

Source: The Economic Times

China plans safety inspections at coal mines

August 31, 2017. China’s cabinet said the government will launch nationwide safety inspections of coal mines, chemical plants, gas operators and logistics firms, starting in September. The new round of inspections comes after an environmental crackdown in August roiled commodities markets, while safety inspections in major coal producing regions have crimped supplies, fuelling a price rally. China’s coal production in July fell to the lowest level since October, reflecting the impact of a crackdown on illegal mining and efforts to reduce pollution.

Source: Reuters


China’s NDRC will launch electricity spot trading scheme in 8 regions

September 5, 2017. China’s state planner, the National Development and Reform Commission (NDRC), will launch a pilot scheme to allow the spot trading of electricity in eight regions as part of long-planned reforms to liberalize the power market. These scheme will take effect in Guangdong, Inner Mongolia, Zhejiang, Shanxi, Shandong, Fujian, Sichuan and Gansu, the NDRC said. The new pilot program came after the country previously allowed trading of long-term electricity contracts. The NDRC said spot trades will be launched by end of 2018.

Source: Reuters


France and Germany seek agreement on EU carbon market reform by November

September 4, 2017. France and Germany will work together on measures to reinforce carbon pricing in the European electricity sector and want an agreement on the European Union (EU)’s carbon market reform by November, France’s ecology ministry said. The two countries have renewed their commitment to jointly promote Europe’s energy transition to more renewable power, the ministry said. The countries will experiment on common renewable energy tenders.

Source: Reuters

World’s No. 1 solar panel maker wants slice of Brazil market

September 1, 2017. China’s Trina Solar, the world’s largest maker of photovoltaic panels, is looking to grab a piece of Brazil’s nascent solar power market despite tough economic conditions, the company’s Latin America chief Álvaro García-Maltrás said. Trina opened an office in Brazil this year, aiming to become a major player by focusing on small-scale projects such as those that place solar panels on residential and business rooftops. Trina has ruled out building a plant in Brazil, as some competitors have, preferring to initially import panels from China, García-Maltrás said. Brazil has turned to solar energy later than other countries in Latin America.

Source: Reuters

China’s legislature passes nuclear safety law

September 1, 2017. China’s parliament passed a new nuclear safety law aimed at improving regulation in the nuclear power sector as new projects are built across the country. The law will give more powers to the regulator, the National Nuclear Safety Administration (NNSA), and establish new systems that will improve the disclosure of information on issues like radiation, and prevent or minimise risks from nuclear accidents. China is in the middle of an ambitious reactor building programme aimed at bringing total nuclear capacity to 58 GW by the end of the decade, up from 35 GW now. But weak and opaque governance has long been seen as an industry problem, especially when it comes to determining the precise roles of the government, the military and state-owned nuclear enterprises on issues such as the handling of nuclear materials and the disposal of spent fuel.

Source: Reuters

Tanzania invites bids for hydropower project in game reserve

August 31, 2017. Tanzania has invited bids to build a 2,100 MW hydroelectric plant in a World Heritage site renowned for its animal populations, despite opposition from conservationists to the long-delayed project. The energy and minerals ministry said it expected construction of the power plant to be completed within three years. The deadline for bids is October 16, which specifies that work must be completed within a period of 36 months, with a maximum mobilisation period of three months.

Source: Reuters

Southern Company plans to complete lone new US nuclear plant project

August 31, 2017. Southern Company said it would seek to complete two unfinished nuclear reactors in the US (United States) state of Georgia despite billions of dollars of cost overruns that pushed the main contractor, Westinghouse Electric Co LLC, into bankruptcy. The project known as Plant Vogtle is the first new US nuclear power plant to be built since the Three Mile Island accident in 1979, and completing it would provide hope for a struggling US nuclear industry. Southern said it expected the two reactors to be completed by the end of 2022. The project was initially expected to produce power in 2016.

Source: Reuters


State-wise No. of Domestic LPG Customers Who have Given-up LPG Subsidy

State/UT No. of Domestic LPG Customers who Surrendered Subsidy (as on July 2017)
Andaman and Nicobar Islands 2,851
Andhra Pradesh 2,39,495
Arunachal Pradesh 23,145
Assam 1,87,050
Bihar 4,17,935
Chandigarh 20,275
Chhattisgarh 1,37,158
Daman and Diu 2,839
Delhi 8,02,923
Dadra and Nagar Haveli 6,837
Goa 42,349
Gujarat 4,48,555
Himachal Pradesh 70,352
Haryana 3,39,511
Jharkhand 98,170
Jammu and Kashmir 1,51,105
Kerala 3,12,126
Karnataka 7,50,498
Lakshadweep 143
Manipur 47,039
Meghalaya 7,633
Maharashtra 16,92,692
Mizoram 43,978
Madhya Pradesh 4,28,129
Nagaland 31,546
Odisha 1,58,053
Puducherry 16,775
Punjab 4,24,468
Rajasthan 6,49,426
Sikkim 7,790
Telangana 3,85,282
Tamil Nadu 6,61,736
Tripura 18,707
Uttar Pradesh 12,64,105
Uttarakhand 1,45,494
West Bengal 3,52,041
Total 1,03,88,211

No. of Domestic LPG Customers Who have Given-up LPG Subsidy (as on July 2017): 1.03 Crores

No. of Registered Domestic LPG Customers/Connections (as on July 2017): 24. 28 Crores

No. of Active Domestic LPG Customers/Connections (as on July 2017): 20.67 Crores

Source: Rajya Sabha Un-starred Question No. 2061 & Petroleum Planning and Analysis Cell

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.