MonitorsPublished on Jan 29, 2018
Energy News Monitor | Volume XIV; Issue 32

Gas News Commentary: December 2017 – January 2018


It literally took the country by storm six months back when dozens of taxes and levies were rolled into one, but as the new GST stabilises, its ambit is now likely to be increased by including natural gas in next couple of months. On July 1, when the new national sales tax was implemented, it was decried as technologically tedious and expensive and had potential to torpedo political prospects of the ruling BJP. While GST transformed India into ‘one nation, one market’ at the “stroke of midnight” on June 30, real estate as well as crude oil, jet fuel or ATF, natural gas, diesel and petrol were kept out of its purview. This meant that the products continued to attract duties like central excise and VAT. That may well change in 2018, at least for natural gas. The revenue department said as the Centre and states are assured of revenue flows, natural gas can be the next big item to be included. A 5 percent GST, equivalent to that being charged on coal, will benefit states in reducing price of CNG as well as cooking gas piped into kitchens. The Centre may try to bring up inclusion of natural gas at the next GST Council meeting in January. But doing so for other petroleum items could be difficult because the states and the Centre both get quite a bit of revenue from those items. The roll out of biggest tax reform since independence on July 1 was without undue disruption. The ‘one nation, one tax’ united at least 17 different central and state indirect taxes under one umbrella to cut tax evasions and reduce corruption.

India is discussing setting up refineries and LNG plants in Indonesia In an attempt to increase its presence in its eastern neighbourhood, India is selling diesel to Bangladesh via rail. India’s presence in the ASEAN region has been historic, one of the country’s oldest overseas oil and gas fields was acquired in 1988 in Vietnam. ASEAN region is also a source of crude oil and LNG to meet India’s hydrocarbon requirement. Last year, India imported 6 mt of crude oil from Malaysia, Brunei and Indonesia, accounting for 2.8 percent of the total crude oil imports, which is an increase of 12 percent from the year before. It also imported 1.45 mt of LNG mainly from Singapore and Malaysia accounting for 7 percent of the total LNG imported. India also imported one mt of petroleum products and some quantities of LPG from the region. There is a healthy collaboration between oil majors Indian Oil Corp (IOC) and Petronas of Malaysia. The two companies are working in India and third country. The Malaysian national oil company is a reliable partner in technology.

GEECL, India’s first producer of natural gas from coal seams, will invest up to Rs 25 billion over the next three to four years to raise output. The planned capex of Rs 20-25 billion will be for “drilling 144 new wells and laying internal pipelines” in GEECL’s Raniganj block in West Bengal. GEECL, the first to start CBM production in India in 2007, produces 0.57 million standard cubic metres of gas a day at the Raniganj block. The company has so far drilled 156 wells on the block which has gas reserves of 2.6 trillion cubic feet in place. The government has so far awarded 33 blocks for extracting CBM but only three have started production so far. While GEECL has been producing CBM for 10 years now, Essar Oil last year produced about 9,00,000 cubic metres a day from another block in Raniganj, RG(E)-CBM-2001/1. Reliance Industries Ltd (RIL) began gas production from its Sohagpur CBM blocks in Madhya Pradesh after winning extraction rights in 2002. ONGC has entered development phase in its four blocks including Raniganj (North). GEECL produces CBM from Raniganj (South) licence area, which covers 210 square kilometres, with 2.62 trillion cubic feet of gas reserves in place. The government is looking at raising share of natural gas in the energy mix to 15 percent by 2020 from 6.5 percent now, in a bid to cut use of polluting liquid hydrocarbon fuels. CBM production is about 1 percent to the total gas consumption.

GGL has increased the prices of natural gas supplied to its industrial consumers in the state. The public sector company has hiked natural gas prices — from Rs 2.50 to Rs 2.57 per scm following a steep rise in prices of natural gas in the international market. GGL, which provides PNG to over 3,000 industrial consumers across the state, has increased PNG prices for industrial units in Morbi by Rs 2.50 per scm (from Rs 24.87/scm to Rs 27.37/scm). For industrial consumers other than those in Morbi, the prices have been raised by Rs 2.57/scm from Rs 26.59 per scm to Rs 29.17 per scm. The new rates are effective from December 23 this year. The state-run gas company confirmed the price hike and stated that around 40% increase in LNG prices in the global market necessitated the price rise for end consumers in the state. GGL supplies 4.3 mmscmd to industrial units in Morbi, Vapi, Ankleshwar, Bharuch and Thangadh among others. It may be mentioned here that the company had in October this year increased PNG prices for domestic consumers by Rs 0.95 (from Rs 19.90 per scm to Rs  20.85 per scm) while CNG prices were hiked by Rs 3.25 per kg (from Rs 44.25 to Rs 47.50 per kg). The price hike, however, seems not to have gone down well with industry. Ceramics industry is the largest consumer of GGL with gas consumption of 2.5 mmscmd.

AGL also has increased the prices of PNG and CNG for different segments including domestic, commercial and industrial in Ahmedabad and Vadodara. For residential (domestic) consumers, retail PNG price has been hiked by Rs 1.20 per standard cubic meter (scm) to Rs 21.36 per scm from Rs 20.16 per scm (exclusive of all taxes). The company has raised CNG price by Rs 1.85/kg to Rs 47.80 per kg from Rs 45.95 per kg (inclusive of all taxes). These revised prices are effective from January 2, 2018. AGL serves about 240,000 households and approximately 150,000 CNG users in Ahmedabad and Vadodara. As far as commercial and industrial segments are concerned, AGL has increased PNG prices (with minimum guaranteed off-take) for industrial consumers to Rs 31.81 per scm, while the rates have been hiked to Rs 45.17 per scm for commercial customers. Both these rates are exclusive of all taxes and are effective from January 1, 2018. Last year, ahead of assembly elections AGL had raised the prices of CNG and PNG (domestic) in the month of October but rolled back the hike on its own. Several CGD companies have increased natural gas prices after the central government’s move to raise domestic natural gas prices from October 1, 2017. In December, GGL, another CGD company, increased the prices of natural gas for industrial consumers.

Indian gas firm GAIL (India) Ltd is renegotiating its LNG purchase deals with US-based Cheniere Energy and Dominion Cove Point. GAIL has signed contracts for sourcing up to 5.8 million tonnes of LNG from the US. India wants to raise the share of natural gas in its energy mix to 15 percent in the next few years from about 6.5 percent now. But price-sensitive customers in the South Asian nation forced renegotiation of the price of two long-term LNG deals. Pricing of US LNG is linked to a formula but other charges including freight to India add an extra $2-$3 per million British thermal units, leading to GAIL scouting for destination, time and volume swap deals. India has in the past renegotiated LNG deals with Qatar’s RasGas and Exxon Mobil Corp as spot prices have declined substantially amid a supply glut.

The Union Cabinet has approved the signing of the MoU between India and Israel on cooperation in the Oil and Gas (O&G) Sector. The MoU is expected to provide impetus to India – Israel ties in the energy sector. ONGC has made a significant oil and gas discovery to the west of its prime Mumbai High fields in the Arabian Sea. The discovery has indicated potential in-place reserves of about 29.74 mt of oil and oil equivalent gas. Mumbai High, India’s biggest oil field, currently produces 205,000 barrels of oil per day (just over 10 million tonnes per annum) and the new find would add to that production in less than two years’ time. ONGC is carrying out a further appraisal of the discovery and has intimated upstream regulator the Directorate General of Hydrocarbons (DGH). The new find, which comes almost 50 years after ONGC began production in Mumbai High, will help the company maintain production levels from the basin for a longer time than currently estimated. Mumbai High is ONGC’s flagship oil producing assets.

Rest of the World

US dry natural gas production was forecast to rise to an all-time high of 2266 million cubic meters per day (mcm/d) in 2018 from 2084 mcm/day in 2017, according to the EIA’s Short Term Energy Outlook. The latest January output projection for 2018 was up from the EIA’s 2257 mcm/d forecast in December and would easily top the current annual record high of 2099 mcm/d produced on average in 2015. EIA also projected US gas consumption would rise to an all-time high of 2195 mcm/d in 2018 from 2096 mcm/d in 2017. The EIA projected gas’ share of generation would rise to 33.1 percent in 2018 and 34.3 percent in 2019 from 31.7 percent in 2017.

A Russian pipeline project that would boost Moscow’s ability to manipulate European energy markets can be slowed by Denmark but ultimately Germany would be needed to stop it, US State Department said. Russian natural gas company Gazprom and its European partners are seeking to build Nord Stream 2, a project to move gas to Germany under the Baltic Sea, bypassing existing land routes through Ukraine and Poland. Russia cut gas shipments in winter months in 2006, 2009 and 2014 during pricing disputes with neighbouring countries including Ukraine. Washington hopes to diversify Europe’s gas supply with shipments of US LNG, a business that has emerged recently with advent of the fracking boom. Currently 90 percent of US LNG goes to markets in Asia. But the exports are expected to soar in coming years as US facilities open, which could mean more will be available for Europe. Washington also supports other gas pipeline projects including the Southern Gas Corridor to bring gas to southern and central Europe from Azerbaijan and the Caspian Sea.

Europe will resume its role as a global gas sink from 2018-2020, absorbing surplus volumes of global LNG as supply growth outstrips demand. A recent report said that the region’s ‘large and liquidly traded’ gas hubs, strong pipeline interconnectivity, extensive regasification capacity, substantial volumes of flexible supply and price responsive demand will enable Europe to adopt this position. Europe’s role in rebalancing the LNG market was previously established from 2009-2011, when it absorbed volumes that had been backed out of the US market by the rise in shale and released them out to Asia following the Fukushima nuclear incident.

Norway’s pipeline gas exports to Europe hit a record high in 2017, exceeding the previous year by almost 7 percent. Europe’s second-largest gas supplier after Russia exported 116 bcm of natural gas via pipelines to receiving terminals in Britain, Germany, France and Belgium last year, up from the previous record of 108.6 bcm in 2016. Norway’s pipeline gas exports meet about a quarter of Europe’s demand. Norway’s export levels in 2017 were boosted by low summer maintenance at the country’s offshore gas fields, and higher output from its largest field, Troll. More than 40 percent of all exports went to terminals in Germany, and over 30 percent to Britain, with the rest shared between France and Belgium. The highest daily delivery in 2017 stood at 365.3 million cubic meters, the preliminary data showed. Norway’s annual export of gas to Europe has held at over 100 billion cubic meters each year since 2012.

Russia’s gas exports increased by 8.1 percent to a record high 193.9 bcm in 2017. Gazprom’s gas production, the world’s largest, rose by 12.4 percent to 471 bcm. Russia has dropped the requirement for Serbia to consume its gas only on the domestic market, a Russian government document published showed, allowing the Balkan state to re-export the fuel. The concession was made ahead of a meeting between Russian President Vladimir Putin and his Serbian counterpart Aleksandar Vucic in Moscow. Gazprom has made a number of concessions to consumers, including price reductions, as it faces increasing competition form other energy sources, such as liquefied natural gas, as well as political pressure in Europe, which has tried to cut its reliance on energy supplies from Moscow. The new document amends the 2012 contract for gas supplies until 2021 for the volume of 5 billion cubic meters per year. The government has ordered the Russian energy ministry jointly with the foreign ministry to conclude talks with Serbia and sign the protocol on changes to the 2012 agreement.

Ukraine’s Naftogaz and Russia’s Gazprom both claimed victory in a long-running gas dispute, each saying a Stockholm court had ruled in its favor over a gas contract. Gazprom appealed a May ruling by the court over a ‘take-or-pay’ clause in a 2009-2019 contract between the two countries. Naftogaz said the court had again rejected Gazprom’s $56 billion claim on this issue and other points. With its claim, Naftogaz had sought a lower price for Russian gas and disputed the take-or-pay clause requiring buyers to pay for gas whether they take physical delivery or not. Gazprom, however, said the court had backed most of its claims and ruled that the main terms of the contract between Naftogaz and Gazprom were valid. Gazprom said the Stockholm court had ordered Naftogaz to pay more than $2 billion to Gazprom for gas supply arrears and that it had also ordered Naftogaz to buy 5 bcm of gas from Gazprom annually from 2018. Pricing disputes in the past led to Russian gas supplies disruptions to Europe via Ukraine, including in 2009 and 2006. Since then Russia has been pushing for new pipeline projects via the Baltic and Black seas to bypass Ukraine. In a separate claim still pending before the Stockholm court, Naftogaz is seeking up to $16 billion from Gazprom in relation to a transit contract. A decision is expected in February 2018.

Beijing’s crackdown on pollution has put China on track to overtake Japan this year as the world’s biggest importer of natural gas, used to replace dirtier coal. China – already the biggest importer of oil and coal – is the world’s third biggest user of natural gas behind the United States and Russia, but has to import around 40 percent of its total needs as domestic production can’t keep up with demand. China still lags Japan, with gas annual imports of around 83.5 million tonnes, all as LNG, but its overall gas imports topped Japan’s in September and again in November, government data and shipping flows show. China’s three biggest LNG suppliers are Australia, Qatar and Malaysia, while pipeline imports come from Central Asia and Myanmar. A pipeline connecting China to Russia is under construction. As a result, Asian spot LNG prices LNG-AS have more than doubled since June to $11.20 per million metric British thermal units (mmBtu), their highest since November 2014, making LNG one of 2017’s strongest performing commodities. China’s surging demand already pushed it past South Korea in 2017 as the world’s number 2 LNG importer.

China’s NDRC said it launched an anti-monopoly investigation into 17 natural gas suppliers on December 20. NDRC said it was investigating whether the companies might have broken anti-trust laws amid surging gas prices driven by Beijing’s efforts to switch millions of household from burning coal to using gas for heating this winter in an ambitious drive to cut pollution. NDRC said PetroChina gas sales unit Qaqing was one of the companies under investigation, without identifying the others. NDRC said it had already punished four Chinese utilities for overcharging on heating fees and gas prices. Heilongjiang Zhongxin Power Heating Co, Zhejiang Haiyan Gas Co, Xuanhan Hexin Natural Gas Co and Shangdong Hengyuan Gas Station were fined a total 540,000 yuan ($82,430.16) for lifting gas prices without approval from central government, the NDRC said.

China plans to launch a natural gas exchange in Chongqing in early 2018, aiming to create an Asian price benchmark as the nation’s use of the fuel surges amid its shift away from coal. China is the world’s third-biggest consumer of natural gas behind the United States and Russia. An exchange in its fast-growing market would be a strong contender for an Asian gas marker off which other supplies in the region could be priced. The Chongqing Oil and Gas Exchange – supported by state energy majors, and private and local government-backed gas distributors – would provide a trading platform for domestic output, pipeline imports from Central Asia and Myanmar, and imports of LNG. Chongqing is China’s second attempt to develop a traded gas market, having set up a similar exchange in 2015 in Shanghai. An Asian gas price benchmark to stand next to those of the United States and Europe is seen as a key missing piece in establishing a truly global market for natural gas. China’s NDRC currently sets wholesale or city-gate gas prices by linking them to alternative fuels such as LPG and fuel oil. China is also struggling to build the infrastructure needed to freely distribute gas supplies. An inadequate pipeline grid and insufficient storage helped to trigger a supply crunch this winter after millions of households were switched from using coal to gas for heating. The exchange, though, is confident rising demand and slowly expanding gas infrastructure will help it succeed. Chongqing, with its population of more than 30 million and proximity to Sichuan province’s large gas basin, already has a relatively well-developed gas grid, and distributors there are keen to participate on the exchange.


India’s imports of Iran oil in December scheduled to rise to most since March

January 16, 2018. India was scheduled to lift its biggest volume of Iranian crude in nine months in December, helping to shore up the OPEC (Organization of the Petroleum Exporting Countries) producer’s oil exports to Asia last month. Asian buyers were scheduled to lift 1.92 million barrels per day (bpd) of Iranian crude in December, down 7 percent from the actual loadings in the previous month. India’s scheduled crude oil loadings from Iran, excluding condensate, an ultra-light oil, were about 550,000 bpd last month, up 78 percent from the previous month and the highest since March.

Source: Reuters

CII urges government to bring oil, natural gas under GST

January 16, 2018. The Confederation of Indian Industry (CII) has asked the government for inclusion of oil and natural gas in the new Goods and Services Tax (GST) regime at the earliest. The GST was rolled out from July 1, 2017 by subsuming most of the Central and State indirect taxes into a single tax. But, crude oil, natural gas, diesel, petrol and ATF (aviation turbine fuel) have not been included in the ambit of GST as of now. The CII said till such time that the five are included in GST, C Form should be continued to avoid high tax incidence on these products. As per the earlier provisions of CST Act, a purchaser can make the interstate purchase of the non-GST goods by availing concessional central sales tax rate of 2 percent against Form-C. Hitherto, fertiliser manufacturers, power producers, automobile manufacturers and other industries were buying natural gas and other petroleum products by paying CST of 2 percent against Form-C. The central government vide Taxation Laws Amendment Act 2017, amended the definition of ‘Goods’ under the CST Act to include only crude petroleum, diesel, petrol, ATF, natural gas and alcoholic liquor for human consumption. This meant that fertiliser companies are not eligible for C Form as the gas is used to manufacture urea and not for manufacture of natural gas. Likewise, automobile manufacturers are not eligible for C Form for inter-state purchase of diesel, petrol or natural gas, which they have to mandatorily fill in the tanks of new vehicles. The industry association said post GST, since Form-C is not available for inter-state purchase of goods and so the extra tax burden will be shifted to the consumer. It suggested that petroleum products, natural gas, electricity, alcohol and real estate should be covered under GST. Alternatively, since VAT is non-creditable tax, VAT rate should be reduced to 4 percent or lower which was the effective rate when credit on VAT was available before July 1.

Source: Business Standard

Diesel prices at record high of Rs 61.74 per litre, petrol crosses Rs 71

January 15, 2018. Diesel prices have touched a record high of Rs 61.74 per litre and petrol prices have crossed Rs 71 as international oil rates continue to rally. Petrol price rose to Rs 71.18 per litre in Delhi, the highest since August 2014, according to daily fuel price list of state-owned oil firms. Diesel prices soared to their highest level of Rs 61.74 per litre in Delhi. It is being sold at Rs 65.74 in Mumbai, where the local sales tax or VAT (Value Added Tax) rates are higher. Prices have been on the rise since December 12, 2017. Diesel in Delhi on that day was priced at Rs 58.34, and in past one month has risen by Rs 3.4. Petrol price has during the period risen by Rs 2.09, according to oil companies. The rally in oil prices has renewed calls to the government to cut excise duty to cushion burden on common man. The BJP-led NDA government has during its tenure cut excise duty only once – by Rs 2 per litre in October 2017 when petrol price had reached Rs 70.88 per litre in Delhi and diesel was priced at Rs 59.14. Because of the excise duty cut, diesel prices had on October 4, 2017 come down to Rs 56.89 and petrol to Rs 68.38. However, subsequent rally has wiped away all the gains and prices have touched new highs. Oil Minister Dharmendra Pradhan had responded to questions on whether the Centre would cut excise duty on the two fuel, by asking states to first cut VAT. Some state governments had followed that excise duty cut with reduction in VAT.  Price of petrol and diesel in Delhi is the lowest in all metros. Pradhan had said that Finance Minister Arun Jaitley has already written to the states seeking reduction in VAT. The October 2017 excise duty cut cost the government Rs 260 billion in annual revenue and about Rs 130 billion during the remaining part of the current financial year that ends on March 31, 2018. The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.

Source: Business Standard

Essar Oilfield Services eyes 20 percent rise in revenues at Rs 3.6 bn in FY19

January 15, 2018. Essar Oilfield Services Ltd is eyeing a 20 percent jump in revenues next fiscal as the country’s focus on raising domestic output propels a stagnant rig hire market. The company, which owns 16 rigs used for drilling of oil and gas, is expected to end the current fiscal with a revenue of Rs 3 billion, up from Rs 1.05 billion in the previous year, its Chief Executive Officer (CEO) Rajeev Nayyer said. Of the 16 rigs it holds, 15 are on-land drilling rig and one is submersible rig. Three of the on-land rigs are in Dubai and out of the remaining 12, the company expects at least eight to be hired by explorers, Nayyer said. The company’s offshore semi-submersible rig, the Essar Wildcat, is already deployed on a three-year contract with Oil and Natural Gas Corp (ONGC) since May 2017, Nayyer said. Public and private sector firms are stepping on gas to explore and produce more oil and gas as they look to meet Prime Minister Narendra Modi’s target of cutting import dependence by 10 percent by 2022. India currently imports over 80 percent of its oil needs. Nayyer said three of the land rigs are in operation through contracts with Oil India Ltd (OIL) and Mercator Petroleum, and another five are likely to be placed next fiscal. The current fiscal, he said, has really been a landmark year for the company with a turnaround in revenues after commencing drilling for contracted clients. He, however, neither disclosed the rig hire rates or the company’s profitability.

Source: Business Standard

ONGC reviews offshore logistics operations after chopper crash

January 15, 2018. Oil and Natural Gas Corp (ONGC) is reviewing offshore logistics operations after five of its ‘energy soldiers’ were killed in the tragic helicopter crash in the Arabian Sea. The five were on the way to ONGC’s oil installation in the Arabian sea when the accident occurred. ONGC is going in to every aspect of how employees and officers are currently transported from land to offshore installations and trying to cut the risk associated with such journeys. The helicopter crash is not the first accident in ONGC’s history. In August 2003, Mi-172 helicopter crashed off Mumbai coast killing 27 company persons and pilot on-board.

Source: Business Standard

PM Modi to attend work commencement of Rajasthan oil refinery

January 15, 2018. Prime Minister (PM) Narendra Modi will attend a function to mark the commencement of work for the oil refinery at Pachpadra in Rajasthan’s Barmer district. The foundation stone of the oil refinery was laid by the then Congress president Sonia Gandhi four years ago. The Prime Minister will also be addressing a public meeting in Rajasthan. Rajasthan has significant reserves of oil and gas and the refinery will be the state’s first. It is envisaged as a 9 million metric tonnes per annum (mmtpa) Refinery cum Petrochemical Complex. The product output from the refinery will conform to the advanced BS-VI emission norms. The estimated cost of the project, which is a Joint Venture of Hindustan Petroleum Corp Ltd (HPCL) and Government of Rajasthan, is over Rs 43,000 crore.

Source: Business Standard

Cairn India to invest Rs 370 bn to ramp up crude production in Rajasthan

January 14, 2018. Vedanta’s oil and gas vertical Cairn India is planning to invest Rs 370 billion to ramp up crude production at its Barmer oil fields in Rajasthan. The investment will be made over the next few years, which will enhance the production of crude oil. Oil Minister Dharmendra Pradhan inaugurated an Enhanced Oil Recovery (EOR) programme for Mangala-Bhagyam-Aishwarya (MBA) fields in Barmer. The programme will help the company in achieving the production target of 500,000 barrels oil per day (bopd) from the Barmer oil fields. Cairn India Chief Executive Officer (CEO) Sudhir Mathur said the company has proposed to double the output and MBA-EOR project will play a vital role in achieving the goal.

Source: Business Standard

J&K government meets 75 percent of targets under free LPG connection scheme

January 14, 2018. The Jammu and Kashmir (J&K) government said it has achieved a target of 75 percent in the implementation of Pradhan Mantri Ujjwala Yojana (PMUY) by providing free LPG (liquefied petroleum gas) connections to 3.70 lakh below poverty line households in the state. Food, Civil Supplies and Consumer Affairs Minister Chowdhary Zulfkar Ali said the state is proud to take lead over rest of the states in the country in implementation of PMUY with 75 percent target achievement. The function was organised by a private gas agency for distribution of free gas connections at koteranka. As many as 510 gas connections were distributed. The females from BPL households were provided with sets of chulha, cylinder, gas pipe, regulator and safety manual. While deliberating on PMUY, the Minister said the scheme was launched with a declared aim to safeguard the health of women and children by providing them with a clean cooking fuel LPG, so that they do not have to compromise on their health in smoky kitchens or wander in unsafe areas for collecting firewood.

Source: The Economic Times

‘India needs 600 mmt refinery capacity by 2040’

January 13, 2018. India needs to increase its refining capacity to 600 million metric tonnes (mmt) by 2040 to meet the rising demand for fuel, Oil Minister Dharmendra Pradhan said. He informed that about $300 billion would be invested in next 10 years in energy and hydrocarbon sectors. He said the focus of the union government is moving towards efficient energy production and consumption. India has decided to meet international best practices by leapfrogging to BS-VI norms by April 2020 in the entire country and by April 2018 in NCT Delhi. The Minister informed that the government has planned to set up West Coast Refinery cum Petrochemical Complex of 60 million metric tonnes per annum (mmtpa) with an estimated investment of Rs 270,000 crore. Foundation stone for another grass root Refinery cum Petrochemical Complex in Barmer, Rajasthan with an investment of Rs 43,000 crore will be laid by Prime Minister Narendra Modi on 16 January 2018.

Source: Business Standard

India’s 2017 oil demand growth posts lowest gain since 2013

January 11, 2018. Indian oil consumption in 2017 grew at its slowest in four years, according to government statistics, hit by the government’s demonetisation move and a tax increase that knocked the gain in fuel use back to a modest 2.3 percent. The low growth also coincided with another year of weak, albeit improving, new vehicle sales. India imports almost all of its oil, shipping in around 4.2 million barrels per day (bpd) of crude in 2017, according to trade flow data. India saw some structural demand changes that affected the use of refined oil products. A government push for household to use more liquefied petroleum gas (LPG) has India challenging China as the world’s top LPG importer. For 2018, energy consultancy FGE expects India’s oil demand growth to improve to 4.3 percent. India’s slow oil demand growth has surprised many, given the country has often been touted as the next China in terms of rising oil consumption. If an Indian citizen with an average salary buys 10 gallons of gasoline per month, that would represent nearly 30 percent of the person’s income, while the average Chinese would fork out just 5 percent, data from statistics company Numbeo showed.

Source: Reuters

Oil Minister rules out upstream oil gas regulator

January 11, 2018. Oil Minister Dharmendra Pradhan virtually ruled out giving statutory powers to upstream oil and gas regulator DGH (Directorate General of Hydrocarbons), saying the sector has not fully developed and needs government support. There are two regulatory bodies in the oil and  gas sector – the Petroleum and Natural Gas Regulatory Board, which is a regulator for the downstream activities like laying of pipelines and fuel marketing but without powers to review pricing. The DGH is a technical arm of the oil ministry which overseas upstream oil and gas exploration and production activities. Various committees have suggested creation of an independent, statutory regulator for the upstream oil sector. He said the sector has not developed fully and still looks at the government for reforms. In 2013, a committee, headed by former finance secretary Vijay Kelkar, had recommended hiving off the DGH’s financial oversight function and vesting it with the income tax authorities. The DGH currently manages petroleum resources besides monitoring PSCs (Production Sharing Contracts), and assists the government in auctioning oil and gas exploration fields. In 2011, a panel led by former finance secretary Ashok Chawla advised the government to turn the DGH into an ‘independent technical office’ attached to the oil ministry and establish an upstream regulator to focus on regulatory functions. It also said the reconstituted DGH as well as the regulator must not have staff on deputation from regulated firms. A similar panel had in 2001 recommended the setting up of an Upstream Hydrocarbon Regulatory Board, giving DGH a techno-administrative role as a part of the oil ministry.

Source: Business Standard

Odisha requests PM to set up Naphtha Cracker unit

January 11, 2018. Odisha Chief Minister Naveen Patnaik requested Prime Minister (PM) Narendra Modi to direct India Oil Corp (IOC) to develop an integrated Naphtha Cracker unit at the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) at the state’s Paradip. Such a unit would provide possibility of maximizing production of ethylene, propylene, butadiene and aromatic cuts, which work as feedstock for a variety of industries that could serve the increasing demand of petrochemical products in the country across sectors such as textiles, polymers, pharmaceuticals, speciality chemicals etc, he said. He said in the meeting held on January 30, 2014 under the chairmanship of the then Petroleum and Natural Gas Minister, the establishment of a Naphtha Cracker unit was planned and IOC was advised to evolve a time bound plan for producing power from gas instead of naphtha. Subsequently, Odisha Chief Secretary in May 2015 requested Cabinet Secretary to intervene in the matter and impress upon IOC to establish a Naphtha Cracker unit. It is also important that development of common infrastructure and utilities at the PCPIR is taken up concurrently and necessary financial support from the Government of India is extended for the success of the project, he said.

Source: Business Standard


GNFC shuts down Dahej plant indefinitely post gas leak

January 16, 2018. Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC) said it has shut down its plant at Dahej indefinitely post a gas leak incident. The company clarified that neither there was any property damage nor any loss of life. In November 2016 too, the facility was shut down after a mechanical failure in a chemical reactor caused leakage of poisonous phosgene gas. The company restarted commercial operation in February last year, more than three months after being shut due to gas leak.

Source: Business Standard

GAIL reworks Gazprom LNG deal, raises volume

January 16, 2018. GAIL (India) Ltd has renegotiated the terms of a long-term liquefied natural gas (LNG) purchase deal with Russia’s Gazprom. This is the third such negotiation by India to make the imported fuel more affordable to its price-sensitive customers. India has been making the most of its position as one of the world’s biggest energy consumers to strike better bargains for its companies. In recent years it renegotiated long-term LNG deals with Qatar’s RasGas and Exxon Mobil Corp as spot prices declined substantially amid a supply glut, strengthening the hand of buyers chafing at high contract prices. Under the re-worked deal, GAIL and Gazprom have extended the duration of the deal by two to three years and the Indian company has agreed to buy an additional six million tonnes of LNG volumes. The pricing of the super-cooled fuel has been changed from 9 month linkage to Japanese Customs cleared crude to three months average of Brent. In the initial three-year period, GAIL will be buying lower volumes — 0.5 million tonnes in the first year, 0.75 million tonnes in the second year and 1.5 million tonnes in the third year. GAIL signed the deal with Gazprom Marketing & Trading Singapore in 2012 to buy 2.5 million tonnes of LNG per year for 20 years on a delivered basis. The supplies were scheduled to start in the second quarter of 2018.

Source: Reuters

Government to extend Urja Ganga gas pipeline project to North Eastern states

January 11, 2018. Prime Minister Narendra Modi’s ambitious Rs 129.4 billion Urja Ganga gas pipeline project is now being extended to North East adding another 750 kilometre (km) up to Guwahati and later to all the state capitals of the region. Connecting to Guwahati itself may see around Rs 37-40 billion investment. Oil Minister Dharmendra Pradhan said that a consortium of state-run companies headed by GAIL (India) Ltd has started its initial work on the project. The other partners are Indian Oil Corp (IOC), Oil and Natural Gas Corp (ONGC), Hindustan Petroleum Corp Ltd (HPCL) and Oil India Ltd (OIL). The companies are set to approach the Petroleum and Natural Gas Regulatory Board with the proposal. The pipeline network will help in better utilisation of gas deposits in Manipur, Silchar Valley and Arunachal Pradesh and create more jobs in the region. As per the earlier plan, Urja Ganga project was targetted at meeting the energy requirements of 40 districts and 2,600 villages covering five Eastern states — Uttar Pradesh, Bihar, Jharkhand, Odisha and West Bengal — by 2020. The 2,539 km project was launched in October 2016 and is also known as Jgdishpur-Haldia and Bokaro-Dhamra Pipeline (JHBDPL). Going by the current investment of slightly above Rs 50 million per km for Urja Ganga, the first phase of North East project up to Guwahati may cost around Rs 37-40 billion. Urja Ganga is also looking at creating city gas distribution networks in seven cities — Varanasi, Bhubaneswar, Cuttack, Kolkata, Patna, Ranchi and Jamshedpur. It may also revive fertiliser units at Barauni in Bihar, Sindhri in Jharkhand, Talcher in Odisha and Gorakhpur in Uttar Pradesh. Meanwhile, Pradhan said that GAIL is also working on a coal to the synthetic project in Odisha and the country is looking to cut 10 percent import of natural gas by 2022 with additional focus on alternative energy sources like biofuel.

Source: Business Standard

GAIL to set up India’s 1st coal-to-gas conversion plant

January 11, 2018. India’s first plant to convert coal to synthetic gas is to be set up in Odisha under the supervision of state-run gas transmission utility GAIL (India) Ltd, Oil Minister Dharmendra Pradhan said. Pradhan said the synthetic gas was expected to be cheaper than natural gas. The situation is mainly because India lacks technology to be used for converting coal to gas. GAIL has roped in other public sector undertakings like Coal India Ltd (CIL), Rashtriya Chemicals and Fertilizers and Fertilizer Corp of India for the project, which will generate ammonia synthesis gas from coal. State-run oil marketing companies (OMCs) are already implementing the Ethanol Blended Petrol (EBP) programme under which they sell the EBP with the percentage of ethanol up to 10 percent.

Source: Business Standard

ONGC set to open India’s 8th sedimentary basin with Kutch offshore gas find

January 10, 2018. After a gap of over three decades, Oil and Natural Gas Corp (ONGC) is set to open a new sedimentary basin in the country as it puts Kutch offshore on the oil and gas map of India. Kutch would be India’s eighth sedimentary basin. ONGC had previously opened for commercial production six out of India’s seven producing basins. Cauvery was the last Category-I producing basin which was discovered in 1985. ONGC has made a significant natural gas discovery in the Gulf of Kutch off the west coast, which it plans to bring to production in 2-3 years. India has 26 sedimentary basins, of which only seven have commercial production of oil and gas. Except for the Assam shelf, ONGC opened up for commercial production all the other six basins, including Cambay, Mumbai Offshore, Rajasthan, Krishna Godavari, Cauvery and Assam-Arakan Fold Belt. The discovery in Kutch offshore may hold about 1 trillion cubic feet of gas reserves. The spread of Kutch offshore basin covers an area of 28000 square kilometres in a water depth of up to 200 meters and will become eighth producing basin of the country. In order to go for early monetising of Kutch Offshore, ONGC is looking for pricing support from the Government of India. Since Kutch Offshore is a difficult field, its cost of production is also going to be high. Hence, a matching pricing support is extremely important. The present government-mandated gas price of $2.89 per million metric British thermal unit (mmBtu) does not make the discovery commercially viable. Since the find is in shallow waters, it does not qualify to get the $6.30 per mmBtu cap price set for difficult fields. ONGC has stepped up the acquisition of 2D and 3D seismic data in a bid to raise production and help cut country’s dependence on imports to meet oil needs by 10 percent by 2022.

Source: Business Standard


Coal India’s new pricing policy to cut power generation cost

January 16, 2018. Coal India’s new pricing policy, which involves selling coal on the basis of total energy content in each consignment, is expected to bring down cost of power generation that would be passed on to consumers, the company said. In its new coal pricing policy, which will come into effect from April, the monopoly has graded coal on the basis of total energy content. Each of these grades will have a different rate for one unit of energy within these slabs with higher prices for higher calorific value. For every 100 unit reduction in energy content measured in kilo calorie, prices would reduce by a minimum of Rs 19 per tonne for the lowest grade and a maximum of Rs 48 per tonne for the highest grade. According to a Coal India, there are nine slabs in the new system. For example, coal with total energy content varying between 3,101 kilo calorie per kg and 4,600 kilo calorie per kg will be billed at 23 paise per unit of energy. This means that the price of coal per tonne for this grade will vary between Rs 713 per tonne on the lowest side for the grade and Rs 1,058 per tonne on the highest side of the grade. The current price for this grade is fixed at Rs 886 per tonne as long as energy content per kg lies within the grade.

Source: The Economic Times

NTPC wants more coal as stocks hit critical levels

January 16, 2018. Though the situation of coal stocks at power plants is believed to have improved with the seasonal fall in electricity demand with the advent of winter, state-run power generation behemoth NTPC Ltd has flagged fuel shortage at a number of its plants. NTPC power plants at Mauda (2,320 MW), Farakka (2,100 MW), Kahalgaon (2,340 MW), Simhadri (2,000 MW) and Solapur (660 MW) were cited to have been facing severe coal shortage. As on January 11, all the above power plants had coal stocks which were not even sufficient to sustain for a day. NTPC power plants received 7.4 million tonnes less coal than what was required in November and December. Stocks at thermal power plants across the country suddenly fell in August-November, with the sudden surge in demand from these stations.

Source: The Financial Express

Polish companies may explore commercial coal mining in India

January 15, 2018. Polish companies may explore opportunities at commercial coal mining in India if conditions are right. The Indian mining sector has been using Polish technology and machinery extensively and many Polish companies are now looking beyond Europe to find new markets and opportunities. India is currently working on a methodology for offering coal blocks for commercial mining. The European country will showcase Silesia region in the Bengal business gathering as a potential region for economic partnership between Bengal and the province.

Source: Business Standard

Mormugao port faces Rs 900 mn loss over coal issues: Goa CM

January 12, 2018. Goa Chief Minister (CM) Manohar Parrikar said that the Mormugao Port Trust (MPT) has faced a loss of Rs 90 crore for the current financial year. He said that the chairman of the MPT approached him with a grievance that the port did not have money to pay staff salaries. The Goa State Pollution Control Board had recently stopped a private firm from handling coal at MPT for violation of norms. Parrikar said that the current situation over the coal handling and stoppage had resulted in MPT losing Rs 90 crore for the current financial year.

Source: The Financial Express

CCI issues order against Nair Coal Services

January 11, 2018. The Competition Commission of India (CCI) issued an order against Nair Coal Services Pvt Ltd, Karam Chand Thapar and Bros (CS) Ltd. and Naresh Kumar and Company Pvt Ltd for rigging bids and dividing market by forming hardcore cartel in respect of tenders floated by Maharashtra State Power Generation Company (MAHAGENCO) for procuring coal liasoning services. The CCI said that it found the companies to be in contravention of the provisions of Section 3(1) read with Section 3(3)(c) and Section 3(3)(d) of the Competition Act, 2002 for acting in a collusive and concerted manner which eliminated and lessened the competition besides manipulating the bidding process in respect of the tenders floated by MAHAGENCO for award of contract of coal liasoning work for its various thermal power stations. Taking a serious view of the collusive conduct of coal liasoning agents, the CCI opined that the case fell in the category of hardcore cartels as the parties reached an agreement to submit collusive tenders and to divide the markets which warranted the matter to be dealt with utmost severity.

Source: Business Standard

CIL to charge customers on energy content in coal from April

January 10, 2018. Coal India Ltd (CIL) has decided to shift to a pricing system under which customers would be billed on the basis of exact energy content per kilogram of coal in every consignment that is sold to them. The new system would be effective from April 1, 2018. At present, prices of coal is fixed for a range of energy content values in coal which is typically a band based pricing system. Customers pay a certain price per tonne if the heat content lies within these predefined ranges. There are 17 grades at present. The new system will bring down the number of bands to 10. Each band would have a definite rate in Rupees or paise for one unit of energy in coal. Billing would be on the basis of this rate multiplied by total energy content in one kilogram of coal for each consignment. In technical terms, coal price will be based on Rupees per kilo calorie — that is Rupees per unit of energy.

Source: The Economic Times


UP government allows industry to choose power discom

January 16, 2018. A month ahead of the investors meet in UP (Uttar Pradesh), the state government offered yet another sop to industries by giving them the option to take power from the power distribution company (discom) of their choice. The power will be wheeled to the industrial units under the ‘open access system’ for which the state government will set up a help desk at the UP state load dispatch centre (UPSLDC). The permission to take power from a source other than the existing distribution company will be granted by the UP power transmission corporation limited and the respective discom. Industries have been seeking power under the open access system but could not do so since the process for getting clearances was tedious. The open access policy, experts said, could prove to be a boon to the industries in UP which has a power crunch. The Aditya Nath Yogi government has been wooing industry with various sops and had recently set up a single window clearance system.

Source: The Times of India

Over 13k houses in West UP get electricity connections in a day

January 15, 2018. As many as 13,254 houses were given electricity connections in Western Uttar Pradesh (UP) in a single day under ‘Saubhagya’ scheme. The districts where the connections were given include Meerut, Baghpat, Ghaziabad, Bulandshahr, Hapur, Gautam Budh Nagar, Saharanpur, Muzaffarnagar, Shamli, Moradabad, Sambhal, Amroha, Rampur and Bijnor. Out of the total houses, 2,372 belonged to Below Poverty Line (BPL) families. The connections were given for free during 464 mega camps set up across West UP. Pradhan Mantri Sahaj Bijli Har Ghar Yojana ‘Saubhagya’– an Rs 16,320 crore scheme of the central government– aims to provide power connections to over 4 crore families in rural and urban areas by December 2018. As many as 464 mega camps were set up in 14 districts of West UP, and a report of the number of electricity connections was made public. Paschimanchal Vidyut Vitaran Nigam Ltd (PVVNL) managing director Ashutosh Niranjan had conducted inspection of the mega camps. While the BPL customers will not have to pay for the electricity connections, Rs 50 per month will be taken from Above Poverty Line (APL) customers in 10 easy installments.

Source: The Times of India

Tata-backed Resurgent bids for power assets of Jaypee

January 15, 2018. Tata Group-backed Resurgent Power has emerged as frontrunner to buy Jaypee Power Ventures after lenders, who own majority shares, put it on the block. Jaypee has 2,200 MW of hydro and coal-fired power generation assets, with Rs 12,000 crore in loans following the debt restructuring. Jaypee has one hydro power plant in Himachal Pradesh and two coal-based plants in Madhya Pradesh. Resurgent Power does not have electricity generating assets in its portfolio and has been looking at acquisition opportunities. Besides Jaypee Power, Resurgent has bid for GMR Infrastructure’s 1,370 MW coal-based plant in Chhattisgarh.

Source: The Times of India

Chandigarh electricity department seeks 20 percent hike in power tariff

January 13, 2018. City residents should brace for higher tariff with electricity department submitting a proposal for enhancement in the existing rates. The department has submitted a tariff petition to Joint Electricity Regulatory Commission (JERC) for enhancement in the tariff up to 20% for the next financial year in different slabs. In the domestic category, the electricity department has proposed a hike from Rs 2.55 to Rs 2.75 in the slab of 0-150 units. It has proposed increase from Rs 4.80 to Rs 5.80 in the slab of 151-400 units and Rs 5 to Rs 6 in slab above 400 units. In the commercial category, increase from Rs 5 to Rs 6.20 in the slab from 0-150, Rs 5.25 to Rs 6.45 in the slab of 151-400 and Rs 5.45 to Rs 6.75 in slab above 400 units has been proposed. The commission will take a decision on considering the proposed hike after interacting with the residents of the city. In the past five years, the commission has revised power tariff only twice – 2012-13 and 2015-16— and turned down the petition on three occasions on the ground that the department had failed to submit certain audited accounts. The electricity department caters to 2.15 lakh consumers of nine categories. The majority of power is consumed by domestic consumers followed by commercial category. Despite being repeatedly pulled by the JERC, the department has again failed to file the petition within stipulated time period. For the ongoing financial year, the department had filed tariff petition on January 19, while in 2016 the petition was filed on February 29.

Source: The Economic Times

Torrent Power seeks nod to increase electricity tariff to recover under-recoveries

January 11, 2018. Electricity consumers in Ahmedabad, Gandhinagar and Surat may have to cough up more as Torrent Power Ltd (TPL) has sought permission to increase power rates. The company claims that it needs higher rates to recover its past under-recoveries. The company has not actually demanded a hike in base tariffs — these are revised annually to cover future costs — it has instead proposed a rise in the form of regulatory charge from April 1, 2018. TPL has sought an increase of 25 paise per unit for Ahmedabad area which includes Gandhinagar. For Surat, the regulatory charge proposed to be levied is 20 paise. The private sector company has filed its petitions with Gujarat Electricity Regulatory Commission (GERC) for determination of tariff for

2018-19. However, the final quantum of the hike to be passed on to the consumers will be decided by the state power regulatory body, which has sought suggestions and objections from all stakeholders by February 9. In its tariff petitions, Torren Power has stated that its past under recoveries, including carrying cost, works out to be Rs 390.83 crore for Ahmedabad, and Rs 67.79 crore for Surat supply area. The proposed increase, if approved, will translate into an estimated burden of Rs 485.62 crore on the consumers. Torrent Power has stated in its petitions that it had last increased tariffs in the year 2015-16.

Source: The Economic Times

Punjab Power Department to bear Rs 7.4 bn subsidy to industry

January 11, 2018. Punjab Chief Minister Amarinder Singh issued formal orders to the state Power Department to bear the Rs 748 crore power subsidy for the industry for 2017-18, with variable cost to be fixed at Rs 5 per unit. The order has been passed in line with the promise made by the Congress government, led by Amarinder Singh, to provide power to industry at a subsidized rate of Rs 5 per unit.

Source: Business Standard

Government may amend power act to levy hefty penalties on discoms

January 10, 2018. The government is working on amendments to the Electricity Act to levy hefty penalties on power distribution companies for load shedding and make provisions for direct subsidy transfers by states to power consumers. The Union power ministry is aiming to introduce the Electricity Act amendment bill in the budget session of parliament. At present, the Act fixes universal service obligation on distribution licensees to provide electricity to all applicants and the penalty for non-compliance can extend to up to Rs 1,000 per day of default. The amendments are proposed in the Act to explicitly fix 24×7 power supply obligation on electricity distribution licensees. The bill will also provide for subsidy transfers from state governments for power consumption directly to the consumers, on the lines of cooking gas cylinders. Industry experts said a DBT (Direct Benefit Transfer) like structure in power distribution sector would help revive the distribution companies (discoms). But the scheme may face challenges in implementation as net electricity metering is not prevalent in rural areas. The roadmap for one of the most awaited reforms in the power sector by enabling electricity consumers to choose their supplier is also likely to be provided in the bill. However, the bill may not impose timelines for implementation of the proposal as that has been opposed by states. The states may, however, be asked to notify their plans for implementation of the reform for electricity connection portability in the next 3-5 years. The proposal, to separate electricity supply and network maintenance services and introduce multiple licensees for a single area by amending the Electricity Act 2003, has been in works for last many years. The UPA government had in 2014 introduced a bill to this effect in the Lok Sabha. The proposal is similar to mobile number portability where consumers can switch to a telecom operator of their choice. Currently, power distribution utilities are responsible for operating and maintaining distribution system in their licensed areas.

Source: The Economic Times


Husk Power raises $20 mn for renewable mini-grid business

January 16, 2018. Husk Power Systems said that it has raised $20 million (Rs 127 crore) to scale its renewable mini-grid business both in Asia and Africa. Husk Power designs, builds, owns and operates one of the world’s lowest-cost hybrid power plants and distribution network in India and Tanzania. It provides power to rural communities and businesses, entirely from renewable energy sources.

Source: Business Standard

Domestic solar panels to get only EPC, subsidy-backed projects

January 16, 2018. As India faces heat at the World Trade Organisation (WTO) for giving preference to domestic solar manufacturers in its renewable energy programme, the Ministry of New and Renewable Energy (MNRE) has made changes to the content sourcing policy. This comes at a time when the domestic solar manufacturing industry has sought safeguards and anti-dumping duty on import of solar panels from China and Malaysia. MNRE Secretary Anand Kumar clarified the CPSUs (Central Public Sector Undertakings) and states are open to call tender with DCR under the EPC (Engineering, Procurement & Construction) or contractor mode. CPSUs such as NTPC Ltd would be allowed to issue tender for solar project construction with the caveat that the private domestic developer should only be an EPC contractor and not power seller. Also, the new rooftop solar projects policy promotes use of domestic content with central financial assistance and subsidy. Kumar said MNRE has floated the proposal to increase the amount of CPSUs projects to 13,000 Mw from current 1,000 MW. Till last year, 10 percent capacity in each of the tender issued by the central government for solar power project was kept for domestic content sourcing. Earlier it was 50 percent and was brought down after the first appeal made by the United States (US) in the WTO in 2014. Apart from this, major PSUs such as NTPC and Coal India Ltd (CIL) have committed to build solar power generation capacity from domestic content. The WTO ruling in September 2016 stated that solar projects which are to be taken up by the government, for the government, there should not be any commercial sale. India asked for a year’s time to close all the projects floated on DCR. The deadline expired in December 2017. As the current status of the case stands, India has sent clarification that the Solar Mission is WTO complaint and none of the solar policies flout any trade regulations.

Source: Business Standard

Azure Power bags 200 MW solar power project via SECI auction

January 15, 2018. Azure Power announced bagging of a 200 MW solar power project through an auction conducted by Solar Energy Corp of India (SECI). The company said that it will enter into a power purchase pact with SECI to supply power at a tariff of Rs 2.48 per kilowatt hour (kWh) for 25 years. The solar plan, it said, will be set up at Bhadla Solar Park in Rajasthan and may be commissioned next year. In 2015, Azure Power developed a 100 MW solar power plant outside a solar park in Rajasthan, which was SECI’s first allocation and also the largest solar power project under India’s National Solar Mission at commissioning. Azure Power, a leading independent solar power producer in India has a portfolio of over 1,600 MW across several states and Union Territories.

Source: Business Standard

’91k solar lights provided in un-electrified villages in J&K’

January 15, 2018. The Jammu and Kashmir (J&K) government said 91,000 solar home lights have been provided to households in un-electrified villages in the state. Minister for Social Welfare, ARI & Trainings and Science & Technology Sajad Gani Lone said the home lighting devices were provided under the Remote Village Electrification Programme. He said the J&K Energy Development Agency (JAKEDA) would also install 54 MW solar rooftop power plants in 2018-19. Under the Prime Minister’s Development Package, the government installed 3,000 solar street lighting systems and more 17,013 would be installed after the identification of the areas, He said. He said the government has set in the process for distributing solar home lighting devices which would be followed by installation of solar rooftop power plants in all the district hospitals across the state. He said the government would provide solar home lighting devices to all the genuine beneficiaries, including those living in Jagti Migrant Township.

Source: Business Standard

Greenko eyes Essel Infraprojects’ power transmission business for $1 bn

January 15, 2018. Renewable energy company Greenko Group is in talks with Essel Infraprojects Ltd to acquire its power transmission business for an estimated $1 billion. Essel Infraprojects has five transmission projects in its portfolio. Hyderabad-based Greenko Group, backed by Singapore’s sovereign wealth fund GIC Holdings Pte and the Abu Dhabi Investment Authority, is planning to enter the transmission business amid low green energy tariffs in India that will likely squeeze project developers’ profitability. Greenko Group currently has over 3.2 GW of operating capacity, with plans to reach 5 GW by 2019.

Source: Livemint

Maharashtra transmission company to purchase 1 GW solar power in 2018

January 15, 2018. In a move to boost solar energy production in Maharashtra, Mahavitaran, the power transmission company of the state government, is planning to purchase 1000 MW solar power this year. Bids to purchase 1000 MW solar power have been invited at Rs 3 per unit. As compared to solar power, thermal power is sold at Rs 5 per unit. States of Rajasthan, Telangana, Tamil Nadu and Andhra Pradesh are ahead of Maharashtra in generation of solar power. Water conservation department has set the target of 1000 MW solar energy from the Ujni dam.

Source: The Economic Times

Making power plants environment-friendly a Rs 1.3k bn opportunity

January 13, 2018. The drive to make power plants compliant with environmental norms is going to open up a Rs 1.3 lakh crore opportunity in the next three years for emission control equipment providers. According to a latest report by research firm Motilal Oswal Securities, companies such as BHEL, L&T, GE Power and Reliance Infrastructure (RInfra) should benefit from the opportunity. The latest emission norms should also bring some respite to the power sector, long mired by the tepid growth of electricity demand on the backdrop of 40 GW of power-generating capacity being stranded, either for want of power purchase agreements (PPAs) or unavailability of fuel. Motilal Oswal estimates that about 17 GW of power plants will have to be decommissioned as they would not meet the emission norms within the 2022 deadline. About 38 GW of power plants have already floated tenders to install flue gas de-sulphurisation (FGD) in power plants, of which nearly 32 GW has been done by state-owned NTPC Ltd itself. As recently reported by FE, RInfra emerged as the lowest bidder for a project tendered by NTPC to install FDG equipment in its 1,500 MW Jhajjar power plant in Haryana. Sources said the order value of the project was expected to be around Rs 567 crore. The ministry of environment and forests had notified new emission norms for power plants in December 2015, with a deadline of two years for implementation.

Source: The Financial Express

Adani, others can’t sell solar power at higher rate: UPERC

January 13, 2018. Uttar Pradesh Electricity Regulatory Commission (UPERC) rapped the six solar power companies that had proposed to set up power plants in the state, saying it could not allow them to sell solar power at a rate much higher than prevailing market prices. The companies, including Adani Green Energy, had approached the commission nearly six months after Uttar Pradesh Power Corp Ltd (UPPCL) issued them a notice seeking cancellation of their agreement with New Energy Development Authority over high cost of power and delay in setting up projects despite an agreement in 2015.  The Commission noted that the cost of power proposed to be supplied by the companies—Rs 7.02 per unit-—was much higher than the prevailing market prices of Rs 2.44 to Rs 4 per unit. The six plants, with a combined capacity of 80 MW, belong to Adani Green Energy, Sahastradhara Energy, Pinnacle Air, Awadh Rubber Prop Madras Elastomers, Technical Associates and Sudhakara Infratech. According to the agreements signed in 2015, the developers had to complete the projects by January 2017. That did not happen, forcing the state government to extend the deadline till March 2017.

Source: The Times of India

Solar-powered pumps to draw water for animals in Mysuru tiger reserves

January 12, 2018. As part of its efforts to ensure wild animals do not bear the brunt of water scarcity in the summer months, the forest department is in the process of setting up solar-powered pumps at the Bandipur and Nagarahole tiger reserves that will used to replenish water in the tanks across the woods. The solar-powered pumps will be set up by the Karnataka Renewable Energy Development Ltd, which is set to start work by the end of January. These submersible pumps will be installed with motors that will be used to pump out water, which will eventually fill up the waterbodies. The pump was first installed by the forest department in the Antarasanthe forest range that falls under the ambit of Nagarahole Tiger Reserve two years ago. During summer, the pump lifted from 60,000 to 70,000 litres of water to a nearby tank, thereby drawing wild animals, including tigers in large numbers in the summer. Meanwhile, director of Bandipur Tiger Reserve Ambady Madhav said that the forest already has 11 solar-powered pumps, and 20 more would be installed by the end of January.

Source: The Economic Times

Chulhas linked to 25 percent of pollution-related deaths in India

January 12, 2018. Exposure to air pollutant PM (particle pollution) 2.5 from the burning of domestic biomass (chulha) is the deadliest source of air pollution in India, responsible for around 25% of all pollution-linked deaths in the country, according to a study, ‘Burden of Disease Attributable to Major Air Pollution Sources in India’. The study found that the burning of biomass or solid fuel was the biggest source of PM 2.5 in both cities and villages. The situation could be worse as the study did not measure its indoor impact. The study attributed nearly 26.7 lakh deaths in India to the burning of biomass at home in 2015. Coal combustion was the second biggest source, causing 15.5% of all, or 16.6 lakh deaths. Agricultural burning — though the practice is limited to some northern and central states — caused 66,000 deaths. Even in Delhi, the largest source of PM 2.5 exposure is residential biomass burning, followed by open burning of trash, according to the study. This may be due to the use of ‘chulhas’ and solid fuels in the rural areas surrounding Delhi. In fact, PM 2.5 pollution from the entire Indo-Gangetic plains area can travel to Delhi, scientists said. Chandra Venkataraman, a scientist at IIT-Bombay, warned that this could be the tip of the iceberg, and said the deaths linked to PM 2.5 could increase substantially if proper action was not taken.

Source: The Times of India

IFC set to invest Rs 28 bn in Madhya Pradesh Solar park

January 11, 2018. The International Finance Corp (IFC) — the World Bank’s private investment arm — is set to invest $440 million (Rs 2,800 crore) in the 750 MW Rewa Ultra Mega Solar Park in Madhya Pradesh, paving the way for the financial closure of this project that has for the first time brought solar tariff in India on a par with thermal power. The investment by IFC will be in the form of debt to three companies that are setting up the units, each of 250 MW — Mahindra Renewables, Acme, and Actis. The deal for a $140 million (Rs 900 crore) funding with Actis has been signed, while the one with Acme for $150 million is due to be signed soon. The third one, with Mahindra, for the remaining $150 million is awaiting final approval. The solar park is being developed by Rewa Ultra Mega Solar, ajoint venture between Madhya Pradesh Urja Vikas Nigam, a state government agency, and the Solar Energy Corp of India. It is scheduled to be commissioned in December 2018 and is part of meeting India’s renewable energy target of 175 GW by 2022.

Source: The Times of India

Westinghouse bailout fuels hope for India’s nuclear energy sector

January 10, 2018. The New Year has brought a fresh ray of hope in India’s nuclear energy sector, with Westinghouse, the bankrupt energy company being sold to a Canadian investment major, Brookfield Business Partners. Westinghouse is supposed to build six of its AP-1000 nuclear reactors in India, a project that had been delayed after the company filed for bankruptcy earlier in 2017. The $4.6 billion acquisition is expected to get the beleaguered US (United States)-Japanese company out of hot water. Toshiba, the owner of Westinghouse had been looking to sell the nuclear business after it filed for bankruptcy. Westinghouse had, in its discussions with the Indian government, assured that it would continue to work on the six reactors which are expected to come up in Kovvada, Andhra Pradesh. The company is expected to build six reactors in India — private sector and government entities are currently exploring whether a greater amount of indigenous components can be used to build these reactors, bringing down their costs as well as giving a fillip to Indian nuclear industry. This might even help Westinghouse avert the potential liabilities of the Indian nuclear liability law, which has been singularly responsible for being a drag on the Indian nuclear industry. The government devised an insurance pool and new rules which make it easier for domestic players, but an air of uncertainty continues to hang over foreign players.

Source: The Times of India

Naxal affected area starts solar drinking water project: West Bengal

January 10, 2018. In a move that defines development, the Salboni Panchayat Samity started a string of unique projects such as solar drinking project and solar sprinkler agriculture water project in Naxal affected area of Salboni district. About eight drinking water projects have been established in eight villages, while two solar sprinkler projects have been installed in the area’s two ponds to supply water in agricultural land. Locals, as well as farmers, are “very happy” as most of the areas of Salboni are drought prone. The villagers are also rejoicing as they will get water without any electricity, where no one has to spend a penny for the water pump. The panchayat now wants this kind of solar water project in every village of Salboni block area. Panchayat Samiti Sabhapati Nepal Sing said that they are willing to establish this kind of project in every village.

Source: Business Standard

UP to invite bids for 100 MW solar power projects in March

January 10, 2018. Encouraged by the successful implementation of solar projects in states like Karnataka and Gujarat, the Uttar Pradesh (UP) government led by Chief Minister Yogi Adityanath is planning to invite bids for 100 MW of solar power projects by March. The bids are for projects on open access basis to be set up in the Bundelkhand region. Leading players like Adani Group, Tata Power Solar, ReNew Power and Hero Future Energies are likely to be interested in the projects to be offered in UP, suggested an industry player. The state government has separately invited tenders for the selection of consultancy firms for establishment of a project management unit to assist UP New and Renewable Energy Development Agency (UPNEDA) in implementation of the state’s Solar Power Policy 2017. The last date for submission of e-tenders is January 14 and the online technical e-tender opening date is January 15. The financial tender opening date for qualified bidders is January 30. The UP Solar Power Policy 2017 targets implementation of 10,700 MW of grid-connected solar power projects by the end of 2022. Of the total capacity, 4,300 MW is targeted to be achieved through deployment of grid connected rooftop projects, and 6,400 MW through ground mounted utility scale power projects.

Source: The Financial Express


Norway awards record 75 oil exploration licenses

January 16, 2018. Norway has awarded a record 75 offshore oil exploration licenses, to Statoil, Aker BP Shell, Total and ConocoPhillips among others, the energy ministry said. The licenses comprised 45 in the North Sea, 22 in the Norwegian Sea and eight in the Barents Sea and were awarded in a so-called annual predefined areas (APA) licensing round, introduced by Norway in 2003 to encourage exploration and development of discoveries near existing infrastructure. The 75 licenses were awarded to 34 firms, of which 19 won the right to lead projects. In total, 39 firms had applied for the offered acreage, up from 33 companies that applied in the previous round a year ago, when the ministry awarded 56 exploration licenses.

Source: Reuters

US oil industry set to break record, upend global trade

January 16, 2018. Surging shale production is poised to push US (United States) oil output to more than 10 million barrels per day – toppling a record set in 1970 and crossing a threshold few could have imagined even a decade ago. And this new record, expected within days, likely won’t last long. The US government forecasts that the nation’s production will climb to 11 million barrels a day by late 2019, a level that would rival Russia, the world’s top producer. US energy exports now compete with Middle East oil for buyers in Asia. Daily trading volumes of US oil futures contracts have more doubled in the past decade, averaging more than 1.2 billion barrels per day in 2017, according to exchange operator CME Group.

Source: Reuters

Vitol to get up to 2 mn barrels of crude a month from Algeria

January 16, 2018. Vitol will get 1.5 to 2 million barrels of crude per month from Algeria’s state oil firm Sonatrach and deliver fuel to the country in exchange, in a rare such deal for the OPEC (Organization of the Petroleum Exporting Countries) member. The deal will kick off on February 1 with the world’s largest oil trader loading a 1 million barrel cargo. Algeria is aiming to cut its fuel import bill through the contract, which will last until the year end. Vitol was among nine contenders vying for deal, including oil majors and its major trading house competitors.

Source: Reuters

Statoil may build onshore terminal for Castberg oil

January 16, 2018. Statoil has begun work on a proposal to build an onshore terminal in northern Norway for handling oil from the Arctic offshore Johan Castberg oilfield and other yet-to-be-developed resources, Minister of Petroleum and Energy Terje Soeviknes and Statoil’s Chief Executive Officer (CEO) Eldar Saetre said. A report on the proposal is expected in 2019, Soeviknes said.

Source: Reuters

Shell agrees to sell its stake in Iraq’s West Qurna 1 oilfield to Japan’s Itochu

January 15, 2018. Royal Dutch Shell has agreed to sell its stake in Iraq’s West Qurna 1 oilfield to Japan’s Itochu, Shell said. Iraq has approved the sale by Shell of its 20 percent stake in the West Qurna 1 oilfield to Itochu. The deal comes as the Anglo-Dutch company agreed to exit the Majnoon oil venture, one of the largest fields in OPEC member Iraq, and hand over its operation to the Basra Oil Company by the end of June 2018. The West Qurna 1 oilfield, operated by Exxon Mobile, currently produces around 405,000 barrels per day.

Source: Reuters

Singapore files more charges against Shell oil theft suspects

January 15, 2018. A Singapore court filed additional charges against nine men accused in a large-scale oil theft at Shell’s biggest refinery, the latest development in an extensive investigation in the city-state. The nine Singaporean men, eight of whom were employees of the Singapore subsidiary of Royal Dutch Shell Plc, faced initial charges in court alongside two Vietnamese nationals, who are due at court. At least one additional charge was brought against each of the Singaporean men, court documents showed. The charges relate to incidents on November 11, November 14 and December 31, in which the authorities say gasoil totaling 2,222 metric tonnes worth S$1,222,815 was stolen. Charges against three other men accused people at Sentek Marine & Trading Ptem, one of Singapore’s biggest marine fuel suppliers, of participating in the oil theft scheme, which involves incidents going back months. Police have seized millions of dollars in cash and a small tanker in the sting operation involving simultaneous raids across Singapore, one of the world’s most important oil trading centers and a major refinery hub.

Source: Reuters

Norway’s Lofoten region to remain off-limits to oil firms: Government

January 14, 2018. Norway’s Arctic region of Lofoten, Vesteraalen and Senja will remain off-limits to oil exploration at least until the next election for parliament, which is due in 2021, the government said. Conservative Prime Minister Erna Solberg announced an agreement to include in her cabinet the centrist Liberal Party, which had demanded that the cod-rich region’s waters continue to be shielded from oil drilling.

Source: Reuters

Venezuela oil production recovering, near 1.9 mn bpd

January 14, 2018. Venezuela’s oil production has increased to near 1.9 million barrels per day (bpd) after hitting a historic low last year, according to Manuel Quevedo, Oil Minister and head of state oil firm PDVSA, who vowed 2018 will see output rise to more than 2.4 million bpd. The OPEC (Organization of the Petroleum Exporting Countries) country is facing an economic crisis, with millions suffering food and medicine shortages. Venezuela relies on oil for about 95 percent of export revenue though output has fallen significantly in recent years. Venezuela told OPEC it produced 1.834 million bpd in November, the lowest figure for the year so far.

Source: Reuters

Iraq nears oil output capacity of 5 mn bpd, committed to OPEC cuts

January 13, 2018. Iraqi Oil Minister Jabar al-Luaibi said that the OPEC (Organization of the Petroleum Exporting Countries) member’s oil output capacity is nearing 5 million barrels per day, but the country will remain in full compliance with its output target under a global pact to cut supplies. Luaibi said the supply cut agreement between OPEC and non-OPEC producers should continue despite a rise in oil prices. The deal between the OPEC and Russia to cut 1.8 million barrels per day of crude, which started in January 2017, is due to last until the end of 2018. Luaibi said current Iraq’s oil production is about 4.3 million barrels per day.

Source: Reuters

OPEC need not rush into changing oil pact: UAE

January 12, 2018. OPEC (Organization of the Petroleum Exporting Countries) need not respond to a rise in oil prices by rushing to change a global supply-cutting pact, United Arab Emirates (UAE) Energy Minister Suhail al-Mazroui said. This year’s rapid rise in oil prices, which hit $70, is backed by strong demand growth and a fall in oversupply on the back of the OPEC and non-OPEC pact, not only by political tensions, Mazroui said. Mazroui said that draining the oil glut needed time to bring global oil inventories down to the industry’s five-year average. Oman’s Oil Minister Mohammed bin Hamad al-Rumhi also said he was not concerned about the current rise in oil prices and that he expected prices to trade within a “healthy” range of $65 to $70 a barrel for a few weeks. Analysts and traders have warned about the risk of a price correction since the start of 2018, but they say overall market conditions remain strong, mainly due to output cuts led by the OPEC and Russia.

Source: Reuters

China’s Sinochem ties up with private chemical group in oil trading

January 10, 2018. Sinochem Group has agreed on a framework deal with China’s private chemical giant Hengli Group to cooperate on imports of crude oil and marketing of refined fuel, Sinochem said. Sinochem gave little details on the agreement, but a source briefed on the matter said the two firms were looking to form a joint venture in oil trading and marketing. A cooperation will boost the trading portfolio of the state firm which operates only one major refinery in China and offer the private chemical group expertise in global oil trading. Hengli is expected to start trial runs at a 400,000 barrel per day new refinery complex in the Changxing island of northeast Dalian city in October this year, Sinochem said.

Source: Reuters


Cheniere signs 15-year LNG supply pact with trader Trafigura

January 16, 2018. US (United States) liquefied natural gas (LNG) exporter Cheniere Energy Inc has inked a 15-year, 1 million tonne per annum (mtpa) sales deal with Swiss commodity trader Trafigura, a sign of how the sector’s middlemen are expanding their market share. LNG deliveries to Trafigura, one of the biggest independent traders of the fuel, will begin in 2019, Cheniere said. Swiss trade houses grabbed a $10 billion share of the rapidly growing LNG business last year, handling roughly 8.5 percent of all supply. Gunvor was the first independent trader to gain access to long-term LNG supply in a deal with Russia’s new Yamal plant in the Arctic. The company has been expanding its presence in Asia to benefit from the rising demand for LNG from the region. According to the sale-purchase agreement, the purchase price for LNG is indexed to the monthly Henry Hub benchmark price, plus a fee.

Source: Reuters

Beach Energy makes gas discovery in South Australia’s Otway Basin

January 12, 2018. Beach Energy has announced a new gas field discovery in the onshore Otway Basin, South Australia following the drilling of its Haselgrove-3 ST1 well. Beach Energy said that the results of the flow test results from the primary target Sawpit Sandstone reveal the possibility of a high deliverability reservoir. The results are also encouraging enough to carry out commercialization of a large gas resource, Beach Energy said.

Source: Energy Business Review

Explosion hits major gas pipeline in Nigeria

January 11, 2018. An explosion ruptured a major Nigerian gas pipeline, the state oil firm said, days after the same line was repaired following damage from a fire that shut it down earlier this month. The Escarvos-Lagos Pipeline was hit by an explosion along Egbokodo-Omadino in the Warri region of Delta state, Nigerian National Petroleum Corp said. The pipeline supplies gas to plants producing about one-sixth of Nigeria’s power, as well as the West Africa Gas Pipeline System.

Source: Reuters


China’s state-owned coal firms target 12.65 mt of capacity cuts

January 15, 2018. China’s central government-owned enterprises will target coal capacity cuts of 12.65 million tonnes (mt) in 2018. It provided a separate 80 mt target for consolidation of coal capacity by central government-owned firms in China, the world’s largest coal producer, this year. The National Development and Reform Commission, China’s state planner, said it planned to create several “super-large” coal mining companies by the end of 2020, each with capacity to produce 100 mt per year of coal.

Source: Reuters

China state coal miners cut prices to kill rally amid heating crisis

January 12, 2018. China’s top state coal miners have cut spot prices for the fuel to dampen a month-long price rally that was triggered after Beijing reversed a ban on using coal in households and some industrial plants amid the nation’s winter heating crisis. Seven firms in China’s top coal mining province of Shanxi, including Shanxi Coking Coal Group, Datong Coal Mine Group and Jinneng Group, have issued statements announcing have lowered their coal prices by 15-20 yuan ($3.10) per tonne, according to the China Coal Transport and Distribution Association (CCTD). Except for Yangquan Coal Industry Group, who did not respond to Reuters, the coal mines confirmed the price adjustments as outlined by CCTD. The move came after coal prices jumped by more than 10 percent since heating season kicked off in mid-November, with demand at coal-fired power plants continuing to surge as freezing weather swept across the country.

Source: Reuters

Germany’s 2017 hard coal imports fall 10.5 percent

January 12, 2018. Germany imports of hard coal in 2017 fell 10.5 percent to 51.2 million tonnes from 57.2 million, preliminary data from coal importers’ lobby VDKI showed. Imports of coking coal used in steelmaking rose by 0.6 million tonnes to 12.9 million tonnes and those of coke, a related product, rose by 0.3 million tonnes to 2.3 million in 2017, VDKI data showed. VDKI said some old coal plants closed and wind power expanded helped by its higher priority on power networks

Source: Reuters

Duke Energy agrees to pay $84k penalty for coal ash leaks

January 10, 2018. The country’s largest electricity company will pay an $84,000 penalty and work to stop potentially toxic waste from three North Carolina coal-burning power plants from leaking into groundwater and nearby rivers under a deal with state regulators announced. The deal, already signed by Duke Energy Corp, includes the penalty for nearly two dozen leaky spots detected at coal ash pits at the Rogers, Allen and Marshall power plants before 2015. Coal ash is the residue left after decades of burning coal to generate power. A 2016 state law requires Duke Energy to install public water lines or water filtration systems to neighbouring homes by October. A separate state law passed after a 2014 coal ash spill into the Dan River ordered Duke Energy to close all its ash ponds at 14 North Carolina power plants.

Source: The Economic Times


ATXI wins PSC approval for Mark Twain Transmission Project in Missouri, United States

January 12, 2018. Ameren Transmission Company of Illinois (ATXI), a wholly owned subsidiary of Ameren, has secured final approval from the Missouri Public Service Commission (PSC) to build, operate and maintain the Mark Twain Transmission Project. The firm has secured certificate of convenience and necessity (CCN) to build a100-mile, 345,000-volt transmission line and substation in northeast Missouri. Planned to be built with an investment of $250 mn, the project will run from Palmyra to Kirksville in Missouri and north to the Iowa border. ATXI said that the transmission project approval marks a significant step toward strengthening the region’s energy grid. The transmission line, which will run through Adair, Knox, Lewis, Marion and Schuyler counties in Missouri, will include construction of the Zachary Substation adjacent to the existing Adair Substation in Adair County. Additionally, the project, which is planned to be commissioned by December 2019, is expected to generate significant property tax revenues, the Commission said.

Source: Energy Business Review

Lauren wins EPC contract for 348 MW Texas peaking power plant

January 11, 2018. Lauren Engineers & Constructors has been awarded the engineering, procurement and construction (EPC) contract for a 348 MW natural gas-fired peaking power plant in Texas from Halyard Energy Wharton, a part of Halyard Energy Ventures. The power project named as Halyard Wharton Energy Center (HWEC) will be a simple-cycle power generating facility. It will be built in Wharton County, within the South Zone of the Electric Reliability Council of Texas (ERCOT). In addition to HWEC, Halyard has four more natural-gas peaking projects that are in progress. All the five simple cycle natural gas fired power plant projects will have a total capacity of 2,000 MW within ERCOT.

Source: Energy Business Review


Saudi Arabia aims to prequalify firms by April or May for first nuclear plant

January 15, 2018. Saudi Arabia plans to prequalify for bidding firms from two or three countries by April or May for the first nuclear reactors it wants to build, Abdul Malik al-Sabery, a consultant at the King Abdullah City for Atomic and Renewable Energy, said. Saudi Arabia, the world’s top oil exporter, wants nuclear power to diversify its energy supply mix, enabling it to export more crude rather than burning it to generate electricity. It plans to build 17.6 GW of nuclear capacity by 2032, the equivalent of around 16 reactors, making it one of the biggest prospects for an industry struggling after the 2011 nuclear disaster in Japan. Sabery said a joint venture between the Saudi government and the winning developers would be signed in 2019 after the shortlisting by end of 2018. Commissioning of the first plant, which will have two reactors with a total a capacity between 2 and 3.2 GW, is expected in 2027. Saudi Arabia’s Energy Minister Khalid al-Falih said that he expected to sign contracts to build two nuclear reactors by the end of 2018. Saudi Arabia has sent a request for information to international suppliers to build two reactors, the first step towards a formal tendering competition. Sabery said Riyadh was currently evaluating requirements from five countries; China, Russia, South Korea, France and the United States (US). Saudi Arabia is interested in reaching a civilian nuclear cooperation agreement with Washington, and Riyadh has invited US firms to take part in developing the kingdom’s first atomic energy program.

Source: Reuters

Abu Dhabi to invite bidders for second solar power plant by mid-2018

January 15, 2018. Abu Dhabi is pushing ahead with a second solar power plant and will invite bidders by the middle of the year, the Abu Dhabi Water & Electricity Authority (Adwea) said. Last year the Abu Dhabi Water & Electricity Authority (ADWEA) closed a $872 million financing package for its first solar power plant with capacity of 1,177 MW. The first plant is scheduled for completion in the second quarter of 2019. Details of the project will be announced in the coming months, ADWEA said.

Source: Reuters

California regulators approve retirement of 2.2 GW Diablo Canyon nuclear plant

January 15, 2018. The California regulators have approved Pacific Gas and Electric Company’s (PG&E) request to decommission the 2,256 MW Diablo Canyon nuclear power plant by 2025. With the approval from the California Public Utilities Commission (CPUC), PG&E will retire the power plant, which features two nuclear reactors, upon completion of its operating licenses.

Source: Energy Business Review

Renewable generation costs continue to fall: IRENA

January 14, 2018. For new projects commissioned in 2017, electricity costs from renewable power generation have continued to fall significantly compared to the fossil fuels, according to a new report from the International Renewable Energy Agency (IRENA). It estimates onshore wind is now routinely commissioned for $4 cents per kilowatt hour (kWh). The current cost spectrum for fossil fuel power generation ranges from $5-17 cents per kWh. The IRENA with more than 150 member countries says the cost of generating power from onshore wind has fallen by around a quarter since 2010, with solar photovoltaic electricity costs falling by 73 percent in that time. It also highlights that solar costs are set to fall further with another halving expected by 2020. The best onshore wind and solar photovoltaic projects could be delivering electricity for an equivalent of $3 cents per kWh, or less within the next two years. Global weighted average costs over the last 12 months for onshore wind and solar photovoltaic now stand at $6 cents and $10 cents per kWh respectively, with recent auction results suggesting future projects will significantly undercut these averages. The IRENA report also highlights that auction results are signalling that offshore wind and concentrating solar power projects commissioned between 2020-22 will cost in the range of $6-10 cents per kWh, supporting accelerated deployment globally. IRENA projects that all renewable energy technologies will compete with fossils on price by 2020.

Source: Business Standard

ADFD approves $25 mn loan for solar PV projects in Mauritius and Rwanda

January 13, 2018. Abu Dhabi Fund for Development (ADFD), the national entity for development aid, and the International Renewable Energy Agency (IRENA) announced that $25 mn in concessional loans from ADFD have been earmarked for two solar PV (photovoltaic) projects, one each in Mauritius and Rwanda. In Mauritius, the ADFD loan of $10 million will help the Central Electricity Board install solar PV systems on rooftops of 10,000 households as part of the government’s efforts to alleviate poverty whilst contributing to the national target of achieving 35% of renewable electricity in the energy mix by 2025. In Rwanda, the ADFD loan of $15 million will contribute to the installation of 500,000 off-grid solar PV home systems across the country, providing clean electricity for lighting, mobile phone and radio charging. The project is a major part of the government’s rural electrification strategy and is one of the most affordable payment schemes in Africa.

Source: Energy Business Review

New York sues fossil fuel majors, plans divestment from pension funds

January 11, 2018. New York City announced that it filed a multibillion dollar lawsuit against five top oil companies, citing their “contributions to global warming,” as it said it would divest fossil fuel investments from its $189 billion public pension funds over the next five years. The lawsuit, against BP Plc, Chevron Corp, ConocoPhillips, Exxon Mobil Corp and Royal Dutch Shell Plc, follows similar lawsuits filed last year by San Francisco and other California cities seeking billions of dollars in damages from rising sea levels due to climate impacts. The lawsuits are the latest legal challenges against oil companies over climate change and come as the firms are searching for new business models amid pressure by governments and consumers for cleaner energy. New York Governor Andrew Cuomo previously has said he planned to halt future fossil fuel investments in the state’s public employee pension fund.

Source: Reuters

US vehicle fuel economy rises to record 24.7 mpg: EPA

January 11, 2018. The fuel economy of new US (United States) cars and trucks hit a record 24.7 miles per gallon (mpg) in the 2016 model year, the US Environmental Protection Agency (EPA) said in a report. Fuel economy rose by just 0.1 mile per gallon in 2016 and was projected in the 2017 model year to hit another record of 25.2 mpg, the report said. The report said that after running surpluses in meeting greenhouse gas emission limits, automakers ran a 9 gram per mile deficit. The EPA said all major automakers still comply with the standards, with some using credits banked from prior years to meet the requirements.

Source: Reuters

World’s largest solar thermal plant to be built in South Australia

January 11, 2018. The world’s largest solar-thermal power plant has been given development approval by the South Australian government. Construction on the 150 MW Aurora plant, to be built by utility-scale solar power company SolarReserve, will begin in 2018 at an estimated cost of $509 million. Chris Picton, South Australia’s Acting Energy Minister, said the plant would create 650 construction jobs and 50 ongoing positions when completed. The plant will work by using a series of mirrors to concentrate sunlight on a receiver at the top of a 220-meter tower. The sunlight will then heat molten salt to 565 degrees centigrade, generating steam to drive a turbine that will produce 150 MW of electricity making it the largest single-tower solar thermal plant in the world. It will have the capacity to power 90,000 homes with eight hours of full load storage. It will join the largest lithium-ion battery, built by Tesla to complement the state’s power grid during the high-demand summer, as another major renewable energy project in South Australia.

Source: Xinhua

Denmark positions itself as the flag bearer for wind power

January 11, 2018. Denmark just set a world record for using wind power to drive its economy. Its government now predicts that anyone betting against the technology is on the wrong side of history. As US (United States) President Donald Trump’s attempts to promote coal founder, Denmark is positioning itself as the flag bearer for wind power. Danish Energy Minister Lars Chr. Lilleholt said the arguments over renewables, once driven entirely by environmental considerations, are now very much based on the economics. Denmark obtained 43.4 percent of its electricity from wind last year, beating its own record. The government’s goal is to derive 50 percent of the country’s entire energy consumption from renewables by 2030. Lilleholt said making economies more reliant on renewable energy sources means efforts to curb electricity consumption will soon be moot.

Source: Bloomberg

New Areva, CNNC sign key agreement for $12 bn nuclear reprocessing facility

January 10, 2018. French nuclear and renewable energy group New Areva has signed a memorandum of commercial agreement with Chinese partner China National Nuclear Corp (CNNC) for the construction of €10 bn ($12 bn) nuclear fuel reprocessing facility in China. In 2013, Areva and CNNC had signed a letter of intent to build a used fuel treatment and recycling facility in the Asian country. Areva said that the latest agreement reaffirms its commitment with the Chinese partner to complete the contract negotiations for the Chinese commercial used fuel treatment-recycling plant project. The Chinese treatment-recycling plant, which will have a reprocessing capacity of 800 ton of spent nuclear fuel from Chinese power plants annually, is planned to be built on the model of New Areva’s two existing plants, La Hague and Melox, both located in France. A final deal on the facility is expected to provide much needed boost to the French nuclear industry, which has been struggling to gain new contracts since the Fukushima nuclear disaster in 2011.

Source: Energy Business Review

Vinci, Andritz to build 350 MW pumped storage hydroelectric plant in Morocco

January 10, 2018. A joint venture of Vinci Construction and Andritz Hydro has secured a €284 mn contract from undisclosed customer to build the 350 MW Abdelmoumen pumped storage hydroelectric plant 70 km from Agadir, Morocco. Under the contract, the joint venture will be responsible for the construction surveys, civil engineering works, supply of materials and pumping equipment, assembly, testing and commissioning. Meanwhile, Andritz Hydro will be responsible for the supply of electromechanical equipment including two 175 MW Francis turbines and a high voltage substation. Vinci said that the energy storage project forms a part of the plan to develop and integrate renewable energies in Morocco.

Source: Energy Business Review

Ukraine to launch its first solar power plant at Chernobyl

January 10, 2018. At ground zero of Ukraine’s Chernobyl tragedy, workers in orange vests are busy erecting hundreds of dark-coloured panels as the country gets ready to launch its first solar plant to revive the abandoned territory. The new one-megawatt power plant is located just a hundred metres from the new “sarcophagus”, a giant metal dome sealing the remains of the 1986 Chernobyl accident, the worst nuclear disaster in the world. Ukraine, which has stopped buying natural gas from Russia in the last two years, is seeking to exploit the potential of the Chernobyl uninhabited exclusion zone that surrounds the damaged nuclear power plant and cannot be farmed. The installation of a huge dome above the ruins of the damaged reactor just over a year ago made the realisation of the solar project possible. Ukrainian authorities offered investors nearly 2,500 hectares (25 square kilometres) for potential construction of solar power plants in Chernobyl.

Source: The Economic Times


India’s Electricity Scenario & Households

Year All India Electricity Consumption (Million Units) Share of Domestic Sector
2011-12 785194 21.8%
2012-13 824301 22.3%
2013-14 874209 22.9%
2014-15 948522 22.9%
2015-16 1001191 23.9%
2016-17^ 1066268 24.3%

^Estimated figure

Electricity Sector Growth Rates

Particulars 2016-17

Electricity Consumed#

(Million Units)

Domestic Sector (%) 24
No. of Households (Million) as per Census 2011 246.7
Avg. Electricity Consumption in kWh (per Household per month) 93

# Revised Figure for 2016-17

Source: Compiled from Central Electricity Authority

Publisher: Baljit Kapoor

Editorial Adviser: 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.