SUMMER BRIGHTENS PROSPECTS FOR POWER DEMAND
The CEA has set the electricity generation target from conventional sources, which include coal, gas, nuclear and hydro power plants, at 126,000 MU for FY19, 6.7% higher than power produced from these sources in FY18. In order to achieve this target, state and private power plants would have to raise their annual production by 9.2% and 13.4%, respectively, while generation from central government-owned plants would slip by 0.7%, data from the CEA report showed. The estimate sounds positive for private power plants which are running at very low utilisation levels due to less-than-expected growth in power demand. The PLF central government-owned thermal power plants in FY18 was 72.4%, while private power plants were running at 55.1% in the same period. PLFs of less than 60% make it difficult to service debts. Stressed assets in the power sector consist of 34 private power plants with an outstanding debt of ₹ 1740 billion. Uttar Pradesh is expected to produce 129,423 MU of power, the highest in the country. It would be followed by Maharashtra at 132,643 MU and Chhattisgarh at 111,858 MU.
India’s daily average spot electricity price has nearly doubled over the last one month and is close to ₹ 5/kWh according to IEX, the country’s biggest electricity exchange. Gujarat and Haryana are states that have been hit by unit outages. Some units in these states have stopped generating as their tariffs are not supporting their cost of generation. Data furnished by the CEA shows that coal stocks at 25 power generating stations are at critical level. These units are, however, non-pit-head plants, meaning they are far from the mining pits and require the railways to supply coal.
A power surplus state till recently, Gujarat may witness a scorcher of a summer, with private power producers —Adani and Essar — discontinuing supply on account of paucity of coal. The situation forces the state to meet demand by procuring expensive power from energy exchanges and other sources. GUVNL has invited bids for procurement of 2,000 MW of power for April, May and June to meet rising demand. GUVNL has PPA of 2,000 MW with Adani Power, 1,000 MW with Essar Power Gujarat and 1,805 MW with Tata Power. Essar discontinued supply from December 15 while Adani stopped supply from January 20 without any prior notice to GUVNL or the GERC. During March, power demand has increased by 640 MW to about 14,890 MW per day and it will increase more when temperature rises further in coming months. At present, Gujarat is depending on central sources for power as its own power production is not sufficient to match the demand. About 53% of power supply comes from central sector sources. The state government has served notices to Adani and Essar for resumption of power supply. It may be mentioned that as per the terms of the PPAs, if any supplier discontinues supply for over a year, it would be declared a defaulter. Energy experts maintain that Essar and Adani have violated terms and conditions of the PPAs and have also violated the Supreme Court order by discontinuing supply.
With present installed capacity of about 27,236 MW in the state, GUVNL can easily manage and cater power demand up to 20,000 MW. But due to stoppage of supply by Adani and Essar, GUVNL is being compelled to purchase more than 2,500 MW from the IEX at a higher rate of nearly ₹ 5/kWh. At present, GUVNL is managing supply to consumers with major contribution from the central sector. Moreover, GUVNL has to purchase power from the IEX at ₹ 5.01/kWh during peak hours with an average cost of ₹ 4.25/kWh. NTPC Ltd said its first unit of 2×800 MW Lara Super Thermal power station in Chhattisgarh commenced generating electricity, which took the group’s total capacity to 52,991 MW. The company is currently building an additional capacity of over 19,000 MW at multiple locations in the country, it said. After the first unit of Lara plant starts generation, the total commissioned capacity of the NTPC and the NTPC group has become 46,100 MW and 52,991 MW, respectively, it said. Located at Raigarh, the first unit has gone on-stream just ahead of the summer season and will help meet additional power demand for states in western region, including Chhattisgarh.
NTPC announced it has commissioned two units of 660 MW capacity each at Meja Thermal Power Project in Uttar Pradesh. With the commissioning of the two units, the company’s total capacity has reached 53,651 MW. A joint venture between NTPC and the Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd, Meja Urja Nigam Private Ltd achieved its full load of 660 MW from the first unit on March 31. The state-owned firm is currently building an additional capacity of over 19,000 MW at multiple locations across the country.
If a power tariff hike proposal from discoms gets a stamp of approval, consumers in Madhya Pradesh will pay three time more than what consumers pay for the same number of units in Delhi. To put it simply, consumers in the state will pay ₹ 3012 for use of same power consumption for which Delhites shell out ₹ 961. Madhya Pradesh power distribution companies submitted their annual revenue requirement before the MPERC for year 2018-19, seeking a tariff hike of 4%. Experts, however, feel there is an urgent need to review existing tariff in the state, where power tariff is highest in the country. A comparison of the power tariff in Delhi after recent hike there reveals startling difference. In its annual revenue requirement filed before the MPERC, discoms have claimed 70% reduction in losses and hence went for nominal losses. Last year, the discoms had sought a 14% hike in tariff.
The Association of Power Producers, a lobby of Indian power companies, has raised objections to an NTPC subsidiary signing a power supply agreement with BPDB, arguing that the proposed cross-border sale will be in violation of government policy and detrimental to Indian consumers. The association said it appears that NVVN will use discounted coal purchased from Coal India Ltd to generate electricity for export to Bangladesh, which should have ideally been supplied to domestic consumers. NVVN has signed a long-term agreement with BPDB for supply of 300 MW of electricity. The supplies are set to start soon. The association has requested the ministry to issue instructions so that coal meant for power generation and supply to Indian consumers is not utilised for BPDB long-term tenders. It has also requested the ministry to issue necessary clarification so that cross-border power supply is done only with imported or coal procured from e-auctions. BPDB invited tender for supply of 500 MW power from India under short-term (June 1, 2018 to December 31, 2019) and long-term (January 1, 2020 to May 31, 2033) contracts.
Delhi sought to allay concerns that the hike in fixed charges, announced by the power regulator, will put extra burden on those availing the government’s subsidy scheme. The government would continue with the power subsidy for which a separate amount has already been allotted in the budget. Contrary to popular perception, the government provides a flat rebate of ₹ 2/kWh for consumption between 0-200 units and around ₹ 2.98/kWh for consumptions in the bracket 201-400, instead of a 50 percent subsidy on the actual energy charges. A household with a 1 KW connection that consumes 100 units will pay only one rupee more from April while for consumption of 200 units one will save ₹116. In each category of sanctioned load — be it 1 KW, 2 KW, 3 KW or 4 KW – the savings will be more for more consumption.
DERC announced a new tariff schedule for 2018-19 and said it will have an overall lowering effect on electricity bills for various categories of consumers in the national capital. In the new tariff schedule applicable from April 1, the DERC, though, hiked the fixed charges but reduced the per unit rates of electricity consumed. The power bills of consumers being given subsidy may marginally rise for those using less electricity however. According to the revised charges, consumers using up to 150 units of electricity, may have to pay marginally higher. The Delhi government gives 50 percent subsidy to consumers using up to 400 units of electricity per month. DERC said that overall, the new tariff schedule will have a lowering effect on power bills of consumers. The consumers using more than 400 units per month will be benefited more according to the new tariff schedule. According to the new plan, existing electricity bill of domestic consumers consuming 105 units, will go down from the monthly ₹ 512.48 to ₹ 507.67, without adjusting subsidy. For consumers using 525 units, the current monthly bill of ₹ 3,409.56 will significantly drop to ₹ 2840.75. The monthly fixed charges have been raised for domestic consumers having up to 2 KW load from the existing ₹ 20 to ₹125. The revised charges for other slabs are: 2-5 KW, from ₹ 35 to ₹ 140; 5-15 KW, from ₹ 45 to ₹ 175; 15-25 KW, from ₹ 60 to ₹ 200; and for more than 25 KW, from ₹ 100 to ₹ 250. The per unit energy charges, however, have been slashed for domestic category consumers. Delhi has more than 5.8 million domestic consumers, including 2.6 million having connections of up to 2 KW load. The increase in fixed charges and lowering of energy charges have also been announced for, nom-domestic, industrial, DIAL, DJB and DMRC category of consumers. The power tariff schedule for 2018-19 has been prepared after public hearings in which suggestions were received from different stakeholders. The domestic tariff category has been expanded by including “paying guests” at premises having domestic connections of load up to 5 KW.
Power consumers in Andhra Pradesh will not face any power tariff hike in 2018-19. Power consumers would get more relief in future. While 92 percent of the power consumers in 2015-16, 96.6 percent in 2016-17 and 90.5 percent in 2017-18, were spared from tariff hike, there will be total exemption next fiscal. The free or concessional supply of power to agriculturists of all descriptions will continue in 2018-19. Sharing insights into power purchase cost, which was as high as ₹ 336.26 billion in 2014-15, the Regulator said it was gradually brought down to ₹ 245.65 billion in 2018-19. While the distribution licensees have projected a deficit of ₹79.83 billion, the Commission estimated the deficit to be ₹ 60.30 billion, thus limiting the burden by ₹ 19.53 billion. The government has enhanced the subsidy from ₹ 37 billion in 2017-18 to ₹ 60.30 billion. The commission accepted a long pending demand of industries for incentivising power usage during off peak hours from 10 pm to 6 pm, where they get concession of ₹ 1/kWh. Earlier, 1.5 million consumers out of 15.9 million consumers were affected by 3 percent to 3.6 percent increase in charges, which was less than the inflation in 2016-17.
Power employees across Uttar Pradesh struck work to protest against the state government’s decision to privatize electricity in Varanasi, Lucknow, Meerut, Gorakhpur and Moradabad. Unions of the power employees also warned the state government that after this token one-day strike, they will be forced to go for a longer agitation in case there was no immediate roll back on the decision. Protests and demonstrations would be held at all district headquarters and project offices during this three-day protest, it was announced. Be it revenue collection or plugging in line losses, the government power officials and employees have been working very hard to improve the situation. The power employees also said that other than directly affecting them, privatization will also punch in a hole in common man’s budget as the power tariff would also witness a steep hike. Employee associations have also warned the state government against any punitive action against them like arresting them and said this if this happened, it would be responsible any further escalation of matters. Protests were witnessed outside the gates of the Pipri, Panki, Obra, Aanpara, Harduaganj and Parischa power plants and Power Department offices at Lucknow, Mirzapur, Faizabad, Ghaziabad, Noida, Meerut, Saharanpur, Jhansi, Banda, Allahabad, Agra, Kanpur, Aligarh, Bareily and Moradabad.
The Uttar Pradesh assembly witnessed an uproar as opposition legislators protested against the government’s recent decision to privatise electricity in five major cities of the state. The state government however justified its decision, saying that this would lead to better and adequate power supply to the people. The move stemmed from the commitment of the BJP government to provide better power supply to the people, while clarifying that private companies would only be involved in revenue collection and minimizing line losses. Production and transmission of power will not be passed on to private players. Power arrears of state government departments would be cleared and deposited within one year and informed that a process of installing prepaid meters in all government offices and buildings has been initiated.
The UPPCL, which got the proposal to privatise approved by state cabinet, will now invite bids from private companies. Private companies will be responsible for maintenance, fault repairing and bill collection. The decision was driven by government’s commitment to Centre’s ambitious 24×7 ‘Power For All’ scheme. The cabinet gave nod after taking up the case study of Agra where power distribution system was handed over to Gujarat-based company Torrent by Mayawati government in 2010. The cabinet also approved transfer of UPPCL employees to private franchisee on mutual consent and on not less than present salary. The power distribution privatization was planned by the previous government in 2013 but was rolled back amid furious protests by employee unions. Employees in Varanasi staged a demonstration at Purvanchal Vidyut Vitran Nigam Ltd headquarters at Bhikharipur. Lucknow is headquarter of Madhyanchal discom, Varanasi of Poorvanchal and Meerut of Paschimanchal distribution company. Kanpur, which has been in news for power theft, has been left out for now.
Dedicated police stations for checking power thefts to be run by the UPPCL would come up in the state soon. Officers of the rank of Deputy Superintendent of Police, Inspector, Sub-Inspector along with Assistant Sub Inspector and Head Constable cadre from the state police department will be taken on deputation to facilitate functioning of these police stations. Dedicated police stations to crackdown on power theft were announced last year but due to some objections from the Home department, they could not be set up. The number of vigilance squads have been increased to 88 from 33. Power import has been increased from 8,100 MW to 10,500 MW and grid capacity has also been increased from 18,500 MW to 21,000 MW. About 3.3 million power connections including 1.125 million to the BPL families, and over 250,000 transformers were changed.
TPDDL, the private power distributor in the national capital, announced it has launched super-efficient “Gorilla” ceiling fans at a 40 percent price discount for consumers. The company said the country’s most energy-efficient fans use a super-efficient Brushless DC motor to deliver 63 percent more efficiency than non-star rated fans. The fans have been designed by Atomberg Technologies, a start-up by the alumni of Indian Institute of Technology, Mumbai. The motor of the fans consumes only 28 Watt power as compared to 75 Watt consumed in a non-star rated fan. TPDDL claimed the Gorilla fans do not produce any humming noise and do not heat on operation and also come with a smart remote with sleep mode and timer mode. TPDDL is offering two modes for purchase of the fans. Consumers can visit nearby TPDDL customer care centre with latest electricity bill or any authorised identity proof. They can also buy the fans online through the TPDDL website. The fan is priced at ₹ 2,200 per unit when purchases offline. For online purchase, the fan is priced at ₹ 2,300 per unit. The fans are available in 3 colour options and carry 3 year on-site warranty.
Despite the base power tariff remaining largely unchanged, the cost of power to consumers of distribution companies affiliated with GUVNL increased by 39% in the last decade thanks to the fuel surcharge increase. The actual power tariff paid by consumers in Gujarat has risen by 39% for residential customers with a monthly consumption of 200 units. The state has the highest tariff in the country after Maharashtra. The rise is mainly on account of the FPPPA increasing from 61 paisa per unit in 2007 to ₹ 1.71/kWh in 2017. A power company is allowed to offset any increase or decrease in fuel (coal and gas) cost by way of the FPPPA, also known as the fuel surcharge. FPPPA charges are revised every three months based on power purchase cost and are approved by GERC. The effective power tariff for consumers of GUVNL, which supplies power to all of Gujarat except Ahmedabad, Gandhinagar and Surat, rose to ₹ 6.65/kWh in December 2017 from ₹ 4.80/kWh in 2007. Apart from the base tariff, final power tariff charged to consumers also includes electricity duty, FPPPA levy, fixed charges and meter rent.
The Internet of Things solution would be made possible for the first time in India by TPDDL, a joint venture of the Delhi government and Tata Power, which is set to install smart meters and also launch a mobile app for Android (to start with). In the first phase, 250,000 smart meters would be installed in north and north-west Delhi. By 2025, 1.6 million smart meters would be operational. Consumers need not buy a smart appliance but can use their existing appliances and still automate their homes. With smart meters and the back-end infrastructure of a smart-grid network, even the distribution company would start behaving smartly. Power theft is a huge challenge in a country like India, where the aggregate technical and commercial losses are over 20%. Pilferage by tampering with meters and distribution lines has been plaguing the sector. But the smart grid would help tackle this. TPDDL, with Omron, has developed a tamper-proof sensor that can withstand high temperature and is water- and fire-proof. The sensor detects tampering, stores the information on the meter and communicates it to a central server. It also enables the discom to disconnect power supply remotely. Wireless power sensors detect hooking and other such tampering of distribution lines. This move would set the stage for Delhi to move towards the Smart City mission, a project the government has been pushing hard. Today, residential consumption accounts for 24% of electricity produced in India, of which 75% is used for lighting and cooling. By 2021, according to the World Bank, residential consumption would surge 260%.
The Tamil Nadu government has taken steps to expedite the commissioning of various power projects in order to meet the growing demand. The government has added 10,777 MW of power generation capacity since 2011 which made it possible to meet the peak demand of 15,343 MW in April 2016. Progress for the 660 MW Ennore expansion project, 800 MW North Chennai Project Stage-III, two units of 800 MW each in Uppur project and two units of 660 MW each in Stage-I in Udangudi project. He said the state-government owned Tamil Nadu Energy Development Agency would enter into an MoU with public sector Energy Efficiency Services Ltd. ₹ 139.64 billion has been provided for the energy sector in the budget 2018-19, which includes ₹ 75.37 billion as power subsidy for agriculture and other purposes.
With an aim to maximise its recovery, the power corporation (Paschimanchal Vidyut Vitran Nigam Ltd) in Bijnor has now decided to severe power connections of an entire village if more than 80% of its residents are found to be not paying bills. Around 400,000 families in the district have power connections and the pending dues have reached ₹ 3 billion. A majority of defaulters are from rural areas and a list of such people is being put together. The power corporation has been facing 30% technical and commercial losses in the district and the unpaid amount by consumers has been increasing with each passing day. Apart from other measures, Paschimanchal Vidyut Vitran Nigam Ltd teams have started conducting raids to curb power thefts, 4,253 cases of which have been detected in the past one year. FIRs have been registered in 4,148 of these cases. The corporation will first issue notices to the defaulters and then take action against them.
Tardy Europeans have one less excuse for being late after Europe’s power network operators fixed a lag of nearly six minutes in mains-powered digital clocks that was caused by a power grid dispute between Kosovo and Serbia. Digital clocks that use the mains frequency in an electric power grid to keep time, like those on microwaves and clock radios, began falling behind earlier this year when the frequency in Europe’s transmission network dropped. The ENTSO-E said that 26 of its members had carried out a compensation scheme to return the mains frequency across Europe to its standard of 50 Hz from 49.996 Hz. ENTSO-E said that to do so the grid operators had put more energy into the system, maintaining an average electric frequency at 50.01 Hz during March. Serbia and Kosovo maintain conflicting claims of ownership of Kosovo’s power grid. Both power grids are synchronised with others in Europe. ENTSO-E said it would continue to support all parties in finding a long lasting solution to energy dispute between Serbia and Kosovo.
German power network company Amprion is seeking permission from the country’s BnetzA energy regulator to install a high-voltage line that would send offshore wind power from the North Sea further inland, BnetzA said. The 300 km line, called A-Nord, would run from the port of Emden to Osterrath, representing a missing link in the energy transition underway in Germany towards reliance on renewable sources and away from fossil fuels. The cables will use direct current electricity transmission to speed up point-to-point delivery, differing from alternating current lines common in Europe. BnetzA said it planned to publish the plans in May, coinciding with the opening of a public consultation. Two more such north-south lines, SuedOstLink and SuedLink, are also being planned and may be completed around 2025.
Zimbabwe added 300 MW to its national power grid and President Emmerson Mnangagwa said work to expand the coal-fired Hwange plant by 600 MW would start soon now that financing had been secured from Chinese investors. The southern African nation has struggled to produce enough electricity due to ageing equipment, with the most recent power plant having been built in 1987. It produces 1,200 MW against a demand of 1,600 MW. The balance is imported from Mozambique and South Africa. French utility EDF plans to invest €8 billion ($9.94 billion) between 2018 and 2035 to become a European market leader in electricity storage. EDF said it aimed to become a French and European market leader, offering storage batteries for customers in the retail power sector. EDF’s investment in power storage will focus on boosting the resilience of power grids, on individual storage for retail customers with solar panels, and on off-grid solar plus storage systems in Africa, notably in Ghana and Ivory Coast. In the coming two years, EDF’s New Business division also plans to invest some €15 million – about a third of its investments – in projects and startups linked to power storage and flexibility.
Brazil may pursue a “plan B” for six power distribution companies owned by state-controlled utility Eletrobras if they are not privatized by June, which could include liquidating the companies. An “extreme” alternative being worked on in parallel to the privatization plan would liquidate the distributors and have power regulator ANEEL hold new auctions for power distribution licenses in the regions where they operate, the ministry of mines and energy said.
A nationwide strike has reduced French electricity generation by over 3 GW as gas and electricity sector workers join rail and public sector workers in a protest against planned reforms. French grid operator RTE said power production has been cut at French nuclear, coal and oil-fired generation plants totalling over 3 GW.
The Asian Development Bank has signed a $260 mn loan agreement with the Government of Pakistan to help improve the country’s power transmission network. The loan agreement is part of the Second Power Transmission Enhancement Investment Program, which aims to improve coverage, reliability, transparency, and quality of the power transmission service in Pakistan. The funding will be used to expand the 220 kilovolt transmission network in Sindh and Balochistan provinces as well as to upgrade the SCADA and RMS in the country. Modernizing the SCADA and RMS across the national grid is expected to allow real time monitoring and control of the grid while preventing losses, reducing power outages, and increasing grid stability and capacity. The upgrade of power transmission network is also expected to help offtake power from new and renewable power plants to the national grid as well as on the load centers, thus enhancing energy security in the country.
French workers plan to cut output at electricity generation sites as part of a nationwide strike by unions against planned government liberalisation reforms, hardline union CGT said. Power sector workers will join rail and public sector workers who will take to the streets to protest against President Emmanuel Macron’s planned reform of the rail and French civil service. The CGT said the French power sector was under the threat of planned liberalisation reforms which could jeopardise French energy security. The union did not say by how much it planned to curb French power production. French electricity grid operator RTE forecast peak electricity demand at 78.2 GW, and 77 GW as temperatures fall by over 3 degrees Celsius below seasonal norm. France’s power grid operator RTE said that workers at Uniper’s French power generation sites plan to strike but it was uncertain whether it would have an impact on output.
Venezuela imposed electricity rationing in six western states, as the crisis-hit country’s creaky power grid suffered from a drought that has reduced water levels in key reservoirs needed to run hydroelectric power generators. Crumbling infrastructure and lack of investments have hit Venezuela’s power supply for years. In the worst-hit western cities, business has all but ground to a halt at a time when the OPEC nation of 30 million is already suffering hyperinflation and a profound recession. But because of the economic crisis, Venezuela has reduced electricity consumption to about 14,000 MW at peak hours, according to engineer and former electricity executive Miguel Lara. Two years ago, state-run Corpoelec put the figure at 16,000 MW.
China’s Southern Power Grid received final approvals to purchase Brookfield Infrastructure’s stake in Chile’s largest electric transmission system, Transelec, the Chilean company said. Late last year, Canada’s Brookfield agreed to sell its 27.7 percent stake in Transelec to China Southern Power for $1.3 billion, but the deal required regulatory approvals to close. Transelec operates more than 6,213 miles (10,000 km) of transmission lines in Chile, covering nearly 98 percent of the country’s population.
An all-German deal to split Innogy between RWE and E.ON looks set to create a template for European utilities M&A that includes the demise of the integrated model, no more big cross-border deals and a quest for emerging market growth. Under the deal, announced, German utility RWE will combine the renewables businesses of rival E.ON with Innogy’s, while E.ON will acquire Innogy’s regulated energy networks and customer operations. The deal continues the break-up of E.ON and RWE, which were two vertically integrated utilities before they split their renewables and grids from their thermal generation assets. A decade ago, the EU tried to drive politics out of utilities with a push for privatization and the unbundling of monopoly-owned grids. But politics has returned via the back door.
CEA: Central Electricity Authority, MU: million unit, FY: Financial Year, PLF: plant load factor, kWh: kilowatt hour, GUVNL: Gujarat Urja Vikas Nigam Ltd, PPA: power purchase agreement, GERC: Gujarat Electricity Regulatory Authority, MW: megawatt, IEX: Indian Energy Exchange, discoms: distribution companies, MPERC: Madhya Pradesh Electricity Regulatory Commission, BPDB: Bangladesh Power Development Board, NVVN: NTPC Vidyut Vyapar Nigam, KW: kilowatt, DERC: Delhi Electricity Regulatory Commission, BJP: Bharatiya Janata Party, UPPCL: Uttar Pradesh Power Corp Ltd, BPL: below poverty line, TPDDL: Tata Power Delhi Distribution Ltd, FPPPA: fuel price and power purchase adjustment, MoU: Memorandum of Understanding, ENTSO-E: European Network of Transmission System Operators for Electricity, Hz: Hertz, BnetzA: Bundesnetzagentur, SCADA: supervisory control and data acquisition, RMS: revenue metering systems, GW: gigawatt, OPEC: Organization of the Petroleum Exporting Countries, km: kilometre, EU: European Union
10 April. India is the world’s second largest importer of LPG (liquefied petroleum gas) after China and remains ahead of Japan as the Narendra Modi government’s drive to provide clean cooking fuel to millions of poor families boosted household demand by nearly 8% in 2017-18. India beat Japan in 2016 to become the world’s third-largest consumer of crude oil after the United States (US) and China. Both International Energy Agency and OPEC (Organization of the Petroleum Exporting Countries) see India as the main driver of growth in global oil demand for the next decade. Available data indicate India’s imports of LPG – a byproduct of refining industry – in 2017-18 surpassing 11 million tonne in 2016-17 on the back of the Ujjwala scheme adding volume to overall demand.
Source: The Times of India
10 April. Mangalore Refinery and Petrochemicals Ltd (MRPL) has cut its annual oil import deal with Saudi Aramco by about 22 percent to 70,000 barrels per day (bpd). MRPL is instead looking to step up crude purchases from Iran.
Source: Reuters
10 April. India is aiming to drive harder bargains with global oil producers, including Saudi Arabia, during bilateral meetings at a conference of energy ministers, leveraging its strength as the world’s third-biggest crude importer. Key producers from the Organization of the Petroleum Exporting Countries (OPEC), threatened by the rising output from new and non-OPEC countries, are trying to secure a foothold in India where refining capacity is set to surge to 8 million barrels per day (bpd) by 2030 from 5 million bpd. Iran has offered to increase a discount on freight prices to Indian state refiners to double its sales to the companies, which control about one-third of India’s refining capacity. Saudi Aramco raised the credit limit for some Indian refiners last year so that they could lift more crude without providing explicit financial guarantees. India’s footprint in global energy markets will increase “materially” from 2018 to 2040, making it the largest growth market for global energy, BP Plc said in its energy outlook report in February.
Source: Reuters
7 April. Oil Minister Dharmendra Pradhan said that nine crore new LPG (liquefied petroleum gas) connections have been distributed in the last four years, including 3.5 crore connections provided under the Pradhan Mantri Ujjwala Yojana (PMUY). He said, LPG penetration across India has improved drastically with nine crore new LPG connections being distributed in the last four years. He said that the government’s target of providing gas connections to nine crore BPL (Below Poverty Line) families by 2020 “will be incorporating genuinely poor households left out of socio economic caste survey (SECC) list and now will be empowering a wider section of society.” Launched in May 2016, under the scheme government provides LPG connections to BPL families with a support of Rs 1,600 per connection.
Source: The Times of India
6 April. Indian state refiners plan to almost double oil imports from Iran in 2018/19, drawn by incentives offered by Tehran, potentially helping Iran increase its share in the world’s third-biggest oil importer. Iran is pushing to retain its oil customers in Asia, offering better terms than other Middle Eastern suppliers including Saudi Arabia, even as the threat looms of potential further US (United States) sanctions on the OPEC (Organization of the Petroleum Exporting Countries) member. Tehran recently deepened freight discount to firms in India, its second-biggest oil client after China, in return for higher volumes. In the current fiscal year to March 2019, state refiners Indian Oil Corp, Mangalore Refinery and Petrochemicals Ltd, Bharat Petroleum and
Hindustan Petroleum plan to import 396,000 barrels per day (bpd) Iranian oil. Indian Oil Corp, Mangalore Refinery and Petrochemicals, Bharat Petroleum and Hindustan Petroleum declined to comment. All four refiners imported about 205,600 bpd Iranian oil in the previous fiscal year. Iran, which used to be the second-biggest oil supplier to India before sanctions, has been gradually growing back its market share in New Delhi since the lifting of sanctions against the Islamic state in 2016, becoming the No. 3 supplier to India in 2016/17 after Saudi Arabia and Iraq, government data shows.
Source: Reuters
6 April. Hindustan Petroleum Corp Ltd (HPCL) received the environment clearance for setting up of a new LPG (liquefied petroleum gas) plant with bottling and storage facilities in East Champaran, Bihar that will entail an investment of Rs 136.4 crore. This will be the third LPG plant in the state. Currently, HPCL has only two LPG plants in Bihar at Patna and Purnia with a bottling capacity of 50,000 cylinders per day. As per the proposal, the HPCL wants to construct mounded storage vessels with a capacity of 1,050 tonnes and bottling capacity of 120 tonnes per annum in an area of 30 acres in Panapur and Kubeya villages in East Champaran district. The purpose of the project is to increase rural penetration of bottled LPG cylinders in Bihar in a safe and environmental-friendly way. The cost of proposed LPG plant is estimated to be Rs 136.4 crore. At present, the HPCL is meeting the demand through sharing filling capacity from other LPG bottling plants/private bottlers. The government’s aim is to increase the LPG penetration to 75 percent by addition of 5.5 crore new LPG connections till 2019-20.
Source: Business Standard
6 April. India produced 32,642 million tonne crude oil in the eleven months between April 2017 and March 2018, a marginal 1 percent decline as compared to the output in the same period last fiscal (April-February 2016-17), and a record seven year low, according to the Petroleum Planning and Analysis Cell (PPAC) data. In February 2018, oil production dipped 2.36 percent to 2,731 thousand tonne (tmt). The dismal performance is attributed to lower than expected output from key wells operated by state-run Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and fields operated by private companies. The lower output dampens the prospect of achieving the government’s target of 10 percent reduction in energy import dependence by 2022. India records lowest crude oil production in seven years PPAC data showed February’s oil production dipped due to poor performance of fields under ONGC and under Production Sharing Contracts (PSCs).
Source: The Economic Times
6 April. Indian Oil Corp (IOC), the nation’s largest fuel retailer, announced it has acquired Royal Dutch Shell’s entire 17 percent stake in Makhaizna oilfield in Oman for $329 million. According to Oil Minister Dharmendra Pradhan, the equity of IOC in the oilfield will feed Indian refineries with an additional 1 million tonne of crude oil. The Mukhaizna oilfield is the single-largest producing oilfield in Oman contributing around 13 percent of the total Omani crude oil production of 120,000 barrels per day.
Source: The Economic Times
10 April. Indraprastha Gas Ltd (IGL) expects its sales volume to industrial and commercial clients rise 20% in 2018-19, after experiencing a similar gain last fiscal year, following a ban on using polluting pet coke and fuel oil in the National Capital Region on rising green concerns. Delhi has been one of the most polluted cities in the world for years now. With smog-filled winter sky becoming an annual feature, the demand for dramatic steps to cut pollution has grown louder with years. IGL plans to use the restrictions on polluting fuel as an opportunity to add as many as 2,000 industrial and commercial customers in 2018-19 to its current base of 3,000. Since most of these clients are likely to be smaller, the sales volume addition is expected to be just 20% over the current volume of 500,000 standard cubic meters a day. IGL is also planning to rapidly expand sales of compressed natural gas (CNG), used by cars and buses. To tide over the scarcity of land in cities for setting up fuel stations, IGL has begun appointing dealers to set up CNG stations – so far the company owned and operated all its filling stations. Two dealer-owned, dealer-operated CNG stations have been launched while a dozen more are on the way, IGL said. IGL expanded its piped gas connection to households by a record 150,000 in 2017-18. IGL is waiting for permission to take piped gas to homes in Delhi’s cantonment area, which has 30,000 houses of defence personnel and an equal number of civilian homes. For its expansion, IGL is focusing on congested colonies, which had escaped attention earlier but are now being targeted with enhanced security features.
Source: The Economic Times
10 April. Oil and Natural Gas Corp (ONGC) and Reliance Industries Ltd (RIL) have started discussions with buyers to sell natural gas from their fields in the Bay of Bengal that are expected to start production over the next three years. The plan is to transport the gas from the east coast to the industrial heart belt of western India. ONGC plans to use Reliance Industries’ 1,375 kilometre (km) pipeline connecting Kakinada on the east coast to Bharuch in Gujarat in the west. ONGC is committed to bring east coast gas onstream by 2019 onwards and ramp up production to around 15 million metric standard cubic meter per day (mmscmd). RIL built the pipeline in 2009, but has been operating at very low capacity utilisation for several years due to a drastic fall in output from the company’s venture in the Krishna-Godavari basin in the Bay of Bengal. RIL and partner BP Plc, which together own three natural gas fields next to ONGC’s in the east coast, has also started discussions with customers to market the natural gas. The RIL-BP joint venture is offering customers contracts ranging from a 10-year tenure, to 5- and 3-year, ONGC said. Prime Minister Narendra Modi has set a target to increase the share of gas in India’s energy mix to 15 percent by 2030 from below 6.5 percent now. The government in February approved a plan by RIL and its partner BP to develop two new fields in the Krishna-Godavari basin. This approval followed an earlier clearance to develop another field called R-Series in the basin. The long term contracts that RIL-BP joint venture is offering is a sign the companies are committed to fulfilling their contracts, ONGC said. Between 2021 and 2023, India would be hitting at a level which will be 50 mmscmd incremental. So India would be producing in the range of 140 mmscmd per day, the Directorate General of Hydrocarbons (DGH) said. India’s current total consumption of natural gas at end of March 2018 stood at 145 mmscmd.
Source: Reuters
9 April. Reliance Industries Ltd (RIL) has been asked by the Directorate General of Hydrocarbons (DGH) to relinquish two deep-sea satellite gas discoveries—D6 and D19—in the KG-D6 block, off India’s east coast after the company told the regulator that it had no immediate plan to develop these fields. The company, which had submitted a combined field development plan (FDP) for four discoveries namely D2, D6, D19 and D22, has now said while it would develop two of these discoveries — D2 and D 22 — straightaway, investments in the other two fields would be contingent on the success in the first set of fields. RIL is the operator of the KG-D6 block with a 60% interest while BP has a 30% stake. The remaining 10% is held by Niko. The companies produce around 7-8 million standard cubic metres of gas per day at present. RIL and BP in June last year had announced an investment of Rs 40,000 crore to reverse the falling production at the KG-D6 block. Apart from the four deep-sea satellite fields mentioned above, which were to be developed together, D29 and D30 finds along with R-Series and MJ gas discoveries were to be developed through these investments. In 2012, the government approved a $1.5-billion plan for the four satellite fields with an estimated reserve of 617 billion cubic feet, with an eight-year production plan with daily output of 10.36 million standard cubic meters. The FDPs were to be submitted by 2016-17. However, the government is now of the view that if explorers are not willing to go by the FDP, they should rather relinquish the fields rather than sit on them. RIL had relinquished fields in the past as well, while it has consolidated its holding areas. The Mumbai-based company had also exited from all its overseas fields. While RIL was not willing to develop the deep-sea satellite fields earlier as gas prices were low, it decided to develop the fields after a price of $6.3 per million metric British thermal unit (mmBtu) was fixed for the October 2017-March 2018 period for difficult fields. The prices have recently been revised to $6.78 per mmBtu for difficult fields and $3.06 per mmBtu for others for the April-September 2018 period.
Source: The Financial Express
9 April. Bharat Petroleum Corp Ltd (BPCL) is planning to hive off its gas business into a separate wholly-owned subsidiary. BPCL, which is present in various segments of natural gas sales and supply, has been strengthening its gas business over the past few years. By hiving off this business as a separate subsidiary, the company intends to sharpen its focus and bring all natural gas-related businesses into one fold, the people mentioned above added, speaking on the condition of anonymity. The new unit may be christened Bharat Petroleum Natural Gas Company. BPCL is a co-promoter of Petronet LNG Ltd, along with Indian Oil Corp (IOC), Oil and Natural Gas Corp (ONGC) and GAIL (India) Ltd. Over the next five years, BPCL has set itself an investment target of Rs 1 trillion to be spent on all its expansion activities including marketing, refining and strengthening of the gas business. BPCL has been importing liquefied natural gas (LNG) and supplying it to customers in the fertilizer, power, city gas distribution, steel and other industries across the country. Its own LNG imports help BPCL mark its presence in the LNG market, apart from being economical for use at its refineries. BPCL also markets LNG by tank trucks from Dahej to some customers such as General Motors, Mahindra & Mahindra Ltd, Modern Insulators Ltd and Tetrapak etc.
Source: Livemint
8 April. Oil and Natural Gas Corp (ONGC) announced the achieving of a landmark in its $5.07 billion oil and gas project in the Krishna-Godavari (KG) Basin eastern offshore by spudding the first of the 34 wells, saying the first gas is slated for marketing by end-2019, and of the oil by 2020. ONGC said well KDG-A on the KG-DWN-98/2, or KG-D5 block, in the Bay of Bengal was spud from the drillship Platinum Explorer, 35 km off the Andhra Pradesh coast. The project will overall produce around 25 million tonnes of oil and 45 billion cubic meters of gas with peak production of 78,000 barrels per day of oil and 15 million metric standard cubic meters per day (mmscmd) of gas. The project envisages capital expenditure of $5.07 billion and operating expenditures of $5.12 billion over a field life of 16 years.
Source: Business Standard
6 April. India plans to set up a natural gas trading exchange as early as October this year to prepare for a surge in supply from India’s east coast and a slew of liquefied natural gas (LNG) terminals. Oil Minister Dharmendra Pradhan in a meeting with industry officials set a deadline of October 1 for the country’s primary natural gas distribution regulator to set up the exchange, said three sources familiar with the discussions. India currently imports LNG at global rates LNG-AS of around $7.50 per million metric British thermal units (mmBtu), while the government sets domestic gas prices at $3.06 per mmBtu. Indian Prime Minister Narendra Modi has laid out a plan to increase the share of gas in India’s energy mix to 15 percent by 2030 from below 6.5 percent now, Pradhan said. India currently produces close to 90 million metric standard cubic meter per day (mmscmd) of gas and imports another 70 mmscmd as LNG, according to government figures for 2016-17. In the next three to five years, as natural gas projects from India’s Oil and Natural Gas Corp (ONGC) and a partnership involving BP and Reliance Industries Ltd (RIL) ramp up, India’s domestic gas output will be in the range of 140 mmscmd. India’s industrial gas consumers such as power plants and fertiliser makers were disappointed in 2010 after promised gas output from the east coast’s Krishna-Godavari basin fell short of expectations. Many facilities that were built in anticipation of more gas production remain stranded without adequate fuel. The RIL-BP partnership plans to develop three assets off India’s east coast, and ONGC is developing another gas field in the same region.
Source: Reuters
4 April. The Petroleum and Natural Gas Regulatory Board (PNGRB) released new rules on bidding for obtaining a licence to retail compressed natural gas (CNG) and piped natural gas (PNG) in cities. Under the fresh parameters, future auctions would be conducted by asking companies to quote the number of CNG stations to be set up, while for PNG it would be the number of domestic cooking gas connections to be given in the first eight years of operation. Bidders quoting higher numbers of these would be given more marks. The previous criteria for winning a licence – the tariff charge for transporting CNG and or PNG within the city – has been given just 10 percent weightage under the new regulations. The number of CNG stations and PNG connections to be released command 70 percent of the bidding weightage. Bidders will also be required to quote the length of pipeline they would lay on winning the licence. Entities having experience of at least one year in operation and maintenance of a city gas distribution (CGD) network and having sufficient technically qualified personnel would be eligible for bidding, as per the terms of the bid. Companies with net worth of no less than Rs 150 crore can bid for cities with population of 50 lakh and above, while Rs 100 crore is the minimum requirement for cities with population of 20 lakh to 50 lakh. A company with a Rs 5 crore net worth firm is eligible to bid for cities that have less than 10 lakh population. According to PNGRB, the successful CGD licence bidder would have to enter into a firm natural gas supply agreement with a natural gas producer or marketer in a transparent manner on the arm’s length principle within 180 days of winning a license. The winning company would have eight years of marketing exclusivity in the given city, which is an increase from the current 5-year licences. So far, the petroleum regulator has undertaken eight rounds of bidding. While the last few rounds of CGD have drew lukewarm response, the fourth round was scrapped altogether.
Source: Business Standard
9 April. The Central Electricity Authority (CEA) has revised the National Electricity Plan (NEP) after getting feedback from more than 30 state-owned and private institutions, mostly questioning the redundancy of coal. From retiring coal-based power completely, the CEA has said India would need 6,440 MW thermal power during 2017-22. In the earlier version of the NEP, which was out in 2017, the CEA had said the country did not need coal-based capacity addition till 2022. However, the CEA said coal-based power projects of 47,855 MW were likely to yield benefits during the period 2017-22. They are currently under different stages of construction. This translates into a likely capacity addition of 176,140 Mw in the next five years, according to the plan. The total coal requirement in the year 2021-22 and 2026-27 has been estimated at 735 million tonnes (mt) and 877 mt, respectively, including imported coal of 50 mt. The World Energy Council (WEC) said the larger the renewable capacity addition, the larger will be the cycling stress on the coal-based power plants and the lower will be the power factor. The CEA also said the coal-based capacity of 22,716 MW is considered for retirement during 2017-22. Additionally, a coal-based capacity of 25,572 MW, has been considered for retirement during 2022-27, which will be completing 25 years of operation by March 2027.
Source: Business Standard
9 April. The government has assured Coal India Ltd (CIL) union leaders that the company would remain dominant even after private commercial mining begins, but workers have decided to go ahead with the April 16 strike. Union leaders, who held talks in Delhi, do not want private competition. INTUC, which had so far kept away, has also joined the strike called by CITU, BMS, HMS and AITUC. These five represent almost the entire workforce of the company.
Source: The Economic Times
8 April. Power plants in eastern India received a major boost after South Eastern Railway (SER) started loading its first coal rake in Sardega, Odisha for transportation to the Kolaghat Thermal Power Plant in East Midnapore. Loading was completed and the rake is headed to the power plant with 3,953 tonnes of coal from the Basundhara Project of Mahanadi Coalfield Ltd (MCL). MCL signed a memorandum of understanding with SER to extend tracks 51 kilometre (km) beyond Jharsuguda to Sardega. The project worth Rs 1,007 crore was completed in December 2017 and the entire cost was borne by MCL. The large yard at Jharsuguda will be put to good use by SER. Not only will this space help in transporting coal to eastern power plants but also western and southern ones from the Basundhara Project. The rake loaded will fetch Rs 45,54,359. It is estimated that SER will be in a position to load a million tonnes of coal from Sardega annually by 2020-21.
Source: The Economic Times
7 April. The High Court (HC) of Bombay at Goa has suggested that Mormugao Port Trust (MPT) and Vedanta Ltd chalk out a solution to the imbroglio over unloading a vessel of coking coal at the port. Vedanta approached the high court after MPT informed it on April 2 that it was withdrawing its permission sated February 12, 2018, to dock its vessel alongside berth No 9. Based on the February 12 communication, Vedanta had ordered a ship to bring in coking coal from Australia. Vedanta, moved the court to allow the ship to berth, failing which they would have to pay high demurrage charges. When the matter came up, the court felt the two parties must find a solution between themselves. Earlier this year, the state pollution control board refused MPT permission to use Mooring Dolphins for coal transfer from incoming ships. Subsequently, the port authorities decided to allow Vedanta to berth at berth no 9.
Source: The Economic Times
5 April. Coal India Ltd (CIL) has put in abeyance implementation of its new coal pricing methodology “till further advice” after customers pointed out that the new regime should be introduced only after the state-owned coal behemoth has the requisite supporting infrastructure. The company’s board, had approved the new system, where coal was supposed to be billed on the basis of gross calorific value (GCV) from April 1. Currently, the fuel is charged on a per-tonne basis, depending on their grades. CIL met coal consumers to discuss the issue, in which the latter pointed out several problems such as slow processing speed of GCV measurement and uncertain tax implications. Some companies also questioned the absence of white paper before launching such a different pricing system. More than 70% of coal produced by CIL is consumed by the power sector. Power companies are also worried about the regulatory implications of the proposed step, as regulators take a long time to pass through the additional fuel costs into power tariffs.
Source: The Financial Express
5 April. With an assessment suggesting the current trend may not warrant pursuing the projected coal output target of 1 billion tonnes (bt) by 2020, the government gave indication of revising the production target of the dry fuel. The government had earlier set a target of 1 bt of coal output by FY2019-20 for Coal India Ltd (CIL). CIL accounts for over 80 percent of domestic coal production. However, the government had in December last year said that of 1.5 bt the country is expected to produce by 2022 and of this, 1 bt would come from CIL. Coal Minister Piyush Goyal said there are plans to put out the list of available coal blocks in the public domain and then depending on the interest, the blocks can be auctioned. This idea comes at a time when there have been occasions where coal block auctions did not attract enough demand.
Source: Business Standard
5 April. Coal India Ltd (CIL) is likely to hike the salaries of executives in the next two months, a move that will result in an additional annual outgo of Rs 10 billion, its chairman and managing director Gopal Singh said. The pay revision of the executives is due since January 1, 2017. Around 23,000 executives would benefit from the move, that would have an impact of around Rs 10 billion per year on the company, he said. When asked if the company was mulling increasing the price of coal to offset the impact of the proposed salary hike, Singh said there is no such consideration. Rather, CIL is looking at various ways of improving efficiency and productivity to contain the impact of the pay hike, he said. CIL has nearly 300,000 employees and the wage agreement was due since July 2016. According to industry experts, increase in coal prices was one of the ways to counterbalance the impact which the PSU (Public Sector Undertaking) incurred from rise in salaries of its non-executive staff last year. The CIL board had in January approved revision of non-coking coal prices. CIL, which accounts for over 80 percent of the domestic coal production, is eyeing one billion tonne output by 2019-20.
Source: Business Standard
5 April. Singareni Collieries Company Ltd (SCCL) said it aims to achieve 68 million tonnes (mt) of coal production during the current fiscal against 62 mt during the last year. SCCL will be investing about Rs 10,000 crore during the next five years on various expansion programmes with a target of achieving Rs 34,000 crore revenue by then. Currently the miner has 47 coal mines spread across the northern part of Telangana with about 10 billion tonnes of coal reserves. SCCL has a target of achieving 100 million tonnes production by 2022.
Source: Business Standard
4 April. Union Coal Minister Piyush Goyal said the Centre is not able to increase coal production in Odisha due to lack of support from the state government. Goyal alleged harassment by local BJD MLAs that creates hindrance in smooth production of coal, particularly in Talcher area, one of the largest coal fields in the country. Goyal said he had sought Odisha Chief Minister’s help in increasing coal production in the state by getting land, making railway line, sorting out law and order issues. Goyal said the state (Odisha) would get royalties, huge employment for people who for many years remained deprived of progress and development had there been smooth production of coal. State Steel and Mines Minister Prafulla Mallik said the state government has extended all cooperation in smooth production of coal in Odisha. While Odisha has been very generous in proving the basic power of Progress in the form of Coal.
Source: The Times of India
10 April. The government will soon kick off pilot auction of medium-term power purchase agreements for 2,500 MW of electricity, ending a six-year long spell of state governments restricting electricity procurement from power plants. The power ministry has already finalised the bid documents, model power purchase agreement (PPA) and model power supply agreement. Bid coordinator Power Finance Consulting Ltd (PFCL) will soon invite expressions of interest while PTC India is likely to be the power demand aggregator for state distribution companies. Experts said the proposed auction could result in higher tariffs to the states, as the auctioned power purchase agreements for three years will be signed with zero escalation clauses. Lack of PPAs is one of the key reasons for stress in the power sector besides other factors such as promoters’ equity crunch, no coal supply, and regulatory and contractual issues. Over 1,00,000 MW power-generation capacity is under stress, as they do not have PPAs or coal or both. The government is formulating a plan to revive stressed assets. The proposed auction aims at helping idling power projects tie up medium-term contracts and service debt. At present, thermal power projects in the country are operating at about 62%. The move will help power projects with no or limited PPAs such as Adani’s Korba West in Chhattisgarh, Coastal Energen’s Mutiara in Tamil Nadu, Jaypee’s Bina plant in Madhya Pradesh, Abhijeet Power’s Mata Shri in Jharkhand, Lanco’s Vidharbha and Athena’s Bhavanapadu project. The auction mandates state distribution companies to pick up a minimum 55% capacity of electricity from the plants.
Source: The Economic Times
9 April. A village in Maoist-hit district of Sukma is getting re-electrified after the ultra-left rebels destroyed the power supply infrastructure 15 years ago. The light vanished from the Chintalnar village when Maoists, in a bid to disrupt the development activities in the district, uprooted electricity poles. Located about 80 kilometres from the district headquarters of Sukma district, the village once deprived of basic amenities due to the strong foothold of the Maoists is now slowly getting back to the path of development. The residents of the village expressed happiness over the electrification of the area. The electrification of the village is in line with the Chief Minister Raman Singh-led government’s mission to ensure power supply in all the village of the state by June 2018.
Source: Business Standard
9 April. Determined to dispel the perception of Dalit alienation, the ruling BJP (Bharatiya Janata Party) is now gearing up to power its way into Dalit homes by organizing 15-day free electricity connection distribution camps in close to 3,500 Dalit-dominated villages in Uttar Pradesh from April 14, the birth anniversary of Baba Saheb BR Ambedkar. The state government has set a target of providing electricity connections to around 4 lakh Dalit families through these camps under Centre’s flagship Saubhagya scheme. A final blue print of the ambitious drive that aims to assuage Dalits is proposed to be ready by Tuesday for being put forth at a review meeting chaired by state Energy Minister Shrikant Sharma. He said that of the 34 lakh new electricity connections given in the last financial year, nearly 11lakh were for Dalits and those in BPL (Below Poverty Line) category. In a follow-up action, the government will set up special teams headed by UPPCL (Uttar Pradesh Power Corp Ltd) chief engineers to do a reality check of the connections given to poor. BJP’s increased emphasis on electricity connection camps from Ambedkar Jayanti comes days after four BJP Dalit MPs spoke against the government and wrote to PM Narendra Modi over atrocities on Dalits and discrimination with them.
Source: The Economic Times
8 April. Power distribution company (discom) Reliance Energy said it has made adequate arrangements to meet the additional power demand of the city during summer by signing long-term power purchase agreements (PPAs). Reliance Energy, which supplies to 30 lakh consumers across the city’s suburbs, said the discom has estimated the “peak demand for power in its distribution area is likely to cross the 1650 MW mark for April and May 2018”. The discom had recorded a peak power demand of 1605 MW on June 1, 2017. The discom said power demand in its distribution area has been consistently increasing over the years “which the company has been successfully meeting each year and ensuring consumer convenience.”
Source: Business Standard
8 April. The sudden rise in the cost of power in the open market seems to have become a cause of concern for the Punjab State Power Corp Ltd (PSPCL) as this might increase its power purchase bill during the current fiscal. As per the multi-year tariff petition, the PSPCL has projected a requirement of 58,299.84 million units to meet state’s power demand the current fiscal year. The power available from state’s own generation is 13,379.71 million units, which includes 5,069.05 million units from state-owned thermal power plants, 4,515.52 million units from hydro plants and 3,795.14 million units from the state’s share from BBMB projects. The remaining 44,920.13 million units are to be bought from independent power producers (IPPs) that are operating from the state with whom the PSPCL has signed long-term power purchase agreements (PPAs) and sources outside the state. As per its planning, the PSPCL is expecting to spend Rs 18,864.56 crore on power purchase during the current fiscal. The prevailing price of per unit cost of electricity in the open market has already shot up by around 54% as compared to the month of February. Power is now available at an average rate ranging between Rs 3.38 per unit to Rs 4.7 depending on the peak and non-peak hours. The rates have even gone up to Rs 8 a unit during the peak hours. In February this year the average cost of a unit was Rs 2.56. According to highly placed sources in the PSPCL, the average cost at which PSPCL is likely to buy power has been calculated at Rs 4.5 per unit. With the shutting down of thermal units at Bathinda and Ropar plants, the PSPCL is now short of 880 units. While, the corporation is maintaining that it has already made arrangements to buy around 1000 MW of power at cheap prices for which agreements have been signed, but any unscheduled purchases made during the peak paddy sowing season to meet increased demand will increase PSPCL’s power purchase bill.
Source: The Times of India
6 April. State-run power distribution companies (discoms) have attributed their failure to meet the performance targets set under the Ujwal Discom Assurance Yojana (UDAY) to delays in disbursal of subsidies by the state governments. At a recent meeting convened by the power ministry, discom representatives pointed out that their respective aggregate technical and commercial (AT&C) losses were worsening because the state governments were delaying the disbursal of subsidies. Delayed receipts reflect adversely on AT&C figures because it deflates the revenue against the units of electricity sold. Under the UDAY scheme, discoms are expected to progressively reduce their AT&C losses, to reach a level of 15% by FY19. Only seven states/UT had reported meeting their respective AT&C loss targets for FY17, while of late, there is also reversal of the loss reduction trend in some states. Chhattisgarh discom, for example, is now awaiting about Rs 1,800 crore from the state government out of the total booked subsidy of Rs 3,000 crore. Representatives from Punjab noted that apart from the subsidy of Rs 5,000 crore from the state government, its discom was also waiting for Rs 1,200 crore of pending payments from various government departments. Uttar Pradesh noted there was a “high amount” of dues to be recovered by the state’s discoms from local bodies and power looms. Rise in rural power consumption also resulted in rise in power supply cost in Uttar Pradesh and Madhya Pradesh. As many as 10.1 lakh households have been electrified under Saubhagya (100% household electrification scheme) in Uttar Pradesh — the largest beneficiary among the states under the scheme so far. Himachal Pradesh said the situation could improve further after receiving the subsidy amounts.
Source: The Financial Express
5 April. At least two Indian companies—Adani Group and Torrent Power—have shown interest in acquiring six electricity distribution firms put on sale by Brazil’s Centrais Elétricas Brasileiras, or Eletrobras. Given the limited opportunities in India, these firms have been attracted by Latin America’s biggest utility’s six subsidiaries that are up for sale and supply electricity to 13 million people. PricewaterhouseCoopers Brazil is running the sell side transaction process. The Brazilian government hopes to raise 12.2 billion reais ($3.68 billion) by privatizing Eletrobras, but the project faces open resistance in the Congress. Adani Group has been eyeing the electricity distribution space. In one of the largest transactions in the Indian power distribution sector, Adani Transmission Ltd announced the Rs 18,800 crore deal for acquiring Reliance Infrastructure Ltd’s Mumbai power business in December. Also, Torrent Power had evinced interest in acquiring Central Electricity Supply Utility of Odisha (CESU Odisha) which supplies electricity to around 2 million consumers in the distribution circles of Bhubaneswar, Cuttack, Paradeep and Dhenkanal. Industry experts caution that entering a foreign electricity distribution market is not an easy task.
Source: Livemint
5 April. Telangana power utilities are spending nearly Rs 38,000 crore for setting up three power projects with a combined capacity of 5880 MW in the state. TS Transco chairman and managing director, D Prabhakar Rao said, a 24-hour power scheme will be successfully implemented from January 1 onwards for as many as 23 lakh agriculture pump sets in Telangana. The state grid met a peak demand of 10,284 MW on March 8, 2018 which is an all time record in the history of Telangana Power sector, he claimed. Further, Transmission and Distribution System is fully geared up to meet a load of up to 11,000 MW in coming seasons and the power utility is spending Rs 12,136 crores towards strengthening the transmission and distribution system.
Source: Business Standard
4 April. The electricity department, in the month of March, disconnected 1,223 connections of both domestic and commercial bill defaulters, some of whom have not cleared their dues for years. More than 60% (748) of these connections were temporarily disconnected while the rest (475) have been permanently disconnected where the meters have also been disabled. Since January, the department has disconnected more than 4,300 such connections. The statewide drive has raked in around Rs 100 crore into the department’s coffer. Directions have been issued by the chief electrical engineer to divisional offices to ensure that all arrears are recovered. After issuing notices to defaulters, the department gives consumers time to pay their arrears, failing which it disconnects power. Since January, the department has reconnected 488 connections after consumers settled their bills. Goa Power Minister Pandurang Madkaikar said arrears to the tune of Rs 200 crore were yet to be recovered from its consumers. The commission in the Multi Year Tariff (MYT) order had approved the collection efficiency of 100% for the financial year 2018-19 and aggregate technical and commercial losses (AT&C) loss level of 10.75%.
Source: The Times of India
10 April. The Solar Energy Corp of India (SECI) is in talks with the Odisha government to develop 100 MW floating Solar PV (photovoltaic) panels, harnessing the state’s unconventional source of energy. A 100 MW solar project can be developed on a water body with a surface area of one square kilometre. Kerala has a 500 kWp (kilowatt peak) floating solar plant installed by the Kerala State Electricity Board (KSEB), spread across 1.25 acres of the Banasura Sagar reservoir in Wayanad. Another 100 MW grid-connected solar PV project has been proposed for Uttar Pradesh. It will come up on the Rihand Dam in UP’s Sonbhadra district. Given the land crisis in Odisha, the state government has long been struggling to develop a 1000 MW solar park. The government has failed to identify 5000-acre plot to develop the park and, eventually, has submitted a detailed project report to the Centre for setting up a 400 MW park. Developing solar projects on the water bodies will further the state’s ability to fulfill Renewable Energy Policy, 2016, where it plans to add a capacity 2200 MW of solar energy by 2022. The cost of developing per MW of solar power on water bodies will be 15 percent more than the cost of putting solar panels on land, Canyon Consultancy, a Bhubaneswar-based renewable energy consultancy firm, said.
Source: Business Standard
10 April. State-run oil marketing companies Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) plan to spend nearly Rs 10,000 crore to set up Bio-CNG (compressed natural gas) plants across India to promote clean fuel and reduce the country’s fuel import bill. The Bio-CNG plan will be detailed in the national biofuels policy to be released this month. The policy will detail a Rs 1 trillion investment opportunity under Waste-to-Wealth projects. Bio-CNG is a purified form of biogas with over 95% pure methane. It is similar to natural gas in its composition (97% methane) and energy potential. While natural gas is a fossil fuel, Bio-CNG is a renewable form of energy produced from agricultural and food waste. This January, IOC signed a Memorandum of Understanding (MoU) with the Punjab government to set up biogas and Bio-CNG plants in the state. IOC will be setting up a plant in Haryana shortly. In 2018, 42 plants will become operational which will be scaled up to 400 over the next three to four years. Bio-CNG is seen as an environment-friendly alternative to diesel. It can be transported either through injecting fuel into the CNG grid or by trucks or in cylinders from the filling stations. The average cost of setting up a Bio-CNG plant is around Rs 40-50 crore. The cost of production of Bio-CNG could be around Rs 23 a litre, cheaper than CNG, petrol and diesel. India currently imports one-third of its energy requirement. The world’s third-largest crude oil importer targets halving its energy import bill by 2030. The government aims to increase the contribution of gas in India’s energy mix to 15% from the current 6.5%. At present, fossil fuels meet 95% of India’s transportation fuel requirement.
Source: Livemint
10 April. Gujarat Chief Minister Vijay Rupani approved setting up a 5000 MW capacity solar park at the Dholera Special Investment Region (SIR), which would be the largest such entity in the world after its completion. The proposed solar power generation project would be set up in 11,000 hectares of land with an investment of Rs 25,000 crore. The project will contribute significantly in achieving Prime Minister Narendra Modi’s target of producing 175 GW of electricity through renewable energy sources by 2022, Rupani said. Rupani exuded confidence that the solar park would not only provide employment to over 20,000 people, but also open new manufacturing avenues for the entire supply chain in and around the Dholera International City.
Source: Business Standard
9 April. After back-to-back controversies, which delayed the construction of waste-to-energy plant at Brahmapuram, Chief Minister (CM) Pinarayi Vijayan will be inaugurating the construction of the plant. The Rs 295 crore plant would be constructed in two phases and a plant to process the garbage and produce refuse derived fuel (RDF), which is in the form of bricks would be set up in the first phase. As per the schedule, the construction of the first phase of the project, which is to treat garbage will be completed by January 2019. In the second phase, the gasification plant to generate energy from the RDF will be constructed. In February, Kochi corporation had handed over 20 acres in Brahmapuram to GJ Eco Power Private Ltd for construction of the plant. The project is yet to get the clearances from the agencies like pollution control board and environmental clearance.
Source: The Economic Times
9 April. Reliance Infrastructure Ltd (RInfra) has received a Rs 1,081 crore purchase order from Nuclear Power Corp of India Ltd (NPCIL) for engineering, procurement and construction (EPC) contract for Common Services System, Structure & Components (SSC) package and allied civil works of Unit -3 and 4 of Kudankulam Nuclear Power Project, the company said. The contract entails design, engineering, supply, erection, testing and commissioning of SSC package and allied civil works on EPC basis. The project is to be commissioned in 56 months, the company said. The contract value is inclusive of taxes and duties and also contains imported component of $23.2 million. EPC division of the infrastructure major has won the contract amidst competition from leading EPC players like BHEL, L&T, Tata Projects and BGR. With a clear focus to position itself in India’s growing infrastructure sector, and a multitude of projects in the offing in areas as diverse as power, metro rails, nuclear power plants, air quality control, marine, railways, ports, and mega infrastructure projects, RInfra is targeting EPC opportunities worth Rs 2 lakh crore and increase the EPC order book to Rs 50,000 crore by FY19.
Source: Business Standard
9 April. The Pune Municipal Corp (PMC) is claiming that they have successfully started 25 plants across the city to produce biogas from waste. But, a study done by a group of politicians and activists has revealed that none of these plants are actually producing electricity according to the plan. The activists are alleging that taxpayers’ money is being wasted, while PMC authorities have stated that only five of these plants are seemingly not functional but only because there are no streetlights surrounding the plant where electricity can be supplied. The problem of garbage disposal is not new for the city. Months have passed with PMC struggling to get a handle on waste piling up across the city. With the aim of implementing zero garbage models, PMC had partnered with Janawani Swach and others for various projects, one of which was the setting up of a biogas plant at Katraj which would produce electricity to be supplied to streetlights in the surrounding area. Following the success of this project, PMC went on to establish 24 new plants across the city. But, when a group of citizens, politicians and activists conducted a survey of these spots, they found out that these plants were merely actually releasing the biogas generated into the air every day.
Source: The Economic Times
7 April. Hydropower generation in India grew over 3 percent in 2017-18 after three-consecutive years of lean generation marred by below normal rains and less snowfall. Dry winter has affected the overall generation in the last quarter this year as well and snagged the generation at the country’s largest hydro company, National Hydro Power Corp by 1.7 percent compared to the last year. Less snowfall in North and scanty rains across country in period between January-March this year is likely to affect generation in the first quarter of next financial year as well. During summers, the agrarian states including Punjab require additional power to cater to demand for irrigation. Despite less rains in winter, other centre owned major hydro companies namely SJVNL and NEEPCO posted increase of 2.5 % and 15% in generation in the current financial year compared to the previous year. BBMB, another centre owned power-cum-irrigation major recorded 2.7 percent increase in generation in the current financial year compared to the last year. As low as 60 percent less rain in January and February this year has reduced the overall generation by 11 percent in March in the country. The generation had increased by less than a percent in FY 17 while it had recorded drop of 6 % in FY 16 and 4 % in FY 15 compared to respective corresponding period. In 2017-18, the generation grew to 126.1 percent billion units compared to 122 billion units in the previous financial year.
Source: The Economic Times
7 April. The country’s 100 GW solar mission target will be achieved ahead of its target in 2022, Minister for Science and Technology Harsh Vardhan said. In West Bengal, roof-top solar project has not picked up fast enough owing to regulatory hurdles. According to the present regulation, net metering is not allowed for single phase roof-top solar projects below 5 KW. The first floating solar project in the city will come up at Vikramgarh jheel close to South City Mall.
Source: Business Standard
7 April. Himachal Pradesh Chief Minister Jai Ram Thakur recently inaugurated the first grid-connected solar power plant in Shimla having a capacity of 35 KW, installed on the rooftop of the Department of Environment, Science and Technology. The power generated by the solar plant would be consumed by the building and remaining power would be sold to the Himachal Pradesh State Electricity Board Ltd. The project was completed by spending around Rs 20 lakh and the Department of Science and Technology would save Rs 2.6 lakh per annum. The project has sustainability of 25 years. Chief Minister Thakur said that the Himachal Pradesh government would encourage setting up of such power plants not only in the government establishments but also in private houses. The private players, who set up this plant, said that the state electricity board installed a bi-directional meter in the office premises for ensuring energy inflow and outflow from the solar plant to the main electric grid.
Source: Business Standard
6 April. The Goa Energy Development Agency (GEDA) has identified 13 sub-division offices of the Goa electricity department in the state that will be solar powered. Six sub-division offices in South Goa and seven in North Goa will have grid connected rooftop solar plants. The agency has floated a tender for the 410 kilowatt peak (kWp) grid connected rooftop solar PV (photovoltaic) power plant project along with operation and maintenance for five years. The project will be funded under the integrated power development scheme (IPDS). In the second phase, the agency is looking at taking solar power to educational institutions and has already received proposals from them. A total capacity of 425 kWp of solar power has been installed in the state and connected to the grid through net metering which will also allow consumers to supply surplus power to the electricity department and earn from it. The tariff will be approved by the Joint Electricity Regulatory Commission (JERC). These solar installations are at Raj Bhavan, MPT, PWD office, NIT and GEDA among other offices. Solar installations can be installed on rooftops or they can be ground based within the premises. The state solar policy is in place and the government is now in the process of constituting a committee to frame the guidelines for the policy which will include details of loans and subsidies to be provided. The JERC in its latest tariff order has directed the department to publicise the solar policy and upload it on its website. It has also directed the department to facilitate stakeholders in rooftop solar power generation within the state. GEDA is in the process of hiring staff and will also have its own director. The department will work closely with the Goa electricity department to promote non-conventional forms of energy.
Source: The Times of India
April 6, 2018. Wind power tariff firmed up further to Rs 2.51 per unit in the auction of around 2,000 MW capacities conducted by Solar Energy Corp of India (SECI). Wind energy tariffs had reversed their downtrend in February auction to quote at Rs 2.44/unit against all-time low of Rs 2.43/unit in an auction conducted by Gujarat Urja Vikas Nigam Ltd December last year. Mytrah Energy (300 MW) and ReNew Wind Energy (TN) Pvt Ltd (300) are also successful bidder in the auction. According to industry experts, wind power tariff is firming up after dropping to all-time low of Rs 2.43 per unit. Wind power tariff had recovered to Rs 2.44 per unit in the auction for 2000 MW capacities concluded by the SECI in February this year. Of the six successful bidders, four had quoted Rs 2.44 while remaining two bid at Rs 2.45 per unit tariff. The tariff last year started its descend to touch a low of Rs 3.46 in the first round of auction for 1GW capacity by the SECI. The price fell further to Rs 2.64 in the second round of auction for 1 GW by the SECI in October 2017. Industry experts think that the tariff would not fall below the Rs 2.5 per unit level in near future. Low wind power tariffs are a big boost for clean energy in view of India’s target of having 60 GW wind energy capacities by 2022. At present, India has an installed wind capacity of 34 GW. The government has planned to auction 10 GW each in 2018- 19 and 2019-20.
Source: The Times of India
5 April. NITI Aayog has submitted a draft Cabinet note on developing a strategy for zero emission vehicles and ancillary technology. Minister of State for Planning Rao Inderjit Singh said that in order to promote electric vehicles, NITI Aayog in its role as government think tank has proposed the formation of six committees. He said that each committee, to be headed by the respective secretaries, will decide issues pertaining to finalisation of non-fiscal incentive; promotion of last mile connectivity; electric mobility in public transport; technology development of R&D electric mobility; charging infrastructure for electric mobility, and demand and supply side incentive.
Source: The Economic Times
5 April. Rooftop solar power generating systems with 200 KW capacity will be installed on 156 BRTS bus stops in the city. A private company into the business of solar power generation will install the system and maintain it for a period of 25 years. The Surat Municipal Corp (SMC) will purchase the power produced at concessional rates. SMC has invited tenders from solar power developer to survey and set up 200 KW solar power units at BRTS bus stops by adopting the Renewable Energy Service Company (RESCO) model. Under this model, the company will install and maintain the solar power system and civic body will purchase the electricity produced at a fixed rate for stipulated period of time. According to an estimate, a 200 KW rooftop solar power system generates nearly 250 units every month and 100 such panels would generate 25,000 units. A solar power company would provide SMC electricity at the rate of Rs 5.8 per unit against regular market rate of Rs 7.69 per unit, resulting in a saving of up to Rs 5.25 lakh in electricity bills. Besides solar power generation, SMC has also started giving contracts for setting up hoardings atop its bus stops.
Source: The Economic Times
4 April. Hyderabad-based solar solutions provider Freyr Energy has announced the completion of 640 KW solar roof-top projects in Manipur. This also includes one of the largest and first of its kind off-grid 100 KW battery powered systems in the country located at Manipur’s Central Agricultural University. The inverter maximizes solar power generation and helps stabilize power from the grid. It also has the functionality to smartly optimize and export solar power when the cost of grid power is at its highest, and draws power when it is low. The system helps withstand power fluctuations and guarantees power round the clock, and can also be monitored remotely. Apart from the Manipur University, the cumulative 600 KW also includes four 100 KW system each in City Convention Centre, Interstate Bus Terminus, National Sports Academy Hostel in Imphal. The project supports the Khwairamband Bazaar through a 50 KW system, which is incidentally, the world’s only all-women marketplace and one of Imphal’s main tourist attractions. The systems have been installed at various government buildings post winning the tender by Manipur Renewable Energy Development Agency.
Source: Business Standard
4 April. State-run power equipment maker BHEL said it has fully commissioned the 330 MW Kishanganga hydroelectric project in Jammu and Kashmir (J&K) with the synchronisation of its third unit. The first two units of the project were commissioned last month. All the three units have been commissioned within a short span of 18 days, BHEL said. Developed by state-run hydropower giant NHPC Ltd, the project is located on the tributary of the river Jhelum, in Bandipora district of J&K. The 3×110 MW Kishanganga project will be able to generate 1,350 million units of clean electricity annually, facilitating reduction of greenhouse emissions. BHEL has so far commissioned 33 Hydro sets with a cumulative capacity of 1,477 MW in J&K.
Source: Business Standard
4 April. NuPower Renewables Pvt Ltd is exploring the sale of its wind power portfolio, said two people aware of the development. The renewable energy company has tasked Ambit Capital with finding a buyer, one of the two people cited above said, requesting anonymity. NuPower has denied any such move. Videocon chairman Venugopal Dhoot allegedly had dealings with NuPower, founded by Deepak Kochhar. To be sure, NuPower had explored the sale of its wind power projects in the past without success. It has around 700 MW of clean energy portfolio. Of this, the firm has an operational wind power capacity of around 177.85 MW. It has also manufactured 2.05 MW wind turbines with German technology from Wind to Energy GmbH. India’s wind power sector is going through a phase of consolidation, partly triggered by record low green energy tariffs in government auctions.
Source: Livemint
9 April. Nigerian energy company Neconde has launched an arbitration case against Royal Dutch Shell, the West African firm’s chief executive officer Frank Edozie said, alleging the oil major continued to lift crude and failed to remit funds after a lease had been sold. The oilfield in question, Oil Mining Lease (OML) 42, is also at the center of corruption allegations. Shell filed a criminal complaint against a former employee in late March over suspected bribes in the $390 million sale of the field. He said the company bought a stake in OML 42 from Shell in April 2011. He alleged the oil giant continued to produce crude there until the petroleum ministry approved Neconde’s license in November that year. He said crude production at the oilfield stood at around 80,000 barrels per day (bpd) and it aimed to increase that to 110,000 bpd by the end of 2018.
Source: Reuters
6 April. Chevron has submitted a proposal to extend its contract to operate the Rokan oil block in Indonesia beyond 2021, Deputy Energy Minister Arcandra Tahar said. Chevron’s proposal is now being evaluated by upstream oil and gas regulator SKKMigas, Tahar said. Chevron recently received government approval for plans to drill additional wells in six fields (Sidingin, Hitam, Petapahan, Pematang, Ampuh and Sikladi) within the Rokan PSC this year. Tahar said the government was currently evaluating 23 oil and gas contracts due to expire up to 2026, and will prioritize decisions on those expiring soonest. The contract for the Corridor block operated by a unit of ConocoPhillips is due to expire in 2023. Indonesia recently adopted the gross split mechanism for new and expiring oil and gas production sharing contracts, whereby contractors shoulder the cost of exploration and production, rather than being reimbursed by the government.
Source: Reuters
6 April. State-run oil company Petroleo Brasileiro SA (Petrobras) said it had initiated the binding phase of the process to sell exploration, development and production rights related to three shallow-water oil fields in Brazil. The company said investors who qualified to bid in the initial phase of the process will receive instructions to carry out due diligence as well as guidelines for sending binding proposals. The Pargo, Sergipe and Merluza fields are respectively located in Rio de Janeiro, Sergipe and São Paulo.
Source: Reuters
6 April. Pakistan State Oil (PSO) issued its first fuel oil import tender for the year after suspending purchases at the end of 2017 ahead of an expected pickup in demand during summer. PSO, Pakistan’s main oil importer, in December halted imports of fuel oil amid an abrupt drop in domestic demand as the South Asian country turned to liquefied natural gas (LNG) to fuel its power sector. The state-owned oil company issued a tender notice inviting bids for the supply of an unspecified amount of high-sulfur and low-sulfur fuel oil for delivery over May 25-June 10 and June 11-June 30. Traders said the tender document was released. The resumption in PSO’s fuel oil imports is expected to strengthen the regional market and restrict exports of the fuel from the Middle East, where most of Pakistan’s fuel oil is supplied from, traders said. But technical issues at some of Pakistan’s newest gas-fired power plants could also be feeding the country’s renewed appetite for fuel oil. Before suspending imports, PSO typically tenders for about seven 65,000 tonne cargoes of high-sulfur fuel oil and around two 55,000 tonne cargoes of low-sulfur fuel oil each month. On average, PSO imported about 400,000 to 650,000 tonnes of fuel oil a month in 2017. It last issued a fuel oil import tender in late 2017 for January delivery, but later canceled it. The drop in Pakistan’s fuel oil demand had also led to a buildup in domestic supplies, prompting PSO to issue a rare export tender for at least two fuel oil cargoes at the start of the year.
Source: Reuters
6 April. Kazakhstan hopes to settle a profit sharing dispute with global energy companies developing the Karachaganak gas condensate field by June, its Deputy Energy Minister Magzum Mirzagaliyev said. Eni and Shell have the biggest stakes in the Karachaganak project, which they jointly operate. Kazakhstan filed a $1.6 billion claim against foreign firms developing the Karachaganak gas condensate field in 2015. The energy ministry has said the row was over how each party’s share of the field’s output was calculated. Eni and Shell each own 29.25 percent of the Karachaganak project in northwest Kazakhstan, while Kazakhstan’s KazMunayGaz owns 10 percent, Chevron Corp has 18 percent and Lukoil owns 13.5 percent.
Source: Reuters
6 April. Asian oil traders are stumped by how Saudi Arabia derived its official selling prices (OSP) for May after the world’s top oil exporter unexpectedly raised the price for its flagship Arab Light crude sold to Asian refiners. State oil giant Saudi Aramco deviated from its usual pricing formula by increasing Arab Light’s official selling price for May by 10 cents per barrel to a premium of $1.20 a barrel to the average of Oman and Dubai quotes. Market participants were expecting a cut of between 50 cents to 60 cents a barrel in a survey. Some predictability in how producers set their prices allow refiners to plan their purchases. Saudi Aramco typically sets the Arab Light crude price each month based on the price curve between the first-month and third-month cash Dubai prices published by S&P Global Platts.
Source: Reuters
6 April. OPEC (Organization of the Petroleum Exporting Countries) member Libya’s oil output is at around 1.05 million barrels per day despite a continuing outage since February at its 70,000 bpd El Feel oilfield. Production was lately fluctuating more or less around the 1.1 million bpd level. It is common for Libyan production to fluctuate due to poor infrastructure in the country. The western El Feel oilfield was shut on February 23 and state-owned National Oil Corp declared force majeure on crude loadings at the Mellitah oil terminal the following day. The shutdown was linked to a protest by members of the Petroleum Facilities Guards (PFG) over their pay and other benefits. While the PFG announced on March 7 that a deal had been reached to reopen the field it remains shut because of security concerns.
Source: Reuters
4 April. A new discovery off the coast of Bahrain is estimated to contain at least 80 billion barrels of tight oil, the kingdom’s biggest ever find, its Oil Minister Sheikh Mohammed bin Khalifa al-Khalifa said. Bahrain said it had discovered extensive tight oil and deep gas resources off the west coast of the kingdom. Tight oil is a form of light crude oil held in shale deep below the earth’s surface that is extracted with hydraulic fracturing, or fracking, using deep horizontal wells. He said he was not sure yet how much of the estimated 80 billion barrels was recoverable, but the kingdom aims to attract foreign oil and gas firms to develop the resources. The Bahrain field, produced around 50,000 barrels per day (bpd) in 2015, according to the United States Energy Information Administration. Bahrain and Saudi Arabia split annual revenues from the 300,000 bpd Abu Safah offshore field where production is overseen by Saudi Aramco. The Bahraini government earned $4.3 billion in oil and gas revenue last year and ran a budget deficit of $2.7 billion.
Source: Reuters
10 April. US (United States) natural gas prices could rise in 2018 after utilities pulled the second biggest amount of gas from storage on record over the winter, even though the season was slightly warmer than normal. That left total stockpiles about 20 percent below usual at the end of the heating season on March 31, and will require companies to add 16 percent more gas than usual into storage this summer just to get inventories back to normal levels before next winter. Some analysts think the market is putting too much weight on rising production to refill inventories this year, and is not worried enough about a projected increase in domestic demand and exports. Prices for gas at the Henry Hub benchmark in Louisiana have averaged less than $3 per million metric British thermal units (mmBtu) since 2015, versus more than $5 over the prior 10 years, and are expected to remain below $3 through at least 2024 based on current futures trading on the New York Mercantile Exchange. US dry gas production is projected to rise to an all-time high of 81.7 billion cubic feet per day (bcfd) in 2018, but US consumption is also expected to hit an all-time high of 78.2 bcfd in 2018. With exports rising to record highs as well, it does not leave a lot of extra gas to go into storage.
Source: Reuters
9 April. BP plc announced that, together with its partner Oman Oil Company Exploration & Production, it has approved the development of Ghazeer, the second phase of the giant Khazzan gas field in Oman. The final investment decision (FID) for Ghazeer follows the successful start-up of Khazzan’s first phase of development in September 2017. This project, which started production ahead of schedule and under budget, is now producing at design capacity of around 1 billion cubic feet (bcf) of gas per day and around 35,000 barrels per day of condensate, BP revealed. Ghazeer is expected to come onstream in 2021 and deliver an additional 0.5 bcf of gas and over 15,000 barrels of condensate per day.
Source: Rigzone
5 April. The state-run energy firms of Chile and Argentina said they had inaugurated a $354 million project to increase production of natural gas off the southern tip of South America. The project, operated by Chile’s state-run ENAP in partnership with YPF, will boost production of natural gas to 4 million cubic meters daily from the current 2.4 million, while increasing petroleum production by nearly 25 percent at the site, the firms said.
Source: Reuters
5 April. Finland has approved the construction of the Nord Stream 2 gas pipeline through Finland’s economic zone, the Finnish government and Russian gas exporter Gazprom said. The pipeline between Russia and Germany, which would run for around 375 kilometre (km) across Finland’s economic zone through the Baltic Sea, still requires a construction permit from local Finnish authorities. Nord Stream 2, planned to run from Russia across the bed of the Baltic Sea to Germany, would double the existing Nord Stream pipeline’s current annual capacity of 55 billion cubic meters. Eastern European and Baltic states fear the pipeline could increase reliance on Russian gas and undermine Ukraine’s role as a gas transit route, but Germany and other beneficiaries in northern Europe back the project. Germany has approved the pipeline and the project is currently collecting permits from Russia, Sweden and Denmark.
Source: Reuters
5 April. South Korea expects its natural gas demand to rise to over 40 million tonnes (mt) in 2031, driven by higher household and industrial consumption of the fuel, the energy ministry said. The world’s third-largest liquefied natural gas (LNG) importer had previously forecast natural gas demand falling to 34.65 million tonnes of LNG equivalent in 2029 from 36.49 million tonnes in 2014 due to lower power generation demand. The increased demand forecast of 40.49 million tonnes of LNG in 2031 from estimated 36.46 million tonnes in 2018 comes as South Korea shifts away from coal and nuclear fuel. Reflecting the country’s growing gas demand over the next 13 years, South Korea also plans to spend about 5.8 trillion Korean won ($5.48 billion) by 2031 on expanding its gas supply infrastructure including storage tanks and pipelines. Household and industrial consumption of LNG is expected to grow by 1.24 percent annually to 23.40 million tonnes in 2031 from 19.94 million tonnes in 2018. For power generation, it is expected to increase to 17.09 million tonnes of LNG in 2031 from 16.52 million tonnes in 2018. To ensure gas supply security, South Korea also seeks to diversify gas supplies and have more flexible LNG contracts that do not include restrictive destination clauses or take-or-pay terms. Most of the long-term LNG contracts include the destination clauses that prevent buyers from reselling excess cargoes to other markets, and Asian LNG buyers have been vocal about the removal of the restrictive clauses. South Korea imports most of its LNG through the country’s sole LNG wholesaler Korea Gas Corp. Last year, South Korea imported 37.55 million tonnes of LNG, mainly from Qatar and Australia.
Source: Reuters
4 April. Argentine natural gas company Transportadora de Gas del Sur (TGS) will invest an initial $250 million on gas transportation infrastructure in 2018 and 2019 in the Vaca Muerta shale fields, the company said. TGS said it would build a 92 kilometre (57 mile) gathering pipeline with 1.3 billion cubic feet per day capacity and later a conditioning plant to adapt the quality of natural gas before it enters the transport pipelines. Overall investment will eventually reach an estimated $800 million with additional expansions planned, the company said. Insufficient transportation infrastructure has held back oil and gas production and investment in Vaca Muerta, the world’s second-largest shale fields. The TGS plant will have an initial capacity of 177 million cubic feet per day with expandable modules of up to 2.0 billion cubic feet per day.
Source: Reuters
10 April. China’s coal imports are expected to fall this year because of increased output at home, Zhao Jianguo, the vice chairman of China’s Coal Transportation Association, said. Arrivals from abroad will be 250 million tonnes, down 8 percent from 271 million in 2017, Zhao said. But shipments will drop because of greater domestic supplies and lower demand, he said. Output is expected to rise 5 percent. Executives at utilities are worried that customs will increase inspections of low-quality coal imports, such as those from Indonesia, potentially inflating prices, hurting their access to raw materials and denting profits. Beijing has banned coal imports at some smaller ports in southern China starting this month in a move to boost domestic prices.
Source: Reuters
10 April. A Colorado-based coal company with mines in Montana and Wyoming is considering restructuring options, including filing for bankruptcy protection, after seeing demand drop and dealing with more than $1 billion in debt. Westmoreland Coal Company said that it may seek bankruptcy protection from its creditors, or that an involuntary petition for bankruptcy could be filed against the company. Work at Westmoreland’s mines wouldn’t necessarily stop with a bankruptcy, just as it didn’t with other coal company bankruptcies in recent years including industry giants Arch Coal and Peabody Energy. Meanwhile, the company’s mines in Canada must contend with government policies that aim to phase out coal.
Source: The Economic Times
5 April. A coal ship that dropped anchor off the coast of the Indonesian port city of Balikpapan on Borneo island was likely to blame for an oil spill, after dragging a pipeline more than 100 meters and causing it to crack, the energy ministry said. Oil and Gas Director General Djoko Siswanto did not identify the vessel, but said it was a coal ship with a Panama flag. Balikpapan is a bustling mining and energy hub, sitting on a shipping lane serving one of Indonesia’s biggest thermal coal mining regions.
Source: Reuters
5 April. London-listed power generator ContourGlobal hopes to secure an equity partner for its new coal-fired power plant in Kosovo by the end of the year or early 2019, its chief executive officer Joseph Brandt said. Several financial institutions, such as insurers AXA and ING have announced plans divest from coal-based investments as part of a move to limit global warming. However, Brandt said he is confident of securing financing and a partner, for an up to 49 percent stake in the 500 MW coal plant. Kosovo is struggling with power shortages and around 90 percent of its power is produced in two ailing coal-fired plants which are seen as among the worst polluters in Europe. The country’s government has endorsed the project and last year, Minister of Development Valdrin Lluka said it would help Kosovo’s economic growth rise to 5 or 6 percent in the coming years, up from around 4 percent in 2017. The company, which operates 83 power plants across Europe, Latin America and Africa and generates about 4,039 MW, said revenue rose 13 percent to $1.02 billion in 2017.
Source: Reuters
4 April. Australia’s biggest energy producer, AGL Energy Ltd, came under pressure from the country’s Prime Minister (PM) Malcolm Turnbull to sell or keep running its coal-fired Liddell Power Station, after Alinta Energy expressed interest in a purchase. AGL had planned to shut the plant, which started operations in 1971, in 2022 as part of a phased exit from coal. AGL, which bought Liddell and another coal plant for A$1.5 billion ($1.2 billion) four years ago, said it was approached by Alinta overnight to start talks, but no formal bid has been made.
Source: Reuters
10 April. Britain’s National Grid said it expects low demand for electricity this summer as small-scale renewables output increases and warned there could be times when there is more generation than needed. National Grid said peak transmission system demand for high summer (June-August) was forecast at 33.7 GW and the summer minimum at 17 GW. Summer electricity demand from the grid has been falling over the past few years due in part to a rapid increase in the amount of solar power generation on people’s homes and factory roofs.
Source: Reuters
9 April. Staff at the United States (US) Federal Energy Regulatory Commission (FERC) said they have preliminarily determined a unit of New Jersey energy company Public Service Enterprise Group (PSEG) violated electricity market rules by submitting incorrect cost-based bids. The company had set aside $35 million to cover potential liabilities related to the issue. The staff at FERC’s Office of Enforcement alleged in a notice dated April 5 that PSEG Energy Resources & Trade LLC made the “false and misleading statements” in the PJM market as early as 2005 through March 2014. PJM Interconnection operates the power grid in the US Mid Atlantic and Midwest region.
Source: Reuters
5 April. French consumer group UFC Que Choisir called for an investigation and tighter regulation of state-owned utility EDF, saying its virtual monopoly on power generation in France led to higher prices. UFC said a five-year study of nuclear plant utilization and wholesale power prices showed that when prices are low, EDF systematically underutilizes its nuclear reactors, leading to greater use of more expensive fossil fuel-fired power stations, which in turn leads to higher retail power prices. The consumer group estimated that these practices had boosted EDF’s income by about €3.2 billion ($3.93 billion) between 2012 and 2016 and had added about €2.4 billion to consumers’ bills between 2012 and 2016. For individual power consumers, whose average bill is around €800 per year, the extra cost was about 71 euros over the five-year period for EDF clients and 109 euros for the clients of EDF competitors such as Engie and Direct Energie, which partly rely on EDF-generated electricity. UFC president Alain Bazot said it is up to energy market regulator CRE or the French Competition Authority to investigate EDF’s practices. The UFC report also said that since 2015, cross-border power exchanges with Germany have been “dysfunctional”. It said this was because when wholesale prices are lower in Germany, relatively little power is imported into France, while when power prices are slightly cheaper in France, exports toward Germany are massive. France’s interconnectors are operated by EDF grid unit RTE.
Source: Reuters
4 April. A consortium of GE Power and Alstom Power was selected to build a 1,000 MW coal-fuelled power plant in Ostroleka for Polish state-run utilities Energa and Enea, Energa said. GE and Alstom offered to build the plant for 6 billion zlotys ($1.76 billion). In December Energa said three offers had been submitted to build the Ostroleka plant, all of which overshot the original budget of 4.8 billion zlotys.
Source: Reuters
10 April. Norwegian utility Statkraft is entering the Spanish market after signing a 15-year-long power purchase agreement to buy electricity from a subsidy-free Spanish solar plant, it said. The plant, a 170 MW facility that will be commissioned by end of 2018, is one of Europe’s first solar projects of this size to be built without state aid and will be developed by Germany’s BayWa Renewable Energy. Statkraft plans to supply the electricity via bilateral contracts to commercial companies and also through the wholesale market, where other traders can purchase it from Spain’s power exchange. Statkraft, a major hydropower producer in Norway that also runs an international markets business, will add the solar farm’s output to its portfolio of 15,000 MW trading capacity. BayWa’s solar plant will generate roughly 300 GW of electricity every year, enough to power about 93,000 households in Spain.
Source: Reuters
10 April. An influential Japanese energy panel left the door open to building nuclear plants to help meet long-term emissions targets, urging rapid technology improvements to allow industry to develop safer and more economic reactors. The advisory panel, whose recommendations will feed into a review of the country’s 2030 basic energy plan and its measures to cut carbon emissions by 2050, said Japan should reduce its dependence on nuclear power, shift from coal to gas and boost renewable energy. However, it listed nuclear power as an option for decarbonization in 2050, implying the possibility of new reactors, which is not part of the current policy of the Ministry of Economy, Trade and Industry. Nuclear faces strong public opposition in the wake of the deadly 2011 Fukushima disaster, with just five of the country’s 39 commercially viable reactors currently operating. The closures have boosted Japan’s reliance on coal and natural gas and it is currently the world’s fifth-biggest carbon emitter. The country has pledged to trim its emissions from 2013 levels by 26 percent by 2030 and by 80 percent by 2050. It is currently aiming for a 2030 electricity mix of 22-24 percent renewables, 20-22 percent nuclear and 56 percent fossil fuels including 27 percent gas and 26 percent coal. In the fiscal year to March 2017, fossil fuels accounted for 83 percent of Japan’s electricity, renewables 15 percent and nuclear just 2 percent.
Source: Reuters
10 April. First wind turbine installed at Scotland’s European Offshore Wind Deployment Centre, the first 8.8 MW turbine installed commercially in the offshore wind industry, Vattenfall said. The facility is an offshore wind test and demonstration facility being developed by Vattenfall’s Aberdeen Offshore Wind Farm Ltd. The turbine is the first of 11 to be deployed at the site in Aberdeen Bay. Another turbine’s capacity has also been increased to 8.8 MW from 8.4 MW. This boosts the facility’s output to 93.2 MW and it will produce 70 percent of Aberdeen’s domestic electricity demand First power is due to be generated this summer.
Source: Reuters
9 April. Royal Dutch Shell Plc is demonstrating how tough it is for a massive, 100-year-old oil company to become a friend to the climate. Shell’s greenhouse-gas emissions rose last year to the highest since 2014, it said. The increase shows the challenge facing Chief Executive Officer Ben van Beurden as his company grows to meet burgeoning energy demand while investors demand a clear path toward a low-carbon future. The company’s direct emissions increased to 73 million tons of carbon-dioxide equivalent in 2017 from 70 million tons a year earlier. That reflected output from refineries it acquired in the United States, included in the data since last May, and the restart of units at a manufacturing site in Singapore. Shell insists it’s working to cut greenhouse-gas output. The company plans to spend as much as $2 billion a year on low-carbon energy sources — the most among the so-called super majors — and intends to halve its carbon footprint by 2050. It has made strides in boosting energy efficiency at its plants and has pledged to reduce methane leaks and emissions.
Source: Bloomberg
9 April. The United States (US) Department of Interior has announced its plan to lease two additional areas offshore Massachusetts totaling 390,000 acres for development of wind energy projects. The proposed sale notice (PSN) for commercial wind power leasing offshore Massachusetts is expected to be published in the Federal Register on 11 April 2018 and will include 60 days of public comment period. The PSN will also be issued to affirm the continued interest from developers who are already been qualified for commercial wind development off Massachusetts, as well as to gather qualification materials from potential bidders who have been qualified for a wind lease sale in the state.
Source: Energy Business Review
9 April. German renewable fuel producer Natural Energy West is reducing biodiesel output by 50 percent because of surging European Union (EU) imports from Argentina and Indonesia, it said. The output cut will be immediate and for an indefinite period, said the company, which produces about 240,000 tonnes of biodiesel a year at its plant in Marl and is jointly owned by German cooperative AGRAVIS, agribusiness Bunge, France’s Diester International and German oilseeds crusher C. Thywissen. The move is the latest sign of problems in Europe’s biofuel industry after the EU’s March removal of duties on biodiesel imports from Argentina and Indonesia after legal proceedings at the European Court of Justice. The two countries had said the EU duties were unfair. EU producers, meanwhile, say that biodiesel from Argentina and Indonesia gains unfair state support that allows it to be sold at low prices in Europe. US (United States) agribusiness group Archer Daniels Midland Co said that was suspending production at a major biodiesel plant in Germany because of an increase in cheap imports.
Source: Reuters
6 April. Ukraine’s largest private power producer DTEK and China Machinery Engineering Corp (CMEC) said they had agreed a joint project to build one of Europe’s largest solar energy generators at a cost of €230 million ($282 million). The solar power station will be built in the central Ukrainian region of Dnipropetrovsk with a planned capacity of 200 MW, making it the third largest in Europe in terms of potential output. The project will be financed with a combination of DTEK funds and a loan from CMEC. The size of the loan was not announced. DTEK is a relative newcomer to solar power, having launched its first solar project – Tryfonivska Solar Power Plant with 10 MW capacity – last August. Ukraine’s energy sector remains heavily dependent on traditional fossil fuels and nuclear power. Last year renewable sources accounted for around 1 percent of total generation. DTEK plans to increase its renewable capacity to 1,000 MW in 2019.
Source: Reuters
5 April. Chinese solar power led a record 157 GW of new renewable energy capacity added worldwide last year, more than double the amount of new generation capacity from fossil fuels, a UN (United Nations)-backed report showed. Globally, a record 98 GW of solar power capacity was installed last year with China contributing more than half, or 53 GW. The new renewable energy generating capacity, also including wind, biofuels and geothermal energy, dwarfed the 70 GW of net new capacity from fossil fuels in 2017, it said. Fossil fuels, however, still dominate existing capacity. Solar, wind, biomass and other renewables generated 12.1 percent of world electricity in 2017, up from 5.2 percent a decade earlier, it said. Climate scientists have advised governments that renewables should be the world’s dominant source of energy by mid-century if they want to achieve the toughest goals set under the 2015 Paris climate agreement to combat global warming. Global investment in renewable energy rose by two percent to $279.8 billion in 2017 from a year earlier. China invested the most in renewables at $126.6 billion – its largest amount ever and 45 percent of the global total. The report said the cost of generating electricity from large-scale solar photovoltaic technology fell by 15 percent last year to $86 per megawatt hour. In the United States, renewable energy investment fell by six percent in 2017 to $40.5 billion. However, it was relatively resilient to policy uncertainties under President Donald Trump, who wants to promote fossil fuels, the report said. Europe’s investment in renewables plunged by 36 percent to $40.9 billion due to factors including the end of subsidies in some countries for solar and wind and lower technology costs.
Source: Reuters
4 April. Australian renewable energy firm Epuron has secured planning consent from the New South Wales (NSW) Government for the proposed 1 GW Liverpool Range wind farm in the Upper Hunter region. Planned to be built between Coolah and Cassilis around 100km north east of Mudgee, the $643 mn wind project is expected to a major part of the electricity transition in NSW as older coal-fired power stations are decommissioned. The Liverpool Range wind farm will feature up to 267 wind turbines and will be grid connected into the Wellington Wollar 330 kilovolt (kV) power network 30 kilometre (km) south of the site. Epuron’s wind project, which is expected to take three years to complete, will benefit the local economy by injecting up to $250 mn and creating 800 new jobs.
Source: Energy Business Review
4 April. Prosody Investments I has completed its exit from a joint venture (JV) holding a portfolio of nearly 100 MW of late-stage, distributed solar photovoltaic assets across northeast US (United States). When placed into service later this year, the projects will provide discounted power to local cities and educational institutions, as well as long-term lease revenue to the governmental entity that owns the underlying real estate. In addition, construction will provide hundreds of good-paying jobs and significantly reduce greenhouse gas emissions.
Source: Energy Business Review
4 April. The leaders of Turkey and Russia marked the official start of work to build Turkey’s first nuclear power station, launching construction of the $20 billion Akkuyu plant in the southern province of Mersin. The plant will be built by Russian state nuclear energy agency Rosatom and will be made up of four units each with a capacity of 1,200 MW. Russian President Vladimir Putin and Turkey’s Tayyip Erdogan marked the start to construction, watching by video link from Ankara. Despite delays Turkey still planned to start generating power at the first unit in 2023. Erdogan said the cost of the project may exceed the planned $20 billion for the 4,800 MW plant, part of Erdogan’s “2023 vision” marking 100 years since the founding of modern Turkey and intended to reduce Turkey’s dependence on energy imports.
Source: Reuters
| Capacity Type | Capacity in MW | Type of Renewable Capacities | Capacity in MW |
| Renewables | 65, 546.58 | Small Hydro Power | 4, 476.66 |
| Coal | 1, 97, 171.5 | Wind | 32, 957.86 |
| Gas | 24, 897.46 | Biomass Power/Cogeneration | 8, 413.8 |
| Diesel | 837.63 | Waste to Energy | 114.08 |
| Nuclear | 6, 780 | Solar Power | 19, 584.18 |
| Hydro | 45, 293.42 | Total | 65, 546.58 |
| Grand Total | 3, 40, 526.6 | ||
Trends in Renewables & Solar Capacity
Source: CEA & MNRE
Publisher: Baljit Kapoor
Editorial Adviser: Lydia Powell
Editor: Akhilesh Sati
Content Development: Vinod Kumar Tomar
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