MonitorsPublished on Jan 28, 2023
Energy News Monitor | Volume XIX, Issue 30

Quick Notes

Discom Discipline: Managing what is Measured 


In June 2022, the Ministry of Power (MOP) notified the electricity late payment surcharge (LPS) and related matters rules, 2022. This was based on subsection (1) of section 176 of the electricity act 2003 (EA 2003) that gives the Central government powers to make rules by notification with the goal of carrying out the provisions of EA 2003. The rules provide a mechanism for settlement of outstanding dues of distribution companies (Discoms) to generating companies, inter-state transmission licensees and electricity trading licensees. Under LPS rules all outstanding dues including principal, late payment surcharge etc., are clubbed into a consolidated amount that can be paid in interest free equated monthly instalments (EMI). The number of EMIs depends on the quantum of outstanding dues with the maximum number of EMIs standing at 48. One-time relaxation is given to all Discoms under which the amount outstanding (includes principal and LPS) on the date of notification of the scheme is frozen without further imposition of LPS. Non-payment of dues by Discoms, one month after the due date of payment or two and half months after the presentation of power bill, whichever is later, shall attract regulation of power as laid down in the LPS rules, 2022. Regulation of power could mean, at the extreme, complete withdrawal of power supply by generating companies and phased reduction in access to transmission.  Power Finance Corporation (PFC) is the nodal agency for implementing the rule. The liquidation of outstanding dues in a phased manner without imposition of LPS is expected to give Discoms time to improve their finances.

Circular Debt

LPS rules were inevitable as the financial health of Discoms in 2020-21 was dire with the absolute cash-adjusted gap of the averaging around INR 1.04 trillion which was nearly 1.4 times the recorded losses according to Power Finance Corporation (PFC).  Total outstanding dues of Discoms to power generators increased by 4 percent year-on-year to about INR 1.32 trillion in June 2022 from INR 1.27 trillion in June 2021. Liabilities of Discoms were nearly twice their overall liquid current asset value in 2020-21.

Barring a few States, most Discoms were reportedly complying with LPS rules especially because access to traded power was reduced by 25 percent along with a reduction in supply of power to Discoms that did not comply with LPS rules. Outstanding dues of Discoms to generating companies declined sharply in August 2022 as strict penalties on defaulting Discoms were enforced. However, the payments made by Discoms to avoid harsh penalties was facilitated primarily by funding from PFC and the RFC (formerly Rural Energy Corporation, now REC Ltd) adding to the debt liability of the Discoms.  Once LPS rules were put in place, REC and PFC, both state-owned non-banking financial institutions focussed on the power sector, were advised to lend over INR 1.2 trillion to Discoms. The irony is that State governments have pending payments of subsidies and unpaid electricity bills of over INR 1.39 trillion which if settled, will allow Discoms to clear their outstanding debt.

LPS rules may bring significant improvement in liquidity and also in creation and maintenance of payment security mechanism.  As the LPS equalises the status of all players in the value chain with rules applicable to all generating companies including independent power producers, renewable energy generators and transmission companies (transcos) it will eliminate Discom practice of paying only those entities that were under regulatory supervision. Earlier the benefit of regulation of power was available only where the power purchase agreement (PPA) or transmission agreements explicitly included regulation of power access as a payment security. The elimination of differentiation will substantially improve receivables and the liquidity position of all generators. Enforcement of LPS rules may also ensure that the power sector attracts required investment.

The government has announced that outstanding dues of Discoms to generating companies will be eliminated by 2026. The Discoms will borrow to pay generating companies and the Government will claim that outstanding debt of Discoms has been successfully eliminated.  In reality the debt would have been merely transferred to financing agencies such as PFC and REC.  The previous restructuring scheme UDAY (ujjwal discom assurance yojana) was based on a similar concept whereby Discom debt was transferred to State governments.

According to PFC, aggregate losses of Discoms with tariff subsidy received excluding regulatory income (deferred tariff increases) and revenue grant under UDAY for loan takeover increased from INR 639.49 billion in 2019-20 to INR 885 billion in 2020-21.  Total revenue (including tariff subsidy billed, regulatory income, revenue grants and other income) of Discoms was about INR 7.14 trillion in 2020-21 whereas total expenditure was about INR 7.65 trillion indicating a cost recovery of 93.41 percent in 2020-21. Average cost of power (including own generation) for Discoms was INR 4.69/kWh in 2020-21 while the average cost of supply was INR 6.19/kWh. Interest & finance charges were INR 0.45/kWh and revenue from operations was INR 4.21/kWh while tariff subsidy received was INR 0.91/kWh. Revenue grant under UDAY for loan takeover and regulatory income was INR 0.71/kWh and cash adjusted gap was INR 0.95/kWh in 2020-21.  The overall trend is an increase in Discom liabilities notwithstanding the long list of Discom restructuring programmes undertaken by various governments over the last three decades.


The power sector in India is a significant part of the welfare politics in India based on redistribution of limited resources. Unlike the affluent West that has a surplus to distribute universally among its population, redistributive policies in India (and elsewhere in the Global South) with limited economic surpluses to dispense, are not based on the vantage point of the reasonably wealthy but on the poor and their need for basic goods such as electricity.  In India welfare programmes such as the offer of free or subsidised electricity are instruments of socio-economic and political transformation and political actors use their control over government resources such as electricity to reinforce their electoral advantage. In India over 27 states including those ruled by parties that oppose distribution of free goods, offer free or subsidised electricity.  A petition filed by the Association of Power Producers (APP) for intervention by the Supreme Court in “in the financially crippling crisis faced on account of populist schemes and unjustified freebies (such as free or subsidised electricity) being announced by competing political parties for electoral gains”. The rhetoric of against free distribution of electricity and other goods from the Government is aimed to placate interests of private enterprise which underwrite electoral expenditure of political parties in return for policies that ensure profit from participation in certain segments.  The responses such as UDAY and its variants and now the LPS that seek to discipline Discoms frame the problem as one of financial mismanagement or economic inefficiency of Discoms while skirting the fundamental issue of welfare politics in India that influence Discom finances. Discoms will manage what is measured but this does not constitute transformational change.

Source: Power Finance Corporation

Monthly News Commentary: NON-FOSSIL FUELS

States Energise Solar Projects


Roof Top /Distributed Solar Projects

The Central Government has extended the Rooftop Solar Programme till 31 March 2026. The subsidy under the programme will be available until the target under the Programme is achieved. The government has advised all residential consumers to not pay any additional charges to any vendor on account of fee for application on the National Portal or any additional charges for net-metering/testing which are not prescribed by the respective distribution company. On the National Portal, any consumer willing to install rooftop solar from any part of the country can apply and track complete process starting from registration to release of subsidy directly into his bank account. The subsidy under National Portal has been fixed at INR14,588/kW (for capacity upto 3 kW) for the entire country and residential consumers have to install rooftop solar plant from any one of the vendors registered by the respective distribution company of their locality.

Punjab Government is planning to equip all state government buildings with solar power. The step is aimed at further strengthening clean energy infrastructure in the state. Punjab New and Renewable Energy Sources Minister Aman Arora said he had written a letter to heads of all departments in this regard. Their consent had been sought to install solar photovoltaic (PV) panels on the rooftops of office buildings under Renewable Energy Services Company (RESCO) Mode. All heads had also been directed to appoint a senior officer of their departments as a nodal officer to coordinate with the Punjab Energy Development Agency (PEDA) to smoothen the process of solarising the building of the departments concerned, Arora said.

Millions of families depending on the powerloom and handloom sector for a living in 34 weaver-dominated districts of Uttar Pradesh (UP) are set to benefit from the recent approval of the proposal for energising the sector with solar power in a phased manner by the state cabinet headed by Chief Minister Yogi Adityanath in future. Under the proposed scheme, general category weavers and those from Scheduled Castes and Scheduled Tribes category will get a subsidy of 50 percent and 75 percent, respectively. Connecting handlooms and powerlooms with solar energy in a phased manner is in line with Adityanath’s intention to make UP the textile hub of the country. As this scheme is to be implemented in a phased manner, the decision of the UP Cabinet is expected to gradually end the dependence of weavers on electricity. According to the plan, the government will give incentives to weavers using solar energy in their workshops and also provide them with solar inverters.  The Yogi government has made a provision of INR100 million (mn) (US$1.22 mn) in the budget to energise the powerlooms sector with solar power.

With Giridih gearing up to become the state’s first solar city, the Jharkhand government has set an ambitious target of equipping 1,000 villages with solar lights across the state under Jharkhand State Solar Policy 2022 of which 200 villages will be solarised in the first phase by 2023. Chief Minister Hemant Soren’s office in a communique said the move will boost to rural economy, improve the quality and reliability of solar power, enhance rural income generation, strengthen education and health services and provide a host of employment opportunities by integrating solar power into the rural economy. Under the policy, the state energy department is working on modalities of electrifying villages through community-based solar installation. Districts have also been directed to identify land banks/chunks in villages that can be put to use to lay solar panel web.

Utility Scale Solar Projects

Tamil Nadu Generation and Distribution Corp Ltd (TANGEDCO) will float tenders to set up a solar park in Thiruvarur district, marking the beginning of the state’s plan to set up 20,000 MW solar energy generation capacity, covering all districts in 10 years. Thiruvarur will get TANGEDCO’s first district-level solar park. Initially, the plan is to set up solar energy power generation capacity of 4,000 MW and 2,000 MW of battery energy storage systems across the state. Chief Minister (CM) M K Stalin is scheduled to launch the Tamil Nadu climate change mission. The district administrators have identified 6,333 acres for setting up solar parks as part of the state-wide exercise. The identified locations are in Salem (5,820 acres), Thiruvarur (143 acres), Karur (54 acres), Chengalpet (142 acres) and Kancheepuram (139 acres). As per the notification issued by the Union ministry of new and renewable energy in July, the revised renewable purchase obligation trajectory for 2029-30 has been fixed at 43.3 percent. Tamil Nadu has the highest installed wind energy generation capacity of 8,685 MW in the country, which is 25 percent of the nation’s wind power generation capacity. It stands fourth in the country in terms of installed solar capacity (5,694 MW).

NTPC Ltd has crossed the milestone of 1 GW (gigawatt) annual capacity in renewable energy (RE) segment by adding 1074.59 MW (megawatt) RE capacity in FY23. With this, standalone installed and commercial capacity of NTPC has reached 57,801.27 MW, while group installed and commercial capacity stands at 70,416.27 MW, the company said. As per the NTPC, the 150 MW and 90MW Devikot Solar PV project is being developed in under the CPSU Scheme Phase-II Tranche-I of Ministry of New & Renewable Energy, Government of India (MNRE).  At present, the NTPC has a commissioned renewable energy capacity of 2,332 MW. Overall, the installed power generation capacity, including fossil-fuel based, of the NTPC Group (including joint ventures and subsidiaries) stands at 70,254 MW. The government has set the target of having 500 GW of power generation capacity from clean sources like solar, wind, and hydro plants by 2030.

Adani Green Energy Ltd (AGEL) announced commissioning of its third hybrid power plant in Rajasthan having generating capacity of 450 MW. With this hybrid plant, Adani Green Energy has the largest operational hybrid power generation capacity of 1,440 MW. Earlier, in May 2022, AGEL had operationalized India’s first hybrid power plant of 390 MW. With the successful commissioning of this 450 MW plant, AGEL has a total operational generation capacity of 7.17 GW. Part of the Adani Group, AGEL has one of the largest global renewable portfolios with an overall portfolio of 20.4 GW including operating, under-construction and awarded assets.

RE Policy and Market Trends

India could attract close to US$10 billion (bn) in renewable energy investment in 2023, a bright spot as public markets remain largely shut to big-ticket capital raising, according to Bank of America Corporation. As per the bank, deals and investments will continue to flow into areas such as electric vehicles and green hydrogen. The bank is of the view that sectors such as renewable energy and retail are set to benefit as India pulls ahead of emerging market rivals in attracting overseas investors. Even as deal making globally has been hit by rising interest rates and market volatility, the South Asian nation’s geopolitical stability helps position it for greater inflows. According to the bank, investors and companies attending the bank’s recent North American roadshow were impressed by the Indian government’s clear targets to achieve net zero carbon. The bank highlighted that it will continue to build out its distressed debt financing business in the renewable energy sector, which has generated double-digit returns.

To help decarbonise the energy sector by promoting renewable energy, the government has brought the Odisha Renewable Energy Policy, 2022. The policy aims to make industries increase renewable energy production as they have to do so as per the renewable purchase obligation (RPO) trajectory fixed by the Centre within 2030. The industries and power distribution companies (discoms) will have to achieve 43 percent RPO by 2030. To make it happen, the policy encourages huge incentives for industrial houses. During the policy period (2022-2030), the industries will be offered incentives such as exemption of INR 0.50/kWh on consumption of electricity for 20 years. The policy is a robust one that encompasses many facets of energy transition. It enables industries and discoms to meet their RPO targets and ensure development of renewable energy projects. A nodal agency will be selected to implement the project. The nodal agency will create a single window platform for approval of all renewable energy projects in a time-bound manner.

A team, including researchers from the Indian Institute of Technology (IIT) Mandi, has developed a new material that can generate electricity from household light sources like LED (light-emitting diode) or CFL (compact fluorescent lamp). A LED is a semiconductor device that emits light when current flows through it while a CFL is a fluorescent lamp that uses a tube which is curved or folded to fit into the space of a light device. The research, published in the journal Solar Energy, supports the internet of things (IoT) technology that is being increasingly used in mobile phones, smart homes, and other applications that require various kinds of real-time data. These IoT devices are required to run independently without being dependent on electrical grids for power supply. Primary and secondary batteries are currently used to power such devices, the researchers said.

Panasonic Life Solutions, the Indian arm of Japanese consumer electronics and white goods giant, has chosen India as a base for expanding production of solar gears to serve the domestic and select export markets. According to the company, the decision to localise comes amid recent government policies to curb imports and increased supply chain issues with Chinese imports. Government policies also influenced to “some extent” Panasonic’s decision to go vocal for local and added that efforts in other countries to find an alternate supply chain to China in terms of sourcing also presents Panasonic India export opportunities. The company is launching solar inverters for homes to tap opportunities presented by rooftop and net metering policies and testing a homegrown prototype net metering as it aims to quadruple solar business turnover to INR10 bn (US$122 mn) in the next 3-4 years.

Wind Power

ACME Group announced its foray into the wind power business with a 50 MW project in Gujarat. At present, ACME operates solar power plants in 12 States and supplies electricity to 13 state distribution companies (discoms). The company was awarded the project through a tariff-based competitive bidding process for the procurement of power from grid-connected wind power projects. The project should be commissioned within 24 months from the signing of the power purchase agreement. Electricity from the project will help light up nearly 6 million homes. In addition to the new wind power projects, ACME is in the process of setting up and commissioning solar power projects of 2,600 MW in Rajasthan. It also set up the world’s first integrated pilot project for green hydrogen and green ammonia plant at Bikaner in Rajasthan.

Nuclear Power

According to the department of atomic energy (DAE), India is taking steps for the development of small modular Reactors with up to 300 MW capacity to fulfil its commitment to transitioning towards clean energy. It said the participation of the private sector and start-ups needs to be explored in the development of this critical technology within India. It said the exploration of new clean energy options is in tune with Prime Minister Narendra Modi’s roadmap for clean energy transition through bold climate commitments which are reflected in the updated Nationally Determined Contributions.

According to the DAE, the country plans to commission 20 nuclear power plants by 2031 and will add nearly 15,000 MW to its power generating capacity. As per the department, the first two reactors of the 20 nuclear power plants, a 700 MW unit each, is expected to be commissioned next year in Gujarat’s Kakrapar, which already has three atomic power generating units operational. As per a physical progress report till October this year, the nuclear plant is nearing completion with 97 percent of the work done. The 500 MW Prototype Fast Breeder Reactor at Kalpakkam is likely to be operational in 2024 and the reactor is also 97.6 percent complete. It will be followed by two 1,000 MW units at Tamil Nadu’s Kudankulam nuclear plant in 2025. Two 700 MW units at Rawatbhata in Rajasthan are likely to be completed by 2026, while another two 1,000 MW units are likely to be completed at Kudankulam by 2027. It informed that two 700 MW units are expected to be completed at Gorakhpur in Haryana by 2029. The DAE is of the view that nuclear power can provide the country with clean base load power and reduce dependence on coal and traditional sources of energy in the long run. Nuclear Power would also supplement clean renewable energy. The government has approved five new sites for nuclear power plants and given the financial go-ahead to build ten 700 MW pressurized heavy water reactors.

Carbon Capture and Storage

Oil and Natural Gas Corporation Limited (ONGC) signed a Memorandum of Understanding (MoU) with global petroleum giant Shell on 7 December 2022, for cooperation in Carbon Capture, Utilization and Storage (CCUS) studies. The MoU is aimed at developing CCUS or CCUS/carbon capture and storage (CCS) as an emissions mitigation tool for combating climate change and injecting carbon dioxide (CO2) for geological storage as well as enhanced oil production from mature fields of ONGC.

Rest of the World


Global renewable power capacity growth is set to double over the next five years, driven by energy security concerns in the wake of Russia’s invasion of Ukraine, the International Energy Agency (IEA) said. The IEA said capacity worldwide is expected to grow by 2,400 GW – equal to the entire power capacity of China today – to 5,640 GW by 2027. The IEA said renewables are set to account for over 90 percent of global electricity expansion over the next five years, overtaking coal to become the largest source of global electricity by early 2025. Global solar photovoltaic capacity is set to almost triple by 2027, becoming the largest source of power capacity in the world, while wind capacity is set to almost double. Meanwhile biofuels demand is set to increase by 22 percent by 2027, the IEA said.

North & South America

According to Brazilian power company, Eletrobras, they have signed a cooperation agreement with Shell to exchange information as they mull a potential co-investment in offshore wind power in the South American country. The move marks another step for Shell in the sector in Brazil, where it already has several offshore wind projects pending approval from environmental authorities. The company, which is mostly focused on hydroelectric power plants, noted that offshore wind farms have been recently boosted by energy policies related to environmental concerns.

The United States (US) will impose new duties on imports from some major Chinese solar panel makers after a months-long investigation found they were trying to dodge tariffs by finishing their products in Southeast Asian countries, traders said. The preliminary decision was bad news for US solar project developers that rely on cheap imports to fuel their growth, but fell short of the industry’s worst fears that Washington would impose new tariffs to cover all solar shipments from the region, instead of just those from specific companies. US President Joe Biden has set a goal to decarbonize the nation’s power sector – the source of around a quarter of national greenhouse gas emissions – by 2035, something that will require rapid deployment of new solar, wind and other clean energy projects.


Germany’s power production from renewable energy rose in 2022, but it is still below the threshold needed to reach the target of generating 80 percent of electricity from renewables by 2030, the Environment Agency said. Renewable energy is expected to account for around 46 percent of German power consumption this year, up from 41 percent a year earlier, the agency said. Some 256 terrawatt hours (TWh) were generated last year, mainly from wind and solar power, up 9% year-on-year, but still below the target of 269 TWh for the year in order to achieve the goal of around 600 TWh by 2030, the agency said. With the goal of becoming carbon neutral by 2045, Berlin raised its renewable energy targets this year and passed several bills to ease restrictions and accelerate the rollout of wind and solar power, declaring the expansion to be of “outstanding public interest”. The need for renewables became ever more urgent with the decline of Russian fossil fuel imports to Europe’s biggest economy following Moscow’s invasion of Ukraine. Only around 0.8 percent of land in Germany is currently designated for onshore wind power. Berlin earlier this year drafted a bill setting out a minimum percentage of land in each of the 16 federal states that must be available for wind farms.

Africa & Middle East

Zimbabwe has proposed incentives to accelerate 1,000 (MW) of privately owned solar energy projects worth about US$1 bn, Finance Minister Mthuli Ncube announced, as the country scrambles to plug an electricity deficit that threatens to compound its economic woes. The southern African country is currently generating about a third of its 2,000 MW peak power demand and experiencing up to 18 hours of power outages daily after its main Kariba hydropower plant cut electricity generation due to low water levels. Zimbabwe’s drive towards generating 1,100 MW from renewable energy sources by 2025 has been slowed by lack of investment by independent power producers (IPPs) spooked by the country’s currency volatility and uneconomic tariffs.

The Egyptian government has finalised agreements with Emirati firm AMEA Power to build a solar park and a wind farm with a combined capacity of more than a gigawatt in a US$1.1 bn deal, the cabinet said. The deal provides for AMEA to build a 560 MW solar plant in southern Egypt and a 505 MW wind farm on the Red Sea coast, and is supported with debt and equity financing from the International Finance Corporation (IFC) and several development and commercial banks. Power from the solar park and the wind farm will be priced at two US cents per kilowatt hour and three US cents per kilowatt hour respectively, the lowest rates in Africa and among the lowest globally, the IFC said. Construction of both projects is due to start in December 2022, with completion of the Abydos solar plant expected after 18 months and of the Amunet wind farm after 30 months. The deals provide a boost for Egypt’s lagging renewable power development, shortly after it hosted the COP27 United Nations climate summit. The share of non-hydro renewable power in Egypt’s total energy mix was just 5 percent 2021, well below potential, the World Bank said in a report.

Asia Pacific

The Australian government has agreed to underwrite new wind and solar farms backed by energy storage, in hopes of unleashing investment at least A$10 bn (US$6.7 bn) to stabilise the grid as coal-fired plants retire. Energy Minister Chris Bowen said the government would hold tenders for the capacity and agree floor and ceiling revenue for the projects. If revenue is below the floor, the government will pay the difference, and if the ceiling is exceeded, it will share in the profits.

Australia is on track to meet recently beefed-up climate action targets once a raft of new measures, including a A$15 bn (US$10.20 bn) national reconstruction fund, is implemented, the government said. Energy Minister Chris Bowen said the target of a 43 percent reduction in emissions would be hit once various proposals are implemented, including an electric vehicle strategy and the A$15 bn national reconstruction fund currently before parliament.

Spain’s Acciona Energia announced plans to build a wind farm worth A$2 bn (US$1.34 bn) in Australia, nearly doubling its investment and generation capacity at a site in the northeastern state of Queensland. The 1,000 MW Herries Range wind farm will be built at the MacIntyre Wind Precinct, where the renewable energy and infrastructure conglomerate is already building a 923 MW wind farm alongside a state-owned one. Queensland has been pushing to attract investment in wind and solar farms as it wants 70 percent of the state’s power supplied by renewable energy by 2032 and hopes to create more jobs.

News Highlights: 21 – 27 December 2022

National: Oil

Centre holds review meeting on 12 percent ethanol blending with petrol for 2022-23

27 December: The Central government plans to achieve 12 percent ethanol blending with petrol in 2022-23. Top officials from the food and public distribution as well as petroleum ministries held a meeting to review the progress of the target. Secretaries from both the ministries and oil marketing companies and chairman of Food Corporation of India (FCI) were also present in the meeting. Ethanol industry showed confidence to supply sufficient ethanol to meet the targets. In India, it is largely derived while extracting sugar from sugarcane. However, other organic matter like food grains can also be used for its production. The government has launched the Ethanol Blended Petrol (EBP) programme to mix this biofuel with petrol to reduce the consumption of fossil fuel.

Taking all steps to ensure crude oil supplies: Government

22 December: The government said it is taking all steps to ensure crude oil supplies and mitigate the risk of dependence on a single region. Minister of State for External Affairs Meenakashi Lekhi said that import of crude oil is carried out by Indian Oil and refining by companies in the public and private sectors from diverse sources through business to business arrangements. India has been ramping up procurement of crude oil from Russia notwithstanding increasing disquiet by several Western countries over Moscow’s military invasion of Ukraine. The Gulf region has been a reliable source of energy for India for a long time. The Minister said the government is regularly engaged with the US (United States) on all matters of mutual interest, including ease of travel between the two countries.

National: Gas

India revises gas procurement rules for fertiliser firms to cut costs

22 December: India has revised the gas procurement policy for fertiliser companies, allowing them to buy about a fifth of their monthly needs through the domestic spot market to help the government cut its subsidy bill. The government provides financial support for domestic fertiliser sales at rates below the market to insulate farmers from high prices and to contain inflation. The government expects to cut its fertiliser subsidy bill by up to INR240 bn if the fifth of companies’ supplies is bought through bilateral contracts or gas exchange. The government has amended 2015 gas procurement guidelines under which fertiliser plants had to procure 80 percent of their gas through long-term contracts, and the balance through three-month tenders. Fertiliser plants can source gas through the Indian Gas Exchange and inter-company contracts. The new rule also allows fertiliser companies to withdraw tenders if they feel the bidding has led to higher-than-expected prices. Fertiliser plants bought gas at US$38 per million metric British thermal units (mmBtu) for supply in the October-December quarter through a tender. The maximum price quoted in the tender was US$55 while gas was available at the Indian Gas Exchange and bilateral markets for US$15 to US$20 per mmBtu.

National: Coal

CIL’s coal quality soars 18 percent, tech in place to improve the quality further

27 December: There has been a substantial improvement in conformity to declared grade of coal supply from Coal India Ltd (CIL) sources, with the figure jumping to 69 percent in 2022-23 (till November) as against 51 percent in 2017-18, the coal ministry said. The ministry said that it has taken various steps for improvement in quality including periodic re-gradation of coal mines, introduction of improved mining technology like surface miners, supply of washed coal, first mile connectivity for direct conveying of coal on belt from coal surface/face to rapid loading silo, installation of auto analysers, and more. Different officials and agencies are entrusted with the job of ensuring supply of coal in conformity to the declared quality, it said. The Coal Controller Organisation (CCO), a subordinate office under the ministry, regularly assesses and declares coal mines grades. Primary reason for grade variation is the inherent heterogeneous nature of Indian coal itself, or that calorific value of coal extracted within the same seam at different points tends to vary. For enhanced customer satisfaction, special emphasis has been given to quality management of coal from mine to dispatch point. Now, all the consumers of CIL have the option for quality assessment of the supplies through independent third-party sampling agencies. App UTTAM (Unlocking Transparency by Third Party Assessment of Mined Coal) is available for consumers/general public to view the third-party validation of coal supply, the ministry said.

India’s coal demand likely to peak between 2030-2035: Joshi

25 December: The demand for coal in India will continue and is likely to peak between 2030-2035, Union Minister of Coal, Mines, and Parliamentary Affairs Pralhad Joshi said. In 2022-23 (April-October), the coal consumption in coal-based power plants increased to 447.6 million tonnes (MT) as compared to 398.2 MT during the same period of last year with a growth of 12 percent, Joshi said. The Ministry of New and Renewable Energy (MNRE) plans to achieve about 50 percent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.

National: Power

Delhi’s peak power demand clocks 4.8 GW, season’s highest

26 December: Delhi’s peak power demand clocked 4,803 MW, the highest this season. The highest peak power demand comes amid plummeting mercury levels in the city. At 4,803 MW recorded at 10.22 am, Delhi’s peak power demand this year is more than the peak power demand clocked in December 2021 and December 2020. Apart from these, the BSES discoms are using avenues such as “banking” and “power exchange” and ensuring sufficient “spinning reserves” to dispose of surplus power as well as ensuring reliable power supply and making arrangements to get power during the summer months.

Parliamentary panel concerned over poor fund usage for smart meters manufacturing

25 December: A Parliamentary panel has expressed disappointment over poor utilisation of budgetary allocation of the Centre’s National Smart Grid Mission (NSGM) and called for expeditious augmentation of smart meters’ manufacturing capacity under it, to match their increasing demand. The panel has also recommended that the quality and reliability of the smart meters should be ensured through their mandatory quality check by independent institutions like the CPRI. The NSGM was unveiled by the government in 2015 to plan and monitor the implementation of policies and programmes related to smart grid activities in India.

Tandwa plant of NTPC to start power generation after 23-year wait

22 December: NTPC Ltd’s North Karanpura power plant will start power generation after a long wait of 23 years. The trial of 660 MW power generation and transmission at full load from the first unit of this plant was successful. The generated electricity was sent to the National Grid. The plant, located at Tandwa in Jharkhand consists of three units and has a total capacity of 1980 MW.

National: Non-Fossil Fuels/ Climate Change Trends

India’s solar energy capacity rose 91 percent in 3 years

25 December: Solar energy capacity in India has increased from 28,180 megawatt (MW) in March 2019 to 53,996 MW at the end of 2021-22, Union Minister of New and Renewable Energy and Power R K Singh said. Accordingly, in the past three years, the solar capacity in the country increased by about 91 percent. The cumulative solar energy capacity at the end of 2019-20, 2020-21, and 2021-22 was at 34,627, 40,085, and 53,996 MW, respectively.

Punjab sanctions INR605 mn for solar power energy system

25 December: The Punjab government has sanctioned INR605 mn to install solar power energy system for rural piped water supply schemes in the state, saving an electricity expenditure of INR 80-90 mn per year, Water Supply and Sanitation Minister Bram Shanker Jimpa said. Under this project, the solar power energy plants, based on net metering, would be installed at 970 rural water supply schemes, covering 1,508 villages with a cumulative capacity of 8.698 MW. He said the government is working to provide basic facilities to the people at their doorsteps.

SJVN to set up 100 MW wind energy project with INR7 bn investment

23 December: SJVN said it will set up a 100 MW wind power project at an estimated cost of INR7 bn. SJVN said it has won the project from Solar Energy Corporation of India (SECI) through an e-reverse auction process. The project is expected to generate 262 MU (million unit) of green energy in the first year of commissioning and cumulative energy generation over a period of 25 years will be about 6,574 MU. SJVN said the project will be commissioned in a 24-month period from the date of signing of the Power Sale Agreement (PSA) with SECI.

India to bolster carbon trading market with stabilisation fund

21 December: India is planning a stabilisation fund to keep prices of credits in its planned carbon market above a certain threshold, ensuring that they remain attractive for investors and that the market succeeds in cutting emissions. Money in the fund would be used by a market regulator to buy carbon credits if prices fell too low. Planning envisages the market becoming fully operational in 2026, covering 37 percent of the country’s emissions. The government intended to publish the market’s rules soon. The Indian market would cover emissions of carbon dioxide and also five other greenhouse gases valued in terms of their carbon dioxide equivalence. Power Minister R K Singh said the Central Electricity Regulatory Commission would probably be the market regulator. India’s carbon market is being set up in two phases, according to the government’s presentation slides. In the first phase, between 2023 and 2025, the existing energy-savings certificates will be converted to carbon credits. The government was still considering whether the new market would subsume one in which certificates for renewable energy generation are traded. India has committed to cutting its ratio of greenhouse emissions to gross domestic product by 2030 to 45 percent of its 2005 level and to net zero by 2070.

International: Oil

Oil price cap may widen Russia’s 2023 budget deficit: Finance Minister

27 December: Russia’s budget deficit could be wider than a planned 2 percent of GDP (Gross Domestic Product) in 2023 as an oil price cap squeezes export income, Finance Minister Anton Siluanov said, an extra fiscal hurdle for Moscow as it spends heavily on its military activities in Ukraine. Russia said price caps on its crude and refined products could see it cut oil output by 5 percent-7 percent early next year. Siluanov said a cut in energy export volumes was possible, as some countries shun Russia and it looks to develop new markets, a process that will dictate export returns.

Sanctions could cut Russia’s Baltic oil exports by 20 percent

22 December: Exports of Russia’s flagship Urals crude blend from Baltic Sea ports may fall by up to a fifth in December, after a Western price cap and an EU embargo on Russian oil took effect, according to traders. Traders said Russia has been unable to fully redirect Urals exports from Europe to other markets, notably India and China, and it had struggled to find enough suitable vessels. The European Union, G7 nations and Australia introduced a US$60 per barrel price cap on Russian oil, effective from 5 December, on top of the European Union’s embargo on imports of Russian crude by sea and similar pledges by the United States, Canada, Japan and Britain. The cap allows non-EU countries to import seaborne Russian crude oil, but prohibits shipping, insurance and re-insurance companies from handling cargoes of Russian crude around the globe, unless it is sold for under US$60. Global oil prices are around US$40 a barrel below this year’s peak, and Russia’s market participants are increasingly talking about a need for significant production cuts to support prices and boost the efficiency of the oil industry.

International: Gas

Turkey discovers new natural gas reserve of 58 bn bcm in Black Sea

27 December: Turkey has discovered a new natural gas reserve of 58 billion cubic meters (bcm) in the Black Sea, as the country’s total reserve in the sea has reached 710 bcm, President Recep Tayyip Erdogan has announced. In addition to the new discovery at a depth of 3,023 meters in the Caycuma-1 field, the total gas reserve was raised also by a revision of the estimated volume in the Sakarya field to 652 bcm from 540 bcm, Erdogan said. The Turkish government will also focus on exploration activities in the Mediterranean, as Turkey’s ultimate goal is to achieve oil and gas independence, Erdogan noted. Earlier, Turkish Energy and Natural Resources Minister Fatih Donmez said the government plans to pump gas from its reserves in the Black Sea to its national grid in the first quarter of 2023. Turkey is heavily reliant on energy imports from Russia, Azerbaijan and Iran.

Russia ready to resume gas supplies to Europe via Yamal-Europe pipeline: Novak

25 December: Moscow is ready to resume gas supplies to Europe through the Yamal-Europe Pipeline, Russian Deputy Prime Minister Alexander Novak said. The Yamal-Europe Pipeline usually flows westward, but has been mostly reversed since December of 2021 as Poland turned away from buying from Russia in favour of drawing on stored gas in Germany. In May, Warsaw terminated its agreement with Russia, after earlier rejecting Moscow’s demand that it pays in roubles. Russian supplier Gazprom responded by cutting off supply and said it would no longer be able to export gas via Poland after Moscow imposed sanctions against the firm that owns the Polish section of the Yamal-Europe pipeline. Novak reiterated that Moscow is discussing additional gas supplies through Turkey after a creation of a hub there. He said that Moscow expects it will have shipped 21 billion cubic meters (bcm) of liquefied natural gas (LNG) to Europe in 2022. Novak said that in the long-term, Russia can send its natural gas to the markets of Afghanistan and Pakistan, either using the infrastructure of Central Asia, or in a swap from the territory of Iran.

Eni’s Vaar Energi makes Arctic gas discovery

23 December: Norway’s Vaar Energi, majority owned by Italy’s Eni, said it had made a gas discovery near the Goliat field in the Arctic Barents Sea, supporting the group’s long-term plans to expand in the area. Preliminary estimates place the size of the gas discovery between 57 million and 132 million barrels of recoverable oil equivalents, or 9 million to 21 million standard cubic metres. The find in the Lupa prospect strengthens Vaar’s foothold in the north, the company said.

International: Coal

Kyrgyzstan’s coal mines dig on in hope of past glory

23 December: Hundreds of metres underground, Emylbek Umarov hacks out lumps of coal by hand with a pickaxe in a dank mine in a remote mountainous corner of Kyrgyzstan. Coal may be falling out of favour elsewhere because of climate change, but Suluktu’s mines hope growing demand from neighbouring Central Asian countries and beyond will help them return to their Soviet heyday. Tucked away in the mountains, the town of Suluktu was founded in 1868 and is one of the oldest coal extraction hubs in Central Asia. Like settlements across the former Soviet Union, it suffered from deindustrialisation after its collapse, leading to a sharp drop in population and coal output.

Indonesia to produce nearly 700 MT of coal in 2023 to fulfill supply

21 December: Indonesia has targeted to raise its coal production to 694 million tonnes (MT) to fulfill domestic supply and export demands, the country’s Ministry of Energy and Mineral Resources announced. According to the Indonesian Coal Mining Association (APBI), Indonesia indeed needs to produce more coal next year as demands from China and India will also increase. Indonesia would continue to receive high coal demands from European countries. In 2022, the coal export to Europe has significantly increased, reaching 4 to 5 MT, the largest coal export to Europe in history, while in previous years it only reached 500,000 tonnes, according to APBI.

International: Power

US government declares power emergency in Texas amid Arctic winter blast

25 December: The US (United States) Energy Department has declared a power emergency in the country’s second-largest state Texas amid an Arctic winter blast that was feared to cause a shortage of electricity in the state. The Electric Reliability Council of Texas (ERCOT), the state grid operator which serves 90 percent of electric customers in Texas, requested the order, allowing it to exceed certain air pollution limits to boost generation amid record power demand in the state. The Energy Department said in the order that units that produce about 11,000 megawatt (MW) of coal and gas-fired power, 4,000 MW of wind and 1,700 MW of solar power were down or scaled back due to the winter storm. However, ERCOT said that the state’s power grid has withstood freezing temperatures through much of the state, expecting the power supply to keep up with demand. According to the Energy Department, power demand in Texas reached an all-time winter peak of over 74,000 MW.

Nigerian government to sell five electricity companies to fund 2023 budget

23 December: The Nigerian government said it plans to sell some electricity-generation companies in the country, six months after it announced the restructuring of power distribution companies and privatisation of five power projects. The government said the sale will take place in the first quarter of 2023 and the proceeds will be used to fund the 2023 budget. The generating companies of Gencos for sale are Geregu power plant, a 562 megawatt (MW) facility in Calabar, Cross River State, and the Olorunsogo power plant. The power plants are part of the power projects that were shortlisted for privatisation in July. Since the government handed over authority in 2013, the privately owned businesses have had difficulty supplying electricity. Nigeria’s power system has mostly remained dysfunctional, producing and distributing an average of 4,000 MW to around 200 million people. The government urged the private sector to invest in electricity to end shortages.

International: Non-Fossil Fuels/ Climate Change Trends

Russia, IAEA discuss safety of Ukraine’s Zaporizhzhia nuclear power plant

23 December: Russian officials and a delegation of the International Atomic Energy Agency (IAEA) held a new round of consultations in Moscow on cooperation in ensuring the safety of the Zaporizhzhia nuclear power plant (NPP). Alexei Likhachev, Director General of Russia’s State Atomic Energy Corporation Rosatom, and IAEA Director General Rafael Grossi participated in the talks among other representatives, Rosatom said. The Zaporizhzhia NPP, which is one of Europe’s largest nuclear power plants, has been controlled by Russian forces since early March. Ukraine and Russia have traded accusations of strikes on the facility.

Bulgaria signs nuclear fuel deal with Westinghouse

22 December: Bulgaria’s nuclear power plant Kozloduy signed a deal with Westinghouse Electric Sweden to supply it with nuclear fuel for its 1,000 megawatt (MW) Russian-built Unit 5, a first step to diversify away from Russian supplies. The European Union country currently relies on Russian nuclear fuel for both units at the 2,000 megawatt Kozloduy plant, but is seeking to boost energy security following Russia’s invasion of Ukraine. The plant produces about 35 percent of the country’s electricity and currently uses nuclear fuel supplied by Russian firm Rosatom. Kozloduy is also aiming to sign a deal with France’s Framatome, a unit of EDF, for its other reactor, Unit 6. Bulgarian Energy Minister Rossen Hristov said that at present nuclear fuel shipments from Russia were unclear, so the new 10-year contract with Westinghouse helped secure the plant’s operation. Bulgaria’s Nuclear Regulatory Agency must still license Westinghouse’s fuel for use in the country.

EU approves US$29.69 bn German renewable energy scheme

21 December: The European Commission said it had approved the German government’s €28 billion (US$29.69 billion) support scheme for renewable energy, which is aimed at rapidly expanding use of wind and solar power. The policy, which replaces an existing renewables support scheme, runs until 2026 and is designed to deliver Germany’s target to produce 80 percent of its electricity from renewable sources by 2030. The European Commission said the scheme was “necessary and appropriate” to promote renewable energy and cut planet-heating emissions, and that its positive environmental impact outweighed possible distortions of competition. The scheme pays a premium to renewable energy producers, on top of the market price they receive for selling their power. Small generators can receive a feed-in-tariff providing a guaranteed price for their electricity. Expanding clean energy production will be key to meeting Germany’s goal to eliminate its net greenhouse gas emissions by 2045 – as well as partially filling the energy supply gap caused by Russia cutting off most of the gas it sends to Europe this year.

This is a weekly publication of the Observer Research Foundation (ORF). It covers current national and international information on energy categorised systematically to add value. The year 2022 is the nineteenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.

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