At the time of India’s independence (1947) electricity generation and distribution were primarily in the hands of the private sector. Private companies and their franchises focused on urban and industrial demand which gave them a reasonable return on investment. Rural and agricultural sectors were ignored as they were seen as unprofitable. Only one in 200 villages was electrified and just 3 percent of the population in six large towns consumed over 56 percent of utility electricity. Over 506 of 856 towns with more than 10,000 people were not electrified. The per-person electricity consumption was 14 kWh per year and in many states the per-person consumption was as low as 1 kWh per year. The first Government of independent India saw this as a “market failure” to provide equitable access to electricity and decided to take charge.
Electricity is a concurrent subject as per the Constitution which meant that both the State and Central Governments could shape electricity sector policy. But the setting up of State Electricity Boards (SEBs) under the Electricity Act 1948 as vertically integrated monopolies gave State Governments greater control of electricity generation, transmission, and distribution. Under SEB governance electricity access increased rapidly to cover most villages but SEB finances deteriorated. In the 1990s, State Governments were forced to concede control over Discoms to market forces with reforms initiated by developmental funding agencies such as the World Bank. The thrust was for unbundling the electricity sector into distinct activities of generation, transmission and distribution that would operate on commercial terms. The enactment of the Electricity Act 2003 (EA 2003) further eroded the power of State Governments over Discoms as it pushed Discoms towards commercial and market discipline.
Now the pendulum of electricity distribution is swinging back to private sector control. Legislative push in the last decade (for example the draft Electricity Amendment Act 2014 and its many revised and updated versions) is focussed on delicensing Discoms to give a greater role to the private sector in distributing electricity. The justification is that multiple players in electricity distribution in a given area will promote competition, substantially improve efficiency in operations and give consumers choices in terms of suppliers and also in terms of fuels (fossil and non-fossil fuel-based electricity). The models of privatisation such as franchising that were abandoned more than seven decades ago are returning to the discussion tables of think tanks. The question of whether private actors will cherry-pick lucrative industrial and affluent consumers and ignore the rest is being debated. There is hope in some quarters that the private sector will promote supply and demand for green electricity. While there is a possibility that economic efficiency and service delivery may improve with the participation of the private sector, it may not make a significant difference to India’s environmental goal of decarbonising the grid and the social goal of improving electricity access.
India’s updated nationally determined contribution (NDC) contained two energy-related quantitative commitments. First to reduce the emissions intensity of its GDP (gross domestic product) by 45 percent by 2030, from its 2005 level and second to achieve about 50 percent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030, with the help of the transfer of technology and low-cost international finance, including from Green Climate Fund (GCF). Efforts to realise these commitments will complement the domestic target of having 500 GW (gigawatts) of renewable energy (RE) capacity by 2030. These mandates along with Government incentives that include but are not limited to the capital, cheaper credit, priority access to transmission, ‘must-run’ status, feed-in-tariff and waiver of interstate transmission fee have created a profitable business model for private players that guarantees despatch of RE electricity and cost recovery through stable tariff over several decades. Not surprisingly the private sector accounts for 95 percent of installed RE power generation capacity. While the private sector is dominant in the supply of RE electricity, they may not necessarily facilitate consumer uptake of RE electricity as Discoms franchisees or licensees.
Today the system level costs of accommodating intermittent RE electricity are socialised. The existing grid that is powered mostly by thermal (coal and natural gas) power generation provides the backup to make up for RE intermittency. The cost of maintaining back-up and related costs such as the cost of rapid depreciation of thermal power generation assets because of frequent ramping up and down to make up for RE intermittency are passed on to electricity ratepayers and taxpayers. Private Discom operators may not significantly deviate from this setup. The political economy of India shaped by a large number of voters with low purchasing power is likely to favour fossil-fuel based electricity, especially domestic coal-based electricity. The draft national energy policy released in 2017 observed that Discoms cannot be burdened with the social and system cost of accommodating RE electricity and recommended finding alternative mechanisms for meeting additional costs. This is true irrespective of whether the Discom is publicly or privately owned.
In 2014, when the current government came to power, 94 per cent of the villages were ‘electrified’ and the per- person electricity consumption was just over 1000 kWh. This signified substantial improvement in providing electricity access to households but the impressive numbers concealed widespread inadequacies. Supply of electricity to grid-connected rural households averaged only about a few hours a day. The per person figures for electricity consumption is a statistical artefact under which all available electricity is distributed equally to over 1.3 billion people. The average hides huge inequalities between different states, between urban and rural areas and between affluent and poor households. If total electricity consumption by the domestic sector alone is distributed equally among the population per person, availability of electricity falls to just over 220 kWh which is the line for energy poverty. In 2014, 90 percent of rural households consumed less than 100 kWh of electricity per month while 50 percent of rural households consumed less than 50 kWh of electricity per month.
In 2019, the government claimed that 99 percent of households were electrified but this claim was not backed with credible data. In 2020, Niti Aayog revised the claim stating that 99 percent of “willing” households have been electrified. The most probable interpretation of the term “willing” is a market-oriented one where it is taken to mean “willingness to pay” for access to electricity. If true, this could be a sign of things to come when electricity distribution is privatised. Labelling those who are “unable” to pay as those who are “unwilling” to pay, is a clever way of side-stepping the social goal of providing electricity access.
All electricity access initiatives in India aim to provide a physical connection between the village (or house) and the grid, side-step the persistent challenge of low demand for electricity (economic scarcity arising from low affordability) from poor households. The Low demand for electricity from rural households is the consequence rather than the cause of economic scarcity (or poverty). Low density of households and low consumption levels increase the cost of providing electricity access and are revenue negative for Discoms. This is an important factor behind the evolutionary rather than the revolutionary pace of increasing electricity consumption. The private sector is not likely to radically change the status quo. Universal service obligation is often cited as a remedy for cherry picking of consumers by private operators but as the telecommunication sector clearly illustrates, private players will find a way to work around it. As the French economist Joel Ruet elegantly put it, “power cuts will be privatised”.
A Special CBI court has ordered further investigation into why three companies, including Adani Enterprise, were allowed to bid for a coal block in Jharkhand when they didn’t meet eligibility criteria. Special Judge Arun Bhardwaj had in December last year asked the CBI to answer if there was a conspiracy by the members of a tender committee constituted by the Steel Authority of India (SAIL) to give undue favours to three companies — AMR India, Lanco Infratech and Adani Enterprise Ltd — despite not having a technical criteria for mining were allowed to bid for developing coal blocks in Jharkhand‘s Jharia coal fields.
The government said that it has extended the deadline to submit bids for the coal blocks under the sixth round of commercial mine auction till 13 January. The biggest tranche of 141 mines covering eleven coal-bearing states is being offered in the sixth round of commercial coal mine auction. The earlier due date for submission of online and offline bids was 30 December. The coal ministry had recently organised investor’s conclaves in Mumbai, Bengaluru and Indore, for which a tremendous response was received. Several pleas for an extension of the bid due date were received during conclaves and also in writing at the office of the nominated authority, the coal ministry. The coal ministry had launched the process for auction of 133 coal mines under the sixth round of commercial auctions, of which 71 are new coal mines and 62 blocks are rolling over from earlier tranches of commercial auctions. Additionally, eight coal mines under the second attempt of the fifth round of commercial auctions were also launched as those mines had received single bids in the first attempt. The coal ministry has successfully auctioned 64 coal mines in the first five tranches of commercial mines’ auction.
India’s coal production will touch one billion tonnes in the next financial year from 900 MT this fiscal ending March, as the country gears up to stop the import of thermal coal by 2024-25, Union Coal Minister Pralhad Joshi said. He said India’s domestic coal requirement will reach 1,500 MT by 2030, for which the nation needs to scale up its production. As per demand projections, coal mines are planned and their operations are run to ensure the energy security of the country. Development of new mines is also required towards Atmanirbhar Bharat to reduce import dependence. Coal demand of 1500 MTPA is projected by various agencies by 2030. Operations of coal mines are monitored by The Government on a regular basis.
India’s coal production went up by 16.39 percent to 607.97 MT during April-December period of the current fiscal as against 522.34 MT produced during the corresponding period of last year. CIL reported 15.82 percent rise in production as 479.05 MT of dry fuel production was recorded up to December in the current fiscal as against 413 MT produced during the corresponding period of last year. According to the coal ministry, production has increased due to greater usage of mining capacities of captive coal blocks. The ministry has also amended the Mineral Concession (Amendment) Rules, 1960 under MMDR (Amendment) Act, 2021 to allow the lessee of captive mines to sell coal or lignite up to 50 percent of the total excess production after meeting the requirement of the end-use plants.
There has been a substantial improvement in conformity to the declared grade of coal supply from CIL sources, with the figure jumping to 69 percent in 2022-23 (till November) as against 51 percent in 2017-18. 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 a 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 a supply of coal in conformity with the declared quality, it said. The Coal Controller Organisation (CCO), a subordinate office under the ministry, regularly assesses and declares coal mines grades. The primary reason for grade variation is the inherent heterogeneous nature of Indian coal itself, or that the 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 the quality management of coal from the mine to the 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.
CIL said that its arm MCL supplied 143.4 MT of coal till December in the current fiscal, the highest among all the subsidiaries of the coal behemoth. Mahanadi Coalfields Ltd (MCL)’s supplies accounted for 28.2 percent of the total off-take of 507.8 MT from CIL. MCL’s coal off-take peaked at 146.12 MT on 5 January, overtaking the total supplies that the company registered for the full year of FY21. This achievement was attained 85 days before the current fiscal year comes to an end. MCL’s supplies ending FY21 were 146 MT. Against the contracted quantity of 81.5 MT to its customers in the power sector, the actual supply from MCL was 102.7 MT till December of FY23.
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 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.
The Centre said an additional 19 first-mile connectivity projects of CIL and SCCL will be implemented by 2026-27. First-mile connectivity refers to the transportation of coal from pitheads to dispatch points. The coal ministry has already undertaken 55 first-mile connectivity projects worth INR180 bn (US$2.2 bn). Out of these 55 projects, eight having a capacity of 95.5 million tonnes per annum (MTPA) have been commissioned and the remaining will be commissioned by FY25. To ensure efficient and environment-friendly coal evacuation, the government is working on the development of the National Coal Logistic Plan, including first-mile connectivity through the railway sidings near coal mines and strengthening of the rail network in coalfields. The ministry has set a target to produce 1.31 billion tonnes of coal by FY25 and 1.5 billion tonnes in FY30. In this context, the development of coal transportation that is cost-efficient, fast and environmentally friendly is important. The government has prepared an integrated approach for eliminating road transportation of coal in mines and has taken steps to upgrade mechanised coal transportation and loading systems under FMC projects.
A total of 3.58 lakh tonnes (0.358 million tonne (MT)) of coal has been imported by Coal India Ltd (CIL) from Indonesia through the vendor namely GHV-BDE-DIL (JV) during this year on behalf of Thermal Power Plants (TPPs) of state GENCOs and Independent Power Plants (IPPs). Union Coal Minister Pralhad Joshi said that orders for the supply of imported coal were placed by CIL based on the firm orders. He said that considering the increasing electricity demand and for building up of coal stock at power plants before the onset of monsoon, the Ministry of Power (MoP) on 28 April advised power plants to import coal for blending purposes to meet 10 percent of their coal requirement. Subsequently, after reviewing the coal stock position, MoP on 1 August 2022 decided that the states, IPPs and Ministry of Coal may decide the blending percentage after assessing the availability of domestic coal supplies.
CIL and trade unions have agreed to a 19 percent minimum guaranteed benefit of the monthly emolument, benefitting 2.38 lakh non-executive workers. The MoU between CIL and trade unions was signed in Kolkata. The MGB of 19 percent is on the emoluments as of 30 June 2021, which include basic pay, variable dearness allowance, special dearness allowance and attendance bonus. The Telangana-based Singareni Collieries Company Ltd (SCCL) was also the other signatory to the MoU.
According to the International Energy Agency (IEA) report, global coal consumption is set to rise to an all-time high in 2022 and remain at similar levels in the next few years if stronger efforts are made to move to a low-carbon economy. High gas prices following Russia’s invasion of Ukraine and consequent disruptions to supply have led some countries to turn to relatively cheaper coal this year. The IEA’s annual report on coal forecasts global coal use is set to rise by 1.2 percent this year, exceeding 8 billion tonnes in a single year for the first time and a previous record set in 2013. It also predicts that coal consumption will remain flat at that level until 2025 as falls in mature markets are offset by continued strong demand in emerging Asian economies. The largest increase in coal demand is expected to be in India at 7 percent, followed by the European Union at 6 percent and China at 0.4 percent. Europe’s coal demand has risen due to more switching from gas to coal due to high gas prices and as Russian gas has reduced to a trickle. However, by 2025 European coal demand is expected to decline below 2022 levels, the report said.
The increasing need to secure energy supplies after easing COVID-19 restrictions has pushed China to gradually resume Australian coal imports and urge domestic miners to boost their already record output. The lifting of the unofficial ban on Australian coal imports, which were halted in 2020 in a fit of Chinese pique over questions on COVID’s origins, is the clearest sign yet of the renewed ties between them. China purchased more than 30 MT of coking coal and nearly 50 MT of thermal coal from Australia before buying stopped. Without Australian supplies, Chinese buyers turned to Indonesia for thermal coal, and Mongolia and Russia for coking coal, but struggled to obtain the high quality coal for power generation and steel production that Australia used to provide.
China’s coal imports from Russia in November rebounded from a four-month low in the prior month despite transport bottlenecks in Russia, as utilities increased purchases to meet rising winter heating demand. China brought in 7.16 MT of coal from Russia last month, data from the General Administration of Customs showed. That compared with 6.43 MT in October, and 5.11 MT in the same period a year earlier. Most Russian coal exports to China are seaborne cargoes, typically transferred to Russia’s Far East ports from coal mines by rail and then shipped to northern Chinese ports. There is also small volume of cargoes transported directly to China by rail. China’s domestic thermal coal prices were high in November as tight curbs on movements imposed under Beijing’s then-zero COVID tolerance policy clogged transportation. That made lower-quality Indonesian coal more attractive to Chinese utilities. But as China eases COVID controls and the logistics situation improves, domestic coal prices could fall and compete with imported cargo, traders said. The customs data showed China’s coal imports from Mongolia stood at 3.77 MT in November, compared with 3.81 MT in October.
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 has targeted to raise its coal production to 694 MT to fulfil 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.
Protesters gathered in the west German village of Luetzerath to challenge the extension of an open-air coal mine they say runs counter to the country’s climate commitments. Protesters participated in a walk around the village, which is slated for destruction to allow for the extension of a neighbouring open-air coal mine. Energy giant RWE also agreed to stop producing electricity with coal in western Germany by 2030, eight years earlier than previously planned. The struggle over Lutzerath comes as Germany has restarted mothballed coal power plants amid an energy crisis triggered by the Russian invasion of Ukraine. Despite resorting to coal to ease the pressure on gas-powered plants, Germany says it is not wavering from its aim of existing coal power in 2030.
17 January: Russia became the third-largest oil supplier to India in 2022, making up about 15 percent of total purchases, dragging down OPEC (Organization of the Petroleum Exporting Countries)’s share to the lowest in more than a decade, data obtained from industry sources show. Refiners in India, the world’s third-biggest oil consumer and importer, have been gorging on Russian oil sold at a discount after some Western companies shunned buying from Moscow following its invasion of Ukraine last February. In 2021, Russia was at the 17th spot, supplying about 1 percent of India’s overall imports. India’s oil imports from Russia surged to an all-time high of 1.25 million barrels per day (bpd), about a quarter of the overall 4.9 million bpd purchase, the data showed. India’s December oil imports were the highest in seven months as refiners were drawn to Russian oil due to the deeper discounts offered ahead of a 5 December embargo by Europe and a price cap by the European Union and G7 nations to cut Moscow’s oil revenue.
17 January: Guyana expects to soon receive a proposal from India for long-term purchases of the South American country’s oil, President Irfaan Ali said, a new attempt to reach a government-to-government deal potentially leading to better sale terms for Guyana. Guyana’s government is entitled to a share of crude produced off the nation’s coast by a consortium led by Exxon Mobil Corp. In 2022, Ali’s government received a total of 13 cargoes of crude, and it expects to receive and export 17 cargoes this year, the finance ministry said. India’s ONGC Videsh Ltd is considering a bid for some of the 14 areas on offer, and refiner Indian Oil Corp (IOC) also is looking to work in Guyana in collaboration with ONGC Videsh. Guyana and India in 2021 failed to reach an agreement for direct sales of Guyana’s sweet crude to Indian state refiners.
16 January: India has cut its windfall tax on crude oil and exports of aviation turbine fuel (ATF) and diesel, according to a government notification dated 16 January. It cut its windfall tax on crude to INR 1,900 (US$23.28) per tonne from INR 2,100 per tonne. The government also cut export tax on ATF to INR 3.5 per litre from INR4.5 per litre, and cut export tax on diesel to INR5 per litre from INR 6.5 per litre, the notification said. India, a major consumer and importer of oil, has been buying Russian crude at well below a US$60 price cap agreed by the West. The country in July imposed the windfall tax on crude oil producers and levies on exports of gasoline, diesel and aviation fuel after private refiners sought overseas markets to gain from robust refining margins, instead of selling more cheaply at home.
17 January: With the government placing a greater emphasis on gas production from challenging fields, experts predict that gas distribution in cities may improve with a relatively lower cost. The expansion of city gas distribution (CGD) networks across 407 districts have the potential to make gas accessible to more than 70 percent of the population. These distribution networks will enable the supply of cleaner cooking fuel to households, businesses, and other industrial and commercial facilities, as well as fuel for transportation. According to a report, the government will prioritise gas from challenging fields for compressed natural gas (CNG) and piped natural gas (PNG) households, if the bidding prices are comparable. This approach also has the added benefit of reducing trading margins on gas resale in difficult fields. Prioritising CGDs would allow them to replace expensive spot gas with cheaper domestic gas.
16 January: Reliance Industries Ltd (RIL) and its partner BP plc suspended a planned auction for the sale of natural gas from their eastern offshore KG-D6 block after the government altered marketing rules to cap margins. In a notice, RIL and its partner BP Exploration (Alpha) Ltd (BPEAL) said the auction has been suspended indefinitely. E-bidding for the sale of 6 million standard cubic metres per day of gas was originally planned for 18 January but was later pushed back first to 19 January and then to 24 January. On 13 January, the ministry of petroleum and natural gas published new rules for the sale and resale of gas produced from discoveries in deep sea, ultra-deep water and high pressure-high temperature areas with marketing and pricing freedom. While end consumers were allowed to resale any unconsumed gas, traders participating in the auction were allowed to resell subject to a maximum trading margin of INR 200 per thousand cubic metres. In the auction that RIL-BP launched on 29 December 2022, the gas was intended for sale to end consumers who were not permitted to resale any unconsumed gas. RIL has so far made 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3 — the largest among the lot — were brought into production in April 2009, and MA, the only oilfield in the block, was put into production in September 2008. While the MA field stopped producing in September 2018, output from D-1 and D-3 ceased in February 2020. Since then, RIL-BP is investing US$5 billion in bringing to production three deep water gas projects in block KG-D6 — R-Cluster, Satellites Cluster, and MJ — which together are expected to meet about 15 percent of India’s gas demand by 2023.
17 January: The government allocated three more coal mines under commercial mining to the successful bidders. With this, allocation orders have been issued for 48 coal mines so far having a cumulative peak rated capacity 89 million tonnes per annum (MTPA) under commercial mining. Representatives of the successful bidder received allocation orders from Additional Secretary (Coal) M Nagaraju who stressed on participation of the private sector for contributing towards energy security, the coal ministry said. The cumulative production capacity of the three blocks mines is 3.7 MTPA and its geological reserves is 156.57 MT. The government launched the sixth round of commercial coal mines auction in November and has put on block 141 mines.
17 January: While distribution companies (discoms) in Madhya Pradesh are seeking a tariff hike of 3.2 percent citing a revenue difference between their income and expenses of around INR 15 bn, more than 8,600 million units of power worth INR30 bn are estimated to be backed down this year. Simply put, this extra power produced is not likely to be used at all. The extra power is less than half of the total surplus energy as discoms estimate to sell more than 11,000 million units of surplus energy which is apart from more than 8,600 million units of backed down energy in the upcoming financial year, ie, 2023-24, as per the ARR submitted before Madhya Pradesh Electricity Regulatory Commission (MPERC).
16 January: The nation’s electricity consumption is projected to increase by 9–10 percent y-o-y (year-on-year) in the current fiscal year, which would be a decadal high, according to Crisil Market Intelligence and Analytics report. Due to increased heating needs with the arrival of winter and ongoing momentum in manufacturing activity, which rose to a 25-month high during the month, peak demand in December increased by a sharp 12 percent y-o-y and 9 percent month-on-month to 206 GW. Peak power demand in India reached a new high of 216 gigawatt (GW) in April 2022, up 6 percent year on year, as several regions in the North suffered from a severe heatwave. Industrial and manufacturing activities also contributed to the increase in demand. Seasonally lower renewable output impacted generation in the third quarter of the financial year 2023, leaving costly thermal power to service incremental demand. In April 2023, the government anticipates a peak demand of 230 GW.
16 January: Hoteliers as well as residents are worried about the high power tariffs in Uttarakhand which they point out are significantly higher than other states, including adjoining Himachal Pradesh. For small domestic consumers in Himachal Pradesh (HP), the tariff for using up to 100 units per month is INR 1.85 per unit, while in Uttarakhand, it is INR 2.95 per unit. In fact, the tariff for small domestic consumers in Mumbai is even lesser at INR 1.72 per unit. Similarly, for domestic consumption above 400 units per month, HP charges INR 5 per unit while Uttarakhand charges INR 6.90 per unit. An analysis of power tariffs revealed that for domestic consumers, the Himachal government offers a subsidy that ranges between 55 percent to 11 percent of the total tariff, but consumers lament that there is no such respite in Uttarakhand.
12 January: Even as the discoms (distribution companies) have failed to meet the target of replacing old electricity metres with smart metres across Haryana, consumers are being pursued to shift to pre-paid electricity connections. Notably, smart metres enable the distribution companies to offer app-based or generally operated pre-paid electricity connections to the consumers. Once a consumer opts for pre-paid electricity connection, he/she becomes eligible for 5 percent discount on the normal electricity billed tariff of regular connections. As of now, the discoms are focussing to introduce prepaid connections in Gurugram, Faridabad, Sonipat and Panchkula cities. In-charge of circles or sub-divisions are targeting special groups, especially the opinion makers or professionals and group housing societies or apartments used for rental purposes to popularise the scheme. The move comes after the two electricity distribution companies — UHBVN (Uttar Haryana Bijli Vitran Nigam) and Dakshin Haryana Bijli Vitran Nigam (DHBVN) – of the state drew flak from the Haryana State Electricity Regulatory Commission (HERC). Energy Efficient Services Limited (EESL) – the company engaged by the two discoms for replacement of old metres with smart metres has also faced the HERC ire. As per information, the Haryana power department had given the target of installation of 30 lakh metres by the end of December 2024. The target till December 2022 was 10 lakh metres, but only 6.24 lakh were installed. In a hearing on 3 January, HERC had advised the discoms and EESL officials to conduct monthly meetings.
12 January: A big initiative is being launched by Smart City Kanpur to ensure uninterrupted quality power supply in order to save electricity and provide better services to consumers of the city. As per the communique issued by the divisional commissioner’s office, this initiative is a joint effort of the Central and the state governments. It will ensure better services and uninterrupted quality supply of electricity by using automation and new technologies in the power sector.
12 January: The Uttar Pradesh Electricity Regulatory Commission (UPERC) has severely reprimanded two power distribution companies (discoms), Paschimanchal Vidyut Vitran Nigam Ltd (PVVNL) and Madhyanchal Vidyut Vitran Nigam Ltd (MVVNL) for poor progress of power metre conversion. The Commission feels that it is due to some ‘nefarious interest or goblin mode’ that the two discoms are not putting their best efforts to convert single-point metre connections to multi-point in group housing societies.
12 January: Karnataka Chief Minister (CM) Basavaraj Bommai dismissed as “irresponsible and irrational” the election promise made by the opposition Congress to provide 200 units of free power to all households every month if voted to power in the state. He said the announcement showed “how low they are in the electoral race”. Projecting it as the party’s “first guarantee” to the people, ahead of Assembly polls due by May, the Congress made the announcement on free electricity as it began its state-wide election bus tour titled ‘Praja Dhwani Yatre’ in Belagavi.
17 January: Power Minister R K Singh said that NTPC’s Tapovan Vishnugad hydropower project has nothing to do with the land subsidence issue being faced in Uttarakhand’s Joshimath town, the problem is with the area’s land. He ruled out review of the ongoing hydropower projects in hilly areas. Singh said that hydropower projects won’t be stopped in the country, despite rising concerns over rampant construction in hilly areas.
12 January: India has set a target to annually auction 8 gigawatts (GW) of wind power projects to the end of 2030 to boost renewable energy capacity, a government order said. India, one of the world’s biggest emitters of greenhouse gases, wants to boost its renewable energy generation to 500 GW by 2030 from a current output of about 120 GW according to government data. Previously the country had not set an annual wind power capacity target.
11 January: Arunachal Pradesh government has decided to hand over five terminated hydropower projects with a generation capacity of 2820 MW to two Central Public Sector Undertakings (CPSUs). The Chief Minister’s Office (CMO) said that these five projects would require an investment of INR400 bn in the next 5-7 years. Of the five projects, two hydropower projects — Naying (1,000 MW) and Hiring (500 MW) — would be handed over to the North Eastern Electric Power Corporation Limited (NEEPCO); and Emini (500MW), Amulin (420MW) and Minundon (400MW) to the Satluj Jal Vidyut Nigam Limited for development. The state cabinet in its meeting chaired by Chief Minister Pema Khandu approved the indicative procedure for transferring the stalled hydropower projects to CPSUs in order to unlock the potential.
11 January: Tata Power Renewable Energy Ltd (TPREL), a wholly-owned subsidiary of Tata Power, said it has signed an agreement with Vivarea Condominium, a residential society in Mumbai, to supply solar power. In the first, a 3.125 MW solar plant will be set up at Himayatnagar, Maharashtra, to power the society with clean energy. The project will be commissioned by October 2023 and will provide green power at approximately 40 percent less than existing cost to Vivarea Condominium. With the installation of this group captive solar plant, Tata Power will enable Vivarea Condominium to become the country’s first residential society to use captive solar energy for domestic usage. TPREL operates a manufacturing unit in Bangalore, with a production capacity of 1,135 MW of modules and cells.
11 January: India may exempt some solar projects from paying duties on equipment imports, according to government and industry sources, to bring renewable-energy capacity additions back on schedule and lower consumer power tariffs. Projects with 30 gigawatts (GW) of capacity will benefit. In March 2021, the government announced 25 percent basic customs duties on solar photovoltaic cells and 40 percent on solar photovoltaic modules with effect from 1 April, 2022 in order to block Chinese imports and encourage indigenous manufacturing.
17 January: The new head of Venezuela’s state oil company PDVSA has suspended most oil export contracts while his team reviews them in a move to avoid payment defaults. Since US (United States) trading sanctions were first imposed on PDVSA in 2019, the company has increasingly resorted to little known middlemen to allocate its oil exports, leading to big price discounts and problems with payments affecting its cash flow. PDVSA’s new Chief Executive Pedro Rafael Tellechea wrote to the heads of the company’s divisions of supply and trade, domestic market, international market, finances and foreign affairs and notified them of the contract suspensions. Venezuela’s oil exports last year declined 2.5 percent to 616,540 barrels per day due to infrastructure outages, US sanctions and rising competition in its key Asia market despite assistance from ally Iran, according to shipping data and documents.
17 January: A long-running dispute on oil revenue-sharing between Iraq’s national government and the semi-autonomous Kurdistan region may be resolved within months with agreement on a hydrocarbons law, Iraqi Kurdish Prime Minister (PM) Masrour Barzani said. Barzani said the federal government committed to freeze for now court actions it had taken for control of oil and gas revenues from the Kurdish region. Agreements on regular budget payments from Baghdad would help authorities in the Kurdish Regional Government resolve payment delays to international oil companies in the region, as well as easing a backlog in salary payments for KRG employees. In 2018, Iraqi forces retook disputed territories, including the oil city of Kirkuk. Baghdad resumed some budget payments but they have been sporadic, and the federal government has tried to bring KRG revenues under its control, including through local court rulings and threats of international arbitration.
14 January: OPEC+ is facing “volatile prospects” in oil markets both in supply and demand, UAE Energy Minister Suhail al-Mazrouei said. He said this was due to European sanctions on Russian crude taking effect in addition to China lifting its “zero-COVID” policy. OPEC+ production capacity was down 3.7 mln bpd due to fewer investments in the oil sector, he said. He said UAE is taking preemptive steps to compensate for the reduced oil production capacity in some countries by bringing forward its five million barrel per day oil production capacity expansion to 2027 from a previous target of 2030.
12 January: Sri Lanka is preparing to issue two-year oil and gas exploration licences for as many as 900 offshore blocks for foreign firms to scout for energy resources and bring in vital investments to the crisis-hit country. Starting up oil production is part of President Ranil Wickremesinghe’s plan to attract foreign investment as he seeks to stabilise the economy amid the country’s worst economic crisis in seven decades. The new regulations were finalised by the government and set a framework for companies to sign an expression of interest (EOI) for exploring offshore assets around the country, the Petroleum Development Authority said. The rules for oil exploration will be made public and the government hopes to start issuing licences for some of the 900 blocks within weeks, the authority said.
11 January: Global oil inventories will increase over the next two years with more global oil production than consumption, the US (United States) Energy Information Administration (EIA) has forecast. Partly as a result, crude oil prices will further go down, the EIA said in its January Short-Term Energy Outlook (STEO) report. The report forecast that global production of liquid fuels will reach an average of 102.8 million barrels per day (b/d) in 2024, up from 100 million b/d in 2022, driven by large growth in non-OPEC production. However, uncertainty over Russia’s oil supply will persist, particularly in early 2023, the report noted, expecting global consumption of liquid fuels will rise from an average of 99.4 million b/d in 2022 to 102.2 million b/d in 2024. The EIA said that ongoing concerns about global economic conditions as well as the easing Covid-19 restrictions in China raised the uncertainty of the outcomes of its demand forecasts. US refining margins for diesel are expected to fall by 20 percent in 2023 and by 38 percent in 2024. The EIA forecast retail diesel prices to average about US$ 4.20 per gallon in 2023, down 16 percent from 2022, and continue to fall in 2024, averaging near US$ 3.70 per gallon.
17 January: Portugal and Spain will formally ask the European Commission to extend the temporary Iberian cap on prices for natural gas and coal used by power plants, the Portuguese Environment Minister Duarte Cordeiro said. Spain’s Energy Minister Teresa Ribera said Spain would seek to extend the mechanism until at least the end of 2024. Portugal only applies the mechanism to gas prices as it no longer has coal-fired power plants.
16 January: Shell PLC’s LNG Canada export project in British Columbia plans to start building its proposed second phase with natural gas-powered turbines and switch to electricity as more renewable power becomes available, a decision that means the expansion project will initially generate high greenhouse gas emissions. LNG Canada, in which Japan’s Mitsubishi Corp owns a 15 percent stake, is set to be Canada’s first liquefied natural gas (LNG) export terminal. The first phase is expected to begin shipments around 2025. With global demand for natural gas from sources other than Russia accelerating after its invasion of Ukraine last year, LNG Canada is weighing whether to build by 2030 a second phase to double annual capacity to 28 million tonnes (MT). LNG Canada plans to initially build Phase 2 with natural gas-powered turbines and switch to electric motors as more power becomes available, pending a final investment decision, CEO (Chief Executive Officer) Jason Klein said. LNG Canada has previously described this approach as only one of the options it was considering.
16 January: The European Commission aims for European Union (EU) countries to start jointly buying gas “well before summer”, European Commission Vice-President Maros Sefcovic said, an attempt to help countries refill storage and avoid a supply crunch next winter. Following a first meeting of EU country representatives to coordinate the planned purchases, Sefcovic said he had urged member states to swiftly engage with market players in their countries to estimate the volumes of gas they will jointly purchase. Sefcovic asked industry to confirm if they are interested in joining the EU scheme to jointly buy gas, which the Commission hopes will help Europe refill depleted storage caverns and negotiate lower prices by using countries’ collective buying power. The Commission aims to publish the amount of gas European countries plan to jointly buy in early spring, to attract offers from suppliers. EU countries must ensure their local companies take part in the aggregation of gas demand with volumes equivalent to 15 percent of the gas needed to fill that country’s storage facilities to 90 percent of capacity. EU-wide, the 15 percent requirement amounts to around 13.5 billion cubic metres (bcm) of gas – a slither of the bloc’s total gas imports, which stood at 338 bcm in 2021, according to Eurostat data.
16 January: Trinidad and Tobago plans an auction this quarter of up to 20 offshore natural gas exploration blocks under new fiscal terms designed to increase the pool of potential bidders. The Caribbean nation has been working to stem a decline in its natural gas output and to spur exploration in its shallow waters, where almost all of its natural gas is produced. The new fiscal terms and a plan to provide seismic data aim to lure new bidders. Minister of Energy and Energy Industries Stuart Young confirmed the bid round at a ceremony to close an onshore auction in which it received 16 bids on 11 blocks.
16 January: Germany can reasonably hope to fill up its gas storage facilities at favourable prices for next winter, Economy Minister Robert Habeck said, but cautioned that the energy crisis in Europe’s biggest economy is not over yet. Habeck said the country has the infrastructure to import 14 billion cubic metres (bcm) per year after building three floating liquefied gas terminals since last year. But 30 bcm were still needed to compensate for the 55 bcm that were pumped from Russia each year through the Nord Stream 1 pipeline, he said.
16 January: Europe’s biggest gas grid operator Snam is expected to increase investments to boost its transport, storage and LNG businesses in the next four years, in a move to reinforce Italy’s energy security. The state-controlled group played a key role in filling Italian gas stocks last year when the country was preparing for the winter with dwindling Russian supplies. Analysts expect the company to ramp up investments to around € 11 billion in the 2022-2026 period – from 8.1 billion in the previous plan – focusing on core business while reducing emphasis on green hydrogen. Under the plan, Snam is expected to complete investments in two terminals for liquefied natural gas (LNG) and expand the country’s gas storage. Before 2022, when Russia provided nearly 40 percent of Italy’s gas consumption, fuel imports used to enter northern Italy and travel south.
11 January: Top United States (US) gas exporter, Freeport LNG, is expected to further extend the seven-month-long outage of its liquefied natural gas (LNG) export plant in Texas to February, as it awaits regulatory approvals. Accounting for 20 percent of US LNG exports, resumption of the facility is important to ease the squeeze of global LNG supplies, especially as Europe is rebuilding its gas storage after Russia cut gas exports following Moscow’s invasion of Ukraine. Freeport LNG said the restart timeline still stands and the company was still targeting the second half of this month for the safe, initial restart of its liquefaction facility, pending regulatory approvals.
17 January: Environmental campaigners have launched legal bids against the UK government’s approval of the nation’s first new coal mine in decades, they said. The project, located in Cumbria in northwest England, has long faced opposition from activists who argue it contradicts Britain’s pledge to become carbon neutral by 2050. The government said the mine will produce coal to be used to make steel, not generate power, and insisted that its commitment to phase out coal power by 2024 remains in place. Britain aims to become carbon neutral by 2050.
16 January: Police said they had almost finished clearing climate activists from a German village being razed to make way for a coal mine expansion, as both sides accused each other of violence. In an operation that began, hundreds of police have removed around 300 activists from the doomed hamlet of Lutzerath in western Germany.
17 January: South African President Cyril Ramaphosa has cancelled his trip to the World Economic Forum in Davos in order to deal with his country’s worsening power blackouts. He had been scheduled to lead a delegation from South Africa to the Swiss resort town to promote the country as an investment destination. But public outrage over the electricity crisis has forced him to hold urgent meetings at home. The power utility Eskom is currently implementing a high level of power blackouts, with households and businesses going without electricity for up to 10 hours daily until further notice. Compulsory maintenance, the breakdown of generating units at its ageing power stations and years of corruption have been blamed for Eskom’s failure to meet electricity demand. South Africa’s electricity regulator approved an electricity price increase for consumers of more than 18 percent for this year and a further increase in 2024, despite the power utility’s failure to provide a reliable supply. South Africa is looking to add additional electricity capacity through emergency procurement of renewable energy sources like wind and solar, but that is unlikely to happen in the short term.
17 January: Zambia’s power utility Zesco has signed an agreement with the United Arab Emirates renewable energy company Masdar to develop solar projects worth US$2 billion, the southern African country’s President Hakainde Hichilema said. The two companies will form a joint venture to facilitate investment in Zambia’s renewable energy, he said. The project will commence immediately, starting with the phased installation of 500 megawatts (MW). Zambia has been rationing electricity supply following a big drop in water levels in lake Kariba, threatening hydropower generation which contributes more than 75 percent of the country’s power output.
17 January: Norway’s $1.3 trillion sovereign wealth fund, the world’s largest, said it had agreed to buy a 49 percent stake in Iberdrola’s 1.3 gigawatts (GW) portfolio of Spanish solar plants and onshore wind farms for €600 million (US$650 million). Iberdrola will remain co-owner and operator of the portfolio, Norges Bank Investment Management (NBIM), the operator of the Norwegian fund. Solar plants make up 80 percent of the portfolio, while onshore wind accounts for the remaining 20 percent. Nine projects are currently under development, with completion expected in 2023-2025, it said. With its sunny plains, fast-flowing rivers and windy hillsides, Spain aims to produce 67 percent of its electricity from renewables by 2026. Power companies from all over the world are investing in the country to build the infrastructure to reach that goal.
13 January: Governor Mike Dunleavy outlined proposed legislation for Alaska to capitalise on carbon markets, seeking to diversify state revenues long heavily reliant on proceeds from oil. Dunleavy plans to introduce his so-called carbon management bill package during the legislative session that begins. Dunleavy has suggested a range of rough estimates for what carbon projects might yield. The Congressional Research Service said in a report on carbon capture and sequestration in October that congressional interest in addressing climate change has increased interest in carbon capture and sequestration. Dunleavy’s office said the new legislation would set out rules for potential storage of carbon dioxide in underground geologic formations and for a carbon offsets program.
12 January: As lingering droughts hit southern Africa’s hydropower dams, Zimbabwe faces growing electricity shortages – but connecting individuals and businesses that have installed private solar panels to the national grid could help fill some of the gap. Farmer Kalani Ndlovu, for instance, wants to expand his 13 kilowatt (KW) solar mini-grid – used to pump well water to fill a farm reservoir – and sell the excess power to the state. But Ndlovu – who has a farm in Umguza, in Matabeleland North Province – worries about the cost of the device he needs to connect his mini-grid to the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), the state-owned distributor. The grid-tied inverter would cost him at least US$ 2,000, a significant outlay on top of the about $5,000 the commercial farmer spent on his solar power system back in 2019. Zimbabwe’s net metering system, launched in 2020, allows people who produce private renewable energy to transfer their excess generation to the national grid in return for electricity credits they can use when they do not have sufficient renewable supply.
12 January: EDP Renovaveis, the world’s fourth-largest renewable power producer, has brought on-stream the first hybrid wind-solar farm in Iberia, adding 36.5 gigawatt (GW) of annual capacity just as Europe is facing an energy crisis. The Mina de Orgueil plant, about 300 km (186 miles) northeast of Portugal’s capital Lisbon, combines 17,000 new photovoltaic panels covering an area of roughly six soccer pitches with wind turbines that EDPR already had on the same plot. Like most European countries, Portugal is accelerating its shift to renewables to reduce reliance on imported fossil fuels whose prices have surged since Russia’s invasion of Ukraine. Benefiting from abundant sunshine and strong Atlantic winds, Portugal seeks to have 80 percent of its electricity usage coming from renewable sources by 2026, up from 60 percent now, which is already one of the highest ratios in Europe.
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 NewsPaper for India under No. DELENG / 2004 / 13485.
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