MonitorsPublished on Oct 09, 2018
Energy News Monitor | Volume XV; Issue 17


Monthly Power News Commentary: September 2018


The government has readied a raft of power sector reforms, including implementing the DBT scheme in the electricity sector for better targeting of subsidies, freeing renewable energy from licensing requirement for generation and supply, and promoting retail competition. According to the draft amendments to the Electricity Act, 2003, which is available on the power ministry’s website, the government is trying to give consumers wider choice by promoting competition in the distribution sector and addressing contracting issues with medium- and long-term power purchase agreements. The government has been pushing for separating the so-called carriage and content operations of existing power distribution companies, and electricity supply business. Such a move will allow consumers to buy electricity from a power company of their choice. According to the draft amendments, there will be a price cap for electricity tariffs in a particular area under which multiple supply licensees can operate. The electricity (amendment) bill, 2014, was introduced in the Lok Sabha in December 2014. It was then referred to the standing committee on energy, and after its recommendations, consultations were held with the states.

The State Bank of India hopes to resolve 7-8 stressed power assets with an exposure of around ₹ 170 billion during the breather given by the Supreme Court till 11 November. The Supreme Court has asked the banks to maintain status quo and not to initiate insolvency proceedings against defaulting power companies till 11 November 2018, when it would hear the case again. During this period lenders would be able to resolve stressed assets.

Union Bank of India hopes to recover ₹ 20 billion from the resolution of three stressed thermal power units as there has been interest from other operators in these projects. Three projects, including GMR Chhattisgarh Energy Ltd and Prayagraj Power Generation Co Ltd, a subsidiary of Jaiprakash Power Ventures Ltd where the bank has exposure, are at different stages of resolution. The project cost of GMR project was ₹ 115.42 billion with debt component of ₹ 81.73 billion while equity of ₹ 33.67 billion. In case of Prayagraj Power, the project cost was revised upwards to ₹ 155.37 billion which was met through ₹ 45.43 billion equity and ₹ 109.93 billion debt. The total exposure of the bank in the power sector is about ₹ 60 billion.

The RBI has refused to be part of the cabinet secretary-led panel set up by the Prime Minister’s Office in July to resolve issues of the stressed thermal power sector. The RBI has formally communicated to the government that the matter is sub judice and that its well-known views on handling loan defaults have already been articulated on many forums in the past. RBI kept away even as lenders and private companies expect the banking regulator to clarify on treatment of stressed assets till the next date of hearing on 14 November in Supreme Court, which has ordered a status quo until then. The committee met for the second time after its first meeting on 31 August and discussed measures to alleviate the sectoral stress to a large extent. The terms of reference of the committee includes suggesting changes required in provisioning norms and obstacles in fuel supply, sale of electricity and payment problems that made many plants unviable. Companies had moved courts after RBI refused extension of deadline for completing resolutions of stressed power plants. While the Allahabad High Court ruled in favour of RBI, the Supreme Court had ordered status quo on the projects and transferred all cases on the circular to itself.

ICICI Bank, together with BSE and PTC India, has sought a licence from power market regulator Central Electricity Regulatory Commission to set up a new power exchange, the bank said. The power sector has of late emerged as the source of much of the stress in the banking sector. A number of projects have failed to repay their loans to banks and other financial institutions because of a lack of PPAs or other regulatory hurdles. ICICI Bank’s exposure to the power sector at the end of the June quarter stood at ₹ 466.25 billion, of which 30% was classified as stressed. As per the RBI’s February 12 circular, lenders will have to file for insolvency proceedings against stressed power assets worth about ₹ 1.8 trillion after the Allahabad High Court refused to provide any interim relief to power companies from the circular, which mandates early detection of bad loans. Analysts’ estimate resolution under this process could result in hefty haircuts of up to 70% for banks.

India is planning to sell its stake in SJVN Ltd and Power Finance Corp to other government-controlled companies in deals that may fetch the federal government about ₹ 200 billion, helping it to rein in the fiscal deficit amid growing risks of a slippage. The government plans to sell its 63.8% stake in hydropower producer SJVN to NTPC Ltd, the nation’s largest thermal power producer, to garner about ₹ 8,000 billion. The other deal being considered will see Rural Electrification Corp Ltd buying the federal government’s 65.6% ownership in Power Finance Corp Ltd.

A high level panel for power sector is considering payment security mechanism for private sector power generators, which has been the main cause of stress in the sector. The committee's meeting was held on 31 August, where detailed deliberations were done on ensuring payment for power supplied by private sector firms. Payments for supplied power to private sector generators has been an issue, which is one of the main reason for their stress as they are not paid for more than six months in some cases. State-owned firms, like NTPC, have an advantage as they get the payment well in time but private sector firms have to deal with the delay in the absence of any payment security mechanism. The Centre will pursue states for improving power procurement. In the second meeting of the HLEC, the power ministry said it was in discussions with states for improving the power demand scenario. The HLEC has been formed under the Cabinet Secretary to formalise resolution plans for the power sector. The committee has members from the ministries of coal, power, finance and railways.

Copying the vote winning move of the Delhi government Haryana’s power distribution company Dakshin Haryana Bijli Vitran Nigam has slashed electricity tariffs. The new rates come into effect from 1 October. According to the revised rates, consumers using up to 50 units per month will be charged at ₹ 2/kWh compared with ₹ 2.70/kWh levied now. Similarly, residents who restrict their power consumption within 200 units per month will be billed at a rate of ₹ 2.50/kWh instead of ₹ 4.50/kWh. Power consumption in the 200-250 and 250-500 units ranges will be charged at ₹ 5.25/kWh and ₹ 6.30/kWh, respectively. However, the reduced tariff is only applicable for those households where the power consumption is below 500 units per month. If the consumption exceeds the limit, the existing rate will continue which is ₹ 4.50/kWh for the first 200 units.  In case a family limits its monthly electricity consumption up to 50 units, the electricity rate would then be applicable at the rate of ₹ 2/kWh. The reduced tariff would ensure saving of ₹ 437 per month to consumers. It would benefit 4.153 million domestic consumers in the state. Free electricity connections would be provided to those 'dhanis' (hamlets) in the state which are situated within one km of 'Lal Dora' of villages. Another scheme is also under the active consideration of the state government under which a cluster of 11 houses within one km radius would be provided free electricity connection when they apply for the same.

Delhi voters were also assured relief from the recently hiked fixed charges on electricity bills. The electricity rates were the "lowest" under the current government. In March this year, Delhi Electricity Regulatory Commission had increased fixed charges for every consumer, but brought down the unit cost of power.

States pacing up to electrify 100 percent of the households under the Centre’s Saubhagya scheme has triggered an accelerated buying at the spot energy exchanges. Indian Energy Exchange, which has a whopping 97 percent share of online power trade has seen its volumes surging 22 percent to 14.43 billion kWh in April-June quarter. The power bourse closed FY18 with a trading volume of 46,214 million kWh, marking a compounded annual growth rate of 38 percent with FY2009 as the base year. Exchanges have 36 percent share in short-term power transactions. The short-term power market accounts for only 10.6 percent of the country’s total power purchase- the rest 89.4 percent is met by PPAs. Power deficit dogged the states of Jammu & Kashmir, Chhattisgarh, Gujarat, Uttar Pradesh and Puducherry in April-August. These states also witnessed rapid electrification of households under Saubhagya scheme. Jammu & Kashmir and Uttar Pradesh were saddled with the steepest AT&C losses at 53.8 percent and 37.9 percent respectively. The AT&C losses are unlikely to moderate in the year as the implementation of Saubhagya remains a top priority for states. The nationwide AT&C losses have widened to 23.1 percent in Q1 of this fiscal from 20 percent in 2017-18, a grim pointer to the slippages in the implementation of the UDAY scheme. The Saubhagya or ‘Power for All’ scheme, launched in September 2017, targets 100 percent electrification of all households across the country by December 2018. At the time of the announcement of the scheme, there were 32.8 million un-electrified households. A year later, 19.5 million or nearly 60 percent of the households are still waiting to be electrified. As many as 8.8 million households were electrified during April-August period of the current fiscal. Uttar Pradesh lags other states with 31 percent of its households not electrified yet.

The Himachal Pradesh State Pollution Control Board ordered the disconnection of power supply of 14 industrial units and hotels in the Shimla district. It was found that these units had been operating without obtaining a valid consent and renewal of consent as required under the provisions Section 25 of Water (Prevention and Control of Pollution) Act, 1974 and Section 21 of Air (Prevention and Control of Pollution) Act, 1981. These units were given opportunities to apply for the consent.

Assam Government proposed to replace fixed "electricity duty" of 0.20/kWh with an ad-valorem rate of five percent on overall energy charge, having a scope to further increase it to 10 percent. The government plans to have the electricity duty at an ad-valorem duty of five percent. Currently, "electricity duty" is charged at 0.20/kWh and there is no scope to raise it beyond this amount. Once the bill is passed by the Assembly and notified by the government, this step will effectively increase the electricity bill of the consumers.

Chandigarh electricity department has failed to implement power sector reforms, especially preparing the online data of consumers, power connections and entire power infrastructure of the city. The work on this programme was started in 2012 but is far from completion. The Restructured Accelerated Power Development and Reforms Programme project has been initiated to bring down the transmission and distribution losses by upgrading the power infrastructure and introduction of the Information Technology. As per the proposal, the UT electricity department had planned to implement power reforms, including the introduction of management integrated system, geographical information system among other initiatives to boost e-governance in the working of the department. Under the proposed plan, computerisation of the UT electricity department will be done. A round-the-clock call centre for consumer grievance redress will also be set up. With the computerisation, the UT electricity department will be able to create a database of the information, including electrical loads, sanctioned connections, consumers’ grievances, billing etc. As per the plan, the UT will put in place the MIS to speed up day-to-day work procedures in the department. With the introduction of MIS, the department will adopt the use of IT applications for meter reading, billing, collection, energy accounting, auditing, redressal of consumer grievances etc. Around six 66 kV sub-stations have crossed their life and the number of such sub-stations will continue to grow. As per the plan, a total of 12 new 66 kV grid sub-stations will be established while all the existing 66 kV sub-stations will be upgraded in next 10 years. The department has set a deadline of 10 years for completion of the work.

The Uttar Pradesh government has sought details from AMC regarding how much it has saved on power consumption by installing LED bulbs across 100 municipal wards on the city. Under the Street Light National Program, a total 30,509 LED street lights were installed in the city. On orders of the state government, the AMC had assigned work for replacing old street lights with energy-efficient LED bulbs to EESL, a joint venture company of PSUs of the union power ministry. But after installation of the bulbs, the civic body did not share details of savings on power consumption made with the state government. The AMC is responsible for maintaining 38,567 street lights in the city. According to ESSL, the installation of LEDs will help AMC to save over 3,955 kilowatt per hour deemed units’ demand annually which is over 60% of power consumption of conventional street lights. This means electricity bills will be reduced by ₹ 80 million a year.

Power generation capacity of Tamil Nadu has to be increased by 1,000 MW every year to ensure uninterrupted power supply and efforts are under way to add 4,000 MW to the power generation capacity by 2022.

Industrial technology provider ABB said it will supply equipment to enhance power quality at rail line along the country's longest freight corridor, helping trains run at optimum speed. ABB will supply fixed and dynamic reactive power compensation panels at 23 traction substations. The solution will be implemented in the western segment of the DFC between Mumbai and Dadri that covers a distance of more than 1,500 kilometre. The DFC will run between the four cities known as the Golden Quadrilateral - Delhi, Mumbai, Chennai and Kolkata - and will be developed by the DFCCIL. DFCCIL expects to transport up to 15,000 tonne of load for long distances and will have a container capacity of 400 units per train, among the highest in the world. To cope with the volume, DFCCIL is pioneering the operation of double stack containers on electrified routes in India. The potential risk of non-compliance to grid codes can also lead to financial penalties. By improving the reliability of the grid and reducing downtime, ABB's innovative Power Quality Compensator Reactive technology will help DFCCIL optimise the operating costs of its freight network.

Tata Power and India Power Corp Ltd have bid to acquire Odisha’s CESU, being privatised again after 17 years. This is first discom privatisation after licences for Delhi Vidyut Board were handed over to Tata Power Delhi Distribution Ltd and BSES Delhi discoms. Orissa Electricity Regulatory Commission had called bids for the sale of CESU in December last year. The successful bidder will manage, invest and operate the company for 25 years. CESU distribution area comprises 19% of the state with major cities of Bhubaneswar, Cuttack, Paradeep, Angul and Talcher and a revenue potential of about ₹ 30 billion. Odisha was the first state to privatise power distribution sector by dividing the state into four companies.

Increased demand in agriculture coupled with a rise in temperature has pushed up electricity consumption across Gujarat. The power demand in the state touched a record high of 17,652 MW. Industry experts attribute the spike in demand from agriculture sector to daily temperature rising to 36 degrees in the wake of inadequate rainfall. The demand is even higher than the summer months. The state usually witnesses the highest demand in September-October period. Electricity consumption in agriculture sector has crossed the ‘100 million units a day’ mark, which normally remains between 60 to 70 million units during September-October. Among all the Indian states, Gujarat has provided the highest amount of power to agriculture sector.

Power discoms in Gujarat, Uttarakhand and Andhra Pradesh are among the top performers while discoms in Telangana, Haryana, and Hubli in Karnataka are severely lacking on key parameters, according to a latest study on the financial health of discoms by India Ratings. The Fitch group research agency analysed the performance of 19 discoms using data for two years – 2015-16 and 2016-17 -- and judged the discoms on key financial and operational metrics in a report. The performance indicators included power purchase cost, leverage, profitability, working capital, and operational efficiency. The report did not cover some of the largest discoms in the country including those in Uttar Pradesh, Bihar and Punjab.

The chances of tapping the 3,000 MW unexplored power potential in the Sutlej basin have brightened with the Centre giving nod for the laying of a transmission line near Wangtoo to evacuate power from the tribal districts of Kinnaur and Lahaul Spiti. Several mega projects have been in the pipeline but not executed for want of a transmission line. A high-level team from the Central Electricity Regulatory Authority and Powergrid visited the area to assess the feasibility of the almost 200 km transmission line which would cost over ₹ 30 billion. The state government too has shot off a letter to the power ministry following receiving the approval. Earlier, there was a proposal to have a provision for power evacuation through the Rohtang tunnel but since the move did not materialise, Himachal had been keen that a transmission line was laid to be able to evacuate power from Kinnaur and Lahaul Spiti.

State-run power major NTPC's trading arm NVVN will begin power supply of 300 MW to Bangladesh. According to the NTPC, NVVN signed a PPA with BPDB on 6 September 2018 at Dhaka for supply of 300 MW power from DVC and back to back agreement has also been signed with the DVC. The company said the testing of additional 500 MW Baharampur (India) Bheramara (Bangladesh) High Voltage Direct Current link has been completed. This will be used to supply power to Bangladesh. BPDB had invited bids for buying 500 MW power from Indian firms under short-term (1 June 2018 – 31 December 2019) and long-term (1 January 2020 – 31 May 2033) timeframes.

Rest of the World

The value of deals in the global power and utilities sector reached an all-time high of $180 billion in the first half of this year, research by accounting firm EY showed. The record high occurred despite a decline in the second quarter of 14 percent to $83 billion compared to the same period last year.

China wants grid companies to restructure and turn their electricity trading arms into independent firms, the NDRC said. The plan is part of China’s year-long efforts to liberalise its electricity market. All types of companies will be encouraged to invest in the new electricity trading firms, with non-grid companies taking at least 20 percent stakes. Grid companies must submit their plans for reforming electricity trading arms to central government by the end of September, and the reforms need to be completed by the end of this year.

Shares in top global aluminium producer China Hongqiao Group tumbled after its home province of Shandong announced new fees for onsite power plants. The declines came after the Shandong commodity price bureau said owners of captive power plants would have to pay 0.05 yuan ($0.0073) per kWh of electricity generated from July 2018, rising to 0.1016 yuan per kWh after the end of 2019. China wants to curb the use of onsite coal-fired electricity plants - which provide cheaper power than the grid - as part of a campaign for cleaner air. Shandong is one of the first provinces to publish such fees after China’s top economic planner, the NDRC, said in July it would force factories with onsite power plants to pay fees to help fund $12 billion in cuts to commercial and industrial electricity prices.

Siemens AG and rival General Electric Company are battling for a mega contract worth an estimated €13 billion ($15 billion) to develop power stations in Iraq, an order that would hand the winner a badly needed boost amid a deep slump in the industry.  The project will install 11 GW of power generation capacity over four years and create thousands of jobs. While Siemens’s chances for winning the order are “high,” the government hasn’t picked a winner or set a price tag on the order.

By 2015, Uganda had 850 MW of installed capacity with effective generation of approximately 710 MW, of which approximately 645 MW is hydro and 101.5 MW is thermal generating capacity. The Resettlement Action Plan implementation at Opuyo -Moroto - Ayago Interconnection project 132 kilovolt is currently ongoing at 88% progress, according to UETCL. Information from UETCL also indicates that feasibility study on the 60 kilometre long Bulambuli - Mbale industrial park transmission line is on-going.

Turkmenistan completed an upgrade of its largest electric power plant, which it hopes will help boost exports and eventually allow supplies to Pakistan, which would require the construction of a new transmission line. The upgraded gas- and steam-turbine plant in the southern Mary province would boost power exports by 3 billion kWh from the current 3.3 bn kWh a year. In addition to its current customers — Afghanistan, Iran and Turkey — Ashgabat plans to tap Pakistan’s market by building a power transmission line through Afghanistan, where it is already laying a gas pipeline in the same direction.

A coal-fired power plant supplying half of Japan’s northern Hokkaido island was damaged in a powerful earthquake that struck earlier, the country’s industry ministry said. Hokkaido Electric Power, the plant’s operator, said earlier it shut down all its remaining fossil fueled plants in the immediate aftermath of the quake, leaving all of its 2.95 million customers without power. The 350 MW capacity No.1 unit and the 600 MW No.2 unit at the Tomato-Atsuma plant operated by Hokkaido Electric Power have been damaged, the ministry said. Hokkaido Electric is preparing to restart the plant’s 700 MW No.4 unit.

Poland plans to hold its first power capacity auction in November as part of a planned scheme in which electricity producers are paid for their readiness to provide electricity when needed. Poland generates most of its electricity from coal, mostly in outdated power plants, many of which need to be shut down in the coming years, raising risk for its security of supply.

DBT: direct benefit transfer, RBI: Reserve Bank of India, PPAs: power purchase agreements, HLEC: High Level Empowered Committee, kWh: kilowatt hour, km: kilometre, FY: Financial Year, AT&C: Aggregate Technical and Commercial, Q1: first quarter, UDAY: Ujwal Discom Assurance Yojana, IT: Information Technology, UT: Union Territory, MIS: management integrated system, kV: kilovolt, AMC: Agra Municipal Corp, LED: light emitting diode, EESL: Energy Efficiency Services Ltd, PSUs: Public Sector Undertakings, MW: megawatt, GW: gigawatt,  DFC: Dedicated Freight Corridor, DFCCIL: Dedicated Freight Corridor Corp of India Ltd, CESU: Central Electricity Supply Utility, discoms: distribution companies, NVVN: NTPC Vidyut Vyapar Nigam, BPDB: Bangladesh Power Development Board, DVC: Damodar Valley Corp, NDRC: National Development and Reform Commission, UETCL: Uganda Electricity Transmission Company Ltd 


Vedanta seeks licence renewal for Barmer block in Rajasthan

2 October. Vedanta is seeking renewal of its licence to produce oil from the Barmer block under the government’s new policy even as it has been legally fighting the policy’s application in this case, its Chairman Anil Agarwal has said. Vedanta has been fighting the government in court for more than two years on renewal terms of the contract for the prolific block in Barmer, Rajasthan. The original 25-year-contract ends in 2020 and under the government’s new renewal policy, an application by a contractor must be made two years ahead of the expiry of the term. Even though it disagrees with the government stand that the Barmer license can be renewed only under the new policy, the company has applied for contract extension under this policy to bring certainty to its own investment plan for the block, Agarwal said. Three months ago, Vedanta had obtained a favourable judgment from the Delhi High Court, which directed government to renew the Barmer contract on the same terms as in the original contract. Vedanta has won 41 exploration licenses in the first open acreage licensing round while ONGC has won just two. All winners of the auction signed contracts with the government. Oil Minister Dharmendra Pradhan said these exploration contracts will bring in investments of Rs 6,000 crore. Agarwal said Vedanta will put in Rs 3,000-4,000 crore in exploring its 41 blocks. Vedanta may be interested in participating in a refinery project in future, but for now its hands are full with upstream projects, Agarwal said.

Source: The Economic Times

India gets $810 mn investment in exploration licensing round: Oil Minister

1 October. India has received investments worth Rs 59 billion ($810 million) in its latest oil and gas exploration licensing round, Oil Minister Dharmendra Pradhan said. India would offer 14 oil and gas blocks in the next licensing round, Oil Secretary M M Kutty said.

Source: Reuters

Government plans blending of methanol with LPG to cut subsidy bill by 30 percent

1 October. The government is considering a plan to sell LPG (liquefied petroleum gas) blended with methanol, which could help reduce its cooking gas subsidy by around a third at current prices. Mixing 20 percent methanol with LPG, as is done in several countries, is estimated to bring down the cost of cooking gas for household consumption by Rs 100 a cylinder. The portion of methanol in the mix could be scaled up further as India enhances production of methane from coal. The financial benefits could be substantial, considering the country’s LPG subsidy bill that is estimated at more than Rs 20,000 crore in the fiscal 2019 budget.

Source: The Economic Times

State OMCs hike jet fuel price by 7.2 percent due to rupee depreciation

1 October. State oil marketing companies (OMCs) have hiked aviation turbine fuel (ATF) or jet fuel price by 7.25 percent in October. This is the third consecutive price revision. Firms have not included 5 percent Customs duty in the latest revision. A kilolitre of ATF is now priced at Rs 74,177 in Mumbai, highest in the past four years. Indian Oil Corp said the hike was due to an increase in ATF prices in the global market and falling rupee.

Source: Business Standard

ONGC expects crude oil prices to go higher

28 September. Oil and Natural Gas Corp (ONGC) expects crude oil prices to continue their upward trajectory in the backdrop of impending Iran sanctions and declining production in Venezuela. A high crude oil price projection by ONGC that accounts for 73% of India’s oil and gas production comes in the backdrop of Brent crude oil spot prices breeching the $80 per barrel mark. S&P Global Ratings said in a recent report that the agency expected Brent price to be at $70 for the rest of 2018, $65 for 2019 and $60 for 2020. Also, retail diesel and petrol prices in India continue to set new records every other day. Transportation fuel prices touched a new high, with diesel and petrol prices reaching Rs 74.42 per litre and Rs 83.22 per litre in Delhi respectively at Indian Oil Corp (IOC)’s outlets. Petrol and diesel now cost Rs 90.57 per litre and Rs 79.01 per litre. Increasing tensions between the US (United States) and Venezuela, the US demanding an end to all imports of Iranian oil by early November and the rupee’s performance as Asia’s worst performing currency of the year have compounded the situation and put India, the world’s third-largest oil importer, in a difficult spot. The international crude oil prices had registered an all time high of $147 per barrel in July 2009. The cost of the Indian basket of crude rose to $81.23 a barrel on 27 September, according to Petroleum Planning and Analysis Cell.

Source: Livemint

Fuel tax cuts cannot keep oil prices low for long: Oil Minister

26 September. Even as petrol and diesel prices are scaling new highs every day, Oil Minister Dharmendra Pradhan said reducing taxes on these items will not have any lasting impact due to the continuing volatility in crude prices. Petrol prices have crossed Rs 90 a litre in many states while diesel is selling at over Rs 80 a litre, due to high VAT (Value Added Tax) rates that states charge on these items. While Maharashtra has the highest VAT on oil products in the country to the tune of over 39 percent, making almost 53 percent of the price that a motorist pays is taxes, Goa, Delhi and Chandigarh have the lowest VAT rates. Ahead of the US (United States) sanctions, kicking in from 4 November on Iran, crude prices have been on an upward spiral and Brent--the benchmark price for the Indian crude basket--is trading over $80 a barrel now. The country meets 82 percent of its oil demand through imports. Blaming global factors for the skyrocketing prices of petroleum products in the country, Pradhan said reducing taxes on oil products by the Centre and the states will not have any lasting impact due to the volatility in crude prices.

Source: Business Standard

Maharashtra faces Rs 22 bn revenue loss if it cuts fuel prices by Rs 1

26 September. The BJP (Bharatiya Janata Party)-led Maharashtra government said the state would lose revenue to the tune of Rs 22 billion per year if it slashes the prices of petrol and diesel by Rs 1 per litre. Finance Minister Sudhir Mungantiwar said the government had already slashed taxes on petrol and diesel to check the surging prices of petrol and diesel at the state level. Prices of petrol have crossed the Rs 90-mark in more than 20 districts of total 36 districts in Maharashtra. He said rising prices is a matter of concern for citizens as well as for the state government. He said Maharashtra gets 26 percent in taxes from the retail sale of petrol.

Source: Business Standard

India's government has not told refiners to halt Iranian oil imports

26 September. India’s government has not told the country’s oil refiners to halt their imports of Iranian crude, even as most Indian refiners have cut down their imports ahead of US (United States) sanctions on Iran. India has close diplomatic ties with Iran and is also building the strategic Chabahar port in the Middle Eastern country. It is expected to be operational by 2019.

Source: Reuters


IGL to set up CNG stations in housing complexes to ease queues at pumps

2 October. Indraprastha Gas Ltd (IGL), India's biggest city gas retailer, is looking at setting up CNG (compressed natural gas) dispensing stations within residential housing complexes to ease queues at CNG pumps, its Managing Director E S Ranganathan said. The company, which retails CNG to automobiles and piped cooking gas to household kitchens in the national capital and its suburbs, is facing pressure to cut queues at CNG stations that have led to traffic snarls in many parts of the city. IGL plans to add a record 60 CNG dispensing stations and give piped cooking gas connections to at least 2 lakh households this fiscal. The company has adopted a dealer-franchise model in the push for rapidly expanding the network. The company, with 452 CNG stations in Delhi, Noida, Greater Noida, Ghaziabad and Rewari, has started giving the franchise to dealers who own lands. Ranganathan said the company opened 30 CNG stations last year and in 2018-19 it has a target to open 50.

Source: Business Standard

ONGC betting big on second, third rounds of OALP auctions, DSF-II

2 October. Oil and Natural Gas Corp (ONGC) is betting high on the second and third round of auctions under the Open Acreage Licensing Policy (OALP) for petroleum blocks. It has given a formal EoI (Expression of Interest) for seven areas in the second round and is in the process of doing so for discoveries in the Bay of Bengal region for the third round. Also, it would be participating in the second round of Discovered Small Fields auction (DSF-II) that has already been launched. OALP is designed to allow companies to carve out their own exploration areas, improving on gaps found in the earlier model. In the EoI stage, companies may carve out their area based on the National Data Repository. The second stage involves bidding and others can come in. ONGC contributes 71 percent of the country's total oil production and 75 percent of gas production, at 35.7 million tonnes and 32.65 billion cubic metres, respectively.

Source: Business Standard

India raises natural gas price for October-March by nearly 10 percent to $3.36 per mmBtu

28 September. India has raised the price of its locally produced gas by nearly 10 percent to $3.36 per million metric British thermal units (mmBtu) for the October-March period, compared with the previous six months, a government website showed. India has also set the ceiling price for gas to be produced from difficult fields at $7.67 per mmBtu for October-March, compared with $6.78 per mmBtu in the previous six months, the website of the Petroleum Planning and Analysis Cell of the oil ministry showed. The prices will be applicable on gross heat value basis. Higher gas prices will lead to higher earnings for Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL).

Source: Reuters

Mundra LNG terminal in West India to start operations by end-October

28 September. India will start operating a new liquefied natural gas (LNG) import facility in western Gujarat state by end-October, as part of the nation's steps to build infrastructure for a gradual rise in gas use. The five million tonne a year LNG terminal is 75 percent owned by the state while billionaire Gautam Adani-controlled Adani group holds the remainder. Prime Minister Narendra Modi will also inaugurate a gas pipeline linking Vendanta Ltd's Barmer block in the desert state of Rajasthan to the national gas grid, the state's chief secretary Jagdip Narayan Singh said. Against the estimated gas demand of 494 million metric standard cubic meter per day (mmscmd) in the fiscal year to March 2018, India consumed about 144.75 mmscmd gas with about half of that met through imported LNG, according to the government data.

Source: The Economic Times


Consumers of captive power complain of coal supply cuts

2 October. Captive power consumers, who primarily run their electricity generation units to cater to own industrial production demand, have expressed dissatisfaction over the government’s recent move of prioritising power production utilities and central government companies for loading railway rakes for coal transportation. The decision was taken in a meeting chaired by Rail and Coal Minister Piyush Goyal on September 22, held in the wake of acute shortage of coal in power plants. Captive power plant producers, which traditionally bear the brunt of coal shortages in other sectors, have repeatedly been writing to the central government about the issue. While seeking resumption of regular coal supply in May, the industry had told the coal ministry and the Prime Minister’s Office (PMO) that curtailing fuel supply to captive units would compromise operations of about 28,000 MW of generation capacity, and in turn, jeopardising production in the aluminium, steel, fertiliser, cement and other sectors. The Aluminium Association of India had also written to the PMO in August about critical coal shortage.   Supply by Coal India Ltd (CIL) to the non-power sector in the first five months of FY19 remained stagnant year-on-year at 50 million tonnes (mt). Simultaneously, coal allocated for this sector under the e-auction route, where price can rise as much as 70% over the notified amount, has been increased more than ten times to 3.47 mt. Though CIL has increased its dispatch to the power sector by 12% year-on-year to 197 mt in the first five months in FY19, 19 power plants had coal stock for less than seven days on 27 September. Analysts at India Ratings, while maintaining its negative outlook for the thermal power sector, recently said the coal supply issue arising from inadequate railway rakes to ferry the fuel remains one of the crucial challenges to the thermal power sector.

Source: The Financial Express

Government asks CIL to supply rakes to power sector on priority basis

1 October. The government has directed Coal India Ltd (CIL) and its subsidiaries to give priority to power plants in fuel supply as plants are grappling with acute coal shortage. Mahanadi Coalfields Ltd (MCL) in a letter said in view of the acute shortage of coal at power plants, it was decided in the meeting that rakes will be loaded only for power plants. CIL accounts for over 80 percent of the domestic coal output.

Source: Business Standard

SCCL produces 28.5 mt coal in first half of FY 2018-19

1 October. Singareni Collieries Company Ltd (SCCL), a state-owned coal miner said it achieved 28.5 million tonnes (mt) of coal production during the first half of the current fiscal against 27.8 mt during the same period last fiscal. The SCCL dispatched 31 mt of coal during the period under discussion against 29.9 mt in the first of the last fiscal. The thermal power plant run by the SCCL achieved 100 percent plant load factor (PLF) during September, it said.

Source: Business Standard

CIL pushes back 1 bt output target by 6 yrs to 2026

26 September. Coal India Ltd (CIL) has officially pushed back a target to produce 1 billion tonnes (bt) annually by six years to 2026. The goal will be achieved by 2025-26 because of changes in the country’s carbon emission targets, sluggish industrial growth, changing energy mix, environmental challenges and difficulties in acquiring land, the company said in a report. Another factor was the changing trend in the country’s coal demand. The coal ministry has hired a consultant to prepare a Vision 2030 document for the coal sector, taking into account the likely demand under various scenarios, views of the power ministry and the impact of the Paris Agreement of December 2015 to combat climate change.

Source: The Economic Times


Power tariff soars to a decade high of Rs 18 per unit in spot market

2 October. Power tariff touched a decade high of Rs 18 per unit in the spot market due to low hydro and wind energy production and coal shortage at thermal plants. The power price have seen an upward trend in the day ahead market (DAM) at IEX (Indian Energy Exchange) since September 23 when it touched to a high of Rs 14.09 per unit. The prices soared further to hit a nine-year high of Rs 16.49 per unit in the day ahead market on 28 September. The spot power rate touched another high of Rs 17.61 per unit in trading at IEX. According to the IEX data, the previous high was recorded at Rs 17 per unit in August 2009. Power Secretary A K Bhalla said that around this time of the year wind energy suddenly goes down and hydro also starts declining that is where some constraints always come in.

Source: Business Standard

Power bills set to shoot up again in Bengaluru

​​​​​2 October. The Karnataka Electricity Regulatory Commission (KERC) has directed BESCOM (Bangalore Electricity Supply Company) Ltd to collect additional fuel cost adjustment charges (FAC) from consumers at the rate of 14 paise per unit, irrespective of the sector and units consumed. It was only recently that KERC had approved a power tariff hike by 25-38 paise per unit. With FAC, a consumer using 200 units of electricity every month will have to pay an additional Rs 28 from October to 31 December.

Source: The Economic Times

PSPCL sells power, earns over Rs 4 bn in one month

1 October. For the first time ever, the Punjab State Power Corp Ltd (PSPCL) has been able to sell power worth over Rs 400 crore through open exchange, without imposing any regulatory measures in the state even during the paddy season when the demand for power is at its peak. PSPCL Chairman and Managing Director Baldev Singh said during September Punjab was rated number 1 at all-India level in selling power at the Indian Energy Exchange (IEX). A total of 744 million units (MUs) worth Rs 426 crore at an average rate of Rs 5.73 per unit were sold. Total power traded on IEX during September was 5,725.4 MUs at average round-the-clock rate of Rs 4.69 per unit and average peak hour rate of Rs 6.52 per unit, so Punjab was able to get much higher average selling rate as it was able to sell more power during peak hours that helped fetch overall average rate of Rs 5.73 per unit. During the previous year, from April to September the state had been able to sell 221 MUs power worth Rs 87 crore at a rate of Rs 3.93 per unit, whereas this year up to September 18, 1,073 MUs power worth Rs 569 crore at a rate of Rs 5.31 per unit was sold. Last year, the PSPCL had sold power worth Rs 446 crore during the entire fiscal year. Baldev said that this power was sold in the open exchange while the PSPCL supplied 28,773 MUs of energy during this year up to August to various categories of consumers within the state. State Power Minister Gurpreet Singh Kangar lauded the role of PSPCL management for optimum utilization of power resources.

Source: The Economic Times

Delhi CM hand in glove with private power companies: BJP

29 September. Hours after Delhi Chief Minister (CM) Arvind Kejriwal described the proposed amendment to the Electricity Act 2003 as "anti-people" and "anti-federal", the BJP (Bharatiya Janata Party) hit back, saying it reflects the city government is hand in glove with private companies to loot people with extra-ordinarily high power tariff. Delhi BJP chief Manoj Tiwari said that the central government is trying to bring a Bill for withdrawal of excessive meter load surcharge. Tiwari said that the Central government provides electricity to all states. Tiwari said it is an effort in public interest effort and there is no misuse of power involved in it. Tiwari's remarks came after Kejriwal said the proposed amendment to the Electricity Act 2003 would lead to a steep hike in the electricity bill of the common man. The Aam Aadmi Party (AAP) leader also alleged that the bill would also result in complete control of the Centre over the power sector and total exclusion of the states. Tiwari said that if the cost of electricity for the public can be brought down without any impact on actual revenue, there is no reason for the state government to oppose it.

Source: Business Standard

Discom claims annual loss of Rs 1.5 bn due to power theft

29 September. Power distribution company (discom) TPDDL (Tata Power Delhi Distribution Ltd), supplying electricity to nearly 70 lakh consumers in north and northwest Delhi, claimed it has suffered a huge annual loss of Rs 150 crore due to power theft in some pockets of its distribution area. Its aggregate technical and commercial losses range between 50 percent and 60 percent, against the overall figure of 8.4 percent, in 24 villages in Narela and Bawana areas. The AT&C (aggregate technical and commercial) losses have been brought down from 53 percent to 8.4 percent since TPDDL took over from erstwhile Delhi Vidyut Board (DVB) in 2002. TPDDL Chief Executive Officer Sanjay Banga said majority of TPDDL's consumers were proactive in taking registered electricity connections and paying bills regularly. The discom claimed to have "successfully" reduced the losses in the most difficult areas such as JJ (jhuggi jhopri) clusters. The AT&C losses in JJ clusters and resettlement colonies went down from 68 percent in 2008-09 to 12.44 percent in 2017-18 while the number of consumers went up from 23,000 to 2.05 lakh in the given period, he said. The revenue collection from JJ clusters and resettlement colonies also rose from Rs 20 crores to Rs 170 crores during this period, he said.

Source: Business Standard

In Uttar Pradesh, 27 government departments yet to pay Rs 70 mn electricity dues

29 September. Nearly 27 government departments in the city owe over Rs 7 crore to the electricity department, with the primary education department topping the list with Rs 2.5 crore as dues. The dues are pending over many years now and repeated requests to pay the power bill arrears have gone waste. However, the department this time is determined to recover dues before Diwali and has requested all departments to pay up. The electricity department, in fact, few months ago had disconnected the power supply to a primary school but had to resume after intervention from the district administration. There are about 38,000 defaulters whose power dues are more than Rs 10,000 in Ghaziabad city alone. In Ghaziabad zone, comprising Hapur, Bulandshahr and Ghaziabad, outstanding power dues are about Rs 698 crore, of which about 30% have been recovered but when it comes to government departments, not a single penny has been paid against power dues in many years.

Source: The Economic Times

Amendments proposed to Electricity Act very dangerous: Delhi CM

29 September. Delhi Chief Minister (CM) Arvind Kejriwal lashed out at the BJP (Bharatiya Janata Party)-led central government, saying the amendments proposed by it to the Electricity Act, 2003 were "very dangerous" and aimed at benefitting "a few power companies" at the cost of the poor people and farmers of the country. The AAP (Aam Aadmi Party) will launch a movement against the amendment bill so that its passage in the Rajya Sabha could be stopped, he said. The Centre had sent the proposed amendments to the Electricity Act to the states for their feedback. It planned to pass the bill in the coming Winter Session of Parliament, he said.

Source: Business Standard

KPTL bags orders worth Rs 11.4 bn

28 September. Kalpataru Power Transmission Ltd (KPTL) said it has secured new orders worth Rs 1,145 crore. The company got two orders totalling Rs 644 crore for design, supply and construction of 500 kilovolt (kV) and 230 kV transmission lines in CIS and Africa region, respectively. KPTL is an EPC company engaged in power transmission and distribution, oil & gas pipeline, railways, infrastructure development, civil contracting and logistics businesses.

Source: Business Standard


India targeting 40 percent power generation from non-fossil fuels by 2030: PM Modi

2 October. India is targeting 40 percent of electricity generation from non-fossil fuel-based resources by 2030 as it looks to tap vast solar and wind potential to replace reliance on polluting coal to meet its energy needs, Prime Minister (PM) Narendra Modi said. Modi said he saw the 121-country International Solar Alliance as the future OPEC (Organization of the Petroleum Exporting Countries) for meeting energy needs of the world. Oil cartel OPEC led by Saudi Arabia currently meets close to half of the world's oil needs. Modi said the solar power will play the same role that oil wells have played over the past few decades in meeting global energy needs. Humans have in the last 150-200 years relied on resources trapped below the earth's surface for meeting energy needs. But for a secure future, resources available above the ground like solar and wind energy need to be harnessed, Modi said. Modi said 50 GW of renewable energy will be soon added to existing capacity and non-hydro renewable will contribute 20 percent of total energy. Modi said 2.8 million solar pumps can save 10 GW of electricity every year.

Source: Business Standard

Solar power plants of 620 MW capacity get operational at Bhadla park

2 October. With the commissioning of 620 MW by three companies, the total capacity of Bhadla solar park has reached 1365 MW, Rajasthan Renewable Energy Corp Ltd (RRECL) Managing Director B K Doshi said. Spread over 4,500 hactare, Bhadla solar park near Jodhpur has a capacity for 2245 MW which is set to be saturated in next six months as plants having 880 MW capacity are at various stages of development. With the commissioning of the 620 MW, the total solar power capacity in the state has increased to 2905 MW which will go up to 3800 MW in the next six months. Doshi said, in next two years, the total capacity is expected to go up at least to 6000 MW given the interest most of the companies that won bids such as ACME Solar, Azure Power, SB Energy, Hero Solar Energy, and Mahoba Solar (Adani group company) have shown in setting up projects in Rajasthan.

Source: The Economic Times

IIT-Bombay to train 100 school students to make solar lamps

2 October. About 100 school students from villages in Gadchiroli district will get a lowdown on making solar lamp from a team of IIT-Bombay. The team is carrying out the drive at several schools on its Powai campus to mark 150th birth anniversary of Mahatma Gandhi. The students will gather at the Wadsa forest department hall for the workshop where they would be taught how to make the lamp. Local NGO Arogya Prabodhini Sanstha had approached IIT-Bombay after learning about its Clean Energy Initiative with a request to help students not just learn about the renewable source but also overcome the challenge of loadshedding. The NGO would ask the students to take home the lamps which will help them in studies during power cuts after dark. NGO president Suryaprakash Gabhane said the IIT-Bombay believes that if students, in their early age, learn to make their own solar devices and use them, they will not only likely be future users of solar energy but will also be promoting its usage in their own generations and become Student Solar Ambassadors.

Source: The Economic Times

Over 5k biogas plants to be set up in 5 yrs at Rs 1.75 tn: Oil Minister

1 October. Oil Minister Dharmendra Pradhan said as many as 5,000 plants for extracting biogas from agricultural residue, cattle dung and municipal solid waste are envisaged to be set up in the country in next five years at a massive Rs 1.75 trillion investment. He announced that state-owned fuel marketing companies will purchase all the biogas from these plants at Rs 46 per kg in a bid to cut reliance on imports for meeting oil needs. India is more than 81 percent dependent on imports for meeting its oil needs and the move to use biogas extracted from waste/bio-mass sources like agriculture residue, cattle dung, sugarcane press mud, municipal solid waste and sewage treatment plant waste is aimed at cutting that. CBG (compressed biogas) so offered will replace compressed natural gas (CNG) currently used in buses, cars and autos. Of the 146 million standard cubic meters per day of natural gas consumed in the country, 56 percent is imported. He said there is a potential to produce 62 million tonnes of CBG from wastes and its usage would lift the share of natural gas in the energy basket from current 6-7 percent. As many as 5,000 CBG plants are envisaged to be set up in the private sector that will generate 75,000 direct employment, he said. The EoI (Expressions of Interest), he said, is valid till 31 March 2019 but the first CBG plant can start within this quarter.

Source: Business Standard

Madhya Pradesh signs 427 PPAs for rooftop solar installation

30 September. A government pilot project in Madhya Pradesh, aimed at popularising rooftop solar installations in the educational and public service sectors, has achieved a significant milestone with 427 Power Purchase Agreements (PPAs) signed between hundreds of educational institutions and private developers in Bhopal. As many as 291 government colleges, 124 engineering and polytechnic colleges and 12 universities signed up for using solar energy from rooftop installation with no upfront capital investments. According to the PPAs signed, end-users will be able to get power at rates ranging from ₹ 1.91 per unit to ₹ 2.35 per unit, which is significantly lower than the rates at which these organisations procure power currently from the State discom.

Source: The Hindu Business Line

Tamil Nadu sugar mills want to produce thermal power

29 September. Faced with a slump in capacity utilisation due to the huge fall in sugarcane production, sugar mills in Tamil Nadu (TN) have said that the state government should allow them to utilise their plants to produce power using coal. These mills already have co-generation plants that enable them to produce power from bagasse, a by-product of sugar production. Tamil Nadu requires 18 lakh tonnes of sugar per year and the demand is now being bet mostly by mills in Maharashtra and Karnataka.

Source: The Economic Times

Experts to help generate power from cow dung for remote islands of Sundarbans

27 September. At a time when Uttarakhand Assembly recently passed a resolution seeking the status of "rashtra mata" (mother of the nation) to cows, experts from Holland and Poland are trying to help generate power from cow dung for remote islands of Sundarbans, where thermal power has not reached yet. The experts from Holland and Polland visited the city to participate in an interactive session on ‘Generation of Electricity from Cow Dung’ organised by Bharat Chamber of Commerce in Kolkata. Gerwin Lubbers from Microgen Engine Corporation said that the company uses the Sterling Engine, which has gone through many upgradations, to produce power from cow dung.

Source: Mumbai Mirror

Reducing dependence on fossil fuel to remain key focus area: Coal Minister

26 September. Reducing dependence on fossil fuel will remain the prime focus area of the government policy and initiatives, Coal Minister Piyush Goyal said. Given that India being is an import dependent economy from perspective of oil and natural gas, he said, it is also necessary to reduce dependent on oil and oil-related products and move to alternate source of energy which are cheaper too. Over the last four years, the government has made efforts to bring down consumption of fossil fuel and replace it with cleaner and greener fuel, he said. As part of the efforts, the government is giving thrust on renewable energy, the minister said, adding that India launched one of the largest programme to promote renewable energy to produce 100 GW solar energy by 2022.

Source: Business Standard

Massive capital flow needed to boost India's transition to renewable energy

26 September. Conditions have to be created for the infusion of capital needed to accelerate the transition to renewable sources of energy, according to a panel of experts. At the same time, the costs have to remain low enough for power to be affordable yet ensure that returns that can attract investors, Ajay Mathur, the Director General of TERI and Co-Chair of the Energy Transitions Commission (ETC) who chaired the panel, said. One of India's advantages is that with its rapid pace of development, more than half of what it needs by 2030 is yet to be built. This means that they can be done in a sustainable manner to balance the imperatives of both development and climate change, he said.

Source: Business Standard

CO2 emissions costing India up to $210 bn every year

26 September. Carbon dioxide (CO2) emissions are costing the Indian economy up to $210 billion every year, according to a global study which found that the country is likely to suffer highest economic damage from climate change after the US (United States). Previous research has focused on how rich countries benefit from the fossil fuel economy, while damages accrue primarily to the developing world. However, researchers from the University of California San Diego in the US found that the top three counties with the most to lose from climate change are US, India and Saudi Arabia. Researchers estimated country-level contributions to the social cost of carbon (SCC) using recent climate model projections, empirical climate-driven economic damage estimations and socioeconomic forecasts. The country-level SCC for India alone is estimated to be about $86 per tonne of CO2.

Source: Business Standard

NIT Goa to be India’s 1st fully solar-powered technical institute

26 September. The National Institute of Technology (NIT), Goa, has received funding of Rs 497 crore from the Union human resource development ministry for construction of the first phase of its permanent campus at Cuncolim. Once ready, the institute will be the first technical institute in India to be fully solar-powered, NIT Goa director Gopal Mugeraya said. The construction work is slated to begin in October with the putting up of a 7 kilometre long compound wall and will be completed within two years. Mugeraya said that till now, other technical institutes of national repute are only partially solar powered. Further, to make the campus a green one, 100 indigenous trees will be planted at the start of the construction work so that they are fully grown by the time the campus shifts to Cuncolim.

Source: The Economic Times

CGHS can now get solar panels set up on rooftops for free in New Delhi

26 September. Cooperative group housing societies (CGHS) in the capital will now be able to install solar panels on the rooftops of their buildings without spending a single penny. This has been made possible through the Mukhyamantri Solar Power Scheme that was approved by the Delhi cabinet on Tuesday. The scheme is applicable to both group housing societies and independent houses. Delhi Power Minister Satyendar Jain said the housing societies will have to sign a tripartite agreement with Delhi government and the service provider for installation of solar panels under Renewable Energy Service Company (RESCO) model. The installation cost would be borne by the private company. CGHS will be able to utilise the energy produced to light up common areas, run elevators and water pumps, among other activities by paying just Rs 1 per unit. Though solar energy generation would cost about Rs 3 per unit, Delhi government will give a generation-based incentive (GBI) of Rs 2 on each unit of electricity consumed by the housing societies. In the case of independent house owners, the installation cost of Rs 45,000-55,000 will have to be borne by them. Though the government will not be a part of the agreement signed between the house owner and service provider, it will still provide GBI of Rs 2. Additional energy generated through the solar panels can be sold to the grid, the Minister said.

Source: The Economic Times


Bangladesh to hold talks with ENOC for LPG terminal

2 October. Bangladesh will hold talks with Dubai-based Emirates National Oil Company (ENOC) to set up a liquefied petroleum gas (LPG) terminal in the country, Sayed Mohammad Mozammel Haque, a director of Bangladesh Petroleum Corp, said. Bangladesh currently imports LPG mostly from Oman and Qatar, he said. Transport costs for LPG are now about $100 per tonne but once the terminal is built that cost could fall to $30 as it will allow big ships to anchor, which would translate into a 10 percent lower price for end-users, he said. The LPG terminal could be built at Matarbari on Moheshkhali Island in the Bay of Bengal, where the country's first deep-sea port will be built, he said. The government is encouraging the use of LPG for households to cope with a shortfall in supplies of natural gas.

Source: Reuters

Venezuelan oil port repairs delayed, crude exports fall

2 October. Repairs to a dock at Venezuela’s main oil export port will take at least another month to complete following a tanker collision more than a month ago, further restraining the OPEC member nation’s crude exports, according to shipping data. A minor incident in late August forced state-run oil company PDVSA to shut the Jose port’s South dock, one of three used to ship heavy and upgraded oil to customers including Russia’s Rosneft and US-based Chevron Corp, and to receive diluents needed for the exports. Jose port typically handles about 70 percent of Venezuela’s total crude exports, which in September declined 14 percent compared with the previous month to 1.105 million barrels per day (bpd). Oil exports are the financial backbone of Venezuela’s economy, which is struggling to overcome hyperinflation, a long-standing recession and scarcity of basic goods.

Source: Reuters

Iran to build crude oil storage facility at Gulf of Oman port

1 October. A unit of the National Iranian Oil Company (NIOC) signed a deal with a local firm on Sunday to build a crude oil storage facility near Iran’s southeastern port of Jask with an initial investment of €200 million ($232 million). NIOC’s subsidiary Petroleum Engineering and Development Company (PEDEC) signed the agreement with Petro Omid Asia Company to build the facility with a total capacity of 10 million barrels on a build-operate-transfer (BOT) basis in Jask, which is located on the Gulf of Oman coast. Omid Investment Management Group Company signed the deal, under which construction should be completed within three years.

Source: Reuters

Iraq aims to boost light crude exports to 1 mn bpd in 2019

30 September. Iraq plans to increase the production and exports of light crude oil to 1 million barrels per day (bpd) in 2019, as part of its strategy to boost state revenue, its Oil Minister Jabar al-Luaibi said. The light crude oil is a new grade with an API gravity of around 34-43, while the current Basrah Light grade that Iraq exports will be renamed Basrah Medium. Iraq is OPEC (Organization of the Petroleum Exporting Countries)’s second-largest producer after Saudi Arabia and pumps around 4.6 million bpd. The majority of its crude exports go to Asia. The bulk of Iraq’s oil is exported via the southern terminals, which account for more than 95 percent of the OPEC producer’s state revenues. Iraq exported 3.583 million bpd from the southern ports on Gulf in August. Iraq, which relies on oil to generate most of its budget revenues, is seeking to increase crude production capacity to 7 million bpd by 2022 from 5 million bpd now.

Source: Reuters

China hikes 2019 non-state oil import quota as private refiners expand

29 September. China has hiked its 2019 crude oil import quota for “non-state trade”, generally meaning independent refiners, by 42 percent to 202 million tonnes, as two private companies prepare to launch commercial production at major new plants. It is the second consecutive year that Beijing has increased the quota, which is equivalent to 4.04 million barrels per day (bpd). The commerce ministry said companies must submit their applications for the quotas by 10 November. At least two private refiners, Hengli Group and Zhejiang Petrochemical, are preparing to launch commercial production of two new large plants.

Source: Reuters

Asia's troubled emerging markets to shave oil demand next year

28 September. Asia’s emerging markets, the key driver for global oil demand growth, are being hit hard by soaring crude prices and sliding currencies, raising red flags over expectations of further increases in consumption. Import-reliant economies are already aching under oil prices that have risen above $80 per barrel, the most since late 2014. Analysts warn the inflationary combination of higher oil costs and weakening currencies, including India’s rupee, Indonesia’s rupiah and the Philippine peso, could cause a global economic slowdown that would also crimp oil demand in those countries. The rumblings of falling demand undermines the current market narrative that projects rising crude prices, in some cases to $100 a barrel, amid the loss of Iranian supply as the United States is set impose new sanctions on the country on 4 November. Edward Morse, the global head of commodities at Citi Research, said the emerging market woes could shave 100,000 barrels per day (bpd) off oil demand growth in 2019. The IEA (International Energy Agency) currently expects global oil demand growth for 2018 and 2019 at 1.4 million bpd and 1.5 million bpd, respectively. At $80 per barrel, Asia’s oil import bill would breach $1 trillion a year, and few traders or analysts expect crude prices to ease. Global oil consumption is set to increase by 1.4 percent in 2018, according to the IEA. But that number may fall as Asian governments and consumers try to cut their oil costs.

Source: Reuters

Saudi Aramco signs crude oil supply term deal with China's Rongsheng

26 September. Saudi Aramco has signed a long-term deal with Zhejiang Rongsheng to supply crude oil to the Chinese company’s new refinery in eastern China. Rongsheng International Trading Company, the trading arm of Chinese conglomerate Zhejiang Rongsheng Holding Group, has already bought spot Omani crude ahead of the new refinery’s start-up. Zhejiang Petrochemical, 51 percent owned by textile giant Rongsheng Holding Group, was in August awarded a quota to import 5 million tonnes of crude oil this year. The company plans to start up its 400,000 barrels per day refinery-petrochemical project in eastern China in late 2018.

Source: Reuters


Singapore's port authority has invested $19 mn to date for LNG marine fuels

2 October. Singapore’s port authority has so far invested S$26 million ($19 million) into developing cleaner-burning liquefied natural gas (LNG) as a marine fuel at the city-state, the world’s largest marine refueling hub, Alan Lim, deputy director at the Maritime and Port Authority of Singapore, said. The bulk of the investments, totaling about S$18 million, were directed at co-funding the construction of LNG-powered vessels including tug boats, Lim said. The remainder was directed at developing the use of LNG in the marine refueling, also known as bunkering, sector. These included S$6 million for the construction of two barges capable of supplying ships with LNG bunkers through ship-to-ship transfers, as well as S$2 million for the development LNG-bunker trucking facilities at the Singapore LNG Terminal.

Source: Reuters

Japan's Mitsubishi to join in development of $31 bn Shell LNG Canada project

2 October. Japanese trading house Mitsubishi Corp said it will join in developing the LNG Canada project in British Columbia led by Royal Dutch Shell, which has taken a final investment decision to go ahead with the development. The C$40 billion ($31 billion) project, on the west coast of Canada, will consist of two liquefied natural gas (LNG) production facilities, known as trains, that are expected to export about 14 million tonnes per year of the fuel. LNG Canada is a joint venture between Shell, Malaysia’s Petronas, PetroChina Co Ltd, Mitsubishi and Korea Gas Corp. Mitsubishi said it share of the project is 15 percent and it will take delivery of 2.1 million tonnes of LNG annually, based on its share.

Source: Reuters

Shell's LNG Canada seen as tip of megaproject iceberg

2 October. The launch of a massive liquefied natural gas (LNG) export project in Canada could fire the starting gun on a wave of other approvals around the world, potentially curbing a supply crunch expected after 2020. Royal Dutch Shell said it would export LNG from the west of Canada by 2025 after approving a C$40 billion ($31.2 billion) project capable of initially producing 14 million tonnes a year. The Canada and Qatar developments will significantly boost the around 300 million tonnes of LNG traded per year, helping ease a supply shortage expected in the next decade amid surging appetite for cleaner fuels from places such as China and wider Asia.

Source: Reuters

ConocoPhillips sells stake in Sunrise gas field to East Timor

1 October. US (United States) oil and gas producer ConocoPhillips said it signed a deal to sell its 30 percent stake in the Greater Sunrise gas field to East Timor for $350 million. East Timor wants the gas to come to its shores as it is eager to develop oil and gas-based industries, such as petrochemicals manufacturing, to diversify its economy, one of the world’s poorest. The need is urgent as the government’s main source of revenue, the Bayu Undan gas field run by ConocoPhillips, is set to run dry by 2022. The Sunrise and Troubadour gas fields, together known as Greater Sunrise, were discovered in 1974 and hold around 5.1 trillion cubic feet of gas, according to the project’s operator, Australia’s Woodside Petroleum.

Source: Reuters

Morocco preparing tender for $4.5 bn LNG project: Energy Minister

1 October. Morocco is preparing to invite bids for a liquefied natural gas (LNG) project in Jorf Lasfar worth $4.5 billion, Energy Minister Aziz Rabbah said. Moroccan state-owned power utility ONEE said it had picked HSBC Middle East Ltd as financial adviser for its plan to boost imports of LNG. The project includes the import of up to 7 billion cubic metres of gas by 2025, and the construction of a jetty, terminal, pipelines and gas-fired power plants.

Source: Reuters

Iraq begins producing gas from Nasiriya oilfield

29 September. Iraq has begun producing gas from the Nasiriya oilfield in the south of the country at a rate of 50 million cubic feet a day, Oil Minister Jabbar al-Luaibi said. The development plans announced at the time included using 50 million cubic feet of gas produced as a by-product of oil production to supply power stations in the province. Iraq has continued to flare some of the gas extracted alongside crude oil at its fields because it lacks the facilities to process it into fuel. Iraq has said it hopes to end gas flaring by 2021, which costs the government nearly $2.5 billion in lost revenue each year, according to the World Bank.

Source: Reuters

Qatar to boost gas output in sign of strength amid Gulf rift

26 September. Qatar announced plans to boost its liquefied natural gas (LNG) production capacity, which will put the tiny state on a par with top energy exporters in an apparent show of strength amid a protracted political row with Gulf neighbours. Qatar Petroleum (QP), the world’s top supplier of LNG, said it was adding a fourth LNG production line to raise its output capacity from the North Field, to 110 million tonnes a year. Russia, a major oil and gas producer, pumps around 11 million barrels of crude per day, while Saudi Arabia, the world’s top oil exporter, produces about 10.5 million bpd of crude. Additional gas volumes available for exports will mean more revenue for the state budget and more cash for Qatar Investment Authority, the country’s sovereign wealth fund, to invest abroad. For Qatar, which is locked in a dispute with four Arab states, broadening its investments outside the Middle East would cement its position as the world’s largest LNG supplier and help it to weather the boycott with its neighbours.

Source: Reuters


Poland's power from coal seen down at 50 percent by 2040

2 October. Half of Poland’s electricity generation will come from coal by 2040 though coal production should remain at current levels as energy demand is expected to increase. Poland and Germany are jointly responsible for over half of the EU (European Union)’s carbon dioxide emissions from coal. Currently, around 80 percent of Poland’s power production is provided by coal-fired plant generation. It aims to cut that to half by 2040, with renewables and nuclear providing much of the rest and gas-fired generation providing back-up. Earlier this year, Poland said it planned to lower the share of coal in its energy production to 60 percent in 2030 and around 50 percent in 2050. Under a long-term plan to restructure the coal industry, some of the oldest and most polluting coal-fired power units could be decommissioned and replaced with bigger, cleaner and more efficient units. Poland is considering whether to open new fields of lignite - an intermediate between bituminous coal and peat - alongside new coal-fired power units which would take around 10 years or build a nuclear plant which would cost and take around the same.

Source: Reuters

Hopi Tribe urges US to save Arizona Navajo coal plant from closing

26 September. The Hopi Tribe called on the US (United States) government to explore options to keep the Navajo coal-fired power plant in Arizona in service after a potential buyer of the plant decided not to pursue ownership. The plant, which is one of the biggest employers for the Hopi Tribe and Navajo Nation, is set to close at the end of 2019. The three units at the 2,250 MW Navajo plant entered service between 1974 and 1976. President Donald Trump’s administration has been waging a broad effort to keep aging coal and nuclear plants from retirement, arguing that their closure would constitute a threat to national energy security. But dozens of coal plants and several nuclear reactors are still expected to shut in coming years, unable to compete with cheaper alternatives like gas and wind and solar. The four non-federal utility owners decided in February 2017 to continue operating the plant until the end of its lease in December 2019.

Source: Reuters

US power producers' coal consumption falls to 35-year low

26 September. Despite political support from the White House, US (United States) coal consumption continues to fall, as power producers shutter coal-fired units in favour of cheaper and more flexible natural gas as well as solar and wind. Electric power producers’ coal consumption fell to 298 million short tons in the first half of 2018, down from 312 million in the same period in 2017, marginally below 2016, and the lowest since 1983. US power producers generated almost 6 percent less electricity from coal in the first half of the year even as total generation rose almost 5 percent and gas-fired generation was up 17 percent. Coal-fired generation declined by 32 billion kilowatt hours in the first six months, while gas-fired generation rose by 89 billion, nuclear was up by 16 billion, solar rose 7 billion and wind was up by 15 billion. Another 9 GW of coal-fired generation capacity are scheduled to close before the end of 2020, so coal consumption is unlikely to rise and will probably continue to decline in the next few years. Most coal-fired power plants still in operation were commissioned in the 1970s and 1980s, when surging oil prices caused a shift from oil-fired to coal-fired generation. Most are now 35-50 years old and as a result of corrosion and fatigue require expensive replacements of steam generators and other large pieces of equipment.

Source: Reuters


France's Engie to help Elia find additional power for Belgium

2 October. French gas and power group Engie said it is helping Belgian grid operator Elia to find additional power capacity to make up for the country’s shortfall. Engie’s Chief Nuclear Officer Thierry Saegeman said that the crisis was “gigantic”. Belgium faces an unprecedented power supply deficit ahead of winter, with only one of seven nuclear reactors operated by Engie’s Belgian unit Electrabel scheduled to have been operational in November.

Source: Reuters

Nepal, China to facilitate joint investment in power sector

1 October. Nepal and China have agreed to facilitate joint investment in the power sector, according to a joint statement issued by both sides after a meeting. According to the joint statement, both sides introduced their power systems, investment prospects, power markets, future plans among others to make both sides familiar with each other's power system. The joint statement said that during the meeting, possible energy collaboration and the possibility of developing cross-border interconnection were also discussed. Nepal's Ministry of Energy, Water Resources and Irrigation, said that the two sides agreed to prepare a power system cooperation plan once the Nepali and Chinese authorities give the go-ahead.

Source: The Economic Times

Danske Commodities cuts position on Nasdaq's Nordic power exchange after trader's default

26 September. Danske Commodities, one of Denmark’s largest commodity traders, has reduced its trading position on Nasdaq’s Nordic power exchange after one trader’s default left a €114 million ($134 million) hole in Nasdaq’s clearing house buffers. Aas, a veteran derivatives trader, made large bets on the power market.  Danske Commodities trades on Nasdaq’s Nordic commodities exchange to hedge against German power prices, which it trades on Nasdaq’s rival exchange, EEX. Eidsiva Energi, Norway’s fifth-largest power firm by number of customers, and Denmark’s EWII, which posted revenues of €200 million last year, said they would soon decide whether to stop clearing power trades via Nasdaq. They will continue to use Nasdaq to trade Nordic power contracts, but could use banks instead of Nasdaq’s clearing house for that function. The estimated margin level on a Nordic 2019 power year contract was around 8.9 percent and is 10.1 percent now. For German power, the margin levels were 7.9 percent before and 9.9 percent after, Nasdaq said.

Source: Reuters

ABB to upgrade and digitise Egypt’s power grid

26 September. ABB has been selected by the Egyptian Electricity Transmission Company (EETC) to help upgrade and digitalise the electrical grid in the Port Said region. The initiative is part of the country’s efforts to upgrade and modernise its power grid. Demand for electricity is growing fast in the area as a result of rapid urbanisation and economic growth. Egypt’s Minister of Electricity and Renewable Energy, Dr Mohamed Shaker, highlighted the need to strengthen the power grid and address the growing demand for electricity.

Source: African Review


China Hebei sets strict new emissions standards for steel mills

2 October. China’s Hebei province, the country’s biggest steel producer, will force all its mills to comply with strict new emissions standards by 2020 as part of its campaign against air pollution. The provincial environmental protection agency said newly built steel producers will be forced to comply with “ultra-low” emissions restrictions starting from 2019, while existing firms will be given until October 2020 to meet the new standards.

Source: Reuters

Carmakers and green groups see flaws in German diesel plan

2 October. The German government presented plans to cut pollution from diesel vehicles by asking carmakers to offer owners trade-in incentives and hardware fixes, prompting objections from environmental groups and grudging concessions from the industry. Owners of millions of older diesel vehicles in Germany’s 14 most polluted cities should be able to choose between trade-in sweeteners and hardware upgrades for their vehicles. Carmakers, however, did not all commit to covering the cost of retrofits, as the hardware fixes are known, which could run into billions of euros. They said instead the focus should be on encouraging car owners to trade in their older diesel models for cleaner vehicles - which would bring a boost in sales, albeit at discounted prices. German Environment Minister Svenja Schulze said that the car industry should take the chance of avoiding driving bans.

Source: Reuters

Saudi shelves $200 bn SoftBank Solar project

1 October. Saudi Arabia has shelved a $200 billion plan with SoftBank Group Corp to build the world’s biggest solar power generation project. No one is actively working on the project, and instead, the Saudi kingdom is working up a broader, more practical strategy to boost renewable energy, to be announced in late October. SoftBank Chief Executive Officer Masayoshi Son had announced in March a plan to invest in creating the world’s biggest solar power project in Saudi Arabia, a project expected to have the capacity to produce up to 200 GW by 2030.

Source: Reuters

Oklahoma-based NGL settles US biofuel credit allegations

27 September. NGL Crude Logistics has agreed to pay $25 million civil penalty and retire $10 million in renewable fuel production credits under to settle a US (United States) allegations that the company was engaged in a scheme to generate addition credits, the US Department of Justice said. The department said a federal court had found the Oklahoma-based company liable for creating invalid Renewable Identification Numbers (RINs) in July, and that another company involved in the alleged scheme - Western Dubuque has settled its alleged violations in 2016.

Source: Reuters

EU won't impose immediate tariffs on cheap Argentine biodiesel

27 September. The European Commission has decided not to impose provisional import tariffs on a flood of low-priced Argentine biodiesel until it gathers more information, although it considers the fuel to be subsidized and a potential threat to local producers. The decision comes as a major blow for European producers of fuels made from vegetable and recycled oil. They have been hit hard since the EU (European Union) scrapped duties last year in response to a ruling by the World Trade Organisation.

Source: Reuters


State-wise Existing Electricity Installed Capacity of Private Sector

As on June 2018

State/UT Installed Capacity (MW) % Share in Total
Andhra Pradesh 9041.8 10.1
Assam 24.5 0.03
Chhattisgarh 12808 14.3
Delhi 108 0.1
Goa 48 0.1
Gujarat 14802 16.5
Haryana 1320 1.5
Himachal Pradesh 1784 2.0
Jharkhand 1830 2.0
Karnataka 2085.2 2.3
Kerala 174 0.2
Madhya Pradesh 8225 9.2
Maharashtra 13125 14.6
Odisha 3800 4.2
Punjab 3920 4.4
Rajasthan 2400 2.7
Sikkim 399 0.4
Tamil Nadu 3864.8 4.3
Uttarakhand 1180 1.3
Uttar Pradesh 6810 7.6
West Bengal 2025 2.3
Total 89774.3 100

Source: Lok Sabha Un-starred Questions

Publisher: Baljit Kapoor

Editorial Advisor: Lydia Powell

Editor: Akhilesh Sati

Content Development: Vinod Kumar Tomar

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