MonitorsPublished on Mar 26, 2019
The week’s updates from the energy sector.
Energy News Monitor | Volume XV; Issue 41


Coal News Commentary: February – March 2019


CIL is aiming to meet the 610 mt production and off-take target as per the pact it signed with the coal ministry, despite a production momentum dip in the initial months of the current fiscal. After the high production growth rate of 15 percent in the April-June quarter of FY19, the dry fuel miner had attempted to meet an internal aspirational target of 652 mt for the year but things did not work out as per CIL’s plans. CIL said the MoU target for production and off-take is 610 mt. Based on the trend, production could be around 590 mt, an analyst tracking CIL said. Coal stock at the pitheads of the miner was at 34.76 mt at the end of February. MCL and South Eastern Coalfields Ltd, which were facing agitations, saw an uptrend in production in February, by 17 and 6 percent respectively over the corresponding month of the previous year. The two subsidiaries account for about half of CIL’s total production. But strikes and disruptions in some of the mines there impacted production. CIL’s total production as on February stood at 528 mt, up 6.6 percent in the first 11 months of the current fiscal. Off-take was at 548 mt during the period. Total coal off-take to power sector in the 11 months till February 2019 was 440.8 mt, against 411.5 mt during the same period of the previous year, registering a growth of 7.1 percent.

Coal stock at power stations have risen to roughly 15 days' operation and the number of plants with precarious inventory has dropped 86 percent to just four from 29 on 31 October last year when the coal and railway ministries scrambled additional supplies to meet a sudden spike in demand and prepare for summer load. The comfortable fuel stocks at generation units ahead of summer leaves no room for discoms to make excuses for load-shedding and will boost the power ministry’s bid to push its 'zero blackout' plan at conference of state power ministers. Available government data shows aggregate coal stock at power plants rising to more than 23 mt on 19 February, indicating an increase of 49 percent from 15.7 mt on 28 February 2018 in spite of a healthy rise in electricity demand. The number of 'critical' and 'super critical plants too has fallen to just two each, indicating a drop of over 84 percent from 25 in the same duration. According to the Central Electricity Authority, which monitors about 114 coal-fired plants, fuel stocks for less than seven and four days are tagged as 'critical' and 'super critical' for power stations away from mines. For pithead plants, the stipulation is set at five and three days' stocks. Available data indicate fuel supply by CIL the mainstay of coal-fired power plants, increased by over 7 percent to more than 407 mt in the April-January period against the same period of 2017-18. Despatch of railway rakes to power stations too has risen by 13 percent to 252 in the same period. The record coal supply has helped power plants to replenish dwindling stockpile even after pumping up generation as electricity demand spiked 14 percent during the October festive season and continues to grow apace at 5-6 percent. The coal ministry expect the supply situation to improve further due to re-opening of the Dhanbad-Chandrapura rail line, a key coal evacuation route, in Jharkhand.

Coal imports increased by 5.1 percent to 189.9 mt in the April-January period of the ongoing fiscal, the report by mjunction services showed. Coal imports were at 180.61 mt in the April-January period of the previous fiscal, the report showed. But January month saw a decline in coal import to 17.25 mt from 19.59 mt in the same month of the previous fiscal. In non-coking coal, the coal stock scenario at thermal power plants showed a steady improvement and this helped to curb volumes. Of the total imports during January 2019, non-coking coal shipments were 12.35 mt and coking coal at 3.53 mt. The government has set a target of 1 bt of coal production by 2019-20 for the mining major, but is considering relaxing the timeline. CIL has announced a production target of 652 mt in 2018-19.

CIL subsidiary — MCL — is likely to miss its production target for the 2018-19 fiscal, as ongoing protests at some of its key mines continue to hamper output. Protests by villagers seeking employment, among other demands, have led to loss of production hours in the current fiscal, mainly impacting the Kaniha mine in Talcher coalfields and Hingula open cast mine. MCL has already revised its aspirational targets to 162.50 mt of coal production and 169 mt of offtake for the fiscal ending 31 March. Even last fiscal’s production of 143 mt might not be equaled.

CIL’s e-auction prices rose about 53 percent in the December quarter, when the company offered half the quantity it did a year ago after diverting supplies to power plants. It offered 14.65 mt of coal during the quarter against 30.8 mt a year earlier. As a result, average prices rose to ₹ 2,847/tonne from ₹ 1,859/tonne. CIL increased supplies to power, its priority sector, at the cost of other customers. The government had asked CIL’s subsidiaries to increase supplies to the power sector.

Illegal coal business is on the rise in Bokaro causing a huge loss to state exchequer. Two trucks loaded with illegal coal were seized during a raid at an illegal coal depot at Bodiya Basti under Bermo Thermal police station. 30 tonne of coal which were stolen and stocked by the coal thieves from the abandoned coal mines of CCL. Thousands of tonnes of coals, which are excavated illegally from forest lands, abandoned CCL mines of rural areas of Bokaro and Dhanbad, are being smuggled to West Bengal through the Chandankyari area of the district. The coal mafias of both Jharkhand and West Bengal run this illegal trade jointly.

The Centre has cancelled the sixth and seventh rounds of coal mines auction under which it was planning to put on sale 19 blocks. However, the government did not specify the reasons for the cancellation. Under the sixth round, the government had earlier announced the auction of 13 blocks for the regulated sectors, including iron and steel, cement and aluminium. The mines were Brahampuri, Bundu, Gondkari, Gondulpara, Jaganathpur A, JaganathpurB, Khappa and Extn, Bhaskarpara, Marki Mangli IV, Sondiha, Chitarpur, Jamkhani and Gare Palma IV/1. While in the seventh tranche the coal ministry had said it would auction six coking coal blocks for iron and steel sector. The blocks were Brahmadiha, Choritand Tilaiya, Jogeshwar and Khas Jogeshwar, Rabodh, Rohne and Urtan North. The successful allottees of the 19 coal blocks will be allowed to sell up to 25 percent of the actual production in open market at prices fixed by CIL. The government had last month allowed sale of 25 percent of coal production from captive mines in the open market, a move aimed at increasing competitiveness and making future auction of blocks attractive. The allottee of a coal mine for specified end use or own consumption was not permitted to sell coal in open market earlier.

Auctions for commercial coal mining may not take place soon as the country is entering the election mode. The statement comes amid resistance from the trade unions operating in the coal sector against commercial coal mining. Last year, the Indian National Trade Union Congress-affiliated Indian National Mine Workers Federation threatened to observe a strike at CIL to protest against commercial mining by private companies. In a major reform in the coal sector since its nationalisation in 1973, the government last year allowed private companies to mine the fossil fuel for commercial use, ending the monopoly of state-owned CIL. The reform is expected to bring efficiency in the coal sector by moving from an era of monopoly to competition. The CCEA had in February 2018 approved the methodology for auction of coal mines/ blocks for sale of coal under the Coal Mines (Special Provisions) Act, 2015, and the Mines and Minerals (Development and Regulation) Act, 1957. The opening up of commercial coal mining for the private sector is the most-ambitious coal sector reform since the nationalisation of the sector in 1973.

CIL has decided to reopen a number of mines that were closed earlier due to safety or viability issues. It is an endeavor to generate local employment and increase production of higher grade of coal. Subsidiaries such as CCL — which had closed three mines — and Bharat Coking Coal — that has many such mines — are collating data and assessing feasibility. CIL said surplus manpower can also be deployed at such mines. Central Coalfields reopened the Rajhara coal mine in Jharkhand, where operations had been suspended since 2010 due to safety concerns. Rajhara was initially an underground mine but after nationalisation it was converted into an opencast mine to recover good quality reserves of coal which otherwise would have been lost. Expected grade of coal from the mine is G9 which is priced at ₹1465/tonne for the power sector. Existing reserves in the mine is estimated at 5 mt. With a capacity to extract 300,000 tonnes of coal per year, the life of the mine is pegged at 18 years.

With the private sector not allowed to do merchant mining of coal, the MDO model is likely to dominate the Indian coal sector once all the mines allocated become operational in 5-6 years. Over 40 mines with an annual capacity to produce more than 500 mt of coal have been allocated to state and central governments besides public sector units through competitive bidding. Currently, coal for merchant mining is not allowed to the private sector and the only available route for them to enter the sector is through the mine developer-cum-operator route. CIL produced over 550 mt of coal last year but the MDO model is fast catching up with CIL that is struggling to meet rising demand from power producers and other industries. Steel producer SAIL, power generator NTPC Ltd, CIL subsidiaries, besides state governments of West Bengal, Odisha, Rajasthan, Telangana, Madhya Pradesh, Andhra Pradesh and Gujarat have adopted the MDO model instead of venturing into mining on their own in the past decade. India meets close to 80 percent of its electricity needs through coal-fired power plants. It is heavily dependent on imports to meet its needs despite having the fifth largest recoverable coal reserves in the world. For a country, which imported over 156 mt coal between April-November 2018, MDO model can reduce import dependency and meet India's surging energy needs and save foreign exchange. MDO, with its technical expertise, enables faster operationalisation of the coal blocks. Since all capital investment on equipment and infrastructure are borne by the MDO, it is responsible for delivering coal of declared quality and quantity at a mining fee arrived at through competitive bidding or reverse auction. MDO attracts stringent penalties for any delay in development of coal block or shortfall in quantity or deviation in quality, they said adding that MDO hedges the owner from the project and financial risk.

Union cabinet approved sale of 25 percent of coal production from captive mines in open market with payment of additional premium on such sale. The cabinet committee on economic affairs has approved the methodology for allowing allocation of coal mines for specified end use or own consumption to sell 25 percent of actual production in open market with premium of 15 percent on such sale under the (Coal Mines Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act 1957. The decision is aimed at increasing competitiveness and to make the future tranches of auction/allotment attractive and commercially viable leading to higher revenues for the government. The move will address the issue of lack of response from bidders during earlier tranches of auction and allotments.

The CCL, the largest coal producer of Jharkhand, is trying to curb coal pilferage and theft through deployment of latest technology in its mines. CCL said every year hundreds of tonnes of coal are lost due to pilferage leading to revenue loss for the company.

The loading of coal at New Mangalore Port has helped the Palakkad division of Southern Railway to record growth in freight loading during the current financial year. The total freight loading in Palakkad division stood at 5.039 mt during April-January of 2018-19 as against the target of 4.762 mt recording a growth of 5.8 percent against the target. The Palakkad division of Southern Railway said the coal loading from New Mangalore Port had helped the division to register improvement in freight loading. The Palakkad division transported 3.645 mt of coal during the period.

Odisha demanded that the Centre immediately take steps to hike coal royalty from 14 percent to 20 percent, and complete sand stowing in closed mines of the state to check soil subsidence. The final recommendation of the study group on coal royalty revision submitted on 5 February 2018 is still under consideration of the central government. Odisha produces about one-fifth of the total coal production in the country. The Mines and Minerals (Development and Regulation) Act permits revision of royalty on coal every three years, but it has remained unchanged during the last six years. However, the rate of clean energy cess levied on coal by the central government has been raised from ₹50 per tonne to ₹400 per tonne during this period. Odhisha demanded a compensation amount of ₹ 82.97 bn towards the cost of about 180 mt of coal extracted in excess of the permissible limits under environment clearance. In two underground mines, closed respectively since 1998 and 2006, the MCL has just completed sand stowing work of 538,000 cubic metre against the total requirement of over 915,000 cubic metre.

Recognised as one the leading mining nations in the world Polish government has prepared ‘West Bengal Project’ that was discussed recently during Bengal Global Business Summit. Poland was partner country of the summit for a third time in a row. Poland looks for collaboration with both PSUs and the biggest private players. During a recent meeting with senior executives of the WBPDCL, Polish companies restated their readiness to provide their Indian counterparts with innovative technologies and solutions for the development of the coal mining sector in India, with particular regard to the Deocha Pachami coal block. The meeting followed the signing of an MoU between the Ministry of Energy of the Republic of Poland and the Ministry of Coal of the Republic of India to increase cooperation in the mining sector. During the meeting, Polish companies expressed their willingness to offer assistance in all aspects of the development of the Deocha Pachami coal block, from the initial exploration of coal reserves, to the development of underground coal mining operations and coal production and extraction. The Deocha Pachami coal block, has estimated coal reserves of over 2 bt — being the largest coal block in Asia, and was recently awarded to the WBPDCL by the union government. As India endeavors to fulfill its ambitious targets to increase domestic coal production to 1 bt annually, Poland stands committed to provide its global expertise and know-how to assist their Indian counterparts in meeting this goal. Poland and India have a long history of collaboration in coal mining. One of the first underground coal mines in India, situated in Moonidih in the present day state of Jharkhand, was developed and operationalised with assistance of Polish mining sector companies in the 1960s.

An action plan has been prepared by Ranchi-based Central Mine Planning and Design Institute for resumption of coal mining in Meghalaya in line with the directions of the NGT. The state government has also framed guidelines for coal mining. The state government had launched a crackdown on illegal coal mining despite a ban imposed by the NGT in 2014 after a major disaster in East Jaintia Hills district when 15 diggers got trapped in a rat-hole mine. The CMPDI has started exploration activity in 1 square kilometre coal block of Khliehriat-Sutnga for preparation of Geological Report and Feasibility study. The government has framed guidelines for coal mining and an action plan has been prepared by the CMPDI to start coal mining in line with the direction of NGT.

The Supreme Court refused to allow miners to transport extracted coal lying at various sites in Meghalaya. Various Interlocutory Applications have been filed for transportation of the coal already mined. The bench had earlier issued notice to the Meghalaya government, the Centre and others seeking their response on various issues connected with coal mining in the state. The court had said the incident, in which 15 miners got trapped in a rat-hole mine in East Jaintia Hills district, shows that illegal mining continues unabated despite the ban and the state may not be supporting it but has failed to contain illegal mining. The top court was hearing pleas filed by several coal miners seeking permission to transport extracted coal which was lying unattended at various places in the state.

Revival of complaints about coal pollution has given the employees and management of MPT a sense of deja-vu, with port dependents apprehensive that coal handling operations could take the same trajectory as iron ore. With its revenue sources drying up, MPT is counting on the source apportionment study by IIT Bombay to put the complaints about coal pollution to rest. For many years, iron ore was the mainstay of MPT’s operations with over 40 mt being exported in 2010-11 before mining came to a grinding halt in the state. In that year, just seven tonnes of coal was handled by MPT. Currently, South West Port Ltd (JSW) is permitted to handle 400,000 tonnes of coal per month, with similar restrictions being placed on Adani Mormugao Port Terminal Pvt Ltd. IIT Bombay is expected to submit the study by February-end and MPT is counting on the report to give coal handling operations a clean chit. MPT held a stakeholders meeting a week earlier to discuss the issue with stakeholders. However closure of coal-handling operations could put over 1,600 jobs under threat.

NGT’s 'oversight committee' has set a 60-day deadline to power companies in Singrauli to completely stop using public roads for transportation of coal. When power generation companies said that there was no option than transporting coal by road, the panel made it clear that there cannot be any relaxation this matter. This panel was constituted by NGT on 28 August 2018, to monitor implementation of its directions. Flyash and dust caused by road transportation of coal continues to be a major problem in the region.

India is keen to collaborate with the US department of energy to source technology for coal gasification to tap into the country’s large reserves, improve its fuel efficiency and reduce dependence on imports. The move was triggered after recent attempts by the government and private players to set up their own coal gasification plants failed. A high-level meeting chaired by NITI Aayog member was held recently with officials from US department of energy. The meeting was called because the government is keen on global partnerships to achieve coal gasification at lower costs and integrate technology for smarter handling of the fuel in an economically viable way. The discussions are in preliminary stage and the challenge for India is the high ash content in indigenous coal.

Rest of the World

China’s coal imports in February fell sharply from January after utilities curbed buying, citing uncertainty over Beijing’s policies on shipments arriving from overseas, while the week-long Lunar New Year holiday also reduced demand. Coal arrivals in February plunged to 17.6 mt, down from 33.50 mt in January, data from the General Administration of Customs showed. The imports fell 15.6 percent from a year ago. The import scrutiny occurred at the same time that rising domestic production before the Lunar New Year caused coal inventories to build at utilities. Coal inventories at China’s six largest coastal power plants rose to 41 days of daily consumption by the middle of February, compared to only 25 days of daily consumption in the first week of March, according to data from the port of Qinghuangdao, a key import terminal for coal.

China’s state planner, the NDRC, said it has approved an open-pit coal mine project in Inner Mongolia region worth 1.46 bn yuan ($218 mn) The mine’s total capacity would be 6 mt a year, the NDRC said. China’s coal consumption is set to rise slightly to 3.89 bt in 2019 from 3.87 bt last year. NDRC said it had approved a new coal mine project in Inner Mongolia region with total investment at 3.37 bn yuan ($499.19 mn). The coal mine project will have an annual capacity of 8 mt.

China has made no changes to its coal import policies nor its inspections of foreign coal cargoes this year. Chinese customs authorities had stepped up environment and safety checks on foreign cargoes. But Chinese coal traders have stopped ordering Australian coal as clearing times through China’s customs have doubled to at least 40 days, according to major buyers in China and international coal merchants, resulting in a sharp fall in Australian prices. Customs clearance typically takes five to 20 days. Now it can be as much as 45 days. The delays have been a large contributor to slump in Australian coal prices. Refinitiv ship tracking data showed coal shipments departing from Australia’s Newcastle port to China fell 30 percent last month compared with December to 18.19 mt.

Customs at China’s northern port of Dalian has banned imports of Australian coal and will cap overall coal imports from all sources to the end of 2019 at 12 mt Dalian Port Group said. The indefinite ban on imports from top supplier Australia, effective since the start of February, comes as major ports elsewhere in China prolong clearing times for Australian coal to at least 40 days. Coal is Australia’s biggest export earner and the Australian dollar tumbled on the news, falling more than 1 percent to as low at $0.7086. Coal imports from Russia and Indonesia will not be affected. Australia’s exports of coal to China in the fourth quarter of 2018 were higher in volume and value than in the same period in 2017. The Dalian ports handled about 14 mt of coal last year, half of which was from Australia. Beijing has been trying to restrict imports of coal more generally to support domestic prices. Dalian had cleared about 6 mt of coal in January that had been delayed since late 2018 as China slowed customs clearance to curb imports. Dalian handles both thermal and coking coal imports but the clamp down is expected to have a bigger impact on coking coal, used in steel making, than thermal coal, used to generate electricity. China bought 28.26 mt of coking coal from Australia in 2018, accounting for 43.5 percent of the country’s total imports of the fuel, customs data showed.

The Indonesian government has set the coal benchmark price (HBA) for March at $90.57/tonne, marking a seventh consecutive month of price fall. February’s benchmark price, which the government uses to calculate a miner’s royalties, was $91.80/tonne. The decline in March benchmark was due to low demand in China. The HBA is a monthly average of the Argus-Indonesia Coal Index (ICI-1), the Platts Kalimantan 5,900 assessment, the Newcastle Export Index and the globalCOAL Newcastle index from the previous month.

The EU energy watchdog urged Bosnia to re-examine a decision to guarantee a Chinese loan to power utility EPBiH for the building of a new unit at the Tuzla coal-fired plant, saying it violates EU energy subsidy rules. The Energy Community, a body established by the EU to extend the bloc’s energy policy to would-be members, said it is committed to supporting a clear and final decision in line with Energy Community law, which would also restore legal certainty for the project. Western Balkan countries are increasingly turning to China for funding as the EU, World Bank and other lenders cut back on financing coal-based projects. Environmentalists have also urged EU policy makers to take a tougher stance on air pollution from the region’s coal power plants, blaming the fumes for 3,900 deaths across Europe and health costs of up to €11.5 bn a year.

Japanese trading house Sojitz Corp said it would sell its 30 percent stake in the BAU thermal coal mine in South Sumatra, Indonesia, to an existing partner for an undisclosed sum. The deal reflects the company’s effort to rebalance its coal assets, shifting away from thermal coal investment and focusing more on coking coal, amid growing global concerns for environment and long-term business sustainability. Sojitz will continue to serve as the BAU’s exclusive sales agent in Japan and continue to provide a stable supply of coal to Japanese market, it said.

The Dutch government has told Vattenfall to close Hemweg 8, its 650 MW coal-fired power plant, by the end of 2019, the Swedish firm said. Last year, the country legislated to shut all power generating plants using coal by the end of 2029, with two of the five having to close by the end of 2024 unless they switch fuels.

More than 90 percent of US coal-fired power plants that are required to monitor groundwater near their coal ash dumps show unsafe levels of toxic metals, according to a study released by environmental groups. The groups, led by the Environmental Integrity Project and Earthjustice, said their findings show the potential harm to drinking water from coal ash and indicate that stronger regulations are needed. Data made public by power companies showed 241 of the 265 plants, or 91 percent, that were subject to the monitoring requirement showed unsafe levels of one or more coal ash components in nearby groundwater compared to EPA standards, according to the analysis by the groups. The environmental groups reviewed data reported from 4,600 groundwater monitoring wells near coal ash dumps of two-thirds of the coal-fired power plants in the US. Coal ash, which is the residue produced from burning coal in coal-fired plants, is stored at hundreds of power plants throughout the country. In response, the Obama administration in 2015 established minimum national standards for the disposal of coal ash, including a requirement that companies monitor groundwater and publish their data. Amid strong pressure from utility and coal companies, the EPA under President Donald Trump last July revised the 2015 rule to suspend groundwater monitoring requirements at coal ash sites if it is determined there is no potential for pollutants to move into certain aquifers. The rule also extended the life of some coal ash ponds from early 2019 to late 2020.

Greece’s PPC said it wants to relaunch a tender for three coal-fired plants and then conclude it in May. Under its post bailout surveillance by its lenders, Greece has agreed to sell the plants to open up the market after an EU court ruled that PPC has abused its dominance in the coal market. The sale, which is overseen by the European Commission, failed to attract any satisfactory bids.

The Finnish parliament approved a government proposal to ban the use of coal to produce energy from 1 May 2029. As a result of the decision, coal plants owned by Fortum and other energy firms will have to halt operations, though a programme will be implemented to compensate some of the costs. In the first nine months of 2018, coal represented eight percent of Finland’s total energy consumption, according to Statistics Finland data. After that date, coal can only be used in an emergency. In 2017, Finland was among the co-founders of the Powering Past Coal alliance, and the country’s Ministry of Economic Affairs and Employment said at the time it aimed to phase out coal from energy production by 2030.

Colombia’s coal production and exports are likely to remain steady this year, companies said, amid predictions international prices for the fuel will fall in 2019. The Andean nation is the world’s fifth-largest exporter of coal. Overall Colombia production figures for last year are expected to be released sometime. Annual output in 2017 was down 1.2 percent from the year before, to 89.4 mt. Analyst Fitch Solutions reduced its Colombian coal production growth forecast from 4.5 percent to 0 percent in January. Thermal coal prices will fall to an average of $85/tonne in 2019, from $101.4/tonne last year, Fitch Solutions said in a note.

CIL: Coal India Ltd, FY: Financial Year, mt: million tonnes, mn: million, bn: billion, MoU: Memorandum of Understanding, discoms: distribution companies, bt: billion tonnes, MCL: Mahanadi Coalfields Ltd, CCL: Central Coalfields Ltd, CCEA: Cabinet Committee on Economic Affairs, MDO: mine developer and operator, WBPDCL: West Bengal Power Development Corp Ltd, NGT: National Green Tribunal, CMPDI: Central Mine Planning and Design Institute, MPT: Mormugao Port Trust, IIT: Indian Institute of Technology, US: United States, NDRC: National Development and Reform Commission, EU: European Union, BAU: Bara Alam Utama, MW: megawatt, EPA: Environmental Protection Agency, PPC: Public Power Corp


Oil companies move poll panel to allot 31,800 new fuel outlets

19 March. The three public-sector Oil Marketing Companies (OMCs) — Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) — have approached the petroleum ministry to seek exemption from the election commission for going ahead with the allotment of at least 31,800 petrol pumps, at a time when the model code of conduct is already in place. Though bids were invited for 78,493 locations, only 31,800 places were finalised prior to the election notification. During the current round, only 3,885 areas were left unbid, while 30,490 areas got single bids and 44,118 locations got multiple interests. States that have got the maximum number of areas include Rajasthan and Uttar Pradesh (UP) with 9,621 and 9,027 areas, respectively. On the other hand, areas in states like Madhya Pradesh, Maharashtra and Tamil Nadu got maximum number of takers.

Source: Business Standard

India to buy 12 percent less Iran oil in April versus March

14 March. Indian state refiners will lift 8 mn barrels of Iranian oil in April, a decline of about 12 percent from the previous month, as the nation is in talks with the United States (US) to renew the waiver from US sanctions against Tehran. The US introduced sanctions aimed at crippling Iran’s oil revenue-dependent economy in November but gave a six-month waiver to eight nations, including India, which allowed them to import some Iranian oil. India has been allowed by Washington to continue to buy about 300,000 barrels per day (bpd) oil or 9 mn barrels in a month till early May. New Delhi, Tehran’s biggest oil client after China, has decided to lift lower volumes in April as a ‘precautionary measure ahead of renewal of waiver’. The US will likely renew waivers to sanctions for most countries buying Iranian crude, including the biggest buyers China and India, in exchange for pledges to cut combined imports to below 1 mn bpd. That would be around 250,000 bpd below Iran’s current exports of 1.25 mn bpd. It is not yet clear if reduced volumes of 8 mn barrels a month is the new condition imposed by Washington for granting a second waiver to New Delhi from sanctions against Tehran. For March, Indian Oil Corp (IOC) had placed an order for 5 mn barrels, Mangalore Refinery and Petrochemicals Ltd (MRPL) for 2 mn, and Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) for 1 mn each. In April, IOC would lift 4 mn barrels, while there is no change in volumes to be loaded by other companies.

Source: Reuters

India’s petroleum products exports to hit 8-year low in 2019

14 March. India’s total exports of petroleum products, which account for over a tenth of the gross value of outbound shipments, are set to drop below the 1.2 mn barrel per day (bpd) mark in the current calendar year, the lowest level of annual exports in the past 8 years. The worrisome trend for export earnings is attributed to a robust rise in domestic demand coupled with a mega maintenance-led refinery shutdown slated for 2019. The country exported petroleum products – mainly petrol, diesel, naphtha, fuel oil and lubricants — worth $35 bn last financial year (2017-18). Domestic refinery upgradation will be required as India plans to shift to Bharat-VI standard fuel in April 2020 coupled with the upgradation required to meet the International IMO 2020 bunker fuel specifications, according to S&P Global Platts. Refiners with planned maintenance in 2019 include Reliance Industries Ltd (RIL), Bharat Petroleum Corp Ltd (BPCL), Hindustan Petroleum Corp Ltd (HPCL) and Indian Oil Corp (IOC), according to Platts. IOC, the largest refiner, will complete its refinery upgradation activity by the second half of next fiscal (2019-20). According to Platts, India’s domestic petroleum product consumption reached 210 million tonnes (mt) in 2018 and is expected to rise 4.8 percent in 2019 on the back of increased demand for petrol, diesel and liquefied petroleum gas (LPG). Data on exports sourced from Petroleum planning and Analysis Cell (PPAC), an arm of the oil ministry, shows the country’s petroleum products exports in January 2019 slumped 25 percent to 4.5 mt as compared to 6 mt exported in the corresponding month a year ago. Overall, in the April-January period of 2018-19, the country’s petroleum products exports have suffered a drop of 8.70 percent at 51.4 mt, as compared to 56.3 mt exported in the same last fiscal. PPAC attributes the hit suffered by petroleum product exports to a drop in out-bound shipments of petrol, naphtha, diesel, LOBS/lube Oil, Fuel Oil, bitumen and Vacuum Gas Oil due to increased domestic consumption of petrol, naphtha and diesel recorded this fiscal year. However, in value terms, petroleum exports increased 14 percent to $32.6 bn during the April-January period of current fiscal as against $28.7 bn worth of exports recorded in the corresponding period of 2017-18. Largest export destinations for India’s petroleum products include Singapore, United Arab Emirates (UAE), Netherland, Malaysia, United States, Israel and Nepal, according to data sourced from the Directorate General of Commercial Intelligence and Statistics, an arm of the commerce ministry. India exported 8.96 mt of petroleum products to Singapore in the first ten months (April-January) of 2018-2019, as compared to 10.55 mt exported in the corresponding period last fiscal. During the same period, petroleum Products exports to UAE increased to 8.18 mt from 6.72 mt while exports to Netherland rose to 5.68 mt from 3.03 mt.

Source: The Economic Times


India’s Petronet expects to boost LNG imports up to 15 percent in fiscal year 2019

15 March. India’s leading gas importer Petronet LNG expects its liquefied natural gas (LNG) imports to rise by up to 15 percent this fiscal year from a year ago once an expansion at its largest terminal is completed, the company said. Natural gas is projected to double as a share of India’s energy mix by 2030 as oil-fired power plants convert to natural gas, while pipelines are being built to expand the fuel’s use in the residential and transportation sectors. Petronet’s LNG imports are expected to rise to around 22 mn to 23 mn tonnes per year (tpy) in the fiscal year ending March 2020, up from just under 20 mn tpy last year, the company said. In February, Petronet LNG inked an initial deal with Tellurian Inc to invest in its proposed Driftwood project in Louisiana in the United States.

Source: Reuters

IOC to receive 2nd LNG cargo for new LNG terminal in May

14 March. Indian Oil Corp (IOC) is set to receive a second liquefied natural gas (LNG) cargo for its new Ennore terminal in south India in May. The 5 million tonnes per annum import facility at Kamarajar port on the outskirts of Chennai discharged its commissioning cargo more than a week ago, with the next due in two months. It was not immediately clear if the company will issue a tender for the cargo. IOC bought a partial LNG cargo for delivery in late February from Swiss trader Gunvor.

Source: Reuters

PNGRB hikes tariff of pipeline transporting Reliance gas by 37 percent, half of sought

13 March. PNGRB (Petroleum and Natural Gas Regulatory Board) has approved a 37 percent rise in tariff from 1 April for the pipeline that transports Reliance Industries' eastern offshore KG-D6 gas to customers. In its final tariff order, the PNGRB said transporting natural gas on the East-West pipeline would cost Rs71.66 per million metric British thermal unit (mmBtu) on gross calorific value (GCV) basis from 1 April as compared to Rs52.33 per mmBtu tariff charged for 1 April 2009, to 31 March 2019, period. The tariff approved is almost half of the tariff sought by East West Pipeline Ltd — the operator of the pipeline. It had sought the tariff to be raised to Rs151.84 per mmBtu with effect from 1 April 2018.

Source: Business Standard


NTPC’s captive coal output to grow three times in current fiscal

17 March. NTPC Ltd is expected to end the current financial year with captive coal production of 7.25 million tonnes (mt), up a massive 170 percent, from 2.68 mt in the year-ago period. The company said that while output at NTPC’s Pakri B arwadih coal mine at Jharkhand has seen a sizeable jump to 6.75 mt in FY19, from 2.68 mt in FY18, Dulanga coal mine in Odisha has started production as well. The Dulanga mine will end the current financial year with an output of 0.5 mt. However, at 7.25 mt, the NTPC’s captive coal production is still a fraction of its annual coal requirement of around 190 mt. The bulk of NTPC’s coal requirement is currently met by Coal India Ltd (CIL), while small quantity is also imported. The first rake of coal from NTPC’s Pakri Barwadih coal mine was flagged off in February 2017. Pakri Barwadih has block area of 46.26 square kilometre with a mine capacity 15 mt per annum and mineable reserve 641 mt. NTPC has been allotted coal blocks including Pakri-Barwadih, Chatti-Bariatu, Kerandari, Dulanga, Talaipalli and Chatti-Bariatu (South), Banai, Bhalumunda and Mandakini B - for captive production so that it can meet the demand for fuel for its coal run power plants. These mines have total geological reserves of around 7.15 bn tonnes with annual production potential of 107 mt. The total capacity for NTPC’s coal fired power plants is currently at 45,500 MW. In its annual report in 2017, NTPC had said that it plans to secure around 33 percent of its total coal requirement through captive coal blocks by 2030.

Source: The Economic Times

Delhi court discharges all accused in coal scam case

16 March. A Delhi court discharged Bajrang Ispat Pvt Ltd, its director and another official in a case related to alleged irregularities in the allocation of the Dumri coal block in Jharkhand in 2006. Special judge Bharat Parashar absolved the company, its director Ramesh Kumar Aggarwal and authorised signatory Anil Jain of all the charges, saying the evidence was not sufficient to proceed against them, defence lawyer D K Dubey said. According to the prosecution, Bajrang Ispat Pvt Ltd was allocated the Dumri coal block in Jharkhand in 2006 but subsequently, the said company was amalgamated with another firm — TP Sao and Sons.

Source: Business Standard


CERC notifies cross border power trade regulations

19 March. The Central Electricity Regulatory Commission (CERC) has announced new regulations that will govern trading of power with neighbouring countries. The new regulations have allowed cross border entities to trade on Indian Day Ahead Market on exchanges for the first time. Under the Cross Border Trade of Electricity Regulations 2019, sale and purchase of power between India and the neighbouring countries will be allowed through mutual agreements between the local entities and the entities of the neighbouring countries through bilateral agreement between two countries, bidding route or through mutual agreements between entities. According to Indian Energy Exchange (IEX), the new regulations were long due and awaited as they have allowed trading through power exchanges. The regulations state that the tariff for import or export of electricity across the border will be determined through competitive bidding or through mutual agreements signed between the parties under the overall framework of agreements signed between India and the neighbouring countries. Under the new regulations, foreign entities will have to apply to the Central Transmission Utility (CTU) for seeking connectivity, long-term access or medium-term access while applications for short-term access will have to made to the National Load Dispatch Centre (NLDC) which will act as the system operator. Currently, a mere 3,000 MW of power is traded in the South Asia region among seven countries including India, Bhutan, Bangladesh, Nepal, Pakistan, Sri Lanka and Myanmar. The country annually imports around 1,200 MW power from Bhutan, exports 1,200 MW to Bangladesh, exports 450 MW to Nepal and 3 MW to Myanmar.

Source: The Economic Times

Bombay HC order spells respite for power consumers

19 March. In a ruling that offers some relief to consumers, Bombay High Court (HC) has held power supply cannot be cut over non-payment of past consumption if the dues were not reflected as arrears continuously for the preceding two years. However, the decision to disconnect would depend on "facts and circumstances of each case", the court held. The HC ruling by a full bench of justices S.C. Dharmadhikari, A.M. Badar and Bharathi Dangre was on a reference to settle "conflicting views" over restrictions provided in the Electricity Act for recovery of arrears pertaining to a period prior to two years unless the arrears have been continuously shown in the bills. The legal issue arose after power supply utilities threatened disconnection on bills raised for the first time for power consumed, in some cases, 17 years ago.

Source: The Economic Times

MSEDCL plans strategy for power faults

18 March. Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has chalked out a two-pronged strategy to overcome frequent power faults affecting 40,000 consumers in Ghansoli. The 7 kilometre (km) long underground 22 kilovolt (kV) power cable stretching from Kalwa sub-station to Ghansoli via Airoli suburban railway station often suffers faults. Each major fault results in a 12-hour power cut. Power demand has increased three-fold in the last five years in Ghansoli node. MSEDCL staff has to struggle to trace any cable fault area owing to the slums on it.

Source: The Economic Times

Power ministry to bring norms to promote green transmission cables

17 March. The power ministry is likely to issue soon new norms for bringing greener options of electricity transmission cables like aluminium to protect environment from ill-effects of lead-based equipment. The ministry along the Central Electricity Authority (CEA), has been discussing issue with industry players to bring new guidelines to avoid use of the material. According to World Health Organisation estimates, 240 mn people globally are overexposed to lead poisoning. The lead-based metallic sheath used in power cables for earthing and anti-corrosion purposes contributes to 35-48 percent of the weight of cables of voltage levels ranging from 66 kilovolt (kV) to 220 kV. A single kilometre (km) of cable, which weighs about 20 tonne/km has lead content of almost 8 tonne/km. The underground power cables have an average life of 25-30 years and once they are laid, they are never dismantled. An industry expert said that power cable manufacturers need to be further encouraged to innovate more and prove the alternatives as rugged and reliable as lead sheathed cables.

Source: Business Standard

In Delhi, peak power demand to cross 7.4 GW this summer

17 March. The capital’s power demand is expected to cross 7,400 MW this summer — around 400 MW more than last year. Arrangements have been firmed up by BSES discoms (distribution companies) to source adequate electricity to meet the demand of over 42 lakh consumers. These arrangements include long-term PPAs (power purchase agreements) and banking arrangements with other states, including Himachal Pradesh, Uttar Pradesh, Jammu & Kashmir, Meghalaya, Manipur and Sikkim.

Source: The Economic Times

Tata Power-DDL ties up with European firms to implement smart grid pilot in Delhi

15 March. Tata Power Delhi Distribution Ltd (Tata Power-DDL) joined hands with European firms Enedis, Schneider Electric, Odit-e and VaasaETT to implement a 1 MW smart grid demonstration project in the national capital, which would be insulated from any blackout in the main grid. This microgrid will cater to a specific area which could be connected to main grid or can be at an isolated place. The project is planned to start in May this year and is expected to be completed by October 2022.

Source: Business Standard

New power tariff regulations a major positive for the sector: Experts

15 March. Power industry experts have hailed the new tariff regulations announced by the central electricity regulator for the period between 2019 and 2024, welcoming several new guidelines. They, however, also cautioned against the possibility of a marginal negative impact on generation projects with respect to new operating norms. The new regulations are set to benefit state-owned utilities including largest generator NTPC Ltd and Power Grid Corp of India Ltd (PGCIL) that transmits around a half of the country’s total electricity through its transmission network. The new CERC regulations state that the assets installed for implementation of the revised emission standards will form a part of the existing generation project and tariff thereof will be determined separately on submission of the completion certificate by the board of the generating company. CERC has approved recovery of capacity charges for thermal generation projects separately during high demand season (three months) and low demand season (remaining nine months).

Source: The Economic Times

Need to strengthen Nagaland’s electricity billing mechanism

14 March. The Power Department in Nagaland needs to strengthen its electricity billing and collection mechanism to increase revenue collection that would go a long way in improving the state’s economy, Nagaland Commissioner and Secretary for Power Department, K D Vizo said. He said that power is an essential service and its interruption could endanger life, health or personal safety of the general population. As of now, Nagaland's power demand is estimated at 250 MW. The state’s four power projects together generate 89.09 MW. The state spends Rs2.96 bn to buy power to meet the shortfall while the revenue receipt stood at Rs1.3 bn, government data showed. He said that power connection is still a costly service and there was a need to work hard to find out ways and means of giving power connections at cheap price.

Source: Business Standard

GE T&D India bags Rs 1.5 bn order for Rajasthan grid modernisation

13 March. GE T&D India Ltd, part of GE’s grid solutions business in India, announced it has bagged a Rs 1.5 bn order from Rajasthan Rajya Vidyut Prasaran Nigam Ltd (RRVPNL) for modernisation of its power grid network. The technology-driven project is part of the power utility’s roadmap — called Smart Transmission Network and Asset Management System (STNAMS) — to implement grid initiatives and augmenting renewable energy in the state. The company said its Advanced Energy Management System (AEMS) will enable the utility to alter production levels based on demand. The software is part of GE’s Digital Energy portfolio and will provide real-time data acquisition and a decision support system for visualisation and situational awareness of the transmission grid. The RRVPNL-STNAMS project will have 535 substations remotely connected to three control centers — a main control center in Jaipur, a back-up control center in Jodhpur and an additional regional center in Ajmer.

Source: The Economic Times


India’s mega renewable energy target to drive growth of wind energy sector: WoodMac

19 March. Aggressive renewable energy target in India and "explosive" growth in the offshore sector are expected to drive a 10-year CAGR (Compound Annual Growth Rate) of 12.2 percent in the wind energy sector in Asia Pacific, excluding China, a report by research group Wood Mackenzie (WoodMac) said. WoodMac said that China’s market recovery would continue, as additional provinces in the north work to lift red warnings, supporting 250 GW of capacity through to 2028.

Source: The Economic Times

Tata Power Solar launches residential rooftop solution in city

19 March. West Bengal Power Minister Sobhandeb Chattopadhyay inaugurated a residential rooftop solution by Tata Power Solar, and said the demand for such products would grow with rising environmental awareness. Residential rooftop solar solutions could typically save up to Rs50,000 annually for 25 years, the company said.

Source: Business Standard

Government cautions against fraudulent websites for KUSUM scheme registration

18 March. The government cautioned against fake websites claiming to be registration portal for Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) scheme and said such websites may be misusing the collected data. The scheme, formulated by the Ministry of New and Renewable Energy (MNRE), aims to promote use of solar energy among the farmers. The scheme consists of three components — 10,000 MW of decentralised ground-mounted grid connected renewable power plants, installation of 17.50 lakh standalone solar powered agriculture pumps, and solarisation of 10 lakh grid-connected solar powered agriculture pumps.

Source: Business Standard

India, US agree to build six nuclear power plants

14 March. The US (United States) has agreed to build six atomic power plants in India to strengthen bilateral security and civil nuclear cooperation and expressed its strong support to India's early membership in the Nuclear Suppliers Group (NSG). India and the US signed a historic agreement to cooperate in civil nuclear energy sector in October 2008. The deal gave a fillip to bilateral ties, which have been on an upswing since.

Source: Business Standard

Telangana calls bids for 31 MW rooftop solar power projects

14 March. Telangana has invited global competitive bids for setting up rooftop solar projects totalling 31.12 MW. The Telangana State Renewable Energy Development Corp Ltd, the nodal agency for development of renewable energy, has invited eligible bidders for setting up of grid-connected rooftop solar photo voltaic systems. These solar units are to be set up on roofs of pump houses, sewage and water treatment plants, office buildings of the Hyderabad Metropolitan Water Supply and Sewerage Board at various locations in the State. The bids have been placed online from 8 March 2019 and open for submission by 8 April 2019 through The price bid opening is slated for 12 October 2019. Telangana has solar PV project installations of over 3,400 MW, making it the second biggest solar PV (photovoltaic) project installations after Karnataka. Telangana plans to increase the solar PV capacity to 5,000 MW in the near term.

Source: The Hindu Business Line


Mexico invites three US companies, foreign firms to bid on new oil refinery

18 March. Mexico invited a host of international firms, including three US (United States) companies, to bid on the construction of an $8 bn oil refinery, as President Andres Manuel Lopez Obrador seeks to fast-track one of his signature projects. The facility would be owned by Mexico’s national oil company, Pemex (Petroleos Mexicanos), becoming its seventh domestic refinery, and built near the Dos Bocas port on Mexico’s southern Gulf coast. It is intended to help wean the country off growing fuel imports, a major campaign promise of Lopez Obrador, who took office in December. To be located in the Gulf Coast state of Tabasco, Energy Minister Rocio Nahle said the refinery has already been granted all required government permits, including for construction. Mexico’s oil safety regulator ASEA, however, fined a contractor in January for clearing protected mangrove from the site without the correct permits. Nahle said the facility will include 17 processing plants and 93 storage tanks, as well as access to highways, a rail line and docking for ships. The 2019 budget for Pemex calls for spending almost $2.5 bn on Dos Bocas, which aims to be able to process 340,000 barrels per day of heavy crude.

Source: Reuters

Oil inventories building despite sanctions on Iran, Venezuela: Saudi Energy Minister

17 March. Saudi Energy Minister Khalid al-Falih said there has been a build-up in oil inventories despite a decline in output from Iran and Venezuela. Falih said that compliance for an OPEC (Organization of the Petroleum Exporting Countries)+ deal in March would be “above 100 percent.” Saudi oil output would not continue indefinitely to compensate for other producers.

Source: Reuters

IEA sees oil market flipping into deficit in second quarter

15 March. The oil market will flip into a modest deficit from the second quarter of this year, with OPEC (Organization of the Petroleum Exporting Countries) possessing a hefty supply cushion to prevent any price rally in case of possible supply disruptions, the International Energy Agency (IEA) said. The IEA, which coordinates the energy policies of industrialised nations, kept its forecast of growth in global oil demand this year unchanged at 1.4 percent, or 1.4 mn barrels per day (bpd). Solid growth in non-OPEC oil output led by the United States (US) should ensure demand is met, the IEA said. The IEA said the market could show a modest surplus in the first quarter of 2019 before flipping into a deficit in the second quarter by about 0.5 mn bpd. In 2019, US seaborne oil trade will move into surplus with net exports rising to nearly 4 mn bpd by 2024.

Source: Reuters

Malaysia’s Petronas to start offering oil products from new refinery in April

13 March. Malaysia’s state energy firm Petronas expects to start offering oil products from its new refining-petrochemical complex in April as the project moves toward full commercial production in October, the company said. The $27 bn Pengerang Integrated Complex was completed in five years, the company said. Petronas and Saudi Aramco jointly own the refining complex which has a capacity of 300,000 barrels per day (bpd). Petronas’ refining capacity will reach 700,000 bpd after including its equity stake in the Pengerang complex, while its petrochemical production will grow to 14.6 mn tonnes per year (tpy) from 12.7 mn tpy currently, the company said. The petrochemical complex is expected to start up by late March. Fuel production from the new refinery will balance Malaysia’s gasoline supply and demand, and will allow it to export diesel from the new refinery, the company said. The company also is prepared to do “a lot more blending” of oil to meet demand for low-sulphur oil from shippers when new fuel regulations by the International Maritime Organization (IMO) start in 2020.

Source: Reuters


Russia’s Gazprom held talks with Serbia over gas pipeline

19 March. Russia’s Gazprom Chief Executive Officer (CEO) Alexey Miller has held talks with Serbian President Aleksandar Vucic over the construction of a gas pipeline in the Balkan country, Gazprom said. The gas pipeline would run from the border with Bulgaria to the border with Hungary, Gazprom said. Gazprom has built the first line of the TurkStream pipeline to Turkey for local gas consumption and is considering various ways to extend the second part of TurkStream to Europe.

Source: Reuters

Australia’s Macquarie leaves group bidding for Brazilian gas pipeline

18 March. Australia’s Macquarie Group is leaving one of the groups that will present a new bid for a gas pipeline network put on sale by Brazil’s state-controlled oil company Petrobras. The other members of the group, sovereign wealth fund GIC Pte Ltd and Brazilian investment firms Itausa Investimentos Itau SA and Cambuhy Investmentos SA, will present a new bid for the pipeline network by the 2 April deadline.

Source: Reuters

Iranian President inaugurates four new phases of South Pars gas field

17 March. Iranian President Hassan Rouhani formally inaugurated four new phases of South Pars, the world’s largest gas field, according to the Iranian oil ministry. Iran has invested $11 bn to complete the four phases and they will increase the country’s gas production capacity by up to 110 mn cubic meters per day, the ministry said. Iranian Oil Minister Bijan Zanganeh said that Iran, which share South Pars with Qatar, expects to operate 27 phases by next March. Gas production at South Pars will exceed 750 mn cubic meters per day by late 2019, Zanganeh said. Iran produced 841 mn cubic meters of gas per day on average in the current Iranian calendar year, which began in March 2018, Zanganeh said. Iran expects to produce 880 mn cubic meters of gas per day in the next year and 950 mn cubic meters of gas per day the following year, Zanganeh said.

Source: Reuters

Egypt returns to LNG exports club seeking to sell cargoes

15 March. Egypt indicated it’s ready to rejoin the club of major exporters of liquefied natural gas (LNG), making its biggest offer to supply the market in at least five years. The state gas company EGAS tendered to sell four cargoes of LNG for loading in April. The bids are due and valid until 25 March. The company is also marketing four cargoes for loading in May and three for June. For Egypt, the tender marks a revitalising of its gas industry, where sagging domestic production forced it to halt most exports of LNG in 2014. The North African nation has regained self-sufficiency with the help of major discoveries including the giant Zohr gas field. LNG is exported from the Damietta and Idku plants, which were largely left idle five years ago.

Source: Bloomberg

LNG Canada expansion to be decided by 2025: CEO

15 March. Royal Dutch Shell and its partners building a massive liquefied natural gas (LNG) export terminal in Western Canada will decide by 2025 whether to double its capacity. The $31 bn LNG Canada project last October became the first major project in five years to be approved, with first exports of the super-chilled fuel planned for 2025. The second phase of the project will include two new processing lines known as trains that will double the plant’s capacity to 28 million tonnes (mt) of LNG per year. LNG Canada Chief Executive Officer (CEO) Andy Calitz said a final investment decision (FID) on phase 2 will happen before the plant’s initial production starts. Since LNG Canada was approved, LNG projects were approved in the US (United States) Gulf Coast and off the coast of Mauritania and Senegal as producers expect a sharp rise in gas demand, particularly in Asia.

Source: Reuters

Eni finds gas offshore Egypt

14 March. Eni S.p.A. has discovered gas at the Nour-1 New Field Wildcat (NFW) offshore Egypt, the Italian oil and gas operator announced. The gas discovery is in the Nour exploration prospect located in the Nour North Sinai Concession in the Eastern Egyptian Mediterranean. The NFW was drilled in a water depth of 295 meters and reached a total depth of 5,914 meters. The well encountered 33 meters of gross sandstone pay and an estimated gas column of 90 meters in the Tineh formation of Oligocene age.

Source: Rigzone

Bulgaria expects SOCAR to invest in its retail gas network this year

14 March. Bulgaria expects Azeri state energy company SOCAR to start investing in the Balkan country’s retail gas distribution network this year, Prime Minister Boyko Borissov said. Sofia plans to cover up to 30 percent of its gas needs beyond 2020 with natural gas from Azerbaijan, reducing its almost total dependence on Russian gas, under its contract to import 1 billion cubic metres (bcm) of gas a year from the Shah Deniz II gas field in the Caspian Sea. SOCAR has previously expressed an interest in investing in Bulgaria’s retail network, as well as in expanding the country’s gas storage facility. The Azeri gas imports are expected to come through the IGB gas interconnector pipeline between Bulgaria and Greece. Borissov said the construction of the IGB would start this summer and that it would become operational in 2020. Bulgaria is looking to secure gas supplies for its planned gas hub at the Black Sea port of Varna and Borissov said he had discussed the possibility of additional Azeri gas shipments for the plan. Currently, more than 95 percent of Bulgaria’s gas needs are met by supplies from Russia’s Gazprom.

Source: Reuters

Bangladesh extends deadline to submit plans for new LNG terminal

14 March. Bangladesh is extending the deadline by three months for companies to submit expressions of interest (EOI) to build the country’s first onshore liquefied natural gas (LNG) terminal. Rupantarita Prakritik Gas Company, the part of state-owned energy company Petrobangla that oversees LNG supplies, on 30 January requested interest from potential terminal developers for a land-based LNG regasification terminal at Matarbari in the Cox’s Bazar district of southern Bangladesh. The EOI is for the design, engineering, procurement, construction and commissioning of a land-based terminal that can handle 7.5 million tonnes (mt) per year of LNG, including receiving, unloading, storage and re-gasification facilities. The project is expected to be built on a build-own-operate basis for 20 years, with ownership then transferred to the Bangladeshi government or a company nominated by the government at no cost. The onshore terminal, which can be expanded to 15 mt per year in the future, is part of Bangladesh’s strategy to develop its gas sector with private companies, according to the EOI document.

Source: Reuters


Chinese go-slow on Australian coal imports may be starting to show

18 March. China’s unofficial go-slow on clearing Australian coal through customs didn’t show up in the first two months of this year, but it may now be starting to have an impact. Chinese coal traders are reported to have cut back on buying from Australia, the world’s largest exporter of the fuel, after the length of time taken by customs to clear cargoes reportedly doubled to at least 40 days. The Chinese customs administration said that it has made no changes to coal import policies nor its inspection of foreign cargoes. The concern that China was restricting Australian coal imports led to a drop in the Australian dollar and weaker coal prices at the main export port of Newcastle. But an analysis of China’s imports of Australian coal for the first two months of 2019 doesn’t show any dramatic changes in volumes from the same period last year. A total of 13.9 million tonnes (mt) of Australian coal arrived in China in the January-February period, up 4.5 percent from the 13.3 mn in the same period last year, according to vessel-tracking and port data. Indonesia, which is the world’s largest exporter of thermal coal and the biggest supplier to China, has also seen largely steady shipments to China in the first two months of the year. China imported 21.2 mt of Indonesian coal in the January-February period, slightly below the 21.9 mn from the same period last year.

Source: Reuters


South Africa’s Eskom ups power cuts as storm hits Mozambique imports

16 March. South African state utility Eskom stepped up rolling blackouts on Saturday as it lost 900 MW of electricity imports from neighbouring Mozambique, which was hit by a cyclone. Eskom, which generates nearly all of the power for Africa’s most industrialised economy, said that it had cut 4,000 MW, double the 2,000 MW it had said would be cut over the weekend after repeated faults at its coal-fired power stations. The situation worsened after a fall in electricity exports from Mozambique, which is cleaning up after a powerful cyclone knocked out communications and electricity pylons.

Source: Reuters

Britain’s Tempus Energy challenges Poland’s power capacity market

15 March. Britain’s Tempus Energy has lodged a challenge in the European Union’s General Court against the European Commission’s approval of a multi-billion euro Polish scheme to pay energy firms to provide back-up power, the company said. Poland last year held its first so-called capacity auction under the scheme aimed at avoiding electricity shortages, awarding contracts to companies such as PGE and Tauron. Tempus Energy was successful last year in a challenge against the European Commission’s approval of Britain’s power capacity market. Payments under Britain’s scheme have been suspended since the November ruling pending further investigation. Tempus has objected to the schemes saying they amount to subsidies for fossil fuel generators and discriminate against technology designed to cut electricity demand during peak times. Poland generates most of its electricity from coal-fired power plants but aims to reduce it 60 percent in 2030 from around 80 percent now.

Source: Reuters

France’s CRE approves hard Brexit access rules for power interconnector

15 March. French energy market regulator CRE said that it had approved daily rules for access to the France-England high-voltage electricity interconnector which would come into force in case Britain were to leave the European Union without a deal. The regulator CRE said daily auctions would be held from 31 March 2019 delivery, to allocate capacity for the France-England power interconnector. CRE had previously said that it was preparing a mechanism which would allow continuity in day-ahead electricity auctions between Britain and France in case there is no deal for Britain to leave the European Union on 29 March.

Source: Reuters

China offers help to Venezuela to restore power

13 March. China offered to help Venezuela restore its power grid, after President Nicolas Maduro accused US (United States) counterpart Donald Trump of cyber “sabotage” that plunged the South American country into its worst blackout on record. With the power blackout in its sixth day, hospitals struggled to keep equipment running, food rotted in the tropical heat and exports from the country’s main oil terminal were shut down. Chinese foreign ministry said China had noted reports that the power grid had gone down due to a hacking attack. Information Minister Jorge Rodriguez said power had been restored in the “vast majority” of the country.

Source: Reuters


French strike cuts EDF’s hydro power output by 600 MW: RTE

19 March. The electricity generation at French utility EDF’s hydro power stations was reduced by 600 MW due to a nationwide strike that affected the power sector, grid operator RTE said. France has an installed hydro electricity capacity of over 25,000 MW, RTE data shows. EDF’s nuclear power reactors, which account for over 75 percent of France’s electricity needs, were largely untouched by the strike, according to RTE’s data.

Source: Reuters

Italian O&G group Eni targets net zero carbon and fatter returns

15 March. Italian oil and gas (O&G) group Eni pledged to cut net carbon emissions to zero by 2030 and promised investors higher returns through a share buyback and raised dividend. State-controlled Eni announced a new business plan on the day of a worldwide student protest against climate change, saying it would grow its green business and invest in planting forests to capture more than 20 million tonnes (mt) of CO2 (carbon dioxide) by 2030. It said it aimed to install more than 10 GW of renewable capacity by 2030 from 0.2 GW this year. As Eni presented its plan in Milan thousands of school students in the Italian city joined a worldwide march calling for action against climate change. The oil and gas industry has come under growing shareholder pressure to tackle carbon emissions following the 2015 Paris climate agreement seeking to reduce net emissions to zero by the end of the century, mostly by lowering fossil fuel burning. BP and Total have set short-term targets on reducing carbon dioxide emissions. Royal Dutch Shell said it planned to reduce carbon emissions from its operations and product sales by 2 percent to 3 percent in 2016-2021. Eni, the biggest foreign oil and gas producer in Africa, said it would be investing €1.4 bn over the next four years in renewable energy projects, mainly solar. Companies like Shell and BP have accelerated spending on wind and solar power as they seek a bigger role in global efforts to slash carbon emissions and battle global warming.

Source: Reuters

Japan court rejects bid to shut Shikoku Electric nuclear reactor

15 March. A high court in western Japan rejected a lawsuit to shut down Shikoku Electric Power Company’s only operating nuclear reactor. A branch of the Yamaguchi District Court denied a legal bid by residents to shut the No. 3 reactor at the Ikata nuclear plant. The 890 MW reactor was restarted on 27 October and is currently running at full capacity. The restart followed a Hiroshima High Court in late September that lifted a 2017 injunction blocking operations at the reactor. Nuclear remains an unpopular energy option in Japan and the country will reboot only a fraction of the 54 reactors it had before the Fukushima disaster in 2011.

Source: Reuters

World Bank, AfDB commit $47 bn to African climate finance

14 March. The World Bank and the African Development Bank (AfDB) will together commit more than $47 bn by 2025 to help African countries tackle the effects of climate change, the banks said. Many countries on the continent, especially those on the coast, are among the most vulnerable to the effects of climate change such as rising sea levels and coral reef deterioration. The World Bank said it had pledged $22.5 bn for 2021-2025, while AfDB said it had committed $25 bn to climate finance between 2020 and 2025. AfDB said the funds would be used to increase investment in renewable energy projects like solar power plants.

Source: Reuters

Shell sets its first carbon reduction targets on output, consumption

14 March. Royal Dutch Shell said it planned to reduce carbon emissions from its oil and gas operations and product sales by 2 percent to 3 percent during the 2016-2021 period, the first time the company has issued carbon footprint targets. The targets, which will be linked to executive pay, aim to cut greenhouse gas emissions from its oil and gas extraction and refining as well for fuels and other products sold to millions of customers, known as Scope 3 emissions.

Source: Reuters

Large-scale solar power set for double-digit growth: Goldman Sachs

14 March. Utility-scale solar power capacity is expected to grow by double digits globally in 2019 and 2020, driven by expansions in the United States, Europe, Middle East and China, US (United States) bank Goldman Sachs said. Solar power is the fastest growing source of electricity generation, taking market share from fossil fuels like thermal coal and natural gas as governments and companies increasingly introduce clean energy targets. Goldman said it expected utility-scale solar installations globally to reach to 108 GW in 2019, up 12 percent on the previous year, and then grow by another 10 percent in 2020 to 119 GW. For 2021 and 2022 the bank expected capacity to reach 129 GW and 135 GW. Utility-scale solar is defined as an installation that is designed solely to feed electricity into a grid, unlike smaller scale residential solar units. Including residential installations, most analysts expect global solar power capacity to soon hit 600 GW.

Source: Reuters

Dutch to introduce corporate CO2 tax as climate plans fall short

13 March. The Dutch government announced a carbon tax for companies after a top advisory body said current plans to cut emissions will fall short of targets. Proposals to fight climate change put forward in recent months will cost the Netherlands around €5.2 bn ($6 bn) over the next decade, but will fall short in achieving a 49 percent CO2 (carbon dioxide) emission reduction goal by 2030, the CPB advisory body said. The Netherlands is one of the most polluting countries in Europe, with higher CO2 emissions per capita and a lower use of sustainable energy than almost everywhere in the European Union (EU). The Dutch government is expected to decide by the end of April on a climate change policy program after a consultation led to a series of measures proposed by businesses, activists and other groups. Prime Minister Mark Rutte said these plans will include a tax on CO2 emissions for corporations, on top of the EU’s current Emissions Trading System, to stimulate more efficient technologies and to make sure companies pay a fair share of the costs of the energy transition. Dutch CO2 emissions are expected to be 21 percent lower than in 1990 next year, missing the goal of a 25 percent reduction which was ordered by a Dutch court last year.

Source: Reuters

US solar installations to rebound in 2019 as prices plummet: Woodmac

13 March. New US (United States) solar installations will grow by 14 percent this year thanks to lower equipment prices that helped to revive a slew of delayed projects, consultancy Wood Mackenzie (Woodmac) said. The forecast for some 12.1 GW of solar panels in 2019 would mark a rebound from 2018 when installations dipped 2 percent to 10.6 GW due to President Donald Trump’s decision to impose 30 percent tariffs on imported panels. In its previous quarterly report on solar released late last year, Wood Mackenzie had forecast just 11.5 GW of solar installations for 2019. A GW of solar is roughly enough to power 700,000 homes.

Source: Reuters


India’s Electricity Sector Scenario

Source: Central Electricity Authority

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 2018 is the fifteenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.

Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted and edited from reliable sources. ORF does not accept any liability for errors therein. News material belongs to respective owners and is provided here for wider dissemination only. Opinions are those of the authors (ORF Energy Team).

Publisher: Baljit Kapoor

Editorial Advisor: Lydia Powell

Editor: Akhilesh Sati

Content Development: Vinod Kumar

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.