The coal ministry has withdrawn Bander mine in Chandrapur district of Maharashtra from the list of 41 coal blocks put up for auction for commercial mining as the mine lies in the eco sensitive zone of Tadoba Andhari Tiger Reserve. Accordingly, the coal ministry has decided to withdraw the Bander coal mine from the auction process under the Coal Mines (Special Provisions) Act, 2015. 41 coal blocks for to be auctioned for commercial mining. The block having geological reserves of 126.105 mt has tentative peak rated capacity of 2 mtpa.
The National Green Tribunal, principal bench, Delhi, has directed formation of a committee and sought a factual action taken report regarding the auction of Bander coal blocks close to Tadoba. The tribunal has also sought reply from the respondents in six weeks. The coal ministry has already issued orders to withdraw Bander coal block as it falls in eco-sensitive zone of Tadoba in Chandrapur district.
Jharkhand is likely to get revenues of around ₹188.89 bn from the 742 mt of coal expected to be mined out by CIL in the state over the next four years. The state earned almost ₹40 bn every year during the last four years, that is around ₹160 bn. The holding company of these coal firms, CIL, pays about 30 percent of its total royalty to Jharkhand alone, while the share of production from the state is about 20 percent. Jharkhand is the only state in the country to have three coal companies simultaneously excavating coal out of its mineral-rich soil. Commercial coal mining may fuel development in Jharkhand in the coming years.
India’s largest coal mining services provider and trader Adani Enterprises Ltd is not interested in participating in the country’s first ever coal mine auctions for the private sector. In June 2020 the coal mining sector was opened up without end-use restrictions and provided financial incentives to attract investment in India, which has the world’s fourth largest coal reserves. Adani restricts participation to mining services. Adani Group’s position highlights the struggles of the global coal sector, which has been battered by low prices and falling demand. It also highlights challenges India – the world’s second biggest coal market after China – will face in attracting private sector investors into coal as it attempts to become a net exporter.
The government has restricted participation of companies from countries sharing a land border with India in the ongoing auction of coal mines for commercial extraction by the private sector. The coal ministry has issued a corrigendum to the tender document issued for commercial coal mining, bringing out the fact that though 100 percent FDI under the automatic route, is permitted in the new activity, investment proposals or bids from countries sharing a land border with India will only done through the government route. The ministry has issued the clarifications, so that investors know about their eligibility before placing the bid and are not caught unawares later. In all, 41 mines with a total geological coal reserve of 17 bt are on offer under the first phase of commercial coal mine auctions. These include both large and small mines with PRC ranging from 0.5 to 40 mtpa of coal. The cumulative PRC of all mines is 225 mtpa. Of these, the Centre is withdrawing one mine of Bander in Maharashtra as it falls under an eco-sensitive zone and has also considered the Chhattisgarh government’s request to replace four coal blocks marked for auction for commercial mining. The mines on offer are largely fully explored ones, meaning that these could be brought to production immediately. Moreover, four coming coal mines on offer are those which could provide inputs to the steel sector. The mines are located in five states since coal mines auctions started in Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra and Odisha. The commercial coal mining auctions are completely different from earlier regimes of restricted sectors, use and price. Now there are no such restrictions at all. The coal block auction has so far received good response from the investors with a lot of inquiries from both Indian and global mining, metal and energy companies.
CIL has revised its production target to 650-660 mt for the current fiscal in the wake of the disruptions caused by the Covid-19 pandemic. The miner had earlier set a production target of 710 mt for the 2020-21 fiscal. CIL is witnessing a 7-8 percent growth in demand in August. The Maharatna PSU had produced 602 mt of coal last year as against a target of 630 mt.
CIL may not sign new fuel supply agreements with customers, for a period, who renege on contracts on frivolous grounds after major customers walked out of deals to buy fuel. Efforts of CIL to supply coal of better quality and larger quantity than what is committed have increased revenue. The company had made a provision of ₹13.65 bn for variation in coal quality in previous years, but it withdrew the provision in the last fiscal. CIL has a third-party sampling system and independent consultants to test quality.
CIL has sought 15 percent distance-based freight concession from Indian Railways for transportation of domestic coal to customers located at a distance of 701 to 1,400 km from its mines. The move is aimed at broadening the client base and bring in more customers under import substitution plans. Out of 126 coal-based thermal plants linked with CIL, 14 plants located over 1,400 km distance are eligible for the freight concession presently. Close to 70 percent of CIL’s overall supply consists of “G9 to G13” grades of coal for which the freight price is around 40 to 45 percent of the total landed cost at consumption point. CIL’s coal would then be competitive with the landed price of imported coal and customers may opt for domestic coal. The price of CIL’s coal is considerably low compared to imported coal. But statutory levies and rail freight makes the landed cost of its coal less competitive compared to imported coal, particularly in the western and southern parts of the country. CIL accounts for over 80 percent of domestic coal output.
According to India Ratings and Research, coal prices are likely to be subdued in the current financial year on the back of low power demand and piling inventory at power stations. Domestic coal production remained subdued for the third consecutive month in June. Accordingly, the coal offtake reduced but improved month-on-month with the gradual relaxation in Covid-19 lockdown norms. Overall, domestic coal imports are likely to have been lower in July due to low domestic demand from end-user industries amid the Covid-19 outbreak. Also, the government has mandated CIL to replace at least 100 mt of avoidable imports in FY21. Commercial coal mining and the associated reforms may influence the coal sector towards a more deregulated and competitive scenario.
The NBWL has ordered CIL to stop all mining activities inside the Dehing Patkai forest in Assam as CIL failed to submit any mine reclamation plan. At a meeting in April, the NBWL had recommended the CIL’s proposal of legalising the illegal mining, which the company was indulging from 2003 to 2019 inside the forest, for approval provided it fulfils the 28 conditions. As part of the recommendation, CIL was supposed to submit a rectified site-specific mine reclamation plan in consultation with the Assam Forest Department and a feasibility report for underground mining for the unbroken area along with a compliance report regarding fulfilment of all other conditions. At present, no mining activity is being carried out by CIL inside Dehing Patkai forest, which is termed the Amazon of the East. The Standing Committee noted that unmined or unbroken area is much larger than what CIL had originally stated in its application to grant approval for a total 98.58 hectares. CIL had mined 57.2 hectares and 41.39 hectares were unbroken.
The power plants which had signed sale agreements with distribution companies but were unable to get enough coal from long-term contract auctions can now use the fuel meant for other plants of the same group. In the past four years CIL has held three long-term supply contract auctions for these generators in which plants with a total capacity of nearly 15,000 MW participated. Each time, as part of the auction scheme CIL offered 80 percent of their requirement as calculated by the Central Electricity Authority. The scheme created a gap in supply with respect to requirement as CIL offered only 80 percent of the requirement and some plants were barred from participating for additional supplies in the second and third rounds.
Operational activities of the coal gasification project of Talcher Fertilizers Ltd is being expedited. Talcher Fertilizers Ltd is a joint venture between GAIL (India) Ltd, CIL, Rashtriya Chemicals and Fertilizers Ltd and Fertilizer Corp of India Ltd. The coal gasification-based ammonia-urea project, a first of its kind in the country, would have a design capacity of 2,200 tonnes per day of ammonia and 3,850 tonnes per day of urea.
India is moving towards reducing coal imports to zero, and the central government has set an ambitious target of 1 bt in annual production of coal by 2023-24. Coal private sector units and captive miners have also launched steps to enhance production, while an investment of ₹1,250 bn is envisaged under the Infrastructure Investment Scheme during 2020-24 for which 534 projects have been identified.
Overall coal imports declined for the third consecutive month and were down in June. The share of imports in total domestic consumption reduced to 22 percent in June from 28 percent in FY20. While non-coking coal imports reduced 34 percent, coking coal imports declined by 41 percent. Non-coking coal import prices have shown signs of recovery as the power demand picked up over May, but it is yet to catch up because the steel sector demand remains subdued. India’s coal import fell 43.2 percent to 11.13 mt in July this year on account of high stockpile of the dry fuel at pitheads, plants and ports. The country had imported 19.61 mt of coal in July 2019, according to a provisional compilation, by mjunction services limited, based on monitoring of vessels’ positions and data received from shipping companies. During April-July 2020, total coal imports were recorded at 57.27 mt, which is 35.76 percent lower than 89.15 mt imported during April-July 2019. During April-July 2020, non-coking coal imports stood at 38.84 mt as compared to 60.97 mt imported in the corresponding period last year. The government had earlier mandated state-owned CIL, which accounts for over 80 percent of domestic coal output, to replace at least 100 mt of imports with domestically-produced coal in 2020-21. Coal production in some of the major mines is still affected due to high stock and less offtake. The Centre had earlier asked power generating companies, including NTPC Ltd, Tata Power and Reliance Power, to reduce import of the dry fuel for blending purposes and replace it with domestic coal. Directions were also given to target thermal coal import substitution, particularly when huge coal stock inventory is available in the country this year. States were asked not to import coal and take domestic supply from CIL, which has the fuel in abundance. The country’s coal imports increased marginally by 3.2 percent to 242.97 mt in 2019-20.
The Jharkhand government has initiated the process to grant sanction to the CBI to prosecute Former State Chief Minister Madhu Koda and former mines secretary Jai Shankar Tiwari for corruption in the allocation of a coal block. The CBI has sought from the Jharkhand government sanction to prosecute Koda and Tiwari in connection with the infamous scam related to the allocation of Parbatpur coal block to Electrosteel Castings. Koda has already been convicted for corruption in the allocation of Rajhara North coal block. A trial court in 2017 held him guilty of corruption and conspiracy in the allocation of the coal block in Jharkhand to Kolkata-based company Vini Iron and Steel Udyog Ltd. The CBI has almost concluded its probe in the allocation of Parbatpur coal block to Electrosteel Castings for their proposed pig iron plants at Khardah in West Bengal and Kalahasti in Andhra Pradesh. The Odisha-based Electrosteel allegedly acquired about 48.5 percent shares of an Andhra Pradesh-based private company and the allocation was made for a plant of the latter which never independently applied for a coal block.
According to the UN coal should play no part in any country’s post-coronavirus stimulus plan and economic recovery should align with global climate goals. China is a major consumer of coal and is still developing new coal mines and power projects while also making efforts to develop green energy. China’s 2020 cap on coal-fired power capacity allows another 60 GW to go into operation, though it is also shutting small and inefficient generators.
Indonesia, the world’s top exporter of thermal coal, is stepping up efforts to diversify sales of the fuel as shipments to top buyer India slump and with exports to China poised to slow. Indonesia’s coal exports fell 8 percent in the first five months of 2020 compared with a year ago, according to data from Statistics Indonesia, led by a mammoth 35 percent drop to India as lockdown restrictions hit demand for power in the Asian giant. Thermal coal exports to China rose by 31 percent to 29 mt in the January-May period from the year prior, while exports to Vietnam jumped 44 percent to 8.9 mt over that period. With China’s plans to boost domestic coal production likely to curb its coal imports in coming months, Indonesia is looking to Vietnam, where coal demand is growing, to offset some of those losses. Vietnam, which became the seventh-largest buyer of Indonesian coal in the first five months of the year, saw a huge jump in coal imports in the first half of 2020 from the year prior of more than 50 percent as it fed the country’s growing number of coal-fired power plants. Global coal-fired power capacity edged down for the first time on record in the first half of 2020 as retirements accelerated and the coronavirus saw new projects put on hold. Bangladesh plans to review the number of coal-based power plants it hopes to build, with an eye to reducing its dependence on coal as costs for the fuel rise and power demand grows more slowly than expected. About 3 percent of the country’s power currently comes from coal, but plans to build 29 new coal-fired power plants in the next two decades would boost that to 35 percent.
Poland has been grappling with corona outbreak among coal miners. More than 220 cases were reported in Silesia, where a rapid spread of infections led to a temporary reduction of coal output and work in 12 mines in June. The resurgence of Covid-19 among miners was a result of easing restrictions and of the working conditions in the mines, where it is difficult to enforce social distancing. Currently 1,043 coal miners are infected, mostly from Poland’s biggest coal producer PGG. The pandemic has added to numerous problems faced by the coal industry. The government, PGG representatives and trade unions have agreed to work out a restructuring plan by the end of September.
Europe’s long goodbye to coal is speeding up, in a transition smoothed by the rise of wind and solar power and energy policy that has priced the fossil fuel out of many markets, according to data released. Centuries after powering Europe’s industrial revolution, coal cannot compete with less polluting fuels to generate electricity, prompting governments and companies to close mines and plants. In Spain, coal generation fell 58 percent in the first six months of the year, even before half its remaining plants closed in June as they no longer complied with EU emissions rules. The covid-19 outbreak depressed power demand, further reducing coal consumption. In Portugal, coal generation fell 95 percent in the first half of 2020. In Germany coal generation fell 39 percent, taking it for the first time below Poland, which now generates as much electricity from coal as the EU’s remaining 25 countries put together.
The closing of plants, especially in Europe and the US, outpaced the start of new units, more than 60 percent of which were in China, according to a report by GEM. The net decline of 2.9 GW may be small, at just over 0.1 percent of the world’s coal generation capacity, but marks a turning point in the burning of the dirtiest fossil fuel to produce electricity. China’s coal power expansion would exacerbate overcapacity, according to the report, which cited a study from the University of Maryland that projected the average utilization rate for the country’s coal plants could drop to 45 percent by 2025. The UN has called for a moratorium on new coal plant builds by 2020 to help meet Paris climate agreement targets, yet there is still around 190 GW of capacity under construction worldwide, according to GEM.
Germany’s energy regulator the Bundesnetzagentur set a 1 September bidding date for a first auction inviting operators of hard coal-fired power stations to compete for compensation to close 4,000 MW of capacity under laws seeking to curb carbon emissions. The auction system implements parts of a wide-ranging package of bills passed by the German government in June to arrange the long-term exit from coal mining and generation activities by 2038. Last year, a total 20,000 MW of hard coal plant capacity supplied 9 percent of Germany’s generation output.
Lost in the countryside of western Germany, the innocuously named L277 road has become a central battleground in a bitter fight over the country’s plan to ditch coal. The road is to be dug up to make way for the expansion of a neighbouring coal mine, with villages such as Kuckum next in line for demolition. Germany is officially on course to abandon coal-fired power generation by 2038, with the government finalising its fiercely disputed “coal exit law”. Kuckum and neighbouring villages such as Berverath and Keyenberg sit atop untapped sources of brown coal which mine operator and energy company RWE claims will be “needed from 2024”. While other mines in the region are slated to close by 2030, the coal exit law allows Garzweiler to keep operating, continuing to supply nearby power plants even as they begin to close down in the coming years.
A New South Wales state regulator gave the green light for Australian miner Whitehaven Coal Ltd to proceed with the expansion of a controversial coal mine, in a blow to local farming communities. Whitehaven applied in 2018 to expand the Vickery project, asking for approval to increase coal extraction by nearly 25 percent, increase the peak annual extraction rate more than three-fold and also expand the so-called disturbance area.
| FY: Financial Year, CIL: Coal India Ltd, mt: million tonnes, mn: million, bn: billion, mtpa: million tonnes per annum, FDI: foreign direct investment, PRC: peak rated capacities, km: kilometre, NBWL: National Board of Wildlife, MW: megawatt, GW: gigawatt, UN: United Nations, EU: European Union, GEM: Global Energy Monitor |
25 August. The Covid-19 disruptions have changed the structure of the country’s oil and gas sector with the share of OPEC (Organization of the Petroleum Exporting Countries) crude in Indian oil imports falling to a decade-low level in July. As per data with industry sources, the oil cartel’s share in India’s oil imports fell to about 67 percent in July as against highs of 75-80 percent maintained earlier. While the share of OPEC crude has been reducing for some time in wake of India expanding its oil import basket to include newer territories in Africa, South and North America, the fall in July has come in wake of Covid-19 which has squeezed demand in the domestic market. The lower domestic demand has also pushed Indian refiners to operate their refineries at 70-80 percent capacity. This means they are using less crude to produce products. This has also impacted imports of crude. Iraq and Saudi Arabia are the two of country’s largest oil sourcing markets. Iraq currently enjoys the top position among markets that supply crude to India.
Source: The Economic Times
23 August. India and Nepal had a Joint Working Group (JWG) meeting, during which the two sides discussed future areas of cooperation in the petroleum energy sector, including possibilities of new pipelines for supply of petroleum products to the Himalayan nation, the Indian embassy said. The second meeting of India-Nepal JWG on oil and gas cooperation was held through video conferencing, the embassy said. Representatives from the Embassy of India in Kathmandu, Indian Public Sector Oil and Gas companies such as IOCL, GAIL and HPCL, Ministries of Finance and Foreign Affairs of Nepal and NOC (Nepal Oil Corp) participated in the JWG meeting. The JWG mechanism was set up in 2017 to further strengthen the long-standing cooperation between IOC (Indian Oil Corp) and NOC and diversify areas of cooperation between the two countries in the oil and gas sectors.
Source: The Economic Times
21 August. A total of 40 drums of illegal oil weighing 240 litres each were seized, and one person was arrested during police raid in Assam’s Nagaon district. A Wagon R and three pickup vehicles used to transport the oil were also seized, police said.
Source: The Economic Times
20 August. India’s crude oil imports fell in July to their lowest since March 2010 as fuel demand slowed amid renewed coronavirus-induced lockdowns and closures of refinery units for maintenance, government data showed. Crude oil imports last month slumped about 36.4 percent from a year earlier to 12.34 million tonnes (mt), or 2.92 mn barrels per day, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed. India is also Asia’s third-biggest economy, which imports and exports refined fuels. Refined product imports surged 46.4 percent to 4.07 mt year-on-year, mainly due to a sharp jump in India’s fuel oil imports. Fuel oil imports rose to record 1.22 mt in July from 127,000 tonnes a year ago. Reliance Industries Ltd, operator of the world’s biggest refining complex, has been buying some straight-run fuel oil from countries including Iraq to process at its revamped coker, to maximise refining margins. However, exports of refined products fell 22.7 percent in July to 3.92 mt, their lowest since April 2018. Diesel shipments continued to hold a major share of the total exports at 2.06 mt, down 21.1 percent year on year, the data showed.
Source: Reuters
19 August. MSRTC (Maharashtra State Road Transport Corp), which incurred huge losses during Covid-19, said it will set up 30 petrol and diesel pumps, five liquefied natural gas (LNG) pumps to earn more revenue. An MoU (Memorandum of Understanding) was signed between MSRTC and IOC (Indian Oil Corp) in the presence of state transport minister Anil Parab, who expedited the plan. Two petrol and diesel pumps will be in Palghar division, three in Nashik, one in Aurangabad, four in Beed, two in Jalgaon, one in Dhule, two in Buldana, one in Jalna, two each in Ratnagiri, Akola and Wardha, one each in Yavatmal, Gadchiroli, Amravati, Ahmednagar, Satara and Pune and two at Solapur.
Source: The Economic Times
20 August. GAIL (India) Ltd sees its gas demand returning to pre-Covid-19 levels by the end of the current quarter as the expansion of the city gas network will offset shrinking consumption, its Director (Marketing) E S Ranganathan said. GAIL sold about 113 mn standard cubic metres per day of the fuel before the outbreak of the pandemic. GAIL saw gas demand almost halving when a nationwide lockdown was imposed beginning March 25 to contain the spread of coronavirus. Industries that used gas as feedstock shutdown and CNG (compressed natural gas)-run buses and vehicles went off the road. But with the restarting of economic activity and unlock phases that began in May and June, the demand started coming back, he said. GAIL is currently selling gas at almost 95 percent of pre-Covid-19 levels. The most prolonged reduction in gas demand came from the city gas distribution sector that sells CNG to automobiles, piped cooking gas to households, and provide fuel to hotels and other industries in towns. He said the reduction in demand in existing city gas networks would be offset by new demand from newer areas where the network is being expanded. City gas networks are mostly concentrated in Delhi, Gujarat, Mumbai and a few other cities and licences have been given to roll out the same in other areas. He said gas consumption for the industry as a whole is likely to return to normal by the end of the financial year.
Source: The Economic Times
20 August. Italy’s Snam, the operator of Europe’s largest natural gas transmission network, is eyeing investment opportunities in the Indian gas pipeline business and has roped in GAIL’s former chairman B C Tripathi as its adviser. Snam top executives have held discussions with the oil minister, officials, regulator and industry executives in India to understand the investment opportunities and regulatory landscape, people familiar with the matter said. The discussions have ranged over several topics including hydrogen fuel, gas storage and small-scale liquefaction technologies but the big thrust has been on pursuing investment opportunities in the gas pipeline business, they said. Niti Aayog proposed hiving off GAIL’s pipeline assets and monetizing it but encountered resistance from the company as well as the petroleum ministry. GAIL owns about 11,000 km of gas pipelines across the country and is currently planning to shift all its pipeline assets to a wholly-owned subsidiary. Snam, which also operates in the UK (United Kingdom), France, Austria, Greece and China, expects to leverage its deep knowledge of the gas sector to launch itself in India. Snam can offer technology and equipment for compressed natural gas (CNG) refuelling stations, the company said. Some of India’s small gas fields are unconnected to a pipeline, and a cheap liquefaction facility can help evacuate such gas. India is seeking to expand the use of natural gas in transport and also setting up new LNG (liquefied natural gas) regasification terminals. The country has given away more than 100 city gas distribution licenses in the past three years to increase population’s access to CNG (compressed natural gas).
Source: The Economic Times
QuIck CommentReliable coal supply to thermal power units will reduce outages! Good! |
22 August. Given the excessive coal stock available with Coal India Ltd (CIL), the coal ministry has approved the company’s plan to supply 100 percent of the normative requirement to thermal power units. The ministry has recommended increasing the ‘annual contracted quantity’ (ACQ) of coal to 100 percent of the normative requirement of a non-coastal plant. It was 90 percent earlier. For coastal plants, the ACQ has been increased to 70 percent. The decision of the coal ministry pertains to coal supply both under long-term agreement signed with CIL and coal supply linkage via the auction route. CIL periodically holds auction of coal for the power and non-power sectors for short-term and medium-term coal supply contracts. The company informed the ministry that around 700 million tonnes (mt) of coal would be available with CIL in the current financial year. It further said that production from next financial year will be in accordance with the plans to achieve the 1 billion tonne coal production target by 2024.
Source: Business Standard
19 August. A study conducted by the Centre for Science and Environment (CSE) has raised serious questions about the rationale behind the central government’s move to auction more coal blocks. Prime Minister Narendra Modi announced that 41 new coal blocks would be opened for auction to the private sector. Since 1980, when the Forest Conservation Act was enacted, India has diverted 0.53 mn hectares of forestland for mining – the bulk of it for coal. Since 2015, 49 coal mining projects have been cleared. According to CSE, every time the government offers newer opportunities for mining coal, it targets denser forests. Since 2015, of the 49 blocks cleared for coal mining, nine were in No-Go areas.
Source: The Economic Times
19 August. NTPC Ltd said it will soon reduce the cost of coal supplies at Kudgi plant by using a newly constructed rail infrastructure. The newly constructed 670-meter bridge in South Western railway is beneficial to NTPC Kudgi as it will help in reducing the cost of electricity generation.
Source: The Economic Times
24 August. The government is implementing a ₹12 bn project to hook up Nubra valley in the country’s northern tip, and Zanskar, among the least-explored regions of Kargil, with the national power grid, casting one of the first building blocks of Prime Minister Narendra Modi’s plan to make Ladakh carbon-neutral. The project envisages laying two 220 kV (kilovolt) lines across some of the world’s highest mountains and inhospitable terrains. Ladakh remained isolated from the national grid till January 2019 when Central utility Power Grid switched on a 350 km (kilometre) transmission line linking Leh with Alusteng near Srinagar via Dras-Kargil. Prime Minister Narendra Modi had laid the foundation stone for the project on 12 August 2014 and formally inaugurated it in January 2016. The project has improved power supply in the region, road connectivity to which remains cut off for 6-8 months during harsh winters when temperature dips to 50 degrees below freezing.
Source: The Economic Times
23 August. The CM (Chief Minister) Nitish Kumar launched a series of power projects worth ₹48.55 bn. Of the total amount, ₹31.3 bn was spent on replacing rickety and old electrical wires in different parts of the state. The CM said the state government’s programme to provide electricity connection to all households under the ‘Har Ghar Bijli Lagataar’ programme ended in October, 2018, two months prior to the deadline for completing the project. All rickety wires across the state were replaced by the end of December 2019. The CM said the Centre had earlier adopted Bihar government’s scheme for providing electricity connection to each household. Now it was going to adopt our scheme of prepaid meter to every consumer. The CM said there would be no curtailment in subsidy being provided to electricity consumers despite adverse economic situation due to Covid-19 pandemic in state. The CM said the state government was currently spending around ₹60 bn per annum on payment of subsidy to electricity consumers and would continue with that.
Source: The Economic Times
22 August. The energy department has managed to restore power in about 20,000 households in the flood-affected areas of East and West Godavari districts. APTransco said that power supply should be restored in the affected villages within 24 hours of recession of floodwater. The Andhra Pradesh Eastern Power Distribution Company Ltd has chalked out an action plan to restore power in all villages and submitted it to the secretary.
Source: The Economic Times
22 August. The power ministry has advised all power generating companies and transmission companies to charge late payment surcharge from distribution utilities at a rate not exceeding 12 percent per annum for all payments made under the liquidity infusion scheme under Atmanirbhar Bharat. The move is aimed at easing the financial burden on power distribution utilities. Covid-19 pandemic has adversely affected the liquidity position of all stakeholders of power sector especially electricity distribution companies. The Cabinet Committee on Economic Affairs (CCEA) approved extending power sector liquidity infusion package to cover discom (distribution company) dues till 30 June and allowed a one-time relaxation in working capital lending limits by Power Finance Corp and REC to electricity distribution companies.
Source: The Economic Times
21 August. A public interest litigation (PIL) challenging the method adopted by BSES Yamuna and BSES Power Ltd for calculating the cumulative electricity consumption charges during the lockdown was disposed of by the Delhi High Court (HC) with directions that it shall be treated as a representation by appropriate authorities. The HC noted that the Delhi Electricity Regularity Commission has not been made a party in the petition. The petition said that the method adopted by respondents has cast a burden on all the poor and middle-class residents of Delhi as the mere applying of the method has resulted in an automatic increase in their electricity bills by at least 5-15 percent for each month especially during the months of March and April, etc, per consumer depending upon their individual consumption. The petition further challenged the entire demand of the cumulative electricity consumption charges “raised by respondents” all at once for being contrary to Regulation 38 Sub-Regulation 8 of the Delhi Electricity Regulatory Commission.
Source: The Economic Times
21 August. Fitch Ratings expects India’s electricity demand to drop by 4 percent during the financial year ending March 2021 given the expectations of only a gradual pick-up in economic activity since pandemic-related lockdowns were relaxed in June. The fall in demand is likely to result in lower load factors, mainly for coal-based power plants. The government’s recent ₹900 bn liquidity facility for discoms (distribution companies) should help them pay the huge outstanding amount owed to generation and transmission companies. Generation companies can delay projects using force majeure clauses under power-purchase agreements because of the pandemic.
Source: The Economic Times
20 August. The state government is still deliberating on the proposal to give a rebate on the inflated electricity bills that consumers had received during the lockdown months. The proposal is likely to be tabled in the state cabinet, but the final decision will be taken by Chief Minister (CM) Uddhav Thackeray. The Maha Vikas Aghadi government—comprising CM from Shiv Sena, Energy Minister from Congress and finance portfolio with NCP—is discussing the modalities for the final formula for giving rebates. Among the formulae under consideration are waiving the bill for those with up to 100 units consumption, and giving a rebate of 75 percent for those consuming up to 100 units, 50 percent for users of 101-300 units, and 25 percent for users of 300 units and above, a source from the ministry said. Scores of electricity consumers have complained of hefty power bills from BEST, Adani Electricity, Tata Power and MSEDCL (Maharashtra State Electricity Distribution Company Ltd) in June and July. But the power firms said that all consumers were charged average and lower bills during lockdown months (April-May) and while taking the actual meter reading in June/July, the excess consumption during lockdown was noted. Energy Minister Nitin Raut had assured that the government will provide relief to over 95 percent of the residential consumers in the state by announcing a rebate on electricity bills.
Source: The Economic Times
QuIck CommentElectricity Amendment Bill Compromises Federal Principles Bad! |
19 August. The AIPEF (All India Power Engineers Federation) said lakhs of power sector engineers and employees held peaceful protests across the country against privatization of discoms (distribution companies) and the Electricity Amendment Bill 2020. The AIPEF had given a call for holding a protest day on 18 August. The Uttar Pradesh government has started the process of privatizing Purvanchal Vidyut Vitran Nigam and the Odisha government has started the privatization process of three discoms, it said. Odisha’s Central Electricity Supply Utility was given to Tata Power and employees are already protesting, it stated. The provisions in the draft Amendment Bill to allow private franchisee or sub-licensee will only lead to cherry-picking of remunerative areas affecting the financial viability of discoms, AIPEF opined.
Source: The Economic Times
19 August. In a major drive against electricity theft, Punjab State Pradesh Corp Ltd (PSPCL) teams conducted mass raids and imposed a fine of ₹66 lakh on people indulged in stealing electricity. The PSPCL informed that as many as 200 electricity connections out of a total of 3,010 connections checked were found to be stealing electricity. 14 electricity meters were also found to be suspicious and were seized for investigation to detect any kind of tampering.
Source: The Economic Times
QuIck CommentCritical dependence on Chinese solar modules for competitiveness is a strategic risk! Ugly! |
24 August. Prices of Chinese solar modules have increased for the first time since 2017, making Indian developers apprehensive about returns on their projects because they import about 85 percent of the equipment from China. The cost of a single multi-crystalline solar module has gone up to over $17 from $16-16.5. The price of a mono-crystalline module has risen to $18-19 from about $17.5, according to data from renewable energy consultancy firm, Bridge To India.
Source: The Economic Times
21 August. India’s dependence on thermal power will reduce to 50 percent by 2021-22 and 43 percent by 2026-27 on the back of renewable energy (RE) capacity additions, a report by Praxis Global Alliance and Zetwerk said. Thermal power includes diesel, gas and coal-based electricity generation which contributes 63 percent of total electricity generation capacity in India as per the report. According to the report the installed power generation capacity has increased at 8.6 percent CAGR over the period FY12-FY19 and renewable energy is growing at the fastest pace.
Source: The Economic Times
21 August. The Chandigarh administration has written a letter to all the departments, corporations and boards, to provide details of spaces available with them in official buildings and other projects for installation of solar power plants to meet the solar energy targets set by the Union government. The UT (Union Territory) administration said some of the departments had provided them with a list of open spaces, which were under the control of respective departments. Accordingly, the UT administration would install solar plants in those vacant spaces too. The Ministry of New and Renewable Energy (MNRE) had enhanced the city’s solar power generation target from 50 MW to 69 MW, to be achieved by 2022. Till date, the UT has achieved generation of 35 MW. The UT administration recently extended the solar installation deadline till next year 31 March 2021.
Source: The Economic Times
21 August. NTPC Ltd said it has received the approval of Niti Aayog and Department of Investment and Public Asset Management (DIPAM) to set up a wholly-owned company for its renewable energy business. NTPC will move to form a subsidiary firm for renewable energy business, as it has requisite approvals for the purpose. The development assumes significance because the NTPC targets to generate nearly 30 percent or 39 GW of its overall power capacity from renewable energy sources by 2032. NTPC is planning to have 10 GW of solar energy by 2022, which entails an investment of around ₹500 bn.
Source: The Economic Times
20 August. The solar industry has sought the intervention of the centre and the government of Andhra Pradesh to expedite the legal dispute over the state’s move to renege from signed contracts. In July last year, the state government decided to renegotiate the purchase cost of wind and solar projects already awarded, saying it would not honour power purchase agreements signed by the previous government.
Source: The Economic Times
25 August. Brazil’s Petrobras (Petroleo Brasileiro SA) has initiated the sale process for a group of 26 onshore and shallow water oilfields and a small nearby refinery in the northeastern part of the country, as the state-run company forges ahead with its ambitious divestment program. Petrobras said it had begun the teaser phase for the sale of the oilfields and the nearby Clara Camarao refinery in the state of Rio Grande do Norte. The oilfields, known collectively as Polo Potiguar, produced roughly 23,000 barrels per day (bpd) of oil in 2020 and 124,000 cubic meters per day of gas, while the refinery has an installed capacity of 39,600 bpd, the company said. Petrobras is years into a drive to sell of tens of billions of dollars of non-core assets in a bid to reduce its hefty debt load and sharpen its focus on deepwater oil production.
Source: Reuters
24 August. Iraq said it would cut its oil production by another 400,000 barrels per day (bpd) in both August and September to compensate for its overproduction in the past three months. Iraq Oil Minister Ihsan Abdul Jabbar said with his Saudi counterpart Prince Abdulaziz bin Salman that Iraq’s output cut was in addition to the 850,000 bpd it had committed to cut in August and September under an OPEC+ supply pact. The total reduction to Iraq’s production in August and September will amount to 1.25 mn bpd for each month.
Source: Reuters
24 August. Energy firms shut 57.6 percent, or 1.07 mn barrels per day (bpd), of offshore crude oil production in the US (United States) Gulf of Mexico because of the twin threat from Hurricane Marco and Tropical Storm Laura, the US government said. Workers have been evacuated from 114 production platforms out of the 643 manned platforms in the Gulf of Mexico, federal Bureau of Safety and Environmental Enforcement said.
Source: Reuters
23 August. Venezuelan President Nicolas Maduro thanked ally Iran for helping the South American country overcome US (United States) sanctions on its oil industry and floated the idea of purchasing missiles from the country. Washington maintains strict sanctions against Iran’s oil industry to try to halt the country’s nuclear program. Tehran sent several gasoline cargoes to Venezuela to help it overcome fuel shortages, as well as equipment to help state oil company PDVSA repair its dilapidated refineries. The US seized four cargoes of Iranian gasoline en route to Venezuela.
Source: Reuters
22 August. Saudi Arabia’s state oil company has suspended a deal to build a $10 bn refining and petrochemicals complex in China, according to people familiar with the matter, as the company slashes spending to cope with low oil prices. Saudi Arabian Oil, or Aramco, decided to stop investing in the facility in China’s Northeastern province of Liaoning after negotiations with its Chinese partners. The oil-price crash and the virus’s impact on energy demand have changed the calculations for energy companies’ projects around the world. Aramco plans deep cuts to its capital spending as it tries to maintain a $75 bn dividend amid low crude prices and rising debt.
Source: Business Standard
20 August. Oil and gas investment in Norway, Western Europe’s top producer, will rise more this year and decline less in 2021 than predicted a few months ago, an industry survey by the statistics office showed. Petroleum companies, including Equinor, have revived several projects after the Norwegian parliament in June granted tax incentives to spur investment and safeguard jobs after a crash in oil prices sparked by the onset of the Covid-19 pandemic. Analysts said the expected drop next year will dampen Norway’s overall economic recovery, while DNB Markets said it reflected a lack of large oilfield projects to develop in the years ahead.
Source: Reuters
25 August. Greece and Bulgaria sought to reduce their reliance on Russian gas with the signing of an agreement that will allow Bulgaria to participate in a planned liquefied natural gas (LNG) terminal in northeastern Greece. The project, which has strong support from the United States (US), is aimed at boosting energy diversification in southeastern Europe, a region largely reliant on Russian natural gas. Greek Prime Minister Kyriakos Mitsotakis and his Bulgarian counterpart, Boiko Borisov, were present for the signing of the agreement under which Bulgaria’s state-controlled Bulgartransgaz will acquire a 20 percent stake in the Greek company, Gastrade, that is developing the LNG terminal outside the Greek city of Alexandroupolis. Bulgarian participation in the venture is tied to a separate pipeline project that will be used to transport the gas northward.
Source: The Economic Times
24 August. French oil major Total has signed a security pact with the Mozambique government to protect a $20 bn natural gas (LNG) project being developed in the southern African country, the company said. Mozambican security forces have been battling a low-level insurgency against militias suspected of having links to Islamic State in the gas-rich north of the country. Total’s project includes the development of the Golfinho and Atum natural gas fields in the Offshore Area 1 concession, containing more than 60 trillion cubic feet of gas, and the construction of a liquefaction plant with a capacity of 13.1 million tonnes per annum. Initial production is slated by 2024.
Source: Reuters
22 August. Turkey expects its energy imports to fall significantly following a major Black Sea natural gas find and more discoveries could be made in another area now being evaluated, Energy Minister Fatih Donmez said. President Tayyip Erdogan announced the discovery of a 320 billion cubic meters (11.3 trillion cubic feet) gasfield that could come on stream as soon as 2023 and said Turkey was determined to become a net energy exporter. If the gas can be commercially extracted, it could transform Turkey’s dependence on Russia, Iran and Azerbaijan for energy imports, which cost the country $41 bn last year.
Source: Reuters
21 August. Exxon Mobil Corp is limiting output at its flagship offshore project in Guyana to 100,000 barrels per day (bpd) due to more issues with the reinjection of natural gas, the South American country’s environmental regulator said. Exxon, which operates the Stabroek block in a consortium with Hess Corp and China National Offshore Oil Corp, had initially planned to ramp up output for this first phase of the Liza project to its full capacity of 120,000 bpd in August, Exxon senior vice president Neil Chapman said. But mechanical issues with gas compressing equipment are preventing Exxon from reinjecting all of the natural gas produced alongside the light, sweet Liza crude, prompting the company to limit output so as to not flare an excessive amount of the gas, Guyana Environmental Protection Agency executive director Vincent Adams said. Natural gas flaring is a significant source of climate-warming greenhouse gas emissions.
Source: Reuters
25 August. Three miners who were trapped in a coal mine for five days have been rescued and are recovering at a hospital near Colombia’s capital city. Manuel Sanchez, Juvenes Avila and Javier Salas were carried out of a mine in the municipality of Lenguazaque with their eyes bandaged and covered by dark sunglasses in a rescue operation that was witnessed in person by Colombia’s president. The group was working in the coal mine when a carriage came loose and crashed into one of its walls causing the main entrance to collapse.
Source: The Economic Times
22 August. South Africa has issued a request for proposals to procure 2,000 MW of emergency power, a step needed to help plug a severe energy shortage, the energy department said. South Africa’s power utility Eskom has been forced to cut power regularly, hobbling economic growth in Africa’s most industrialised country as unreliable coal-fired plants struggle to generate enough electricity to meet demand. Scheduled blackouts, known as load shedding, have resumed as South Africa has eased strict lockdown restrictions to contain the new coronavirus and has re-opened power-hungry industries, such as mining, in a bid to kick-start a weak economy. During load shedding, which is meant to protect the national power grid from complete collapse, residents and businesses are typically left without electricity for a couple of hours at a time. In December, South Africa issued a request for information to source between 2,000 and 3,000 MW of generation capacity to be connected in the shortest time, at the least cost.
Source: Reuters
20 August. General Electric (GE) said it had signed two new agreements valued at over $1.2 bn with the Iraqi Ministry of Electricity, to undertake maintenance programs across key power plants in the country and bolster its transmission network. The US (United States) conglomerate was also working with multiple export credit agencies to facilitate financing of more than $1 bn for the projects, it said.
Source: Reuters
20 August. As if the pandemic and economic recession weren’t bad enough, millions of Californians are facing recurring threats of abrupt blackouts during a heat wave in the nation’s most populous state. California’s Independent System Operator, a nonprofit agency that manages the state’s power supply, ordered utilities to impose temporary blackouts for the first time in 19 years and did so again, pulling the plug on hundreds of thousands of customers for one to two hours. The blackouts seemed to catch government officials off guard, despite an ISO warning in January that the state could run low on power over the summer if several western states were to experience extreme heat at the same time – which indeed happened several days ago. The state’s highest recorded demand for electricity occurred in August 2006 when usage peaked at 50,270 MW, according to the ISO. No blackouts were necessary. But at the time, natural-gas plants were still producing about 7,000 MW of electricity that is longer available, according to the ISO. The recent shortages would have likely been even worse but for pandemic restrictions that closed many large offices. By some estimates, the pandemic so far has reduced overall electricity demand in California and other parts of the country by 8 percent to 10 percent.
Source: The Economic Times
19 August. Sri Lanka’s Power Minister Dullas Alahapperuma has appointed a high-level committee to investigate a nationwide power outage which plunged the country into darkness for over seven hours, disrupting daily life and bringing businesses to a standstill. A sudden power cut, plunged the island into crisis as technicians said the failure was due to a technical issue in the Kerawalapitiya Sub Power Station, located on the outskirts of Colombo. The power failure led to a shortage of water supply and severe traffic congestion in the capital as people began to store up on fuel and other supplies. Incident was the worst to be reported in recent years after a nationwide power failure hit the island in 2016.
Source: The Economic Times
21 August. US (United States) energy-related carbon dioxide (CO2) emissions in April fell to their lowest level, according to the US Energy Information Administration (EIA)’s records dating back to 1973, as coronavirus-led travel curbs limited energy consumption. CO2 emissions in April fell to 307 mn metric tons as virus-led stay-at-home orders decreased petroleum usage and shifted electricity consumption from commercial and industrial sectors to residential sector, the EIA said in a report. In April, CO2 emissions from petroleum and coal consumption fell to their record low, declining 25 percent and 16 percent, month-on-month, respectively, the report showed. Emissions from motor gasoline consumption, which accounted for 57 percent of transportation sector emissions in 2019, fell to a record-low 59 mn metric tonnes. However, emissions from natural gas were 22 percent higher than the corresponding month of last year. A larger share of power generation came from natural gas-fired plants and renewable energy powered plants, while coal-fired plants have retired or been used less often, according to the report. The EIA forecasts emissions to increase through the reminder of 2020 but expects it to be 11 percent lower than the previous year, according to the report.
Source: Reuters
20 August. Germany reduced greenhouse gas emissions in 2019 and narrowed the gap to achieve its climate protection target for 2020, the environment ministry said. The announcement was made in the ministry’s 2019 climate protection report, which examines whether the set of measures aiming to reduce CO2 (carbon dioxide) emissions would be sufficient to reach the official 2020 target. Germany wants to reduce its greenhouse gas emissions by at least 40 percent by 2020 compared with 1990 levels, and by at least 55 percent by 2030. Based on available estimates, Germany cut greenhouse gas emissions by 35.7 percent in 2019 compared with 1990 levels. Total emissions in 2019 decreased by 6.3 percent from 2018 to around 805 million tonnes (mt). However, without the impact of the coronavirus pandemic, those climate action measures introduced over the past years to reduce the country’s greenhouse gas emissions could have been insufficient.
Source: The Economic Times
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 2020 is the seventeenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.
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