The Centre’s plans to impose a basic customs duty on the import of solar cells and modules to promote domestic manufacturing could turn out to be counterproductive for local manufacturers as more than 50 percent of the installed capacity is located in special economic zones. According to manufacturers, a customs duty in the range of 10-20 percent is being considered with the country importing 90 percent of the solar equipment, mostly from China. This will be in addition to the safeguard duty of around 15 percent on the import of cells and modules that has been extended till July 2021.
One solar industry association wants the government should postpone the imposition of BCD by 18 months to avoid financial burden on already bid out projects of 50 GW capacity. Solar power developers association, an independent body, wants the government to reconsider its decision of imposing BCD on cells and modules, as it would damage the sector’s prospects at this stage. It wants the government to tax incremental imports instead of making duty applicable to 100 percent of imports and also issue more manufacturing-linked tenders to give a boost to domestic production.
The pace of India’s solar power capacity addition tumbled 81 percent to 205 MW in the April-June lockdown months from 1,090 MW installed in the preceding January-March period of the calendar year. In terms of year-on-year comparison, the figures indicate a plunge of 86 percent from 1,510 MW installed in the year-ago period, latest data from green energy market tracker Mercom shows. Solar project construction activity came to a standstill in the second quarter (calendar year) as the Coronavirus pandemic disrupted every aspect of the economy. Solar installations in the first half of 2020 totalled 1.3 GW, a 59 percent decrease compared to 3.2 GW of capacity added in the first half of 2019. Large-scale installations totalled 120 MW compared to 896 MW in the previous quarter. Year-on-year, large-scale installations decreased by 90 percent. Large-scale project installation figures in the second quarter were the lowest in seven years. Most solar projects scheduled for commissioning have been delayed and slipped into later quarters with a possibility of moving to next year due to phased lifting of curbs in states, supply chain disruption and workforce shortages. Rajasthan and Karnataka were the top states, contributing 68 percent of solar installations in the second quarter.
Solar capacity addition in Covid-hit second quarter of 2020 fell to a six-year low of 205 MW, plummeting 86 percent year-on-year, a report by consulting firm Mercom India Research showed. Large-scale installations accounted for 59 percent, while the rest was from rooftop projects. Total power capacity added since January was 2.3 GW, out of which about 85 percent came from renewable energy. Coal-fired plants accounted for 13 percent of new projects in the first half of the year, while wind energy’s share was 14 percent. Rajasthan and Karnataka together accounted for 68 percent of solar installations in the quarter. Mercom pegs cumulative solar projects online at 37 GW, with an additional 42 GW under construction. The Central Energy Agency data showed renewable energy generation fell 24 percent year-on-year.
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 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. New private investment in the generation sector is expected to be largely in the renewable sector. The report showed that owing to past bad experiences, long-term PPAs in thermal power are unlikely to pick-up in the future.
NTPC Ltd said it has received the approval of Niti Aayog and Department of Investment and Public Asset Management 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. The company is aiming to have 30 GW of solar and two GW of other renewable energy sources based power generation capacity by 2032. Besides, it will have 5 GW of hydropower and 2 GW of nuclear energy by 2032, taking the total clean energy capacity to 39 GW. The non-fossil fuel based capacity would achieve a share of 30 percent and thermal-based generating capacity share would be 70 percent by 2032.
Indian Railways plans to use its surplus land to generate 20 GW of renewable energy from ‘Made in India’ solar or wind equipment to power its network. Indian Railways will be a 100 percent electricity-driven rail network in coming years which would make it the largest such network in the world. 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.
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 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 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.
Vena Energy emerged as the lowest bidder in a wind auction conducted by the SECI, winning 160 MW at ₹2.99/kWh. JSW Energy was a close second, winning 810 MW at ₹3.00/kWh. The tender was for 2500 MW but only 970 MW was awarded. SECI is the nodal agency through which the renewable energy ministry conducts wind and solar auctions. The last wind auction it conducted was in August 2019 where the winning tariffs were in the range of ₹2.83-2.84/kWh. The new and renewable energy ministry has been gradually moving away from conducting auctions for plain vanilla solar and wind tenders, towards hybrid wind-solar tenders.
Hospitality major IHCL said it has joined hands with Tata Power for supply of solar energy for its Mumbai hotels as part of strategy to focus on sustainable and cost-efficient business practices. The company has signed a solar energy PPA with TP Kirnali Solar Ltd, a wholly owned subsidiary of Tata Power Company Ltd, IHCL said. This agreement is valid for a period of 25 years. Sustainability is a prerequisite to IHCL operations and in the last four years, the company has increased its renewable energy mix from 7 percent to 25 percent.
Bharat Electronics Ltd has set up solar-powered smart classrooms in 122 government schools across the backward Yadgir district in north Karnataka. As the district is located in the Deccan plateau across the tropical region, the schools have assured sunlight for nine months in a year to charge photovoltaic cells of the solar panels to power the electronic equipment.
Andhra Pradesh, a major renewable energy producer, has an installed renewable energy generation capacity of around 8,203 MW. Of this capacity, commissioned till 31 July 2020, wind energy projects took the largest share with 4,080 MW capacity, followed by solar energy with a capacity of 3,530 MW commissioned, according to the New The total solar capacity commissioned up to 2019-20 was about 3,522 MW. The renewable energy status update also showed that out of all the segments, only solar projects of 8.75 MW capacity were commissioned during 2020-21. According to Mercom India, Andhra Pradesh has installed solar capacity of about 3.6 GW and a project pipeline of 1.3 GW. In small hydro projects, the state has commissioned a total of 103 MW capacity till 31 July of this year, while biomass, biomass energy co-generation, and bagasse projects contributed a total of 445 MW to the state’s renewable energy capacity. The share of municipal solid waste and industrial waste capacity stood at 47 MW, according to the NREDCAP. It said that the total renewable energy capacity commissioned up to 2019-20 in the state was 8,194 MW. The Andhra Pradesh government in July had announced its renewable energy export policy, 2020 which would apply to solar, wind, and wind-solar hybrid projects. Under this policy, the land in the state would be used for renewable energy projects for the purpose of export to other states.
New Delhi-headquartered ReNew Power has proposed to set up 2000 MW solar cell and module manufacturing plant in Rajasthan with an investment of ₹16 bn. If the state government clinches the deal by offering the incentives the company has sought, this would be a first solar cell manufacturing plant in Rajasthan, which has already become a lucrative destination for power generation. ReNew Power, which builds, owns and operates utility scale wind and solar projects, already has an operational capacity of 740 MW and a firm pipeline of 2,400 MW to be commissioned in the next two years. The state government is currently examining the incentives the company needs to set up the plant in the state. For the next five years, ReNew power also targets to set up 10,000 MW solar energy generation projects.
Ayana Renewable Power said it has acquired 100 percent equity stake in two First Solar-developed PV power plants in Karnataka for an undisclosed amount. The total capacity of these plants is MW, the company said. The two facilities, which are powered by First Solar’s high-performance thin film modules and have been operational for more than two years, are connected to Karnataka’s 110 kV transmission network, it said. The company is in the process of developing 1,100 MW of projects that were awarded under auctions by the central government agencies.
Solar sector continues to occupy a bright spot in the otherwise cloudy, overcast business environment in the state. According to a recent survey of states by JMK Research and Analytics, Rajasthan has added maximum capacity of 1,745 MW solar plants in the country in 2019-20, followed by Karnataka (1,443 MW) and Tamil Nadu (1,342 MW). The pipeline of projects also remains robust at 23,176 MW, which is within the striking distance of 30,000 MW, the five-year target announced in the solar policy 2019-20. While the state may have been dislodged from the number 1 position by Karnataka in about two years ago, it seems to be bouncing back aggressively. Karnataka currently has 7,045 MW installed capacity against Rajasthan’s 4,932 MW. While the industry in the state admits that Rajasthan is attracting a lot of attention from investors, many said that without the growth of solar component manufacturing, the benefits will not be significant.
Power discoms in the national capital are witnessing a “surge” in residential rooftop solar power connections, with more than half of over 3,700 net metering connections installed in recent years falling under this category. The BSES discoms have so far energised over 2,700 solar net metering connections in the city, with the highest number of rooftop solar connections in the residential segment (1,526) followed by educational (581) and commercial (473) segments. The Delhi Electricity Regulatory Commission had issued regulations on net metering for renewable energy in September 2014. The regulations allow registered customers of discoms to install renewable energy systems and the discoms will allow connectivity of these systems to their network through net meters. The TPDDL has so far installed nearly 1,000 rooftop solar net metering connections. In solar net metering systems, the consumers can sell the surplus electricity after consumption, and get paid by the discoms. The MNRE subsidy on capital cost is between 20 percent to 40 percent (up to 10 kW) for residential consumers and 20 percent (upto 500 kW) for group housing societies, depending on the capacity of the solar plant.
Tata Power will focus on the renewable front for future growth and aims to raise its green energy portfolio to 50 percent. Around 30 percent of Tata Power’s total generation comes from clean and green sources — 3.9 GW out of 12.7 GW and the company has to achieve around 50 percent clean energy portfolio by 2025.
Telangana State, which has implemented several innovative power and water-saving initiatives in the past six years, is all set to take another revolutionary step — setting up FSPV based power generation units on its reservoirs. Two organisations have already proposed a total of 1,000 MW of solar power to be generated on different reservoirs of the multi stage KLIS. The State nodal agency, TSREDCO, which initially submitted a pilot project to the government to set up a 100 MW floating solar unit on Annaram reservoir of KLIS, will be helping the NHPC Ltd and the SCCL in setting up the floating solar power plants by providing technical help and also in preparing the Detailed Project Reports. The government, on the other hand, has also considered the advantages of saving precious government lands to set up solar panels on the ground. TSREDCO has estimated that a 100 MW floating power unit on KLIS could cost ₹32.3 mn/MW. This is less when compared to the 2016, 2 MW project in Visakhapatnam that cost the government ₹54/MW. India, as a whole, has a total installed capacity of 2.7 MW peak from FSPV. In India, the NTPC has envisaged 32 MW, 100 MW and 145 MW FSPV on their raw water storage reservoirs.
The government is looking at blending biogas with natural gas to boost domestic availability of biofuels and cut reliance on imports. The plan for biogas follows a move to mix ethanol extracted from sugarcane with petrol and doping diesel with biodiesel extracted from non-edible oil. Kapoor said India is an agricultural economy largely and there is a large amount of agricultural residues available, providing good scope of producing biofuels. He sought the support from the state governments, as the agricultural residues and other wastes that may come from the municipal solid wastes or other forms of wastes have to be collected, segregated, managed, and then supplied to various plants for the production of biofuels.
Plastic from used PPE can and should be transformed into renewable liquid fuels, according to Indian researchers. The study, published in the journal Biofuels, suggested a strategy that could help to mitigate the problem of dumped PPE – currently being disposed of at unprecedented levels due to the current Covid-19 pandemic – becoming a significant threat to the environment. The research from the University of Petroleum and Energy Studies in Uttarakhand shows how billions of items of disposable PPE can be converted from its polypropylene (plastic) state into biofuels – which is known to be at par with standard fossil fuels. During the current Covid-19 pandemic specifically, PPE is being designed for single-use followed by disposal. Once these plastic materials are discharged into the environment they end up in landfills or oceans, as their natural degradation is difficult at ambient temperature. They need decades to decompose. The research team reviewed many related research articles as they looked to explore the current policies around PPE disposal, the polypropylene content in PPE, and the feasibility of converting PPE into biofuel. According to the researchers, this process is among the most promising and sustainable methods of recycling compared with incineration and landfill.
A group of four-member IIT and IIM alumni team have transformed Guwahati Municipal Corp’s goal of generating power from organic municipal wastes into a reality. Northeast’s first biomethanation plant was installed at Beelpar in Chatribari area of Guwahati. With 5,000 kilos of segregated organic waste per day as input, the plant will generate 800 units of electricity and 450 kilos of manure a day.
The power ministry has extended waiver of ISTS charges and losses on supply of power generated from solar and wind sources until 30 June 2023. It said that no ISTS charges would be levied for 25 years from the date of commissioning of the power plants for the supply and sale to entities having renewable purchase obligations. According to the ministry Order issued, this would be applicable on power plants using solar and wind sources of energy including solar-wind hybrid power plants with or without storage commissioned till 30 June 2023. It would also apply to solar photovoltaic projects commissioned under the second phase of the MNRE’s Central Public Sector Undertaking scheme. Apex industry bodies had been pressing for extending the waiver by a period of 12 months to account for the disruptions on account of Covid-19 pandemic. Solar associations had said that due to the pandemic, planning in terms of capacity addition, development pipeline, and execution on ground was affected and expected to get further delayed. In June, the concerned ministry was considering an extension of the waiver beyond 2022. In 2019, the ministry had extended the ISTS charges waiver to renewable energy projects by nine months till December 2022.
In what has the potential to eclipse the prospects of solar energy in Rajasthan, the state energy regulator Rajasthan Electricity Regulatory Commission has proposed to levy cross-subsidy charges on solar plants put up by developers for their industrial or commercial clients (third party). Cross-subsidy charges, which go up to ₹2.16/kWh are collected from general consumers to compensate for the power subsidies given to farmers, a major reason for high electricity tariffs in Rajasthan. Imposition of cross-subsidy is expected to raise the cost of solar power closer to conventional energy and shut the door for investors. Even the solar industry in Rajasthan is vocal against the move, is determined to stall any attempt to levy cross-subsidy charges. India has made an international commitment for 40 percent electric power installed capacity from non-fossil fuel-based energy resources by 2030.
The MNRE has granted extension in the scheduled commissioning date for RE projects by five months from 25 March to 24 August 2020 to overcome the Covid-19 disruption. In April, MNRE had granted a 30-day extension beyond the lockdown period for RE projects and said that this would be a blanket extension where there would be no requirement of case-to-case examination. The ministry has decided that all renewable energy implementing agencies will treat lockdown due to Covid-19 as Force Majeure and all RE projects under implementation as on the date of lockdown, 25 March 2020, through RE Implementing Agencies designated by MNRE or under various schemes of MNRE, will be given the five month time extension. National Solar Federation of India had asked the ministry to extend the period by six months.
Solar power tariffs in India would continue to see 5 percent to 10 percent annual declines over the coming decade as a result of the technological development of solar and large factories that drive economies of scale, according to a recent study by the Institute for Energy Economics and Financial Analysis and JMK Research & Analytics. This in turn would result in stronger competitiveness against incumbent fossil fuel alternatives in the country. Regarding solar tariffs in other countries, the report said that nations in the Gulf region have set record-low prices for solar in recent years, however, it was unlikely that this would happen with India as the economic makeup of each country plays a direct role in determining tariffs. It said that if India imposed import duties on solar modules, the required Indian solar tariff would widen further. In fact, solar tariffs in India are almost double the tariffs in the Gulf region.
Power Ministry has proposed RPO mechanism for RTC renewable energy, which will promote storage of electricity in the country. Under RPO, bulk purchasers like discoms, open access consumers and capacitive users are required to buy a certain proportion of renewable energy or RECs in lieu of clean energy. Once the RPO is mandatory for RTC renewable energy, it would encourage investments in renewable electricity storage projects.
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. The High Court had then stayed the order and directed distribution companies to clear the dues owed in December after developers took the state to court. The court remained shut due to the Covid-induced lockdown, but has not picked up the issue since it resumed its operations virtually. The National Solar Energy Federation of India said that although many of the solar industry stakeholders had filed urgency applications to the Andhra Pradesh HC to pick up the matter, they have not received a response.
The APTEL has postponed the trading of RECs. In an order issued on 24 July, APTEL postponed the RECs trading session scheduled on 29 July 2020 by four weeks in three separate appeals filed by Green Energy Association, Indian Wind Power Association and Techno Electric and Engineering Company Ltd against the CERC order issued on fixing REC floor and forbearance price. Under the RPO, bulk purchasers like discoms open access consumers and capacitive users are required to buy certain proportion of RECs. They can buy RECs from renewable energy producers to meet RPO norms. According to a CERC order in June, the floor price of solar and non-solar RECs have been reduced to zero from ₹1,000 earlier. Industry experts think that the higher REC prices put additional burden on consumers in power tariff. Sales of renewable energy certificates declined over 29 percent to 89.27 lakh units in 2019-20, compared to 12.6 mn units in 2018-19.
As with solar parks earlier, the MNRE has now identified areas where hybrid wind-solar parks can be set up. Ten such locations have been found. With hybrid parks it hopes to resolve two of the biggest issues troubling the wind industry — that of land and connectivity. Solar parks have been set up in almost every state, with a profusion of them in sunshine-rich states like Rajasthan and Gujarat, but wind-solar hybrid parks are a new concept. MNRE is also slowly moving away from conducting separate wind and solar projects in favour of doing so for hybrid ones.
Public sector SJVNL announced it will commission a 100 MW facility in Gujarat’s Dholera Solar Park at an outlay of ₹4.5 bn. Gujarat Urja Nigam Ltd had invited bids for 700 MW capacity. The SJVNL got 100 MW capacity at the rate of ₹2.80 per unit on the build-own-and-operate basis. According to SJVNL the tentative cost of the project is ₹4.5 bn. The project is expected to generate 244 mn units in a year. The power purchase agreement will be signed for 25 years. The solar park in the Dholera Special Investment Region is situated along the Gulf of Khambhat. At the current rates, the solar power generation cost is at par with that of thermal power generation. The development of these parks will lead to realization of the vision of providing 175 GW of power through renewable sources by 2022. The SJVNL is implementing 13 hydro projects in Himachal Pradesh, Uttarakhand, Nepal and Bhutan. The SJVNL is implementing the 1,320 MW Buxar Thermal Power Project in Bihar.
The CBI has started preliminary enquiry into allotment of the ₹90 bn hydro power project in J&K (Jammu and Kashmir), allegedly done by flouting all central government guidelines governing such allotments, according to top sources. The proposed 1,540 MW Kiru hydro power project is to be completed in two stages, with stage one costing ₹49.48 bn and stage two ₹42.87 bn.
China’s state-owned energy and infrastructure giant China Three Gorges has agreed to buy 13 Spanish solar plants built by Madrid-based renewables firm X-Elio, marking its entry into the Spanish energy sector, X-Elio said. The photovoltaic plants were built between 2019 and 2020, and are fully operational with a total capacity of just over 500 MW, X-Elio said.
Energy group BP will increase its low-carbon spending to $5 bn a year by 2030 and boost its renewable power generation to 50 GW while shrinking oil and gas output by 40 percent compared with 2019, it said. The portfolio it plans to build would include renewables, bioenergy and early positions in hydrogen and carbon capture and storage technology, with the bulk of the budget to be spent by 2025.
German automotive supplier Bosch published details of three long-term solar power supply deals with utility companies as it switches its electricity sourcing away from fossil fuels to green energy. The contracts were arranged with utilities RWE, Vattenfall and Statkraft. Bosch is expanding green power generation at its locations and will also continue to expand sourcing via such external deals, called power purchase agreements (PPA). PPAs act as an insurance for operators of solar, wind or hydropower installations against falling power prices while locking in a purchase price for consumers, and have long been common in the US, southern Europe and Nordic countries. They are of increasing interest to wholesale markets, consumers and project companies in Germany, which needs to harness PPA expertise to spur more renewables after fixed price support schemes end next year. German utility E.ON said it has sold forward 73 percent of its 2021 nuclear power generation and 46 percent of its 2022 output at prices above the current wholesale market, raising earnings prospects from that segment. The company has to date also sold some 91 percent of output in the current year from reactors at its Preussen Elektra unit, it showed in presentation slides on reporting second-quarter financial results. Power curve prices slumped to two-year lows during the lockdown in March and April as the coronavirus crisis sapped demand. German utility RWE completed a €2 bn ($2.4 bn) share issue to back its expansion into renewable energy, including its $480 mn purchase of wind turbine maker Nordex’s project development pipeline. The move increases RWE’s share capital by 10 percent and was successfully placed with institutional investors via an accelerated book building process, RWE said. Part of the proceeds will be used to buy 2.7 GW worth of European wind and solar projects from turbine maker Nordex in a deal made public at the end of July. RWE wants to increase its renewables portfolio to more than 13 GW and invest a total of €5 bn by the end of 2022. The restructuring positions RWE as Europe’s third-largest renewables player as Germany phases out nuclear power and coal in pursuit of a safe and environmentally sustainable energy mix.
Belarus began loading fuel into the first of two reactors at its new Russian-built Astravets nuclear power plant and said it expects to begin using the plant in the fourth quarter. Built by Russian state firm Rosatom and financed by Moscow with a $10 bn loan, the project is opposed by neighbouring Lithuania, whose capital Vilnius is just 50 km away. Vilnius has banned all electricity imports from the plant, citing concerns about safety and national security, and along with Estonia and Latvia is considering slapping a fee on power imports from Russia, as well. Lithuania, Latvia and Estonia are moving towards a full decoupling from their Soviet-era common power system by 2025. Belarus denies that the plant poses a risk and has insisted it meets all safety requirements. Its energy ministry said it plans to add the first 1.2 GW VVER 1200 reactor to the country’s power system in the fourth quarter of 2020. Construction of the second reactor is scheduled for completion in 2022 and will double the plant’s capacity to 2.4 GW.
Poland’s government will approve the country’s updated nuclear energy strategy in the third quarter as Warsaw sees the need to accelerate its plans to build the first nuclear power station as it seeks to lower carbon emissions. Poland generates most of its electricity from burning coal and sees nuclear energy as a way to help it reduce emissions as required by the EU. The government said the basic assumptions to build 6-9 GW of capacity in nuclear energy will not change, but elements including the timetable, financing and infrastructure may be updated. Poland had planned to build its first nuclear power plant by 2033, while it has not yet worked out a financing scheme. The government approval of a nuclear energy strategy will be a sign there is unanimity in the cabinet on the issue and that Warsaw plans to move ahead with the plans, after years of delay.
Europe-based ALAS Group announced it has signed a MoU with Pike Hydropower for collaboration in the renewable energy sector under the Nepal government’s PPP policy. ALAS plans to meet with senior members from the Cabinet of Nepal to discuss future PPP-related opportunities and investments.
Portugal’s latest auction of contracts to build and operate new solar energy capacity set a world record for the lowest price of future output. One of the winning bids was for output costing as little as €11.14/MWh. That compares with a then-record minimum price per Mwh of €14.6 in Portugal’s first mega auction of 1,150 MW of solar energy capacity in June last year. Based on the locations where solar plants will be installed, auctions were held where the winners would be those offering the highest discounts to the bidding tariff of around €41/ MWh. Of the 35 entities initially competing in the latest 700 MW auction, there were six winners, with South Korean solar panel manufacturer Hanwha Q Cells grabbing a total of 315 MW. 670 MW of the 700 MW have been allocated, covering a total of 13 allotments mostly in the country’s sunny southern region. Both licensing auctions of new solar energy capacity are set to help Portugal – among Europe’s sunniest countries – reach its ambition of having 7,000 MW of renewable energy by 2030.
US oil major Exxon Mobil said it has signed an agreement with Global Clean Energy to buy 2.5 mn barrels of renewable diesel per year for five years to help reduce its carbon footprint. Investors in recent years have increased pressure on fossil fuel companies, including Exxon Mobil, to reduce emissions, spend more on low-carbon energy and make disclosures on the impact of fossil fuel production on climate change. The renewable diesel will be sourced from Global Clean Energy’s refinery in Bakersfield, California, starting 2022. The plant is among several traditional oil refineries being converted to manufacture renewable diesel, as demand for the alternative fuel continues to grow. Exxon said it plans to distribute the renewable diesel within California and potentially to other domestic and international markets. In a first, a group of the world’s top oil companies set goals this year to cut their greenhouse gas emissions as a proportion of output, as pressure on the sector’s climate stance grows.
Brazil’s Petrobras is ready to produce renewable diesel from soy or other edible oils at commercial scale and will expand investments in the segment as soon as it is granted a sales permit. Petrobras is awaiting approval from Brazil’s oil regulator ANP, after the company concluded tests this month. Petrobras refined 2 mn liters of soy oil in one of its Southern refineries, resulting in 40 mn liters of renewable diesel. The initiative is part of Petrobras’ climate strategy announced earlier this month, which includes a target to reduce by 16 percent the carbon intensity in the refining segment in the next five years. Soy is currently the basis of more than 70 percent of the biodiesel produced in the country. The introduction of a new type of fuel that could affect soy demand is controversial within the industry. Renewable diesel contains no contaminants, unlike biodiesel, and is therefore better for the environment.
The UAE has begun start-up operations in the initial unit of its first nuclear power plant, the Emirates Nuclear Energy Corp said. The Barakah nuclear power plant in Abu Dhabi, a major oil producer, is being built by Korea Electric Power Corp. The Federal Authority for Nuclear Regulation, which issued an operating licence for the plant in February, said Nawah Energy Company met all regulatory requirements to start operations, after regular inspections and oversight to ensure the plant’s safety. When completed Barakah will have four reactors with 5,600 MW capacity. The UAE has not disclosed the total planned investment in the project.
Indonesia, the world’s largest palm oil exporter, plans to finish research into biodiesel containing 40 percent palm oil by November, the head of the energy ministry’s research department said. The country will implement the mandatory use of biodiesel containing 40 percent palm oil, known as B40, in July 2021 as it seeks to increase domestic palm oil use while slashing regular diesel imports. The country previously scheduled a road test in April for B40, but that was delayed because of the coronavirus outbreak. Indonesia currently mandates biodiesel containing 30 percent of palm oil’s fatty acid methyl ester, the highest palm-based mix for biodiesel in the world.
| FY: Financial Year, BCD: basic customs duty, mn: million, bn: billion, MW: megawatt, GW: gigawatt, CAGR: compound annual growth rate, UT: Union Territory, kWh: kilowatt hour, SECI: Solar Energy Corp of India, IHCL: Indian Hotels Company Ltd, PPA: power purchase agreement, MNRE: Ministry of New and Renewable Energy, NREDCAP: New and Renewable Energy Development Corp of Andhra Pradesh, discoms: distribution companies, TPDDL: Tata Power Delhi Distribution Ltd, KLIS: Kaleshwaram Lift Irrigation Scheme, TSREDCO: Telangana State Renewable Energy development Corp, SCCL: Singareni Collieries Company Ltd, FSPV: Floating Solar Photo Voltaic, PPE: personal protective equipment, ISTS: inter-state transmission system, RE: renewable, RPO: renewable purchase obligation, RTC: round the clock, APTEL: Appellate Tribunal for Electricity, RECs: Renewable Energy Certificates, CERC: Central Electricity Regulatory Commission, SJVNL: Satluj Jal Vidyut Nigam Ltd, UK: United Kingdom, EU: European Union, PPP: Public Private Partnership, MWh: megawatt hour, US: United States, Petrobras: Petroleo Brasileiro SA, UAE: United Arab Emirates |
QuIck CommentLow jet fuel price will facilitate growth of air travel! Good! |
8 September. Subdued crude oil prices, on account of the Covid-19 outbreak, are expected to keep the cost of air turbine fuel (ATF) low, ratings agency ICRA said. Following the pandemic outbreak, crude oil prices declined materially, reaching a low of $19 per barrel in April, thereby leading to a decline in ATF prices. However, crude oil prices have increased gradually since then, and currently range around $44 per barrel. Consequently, ATF prices increased sequentially by 24.1 percent in July and by 4.2 percent in August.
Source: The Economic Times
7 September. The price of diesel in the Mumbai metropolitan region has fallen and it has dropped below the ₹80-mark. The price of diesel in Mumbai was ₹79.81 per litre while that in Thane and Navi Mumbai had dipped to ₹79.91 per litre. The price of diesel in Mumbai was at a 20-month high lately at ₹80.11 per litre. While the price was ₹66.21 a litre in Mumbai on 31 May, it increased by around ₹14 a litre to touch at ₹80.11 a litre at the city pumps. With the gradual dip and more likely in coming days, sources said that this will benefit the transport sector which depends on this fuel for transportation of commodities and essential goods.
Source: The Economic Times
7 September. Oil and Natural Gas Corp (ONGC) has managed to save its golf courses in Ahmedabad and Vadodara after the department of disinvestment dropped a proposal to divest the company of the ‘non-core’ assets. The Department of Investment and Public Asset Management (DIPAM), erstwhile called the department of disinvestment, had in May 2019 decreed golf courses and sports clubs owned by central public sector enterprises as non-core assets and wanted them to monetise them. It listed ONGC’s two golf courses in Ahmedabad and Vadodara as non-core assets that needed to be sold to private developers to raise money for the government. But the Ahmedabad golf course was in the middle of an oilfield and had oil wells. DIPAM dropped the two golf courses from its list a few weeks back after ONGC made a case of how selling them would mean also handing over producing oil wells to a private developer. The 9-hole Ahmedabad golf course sits in the middle of ONGC-operated 15.69 square kilometre Motera oilfield. Two of the five wells on Motera oilfield are housed in the golf course. Motera produces 245 barrels of oil per day and 16,000 cubic metres per day of gas.
Source: The Economic Times
4 September. Cooking gas or LPG (liquefied petroleum gas) customers may continue receiving subsidy into their bank accounts post privatisation of PSU (Public Sector Undertaking) oil refiner and retailer Bharat Petroleum Corp Ltd (BPCL), with the government clarifying to potential investors that the present system would not be changed post the change of management in the company. Several potential bidders for BPCL in their query have raised the issue of subsidy on cooking gas, whether such subsidy would be borne by the new owners post the sale of government stake in the company. The government head clarified that the present system where the oil companies pay the subsidy amount and the government reimbursed such payments would continue. Private oil companies such as Reliance Industries Ltd, Nayara Energy do not get any subsidy support from the government for cooking gas. So if these companies were to sell domestic LPG (liquefied petroleum gas) cylinders, it would be priced at market rates.
Source: The Economic Times
3 September. Oil Marketing Companies (OMCs) announced a 16 paise cut in the prices of diesel, first drop in the retail prices of the fuel in two months. Petrol prices were, however, left unchanged. Post the revision, diesel is priced at ₹73.40 per liter in the national capital while petrol continues to be priced at ₹82.08 per litre. In Mumbai, Petrol and diesel prices stand at ₹88.73 and ₹79.94, respectively. Diesel prices were put on hold after June 30 when the Delhi government announced the rollback on value added tax causing the prices to fall by ₹8.38 per liter. Since then diesel continued to be priced at ₹73.56 per litre. The OMCs had raised petrol prices irregularly between 16 August and 1 September by an overall ₹1.96 per litre.
Source: The Economic Times
3 September. It’s just not electricity rates in Rajasthan that are highest in the country. Comparative VAT (Value Added Tax) rates across states in the country show that people in the state cough up the highest VAT on petrol and diesel. People in Rajasthan pay 38 percent VAT on petrol and 28 percent on diesel which is highest in the country, while the fuels attract road development cess of ₹1,500 and ₹17 per kilolitre, respectively. It’s not only the common man who is facing hardship. Businesses are also suffering because of the high diesel prices. Goods carriers plying through Rajasthan are not buying diesel from the state as the rates are much higher compared to neighbouring states.
Source: The Economic Times
7 September. The Petroleum and Natural Gas Regulatory Board (PNGRB) may allow additional relief period for city gas distribution (CGD) companies facing delays in execution of projects due to national and state-level lockdowns imposed by the government to curb the spread of Covid-19 pandemic. The downstream regulator had issued a fresh set of guidelines to examine the requests of CGD compressed natural gas players for time extension on account of Force Majeure (FM) events. The guidelines list events such as war, riots, natural disasters and restrictions by the central or state governments as conditions that qualify under FM and can result in time extension to complete Minimum Work Programme (MWP) obligations. PNGRB may further allow additional restoration period after the determination of the event of FM for restoration of the activities, ratings agency ICRA said. Over the last few months, while several city gas firms have claimed FM after work on sites got stalled due to the lockdowns, such claims could not be immediately accepted by the regulator PNGRB in the absence of guidelines listing the events that can trigger FM. The new guidelines by PNGRB come as a major relief for CGD companies. CGD players have MWP obligations for each year in terms of the length of pipelines, number of CNG (compressed natural gas) stations and number of domestic connections to be completed during each of their initial years after receiving exclusive authorization to market gas in each Geographical Area which generally consists of 1-3 districts. If there is delay in execution, CGD regulations permit imposition of penalties on the entities.
Source: The Economic Times
7 September. In yet another reprieve for the state, the Centre has given Goa Industrial Development Corp (GIDC) additional time to pay the performance security and appoint a transaction advisor for the Dongri Tal II coal block at Singrauli, Madhya Pradesh (MP). Due to the Covid-19 pandemic, GIDC had written to the Union coal ministry seeking more time to complete the formalities. GIDC has been unable to appoint a transaction advisor and obtain the funds, equivalent to a year’s royalty, required to formally develop the coal block. The Dongri Tal II coal block at Singrauli in MP has been allocated to Goa as part of the fifth tranche of allotment by the coal ministry. The coal block had been earlier allotted to Madhya Pradesh State Mining Corp (MPSMC) but was taken back after MPSMC failed to exploit the mine in due time. Coal mines have been allotted to state governments for sale of coal under the Coal Mines (Special Provisions) Act, 2015.
Source: The Economic Times
7 September. Mining company Thriveni Earthmovers has bagged a contract worth ₹314.28 bn from NTPC Ltd to develop and operate Talaipalli coal mine in Chhattisgarh alloted to the state-owned power giant. Earlier, NTPC had terminated the contracts it had awarded to BGR Mining & Infra for development of its coal mines in Jharkhand and Chhattisgarh over allegations of corruption against senior officials of the private mining company. NTPC had terminated the contracts for development and operation of Chatti-Bariatu coal mine in Jharkhand and Talaipalli coal mine in Chhattisgarh, according to two separate letters dated 4 July 2019 by NTPC. NTPC had awarded mine development and operation contract of the Chatti-Bariatu mine to BGR in November 2017. Talaipalli coal mine has a production capacity of 18 million tonnes (mt) of coal per annum. The block was reallocated by the coal ministry to NTPC in 2015.
Source: The Economic Times
3 September. Western Coalfields Ltd (WCL) a subsidiary of Coal India Ltd, has offered additional quantity of coal to various power generation companies of central, west and south regions at a cheaper landed price, according to WCL. WCL said the move will not only help power generation companies (gencos) minimise their cost to cut power tariffs, but will also reduce import of thermal coal. The company has the advantage of having its mining operation in central India, it said. This helps consumers of central, west and south India to get cheaper landed coal due to advantage in lesser railway freight in comparison to other coal companies of CIL located in the eastern part of the country. WCL said that in a series of detailed discussion during the past two days with WCL and state gencos of Maharashtra, Madhya Pradesh, Karnataka, Gujarat, followed by NTPC Ltd and IPPs, all parameters of existing linkage and future swapping have been discussed along with financial benefit to gencos. It said that the additional quantity offered for swapping ranges from 3-6 million tonnes (mt) to various gencos depending on their requirement.
Source: The Economic Times
3 September. Coal India Ltd is implementing a ₹150 bn project for mechanised transportation and automatic loading of dry fuel in 49 major mines. Altogether 650 million tonnes (mt) of coal will be transported and loaded without manual intervention after the project is completed by 2024. The miner seeks to reduce manual intervention to overcome the perennial problems of overloading and underloading of coal when it is supplied to consumers.
Source: The Economic Times
7 September. The Covid-19-induced lockdown had brought economic activities to a near halt, but overall electricity demand in Delhi was not affected significantly beyond the first lockdown period, says an analysis of the Centre for Science and Environment (CSE) on power consumption in the capital during lockdown and unlock phases. It found that the lowest demand (1,748 MW) during lockdown phases was recorded on 29 March – just before the onset of high summer. The city’s average daily mean electricity demand rose from 1,946 MW during lockdown 1.0 to nearly 3,812 MW during lockdown 4.0 by the end of May — nearly doubled within the lockdown phases. The CSE’s analysis report – Power and The Pandemic – factored in electricity demand and its correlation with weather data during the successive stages of lockdown and unlock phases in the city and also analysed daytime and night peak demands till 31 July. The CSE in its report suggests multiple ways to reduce electricity consumption in the residential sector.
Source: The Economic Times
7 September. India’s power demand in August stood close to last year’s levels on a low base as electricity consumption was stagnant in the same period a year ago. Power demand during the month remained muted in industrial states like Maharashtra and Gujarat but improved over last year in northern agrarian states like Punjab and Rajasthan. The demand for power in August 2020 was 2 percent less than that reported during the same month last year, data available with grid operator Power System Operation Corp showed. India had registered a slump in power consumption for five months beginning August last year till January this year. Electricity demand fell 4 percent against July this year but it is a normal phenomenon every year. Maharashtra and Gujarat electricity demand was low by about 9 percent each than in August 2019. In July this year, Maharashtra had reported a 12 percent slump in its power demand year-on-year while demand in Gujarat was down by 17 percent. Demand in Goa and Daman & Diu was low by 22 percent each while in Dadra Nagar Haveli by 18.3 percent over August last year. The other states to have reported more than 10 percent reduction in electricity demand year-on-year in August were Odisha and Delhi. ICRA continues to maintain its outlook for 5-6 percent decline in the all India electricity demand in FY21 over FY20.
Source: The Economic Times
QuIck CommentPrivatisation of discoms may not introduce efficiency and market competition! Bad! |
7 September. The easing of lockdown restrictions and gradual opening of offices, shops and other facilities have resulted in increased power demand. Since the lockdown restrictions are being removed since 18 May, Delhi’s peak power demand has gone up by 50 percent and, compared to the peak power demand since April 2020, has already increased by over 87 percent. From March till mid-May, the only power demand in Delhi was from domestic users as institutional and commercial establishments remained shut to battle the Covid-19 pandemic. However, after the end of the Lockdown 3.0 on 17 May, Delhi’s peak power started increasing and the gap narrowed. According to estimates, around 50 percent of Delhi’s power demand in the summer is because of the cooling load of airconditioners, coolers and fans. However, with the capital slowly approaching the winter season, it is unlikely that the peak power demand will go further up. Though appliances like heaters and geysers consume a lot of power during winter, the consumption is not as high as in summer. Delhi’s all-time high peak power demand was recorded on 2 July 2019, when it clocked 7,409 MW, an increase of over 250 percent from the peak of 2,879 MW recorded in 2002.
Source: The Economic Times
6 September. Andhra Pradesh CPM Secretary P Madhu has condemned the state government’s decision of Direct Benefit Transfer (DBT) of permanent free power to farmers. The party has opposed the idea of fixing metres to pump sets and demanded the State government to take back its decision in this regard, alleging that the Jagan Reddy-led government accepted the Centre’s decision only to obtain ₹15 bn debt.
Source: The Economic Times
5 September. The Central government’s plan to privatise power distribution sector across the country starting with UT (Union Territory) has evinced interest from state-owned companies such as NTPC Ltd and REC, which through their subsidiaries are expected to bid for privatisation projects on offer in the first phase. It is expected that NTPC may participate through its subsidiary NTPC Electric Supply Company Ltd (NESCL) and power sector financier REC through its entity REC Power Distribution Co Ltd. NTPC is already in distribution operations through a joint venture in Kerala.
Source: The Economic Times
4 September. Delhi Chief Minister (CM) Arvind Kejriwal has assured traders and industrialists that steps to provide them relief from fixed power charges in view of the Covid-19 pandemic will be taken soon. The traders and industrialists in the city have been demanding relief from fixed charges, saying their shops and factories were closed due to the lockdown and also because they suffered losses due to shutdown of all commercial and industrial activities. The monthly electricity bill comprises fixed charges component and a variable energy charges which is actual electricity consumed. He told the traders and industry association representatives that the revenue situation of the Delhi government has taken a hit owing to the complete shutdown of businesses and the economy due to coronavirus. The Delhi government decided to lift the lockdown and it will take time to cover the economic shortfall, now that businesses and industries have resumed, he said. The Delhi Electricity Regulatory Commission recently announced new power tariff for 2020-21, with no hike in the rates in view of the Covid-19 pandemic.
Source: The Economic Times
3 September. The demand for electricity is expected to increase by another 3000 MW by the summers of 2021. The projection came forth during a review meeting presided over by UP (Uttar Pradesh) Energy Minister Shrikant Sharma. According to UP Power Corp Ltd (UPPCL), the utility managed to meet the peak power demand of 23,419 MW this year which is expected to touch 26,500 MW-mark by next year. To meet the escalation in demand, UPPCL has decided to increase its import capacity from existing 12300 MW to 14,000 MW by next year. Likewise, the transmission capacity is proposed to be increased from existing 24,500 MW to 28,000 MW by next year. Sharma said the process of construction of 50 new transmission sub-stations was on which would get operational by June next year. The new sub-stations would address the problems of unregulated tripping and low voltage in at least 50 districts. Sharma said the state government was working to set up transmission infrastructure to meet the demand of 31500 MW which is expected by 2025.
Source: The Economic Times
2 September. The Uttarakhand High Court (HC) directed the Uttarakhand Power Corp Ltd (UPCL) to produce the electricity bills after its compliance report informed the court that it has installed meters at the residences of most of its employees. The counsel representing the UPCL informed the bench that the corporation has already installed meters at the residence of most of its former and serving officials and that the meters are functioning. The court has given the UPCL two weeks’ time to produce the electricity bills before the court. The electricity bills of several high ranking officials of the UPCL run into lakhs. These officials had not paid these dues for years. The court had directed the UPCL in March to file an affidavit furnishing details of the number of residences where they have installed the electricity meters and to specify the time frame by when the rest of the homes will have functional meters. The corporation, however, has not filed the affidavit even after five months of the order.
Source: The Economic Times
QuIck CommentUse of electric vehicles may relocate and not reduce pollution! Ugly! |
8 September. The Centre has upgraded the fuel standards to BS-VI in a bid to fight pollution, Environment Minister Prakash Javadekar and urged people to shift to electric vehicles. Javadekar urged the states to come up with specific plans of how to reduce pollution in their respective cities. He said as the country has now migrated to BS-VI standards, quality petrol and diesel is being provided, which is an important initiative to fight pollution. He said in the last few years, roads and highways are being constructed by the government at a record pace and due to this less pollution is taking place in comparison to previous times. Sharing a roadmap to tackle air pollution, Central Pollution Control Board (CPCB) Member Secretary Prashant Gargava said out of 122 non-attainment cities identified under NCAP (National Clean Air Programme), city plans of 110 cities in 23 states are under implementation while plans of 12 cities in five states are under review. States in which no city has been identified as non-attainment cities under NCAP include Haryana, Goa, Kerala, Sikkim, Arunachal Pradesh, Tripura, Mizoram and Manipur. Gargava said shifting two-wheelers to electric mode of energy could greatly help in curbing pollution.
Source: The Economic Times
7 September. The off-grid and decentralised concentrated solar thermal (CST) scheme should have a performance-based financial support mechanism instead of capital subsidy earlier being provided by the Ministry of New and Renewable Energy (MNRE), according to a study by a research institute. MNRE in a notice requested stakeholders for their comments on the findings of the report by the Gujarat Energy Research and Management Institute (GERMI). It proposed that the financial assistance should be provided over a period of five years after commissioning of the project. And said that in order to avail financial assistance, performance measurement instruments should be installed in the CST plant with an online monitoring system. The ministry had announced this scheme in 2014, aimed at promoting the use of CST technology for reducing dependence on fossil fuels for thermal applications such as community cooking, process heating, cooling, and drying. The programme was extended to 2019-20 for the promotion of the application of solar thermal.
Source: The Economic Times
7 September. The UT (Union Territory) administration has decided to install more solar plants in Model Burail Jail and government schools. Recently, the administration wrote a letter to all the departments, corporations and boards, asking them to provide details of spaces available with them on official buildings and other projects for installation of solar power plants to meet solar energy targets set by the Union government. The MNRE 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 35 MW generation. According to UT, solar power generation figures will touch 100 MW in Chandigarh by 2022. As residents were not coming forward for installation of solar plants because of the initial capital investment involved, the Chandigarh Renewable Energy and Science & Technology Promotion Society (Crest), the nodal agency for installation of solar plants in the city, decided to install solar plants under RESCO model. Under it, the UT will rope in private companies, which will install solar plants on private properties. In return, the building owner will be charged a much lesser tariff (₹3.44 per unit) for solar-produced electricity as compared to normal electricity tariff (₹2.75 to ₹5.20 per unit). The plant will be installed for a period of around 15 years tentatively (exact time frame to be finalised after the tender process). Thereafter, the house owner will be given the power plant.
Source: The Economic Times
7 September. The push by Rajasthan government to wean away farmers from using subsidised conventional power and facilitate a shift to renewable energy found a helping hand from RBI (Reserve Bank of India) which made small solar plants on barren land eligible for loans in the revised priority sector lending norms. On the basis of the new guidelines issued, farmers now can get priority loans for installation of standalone solar agriculture pumps and solarisation of grid connected agriculture pumps. Similarly, farmers can also avail priority loans for installation of solar power plants on barren land or in stilt fashion on agriculture land. Rajasthan has been aggressively driving the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan (Kusum) Yojana to encourage more farmers to use their barren land for setting up micro solar plants at substation level. Under the scheme, farmers can set up plants with capacity ranging from 0.5 to 2 MW and the power will be bought by discoms (distribution companies) at ₹3.14 per unit which is much higher than the rates discovered through auctions. The farmers who do not have no money to invest, can also lease out the land to private developers and receive an annual income.
Source: The Economic Times
6 September. After helping Raj Bhavan to switch to renewable energy, Telangana State Renewable Energy Development Corp (TSREDCO) is exploring the possibility of installing rooftop solar power systems for the upcoming secretariat building. The recently demolished old secretariat used to consume around 3,000 kilowatt (kW) of electricity per month. Till now, 23 government departments are using solar power.
Source: The Economic Times
5 September. Union Minister Nitin Gadkari said that the country should now focus on using more of alternative biofuel technologies. India’s auto industry achieved the landmark feat of transitioning to the BS VI Emission Norms from 1 April 2020, across all vehicle segments, bringing the country at par with rest of the world.
Source: The Economic Times
5 September. REC said its arm REC Power Distribution Company Ltd has emerged as the lowest bidder for a 10 MW solar project in the Jaipur district of Rajasthan under an auction conducted by the Solar Energy Corp of India (SECI). As per the request for selection (RfS) invited by SECI, the Jaipur Development Authority (JDA) shall enter into a power purchase agreement (PPA) with the successful bidder for the purchase of solar power for a period of 25 years. The projects will be connected to the Rajasthan Rajya Vidyut Prasaran Nigam Ltd grid substation, Bagru at 33 kV (kilovolt), and will be set up on 15-hectare land owned by the JDA.
Source: The Economic Times
7 September. China’s crude oil imports in August climbed 13 percent from a year earlier, buoyed by hefty orders placed earlier this year when global oil prices collapsed and as cargoes previously delayed by congestion at arrival ports finally cleared customs. Imports were 47.48 million tonnes (mt), the General Administration of Customs data showed, equivalent to 11.18 mn barrels per day (bpd). That was well below the monthly record of 12.94 mn bpd set in June this year, but easily beat last year’s overall monthly average of 10.11 mn bpd. China, the world’s top crude oil importer, has been shipping in historically high volumes since May as bargain hunters snapped up cheap supply. Amid the jump in cargoes, oil storage tanks have filled up and major Chinese ports are still clogged, even though congestion has eased of late. Analysts expect the number of shipments to ease as Chinese fuel demand has reached a peak, while oil prices are steadily recovering. For refined oil products, customs data showed exports in August jumped to 4.27 mt from 3.21 mt in July, as well as being 4.8 percent higher than in the same month last year. Meanwhile total natural gas imports, including liquefied natural gas and piped gas, reached 9.36 mt, up from both 7.35 mt in July and 8.34 mt in August 2019.
Source: The Economic Times
7 September. Saudi Arabia cut pricing for oil sales to Asia and the US (United States) for October shipments, a sign that the world’s biggest exporter may see fuel demand wavering amid flare-ups in the coronavirus. State oil producer Saudi Aramco is cutting its benchmark Arab Light crude more than expected and lowering the grade to a discount for the first time since June for buyers in Asia. It’s the second-consecutive month of cuts for barrels to Asia. Aramco will also trim pricing for lighter barrels to northwest Europe and the Mediterranean region. Aramco is reducing pricing to Asia for October shipments of the Light grade by $1.40 a barrel, to 50 cents below the regional benchmark. The company was expected to pare pricing by $1 a barrel, to a 10-cent discount, according to a survey of eight traders and refiners. Oil demand has plunged this year as the pandemic forced governments to lock down economies, airlines to cancel fights and workers to stay at home.
Source: The Economic Times
7 September. New tax regulations on shipments overseas may cost Russian exporters of fuel oil as much as $1 bn a year, customs data show. Moscow has been looking for ways to shore up state coffers, which have been hit by the coronavirus crisis and the oil and gas industry is seen as a central source of income, generating around a third of the budget revenues. The state has introduced new customs rules for the export of fuel oil, which take effect on 14 September, to eliminate a loophole that has previously allowed sellers to avoid hefty export duty. Some exporters have used the loophole to pass off the fuel oil and another heavy refining products, including vacuum gasoil, for duty-free products, such as heavy oil residue. Data shows that producers of heavy oil products could have earned an extra $1 bn last year by exporting more than 12 million tonnes (mt) of products using the scheme. Many refineries have enjoyed high refining margins thanks to the loophole.
Source: Reuters
7 September. The global economy is likely not headed for any major slowdown due to Covid-19 but piled-up storage and uncertainty over China’s oil demand cloud oil markets’ recovery, an official with International Energy Agency (IEA) said. Keisuke Sadamori, IEA director for energy markets and security, said the outlook for oil was in the midst of either a second wave or a steady first wave of the coronavirus. The IEA cut its 2020 oil demand forecast in its monthly report on 13 August, warning that reduced air travel would lower global oil demand by 8.1 mn barrels per day (bpd). China, the world’s largest crude importer, emerged from an economic lockdown sooner than other major economies and used its financial muscle to make record oil imports in recent months, a rare bright spot amid global demand destruction.
Source: Reuters
3 September. An idled oil storage facility off Venezuela’s eastern coast is in “satisfactory” condition, an official with state company Petroleos de Venezuela (PDVSA) said, after a series of incidents in recent months raised concerns about environmental hazards. About 1.3 mn barrels of Corocoro crude have been stuck for over a year aboard the Nabarima floating storage and offloading facility, part of the Petrosucre joint venture between PDVSA, as the company is known, and Italy’s Eni SpA, as United States sanctions have complicated the nation’s exports.
Source: Reuters
3 September. Britain’s Oil and Gas Authority (OGA) awarded 259 offshore blocks to 65 companies for oil and gas exploration in areas close to producing fields with existing infrastructure, it said. The 32nd offshore licensing round was launched last July, and the OGA has said it would suspend new licensing rounds in 2020/21. Premier Oil, which is currently restructuring its debt and plans to raise new equity, was awarded blocs near its Tolmount and Catcher fields.
Source: The Economic Times
2 September. US (United States) crude oil and fuel stockpiles fell sharply as Hurricane Laura shut offshore production and refining facilities, the Energy Information Administration (EIA) said. Crude inventories fell by 9.4 mn barrels in week to 28 August to 498.4 mn barrels, according to data, compared with analysts’ expectations in a poll for a 1.9 mn barrel drop. That was driven by a record fall in production, which dropped by 1.1 mn barrels per day (bpd) to 9.7 mn bpd, its lowest since January 2018, as most US offshore facilities were shut as a precaution ahead of Laura. Imports at the US Gulf fell by 501,000 bpd to a record low of 781,000 bpd. Net US crude imports fell 655,000 bpd, EIA said. Gasoline stocks fell 4.3 mn barrels in the week, the EIA said, compared with expectations for a 3 mn barrel drop. Refinery crude runs fell by 844,000 bpd and refinery utilization rates fell by 5.3 percentage points to 76.7 percent of total capacity, the EIA said.
Source: Reuters
8 September. Japanese trading house Sumitomo Corp has sold all its stake in the Marcellus shale gas project in the United States (US) for an undisclosed sum, it said. Sumitomo bought a 30 percent stake in the project in 2010 from Rex Energy Corp, which went bankrupt in 2018. The project is 70 percent owned and operated by PennEnergy Resources. Sumitomo had booked an impairment loss on the stake in around 2015 when slumping oil and gas prices forced international energy companies and Japanese trading houses to write down the value of their assets.
Source: The Economic Times
8 September. European energy exchange EEX said it will enable negative prices on its natural gas spot markets from 1 October to cater for any such market movements in the future. This spring, European gas prices slumped due to weak demand amid coronavirus lockdowns and strong renewables output, compounding an already oversupplied market with little available storage space left.
Source: The Economic Times
4 September. China’s Sinopec Corp has awarded a 10-year tender to buy 1 million tonnes (mt) of liquefied natural gas annually from Qatargas. Sinopec has agreed to pay at a slope of 10.19 percent to Brent crude on a delivered ex-ship basis. The Chinese state oil and gas producer issued the tender in July, seeking supplies starting 2023, to take advantage of current low prices after the Covid-19 pandemic hammered global demand for the fuel.
Source: Reuters
2 September. The amount of regasification capacity, plants that bring liquefied natural gas (LNG) back to a gas, currently under construction globally will rise to a 10-year high this year, research and consultancy firm Wood Mackenzie said. Regasification capacity being built may rise to 144 million tonnes per annum (mtpa), led by projects in China, Wood Mackenzie said. This includes 33 new terminals totalling 92.8 mtpa that are under construction and another 51 mtpa of capacity to be adde d to existing terminals, WoodMac said. China, the world’s second largest LNG importer after Japan, accounts for over one-third, or 52.6 mmtpa, of the new capacity, including 10 new terminals.India is building five new terminals with a capacity of 20 mtpa while Europe could add 13 mtpa of additional capacity from expansion projects until 2025 across the Netherlands, Poland, France, Greece and the United Kingdom. While the coronavirus pandemic has hampered construction and could lead to potential delays of new projects, seven new regas terminals are expected to make a final investment decision (FID) this year, WoodMac said.
Source: Reuters
2 September. Imports of natural gas to Ukraine from European countries have risen by 30 percent to 12.5 bn cubic meters so far 2020, including 3.4 bn in August, Ukrainian state-run gas transit operator said. It said 65 percent of the volume was supplied by owners for the future transit outside Ukraine. The operator said most of the gas had been imported from Slovakia. Ukraine used to meet its gas needs with imports from Russia but has not bought Russian gas directly since November 2015 after Kiev’s relations with Moscow soured over Russia’s annexation of Crimea. Kiev imports from Europe but transit volumes remain important both as a source of gas which Ukraine can tap into and then replace from its own supplies when it needs and as a source of revenue to buy gas from Europe.
Source: The Economic Times
8 September. Among China’s generally strong imports of major commodities in August there was one standout area of weakness – the large drop in coal. China’s coal imports fell to an eight-month low of 20.66 million tonnes (mt) in August, down 20.8 percent from July’s 26.1 mn and a massive 33 percent below the level recorded in August last year, according to customs data. The lack of growth in coal imports in the January to August period contrasts with a 12.1 percent rise in imports of crude oil, an 11.8 percent gain in iron ore and a 34 percent surge in unwrought copper. The problem for major coal exporters, such as Indonesia and Australia, is that the drop in top importer China’s demand removes a key pillar of support, and adds to an increasingly bearish narrative for the polluting fuel. Asia’s total imports of coal from the seaborne market have slumped this year amid the economic fallout from lockdowns in many countries as they battle to contain the novel coronavirus pandemic. In the first eight months of the year, Asia’s seaborne coal imports were 612.82 mt, down 7.1 percent from the same period last year, according to vessel-tracking and port data. China’s customs data is for total coal imports, including those that come overland by rail and truck from neighbouring countries such as Mongolia.
Source: Reuters
2 September. The Nigeria Union of Electricity Employees (NUEE) said the Central Bank of Nigeria (CBN)’s directive authorising banks to ring-fence collection accounts of electricity distribution companies (discoms) in Nigeria is counterproductive. Its General Secretary, Joe Ajaero, said that the directive would result in operational and overhead cost challenges. The News Agency of Nigeria (NAN) reports that CBN had issued a circular authorising banks to ring-fence collection accounts of electricity discoms distribution companies (DisCos) in Nigeria. According to him, it will throw thousands of electricity workers into the labour market, thus increasing hardship and hunger on family members of those affected. He urged the Federal Government to concentrate on metering every electricity consumer in the country, instead of asking them to keep paying for electricity not consumed.
Source: Premium Times
4 September. Canada’s main crude-producing province Alberta looks to use hydrogen to fuel expansion of its oil sands without increasing emissions, even as Prime Minister Justin Trudeau promises strong action against climate change. Alberta will announce no later than October a strategy to develop “blue hydrogen” as a cleaner alternative to using natural gas to extract crude at steam-driven oil sands sites, Associate Minister of Natural Gas Dale Nally said. Deploying cleaner feedstock will allow Alberta to produce more oil without exceeding its 100 megatonne annual limit on provincial carbon emissions, Nally said. The federal government’s draft plan – three years in the making – says several provinces could produce hydrogen, some using renewable energy, and by 2050 the industry could create 100,000 jobs, generate more than C$5 bn in annual revenue and reduce annual greenhouse gas emissions by 100 megatonnes.
Source: Reuters
3 September. Lithuania plans to hold an international auction in 2023 for installing offshore wind turbines in the Baltic Sea, the energy ministry said. The country plans to use a so-called contract for difference (CfD) scheme, similar to that of Britain, to support wind power producers, it said. The government has previously decided to develop up to 700 MW of offshore wind by 2030, which could meet about 25 percent of Lithuania’s electricity needs. The Baltic state shut down its Soviet-era Ignalina nuclear power plant in 2009 as part of a deal to join the European Union, and has since been heavily reliant on electricity imports.
Source: The Economic Times
3 September. China’s state energy producers outlined initiatives to develop hydrogen and wind power after their earnings slumped along with the oil price in the first half but their renewables projects could take years to materialise. The tentative plans laid out by PetroChina, Sinopec and CNOOC Ltd come as global energy majors like BP prepare to spend billions on renewable energy assets to stay relevant in a low-carbon future. The world’s largest oil refiner, Sinopec wants to lead China’s hydrogen push, with plans for hydrogen refuelling stations alongside its petrol stations on the east coast, its top executive said this week, but will tread cautiously. Larger rival PetroChina became the first Asian state-owned firm to set a target for near-zero emissions by 2050, while offshore oil explorer CNOOC will start its first offshore wind farm by the end of 2020.
Source: Reuters
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