MonitorsPublished on Jan 20, 2021
Energy News Monitor | Volume XVII; Issue 28

Quick notes

Underground Coal Gasification: Unconventional Source of Gas for Energy Self Reliance & Emission Reduction?

Basic Technology

UCG is the partial in-situ combustion of coal seam to produce usable gas through the same chemical reactions that occur in surface gasifiers. This is achieved by injecting steam and air (or oxygen) into the coal seam which is then ignited to initiate gasification. Typically temperatures above 1000°C are required for the gasification to proceed. The products and by-products of gasification varies depending upon the nature of coal, the temperature, the pressure and also on whether air or oxygen is used. The product gases (synthetic gas or syngas) consist primarily of CO, CO2, H2, methane (CH4) and to a lesser extent H2S and some higher molecular weight pyrolysis products. Regardless of use, syngas has to be cleaned up using commercially available technologies to remove impurities such as particulates, tar and sulphur compounds such as H2S and carbonyl sulphide (COS) to make it usable.

Products of UCG


The hot syngas from UCG can be used to make steam to drive a steam turbine that generates electricity or it can be combusted to produce steam to drive an electric turbine. Syngas can also be directly fed into a fuel cell that can tolerate CO to generate low voltage electricity that can be stepped up and fed into the grid.

Chemical Feedstock

Syngas can be used as chemical feedstock (after its H2 to CO ratio is suitably balanced) to produce methanol, hydrogen, ammonia and other chemical products using the Fischer-Tropsch process. CIMFR, India has identified methanol and LPG as potential products of gas produced from UCG operations. CIMFR currently produces 5 litres of syngas a day from its pilot UCG project and converts 1.5 tonnes of coal to methanol in its methanol rectifier.

Production of Hydrogen

A stronger case for UCG lies in the fact that coal is the obvious source for hydrogen which is potentially an important near zero carbon energy carrier of the future. UCG as a hydrogen generator coupled with SOFC to generate electrical power directly has been studied by Indian experts. Integration with SOFC gives two specific advantages: (1) The anode exhaust from SOFC that has high operating temperature can be used to produce steam required for the operation of UCG as well as for the reforming of the syngas for the SOFC (2) SOFC can also serve as a selective absorber of oxygen from air for an efficient system of a carbon-neutral electrical power generation from underground coal. Thermodynamic analysis of the integrated system shows considerable improvement in the net thermal efficiency over that of a conventional combined cycle plant.


Energy Self Sufficiency

Only a small fraction of Indian coal is mined under-ground with most of the rest mined through strip-mining. Large reserves of coal are available at depths exceeding 300 meters that are less suitable for conventional mining technologies. This restricts available coal resources despite large reserves in paper. Indian coal considered ‘unmineable’ because they were under pristine forest lands, too deep, low grade or in narrow seams can be gasified thus increasing coal resource availability enormously. India also has large deposits of lignite which is difficult to mine economically because of its low energy content. According to estimates made in 2006, about 66 percent of low grade Indian coal at intermediate depth could be gasified underground to produce synthetic natural gas, methanol, petrol, diesel, hydrogen and also used as feedstock for fertilizer production.

Emission Reduction

High ash content in Indian coal presents an operational challenge in utilisation of domestically mined coal in surface equipment such as gasifiers and boilers. UCG has unique potential in recovering heating value from high ash coal. No coal would be transported at the surface which would also reduce cost and local pollution foot print associated with coal transport by rail (or trucks); it would also reduce pollution associated with coal stockpiling. As conventional coal mining is eliminated with UCG, operational costs and surface damage are reduced and mine safety is increased as accidents such as mine collapse and asphyxiation are eliminated. No surface gasification systems are needed for UCG and hence capital costs would be lower. More importantly UCG with separation and reinjection of CO2 underground can decouple rising electricity demand from rising GHG emissions. The growing interest in hydrogen as zero carbon energy carrier also justifies a revisit of the UCG option.

Carbon Management

CCS has emerged as a key technology component to reduce GHGs mainly CO2 through geological sequestration as observed in the report by the Inter-Governmental Panel on Climate Change (IPCC). Geological carbon storage (GCS) is similar to CCS. Storage of CO2 in the void space made by UCG process in the reactor zone has a number of advantages: (1) UCG creates a fairly large cavity (in the order of 5-8 meters (m) in diameter) between wells. A single burn with 300 m spaced wells would create a void of 6000-15000 cubic meters which can store about 8000 tonnes of CO2 (2) Production and injection wells are available for CO2 delivery and appropriate plugging and abandonment. This will substantially reduce cost of CCS as the wells account for 40-60 percent of CCS costs (3) Physical response of coal to CO2 may enhance sequestration. When oxygen is used for gasification, water-gas shift reactors (reacting CO with steam to produce CO2 and H2) to convert almost all the CO to CO2 from which CO2 can be readily removed by a number of available technologies. CO2 can be stored in deep saline aquifers, depleted gas fields, active oil fields, depleted and un-mineable coal seams all of which are frequently found near coal seams chosen for UCG which makes the UCG-CCS package an attractive option for carbon management. As coal swells and plasticises in the presence of CO2, fractures and porosity may be closed quickly which will immobilise and attenuate potential CO2 leakage.


Induced Subsidence

The void created by UCG may cause significant deformation both in the remaining coal and surrounding rocks. Heating, quenching, water flux and potential roof and wall collapse may seriously compromise integrity of the cavity. These are difficult to predict. In general, the sides of the cavity move inward, the floor upward and the roof downward (subsidence). The magnitude and form of subsidence is a function of many factors including seam depth (thickness and overburden) effective rock stiffness and yield strength. Predictions may be inaccurate because many rocks exhibit non-linear stress-strain behaviour.

Contamination of Groundwater

UCG operations cannot be controlled to the same extent as surface gasifiers which poses the risk on account of high temperature and pressure in the cavity. Some of the coal in UCG may have geologic or hydrologic features that increase environmental risks to unacceptable levels. Larger reaction zone of full scale UCG may create extensive groundwater depression zone creating flow into rather than away from the combustion zone. Because UCG is a high temperature, high pressure process, the production and transport of toxic organic compounds from the burn cavity will be a consequence no matter what type of coal is gasified. Deeper UCG locations have to use higher pressure and temperature to maintain the burn zone which increases the risk of outward flow to regional groundwater. Use of UCG site for CCS may increase the mobility of many contaminants because organics are typically highly soluble in CO2 and metals are mobilised under acidic aqueous conditions. By maintaining the direction of groundwater flow into rather than away from the cavity the mobility of soluble contaminants is greatly reduced.


The economics of UCG based power plants are not readily available as there are no UCG power plants operating in the western world and cost estimates are difficult to obtain for plants that are operating in China and Russia. In general, a UCG based power plant is very similar to an IGCC power plant minus the surface gasifier. The UCG plant also needs much smaller gas clean up equipment because both tar and ash content in UCG based syngas is substantially lower than that obtained from a surface gasifier. These factors give UCG based power plants a significant economic advantage over IGCC plants and SCPC plants. Estimates put the cost of an UCG power plant at roughly half that of an SCPC and IGCC plants and the cost of electricity generated using a UCG plant at roughly a fourth of that from an IGCC or SCPC plant.

The economics of UCG has major uncertainties that are likely to persist. UCG is an inherently ‘unsteady’ state process and both the flow rate and the heating value of the product gas will vary over time. Any operating plant must take this factor into account. Many important process variables such as the rate of water influx, the distribution of reactants in the gasification zone and the growth rate of the cavity can only be estimated from measurements of temperature and product gas quality and quantity. Changes in the quantity and quality of gas produced will have a significant impact on the economics of the project. On the other hand, capital expenditure of UCG projects can be substantially lower than equivalent surface gasifiers because purchase of gasifier is not required. Operating expenses on account of coal mining, coal transport and ash management are also substantially reduced in UCG. Even for projects that have substantial environmental monitoring and safety facilities UCG plants have maintained their economic advantages.

UCG: Underground Coal Gasification, CO2: carbon dioxide, CO: carbon monoxide, H2S: hydrogen sulphide, GHGs: greenhouse gases, H2: hydrogen, CIMFR: Central Institute of Mining & Fuel Research, SOFC: solid oxide fuel cell, LPG: liquefied petroleum gas, CCS: Carbon capture and storage, IGCC: Integrated Gasification Combined Cycle, SCPC: Super critical pulverised coal

Composition of UCG dry Syngas

Source: Singh, A K Underground Coal Gasification in India, Central Mining Research Institute, Dhanbad


Discom Reforms Gain Momentum


Discom Reform

The government signed a $133 mn loan agreement with the ADB to strengthen the power distribution sector in Meghalaya. The loan will be used to modernise Meghalaya’s power distribution network and improve the quality of power supplied to households, industries, and businesses, the finance ministry said. Although Meghalaya has achieved 100 percent electrification, remote villages in the north-eastern state suffer from frequent power cuts due to overloaded distribution networks and substations that use outdated technology, resulting in high aggregate technical and commercial losses, the ministry said. The funds will support the state’s ‘24×7 Power for All’ initiative in conjunction with the central government. The loan will fund projects for constructing 23 substations, renovate and modernise 45 substations and install and upgrade 2,214 km of distribution lines and associated facilities covering three out of the six circles in the state. The installation of smart meters under the project is expected to benefit some 180,000 households. The project will also develop a distribution sector road map and a financial road map for the Meghalaya Power Distribution Corp.

Goa also launched the OTS scheme, 2020 of the electricity department for consumers who have defaulted on bill payments. An amount of over ₹4 bn has to be recovered, of which delay payment charges (DPC) itself account for around ₹910 mn. Consumers have to apply for OTS within one month from the launch date. The first OTS scheme was launched in 2008 in an attempt to recover large accumulated arrears with the electricity and the Public Works department (PWD). OTS, 2020 is proposed along similar lines to recover outstanding revenue from temporary or permanently disconnected or RCC consumers and also for active consumers of the power department.

ADB has approved a $190 mn (₹14 bn) loan for modernisation and upgradation of power distribution system in Karnataka’s capital city of Bengaluru. The funding for the Bengaluru Smart Energy Efficient Power Distribution Project by ADB includes a $100 mn sovereign loan and a $90 mn without sovereign guarantee loan to BESCOM. BESCOM is one of five state-owned distribution utilities and the largest in Karnataka. ADB said the project will convert 7,200 km of overhead distribution lines to underground cables with parallel installation of 2,800 km of fiber optic communication cables. Moving the distribution lines underground protects them from natural hazards and interference, reducing technical and commercial losses by about 30 percent. The fiber optic cables will be used for smart metering systems, DAS in the distribution grid, and other communication networks. The project will install 1,700 automated ring main units adapted with a DAS to monitor and control the distribution line switchgears from the control center.

Andhra Pradesh government will not increase electricity tariffs in the state for the second consecutive year. Discoms in the state have recently filed their Annual Revenue Requirement (ARR) before the Andhra Pradesh Electricity Regulatory Commission (APERC). The government allocated ₹83.53 bn for the free power scheme, ₹7.17 bn towards subsidised power to aqua farmers and ₹17.07 bn towards domestic subsidy. The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has offered an instalment scheme to high- and low-tension domestic, commercial and industrial consumers to help them clear their pending and current electricity bills. The distribution firm said the scheme would also offer to reinstate the power supply of defaulters. Consumers who have filed court cases regarding electricity bills can also avail the instalment scheme, provided they agree to withdraw the cases unconditionally. The consumers whose power supply has not been disconnected will be allowed to clear the arrears in three instalments without making any down payment.

Amidst the debate over the efficiency of Goa’s power model, the Goa electricity department has been conferred the GCloud and Data Centre Award 2020 for successful implementation of various IT projects. Goa bagged the award for undertaking power reforms and for introducing digital initiatives such as Bharat Bill Payment System and online services and other initiatives.

Draft Electricity Amendments Act 2020

The government’s plan to initiate privatisation in the power distribution sector beginning with sell-off of utilities in Union Territories has hit a roadblock. The Punjab and Haryana high court stayed the Centre’s privatisation bid of Chandigarh electricity distribution company saying it is illegal and the utility cannot be completely sold to private companies. Chandigarh was the first Union Territory to issue tender inviting bids to sell off its power distribution company. The Central government had in May announced privatisation of discoms in union territories as part of its Atma Nirbhar Bharat plan. Recently, Uttar Pradesh shelved the privatisation plan of its power distribution companies due to agitation by employee trade unions.

Puducherry government was against the Centre’s move to privatise power distribution. Puducherry does not have an Electricity Board and distribution of power has been done traditionally through a department. According to the government the power sector is not suffering any loss and hence, there is no room for any move to privatise power distribution.

Demand Revival

The peak power demand in Delhi this November has already surpassed that of the same month last year prompting the discoms to gear up to meet a much higher demand this winter. On 20 November, the season’s peak power demand was 3,678 MW compared with 3,631 MW recorded on November 15 last year, according to sources. But that’s not all. The peak power demand has surpassed the corresponding demand on 12 days till 24 November compared with the same month last year. The power discoms expect the city’s peak power demand to go up to 5,480 MW this winter, surpassing last year’s demand during the season. Last winter, the demand had peaked at 5,343 MW. While it was 4,125 MW in the winter of 2015-16, it increased to 4,168 MW the next winter and to 4,511 MW in 2017-18. However, it dipped to 4,472 MW in the winter of 2018-19.

The peak power demand in November 2020 surpassed the peak power demand of November 2019. In the first five days of December also, Delhi’s peak power demand has been more than the peak power demand of December 2019 on three corresponding days. A similar pattern was witnessed in October too. The peak power demand of the national capital in this winter can go up to 5480 MW, surpassing last year’s winter demand. Last year, it had peaked at 5343 MW. The peak winter power demand in BRPL and BYPL areas had reached 2020 MW and 1165 MW respectively during last winter. This year, it is expected to reach 2200 MW and 1270 MW for BRPL and BYPL respectively.

A record 14,856 MW power was successfully supplied by discoms in Madhya Pradesh. The state faced a peak demand of 14,856 MW and the same was supplied by power companies operating in the state. This was the highest-ever power supply in the history of the state. A demand of more than 14,000 MW has been recorded in the state during the past ten days which was supplied successfully. The previous highest peak demand was 14,555 MW, recorded on 3 February this year. During the peak demand, Madhya Pradesh West Zone Power Distribution Company (Indore and Ujjain Division) supplied maximum power of 6,077 MW, Madhya Pradesh Madhya Pradesh Power Distribution Company (Bhopal and Gwalior Division) 4,752 MW and Madhya Pradesh East Region Power Distribution Company (Jabalpur, Sagar and Rewa division) recorded supply of 4,028 MW.

Puducherry government was against the Centre’s move to privatise power distribution. Puducherry does not have an Electricity Board and distribution of power has been done traditionally through a department. According to the government the power sector is not suffering any loss and hence, there is no room for any move to privatise power distribution.

Generation Assets

The Meja Thermal Power Plant, Uttar Pradesh’s first supercritical power plant, will be fully operational by December. MUNPL is a 50:50 joint venture (JV) of NTPC Ltd and Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd (UPRVUNL). The JV was incorporated in 2008 to set up a 1,320 MW (with 2X660 MW units) coal-based Meja Thermal Power Plant at Meja, about 45 km from the state’s Prayagraj district. Currently, the plant is operating at a plant load factor of 80-85 percent.

Lenders to the Avantha Group’s distressed 600 MW Jhabua power plant are locked in tough negotiations over the completion of the deal with NTPC Ltd almost a year after it was declared the winning bidder due to concerns over power demand due to the economic downturn caused by the Covid-19 pandemic. The deadlock over this asset highlights the challenges to debt resolution to distressed power plants in India besieged by lack of PPAs, coal linkages and the economic recession caused by the Covid 19 pandemic which has hurt corporate demand. Jhabua was also the first time that the state-run power producer had bid for any stressed project. The company has decided against buying any stressed projects outside the Insolvency and Bankruptcy Code. The project has PPAs and NTPC has apprehensions that state discoms may renege the contracts due to lack of demand post Covid.

Tariff Discounts

Aam Aadmi Party promised zero power bills to 73 percent of Goa’s consumers if it forms the government in the State. According to the party, Delhi residents who consumed 177, 174, 204 and 211 units of power received bills of nil, nil, ₹13.4 and ₹5 respectively.

Electricity Trade

India Energy Exchange registered trading volume of 6,164 mn kWh in November, registering a 61 percent year-on-year growth, while the average market price declined by 4 percent to ₹2.73/kWh from 2.85/kWh yoy during the same month last year. As per the data published by National Load Dispatch Centre, the national peak demand in November saw an increase of 3.2 percent while the energy consumption registered 3.15 percent growth. The real-time electricity market saw an all-time high volume of 894 kWh in November since commencement on 1 June 2020 and registered a 10 percent growth on month-on-month basis.

Regulation and Governance

In light of the recent blackout in the entire Mumbai Metropolitan Region, the state government has sanctioned a plan to build an underground transmission network – an 80 km line from Aarey to Kudus, in Palghar district. It is projected that the entire project will cost around ₹80 bn. On 12 October, the entire Mumbai and its adjacent regions had suffered a major power blackout due to grid failure which was happened because of a technical fault. Therefore, the government had decided to fast-track the underground HVDC cables project. The first-of-its-kind project would provide an additional 1,000 MW of electricity to Mumbai. The HVDC technology is tailor-made and modular in design, requires less footprint compared to conventional technology and has a unique feature of Black Start, which ensures faster restoration of power supply in the event of widespread grid disturbances. The HVDC scheme has been identified as a critical bulk power injection scheme for Mumbai, which will act as a virtual generating station. The 1,000 MW underground Kudus-Aarey HVDC link will be completed in the next three years.

Rest of the World


Royal Dutch Shell Plc experienced a power outage that caused a process upset at multiple units at its Deer Park, Texas, facility, where it operates a 318,000 bpd joint venture refinery. Power outage at the Deer Park facility was due to a transmission line event outside of Shell.


Trading of a Japanese power market derivative offered by the EEX has surged in the six months since its launch as overseas traders and investors pile into the world’s fourth-biggest electricity market. EEX Japan power swaps amounting to 111.5 mn kWh were traded in October, 10 times the volume in the first month of trading in May. Once a backwater in the energy sector, the JEPX has become the locus of action in a deregulated market, with volumes of the bourse’s spot power contract accounting for more than 40 percent of sales in June in the roughly $140 bn electricity market. Before the market was almost fully liberalized in 2016, when the government allowed any supplier to sell electricity to households, trading on JEPX accounted for less than 2 percent of the market. Germany’s biggest electricity producer, RWE, also recently set up a Japanese subsidiary to trade power and offer risk management products to local companies.

France will not face electricity outages this winter even if the new coronavirus crisis disrupts nuclear plant maintenance. Power grid operator RTE is expected to update its forecasts for electricity needs this winter later. Industrial companies would have to halt output in the case of any electricity shortages to reduce demand.

Energy exchange Nord Pool will provide a platform offering traders day-ahead capacity on a new subsea power cable linking Norway to Britain from 2021. Nord Pool would offer capacity for the 1,400 MW North Sea Link cable on behalf of its operators, British electricity system operator National Grid and its Norwegian counterpart Statnett. Nord Pool already runs day-ahead power auctions for Britain, the Nordics, Germany, France, Belgium, Austria and the Netherlands. The North Sea Link will be the first power cable directly linking Britain and Norway.

West Asia

Dubai will reduce a fuel surcharge on customer electricity and water bills from 1 December, citing savings made by including renewable sources in its energy mix. The fuel surcharge for electricity will be 5 fils/kWh down from 6.5 fils. The surcharge for water will become 0.4 fils per gallon, instead of 0.6 fils previously.

OTS: One-Time Settlement, discom: distribution company, ADB: Asian Development Bank, BESCOM: Bangalore Electricity Supply Company, km: kilometre, DAS: distribution automation system, BRPL: BSES Rajdhani Power Ltd, BYPL: BSES Yamuna Power Ltd, MW: megawatt, mn: million, bn: billion, tn: trillion, PPAs: power purchase agreements, kWh: kilowatt hour, HVDC: high-voltage direct current, EEX: European Energy Exchange, JEPX: Japan Electric Power Exchange

News Highlights: 9–15 December 2020

National: Oil

BPCL to consider buying Oman Oil stake in Bina refinery

15 December: Bharat Petroleum Corp Ltd (BPCL) has said its board will consider buying out Oman Oil Company in the Bina refinery project in Madhya Pradesh. BPCL board will also consider merging Bharat Gas Resources Ltd (BGRL) with itself, the company said. BPCL holds 63.68 percent stake in Bharat Oman Refineries Ltd (BORL), which built and operates a 7.8 million tonnes (mt) oil refinery at Bina in Madhya Pradesh.

Source: The Economic Times

Petrol would be ₹8 cheaper if additional VAT is removed

14 December: The price of petrol, which touched ₹90.85 a litre in the city, could have been ₹8 to 10 less, had the government reduced burden of additional Value Added Tax (VAT), levied from time to time to tide over specific crises. The taxes were never reversed, even after the crisis situation normalized. The latest addition was of ₹2.12 in May 2020 to deal with Covid. The calculations show that even as base price of diesel is higher than that of petrol, the latter is costlier due to extra taxes. This is because diesel is no longer subsidized. It was seen that additional VAT was charged at ₹10.12 a litre in case of petrol and ₹3 for diesel. Additional VAT is the tax that is levied in times of crisis. Sources said even after the crisis has ended the tax has been continued. Had earlier additional VAT been removed, and then only Covid VAT levied, petrol price would still have been cheaper by ₹8. According to the calculations, base price of petrol that reaches the depot at Nagpur comes to ₹28.03. The additions include freight, excise duty, dealers’ commission, VAT, additional VAT and tax collected at source. For diesel, the base price at depot comes to ₹29.01, and after all the additions, the final rate payable by the consumer came to ₹81.06. This includes integrated road development cess of 65 paise on petrol and ₹1.85 on diesel levied for Nagpur.

Source: The Economic Times

Indian consumers to face more hikes in petrol and diesel prices

13 December: Steeper fuel price hikes await Indian consumers as international crude oil rates have crossed $50 a barrel for the first time since March on global demand recovery. Rising crude oil prices push up rates of refined products such as petrol and diesel, which have already risen by ₹2.6 per litre and ₹3.4 per litre, respectively, in three weeks in the domestic market. Since the beginning of November, crude oil prices have risen about $11 a barrel, or 28 percent, to $50 a barrel mainly on hopes that a quick vaccine roll-out across nations could help contain the coronavirus and its damaging impact on fuel demand. Some countries have already approved vaccines while others are considering such requests from pharma companies. An oil demand pickup is showing up in India too with petrol sales rising above pre-Covid levels. The demand for diesel and jet fuel has also vastly improved since April but is still lower than last year’s. Refinery runs have also recovered with facilities at Indian Oil Corp (IOC), the nation’s largest refiner, running at full capacity. Rising international rates have forced state oil companies to raise domestic fuel prices. Petrol now costs ₹83.71 per litre in Delhi, just a tad lower than the record rate of ₹84 per litre registered on October 4, 2018. Diesel is selling for Rs 73.87 per litre. In Mumbai, petrol and diesel cost ₹90.34 and ₹80.51 a litre, respectively. Rates have been static for the past four days after rising almost daily since 20 November. State oil companies are expected to daily revise domestic rates of petrol and diesel to align them with international rates. But in 2020 companies haven’t quite followed this, keeping rates static for weeks and months, making domestic price predictions harder. Domestic prices are near-record levels also because of steep rise in taxes.

Source: The Economic Times

IOC brands convenient 5 kg LPG cylinder as ‘Chhotu’

11 December: The convenient 5 kg (kilogram) LPG cylinder has been rechristened ‘Chhotu’, the nation’s top oil firm Indian Oil Corp (IOC) said. The cylinders are available at various points of sale, including IOC petrol pumps, Indane LPG distributors and department (Kirana) stores and can be purchased by submitting just an ID proof. There is no requirement of address proof for obtaining these cylinders. In a small virtual ceremony, IOC Chairman S M Vaidhya launched the market-priced ‘Chhotu’ 5 kg cylinders, which will be available pan India, the company said. The 5 kg cylinder is hugely popular with low-income groups as well as young professionals and single people who do not either have the money or the requirement for the traditional 14.2 kg cylinder. IOC said to obtain a cylinder, a customer merely needs to submit an ID proof. These cylinders are easy to carry and use.

Source: The Economic Times

National: Gas

Torrent Gas in pact with Tamil Nadu to invest ₹50 bn on city gas distribution infra

15 December: Torrent Gas has signed an agreement with the government of Tamil Nadu, committing to invest ₹50 bn for the development of city gas distribution infrastructure in the state. Torrent Gas was earlier authorised by Petroleum and Natural Gas Regulatory Board (PNGRB) to provide compressed natural gas (CNG) and piped natural gas (PNG) in Chennai and Thiruvallur districts in the state. Torrent Gas will be laying pipelines and other requisite infrastructure in Chennai and Thiruvallur districts over an area of 3,569 square kilometres to provide PNG connections to homes, industries and commercial establishments and CNG to vehicles. As part of the first phase of the infrastructure roll-out, the company aims to commission over 30 CNG stations in Chennai and Thiruvallur districts in the last quarter of the current financial year. Torrent Gas has recently commissioned the first CNG station at Nagapattinam in Tamil Nadu and started the work of laying the pipelines.

Source: The Economic Times

India and LNG supplier Qatar set up task force to identify projects for investment

11 December: India and its biggest LNG (liquefied natural gas) supplier Qatar agreed to set up a task force to identify projects in India for investment by the gas-rich Gulf nation, Oil Minister Dharmendra Pradhan said. India imports 8.5 million tonnes per annum of gas in its liquid form (LNG) from Qatar under a long-term contract. It also buys LPG (liquefied petroleum gas) to meet the fast-expanding cooking gas requirements in the country. At the beginning of this year, India asked Qatar for renegotiation of its long-term supply contract, but the Gulf state was not inclined to renegotiate the prices. India wants to significantly boost its gas consumption and expand its gas infrastructure. An investment of $66 bn is lined up in developing gas infrastructure which includes pipelines, city gas distribution and LNG re-gasification terminals, Pradhan had said earlier this month. Qatar, for its part, sees LNG as an important part of India’s plans to increase its gas-based economy. India is targeting to raise the share of natural gas in its energy basket to 15 percent by 2030 from the current 6.3 percent.

Source: The Economic Times

National: Coal

SC seeks reply from Centre, States on plea against coal blocks auction in dense forest areas

15 December: The Supreme Court sought response from Centre and seven states on a plea challenging the decision to allocate/auction coal blocks for commercial mining in densely forested areas. A bench headed by Chief Justice S A Bobde and Justices A S Bopanna and V Ramasubramanian issued notice and tagged the matter along with other pending matters related to mining. The seven states from whom the top court has sought response include Chhattisgarh, Jharkhand, Maharashtra, Odisha, Madhya Pradesh, West Bengal and Telangana. It said that this is being done in contravention of the principles of Sustainable Development and Precautionary Principle since only 15 percent of Indian Coal Deposit lies beneath the Densely Forested Areas and remaining 85 percent can fulfil even the enhanced demand of the Coal for coming 50 to 70 years. The plea said that the decision to allot Coal and other mineral blocks in dense forest especially when less forested blocks are available is in direct contravention of the National Forest Policy 1988 as well. The plea said that the Centre did not consider the environmental aspect and went on to allot/auction many such coal blocks which were classified as No Go areas along with the Coal Blocks of the GO areas. It said that the allotment or auction of the Coal Blocks without any prior forest clearance is in contravention of the provisions of Forest Conservation Act 1980 and Environment Protection Act 1986. The petitioner sought de-allocation of all coal blocks situated in the densely forested areas which were categorized as No Go in 2010 study beside seeking a direction from the Court to Centre for proper inventory of coal and all other major mineral deposits on the basis of their environmental value.

Source: Reuters

Merger of multiple e-auction windows into one will help expand customer base: CIL

14 December: With surging pithead stock and a surplus scenario in the sector, Coal India Ltd (CIL) is in favour of tweaking its e-auction policy to broaden its customer base and maintain a steady bottom line. The government had indicated that the reform measures could be taken in the marketing of the fuel. The allocation of coal for e-auctions is “more than demand at present” even though there are signs of revival in the economic activities after the lockdown. The coal behemoth conducts five types of e-auction of the dry fuel for its customers. The PSU (Public Sector Undertaking) major had recently allowed its subsidiaries to fix the base price for e-auction depending on demand to improve their margins. However, CIL registered a 77 percent growth in e-auction sales under the five windows, with a booking of 68.3 million tonne (mt) in the April-November period in the current fiscal as compared to 38.6 mt booked during the year-ago period. In absolute term, there was a 30 mt increase in the e-auction coal booking.

Source: The Economic Times

Coal, Power Ministers discuss substituting imported coal with domestic fuel under ‘Aatmanirbhar’ campaign

12 December: Coal Minister Pralhad Joshi met his counterpart in the power ministry, R K Singh, and deliberated on substituting imported coal with domestic fuel as part of initiatives towards the government’s ‘Aatmanirbhar Bharat’ goal. During the meeting, both ministers also deliberated on strategies for removing bottlenecks to augment coal supply in the country. Joshi said that he held meeting with Oil Minister Dharmendra Pradhan, Union Minister for Chemicals and Fertilisers D V Sadananda Gowda and Union Minister of State for Chemical and Fertilizers Mansukh Mandaviya to address various issues pertaining to Talcher Fertilizer Ltd. In August, Joshi had reviewed the progress made in operational activities of Talcher Fertilizers Ltd and asked it to expedite the coal gasification project. 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, the government had earlier said. The state-of-the-art plant at Odisha will produce 100 tonne per day of sulphur flakes as a saleable by-product. The plant will produce 2.38 million tonne cubic metres per day of natural gas equivalent synthesis gas from coal, the government had said.

Source: The Economic Times

MAHAGENCO gets environmental clearance for Chhattisgarh coal mine

11 December: After a wait of over two years, MAHAGENCO (Maharashtra State Power Generation Company) has finally got environmental clearance from the Ministry of Environment, Forests and Climate Change (MoEFCC) for its captive coal mine in Chhattisgarh. The mine — Gare Palma II — will supply coal to Koradi, Chandrapur and Parli power plants. The coal ministry had allocated the block, located in Raigarh district, spread across 2,583.486 hectare with geological reserves of 1,059.761 million tonnes (mt) in August 2016 to MAHAGENCO. MAHAGENCO had appointed Adani Group as the mine developer and operator and Maharashtra Electricity Regulatory Commission (MERC) had granted approval for a coal mining agreement with it. The company is expected to launch production of 23.60 million tonnes per annum (mtpa) from March 2023, which will increase to 29 mtpa from the seventh year onwards.

Source: The Economic Times

Coal India likely to see reforms in marketing, sales in 2021

10 December: Coal India Ltd will likely undergo a reform in marketing and sales next year, Union Coal and Mining Secretary Anil Kumar Jain said. The exercise, among other improvements, will aim at doing away with multiple types of auctions of the dry fuel. Jain said smaller such buckets are not serving the purpose, and only enhancing the prices of raw materials for some sectors. He, however, did not talk about fuel supply agreements as part of the proposed reforms.
Source: The Economic Times

National: Power

UPPCL offers OTS scheme for power consumers

15 December: The energy department announced the One Time Settlement (OTS) scheme for power consumers, including those in the commercial and industrial category. The scheme will start from 15 December and continue till 31 January. Earlier, the OTS scheme was applicable for urban and rural domestic consumers only. Power Minister Shrikant Sharma said consumers of various categories, including commercial, private institutions and industrial, would get 100 percent waiver on surcharge on pending electricity bills up to 30 November. In urban areas, consumers will have to apply online with the office of the executive engineer or sub-divisional officer concerned, while in rural areas applications will have to be filed at the Common Service Centre. Sharma said the facility has been extended to commercial and industrial category consumers to provide them relief in the wake of pandemic. The scheme will also cover consumers who were slapped with a fine after an anomaly was found during an electricity checking drive. Principal secretary, energy, Arvind Kumar said officials have been directed to ensure the benefit of the scheme is passed on to the intended consumers for which a campaign may be carried out. He said that the Uttar Pradesh Power Corp Ltd (UPPCL) may also organise camps to facilitate the scheme.

Source: The Economic Times

India, China to lead 2021 growth in global power demand: IEA

15 December: India, along with China, will lead the growth in global demand for electricity in 2021, although consumption will recover at a slower pace than after the global financial crisis of 2008, the International Energy Agency (IEA) said in its first ‘Electricity Market Report’ released. The report, however, expects global electricity demand in 2020 to fall by around a historic 2 percent due to impact of the Covid-19 pandemic. “This is the biggest annual decline since the mid-20th century and far larger than what followed the global financial crisis, which resulted in a drop in electricity demand of 0.6 percent in 2009. India’s power demand had contracted by more than a quarter in April as the Covid lockdown brought nearly all economic activities to a grind. Consumption began rising as the unlock process started in June, rising more than 13 percent from a year-ago period in October. Demand has been growing at a 4-5 percent every month on an average. As the recovery takes root and the economy returns on the growth path, power consumption in India will also rise, aided by the 100 percent household electrification and revival in industrial activities. But despite this growth, India will still trail China. The IEA report said China will be the only major economy to see higher electricity demand in 2020. However, projected demand growth of around 2 percent, which represents about 28 percent of global electricity consumption, will still significantly below its average since 2015 of 6.5 percent.

Source: The Economic Times

India’s day-to-day power demand 5-10 GW higher in December than last year: Singh

14 December: India’s daily power demand in December this year is 5-10 GW higher than the corresponding day previous year, Power and Renewable Energy Minister R K Singh said. He said that this increase in power demand is a sign of a growing economy. In October, the country’s power demand had gone up by 12 percent. According to the power ministry data, power consumption grew by 13.65 percent during 1-7 October to 25.95 bn units, up from 22.83 bn units in the same period last year. This doubt-digit rise was attributed to an increased commercial and industrial with easing of the Covid-19 lockdown restrictions imposed by the government on 25 March to limit the spread of the pandemic after which power consumption declined from March to August as economic activities reduced.

Source: The Economic Times

DVC agrees to defer power regulation in seven districts: JBVNL

14 December: The Damodar Valley Corp (DVC) has agreed to defer its power regulation to seven districts of Jharkhand after fruitful discussions with the state-owned power distribution company Jharkhand Bijli Vitaran Nigam Ltd (JBVNL). Earlier, DVC threatened to reduce power to Bokaro, Dhanbad, Giridih, Koderma, Ramgarh, Chatra and Hazaribag districts by as much as four hours every day beginning 13 December unless its power bills averaging ₹1.50 bn per month are paid in full. JBVNL has been defaulting payment to the power major, which supplies around 650 MW to the seven districts, since September.

Source: The Economic Times

New power islanding for Delhi proposed to prevent blackouts

12 December: The government proposes to put in a robust islanding facility for power supplies in Delhi to prevent the national capital to face electricity disruptions, especially for essential services, in case of grid disturbances. The country’s largest power producer NTPC Ltd has suggested a mix of its gas-based and coal-fuelled power units in the vicinity of the Capital for dedicated use for the city to create an island in the case frequency in the main grid collapses and there is real threat of a complete power breakdown. Though an islanding scheme for Delhi was developed by grid manager Power System Operation Corp Ltd (POSOCO) in 2017, it yet to be commissioned. Moreover, with over dependence of gas-based capacity to provide dedicated power to Delhi in the event of a sudden drop on frequency has created a situation where despite islanding infrastructure adequate electricity supply would be hard to maintain. NTPC is ready to keep at least two units of Dadri power plant and one unit of Jhajjar plant on bar at all times to take care of any grid disturbances. These coal-fired units would become critical in times of frequency collapse to ensure power generated from there helps to keep essential services running in the Capital. The Delhi Region is a part of Northern Grid and in case of any grid disturbance, this islanding scheme will isolate Delhi from rest of the grid. Once islanding is done, the demand is matched with the own generation. The priority is Delhi Metro, Railways, DIAL and the healthcare facilities. As per guidelines, each state has been given a share of load shedding which should contribute in case of any fall in frequency. When any grid disturbance occurs in the grid, there’d be an increase or decrease in frequency.

Source: The Economic Times

Discom to hold online court for power theft cases

10 December: Adapting to the new normal in the wake of Covid, BSES Rajdhani Power Ltd will soon organise an online special lok adalat for on-the-spot settlement of power theft cases in south and west Delhi. The first-of-its-kind online lok adalat for power theft cases will be organised in association with Delhi State Legal Services Authority on 12 and 13 December between 10am and 3pm at Permanent Lok Adalat (PLA) 3 at Vikaspuri. BSES said consumers could use this opportunity for an on-the-spot settlement of cases relating to both direct theft and meter tampering. Consumers can either participate in person or through their advocates or authorised representatives. Those who don’t have access to the internet can participate in the lok adalat by visiting PLA-3 and using the virtual hearing facility being organised there. All judges, court staff and BSES officials will participate in the hearings from home. All consumers/litigants will have to register beforehand by sending an email to [email protected] or by calling 49209419.

Source: The Economic Times

Power sector will see some cash flows but regulatory difficulties to continue: Moody’s

9 December: Power sector that has seen a substantial impact on their operations due to the disruption caused by Covid pandemic is set to see some improvement in the coming months, Moody’s research said. The research said that while cash flows for many companies would improve they are set to face difficulties from the global regulators. The cash flow of most rated issuers will recover or stabilize in the next 12-18 months. This will be supported by power demand recovery or manageable cost pass through mechanisms but partly offset by falling power prices and regulated returns, as well as payment delays by off-takers, it said.

Source: The Economic Times

India may have several trillion-dollar companies, cheapest power by 2050: Adani

9 December: India will create several of its own trillion-dollar value companies by 2050, driven by technology and scale of opportunities, billionaire Gautam Adani, the head of the Adani Group, said. Adani also sees India emerging as the least expensive producer of renewable energy. He said that India may face challenges but the scale of opportunity will remain a key driver. He said that three factors will define India over the next three decades — the macroeconomic factors that favour India, the intersection of digitization and sustainable energy and its transformational impact, and accelerated new possibilities for India in a post-Covid world.

Source: The Economic Times

National: Non-Fossil Fuels/Climate Change Trends

PM Modi lays foundation of India’s largest renewable energy park in Gujarat

15 December: Prime Minister Narendra Modi laid the foundation of India’s largest hybrid renewable energy park having 30 GW capacity at Vighakot village in the district of Kutch in Gujarat. He said that the plant would provide employment to about one lakh individuals and power produced from it would curb 50 mn tonne of carbon dioxide emissions every year, which is equal to planting 9 mn trees. He said that the setting up of wind turbines along the border region would strengthen and improve India’s border security as well. The park will have a hybrid park zone for wind and solar energy storage, as well as an exclusive zone for wind park activities.

Source: The Economic Times

India will exceed its climate commitments: PM Modi

13 December: As global leaders gathered on a virtual platform to set the tone for higher climate goals, Prime Minister (PM) Narendra Modi said India is not only on track to achieve its 2030 targets but to better them “beyond expectations”. As the Paris agreement completed five years, Modi pledged that a “centennial India” would have achieved much more. The Paris Agreement on climate change, which was adopted on 12 December 2015, will become operational on 1 January 2021. Though India, unlike China, European Union, South Korea and Japan, has not pledged for any carbon neutrality time-lines, it is the only G-20 nation, which will meet its Paris Agreement commitment and is among few countries whose target is 2°Celsius-compliant. The PM also told the gathering about India’s progress in reducing its carbon footprints by adopting renewable energy in a big way and increasing its green cover. Modi mentioned about two major initiatives — International Solar Alliance and Coalition for Disaster Resilient Infrastructure — which India had taken to deal with mitigation and adaptation aspects of climate change.

Source: The Economic Times

Uttar Pradesh to purchase solar power produced by farmers

12 December: The state government would set up four sub-stations which would purchase solar power produced by farmers on their barren land. This was announced by state energy minister Shrikant Sharma while addressing a seminar on development of east UP (Uttar Pradesh), organised by DDU Gorakhpur University. He said farmers would be able to sell power to Uttar Pradesh Power Corp Ltd after using a part of it to meet their requirements under the PM Kisan Urja Suraksha Evem Utthan Mahabhiyan (PM-KUSUM) scheme. He said that of the 8,000 solar powered irrigation pumps, 2,882 have been allocated to east UP. He said that UP cannot progress without the development of east UP and for this availability of adequate power plays a key role. He said the state government is working towards increasing non-conventional energy from the existing 6 percent to 20 percent of the total energy availability by 2021. He said that providing uninterrupted power supply is the key goal of the state government.

Source: The Economic Times

India adds 764 MW renewable energy capacity in November 2020

11 December: India added a 763.47 MW renewable energy (RE) capacity in November this year, which took the total installed RE capacity to 90.39 GW as on 30 November 2020, according to the monthly Cabinet brief issued by the Ministry of New and Renewable Energy (MNRE) recently. Only solar and wind capacity addition changed in November. For solar it increased from 36.32 GW in October to 36.91 GW in November and for wind it increased from 38.26 GW in October to 38.43 GW capacity in November. India has set an ambitious target of 175 GW capacity by 2022, which would include 100 GW of solar energy, 60 GW of wind energy, 10 GW of small hydro power, and 5 GW of biomass-based power projects. Prime Minister Narendra Modi in his inaugural speech at RE-Invest 2020 had informed that India’s renewable energy capacity was currently at 136 GW, which was about 36 percent of the country’s total capacity. He had said that by 2022, the share of renewable capacity would increase to over 220 GW.

Source: The Economic Times

Maharashtra to add 17.3 GW renewable energy capacity by 2025

10 December: The Maha Vikas Aghadi (MVA) government has come out with a renewable energy policy that has set a target of adding 17,385 MW renewable energy capacity by 2025. It was cleared by the cabinet. An investment of ₹750 bn is expected in this sector in the coming five years. Other than this, a lot of solar energy will be generated in off-grid mode especially by installing 1 lakh solar farm pumps every year. The current installed capacity is 9,305 MW and work on projects having 2,123 MW capacity is in progress. The state policy is in line with India’s commitment to international community to reduce its carbon emissions. The country has signed the Paris Agreement in 2015 wherein 40 percent of its power generation capacity will be from non-fossil fuel sources by 2030. The policy also aims to meet Maharashtra Electricity Regulatory Commission (MERC)’s targets for renewable energy, which MSEDCL has consistently failed to meet. The mammoth share of the total target belongs to solar — 12,930 MW. Other sources include: wind — 2,500 MW, bagasse and agricultural waste — 1,350 MW, small hydroelectric — 380 MW, municipal solid waste — 200 MW and new technologies — 25 MW. Increase in solar capacity through various routes has been stated in the policy. 10,000 MW solar capacity will be added by setting up plants with minimum 1 MW capacity. Private players will be selected through competitive bidding.

Source: The Economic Times

International: Oil

Vaccine impact on moribund oil demand is several months away: IEA

15 December: The roll-out of vaccines this month to combat the coronavirus pandemic will not quickly reverse the destruction wrought on global oil demand, International Energy Agency (IEA) warned. The Paris-based watchdog revised down its estimates for oil demand this year by 50,000 barrels per day (bpd) and for next year by 170,000 bpd, citing scarce jet fuel use as fewer people travel by air. The IEA praised “effective” supply management efforts by major producers in the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a grouping known as OPEC+, for a deal this month to largely keep supply reined in. Along with relatively robust Asian demand, the deal helped push oil prices back above $50 a barrel, according to the IEA. Global oil stocks, which have mounted as consumption faltered during the pandemic, will finally reach a deficit compared to pre-crisis levels at the end of 2019 by July, the IEA added.

Source: Reuters

North Dakota oil output holds steady at 1.2 mn bpd for October

15 December: North Dakota oil production was just over 1.2 mn barrels per day (bpd) in October, holding near its strongest levels since the coronavirus pandemic began to curtail output in the state’s Bakken shale field. The state’s crude oil output sat at 1.22 mn barrels in October, a 0.02 percent decline from the prior month, North Dakota Department of Mineral Resources Director Lynn Helms said. North Dakota oil production remained below the 1.4 mn bpd output it maintained in the months before Covid-19 began to slash global fuel demand. The state’s oil rig count was down 75% from January to October. An oil market crash in the late 1990s brought North Dakota down to zero drilling rigs and the oil price collapse in the mid-1980s cut the number of rigs down to the teens from about 150 rigs, he said. The current price of crude produced in the Bakken, the second-largest US (United States) shale basin, is about $37 a barrel, a drop off from the more than $60 a barrel before the health crisis curtailed fuel demand, the state said in its monthly report. In 2021, Helms said he expected weak fuel demand caused by the pandemic, coupled with a push for cleaner energy as opposed to crude oil, to continue pressure oil prices and production.

Source: Reuters

Australia to bring forward subsidy payment in push to keep refineries open

14 December: Australia will bring forward by six months a payment to support the country’s three remaining oil refineries to help tide over the financial hit from the coronavirus pandemic, Energy Minister Angus Taylor said. Australia’s refineries are reeling from a slump in demand triggered by international travel curbs and local lockdowns due to Covid-19 this year, racking up losses which they say threaten the future of their plants. Taylor said the support, announced as part of a A$2.3 bn ($1.7 bn) comprehensive fuel security package in September, will now begin on 1 January 2021 versus 1 July. The support will be provided through a minimum one cent payment for each litre of petrol, diesel and jet fuel from the domestic refineries that continue operations in Australia. Refiners must agree to continue to run at least through June 2021 to receive the payment, worth A$83.5 mn over the first six months. Viva Energy, operator of what will be Australia’s largest remaining refinery as of April 2021, said it would take the payment, which would boost its underlying refining earnings for the six months through June 2021 by A$30 mn. Viva still plans to make a decision this month on the long term future of its Geelong refinery, a spokesman said.

Source: Reuters

OPEC cuts 2021 oil demand outlook again as pandemic impact lingers

14 December: Global oil demand will rebound more slowly in 2021 than previously thought because of the lingering impact of the coronavirus pandemic, OPEC (Organization of the Petroleum Exporting Countries) said, hampering efforts by the group and its allies to support the market. Demand will rise by 5.90 mn barrels per day (bpd) next year to 95.89 mn bpd, the OPEC said. The growth forecast is 350,000 bpd less than expected a month ago. The group has steadily lowered its 2021 demand growth forecast in recent months.

Source: Reuters

Iran contains fire after southwest oil pipeline spill

13 December: Firefighters have contained most of a blaze that broke out after a pipeline carrying crude oil to Iran’s second-largest refinery ruptured because of a landslide, the head of the state company in charge of oil pipelines said. The damaged Maroun pipeline feeds the Isfahan refinery, which has a capacity of about 375,000 barrels a day. Iran’s ageing oil infrastructure has long been in need of rehabilitation, as refurbishment plans have been delayed by Western sanctions and local bureaucracy, analysts said.

Source: Reuters

Nigeria considering oilfield licensing rounds in 2021: NNPC

12 December: Nigeria is considering new oilfield licensing rounds next year, NNPC (Nigerian National Petroleum Corp) chief Mele Kyari said. Africa’s largest oil exporter delayed major oilfield bid rounds this year due to Covid-19, which led to a global oil price crash. Nigeria this year launched its first marginal oilfield licensing round in roughly two decades, fields it said were likely to be developed by local companies and were less reliant on limited international funding. Some of those have been awarded, sources told Reuters, but the government has yet to announce a full list of winners. While Nigeria’s oil output is limited by a supply cut deal between the Organization of the Petroleum Exporting Countries and other producing nations, led by Russia, Kyari said that by 2022 demand will recover and there will be a need for more output. He repeated the government’s ambitious target of 3 mn barrels per day (bpd) of oil production by 2023.

Source: The Economic Times

International: Gas

Qatar Petroleum Trading participates in Pakistan LNG tender for first time

11 December: Qatar Petroleum’s newly formed trading unit participated in a buy tender by Pakistan LNG Ltd (PLL) for the supply of liquefied natural gas (LNG) for the first time. Qatar Petroleum said in November that it had set up a trading unit, Qatar Petroleum Trading Company, which will be headquartered in Doha and aims to build a diversified global portfolio of LNG produced locally and internationally. The parent company typically negotiates the supply of LNG to Pakistan on a government to government level, one of the sources familiar with the matter said, adding that this was the first time any Qatari company had participated in a Pakistan tender. The trading unit, which signed its first contract in November to supply LNG to Singapore’s Pavilion Energy, placed the lowest offers for three of six LNG cargoes sought by Pakistan for January delivery, a document of PLL showed. PLL is a government subsidiary that procures LNG from the international market. Pakistan’s gas needs typically rise in December and January. The deficit in supply versus demand is expected to increase this year as consumption rises and indigenous supply declines.

Source: Reuters

CNOOC, PetroChina invite LNG tenders on Shanghai gas exchange

11 December: Subsidiaries of Chinese energy firms PetroChina and China National Offshore Oil Corp (CNOOC) will invite global bids for liquefied natural gas (LNG) on the Shanghai Petroleum and Natural Gas Exchange. PetroChina will award its tender. The Shanghai exchange had launched its international LNG tender services in late October. China imported nearly 6.4 million tonnes (mt) of LNG in November, its highest monthly volumes since December 2019, Refinitiv Eikon data showed, with this month’s volumes expected to surpass that of November. The increase in imports by the world’s second largest economy is one of the main factors pushing up spot Asian LNG prices LNG-AS to nearly two-year highs. China’s economy has seen a steady rebound from the coronavirus pandemic, with both exports and manufacturing activity rising rapidly in November. Its latest factory gate prices had also fallen at a slower pace last month.

Source: Reuters

International: Coal

Australian PM warns of ‘lose-lose’ in any China coal shift

15 December: Australian Prime Minister Scott Morrison said any shift by China away from importing high quality Australian coal would be a “lose-lose” for the environment and their trading relationship. China’s top economic planner had granted approval to power plants to import coal without clearance restrictions, except for Australia. Coal is the third largest export from Australia, which is in a diplomatic row with China, its largest trading partner, which imposed trade reprisals after Canberra called for an international inquiry into the source of Covid-19. Australia urged China to clarify the reports in outlets including The Global Times and Caixin, saying if they were true any restrictions on Australian coal would be in breach of World Trade Organisation (WTO) rules. Australia’s Morrison said a shift away from Australian coal imports would be “a bad outcome for the environment”. Although A$4 bn of A$13 bn ($3 bn of $9.8 bn) in thermal coal exports went to China, it was not Australia’s largest customer, said Morrison.

Source: Reuters

Anglo American maps out thermal coal exit, sees higher output

11 December: Anglo American will divest from its South African and Colombian thermal coal operations by mid-2023, the miner said as it sought to demonstrate to investors its commitment to a shift towards clean energy sources. The global miner said a de-merger and listing on the Johannesburg Stock Exchange was the most likely route for its South African thermal coal assets. Anglo American, which produces platinum, copper, diamonds, iron ore, and thermal and metallurgical coal, highlighted its green credentials as the mining industry faces increasing scrutiny over its carbon footprint. The company planned to exit its Cerrejon thermal coal mine in Colombia within 1 1/2 to 2 years, while the South African thermal coal exit will happen within 2 1/2 years.

Source: Reuters

US targets North Korean coal shipments with new sanctions

9 December: The United States (US) has blacklisted six companies, including several based in China, and four ships accused of illicit exports of North Korean coal, the Treasury Department said. The United Nations Security Council banned North Korean coal exports in 2017. The 15-member body has unanimously boosted sanctions on North Korea since 2006 in a bid to choke off funding for Pyongyang’s nuclear and ballistic missile programs.

Source: Reuters

International: Power

ABB to pay $104 mn to settle South Africa power plant probe

11 December: ABB has agreed to pay 1.56 bn rand ($104 mn) to South African state power utility Eskom to settle an investigation into improper payments and compliance issues, the two companies said. ABB was investigated by South Africa’s Special Investigating Unit in relation to over-payments for work it carried out for Eskom at the Kusile power plant, which will be among the largest coal-fired plants in the world when complete. Kusile and sister project Medupi were meant to help end crippling power cuts in Africa’s most industrialised economy but instead they have been beset by delays and faults that have hobbled their electricity output and helped swell Eskom’s debts to more than 480 bn rand.

Source: Reuters

International: Non-Fossil Fuels/ Climate Change Trends

UK firm Drax to focus on biomass after selling gas assets

15 December: British power producer Drax plans to develop its biomass business using proceeds from the sale of its gas assets that could raise up to 193.3 mn pounds ($258 mn), it said. Drax agreed to sell four combined cycle gas turbines (CCGT) — namely Damhead Creek (812 MW), Rye House (715 MW), Shoreham (420 MW) and Blackburn Mill (60 MW) — to VPI Holding for 164.3 mn pounds, it said. Drax said it expected to use the proceeds to boost its production of biomass to use in generation to 5 million tonnes (mt) a year by 2027 from a current target of 2 mt. It would cost 600 mn pounds to achieve the 5 mt target. Drax Chief Executive Officer Will Gardiner said the shift to more flexible and renewable generation aimed to cut the firm’s carbon dioxide emissions so that by 2030 the firm was carbon negative, meaning it was capturing more than it produced.

Source: Reuters

US solar industry surges despite pandemic fallout, study finds

15 December: US (United States) solar installations are expected to soar 43 percent this year, just shy of a pre-pandemic forecast, as the industry has recovered more quickly than expected from a virus-related slowdown, according to a report by the top solar trade group. The improved outlook reflects robust demand from utilities seeking to meet carbon-reduction goals and a rebound in demand for home solar systems, thanks in part to declining costs for the technology. The sector is now expected to install more than 19 GW of solar this year, enough to power more than 3.6 mn homes, according to the US Solar Energy Industries Association (SEIA) and energy research firm Wood Mackenzie. Last year it installed 13.3 GW of capacity. Solar energy also accounted for 43 percent of new US power capacity additions through the third quarter, compared with less than a third for wind and natural gas. SEIA and Wood Mackenzie had initially forecast 2020 solar growth of 47 percent, but that outlook slid to 33 percent as the coronavirus spread throughout the US in the spring. The solar industry has been growing rapidly in recent years thanks to declines in the cost of the technology that enable it to compete with power generated by coal and gas.

Source: Reuters

Japan to install 45 GW of offshore wind power by 2040

15 December: Japan plans to install as much as 45 GW of offshore wind power by 2040, the country’s industry ministry said as the government aims to reduce emissions and meet a target to achieve carbon neutrality by 2050. The plans, if followed through on, would make Japan a global leader in offshore wind. They create targets for offshore wind capacity over the next two decades, which could spur more investment in the sector. The government passed legislation in 2018 designed to promote offshore wind development, but no major projects have been approved since then and some industry participants say that the rules for investment and regulations are too complicated. The government is now targeting 10 GW of offshore wind capacity by 2030 and between 35 GW and 45 GW by 2040, the ministry said. Prime Minister Yoshihide Suga said in October that Japan, the world’s fifth-biggest greenhouse gas emitter, would aim for carbon-neutrality by 2050, in a major shift in position.

Source: Reuters

Pakistan eyes 60 pc clean energy by 2030: PM

13 December: Prime Minister (PM) Imran Khan said Pakistan aims to produce 60 percent of its energy needs through renewable resources by 2030 to mitigate the effects of climate change. He said it was decided to not have coal-based power plants. He said as part of efforts to achieve the goal of clean energy, Pakistan already scrapped two coal-plant projects that were to produce 2,600 MW energy.

Source: The Economic Times

China solar capacity growth hits 40 GW in 2020

10 December: China has brought about 40 GW of new solar power into operation in 2020, taking its total installed solar capacity to 240 GW. China’s total solar capacity had increased more than fivefold since 2015 and could double in the next five years, China Photovoltaic Industry Association (CPIA) vice-chairman Wang Bohua said. Solar capacity growth has slipped back since hitting a record 53 GW in 2017, with the state grappling with a subsidy payment backlog in excess of 200 bn yuan ($30.55 bn) as well as grid access problems for many projects. Solar accounted for about 10 percent of China’s total generation capacity at the end of 2019. But it is now embarking on an accelerated clean energy transition as it bids to become “carbon-neutral” by 2060, and construction is expected to hit new highs in coming years.

Source: Reuters

BP expands renewable energy deal with Amazon in Europe

10 December: Oil major BP has expanded a renewable energy supply deal with Inc to power the US (United States) e-commerce giant’s operations and Amazon Web Services in Europe, the British company said. The company said it would supply Amazon with an additional 404 MW of wind power in Europe, starting in 2022, with more than half of that sourced from a new wind project in Sweden and the rest from two new wind projects in Scotland. BP said the deal was a key part of its strategy to transform into an integrated energy company.
Source: Reuters

This is a weekly publication of Observer Research Foundation (ORF). It covers current national and international information on energy, categorised systematically to add value. The year 2021 is the eighth 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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