MonitorsPublished on Jan 30, 2021
Energy News Monitor | Volume XVII; Issue 30

Quick Notes

Oil Demand: Prospects for Short Term Demand Revival


The IEA expects oil demand to bounce back to 96.6 mn bpd in 2021, an increase of 5.5 mn bpd over 2020 levels. This is lower than the 8.8 mn bpd demand decline in 2020. On the supply side, the IEA expects production to increase by 1 mn bpd this year which is less than a sixth of the 6.6 mn bpd decline in production in 2020. The US EIA forecasts are slightly more optimistic with a demand of 97.8 mn bpd in 2021 which increases to 101.1 mn bpd in 2022 to match demand of 101.2 mn bpd in 2019. OPEC expects demand to increase by 5.9 mn bpd in 2021 to 95.9 mn bpd.

Factors Influencing Demand

The recovery of oil demand has been slower than expected and it is now expected to take longer to reach its pre-crisis level. The pace of oil demand recovery is also highly uneven, both in terms of geography and fuels. Asian oil demand remains robust led by China and India but in Europe where the re-imposition of restrictions has reduced demand for petrol and jet fuel. In terms of fuels, jet fuel remains the weakest in terms of demand revival with diesel consumption impacted by the economic contractions. Even if global oil demand reaches its pre-virus level of demand, many are of the view that COVID-19 has profoundly changed consumers’ behaviour and accelerated the pace of the energy transition away from fossil fuels, which will cause oil demand to shift to a slower growth path. There is strong belief among some experts that oil consumption related to mobility and car ownership will fall sharply as more people decide to work from home. On the other hand, there is a view that the pandemic could induce a drop in the use of public transport and a preference for more private passenger vehicles. People could also avoid planes in favour of cars in OECD countries. In India data reveals a clear shift towards petrol driven passenger cars. Demand for petrol in India in September 2020 increased by 22,000 bpd (y-o-y) while diesel demand fell by over 85,000 bpd and jet fuel demand fell by 95,000 bpd. Furthermore, while there may be a change in people’s purchasing habits through digital platforms, reductions in shopping trips are being offset by higher delivery truck/two-wheeler miles. In short, while COVID-19 may have accelerated shifts in consumers’ behaviour, it is still too early to tell how durable these changes will be and whether new work and driving habits on their own will result in a massive reduction in oil demand. Overall, there is a belief that tight lockdowns similar to what the World saw in the early months of the COVID outbreak is not likely and therefore demand will recover but at a slower pace.

However, oil producer BP holds one of the most pessimistic views on oil demand revival. According to BP, 2019 might have been the year of peak oil demand as increasing ‎efficiency and electrification of road transport will drive reductions in oil demand. If so, global oil demand might never recover to “peak” pre-pandemic levels, amid a fundamental restructuring of the energy system towards low carbon. Even in BP’s “business-as-usual scenario”, in which energy policies and consumption habits continue without acceleration towards low carbon, world oil demand is seen to plateau in the early 2020s.

Impact on Price

In January 2021, Brent rose to $57/bbl and WTI to $53/bbl, reflecting a boost in demand on a cold-snap in Europe and Asia and OPEC+ supply cuts that are expected to keep the oil market in deficit. Anticipating weaker demand, OPEC+ decided in January to delay a further easing of cuts and Saudi Arabia’s surprised announcement of an additional 1 mn bpd supply reduction in February and March. Higher crude prices could provide an incentive to increase production by the US shale industry, which saw the biggest fall in output in 2020. New shale oil wells are estimated to have an average breakeven price of $46 to $52/bbl compared to around $77/bbl in 2014.

The common view among experts is that the oil industry cannot increase investment and bring new supplies in this price environment and that it will take time for US shale output to recover to its previous peak. The market has a pessimistic view on the return of some of the disrupted supplies from countries such as Iran, Venezuela and even Libya which may push up prices. The case for higher prices is further supported by the belief that OPEC+ will maintain high compliance. In general, geopolitical risks are likely to increase with balances and prices in 2021 and 2022 susceptible to negative pressures to some extent. If OPEC+ expects US shale to respond strongly to prices above $50/bbl, then OPEC+ could increase output and market share and maintain a cap on the oil price. If so OPEC + may sustain prices in the $50/bbl-$55/bbl range in 2022. EIA expects global inventory draws will contribute to forecast rising crude oil prices in the first quarter of 2021. Despite rising forecast crude oil prices in early 2021, agencies such as the EIA expect upward price pressure to be limited through 2021 because of high global oil inventory, surplus crude oil production capacity, and stock draws decreasing after the first quarter of 2021. EIA expects Brent crude oil prices to average $53/bbl in both 2021 and 2022. Overall, most forecasts maintain that crude prices are unlikely to touch $70/bbl but are likely to remain in the $50-60/bbl range. Based on oil price movements in the last few months, the oil market seems more prepared to move to a higher rather than to a lower price range and has been waiting for some positive signals on the demand side, particularly from the US and India.

IEA: International Energy Agency, bpd: barrels per day, mn: million, US: United States, OECD: Organization for Economic Cooperation and Development, y-o-y: year-on-year, OPEC: Organization of the Petroleum Exporting Countries, bbl: barrel, WTI: West Texas Intermediate, EIA: Energy Information Administration

Changes in oil product demand by type and call on refineries in the Stated Policies Scenario

Source: International Energy Agency (2020), World Energy Outlook 2020, IEA, Paris

Monthly News Commentary: Oil

Oil Prices Show Upward Trend


Retail Prices

Steeper fuel price hikes await Indian consumers as international crude oil rates have crossed $50/bbl 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/l and ₹3.4/l respectively, in three weeks. Since the beginning of November, crude oil prices have risen about $11/bbl or 28 percent, to $50/bbl mainly on hopes that a quick vaccine roll-out across nations could help contain the coronavirus and its damaging impact on fuel demand. 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 years. Refinery runs have also recovered with facilities at IOC the nation’s largest refiner, running at full capacity. Rising international rates have forced state oil companies to raise domestic fuel prices. 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 followed this, keeping rates static for weeks and months, making domestic price predictions harder. With diesel comprising 65 percent transportation costs, the spree of hikes will lead to at least 7-8 percent increases in freight rates across the state.

The price of petrol, which touched ₹90.85/l in Nagpur, could have been ₹8 to 10 less, had the government reduced burden of VAT levied from time to time to tide over specific crises. 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/l in case of petrol and ₹3 for diesel. Additional VAT is the tax that is levied in times of crisis. 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/l. 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/l, and after all the additions, the final rate payable by the consumer came to ₹81.06/l. This includes integrated road development cess of 0.65/l on petrol and ₹1.85/l on diesel levied for Nagpur.


BPCL 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 with itself. BPCL holds 63.68 percent stake in Bharat Oman Refineries Ltd, which built and operates a 7.8 MT oil refinery at Bina in Madhya Pradesh. IOC and HPCL have launched a high-octane war with super-premium petrol to corner the expanding niche of high-performance supercars and superbikes as competition promises to intensify with the imminent privatisation of BPCL. HPCL has been priming the market with soft launch of 99-octane petrol under ‘poWer 99’ brand in 21 cities since 2017, IOC raised the bar by going full-throttle with a 100-octane version under ‘XP 100’ brand. XP100 has put India in an elite group of six countries, including the US and Germany. India currently uses petrol with 91 octanes. The premium versions sold by IOC, HPCL and BPCL have engine cleaning agents as additives. In the first phase XP 100 will be available at select pumps in Delhi, Gurgaon, Noida, Agra, Jaipur, Chandigarh, Ludhiana, Mumbai, Pune and Ahmedabad. In the second phase, it will be rolled out in Chennai, Bangalore, Hyderabad, Kochi and Kolkata. These cities have been selected on the basis of their aspirational demographics and availability of high-end cars and bikes dealerships in these cities. The companies had launched the premium versions of petrol and diesel around 2008, coinciding with the entry of a slew of zippy cars and bikes in India.


Cooking gas or LPG price was increased by ₹50/cylinder, the second hike in rate this month following firming of international prices. This is the second increase in rate this month. On 1 December, price was hiked by a similar ₹50 per cylinder. There is not much clarity on whether most customers would receive subsidies to cushion the impact. Cooking gas price has risen to ₹644/ cylinder in Delhi in December from ₹594 in November. Prices, which vary from state to state, had remained unchanged at ₹594/cylinder since July this year. Since May, most cooking gas customers have not received subsidies as the combination of international oil price collapse and domestic refill rate increases brought parity between subsidised and market rates. In June last year, a subsidised cooking gas cylinder cost ₹497 in Delhi. Since then, the total price increase has been ₹147. The subsidy for a customer in Delhi was ₹240 in June 2019. The government has not yet intimated state oil companies about whether customers buying refills in December would be eligible for subsidies. For the government, cooking gas subsidy has shrunk to ₹11.26 bn in the first half of this financial year from ₹226.35 bn for the entire 2019-20. LPG subsidy had fallen 28 percent in 2019-20 from ₹314.47 bn in 2018-19 as oil prices stayed low and domestic refill rates rose. The convenient 5 kg LPG cylinder has been rechristened ‘Chhotu’, by IOC. 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. 5 kg cylinders, which will be available pan India. 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.


India, the world’s third-largest energy consumer, wants the new US administration to allow resumption of oil supplies from Iran and Venezuela so as to give the country more options to meet its requirements. Iran was India’s second-biggest supplier of crude oil after Saudi Arabia till 2010-11, but Western sanctions over its suspected nuclear programme led to reduced volumes. India stopped importing crude oil from Iran following the re-imposition of economic sanctions in May 2019, by the US. Venezuela was India’s fourth-biggest oil supplier but import dwindled after Washington imposed sanctions on Venezuela’s state oil company PDVSA in January 2019. India is 85 percent dependent on imports to meet its oil needs. Two-third of its imports come from the Middle-East with Iraq and Saudi Arabia being the largest suppliers. India consumed just 6 percent of the world’s primary energy and its per capita consumption is one-third of the global average.


India’s crude oil production fell by 5 percent in November primarily due to a sharp drop in output at Rajasthan oilfields operated by private sector Cairn Vedanta. India is dependent on imports for 85 percent of its needs and the government is pushing domestic explorers to raise output to help cut down imports. Crude oil production in November at 2.48 MT was lower than 2.61 MT produced in the same month a year back. Rajasthan fields produced 9.6 percent less crude oil at 476,990 tonnes as Mangala, Aishwarya and other fields in the Cairn block flowed less oil for a variety of reasons. ONGC produced 1.5 percent less oil largely due to lesser than the anticipated output at newer fields. OIL produced 6.6 percent less oil from Assam due to protests/agitation in the state following the Baghjan blowout. During April-November, India’s oil production was 6 percent lower at 20.42 MT. The output from Rajasthan during this period dropped 16 percent to 3.91 MT. West Bengal found a place in the oil map of India with the development of oil and gas producing field in North 24 Parganas district. Production from the petroleum reserve, about 47 km from Kolkata, has started with the extracted oil being sent to Haldia refinery of IOC. ONGC spent ₹33.81 bn for discovery of the Ashoknagar oilfield and two more wells will be explored by the company under Open Acreage Licensing Policy.


India’s petrol consumption spiked 9.5 percent in the first fortnight of December from a year ago but diesel demand still ran 5 percent short of the pre-pandemic days, indicating the economy is yet to come out of the woods. Diesel sales of public sector retailers, who command about 90 percent of the market, rose 1.6 percent in the first fortnight of December from the same period of November. Diesel consumption, one of the barometers of economic activity, had fallen 7 percent from the year-ago period in November after shooting past the pre-pandemic level for the first time in eight months in October, clocking a 6 percent year-on-year growth. In contrast, petrol demand jumped more than 9.5 percent over the year-ago period on the back of a 4 percent increase in passenger car sales in November.

Rest of the World


The roll-out of vaccines this month to combat the coronavirus pandemic will not quickly reverse the destruction wrought on global oil demand according to the IEA. The IEA revised down its estimates for oil demand this year by 50,000 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 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/bbl. 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.

Global oil demand is expected to rebound more slowly in 2021 than previously thought because of the lingering impact of the coronavirus pandemic according to OPEC. Demand will rise by 5.90 mn bpd next year to 95.89 mn bpd. The growth forecast is 350,000 bpd less than expected a month ago. OPEC has steadily lowered its 2021 demand growth forecast in recent months. Global crude oil prices are expected to be range bound and between $40-50/bbl in 2021 as major oil producers have decided on a modest output rise from January that earlier anticipated. The news of a successful coronavirus has ignited the oil market again with crude price moving up more than 20 percent in a month to hover above $50/bbl now. Oil prices may not see any big rise even in 2021 as demand conditions continue to remain below the peak levels. The OPEC+ decision now not to go for any big time increase in oil production in first two quarters of 2021, any major price fall of crude has been averted and crude may be range bound even in 2021.


OPEC and Russia agreed to slightly ease their deep oil output cuts from January by 500,000 bpd but failed to find a compromise on a broader and longer-term policy for the rest of next year. The increase means the OPEC and Russia, a group known as OPEC+, would move to cutting production by 7.2 mn bpd, or 7 percent of global demand from January, compared with current cuts of 7.7 mn bpd. The curbs are being implemented to tackle weak oil demand amid a second coronavirus wave. OPEC+ had been expected to extend existing cuts until at least March, after backing down from earlier plans to boost output by 2 mn bpd. But after hopes for a speedy approval of anti-virus vaccines spurred an oil price rally at the end of November, several producers started questioning the need to keep such a tight rein on oil policy, as advocated by OPEC leader Saudi Arabia. Russia, Iraq, Nigeria and the United Arab Emirates have all to a certain extent expressed interest in supplying the market with more oil in 2021. OPEC would now gather every month to decide on output policies beyond January with monthly increases not exceeding 500,000 bpd. Compensatory cuts for countries which overproduced in previous months has been extended until March 2021. OPEC+ has to strike a delicate balance between pushing up oil prices enough to help their budgets but not by so much that rival US output surges. US shale production tends to climb above $50 /bbl. Saudi Arabia announced a $263.91 bn budget for 2021, around 7 percent less than estimated spending for this year, as the world’s biggest oil exporter seeks to tame a huge deficit caused by lower petroleum revenues and the coronavirus crisis. The kingdom expects to post a deficit of 298 bn riyals this year, or 12 percent of GDP as crude revenues are slated to drop by over 30 percent, and 141 bn riyals or 4.9 percent of GDP next year, according to budget. It plans to nearly balance its budget by 2023. Brent crude oil prices have rebounded since plunging to a more than 20-year low in April, but at around $50/bbl they are significantly below the $67.9/bbl that Saudi Arabia would need to balance its budget next year.

Russia and Saudi Arabia plan to continue working on balancing out the global oil market. The two countries were committed to the OPEC+ agreement curbing global oil output. Iran has instructed its oil ministry to prepare installations for production and sale of crude oil at full capacity within three months, ahead of a possible easing of US sanctions. Iran exported more than 2 mn bpd before US President Donald Trump exited the 2015 nuclear deal with six powers in 2018 and reimposed sanctions that have hit Iran’s economy hard by sharply cutting its vital oil exports. It is estimated that Iran exports less than 300,000 barrels of oil per day, compared to a peak of 2.8 mn bpd in 2018.

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.


North Dakota oil production was just over 1.2 mn 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 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 percent 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. The current price of crude produced in the Bakken, the second-largest US shale basin, is about $37/bbl a drop off from the more than $60/bbl before the health crisis curtailed fuel demand. In 2021 weak fuel demand caused by the pandemic, coupled with a push for cleaner energy as opposed to crude oil will continue to put downward pressure oil prices and production.

Asia Pacific

Asian refining profits for gasoil have hit four and a half month highs on recovering demand led by China and India, though rising shipments from those and other exporters may curb further gains. Refining margins, also known as cracks, for the benchmark 10 ppm gasoil grade in Singapore have surged 42 percent in the last month, but remain 54 percent weaker than their historical average for this time of year. Revived transportation and industrial activity in China and India since September have helped boost gasoil market sentiment, curbing Indian fuel exports and tightening regional stocks. Diesel refining margins in Europe have edged higher lately and have held largely flat in the United States on increased seasonal freight deliveries. However, refiners are expected to boost fuel output heading into 2021, potentially pressuring margins and prices in all key markets. Fresh lockdowns in several European countries, as well as tightening restrictions in parts of the United States, are slowing the fuel demand recovery in those regions, which will be key to the global diesel balance in 2021. Diesel cracks in Europe firmed to around $5.50/bbl on a rise in trading volumes and a smaller-than-expected rise in US fuel inventories.

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. 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. The support, announced as part of a A$2.3 bn ($1.7 bn) comprehensive fuel security package in September, began 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 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.


Norway’s supreme court upheld government plans for Arctic oil exploration, dismissing a lawsuit by campaigners who said they violated people’s right to a healthy environment. While most of Norway’s oil output flows from south of the Arctic, the government believes the greatest untapped potential lies in the Barents Sea off Europe’s northernmost coast. Norway is western Europe’s largest oil and gas producer, with a daily output of around 4 mn boe. The plaintiffs said pumping more oil would lead to increased climate-warming carbon dioxide emissions and ultimately violate Norway’s constitution as well as its commitments under the Paris climate agreement and the European Convention on Human Rights. The majority concluded, however, that parliament and the government had broad authority to award new oil acreage. The Ministry of Energy and Petroleum has announced plans for another round of Arctic licensing awards, setting an application deadline for early next year. Denmark’s government agreed with a majority in parliament to put an end to all oil and gas exploration and extraction in the North Sea by 2050 as well as cancel its latest licensing round. The future of Denmark’s oil and gas operations in the North Sea has been a political issue after the Nordic country agreed last year on one of the world’s most ambitious climate targets of reducing emissions by 70 percent by 2030 and being climate neutral in 2050. The deal agreed by lawmakers late will cancel a planned eighth licensing round and any future tenders, while also making 2050 the last year in which to extract fossil fuels in the North Sea. Denmark is estimated to produce 83,000 barrels of crude oil and another 21,000 boe in 2020.

Russian oil pipeline monopoly Transneft expected to complete compensation payments for contaminated oil by around mid-2021 and that it had already paid out over $143 mn, more than half of what is due. Up to 5 MT of tainted oil was sent to central Europe via the Druzhba pipeline last year, in one of the most serious crises ever to hit Russian energy exports. Transneft has already paid some compensation to companies from Kazakhstan, as well as to French energy giant Total and Hungary’s MOL. Belarus, Russia’s large oil buyer, is yet to receive compensation. Belarusian energy company Belneftekhim was expecting over $61 mn in compensation for the 563,000 tonnes of contaminated oil it received. That translates roughly to $15/bbl, the highest possible level of compensation expected from Transneft. Transneft expected oil flows via its system, which transports more than 80 percent of all Russia’s oil, to reach 440-450 MT next year, on a par with 2020. The finance ministry is currently working on a dividend policy for the state-owned companies, including Transneft, which had to cut their investments and saw profits plummet due to the fallout from the COVID-19 pandemic.


Petrol stations across Sudan will rely exclusively on imported fuel while the country’s main oil refinery begins routine maintenance, the energy ministry said. Sudan has operated a two-tier price system since October, in an attempt to decrease reliance on subsidies, whereby imported gasoline and diesel is sold at more than double the price of locally-produced fuel. However, with the 70-day maintenance of the Khartoum refinery, only imported gasoline and diesel will be available to consumers. Any fuel produced locally during this period will be directed towards the agriculture, electricity, public transportation, and security sectors. Fuel shortages and long queues at stations are common in Sudan as the government struggles to come up with foreign currency for imports, which were opened up to the private sector in April. Nigeria is considering new oilfield licensing rounds next year according to Nigerian National Petroleum Corp. 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 oil-field 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 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 OPEC and other producing nations, led by Russia, by 2022 demand is expected to recover facilitating the need for more output. The government has an ambitious target of 3 mn bpd of oil production by 2023.

IOC: Indian Oil Corp, VAT: Value Added Tax, BPCL: Bharat Petroleum Corp Ltd, HPCL: Hindustan Petroleum Corp Ltd, bbl: barrel, MT: million tonnes, LPG: liquefied petroleum gas, kg: kilogram, bpd: barrels per day ONGC: Oil and Natural Gas Corp, GDP: Gross Domestic Product, EU: European Union, boe: barrels of oil equivalent

News Highlights: 23 – 29 December 2020

National: Oil

Government may reduce oil subsidy budget by half in 2021-22

26 December: A rather stable phase of oil prices is expected to help the government make big cuts in the oil subsidy allocation in next year’s budget. The maths being worked out by the finance ministry ahead of the presentation of Budget 2021-22 in February next year could see petroleum subsidy burden falling by more than half from the FY21 levels of ₹409.15 bn. A major saving on the subsidy is expected to come from reduced government support for domestic LPG cylinders. A favourable global oil market, in the first half of current fiscal, helped the government to completely eliminate the subsidy paid under direct benefit transfer (DBT) to eligible domestic consumers from September this year. The government had allocated ₹409.15 bn as petroleum subsidy for FY21, a 6 percent increase from ₹385.69 bn allocated for the last fiscal. Out of this, the allocation for LPG (liquefied petroleum gas) subsidy has been increased to ₹372.56 bn for the current year. If the current price trend holds and the projections that oil prices remains range bound at around $ 45-55 per barrel next year, the government’s LPG subsidy burden could fall by almost ₹200 bn in FY22. The subsidy could be higher if government extends provision of three free cylinders for the poor as part of COVID-19 relief measures in FY22. India has about 28.65 crore LPG consumers. Of these, around 15 mn are not eligible to get LPG subsidy since December 2016 because they have an annual taxable income above ₹10 lakh.

Source: The Economic Times

No revision in petrol, diesel prices on Christmas

25 December: Petrol and diesel prices remained unchanged as Oil Marketing Companies (OMCs) continued to maintain a wait and watch stance amid range bound global oil prices. Accordingly, the pump price of petrol remained at ₹83.71 a litre and diesel ₹73.87 a litre in Delhi. Across the country as well the price of the two petroleum products remained unchanged. The price of petrol in Mumbai remained at ₹90.34 and diesel ₹80.51, the two fuels remained at ₹86.51 and ₹79.31 a litre respectively in Chennai. The retail price of petrol remained at ₹85.19 and ₹77.44 a litre in Kolkata. The OMCs have gone on a pause mode at a time when the news of a successful coronavirus and expectations of big pick up in demand had kept crude on the boil with prices breaching $50 a barrel mark. Petrol price was very close to breaching the all-time high level of ₹84 a litre (reached on 4 October 2018) when it touched ₹83.71 a litre on 7 December. But the march has been halted ever since then with no price revision by the OMCs.

Source: The Economic Times

Centre’s LPG subsidy bill likely to be lower next year: Experts

25 December: The government’s liquefied petroleum gas (LPG) subsidy bill for the next financial year (FY22) is expected to be much lower than previous years, experts said. This is because crude oil price is expected to remain soft, and the price of domestic (14.2 kg) LPG cylinders is likely to be kept high. The steep fall in crude oil prices coupled with a gradual rise in the price of subsidised domestic LPG cylinders had brought relief to the Centre this year. The price has been maintained at this level for the rest of 2020. The price of an unsubsidised domestic cylinder was ₹595 a cylinder for the most of 2020 in the national capital. This was hiked to ₹644.00 a cylinder. To offer enhanced relief for the economically weaker section, the Centre offered free LPG cylinders to 80 mn Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries. These three free cylinders were offered during the COVID-19 pandemic lockdown months. This cost the exchequer around ₹100 bn this year. Experts had mixed views on whether this support would be extended next year. According to Ranadive, this may be expected as the government has been trying to increase the outreach under the scheme.

Source: Business Standard

Fuel sale coming back to pre-COVID level: IOC

24 December: Fuel sale in the country is coming back to normal which also shows the reflection of normalcy in economy, Indian Oil Corp (IOC) said. In Maharashtra, the sale is yet to reach the pre-COVID situation and the deficit in diesel sale is still around 12 percent, Executive Director and Maharashtra State head of IOC Amitabh Akhauri said. About fuel sale in Maharashtra, he said that there are limitations in the state as cities are sometimes closed. The new LPG cylinder named Chhotu which weighs just 5 kg, Akhauri said the company is planning to distribute it with the help of grocery shops and fuel outlets. The cylinder can prove useful for travelling and floating population and can get the refill from any outlet of the company.

Source: The Economic Times

National: Gas

Private CNG pump owners warn of stir over MGL’s 15-year lease

29 December: Private CNG (compressed natural gas) pump owners in Mumbai, Thane and Navi Mumbai have declared a strike in the New Year—from January 4—if Mahanagar Gas Ltd (MGL) attempts to ‘force’ them into signing lease agreement for 15 years. The pump owners said that they had support from the Petrol Dealers Association and threatened a major showdown. MGL said that they were prepared with an “alternative arrangement” in case there was a strike. There are 7 lakh CNG consumers in Mumbai and a majority of them are private car owners, followed by auto and taxi drivers. If there is a strike, it could hit public transport.

Source: The Economic Times

Natural gas network in industrial areas of UP

28 December: In view of the rapid industrial growth and investment in the manufacturing sector in Uttar Pradesh (UP), the Yogi Adityanath government has issued guidelines for the supply of piped natural gas (PNG) to the industrial development authorities with the objective of environmental conservation and providing safe fuel to the industries. Necessary steps are being taken to convert the major highways of the state into Green Energy Corridors to promote the use of pollution-free fuel in the transport sector. State Minister for Industrial Development, Satish Mahana said the Industrial Development Authorities had been directed to allow authorized gas companies and facilitate them in laying pipelines for the network of natural gas in areas of state’s industrial development authorities. The Infrastructure and Industrial Development department has issued a government order to all the Chief Executive Officers of aforementioned industrial development authorities to implement the ‘Dig and Restore’ policy of the Urban Development department in industrial areas in compliance of Petroleum Natural Gas Regulatory Board (PNGRB) directives for development of city gas distribution (CGD) network based on geographical area. These industrial development authorities have been directed to permit and facilitate infrastructure development by authorized gas companies for supply of piped natural gas (PNG). Under the ‘Dig and Restore’ policy, permission has been given to lay underground pipelines for gas supply through the use of such technologies that do not affect or interrupt traffic and normal activities. It provides that the gas company must submit a bank guarantee before getting the permission for laying a gas pipeline or setting up a pit or chamber. If the digging and restoration work done by the company is found to be satisfactory, then a No-objection certificate (NoC) will be provided and the bank guarantee will be returned within a month from the receipt of such NoC.

Source: The Economic Times

RIL-BP’s natural gas production to raise domestic consumption and cut expensive imports

24 December: Natural gas from Reliance-BP’s new field in the KG basin will help raise domestic consumption and cut expensive imports, analysts said. RIL-BP’s production has started at a time the liquefied natural gas (LNG) prices in the international spot markets are roaring. Spot LNG rates in Asia have jumped to above $11 per unit this month, a six-year-high, from a record low of under $2 per unit in May on colder-than-normal winters in north Asia, higher freight, and supply outage at some LNG exporting plants. Most of the gas currently being produced by RIL-BP’s new field was sold last year at a price linked to crude oil and can’t rise above the government-set ceiling of $4.06 per unit until March. Consumers will also be inclined to partly replace expensive spot purchases with cheaper long-term volumes, which are mostly linked to crude oil prices, analysts said. Customers had begun using more spot buys when prices had sharply fallen due to the pandemic in previous months. Long-term contracts usually offer customers the flexibility to partly switch between long-term and spot volumes. Since some of the customers of RIL-BP were already using imported LNG, they may cut such imports, a GAIL executive said, adding that country’s imports may shrink to that extent. Imports meet 55 percent of domestic gas demand today, compared to 51 percent last year.

Source: The Economic Times

India’s natural gas consumption rises 2 percent in November from a year earlier

23 December: Natural gas consumption in the country has risen 2 percent in November from a year earlier, signalling a rebound in the industrial activity. The consumption rose to 5.2 billion cubic meters (bcm) from 5.1 bcm last November. The demand for the April-November period is down nearly 5 percent from last year. Lockdown had curbed public transport, a key consumer of compressed natural gas in big cities like Delhi and Mumbai. With schools still shut, a big segment of CNG (compressed natural gas) buses are still not on the roads. But the deficit is being met by new CNG pumps being set up in new city gas license areas. Increased activity in smaller factories, which get supply from city gas distributors, has also helped. India imports a little more than half of its natural gas requirement and lower international prices for many months also helped boost domestic demand. Rates of natural gas have risen in the international market now, which can have adverse effect on consumption.

Source: The Economic Times

Delhi industries asked to switch over to PNG by January-end

23 December: All the industrial units spread across 50 areas in Delhi have been directed to switch over to piped natural gas (PNG) by 31 January 2021. This move is aimed at reducing the city’s air quality index which has been deteriorating regularly. Though a sizeable number of industries are using PNG, the Commission stressed the need for all identified industries in Delhi to switch to PNG. Indraprastha Gas Ltd (IGL) and Gas Authority of India Ltd (GAIL) were impressed upon to complete the pipeline network, metering and associated infrastructure.

Source: The Economic Times

National: Coal

Coal import prices volatile as China bans Australian import: Ind-Ra

29 December: The indefinite Chinese ban on Australian coal imports will keep import prices for India volatile over the near term, according to India Ratings and Research (Ind-Ra). Australia-origin coking coal import (comprising 67 percent share in FY20) prices have remained subdued up to mid-December, providing respite to the spreads for domestic steel players while iron ore prices are soaring. The import prices of non-coking coal from South Africa and Indonesia (comprising 85 percent share in FY20) have seen a strong momentum up to mid-December, making imported coal more expensive and thus, hitting the margins of domestic power sector participants dependent on imported coal. Ind-Ra said coal offtake continued to improve in November to 56 million tonnes (mt), higher 2.6 percent month-on-month (m-o-m) and 6.2 percent year-on-year, driven by an improving domestic power demand by 3.7 percent y-o-y. Accordingly, domestic coal production continued to improve to 56.6 mt, higher 11.6 percent m-o-m and 2.2 per cent y-o-y. The increase in prices may also provide Coal India Ltd (CIL) to push domestic coal over imported coal in India, subject to an improvement in price competitiveness considering the gross calorific value and applicable freight costs.

Source: The Economic Times

NTPC declares Dulanga coal mine commercially operational

28 December: NTPC Ltd said its Dulanga coal mine is commercially operational from 1 October 2020. The central government has allocated nine coal blocks — Pakri-Barwadih, Chatti-Bariatu & Chatti- Bariatu (South), Kerandari, Dulanga, Talaipalli, Banai, Bhalumuda, Mandakini-B and Badam — directly to NTPC. Banhardih coal block, allocated earlier to the Jharkhand government, is now being developed by Patratu Vidyut Utapadan Nigam Ltd. NTPC is planning to produce about 103 million metric tonnes (mmt) of coal per annum from these mines when all the mines reach the peak-rated capacity. Out of 10 blocks, three mines, Parkin-Barwadih, Dulanga and Talaipalli are in operation — about 27.2 mmt of coal has been produced from these mines (till November 2020). Two mines — Chatti-Bariatu and Kerandari — are in advance stage of development.

Source: The Economic Times

CIL set to diversify into non-coal mining areas in 2021

26 December: Coal India Ltd (CIL) is set to diversify into non-coal mining areas as well as make major investments in clean technology in 2021 after demand for the dry fuel remained muted for most of this year amid the coronavirus pandemic impacting economic activities. Against all odds, including the slump in coal demand, the government opened up the country’s mining sector for private players by auctioning 19 blocks. Coal demand across the world is projected to fall by around five percent this year compared to 2019 while various sectoral challenges are expected to persist in 2021, analysts said. In the coming year, CIL is also likely to go ahead with its agenda of achieving one billion tonnes of production target by 2023-24. Global coal consumption is estimated to have fallen 7 percent, or over 500 million tonnes (mt), between 2018 and 2020. In 2019, global coal demand decreased 1.8 per cent after two years of growth as power generation from coal weakened globally, including in India. Analysts opined that there will be a modest rise in demand in 2021 and prices are also expected to firm up. Coal demand is set to revive by 2021 in India and other Asian nations, including China, which are the major consumers of the fuel, Moody’s Investors Service said in a report in October.

Source: The Economic Times

India to put in place Coal Import Monitoring System from 1 February

24 December: India will implement a Coal Import Monitoring System (CIMS) from 1 February that would require coal importers to submit advance information in an online system for import and obtain an automatic registration number. As per the notification, imports of anthracite coal, bituminous coal, coking coal, and steam coal will be subject to the Coal Import Monitoring System (CIMS). The government already has an import monitoring system for a number of steel items, called SIMS, that keep a tab on imports and boost domestic manufacturing. For CIMS, the automatic registration number shall remain valid for a period of 75 days and the importer would have to enter the registration number and expiry date of registration in the Bill of Entry to enable customs for clearance of consignment.

Source: The Economic Times

IWAI wants more coal movement via waterways

23 December: The Inland Waterways Authority of India (IWAI) want more transportation of coal through waterways. National Waterway (NW-1) holds immense potential for coal movement through inland waterways but still coal movement remains scanty. However, currently most of the fly ash of power plants in West Bengal are being exported to Bangladesh through the protocol route. IWAI chairperson Amita Prasad said inland waterways should get at least five per cent of the transport sector in the near future and 10 percent by 2030 from 2.5 percent now.

Source: The Economic Times

National: Power

MP Power Management Company supplies record 15 GW of electricity in single day

24 December: Madhya Pradesh Power Management Company (MMPMC) said it supplied 15,083 MW of electricity, which is the highest-ever demand on a particular day in the state. MPPMC Managing Director Akash Tripathi said that it was done on the basis of better management and strong network of power infrastructure without any interruption. Since the past 25 days, over 14,000 MW demand was being made in the state because of an increase in the agriculture area, development of new resources for irrigation, expansion of rural and urban areas, and improvement in lifestyle of the people, he said. He said that the demand of 15,083 MW was fulfilled with the help of getting 3,487 MW from the thermal and hydro power plants of MP Power Generating Company, 1,176 MW from Indira Sagar, Sardar Sarovar and Omkareshwar power projects, and 4,019 MW from NTPC Ltd.

Source: The Economic Times

National: Non-Fossil Fuels/ Climate Change Trends

Gujarat announces new solar power policy 2021

29 December: Gujarat’s Chief Minister (CM) Vijay Rupani announced the state’s new solar power policy which will be valid for the next five years. The policy has multiple incentives to reduce the share of coal-based power and move towards green energy. Gujarat had installed a whopping 50,915 subsidised rooftop solar plants in the residential segment — the highest in India — as on 2 March, 2020. The high number of installations is linked to the state’s specific policy which had incentivised rooftop installations. As per the new policy, the state government would purchase surplus energy from residential and micro, small and medium enterprises consumers after setting off against their consumption. This means that they would be allowed to sell their surplus power at a tariff of ₹2.25 per unit. Solar power association, NSEFI, welcomed the step of removing the capacity restrictions for all categories of commercial, industrial and residential consumers. According to the solar body’s Chairman Pranav R Mehta, Gujarat continues to be in the forefront in the policy initiatives for solar industry not only for large but also benefitting MSMEs. In 2015, the Gujarat government announced a solar policy to increase the sector’s growth and supply affordable power. Prime minister Narendra Modi had earlier this month laid the foundation of India’s largest hybrid renewable energy park of 30 GW capacity in Kutch, Gujarat.

Source: The Economic Times

Vikram Solar commissions 10 MW solar plant in West Bengal

29 December: Vikram Solar said its 10 MW solar plant for the West Bengal State Electricity Distribution Company Ltd (WBSEDCL) was commissioned. The project was inaugurated by West Bengal Chief Minister Mamata Banerjee, the company said. The solar plant is located in Birbhum district of West Bengal and consists of 30,150 solar modules of Vikram Solar, the company, one of India’s leading module manufacturers and a prominent engineering, procurement and construction (EPC) and rooftop solar solutions provider, said. The plant will reduce carbon dioxide emissions by over 10,540 tonnes per annum and light up approximately 17,649 homes. In addition to the 10 MW solar plant in Birbhum, Vikram Solar has already commissioned 33 MW of cumulative solar energy capacity for WBSEDCL across locations in the state, while a 10 MW solar project is currently under execution, it said.

Source: The Economic Times

TP Renewable Microgrid inaugurates first 5 kW Bio-gas plant in Bihar

28 December: TP Renewable Microgrid (TPRMG), a wholly owned subsidiary of Tata Power, announced that it had inaugurated its first 5 kilowatt (kW) Bio-gas generating plant at Kamalpura (Basaitha) village in Muzaffarpur district of Bihar. The plant commenced operations on ‘National Energy Conservation Day’, on 14 December. TPRMG constructed this plant in association with Grassroots Energy. The plant consumes cow dung which is procured from nearby villages and then it is processed through a Bio-digester to generate methane gas. This gas is then used to drive a specially designed 5 kW generator to generate electricity which is fed to the adjoining 30 kW microgrid generating station. The residue of the Bio-gas plant is processed to create organic manure for the farmers. This Bio-Gas plant was inaugurated in the presence of the village Pradhan (Headman), the land owner, the Grassroot Energy team along with TPRMG’s team. TPRMG’s focus now lies on developing and commissioning its Bio CNG plant in rural parts of India.

Source: The Economic Times

Delhi Police sets up solar energy-enabled beat booth at India Gate

27 December: The Delhi Police set up a solar energy-enabled ‘modern beat booth’, which is also water, fire and vandalism proof, at the iconic India Gate. The booth is solar energy-enabled with a storage capacity of 10 hours. Similar police booths with solar-powered LED (light emitting diode) panels will also be set up at other prominent places in Delhi.

Source: The Economic Times

MSEDCL floats solar bids for 6.5 GW, signs pacts for only 527 MW

26 December: The Maha Vikas Aghadi (MVA) government has recently approved a renewable energy policy under which about 13,000 MW capacity is to be added through solar. Going by the response to Mukhyamantri Saur Krishi Vahini Yojana (MSKVY) in the last three years, this seems to be a difficult target. According to MSEDCL’s submission before Maharashtra Electricity Regulatory Commission (MERC), the company had floated bids for 6,500 MW solar power in three years, but received bids for only 1,873 MW and it was able to sign agreements for only 527 MW, which is less than 10 percent of the sought capacity. MSEDCL has attributed the poor response to the impracticality of the ₹3.30 per unit tariff ceiling and unavailability of low-cost land in the state.

Source: The Economic Times

Vikram Solar commissions rooftop solar plant at its manufacturing unit in Kolkata

23 December: Vikram Solar, a Kolkata-based green energy provider, said it has commissioned a rooftop solar project on their manufacturing facility in Falta, West Bengal. It said that the 919.73 kilowatt plant, set-up earlier in December, consists of 2,574 solar panels ranging from 325 watt to 400 watt and covers an area of 6,500 square meters. The solar plant would cater to more than 27 percent of the entire manufacturing unit’s electricity consumption during normal day time operation and would generate an annual yield of 1,350.58 MW, the company said. It said that in order to utilise the energy generated from the solar plant, the firm has installed 14 grid-connected string inverters and 60 micro-inverters.

Source: The Economic Times

International: Oil

Cambodia starts first crude oil production after years of delays

29 December: Cambodia has begun extracting its first crude oil from fields in the Gulf of Thailand, in a venture between Singapore’s KrisEnergy Ltd and the government, both parties said, bringing an end to years of delays. Cambodia has struggled to develop its oil fields as few companies were willing to invest in the area following a global oil price slump in 2014. KrisEnergy, which has been a partner in the project for more than a decade, bought out Chevron Corp’s operating interest in Block A in 2014 for $65 mn. Chevron had found oil in the block in 2004 but failed to strike a development agreement with Cambodia, which has a 5 percent stake in the venture with KrisEnergy. Earlier, KrisEnergy had anticipated oil production from the Aspara field to start some time last year.

Source: Reuters

Venezuela resumes direct oil shipments to China despite US sanctions

23 December: Venezuela has resumed direct shipments of oil to China after US (United States) sanctions sent the trade underground for more than a year, according to Refinitiv Eikon vessel-tracking data and internal documents from state company Petroleos de Venezuela (PDVSA). Chinese state companies China National Petroleum Corp (CNPC) and its listed subsidiary PetroChina – long among PDVSA’s top customers – stopped loading crude and fuel at Venezuelan ports in August 2019 after Washington extended its sanctions on PDVSA to include any companies trading with the Venezuelan state firm. PDVSA’s customers instead boosted shipments to Malaysia, where transfers of cargoes between vessels at sea have allowed most of Venezuela’s crude to continue flowing to China after changing hands and using trade intermediaries. The first tanker to resume transport of Venezuelan crude directly to China was the Kyoto, identified by shipping monitoring service while loading 1.8 mn barrels of heavy crude at Venezuela’s Jose port in late August.

Source: Reuters

International: Gas

SOCAR, ENOC offer lowest prices for February LNG cargoes to Pakistan

29 December: SOCAR Trading (UK) Ltd and ENOC Singapore have offered the lowest prices to supply two liquefied natural gas (LNG) cargoes to Pakistan LNG Ltd (PLL) for delivery in February 2021. SOCAR offered a cargo for delivery between 15 to 16 February at a percentage of the Brent crude oil futures price, known as a slope rate, of 23.4331 percent while ENOC offered a slope rate of 20.8483 percent for a cargo for 23 to 24 February, according to the PLL. Global LNG supply has been tight amid production issues and that has pushed spot prices to a near two-year high and freight rates for LNG tankers to a more than one-year high. Pakistan is yet to decide on whether it will award the tenders, the country’s petroleum ministry said. The South Asian country has become an emerging buyer in the international LNG market over the last few years, with an increasing gap between demand and supply of gas.

Source: Reuters

PetroChina to more than double Sichuan shale gas output by 2025

29 December: PetroChina Co Ltd, Asia’s largest oil and gas producer, aims to more than double shale gas output from operations in the Sichuan basin to more than 22 billion cubic meters (bcm) by 2025 from this year’s level. That will surpass a target set by Sinopec, which led China’s shale gas development with the first commercial find at Fuling, also in the Sichuan basin, and which aims to nearly double its shale gas output to 13 bcm in 2025. Shale gas operations managed by PetroChina’s Southwest Oil and Gas division will top 10 bcm this year, making the company China’s single largest shale gas producer. The operation covers Yibin, Zigong, Neijiang, Luzhou and Yongchuan regions of the gas-rich Sichuan province in southwest China as well as Yongchuan in Chongqing municipality. PetroChina sunk more than 240 wells this year in the sprawling blocks of Sichuan, resulting in daily shale gas output 40 percent higher than at the beginning of 2020. PetroChina started appraising shale gas blocks in the Sichuan basin in 2006 and made its first major discovery with the Wei-201 well in 2010.

Source: Reuters

BP well comes up empty at promising Ironbark gas prospect off Australia

29 December: BP Plc said it has found no oil or gas at its Ironbark-1 exploration well off Western Australia, in what had been seen as a multi-trillion cubic feet gas prospect. The result marked a big disappointment for BP’s partners in the prospect, which had been seen as a potential gas supplier to the North West Shelf liquefied natural gas (LNG) plant, where BP is a co-owner, within five to 10 years.

Source: Reuters

Gas price rally buoys North American LNG developers looking to 2021

23 December: North American LNG exporters are sounding more confident about the prospects for new projects in 2021 due to a sharp rally in prices driven by surging Asian demand, even as most industry analysts expect next year to be another difficult one. Natural gas futures in Europe and Asia have climbed to their highest levels in more than a year due to a sharp increase in demand late in 2020, especially out of China, where buyers have scrambled to secure supply. Asian nations have driven record growth in liquefied natural gas (LNG) as they seek to replace dirtier coal plants and fuel growing energy consumption.

Source: Reuters

Australia’s Santos Narrabri gas project approval faces court challenge

23 December: An Australian community group has launched a court challenge against Santos Ltd’s A$3.6 bn ($2.7 bn) Narrabri coal seam gas project, saying an independent panel that approved the development failed to consider its climate impacts. The action was launched by the Environmental Defenders Office, a not-for-profit legal firm, on behalf of a group of 100 residents and farmers from the town of Mullaley, about 110 km (68 miles) south of Narrabri in northern New South Wales (NSW). The challenge said the NSW Independent Planning Commission (IPC) had failed to look at the impact of greenhouse gas emissions from the project and the environmental effects of a gas pipeline needed for it to go ahead.

Source: Reuters

International: Power

Mexico electricity outage leaves 10.3 mn temporarily without power

29 December: An outage in Mexico’s electricity network left 10.3 mn users without power for up to two hours, the national electricity utility (CFE) said. The National Center of Energy Control (CENACE) said the network lost 7,500 MW because of “an imbalance between load and power generation.” The outage affected people in a dozen states as well as the populous capital district.

Source: Reuters

Locals set fire to electricity transmission tower to protest no power supply in Gilgit-Baltistan

23 December: A transmission tower was recently set on fire by locals in Gilgit Baltistan citing it was of no use as the region was not getting any power. While a large part of the Pakistan-occupied Gilgit Baltistan receives just 5 to 6 hours of electricity in a day, the remaining parts do not get even that. Locals, who held a demonstration against the government, said that they were duped into installing smart meters at their homes but never given adequate power supply. Gilgit- Baltistan, a region under Pakistan’s illegal occupation is among the top regions in the world with maximum electricity generation potential. Residents complain that the electricity crisis is deepening day by day as it not only affecting their day to day lives but also their health and employment.

Source: The Economic Times

International: Non-Fossil Fuels/ Climate Change Trends

Japan’s green growth strategy to help achieve carbon neutral goal

25 December: Japan laid out a “green growth strategy” that includes a goal to replace new gasoline-powered vehicles with electric cars by the mid-2030s to reach net zero carbon emissions and generate nearly $2 trillion a year in green growth by 2050. Japan’s electricity demand is expected to increase 30 percent to 50 percent from current levels by 2050 due to electrification in industrial, transportation and household sectors. The country aims to expand renewable energy as much as possible by 2050, with the reference goal of renewable energy sources accounting for 50 percent to 60 percent of the nation’s power supply by 2050, up from 18 percent in the financial year ended March 2020. To boost green power, Japan plans to install up to 10 GW of offshore wind capacity by 2030, and 30-45 GW by 2040, while slashing the cost to between 8-9 yen ($0.08-$0.09) per kilowatt hour by 2030-2035. Japan targets to have all new houses and buildings to be built with zero emission technology by 2030.

Source: Reuters

This is a weekly publication of the Observer Research Foundation (ORF). It covers current national and international information on energy categorised systematically to add value. The year 2020 is the seventeenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.

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