MonitorsPublished on Mar 26, 2021
Energy News Monitor | Volume XVII; Issue 38

Quick Notes

Can Nuclear Power Overcome the Cost Barrier?


Nuclear energy accounted for just over 1 percent of primary energy in India, 2 percent of generation capacity and 3 percent of power generation in 2019.  Current installed capacity for nuclear power generation is 6885 MW (megawatts) from 22 reactors. This includes the 700 MW pressurised heavy water reactor (PHWR), unit 3 of Kakrapar nuclear power plant (KAPP) that was synchronised with the grid in January 2021. 15 more such units are expected to follow in fleet mode.  Nuclear power plants of capacity 4194 MW are under construction.

Capacity Addition Targets   

In 2004, the target set for nuclear power capacity was 20 GW by 2020. In 2007, the government stated that this target could be doubled with the opening up of international cooperation through the 123 nuclear agreement that was to be signed with the United States in 2008.  In 2009, the NPCIL (Nuclear Power Corporation of India Limited) said that it aimed for a capacity of 60 GW by 2032 including 40 GW of PWRs (pressurised water reactors) and 7 GW of PHWRs all powered by imported uranium. Projections in the draft energy policy of 2011 are more modest with 12 GW nuclear power capacity in 2022 and 34 GW in 2040 even under the ‘ambitious’ scenario.  In 2021, the government stated in the Parliament that nuclear power generation capacity would increase to 22,480 MW by 2031.  India’s targets for nuclear power generation capacity addition have been described as aspirational even by experts from the department of atomic energy (DAE). One of the key reasons why India’s targets for nuclear power generation capacity remain aspirational is the difficulty in mobilising investment.


According to the CEA (central electricity authority), the capital cost of a PHW nuclear power plant in India is about ₹110 million (₹11 crore) per MW in 2021.  Other estimates are higher at ₹160 million/MW (₹16 crore/MW). The average capital cost of nuclear power is in the same range as that of large hydro-power projects or LNG (liquefied natural gas) liquefaction plants but it is far more difficult to raise capital for nuclear power plants as they are exposed to unique risks (low probability but high-risk events such as natural disasters, terrorist attacks, nuclear proliferation problems). In addition, there are issues like long lead times, risk of construction problems, delays and cost overruns and the possibility of future changes in policy or technology. Globally escalating costs and delays of new nuclear projects have devastated the industry, forcing two of its powerhouses, Westinghouse and Areva, into bankruptcy. This has increased preference for low carbon sources like solar power.  But the capacity adjusted (80 percent capacity factor) capital cost of nuclear power is ₹250 million/MW (₹25 crore/MW) while the capacity adjusted (25 percent capacity factor) capital cost of solar power is ₹300 million/MW (₹30 crore/MW) according to NPCIL.  The life of a nuclear plant is greater than 60 years (close to 100 years) and that of solar plants about 20 years which adds to the economic value of nuclear power plants.  Moreover, the system integration cost of nuclear plants is just $2/MWh for nuclear power plants compared to about $43/MWh for renewable generators. The cost of electricity generated by nuclear power plants compares well with electricity from other sources. In fact, firm (dispatchable) electricity from Tarapur Atomic Power Station (TAPS 1&2), the oldest nuclear power generators in India, costs less than ₹1/kWh (kilowatt hour).  This is lower than the cost of solar power which is intermittent.  The cost of power from newer plants like Kudankulam is in the range of ₹4-6/kWh comparable to power from some thermal power plants and also comparable to hybrid solar-pumped hydro power combination. In India specific generation, a parameter that signals economic efficiency of power generation (gigawatt hours of power generated for megawatt of capacity) was highest for nuclear power at 6.85 compared to 4.9 for coal-based power in 2019-20. The specific generation of nuclear power has been consistently higher than the average specific generation value over the last two decades.  The 2020 report of the International Energy Agency (IEA) on projected costs of generating electricity states that nuclear power remains the dispatchable low-carbon technology with the lowest expected costs in 2025. The value adjusted levelized cost of electricity (VALCOE) of nuclear power is lower than that for solar or wind especially when the life of nuclear plants is extended. VALCOE incorporates information on both costs and the value including estimates of energy, capacity and flexibility to provide a more complete metric of competitiveness for power generation technologies. VALCOE of electricity from intermittent sources like wind and solar increases as the share of electricity from these sources increases while the VALCOE of nuclear power decreases as its share of electricity supplied to the grid increases.

Environmental Benefits

According to NPCIL, the land foot print of nuclear power is at least 20 times smaller than that for solar energy. The lifecycle greenhouse gas emissions from solar is 50 grams/kWh compared to 14 g/kWh for nuclear power.  Globally, the use of nuclear power has reduced CO2 emissions by about 60 gigatonnes, or nearly two years-worth of emissions over the past 50 years according to the IEA. Without nuclear power, emissions from power generation would have been almost 20 percent higher. The IEA that favours nuclear power for decarbonisation says that the world risks a steep decline in nuclear power in developed countries that could lead to billions of tonnes of extra carbon emissions. Without new nuclear power, the energy transition will become more difficult and more expensive. But sceptics of nuclear energy point to the well-known accidents from Three Mile Island in the US, Chernobyl in Russia and Fukushima in Japan. Nuclear reactors generate radioactive waste that remains dangerous for hundreds of thousands of years and the first deep geological disposal facility for nuclear waste is still on the drawing board.

Small Modular Rectors to the Rescue?

In 2019, for the first time in history, non-hydro renewables like solar, wind and biomass generated more electricity than nuclear power plants globally. Global nuclear power generation peaked in 2006 and there were fewer reactors operating around the world at the end of 2019 than 30 years ago. Even in China that is building several nuclear power generators, wind generated more electricity than nuclear power in 2019. But support for small modular reactors (SMRs) is increasing around the world and also in India. Since the 1950s when nuclear power generation was established, the size of the reactors has increased from 60 MW to more than 1600 MW, with corresponding economies of scale in operation. SMRs generally have a capacity of 300 MW or less and are designed with modular technology using module factory fabrication, pursuing economies of series production and short construction times. There have been many hundreds of smaller power reactors built for naval use (up to 190 MW thermal) and as neutron sources, yielding enormous expertise in the engineering of small power units. SMRs are much less likely to overheat, in part because their small cores produce far less heat than the cores in large reactors. Innovative designs in SMR technology can also reduce other engineering risks, like coolant pumps failing. SMR has far fewer moving parts than traditional reactors, lowering the likelihood of failures that could cause an accident. Building smaller reactors also allows for mass-manufacturing which reduces cost and lead times. SMRs provide an opportunity for the Indian nuclear industry to show that it can deliver cost-effective carbon emission reductions fast enough to help climate change.

Source: Central Electricity Authority

Monthly News Commentary: Power

Peak Power Demand Touches Historic Highs


India’s power consumption increased to a three-month high of nearly 6 percent at 111.43 bn kWh in January 2021, showing spurt in economic activities. Power consumption in January 2020 was 105.15 bn kWh. Besides, peak power demand also recorded double-digit growth of nearly 11 percent to 189.64 GW in January 2021 compared to 170.97 GW in January 2020. On 30 January, peak power demand surged to its all-time high of 189.64 GW. After a gap of six months, power consumption recorded a 4.5 percent year-on-year growth in September and 11.6 percent in October. In November 2020, the power consumption growth slowed to 3.12 percent, mainly due to the early onset of winters. In December, power consumption grew by nearly 5 percent. Nearly 6 percent growth in power consumption and all-time high peak power demand of 188.45 GW in January give sufficient evidence that most of the economic activities are now at pre-pandemic levels. Power demand growth is expected to be more robust and consistent in coming months. Peak power demand is likely to surpass the 200 GW mark very soon. Power demand started declining from April as economic activities were disrupted due to the pandemic. It affected power demand for five months in a row from April to August 2020. The demand recovered from September onwards. Peak power demand met grew at 1.7 percent in September, 3.4 percent in October, 3.5 percent in November and 7.3 percent in December.

There has been a 53 percent increase in electricity consumption in Maharashtra compared to the initial months of the Covid-19 lockdown, and power demand has touched 23,000 MW. This is chiefly due to Mission Begin Again from June onwards—with many industries, manufacturing units and private sector companies reopening in phases and the consumption demand increasing gradually. Many offices resumed with 30-50 percent staff while industrial power consumption too went up by at least 20 percent over the past few months. The latest relaxations, which allow more offices, shops, malls, multiplexes and restaurants to reopen, have led to more consumption. The demand for power across the state (including Mumbai) was an average 15,000 MW in March-end and in April and May last year. This gradually increased to 18,000 MW in June, and later averaged between 20,000 MW and 21,000 MW between July and December. In January, the demand peaked to 22,000 MW and has now touched 23,000 MW in February. Compared to the first two quarters of 2020 (April to June and July to September), there was not much of an expectation in the third quarter (October to December) during COVID pandemic. Mumbai’s power demand during summer season touches 3,400-3,600 MW and drops to 2,400 MW during winters. Since 1981, the city has been protected by a system called ‘islanding’ for which citizens pay around ₹4.5-5 bn each year through electricity bills.

The NTPC Group generated its highest-ever day gross generation of 1009 mn kWh on 18 January 2021. As per the CEA NTPC Singrauli unit number 1 in Uttar Pradesh, which had commenced operation 38 years ago, achieved the highest Plant Load Factor (PLF) of 100.24 percent for the period from April 2020 to December 2020. NTPC Group has achieved gross cumulative generation of 222.4 bn kWh from April to December 2020, an increase of 3.8 percent compared to the same period last year. NTPC, being an essential service provider, maintained operations at its power stations uninterruptedly during the lockdown while adhering strictly to all the COVID-related guidelines issued by the government.

Discom Reform

The government’s proposed plan to improve the operations and finances of state-owned discoms, the weakest link in India’s power supply value chain, will help mitigate cash flow stress observed in rated power generation companies over time, according to Fitch Ratings. The $41 bn plan intends to trim electricity losses, gradually narrow discoms’ cost-revenue gap, improve the reliability and quality of power supply, and promote more sustainable competition in the sector through 2024-25. The pandemic has aggravated the discoms’ difficulties due to the fall in electricity demand from higher-paying commercial and industrial customers, payment concessions, and delay in cash collections. The extended payment cycles of discoms put pressure on the working capital of generation companies, weakening their cash flows available for debt servicing.

The ‘smart prepaid meter’ scheme implemented in Bihar will now be extended nationwide. The North and South Bihar Power Distribution Company signed an agreement with Energy Efficiency Services Ltd (EESL), a public sector company, in 2018. After this, it was decided to install the meters in the state in 2019 in a cabinet meeting. Public sector EESL has tied up with Bihar’s two power distribution units to install 2.34 million smart meters in the state. EESL said this is the first time that such meters are being installed on such a large scale in the state. According to data, the per capita electricity consumption in the state was only 145 units in 2012-13, which has increased to 345 units in 2018-19. The number of consumers in the state has also increased.

The smart prepaid meters will optimise the discom operational performance by increasing the billing and collection efficiency, reduce the operation and maintenance cost, and enhance the quality of service, along with providing the consumers with demand side management (DSM) options. The smart prepaid meters are connected through a web-based monitoring system, which will help reduce commercial losses of utilities, enhance revenues and serve as an important tool in power sector reforms. EESL’s smart metering initiative is revamping the current manual system of revenue collection, which suffers from low billing and poor collection efficiencies. The implementation of these meters will also enable considerable energy and monetary savings for consumers, who will have an avenue to track their power usage in real time. The prepaid functionality of the smart meters is also an added advantage, as it provides discoms with an option to switch to prepaid mode, wherein the consumers pay upfront for the electricity. The utility of this feature was quite apparent during the lockdown, as discoms in Bihar were able to generate a daily revenue of ₹500,000 with consumers on an average recharging their prepaid smart meters with a credit balance of ₹20 daily. The Smart Meter National Programme aims to replace 250 mn conventional meters with smart meters in India.

Draft Electricity Amendments Act 2020

The All-India Power Engineers Federation (AIPEF) has demanded that the Electricity (Amendment) Bill, 2021 must be put out in the public domain before starting the discussion on it in Parliament. The Bill is not available on the power ministry website. The Electricity (Amendment) Bill 2021 is included in the list of 20 new Bills to be placed in the current Budget session of Parliament. AIPEF has threatened a lightning strike against any unilateral move to rush through the Bill in Parliament. The reported matters in the Electricity (Amendment) Bill 2021 are un-authenticated and deserve to be discarded, particularly as they are tantamount to introducing a drastic policy of separating carriage and content which was earlier rejected by as many as 20 states. The outcome of the various suggestions of the stakeholders on the Bill 2020 remains undisclosed and a new draft Bill 2021 has been leaked to the selected few. The present approach of the ministry of power is non-transparent and secretive, and seems that the government is trying to hide secret critical facts according to the AIPEF.

Tata Power has received a letter of intent from the Odisha Electricity Regulatory Commission (OERC) for distribution and retail supply of electricity in five circles of North Eastern Electricity Supply Company of Odisha (NESCO) constituting areas of Balasore, Bhadrak, Baripada, Jajpur and Keonjhar. Tata Power will hold 51 percent equity with management control and the Grid Corp of Odisha (GRIDCO) will have the remaining 49 percent equity stake in the company, according to conditions of the bid documentation. With inclusion of additional distribution utility of Odisha, Tata Power will now serve the entire population of Odisha with nearly 9 million consumers experiencing uniform processes and synergies in operations. The expansion will enhance Tata Power’s consumer base to nearly 12 mn from the present 9.6 million across Mumbai, New Delhi, Ajmer, central, southern and western parts of Odisha. With this takeover, the company’s distribution circles will expand to NESCO with geographical spread of more than 27,500 square kilometre (km) and serve over 1.9 million consumers with annual input energy of 5,450 mn units. It will manage a network of more than 90,000 circuit km for a license period of 25 years.


India’s T&D losses in the power sector are “substantial” and are very high compared to peer nations, flagged the Economic Survey for 2020-21. The T&D losses represent electricity that is generated but does not reach intended customers. India’s T&D losses have been over 20 percent of generation, which is more than twice the world average. The ideal level of T&D losses ranges between six to eight percent. According to CEA’s latest report of October, 2020 the T&D losses had declined to 20.66 percent in 2018-19, from 21.04 percent in 2017-18, and 21.42 percent in 2016-17.

Power Grid Corp of India (PGCIL) has won two electricity transmission projects in Rajasthan under tariff-based competitive bidding. PGCIL has been declared as the successful bidder under tariff-based competitive bidding to establish two transmission systems. The firm bagged a “transmission system strengthening scheme for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under phase II – Part A” on build, own operate and maintain basis. The transmission system comprises establishment of a new 400/220 kV (kilovolt) Substation, 400 kV D/C Transmission lines and associated Substation extension works in Rajasthan. The transmission system comprises establishment of 765 kV D/C Transmission line and associated substation extension works in Rajasthan.

Odisha Power Transmission Corp Ltd (OPTCL) has signed an MoU with IIT, Bhubaneswar for the establishment of OPTCL Chair in the premier engineering institute. IIT would be a troubleshooter for various technical issues surfacing in the power sector. Uttar Pradesh Power Corp Ltd (UPPCL)’s plan to file a fresh Annual Revenue Requirement (ARR) for fiscal 2021-22 with the power regulatory body has raised curiosity about the possibility of a hike in power tariff, which was untouched last year. ARR is a projection of power tariff, which UPPCL seeks to recover in a new financial year. UPPCL said ARR would be filed with the power watchdog, UP Electricity Regulatory Commission (UPERC), in the next few days. While UPERC asked UPPCL to file the ARR by month-end, the corporation sought more time to conduct an audit before moving the commission for tariff revision. An urban domestic consumer, for instance pays at the rate of ₹5.50/kWh for first 150 kWh, followed by ₹6/kWh on consumption of 150-300 kWh. Likewise, for the slab between 301-500 kWh, a consumer pays at the rate of ₹6.50/kWh. Consumption of electricity above 500 kWh will require the consumer to shell out ₹7/kWh. The consumer pays ₹110/KW/month as fixed charge. The possible power tariff revision comes months after UPPCL initiated a proposal to privatize loss-making power distribution companies like Purvanchal Discom.


Electricity bills in Assam are all set to go down as Assam Electricity Regulatory Commission approving a reduction in energy charges by ₹0.15-0.20/kWh for both domestic and commercial connections from April onwards. According to the order from Assam Electricity Regulatory Commission energy charges of low tension domestic and low tension commercial (up to 25 kW) categories have been reduced by ₹0.20/kWh, while the energy charges of all other categories have been reduced by ₹0.15/kWh. The fixed charges, which vary for different categories of connections, have not been changed though. The Assam cabinet approved free electricity in all households for consumption of up to 30 units a month for three months till March.

Regulation and Governance

Mumbai needs to add electricity generation capacity that’s dedicated for its own consumption and reduce dependence on buying power from outside. This was the recommendation from the CEA team investigating the unprecedented outage across the city and nearby areas in October. The CEA said in its report that the inadequacy of the transmission network is likely to hamper the security of the Mumbai Metropolitan Region grid in the future. The generation capacity available in Mumbai is 1,877 MW, of which Tata Power supplies 1,377 MW and Adani Electricity Mumbai supplies 500 MW. That’s half of Mumbai’s peak demand of 3,800 MW. The panel suggested that to ensure uninterrupted supply, generation sources in Mumbai and adjacent areas should be given “must run” status, which means power distribution companies cannot discontinue or reduce offtake from them.

The Centre sanctioned ₹66 bn to the State power utilities as Atmanirbhar loan to Andhra Pradesh. The government released ₹33 bn to the State under the second trench of the loan and already released an amount of ₹33 bn so far. The power utilities saved ₹10.23 bn by procuring power at power exchanges. The power utilities reduce AT&C losses to 13.36 percent in in the year 2019-20 from 16.36 previous year. The State also saved fixed cost payments of ₹8.50 bn per annum by surrendering 625 MW of coal power from Central Generating stations. The power utilities procured 6,320 mn kWh of power from the open market during the current financial year. The average cost of procurement, including transmission charges is ₹3.12/kWh against the approved weighted average procurement cost of ₹4.55/kWh.

From 1 April, all the cash counters of the MP Madhya Kshetra Vidyut Vitaran Company Ltd, which caters to energy consumers of 16 districts, including State capital Bhopal, will be closed. Consumers will have to pay online monthly bills online only from 1 April onwards. As an alternate for cash counters consumers will have the option to pay from MP Online kiosks, common service centres, ATP machines and from the portal of the discom as well the Upay App launched by the discom. Apart from this, agencies will be authorised at certain designated places for collection of bills. Online payment will enable users save between ₹5 and ₹20 on each payment, they will get information regarding payment instantly and at the same time payment could be done from anywhere and at anytime. For the current month of February-March, meter readers have not been authorised for receiving payments.

The Odisha Electricity Regulatory Commission (OERC) started public hearing via online mode on the pleas of power companies on electricity tariff revision for the year of 2021-22. Odisha Hydropower Corp (OHPC) and Odisha Power Generation Corp (OPGC) have presented their view before the commission on the first day of the hearing. OHPC presented its application for determination of the annual revenue requirement (ARR) and tariff of its generating stations for financial year 2021-22. The company has proposed to generate energy of 5619.2 million kWh for the upcoming financial year and for this it has estimated its ARR at ₹5.35 bn. The OHPC has proposed to sell 5 MW to Chhattisgarh at an average tariff of ₹1.80/kWh during 2021-22. The company has proposed for an average generation tariff of ₹0.9536/kWh for the coming financial year.

Power cuts in Andhra Pradesh dropped by nearly 35 percent in the 2020-21 financial year compared to the 2019-20 fiscal. A total of 250,000 power outages were reported in 2020-21, a steep fall from 391,0000 in 2019-20. To reduce interruptions in power supply, power utilities have laid special focus on augmenting the power infrastructure in the state. Among such augmentation attempts are upgrading electricity substations, strengthening distribution networks and providing additional infrastructure for agricultural requirements during the day. Achieving 100 percent excellence in uninterrupted power supply at par with international standards is the ultimate objective of the state government. AP Transco has recently deployed a day-ahead electricity forecast model which uses artificial intelligence and machine learning to forecast the next day’s electricity consumption in units.

A 66/11 kV (kilovolt) smart power grid was inaugurated at Narela. The smart power grid has been built by the state government to provide reliable power supply to consumers in north Delhi. The power grid involves minimum input and gives maximum output, with zero human intervention. The smart power grid is constructed to cater to chemical industries and solve the problem of overloading in the area.

Out of the 335,000 electricity consumers in Gautam Budh Nagar, disconnection exercise has been initiated by the power department on about 25,000 consumers whose bills are pending since over a year. These are largely rural consumers from Dadri, Dankaur, Rabupura etc. areas, who are either out of town or have changed addresses. Notices are being sent to them to ensure part payment which will enable reconnection. There are also about 80,000 rotational soft arrear consumers from mostly urban areas with bills pending up to three months. They are being given door-to-door notices to clear payment dues. According to Pashchimanchal Vidyut Vitran Nigam Ltd, there are many such defaulters from Dujana village in Dadri and other villages from Dankaur, Jewar, Rabupura, etc.

Rest of the World


China has invested billions in Pakistan’s power sector but all the deals made with Pakistan are tainted that contributed to the recent nationwide blackout, which is likely to return in future. China has earmarked ₹30 bn for Pakistan’s energy sector through CPEC funds. Several Chinese IPPs (Independent Power Producers) have been involved in the construction of as many as 27 power plants in Pakistan with a total installed capacity of 12,000 MW under the CPEC program. Chinese-funded power projects, after completion, will mostly utilise existing rundown distribution infrastructure, which is currently making 25 percent annual losses. Moreover, transmission and distribution losses, overdue payments, and theft and pilferage of electricity also power up the debts that threaten to keep the lights out in Pakistan.

Rest of Asia

Japan’s overstretched electricity grid is likely to receive another Arctic blast in the coming days, which is already pushing up wholesale prices and may stress generators as they struggle to keep units running after a powerful quake. While the world’s third-biggest economy is unlikely to see millions plunged into blackouts as in the US currently, the country narrowly avoided power cuts only last month in another wintry spell. Utilities and independent power providers got another jolt at the weekend when a 7.3-magnitude earthquake struck off the coast of Fukushima, northern Japan, and sent plants into automatic shutdown, briefly knocking out power for nearly 1 mn people. Power companies restarted some units after checks for quake damage. Wholesale electricity prices for peak-hour delivery reached a three-week high of 38.80 yen (37 cents)/kWh up more than 40 percent.

Myanmar security forces fired to disperse protesters outside a power plant in the northern state of Kachin, footage broadcast live on Facebook showed, although it was not clear if they were using rubber bullets or live fire. Hundreds had gathered outside a power plant that soldiers had occupied in the city of Myitkyina. As darkness fell, riot police accompanied by soldiers arrived to drive away the crowds, the footage showed.


Electricity consumption in Norway hit an all-time high of 25,146 megawatt hours (MWh) amid an ongoing cold spell, outpacing domestic production, grid operator data showed. Unlike the previous high, demand outstripped supply, which reached 24,920 MWh at that time. Most Norwegian homes are heated electrically, while overall power demand has also increased due to more electricity use in the transport sector and from industry in recent years. The recent cold weather has also driven up wholesale power prices in the short-term market to some of their highest levels in five years.

A consortium of four Dutch companies, including Heineken and Philips have signed a 10-year contract to purchase 330 GWh of power annually from a wind farm being built in Finland. The virtual contract covers an expected output volume of 330 GWh per year – equivalent to the electricity consumption of 40,000 households. Compared with the average European electricity generation, this renewable electricity will help avoid more than 230,000 tons of carbon emissions every year. The power will be delivered to the Finnish grid and the companies will use it at industrial plants across Europe.

Middle East

Lebanon is set to receive 500,000 tonnes of fuel oil from Iraq in 2021 for power generation. Lebanon’s state power company does not have the capacity to meet demand, leaving Lebanese homes and businesses facing power cuts for several hours each day and forcing many to turn to private power generators.

kWh: kilowatt hour, MW: megawatt, CEA: Central Electricity Authority, discoms: distribution companies, mn: million, bn: billion, T&D: transmission and distribution, AT&C: Aggregate Technical and Commercial, MWh: megawatt hour, GWh: gigawatt hour

News Highlights: 17 – 23 February 2021

National: Oil

Oil minister gives ‘two main reasons’ behind rising fuel prices

22 February: Oil Minister Dharmendra Pradhan said that reduced fuel production and oil-rich nations seeking more profits are the primary reasons behind spiralling petrol and diesel prices in the country. The prices of petrol and diesel are increasing continuously for more than 10 days and in some states, the price of petrol has even crossed the ₹100-mark. Justifying the taxes levied on petrol and diesel, he said that the Centre and the states are doing various developmental works in the wake of the Covid-19 pandemic, for which they collect taxes, adding that these development projects generate jobs.

Source: The Economic Times

Centre, States need to work together to lower fuel prices: FM

21 February: Amid an outcry over record high petrol and diesel prices, Union Finance Minister (FM) Nirmala Sitharaman said the Centre and state governments will have to together work out a mechanism to bring retail rates to reasonable levels. As much as 60 percent of the retail price of petrol, which shot above ₹100-mark in some places in Rajasthan and Madhya Pradesh and is at an all-time high elsewhere in the country, is made up of central and state taxes. Taxes make up for about 56 percent of the record high diesel rates. Sitharaman, who had increased central excise duty on petrol and diesel by a record margin last year to mop up gains arising from international oil prices plunging to two- decade low, remained non-committal on cutting taxes to give relief to consumers.

Source: The Economic Times

In a first, Lakshadweep to have own fuel delivery stations soon

21 February: The long-pending dream of Lakshadweep natives to have fuel pumps in their archipelago is set to come true soon as a newly built 700 million tonnes (mt) oil tanker vessel M V Thilaakkam was delivered to Lakshadweep administration in Kochi. The protocol of delivery and acceptance of the newly constructed tanker vessel was signed at Kochi between the builder Vijai Marine Services Pvt Ltd and the owner Lakshadweep administration. The vessel is also a step towards the islands having its own fuel pumps.

Source: The Economic Times

India’s January crude processing scales over 1-year peak

19 February: India’s crude oil processing registered its second straight year-on-year gain in January, while hitting a more than one-year high, as fuel demand improved on the back of a gradual increase in industrial and economic activity. Crude oil throughput in January rose 0.6 percent year on year to 5.16 mn barrels per day (21.81 million tonnes), the highest since November 2019, provisional government data showed. India’s factory activity expanded at its strongest pace in three months in January, fuelled by a continued recovery in demand and output, according to a private survey. However, an uptick in global oil prices posed a roadblock to the gradual recovery in demand. Indian refiners operated at an average rate of 102.8 percent in January, slightly up from 102.6 percent in the same month last year and above December’s 99.1 percent, the government data showed. Refineries can operate at more than their usual capacity through technical alterations. The country’s largest refiner, Indian Oil Corp (IOC), operated its directly owned plants at 106.1 percent capacity, the data showed. Reliance Industries Ltd (RIL), owner of the world’s biggest refining complex, operated its plants at 96.1 percent capacity in January. India will be the main driver of rising demand for energy over the next two decades and is set to overtake the European Union as the world’s third-biggest energy consumer by 2030, the International Energy Agency (IEA) said.

Source: Reuters

Rates of petrol, diesel cheaper in Chhattisgarh than in other states

19 February: While there are protests in most parts of the country against the steep hike in fuel prices, in Chhattisgarh the rates of petrol and diesel are cheaper by ₹12 and ₹4 compared to its neighbouring states. The cheaper rates are due to Chief Minister Bhupesh Baghel-led government’s decision to have the Value Added Tax (VAT) rate lower than other states. Presently, the State Tax or VAT rate in Chhattisgarh is 25 percent + ₹2 per litre on petrol and 25 percent + ₹1 per litre on diesel. The petrol price in the Raipur district is ₹87.28 per litre and the diesel price is ₹85.66 per litre in the Raipur district, whereas the petrol price in the Gondia district of Maharashtra state is ₹96.07 per litre and diesel price there is ₹86.31 per litre. Likewise, in the Balaghat district of Madhya Pradesh, petrol price is ₹99.07 per litre and diesel price is ₹89.55 per litre. In the Sonbhadra district of Uttar Pradesh, petrol price is ₹87.76 per litre and diesel price is ₹84.24 per litre. In Simdega of Jharkhand, petrol price is ₹87.81 per litre and diesel price is ₹85.19 per litre. In Bargadh of Odisha state, petrol price is ₹90.64 per litre and diesel price is ₹87.34 per litre. The base price of petrol is ₹19.48 per litre, on which the Central Government imposes central excise of ₹31.98, whereas the Chhattisgarh Government imposes VAT of ₹15.11. Similarly, the base price of diesel is ₹28.66, on which the Central Government imposes central excise of ₹31.83, whereas the Chhattisgarh Government imposes only ₹16.12 as VAT.

Source: The Economic Times

Recovering petroleum demand to support OMCs profitability: Fitch

17 February: Recovering demand for petroleum products is supporting the profitability of India’s Oil Marketing Companies (OMCs), Fitch Ratings said. The ratings agency cited the sustained strength of marketing margins (MM) and recovering demand for petroleum products is supporting the profitability of OMCs against weak gross refining margins (GRM). The trend, thereby, lowers the downside risks for OMCs credit metrics, it said. However, reported GRMs dropped due to lower inventory gains and the improvement in underlying GRMs was limited by weakening product cracks and increasing crude oil prices. According to Fitch Ratings, the above long-term average MMs from FY22, which should aid GRMs in the short term, partly to recover past refinery investments and fund new investments over the medium term.

Source: The Economic Times

National: Gas

Syama Prasad Mookerjee Port and Hiranandani Group enters into an agreement to build LNG terminal

23 February: Kolkata Port Trust rechristened as Syama Prasad Mookerjee Port, has entered into an agreement with Mumbai based Hiranandani Group to build a jetty based liquefied natural gas (LNG) terminal at east Midnapur for storage and re-gasification of LNG with a maximum capacity of 5 million metric tonnes per annum (mmtpa). The proposed project entails an investment of around ₹39 bn and has an economic value of about ₹60 bn. Apart from the onshore LNG storage and regasification terminal, the project envisages the development of a 125 kilometre (km) long pipeline from Kukrahati to Itinda in Bangladesh and 225 km long pipeline from Kanaichatta to Shrirampur.

Source: The Economic Times

Essar signs MoU with IIT Dhanbad (ISM) for R&D in CBM gas exploration

18 February: Essar Oil and Gas Exploration and Production Ltd (EOGEPL), India’s leading coal seam gas producer, said it has signed a pact with IIT Dhanbad (Indian School of Mines) to jointly carry out research and development on coal bed methane (CBM) technologies. The Memorandum of Understanding (MoU) for collaboration provides for finding “an effective solution for various technological and operational challenges faced during CBM exploration and production,” the company said. EOGEPL, an investee company of Ruia-family owned Essar Global Fund Limited (EGFL), operates West Bengal’s Raniganj CBM block, producing over 1 mn standard cubic meters per day of gas. EOGEPL has already invested over ₹40 bn in the Raniganj East CBM Block towards drilling wells, setting up supply infrastructure, and laying customer pipelines to Durgapur and nearby industrial areas. Raniganj has 1.1 trillion cubic feet of certified CBM reserves. EOGEPL aims to double its reserve base in the next few years.

Source: The Economic Times

National: Coal

CIL inks pact with CRIS for sharing of coal freight data

22 February: Coal India Ltd (CIL) said it has signed a pact with the Centre for Railway Information Systems (CRIS), a wing under the railways ministry, for monitoring the movement of rakes laden with fossil fuel and coal despatch activity. The first-of-its-kind data sharing offers CIL a bouquet of benefits that help it in rationalising the entire coal supply matrix through rail mode, according to the company. Primarily, it is a handshake of freight operation information between the networks of CIL and CRIS regarding CIL’s rail movement of coal, the company said. Up to 20 February of the ongoing fiscal, CIL’s coal movement through rail mode from its own sidings, goods sheds and private washeries at 302.51 million tonnes (mt) accounted for 61 percent of the total off-take quantity.

Source: The Economic Times

India proposes single spot coal auction for all consumers, CIL to export

22 February: The government proposes to allow Coal India Ltd (CIL) to export surplus coal for the first time since its inception while clubbing all spot auctions held by the state-owned miner for various consumers for trading on one exchange. The state-run miner is likely to set up a special e-auction window for export of coal which cannot be sold in India. The coal ministry has also proposed a single auction trading platform for all coal consumers of Coal India. The government said coal prices to power and non-power CIL consumers who hold long term linkages will remain unchanged. Presently, CIL sells 20-25 percent of its coal through several exclusive auctions to power consumers, non-power consumers and coal importers. The proposal to allow CIL hold single e-auction would require change in present policy and an approval from the Union Cabinet. The government said next year CIL targets production of 740 million tonnes (mt) of coal against about 640 mt now, ensuring adequate coal availability. CIL registered 77 percent growth in e-auction sales in April-November of the ongoing fiscal, booking 68.3 mt. The government has auctioned 19 coal blocks in the first tranche of commercial coal auctions. Another 75 mines with reserves of over 38,000 mt are proposed to be offered in the current tranche of the auctions. The coal blocks do not have any end use restrictions and coal produced from the mines can be exported by the developers to other countries.

Source: The Economic Times

CII aims to create common platform for MPT and NGOs to discuss coal

19 February: The Confederation of Indian Industry (CII)’s Goa chapter met Ramesh Kumar, chairman of Mormugao Port Trust (MPT) to discuss the port’s operations and future plans, particularly cargo movement and passenger traffic. CII’s logistics panel also took stock of the coal-handling operations at MPT as part of an effort to create awareness about the need for rail, road and port connectivity in Goa. Given the turmoil and opposition to coal transportation and the South Western Railway’s track-doubling project, CII wants all stakeholders to come together to find a solution that benefits both sides, CII vice chairman Atul Jadhav said. CII also urged Kumar to identify new cargo streams for the port and to provide information on port-related issues so that the industry stakeholders can collaborate with MPT.

Source: The Economic Times

National: Power

Bihar CM pitches for ‘one nation, one rate’ policy for electricity

21 February: Bihar Chief minister (CM) Nitish Kumar pitched for ‘one nation, one rate’ policy in the power sector across the country. He said the State government spends more than ₹50 bn as subsidy to electricity users every year. Nitish said Bihar has achieved several milestones in the power sector. The state government provided electricity connection to each household across the state in October, 2018.

Source: The Economic Times

Proposed delicensing of power distribution evokes mixed reaction in Bengal

17 February: The proposed move by the Centre on delicensing power distribution business to induce competition has evoked mixed reaction. Discom (distribution company) said it will impact the small consumers adversely and benefit the bulk users. Former West Bengal State Electricity Regulatory Commission chairman R N Sen on the other hand welcomed the reform mooted by the Centre in Electricity Bill (Amendment), 2021 stating it will be pro-consumers. However, implementation methodology will be crucial for its success, he said. West Bengal government said the authorities will react after the meeting of the union power ministry with state power secretaries and top officers of the discoms where the proposed amendments to the Electricity Act 2003 will be discussed. But he expressed apprehension that the Centre may hijack the power vested on the states by the Act through the amendments. The financial losses of state-run distribution licensees jumped 83 percent to ₹613.60 bn in FY19. The delicensing of power distribution is expected to be a key reform as it aims to provide more choices to consumers by allowing other operators to run distribution companies without any restriction in a bid to induce higher efficiency in the sector.

Source: The Economic Times

National: Non-Fossil Fuels/ Climate Change Trends

Supreme Court approves setting up of waste-to-energy plant in Agra

21 February: Garbage littered on roads of the city of Taj Mahal may soon be a thing of the past. The Supreme Court has cleared the project for a state-of-the-art waste-to-energy plant in Agra — a first for a city in Uttar Pradesh — which was pending for four years. According to Agra Municipal Corp (AMC), the advanced municipal solid waste (MSW) processing plant will be built at the Kuberpur landfill site within the next 14 months. It will also produce at least 10 MW electricity by processing 500 metric tonnes of solid waste. A huge amount of legacy waste (about 6 lakh tones as per AMC records) has accumulated over a period of time at the landfill site, besides the 700-750 tonnes of mixed MSW that is dumped at the landfill site every day. Initially, it will produce at least 10 MW of electricity every day. In October 2017, a Power Purchase Agreement (PPA) was signed in Lucknow between Uttar Pradesh Power Corp Ltd (UPPCL) and Spark Bresson, a Czech company, under which UPPCL agreed to purchase electricity produced at the waste-to-energy plant it would set up in Agra.

Source: The Economic Times

Himachal focusing on hydel, solar to boost electricity access in rural areas

21 February: The Himachal government has launched a comprehensive programme to solve the power problem in far flung areas. While electricity problems in remote areas have been solved through hydel power generation, use of solar power has been encouraged in other parts of the state, which has also reduced electricity bills. After the constitution of Himurja in the state, the department has installed 89 small hydro units of 331.25 MW, which are of up to 5 MW. These small hydro units are contributing significantly in solving power problems faced by people. To ensure electricity supply, the state government has set up one kilowatt of grid solar power plants free of cost in 34 houses of Kunnu village and 40 houses of Charang village in Kinnaur district. Also, 250 watt off-grid solar power plants have been set up in the houses of 1,000 BPL families in Pangi sub-division of Chamba district to prevent problems due to breakdown. Grid connected solar power plants have also been set up in Shimla. These solar power plants have been installed on the roofs of about 66 government offices in the city, which has reduced electricity bills in government offices. Apart from this, grid connected projects of 23.25 MW have been set up on the ground, which has provided employment to youth of Himachal.

Source: The Economic Times

Delhi Metro’s ambitious goal of solar power generation

21 February: Setting an amitious goal, the Delhi Metro Rail Corp (DMRC) is planning to meet all its energy requirements from clean solar energy. Some of its solar power plants are installed at Dwarka Sector 21, Anand Vihar, Pragati Maidan, Yamuna Bank, Yamuna Bank Depot, ITO, Ajronda Depot, Bata Chowk, Escorts Mujesar and Faridabad Metro stations. These solar power plants have been installed under the Renewable Energy Supply Company (RESCO) model. Unlike a solar engineering, procurement and construction (EPC) model, wherein the consumer owns the system and invests upfront, the RESCO model is a zero-investment model. Under the RESCO model, the solar plant is owned by the RESCO developer who makes the capital investment and the consumer (in the present case, the DMRC) pays only for the electricity generated. For instance, DMRC is already sourcing power from the Rewa Ultra Mega Solar Ltd (RUMSL) in Madhya Pradesh under the RESCO model. RUMSL is a solar power plant in Rewa district in Madhya Pradesh with a total solar plant capacity of 750 MW. By the end of 2021, DMRC plans to phase out thermal electric generation resources by energy from the sun, aiming to become a zero carbon emitter. Even as of now, it saves carbon emission of 20,850 tonnes per annum. In this process, the DMRC will act as a template for India to follow and fulfil India’s binding commitment to the Paris Climate Agreement. As the scale of use of solar energy will increase, the tariff charges per unit will also go down drastically, which will lead DMRC towards achieving its goal of 100 percent electrification through solar energy.

Source: The Economic Times

L&T secures contract to build two units of Kudankulam nuclear power project

18 February: Engineering giant Larsen and Toubro (L&T) announced it has secured orders from Nuclear Power Corp of India (NPCIL) for the construction of the Main Plant Civil Works of two units of the Kudankulam nuclear power plant. The scope of the work includes the construction of reactor building, reactor auxiliary building, turbine building, diesel generator building and other safety-related structures in a duration of 64 months. The Kudankulam plant is India’s largest Light Water Reactor (LWR) of six units with a generation capacity of 1,000 MW each. L&T is currently executing similar works of Kudankulam 3 and 4 units in the same premises.

Source: The Economic Times

PM Modi to inaugurate two power projects in Kerala

18 February: Prime Minister Narendra Modi is set to inaugurate one power transmission and one solar power project in Kerala. The projects include a 320 kilovolt (kV) power transmission project in Pugalur-Thrissur and a 50 MW solar power project in Kasaragod. The 320 kV transmission project is built at a cost of ₹50.7 bn and would facilitate transfer of 2,000 MW power from the western region. According to the press release, the 50 MW solar project has been developed under the National Solar Energy Mission. It is set up over 250 acres of land spread across Paivalike, Meenja and Chippar villages of Kasaragod district, it has been built with Centre’s investment of about ₹2.8 bn.

Source: The Economic Times

India’s new net-metering limit risks stalling progress on rooftop solar target

18 February: Power ministry’s new rules that excludes rooftop solar systems above 10 kilowatts (kW) from net-metering would stall adoption of larger installations in India affecting the country’s rooftop solar target, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research. The new rules mandate net-metering for rooftop solar projects up to 10 kW and gross metering for systems with loads above 10 kW. India has a rooftop solar target of 40 GW capacity by 2022. According to the report by IEEFA and JMK Research, gross-metered consumers were compensated for the export of solar power to the grid at rates of ₹2-4 per kilowatt hour (kWh). However, current rooftop power purchase agreements signed by tier-1 developers have tariffs in the range of ₹3.5-4 per kWh. Under a net feed-in arrangement, rooftop solar power used for self-consumption is charged at the retail tariff, and surplus energy is exported to the grid after self-consumption is credited at a net feed-in tariff determined by the state.

Source: The Economic Times

Government aims to produce 40 GW power through rooftop solar in next 1.5 years: PM Modi

18 February: Prime Minister Narendra Modi said the government aims to produce 40 GW of solar power in the next one-and-a-half years through rooftop solar projects. He said that renewable energy capacity enhanced two-and-a-half times in the past six years, while solar energy capacity increased by 15 times. PM Modi said that under the PM-KUSUM scheme, farmers were becoming energy entrepreneurs and the goal was to create 30 GW solar capacity through small plants in the farmers’ fields. Referring to the production-linked incentive (PLI) scheme, the Prime Minister said that high efficiency solar PV modules were now part of the PLI scheme and the government was committed to invest ₹45 bn in it. Under the PLI Scheme, 10,000 MW capacity integrated solar PV manufacturing plants will be operationalised with an estimated investment of ₹140 bn, which would increase demand for locally produced materials. He said that this year’s Budget had shown unprecedented commitment towards investment in infrastructure and that was evident in Mission Hydrogen, domestic manufacturing of solar cells and massive capital infusion in the renewable energy sector. The government in this Budget had announced additional capital infusion of ₹10 bn in Solar Energy Corp of India and ₹15 bn in Indian Renewable Energy Development Agency.

Source: The Economic Times

Solar-based water supply project set up in Punjab’s Jalandhar

17 February: Punjab’s water supply and sanitation department has set up first-of-its-kind solar-based water supply project at Jagrawan-Muradpur and Talwara villages of the Jalandhar district. The solar-based pilot projects were commissioned at a cost of ₹67.71 lakh. Expressing gratitude towards Chief Minister Amarinder Singh for the solar-based water supply project, Jagrawan village Sarpanch Harjit Kaur said the panchayat and residents of the village felt relieved as electricity bills have come down to zero. Similarly, clean water supply has started reaching every household of Talwara and Muradpur villages. With the successful commissioning of these projects, 141 households of Jagrawan and Muradpur and 102 households of Talwara village have benefited.

Source: The Economic Times

International: Oil

Iraq decides to freeze oil prepayments deal on rising oil prices

21 February: Iraq has decided to freeze its first crude oil prepayment deal, which had aimed to boost its finances, because oil prices are rising, Oil Minister Ihsan Abdul Jabbar said. Brent crude has been trading above $60 a barrel recently. Chinese state oil trader Zhenhua Oil Corp had emerged as the frontrunner in a tender to buy Iraqi crude for five years after it submitted the “most competitive bid” in the tender held by Iraq’s state oil marketer SOMO that attracted participation from international oil companies, trading houses and Chinese and Indian refiners. OPEC (Organization of the Petroleum Exporting Countries) member Iraq was seeking a five-year prepayment starting January 2021 until December 2025 to be repaid with cargoes of its Basra crude, according to a letter sent by state oil marketer SOMO to its customers. Under the prepayment deal, the winner of the tender was to pay SOMO about $2.5 bn in return for 48 mn barrels of crude between 1 July 2021 and 30 June 2022. Iraq’s 2021 federal budget is currently under discussion in parliament and lawmakers say unresolved disagreements over Kurdish oil exports are still delaying budget’s approval.

Source: Reuters

Israel’s beaches blackened by tar after offshore oil spill

21 February: Israel is trying to find the ship responsible for an oil spill that drenched much of its Mediterranean shoreline with tar, an environmental blow that will take months or years to clean up. Thousands of volunteers gathered to remove the clumps of sticky black refuse from the pale beaches. Together with European agencies, Israel was looking as a possible source at a 11 February oil spill from a ship passing about 50 km (21 miles) from shore. Satellite images and modelling of wave movements were helping to narrow the search.

Source: Reuters

Goldman Sachs sees minimal oil price impact from Texas freeze

19 February: A deep freeze in Texas that has brought power outages and shut refineries and pipelines will have only a small and transitory impact on the global oil market, Goldman Sachs said in a note. Oil prices slid by up to 2 percent, on worries that refineries will take time to resume operations after the big freeze in the US (United States) South, creating a gap in demand, while OPEC+ supplies were expected to rise. Goldman estimates, on the demand side, industrial and shale downtime will reduce refinery gas by 50,000 barrels per day (bpd) and diesel consumption by 150,000 bpd, while blocked roads and canceled flights will limit road gasoline demand by 250,000 bpd and jet fuel demand by 60,000 bpd. Low temperatures and power outages should fuel heating demand for LPG (liquefied petroleum gas) by 80,000 bpd and for diesel powered generators by 200,000 bpd, however, it said. Since oil refineries are potentially worse prepared for uniquely cold weather than seasonal storms, that could leave risks to the downside to even more prolonged refining downtime, it said.

Source: Reuters

US shale could face weeks of depressed oil production due to cold

17 February: The US (United States) deep freeze will wreak havoc on oil and gas production for several days if not weeks, according to industry experts, as companies deal with frozen equipment and a lack of power to run operations. Texas produces more oil and natural gas than any other US state, and its operators, unlike those in North Dakota or Alaska, are not accustomed to dealing with frigid temperatures. Numerous refineries in Texas have also been shut, though weather events rarely knock substantial amounts of production offline in oil patches far from the Gulf coast. Roughly 500,000 to 1.2 mn barrels per day of the state’s crude production has been shut-in by the weather, which hit Texas with the coldest temperatures in 30 years, analysts at Rystad Energy said. The ripple effect from the cold is likely to reduce output for several weeks.

Source: Reuters

Kuwait plans to shorten oil supply deals for some Asian buyers

17 February: Kuwait Petroleum Corp (KPC) is in talks to shorten its annual supply deals with some customers in India and Japan to nine months this year to meet demand from its new refinery. The proposed change follows a decision by Iraq, OPEC (Organization of the Petroleum Exporting Countries)’s second-biggest producer, to cut its oil exports to India this year to comply with OPEC quotas just as Indian refiners ramp up output to meet a demand uplift as the world’s third-largest crude importer emerges from the COVID-19 pandemic. KPC’s 615,000 barrel per day Al-Zour refinery, the country’s fourth, is due to start operating towards the end of the year, turning the nation into one of the biggest fuel producers in the region. Indian refiners had planned to ramp up imports of Kuwaiti oil this year after Iraq cut term supplies of its Basra Light grade this year. The refiners and KPC are still negotiating volumes under the new supply deals while a Japanese refiner is in talks over the duration of its contract.

Source: Reuters

International: Gas

Black Sea Oil & Gas to begin Romania offshore gas extraction in November

23 February: Romania-based Black Sea Oil & Gas (BSOG) will begin extracting natural gas from its $600 mn offshore Romanian project in November, its chief executive officer (CEO) Mark Beacom said, but added further progress hinged on scrapping a disputed tax. BSOG, controlled by private equity firm Carlyle Group LP, has pressed ahead with its project to extract an estimated 10 billion cubic meters (bcm) of gas, believing the new centre-right government will scrap the tax before November. Meanwhile, OMV Petrom, majority-controlled by Austria’s OMV, has delayed a final investment decision on its much larger Neptun Deep offshore project. Energy Minister Virgil Popescu said he was confident parliament would amend the offshore law and remove the additional tax before the summer recess. He said OMV Petrom could start extracting gas from Neptun Deep by 2025.

Source: Reuters

‘Israel to link Leviathan gas field to Egypt LNG plants’

21 February: Israel and Egypt have agreed to build a pipeline to connect Israel’s offshore Leviathan natural gas field to liquefied natural gas (LNG) terminals in northern Egypt, Israeli Energy Minister Yuval Steinitz said. The Palestinians also said they had signed an agreement with Egypt’s energy minister, who visited Israel and the occupied West Bank, on developing a gas field off the coast of Gaza. Israel’s Leviathan field, located 130 km (80 miles) off Israel’s coast, already supplies the Israeli domestic market and exports gas to Jordan and Egypt. Leviathan’s partners have been exploring options to expand the project, including a floating LNG facility or a subsea pipeline to link up with LNG terminals in Egypt that have been idled or run at less than their potential capacity. Gaza Marine sits about 30 km (19 miles) off the Palestinian enclave’s coast and is estimated to hold over 1 trillion cubic feet of natural gas.

Source: Reuters

Venezuelan President offers natural gas to Mexico, experts question plan

19 February: Venezuelan President Nicolas Maduro said the country should propose supplying natural gas to Mexico, which experienced disruptions to its supplies from Texas, though energy experts dismissed the plan as unrealistic. Texas banned out-of-state exports this week during an unprecedented cold snap, prompting Mexico to import liquefied natural gas (LNG) under emergency conditions. Maduro did not provide further details. Venezuela does not have a liquefaction plant to convert natural gas into LNG, which would be necessary to send the gas via sea, industry experts said. Cash-strapped Venezuela, under heavy US (United States) sanctions, would struggle to finance such a project. Venezuela has vast gas reserves and could in theory export gas to neighbouring Trinidad and Tobago, which has several LNG plants, but there is currently no pipeline linking the two countries.

Source: Reuters

International: Coal

Indonesia to remove royalty payments for downstream coal

22 February: Indonesia is removing royalty payments for coal used in its downstream sector in a bid to boost its coal processing industries, a government regulation showed. The world’s top exporter of thermal coal aims to develop its coal processing industry to replace energy imports, such as refining coal to gas to reduce its liquefied petroleum gas imports, while optimising the use of its domestic coal. Companies usually pay 2 percent to 7 percent of calorific value of the coal to the central government in royalties, depending on the calorific value of the coal and if it has been mined from underground or open pit mines. The regulation took effect on 2 February. The energy ministry will issue a further regulation clarifying which coal processing activities are eligible to pay 0 percent royalties, the document showed, without giving a timeline.

Source: Reuters

International: Power

Texas power plants back online, but 325k households still in the dark

18 February: Texas Governor Greg Abbott said that all power generating plants in the state were back online but hundreds of thousands of homes remain without energy because of downed lines and other issues after a ferocious winter storm and cold snap. While welcoming the progress, other leaders in Texas warned that the state’s energy grid would remain extremely “fragile” for a few days and that the cold weather that created the problems would stick around through the weekend. Some 325,000 households still do not have power, down from 2.7 mn, and more than 13 mn Texans are seeing interruptions in their water services. Energy operators and state leaders including Abbott are facing withering criticism for the prolonged outages due to freezing temperatures that began four days ago. Abbott said he has asked state legislators to push through laws mandating that all energy generation plants in Texas “winterize” their facilities like those in colder states do in the hope that future cold snaps don’t result in electrical grid failures. Abbott lashed out at the Electric Reliability Council of Texas (ERCOT), a cooperative responsible for 90 percent of the state’s electricity, which he said had told officials before the storm that the grid was prepared for the cold weather.

Source: Reuters

International: Non-Fossil Fuels/ Climate Change Trends

Iraq seeks international investors to build 750 MW solar projects

21 February: Iraq is seeking international investors to build seven solar power plants, with a total capacity of 750 MW as it aims to develop its renewable energy potential. Keen on expanding its small power generation capacity, Iraq is in talks with some of the international companies, including French Total and “Norwegian companies” to discuss building solar projects, the oil ministry said. All the seven solar power plants to be built in the south of the country, including a largest 300 MW plant in Kerbala, the ministry said. The dilapidated national grid supplies only a few hours of power a day, leaving Iraqis to swelter in the summer months, when temperatures can top 50 degrees Celsius. Solar energy is rare in Iraq, expect for lighting on some of its main streets.

Source: Reuters

Europe needs to spend billions to meet 2030 climate target: WoodMac

18 February: Europe needs to invest billions in renewable power and storage or it will fail to meet its 2030 climate target, a report by consultancy Wood Mackenzie said. European Union leaders in December agreed to cut net greenhouse gas emissions by at least 55 percent from 1990 levels by 2030, substantially toughening an existing 40 percent target. But the Wood Mackenzie analysis found that, under current plans, Europe would reach an emission reduction cut of 46 percent compared with 1990 levels by 2030. To meet the new target the bloc needs a significant increase in renewable power capacity, such as wind and solar and electricity storage, equating to around $585 bn in investment by 2030, the report said. Technology to capture and store carbon emissions, widespread use of hydrogen as a fuel, more electric vehicles and reforms of the bloc’s emissions trading system including the introduction of a floor price on the cost of carbon emissions are also necessary, the report said. A $65 per tonne carbon price would ensure the maximum possible shift from polluting lignite power coal plants to lower emission gas-fired power plants and would spur investment in technology, the report said.

Source: Reuters

Italian energy group Eni to grow green footprint in Spain after buying three solar plants

18 February: Italian energy group Eni has agreed to buy three solar power projects in Spain from renewable energy developer X–Elio as part of plans to expand its green business. The plants have a total installed capacity of 140 MW, Eni said. Eni, which makes most of its core earnings from oil and gas, unveiled an ambitious clean-up drive of its business last year that includes hiking its renewable energy capacity to 5 GW by 2025 and more than 55 GW by 2050. X-Elio has 250 MW of renewable capacity under construction in Spain and more than 1.5 GW under development.

Source: Reuters

Denmark plans to explore setting up of wind energy hubs in India

17 February: Denmark, close on the heels of its decision to construct an artificial island in the North Sea and use it as a clean energy hub, is exploring wind energy hubs along Indian coasts. The proposal is expected to get a push at a high-level meet in near future and a Special Purpose Vehicle for the same can also be considered. When built, the Danish island will supply both clean power to homes and green hydrogen for use in shipping, aviation, industry and heavy transport. The planned island, which will be located 80 km off Denmark’s west coast, will initially be 120,000 square meters in size, bigger than 18 standard football fields. The hub will be operated by 2033 and the first phase of the project is expected to cost around $33.87 bn. Denmark, with its favorable wind speeds, was a pioneer in both onshore and offshore wind, building the world’s first offshore wind farm almost 30 years ago. Denmark gets 40 percent of its electricity from wind power. The nation is also home to the world’s largest wind turbine producer, Vesta Wind Systems and the world’s top developer of offshore wind, Orsted AS.

Source: The Economic Times

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 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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