MonitorsPublished on Jul 17, 2020
Energy News Monitor | Volume XVII; Issue 5


Monthly Oil News Commentary: June 2020


Taxing Petroleum Products

Diesel price for the first time in living memory crossing the rate of petrol in the national capital was a result of a steep hike in VAT. Diesel prices rose to their highest in 19 months and petrol to the highest since January, after oil companies raised fuel prices for the sixth time in as many days. In Delhi, the retail selling price of diesel was ₹72.81/l highest since 8 November 2018. Petrol was retailed for ₹74.57/l highest since 23 January this year. In Mumbai, petrol and diesel were retailed for ₹81.53/l and ₹71.48/l, respectively. Oil companies raised petrol and diesel prices by 57 paise and 59 paise a litre, respectively. Petrol and diesel prices have gone up by a cumulative ₹3.31 and ₹3.42/l, respectively, when oil companies started raising prices after keeping them unchanged for weeks. Crude oil prices have doubled to about $39/barrel since late April, pushing up rates for petrol and diesel in the international market with which local prices are expected to be aligned. Local fuel rates are playing a catch-up with the international price trends. For oil companies, price hikes have helped their net marketing margin turn positive. The margin on auto fuels had slid into negative territory, as local prices were frozen while international crude oil rates went up.

According to a price notification of state oil marketing companies, petrol price was unchanged after 17 consecutive increases, while diesel rates were hiked by 0.48/litre, the 18th daily increase in a row across the country. Rates differ from state to state depending on the incidence of VAT. However, diesel is costlier than petrol only in the national capital where the state government had raised local sales tax or VAT on the fuel sharply. This massive hike in VAT resulted in rates going up by ₹1.67/litre for petrol and by a record ₹7.10 for diesel on a single day. In all other cities is priced lower than petrol — the difference between the two being as high as ₹9.50/l in Pune and over ₹3.50 in most state capitals and major cities. IOC and other firms BPCL and HPCL too held the rates for volatility to end. Oil companies returned to revising rates after international markets stabilised. Diesel in Delhi is the second most costliest in the country. It costs ₹80.68/l in Rajasthan but even there the difference between diesel and petrol is ₹6.17 per litre. Petrol costs ₹86.54/l in Mumbai and diesel is priced at ₹78.22/l. In Chennai, a litre of petrol comes for ₹83.04 and diesel for ₹77.17. In Kolkata, petrol is priced at ₹81.45/litre and diesel costs ₹75.06. In Bengaluru, petrol comes for ₹82.35/l and diesel for ₹75.96. In Hyderabad, petrol is priced at ₹82.79/l and diesel at ₹78.06. Traditionally, diesel was priced ₹18-20/l lower than petrol due to lesser taxation. But over the years, the taxes have increased, narrowing the gap.

Petrol and diesel prices increased by ₹2 from 1 June, following Maharashtra government decision to hike the cess levied on the two fuels. Petrol price in the city increased to ₹78.31/l from ₹76.31. The diesel retail rate went to ₹68.21/l from ₹66.21. Besides the 26 percent and 24 percent VAT on petrol and diesel, respectively, the state government levies a cess on the fuels. The government issued a notification increasing the cess for petrol to ₹10.12/l from ₹8.12. The cess on diesel is to rise to ₹3/l from ₹1. A member of an association of petrol dealers said that after the rate changes the price of diesel in the state is higher than in neighbouring states like Karnataka. Tax collection from petrol and diesel had dipped heavily in the Covid-19 lockdown over the past few months. Diesel prices have risen over ₹12/l, which is a cause for concern for transporters who said they may be compelled to hike freight charges on transportation, which could increase the cost of essential commodities in the coming days.

The Communist Party of India members protested the petrol and diesel price hike. The fuel price was hiked nine times so far this year, the party representatives said that was when crude oil prices were falling. The central government has not passed on the benefits (of falling crude oil prices) to the people. Crude oil price was lower than that of the pre-Covid period, but the Centre was not passing the benefits onto the people. Congress demanded that petrol and diesel should be brought under the GST while attacking the government over increase in fuel prices. The party demanded that the 12 hikes in excise duty by Modi government since May 2014 on petroleum products should be withdrawn immediately until it is brought under the GST regime. The excise duty on petrol and diesel has been increased on petrol by an additional ₹23.78/l and on diesel by an additional ₹28.37/l in last six years. The Congress stated that the government has hiked taxes on petrol and diesel 12 times and has collected a whopping ₹17,800.56 bn in just the last 6 years between the financial year 2014-15 to the fiscal year 2019-20.


India, the third-biggest oil consumer, expects fuel demand to return to normal earlier than projections by the IEA and OPEC. The world’s biggest lockdown put in place on 25 March in India pummeled demand for transportation and industrial fuels by as much as 70 percent, forcing a reduction in crude processing and oil imports by refiners. The IEA and the OPEC expect India’s demand to not normalize until the end of this year. India’s energy demand is projected to grow multifold over the next decade upon emerging from the pandemic and is looking at all energy sources to meet the expanding appetite. The country would need refining capacity of 439 mtpa by 2030 and 533 mt by 2040 from about 250 mt. Expanding fuel demand is attracting oil suppliers such as Saudi Aramco to target refining deals in India. The government is offering refiner BPCL to global investors. The government, meanwhile, has deferred the deadline for submitting initial bids for the company twice to 31 July.

Due to certain relaxations by the Centre and some state governments starting last month, sales for the products improved in May as compared to April 2020. However, the improved demand for petroleum products in May 2020 resulted in higher capacity utilisation of refineries to the extent of 75-80 percent and is further being ramped up. The oil industry in general and IOC in particular came under the twin assault of drop in crude oil prices as well as demand destruction. Petroleum product sales had witnessed a demand growth of 1.9 percent in 2019-20 till February 2020. Covid-19 impacted the crude oil and product prices across the world, which saw a significant fall by 31 March 2020. To manage the crude oil inventory, planned crude import was either deferred or cancelled with mutual consent.

India’s gasoline and gasoil sales jumped sharply in May compared with April, in a recovery from historic lows after a partial easing of the lockdown imposed to curb the coronavirus pandemic, provisional sales data from state fuel retailers showed. But industry analysts expect a full-scale recovery to pre-Covid-19 consumption levels in India to be months away as the monsoon season approaches while manufacturing activities remain low and transportation demand takes a hit in some parts of the country. State-retailers’ gasoline sales in May rose by about 83 percent from April to about 1.6 mt. Sales of gasoil, which accounts for about two-fifths of the country’s overall fuel sales, rose by about 69 percent in May compared with April to 4.8 mt. However, gasoline and gasoil sales in May are still down by about 36 percent and 31 percent respectively from a year earlier, after contracting more than 50 percent in April year on year. State companies IOC, HPCL & BPCL own about 90 percent of the retail fuel outlets in India. Sales of LPG rose 13 percent in May from a year ago while jet fuel declined by 85 percent during the same period. Fitch expects India’s 2020 diesel demand to decline by 14 percent from a year ago, and sees a full-scale recovery in fuel demand in 2021-2022.

India’s gasoline and diesel demand is expected to return to pre-lockdown levels in July. Demand was recovering more quickly for gasoline than for diesel. India, the world’s third biggest oil consumer, imports about 84 percent of its oil requirements. Some 60 percent of its needs are shipped from the Middle East, with Latin America and Africa other major supplying regions. With China’s oil demand recovering to over 90 percent of levels seen before the coronavirus struck early this year, a potential consumption recovery in India – the world’s third largest crude importer – would be good news for oil-producing countries. Diesel sales by Indian state-run fuel retailers in May were down about 31 percent, while gasoline sales dropped by 36 percent. In April, the country’s gasoline sales were 60.6 percent lower, while diesel sales dropped 55.6 percent.

State-run oil companies are rushing additional fuel supplies to Ladakh and have tanked up storage depots in the northern region to meet increased demand from the defence forces, deployed in large numbers as the deadly border stand-off with China continues in the Galwan valley and Pangong Tso (lake in Ladakhi) areas of the newly-created federal territory. The oil companies have also deployed aviation bowsers in several locations, essentially for easy refuelling of helicopters being used extensively by the forces. Jet fuel stocks have also been beefed up as the air force has moved fighter aircraft to forward locations. Transporters said more than 100 tankers are leaving daily from IOC’s Jammu, Jalandhar and Sangrur storage terminals carrying diesel, jet fuel, kerosene and petrol to Kargil, Leh and other forward areas. Tankers are also being sent from HPCL’s refinery in Punjab’s Bhatinda. The oil companies had a target of moving a total of 150,000 kilolitres of liquid fuels and 3,300 tonne of LPG this year for both civilian consumption and defence forces.

J&K government’s orders on stocking up LPG sufficiently in Kashmir and asking district administration in Ganderbal, which connects the Valley with Ladakh, to vacate school buildings for forces have sparked speculation in the Union Territory, especially in the wake of the tension along the Line of Actual Control. The order said the matter was “most urgent” and directed the concerned department to stock up LPG, which can last for at least two months, owing to frequent landslides along Srinagar-Jammu national highway.


Oil India Ltd has lost production of over 7,627 mt of crude oil from 33 wells and around 10 mmscmd of natural gas from five gas wells due to blockades by protesters in two districts of Assam. Experts from the USA and Canada associated with Singapore-based M/S ALERT, firefighters, NDRF and engineers intensified efforts to douse the oil well fire in eastern Assam’s Tinsukia district, local people and various students organisations had forced Oil India to stop its operations at many drilling locations and nine work-over locations in Tinsukia and Dibrugarh districts. In the meantime, the Army has started to build a 150-metre bridge over a water body to facilitate technical works to control gas leak and oil well fire. Ongoing operation at oil well No 5 of Baghjan in Assam’s Tinsukia was suspended after floodwater inundated the area following heavy rainfall. All connecting roads to the well site have been badly hit by flood. The approach road via Talap-Daisajan-Kordoiguri-Badarkhati-Baghjan which was being repaired along with APWD is also affected by flood water in number of places. According to Oil India a recce is underway for exploring approach road to the well site.

ONGC has sold one Russian Sokol crude cargo, loading 2-8 August, at a spot premium of around $3.60/barrel to Dubai quotes to China oil through a tender. ONGC sold one Russian Sokol crude cargo, loading 18-24 July, at a small spot premium of less than 20 cents a barrel to Dubai quotes to a Korean buyer.

Disruption of global supply chains by the pandemic is delaying projects of ONGC, which may have to cut capital spending by about ₹40 bn to ₹50 bn, or about 15 percent of this fiscal year’s target. ONGC also faces another big challenge. Lower oil prices reduces cash flow and upsets the economics of some projects. Oil prices fell below $20 late April but have recovered to $40, giving ONGC a breather but they are still below its breakeven level. However, oil prices have not impacted its capex. Capex reduction would translate into lower fund requirements at ONGC this year but would also mean some projects would start production later than expected.

The government extended the last date of bidding for the 11 oil and gas blocks on offer in the fifth exploration bid round to 30 June in view of the lockdown. The fifth bid round under OALP opened in January and was to initially close on 18 March. However, the bid date was first extended to 16 April and then to 10 June. The last bid round, OALP-IV, saw just eight bids coming in for seven blocks on offer. ONGC walked away with all the seven oil and gas blocks on offer.


India’s crude oil imports in May fell 22.6 percent from a year earlier, it’s biggest drop since at least 2005, as fuel demand and refinery production was hurt by a country-wide lockdown to curb the spread of coronavirus. Crude oil imports fell to 14.61 mt it’s lowest since 2015, PPAC data showed. Oil products imports eased 0.8 percent to 3.57 mt year-on-year, while exports rose by 5.9 percent to 5.75 mt, gaining for a ninth straight month in May as slowing demand at home prompted companies to ship more oil overseas. The country has relaxed coronavirus-led restrictions in lower risk areas, which is expected to improve demand and scale up crude processing. Diesel exports, which continued to account for a major share of exports, increased by nearly 33 percent to 2.79 mt. India revised down its crude oil imports figure for April to 16.55 mt- a decline of 16 percent year-on-year, from 17.28 mt reported earlier, the data showed.


Cooking gas or LPG subsidy has fallen to zero for many customers as the net price paid by domestic users has risen 20 percent in the past year even as crude oil rates are down 40 percent. Some customers are still getting a small subsidy as the final price depends on local transportation cost. Monthly increase in the net price for subsidised consumers and the recent collapse in global rates has helped end the subsidy. With kerosene subsidy already eliminated since March, the end of the subsidy on LPG is a relief for the government at a time its revenue collection is stressed by the impact of the pandemic on the economy. The price of a subsidised 14-kg LPG cylinder in Delhi has risen from ₹497 in June last year to ₹593. The subsidy for a customer in Delhi has fallen from ₹240 to zero in the same period. However, this can change if LPG costs rise. In a year, the market price of an LPG refill is down from ₹737.5/cylinder to ₹593, primarily due to an oil price crash caused by a severe destruction of demand due to the coronavirus pandemic. LPG is derived from crude oil. In the same period, the subsidised prices have risen by ₹96/cylinder to ₹593 as state oil companies, on the directive of the government, have raised prices every month for all customers since August. The price for customers who obtained gas connection under the Ujjwala scheme rose by ₹8 in August while for others the rise was ₹29. Since then the refill rates for Ujjwala customers have also been rising but has stayed at a discount of ₹21 to other customers. Prices have risen by ₹19/cylinder since March for other customers, while Ujjwala beneficiaries have the option to get three free refills between April and June. Of the total 280 mn LPG customers in the country, about 15 mn customers do not receive subsidy and another 80 mn are Ujjwala beneficiaries. In 2019-20, the LPG subsidy amounted to ₹226.35 bn, down from ₹314.47 bn in the previous year.

The Union government has asked OMCs to go for around 100 percent digitalisation on payments for LPG by March 2021. Though a step towards Digital India, the move is likely to have an impact on more than 80.3 mn Pradhan Mantri Ujjwala Yojana consumers, majority of whom are not exposed to digital transactions. Among the three companies IOC, HPCL & BPCL has already initiated steps towards achieving this target by “asking distributors for compulsory digital transactions”. The three oil marketing companies together have 278.7 mn LPG customers, being served by 24,670 LPG distributors. OMCs sold nearly 23.1 mt packed domestic LPG during 2019–20 and 16.1 mn new domestic customers were enrolled too. HPCL dealers, however, are under greater pressure.


HPCL has pushed back the completion of a billion-dollar expansion at its southeastern Vizag refinery to at least October-November due to a labour shortage and the onset of monsoon. The refiner had initially planned to complete the ₹209.28 bn ($2.77 bn) expansion, which will nearly double the capacity of its coastal plant to 300,000 bpd, in July. India has significantly eased the lockdown but a return to pre-Covid activity will take some time as inter-state transportation remain restricted and the virus cases are still rising. The expansion includes the replacement of a smaller crude distillation unit with a new 180,000 bpd at the refinery in Andhra Pradesh.

IOC has boosted refinery run rates to nearly 83 percent of the capacity after the demand for fuel almost doubled with the easing of the coronavirus-led lockdown. The state-run refinery had cut its overall run rate by 25-30 percent in March to adjust operations due to slump in demand. It began raising throughput in May after some lockdown restrictions were eased. The company’s nine refineries saw throughput gradually being raised from about 55 percent of rated capacity at the beginning of May to about 78 percent by the month-end, and 83 percent as on date. In the case of LPG with IOC rolling out about 2.5 million cylinder refills a day, the average backlog is less than a day. IOC said with the gradual lifting in lockdown restrictions, several downstream industries in the petrochemicals sector have resumed operations from late April and product evacuation from refinery stocks has increased gradually.

IOC the country’s top refiner, is seeking to buy up to 24 mn barrels of US oil for delivery between October 2020 and March 2021 as part of its efforts to diversify supply. The move will help IOC to hedge against unpredictable pricing moves by Middle East producers. IOC is requesting 2 mn barrels of US crude per month with the option of an additional 2 mn barrels per month for discharge at the Paradip port on the east coast.

HPCL will restart a 70,000 bpd crude unit at its Vizag refinery over the weekend after a maintenance shutdown. HPCL shut the unit at the 166,000 bpd refinery in southern India last week.

In the month of May this year Assam based NRL witnessed sales drop of 7 percent in diesel and 13 percent in petrol in comparison to corresponding period last year. NRL said that the Refinery had enhanced LPG or cooking gas yield and bottling during the lockdown to ensure that people are not inconvenienced due to shortage of LPG. NRL’s LPG Bottling Plant is operating in two shifts and is also bottling imported LPG brought in by BPCL through Haldia by road for sales in northeast. NRL said that operations in Refinery have come back to the normal level since last 2 weeks with the primary process units running at 90 percent to 95 percent throughout.

Policy & Governance

India has saved ₹50 bn in foreign exchange after it capitalised on the global low oil prices to fill its underground strategic oil storage to shore up insurance against any supply or price disruption, the petroleum ministry said. While the 5.33 mt of emergency storage — enough to meet India’s oil needs for 9.5 days — was built in underground rock caverns in Mangalore and Padur in Karnataka and Visakhapatnam in Andhra Pradesh by the government, state-owned oil firms were in April asked to buy import oil when global rates fell to a two-decade low. The storages at Mangalore and Padur were half-empty and there was some space available in Vizag storage as well.

Rest of the World

Global Demand Trends

Global oil demand may have peaked in 2019 as Covid-19 has heightened the risk that behavioural changes such as working and shopping from home may be long-term trends, while renewable energy and electric cars are rapidly reducing the use of fossil fuels, Moody’s said in a research report. Recovery would take even more time for some oil-intensive activities like aviation. Transportation, including daily commuting, air travel and cruises, which account for more than half of global oil demand, will take a long time to recover as business and leisure travel will take a long time to revive, while companies adjust to a new normal where commuting is reduced. Oil demand would fall further after 2025 as emission targets in China, Europe and California require more electrification and greater internal combustion engine efficiency, it said.


A record amount of crude oil is heading from the US to China, but rather than signalling that the trade deal between the two countries is working, it serves to underscore just how far Beijing is from meeting its commitments. A total of 31.02 mn barrels of crude on 26 vessels is due to arrive in China from the US in July, according to vessel-tracking and port data. This equates to about 1 mn bpd and is more than double the previous best month of 466,000 bpd in June 2018. In the first six months of 2020, China imported just 5.55 mn barrels of US crude, or about 41,500 bpd. The Trump administration released its plan to open environmentally sensitive areas in Arctic Alaska to oil development, overturning some protections that go back decades. The plan released by the Interior Department’s Bureau of Land Management revokes an Obama-era management system for a huge swathe of federal land on the western North Slope, the National Petroleum Reserve in Alaska. The Trump plan, contained in a final environmental impact statement, opens 18.7 mn acres of the 23 mn-acre reserve to development. The Obama-ere plan in effect since 2013 allowed oil development on about half of the reserve. The new National Petroleum Reserve plan allows oil development on all of Teshekpuk Lake, the biggest lake on the North Slope, famous for its migratory bird and caribou populations. The new plan could result in up to 20 years of new oil production of up to 500,000 bpd supported by 240 miles of pipelines, 250 miles of roads and assorted drill pads and other industrial sites.

US shale producers are expected to restore roughly half a mn bpd of crude output by the end of June, according to crude buyers and analysts, amounting to a quarter of what they shut since the coronavirus pandemic cut fuel demand and hammered oil prices. Such a swift rise in US production would complicate efforts by top producers Saudi Arabia and Russia to encourage global allies to fulfill their pledges to make record production cuts. US producers cut supply by roughly 2 mn bpd. But the recovery in benchmark oil prices to around $40 a barrel makes some shale output profitable again, even though that level is unlikely to spur additional new drilling activity. Larger producers are re-opening the taps in low-cost plays in Texas, but also in expensive shale basins in North Dakota and Oklahoma. US shale oil producers are reversing production cuts as prices recover from historic lows, underscoring shale’s ability to quickly adjust to pricing and posing a challenge to OPEC as it considers extending production curbs. US producers began cutting output in March as oil prices collapsed due to a supply glut and falling demand due to the Covid-19 pandemic. US oil companies are forecast to pare their output by as much as 2 mn bpd this year, with half coming from shale fields, as prices tumbled below the cost of production. The OPEC and allies meet to consider extending an agreement to cut a record 9.7 mn bpd to offset the lost demand from the coronavirus outbreak. Analysts are easing estimates of overall US production cuts, which have ranged up to 2 mn bpd by December. Oil firms reduced planned spending on production this year by an average of a third, leading to output and job cuts across the energy sector. Consultancy Rystad Energy estimates US production will pare 1.3 mn to 1.35 mn bpd in June, down from the 1.65 mn bpd cut it had initially expected.

Energy companies evacuated 10 percent of production platforms and shut nearly 30 percent of offshore oil output, pushing gasoline prices higher, as Tropical Storm Cristobal entered the US Gulf of Mexico. Equinor ASA, BP PLC and Occidental Petroleum Corp halted production and evacuated offshore staff, while Murphy Oil Corp and Royal Dutch Shell PLC evacuated some platforms. Operators evacuated 65 offshore facilities and moved seven drill rigs out of the storm’s path. Spot Gulf Coast gasoline prices rose a half a penny as buyers acquired contracts in case the storm disrupts the market.

Occidental Petroleum Corp warned of asset writedown of up to $9 bn in the second quarter and said it would restructure some of its debt to avoid a possible default. The oil producer said it will buy back a part of its $9.12 bn outstanding senior notes due in 2021 and 2022 by issuing new high-yielding notes, while also looking to remove some covenants and events of default from the old notes. The company said it expects preliminary oil and gas production from continuing operations for the second quarter to lean toward the high-end of range of 1.3 mn – 1.4 mn boe/d.

Middle East & Africa

The value of Saudi Arabia’s oil exports dropped by 65.4 percent in April when compared to the same month a year earlier, or a fall of about $12 bn. Compared to March, total exports – including non-oil exports of goods such as chemicals and plastics – decreased by 23.5 percent, or about $3 bn. Amid a drop in demand and oil prices, in the first quarter the value of Saudi Arabia’s oil exports plunged by 21.9 percent year on year to $40 bn, corresponding to a decline of about $11 bn. According to the IMF the world’s largest oil exporter could see its economy shrink by 6.8 percent this year. The value of Saudi Arabia’s oil exports plunged by 21.9 percent year on year in the first quarter to $40 bn, corresponding to a decline of about $11 bn. Brent crude prices fell more than 60 percent in the quarter hurt by the coronavirus pandemic and an oil price war between Saudi Arabia and Russia following the collapse in March of talks on further production cuts. The decline in oil exports was the main reason behind a 20.7 percent decline in the value of overall merchandise exports in the first quarter. Saudi Arabia posted a $9 bn budget deficit in the quarter as oil revenue fell by 24 percent to $34 bn.

Iraq is reviewing oil contracts with some companies operating fields where costs are high, in order to reduce expenses while cutting production. It is in OPEC member Iraq’s interest to cooperate with the OPEC+ group to raise the market value of oil. Iraq told OPEC+ – a group comprised of the OPEC and allies – that it would start an urgent plan to cut its oil production gradually to fully comply with its quota, after the group demanded that Baghdad and other laggards adhere to a pact on output curbs. Iraq has agreed with major oil companies operating its giant southern oilfields to cut crude production further in June. Baghdad aims to improve its compliance with its output cut targets under a global deal with OPEC and its allies to reduce oil supply. Iraq has agreed with Russia’s Lukoil to start an additional cut of 50,000 bpd as of 13 June to lower production from the West Qurna 2 field to around 275,000 bpd. Lukoil cut output by 70,000 bpd in May in response to a request by Iraq’s oil ministry.

Iran plans to export oil from a port on its Gulf of Oman coast a shift that would avoid using the Strait of Hormuz shipping route that has been a focus of regional tension for decades. Iran has often threatened to block the Strait if its crude exports were shutdown by US sanctions, a move Washington has said would cross a “red line” and would demand a response. Iran aimed to export 1 mn bpd of oil by March from Bandar-e Jask, a port on Iran’s Gulf of Oman coast, just south of the Strait of Hormuz. Hit by US sanctions, Iran’s oil exports are estimated at 100,000 to 200,000 bpd, down from more than 2.5 mn bpd that Iran shipped in April 2018. The Islamic Republic’s crude production has halved to around 2 mn bpd. The Strait is a narrow channel at the mouth of the Gulf through which about a fifth of the world’s oil passes from Middle East producers to markets in Asia, Europe, North America and beyond. Iran’s oil revenues, already hit by US sanctions, have fallen further as global crude demand has tumbled due to the coronavirus crisis. Iran’s oil revenues fell to $8.9 bn in the year to March compared to $119 bn earned almost a decade earlier, in 2011. Iran could send two to three cargoes a month in regular gasoline sales to ally Venezuela, helping offload domestic oversupply but risking retaliation from. Iran has since April sent five tankers totalling about 1.5 mn barrels to the leftist government of fuel-starved Venezuela, though the shipments have done little to alleviate hours-long lines at gas stations. A net gasoline importer for decades, Iran announced self-sufficiency last year with the third phase of its newly-constructed 350,000 bpd Persian Gulf Star refinery in the port of Bandar Abbas. But the coronavirus pandemic cut demand to almost 450,000 bpd in the first quarter of 2020 from about 650,000 last of gasoline in the last quarter of 2019, but it soared to 172,000 in the first three year, according to energy consultancy FGE. Even before the virus, oversupply had reached 84,000 bpd months of this year, according to FGE.

Nigeria has launched its first licensing round for marginal oilfields in nearly 20 years despite court rulings that barred some of the fields from being auctioned. Marginal fields are smaller oil blocks that are typically developed by indigenous companies. The new licensing round is the first marginal field round since 2002, which the country hopes will boost oil output and bring in much-needed revenues from fees associated with the licences.


China’s oil demand has recovered to more than 90 percent of the levels seen before the coronavirus pandemic struck early this year, a surprisingly robust rebound that could be mirrored elsewhere in the third quarter as more countries emerge from lockdowns. While China – the world’s second-largest oil consumer – is the outlier for now, easing travel restrictions and stimulus packages aimed at resuscitating economies could accelerate global oil demand in the second half of 2020. Widespread lockdowns to contain the spread of the virus took an especially heavy toll on oil markets, wiping roughly 70 percent off global prices by mid-April and leading to huge build-ups in oil and fuel inventories worldwide. Wood Mackenzie expects China’s oil consumption in the second half to grow 2.3 percent to 13.6 mn bpd from the same period last year, driven by increased transportation and industrial use. In contrast, the IEA said in its May report that China’s demand will fall 5 percent on year to 13.2 mn bpd in the second half.  CNOOC said it had made a significant discovery in the eastern part of the South China Sea. The field, named Huizhou 26-6, was tested to produce around 2,020 barrels of oil and 15.36 mn cubic feet of gas each day. CNOOC expect Huizhou 26-6 to become the first mid-to-large sized condensate oil and gas field in the shallow water area of the Pearl River Mouth Basin.

Asia Pacific

Japan’s weaker oil demand amid the coronavirus pandemic is currently balanced by reduced supply from OPEC+ nations. The world’s largest oil exporter, Saudi Aramco, has reduced the volume of July-loading crude that it will supply to at least five buyers in Asia. That followed a deal struck by the OPEC and its allies to keep production cuts of 9.7 mn bpd in place until the end of July.

S America

Venezuelan state oil firm PDVSA has told independent gas station operators it can revoke their licences “at any time”, only weeks after it cut generous fuel subsidies and as widespread shortages take hold, a notification PDVSA sent to the operators showed. PDVSA has a monopoly over the wholesale fuel distribution market and owns almost all of the country’s 1,200 service stations, although most are operated by private companies through commercial licences. The shift is a new sign of the desperation of the government for hard currency as the Covid-19 pandemic and US sanctions have reduced Venezuela’s capacity to earn export revenue from oil shipments. Hundreds of Venezuelans queued up in miles-long lines to try to fill their cars with subsidized gasoline, a week after a new dual-price system aimed at easing an acute fuel shortage was lunched.  Under the new system motorists could purchase up to 120 liters (31.7 gallons) of gasoline at a heavily subsidized price of 5,000 bolivares (2.5 US cents) per liter, and 50 US cents per liter thereafter. Some 200 gas stations were designated to charge solely at the higher price. Fuel shortages have plagued Venezuela for years as its economy deteriorated due to a plunge in the price of crude, its main export, as well as socialist policies that many economists criticize as misguided. But the shortages grew more acute this year due to a near-complete collapse in the South American country’s 1.3 mn bpd refining network, as well as US sanctions. The new system was lunched after receiving five shipments of fuel from Iran, another US adversary whose oil sector is under sanctions by Washington. But the government has not provided details of how much arrived through the shipments.

Mexico will not join other top oil producers in extending through July output cuts aimed at propping up the price of crude. Made up of OPEC members and allies led by Russia, the group known as OPEC+ agreed in April to cut oil supply by 9.7 mn bpd in May and June to support prices. Under that deal, Mexico pledged to reduce its crude output by 100,000 bpd in May and June, after resisting pressure from other oil producers to make cuts of 400,000 bpd. The cuts had been due to taper to 7.7 mn bpd from July to December, but OPEC+ agreed to extend the production cuts until the end of July. Mexico was not in a position to make additional cuts on top of what it had agreed in April.

Brazil’s state-controlled oil company Petrobras is resuming plans to unload its remaining stake in the country’s top gas station operator, Petrobras Distribuidora SA. Both sales are part of a wider push by Petrobras to sell up to $30 bn in assets by 2024 to reduce its hefty debt load. Those plans have been slowed of late by coronavirus-related market turbulence, leading the company to scrap its debt reduction target for the year. In January, Petrobras had hired the investment banking units of Morgan Stanley, JPMorgan Chase & Co, Goldman Sachs Group Inc, Itau Unibanco Holding SA, XP Inc, Bank of America Corp and Citigroup Inc to manage the offering.


Norway’s parliament has agreed additional tax breaks for the oil industry on top of those proposed by the minority government to spur investment and protect jobs, the ruling Conservative Party said. Equinor and other companies hit by low crude prices as the Covid-19 pandemic has destroyed demand, had said the government’s plan to postpone tax payments of 100 bn crowns ($10.8 bn) was not enough.  The terms agreed by parliament will temporarily shield a greater portion of income from taxes, potentially saving jobs at oil companies and in the industry that serves them, negotiators said. Norway is western Europe’s biggest oil and natural gas producer, representing about 2 percent of global crude output. The country has also been trying to improve its reputation for sustainability. Energy companies can apply to explore for oil and gas in 36 new exploration blocks off Norway. Companies can apply for so-called awards in pre-defined areas, with results due in the first quarter of 2021.


Russia is taking a leaf out of the US shale playbook so it can ramp up oil production quickly and hang on to its share of the global market when demand finally recovers after the coronavirus pandemic. At least two state-owned banks, Sberbank and VEB, plan to lend oil firms some 400 bn roubles ($6 bn) at effectively almost zero interest rates to drill about 3,000 unfinished wells. Once oil prices recover, the wells can be finished off faster than starting from scratch so Russia can get its output back to levels reached before it agreed along with other leading producers to cut supply because of the fallout from Covid-19. US shale producers tend to drill but not complete wells when oil prices are low, rather than freezing all activity, so they can finish off the wells and quickly boost production when demand picks up. According to a geologist advising Russian oil firms the new wells would add at least 200,000 bpd to output based on average flow rates but if their assumptions about large reserves pan out the wells could boost output by 2 mn barrels.

VAT: Value Added Tax, mt: million tonnes, mn: million, bn: billion, IOC: Indian Oil Corp, BPCL: Bharat Petroleum Corp Ltd, HPCL: Hindustan Petroleum Corp Ltd, GST: Goods and Services Tax, IEA: International Energy Agency, OPEC: Organization of the Petroleum Exporting Countries, mtpa: million tonnes per annum, LPG: liquefied petroleum gas, J&K: Jammu and Kashmir, ONGC: Oil and Natural Gas Corp, OALP: Open Acreage Licensing Policy, PPAC: Petroleum Planning & Analysis Cell, kg: kilogram, OMCs: Oil Marketing Companies, bpd: barrels per day, NRL: Numaligarh Refinery Ltd, US: United States, IMF: International Monetary Fund, boe: barrels of oil equivalent, CNOOC: China National Offshore Oil Corp, Petrobras: Petroleo Brasileiro SA


Himachal first state where everyone has an LPG connection: CM

7 July. Himachal Pradesh has become the first state in the country where all households have LPG (liquefied petroleum gas) gas connections, Chief Minister (CM) Jai Ram Thakur has announced. As many as 1.36 lakh families of the state have been benefitted under the Pradhan Mantri Ujjawala Yojna, he said collecting fuelwood and cooking food on traditional gas was not only cumbersome but also had adverse effects on the health of the women as well as on environment as lakhs of trees were cut for fuelwood. Thakur said the state has become the first state in the country where cent percent households have LPG gas connections. Under the central government’s ‘Pradhan Mantri Ujjawala Yojana’, gas connections were provided free of cost to women of rural areas. The state government had launched ‘Himachal Grihini Suvidha Yojana’ to cover the left out families in the state, who were not covered under the Centre’s scheme. The CM said as many as 2,76,243 families in the state were provided free gas connections under this scheme.

Source: Livemint

Delhi petrol pump owners seek reduction of VAT on petroleum products

7 July. Petrol pump owners in the national capital urged Delhi government to reduce VAT (Value Added Tax) on petroleum products, citing lower rates in neighbouring states. The increase in VAT on diesel is resulting in heavy loss of sales at petrol pumps in Delhi and making it unviable to operate them, the Delhi Petrol Dealers Association (DPDA), which has around 400 petrol pump owners as members, said. The Delhi government had increased VAT on petrol to 30 percent from 27 percent on 5 May. For diesel, VAT has been almost doubled to 30 percent from 16.75 percent. DPDA said petrol dealers will have to resort to cost cutting for survival if VAT is not lowered. The migration of diesel sales to neighbouring states and its smuggling into the city from these states has led to a massive drop in sales, and thus revenue, DPDA said.

Source: The Economic Times

SEBI considers allowing futures trading in petrol, diesel

7 July. Markets regulator SEBI (Securities and Exchange Board of India) is looking at permitting futures trading in petrol and diesel, emphasising that there has been no disruption in commodities derivatives trading during the Covid-19 crisis. Currently, futures trading is allowed in crude oil. Petrol and diesel are, among others, the two major refinery products derived from crude oil. Earlier too, there was an industry demand to allow futures trade in these two petroleum products. SEBI had sent the proposal to the petroleum ministry.

Source: Business Standard

RIL plans to up aviation fuel stations by 50 percent

6 July. Reliance Industries Ltd (RIL) plans to increase its network of aviation fuel stations by 50 percent as it looks to capture greater market share in the business currently controlled by public sector oil retailing firms. In its latest annual report, RIL said the double-digit growth observed over 52 consecutive months might have been stalled due to the Covid-19 pandemic, but India continues to be one of the fastest growing aviation markets in the world for the fifth consecutive year. RIL, which operates the world’s largest single location oil refining complex, plans to capture this opportunity through increased presence at airports to refuel airplanes. India currently has 256 aviation fuel stations, with state-owned Indian Oil Corp (IOC) owning 119 of them. Bharat Petroleum Corp Ltd (BPCL) has 61 and Hindustan Petroleum Corp Ltd (HPCL) the remaining 44. RIL is the largest private aviation fuel retailer with 31 stations, according to the latest data from the oil ministry. In comparison, RIL’s auto fuel retailing network is very small. Out of 69,392 petrol pumps in the country, RIL operates 1,398. IOC has the highest number of outlets at 29,208, followed by HPCL with 16,557 and BPCL with 16,309 petrol pumps. RIL said it registered 9.8 percent growth in retail diesel sales and 14.7 percent in retail petrol volume as compared with 1.5 percent and 6.3 percent for industry, respectively. During financial year 2019-20, RIL registered over 10 percent growth in average outlet sales volume. On bulk diesel, RIL said it registered a volume growth of 10.8 percent, increasing market share to 8.8 percent, despite expected demand contraction and margin pressure.

Source: The Economic Times

Petroleum demand near normal levels

3 July. Consumption of petroleum products was estimated at 11.8 million tonnes (mt) in June, which is 88 percent of the level seen a year ago, indicating that economic activity was limping back towards normalcy. In June, petrol consumption is estimated to have reached 85 percent of last year’s level, while diesel was at 82 percent. The sales of petroleum products in India, the world’s third-biggest oil consuming nation, had in April fallen to the lowest since 2007, due to the nationwide lockdown, necessitated to prevent the spread of Covid-19 pandemic. At 11.8 mt of consumption, fuel demand in June was 88 percent of 13.4 mt consumption in June 2019. Petrol consumption of 2 mt in June was 85 percent of last year’s levels, while diesel at 5.5 mt was 82 percent of normal levels.

Source: The Economic Times

Petrol sales up 36 percent, diesel 20 percent in June

1 July. Sales for petrol, diesel, jet fuel and cooking gas rose a combined 16 percent in June from May as the lockdown restrictions eased in the country but were still 14 percent lower than the sales in the same month last year. The demand for diesel, which makes up 40 percent of the country’s total oil demand, was 20 percent higher in June than May, indicating increased long-haul transportation and rising economic activity. The sales, however, were still 17 percent less than in June 2019. Petrol sales soared 36 percent in June from May but were 15 percent lower than the year-ago period. Jump in consumption of petrol, mostly used by cars and bikes for shorter distances, means more people came out of their homes and drove to their workplaces in June. The demand for jet fuel is also returning, albeit slowly, with the resumption of domestic flights.

Source: The Economic Times

India-Bangladesh form LPG joint venture

1 July. Indian Oil Corp (IOC) has agreed to form an equal joint venture with Bangladesh’s Beximco LPG to set up a terminal to import liquefied petroleum gas (LPG) in Bangladesh. IOC’s Dubai unit IOC Middle East FZE and Beximco’s holding company RR Holdings Ltd, Ras Al Khaimah, UAE have signed an agreement for LPG business in Bangladesh. The joint venture intends to diversify into other downstream oil and gas businesses such as lube blending plant, LNG, petrochemicals, LPG export to north east India through pipeline between two nations and renewable energy.

Source: The Economic Times


$140 bn of fresh investment to flow in India’s gas infrastructure over 8 years

3 July. The Covid-19 outbreak has accelerated the transition in India’s energy sector with profound implications for the economy, including addition of $140 bn of new direct investments in gas over eight years, rise in the employment growth rate by up to 300 basis points and a lower current account deficit by an average $4-4.7 bn annually. The investment banking firm expects gas to account for around 10 percent of India’s primary energy supply in 2025, up from 6 percent currently, with renewables at 6 percent from the current 3.6 percent. As global oversupply has accelerated, prices for Asian gas consumers have deflated to the greatest extent. India is the biggest beneficiary as consumer prices have fallen 25 percent and remain structurally low at a time when gas infrastructure is doubling and the advent of renewables is making gas even more prominent in the fuel mix. Morgan Stanley Research said in a report that personal use of gas for cooking and travel should rise as last mile infrastructure more than doubles by 2025.

Source: The Economic Times

India to simplify gas pipeline tariff to boost demand

QuIck Comment

Simplified gas pipeline tariff will benefit the gas sector!


1 July. India is simplifying its gas pipeline tariff structure to make the fuel more affordable and to attract investment for building gas infrastructure in the country, Oil Minister Dharmendra Pradhan said. Prime Minister Narendra Modi has set a target to raise the share of gas in India’s energy mix to 15 percent from the current level of about 6.3 percent to cut its carbon footprint. Use of gas is also set to rise as India wants to push local manufacturing to cut costly imports and lift its battered economy. Pradhan said the new tariff structure would help to create a single gas market in the country by attracting investment to complete the gas grid and make it more easily accessible. He did not provide more details of the new pricing structure. Pradhan said India’s current “zonal” tariff rates for gas pipelines resulted in higher transportation charges and had hindered development of gas markets and demand centres in remote areas. India, the world’s fourth biggest importer of liquefied natural gas (LNG), is spending $60 bn to strengthen its gas infrastructure that includes expanding the pipeline network and building gas import terminals. Pradhan said new rationalised tariff would help to promote faster development of city gas project to connect households, industries and transport sectors with gas network.

Source: Reuters


Online mine plan clearance for coal blocks by August-end: Government

7 July. The government expects to roll out the online single-window clearance system for coal block plans by the end of next month, the coal ministry said. Coal Joint Secretary M Nagaraju highlighted that various regulatory approvals at state level were causing delay in development of coal mines. The government was trying to launch the single window clearance mechanism where all approvals can be granted at one place. The coal ministry has allocated around 80 mines in the last few years but only 32 of them have become operational and the remaining are still to begin operation, he said. States have more responsibility of putting to production a coal block than the Centre, he said. The government has put on auction 41 coal blocks for commercial mining.

Source: The Economic Times

India’s coal import drops 30 percent to 48.84 mt in April-June

6 July. The country’s coal imports registered a drop of 29.7 percent to 48.84 million tonnes (mt) in the April-June period of the ongoing financial year, according to industry data. India had imported 69.54 mt of coal in the April-June period of 2019-20, according to provisional compilation by mjunction. The drop in imports assumes significance in the wake of government mandating Coal India Ltd (CIL) to replace at least 100 mt of imports with domestically-produced coal in 2020-21. The country’s coal imports also dropped 22.5 percent to 15.22 mt, against 19.64 mt of coal imported in June last fiscal, it said. India is expected to save around ₹300 bn annually on import bill of thermal coal on account of commercial mining of blocks, Coal Minister Pralhad Joshi had earlier said.

Source: The Economic Times

Trade unions to mobilise people to build public opinion against commercial coal mining

6 July. Five trade unions in the coal sector have planned to mobilise people in mine areas to generate public opinion against the government’s decision to start commercial mining, after their three-day nationwide strike could not budge the Centre from its stand. The unions, including RSS-affiliated Bharatiya Mazdoor Sangh (BMS), of Coal India Ltd (CIL) have also decided to go for a day’s strike on 18 August, the last date for submitting bids for the auctioning of 41 blocks. The Centre has started the auction process for commercial mining, a move that opens the country’s coal sector for private players.

Source: The Economic Times

CIL output drops 63 percent, dispatches by nearly 60 percent on 1 day of workers strike

QuIck Comment

Reduction in coal output may inhibit power demand revival!


4 July. The production of Coal India Ltd (CIL) declined by 63 percent on the first day of three-day strike by its workers affiliated to five trade unions. The overburden removal, or clearing of top soil to make coal seams ready for mining, was 57.84 percent. CIL produced 4,81,000 tonnes of coal, which is 37 percent of the last 10 days average production (from June 22 to 1 July) of 12,96,900 tonnes. Protesting trade unions, however, had claimed that on the first day of the strike there was no production and dispatch. The coal ministry said that 37 percent of production could happen because of around 1 lakh contract workers employed by CIL. The coal dispatch by CIL on the first day of the strike was 41.14 percent at 5,78,000 tonnes, when compared to 14,05,000 tonnes of average coal dispatched in the last 10 days (from 22 June to 1 July). The overburden removal was also 58 percent of the normal removal.

Source: The Economic Times

Jharkhand moves SC against Centre’s decision to auction state’s coal blocks for commercial mining

4 July. Jharkhand government has moved the Supreme Court (SC) against the Centre’s decision to auction coal blocks situated in the state for commercial mining alleging that the announcement was made “unilaterally” without its consultation. The Jharkhand Mukti Morcha-led government has filed an original suit under Article 131 of the Constitution which provides for the state to move directly to the Supreme Court in matters of dispute with the Centre. The move came weeks after Jharkhand government had filed a separate petition in the apex court challenging the Centre’s action for virtual auction process of 41 coal blocks for commercial mining. Referring to the Fifth Schedule to the Constitution, which deals with administration and control of Scheduled Areas and Scheduled Tribes, it said that six of the nine coal blocks in Jharkhand – Chakla, Chitarpur, North Dhadu, Rajhara North, Seregarha and Urma Paharitola — which have been put up for auction fall within the Schedule Fifth areas.

Source: The Economic Times

CIL workers start strike against privatisaion in Ranchi

2 July. Workers of Coal India Ltd (CIL) started a three-day strike against the privatisation of the company. The workers raised slogans against the e-auction of coal blocks to private parties. Five labour unions are leading the strike and have halted mining and production activities across CIL’s subsidiaries in Jharkhand and seven other states. Protestors gathered outside the Central Coalfields Limited (CCL) headquarters and shouted slogans against commercial mining. According to the Akhil Bhartiya Mazdoor Sangh secretary Rajiv Ranjan, the workers are making demands against the privatisation of CIL. Earlier in May, Finance Minister Nirmala Sitharaman said the Central government will introduce competition, transparency and private sector participation in the coal sector and will do infrastructure development of ₹500 bn.

Source: The Economic Times

Aaditya, Rathod welcome scrapping of Bander coal block auction

2 July. Greens and state ministers are overjoyed with the Union Coal and Mines Minister Pralhad Joshi’s decision to scrap Bander coal blocks, near the buffer and eco-sensitive zone (ESZ) of Tadoba-Andhari Tiger Reserve (TATR), from the auction list. Bander was among 41 blocks released for auction on 18 June. The decision was vehemently opposed not only by wildlife and environment activists but also Maharashtra Environment Minister Aaditya Thackeray. State Forest Minister Sanjay Rathod said he had asked his ministry that as the proposed mines would destroy tiger corridor to several protected areas in Central India, no process should be initiated for forest land diversion under the Forest Conservation Act (FCA), 1980.

Source: The Economic Times 


Bhopal railways ‘light off’ plan to save electricity

7 July. In order to reduce consumption of electricity, DRM Bhopal has come up with an energy-saving plan. Bhopal railway station has implemented a system wherein 50 percent bulbs and tube lights will turn off when there is no train at the station. Light will turn on when any train arrives at the platform. The concept has been commissioned for platform no-1, which will help railways save electricity up to 35 percent to 40 percent. At present, the total consumption of electricity at platform no-1 is around 600 units for 12 hours.

Source: The Economic Times

Higher electricity bills due to people staying in homes, no wrong in calculations: TANGEDCO to Madras HC

​​7 July. People were getting higher electricity bills since they were spending more time in homes due to the Covid-19 lockdown, power distributor TANGEDCO (Tamil Nadu Generation and Distribution Corp Ltd) informed the Madras High Court (HC). Denying allegations in a PIL that it was using arbitrary and unjust methodology for calculating the power bills, the corporation told a bench of Justices M M Sundresh and R Hemalatha that they were following the statutory regulations. Power consumption charges were collected on a bi-monthly basis in the state and calculated based on different slabs for those who consume below 100 units, 101 to 200 units, 201 to 500 units, and above 500 units.

Source: The Economic Times

Telangana Congress demands state government to waive off electricity bills of poor for lockdown period

6 July. Telangana Congress president and Nalgonda MP N Uttam Kumar Reddy demanded that the State government waive off the electricity bills for the entire lockdown period for below poverty line families, small and medium enterprises. He demanded appropriate reduction in bill amount for the other category of consumers. He said the State government should shift to the telescopic method of billing instead of continuing with the present non-telescopic method. The electricity bills with inflated power consumption charges were served on the consumers in June. The bills were not only inflated and exorbitant but were prepared in an erroneous manner. Of the 95 lakh power consumers in Telangana, nearly 75 lakh are in the domestic category and almost 80 percent of them are poor consuming below 200 units per month, he said. He said Congress would organise protest demonstrations in Telangana with black flags and badges against the inflated electricity bills and to demand waiver of power bills for the poor, for the lockdown period.

Source: The Economic Times

Power demand slump narrows to 2.6 percent in July beginning

6 July. Power demand slump has narrowed to 2.6 percent in the beginning of July from 9.6 percent in June, showing improvement in commercial and industrial activities in the country. The peak power demand had declined by about 25 percent in April and 8.82 percent in May this year due to lower commercial and industrial demand during the Covid-19 induced lockdown. The government had imposed the lockdown from 25 March. Experts have expressed hope that power demand would reach normal levels by August this year. Unlock 2.0 is expected to bring economic activities to almost normal levels, which would be reflected in power demand data. The government had started easing the lockdown from 20 April 2020. According to power ministry data, peak power demand met was recorded at 170.54 GW on 2 July, which is just 2.61 percent lower than 175.12 GW in July 2019.

Source: The Economic Times

Electrification work at world’s ‘largest’ Covid care centre completed in record time: Discom

5 July. To ensure seamless power supply to the world’s “largest” Covid-19 care centre here in a “record time”, more than 100 workers and officials of discom (distribution company) BRPL (BSES Rajdhani Power Ltd) worked round the clock to lay 22-km-long cable underground and install 24 transformers for a load of 23 MW. The transmission chain involved laying 22-km-long cable underground and installing 24 transformers for a load of 23 MW, BRPL said. Initially, BRPL had been entrusted with providing an electricity supply load of 18 MW, but the power load was subsequently increased to 23 MW looking at the requirements, BRPL said. Also, to keep the electricity infrastructure free from waterlogging during the monsoon, four water-pumps have been installed, BRPL said. The power lines at the facility conform to the best international standards and will be remotely controlled from the Supervisory Control and Data Access (SCADA) centre in Kalkaji.

Source: The Economic Times

Bihar against electricity amendment bill: State Energy Minister

4 July. Bihar is against The Electricity (Amendment) Bill, 2020, State Energy Minister Bijendra Prasad Yadav said in the online conference of power ministers from across the country. Yadav said since power is in the concurrent list of the Constitution, the states’ consent is required before making any amendments regarding policy matters. He said Bihar is not in the favour of privatization of power distribution companies (discoms). He demanded ‘One Nation, One Tariff’ policy in the country at the earliest. He raised the issue of unavailability of prepaid smart electricity meters. Speaking on the situation during lockdown due to Covid-19 pandemic, he said electricity consumption in domestic sector was higher due to return of lakhs of migrant workers to Bihar.

Source: The Economic Times

Arunachal seeks ‘special consideration’ for its power sector under Atma Nirbhar Bharat Abhiyan

4 July. Arunachal Pradesh government has urged the Centre for “special consideration” for the state’s power sector under the Atma Nirbhar Bharat Abhiyan. Deputy Chief Minister Chowna Mein sought consideration in the implementation of system upgradation for generation, transmission and distribution of power, saying heavy rains, landslides and snowfall in the hilly state damage the power infrastructure. Mein put forward the need for adequate financial support for replacing and improving existing transmission lines, substations, transformers and other infrastructures. While welcoming the amendments proposed in the Electricity Act, 2003, Mein said the proposed amendment should not take away the rights of the state as the matter pertains to the concurrent list.

Source: The Economic Times

Maharashtra Energy Minister promises free power if Centre gives 100 bn

4 July. Maharashtra Energy Minister Nitin Raut has promised free electricity to residential consumers if central government agrees to his demand of ₹100 bn grant for Maharashtra State Electricity Distribution Company Ltd (MSEDCL). Raut demanded low interest loans for MSEDCL as it was facing liquidity crunch due to reduced collections because of the lockdown. Raut demanded one lakh subsidized solar agricultural pump sets for the state under Centre’s Kisan Urja Suraksha evam Uhaan Mahabhiyan (KUSUM).

Source: The Economic Times

Disclose purpose of electricity amendment bill, demands UP power engineers body

QuIck Comment

State protests highlights flaws in the electricity amendment bill!


3 July. A section of Uttar Pradesh (UP) power department employees said it will go on protest if the Centre moves ahead with the Electricity (amendment) Bill 2020 without hearing their concerns properly. Any attempt to place the bill in a haste in Parliament without giving adequate opportunity to concerned parties would be opposed tooth and nail, UP Power Engineers Association President V P Singh said. The government should first disclose the basic purpose of the proposed bill, he said.

Source: The Economic Times

Adani Electricity issues clarification after uproar over exorbitant electricity bills in Mumbai

2 July. After social media uproar over exorbitant electricity bills being received by Mumbaikars, AdElectricity said that the consumers will be receiving bills based on their actual consumption with applicable tariff slab benefits. Further, it assured that no electricity connection will be disconnected over non-payment of dues until the consumer’s grievances have been redressed. It said that it has prepared a video to spread awareness about the billing process among the consumers and has also provided them options to self-check their bills on the website by uploading their details and cross-verify the meter reading on the bill, consumption, and the amount payable leading to a speedy redressal to their queries. It further clarified that the bills received by the consumers contain the current reading taken, total amount payable and amendment details of March and April. It said that it has set up over 25 dedicated help desks and consumers can also reach helpline numbers. For improving the functioning in the long-run, the AEML (Adani Electricity Mumbai Ltd) shall install more than 7 lakh smart meters in the coming months.

Source: The Economic Times

Uttar Pradesh: Agencies generating faulty power bills to be booked

2 July. Uttar Pradesh (UP) Power minister Shrikant Sharma ordered registration of FIRs against agencies engaged in generation of faulty bills. Presiding over a review meeting at UP Power Corp Ltd (UPPCL), Sharma directed corporation chairman Arvind Kumar to initiate vigilance inquiries against agencies which produce faulty electricity bills. Sharma directed all managing directors of distribution companies to set accountability of the employees responsible for generation of faulty bills.  Sharma said UPPCL was still receiving complaints of power supply getting interrupted because of thunderstorms. Meanwhile, to provide relief to farmers hit by the Corona pandemic, the state power department extended the easy instalment scheme till 31 July. The scheme ended on 30 June. The scheme, started in February this year, allows farmers to pay power dues till the month of January in six instalments. Sharma said the scheme has been extended in the interest of farmers who could not avail it till now. Sharma said that four lakh farmers, mainly those with tubewell connections, have benefited from the scheme so far. He said farmers would, however, be required to pay their bills regularly from July.

Source: The Economic Times

BJP holds protests against ‘inflated’ power bills

1 July. BJP (Bharatiya Janata Party) leaders and workers held protests in Thane city against the Maharashtra State Electricity Distribution Company Ltd (MSEDCL) and a private power supplier over the “inflated” bills to consumers. The party held the agitations in front of the district collectorate and some other locations in the city. BJP’s city unit president and MLC Niranjan Davkhare, Thane MLA Sanjay Kelkar and women’s wing chief of the party’s state unit Madhavi Naik led the protest outside the collectorate. Holding banners and placards, the protesters shouted slogans against the power companies over the hefty bills. The bills should be levied as per the actual meter readings instead of average bills, he said.

Source: The Economic Times

India’s electricity output shows signs of recovery in June

1 July. India’s electricity generation recovered slightly in June, provisional government data showed, driven by increased power consumption in industrial western states. June power generation fell 9.9 percent, an analysis of daily load despatch data from federal grid operator POSOCO showed, compared with a 14.3 percent decline in May. In the second half of June, electricity generation declined 5.3 percent, compared with a 14.5 percent slide during the first fifteen days of the month. Prime Minister Narendra Modi has been citing electricity consumption to show there are “greenshoots” in the Indian economy. The recovery in power demand in the second half of June was largely led by higher consumption by industrial regions such as western states of Maharashtra and Gujarat, and Delhi in the north.

Source: Reuters 


Odisha to scale up solar power production to 1.5 GW

7 July. The Odisha Government has decided to increase solar power production capacity to 1500 MW by 2022 to promote carbon neutral green energy and meet its renewable power obligation (RPO). As of now, around 474 MW on grid solar power plants have been installed at different parts of the State through Green Energy Development Corporation of Odisha Ltd (GEDCOL) and Odisha Renewable Energy Development Agency (OREDA). GEDCOL has set up plants of 362 MW capacity through public and private investment. OREDA has installed 112 MW on-grid solar power plants and projects of 460 MW capacity are in pipeline.

Source: The New Indian Express

India’s solar capacity addition expected to come down by 15 percent to 5.5 GW in FY21: ICRA

6 July. India’s domestic solar capacity is expected to add about 5.5 GW during the financial year 2020-21 (FY21) due to the execution headwinds amid lockdown restrictions post-Covid pandemic, according to ratings agency ICRA. ICRA The ratings agency said that the domestic solar capacity addition in FY20 remained lower by 15 percent than its previous estimate of about 7.5 GW as a result of various disruptions caused by the pandemic in the fourth quarter in the fiscal year.

Source: The Economic Times

Punjab hopes to cut subsidy bill with solar power to farmers

6 July. Punjab has high expectations from the new version of Kisan Urja Suraksha Evam Uhaan Mahaabhiyan (KUSUM), which the Union government plans to launch. Authorities hope that the new initiative, under which solar power will be provided to agricultural feeders, will reduce Punjab’s agriculture subsidy bill of ₹68 bn. Under the scheme, which was initially launched in January, the government planned to offer up to 90 percent subsidy on setting up solar units to run agricultural power connections of individual farmers. Punjab government pays ₹68 bn to the Punjab State Power Corp Ltd (PSPCL) for around 14 lakh tubewell connections provided to farmers with free electricity. However, previous efforts to launch similar plans made by the state and Union government failed to generate desired response from farmers due to the high cost of solar energy.

Source: The Economic Times

IIT-Jodhpur develops process to convert bio-oil into transport fuel

6 July. IIT-Jodhpur has developed a catalytic process for converting bio-oil from organic waste into transport fuel thereby paving the way for bio-refineries. Using Rajasthani clay once again, Rakesh Kumar Sharma from the chemistry department has devised a novel catalyst concept bringing reduction in the requirement of high temperature and energy for bio-fuel production from bio waste.

Source: The Economic Times

Government working on mega plan to triple solar manufacturing capacity

4 July. The central government has proposed a major push to domestic manufacturing of renewable energy equipment in the country that would completely eliminate the need for imports, particularly from countries such as China. As part of the plan, an accelerated manufacturing plan is being operationalised that is incentivising setting up of solar cell manufacturing capacity of 4,000 MW that would allow project developers to restrict import of this product completely. Additionally, 3,000 MW of fresh solar cell capacity is being added under manufacturing linked bids for solar projects. This would incentivise power project developers planning manufacturing in India. The current capacity of solar cell manufacturing in India is about 2,500 MW. This is proposed to rise over three times in coming years. In case of solar modules as well, 7,000 MW of capacity is being added in addition to existing capacity. Power and Renewable Energy Minister R K Singh had said that under ‘Atmanirbhar Bharat’ mission, domestic manufacturing capacities would be expended at a rapid pace for meeting goals towards import substitution.

Source: The Economic Times

Power producers seek more time to install emission controlling FDG technology

4 July. An association of power producers has sought more time to install emission controlling equipment at their plants, saying various issues, including Covid-19 followed by supply disruptions from China, have posed challenges in meeting the December 2022 deadline. In a letter to the Prime Minister’s Office (PMO), the Association of Power Producers (APP) has sought another three years to complete the process. As per a government order, all thermal power plants in India have to install the flue gas de-sulphurisation (FGD) technology that reduces sulphur oxides emissions on burning of coal, in a phased manner by December 2022. In the letter, the APP has apprised the top office that under the current circumstances meeting the deadline would be a challenge as the Covid-19 outbreak has led to supply disruptions of equipment from China. Only about 20-30 percent of the emission reducing components, it said, are manufactured in India and for a major share of 70-80 percent, the country is dependent on imports from China, it said.

Source: The Economic Times

Global firms showing more interests in Indian solar space helped in competitive bidding: CRISIL

4 July. Rating agency CRISIL said absence of any formal duty on imports at the time of projects tendering and lower returns globally in the wake of Covid-19 outbreak have resulted in competitive tariff rates in the solar energy sector. According to the agency, a chance coming together of several positives has led to a new record low tariff bid in the interstate transmission system (ISTS) tranche IX auctions of the Solar Energy Corp of India (SECI). Improved interest from global firms in the Indian solar sector, especially given the environment of lower returns globally due to the Covid-19 pandemic, and absence of any formal duty on imports when the projects were tendered, resulted in the discovery of lowest tariff of ₹2.36 per unit for the Seci bids, CRISIL said.

Source: The Economic Times

NLC India, CIL sign pact to form JV to develop 5 GW solar, thermal power assets

4 July. NLC India said it has signed a pact with Coal India Ltd (CIL) to form a joint venture (JV) to develop 5,000 MW of solar and thermal power assets across the country. The equity participation in the proposed JV between CIL and NLC India will be in the ratio of 50:50, NLC India said.

Source: The Economic Times

biofuel supply chains IIT-Hyderabad uses machine learning to study

4 July. Researchers at the Indian Institute of Technology (IIT), Hyderabad have developed a method using machine learning algorithms to study supply chain network of biofuels. According to the IIT-Hyderabad team, the method considers revenue generation not only as an outcome of sale of biofuel but also in terms of carbon credits through savings on greenhouse gas emission. Employing computational methods, the researchers devised the method to understand the factors and impediments in incorporating biofuels into the fuel sector in India. This work has been spurred by the increasing need to replace fossil fuels by bio-derived fuels, which, in turn, is driven by the dwindling fossil fuel reserves all over the world, and pollution issues associated with the use of fossil fuels. IIT-H researchers said their method has shown that in the area of bio-ethanol integration into mainstream fuel use, the production cost is the highest (43 percent) followed by import (25 percent), transport (17 percent), infrastructure (15 percent) and inventory (0.43 percent) costs. The model has also shown that feed availability to the tune of at least 40 percent of the capacity is needed to meet the projected demands.

Source: The Economic Times

India needs solar modules worth 150 bn to meet annual domestic demand

3 July. India would require solar modules worth about ₹150 bn to meet its domestic demand of 10 GW per year, according to Council on Energy, Environment and Water and National Institute of Public Finance and Policy report. It said that meeting the bulk of this demand through domestic production could avoid forex outflow of ₹75 bn. It said that these imports would be hindered by the Covid-19 pandemic-led lockdown followed by supply chain disruption. It said that in the long term, domestic manufacturers could tap the international market and start supplying modules to member countries of the International Solar Alliance. India has an installed manufacturing capacity of about 3.1 GW of PV (photovoltaic) cells and 11 GW of solar modules. India had imported solar cells and modules worth $1,179.89 mn from China in the first nine months — April to December period — of the financial year 2019-20 (FY20), Power and Renewable Energy Minister R K Singh said. In FY17, FY18, and FY19 India’s solar imports from China stood at $2,817.34 mn, $3,418.96 mn, and $1,694.04 mn, respectively. The total value of solar PV cells or solar cells imports, whether or not assembled in modules or panels, stood at $1,525.8 mn for the April-December period of FY20.

Source: The Economic Times

India to add 60 GW renewable energy capacity in 5 years

3 July. India is expected to add only 60 GW of renewable energy capacity in the next 5 years, according to Bridge To India’s India Renewable Energy CEO survey report 2020. India’s utility scale solar capacity was 32.2 GW and wind capacity was 37.6 GW as on 31 March 2020. It said 58 percent of the respondents are against the idea of imposing import duty on cell and module imports. Power and Renewable Energy Minister R K Singh told the power sector that a basic customs duty on solar modules, cells and inverters will be effective starting 1 August. The survey observed that 50 percent of the respondents believe the auctions market is quite aggressive.

Source: The Economic Times

NTPC Kameng hydropower project’s 2nd 150 MW unit commercially operational

1 July. NTPC Ltd said the second 150 MW unit of its Kameng hydropower project is commercially operational. The first unit of 150 MW was made commercially operational earlier in June 2020. The remaining third unit of 150 MW of this plant is expected to be commercially operational within this fiscal year. Total capacity of the plant is 450 MW. With this, the commercial capacity of the NTPC group has reached 62,086 MW, it said.

Source: The Economic Times


Iran’s oil storage almost full as sanctions and pandemic weigh

7 July. Iran has slashed crude oil production to its lowest level in four decades as storage tanks and vessels are almost completely full due to a fall in exports and refinery run cuts caused by the coronavirus pandemic, industry data showed. Total onshore crude stocks surged to 54 mn barrels in April from 15 mn barrels in January, and swelled further to 63 mn barrels in June, according to FGE Energy. Market intelligence firm Kpler estimated Iranian average onshore crude storage for June to be around 66 million barrels. Iran’s floating storage is also filling up. Iran was estimated to be using in the region of 30 tankers to store oil – most of them supertankers, each of which can carry a maximum of 2 mn barrels of oil. Refinitiv data showed a maximum of 56.4 mn barrels were being held in floating storage by 3 July. Iran’s fleet of crude oil tankers numbers 54 vessels, data from valuations specialist VesselsValue showed. The oil ministry is trying to manage crude stocks by shutting more production. Iran’s total liquid production – including crude oil, condensate and natural gas liquids – fell from 3.1 mn barrels per day (bpd) in March to 3 mn bpd in June, according to FGE. The firm predicts the production will fall by another 100,000 bpd in July. Crude production was as low as 1.9 mn bpd in June, according to OPEC survey. That was almost half of Iran’s production in 2018, and the lowest level since 1981, the beginning of Iran’s war with Iraq and attacks on its oil facilities, according to OPEC data. Iranian exports also fell to new lows as an oversupplied market and the coronavirus pandemic made it harder for Tehran to find customers willing to take its sanctions-hit oil.

Source: Reuters

Oil prices mixed as coronavirus spike casts shadow over US demand

6 July. Oil prices offered up a mixed market snapshot, with Brent crude edging higher, supported by tighter supplies, while US (United States) benchmark WTI (West Texas Intermediate) futures dropped on concern that a spike in coronavirus cases could curb oil demand in the US. The implied volatility for Brent crude has dropped to the lowest since prices started collapsing in March as some in the market remain focused on tightening supplies as production by the Organization of the Petroleum Exporting Countries (OPEC) fell to its lowest in decades with Russian output dropped to near targeted cuts. OPEC and allies including Russia, collectively known as OPEC+, have pledged to slash production by a record 9.7 mn barrels per day (bpd) for a third month in July. After July, the cuts are due to taper to 7.7 mn bpd until December. US production, the world’s largest, is also falling. The number of operating US oil and natural gas rigs fell to an all-time low for a ninth week, although the reductions have slowed as higher oil prices prompt some producers to start drilling again.

Source: Reuters

Saudi Arabia ups August crude prices to Asia

6 July. Saudi Arabia’s state oil producer Aramco has hiked official selling prices (OSPs) for its crude to Asia by $1 a barrel in August, and raised the OSPs for almost all grades to Europe and the United States (US). Saudi Arabia has set the August price to Asia at plus $1.20 a barrel versus the Oman/Dubai average, Aramco said.

Source: Reuters

Fuel demand shock threatens future of Australia’s oil refineries

2 July. A coronavirus-driven collapse in fuel demand is threatening Australia’s oil refining industry, just as supply chain disruptions wrought by the pandemic have focused the government on the need to shore up fuel security. Already dependent on imports for more than half its fuel needs after the closure of four refineries since 2003, industry and analysts say at least one of the country’s four remaining refineries could close unless the government steps in. Pandemic lockdowns decimated demand for gasoline, jet fuel, diesel and shipping fuel, hitting refiners that only recently enjoyed a return to profitability after years in the red. As well as seeking proposals to build fuel storage, Energy Minister Angus Taylor launched talks with the industry on how to shore up the refineries, aiming to “protect Australia’s national sovereignty”.

Source: Reuters

OPEC cuts output to lowest since 1991 as coronavirus slams oil demand

2 July. OPEC (Organization of Petroleum Exporting Countries) slashed oil production to the lowest level since the Gulf War in 1991, as it escalated efforts to revive global markets just as a resurgence of the coronavirus is threatening demand again. Saudi Arabia faithfully delivered the extra curbs promised in June, and the laggards, though still trailing in implementing the cuts, stepped up their performance, according to the survey. OPEC and its partners’ record output cuts since May have helped revive the oil market, but a recent surge of Covid-19 infections in countries including the US (United States) is highlighting the fragility of the revival. The OPEC cut production by 1.93 mn barrels a day to 22.69 mn a day, according to the survey. That’s the lowest since May 1991, though membership changes since then affect the comparison. The survey is based on information from officials, ship-tracking data and estimates from consultants including Rystad Energy A/S, Rapidan Energy Group, JBC Energy GmbH and Kpler SAS.

Source: Business Standard


Buffett’s Berkshire to buy Dominion Energy gas assets for $4 bn

5 July. Berkshire Hathaway Inc said its energy unit will buy Dominion Energy Inc’s natural gas transmission and storage network for $4 bn, helping billionaire Chairman Warren Buffett reduce his conglomerate’s cash pile while letting Dominion focus on utilities operations. The transaction announced includes more than 7,700 miles (12,390 km) of natural gas transmission lines and 900 billion cubic feet of gas storage. Berkshire Hathaway Energy is buying Dominion Energy Transmission, Questar Pipeline, Carolina Gas Transmission, 50 percent of the Iroquois Gas Transmission System, and 25 percent of the Cove Point liquefied natural gas facility in Maryland.

Source: Reuters

Asian LNG prices stable as oversupply continues

3 July. Asian spot liquefied natural gas (LNG) prices were stable this week, with demand still sluggish in an oversupplied market. The average LNG price for August delivery into northeast Asia LNG-AS was estimated at around $2.20 per million metric British thermal units (mmBtu), the same level as the previous week. Some Chinese buyers were on the market and there could be gas demand for air conditioning in Japan due to hot weather, but overall, buying was subdued, industry sources said. Indian buyers were quiet as there is not much capacity in Indian ports to take more cargoes, in particular during the monsoon season, an LNG trader said. In Europe, June LNG deliveries dropped by 32 percent from volumes in May and by 5.6 percent from June 2019, Refinitiv data showed, as gas stocks in Europe move close to full capacity. Gas storage sites in Europe are on average just over 80 percent full, according to Gas Infrastrucure Europe data.

Source: Reuters

Japan’s investment drive in LNG faces risk of souring

2 July. Japan’s banks and public agencies have funnelled nearly $25 bn into liquefied natural gas (LNG) projects since 2017 but the investments may sour as prices plummet from the Covid-19 pandemic and as climate change risks rise, Global Energy Monitor (GEM) study shows. Spurred on by the government to boost energy security since the 2011 Fukushima disaster shut down the country’s reactors, Japan’s investment in LNG rivals that for coal, the dirtiest fossil fuel, while more evidence is emerging of the high climate impacts from LNG and gas. Japan is the world’s biggest importer of LNG, with burning gas from LNG producing about 40 percent of the country’s electricity, though purchases are in long-term decline. Japanese banks, public agencies and other entities have provided $23.4 bn of loans and support in 10 countries for more than 20 LNG terminals, tankers and pipelines, GEM said.

Source: Reuters


Japan to accelerate closure of old coal power plants

3 July. Japan will introduce measures to accelerate the closure of old, inefficient coal power plants by 2030, Industry Minister Hiroshi Kajiyama, said. The ministry will consider new rules, tax incentives and other measures to ensure Japan achieves its goal to lower coal’s share of the country’s power mix to 26 percent by 2030, from 32 percent, Kajiyama said.

Source: Reuters

German parliament passes coal exit bill

3 July. Germany’s Bundestag, the lower house of parliament, passed a bill on the country’s exit from coal as a power source to meet climate targets. The bill involves over €50 bn ($56 bn) for mining and power plant operators, affected regions and employees to cushion the impact of the transformation from coal to renewables. Germany will abandon nuclear energy by 2022 and coal by 2038 at the latest, and will simultaneously aim for 55 percent cuts in greenhouses gas emissions by 2030 over 1990 levels. Costs of generating power from renewable sources have become increasingly competitive, and cheap gas is pushing coal out of the fuel mix in a trend that has been enhanced by the political will to drive up the cost of carbon emission allowances.

Source: Reuters

Czech state coal miner OKD shutting all mines for 6 weeks after coronavirus outbreak

2 July. Czech state-owned hard coal mining group OKD will shut all its mining operations for six weeks as it battles an outbreak of coronavirus infections, it said. The mines, in the country’s industrial east, have been the Czech Republic’s main hot spot of new cases in the past weeks.

Source: Reuters

Most miners at Poland’s biggest coal company recover from Covid-19

1 July. Poland’s biggest coal producer, state-run PGG, said that most of its infected miners have recovered from the novel coronavirus, as the company relies on government support to see it through the crisis. Polish coal mines have struggled with the rapid spread of the virus, with the mining region in southern Poland accounting for at least half of new daily cases throughout much of May and June. The government halted output at 10 PGG mines and at 2 mines owned by coking coal producer JSW to stop the spread of the virus, with normal operations expected to resume on 3 July.

Source: Reuters


Russia temporarily halts parts of Nornickel power unit after fuel spill

3 July. Russia’s safety watchdog ordered NTEK, a power unit of mining giant Norilsk Nickel, to suspend operations at six facilities for 90 days for violating safety rules, following a fuel spill in the Arctic. The watchdog’s decision will not affect the power supply of the region, meaning production should not be affected.

Source: Reuters


EU lawmakers agree to include shipping emissions in EU carbon market

7 July. European lawmakers agreed to include international carbon emissions from the maritime sector EU (European Union) in the carbon market, targeting an industry that does not yet pay for its pollution. They also called for binding targets for shipping companies to reduce the annual average CO2 (carbon dioxide) emissions of all ships when in operation, by at least 40 percent by 2030 compared to 2018 levels, going further than an original European Commission proposal. Pollution from ships plying international waters usually escapes countries’ domestic emissions-cutting targets, but the Commission has said the sector must contribute to its trillion-euro push to achieve a “climate neutral” economy by 2050. Shipping companies are not yet included in the EU emissions trading system (ETS), which obliges factories, power plants and airlines to pay for their pollution. The environment committee of the European Parliament also called for the creation of an “Ocean Fund” from 2023 until 2030, financed by revenues from auctioning allowances under the ETS, to make ships more energy-efficient.

Source: Reuters

Court orders Dakota pipeline shut in latest blow to US fossil fuel projects

6 July. A US (United States) court ordered the shutdown of the Dakota Access oil pipeline over concerns about its potential environmental impact, a big win for the Native American tribes and green groups who fought the major pipeline’s route across a crucial water supply for years. The decision by US District Court for the District of Columbia followed the cancellation of another high-profile US pipeline project and came as a blow to the Trump administration’s efforts to lift the domestic fossil fuels industry by rolling back environmental red tape.

Source: Reuters

Bangladeshi solar-sharing start-up aims to cut power waste

3 July. A start-up that helps rural Bangladeshi owners of home solar power systems trade their surplus electricity with their neighbours won an international award for climate change innovation. Bangladesh is one of the world’s leaders in solar home systems for off-grid communities, with more than 5 mn of the systems now in place. Using an electronic unit installed alongside their solar system, owners can transfer excess energy into a local power “microgrid” created with other SOLshare users, allowing those who need more power to buy it and cutting waste. Homes that can’t afford to buy solar panels also can buy electric power through the system, which won an award for innovation in energy access from Ashden, a British charity that works to scale up climate-smart energy solutions. Bangladesh’s government, which aims to boost its use of renewable energy to 10 percent of electrical power demand by next year, said it saw SOLshare’s device as a useful part of the push.

Source: Reuters

Japan picks four more ‘promising areas’ for offshore wind power

3 July. Japan’s industry ministry said it has identified 10 areas as potentially suitable for development of offshore wind farms, four of which were designated “promising areas”, as it started a second round of the process to select operators. Japan’s offshore wind power market is expected to grow after the government enforced a law last year to enhance development of wind farms. Last year, the ministry selected four promising areas from 11 that were seen as potentially suitable for offshore wind power development. Of those four, the 21 MW Goto project in Nagasaki is leading the way, with the ministry launching a bidding process to select an operator in June, the first auction under the new law.

Source: Reuters

Polish government and industry agree to jointly develop Baltic wind power

1 July. Poland’s government signed a letter of intent with lobby groups and industry to collaborate on developing offshore wind farms in the Baltic Sea as the country seeks to reduce its reliance on coal. Poland, which generates almost 80 percent of its electricity from coal, is under European Union pressure to reduce carbon emissions and the government hopes the planned Baltic wind farms, followed by a nuclear power station, will help. Poland expects to have its first wind farm production in 2025. It sees the total offshore wind capacity at 10 GW by 2040. The Polish Wind Energy Association (PWEA) said that the construction of 10 GW of offshore wind farms will create over 60,000 jobs and add 54 bn zlotys to the economy. PGE, which is Poland’s biggest power producer, mostly from lignite, plans to build three Baltic wind farms with a total capacity of 3.5 GW. Other state-run groups are also investing, including Enea and PKN Orlen. The project is attracting foreign companies too, including Denmark’s Orsted and Spain’s Iberdrola.

Source: Reuters

China to cut or suspend subsidy for substandard waste-to-energy power plants

1 July. China will cut or suspend subsidy for waste-to-energy (WTE) power plants that violate emission standards, as part of its anti-pollution campaign, the country’s finance and environment ministries said. The move, effective 1 July, aims at improving environmental levels at WTE power plants and mitigating public discontent with stench and the risk of toxic emissions, such as dioxin. The Ministry of Ecology and Environment (MEE) had rolled out a new regulation last year, forcing waste incinerators to reveal real-time emission and temperature data to the public as well as to upload it to the environmental bureau monitoring system. The government will cut or even suspend the subsidy for the WTE power generators that are found not revealing emission data or forging the data or not reaching the standards. China has vowed to build waste incineration handling capacity of 591,400 tonnes per day by 2020. At end 2019, China had installed WTE power generation capacity of 12.02 GW and daily incineration capacity of 490,000 tonnes. According to China’s Biomass Energy Association, the country is expected to add 2.9 GW WTE power generation capacity in 2020, requiring a subsidy of about 11.1 bn yuan ($1.57 bn). However, Beijing has been striving to curtail financial supports to renewable power sources in order to ease a backlog of subsidy payment exceeding 223 bn yuan, which may shadow the development of WTE projects in the pipeline.

Source: Reuters

Abu Dhabi’s Masdar to boost its renewable capacity on new projects: CEO

1 July. Abu Dhabi Future Energy Company (Masdar) plans to boost its renewable energy capacity to 8 GW before the end of this year, as it expands globally and bids for new projects, its CEO (Chief Executive Officer) Mohamed Jameel al-Ramahi said. Masdar, a developer and operator of utility-scale renewable energy projects, is eyeing new projects in Saudi Arabia, the United States (US) as well as in eastern and central Europe and southeast Asia, Al-Ramahi said. In January 2019, Masdar announced plans to double its renewables energy capacity from 4 GW in five years with new projects in Asia and the Americas. The company has expanded its portfolio in the past years to the US and had lately announced projects in Australia, Indonesia, and Uzbekistan while completing a project in Serbia and an investment in India. Al-Ramahi said Masdar had bid for renewable projects in Saudi Arabia, which had launched a multi-billion-dollar renewables energy push.

Source: Reuters


Hydroelectric Scenario of India: State-wise Capacity & Utilisation Factor

 As on 29 February 2020

State/UT Electricity Capacity from Thermal, Hydro & Nuclear (MW) % Share Hydro
Himachal Pradesh 9809 100.0
J & K and Ladakh 3624 95.2
Punjab 6776.3 16.2
Rajasthan 11774.13 3.5
Uttar Pradesh 24843.74 2.0
Uttarakhand 4206.35 89.3
Chhattisgarh 23248 0.5
Gujarat 26213.41 7.6
Madhya Pradesh 22725 9.8
Maharashtra 32620.08 9.3
Andhra Pradesh 18135.34 8.9
Karnataka 14029.4 26.0
Kerala 2550.04 72.8
Tamil Nadu 19007.08 11.5
Telangana 9588.1 25.1
Jharkhand 4800 4.4
Odisha 11942.25 17.9
Sikkim 2169 100.0
West Bengal 15586.2 8.6
Arunachal Pradesh 815 100.0
Assam 1719.205 20.4
Nagaland 75 100.0
Manipur 141 74.5
Meghalaya 322 100.0
Mizoram 60 100.0
Note: all above figures for Hydro Projects of 25 MW and above.
Source: Lok Sabha Questions 


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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