MonitorsPublished on Oct 15, 2021
Energy News Monitor | Volume XVIII, Issue 14

Quick Notes

China and India postpone peak coal


In 2006, China overtook the USA to become the largest CO2 (carbon dioxide) emitter. As pressure mounted on China to reduce emissions, it made the following statement during the visit of the US President to China in 2014: ‘China intends to achieve the peaking of CO2 emission around 2030 and make best efforts to peak early and intends to increase the share of non-fossil fuels in primary energy consumption to around 20 percent by 2030.’  Speaking at a World Resources Institute event in June 2015, Zou Ji, Deputy Director General, National Centre for Climate Change, China, underlined the importance of the joint announcement from the world’s top two economies and emitters USA and China. He noted the significance of China’s aim to peak emissions before reaching the income level of US $20,000-25,000 per person.  Peaking emissions inevitably meant peaking coal use.

Peak coal projections

In 2014, the International Energy Agency (IEA) projected that China would remain the single largest coal consumer accounting for 51 percent of the global consumption, while India was expected to take the second place with 13 percent of the global consumption overtaking the United States in 2024. India overtook the USA as the second largest coal consumer in the world about a decade earlier in 2015. British Petroleum’s (BP) projections which reflected its ‘most likely’ scenario expected China’s coal demand growth to decelerate rapidly from 1.3 billion tonnes (6.1 percent a year) in 2005-15 to just 19.5 million tonnes (MT) (0.1 percent a year) in 2025-35.

BP expected China’s coal demand to peak around 2030 and for it to decline at 0.1 percent a year from then on.  Both the IEA and BP gave credit to structural changes and policy measures such as China’s move from a manufacturing and industry driven economy to a service and domestic demand-driven economy along with efficiency improvements and stringent environmental policy for the rapid fall of coal demand in China. A report by Bernstein argued that China will stop importing coal by 2015 and that China’s coal demand will start declining by 2016. China imported 197.69 MT of coal in the first eight months of 2021 according to Reuters data. Though growth in coal demand from India was expected to continue well past 2030, India’s growth (in demand for coal) was not expected to be comparable in scale to the demand growth from China in the previous two decades.

Reports from climate-focused institutions were far more optimistic on peak coal in China. The March 2015 report of the climate action tracker (CAT) celebrated the ‘coal crash’ in the US and argued that the decline in demand for coal in Organisation for Economic Co-operation and Development (OECD) countries will not be made up by China and India. It pointed out that the price of seaborne thermal coal had weakened and much of exported production (mainly to China and India) would not cover costs and that the future price of coal was unlikely to show much improvement. Coal is currently (October 2021) trading at over US$260/tonne, an increase of over 375 percent compared to price in November 2020. The CAT analysis also pointed out that China’s coal consumption fell for the first time in 14 years by 2.9 percent in 2014 and predicted that China’s coal consumption would peak before 2020.

The Economist in its issue for March 2015 noted that China’s coal consumption decreased by 1.6 percent in 2014, despite economic growth of 7.3 percent. It observed that though the coal industry has capabilities to cope with cycles in the coal business, the slowdown in 2014 was a structural shift driven by (1) China following the western world in beginning to phase out coal (2) India increasingly producing its own coal and (3) gas displacing coal in most other coal consuming countries.

Current trends

China is the only major economy where coal demand increased in 2020. China’s 2020 coal consumption reached a new high of 2,829 MT of coal equivalent, exceeding what was thought to be the previous peak in 2014 and contradicting many expert predictions that China’s economic growth had already decoupled from coal consumption.  Strong economic growth is driving electricity demand in 2021, while post-pandemic stimulus measures are boosting production of steel, cement, and other coal-intensive industrial products. The IEA expects coal demand in China to increase by more than 4 percent in 2021, keeping demand well above the 2014 peak and reaching the highest ever levels for China.

The Chinese coal power fleet (including combined heat and power, or CHP, plants) represent around one-third of global coal consumption. From late 2020 through to early 2021, coal’s share in the Chinese generation mix bounced back from record lows earlier in 2020. The rebound was bolstered by reduced hydropower availability in the dry winter period and rapidly growing demand. Since November 2020, coal’s share in power generation in China has increased, remaining above 64 percent until April 2021. Over the first four months of 2021, the share was 66.5 percent, higher than in the same periods in 2019 and 2020. Considering China’s recent pledge to achieve net-zero emissions by 2060, this seasonal shift back to coal highlights the challenge China faces, at least in the short to medium term, in reducing coal-fired generation even as electricity demand grows strongly.

In India, April 2020 marked the lowest point of coal consumption in many years as a significant economic slowdown in the second half of 2019 was followed by COVID lockdowns. The economic recovery since then led to a continuous rebound of coal consumption, with a 6 percent increase in the fourth quarter of 2020. Higher coal demand was also driven by a decline in generation from hydro, following 2019’s exceptionally high output. Coal consumption is demonstrating a strong economic rebound in 2021, driving up coal demand by almost 9 percent, which is 1.4 percent above 2019 levels.

In early 2021, coal-fired generation in India reached a monthly share of 79 percent in the mix, the highest level since early 2019, as demand growth was met by coal-fired generation as availability of hydropower and wind was low. Generation of electricity in India in the first quarter of 2021 was around 10 percent higher than in the same period in 2019. In January and February, it was 5 percent higher than in the same period in 2020, before COVID-19 restrictions started.

China and India are not exceptions to the trend of coal resurgence.  Coal consumption is surging in gas-abundant United States and in gas-importing Europe. In both these mature energy markets, increase in the price of natural gas has forced some power generators to shift to coal driving up the price of coal. However, coal remained the cheaper option—including high carbon prices in Europe—given the phenomenal increase in the price of natural gas.

According to projections by the IEA, fossil fuel-based electricity is set to cover 45 percent of additional demand in 2021 and 40 percent in 2022. Coal-fired electricity generation, after declining by 4.6 percent in 2020, is expected to increase by almost 5 percent in 2021 to exceed pre-pandemic levels and grow by a further 3 percent in 2022 possibly setting an all-time high record. This indicates a discrepancy between current market trends and stated medium- and long-term climate protection targets.


The threat to energy security pushed global energy markets towards despised fossil fuels. Both highly controlled markets (as in India and China) and lightly regulated but decontrolled markets (Europe and the USA) were not capable of adapting to sudden surges in demand and decline in supply (renewable) without the aid of firm capacity from fossil fuels.  This may be a transient phenomenon, but it raises some issues for India as it has embarked on deregulation of the electricity market in parallel with decarbonisation of supply.  Achieving the perfect balance between maintaining enough electricity generating capacity to meet peak demand while not paying for idle power capacity is a complex problem for India’s power system. Too much capacity will add unnecessary cost and too little will risk blackouts. In the context of cost recovery, a problem unique to India is how costs for capacity will be recovered when current tariff is insufficient to recover cost of energy supply. Developments in advanced energy markets offer India a preview on the challenges in balancing the demand for energy security and the need for climate protection.

Source: BP statistical review of world energy

Monthly News Commentary: Natural Gas

Domestic Gas Production inches up



Helped by new output from KG-D6 fields of Reliance-BP, India’s domestic gas production, which had been falling for more than a decade because of declining output from legacy fields, now looks in rude health, according to energy consultancy Wood Mackenzie. Reliance Industries Ltd (RIL) and its partner BP Plc of UK in December last year started putting the second wave of gas discoveries in eastern offshore KG-D6 block to production with R-Series started flowing gas. In April they started output from the Satellite Cluster fields. This helped raise India’s gas production by almost 20 percent. As per the consultancy in 2020, LNG (liquefied natural gas) demand increased by around 14 percent to reach 25.7 million tonnes (mt), with India climbing the ranks of the world’s most important LNG markets. Last year’s low traded LNG prices saw India import over 9 mt of spot LNG as the country’s price-sensitive buyers came in from the cold. With the KG-D6 deepwater projects ramping up and new output from onshore blocks in Rajasthan of Vedanta and coal bed methane projects, India’s gas producers are reversing years of decline. Supporting this has been changes in government policy across gas pricing, marketing, and pipeline tariffs. The rising availability of competitively priced domestic gas is injecting fresh life into India’s gas market. But beyond the projects of Reliance-BP, ONGC and Vedanta, India’s pipeline of pre-FID (final investment decision) domestic gas supply is perilously thin. The consultancy is of the view that LNG demand, is expected to grow by around 5 percent annually between 2024-2030, reaching almost 37 million tonnes per annum (mtpa).

Vedanta had made a natural gas discovery in a block in Gujarat. It had won in the open acreage licensing policy (OALP) round. The approval of the management committee has also been sought. The block was awarded to the company in October 2018 and is one of the 41 areas awarded to it in OALP-I round of bidding.


India will boost LNG imports from next year as private firm Swan Energy starts its floating terminal, raising the country’s capacity to ship the super chilled fuel by 12 percent to 47.5 mtpa. New demand for LNG from India is expected to support Asian gas prices which rose to record highs earlier this year, partly aided by the transition from coal or oil to gas in developing countries. The 5-mtpa floating storage and regasification unit (FSRU), located at Jafrabad in western Gujarat, will be commissioned in April. India, the world’s fourth largest LNG importer, wants to raise the share of natural gas in its energy mix to 15 percent by 2030, from the current 6.2 percent to cut emissions.  Swan is setting up a jetty and will build more tanks to eventually double the LNG import capacity. IOC and Bharat Petroleum Corp Ltd (BPCL), and exploration firm Oil and Natural Gas Corp (ONGC) have leased 1 mtpa capacity each at Swan’s terminal. ONGC earlier this year invited bids from potential suppliers for regular participation in its spot LNG buy tenders.

Indian Oil Corp (IOC) is expanding its joint venture (JV) with Malaysia’s state-run Petronas to include building LNG terminals, fuel retailing and gas distribution. IOC imports some liquefied petroleum gas (LPG) through IndianOil Petronas Pvt Ltd, its equal joint venture with the Malaysian firm. IOC is investing INR1 trillion (US$13.49 billion) to raise its refining capacity by 25 mt a year in next 2-5 year.


Indraprastha Gas Ltd (IGL), the sole supplier of natural gas in the National Capital Region (NCR), has raised CNG (compressed natural gas) price by 90 paise to INR45.20/kg and PNG (piped natural gas) price by INR1.25 to INR30.91 per standard cubic meter (SCM), stretching household budgets already bearing the burden of high petrol and diesel prices. As per the company prices have been raised to cover the increase in input costs. The company has been forced to service CNG and PNG consumers with imported gas, which costs eight times more than domestic gas, because of rising demand. After the revision, CNG costs INR50.90 per kg and PNG INR30.86 per SCM in Noida, Greater Noida and Ghaziabad. In Gurgaon, PNG costs INR 29.10 per SCM. In Kaithal, CNG costs INR52.30 per kg. In Karnal, CNG costs INR52.30 per kg and PNG INR 29.71 per SCM. In Muzzaffarnagar, Meerut and Shamli, CNG sells for INR 58.15 per kg and PNG INR 33.92 per SCM.

The city gas distribution (CGD) company Gujarat Gas Limited (GGL) has raised the compressed natural gas (CNG) price across its authorized geographical areas within and outside Gujarat. GGL has also hiked the price of industrial PNG supplied to the ceramic and sanitary ware units in Morbi and Surendranagar. However, the company has kept unchanged the price of natural gas supplied to its residential consumers. According to GGL, the CNG price has been increased to INR 54.45/kg (inclusive of taxes and duties) in Gujarat, which shows a rise of INR 2/kg over its previous tariff of INR 52.45/kg. The new price is effective from 24 August. The company serves about 7 lakh CNG consumers through its network of around 450 CNG stations in Gujarat. Meanwhile, GGL also hiked industrial PNG prices to INR 37.51 per SCM for ceramic and sanitary ware units in Morbi and Surendranagar. Gujarat Gas provides 6.5 million metric standard cubic meter per day (mmscmd) to ceramic and sanitary ware units in Morbi and Surendranagar.

Gas Transport

Agartala, Gas leak from a pipeline of the ONGC at Dhananjoynagar in South Tripura district triggered panic. Locals saw in the morning that gas was gushing out of the pipeline. A team of technical experts from ONGC was rushed to the spot and the leakage was plugged, bringing the situation under control.

Policy & Governance

Goa Chamber of Commerce and Industry (GCCI) has written to Chief Minister (CM) of Goa asking for Value Added Tax (VAT) on PNG for industrial use to be reduced from 12.5 percent to 3 percent. As per the GCCI the rate of VAT on natural gas in Goa is more than four times that levied in Maharashtra, and double the rate of other states such as Gujarat and Haryana. The chamber is of the view that the sharp difference between the VAT levied in Goa and in the neighbouring states will put Goa’s industrial units at a disadvantage. It has also called for the inclusion of natural gas under the goods and services tax (GST) regime. GSPCB (Goa State Pollution Control Board) has recommended CNG and LNG as alternatives, but unlike furnace oil and petcoke, which are taxed under the GST regime, natural gas and CNG are taxed under VAT. Since there is no VAT credit available on PNG, it would have a cascading effect on the final cost to consumers as well as make the products less competitive against those from other states. Gujarat and Haryana charge 6 percent VAT on natural gas while Maharashtra levies a rate of 3 percent on natural gas for industrial use.

Rest of the World


Energy prices for millions of Britons are expected to rocket from October as the energy regulator Ofgem (Office of Gas and Electricity Markets) would increase its cap on the most widely used tariffs by about 12-13 percent, due to soaring global gas prices. A cap on electricity and gas bills came into effect in January 2019 and was aimed at ending “rip-off” prices charged by energy companies. According to Ofgem, the rise was driven by a 50 percent increase in wholesale energy costs over the last six months. Ofgem calculates the cap using a formula that includes wholesale gas prices, energy suppliers’ network costs and costs of government policies such as renewable power subsidies. The cap is updated twice a year. Since the previous cap update announced in February many British wholesale gas contract prices have doubled. Gas prices have soared globally this year owing to factors including low stock levels, outages at gas plants and gas fields curbing domestic supply and imports from Norway while a buying spree in Asia has led to fewer international deliveries of LNG. The regulator is of the view that with wholesale energy prices accounting for about 40 percent of an average dual-fuel (gas and electricity) bill, there was no option but to make a significant increase to the cap. The price cap was originally due to end in 2023, but the government said last month that it would prepare legislation to allow it to continue beyond this date.


Exxon Mobil Corp has begun marketing US (United States) shale gas properties as it ramps up a long-stalled program that aims to raise billions of dollars to shed unwanted assets and reduce debt taken on last year. Three years ago, the top US oil producer set a goal of raising US $15 billion (bn) from sales by December 2021. More recently, it promised to accelerate lagging sales to whittle a record US$70 bn debt pile.  The company’s XTO Energy shale unit is seeking buyers for almost 5,000 natural gas wells in the Fayetteville Shale in Arkansas. The assets are amongst gas projects with declining production and market value Exxon is selling as it focuses on newer ventures in Guyana, offshore Brazil and Texas’s Permian Basin. Exxon acquired the Fayetteville assets in 2010 for US $650 million (mn) during a shale boom that would change the US energy landscape, leading to an oversupply of gas that pushed prices to record lows and last year. This led Exxon to reduce the value of its US oil and gas holdings by US $17.1 bn.

Russia & the Far East

According to Russia, there are only 15 kilometres (km) left to finish the Nord Stream 2 gas pipeline from Russia to Germany that bypasses Ukraine. The US$11 bn project doubling the capacity of the first Nord Stream pipeline to 110 billion cubic metres (BCM) a year has been a focal point of tensions between Moscow and the West. Despite US sanctions, Nord Stream 2 is almost complete and the key question is how Russia will ship its gas to Europe once a current transit deal between Kyiv and Moscow expires in 2024. After two countries meeting (German and Russia), Russia planned to fully comply with its obligations on gas transit via Ukraine. Moscow was ready to send gas via its neighbour even after 2024, but it needed to understand the scale of demand for its fossil fuel first. The European gas market is eagerly awaiting Russian flows via Nord Stream 2 as European gas prices have reached record highs due to low supplies.


China’s Sinopec Corp has completed adding two new tanks for LNG at its receiving terminal in the eastern province of Shandong, two months ahead of the winter heating season starting mid-October. The tanks, each sized 160,000 cubic meters, were ready for use this month since construction began in November of 2018, bringing the terminal’s annual handling capacity to 7 mt, or equivalent to 9.6 BCM a year. This would be 17 percent more than its current annual capacity of 6 mt. The state oil and gas major is also aiming to double the Qingdao terminal’s capacity to 14 mt annually by end of 2023, making it the largest in the country by then.

China’s national oil and gas pipeline operator, PipeChina, had begun construction on a 1.26 bn yuan (US$154 mn) natural gas pipe project that will supply Zhangjiakou, one of the venues for the 2022 Winter Olympics. Beijing will be the official host of the Games, taking place in February. The gas pipeline project will feature six branch lines of a major Shaanxi-Beijing trunkline that will each run 173.7 km to Zhangjiakou.

Rest of Asia-Pacific

According to Mitsubishi Corp and other Japanese firms, an Indonesian regulator has approved their plan to develop the new Ubadari gas field and raise output at the existing Vorwata gas field using carbon capture utilisation and storage (CCUS). SKK Migas—Indonesia’s upstream oil and gas regulator – has approved the plan of development (POD) for Ubadari field and Vorwata CCUS at BP’s Tangguh LNG project in Papua Barat, Indonesia. The new development has an estimated potential additional recovery of 1.3 trillion cubic feet (Tcf) of gas in total from new Ubadari field and enhanced Vorwata field. The Tangguh LNG Project currently produces 1.4 billion cubic feet (Bcf) per day of gas through two LNG trains and will reach 2.1 Bcf per day once Train 3—currently under construction—is online.

The Papua New Guinea government and US oil major Exxon Mobil Corp plan to resume talks on the P’nyang natural gas project, nearly two years after their negotiations halted. The government has been pressing for better returns for the impoverished country than it obtained in the original PNG LNG agreement in 2008. The talks are focused on developing the P’nyang gas field. Exxon and its partners, including Oil Search Ltd, had intended to develop P’nyang to feed a new processing unit, or train, at the two train PNG LNG plant. However, since the talks collapsed, the thinking has moved toward developing P’nyang further down the track to feed the existing trains as the current gas sources dry up, rather than expanding PNG LNG.

Bangladesh has announced to have discovered a new gas field containing a probable reserve of about 68 Bcf worth over US$148 mn. The Bangladesh Petroleum Exploration Company (BAPEX) made the discovery in Sylhet region, some 240 kms northeast of Dhak. According to BAPEX, they plan to launch a 3D survey soon to assess the real position as they expect to extract up to 13 years at 10 million cubic feet per day (Mcf/d) from the virgin field. The field was primarily discovered in June but preferred to make the announcement public after assessing its probable reserve and extraction prospects. Bangladesh previously discovered 27 gas fields, with the latest one being in the southwestern coastal district of Bhola in October 2017, the biggest one so far, having hundreds of billions of cubic feet reserves. Currently, 20 gas fields are operational in Bangladesh with the supply of 2,300 Mcf/d against a national demand of 3,500 Mcf/d, a situation that prompted the government to import 600-800 Mcf/d LNG. As per the Bangladesh Oil, Gas and Mineral Corporation, previously discovered 27 gas fields contained a cumulative original recoverable gas reserve of around 28 Tcf.

News Highlights: 1 – 7 September 2021

National: Oil

India’s ATF demand faces rough patch amidst 3rd wave fears: S&P Global Platts

4 September: India’s aviation turbine fuel demand is expected to remain subdued in the near-term as fears of a third wave of COVID-19 infections lurk in the country ahead of the upcoming festival season, S&P Global Platts Analytics said. Industry sources anticipate jet fuel prices to be weighed by fresh movement restrictions if cases soar. S&P said while domestic travel has picked up in recent months, a potential spike in cases could derail this recovery. Jet fuel production extended further declines in July as refineries capped production of aviation fuels on underwhelming jet fuel demand. The production fell 10.39 percent month-on-month to 604,000 tonnes. This marked the fourth consecutive decline since March with production last seen lower in October when it was 548,000 tonnes. Still, August data showed signs of improvement. Based on preliminary data from state-owned refiners, sales of jet fuel increased by nearly 20 percent month-on-month in August. Platts Analytics expects India’s kerosene/jet fuel demand to rebound by 8 percent in 2021 but the demand will still be 40 percent below 2019 levels.

Source: The Economic Times

Youth Congress protests against hike in LPG cylinder price in Jaipur

3 September: Youth Congress workers protested against hike in price of LPG (liquefied petroleum gas) cylinders by the Centre at the Collectorate Circle. A march was taken out from the Youth Congress office to the Collectorate Circle raising slogans against the continuous hike of LPG gas cylinders denting the family budgets. Youth Congress General Secretary Dushyant Raj Singh Chundawat and Ayush Bhardwaj have alleged that the price of LPG has been increased by INR294 in 13 months. On 1 July 2020, in Jaipur, where LPG cylinder was available for INR594.50, its price has increased by INR294 in just 13 months, the direct effect of such increase is on the common man. The rate of 14.2 kg domestic gas cylinder has been increased by INR25 costing it now INR889 while the rate of commercial 19 kg gas cylinder has also been increased by INR75 price touching INR1715. Apart from this, subsidies have also been removed on domestic gas cylinders.

Source: The Economic Times

India’s gasoline demand seen hitting record as COVID-19 curbs ease

2 September: India’s gasoline demand is set to hit a record this fiscal year, with consumption accelerating as more people hit the road for business and leisure travel after easing of COVID-19 curbs. The stronger-than-expected gasoline consumption growth could prompt Indian refiners to import the fuel or boost gasoil exports in coming months. Indian refineries are traditionally configured to maximise production of diesel, where demand is still below pre-COVID levels, hurt by an uneven economic recovery. The expected rise in India’s gasoline imports could support Asian refiners’ margins for the fuel. The country, which has a refining surplus, has shunned gasoline imports since May and raised gasoil exports by a fifth in July from April, government data showed. Sluggish diesel demand has forced some refiners to cut crude oil processing as their fuel storage were full. That reduced India’s July crude oil imports to their lowest in a year. Changes in India’s fuel demand patterns are crucial for global oil markets as Asia’s third-largest economy is seen as the main driver of rising demand for energy over the next two decades, the International Energy Agency said.

Source: The Economic Times

LPG cylinder prices hiked second time in 15 days

1 September: A cylinder of non-subsidised LPG (liquefied petroleum gas) is now INR25 more expensive. The price of LPG was recently hiked by oil companies. A 14.2 kg cylinder of domestic non-subsidised cooking gas is now at INR884.5 in the national capital and in Mumbai. This is the third consecutive month where prices have risen. The price of an LPG cylinder varies in each state due to state taxes. The prices of commercial LPG have also risen. The price of a 19-kg commercial cylinder in Delhi went up by INR75 to INR1,693. There has been a constant rise in the number of LPG users. As of 1 July 2021, there are 291.1 mn active domestic LPG consumers, including those that avail the Pradhan Mantri Ujjwala Yojana. In 2018-19, the country had 265.4 mn customers.

Source: The Economic Times

ONGC pumps first gas from U1B deep-water well in KG basin

1 September: Oil and Natural Gas Corp (ONGC) has pumped first gas from its deep-water U1B well in Krishna Godavari block KG-D5 in the Bay of Bengal. The well, in KG-DWN 98/2 Block’s Cluster-2, has an estimated peak production of 1.2 million cubic meters per day of gas, the company said. ONGC’s KG-DWN-98/2 or KG-D5 block, which sits next to Reliance Industries’ KG-D6 block in the KG basin, has a number of discoveries that have been clubbed into clusters. The discoveries in the block are divided into three clusters- Cluster-1, 2 and 3. Cluster 2 is being put to production first. The Cluster 2 field is divided into two blocks namely 2A and 2B, which are expected to produce 23.52 million metric tonne of oil and 50.70 billion cubic meters (bcm) of gas. The firm is investing US$5.07 billion in developing the oil and gas discoveries in the block. It will cumulatively produce around 25 million tonne of oil and 45 billion cubic meters of gas with a peak production of 78,000 barrels per day of oil and 15 million standard cubic meters per day.

Source: The Economic Times

National: Gas

Petronet looks to make foray into petrochemical business, plans LNG terminal in Odisha

3 September: Petronet LNG Ltd, India’s largest gas importer, plans to set up a petrochemical complex at Dahej in Gujarat as it looks to make a foray into high margin business to hedge gas trading risks, Oil Secretary Tarun Kapoor said. Petronet, which owns and operates to terminals at Dahej and Kochi in Kerala for import of super-cooled gas in ships, is also looking at setting up a floating terminal at Gopalpur port in Odisha, Kapoor, who is also chairman of the company, said. After establishing a presence in the southern and western parts of the country, Petronet is now planning to set up a floating LNG terminal at Gopalpur port in Odisha with a view to establishing its presence on the eastern coast of India, he said.

Source: The Economic Times

National: Coal

Coal India supply exceeds pre-COVID levels even as utilities face fuel shortage

3 September: Coal India Ltd said the miner’s supplies to coal-fired utilities were higher than before the pandemic, even as many power plants are on the verge of running out of coal. The world’s largest coal miner supplied about 206 million tonnes (mt) of coal to utilities from April to August, 27 percent higher compared with the same period last year and up 8 percent compared with April-August 2019, it said. India is the second-largest importer of coal despite having the world’s fourth-largest reserves, and coal powers nearly three-fourths of the country’s electricity demand. The government has urged utilities to import coal as coal-fired electricity generation surged in Asia’s third-largest economy after an easing of coronavirus-related curbs, with several power plants on the verge of running out of fuel. Coal shortages occur periodically in India, with the last such shortage occurring in 2017.

Source: The Economic Times

National: Power

Government order to link 33 kV sub-stations with power grid an attempt towards privatisation: AIPEF

6 September: The All India Power Engineers’ Federation (AIPEF) opposed the Union government’s order to link 33 kilovolt (kV) sub-stations with the power grid, saying it is an “attempt towards privatisation” of the electricity sector through the “backdoor”. Chairman Shailendra Dubey said that the country’s power engineers will “oppose tooth and nail” the move of the Union government. Narrating the order of Union government dated September 1 sent to state government, the officials said all the 33 kV power sub-stations running under electric distribution companies of the state and their network will be merged with transmission companies. He said the order also envisages to form a joint venture of the state’s transmission companies and the central government’s power grid. Orders to power grid on these lines have already been issued by the union government, he said.

Source: The Economic Times

India’s power consumption up 18.6 percent to 129.51 bn units in August

2 September: India’s power consumption grew 18.6 percent in August to 129.51 bn units and remained higher than the pre-COVID level due to improved economic activities amidst easing of lockdown curbs by states, according to power ministry data. The country’s power consumption in August last year stood at 109.21 bn units, lower than 111.52 bn units in the same month in 2019, as per the data. Experts said the recovery in power demand and consumption in August 2021 is consistent and robust. The commercial and industrial power demand and consumption got affected from April onwards this year due to lockdown restrictions imposed by states to contain the deadly second wave of COVID-19. Peak power demand met or the highest supply in a day stood at 196.24 GW in August, which is 17.1 percent higher compared to a year ago. The peak power demand in August 2020 stood at 167.52 GW, lower than 177.52 GW in the same month in 2019, showing the adverse impact of the pandemic on power demand. The government had imposed a nationwide lockdown on 25 March 2020 to contain the spread of coronavirus. The lockdown was eased in a phased manner, but it hit the economic and commercial activities and resulted in lower commercial and industrial demand for electricity in the country. April 2021 saw year-on-year growth of nearly 38.5 per cent in power consumption. The second wave of COVID-19 started in the middle of April this year and affected the recovery in commercial and industrial power demand as states started imposing restrictions in the latter part of the month. After a gap of six months, power consumption had recorded 4.6 per cent year-on-year growth in September 2020, and 11.6 percent in October 2020. In November, power consumption growth slowed to 3.12 percent, mainly due to early onset of winters.

Source: The Economic Times

Power market on IEX clocks all-time high monthly volume of 9,538 mn units

1 September: Indian Energy Exchange (IEX) said the electricity market achieved a new milestone with a record all-time high monthly volume of 9,538 mn units in August, achieving 74 percent year-on-year growth. The national peak demand at 196 GW saw an increase of 17 percent while energy consumption at 129.51 bn units also grew 17 percent. The market, however, continued to work uninterrupted facilitating the distribution utilities and industries in addressing the increased power demand in the most flexible, competitive, transparent and efficient manner, IEX said. The day-ahead market traded 6,649 mn units volume during August with average price of electricity at INR5.06 per unit, marking 48 percent growth.

Source: The Economic Times

National: Non-Fossil Fuels/ Climate Change Trends

RIL to invest INR750 bn in four renewable energy gigafactories

3 September: Reliance Industries Ltd (RIL) will invest INR750 bn over the next three years to set up four renewable energy gigafactories in Jamnagar, Gujarat, Mukesh Ambani, chairman and managing director of the company, said. He said that this complex will have four gigafactories, covering the entire spectrum of renewable energy. The first will be an integrated solar photovoltaic module factory. The second will be an advanced energy storage battery factory. The third will be an electrolyser factory for the production of green hydrogen and the fourth will be a fuel-cell factory for converting hydrogen into motive and stationary power. He said that the rapid fall in the cost of production had made solar energy highly competitive, attracting large-scale investments and this would play a key role in ensuring similar growth trends for hydrogen. The company has set a target to become a net-zero carbon firm by 2035 and has announced a roadmap for its New Energy Business this year. He said that of India’s 450 GW renewable energy capacity target by 2030, the company will establish and enable at least 100 GW of solar energy by 2030. He said that this would create millions of new and high-value green jobs, will give a big boost to green enterprises in India, and transform India from an importer of fossil energy to an exporter of clean energy.

Source: The Economic Times

Madhya Pradesh to get 93 MW nuclear power from Gujarat’s KAPS

3 September: Madhya Pradesh Power Management Company Ltd (MPPMCL) inked a fresh power purchase agreement with Nuclear Power Corporation of India for the supply of 93 MW power for the next 15 years. Under the agreement, Madhya Pradesh will get nuclear power at INR 2.289 per unit from the Kakrapar Atomic Power Station (KAPS) near Surat in Gujarat. Due to the low tariff of power available from KAPS, a fresh agreement was signed to continue the supply, as the old agreement signed 15 years ago ended in 2020. Presently, the state gets 273 MW of power from different nuclear power plants.

Source: The Economic Times

Identify locations for installation of solar power lights: Bihar CM

3 September: Bihar Chief minister (CM) Nitish Kumar asked the panchayati raj department (PRD) to make a foolproof plan for the installation of solar lights across the state. While watching a virtual presentation on the status of the Mukhyamantri Gramin Solar Street Light Scheme, the CM said a detailed survey should be done to identify all the places where solar lights can be installed.

Source: The Economic Times

India has potential to become energy exporter by producing green hydrogen: Jitendra Singh

3 September: By producing green hydrogen on a large scale and taking advantage of its geographical location, India has the potential to transform itself from a net importer of fuel to an exporter of clean energy, Science and Technology Minister Jitendra Singh said. Singh said India has a large proportion of the world population and unless it participates in the mission for clean climate, the world would not be able to see optimum results. He said there is a huge requirement of clean fuel and green hydrogen across the world, and India has the potential to step in to fulfil the requirement of the rest of the world as well. Referring to the National Hydrogen Mission announced by Prime minister Narendra Modi during his Independence Day speech, Singh said this reflects India’s commitment to working in mitigating climate change. He said the problem of climate change cannot be resolved unless India reduces its emissions and that the country has taken several initiatives in the area of clean energy. He said in the last seven years, India, under the leadership of PM Modi, has assumed a leading role in the campaign for clean climate. Referring to the clean climate mission and green hydrogen, Singh said India also has the responsibility and that the entire world is also looking up to it as a country which can play a frontline role in the community of world leaders. He said 90 percent of India’s energy demand is met by imported fossil fuel. Therefore, the problem of climate change in the world cannot be resolved unless India reduces its emissions. He said India’s share of renewable energy is also going up each day and it is expected to be 50 per cent by 2030. Its tariff from renewable energy is less than INR2 which is already one of the lowest in the world. Despite this, renewable energy can help in the reduction of only 45 percent to 50 percent of carbon dioxide emissions, he said.

Source: The Economic Times

Draft open access norms can be a tailwind for new renewable projects: CRISIL

2 September: The Draft Electricity (promoting renewable energy through Green Energy Open Access) Rules, 2021, announced by the Ministry of Power, if implemented, could improve the certainty of cash flows for new renewable energy projects coming up through this route, CRISIL Ratings said. CRISIL Ratings said that considering commercial and industrial (C&I) consumers account for almost 50 percent of all power consumption in India, and have their own go-green initiatives, the open access route can support likely strong demand pull from these consumers. In India, power distribution happens through three modes – state distribution companies, captive sources and open access. Under the open access route, which had a total installed capacity of about 11 GW as on 31 March 2021, renewable power producers sell electricity directly to C&I consumers.

Source: The Economic Times

Tata Power to set up 330 MW solar project in Madhya Pradesh

2 September: Tata Power’s wholly-owned subsidiary, TP Saurya, has received a Letter of Award from Rewa Ultra Mega Solar to set up a 330 MW solar power project in Neemuch Solar Park, Madhya Pradesh. The project has been awarded through tariff-based competitive bidding followed by e-reverse auction. With this, the total renewable capacity of Tata Power will reach 4,361 MW with an installed capacity of 2,947 MW and 1,414 MW under implementation.

Source: The Economic Times

GUVNL to procure 3 GW thermal power on long-term basis

2 September: Gujarat Urja Vikas Nigam Limited (GUVNL) plans to procure 3,000 MW electricity from thermal power plants on long-term basis through competitive bidding process. The apex power utility has also floated draft bid documents for the procurement of power and has sought views and comments from the interested stakeholders. According to GUVNL, the power will be procured from the thermal power plants — existing and new — set up on design, build, finance, own and operate (DBFOO) basis. For power generation, these plants use coal allocated under the Union government’s Shakti (Scheme for Harnessing and Allocating Koyala Transparently in India) policy. GUVNL intends to invite bids after obtaining Gujarat Electricity Regulatory Commission’s (GERC) approval to the draft bid document. The contract period for the power supply will be 15 years and the date of registration and process for submission of bids will be intimated by GUVNL separately once the state-run company secures GERC’s approval to the bid documents, GUVNL said.

Source: The Economic Times

Railways shifting to solar power could cut emissions: Study

1 September: Direct supply of solar energy to Indian Railway lines, without the need to connect through the grid, would save almost 7 million tonnes (mt) of carbon a year while also powering at least one in four trains on the national network on competitive terms. According to the annual report of Indian railways 2019-2020, there was a passenger traffic of over 8 billion in that period, which would mean that 2 billion passengers could be travelling on trains directly powered by solar energy. The new analysis highlights that around a quarter of this new solar capacity — up to 5,272 MW— could be fed directly into the railway’s overhead lines instead of being procured over the electricity networks, reducing energy losses and saving money for the rail operator. The researchers found that substituting energy supplied from the coal-dominated grid for private-wire supply from solar could also rapidly cut emissions by as much as 6.8 mt carbon dioxide (CO2) each year — just over the entire annual emissions of Kanpur. The researchers also warned, however, that achieving the target of full electrification of all routes by 2023 could be accompanied by an increase in CO2 emissions in the short term because of India’s current reliance on coal to produce electricity.

Source: The Economic Times

MSEDCL must give 40 percent subsidy on solar rooftop panels: Consumers

1 September: Power consumers, especially those from housing societies in Navi Mumbai and Thane, have demanded that MSEDCL avail of Central subsidy up to 40 percent on solar rooftop panel installations, which it can pass on to consumers who can then save INR800-2,400 in bills every month. BEST, Adani Electricity and Tata Power announced this scheme for their consumers in Mumbai. The subsidy is an initiative of the Union ministry of renewable energy and is being availed by most states. However, MSEDCL, which supplies electricity to the largest base of consumers – over 2.6 crores in Maharashtra – is yet to avail of the subsidy. Residential consumers can opt for a minimum 1 kilowatt peak (kWp) solar panel, which will generate 1,400-1,500 units annually. For instance, if you generated 125 units in solar power in a month, and consumed 300 units a month, you pay for 175 units (300 minus 125). Savings could be INR800-INR2,400 a month, depending on 1-3 kWp of solar panel installed. For 1 kWp, the actual cost is INR46,000, but 40 percent subsidy reduces it to INR27,600, all inclusive of GST, and related costs such as supply, installation, testing, commissioning and a comprehensive 5-year maintenance.

Source: The Economic Times

International: Oil

US offshore oil recovery begins with ports, refineries restarting

5 September: US (United States) Gulf Coast energy companies got a boost by a reopening of ports and restart of oil refineries shut by Hurricane Ida, but damage to key facilities continued to crimp oil production. The ninth named storm of the 2021 Atlantic hurricane season has cut more US oil and gas production than any of the eight named storms to strike the US Gulf Coast last year. Royal Dutch Shell Plc, the largest US Gulf Coast producer, was still evaluating damage to its West Delta-143 offshore platform, which when operating transfers about 200,000 barrels of oil and gas per day from three offshore oil fields.

Source: The Economic Times

Venezuela’s August oil exports fall amidst feedstock scarcity

2 September: A lack of diluents to produce Venezuela’s flagship crude grades took a toll on oil exports last month, forcing state-run PDVSA to declare “maximum alert” at its main terminal, company documents and tanker tracking data showed. The shortage of these blending feedstocks, which also reduced oil output at Venezuela’s main producing region last month, has worsened recently as PDVSA turned to refining more of its light and medium crude into motor fuels. Historically, those grades were used to dilute its more abundant extra heavy crudes. Over three quarters of Venezuela’s oil shipments departed for Asian destinations, mainly China and Malaysia. Political ally Cuba received about 40,000 bpd (barrels per day) of crude and residual fuel for power generation, the PDVSA’s fuel oil exports to destinations including Turkey, China, Malaysia and the United Arab Emirates also fell, to 128,000 bpd from a peak of 274,000 bpd the previous month. But the company managed to increase exports of petroleum coke to Cuba and Europe.

Source: The Economic Times

China’s oil demand recovers as COVID impact eases, more quotas eyed

1 September: China’s demand for spot crude appears to be recovering after nearly five months of slower purchases caused by a shortage of import quotas, drawdowns from high inventories and COVID-19 lockdowns that muted Chinese fuel consumption. Softer buying since April by the world’s top crude importer and a drop in China’s refining output to 14-month lows in July have depressed the prices of staple crude grades from West Africa and Brazil to multi-month lows. But traders and analysts said Chinese importers are now increasing the pace of purchases and paying higher premiums to secure supplies from November onwards as lockdown restrictions ease. A sustained rebound in demand by China may tighten supplies and support global oil prices. Oil demand in the world’s No. 2 consumer looks to be on a recovery path as Beijing eases lockdown measures after largely containing several outbreaks of the COVID-19 Delta variant since it emerged in the country in July, traders said. Traders hope Beijing will soon wrap up a probe into the resale of import quotas and tax evasion by importers that has created uncertainty in the market. A fourth batch of quotas is also expected to be issued in September or October which could revive demand from independent refiners, also known as teapots, which account for a fifth of China’s imports.

Source: The Economic Times

Pakistan steps up oil and gas imports as economic activities rebound

1 September: Pakistan has stepped up its oil and gas imports this year from last year as demand from its power sector increases amidst more economic activities as coronavirus-induced restrictions are lifted. So far in 2021 through September, the South Asian country has imported at least 785,000 tonnes of fuel oil through tenders, up 52 percent from what it imported all of last year, according to data from tender documents and traders. Its total imports of oil and refined fuels went up by 24 percent to about 10 million tonnes (mt) in the financial year which ended in June, data from Pakistan’s ministry of petroleum showed.

Source: The Economic Times

OPEC+ raises 2022 oil demand growth forecast

1 September: OPEC+ revised up its 2022 oil demand forecast ahead of a meeting of the oil producing group, amidst US (United States) pressure to raise output more quickly to support the global economy. OPEC+ sources said the group’s experts revised the 2022 oil demand growth forecast to 4.2 million barrels per day (bpd), up from the previous forecast of 3.28 million bpd. OPEC+ expects global oil demand to grow by 5.95 million bpd in 2021 after a record drop of about 9 million bpd in 2020 because of the COVID-19 pandemic.

Source: The Economic Times

International: Gas

Trafigura, PetroChina place lowest offers in Pakistan LNG tender

3 September: Trafigura and PetroChina International have placed the lowest offers in a tender by Pakistan LNG seeking five liquefied natural gas (LNG) cargoes for delivery in October and November, a tender document showed. Trafigura placed the lowest offers ranging from US$19.8477 per million metric British thermal units (mmBtu) to US$20.9677 per mmBtu for four of the cargoes to be delivered over 8-9 October, 23-24 October, 28-29 October and 12-13 November. PetroChina offered the lowest price of US$20.3888 for a cargo to be delivered over 6-7 November. Asian spot LNG prices are trading at their highest for this time of the year since at least 2010 as a hot summer has drawn down gas inventory levels around the world. It was not immediately clear if the tender has been awarded. Other companies which took part in the tender are Gunvor Singapore, Vitol Bahrain and Total Gas & Power.

Source: The Economic Times

China approves US$149 mn coalbed methane pipeline project in northern China

3 September: China’s state planner has approved a 960 million yuan (US$149 million) coalbed methane pipeline project linking the northern provinces of Shanxi and Shaanxi, the National Development and Reform Commission said. The 74.1 km (46 mile) pipeline is designed to transmit 2 billion cubic metres (bcm) of gas each year and will be managed by China United Coalbed Methane Corp, a subsidiary of China’s CNOOC. The project is part of the gas pipeline connecting Shenmu city in Shaanxi province and Anping county in Hebei province. China’s state planner approved another part of the pipeline in 2019, from Shanxi to Hebei, with annual transmission capacity of 5 bcm. The cross-region pipeline aims to help boost the development of coalbed methane, a form of natural gas extracted from coal beds.

Source: The Economic Times

International: Power

Iraq at risk of power shortages after Iran reduced gas supply

2 September: Iraq’s electricity ministry said Iranian gas supplied to the central and southern regions was reduced to 8 million cubic metres per day from 49 million, causing a risk of serious power shortages. The ministry said that there has been contact with the Iranian energy ministry and Iran’s embassy in Baghdad to clarify the reasons for the reduction. A reduction in Iranian gas supplies led the Iraqi national power system to lose about 5500 MW, the ministry said.

Source: The Economic Times

International: Non-Fossil Fuels/ Climate Change Trends

Europe to miss 2030 climate goal by 21 years at current pace

5 September: Europe will miss a key climate target for cutting greenhouse gas emissions by more than 20 years unless it picks up the pace on energy transition measures and improves governance, a study involving Europe’s biggest utility Enel said. At the current pace, Europe will only reach its 2030 target for a 55 percent reduction in greenhouse gases in 2051, the study said. In July, Brussels unveiled a raft of ambitious measures in its ‘Fit for 55’ package aimed at putting the European Union on track to meet the 2030 goal of reducing emissions by 55 percent from 1990 levels. The study said investments of around €3.6 trillion (US$4.3 trillion) were needed across the bloc to reach 2030 goals, with a potential cumulative impact on the EU (European Union)’s economic growth of more than €8 trillion. But it warned the EU needed to step up its efforts if this potential was to be realised.

Source: The Economic Times

WTO panel rejects China’s solar safeguard challenge: US

3 September: A WTO dispute settlement panel has rejected China’s challenges to the US (United States) safeguard tariffs on solar products, Office of the US Trade Representative (USTR) said. USTR said that this is the first successful defence of the US – Safeguard Measure on Imports of Crystalline Silicon Photovoltaic Products. In early 2018, the US imposed the solar safeguard measure to support the domestic solar industry’s efforts to adjust to import competition primarily attributable to excess solar cell and module capacity by Chinese producers in China and around the world and exacerbated by China’s non-market practices. In July 2019, China requested the establishment of a WTO panel alleging that the US imposition of the safeguard was inconsistent with various obligations under the General Agreement on Tariffs and Trade 1994 and the WTO Agreement on Safeguards. The Panel rejected all of China’s claims. Specifically, the WTO Panel found that the US established that solar imports had increased as a result of unforeseen developments, established a causal link between increased imports and serious injury to the domestic industry, and appropriately considered other factors besides increased imports that were allegedly causing injury to the domestic industry.

Source: The Economic Times

China crucial to handling climate crisis: US envoy

2 September: China needs to expand its efforts to reduce carbon emissions to help hold back the rise in global temperatures, US (United States) envoy John Kerry said. China is the world’s largest carbon emitter, producing an estimated 27 percent of global greenhouse gases, followed by the US. China obtains roughly 60 percent of its power from coal and is opening more coal-fired power plants, while also committing to reducing its use of the fossil fuel. Beijing has pointed to historical US emissions as a reason to resist action while making advances in solar power and other renewable energy sources. The country has set a target of generating 20 percent of its total energy needs from renewables by 2025, becoming carbon-neutral by 2060 and reducing total emissions starting from 2030.

Source: The Economic Times

Japan, Russia to cooperate in hydrogen, ammonia to fight climate change

2 September. Japan and Russia agreed to work together on hydrogen and ammonia production, the Japanese industry ministry said, as the long-time partners in oil and natural gas shift the focus to cleaner alternatives to fossil fuels. The two nations will cooperate in research and development and on technology to reduce planet-warming emissions in the atmosphere, including carbon capture and storage (CCS) and carbon capture and utilisation (CCU).

Source: The Economic Times

Indonesian state coal miner plans solar power projects

1 September: Indonesian coal miner PT Bukit Asam plans to build three solar power projects on former mine sites as part of its expansion into renewable energy, the company said. State-controlled Bukit Asam has set aside land in West Sumatra, South Sumatra and East Kalimantan provinces and at each location the company plans to develop solar plants of up to 200 MW, the company said.

Source: The Economic Times

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