MonitorsPublished on May 30, 2022 PDF Download
Energy News Monitor | Volume XVIII, Issue 46
Quick Notes

The Indian solar Industry: Role of the private sector


In 2008, the Government of India (GOI) launched the National Action Plan for Climate Change (NAPCC) outlining eight missions to address the challenges posed by climate change. The National Solar Mission was the first amongst these missions and its initial goal was to install 10 GW (gigawatt) of solar power generation capacity by 2020. This goal was thought to be too ambitious as the installed capacity around that time was about 10 MW (megawatt), an order of magnitude lower. Most of the capacity was decentralised solar lighting projects implemented by international aid agencies, whilst grid-connected capacity accounted for only 2.1 MW.  In 2010 the goal of the solar mission was increased to 22 GW capacity by 2022 and the mission was named Jawaharlal Nehru Solar Mission (JNNSM). JNNSM envisaged the achievement of grid parity of solar electricity through long-term and predictable policy, large-scale deployment, aggressive research and development (R & D), and domestic production of critical materials, components, and products along the value chain.

The increase in capacity for power generation from solar energy projected by JNNSM has exceeded expectations, partly because of the nature of solar energy projects, but mostly because of incentives offered by the government to promote the development of (RE) in general and solar energy in particular. However, the goal of domestic production of critical materials, components, and other elements of the solar value chain has failed to materialise, notwithstanding a range of incentives offered by the government. The private sector which was able to capitalise on the incentives for solar project development did not grow in manufacturing though attractive incentives were offered through government policy. The renewed effort to reinvigorate the manufacturing of solar products must consider these lessons from the JNNSM experience.

Incentives for Capacity Development

Noting that the Electricity Act 2003 (Act) provided a role for RE, the JNNSM policy (2010) observed that amendments to the Act must be made to further promote solar energy. The JNNSM policy also stated that the national tariff policy 2006 would be modified so that state electricity regulators can mandate that a certain percentage of solar power is purchased annually. The policy suggested that the solar purchase obligation may start at 0.25 percent of total electricity purchase in phase I and go up to 3 percent by 2022. The national tariff policy was amended in January 2011 to prescribe these targets. This was to be complemented with a solar-specific renewable energy certificate (REC) mechanism to allow utilities and solar power generation companies to buy and sell certificates to meet their solar power purchase obligations.

An amendment to the tariff policy in 2016 provided for state electricity regulatory commissions (SERCs) to reserve 8 percent of total consumption of energy to solar energy, excluding hydropower, by march 2022 or as notified by the Central government from time to time. In 2018 the government of India notified the long-term growth trajectory of renewable purchase obligations (RPOs) for solar as well as non-solar, uniformly for all states and union territories, reaching 21 percent by 2022 with 10.5 percent for solar electricity.

As the solar tariff was relatively high in the 2010s, the JNNSM proposed bundling of solar power with cheaper unallocated power from central power generating stations and sold to distribution companies at a tariff decided by Central Electricity Regulatory Commission (CERC). NTPC Vidyut Vyapar Nigam Limited (NVVN) was designated as the nodal agency by the Ministry of Power for signing power purchase agreements (PPAs) with solar developers for the purchase of bundled power.  As of 31 March 2021, the total commissioned solar capacity under JNNSM was 733 MW or just 1.6 percent of the total installed capacity.

More recently, the government has conferred “must-run” status on power generated by RE sources that has a power purchase agreement (PPA) so that it is not subject to curtailment or regulation of power dispatch on account of merit order or any commercial consideration. RE based power generation can be curtailed only for technical reasons such as grid stability or security. The government has also provided that the inter-state transmission charges and losses will not be levied on the transmission of electricity generated from power plants using solar and wind sources of energy, including solar-wind hybrid power plant with or without storage which have been commissioned on or before 30 June 2023.

For evacuation of large-scale RE, the intra state transmission system (InSTS) was sanctioned by the Ministry of New and Renewable Energy (MNRE) in 2015-16. It is being implemented by eight renewable-rich states of Tamil Nadu, Rajasthan, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Himachal Pradesh, and Madhya Pradesh through the respective state transmission utilities (STUs) with domestic funding (state and Central government) along with a loan from the German government. The goal of the project is to evacuate over 20 GW of RE without any transmission restrictions.

In March 2022, solar power generation capacity is 46 GW, implying a CAGR (compound annual growth rate) of over 5500 percent between 2008 and 2022. Though the JNNSM policy envisaged a leading role for state-owned companies in the development of solar projects, the private sector has captured the segment and now accounts for over 95 percent of solar power generation capacity. Apart from policy, the modular nature of solar projects that required lower investment (compared to thermal projects) and consequently involved lower risks also made the sector attractive to the private sector.

Incentives for Manufacturing

Noting that the Indian PV (photovoltaic) industry is dependent on imports of critical raw materials and components, including silicon wafers the JNNSM proposed transforming India into a solar energy hub with leadership role in low-cost, high quality solar manufacturing, including balance of system components in 2010. Proactive implementation of the special incentive package (SIPs) policy, to promote PV manufacturing plants, including domestic manufacture of silicon material, was seen to be essential. Towards this goal, the JNNSM proposed soft loans for expansion of existing solar assembly facilities in the small and medium enterprise facilities and for technology upgradation and working capital through IREDA (Indian Renewable Energy Development Agency). Provision for transfer of technology was to be built into Government and private procurement from foreign sources. Simultaneously, the national manufacturing policy of 2011 (department of industrial policy and promotion [DIPP] 2011) identified solar energy as amongst industries of strategic importance where national capabilities were to be developed to make the country a major force in the sector.

Under phase I of JNNSM most of the project developers used thin film (TF) based solar panels that accounted for close to 70 percent of PV installations. One of the main reasons for the use of TF based solar panels was to circumvent the constraint of domestic content requirement (DCR) that mandated that crystalline silicon (c-Si) cells and modules should be procured from domestic manufacturers. This requirement did not apply to TF as India did not have a manufacturing base for TF based panels. The other reason was that US based TF suppliers provided competitively priced TF modules along with low-cost long tenor debt through the export-import (EXIM) bank of the USA. With the dramatic decline in c-Si prices, the economic rationale behind import of TF based solar panels from the USA by the Indian private sector lost ground by the late 2010s.  Globally, TF that accounted for 30 percent of the market in the early 2000s was losing market share. The investment in TF based solar panels not only put India on the wrong technology track but also undermined the nascent c-Si based solar panel assembling plants in India that were export oriented.  The value of export of solar products declined from over US$321 million in 2009-10 to about US$80 million in 2012-13.

Overall, the DCR constraint did not facilitate the development of the domestic solar manufacturing industry, but encouraged creation of alternative routes for imports. Lack of raw materials, non-availability of low-cost financing, and an underdeveloped supply chain that meant high inventory costs also increased risk for the private sector to invest in solar manufacturing. The Indian solar manufacturing industry did not straddle the high technology upstream segments of the industry, such as production of polysilicon, wafers and ingots and this increased risk for investing in the sector in the early 2010s. This situation has hardly changed in 2022, and it could become a barrier to development of solar manufacturing industry yet again.

In 2020, the government launched a production linked incentive (PLI) scheme ‘national programme on high efficiency solar PV modules’ for achieving manufacturing capacity of GW scale with a budget of about INR45 billion (about US$580 million) to be spent over five years.  The budget was later increased to INR250 billion (about US$3 billion).  The scheme expects the private sector to manufacture polysilicon from imported metallurgical grade silica, produce ingots and wafers from the refined polysilicon, assemble the wafers into solar cells and modules or set up fully integrated TF based (or any alternative technology) solar manufacturing facilities.  Globally, the complex high technology based upstream part of the solar value chain has become more concentrated and competitive compared to the situation in the early 2010s. It is yet uncertain whether the PLI scheme will be sufficient to entice the risk averse Indian private sector to invest and succeed in upstream solar manufacturing this time around.

Source: Central Electricity Authority

Monthly News Commentary: Power

Electricity Demand growth strains Power Generation


Demand Growth

India is likely to face more power cuts this year as utilities’ coal inventories are at the lowest pre-summer levels in at least nine years and electricity demand is expected to rise at the fastest pace in at least 38 years. Power cuts could stifle industrial activity in Asia’s third largest economy, just when economic activity was starting to recover after months of COVID-related lockdowns. The shortage of electricity as a percentage of demand has shot up to 1.4 percent over the last week, higher than the 1 percent deficit in October, when India last faced a serious coal shortage, and the 0.5 percent shortfall in March.

India’s power consumption grew 4.6 percent in March from a year earlier to 126.12 BU (billion units), signalling the impact of early onset of summers and easing of lockdown restrictions by States. As per Power Ministry data, power consumption in March 2021 was 120.63 BU, higher than 98.95 BU seen in the same month of 2020. February too witnessed 4.6 percent growth in power consumption to 108.03 BU, the data showed. Peak power demand met, or the highest supply in a day, rose to 199.29 GW in the month under review, compared to 170.16 GW in March 2020 and 185.89 GW in March 2021. Experts are of the view that power consumption growth remained steady in March due to easing of local restrictions imposed by States to curb the spread of the deadly coronavirus coupled, with early onset of summers. Local restrictions had affected industrial and commercial demand. Experts opined that the power demand and consumption would show a robust growth in the coming months as the States have lifted almost all local restrictions after a decline in the positivity rate. Going ahead, power consumption would surge with increased industrial and commercial activities after the easing of lockdown restrictions and due to the longer spell of summers in the coming months, according to experts. Power consumption grew 1.8 percent in January 2022 to 111.80 BU. Growth rates were 3.3 percent and 2.5 percent in December and November 2021, respectively.

The Delhi government’s power department met the peak demand of 7323 MW from April to December last year, according to the Outcome Survey status report 2021-22. It stated that out of 52 indicators for assessment, 83 percent are on track. The survey said 1,160 rooftop solar photovoltaic plants were installed in government buildings till December 2021 as against the target of 1,150. Also, 4519 such plants were installed in private buildings against a target of 4,500, it noted. Delhi met the peak demand of 7,323 MW successfully during April-December 2021, the survey mentioned. It said the power department has subsidized 100 percent of the energy charges for domestic consumers consuming up to 200 units per month and provided subsidies up to INR800 per month for consuming between 201 to 400 units monthly.

Karnataka achieved its highest energy consumption post Covid in the first week of March (14,800 MW), signifying that economic activity has returned to pre-pandemic levels after a two-year slowdown. This has resulted in unscheduled power cuts across the state. Electricity companies are resorting to one or two hours of unscheduled outages in urban areas every day and the duration is around six hours in rural areas.

Electricity Trade

The average power purchase price on India’s largest electricity exchange, Indian Energy Exchange Limited, surged in March to the highest level since April 2009, reflecting a steep rise in electricity demand. Power demand during March rose at the fastest pace in three months, with electricity shortages the worst since October due to soaring temperatures and a sharp uptick in economic activity. The number of buy bids, reflecting demand on the day-ahead market, exceeded sell bids, indicative of supply, by 35 percent, data showed, pushing the average purchase price to INR8.23 Indian (US$0.1087) per kilowatt hour (kWh), over double the average price in March 2021. India’s power regulator capped prices at INR12 (US$0.1580) per kWh, saying in an order dated 1 April that “abnormally high prices” at power exchanges hurt consumers’ interests and eroded buyers’ confidence in the market.

Tamil Nadu Generation and Distribution Corporation (TANEGDCO) signed power procurement agreements for the supply of 2900 MW of electricity from various players including NLC. The agreements were signed between TANGEDCO and NLC amongst others, in the presence of Chief Minister of Tamil Nadu. The agreements were aimed at purchasing power at “lesser rates”. TANGEDCO entered into an agreement for the supply of 1500 Megawatt (MW) of electricity with NLC from its Talabira (Odisha) 3×800 MW project, as allocated by the union power ministry. Further, TANGEDCO signed four mid-term power procurement agreements with Power Trading Corporation of India Ltd for the supply of 400 MW at INR3.26 per unit. The agreement is valid for three years.

Discom Reform

Adani Power shares shot up to a 52-week high, hitting the 10 percent upper circuit on reports the company has received INR30 bn in past dues from three Rajasthan discoms (distribution companies). The company received the payment under a 25 March Supreme Court order asking Rajasthan Urja Vikas Nigam, Jaipur Vidyut Vitran Nigam, and Jodhpur Vidyut Nigam to pay past dues with interest within four weeks or face the prospect of the discom brass to personally appear in court to explain. Adani Power had signed an agreement with the Rajasthan discoms in March 2008 to set up a 1,200 MW coal-based power project in the state’s Kawai area at a cost of INR60 billion (bn). The discoms challenged this at the Appellate Tribunal for Electricity, which upheld the state regulator’s order. The matter ultimately moved to the Supreme Court, which settled the case in favour of the supplier.

Torrent Power has inked agreements to acquire 51 percent equity of Dadra and Nagar Haveli and Daman and Diu Power Distribution Corporation Ltd. The SPV will be responsible for the distribution and retail supply of electricity and holds distribution licence in the Union Territory of Dadra and Nagar Haveli and Daman and Diu (DNH & DD). With the addition of DNH & DD, Torrent will distribute nearly 24 billion units (BU) of electricity per annum to over 3.85 million (mn) customers and cater to a peak demand of over 5,000 MW. The Torrent Power, the integrated power utility of the diversified Torrent Group, with its total revenue of INR205 bn and a market cap of INR710 bn, is one of the largest companies in the country’s power sector with a presence across the entire power value chain of generation, transmission, and distribution.


NTPC Limited has no debts to the two main power distribution corporations in the national capital, BSES Rajdhani Power Limited (BRPL) and BSES Yamuna Power Limited (BYPL). NTPC plants provide 1,800 MW to Delhi, with 1,500 MW going to BSES.

NLC India Ltd has registered an 18.64 percent rise in power generation at 29.20 BU in FY22. A new record has been created in terms of electricity generation, with the power stations of NLC India Ltd and its subsidiaries together generating 29.2 BU of electricity during 2021-22. The company and its subsidiaries have also exported 25.89 BU of power during the year under review, which was 19.75 percent higher than the preceding year.

Regulation and Governance

The 2.64 percent hike in electricity rates that was cleared by the Madhya Pradesh Electricity Regulatory Commission (MPERC) on 31 March has come into effect. The three power discoms had, incidentally, sought an 8.71 percent hike to tide over revenue deficit. As per the new tariff plan post the hike, a consumer using up to 30 units of electricity per month will have to pay INR3.34 per unit against INR3.25 earlier, while those in the 32-50, 51-150, and 151-300 unit slabs will also have to pay more. There are around 16.6 mn electricity consumers in Madhya Pradesh.

The state cabinet cleared a proposal to allow Maharashtra State Electricity Distribution Company Ltd (MSEDCL) to purchase additional power from private players till at least 15 June, when the power generation situation is expected to improve. At present, there is a shortfall of 1,000-1,500 MW in power demand and supply during peak hours owing to the sweltering heat and coal shortage. 400-500MW electricity is being saved through ‘load relief’ in areas where distribution losses are high. According to Maharashtra Energy Minister, the electricity available with the power exchange is costly, so they will purchase it from private players at half the cost.

Amid the hike of fuel prices, the Karnataka government has revised the electricity tariff in the state for financial year 2022-23, applicable from 1 April, with consumers now having to pay an additional 35 paise per unit. The Karnataka Electricity Regulatory Commission (KERC) has approved increase in energy charges by 5 paise per unit and along with it, there is an increase in fixed charges ranging between INR20 to INR30 per HP/KWh/KVA to the consumers to the recovery of gap of INR21.59 bn. The hike has been done considering the proposals of the Electricity Supply Companies (ESCOMs).

The Power Ministry clarified that allocation of power from central generating plants is done by the Union government to states on their request and the Delhi Electricity Regulatory Commission (DERC) has no jurisdiction over those. According to the Ministry, if any reallocation is to be done it is only on the request of the state government; and that also in case any other state is willing to take the surrendered power. The DERC jurisdiction extends only to fixation of tariff and giving advice and direction to discoms of their state.

According to Arunachal Pradesh Deputy Chief Minister, progress in many projects could not be achieved due to various reasons and hence the termination. Terminated projects offered to central PSUs for development, Minister said. The Arunachal Pradesh government has scrapped 44 memorandums of agreements signed with private power developers more than a decade ago for failing to start working on them. As per the Deputy Chief Minister, the terminated projects have been offered to the central public sector undertakings (CPSUs) considering their performance and reliability and the long-pending issue of land acquisition of the 2,880 MW Dibang multipurpose project had been resolved.

Rest of the World

Asia Pacific

Vietnam’s state-run utility EVN called on citizens to save energy as it warned of electricity shortages from next month due to tight coal supplies. Several coal-fired power plants operated by EVN have had to cut their run rates due to a shortage of coal, the group, formally known as Electricity of Vietnam. Vietnam, a manufacturing hub with one of the fastest-growing economies in Asia, is increasingly reliant on imported coal for power generation. Coal is responsible for around a third of its electricity output. In the first quarter, power plants operated by EVN only received 76.7 percent of 5.85 million tonnes (MT) in agreed supplies.

Sri Lankans faced 10-hour power cuts and warnings of longer blackouts, as a deepening economic crisis roiled markets and the electricity regulator urged more than a million government employees to work from home to save fuel. Power cuts would be extended to 13 hours, Sri Lanka’s power regulator said. The drawn-out power cuts were partly caused by the government’s inability to pay US$52 mn for a 37,000 tonne diesel shipment that was awaiting offloading, the Public Utilities Commission of Sri Lanka said.

Pakistan’s power sector has gone bankrupt but the country lavishly spends its resources on secretly funding terrorist activities and fails to honour its payment obligations to the Chinese partners in the power projects who have expressed concerns to Islamabad for the immediate release of the money. Pakistan’s power sector is bankrupt and the real culprit is the government’s gross mismanagement, which shows up as circular debt. The Pakistani Prime Minister Imran Khan’s government has also grossly mismanaged the power sector.

Tens of thousands of Japanese households remained without power after a magnitude 7.4 quake struck shortly before midnight, throwing a swathe of north-eastern Japan into darkness, severing key transportation links and killing four. Companies including Toyota Motor Corp and chipmaker Renesas Electronics Corp raced to assess the impact, with any supply chain disruption likely to add pressure to strained global output of smartphones, electronics, and automobiles. About 300 km (186 miles) south of Fukushima, areas of the capital Tokyo lost power immediately after the quake, though most regained it within three hours. However, some 5,775 households serviced by Tohoku Electric Power Co Inc in the northeast remained without electricity as of noon local time, though the firm said it expected most will have supply restored later in the day.

Africa & Middle East

According to the Federal Ministry of Power, Nigeria’s national electricity grid has collapsed for the second time in a month, leaving the parts of the country it serves, including capital Abuja and Africa’s biggest city Lagos, without power. The power ministry said the outage had occurred overnight. It gave no estimate of when the grid, which serves around 117 million people, would be back in operation. While power outages in Nigeria, Africa’s biggest economy, are common, a total system collapse is not. Nigeria has installed capacity of 12,500 MW but on a good day produces only a quarter of that, leaving many Nigerians and businesses reliant on diesel-powered generators. The nation’s sclerotic power grid, and its precarious energy supply, are often cited by businesses as a key issue hindering growth in Africa’s most populous country.

Lebanon’s Cabinet approved a plan to reform and restructure the country’s crippled electricity sector, a main condition of Western donors and the World Bank to provide financing for regional deals to increase the country’s power supply. The Cabinet had endorsed the plan with amendments from a previous version, including the creation of an electricity regulatory authority in 2022 rather than in 2023, another step demanded by donors. Lebanon’s crippled power sector has not provided round-the-clock power since the country’s 1975-90 Civil War and cash transfers to state-run utility Electricte du Liban (EDL) to cover chronic losses have contributed tens of billions of dollars to the country’s huge public debt.

North & South America

According to the US Energy Information Administration (EIA), US (United States) power consumption will rise in 2022 and 2023 as the economy grows. The EIA projected power demand will climb to 3,995 billion kWh in 2022 and 4,040 billion kWh in 2023 from 3,930 billion kWh in 2021. That compares with a coronavirus-depressed eight-year low of 3,856 billion kWh in 2020 and an all-time high of 4,003 billion kWh in 2018. EIA projected 2022 power sales would ease to 1,468 billion kWh for residential consumers, but rise to 1,358 billion kWh for commercial customers as more people return to work in offices and 1,022 billion kWh for industrials. That compares with current all-time highs of 1,477 billion kWh in 2021 for residential consumers, 1,382 billion kWh in 2018 for commercial customers and 1,064 billion kWh in 2000 for industrials.

Mexico’s Supreme Court upheld contentious changes to electricity legislation championed by President Andres Manuel Lopez Obrador that strengthen the power utility at the expense of private firms, sparking US concerns. Debating a challenge against a March 2021 law, the court narrowly failed to reach the two-thirds majority needed to declare unconstitutional a provision in the law mandating that national power company Comision Federal de Electricidad (CFE) should take priority on dispatch, or when plants come online.

An alliance of opposition parties in Mexico is threatening a proposal for greater state control of the electricity market, saying it would vote against President Andres Manuel Lopez Obrador’s plan. The coalition’s move would deprive Lopez Obrador of congressional support for constitutional change that he is seeking to protect his reform. He has said the reform would help limit electricity prices and improve Mexican independence from foreign-owned producers. Lopez Obrador, a leftist and nationalist on energy policy, has pitched the overhaul as needed to keep a lid on creeping energy prices by giving more control over the power market to state-owned electricity company Comision Federal de Electricidad.

Europe & Russia

French power grid operator RTE warned of a potential “tense” situation between the supply and demand of electricity in the country in the wake of the cold wave that has hit Europe. RTE issued a statement asking French companies and local authorities to reduce their energy consumption in particular between 7 a.m. and 10 a.m. RTE said that the electricity consumption may reach 73,000 MW, while the production of electricity may reach 65,000 MW. France may import up to 11,000 MW as a result, RTE said.

Italy’s Terna is planning to spend €10 billion (US$11 billion) over the next four years to upgrade the country’s power grid, to meet energy security and climate change demands. That means power transmitters like Terna will need to invest more money to modernise grids to cope with the less predictable flows from solar and wind power. In its 2021-2025 plan, Terna said its investments would help strengthen connections between the south of the country, which produces increasingly more electricity from renewable sources, and the industrial north. The group will also ramp up connections with neighbouring countries like Greece, France, and North Africa to boost its role as a European and Mediterranean power transmission hub. Terna, which makes most of its money from running the domestic grid, said it was looking to sell its assets in Latin America which could be worth €250-270 million.

News Highlights: 13 – 19 April 2022

National: Oil

Cairn bets on shale, sees 10 percent drop in India’s oil imports at peak output

18 April: Vedanta-owned Cairn Oil and Gasoline is betting on its shale exploration programme in its prolific Rajasthan asset, estimating that shale oil and fuel manufacturing could cut back India’s oil and fuel import by 10 percent when manufacturing kicks in. Shale is a kind of pure fuel trapped in fine-grained sedimentary rocks known as shales. Cairn’s onshore Rajasthan oilfields – Mangala, Bhagyam, and Aishwariya (MBA) – are its flagship and most prolific property. They collectively produce as much as 20 percent of India’s whole crude output.

Petrol price rises to INR123 per litre in Rajasthan, highest in India

18 April: Petrol prices in Rajasthan’s Sri Ganganagar district rose to INR123 per litre, making it the costliest in the country. The unprecedented hike has impacted over 80 percent of petrol pumps bringing them on the verge of closure, confirmed petrol pump owners. In fact, the price of diesel here is INR105.31 per litre, which yet remains one of the highest prices in India. However, in the neighbouring state of Punjab, petrol and diesel are cheaper by INR17 and INR11 per litre respectively. Petrol consumers from Rajasthan can be seen making beeline at filling stations of Punjab, whilst those in Sri Ganganagar have very limited consumers. In fact, 80 percent of petrol pumps are on the verge of closure as an impact of this huge difference in fuel costs, Sri Ganganagar District Petrol Pump Dealers Association District President Ashutosh Gupta said.

National: Gas

IGL increases PNG price by INR4.25 per SCM

14 April: Indraprastha Gas Limited (IGL) has increased the price of domestic piped natural gas (PNG) by Rs 4.25 per standard cubic meter (SCM) effectivey to partially cover the hike in input gas cost. According to IGL, PNG will cost INR45.86 per unit in Delhi and INR45.96 per unit in Noida, Greater Noida and Ghaziabad. While people in Gurugram will have to pay INR44.06 per SCM. Earlier on 1 April, IGL increased the Compressed Natural Gas (CNG) price by 80 paise per kg and PNG price by INR5.85 per cubic meter (16.5 percent).

National: Coal

Coal India to launch its own e-auction platform, asks bidders to register

18 April: Coal India Ltd (CIL) is set to launch its own e-auction platform, and the mining major has informed new and existing bidders to register on the portal. At present, the e-auction portal is managed by mjunction and MSTC Ltd. E-auction sales account for around 120 million tonnes (MT) annually for CIL, while the rest is sold through fuel supply agreements and other special sales windows. The miner’s dedicated e-auction portal has been developed by National Informatics Centre and supported by CIL subsidiary Central Mine Planning & Design Institute Ltd. E-auction of Coal India is executed in a 60:40 ratio between mjunction and MSTC. The Centre is also planning to introduce a coal exchange after taking into account consumer feedback.

Government in discussion with World Bank for collaboration on coal mine closure framework

13 April: The Coal Ministry is in discussions with the World Bank for collaboration on the mine closure framework. Coal additional secretary M Nagaraju said the government is committed to ensuring that mines are properly and scientifically closed for the benefit of the society. The Ministry had earlier said that as of now, the Indian coal sector is doing its best to fulfil the country’s energy demand by augmenting coal production. However, the Indian coal sector, the Ministry had said, is relatively new to the concept of systematic mine closure. The Ministry has, therefore, envisaged building an all-inclusive comprehensive nationwide mine closure framework to cover legacy mines, recently closed mines and mine closures scheduled to happen in the short term.

National: Power

Load-shedding unavoidable but agricultural consumers spared: Maharashtra Energy Minister

16 April: Maharashtra was facing a power deficit of 4700 megawatt (MW) but agriculture sector consumers have been spared load-shedding, state Energy Minister Nitin Raut said. The Minister said load-shedding had become unavoidable due to shortage of coal and insufficient gas supply. Raut said power purchase agreements have been inked with Coastal Gujarat Power Ltd (CGPL) for 760 MW and NTPC for 673 MW per day till 15 June, while state-run Mahavitaran is buying 1500-2000 MW from the power exchange.

CM likely to announce 300 units of free electricity for Punjab

15 April: Punjab Chief Minister (CM) Bhagwant Mann is likely to announce 300 units of free electricity for the people of the state, as per sources. Mann met Delhi CM Arvind Kejriwal to discuss the scheme of providing free electricity in Punjab for up to 300 units, informed Aam Aadmi Party (AAP) sources. Providing free electricity to every household for up to 300 units is one of the major promises made by AAP in Punjab in the Assembly elections that concluded last month.

Prolonged power outages hit production in Bokaro industries

15 April: Power outages have adversely affected production in more than 100 MSMEs in JIADA industrial area of Bokaro region, raising serious concerns. Industrialists claimed that they are facing power cut of more than six hours during working hours every day. Use of generator has increased production cost as the diesel price has also touched INR102 a litre.

India risks widespread blackouts this summer

14 April: India faces a persistent shortage of electricity over the next four months as rapid demand growth from air conditioners and refrigeration loads overwhelms the available generation on the network. India’s grid reported a record load of 200,570 megawatt (MW) on 7 July 2021, at the height of last summer, according to the National Load Despatch Centre of the Power System Operation Corporation (POSOCO). Since the middle of March, the grid has routinely reported maximum loads above 195,000 MW, including a peak of 199,584 MW on 8 April – less than 0.5 percent below the record. India has a frequency target of 50.00 cycles per second (Hertz), with grid controllers tasked with keeping it steady between 49.90 Hz and 50.05 Hz to maintain the network in a safe and reliable condition.

National: Non-Fossil Fuels/ Climate Change Trends

Soon, house owners in Chandigarh can get rooftop solar panels installed for free

16 April: Soon, house owners in Chandigarh can get rooftop solar plants installed without shelling out a single penny. The UT administration is set to roll out the Renewable Energy Service Company (RESCO) model, under which a private firm will be responsible for developing, installing, financing and operating the rooftop solar power plant. While consumers (house owners) won’t be charged for installation, RESCO will own the rooftop solar plants for 15 years, after which the ownership will be transferred to the consumer. During the 15-year period, the consumer will be entitled to electricity at INR1.5 less than the normal rate per unit.

RRECL, THDC ink MoU for solar park

16 April: Rajasthan Renewable Energy Corporation Ltd (RRECL) and Tehri Hydro Development Corporation (THDC) inked an agreement to set up 10,000 megawatt (MW) solar power park in Rajasthan. Rajasthan has added record 3,000 MW capacity of solar energy in the last financial year, while in the past three years, the capacity increased by 6552 MW in the state. THDCIL said the agreement will add further impetus to achieving the national targets for solar power.

BlackRock, Mubadala to invest US$526 mn in Tata Power’s renewable energy unit

14 April: India’s Tata Power Company said that BlackRock Real Assets and Abu Dhabi’s Mubadala Investment Company would invest INR40 billion (US$525.76 million) in the company’s renewable energy unit for a 10.53 percent stake. The investment is expected to fund Tata Power Renewable Energy’s aggressive growth plans in the rooftop and electric vehicle charging space in India. Tata Power Renewables is targeting a portfolio of over 20 gigawatts (GW) of renewables assets over the next five years, from 4.9 GW currently, Tata Power said.

International: Oil

Libya halts operations at El Feel oilfield, Zueitina port due to protests

17 April: Libya halted oil production from its El Feel oilfield and two sources at Zueitina oil port said exports there had been suspended after protesters calling for Tripoli-based Prime Minister Abdulhamid al-Dbeibah to resign took over the sites. Halting operations in El Feel and Zueitina would cripple Libya’s oil production which averaged 1.21 million barrels per day before the latest outages. The force majeure on El Feel curtails the North African nation’s production by 70,000 barrels per day.

Nepal considering two-day government holiday to curtail fuel consumption as prices surge

17 April: The Nepal government is considering to declare a two-day holiday in public sector offices to reduce fuel consumption, as the country battles a foreign exchange crisis and the price of petroleum products sky-rockets. The Central Bank of Nepal and Nepal Oil Corporation advised the government to give two days government holiday. The advise to the government sees significant savings for Nepal Oil Corporation which is selling fuel at subsidised rates and suffering huge losses at the present global rates.

Japan’s ruling party seeks jet fuel subsidies in government relief package

14 April: Japan’s ruling Liberal Democratic Party (LDP) urged the government to introduce jet fuel subsidies and launch a tourism campaign as part of a relief package to cushion the blow from global commodity inflation driven up by the Ukraine war. While the proposal did not mention the size of spending, it called on the government to act swiftly by drawing on existing budget reserves of 5.5 trillion yen (US$43.9 billion). Prime Minister Fumio Kishida has instructed his cabinet to compile measures to cushion the blow from rising fuel and food costs by the end of the month.

Russian oil supply drop to double in May: IEA

13 April: The impact of sanctions and buyer aversion on Russian oil will take full effect from May onwards, the International Energy Agency (IEA) said. Countering that, expected lower demand in China, output increases from OPEC+ producers and beyond plus a record draw on emergency oil storage by the United States (US) and its IEA member allies ought to prevent any sharp deficit, the IEA said. Global demand is now expected to be balanced with supply in the second quarter at 98.3 million barrels per day (bpd), with the potential to calm soaring energy price inflation. It had previously expected market balance to be next achieved in the fourth quarter. Chinese coronavirus lockdowns and lower than expected first-quarter demand, especially from the US, prompted the IEA to lower its global oil demand forecast for the year by 260,000 bpd.

International: Gas

Greek recoverable gas reserves seen topping 600 bcm: Commission

14 April: Greece could be sitting on tentative recoverable gas reserves of more than 600 billion cubic meters (bcm), a senior executive of its hydrocarbons commission said, as Athens accelerates gas exploration to cut its reliance on Russian energy. Greece covers nearly 40 percent of its annual energy consumption of about six billion cubic metres with Russian gas. With Russia’s invasion of Ukraine exacerbating a jump in prices and fears over gas supplies, the Greek government pledged to speed up its gas search in six blocks in western Greece and off the southern island of Crete. Collecting seismic data through survey vessels is a key step in gas exploration to identify potential reserves. Greece aims to conclude a first round of all seismic research by March 2023.

Eni signs Egyptian gas deal to unlock LNG supplies for Europe this year

13 April: Eni has signed a deal to boost gas production in Egypt and boost liquefied natural gas (LNG) supplies to Europe, the Italian energy group said. The move comes as Italy and Europe step up efforts to find alternative gas imports to cut their reliance on Russian gas as the war in Ukraine escalates. Italian Prime Minister Mario Draghi clinched a deal to ramp up gas imports from Algeria to help replace some of the 29 billion cubic meters (bcm) Italy receives from Russia. Eni, which in 2015 discovered the super giant Zohr gas field in Egypt, said it had agreed with the Egyptian Natural Gas Holding Company (EGAS) to boost gas production and step up exploration at existing and new fields. Eni said the agreement could result in shipping up to 3 billion cubic meters of LNG to Europe this year. Eni, whose biggest shareholder is the state, holds a stake in Egypt’s Damietta LNG plant which has a capacity of more than 7.5 bcm per year.

German gas data portal to go live in October

13 April: A German portal that will collect live data from the country’s biggest gas consumers will go live in October, the country’s network regulator said, marking the latest step in preparations for an eventual halt in supplies from Russia. All major gas consumers in Europe’s largest economy need to register with the platform to give the Bundesnetzagentur – which would be in charge of rationing in case of an emergency – a detailed overview over consumption. The regulator said an initial data collection would take place 2-15 May.

International: Coal

Tough to find alternatives for Russian thermal coal: Japan utilities group head

15 April: Alternatives for Russian thermal coal are difficult to find as the market is getting tighter, Japan utilities group head Kazuhiro Ikebe said. The Japanese government said that it would ban coal imports from Russia in a broad escalation of sanctions after gradually reducing imports while looking for alternative suppliers.

International: Power

Switzerland readies financial safety net for power sector

14 April: The Swiss government is readying a multibillion-dollar financial safety net for the electricity sector, it said. Terms of the package are still being discussed but it could be worth as much as 10 billion Swiss francs (US$10.7 billion) and last four years, Energy Minister Simonetta Sommaruga said. The idea is to safeguard Swiss power supply even if the situation worsens for critically important players in a European energy crisis, the government said. Strong price fluctuations on energy markets mean that electricity companies need more financial resources to cover security deposits associated with electricity trading, it said.

AGL signs battery deal with Neoen to maintain electricity supply in Australia

14 April: AGL Energy signed a deal with France’s Neoen SA that will help Australia’s largest power producer virtually charge and discharge a part of the 100 MW/200 megawatt-hour (MWh) Capital Battery to support consistent electricity supply. The seven-year deal for the 70 MW of battery capacity comes at a time when the Australia’s most populous states are at a risk to face a blackout from 2025 if new power capacity is not built in time to replace its biggest coal-fired plant. AGL said that the financial offtake agreement would also allow it to mirror the services of a grid-scale battery.

International: Non-Fossil Fuels/ Climate Change Trends

New York State backs long-term Canadian hydropower project

14 April: New York State approved a multi-billion-dollar, long-term project by Montreal-based public utility Hydro-Quebec to deliver hydropower to parts of New York City. Hydro-Quebec said its US (United States) partner, Transmission Developers Inc, will begin construction of the Champlain Hudson Power Express line in summer 2022 to supply hydropower. Commissioning of the line is scheduled for 2025, it said.

Exxon Mobil begins studies for carbon storage hub in southeast Australia

14 April: Exxon Mobil Corp said has begun design studies for its carbon capture storage (CCS) hub in southeast Australia, similar to its project in Houston, Texas, to reduce emissions from industries in the Gippsland Basin. The CCS hub would use existing infrastructure to store carbon dioxide in the depleted Bream field off the coast of Gippsland in the state of Victoria, the US (United States) energy major said. Exxon said it is in discussions with local emissions-intensive industries which may be interested in availing the hub to reduce greenhouse gas emissions from their operations.

Enel to accelerate growth in Brazil’s renewable energy

14 April: Enel is planning to ramp up its growth in renewable power in Brazil in the coming years with new investments in onshore solar and wind generation plants, the company’s Chief Executive Officer Francesco Starace said. Brazil already accounts for 40 percent of Enel’s growth in Latin America’s renewable market, a figure expected to increase as the group starts to depart from polluting thermal generation and adds more renewable power capacity to its portfolio, Starace said. Enel Green Power, the Italian company’s renewable generation arm, operates more than 4,700 MW of renewable power in Brazil. Almost half of this power is concentrated in wind power, and the rest is divided between solar and hydro plants.

Global renewable power prices soar on heavy demand, chaotic supply chain

13 April: Prices for wind and solar power in major global markets have climbed nearly 30 percent in a year as developers have struggled with chaotic supply chains and surging costs for everything from shipping to parts to labor. Contract prices for renewables jumped 28.5 percent in North America and 27.5 percent in Europe in the last year, according to a quarterly index by LevelTen Energy that tracks the deals, known in the industry as power purchase agreements (PPAs). In the first quarter alone, prices rose 9.7 percent in North America and 8.6 percent in Europe, LevelTen said. Economic, logistical and labor market disruptions during the coronavirus pandemic have worsened since the Russian invasion of Ukraine, reversing a decade of cost declines for the renewable energy sector.

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 2021 is the eighteenth 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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