MonitorsPublished on Oct 17, 2022
Energy News Monitor | Volume XIX, Issue 15
Quick Notes

Wind Energy in India: Tailwinds and Headwinds


In 2007, Time magazine featured a story on Mr Tulsi Tanti, wind energy pioneer and Chairman & Managing Director of the Suzlon group, who passed away suddenly this month (October 2022). As part of a series on ‘Heroes of the Environment’, the story offered two reasons behind Mr Tanti’s entry into the Indian wind energy industry. One was the poor quality and high price of grid-based power that affected the profitability of his textile yarn business. The second was a report on climate change that predicted that without a radical decrease in the world’s carbon emissions, many parts of the world would be underwater by 2050. Both factors continue to drive investment in renewable energy (RE) by the industry today.

When Mr Tanti entered the Indian wind energy industry, the total installed capacity was about 500 MW (megawatt). In August 2022, total wind energy capacity was over 41 GW (gigawatts), a CAGR (compound annual growth rate) of over 14 percent.  But the tailwinds that propelled the Indian wind energy industry from the late 1990s until the early 2010s have died down. The industry is now facing the headwinds of cost escalation, competition from cheaper solar photovoltaic (PV) power and policy attention devoted to the solar sector. Suzlon’s own history is a testimony to the rise and stagnation of the Indian wind energy industry. In the 2000s, the growth and success of Suzlon enabled its founder to become an international hero of the environment. Today the company characterises travails of the wind energy sector.


India’s wind energy journey is essentially India’s RE journey. In 1982, the Department of Non-conventional Energy Sources (DNES) was constituted under the Ministry of Energy. Based on an assessment of wind energy potential in India by the Indian Institute for Tropical Metrology, DNES supported the commissioning of the first grid-connected wind turbine of 40 kW (kilowatt) capacity at Gujarat in 1984. Later DNES offered grants to five projects of 550 kW. In 1987, the Renewable Energy Development Agency (IREDA) was established to act as a dedicated public sector financing arm for RE projects.

In 1988, the Danish aid agency DANIDA supported plans to develop two commercial projects of 10 MW (megawatt) each in the states of Gujarat and Tamil Nadu. These DANIDA-sponsored projects were the first demonstrations of large-scale grid-connected wind farms. These demonstration projects provided real data on the techno-economic feasibility of wind energy generation in India that initiated private sector interest in wind energy generation. Favourable policies by the government also played an important role in garnering private investment in both the manufacture of wind turbines and in wind energy generation. These included but were not limited to: a) 100 percent accelerated depreciation on capital investment in equipment in the first year of installation b) 5 years’ income-tax exemption on income from the sale of power generated by wind energy c) mandatory purchase of electricity by State Electricity Boards (SEBs) d) industry status to wind equipment manufacturers. In 1992, DNES became the Ministry of non-conventional energy sources (MNES).  MNES set targets for RE generation based on incentives for capacity addition.

One of the lesser-known drivers of the wind energy sector was the technology upgradation fund (TUF) launched by the Ministry of Textiles in 1999 to facilitate the modernisation and technology upgradation of jute and textile mills over a period of five years. The scheme continues to be operational with modifications and adaptations even today. When first initiated, TUF provided loans at commercial rates to assist the textile industry’s modernisation, including gaining access to firm supplies of power by investing in their own power plant. In Tamil Nadu, home to at least half of India’s textiles market, the TUF scheme was boosted further by the state government’s decision to introduce a special lending rate of 12.5 percent for wind projects supplying power directly to the textile company. As the textile industry was power intensive, investment in wind energy generation for captive consumption made economic sense. Captive wind power generation fixed one of the major components in the cost of production of textile yarn which, in turn, improved the profitability of textile mills. This historical policy push to wind power generation by the state government along with the fact that Tamil Nadu has one of the best windy coastal areas explains why it leads all other states in cumulative installed wind energy capacity and also in annual capacity additions.

The provision of an accelerated depreciation mechanism within the context of the income tax act was another significant driver of growth in the wind energy segment.  Accelerated depreciation allowed the investor (such as a textile company) to divert taxable income into a wind power project which acted as a tax shield. With accelerated depreciation, investors could show the allowed depreciation value as deductible from income in the first year of investment thus avoiding the tax that would be levied on that amount.

Accelerated depreciation led to negative outcomes such as large textile and cement industries appropriating all the tax benefits as they were large investors in technology. These industries also made hasty decisions around the time of tax filings to install wind plants. This resulted in poor siting and low or no generation by wind generators. These outcomes eventually led to the scaling down and phasing out of accelerated depreciation.

Wind energy also benefited from incentives like renewable purchase obligations (RPOs), attractive rates for feed-in-tariff along with capital subsidies that continue in one form or the other even today.


The tailwinds behind wind energy in India began to ebb when the market-oriented electricity act was introduced in 2003.  Though the act stipulated special treatment for RE resources, the act-initiated market-based discipline on the electricity sector that indirectly influenced RE projects. In 2006, MNES was recast with the more progressive title of Ministry of New & Renewable Energy sources (MNRE) to resonate with the global narrative of climate change as a key challenge and RE as the solution. The national tariff policy announced that year emphasised the importance of setting targets for RE capacity addition and stressed the importance of preferential tariffs for RE power. In 2009, generation-based incentives (GBI) for RE generation replaced policies that supported RE capacity addition rather than generation. In the late 2000s, the success of reverse auctions in driving down solar tariffs led the wind energy sector to adopt the model.  Initially, it was welcomed by the wind sector but eventually, the sector began crumbling under the constant pressure to lower tariff that was not consistent with the increase in the price of steel and other wind energy components.

In 2014, targets for RE capacity were increased by almost five-fold. The increase in targets for RE has meant a large degree of centralisation of the initiatives and programmes to increase RE capacity. Centralisation of decision-making has produced mixed results. On the one hand, it has dramatically improved the visibility of India’s effort to decarbonise the power sector. This has attracted large overseas players and foreign investment in the RE sector. On the other hand, centralisation has oversimplified and generalised RE projects offered on auction or tender basis which has affected their technical and economic viability. Whilst the involvement of technologically competent international players in the RE sector has introduced advanced technology, it has also driven out small players with domestic roots, especially in the wind sector. Most importantly the constant pressure to drive down tariffs on RE projects has favoured large international players with access to low-cost finance at the expense of smaller domestic players.

In addition, the overemphasis on lower tariffs has meant that tariff caps set for centrally auctioned projects are often too low to make the projects bankable or economically viable. The case of the Indian wind energy industry which has developed domestic manufacturing capabilities over the last 30 years illustrates the challenge. Four thousand small and medium enterprises (SMEs) that manufacture equipment and components for the wind energy industry employ 2 million people directly or indirectly. These industries and jobs are now under threat as the downward pressure on tariffs has pushed many wind SMEs to the verge of bankruptcy.

Whilst solar is generally location agnostic, wind favours specific locations and this has become a major problem when tariff caps are set at low levels. Under a ‘one tariff fits all’ approach that centralised efforts pursue, wind projects crowd around a few favourable locations around the country. This has limited capacity creation. Continued emphasis on low tariffs pushed projects towards cheaper components that compromised the efficiency and life of wind energy systems.  It has also contributed to the creation of stranded assets that drain public finances replicating the plight of some of the conventional power generation projects.  In 2001, the capital cost of wind projects in India was estimated at about INR30 million/MW compared to INR300 million/MW for solar projects. By 2020, the capital cost of solar projects had fallen to about INR55 million/MW whilst the capital cost of wind increased to about INR60 million/MW.  The modular nature of solar projects adds to the attractiveness of solar compared to wind projects. Between 2016 and 2022, wind energy capacity addition has grown at a CAGR of about 5 percent. To meet the target of 140 GW wind energy capacity by 2030, the growth rate in capacity addition has to triple. The government’s decision in July 2022 to end reverse auctions for RE projects may ease price pressure but it is likely to bring out new problems such as the competitiveness of RE power.

Source: MNRE

Monthly News Commentary: NON-FOSSIL FUELS

State Policies add Momentum to Renewables Growth


RE Policy and Market Trends

After signing a pact for developing 10,000 Megawatt (MW) solar projects and parks in Rajasthan, public sector SJVN is now eyeing to tap renewable energy in Punjab, which holds a huge potential for generation from agro-residues, an alternative model of diversification, besides solar power. SJVN Chairman and Managing Director met Punjab Chief Minister in Chandigarh and expressed keen interest in developing 5,000 MW renewable energy projects in the state. SJVN proposed to develop solar energy projects either by way of joint venture formation or memoranda of understanding by setting up canal top projects and floating solar projects across the state.

Tripura has emerged as one of the best-performing states in the country to tap renewable sources of energy and aggressively motivate rural and marginalised households to shift from conventional energy uses. The Association of Renewable Energy Agencies of States (AREAS) has recognised Tripura for installing the highest number of solar irrigation pumps in the northeastern (NE) states and achieving the second-highest solar power installed capacity. The association will award the state on 27 August in Cochin on the occasion of its 8th foundation day.

Emphasising the need to promote solar projects, UP (Uttar Pradesh) Chief Minister (CM) set the target of generation of 22,000 MW of solar power in the next five years and asked the officials to formulate a new solar energy policy keeping the future needs in view. He said though efforts were being made for the last few years, more planned efforts were required to achieve self-reliance in the energy sector. The CM said that under the guidance of the Prime Minister of India, the UP government was working on a plan to develop Ayodhya as a ‘model solar city’. The CM emphasised the need for a conducive environment for private sector investment in the field of solar energy generation and said that a single window system could be introduced for the timely completion of projects. The CM said that public awareness should be increased to promote the installation of solar power plants on rooftops. The CM said a solar cell should be constituted in districts under the chairmanship of the chief development officer and registration of all solar projects should be made mandatory. The CM said prisoners should be trained in making solar energy equipment.

Oil and Natural Gas Corporation (ONGC) has embarked upon a journey to generate electricity on a utility scale by tapping steam gushing from the earth’s bowels at Puga, a remote valley located at an altitude of over 14,000 feet, off the road to Chumar on the de-facto border with China. This will be India’s first geothermal energy project, and also the world’s highest. It will boost Ladakh’s potential to emerge as one of the country’s clean energy bowls by expanding the area’s horizon beyond solar or wind power. ONGC started drilling its first well for the project and encountered high-pressure steam at 100 degrees Celsius with a discharge rate of 100 tonnes of geothermal energy per hour. This has made the crew confident about the project’s viability.

Solar and wind potential in India are likely to face a negative trend in the future due to climate change, according to a new study by the Pune-based Indian Institute of Tropical Meteorology. The researchers used state-of-the-art climate models devised by the Intergovernmental Panel on Climate Change (IPCC) to analyse the wind and solar projections for the renewable energy sector over the Indian subcontinent. The seasonal and annual wind speed is likely to decrease over North India and increase along South India. The southern coast of Odisha and the southern Indian states of Andhra Pradesh and Tamil Nadu show promising potential for wind energy in the climate change scenario, the study said.

Solar capacity installations in the country rose by 59 percent to record 7.2 gigawatt (GW) during first half of 2022, according to Mercom India Research. In January-June or H1 of 2021, the country had added 4.5 GW solar capacity, the research firm said. The solar installations in April-June period of 2022 also increased by 59 percent to over 3.9 GW compared to 2.4 GW installed in the second quarter of 2021. India’s cumulative installed solar capacity now stands at 57 GW. Cumulative large-scale solar PV installations in Rajasthan reached almost 13 GW as of June 2022, and the state accounted for almost 27 percent of the total installations in the country. In the first half of 2022, Rajasthan and Gujarat were the top states for large-scale solar, accounting for 53 percent and 14 percent of installations, respectively, followed by Maharashtra with 9 percent. Multiple government agencies announced tenders for about 9 GW in Q2 2022, which was 8 percent higher year-on-year.

Roof Top /Distributed Solar Projects

Mohali-based Hartek Solar Private Limited (HSPL), the rooftop solar division of the Hartek Group, has been named in the list of top 10 rooftop solar companies in India. The Hartek Group gained global recognition when it installed a 525 kilowatt (kW) capacity solar power plant in the holiest of Sikh shrines, Harmandir Sahib in Amritsar. The solar photovoltaic (PV) project generates more than 7.40 lakh units (kWh) of electricity every year. The Annual India Solar Report for the financial year 2022 compiled by JMK Research and Analytics put Hartek at the 6th position in the country in the Rooftop/Onsite category. Tata Power Solar tops the list of companies in this category followed by Fourth Partner Energy, Amplus, Havells and Mahindra Solarize. The rooftop solar division of Hartek Solar has been involved in close to 100 MW­ of rooftop solar projects across India and is now rapidly expanding its base in the commercial and industrial segments.

Utility Scale Solar Projects

The Assam government evicted 299 families squatting on about 1,000 bighas of government land at a riverine area (char) in Sonitpur district for setting up a 100 MW solar power project. The district administration carried out the eviction with multiple bulldozers in the presence of a massive contingent of armed security personnel at No. 3 Sitolmari village under the Borsola assembly constituency.

Global commercial real estate developer CapitaLand Investment is mulling setting up a 30 MW solar power farm in Tamil Nadu in its efforts to have green/sustainable buildings. The company is set to double its built-up space to about 40 million square feet by 2024-25 and also get into the data centre segment.

Hydro Power

Arunachal Pradesh Chief Minister (CM) Pema Khandu said that with the active intervention of the Central government, the work on the 2,000 MW Subansiri Lower, the biggest hydro-project in India, is progressing rapidly. The CM said that work on 2,880 MW Dibang projects would also commence very soon. The CM said that out of the total installed capacity of power generation of 1,139 MW, 734 MW was added during the last 6 years.

Wind Power

Reliance Industries Limited (RIL) is gearing up to set up captive offshore wind power projects with up to 5 MW capacity initially. The projects are likely to come up in Gujarat. RIL already has operational experience in the offshore segment through its exploration and production division and has firmed up some partnerships in the offshore wind power segment, too. As part of the agreement, the companies have also partnered to collaborate in areas including offshore wind energy, next-generation fuel cells for conversion of hydrogen to electricity for mobile and static electricity generation, long-duration energy storage and production of carbon-negative fuels. RIL has a manufacturing facility at Silvassa, Dadra and Nagar Haveli, where it makes windmill blades, nacelle covers and nose cones. It also offers mounting frames, tanks and structural profiles for solar panels.

KP Energy has bagged an order worth INR2.22 billion (bn) (US$27.4 mn) to develop wind energy projects for Aditya Birla Group. It has aligned with Aditya Birla Group, a global conglomerate headquartered in Mumbai for the development of the wind power project at Bhungar and Fulsar Site in Mahuva, Bhavnagar, Gujarat, under the Gujarat hybrid power policy 2018.


The Union Road Transport and Highways Minister Nitin Gadkari said that India is capable of meeting its demand for cleaner fossil fuel alternatives such as LNG (liquefied natural gas) and compressed natural gas (CNG) through a focus on processing and investing in biomass. Blue Energy Motors said that its Chakan plant was the first of its kind in India, producing LNG “green” heavy-duty trucks for the Indian market.

EverEnviro Resource Management Pvt Ltd (EverEnviro), a wholly owned subsidiary of Green Growth Equity Fund (GGEF), is planning to set up 14 compressed biogas plants in the country with an investment of INR10 bn (US$123.3 mn). Compressed biogas, or CBG, is a greener fuel produced from waste/biomass sources. It has properties similar to CNG and can be used for automotive, industrial and commercial uses. The company is working on projects based on municipal waste, agro waste and agro-industry waste. India currently has around 25 CBG plants under operation. Industry players said the sector could see over US$2 bn in investments in the next five to seven years.

Hindustan Petroleum Corporation Limited (HPCL) commenced its Cowdung to Compressed Biogas Project at Sanchore, Rajasthan. The plant, the first such under HPCL’s Waste-to-Energy portfolio, is proposed to utilise 100 tons of dung per day to produce biogas, which can be utilised as automotive fuel. The project is proposed to be commissioned in a year. The project is being developed under the GOBAR-Dhan scheme launched by the Government of India in April 2018 as a part of the Biodegradable Waste Management component under the Swachh Bharat Mission (Grameen) to positively impact cleanliness and generate wealth and energy from cattle and organic waste.

Rest of the World

Asia Pacific

Australia will have to invest in renewable energy and carbon capture and storage at unprecedented speed and scale for the economy to achieve net zero carbon emissions by 2050. The Net Zero Australia project found the country will need about 40 times the total generation capacity of the national electricity market to achieve this goal by 2050, including 1,900 GW of solar and 174 GW of onshore and offshore wind capacity. That level of capacity would require five areas nearly the size of Ireland each across northern Australia to house solar arrays teamed with electrolysers to produce green hydrogen—hydrogen produced using renewable energy—for export, the project found in interim findings for a study due to be completed in 2023.

Japan will restart more idled nuclear plants and look at developing next-generation reactors, Prime Minister Fumio Kishida said, setting the stage for a major policy shift on nuclear energy a decade after the Fukushima disaster. The comments from Kishida – who said the government would look at extending the lifespan of existing reactors – highlight how the Ukraine crisis and soaring energy costs have forced both a change in public opinion and a policy rethink toward nuclear power. Japan needs nuclear power because its grid is not connected to neighbouring countries, nor is it able to boost the output of domestic fossil fuels, he said. Kishida said the government would look at extending the lifespan of existing reactors. Local media earlier reported this could be done by not including the time reactors remained offline – years in some cases – when calculating their operating time. Under current regulations, Japan decommissions plants after a predetermined period, which in many cases is 60 years.

Japan’s biggest power generator JERA will spend about 15 bn yen (US$112 mn) to buy a 35.1 percent stake in Vietnamese renewable energy company Gia Lai Electricity JSC (GEC) to expand its overseas business. The acquisition of an affiliate of Vietnamese conglomerate TTC Corp comes as the Japanese utility steps up its decarbonisation efforts to help tackle global climate change. The deal is aimed at contributing to both economic growth and decarbonisation in Vietnam. GEC, which holds about 600 MW of wind, solar and hydroelectric power assets, including projects under construction, aims to expand its power generation assets to 1.7 GW by 2025, mainly solar and wind power.

At a row of greenhouses around 50 km (30 miles) from Taiwan’s capital Taipei, vanilla farmer Tseng Tien-fu is installing dozens of solar panels, part of the island’s plan to meet its renewable energy goals without sacrificing scarce farmland. Tseng, who exports most of his crops to Japan, is expanding his business to meet demand from elsewhere and government payments for solar energy will reduce any risk to his livelihood whilst he waits for the slow-maturing plants to develop. The use of “distributed” solar panels installed on walls and rooftops – has become increasingly popular in regions where land is at a premium. Taiwan provides generous subsidies for rooftop panels, and the government is also obliged to buy the surplus electricity they produce, providing Tseng’s greenhouses with a vital new earning opportunity. Tseng’s shift to solar is part of a wider attempt to solve one of the biggest challenges facing Taiwan as it strives to meet its renewable energy targets.

North & South America

The International Solar Alliance (ISA) in partnership with the Cuban government has floated a tender for setting up a 1150 MW solar project in Cuba. The project is part of Cuba’s plan to implement 2100 MW of solar projects, reducing the reliance on expensive and polluting diesel generators and increasing its green energy portfolio. ISA said the Association has a strong pipeline of solar park projects in Latin America, Africa and Asia and this project in Cuba is the first tender of many.

Africa & Middle East

Botswana Power Corporation (BPC) has awarded Norwegian company Scatec ASA a contract to build a 50 MW solar plant, BPC’s first utility-scale renewable energy project as Botswana looks to boost power supplies and increase clean energy shares. Under the terms of a Power Purchase Agreement signed, Scatec will finance, build, own and operate the solar plant and recoup its investment by selling electricity to BPC over 25 years. Botswana currently does not have any large-scale solar power generation and its 600 MW national energy demand is predominantly met by state-owned coal-fired plants. Endowed with over 212 billion tonnes of coal, fossil fuels are likely to dominate power generation soon, but Botswana has a target of at least 18 percent of national production being generated from renewables by 2030.

Gas-rich Qatar announced two major solar projects that will more than double its energy output from the renewable source within two years. The new plants at Mesaieed and Ras Laffan will take Qatar’s solar output to 1.67 GW by the end of 2024. Mesaieed and Ras Laffan are key bases for Qatar’s natural gas production, which is also undergoing a major expansion. South Korean conglomerate Samsung will lead the construction of the new solar plants, with an initial investment of more than US$600 million (mn). Whilst lagging behind other Gulf states in the solar race, Qatar has announced a target of 5 GW of solar energy capacity by 2035.

South Africa’s Tiger Brands will soon roll out solar power at its manufacturing sites, kicking off a multi-million rand investment into sustainable energy, the country’s biggest food producer said. Demand for sustainability has multiplied in the past few years as shareholders increasingly expect companies to take steps toward greater transparency and use cleaner energy. Onsite solar power and other renewable energies will be installed at 35 manufacturing sites across South Africa by 2030, beginning with four sites, which will generate 2 MW of power, providing at least a third of their power usage, Tiger Brands said. Solar power generation at these four sites is expected to go online between the last quarter of this year and the first quarter of 2023.


French energy firm Engie has started commercial operations at its Kerian solar power project in Malaysia, the company’s first such plant in Southeast Asia. The project, located in Perak state, has a capacity of 100 MW, or 136.44 megawatts-peak (MWp). Kerian Solar, named after the special-purpose company formed by a joint venture between Engie and TTL Energy Sdn Bhd, has entered into a 21-year power purchase agreement (PPA) with Malaysia’s state utilities company Tenaga Nasional Berhad TENA.KL. The project will contribute to Engie’s plans to install 50 GW of renewable energy capacity globally by 2025.

Norway is right to preserve water in its hydroelectric dams to secure the country’s power supply, German Chancellor Olaf Scholz said. Norway plans to regulate its power production more and could ultimately limit exports to prevent hydroelectric reservoirs from running out of water in the coming winter, the government has said. The Nordic country last year inaugurated its first direct power link with Germany, the 1.4 GW NordLink cable. High demand and low precipitation have resulted in low water levels in Norway’s hydropower reservoirs, pushing domestic electricity prices to record highs and prompting some politicians to call for a halt to exports.

News Highlights: 7 – 13 September 2022

National: Oil

Government plans US$2.5 bn aid to oil firms hit by soaring costs

12 September: India plans to pay about INR200 bn (US$2.5 billion) to the fuel retailers, such as Indian Oil Corporation (IOC), to partly compensate them for losses and keep a check on cooking gas prices. The oil ministry has sought compensation of INR280 bn, but the finance ministry is agreeing to only about an INR200 bn cash payout. The government had earmarked oil subsidy at INR58 bn for the fiscal year ending March, whilst fertiliser subsidy was pegged at INR1.05 tn. State oil companies are obligated to buy crude at international prices and sell locally in a price-sensitive market, whilst private players such as Reliance Industries Limited (RIL) have the flexibility to tap into stronger fuel export markets. India imports about half of its liquefied petroleum gas, generally used as cooking fuel. The price of the Saudi contract price, the import benchmark for LPG in India, has increased 303 percent in the past two years, whilst the retail price in Delhi was increased by 28 percent, Oil Minister Hardeep Singh Puri said.

GSL builds ship to supply gas cylinders to Lakshwadeep

8 September: Goa Shipyard Limited (GSL) launched its first indigenous LPG (liquefied petroleum gas) cylinder carrier with the second one expected to launch in the coming months. The ship will play a key role in ensuring the supply of gas cylinders to the residents of Lakshwadeep’s scattered islands. The vessel, which can carry 2,000 gas cylinders, will be delivered to the Lakshwadeep administration in the next few months, GSL chairman and managing director Brajesh Kumar Upadhyay said. GSL inked the contract for the two LPG carriers on 23 September 2019. Developed in-house by GSL, the ship is designed to carry LPG cylinders from the mainland to various islands of Lakshadweep.

BPCL plans to load Sokol cargo in September

8 September: Indian state refiner Bharat Petroleum Corporation Limited (BPCL) is re-attempting to charter a ship to load 700,000 barrels of Russia’s Sokol crude oil. The Sokol cargo had been one of two sold by ONGC Videsh, the overseas investment arm of and Natural Gas Corporation (ONGC) to refiners Hindustan Petroleum Corporation Limited (HPCL) and BPCL in March. BPCL has provisionally booked the Russian tanker Yuri Senkevich and is trying to obtain insurance coverage. India recognises cover provided by Russian insurance companies and the Indian Register of Shipping (IRClass) provides classification to vessels managed by SCF Dubai. ONGC has a 20 percent stake in the Sakhalin 1 project that produces a Russian grade known as Sokol, which ONGC exports through tenders. India, the world’s third-biggest oil consumer and importer, has not banned Russian oil imports.

Software snag hits IOC’s LPG booking system but no need to panic

7 September: Indian Oil Corporation (IOC)’s LPG (liquefied petroleum gas) booking and delivery platform managed by tech giant IBM has been hit for the last two days by a software snag but the country’s largest fuel retailer said alternative methods were in place and supplies were being maintained through the manual mode. IOC along with IBM and Oracle are working to restore the system, the company said. Since most of the consumers have connections with two refills and supplies are near normal, households did not have to face the LPG crisis. However, dealers said those with single-cylinder connections will have to use alternative methods. IOC had, in 2020, entered into a collaboration with IBM to transform its customer experience using digital tools.

National: Gas

India’s LNG imports seen at multi-year lows in August

7 September: Liquefied natural gas (LNG)imports by India likely hovered near multi-year lows in August whilst natural gas inflows so far this year are estimated to have declined more than 10 percent on year. India’s August LNG imports were only around 1.45 million tonnes (MT), the lowest since at least 2018, compared with 1.84 MT in July, according to shipping data from S&P Global Commodity Insights. Indian buyers attributed their unwillingness to purchase expensive LNG spot cargoes to their inability to pass on costs to industrial and residential customers, as well as lower domestic gas prices due to existing price ceilings. The PPAC (Petroleum Planning and Analysis Cell) data for the April-July period showed LNG imports fell 7.9 percent on the year to 9.97 bcm (billion cubic meters).

National: Coal

Madhya Pradesh government won’t import coal for thermal power plants

11 September: The Madhya Pradesh (MP) government has decided not to import coal for its thermal power stations. In May 2022, MP Power Generating Company Limited (MP Genco) invited tenders for importing 7.5 lakh metric tonnes of coal. As per estimates made in the tender documents, it would have cost around INR9.76 bn (without transportation costs) but was likely to be much higher, as rates were higher in volatile foreign markets. Later, the Union government asked states to provide their requirements to Coal India Limited (CIL) as it would import and provide it to states that have not floated tenders for import yet. This coal was to be mixed with indigenous coal (10 percent imported + 90 percent local) to cope with ‘coal scarcity’. Nearly four months after issuing the tenders, the MP government has decided against importing coal.

India considers new coal imports as energy supply concern grows

9 September: Energy officials in India are considering whether further coal imports may be needed to avoid any fresh squeeze on the nation’s power supply. Coal helps produce about 70 percent of India’s electricity. Coal India Limited (CIL), issued a first-ever import tender in June and NTPC Limited. also added more purchases from seaborne markets under Prime Minister Narendra Modi’s government’s efforts to bolster supplies. India is seeking to avoid any repeat of 2021’s coal crunch, the worst in years and triggered by a prolonged monsoon season which flooded mines and choked shipments. Coal-fired power generation jumped almost 16 percent in the first week of September from a year earlier, as warmer weather in several parts of the country lifted demand for cooling.

Coal price hike remains difficult for CIL

8 September: Coal India Limited (CIL) informed investors that increasing coal prices remain difficult in the current context when the economy is grappling with high inflation. The miner was seeking to raise prices to mitigate high input costs on account of high diesel and explosives prices, among others. CIL has not raised prices in the last four years. CIL was rather focused on ramping up production and cost control to overcome the cost pressure. CIL was hopeful of reaching close to the H1 production target of 306 million tonnes (MT) by September. For FY23, the annual production target is 700 MT. CIL expects to achieve production levels of above 900 MT by 2024-25.

National: Power

India power demand growth rate seen nearly doubling in next five years

8 September: India expects annual electricity demand to grow at an average of 7.2 percent over five years ending March 2027, a draft government plan showed, nearly double the growth rate of over 4 percent seen during the five years to March 2022. The Central Electricity Authority (CEA), an advisory body to the federal power ministry, said in a draft plan India’s power demand would reach 1,874 billion units during the year ending March 2027, compared with over 1,320 billion units in 2021/22. India would add a power generation capacity of 165.3 gigawatt (GW) over five years ending March 2027, most of which would be renewable energy, according to the plan. That would represent a 41 percent increase from the current installed capacity of 404.1 GW.

OTPC plans to add one more 360 MW power unit at Palatana

8 September: ONGC Tripura Power Corporation Limited (OTPC) has planned to establish one more 360 MW power unit at its Palatana plant in Tripura’s Gomati district. Currently, the OTPC, one of the subsidiary companies of ONGC is successfully running two power generation units with a combined capacity of 726 MW. Seven Northeastern states are receiving power from the OTPC’s Palatana plant. OTPC is also in talks with the state government for the enhancement of old power plants and new power units, he said, adding no final decision in this regard has been taken yet.

Sterlite Power arm commissions transmission lines in Gujarat

7 September: Sterlite Power’s Mumbai Urja Marg Transmission Limited (MUML) has commissioned 400 kV (kilovolt) Banaskantha, Kansari and Vadavi Transmission lines in Gujarat. The high voltage transmission line will help in the evacuation of around 1000 MW of renewable power from the pooling station at Bhuj in northern Gujarat to the national grid, a company statement said. The transmission line, which has been commissioned 4 months ahead of schedule, will significantly augment the available power transmission capacity of the state, taking it from 9300 MW to 11200 MW. Against India’s renewable capacity of 90 GW, Gujarat’s contribution stands at around 12 GW. On the back of its strong energy infrastructure, Gujarat aims to establish more than 67 GW of renewable energy by 2030.

National: Non-Fossil Fuels/ Climate Change Trends

India needs up to 10 GW of annual wind energy tender capacity to install 70 GW by 2030: GWEC

12 September: India will require 8 gigawatt (GW) to 10 GW of annual tender capacity between 2022-29 to be able to install 70 GW of onshore wind capacity by 2030, according to the Global Wind Energy Council (GWEC) report. The report mentioned that the average annual wind capacity tendered by the Solar Energy Corporation of India, excluding hybrid tenders, between 2017 and 2021 was 3.5 GW, whilst 1.6 GW of average annual capacity was tendered between 2018 and 2021 by it as part of hybrid tenders. It said that this 21.5 GW of onshore wind capacity would produce about 37,800 GWh of electricity from 2026, enabling 24 million homes to be powered with clean energy per year. This also translates to powering 10 million electric vehicles on an annual basis. The wind power generated will save 525 million metric tonnes of carbon dioxide emissions which would otherwise be generated by thermal plants—this is the same as taking 114 million cars off the road, presenting a huge upside in terms of air pollution and public health cost savings, according to GWEC.

Avaada Energy bags 300 MW solar project from MSEDCL

12 September: Avaada Energy said it has won a 300 MW solar project at a tariff of INR2.83 per kWh (kilowatt hour) from Maharashtra State Electricity Distribution Company Limited (MSEDCL). Avaada Group has been declared one of the winners in an auction conducted by MSEDCL to procure power from 500 MW of grid-connected inter or intrastate solar projects (Phase-VIII) on a long-term basis, it said. As per the terms of the tender, the projects can be set up anywhere in India and are required to supply power to MSEDCL at the state grid in case projects are set up in Maharashtra (Intra-State projects) and Western Region (WR) periphery.

Punjab thermal power plants to start utilising biomass

9 September: Punjab’s thermal power plants are going to use paddy straw as fuel by blending the biomass pellets with coal, which will reduce the burning of crop residue and control air pollution. The use of biomass will start from the current season, as Punjab State Power Corporation Limited (PSPCL) has placed purchase orders for 6,000 metric tonnes of straw pellets or briquettes. In September last year, the central power ministry made it mandatory for coal-fired units to use 5-10 percent of biomass pellets, of agro-residue within a year from the announcement of policy (8 August 2021).

Adani to build 3 giga factories in India as part of US$70 bn green investment

7 September: Asia’s richest man Gautam Adani said his ports-to-power conglomerate will build three giga factories for manufacturing solar modules, wind turbines, and hydrogen electrolyzers as part of a US$70 billion investment in clean energy by 2030. Adani group is stepping up investments across the green energy value chain as it aims to become the world’s top renewable energy producer by 2030. The new giga factory for power electronics will be in addition to four giga factories announced last year for making integrated solar PV modules that will produce electricity from sunlight, electrolyzers that produce hydrogen from water, fuel cells and batteries to store energy from the grid as well as 20 GW solar energy capacity by 2025 for captive needs.

International: Oil

OPEC sticks to oil demand growth view, sees pre-pandemic demand in 2023

13 September: Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecasts for robust global oil demand growth in 2022 and 2023 citing signs that major economies were faring better than expected despite headwinds such as surging inflation. Oil demand will increase by 3.1 million barrels per day (bpd) in 2022 and by 2.7 million bpd in 2023, unchanged from last month, the Organization of the Petroleum Exporting Countries (OPEC) said. Oil use has rebounded from the lows of the pandemic, although high prices and Chinese coronavirus outbreaks have trimmed 2022 projections. The downgrades, in OPEC’s view, have delayed a recovery in oil use to above 2019 levels until 2023, it said. Oil prices traded lower after the OPEC report was released, slipping below US$94 a barrel. OPEC and allies including Russia, known as OPEC+, have this year been ramping up oil output as they look to unwind record cuts put in place in 2020 after the pandemic slashed demand.

Indonesia considering buying Russian oil as fuel prices soar

12 September: Indonesian President Joko Widodo is considering joining India and China in buying Russian oil to offset the increasing pressure of rising energy costs. Widodo hiked subsidised fuel prices by 30 percent and said that the price hike was his “last option” due to fiscal pressures, sparking protests across the nation of 270 million people. Any move to purchase Russian crude at prices above the cap agreed by G7 countries could subject Indonesia to US (United States) sanctions. In August, Tourism Minister Sandiaga Uno said that Indonesia had been offered Russian crude at a 30 percent discount. Following this, the country’s state-owned oil company, Pertamina said it was reviewing the risks of buying Russian oil.

Oil output in Permian to rise in September to highest on record: EIA

12 September: Oil output in the Permian in Texas and New Mexico, the biggest US (United States) shale oil basin, is due to rise 66,000 barrels per day (bpd) to a record 5.413 million bpd in October, the US Energy Information Administration (EIA) said. Total output in the major US shale oil basins will rise 132,000 bpd to 9.115 million bpd in October, the highest since March 2020, the EIA projected. In the Bakken in North Dakota and Montana, the EIA forecast oil output will rise 21,000 bpd to 1.204 million bpd in October, the most since November 2020. In Eagle Ford in South Texas, the output will rise 26,000 bpd to 1.250 million bpd in October, its highest since April 2020.

US emergency oil reserves tumble to lowest since 1984

12 September: United States (US) emergency crude oil stocks fell 8.4 million barrels to 434.1 million barrels, their lowest since October 1984, according to US Department of Energy (DOE) data. President Joe Biden in March set a plan to release 1 million barrels per day over six months from the SPR (Strategic Petroleum Reserve) to tackle high US fuel prices, which have contributed to soaring inflation. The SPR stocks also have declined due to sales from congressional mandates and Biden’s price initiative. The oil is sold to qualified oil companies via online auctions, and prices are set using a five-day average bracketing the date of delivery.

Ecuador court paves way for referendum on oil drilling in Yasuni reserve

7 September: Ecuador’s top electoral court has opened up a route for a referendum to ban oil drilling in the Yasuni National Park, an environmental group said, a move which could disrupt government plans to boost its crude production. Electoral authorities had repeatedly denied calls for a vote on whether oil in the Yasuni reserve, one of the planet’s most species-diverse rainforests, should be kept underground indefinitely. Former President Rafael Correa had in 2007 proposed to leave the oil reserves untouched if wealthy countries contributed US$3.6 billion dollars to offset lost revenue, but later abandoned the plan due to lack of international support. The current administration of conservative ex-banker President Guillermo Lasso now hopes to more than double the country’s oil output to one million barrels per day – but is facing opposition from environmental and indigenous groups.

International: Gas

Pemex deepwater gas project draws rebuke from Mexico’s regulator

13 September: Mexico’s oil regulator and state company Pemex are at odds over how to develop a deepwater natural gas project, eight people close to the matter said, threatening to stall a US$1.5 billion energy venture. The Lakach field holds up to 937 billion cubic feet of reserves but rising costs have hindered development. Now, a Pemex proposal to revive development with US liquefied gas company New Fortress Energy is at issue. The project’s fate could depend on the replacement for CNH chief Rogelio Hernandez, who resigned. In July, Pemex and New Fortress announced a “long-term strategic partnership” for Lakach that would supply gas for domestic use and produce liquefied natural gas for exports. Lakach, a Gulf of Mexico field with the potential to supply up to 1.8 billion cubic feet of gas per day, could become the country’s first commercial deepwater gas project and provide a huge boost for a country importing over 80 percent of the fuel.

Portugal PM calls on France to back MidCat gas pipeline across the Pyrenees

13 September: Portugal’s Prime Minister (PM) Antonio Costa has urged France to stop blocking the proposed MidCat gas pipeline across the Pyrenees noting it would help central and eastern Europe wean themselves off of Russian gas. Spain and Portugal have seven liquefied natural gas terminals that could supply central Europe via additional pipelines such as the proposed Spain-to-France Midcat pipeline. According to Costa, the European Commission has identified a subsea pipeline between Spain and Italy as an alternative to MidCat if France continues to block the project.

Cap on gas price won’t solve Europe’s shortage: Norwegian PM

12 September: Norway and the European Union (EU) have agreed to a closer dialogue on proposals to resolve Europe’s energy crisis, Norwegian Prime Minister (PM) Jonas Gahr Stoere said. EU energy ministers asked the European Commission to propose broad gas price caps, even as the EU executive itself poured cold water on the feasibility of such an idea. Norway, which is not an EU member, has become the union’s largest supplier of gas after Russia cut back exports in the wake of the Ukraine war, giving the Nordic nation record income from its petroleum industry as prices soared. Whilst Norway aims to be a reliable supplier of gas to Europe, the terms of trade should be determined by negotiations between companies that pump the hydrocarbons and the firms that buy it, the Nordic country has said.

International: Coal

Poland offers to buy Tauron’s coal mining unit for US$0.2118

13 September: Poland’s Ministry of State Assets has offered to buy Tauron’s coal production unit Tauron Wydobycie for a symbolic 1 zloty (US$0.2118), the Polish utility said. Poland’s government has been pushing a plan to carve out the coal assets of state-controlled utilities PGE, Tauron and Enea into a single entity to boost the investment potential of the utilities. Tauron Wydobycie carries out production, enrichment and sale of coal at three mining plants – Sobieski, Janina and Brzeszcze and owns Poland’s largest power coal resources, Tauron said.

Mongolia completes rail crossing with China to boost coal exports

12 September: Mongolia has launched a rail line that could help boost coal exports to China to 50 million tonnes (MT) a year, the country’s president said, ending a decade-long wait for the crossing. China has stepped up its investment in coal in the face of extreme weather, an economic slowdown and a global fuel crisis. The 233-kilometre (145-mile) Tavan Tolgoi rail line can export between 30 million and 50 MT of coal to China annually, according to Tavantolgoi Railway LLC, the state agency that built the line. In 2020 the North Asian country exported 28.6 MT of coal. Last year, exports fell to 15.9 MT. The railway is also expected to lower the cost to transport coal to US$8 per tonne, compared to US$32 per tonne when coal is delivered by truck, according to the railway authority.

China’s August coal imports rise as heatwave stokes cooling demand

7 September: China’s coal imports rose in August to their highest this year, as power generators sought additional supply from abroad to meet surging electricity demand amid the baking temperatures of a heatwave. The world’s biggest coal consumer brought in 29.46 million tonnes (MT) of the fossil fuel last month, up from 23.52 million in July, data from the General Administration of Customs showed. In the first eight months of this year, China imported 167.98 MT of coal, down 14.9 percent on a year before, customs data showed.

International: Power

Pakistan races to keep floodwaters out of power station that supplies millions

12 September: Authorities in Pakistan are scrambling to protect a vital power station supplying electricity to millions of people against a growing threat of flooding. Both the government and UN Secretary General Antonio Guterres have blamed climate change for the extreme weather that led to the flooding that submerged huge areas of the nation of 220 million. The electricity station in the district of Dadu in the southern province of Sindh, one of the country’s worst affected areas, supplies power to six provincial districts.

Czech Minister wants power price limits for industry as part of broader help

11 September: The Czech government will look at putting a limit on industrial electricity bills at the same time as it caps prices for households and state institutions to help them get through the energy crisis, Finance Minister Zbynek Stanjura said. Stanjura said the government was likely to set a maximum end price that households can be charged for electricity. Stanjura said compensation for power producers amid caps was also unlikely as they would still cover costs and keep reasonable profits. In the state sector, the government wants to ensure supplies at reasonable prices for places like schools, hospitals or other public institutions, Stanjura said. Stanjura said legislation to mandate electricity producers to sell a certain amount to the state, less than 20 percent of their output, would be necessary.

South Africa’s Eskom to reduce power cuts throughout week

11 September: South Africa’s Eskom will reduce planned power cuts after sufficient progress was made in replenishing emergency generation reserves, the utility said. Eskom’s aging power stations run mostly on coal and are highly prone to faults resulting in frequent outages which constrain economic growth. South African President Cyril Ramaphosa’s government has tried to reform Eskom to make it more efficient, but progress has been slow. Having implemented cuts of up to 4,000 megawatt (MW), Eskom said it will reduce these to Stage 3 cuts of up to 3,000 MW. Thereafter Stage 2 will be implemented. Stage 2 cuts mean that homes and businesses without their own generators will not have power for two to four hours a day.

Grid operators, exchanges call for EU to change power price rule

9 September: Europe’s transmission system operators (TSOs) and electricity exchanges have called for the European Union (EU) to change the mechanism used for raising the power market price ceiling, Finland’s grid operator said. The cost of electricity in Europe has soared this year as Russian gas supplies dwindled whilst other power sources such as nuclear and wind also faltered, raising the risk of blackouts during the coming winter. Fingrid said the grid operators and exchanges had sent a common letter to the European Commission and the EU agency for the cooperation of energy regulators (ACER). ACER said it would like to review the mechanism after two rises in the price ceiling this year. In May, the cap rose by €1,000 to €4,000 per megawatt hour (MWh), after an April French power price spike.

Thai Gulf Energy invests US$409 mn in 49 percent stake in Illinois power project

9 September: Thailand’s Gulf Energy Development Pcl said it has invested US$409 million in a 49 percent stake in Jackson Generation, a 1,200 megawatt (MW) gas-fired power project in Illinois, its first expansion into the United States (US). Gulf is acquiring the stakes from its long-term Japanese partner, J-Power and joins other Thai firms in investing in US energy, including miner Banpu Pcl, owner of Denver-based BKV, which in May bought natural gas properties from Exxon Mobil for US$750 million. Gulf currently has total capacity of 9.4 gigawatt (GW) with a target to reach 14.5 GW by 2027, most of it in Thailand. South Africa’s Eskom will reduce planned power cuts after sufficient progress was made in replenishing emergency generation reserves, the utility said.

Finland starts two backup power plants to prevent blackouts

8 September: Finnish power grid operator Fingrid started up two backup power plants to balance the country’s electricity system and prevent blackouts whilst repairs were made at a reactor seen as crucial to ensure reliable power supplies this winter. Grid operator Fingrid also asked the electricity market for more short-term power, with extra supply coming at an “exceptionally high” price of €5,000 per megawatt hour (MWh), it said. Regular wholesale power prices in Finland were at around 500 euros/MWh early. Fingrid later said the two reserve power plants, Huutokoski and Forssa, were no longer needed and were shut down.

International: Non-Fossil Fuels/ Climate Change Trends

Niger seeks renewables route to electrification

13 September: Niger, with World Bank support, launched a major electrification programme, employing renewable energy, with the goal of reaching 80-percent coverage by 2035. The US$317.5-million “Haske” project, (“Light” in the local Hausa language) aims to “accelerate access” to electricity for urban and rural households as well as to health and education establishments and businesses, Energy Minister Ibrahim Yacoubou said. The scheme includes the expansion of the use of solar photovoltaic energy, which is in abundant supply in the landlocked West African nation. Currently, wood-burning provides nearly 80 percent of the energy used in Niger households for lighting and cooking. Two-thirds of the impoverished country of 22 million people is desert, and the “harmful effects of climate change” are making matters worse, the Minister said.

EU eyes levy on fossil fuel firms to help consumers survive energy crisis

12 September: Fossil fuel firms may have to share their excess profits to help European households and industries cope with red-hot energy bills, a draft European Union (EU) plan showed as the cost of the West’s “energy war” with Russia took a growing toll. The draft European Commission proposal, which is expected to be unveiled, would see the 27 EU countries introduce a ‘solidarity contribution’ for the fossil fuel industry.

EBRD to help fund transition from gas to wind power in Egypt

11 September: The European Bank for Reconstruction and Development (EBRD) will help finance the decommissioning of 5 GW of inefficient gas-fired power plants in Egypt from 2023 whilst pledging up to US$1 billion for renewables, Heike Harmgart, EBRD’s managing director for the Southern and Eastern Mediterranean said. EBRD would raise up to US$300 million in sovereign financing for projects including work to stabilise Egypt’s grid, adding battery storage, developing the local supply chain for renewables, and retraining workers, Harmgart said. A separate US$1 billion pledged for renewables would be about one-tenth of the private funding needed for 10 GW of mainly wind-powered projects planned by the government by 2028, Harmgart said. The government is hoping gas exports can help contain pressure on Egypt’s currency after the Ukraine war triggered the latest dip in dollar inflows from portfolio investment and tourism. The role of gas is set to be an issue of dispute at the COP27 climate summit in Egypt in November.

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 2022 is the nineteenth 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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