MonitorsPublished on May 14, 2022
Energy News Monitor | Volume XVIII, Issue 44

Quick Notes

Technocratic Solutions to Climate Change

Technology as the Problem

In the 1960s, Rachel Carson’s powerful book ‘The Silent Spring’ on environmental degradation and its impact on human lives convinced people that ‘the control of nature was a phrase conceived in arrogance, born of the Neanderthal age of biology and philosophy when it was supposed that nature exists for the convenience of man’. It was scarcely coincidental that the environmental movement that followed the release of Carson’s book and the energy crisis occurred at the same time. They had common origins in rapidly increasing energy demand and even more rapid depletion of oil and natural gas. On the production side, depletion of oil and gas reserves necessitated renewed reliance on coal, as well as oil & gas exploration in offshore and wilderness areas. To combat rising production costs, technologies of scale were increasingly applied. The immense scale of the energy systems, their drain on energy resources, and the cumulative effects of their effluents evoked widespread academic debate over the possible limits to growth by the Club of Rome study published in 1972. The accident of the nuclear reactor in Three Mile Island in 1979 and numerous oil spills between 1970 and 1980 was sufficient to convince the public that ‘technology’ was in fact the main cause of environmental degradation. The environmental movement that was sustained in this period sought a radical social change in the form of increased self-determination, decentralisation of energy production and use, and decentralisation of decision making. This movement which appeared to threaten existing economic, institutional and social order has since been labelled ‘eco-fundamentalism’ and marginalised to the fringes of society.

Technology as the Solution

The climate movement of today is less radical and more practical and policy-oriented. Rather than finding alternatives for society it is seeking to find alternatives within society in the form of technology to solve the problem of environmental degradation.  The origin of this perspective can be traced to the report, ‘Our Common Future,’ also referred to as the Brundtland Report released in 1987.  It concluded that economic growth and environmental protection have to be made more compatible for humanity to have a positive future. ‘Sustainable development’ was the label attached to this compromise between the economy and the environment, and since then humanity has looked upon technology to deliver this ideal state of affairs. This was projected as the logical choice given the difficulty in changing human behaviour to change the course of growth in population and affluence. Technological ‘fixes’, even if only temporary, were seen by the dominant environmental and climate groups as the only source of comfort and hope to take on the gloom that was forecast by climate studies. Technology has in fact played a key role in facilitating a 70-fold increase in global income (GDP, Gross Domestic Product) between 1800 and 2000 without a proportional increase in energy consumption and carbon emissions. In this period global energy use increased 35-fold, carbon emissions increased 20-fold, and the world’s population grew 20-fold. The sharp growth in population was overshadowed by the positive feedback loop of capital creating more capital and thus causing super-exponential growth in industrial output. Substantial improvement in energy use efficiency was achieved through the systematic application of technology and knowledge. Cultural historian Leo Marx argued that our inadequate understanding of the part played by ideological, moral, religious, and aesthetic factors in shaping a response to environmental problems makes us lean more on science and technology.  The faith in scientific knowledge and technology is so strongly embedded in society that environmental problems are named after their biophysical symptoms such as ‘soil erosion’ or ‘acid rain’ and scientists and technologists are expected to provide solutions. Marx points out that if we as a society, were less technology-friendly, might have avoided the term ‘Greenhouse effect’ in favour of ‘the problem of global dumpsites’. Social justice would have set the terms of the climate debate rather than economic and technological efficiency if ‘colonisation of the atmosphere’ had been the chosen term rather than ‘climate change’. The technology-friendly environmental movement has facilitated the crossover of hard-core environmentalists of the 70s to become counter-experts who borrow from the same industrial structure that created a polluted and divided world. They project science, technology, and expert-led process as solutions to the environmental conflict whilst marginalising inherent social contradictions. A new course of scientific inquiry known as ‘industrial ecology’ has been designed to marry industry and ecology so as to minimise the intensity of resource use in production and consumption.  Under this course, the use of technology to reduce environmental impact can, in theory, not only compensate for more people but also the impact of more affluent people.


The expectation from technology is that it will double the supply of energy and halve the level of emissions by 2050.  In other words, ‘technology’ is expected to ensure that the current emissions track, which would see energy-related emission increasing to around 62 Gt CO2 (gigatons of carbon dioxide) in 2050, is reduced to half the level by 2050. Energy-related emissions alone must be reduced to just 14 Gt CO2 per year. The problem here is that most of the gains in emission reduction must come from developing rather than developed countries. More than 75% of the global growth in CO2 emissions will originate from developing countries, with more than 50% from China and India alone.  Halving emissions in OECD countries alone will yield only around 10 Gt CO2 emission reductions needed. Even if OECD emissions are reduced to zero, this would still only deliver up to 38% of the 48 Gt CO2 emissions reductions needed. Key issues in this context are whether the optimism over technology is justified and how developing nations would pay for technologies that are owned predominantly by the private sector in developed nations. The answers to these questions expose some inconvenient truths. Energy technologies in use today such as the internal combustion engine and the steam turbine were invented in the 1880s, whilst nuclear power generation and gas turbines were invented in the 1930s. No technology under development today is expected to rival these technologies in the next two to three decades unless their natural course of progress is interrupted by massive investment. The cost estimates for dramatic interventions for technological shift vary widely. According to the IPCC, a 20-38% reduction in emissions can be achieved at a cost of US$50 per tonne of CO2.  The Stern report gave an even more optimistic projection of a 70% reduction in CO2 emissions by 2050 at the same cost.  Empirical literature suggests that using current technology, the average abatement cost for a 70% reduction in carbon in the energy sector would be about US$400 per tonne of carbon. Assuming that marginal costs of mitigation do not fall, the cost of emission reduction programmes is estimated at around US$800 billion to US$1.2 trillion per year. Under the egalitarian principle for cost sharing, large amounts of wealth have to be transferred from developed nations to developing nations. So far, developed countries have resisted this idea. The straightforward application of the equity principle will necessarily create winners and losers. Moreover, even when a country makes a case for the equity principle, it will be difficult to discern between the country’s concern with equitable burden sharing and its informed calculation of ‘national interest’. Constructing a single formula that embraces the self-interest of both developed and developing nations is impossible.  Dynamic graduation formulae on the other hand offer a degree of flexibility for balancing the growth concerns of developing countries against the concern of developed countries to expand participation and reduce leakage. For now, developed and developing nations have agreed on a graded burden sharing formula for what is essentially a technocratic response to climate change. This will postpone, but not eliminate the need for a social and political response to the environmental problem. Technology which appears to be rational and efficient, has often been short sighted as it tends to betray the future for the sake of the present. Source: International Energy Agency, Energy Technologies Perspective 2020;
Note: CCUS: Carbon capture, utilisation and storage

Monthly News Commentary: Natural Gas

Higher Price sought for Domestic Gas



Vedanta Ltd is seeking a minimum US$19 price for natural gas produced from a field off Gujarat as it looks to cash in on the recent surge in global energy prices. The firm has called for bids for the sale of 0.25 million metric standard cubic meter per day (mmscmd) of gas produced from CB/OS-2 block located in Suvali, Surat district of Gujarat. Bids have been sought based on the average monthly price of Brent crude oil and Platts' West India Marker (WIM) for liquefied natural gas (LNG) shipments. The sale price will be lower of Platts LNG WIM + 1.0 or a premium over 16.67% average Brent crude oil price. Vedanta, the operator of the block, is seeking buyers for 0.25 mmscmd of gas for 14 months starting 1 May 2022. Reliance Industries Ltd (RIL) had sold natural gas produced from a coalfield in Madhya Pradesh for over US$24 to firms, including GAIL (India) Ltd, GSPC and Shell. RIL sold 0.65 mmscmd of gas from its coal-bed methane (CBM) block SP-(West)-CBM-2001/1 at a US$8.28 premium over 13.2%  of the prevailing Brent crude oil prices.


According to the Institute for Energy Economics and Financial Analysis (IEEFA) report, by shifting away from expensive LNG imports for fertiliser production and using domestic supplies instead, India could reduce its vulnerability to high and volatile global gas prices and ease the subsidy burden. Natural gas is the main input (70%) for urea production, and even as global gas prices increased 200% from US$8.21/mmBtu (metric million British thermal unit) in January 2021 to US$24.71/mmBtu in January 2022, urea continued to be provided to the agriculture sector at a uniform statutory notified price, which led to an increased subsidy. The budget allocation for the fertiliser subsidy is about US$14 billion (bn) or INR1.05 trillion (tn), the report said. The prices of domestic gas and imported LNG are pooled to supply gas to urea manufacturers at a uniform price. With domestic supplies being diverted to the government’s city gas distribution network, the use of expensive imported LNG in fertiliser production has been rising rapidly. In FY2020/21 the use of regasified LNG was as high as 63% of the total gas consumption in the fertiliser sector, according to the report.


The Maharashtra Natural Gas Ltd (MNGL) has started trial operation of its LNG-CNG conversion plant at Pathardi on the outskirts of the city, after getting all the necessary permissions. The plant is expected to be commercially operational within a month. As per MNGL, the trials of the LNG processing plant started and around 18,000kg CNG was produced on the first day. MNGL will bring LNG to Nashik through tankers and will convert it into CNG for vehicles and PNG for cooking. The plant will be able to produce a total of 1 lakh kg CNG per day and it will be enhanced gradually. The CNG will be supplied to the outlets in the city. Moreover, MNGL will provide adequate supply to the Nashik Mahanagar Parivahan Mahamandal Ltd (NMPML) for its CNG buses.


BPCL announced investment of INR39.72 bn (US$ 521 million) for development of city gas distribution (CGD) network in two districts Maharashtra. The state-run oil PSU (Public Sector Unit) has launched the CGD network in Aurangabad and Ahmednagar districts of Maharashtra. BPCL will invest around INR16 bn (US$210 mn) over next 5 years and a total of INR40 bn (US$525 mn) for completion of full project. BPCL won geographical area (GA) of Aurangabad and Ahmednagar during ninth round of bidding of Petroleum and Natural Gas Regulatory Board (PNGRB), through a wholly owned subsidiary Bharat Gas Resources Ltd (BGRL). Despite the pandemic during last two years, the company has already started laying steel pipeline for development of PNG and CNG in the two districts. BPCL has developed 21 CNG stations (15 in Ahmednagar and 6 in Aurangabad) and work is in process for 40 more CNG stations to be set up in both districts. For the industrial consumers, the connectivity in areas of Walunj and Shendre in Aurangabad, and Supa in Ahmednagar is expected to be completed by September 2022.

Gas Trade

Reliance Industries Ltd (RIL) has sold natural gas produced from a coalfield in Madhya Pradesh for over US$23 to firms, including ­GAIL (India) Ltd, GSPC, and Shell, but its price discovery was beaten by smaller explorer Hindustan Oil Exploration Company (HOEC), which sold half of its sales volume for over US$25. RIL sold 0.65 mmscmd of gas from its CBM block SP-(West)-CBM-2001/1 at a US$8.28 per mmBtu premium over prevailing Brent crude oil prices. The firm had sought bids at a premium over the base of 13.2% of Brent crude oil prices. At the current Brent crude oil price of US$115 per barrel, the base comes to US$15.18 per mmBtu and adding US$8.28 premium bid by state-owned gas utility GAIL and other firms, the final price comes to US$23.46 per mmBtu. This rate compares to US$2.9 that state-owned producer ONGC and Oil India Ltd get gas from fields given to them on a nomination basis. A higher capped rate of US$6.13 is available for discoveries made in difficult areas, such as the deep sea. However, no cap is imposed on gas from CBM blocks or areas like B-80 in Mumbai Offshore that was bid out under-discovered field round. RIL gets US$6.13 for gas from its KG basin fields. HOEC sold 0.3 mmscmd of gas to Gujarat State Petroleum Corp (GSPC) at a price of around 22% of Brent. At the current Brent price, this translates into a price of US$25.3. As per the government mandate, gas producers are obligated to tender the available quantities, seeking bids from users on a formula. The sources said e-auctions of both RIL and HOEC intense competition with participation from multiple companies, including GAIL, GSPC, Indian Oil Corporation (IOC), BPCL, Hindustan Petroleum Corporation Ltd (HPCL), Shell, and Adani-Total Gas Ltd. In the RIL tender, GAIL, and GSPC picked up 0.28 mmscmd each while Shell took 0.04 mmscmd. City gas distributor Think Gas took 0.02 mmscmd and an affiliate of RIL bought a similar volume. GSPC bought the entire 0.3 mmscmd of the gas bid out by HOEC.

Policy & Governance

In order to provide some relief to industries in NCR where norms require them to shift to cleaner fuels, the Haryana government has proposed to reimburse 50% of VAT collected on natural gas purchased by MSMEs (Micro, Small and Medium Enterprises) for a period of two years. As per the Haryana government, to promote industrial exports and as per the demand from exporters, the government has decided to provide freight subsidy for industrial exports, details of which will be notified separately by the industries and commerce department. In a relief for consumers of domestic piped CNG (compressed natural gas) as well as vehicle owners, Maharashtra Finance Ministry proposed a drastic cut in the Value Added Tax (VAT) on natural gas from 13.5% to 3%. As per the State Ministry, this reduction will cause a revenue loss of INR8 bn annually. Natural gas is "environment-friendly" and is largely used for domestic piped gas supply and for CNG-powered motor vehicles, auto-rickshaws, taxis, and private vehicles.

Rest of the World


The EU (European Union) leaders are expected to agree at a two-day summit starting to jointly buy gas, as they seek to cut reliance on Russian fuels and build a buffer against supply shocks, but the bloc remains unlikely to sanction Russian oil and gas. The invasion of Ukraine by Russia, Europe's top gas supplier, pushed already-high energy prices to records and has prompted the EU to attempt to slash reliance on Russian fossil fuels by hiking imports from other countries and quickly expanding renewable energy. The European Commission said it was ready to lead negotiations pooling demand and seeking gas ahead of next winter, following a similar model to how the bloc bought COVID-19 vaccines. The US exporters have shipped record volumes of LNG to Europe for three consecutive months, as prices have jumped to more than 10 times higher than a year ago. Europe is competing in global markets for tight LNG supply, and analysts have warned a jump in demand could inflate prices further and leave poorer nations struggling to afford supply. Germany and Qatar are negotiating a long-term energy partnership, as Europe’s biggest economy seeks to become less dependent on Russian energy sources. Germany said a partnership had been clinched, but Qatar stopped short of saying a deal had been finalised. Russia is the largest supplier of gas to Germany, and Germany has launched several initiatives to lessen its energy dependence on Russia since it invaded its neighbour Ukraine. Qatar said that for years it had sought to supply Germany, but discussions never led to concrete agreements. Germany has recently announced plans to build two LNG terminals. With no terminals currently, Germany cannot receive direct shipments of LNG from Qatar. According to French Prime Minister (PM), France wanted to end its imports of Russian gas and oil by 2027. As part of that effort, the country will boost its LNG import capacity, he said. Asia’s LNG demand growth may cool this year as buyers baulk at record-high spot prices pushed even higher by Europe’s shift to the super-chilled fuel amid the Ukraine crisis. High spot prices since late last year have already slowed trade and are likely to crimp demand growth of the fuel in Asia - the largest consuming region - even as some countries see widening gas supply deficits as domestic production falls. This comes just as new LNG buyers in Asia, the Philippines and Vietnam, are set to enter the market later this year. Asia’s spot LNG benchmark price assessed by S&P Global Platts, known as Platts JKM, jumped to a record US$84.762 per metric mmBtu on the back of strong prices in Europe as buyers scour global markets for LNG cargoes to replace Russian gas and LNG. Consultancy Wood Mackenzie expects Asian LNG demand growth to slow to 2% year-on-year in 2022, from 8% in 2021. Europe must urgently diversify its natural gas supply sources to reduce its dependence on Russia, Portugal’s energy secretary of state, Joao Galamba said. Galamba said diversification efforts must be coordinated among European countries, with the help of the US, Qatar, Saudi Arabia, Norway and Algeria and other gas producers. But the diversification of sources will not be enough to solve the problem, he said, explaining the continent’s logistics chains have for years been too dependent on gas flows from Eastern Europe. He said Portugal does not depend on gas pipelines from Russia as its imported LNG is transported by ships and unloaded at the deep-water port of Sines, the closest European port to the US.

North and South America

President Joe Biden promised the US would deliver at least 15 billion cubic metres (bcm) more of liquefied natural gas (LNG) to Europe this year than planned before. The deal would be announced and would also include higher US LNG exports to the European Union in 2023. Two years ago, the American LNG company Tellurian was in free fall: Its stock price collapsed, it laid off 40%  of its staff, and suspended a key project in Louisiana. US­ banned all imports of LNG, petroleum and coal from Russia, and has for years encouraged its European allies to decrease their dependence on their eastern neighbour. Eight LNG terminals operate in the US, pumping out 14 billion cubic feet (400 million cubic meters) per day, and fourteen other terminals have already been approved by the Federal Energy Regulatory Commission (FERC). That’s the case for Driftwood LNG, Tellurian's future liquefaction plant and export terminal, south of Lake Charles, Louisiana.

Russia & the Far East

Russian energy giant Gazprom said that it was continuing to supply natural gas to Europe via Ukraine in line with requests from European consumers. The company said requests stood at 104 million cubic metres for 24 March, down from 106.5 million cubic metres the previous day.


China’s National Energy Administration (NEA) is targeting a 4.2% rise in the country’s natural gas production this year to 214 bcm. The world’s top energy user and the biggest emitter of greenhouse gases sees natural gas as a key bridging fuel on the way to eventually reaching its carbon-neutral goal by 2060. Natural gas production grew 8.2% last year to 205.3 bcm.

Rest of Asia-Pacific

Japanese energy company Eneos Holdings aims to withdraw from Myanmar’s Yetagun gas project in response to "social issues". In January, TotalEnergies and Chevron Corp, partners in a major gas project in Myanmar, said they were withdrawing from the country, citing its worsening humanitarian situation after the coup.

News Highlights: 30 March – 5 April 2022

National: Oil

Higher transportation cost pushes petrol rate in Maharashtra’s Parbhani district to INR122.67 per litre

5 April: The rate of petrol in Parbhani district in Maharashtra reached INR122.67 a litre, one of the highest prices in the country, mainly due to the higher transportation cost. The steep rise is also attributed to the long distance of over 400 km between Parbhani city located in the Marathwada region and the fuel depot at Manmad in the Nashik district in north Maharashtra, a petrol dealer said. He said the roundtrip distance for a tanker transporting fuel to Parbhani from the Panewadi-based depot in Manmad is nearly 730 km. Bhedsurkar said the fuel depot at Panewadi is the nearest to Parbhani compared to other such depots in Maharashtra. When contacted, an official at the HPCL (Hindustan Petroleum Corp Ltd) regional office in Aurangabad city said that the prices of fuel at a specific location depend on the distance between that location and the nearest depot.

MRPL buys 1 million barrels of Russian Urals crude for May loading

4 April: Mangalore Refinery and Petrochemicals Limited (MRPL) has bought 1 million barrels of Russian Urals crude for May loading via a tender, three trade sources familiar with the deal said, a rare purchase driven by the discount offered. Refiners in India, the world’s third biggest oil importer and consumer, have been snapping up Russian oil through spot tenders since Russia’s invasion of Ukraine on 24 February, taking advantage of deep discounts as other buyers back away. With MRPL’s purchase, India has so far booked at least 14 million barrels of Russian oil since 24 February, compared with nearly 16 million barrels in all of 2021. The Urals oil discount to dated Brent has hit a record for the post-Soviet era as buyers stayed away from Russian oil. Unlike several Western countries, India has not banned Russian oil imports.

India supports release of oil from reserves to cool prices: Teli

1 April: As oil prices dived on news that the US (United States) was considering record release from the reserves, India said it supports the initiative to let out from the strategic stockpile to cool rising oil prices. Oil prices plunged on news that the US was considering releasing up to 180 million barrels from its strategic petroleum reserve (SPR). International benchmark Brent crude fell around 4% to US$108.85 per barrel. Minister of State for Petroleum and Natural Gas Rameswar Teli said India maintains SPR of 5.33 million tonnes (MT), or equivalent of about 9.5 days of crude oil requirement. In addition, oil marketing companies (OMCs) currently have a capacity of 64.5 days. While OMCs paused retail price revision during the period when international oil prices spiked to a 14-year high of US$139, petrol and diesel prices have been since 22 March revised 9 times, totalling INR6.4 per litre. The opposition parties have accused the government of holding the rates when five states including Uttar Pradesh and Punjab went to the polls, and raising prices after the elections were completed. India is dependent on imports to meet 85% of its oil needs.

National: Gas

Oil and gas price hike supports upstream profitability of producers: Fitch

5 April: The more than doubling of natural gas prices and rise in oil prices will boost the profitability of oil and gas producers like Oil and Natural Gas Corporation (ONGC) and Reliance Industries Ltd (RIL), Fitch Ratings said. From 1 April, the government has raised the price of gas for old fields of ONGC and Oil India Ltd (OIL) to US$6.1 per million metric British thermal unit (mmBtu) for April-September 2022 from US$2.9. The rate for difficult fields of deepsea KG-D6 of RIL has gone up to US$9.9 per mmBtu from US$6.1. Fitch said the natural gas price increase was largely in line with its expectations, driven by the rise in global prices in 2021.

CNG price hiked by INR2.5 per kg in Delhi

4 April: The Indraprastha Gas Limited (IGL) hiked the price of compressed natural gas (CNG) in Delhi by INR2.5 per Kg to INR64.11 per Kg. The last price hike was seen when it was hiked by 80 paise per kg. In light of the significant hike in CNG prices, cab drivers have expressed dismay. A cab driver in Delhi said that he wouldn't prefer switching on ACs for customers as the prices of CNG have gone up. This is the seventh increase in CNG prices in the last month. In all, rates have gone up by about INR6.5 per kg. The increase comes on the back of a surge in gas prices globally. IGL sources natural gas from domestic fields as well as buys imported LNG (liquefied natural gas). LNG in the spot or current market touched record highs in recent months and on Thursday the government raised the price of gas produced from local fields to a record USD 6.10 per million British thermal unit from US$2.9.per kg. Meanwhile, the price of piped natural gas (PNG) was hiked by INR5 per Standard Cubic Metre (SCM). The applicable price in Delhi would be INR41.61/SCM (including VAT). For Ghaziabad and Noida, the domestic PNG price had been increased by INR5.85 to INR41.

ONGC to open Vindhyan Basin in Madhya Pradesh for gas production

31 March: Oil and Natural Gas Corporation Limited (ONGC) is set to commercialise the Vindhyan Basin in Madhya Pradesh for gas production. This would be the ninth producing Basin of India and the eighth by ONGC. The eighth Indian Basin -– the Bengal Basin -– was dedicated to the nation on 20 December 2020. Active exploration in the Vindhyan Basin began with the acquisition of seismic data in the late 1980s. ONGC said that it is now working out various monetisation options for the gas including direct marketing to industries in the vicinity, cluster-based gas production through cascade systems, CNG bottling at well-head as the gas is of high calorific value and transportation using available facility.

India to more than double price of locally produced gas

30 March: India will more than double the price of natural gas for the first half of this fiscal year, reflecting a surge in global prices, further stoking inflation in Asia’s third largest economy. India will raise the price of locally produced gas from old fields for April-September to a record high US$6.1 per million metric British thermal units (mmBtu) from the current US$2.90/mmBtu. It will raise the ceiling price for gas produced from more challenging fields to US$9.92 per mmBtu for April-September from US$6.13 per mmBtu. India links prices of locally produced gas from old fields to a formula tied to global benchmarks, including Henry Hub, Alberta gas, NBP and Russian gas. The prices will be applicable on a gross heat value basis. The Petroleum Planning and Analysis Cell of the federal oil ministry will announce the new prices. High natural gas prices will boost earnings of producer Oil and Natural Gas Corp Ltd, Oil India Limited, and Reliance Industries Limited.

National: Coal

Andhra Pradesh cancels Adani bids to supply imported coal:

4 April: India’s southern Andhra Pradesh has cancelled bids made for two separate tenders by India's Adani Enterprises to supply imported coal as the prices quoted were too high, two state. It is the first time in recent years that a major government tender for imported coal has been cancelled over high prices. Details on the cancellation have not been previously reported. Adani, India’s largest coal trader, offered to supply last month 500,000 tonnes of South African coal at INR40,000 (US$526.50) per tonne and another 750,000 tonnes at INR17,480 (US$230.08) in January. Both tenders were cancelled because the prices quoted were too high. Adani was the only bidder for the 500,000 tonnes tender, whilst Indian trader Agarwal Coal, which had also bid for the 750,000 tonnes tender, had quoted a higher price than Adani.

India’s annual coal output up 8.6 percent, supply up 18.4 percent

1 April: India’s coal production rose 8.6% to 777.2 million tonnes (MT) during the year ended March 2022, the government said, driven by a surge in power demand due to an economic recovery after the relaxation of coronavirus-related restrictions. India’s coal supply rose 18.4% to 818 MT in the fiscal year 2021/22, the government said, with domestic supply exceeding annual output by 5.2% as consumers dipped into reserves to address higher demand. The electricity sector accounts for over three-fourths of India’s coal consumption, and coal accounts for nearly 75% of India’s power production. The consumption of coal by India, the world’s second largest producer, consumer and importer of the fuel, is set to cross the 1 billion tonnes mark for the first time in the financial year 2021/22.

Coal India achieves record production of 622 MT in FY22

1 April: Coal India Limited (CIL) reported a record coal production in FY22 at 622.6 million tonnes (MT), registering an annual growth of 4.4%. In 2020-21, coal production stood at 595.2 MT. Coal supplies to power generation companies during FY22 also touched a record of 540.4 MT, up 21.4% as compared to 445 MT in FY21. CIL began FY22 with 99.13 MT of stock at its pitheads and could liquidate 38.4 MT of coal in March 2022-end. Coal output and offtake targets are pegged at 700 MTs for FY23. Meanwhile, Central Coalfields Limited (CCL), the Jharkhand-based subsidiary of Coal India Limited (CIL), has shattered all its previous records by registering the highest ever coal production and dispatch.

National: Power

Adani Power scrip hits circuit as Rajasthan discoms pay INR30 bn

5 April: Adani Power shares shot up to a 52-week high, hitting the 10% 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 March 25 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 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.

Power tariff revised in Karnataka, users will have to pay more

4 April: Amidst 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).

Central government allocates power from its plants, DERC has no jurisdiction

2 April: 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 (Delhi Electricity Regulatory Commission) jurisdiction extends only to fixation of tariff and giving advice and direction to discoms (distribution companies) of their state.

Madhya Pradesh regulatory panel clears 2.64 percent hike in power tariff

1 April: The Madhya Pradesh Electricity Regulatory Commission (MPERC) has cleared a hike of 2.64% in power tariff for the current financial year. MPERC secretary Gajendra Tiwari said that once the commission clears a hike in tariff, the three power distribution companies (discoms) in the state have to issue a public notice, and new rates come into effect seven days after the notice. There will be no hike in rates for Low Tension (LT) industrial category consumers, he said. The MPERC cleared only 2.64% hike even though the discoms had sought 8.71% increase to make up for revenue deficit, as per the approved tariff plan. Once the hike comes into effect, a consumer who uses up to 30 units of electricity per month will have to pay INR3.34 per unit against INR3.25 earlier. Power rates in the consumption slabs of 32 to 50 units, 51 to 150 units and 151 to 300 units have been hiked too. A consumer who uses more than 300 units a month will have to pay INR6.74 per per unit, against INR6.65 earlier. There are around 16.6 mn electricity consumers in Madhya Pradesh. Meanwhile, Congress leader Kamal Nath criticised the government for increasing the electricity rates.

India’s power consumption grew 4.6 percent in March as States eased curbs

1 April: India’s power consumption grew 4.6% in March from a year earlier to 126.12 billion units (BU), signalling the impact of early onset of summers and easing of lockdown restrictions by States. Power consumption in March 2021 was 120.63 BU, higher than 98.95 BU seen in the same month of 2020, as per Power Ministry data. February too witnessed 4.6% 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% in January 2022 to 111.80 BU. Growth rates were 3.3% and 2.5% in December and November 2021, respectively.

National: Non-Fossil Fuels/ Climate Change Trends

Tata Power Solar commissions 160 MW solar project in Rajasthan

5 April: Tata Power Solar has commissioned a 160 MW AC solar project at Jetstar in Rajasthan. Around 6,75,000 monocrystalline PV modules were used in this installation and it will produce 387 million units of energy per year. The Jetstar project was completed within a period of 15 months. It is one of the largest solar projects in Rajasthan.

NTPC begins commercial operation of 22 MW floating solar capacity in Kerala

1 April: NTPC Limited announced the commercial operation of 22 megawatt (MW) of floating solar capacity in Kayamkulam, Kerala. The capacity, which began commercial operation on Thursday, is part of its 92 MW Kayamkulam floating solar PV project, NTPC said. With this, the standalone installed and commercial capacity of NTPC has become 54,516.68 MW. Further, the group’s installed and commercial capacity have increased to 68,631.68 and 67,971.68 MW, respectively.

Cabinet clears Karnataka Renewable Energy Policy

30 March: The State Cabinet cleared the Karnataka Renewable Energy Policy (2022-27) that provides for developing the State as a hub of renewable energy generation as well as manufacturing of equipment related to renewable energy. The policy also envisages upgrading the renewable energy generation capacity of the State to 10 GW in the next five years. This includes 1 GW of rooftop solar energy. Presently, the State has renewable energy generation capacity of 15,392 MW. The policy envisages economic development of Karnataka by attracting investments in the field of renewable energy generation in a massive way. As part of the ambitious plans, the policy wants to develop exclusive green power corridors for evacuation of power from generation site with private participation. Interestingly, the new policy is focusing on creation of market for development of suitable storage capacity for the proposed increase in generation of the renewable energy. As part of measures to increase generation of renewable energy, the policy wants to promote floating solar and hybrid generation units in the hydel stations. Among other things, the policy enlists setting up of renewable energy parks at various places in the State including the hybrid parks. Technically, the policy wants to improve the reliability of power availability from renewable energy sources and also ensure that it is available round the clock with the help of storage methods whose costs are now seeing a reduction due to innovation in technology. The policy further wants to focus on improving the efficiency (plant load factor) of the renewable energy plants.

International: Oil

IEA still examining details of coordinated oil release: Japan Industry Minister

5 April: The International Energy Agency (IEA) is still examining details of a planned second round of the coordinated release of oil reserves, Japanese Industry Minister Koichi Hagiuda said. Japan aims to make a decision on its release plan swiftly after receiving official notification from the IEA to make the cooperative action effective, Hagiuda said.

Kazakhstan oil output down in March, Chevron leads the fall

4 April: Kazakh oil production excluding condensate fell to 1.55 million barrels per day (bpd) in March, down 3% from February, amid export problems from the Black Sea Caspian Pipeline Consortium (CPC) terminal. The fall in Kazakh oil output was because of lower intake in the Caspian Pipeline Consortium (CPC) system in the second half of March owing to storm damage to loading facilities at its Black Sea terminal situated in the south of Russia. More than 80% of Kazakhstan’s crude is exported via the CPC pipeline to the port of Yuzhnaya Ozereyevka, close to Novorossiisk, supplying around 1.2% of global oil demand. CPC terminal damage affected operations of Kazakhstan’s giant Tengiz and Kashagan oilfields led by Western oil majors including Chevron, Exxon Mobil, Total, Eni, and Shell. Chevron-led Tengizchevroil, operator of the giant Tengiz oilfield, decreased its March oil output the most among other Kazakh producers, by 6% from February to 622,209 bpd. TCO is the biggest exporter of oil via CPC pipeline and relies on the pipeline as its main route for oil deliveries. Lower oil intake in the CPC system hit its output almost immediately.

Exxon to invest US$10 billion in massive Guyana offshore oil project

4 April: Exxon Mobil Corp decided to invest US$10 billion in a fourth oil production project off the coast of Guyana, the largest in the South American country. Guyana is one of Exxon’s top bets for future production growth, with as much as 1.2 million barrels per day of oil and gas (boed) expected to be produced by 2027. Exxon and partners Hess Corp and CNOOC Ltd Consortium started production in Guyana in 2019 and are responsible for all output in the country. They have discovered more than 10 billion barrels of recoverable oil. Exxon’s Yellowtail development in the Stabroek block is expected to produce about 250,000 barrels of oil per day starting in 2025. The US$10 billion project is one of up to 10 that the companies plan to install in Guyana.

Brazil’s Petrobras discovers new oil accumulation in Campos Basin

1 April: Brazilian state-run oil company Petrobras announced it has discovered an oil accumulation in the southern portion of the Campos Basin. The oil was found in a pioneering well in the Alto de Cabo Frio Central block, which is owned by Petrobras and BP. The oil-bearing interval was verified by electrical profiles and oil samples, which will be further characterized by laboratory analysis, the company said.

China's retail diesel, gasoline prices to hit record highs

31 March: China’s retail diesel and gasoline prices are set to soar to historically high levels, following a surge in global crude oil benchmarks amid the Russia-Ukraine conflict. Prices of retail diesel and gasoline will both be increased by 110 yuan (US$17.34) a tonne effective, the National Development and Reform Commission (NDRC) said. Local Chinese authorities will make the adjustment of their respective ceiling prices for the fuel. Beijing, for instance, will see its diesel prices touching 9,805 yuan a tonne, the highest level ever, while gasoline prices will hit 10,880 yuan a tonne, breaking a previous record set two-weeks ago. Under China's pricing system, retail fuel prices are assessed every 10 working days to reflect global crude oil benchmarks as long as the benchmark prices move between US$40 and US$130. Outside that band, retail prices do not change or only move marginally. Brent futures prices have moved between US$99 and US$124 per barrel in the past 10 days.

UK regulator extends licence for North Sea Cambo oil prospect

30 March: The British oil and gas regulator has extended by two years the licence for the Cambo oilfield prospect in the North Sea which is owned by Shell and Siccar Point, Shell said. Shell last December announced it had scrapped plans to develop the field, which had become a lightning rod for climate activists seeking to halt the development of new oil and gas resources. However,  following Russia’s invasion of Ukraine and the greater focus on European energy security, there have been growing calls to develop new oil and gas fields in the North Sea. Shell owns 30% in the project, while Siccar Point, which operates it, holds the remaining 70%. The field could produce up to 170 million barrels of oil equivalent and 53.5 billion cubic feet of gas over 25 years, according to Siccar Point.

Gulf producers role critical in dampening oil volatility: World Bank president

30 March: The World Bank president David Malpass said Gulf oil producers could play a key role in dampening oil and gas price volatility in coming months. Several consuming nations have urged OPEC+ to increase output at a faster rate, as crude prices have surged, hitting their highest since 2008 this month at over US$139 a barrel. Saudi Arabia and the UAE hold the majority of spare capacity in the OPEC plus group, which includes the organization of petroleum exporting countries and their allies, including Russia. The group has been adding 400,000 barrels per day to the market since August to restore output after historic cuts on the back of the pandemic. OPEC plus has come under increasing pressure to pump more crude since Russia, the largest producer in the group, invaded Ukraine on 24 February, and Western nations responded with sanctions that have curtailed Russian oil exports.

International: Gas

Alaska oil field gas leak estimated at 7.2 million cubic feet

4 April: More than 7.2 million cubic feet of natural gas escaped in a leak at a key Alaska oil field, forcing workers to evacuate and cutting production last month, operator ConocoPhillips and a state regulatory agency said. ConocoPhillips is working to seal off the leak at its Alpine field, the Alaska Oil and Gas Conservation Commission said in a report, as it determined the gas volume lost in the leak discovered a month ago that brought a cut in oil output.

US LNG exports rise 16%, to new record

1 April: US (United States) liquefied natural gas (LNG) exports rose nearly 16% last month to a record high, according to preliminary Refinitiv data, with shipments to Europe continuing to dominate. The US LNG is in high demand as European countries try to cut gas imports from Russia following its invasion of Ukraine, whilst also looking to rebuild low inventories. The US LNG exports to all destinations were about 7.43 million tonnes (MT) last month, according to Refinitiv, up from 6.4 MT in February and topping the prior record of 7.25 MT in January.

Germany’s EnBW to buy 3 bcm of LNG from planned Stade terminal

31 March: Germany’s EnBW said it plans to buy 3 billion cubic meters of gas a year from a liquefied natural gas (LNG) terminal planned at the Elbe river port of Stade as operators spur plans to reduce their dependence on Russian energy. It said a memorandum of understanding has been signed with the LNG hub’s operator, Hanseatic Energy Hub (HEH). EnBW, Germany’s No.3 energy company by market value, is stepping up efforts to cut its use of Russian coal and gas but has said it cannot make up for a sudden halt to imports - chiming with larger rivals RWE and E.ON. Stade managers said the planned hub could be ready from 2026 with a regasification capacity of 12 bcm per year. EnBW said HEH plans to submit the approval documentation for the LNG terminal and port before Easter.

Moldova will pay double for Russian gas in April: Moldovagaz chief

30 March: Moldova will pay Russia’s Gazprom a preliminary price of US$1,160-1,170 per thousand cubic metres of gas from 1 April, the head of the state energy company Moldovagaz chief Vadim Ceban said. The figure is more than double the US$547 per thousand cubic metres which Moldovagaz paid Gazprom for gas in March. Moldova’s pro-Western government has tussled with Moscow over gas prices. Gazprom had last year threatened to shut off supplies if its payment demands were not met. From 1 May, Moldovagaz will pay Gazprom only in Russian roubles and euros, whereas previously it also paid in U.S. dollars, Ceban said.

International: Coal

Dutch coal-fired power plant to remain operational longer than planned

31 March: The Dutch government said energy company Onyx Power had decided to keep its coal-fired power plant in Rotterdam open longer than previously planned. The government said Onyx had changed its mind over a deal announced in November, in which it would close the plant within a few months in return for a subsidy of €212.5 million (US$235.7 million). The Rotterdam site is one of four coal-fired plants in the Netherlands, all of which are due to be shut down by 2030. Current regulations cap production of the coal-fired plants at 35% of their capacity.

China’s coal output set for moderate growth in 2022

30 March: China is expected to see its coal output to grow further in 2022 after hitting a record last year, an industry body forecast, as the country will need to consume more of the dirty fossil fuel to power its economic growth. The world’s second-largest economy and its biggest coal consumer churned out a historically high 4.07 billion tonnes in 2021 after Beijing sought to tame the runaway coal prices and to ease a nationwide power crunch in the second half of the year. China's coal output will maintain a moderate increase in 2022, said China National Coal Association (CNCA), an industry body mainly representing Chinese coal miners, in a report. The national coal association did not give a forecast of coal output level in 2022. It expected some big and modern coal mines in northern and north-western China to add production capacity this year and production efficiency at coal mines to improve.

International: Power

Mexican opposition threatens President’s electricity reform

4 April: 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.

French power grid operator asks users to cut consumption

2 April: 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 megawatt (MW), while the production of electricity may reach 65,000 MW. France may import up to 11,000 MW as a result, RTE said.

Vietnam faces imminent power shortage, calls for energy-saving

30 March: 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% of 5.85 million tonnes (MT) in agreed supplies, EVN said.

Sri Lanka suffers long power cuts as currency shortage makes fuel scarce

30 March: 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 million for a 37,000 tonne diesel shipment that was awaiting offloading, the Public Utilities Commission of Sri Lanka said.

International: Non-Fossil Fuels/ Climate Change Trends

Global wind power must gather speed to meet climate goals, report finds

4 April: Pandemic-related supply chain problems slowed the rollout of new wind power in 2021, as the sector lags far behind the capacity needed to curb greenhouse gas emissions and meet net zero emission targets, an industry report said. The Global Wind Energy Council (GWEC) report comes ahead of a UN (United Nations) report to be published that is expected to tell policymakers a huge ramp up in low carbon technology, such as renewable power, is needed if goals set under the 2015 Paris climate agreement are to be met. By the end of 2021, total global wind power capacity was 837 gigawatts (GW) the report said, compared with the roughly 3,200 GW needed by 2030, the report said. Some 93.6 gigawatts (GW) of wind power capacity was installed globally in 2021, down from a record 95.3 GW the previous year, with many projects slowed by COVID 19-related supply chain issues, the report said.

Fossil fuel backers overshadow climate change talks in Dubai

3 April: A flurry of summits across Dubai addressed the threat of climate change, or at least acknowledged that a pivot away from fossil fuels toward cleaner sources of power is needed to keep temperatures from rising. The glaring fault lines, however, lie on when and how to achieve this. For fossil fuel producers, like the United Arab Emirates (UAE), which hosted the gatherings, more investments, not less, are needed in oil and gas. It was a drumbeat echoed throughout the week in Dubai, reflecting the prominent voice fossil fuel producers are seeking to have in the global climate change conversation. It rang out at the Atlantic Council Global Energy Forum, the World Government Summit and the UAE-sponsored climate week in partnership with the United Nations.

Sinopec’s greenhouse emissions rise for second year in 2021

1 April: Total greenhouse gases emitted by Asia’s biggest oil refiner, China Petroleum & Chemical Corp (Sinopec), drifted up for a second year in 2021, while methane recovery rose nearly 20% from year-ago levels. The state-backed firm plans to achieve carbon-peaking and carbon-neutrality ahead of the national schedule of 2030 and 2060, respectively. China plans to look into methane emissions in key industries, including petroleum, and publish a nationwide methane emission control action plan. It has included Sinopec and China National Petroleum Corp (CNPC) in a pilot programme to assess best practices for measuring greenhouse gases. For a near-term target, Sinopec has aimed to reduce greenhouse gases emissions by 12.6 million tonnes of carbon dioxide equivalent by 2023 from the 2018 level of 171.52 million tonnes, and recycle methane emissions by 200 million cubic metres annually.

Italy’s Enel Green Power signs EU grant deal for solar gigafactory in Italy

1 April: Italy’s biggest utility Enel has signed a grant deal with the European Commission to scale up a solar panel gigafactory it owns in Sicily and make it Europe's largest maker of bifacial photovoltaic modules, which produce power from both sides of the panel. The development of the 3Sun panel factory, dubbed TANGO, is expected to raise production at the site fifteen-fold to 3 GW from the current 200 megawatt (MW), Enel’s renewable arm Enel Green Power said. It will be fully commissioned by July 2024. Enel is looking to scale up its manufacturing capacity to meet growing demand for solar panels and cut Europe's dependence on Asian suppliers. The EU (European Union) is looking to source 40% of its energy consumption from renewable sources by 2030.

US may weigh up exemptions to ban on financing fossil fuel projects abroad

1 April: The Biden administration may soon consider calls for exemptions to a ban on financing of new carbon-intensive fossil fuel projects overseas, as energy markets tighten on Russia’s invasion of Ukraine. President Joe Biden in December ordered US (United States) agencies to immediately stop financing coal, gas, and other projects and prioritise global collaborations to deploy clean energy technology. The order provided exemptions if a country faced severe consequences if it was unable to build a plant burning fossil fuels, such as natural gas or coal.

PetroChina plans to boost renewables output, posts biggest profit in 7 years

31 March: China’s largest oil and gas producer, PetroChina, said it aimed to have renewable energies make up one third of its energy portfolio by 2035 and 50% by 2050. Emissions of greenhouse gases were 159.54 million tonnes (MT) of carbon dioxide equivalent in 2021, down 4.7% from a year ago. PetroChina has aimed to bring its carbon emissions to a peak by around 2025 and reach near zero emissions by 2050, ahead of China’s national target of peaking carbon by 2030 and achieving carbon neutrality by 2060. It also plans to raise the output of natural gas, a bridge fuel in the energy transition, to account for 55% of its total oil and gas production by 2025, up from current 51.6%, PetroChina chairman Dai Houliang said.
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. Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted and edited from reliable sources. ORF does not accept any liability for errors therein. News material belongs to respective owners and is provided here for wider dissemination only. Opinions are those of the authors (ORF Energy Team).
Publisher: Baljit Kapoor Editorial Adviser: Lydia Powell Editor: Akhilesh Sati Content Development: Vinod Kumar
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.