Quick Notes
The emergence of China and India as major forces in the global economy is the most significant economic development in the last three decades. The simultaneous emergence of two large economies has led to the perception, at least amongst more casual observers, that China and India are similar. Though China and India started at almost the same level of per-person incomes three decades ago, and shared the goal of poverty alleviation through economic growth, their development trajectories and achievements have diverged significantly.
China’s growth exploded through the industrial sector aided by low-cost manufacturing; India’s growth, in contrast, was fuelled by the rapid expansion of services which was not the traditional development path that begins with low-wage manufacturing. Between 1978 and 1995, manufactured exports rose over 100-fold in China. By 2006, China overtook Japan as the world’s largest manufacturer (in gross value-added basis) and industry accounted for roughly half of China’s GDP (gross domestic product) from 2005-06. In 2010, China overtook the USA as the world’s largest manufacturer. Industry dominated by manufacturing contributed 40 percent to China’s GDP in 2017 and about 36 percent in 2021. China’s dominance in the solar photovoltaic (PV) value chain must be seen in the context of its dominance in manufacturing.
Though China’s solar energy program was initially designed to meet low-end demand for electricity from rural households, China leveraged its manufacturing capabilities to respond to high-end demand for solar panels from Germany, Spain, and Italy in the 1990s. Provincial and local governments saw the opportunity to generate skilled and semi-skilled jobs by setting up solar manufacturing facilities with funding support for “strategic industries” from the federal government. This expansion led to a dramatic reduction of solar panel and module costs for renewable energy consumers initially in Europe and eventually in other parts of the world including India.
Globally between 1980 and 2012, solar module costs fell by about 97 percent. According to a detailed analysis of factors behind the cost reduction, policies that stimulated market growth accounted for 60 percent of overall cost decline in solar modules and government-funded research and development (R&D) for the remaining 40 percent. R&D in advanced economies was important in the early years but the exponential decrease in cost in the last decade was on account of economies of scale in manufacturing, for which China must be given credit.
Though cost reductions in technologies to harness solar energy has expanded the consumer base for solar energy, the effort was driven less by China’s desire to subsidise the production of global public goods and more by China’s quest to maintain its competitive edge in manufacturing based on cheap labour and abundant capital. China’s 12th five-year plan articulated a green strategy to turn low carbon industries into major drivers of the economy. The Communist Party of China endorsed the strategy of leveraging low carbon development for China’s economic and social development. The development of renewable energy manufacturing capabilities was thus not just a part of China’s environmental and foreign policy (in the context of climate change negotiations) but also a part of its industrial policy. Essentially, China leveraged its industrial policy in its climate policies and not the other way around.
Behind China’s drive to maintain its competitive edge in manufacturing renewable energy technologies (and other goods) was what Feng refers to as “economic insecurity” that originated primarily from China’s qualitative weakness. China believed that the global conversation about climate change had moved from “well-intentioned” environmentalism to the future geo-political international economic order and that not investing in low carbon energy sources would affect China’s economic and trading competitiveness.
Motivations that turned China into a consumer of renewable energy were different from those that turned China into a producer of renewable energy technologies. Today, China is the world’s largest consumer of renewable energy but in the early stages of the industry, the need to absorb excess capacity particularly of solar modules was the motivation behind domestic consumption. Following the lead from Germany, China introduced an attractive feed-in tariff to promote the domestic use of solar energy in 2013. By 2015, China surpassed Germany as the largest market for solar energy in the world. Domestic consumption of renewable energy (seen as part of its climate change policy) by China is in large part a co-benefit of its industrial strategy.
Today, China’s share in all segments of the value chain (polysilicon, ingots, wafers, cells, and modules) is about 80 percent. This is more than double China’s share of global PV demand. In addition, China is home to the world’s top 10 suppliers of solar PV manufacturing equipment. According to the International energy agency (IEA ) the world will almost completely rely on China for the supply of key building blocks for solar panel production through 2025. Based on manufacturing capacity under construction, China’s share of global polysilicon, ingot, and wafer production is expected to reach almost 95 percent.
China’s suspicion that the real motivation of western powers was in securing economic advantages but masked by powerful ethical discourse in climate dialogues has some merit when seen in the context of renewable energy technology-related trade disputes between countries that include, but are not limited to, China and India. Developing as well as developed countries are building up financial and non-financial trade barriers to protect domestic renewable energy manufacturers. Trade barriers increase the cost of transitioning to low carbon growth paths and thus go against the spirit of solving a common global problem conveyed in negotiating frameworks of multilateral climate platforms. The imposition of carbon-related border adjustment taxes proposed by the United States and Western Europe suggests that green marginalization is indeed a realistic possibility.
The expansion of scientific and technological capabilities in China has created a more multipolar global scientific landscape. In a multipolar scientific landscape, the big challenge is to institute traffic systems between China and the rest of the world to reduce transaction costs with everyone having to play by the same rules. China’s ability to scale clean energy manufacturing dramatically reduced the cost of clean technologies. This cost reduction is a public good from a climate perspective because relatively poor countries can now afford large clean energy projects thanks to the import of cheap clean energy equipment from China.
According to CIL (Coal India Limited), coal stocks at power plants will be in a comfortable position post-monsoons this year and a crisis like last August’s is unlikely. The company is reorienting its strategy by accelerating its production pace from the first quarter itself. Historically, CIL’s production is the highest during fourth and third quarters of the year. The company indicated that the entire imported coal quantity tied up under two tenders is unlikely to be drawn.
India has eased coal import targets for utilities owned by state governments and private companies, according to a notice issued to government officials and private utilities. India’s power ministry has asked state government-run utilities and private power producers to assess the amount of coal needed to be imported for blending, according to a notice. Many states have stocks 50 percent above normal levels while others are still near critical levels, the ministry said. States, independent power producers, and the coal ministry could decide on coal import percentages after assessing the availability of domestic supplies, the ministry said. The power ministry said in May that it would cut domestic fuel supplies to state government-run utilities if they do not import 10 percent of their overall requirements to blend with local coal.
CIL said that it produced 47.3 MT (million tonnes) of coal in July this year, registering a growth of 11 percent from the year-ago period. CIL’s output in the corresponding month of previous fiscal was 42.6 MT. The company said it has maintained the double-digit rising streak for four consecutive months of the current financial year. Coal India accounts for over 80 percent of domestic coal production. The total coal offtake by CIL increased by 10 percent during the first four months of the current financial year at 232 MT, compared to 211 MT in the year-ago period. In July 2022, CIL’s total offtake increased to 54.5 MT, registering a growth of 8 percent. CIL’s total offtake in the same month of last financial year was 50.4 MT. Coal inventory at CIL’s pitheads stood at 36 MT at the closure of last month. Around 11.5 MT of coal is available at various loading points awaiting shipment.
According to the Coal Ministry, the government will make available more than 107 coal blocks for commercial mining through the auction route shortly. As per the Ministry, the Indian economy is growing at a very fast pace and coal-based power generation has recorded a 16.8 percent increase this year, and production of domestic coal has gone up by 22 percent. By the year 2030, India’s coal requirement will be 1.5 billion tonnes (BT). So far, the government has allocated 43 coal mines since the launch of commercial coal mining in India by Prime Minister Narendra Modi in June 2020. Once fully operational, these coal mines are expected to generate employment for 31,954 persons directly and indirectly. The successful bidders include MP Natural Resources, Mahanadi Mines and Minerals, Dalmia Cement (Bharat), Assam Mineral Development Corporation, BS Ispat and Jindal Steel and Power. Coal Ministry is targeting a coal production of 900 MT in FY23, and the target for CIL comes to 700 MT. The all-India domestic coal production in FY22 stood at 778.19 MT compared to 716.083 MT in FY21 with the growth of about 8.67 percent.
The Centre has rolled back an emergency order that mandated power plants to import 10 percent of their coal requirement and blend it with domestic supply. The withdrawal of the mandatory blending order indicates adequate stocks at power plants before the annual rise in coal demand post-monsoon when electricity demand picks up. Data showed 31 MT of coal stock, including 2.5 MT of imported coal, at power stations, among the highest in August any year. The coal blending order, issued on 26 May under Section 11 of the Electricity Act, mandated 10 percent imported coal use and provided appropriate compensation to 32 GW (gigawatt) domestic coal-based power projects till March next year. The coal ministry has withdrawn another order issued on 13 July that said coal supplies of generation companies that did not adhere to the 10 percent blending order would be reduced.
Odisha has become the first state in the country to retrospectively refund excess royalty collected from coal consumers if they received inferior quality coal than contracted. If adopted by other coal-producing states, coal buyers could receive significant refunds when supply quality is not up to the agreed quality. Odisha is expected to reimburse over INR3 billion (bn) royalty for coal supplied by Mahanadi Coalfields Limited (MCL), a Coal India Limited unit, between April 2015 and March 2021. Coal consumers claim refunds from Coal India subsidiaries and Singareni Collieries Company Limited in case they are delivered a lower grade of coal than paid for. These companies issue credit notes in such cases that can be adjusted in future payments. However, once submitted to the state exchequer, there are no refunds made for royalty, District Mineral Fund (DMF), and National Mineral Exploration Trust (NMET) payments. Royalty rates for coal are fixed at 14 percent of the price of coal, DMF at 30 percent on royalty, and NMET at 2 percent of royalty, adding to 18.48 percent of the cost. In contrast, if coal delivered is of a higher grade than paid for, the differential cost including royalty and other duties is charged to consumers. Odisha’s decision addresses this anomaly, permitting adjustments in royalty and other statutory dues when inferior quality coal is supplied. The Odisha directorate of mines issued an order allowing MCL to adjust royalty, DMF and NMET in credit notes for grade slippage from the current month. Refunds for the earlier period beginning 1 April 2015, will be issued after reconciliation that is already in process.
China’s coal imports from Russia jumped 14 percent in July from a year earlier to their highest in at least five years, as China bought discounted coal while Western countries shunned Russian cargoes over its invasion of Ukraine. China brought in 7.42 MT of coal from Russia last month, data from the General Administration of Customs showed. That was the highest monthly figure since comparable statistics began in 2017, up from 6.12 MT in June and 6.49 MT in July 2021.
China’s coal imports in July rose by nearly a quarter from June to near the highest levels so far this year as power generators increased purchases to provide for peak summer electricity demand. Arrivals of the fuel totalled 23.52 MT last month, up sharply from 18.98 MT in June but 22 percent lower than a year earlier, data issued by the General Administration of Customs showed. Over the first seven months of the year, China imported 138.52 MT of coal, down 18 percent on the same period in 2021. Daily coal consumption in major coastal regions hovered around 2.2 MT in late July, a similar level to last year, according to Shanghai Shipping Exchange. The government has vowed to avoid power rationing this year and has urged coal-burning power generators, which supply about 60 percent of the country’s electricity, to enlarge coal stocks. Data tracked by Refinitiv showed China’s seaborne coal imports from Russia would hit a record high of 7.38 MT in July. However, analysts have expected coal demand will soon begin to ease as temperatures moderate, while industrial activity remains sluggish amid COVID-19 restrictions.
Rescuers battled to free about 10 workers believed to be trapped in a coal mine in northern Mexico, while three others were found alive, authorities said. President Andres Manuel Lopez Obrador had said nine miners were missing, but the security ministry said later that three had been rescued and taken to hospital while 10 were still believed to be inside. Coahuila, the country’s main coal-producing region, has seen a series of fatal mining accidents over the years.
South Africa’s coal sales to Europe rose eight-fold during the first half of 2022 compared with last year as demand for the fossil fuel surged ahead of a ban on Russian coal, Thungela Resources said. In April, the European Union (EU) announced a ban on coal imports from Russia as part of sanctions for its invasion of Ukraine. The ban came into effect on 10 August. Ahead of the ban, European countries, which previously imported 45 percent of their coal from Russia and have been switching away from expensive natural gas to coal, started to source the fossil fuel from other countries, including South Africa.
Britain is turning to old coal-fired power units as a “last resort” in case other sources cannot provide enough electricity through the winter, as the country faces a wider energy crisis. Several European governments have requested that backup power be made available from idled coal plants or those due to close due to lower gas flows from Russia as a result of disputes triggered by its invasion of Ukraine. Britain’s National Grid said it had signed contracts with power generators Drax Group and EDF to extend the life of four coal-fired power units at two plants for the upcoming winter. The available capacity will only be used as a last resort to ensure the security of supply if needed, National Grid’s Electricity System Operator (ESO) said, adding that negotiations continue with a third generator for a fifth coal unit.
An EU ban on imports of Russian coal, the cornerstone measure in the bloc’s fifth package of sanctions against Moscow for its invasion of Ukraine, will come into full force. EU said the ban will hit Russia hard because the 27-nation bloc is its biggest coal-trading partner, resulting in revenue losses for the country of around 8 bn euros (US$8.3 bn) a year. It has depended on Russia for around 45 percent of its coal imports, according to Commission data, with Germany, Poland and the Netherlands the biggest buyers. Almost 70 percent of its thermal coal, which is used in power and heat generation, has come from Russia, according to the Brussels-based think tank Bruegel. The ban on Russian coal imports will bring further strain on coal supplies and force European consumers to look elsewhere at a time when there is already concern about dwindling supplies of Russian gas and a severe energy crunch in the winter.
Germany’s hard coal importers expect more shipments from next month when generators will seek to switch to more coal burning and away from Russian gas, but fear logistics problems could hamper deliveries. Verein der Kohlenimporteure (VDKi) expects significant volume increases in the monthly import figures from September onwards, Alexander Bethe, the chairman of the German coal importers’ group, said. September could bring a 50 percent rise over May, Bethe said, when imports had been 2.35 MT. Monthly coal receipts recorded last winter by VDKi members ran at 3.5-4 MT. Australia, South Africa, Indonesia and Colombia were all cited as potential coal suppliers by the VDKi earlier this year. Germany may import 32 MT or more of steam coal for power this year, up from 27 million tonnes last year, Bethe estimated, again citing the availability of wind power and weather-driven demand.
Australian mining firm BHP revealed that its profits jumped nearly 40 percent in the past year despite falling iron ore prices, bolstered by unprecedented demand for coal and copper. BHP’s coal business drove its strong results, with both metallurgical and energy coal prices hitting record levels after Russia’s invasion of Ukraine.
Thai energy firm PTT Pcl said it had agreed to sell its coal unit to Indonesia’s PT Astrindo Nusantara Infrastruktur Tbk for US$471 million, as the company moves out of the coal business entirely. The announcement came as global coal demand is set to match a record high reached nearly a decade ago. Astrindo said the deal, which includes coal concessions in Brunei Darussalam, Madagascar and three mines in Kalimantan, Indonesia, will have a “substantial” impact for the company.
29 August: Reliance Industries Ltd (RIL), operator of the world’s biggest refining complex, will invest INR750 billion (US$9.38 billion) over 5 years to expand its oil to chemical business. RIL’s two refineries at Jamnagar in western India have the capacity to process about 1.4 million barrels per day of crude. Refiners in India and elsewhere are boosting petrochemicals output to meet rising demand and help hedge against lower margins for conventional fuels as consumption of gasoil and gasoline is set to ease with a global push for clean energy.
24 August: India’s crude oil production fell 3.8 percent in July on lower output from fields operated by ONGC (Oil and Natural Gas Corporation) and private sector firms, the Ministry of Petroleum and Natural Gas data showed. Production of crude oil, which is refined to produce fuels such as petrol and diesel, fell to 2.45 million tonnes (MT) in July from 2.54 million tonnes a year back. The output was lower than the monthly target of 2.59 MT, the data showed. ONGC produced 1.7 percent less oil at 1.63 MT on lower output from western offshore. Fields operated by private firms saw a 12.34 percent decline in production. However, the oil production during the first four months of the current fiscal that began on 1 April was only marginally lower at 9.91 MT as opposed to 9.96 MT during April-July 2021. Oil Minister Hardeep Singh Puri said that the declining trend in crude oil production has been reversed. According to the ministry data, ONGC’s oilfields in Gujarat and Assam produced less oil while Vedanta’s Rajasthan block had a lower output. Domestically produced crude oil forms just 15 percent of the processing at refineries, the rest being imported oil.
24 August: The oil ministry is finalising a report which would suggest a comprehensive strategy to reduce import dependency on crude, gas and coal by 2024-25, as per sources aware of the development. The ministry had formed several working groups for monitoring the progress of various measures being taken by different departments and ministries to curb dependency on imported crude and gas. The reports prepared by these working groups have been compiled and would be presented as a comprehensive strategy on part of the Central government to reduce import dependency of crude oil, gas and coal in the entire energy sector.
24 August: TRS working president and minister KT Rama Rao demanded the Centre to lower the fuel prices and reduce the burden on the people of the country as international crude oil prices declined. He said the BJP government should immediately do away with all types of cesses on petrol and diesel. The industries and municipal administration ministry said if the prices of a barrel of crude oil decreased internationally, the benefit should be passed on to the people. He said the Modi government does not want that to happen and has been increasing excise duties and cesses. Since 2014, the Centre has increased fuel prices many times and put an INR26k bn burden on the people in the form of fuel taxes and cesses. The working president said before coming to power in 2014, Modi made hue and cry about rising fuel prices and even accused the then UPA government for its failure to control the prices. The minister said if the Centre lifts the duty levied on fuel, the people would get a relief of around INR30 per litre. The Telangana government has not levied a single rupee of additional tax on fuel since the state’s formation, KTR said.
29 August: The government is planning to overhaul the natural gas pricing policy with an aim to cushion consumers from global shocks and ensure fair rates for both buyers and producers. The oil ministry may soon set up a committee under economist Kirit Parikh to recommend ways to keep domestic natural gas prices stable and affordable for consumers whilst offering decent returns to producers. The ministry has also asked producers and consumers such as fertiliser, power and city gas companies to nominate representatives to the committee. The committee’s recommendations will help frame a new policy to replace the gas guidelines of 2014, under which volume-weighted average prices of gas in the US (United States), Canada, Europe and Russia are used to determine domestic prices every six months. Spiralling prices have shaken local gas consumers and spurred the government to relook at the pricing policy. A sharp economic recovery from the Covid-led slump and the Russian supply curbs following the invasion of Ukraine has driven up gas prices to record-high levels. Before the recent surge, domestic formula prices have mostly remained benign, in line with global rates, which were affected by the liquefied natural gas (LNG) glut or Covid in the last few years. Consumers have often sought affordable rates, while city gas companies—a key consumer segment—have recently demanded a ceiling on domestic prices to keep compressed natural gas (CNG) fuel attractive with respect to petrol. For years, city gas companies have made big profits by obtaining traditionally cheaper domestic gas and selling CNG to drivers at market rates.
25 August: Seeking to capitalise on the rise in energy prices, Oil and Natural Gas Corporation (ONGC) has relaunched its tender for the sale of KG field gas. The idea behind the rebidding is to get a higher price of US$15 per mmBtu (million metric British thermal units). As per the tender papers, bids have been sought for the sale of 0.75 million metric standard cubic metres per day (mmscmd) of gas for one year from the KG-DWN-98/2 (KG-D5) fields in the Bay of Bengal. At current Brent rates (US$101 a barrel), the reserve price comes to over US$15 per mmBtu. The price of locally produced natural gas is set twice a year by the government. The going rate for gas from deepsea fields stands at US$9.92 per mmBtu for the current six-month period (starting 1 April). For the next six-month period (starting 1 October), the prices are expected to be revised upwards for them to be in sync with the global energy prices surge. The KG-D5 block is seen as having a peak production rate of 15.25 mmscmd of natural gas and 80,000 barrels of oil a day. ONGC has plans in the making for another tender later this year for the sale of 5 mmscmd of gas, beginning 2023.
24 August: Oil Minister Hardeep S Puri said that India has set a target to provide 60 mn piped natural gas (PNG) connections to households, commercial establishments, and industries in the next eight years in India. Virtually inaugurating a private gas supplier (LCNG) in Mysuru, the minister said in proportion to that, about 9,500 CNG stations would be set up in the country in the said period. Briefing the growth of the industry, the minister said India has managed—in a short period of time—to increase the gas connections from 25 lakh connections in 2014 to 97 lakh connections—almost a four-fold increase. Even the number of city gas distribution (CGD) districts has increased nine times—from 66 in 2014 to 630 in 2022. The number of CNG stations too, has gone up from 938 in 2014 to 4,629 at present.
30 August: Coal India Limited (CIL) said the miner has not raised prices of the dry fuel in the last four years to ensure its supply at competitive prices to consumers compared to the international market. CIL meets 80 percent of the country’s dry fuel requirement. Chairman Pramod Agrawal said that coal would continue to fuel India’s electricity generation based on the current usage pattern. CIL produced 622.63 million tonnes (MT) of coal in FY22, which is the highest since CIL came into being. Production for the year represents an increase of 26.41 MT which is a 4.4 percent growth over last year. CIL has devised a transformational plan for operationalising 14 mines through engagement of mine developer cum operators, having proposed a capacity of 165.58 million tonnes per annum which would contribute to sizeable production in the coming years, he said.
24 August: Transportation of coal to Maithon Power Limited, a joint venture of Tata Power and DVC, remained disrupted after a 20-feet deep crater was created beneath the rail track connecting Thapar Nagar railway station to MPL power plant due to land subsidence. This is the third incident of landslide reported around Shyamnagar locality within a fortnight. According to residents of Shyamnagar, earth material beneath the rail track constructed for supplying coal to the power plant slid with a huge thud in the morning. Besides the creation of the crater, cracks also appeared in a 50-ft area around the track.
30 August: Adani Electricity Mumbai (AEML) said it is investing INR5 bn to install smart metres for seven lakh consumers in the financial capital by the end of 2023. The power discom (distribution company), a unit of the listed Adani Transmission, said the 7 lakh smart metres is the first phase target and the remaining 20 lakh consumers will get smart metres by the end of FY25. Smaller rival Tata Power said that it is on a similar drive of installing smart metres, aiming to have 1 lakh of its 7.5 lakh consumers under the technologically better metres by March 2023, and cover all consumers by FY25-end. AEML has already installed 1.10 lakh of such smart metres, and the remaining 5.90 lakh will be done by 2023-end to finish the first phase. The metres will help consumers to get real-time updates on power consumption, and also enable the company to improve its collection efficiency in case of non-payment as it can disconnect a metre remotely. Each unit of the smart metre costs up to INR1,000 extra, but the savings in the operating expenses accruing over time outweigh the costs borne upfront, the company said.
26 August: The Dakshin Haryana Bijli Vitran Nigam has decided to give INR5 lakh to the village panchayat where 95 percent of power consumers will be paying their bills through the digital mode. Similarly, INR2 lakh will be given to the panchayat where 90 to 95 percent people make the payment through the online mode. He said to encourage rural consumers to make online payments, prizes worth INR2,100 will also be given.
25 August: Power Grid Corporation of India emerged as the successful bidder under tariff-based competitive bidding (TBCB) to acquire Neemuch Transmission (NTL). The company acquired NTL, the project SPV to establish ‘transmission system for evacuation of power from Neemuch SEZ’, on a build, own, operate and transfer (BOOT) basis from the bid process coordinator, REC Power Development and Consultancy. The transmission system comprises the establishment of two 400-kilovolt DIC transmission lines passing through the states of Rajasthan and Madhya Pradesh, a new 400 or 220-kilovolt pooling substation at Neemuch (Madhya Pradesh) and 400-kilovolt bay extension works. The transmission system is an interstate transmission system project and is expected to be completed in 18 months. Power Grid said that the approval for the grant of transmission license and adoption of transmission charges are to be obtained from Central Electricity Regulatory Commission by NTL after the acquisition by the company.
24 August: Punjab State Power Corporation Limited (PSPCL) has successfully met its all-time highest ever power peak demand of 14,295 MW in August 2022, thereby surpassing its previous demand achievement of 14,207 MW recorded on 29 June. Power Minister Harbhajan Singh said that peak demand of PSPCL is observed during the end of June month or start of July month due to high temperatures and initial high irrigation demand of paddy plantation. However, this year due to the prevalence of comparatively dry weather conditions, the peak demand in the state continued till the end of August. PSPCL has also made additional arrangements for power through more banking from other states and allocation of 1300 MW of additional power from the Central sector. He said that PSPCL is supplying a regular 8-hour supply to Agriculture Tube Wells without imposing any power cut on any other category of consumers.
24 August: Jammu and Kashmir (J&K)’s Kishtwar district is set to become a major power hub in north India, as it will generate nearly 6,000 megawatt (MW) of power after the completion of the ongoing power projects. The surplus power from Kishtwar will not only be utilised for other parts of the union territory but will also be sold to other States. 1000 megawatt (MW) Pakal Dul Project, 624 MW Kiru Project, 540 MW Kwar Project and 930 MW Kirthai Project are all located in close vicinity of each other, along with 850 MW Ratle Project which has been revived as a joint venture between the Centre and the union territory. The work on Kwar Hydro Electric Project (540 MW) started in 2022 and the project will generate 1975 million units (MU) of power annually, and the scheduled completion is in November 2026. Transmission and distribution capacity has been increased. More power has been supplied even during peak days. Important power projects which were hanging in balance for decades are now being executed. In the next three years, J&K is set to generate the capacity equivalent to what was achieved in 70 years.
26 August: GAIL (India) Limited has set a 2040 target to achieve net zero carbon emissions from its operations, Chairman Manoj Jain said. India, one of the world’s biggest greenhouse gas emitters, is aiming to reach net zero emissions by 2070, and wants to raise the share of gas in the country’s energy mix to 15 percent by 2030 from the current 6.2 percent. Reliance Industries Limited (RIL), operator of the world’s biggest refining complex, aims to achieve net zero by 2035, while Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have set a 2040 goal. India Oil Corporation (IOC), the country’s top refiner, aims to achieve net zero Scope 1 and 2 emissions by 2046. To cut its carbon footprint, GAIL is venturing into green hydrogen production and aims to set up 3 gigawatts of renewable energy capacity by 2030.
24 August: 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. Compressed biogas, or CBG, is a greener fuel produced from waste/biomass sources. It has properties similar to compressed natural gas (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 billion investments in the next five to seven years.
24 August: Tripura has emerged as one of the best performing states in the country to tap the renewable sources of energy and aggressively motivate the 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.
30 August: Oil production in the Iraqi region of Kurdistan could almost halve by 2027 if there is no new exploration or major investment in the sector, government documents showed. A steep decline in oil revenue, a lifeline for the Kurdish Regional Government (KRG), would compound the economic woes of a region already struggling financially within an unstable Iraq. According to the documents, the Kurdistan Region in Iraq’s (KRI) oil output could rise to 580,000 barrels per day (bpd) in five years’ time under a scenario in which investment is fully optimised, leaving 530,000 bpd available for export. But without new investment, the semi-autonomous region might only have 240,000 bpd available to export as older wells become depleted, the documents, which have not previously been reported, show.
29 August: Top oil exporter Saudi Arabia could slash October prices for most crude grades it sells to Asia after a plunge in spot premiums as tepid fuel demand and increasing arbitrage cargoes put pressure on oil prices in the region. State oil giant Saudi Aramco could cut the official selling price (OSP) for its flagship Arab Light crude by about US$4.50 a barrel in October, according to five refining sources surveyed. Spot premiums for regional benchmarks Dubai, Oman and Murban plummeted in August as fears over a global recession and the narrowing spread between Dubai- and Brent-linked grades dented demand for Middle Eastern crude oil. Despite expectations of recovering demand from India and Indonesia when the monsoon season passes in late September, fuel consumption in China, the world’s top oil importer, could still be gloomy as the country continues to grapple with COVID-19 restrictions.
24 August: United States (US) crude and fuel inventories fell, the Energy Information Administration (EIA) said, while weakening gasoline consumption fanned concerns about slowing demand. Crude inventories fell by 3.3 million barrels in the week to 19 August to 421.7 million barrels, compared with analysts’ expectations in a poll for a 933,000-barrel drop. The inventory decline would have been larger if not for another big release of barrels from US Strategic Petroleum Reserve (SPR). US released more than 8 million barrels from the SPR, offsetting a drop in production and a modest uptick in refining activity. After rebounding, overall US gasoline demand sunk in the most recent period, leaving the four-week average of daily gasoline product supplied 7 percent below the year-earlier period. Analysts are concerned by the weak demand for fuels, saying it augurs a notable slowdown in economic activity. Crude production slipped 100,000 barrels per day (bpd) to 12 million bpd, data showed.
30 August: Centrica’s Rough gas storage site off England’s east coast has received all the regulatory approvals to start storing gas again, Britain’s oil and gas regulator said. Countries across Europe have been building gas stocks ahead of winter to prepare for disruptions to the supply of Russian gas, but Britain has had very little storage capacity since Rough’s closure in 2018. Britain’s North Sea Transition Authority (NSTA) said it had granted the required approvals and consents to Centrica Offshore UK Limited for Phase 1 of the Rough gas storage site.
29 August: Bulgaria has reached an agreement in principle to double its reserved capacity at a new liquefied natural gas (LNG) facility to be built off the northern Greek port of Alexandroupolis, the interim Energy Minister Rossen Hristov said. Rossen Hristov said that raising the reserved capacity to 1 billion cubic metres (bcm) of gas per year at the LNG terminal, expected to become operational at the end of 2023, will help the Balkan country ensure diversified and stable gas supplies. The interim government, which has come under fire at home for seeking to renew gas supplies from Russia’s Gazprom, has said it plans to open tenders for mid to long-term gas deliveries and wanted to import more LNG gas through Greece. The Alexandroupolis terminal is due to be built by a consortium of Greece’s Copelouzos family, Greek gas companies DEPA and DESFA, Bulgaria’s Bulgartransgaz and Cyprus’s Gaslog. It will be able to process 5.5 billion cubic metres (bcm) of LNG annually and store 153,500 cubic metres. Bulgaria is struggling to secure natural gas at optimal prices for the coming winter after Russia halted its gas supplies in April over Sofia’s refusal to pay in roubles amid European sanctions on Moscow over its invasion of Ukraine. The interim government has sought talks with Gazprom to renew supplies under the current contract that expires at the end of 2022 and reschedule gas shipments the country has not taken until next April or June.
29 August: Australia’s Santos Ltd said it would spend an additional US$311 million to build a new pipeline to transport gas from its offshore Barossa field to its Darwin LNG plant in the Northern Territory. First gas production at the Darwin LNG plant using Barossa gas is targeted for the first half of 2025. Gas from Barossa will replace gas from the Bayu-Undan field, which is set to stop producing later this year. The new pipeline for Barossa gas will free up an existing pipeline from Bayu-Undan to transport carbon dioxide from Darwin into the depleted oil and gas field.
29 August: Hungary will continue talks with Russia on additional gas supplies and expects to reach a deal with Gazprom to boost supplies further from next month, Hungary’s Foreign Minister Peter Szijjarto said. Szijjarto met his Russian counterpart Sergei Lavrov in Moscow, seeking 700 million cubic metres (BCM) of gas on top of an existing long-term supply deal with Russia. Gazprom started to increase gas supplies to Hungary this month, adding to previously agreed deliveries via the Turkstream pipeline. Hungary’s reserves stored 3.25 billion cubic metres of gas as of 1 August, more than 51 percent of total storage capacity, based on data from the national energy regulator. Under a deal signed last year, before the start of the war in neighbouring Ukraine, Hungary receives 3.5 bcm of gas per year via Bulgaria and Serbia under its long-term deal with Russia and a further 1 bcm via a pipeline from Austria. The agreement with Gazprom is for 15 years.
25 August: Military-ruled Myanmar earned US$800 million from natural gas exports mainly to China and Thailand between April and July. Income from gas exports was US$60.7 million higher than the same period last year, the ministry said. Thailand’s PTT Exploration and Production Pcl produces and exports natural gas from the Yadana, Yetagun and Zawtika fields. Myanmar accounts for about 14 percent of Thailand’s natural gas needs.
24 August: Gas production in the United Kingdom (UK) rose 26 percent in the first half of this year compared to the same period last year, an industry body said, as Britain cuts Russian energy imports in response to Moscow’s invasion of Ukraine. The 3.5 billion cubic metres increase in locally-produced gas is enough to heat almost 3.5 million UK homes for a year, Offshore Energies UK (OEUK) said. The increases were driven by the start-up of new gas fields in the southern North Sea, including Harbour Energy’s Tolmount field and IOG’s Saturn Banks project, OEUK said. British wholesale gas prices have hit record highs this year following Russia’s invasion of Ukraine, increasing pressure on household budgets as bills soar.
25 August: Australia’s Whitehaven Coal declared a bumper dividend and said it expects coal prices to stay elevated after the global energy squeeze triggered by Russia’s invasion of Ukraine helped the Australian miner book a record annual profit. Western sanctions on Russia—the world’s third-largest exporter of coal—have sparked a scramble for alternate supplies, sending prices of the commodity to record levels. The company expects to produce 20 to 22 million tonnes (MT) of managed run-of-mine (ROM) coal this year, compared with 20 MT in fiscal 2022. The average price Whitehaven received for a tonne of coal more than tripled to AUD325 in the year to 30 June, helping it post a net profit after tax attributable of AUD1.95 billion (US$1.35 billion).
30 August: “Skyrocketing” energy prices expose the limits of the European Union (EU)’s electricity market design, European Commission President Ursula von der Leyen said while announcing plans for a structural reform. The market “was developed under completely different circumstances”, von der Leyen said. The EU has grappled with surging energy prices for the last six months in the wake of the Russian invasion of Ukraine. An emergency meeting of EU Energy Ministers is planned for 9 September. Electricity prices in the European market are set by the most expensive energy source needed in production, currently gas-fired power plants. A reform of the European electricity market could revise this so-called merit order mechanism and allow consumers to pay less for cheaper electricity generated with solar and wind energy. German Economy Minister Robert Habeck also recently announced market reforms to separate customer prices for electricity from the rising cost of gas.
29 August: China’s Sinopec Corporation said it has put into operation the country’s largest carbon capture, utilisation and storage (CCUS) facility in east China, and plans to build two more plants of similar size by 2025. The state oil giant is one of the leading companies building pilot CCUS projects in China, part of the country’s goal to reach peak carbon emissions by 2030. The new CCUS project, which started construction just over a year ago, involves capturing the carbon dioxide produced from Sinopec’s Qilu refinery in eastern Shandong province during a hydrogen-making process and then injecting it into 73 oil wells in the nearby Shengli oilfield. Sinopec has estimated that 10.68 million tonnes (MT) of carbon dioxide will be injected into the oilfield over the next 15 years, boosting crude oil production by nearly 3 MT. Sinopec will explore setting up a CCUS research and development centre by 2025, focusing on developing frontier technologies such as combining CCUS with wind and solar power, CCUS with hydrogen energy and biomass, the company said. Last year Sinopec captured and stored more than 1.52 MT of carbon dioxide.
25 August: 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 gigawatt (GW) by the end of 2024, Qatar Energy said. 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. While lagging behind other Gulf states in the solar race, Qatar has announced a target of 5 GW of solar energy capacity by 2035.
25 August: 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, modelling released showed. 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 gigawatt (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.
24 August: 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 that 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.
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