Energy News Monitor I Volume I, Issue 28

Oil & Gas Discovery & Production in India: Historical Milestones (part IV)

Continued from Volume VI, Issue No. 26…

· 1978: The total initial recoverable reserves increased to about 452 million tones. By the end of the year 1979-80, the inventory of geological reserves of oil reached over 2.3 billion tonnes of which 478 million tonnes were considered recoverable. The balance of recoverable reserves of oil in 1980 stood at about 360 million tonnes.

· 1979: The first strategic initiative for inviting foreign companies for foreign technologies, expertise and above all capital to deal with the future challenges and commitments of Indian oil economy was taken in 1979-80 by offering 32 exploration blocks (17 offshore and 15 onshore) covering 8 basins for global bidding. In the second half of the 1980s nine contracts were signed for offshore exploration.

· 1980: ONGC discovered oil in offshore Ratnagiri structure (Ratnagiri 9, 12) of Bombay Offshore basin, southern part of Bombay high and gas at Dahej, Cambay baisn, Gujarat. From 1980, the government started to offer sedimentary basins in a systematic way through bidding rounds to foreign oil companies for exploration and production. The two rounds between 1980 and 1986 were not very successful. In the second round 8 medium and 33 small fields were offered. By the end of 1980, OIL & ONGC had together drilled over 3100 wells totalling about 4.9 million meters and the inventory of geological reserves of oil reached over 2.3 billion tonnes, of which 478 million tonnes were considered recoverable. The balance of recoverable reserves of oil stood at about 360 million tonnes in 1980.

· 1981: The government took over Oil India Ltd., and it became a full fledged public sector company in October 14, 1981. During 1981-82 OIL delivered 3.501 million tones of crude oil.

· 1982: ONGC made its biggest onshore gas discovery of 3.4 TCF in Gandhar field, Cambay basin, Gujarat

· 1983: ONGC struck gas at Razole (onland) in KG basin, Andhra Pradesh and in Ghotaru extension in Jaisalmer basin, Rajasthan in 1983-84. It also discovered oil in Changmaigon in Assam in 1984.

· 1985: ONGC struck oil in Kaovikalappal, Narimanam and Nannilam in Cauvery basin (Tamil Nadu, Karnataka, Kerala) in the period 1985-1989. The Krishna-Godavari and Cauvery basins both onshore and offshore came up on the Indian and global map with substantial discoveries during 1985-88.

· 1986: The third round of international bidding for exploration blocks containing more attractive terms such as exemption from royalty payment and minimum expenditure commitment was organised. ONGC & OIL were given the option to take 40 percent stake in the joint venture, if the fields were found viable. Some foreign companies participated in this round but there was no committed exploration or break through discovery.

· 1988: Gas from Bombay High started flowing through the HBJ (Haldia-Bijapur-Jagdishpur) pipeline.

· 1989: OIL discovered commercially exploitable gas in Tanot Structure in Rajasthan. During 1989-90 oil production was reached at peak at 692,000 bpd and the India’s oil dependency was reduced to 32 per cent.

· 1990: Till 1990, the government had invited four rounds of bidding for blocks. One noticeable feature of the fourth round was that Indian private companies were allowed to participate along with foreign partners for the first time. However no major field was discovered by these partnerships.

· 1991: From 1991 to 1996, the government had held five rounds (fourth, fifth, sixth, seventh and eighths) of bidding for exploration acreages offering as many as 126 blocks, ranging in sizes from a few hundred square kilometres to over 50,000 sq kilometres. 11 contracts were awarded. Some of the important companies which have been either awarded contracts or participated in the exploration round were: Shell, Occidental, Amoco, and Enron. In this period, the process of opening up the oil & gas sector gathered momentum and was more stream-lined in approach. ‘Structural Adjustment Process’ was how the policy makers preferred to call it but the general idea was to deregulate and de-license the petroleum sector with partial disinvestments of government equity in Public Sector Undertakings.

· 1992: The Government offered a more attractive option to foreign and private companies. However this culminated in generating controversy concerning the Production Sharing Agreements (PSAs) offered in 1994.

to be continued…

Comments may be mailed to [email protected]

Energy in India’s Future: Insights (part –XIII)

Jacques Lesourne and William C. Ramsay*

Continued from Volume VI, Issue No. 27…

Energy profile and political economy

ndia’s high rates of economic growth have attracted considerable attention from the international community and domestic experts but for different reasons. The International community’s concern is the impact India’s demand will have on international crude and gas prices while domestic experts are concerned about the failure of such growth to bring about a corresponding shift in the employment structure (Papola 2007). The two issues are linked and thus have to be reconciled by policymakers. The structure of energy consumption is of great concern in electricity where there is a correspondingly low end-use productivity. That is partly explained by the long-distance transport infrastructure for other primary sources, but also by the centrality of the tools that the State Electricity Boards can deploy. If socialism is the “Soviets plus electricity” (Lenin), independent India is to a great extent “democracy plus State Electricity Boards” — for better or for worse (see Ruet, 2005). In point of fact, we can consider that the electrification program was not successful enough as despite its geographical reach the actual energy supply is little more than intermittent and has resulted into severe environmental degradation. This originates from the politics of nation building and development since 1947. This must be understood in order to evaluate the bottlenecks to be targeted by contemporary reforms.

A review by Bhaskar and Gupta (2007) of growth since 1991 has identified important disparities. There exist enormous differences between sectors, most obviously between agriculture and industry/commerce but also across states and regions. Poor regions of India show no signs of economic awakening. Widening inequality with higher growth rate states has produced many riches in India along side 38% of world’s poor. This phenomenon has made the term “inclusive growth” a politically unavoidable criterion in undertaking reform. One of the key ingredients to ensuring local-inclusive growth and global sustainability is access to modern energy services, which are largely missing in most poor regions of India. Lack of access to modern energy services (MES) can hinder progress in health care, education, gender justice and economic diversification of the rural economy. We then particularly explore the issue of the lack of access to MES.

1947–1991: How rural electrification choices have shaped the energy sector

In 1947, 85% of the population lived in rural areas with the modern economy concentrated in a few large cities. Public financial transfers went from the cities to the countryside, promoting a nationwide trend toward the reduction in economic inequality. Rural development extended the geographic scope of industrial development, which under British rule had been confined to a few cities (Bombay, Calcutta, Ahmedabad). From 1947 to 1967, many inequalities diminished between states, and between urban and rural areas in terms of income, but not as far as access to energy was concerned. State Electricity Boards were formed only in the 1960s. In the 1950s, much of the energy supply was granted through a regulated tariff and subsidized distribution system of LPG and kerosene for cooking and lighting.

In the 1967 elections, the Congress Party lost key states for the first time. In 1971, Indira Gandhi led the party to victory again but on a profoundly renewed political-economic platform. India had entered an era of “mixed socialism.” Up until 1984, the political intermediaries in society were shifting. The accumulation of physical capital remained a central model, but with intermediation in the form of social capital constituted by communal ties and class. States became major actors in the negotiations, which were no longer the sole domain of the federal government. The overall dynamics of inequality were still dominant, but new phenomena appeared:

· The emergence of midsize cities as relays for the development-oriented administration;

· An “overall rural development process,” the start of agricultural mechanization creating activities for small local workshops, themselves generating local purchasing power for basic manufactured goods;

· And especially, the obtaining of state benefits by the formerly underprivileged classes through specific development programs for tribal or aboriginal communities, untouchables or Dalits including the specific programs and administrations in favor of the inhabitants of certain slums.

This period showed a marked acceleration in electrification in general and rural electrification in particular (see Figure 11). But it was also the period when the majority of State Electricity Boards stopped metering consumption and/or heavily subsidized tariffs so as to develop “vote banks.” The importance of rural electrification and associated subsidies in electoral politics emerges from the fact that most underdeveloped states of India, such as Bihar and Uttar Pradesh, historically have had little access to electricity but have played the role of “kingmakers” at the federal level. It is difficult to establish a defensible methodology to evaluate the quantum of subsidies going to rural areas because three factors are at play simultaneously: “cross subsidies” for industrial, domestic and agricultural tariffs differ. Total costs are badly assessed and the official figures are merely an accounting result rather than an evaluation of full economic costing. The “nontechnical losses” average more than 20% in the country, reaching 40 or even 50% in some districts—and nearly 90% on some feeders. Whether one calculates the cost of nontechnical losses valued at unrealistic tariffs, or the official load at an economic cost, or any combination, figures would vary. Using different methodologies, Ruet (2006a) finds that these subsidies amount to 1 to 2.5 billion euros a year for the period 1997–2002. This, along with the development of India’s capital-intensive Green Revolution⁷, accrued disparities among regions where the Green Revolution was possible and those where it was not; and within the latter it increased the disparities in income among landed farmers who could invest and others.

Figure 11. The rise of rural electrification

Energy News Monitor I Volume I Issue 28

Source: Nouni et al. (2008).

From 1985 to 2007, a “liberalization” process was initiated and the political economy refocused on industry that was suffering the adverse effects of carrying, through crosssubsidies, the low tariffs paid by households and farmers. Liberalism and economic revival of cities went hand in hand. From 1993 to 2004, India went from a Gini coefficient of 32.9 to 36.2. The coefficient was higher in urban areas (37.6) than rural areas (30.5). As in China, the impact of this growing inequality is reflected in a smaller reduction of India’s absolute poverty rate (less than a dollar a day) than what could have been achieved if the recorded growth had been divided according to the income distributions recorded at the start of the period. Had this happened, the absolute poverty rate today would be less than 42%. As can be seen from Figure 11, village electrification slowed down during the period.

Rural-urban divide and interstate disparities

Seventy-two percent of India’s billion-plus population lives in rural areas, directly or indirectly dependent on agriculture, and survives on just 20.5% of the GDP. Nearly 80% of the income is enjoyed the rest 28% population. One might see the lack of access to modern energy services (MES) as a significant barrier to an entry into a market process targeted by a series of economic reforms under the aegis of structural adjustment programs since the early nineties. Thus the imbalance in favor of richer regions and industrial sectors.

Biases in access to MES occur for two major reasons: a national financial effect due to the current structure of investment, as well as local pilferage to satisfy local vested interests. Both translate into political economy equilibrium where the “higher governance” sees an alliance of the industrialists and the state developing into liberal policies, and the “lower governance” sees locally powerful communities channeling their economic benefits through an upper hand over the local structures of the state, allowing practices of corruption.

Therefore, the growth experience of the Indian economy is mainly concentrated in a small section of the population (see Aiyer [2008] for further details), leading to high savings. Savings to GDP ratio increased by 11 percentage points from 23.5 in 2001–02, and finally to 34.8 in 2006–07. These funds are being increasingly used by Indian corporations for acquiring foreign firms instead of greenfield projects in India that would include the domestic energy sector. While the benefits of such acquisitions may accrue to India in the long run, it leaves 72% of rural population in low-level income traps for a prolonged period. In 2006, the value of overseas acquisitions reached a peak of $30 billion which is much higher than the inflow of the FDI in India ($5.5 billion) for the same fiscal year (the net outflow would then represent around 3% of the GDP).⁸

Even though India faces energy shortages, there are situations when availability does not lead to final consumption by the people who need it. The public distribution system (PDS) subsidized by the Government of India operates at the grassroots level with a very extensive retail network all around Indian villages and towns. It distributes basic food items and kerosene at subsidized rates to meet the needs of the poorest population of India. Unfortunately, this system is one of the most corrupt in India. The allocations of PDS including kerosene find their way to the “black”⁹ market by PDS agents. Nearly half of the subsidized kerosene found its way into the “black market”—in monetary terms, amounting to 40 billion rupees in 1999–2000 (ESMAP 2003, p. 2). These agents are getting rich at the expense of the poor, who end up buying subsidized kerosene through the “black” market at exorbitant rate. In the case of electricity, farmers were often counted as electricity users even when electricity did not reach them¹⁰.

Notes:

7. After a food crisis in mid 1960s, India embarked upon a “green revolution” program using intensive cultivation techniques like high-yeilding varities of seed and intensive use of ground water with the help of subsidized power.

8. True, balanced in a large way by massive remittances.

9. This black market is so open that a drum of kerosene can be easily seen in front of most of the food stores in small towns of India.

10. One village known to the author has had faulty transformers for the last 7 years, yet in official reports such villages are still said to be consuming electricity. This is repeated across the country (see Ruet 2005, quoted above).

* Editors

to be continued…

Courtesy: ENERGY IN INDIA’S FUTURE: INSIGHTS, GOUVERNANCE EUROPÉENNE ET GÉOPOLITIQUE DE L’ÉN

Note: Part XIII of the article on Gas in India – Issues, Opportunities and Challenges will be published in Volume VI, Issue 29

Climate and the Clash between the Diversely Developed (part – VII)

Lydia Powell, Observer Research Foundation

Continued from Volume VI, Issue No. 24…

The Clash over Affluence

t has been observed that the prospect of every nation enjoying the same per capita income as the United States (roughly $ 40,000 per year), the same education, health and lifestyles is not the ultimate human dream as one would imagine but a development nightmare^xxxv. The aggregate global CO₂emissions in this scenario would be about 4 times the current level and more than twice the level anticipated in 2050 (assuming no mitigation measures are adopted) because each person in the world would, at least in theory, be emitting over 20 tonnes of CO₂per annum into the atmosphere. The fact that this ‘development nightmare’ has not materialised despite 60 years of global effort poured into the political project of ‘development’ captures the essence of the clash over ‘affluence’ in the context of climate change.

The richest 5 percent of the world’s people still receive 114 times the income of the poorest 5 percent. The richest 1 percent receives as much as the poorest 57 percent. 25 million richest Americans have as much income as almost 2 billion of the world’s poorest people^xxxvi. The accumulated emissions of CO₂ between 1850 and 2005 in the United States and European Union (27) account for over 56 percent of world total and per capita emissions of CO₂ in the United States in 2005 was 13 times that of India and 4 times that of China [Table 4, This table also appeared in Issue 13].

TABLE 4: KEY ECONOMIC AND ENVIRONMENTAL INDICATORS: SELECT COUNTRIES / REGIONS

	Per capita emissions in tonnes 2005	Total accumulated emissions of CO₂ (1850-2005) as % of world total	Per capita accumulated emissions of CO₂ (1850-2005) tonnes	Per capita GDP in PPP USD in 2009	Number of people without electricity in millions 2007/08
USA	23.5	29.25	328,268	45,550	-
Europe(27)	10.3	26.91	301,940	32,651	-
India	1.7	2.32	26,008	2872	487.0
China	5.5	8.28	92,950	6378	8.5

Sources: Calculated from CAIT World Resources Institute, HDR 2007/2008, IMF Data Base 20095

In most countries, energy accounts for over 90 percent of Carbon emissions. Within the energy sector, generation of electricity and heat accounts for nearly half the emissions. However there are significant differences in the respective contribution to total global emissions. Electricity and heat generation by the United States accounts for over 22 percent of world carbon emission from this sector while India’s contribution is only 5.6 percent. Emissions from the transportation segment in the United States accounts for over 33 percent of world emissions from this segment while India’s contribution is less than 2 percent^xxxvii.

In developed countries consumption by house-holds accounts for two thirds of the electricity generated and in developing countries consumption by the industrial, agricultural and commercial sectors accounts for over three fourths of the electricity generated^xxxviii. According to a 2006 report by the United Nations Food and Agriculture Organization (FAO), non-vegetarian diets cause more GHG emissions than either transportation or industry^xxxix. Yet the lifestyles and diets of affluent and less affluent nations are not on the agenda for global climate negotiations.

In most climate narratives developed country lifestyles supported by high energy households and diets are treated as ‘non-negotiable’ while developing country livelihoods supported by small industries and marginal farming is under constant scrutiny^xl. The compromise of livelihoods in the developing world in favour of lifestyles in the developed world has meant that the addition of the prefix ‘sustainable’ to ‘development’ is seen by the developing world as little more than an effort to distribute ‘bads’ before distributing ‘goods’, which was supposed to be the goal of the ‘development’ regime.

Article 3 of the United Nations Framework Convention on Climate Change (UNFCC) signed in 1992 divided the world into two and assigned the responsibility of combating climate change primarily to the affluent world (‘Annex 1 countries’) stating that ‘the parties should protect the climate system for the benefit of the present and future generations of humankind, on the basis of equity and in accordance with their common but differentiated responsibilities and their respective capabilities’. Accordingly the developed country parties were expected to take the lead in combating climate change and the adverse effect thereof. Though 154 nations and the European Union signed the UNFCC, the phrase ‘common but differentiated responsibilities’ in the Convention has become the battleground for the clash between the affluent and less affluent nations in climate negotiations. Less affluent countries emphasise their common commitment towards the goal of mitigating climate change but seek responsibilities to be differentiated as per the economic status of the respective countries. Affluent nations, interpret common responsibility towards combating climate change which necessarily means underplaying any difference, be it between nations or between people.

The Kyoto Protocol negotiated at the third Conference of Parties (COP3) in December 1997, was signed by 84 Parties and ratified by 39. The overall nominal effect of the Kyoto protocol was a reduction of 5.2 percent by 2010 against 1990 level of emissions. The parties to the Kyoto Protocol agreed to differentiated targets that were not based on any standardised formula but rather on complex negotiations on multiple issues. Article 4 of the Protocol even allowed groups of countries to negotiate a redistribution of their collective GHG emission limits.

In addition, there is a fundamental confusion in temporal dimension of the climate issue in the Kyoto Protocol. The Protocol attempts to account for past damage which is stored in existing stock of CO₂in the atmosphere through current liabilities which is carried in the flow of CO₂. Past damage was caused by industrialised countries while current and future damage flows are coming from large developing countries such as India and China. The Kyoto Protocol neither assigns specific responsibility for the stock of CO₂ to affluent nations nor does it contain any gradation in liability for the current flow of CO₂ from developing nations. The ambiguity in UNFCC and Kyoto Protocol has meant that political power in climate negotiations is not derived from their consistency but from their multi-interpretability.

One other issue that rarely gets the attention that it deserves is the differential vulnerability of developing and developed countries to climate impacts. The Second Assessment Report of the IPCC released in 1992 assessed the damage of doubling concentrations of GHG emissions in the atmosphere at about 1.0-1.5 percent of GDP for developed countries and 2.0-9.0 percent of GDP for developing countries, with some low lying countries with greater damage. Dependence on natural systems such as agriculture and modest economic capacity to adapt characterise greater vulnerability of developing and low lying poor countries. Although there is no consensus on damage estimates, the increased vulnerability of developing countries is broadly accepted but rarely treated as a key issue in climate negotiations.

Even if the climate change issue is restricted to the present and the future, simulations using various combinations of burden sharing arrangements have consistently found that in terms of the total stock of CO₂ in the atmosphere, at least 50 percent would have originated in affluent (Annex I) countries even by 2100^xli [Figure 3]. The early colonisation of the atmosphere by developed nations and their continued occupation of carbon territory even by 2100 limits the room for manoeuvre by developing nations. If stocks of CO₂ did not exist in the atmosphere current flows of CO₂ would not be a problem irrespective of whether the flows are coming from developed or developing nations. The irreversible constraint in the form of stock of CO₂ in the atmosphere makes it necessary for India (as well as other developing countries) to deviate from Business as Usual economic growth even to merely maintain the offer of keeping per capita emissions below developed country levels.

FIGURE 3: OCCUPATION OF CARBON SPACE

Energy News Monitor I Volume I Issue 28

Tejal K, et al. 2009. How Much Carbon Space do we have? Physical Constraints on India’s Climate Policy & its Implications. Economic & Political Weekly October 10, 2009. Volume XLIV No 41

Suggestions of creating a superfund under which developed nations would pay for past damage have not received the logical and moral attention that it deserves^xlii. Current negotiations on climate change are proceeding with asking developing countries to accept the liability for current flow of emissions without accounting for past damages in some form. Even when past damage is not taken into account, the share of responsibility that can equitably be assigned to developing countries, particularly to India, on the basis of current and future emissions is negligible, irrespective of whether the division of responsibility is on the basis of groups of nations or particular sector.

TABLE 5: GROUPING OF COUNTRIES ON THE BASIS OF PER CAPITA EMISSIONS

	Population (millions)	2009 per capita emissions (tonnes)
USA, Canada, Australia	330	20
Other advanced	670	11
High growth developing	3356	4.2
Lower growth developing	2178	1

Micheal Spence. 2009. Climate Change, Mitigation and Developing Country Growth. Commission on Growth & Development

For example, developed nations could be broadly divided into two groups: (i) the United States, Canada and Australia (ii) the rest of OECD and the developing world into two groups (iii) high growth developing countries and (iv) low growth developing countries based on their current per capita emissions [Table 5].

FIGURE 4: TRAJECTORY OF EMISSIONS UNDER SPECIFIC CARBON TRADING SCHEME

Micheal Spence. 2009. Climate Change, Mitigation and Developing Country Growth. Commission on Growth & Development

An appropriately designed carbon trading scheme introduced among these four groups, can stabilise per capita carbon emissions to the safe level target of 2.3 tonnes per annum by 2050 without any compromise on developing country growth objectives^xliii. Under this scheme, developing countries enter the carbon trading system only when they graduate into economic standards of developed nations [Figure 4].

If individual emissions are taken into account irrespective of the geographic location of the emitter, a reduction of emissions from roughly 1.13 billion people with per capita emissions above the target of about 10.8 tonnes of CO₂ per annum per capita would be sufficient to stabilize global CO₂ emissions by 2030^xliv. As only one million of these high emitters would be Indian, India would virtually get a free pass. The per capita emission argument with which developing nations try to claim their right to affluence, or more correctly a right to improved quality of life, is consistently being disregarded in favour of arguments based on sovereignty, aggregate economic status and geopolitical divisions because they deliver the most economically efficient outcome for developed nations [Table 6]. As long as the dominant framing of the climate issue remains one of territory (or economic category) individual entitlement to a better life is unlikely to be included in the climate agenda.

TABLE 6: ALTERNATIVE CRITERIA FOR CLIMATE POLICY

Equity principle	Interpretation	Implied burden-sharing rule
Sovereignty	Current rate of emissions constitutes a status quo right now	Reduce emissions proportionally across all countries to maintain relative emission levels between them (‘grandfathering’)
Egalitarian	People have equal rights to use atmospheric resources.	Reduce emissions in proportion to population or equal per capita emission.
Horizontal	Similar economic circumstances have similar emission rights and burden sharing responsibilities.	Equalize net welfare change across countries so that net cost of abatement as a proportion of GDP is the same for each country.
Vertical	The greater the ability to pay, the greater the economic burden	Set each country’s emissions reduction so that net cost of abatement grows relatives to GDP.
Consensus	Seek a political solution that promotes stability.	Distribute abatement costs (power weighted so the majority of nations are satisfied.

Source: Butraw and Toman, Ringius and others, and Rose 1992 quoted in Marine Cazarola & Michael Toman 2000. International Equity & Climate

Notes:

xxxv. Kenneth Rogoff. “A Development Nighmare: What if Poor Nations Actually Caught Up with Rich Ones?” Foreign Policy January-February 2004.

xxxvi. Human Development Report 2003

xxxvii. Calculated from CAIT figures

xxxviii. Central Electricity Authority for India, EIA for developed countries

xxxix. Nathan Fiala. The Greenhouse Hamburger in the Scientific American February 2009. pp72-75

xl. The American Way of Life is non-negotiable’ is a quote attributed to the former US President George W Bush.

xli. Tejal K, et al. 2009. “How Much Carbon Space do we have? Physical Constraints on India’s Climate Policy & its Implications”. Economic & Political Weekly October 10, 2009. Volume XLIV No 41

xlii. Prof Jagdish Bhagwati, Professor of Economics & Law, Columbia University, USA is among the leading proponents of this idea.

xliii. Ibid N 20

xliv. Shoibal Chakravartya, Ananth Chikkaturb, Heleen de Coninckc, Stephen Pacalaa, Robert Socolowa, and Massimo Tavonia. “Sharing Global CO₂Emission Reductions among One Billion high Emitters” in the Proceedings of the National Academy of Sciences. Early Edition. May 2009.

to be continued…

Views are those of the author

You can reach the author at [email protected]

Note: Some parts of this paper have been re-organised.

Climate Change – Copenhagen – Future of Kyoto (part –III)

K K Roy Chowdhury, Energy & Environment Expert, Delhi

Continued from Volume VI, Issue No. 27…

Declarations

his crucial year of 2009 slated for holding the Copenhagen Climate Summit in December witnessed the maximum spate of activities in this direction with countries doing their respective home work for formulating a suitable response to the ongoing summit, intense lobbying taking place amongst the common bloc countries for finding a collective response to the global deal making at Copenhagen. The primary concern for the developed countries revolved around looking for efficiency induced technology-based ‘CAP & TRADE’ Mechanism to bring down GHG emissions. On the other hand, the developing countries chose to retain an uninterrupted growth path and take domestic measures as per their capacities and capabilities on a voluntary basis, and also address the needs of the developed countries accordingly, but without any legal commitment to an internationally binding emission cut agreement

Declarations after declarations for the control of climate change started emerging, for instance,

US President’s Statement on Climate Change at the Summit of G 8 & G 5 countries in Italy on July 09, 2009;

Delhi Declaration on Global Cooperation on Climate Technology on October 23, 2009;

Barcelona Talks on Climate Change on November 02, 2009;

G 20 Finance Ministers’ Meeting in Scotland including Climate Funding on November 08, 2009;

The CHOGM [Commonwealth Heads of Government] Summit 2009: Port of Spain Climate Change Consensus: The Commonwealth Climate Change Declaration on November 28, 2009.

All these meet and many more on Climate, had different views from different stakeholder countries, but reached a convergence of ideas at the end, that led the UN Secretary General to urge the Leaders in this context saying, “Stay Focussed, Stay Committed, To Arrive at a Comprehensive, Agreeable and Equitable Outcome at the Copenhagen Climate Summit, Guided by Science”.

Individual Countries’ and Groups’ Stands as of Now: Denmark, the Host country for the now ongoing Copenhagen Summit, is all set to press for a globally binding climate agreement to come out from Copenhagen alongwith other Annex I countries. Now France is reportedly saying there can be no free rider on the environment and that India needs to be more pro-active; if Greenhouse Gases emissions are a collective problem, there have to be international yardsticks on assessing reduction measures; it can not be that any one country decides on the parameters of emission reduction unilaterally.

While U N is strongly urging for a positive outcome from the Copenhagen Climate Summit now in progress, emission cuts are going to be discussed in the meeting, the developed countries including US are strongly lobbying for an internationally legally binding agreement on climate for all the stakeholder countries of the world thereby defying the very spirit of Kyoto Protocol that mandates them to take responsibilities for the historic emissions for which they are responsible and promote sustainable development in developing countries and get emission reduction credits for them in lieu thereof. They are not believing in the unilateral and unsupported voluntary actions either, announced by developing countries like China and India, undertaken for domestic emission reduction and mitigation in their respective countries. The attitude of the developed world so far have all the implecations for us to apprehend their intention and efforts for the control of Climate Change, and doom sayers have all the reasons to envisage a doom for the Kyoto era. Such thoughts may only be enhanced as cracks are reportedly showing up in G-77 Bloc itself on Day 1 of the ongoing Copenhagen Summit.

Reports are coming that, on Day 1, the G-77 plus China spokesperson told the gathered negotiators that the developing countries were not at all happy with the “common but differentiated responsibilities” being discarded. However, some of them, in internal parleys, have demanded that emerging economies also undertake some form of commitments and get their actions scrutinised. The Association of Small Island States (AOSIS), the group of nation states that are most vulnerable to any rise in sea levels caused by global warming, was reportedly preparing its own draft of a political declaration at the end of the Copenhagen talks. Just before Day 1, the four BASIC countries (Brazil, South Africa, India and China) had shared their draft with the G-77 hoping to get their buy-in and finally table it before all the countries officially.

We still have high hopes. There are offers from many countries for suitably contributing to this global mitigation action for the control of climate change and upholding the very survival of the Earth, but also upholding, first and foremost, their national interests.

Offers from key countries are highlighted below:

COUNTRY	NEGOTIATING POSITION	CONDITIONS
US	Willing to cut GHG emissions roughly by 40% below 1990 levels by 2020.	Economies like India and China must also make commitments and US can use cheap offsets to take care of almost 25% of promised reductions.
CHINA	Reduce carbon intensity by 40-50% by 2020, as a domestic voluntary target.	Based on strong domestic targets for energy efficiency, renewable energy and afforestation.
BRAZIL	Cut emissions 36% below normal growth levels.	Only if it is provided international funding for preventing deforestation.
INDIA	Reduce carbon intensity by 20-25% on its 2005 levels over the next 11 years, as a domestic voluntary target.	Out of the purview of an international legal binding

CONCLUSIONS:

Climate change has become an urgent and pervasive pre-occupation across the globe. It is a global challenge which requires an ambitious global response. India and other developing countries would be among those most seriously impacted by the consequences of climate change. It is for this reason that India, alongwith its G-77 plus China partners, has been playing an active and constructive role in the ongoing multilateral negotiations under the UNFCCC, to ensure that the Copenhagen Summit on Climate delivers an ambitious, but also an equitable outcome, as also urged by the United Nations Secretary General now.

The mandate of the fifteenth Conference of Parties (COP 15) is to enhance long-term cooperation on Climate Change under the Bali Action Plan (BAP). It is not about renegotiating the U N Framework Convention on Climate Change (UNFCCC).

The BAP adopted by consensus at the thirteenth COP, envisages long-term cooperation in terms of enhanced action on reducing greenhouse gas emissions (Mitigation), and increasing the capacity to meet the consequences of climate change that has already taken place and is likely to continue to take place (Adaptation). These objectives must be supported by sufficient financial resources (Finance) and technology transfers (Technology) from developed to developing countries.

We therefore expect the outcome at Copenhagen will also be fair, acceptable and equitable. It must be in accordance with the principle of common but differentiated responsibilities and respective capabilities, a principle that the entire international community has, by consensus, enshrined in the UNFCCC, concluded in 1992 at the historic Rio Summit.

US should not miss the opportunity this time to lead from the front again till a logical conclusion is arrived at and to stand by it this time, with such positive spirit prevailing, and one can only expect so under the new Presidency which has been trying very hard to pass a legislation in the country for domestic emission cuts.

Sustainable Consumption & Sustainable Development

Developed countries, in particular, must relook at their concept of Sustainable Development which should necessarily be governed by the principle of sustainable consumption in this fast changing global scenario of climatic degradation. Issues of Lifestyle, Transportation, Rapid Urbanisation etc have to be addressed holistically and redesigned for Sutainable Development.

An analysis by the International Energy Agency (IEA) finds that while the global energy intensity- final energy use per unit of GDP largely driven by technology- fell by 26% during 1990-2005, energy use per capita- largely driven by increase in wealth- increased more than 6% in developed countries and less than 1% in developing countries. Consequently, even though Carbon di-oxide emissions from manufacturing have not increased, overall emissions increased by 15% in developed countries during the period. What is more significant is that since 1990, the reduction in energy intensity has been double in India and triple in China when compared with Europe. Even in the electricity generation sector, the potential for improving efficiency is greater in developed than in developing countries. In developed countries, the rate of Energy efficiency improvement has been half that in previous decades as climate policies have had little impact. Thus it is shown that developing countries have done better than developed ones in improving Energy Efficiency.

On the other hand, developing countries have to follow their ongoing growth path for Sustainable Development purpose. Garnering support for afforestation measures and technology transfer, extension of CDM are essential to meet the objectives. Assurance of the US President to his Chinese counterpart during his recent visit to China for cooperation with developing countries in the Copenhagen Summit on these issues bears significance. As developing countries need to build their infrastructure, the global leaders should recognize this effort and the negotiations should really be an opportunity to discuss options for making the societal transformation to achieve sustainable development.

India with commendable domestic voluntary actions taken for energy conservation and environmental protection with an aggressive start right from early 1980’s and laudable performance in Energy Efficiency improvements to her credit is now viewed as a most potential negotiator for a successful outcome under the UNFCCC Framework because of her contemporary aggressive National Action Plan on Climate Change (NAPCC) for domestic voluntary mitigation actions, with eight missions, that are already under implementation, and a fact that has urged prominent world leaders including the US President to specially request the Indian Prime Minister to be present at the Copenhagen Summit which the Indian PM has obliged. He will join the Presidents of US, France and other world leaders when the Summit will pass through its most crucial moment for action.

Overall, participation of 193 nations, expected participation of 80 Presidents and Prime Ministers from different countries, and key negotiating experts and scientists from all over the world would definitely not fail to add strength to the ongoing process of global action for controlling climate change and fulfilling the aspirations of the common men across the globe that represent the majority of the human race.

Hope and only Hope. Amidst despair, a positive outcome like ‘a light at the end of the tunnel’ can definitely be seen to emerge from this world’s biggest climate change conference as of now in Copenhagen. Because the reality appears to be, ‘ACT NOW, or NEVER’, being signalled by the Earth systems as the only Mantra for our survival now.

Concluded

The article, updated till Day 1 (December 07, 2009) of the Copenhagen Summit, is based on personal views of the Author. Comments may be mailed to [email protected]

NEWS BRIEF

NATIONAL

OIL & GAS

Upstream

RIL successfully tests its peak output capacity of K-G fields

December 28, 2009. Reliance Industries said it has successfully tested the design capacity of its massive eastern offshore Krishna-Godavari basin D6 field production facilities. “A flow rate of 80 million standard cubic meters (the peak production envisaged from KG-D6 fields) was achieved through the KG-D6 facilities and delivered" to the pipeline, a company statement said. RIL, which is currently producing about 60 mmscmd gas from two of the 18 gas discoveries in the KG-D6 block, has put deep-sea production facilities to produce 80 mmscmd. 80 million units of gas was delivered to the Reliance Gas Transportation Infrastructure Ltd -- the firm that owns the East-West pipeline that transports the KG-D6 gas from Kakinada on the Andhra coast to Baruch in Gujarat.

ONGC suffers Rs 20 mn loss per day on oil blockade

December 24, 2009. The 96-hour oil blockade clamped on ONGC has resulted in losses of Rs 20 mn per day. When the blockade ends, the company’s losses will cross Rs 100 mn. Besides, there has been permanent damage to the oil wells. The bandh has been called by AASU to protest the move to form a new subsidiary which will include the Assam assets of ONGC. These assets account for 15 of domestic petroleum and 10 of the total gas produced in India. ONGC has said no such decision has been taken either by the company management or by the petroleum ministry.

RIL announces another discovery in KG basin

December 23, 2009. Reliance Industries (RIL) announced its third natural gas discovery this year. All three finds have been in the Krishna Godavari (KG) basin of India’s eastern coast. The commercial potential of the discovery, in the block known as KG-D3, was being evaluated by gathering more data, RIL said in a statement. RIL holds a 90% equity stake in the block, which covers an area of 3,288 sq km, while UK-based Hardy Oil holds the rest. Earlier, there has been some controversy over the exact quantum of natural gas in the block. Hardy Oil had said in May this year that potential resources in the KG-D3 field might be as much as 9.5 trillion cubic feet, almost on a par with the 10.03-trillion cubic feet of recoverable reserves in the famous KG-D6 block, the largest discovery of natural gas in India. The latest discovery, which the company has named ‘Dhirubhai – 44’ has been notified to the government and the Directorate General of Hydrocarbons, the statement added. RIL plans to produce 80 million cubic meters of gas from KG-D6 by next year and double India’s output of the cleaner burning fuel.

Downstream

Ball in refiners' court to get ‘clean fuel' deadline extended

December 26, 2009. The fact that India is going to miss its clean fuel deadline on April 1 is not news any longer. The bigger dilemma facing its key players — the oil and auto sectors — is getting the Supreme Court to legally defer it before the situation gets out of hand. The only hitch here is who is going to bell the cat. Will it be the oil sector or its custodian, the Petroleum Ministry, which will seek an extension of the deadline? According to experts, protocol demands that the latter take the initiative since this is a problem that will affect the entire country in terms of clean fuel availability. However, indications are that the Petroleum Ministry has already written to the Big Three — IndianOil, Hindustan Petroleum Corporation and Bharat Petroleum Corporation — to take the lead with the Supreme Court and get the deadline extended to July 1.

Essar may emerge as third-largest refiner

December 24, 2009. Ruias-owned Essar Oil is set to emerge as India's third-largest oil refiner within two years from its current fifth position in the pecking order, according to an analyst report. Essar Oil is scaling up its refining capacity at its plant at Vadinar in Gujarat from 10.5 million tonnes to 16 million tonnes by December 2010 and further to 34 million tonnes by December 2011, making it the country’s third-largest refining company after Reliance Industries and Indian Oil (IOC). Mumbai-based Essar Oil, which now lags behind BPCL and HPCL in terms of refining capacity, will surge ahead of the state-run refiners after the completion of its expansion plans.

Indian-American works new way to save refineries' billions

December 23, 2009. Oil refineries worldwide could save billions of dollars in energy costs yearly, by using a novel method developed by an Indian-Amercian chemical engineer. Researchers led by Rakesh Agarwal, Purdue University professor of chemical engineering, have shown how their method could help refineries improve the energy efficiency by six to 48 per cent. Chemical plants of refineries expend from 50 per cent to 70 per cent of their energy in 'separations', usually distillation steps that separate a raw material into various products. In case of petroleum, four distillation columns are needed to separate raw crude into five separate components - naphtha, kerosene, diesel fuel, gas oil and heavy residue. Some of these components are later used to process gasoline.

Transportation / Trade

HC upholds sales tax on ‘superior' kerosene at higher percentage

December 28, 2009. Levy of sales tax on a higher percentage on ‘superior kerosene oil' (SKO) (also called white kerosene oil) and also levy of resale tax and surcharge on it by Tamil Nadu Government have been upheld by the Madras High Court. The attack by dealers that levy of different rates for same commodity was discriminatory was turned down by the Court which ruled that such allegation of discrimination would “amount to questioning legislative policy of the State to tax a particular commodity”. Dismissing a batch of writ petitions by Southern Petro Oils (P) Ltd., Chennai, and others challenging Government's decision to levy sales tax on different rates on ‘superior' kerosene and ordinary kerosene, Mr Justice K. Chandru said that when the legislature had consciously made a distinction between the two products, same could not be attacked on ground that they were same products and should receive same percentage of levy of tax. The Government had come out with a stand that a separate levy was made to prevent misuse or black-marketing of public distribution commodities.

Fertiliser industry seeks more gas allocation

December 23, 2009. As prospects for increased gas supplies from domestic sources, especially the KG Basin brighten, user industries such as fertiliser, power, glass and even the ceramic sector, are stepping up their campaigns for increased allocation. The gas demand in the country, currently pegged at about 196 MMSCMD, is expected to swell to about 280 MMSCMD by 2011-12. However, the availability is also expected to increase with RIL's D6 and other finds including ONGC and GSPC blocks, coming up in the next five years. The fertiliser industry, apart from seeking more gas allocation to help achieve the country's fertiliser security and, thereby, food security, is now harping on a change in gas transmission charges from the existing slab basis to distance basis.

Policy / Performance

No immediate hike in fuel prices: Govt

December 29, 2009. The government has no immediate plans to raise fuel prices, petroleum secretary said, after a newspaper report that auto fuel prices could be raised early next year. India previously raised fuel prices by as much as 10 per cent in July, when global crude oil prices were hovering at about $70 a barrel. State-run refiners sell petrol, diesel, kerosene and cooking gas at low government-fixed rates to control inflation and help the poor, and receive partial compensation from the government.

Reliance making profit of 200 bn from KG gas, RNRL tells SC

December 29, 2009. Anil Ambani’s Reliance Natural Resources has told the Supreme Court that Mukesh Ambani’s Reliance Industries is making a super profit of over Rs 200 bn by selling gas from Krishna-Godavari basin to others. This gas, RNRL said, was committed to the company and National Thermal Power Corporation (NTPC) by the contractor at $2.34 per million British thermal units (mmBtu). The non-supply of gas at that price will cause the public sector undertaking to lose Rs 320 bn, RNRL said in its written submissions.

Global expert to set price matrix for RIL, Cairn crude

December 29, 2009. The government has decided to appoint a global consultant to evolve a pricing formula for crude produced at Reliance Industries’ Krishna-Godavari basin fields and Cairn India’s Barmer oil fields, after disagreement over prices delayed signing of long-term contracts between oil producers and refiners. This is for the first time that an external agency is being involved in valuation of crude oil produced under the new exploration licensing policy (NELP). The move is aimed at ensuring that the government gets the best value for its share of crude oil produced from the two fields. Valuation of the crude oil, undertaken through an arm-length process, is required to determine cost recovery, profit petroleum, and the royalty. Under NELP, the government awards blocks to exploration & production (E&P) firms. Profit petroleum is government’s share of crude oil or gas it gets because of its ownership of the fields.

ONGC, GAIL to take 12.5 pc stake in Chinese gas pipeline

December 29, 2009. State-run Oil and Natural Gas Corporation and GAIL India plans to take 12.5 per cent stake in the USD 2.01 billion (around Rs 93 bn) gas pipeline that China is building in Myanmar to transport natural gas found in the Bay of Bengal. Sources said the Cabinet Committee on Economic Affairs is likely to soon consider a proposal allowing ONGC Videsh, the overseas arm of the state explorer, and GAIL to invest USD 251.2 million (around Rs 11.7 bn) in the 870-km pipeline China National Petroleum Corp is laying in Myanmar to supply gas found in offshore blocks A-1 and A-3 to mainland China. ONGC has agreed to lend about Rs 40 bn to OVL to fund its share of cost of developing the gas fields in A-1 and A-3 blocks and the pipeline to China. CNPC is said to have offered 49.9 per cent stake to the consortium developing gas fields in blocks A-1 and A-3.

IIM study suggests deregulation of oil sector

December 28, 2009. An Indian Institute of Management (IIM), Ahmedabad, study on the oil sector has suggested radical reforms, including complete deregulation, where private and public sector firms are free to price fuel as they deem fit. Currently, the government controls prices of petrol, diesel, domestic LPG and kerosene and compensates public sector firms through a complex mechanism that has squeezed out liquidity with the retailers and drained resources of upstream firms. It gives oil bonds to make up for a part of the revenue lost on selling fuel below cost and asks upstream operators like ONGC to bear the rest. "The social and fiscal costs arising out of the current method of subsidisation, and taxation are very severe," it said. It also said the fiscal costs were very large and much larger than that reported in the budget since they do not include the costs of diversion and tax avoidance that result from differential pricing. Thus in the case of kerosene the cost of delivering Rs 20 bn to the BPL consumers was in excess of Rs 240 bn.

ONGC awards $162 mn contract to UAE firm

December 27, 2009. India's oil exploration firm ONGC has awarded an USD 162-million (over Rs 7.53 bn) engineering and construction contract for an oil well platform project at the Mumbai High Field to Abu Dhabi-based National Petroleum Construction Company (NPCC). The contract value is approximately USD 162 million. The work will consist of survey, design and detailed engineering, procurement, fabrication, transportation, installation, hook-up, pre-commissioning and commissioning of under-sea pipelines and composite under-sea cables. The project will be completed by April 2011. In October this year, NPCC signed a contract with ONGC for the construction of B-22-3 Wellhead Platforms with pipeline and modification works. The contract value is approximately 1 billion dirhams and the project is to be completed by April 2011.

LNM gives top billing to whistle-blower policy

December 26, 2009. L N Mittal group’s first oil sector venture in India — HPCL-Mittal Energy (HMEL) — has put out a whistle-blower policy in the public domain even before its refinery project is operational. Interestingly, most of the domestic blue-chip oil firms still do not have such a policy to encourage people to point out wrongdoing. While country’s biggest energy explorer Oil & Natural Gas Corp (ONGC) and largest fuel marketing firm Indian Oil Corp (IOC) have recently put in place a whistle-blower policy, two public sector maharatnas NTPC and SAIL have no such formal system. As per clause 49 of the listing agreement, all companies listed on Indian bourses are expected to have a whistle-blowing policy.

Chamber plea on gas pipeline

December 24, 2009. The Sattur Chamber of Commerce and Industries has called for the extension of the gas pipeline project to Tamil Nadu. In a letter addressed to the Union Petroleum Minister, Mr Murli Deora, the chamber secretary, Mr P.T.K.A. Balasubramanian, said that a re-gassified liquefied natural gas pipeline project has been planned along Kochi-Kanjirkkod-Bangalore-Mangalore at an estimated cost of Rs 30.32 bn to transmit 16 MSCMD for a distance of 1,114 km.

November gas production up 47.6 pc, crude oil down 1.5 pc

December 24, 2009. The domestic natural gas production remained robust in November registering a 47.6 per cent increase year-on-year. While the crude oil output continued its declining trend in November with production dropping by 1.5 per cent against the same month last year. According to a data released by the Petroleum Ministry, the natural gas production grew to 4.06 billion cubic metres. The continued growth in natural gas production is backed by production from Reliance Industries Ltd operated D6 block in Krishna Godavari Basin, which started production from April this year. The crude oil production in November fell to 2.793 million tonne (6,82,423 barrels per day) against 2.837 million tonne (6,93,173 barrels per day) in the same month last year. This decline in domestic crude oil output was led by lower production by ONGC.

PM to hold review meeting of petro sector on Jan 13

December 23, 2009. The Prime Minister, Dr Manmohan Singh, will hold a review meeting to discuss the financial health of the public sector oil companies and also take stock of the petroleum sector. The Petroleum Ministry had sought oil bonds worth Rs 208.72 bn to partially compensate the OMCs – Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation – for selling cooking fuels below the market price during the three quarters of the current fiscal.

OPaL set to award contract projects in the next few months

December 23, 2009. The ONGC Petro additions Ltd (OPaL) which is setting up one of the largest petrochemcial complexes in the country at Dahej in Gujarat with a capital outlay of $ 3 billion, is all set to award the next round of multi million contract work in the next six months. OPaL, a special purpose vehicle promoted by ONGC and Gujarat State Petroleum Corporation, has already spent Rs 86 bn on the project and with the next phase of contracts set to be awarded in the next few months the infrastructure majors are set to vie for a share in the pie.

Fuel doping: Govt to rework pricing formula for ethanol

December 23, 2009. In an urgent bid to revive the mandatory blending of 5% ethanol with petrol, the Centre is gearing up to rework the formula for pricing ethanol in order to activate the ethanol supply tenders from sugar factories to OMCs (Oil Marketing Companies. The new formula is likely to include a “Take or Pay” clause which amounts to 10% to the total supply value. Food minister Sharad Pawar indicated at the 75th annual AGM of the Indian Sugar Mills Association (ISMA) that he planned to put the new formula—this is being worked out in consultation with the sugar companies—before the Cabinet soon to ensure that 5% mandatory ethanol doping of petrol was started imminently.

POWER

Generation

ADAG switches on its Rosa Power plant in UP

December 29, 2009. 28^th of December, the 77th birth anniversary of late Dhirubhai Ambani was chosen by Anil Dhirubhai Ambani group (ADAG) to switch on its Rosa Power plant in Uttar Pradesh. That day the power plant got synchronised with the state grid, becoming northern India's first thermal power plant in the private sector to do so. Around 20 MW of power flowed into the state grid from 300 MW Phase-I of the power project, which went operational. The total capacity of the project, costing Rs 60 bn, is expected to be 1,200 MW. The first unit would get fully operational by April 2010, even as the company started installation of a turbine which would generate another 300 MW, expectedly by July 2010. The second stage of 600 MW is likely to get operational by March 2012.

AP Genco to take up phase I of Karimnagar project

December 27, 2009. The Generation Corporation of Andhra Pradesh (AP Genco) has secured the State Government nod to go ahead with the first phase of 2,100-mw gas-based power project planned at Karimnagar district of the State. The Chief Minister, Mr K. Rosaiah, has directed AP Genco to initiate works for the Rs 25 bn, 700-mw first unit of the proposed project based on Regassified Liquefied Natural Gas (RLNG). The necessary pipeline to evacuate gas from the KG Basin fields would be developed from Shamirpet to Nedunnuru village in Karimnagar. The project has secured most of the statutory clearances. The State Government and AP Genco are seeking gas supplies from Reliance Industries Ltd., KG basin fields. The gas from the fields is being evacuated to other parts of the country through a pipeline. It is proposed to create a link line and also supply gas from the pipeline through city gas network.

Patni, Spanco among 4 cos empanelled for power project

December 24, 2009. Patni Computer Systems and Spanco are among the four technology companies that have been empanelled as system integrators, by the Centre for its ambitious Rs 500 bn plan to cut power distribution losses in the country. With this, the four companies can now bid for State-level projects as part of the centre-funded Restructured Accelerated Power Development and Reform Programme (R-APDRP). These companies join Accenture, Capgemini, CMC and others that were earlier empanelled as IT consultants for the R-APDRP project. The scope of the IT jobs under R-APDRP include setting up data centres, disaster recovery back-ups and GIS (geographic information system) mapping, besides developing applications for reading meters, billing and collection, energy accounting and auditing and consumer grievance redressal.

Transmission / Distribution / Trade

Old city in first phase of Warning stickers on electricity meters

December 29, 2009. Adopting an American model to check power pilferage, the Central Power Distribution Company Limited (CPDCL) has decided to paste stickers on the electricity meters throughout the city to warn the pilferers on the consequences they have to face for their illegal act. A decision to this effect has been taken by CPDCL following a proposal mooted by the city wing of the CPDCL. The power utility has decided to follow the United States of America (USA) in this regard. In the US, the authorities paste a sticker displaying the punishment to be faced by people who draw power illegally.

RPTL bags two power transmission projects worth Rs 41 bn

December 27, 2009. Reliance Power Transmission Limited, a subsidiary of Reliance Infrastructure, is believed to have bagged two transmission projects worth Rs 41 bn connecting six states. RTPL North Karanpura Transmission project is worth around Rs 27 bn, while Talcher-II is of Rs 14 bn. The 1,045-km-long North Karanpura transmission line will be implemented in 30-42 months. It will serve Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Haryana. The Talcher-II is 592-km long and will be implemented in 30 months. It will cater to Orissa and Andhra Pradesh. Meanwhile, Sterlite Technologies has been declared winner for the first independent transmission project, the East-North Interconnection project, for which the nodal agency is PFC Consulting, the wholly-owned subsidiary of state-run Power Finance Corporation.

CAG blames Maharashtra power distribution co for costly buys

December 25, 2009. The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has been buying power from outside the State when it could have made cheaper purchase from Central Government. The distribution company had incurred additional expenditure of Rs 3.7479 bn on purchase of power on short-term basis from 2005-08 as it did not avail to the full extent its allocation from the Central units, a report of Comptroller and Auditor General (Commercial) said. In the last five years, MSEDCL has been buying power from outside the State so as to meet the shortfall here. It can purchase power from the Centre's stations, and a quota has been allocated. But the report says that the company has bought power from Power Trading Corporation at higher cost.

Singareni miners strike work

December 25, 2009. A flash strike call by Telangana movement supporters brought work to a standstill at all the mines of the State-owned Singareni Collieries Company Ltd. The coal production loss for the day is estimated at Rs 150 mn. In addition, about 70,000 miners are likely to lose wages estimated at Rs 50 mn/day. Mining activity came to a halt at all the 14 open-cast mines and 42 underground mines spread across Karimnagar, Khammam, Warangal and Adilabad districts of the State.

Policy / Performance

India-Sri Lanka power link by 2013

December 29, 2009. The government’s initiative to set up a high-capacity power transmission link between India and Sri Lanka is likely to be completed by 2013. The 285-kilometre power link, including submarine cables over a stretch of 50 km, will enable the two countries to trade their surplus power, thereby offering a cheaper option to bridge their power generation deficit and also manage their peak demand. The transmission link will pave the way for future trading of electricity between the two countries. Powergrid Corporation of India Ltd (PGCIL), the country’s largest electricity transmission company and the implementing agency from the Indian side, hopes that a memorandum of understanding (MoU) for developing the Rs 23 bn project would be signed with the Ceylon Electricity Board, the largest electricity company of Sri Lanka, shortly.

J&K to tap 6760 MW hydel power in 12th plan: Minister

December 27, 2009. The Jammu and Kashmir government has chalked out a hydel power capacity addition programme under which 6760 MW hydro power would be tapped in the state by the end of 12th five-year plan. The prestigious power projects like Bagliharstage-II (450MW), Kishan Ganga (330MW), Uri-II (240MW), Sawlakot (1200 MW), Kirthi-I and II (1230 MW) and New Ganderbal (93MW) were being taken up in the state under state and centre sectors.

Pranab for early end to row over units in Bengal's coal zone

December 24, 2009. The controversy over setting up industrial units in the coal bearing zones in West Bengal, mainly Asansol and Ranigunj areas, needs to be sorted out soon, according to the Union Finance Minister, Mr Pranab Mukherjee. The Finance Minister was replying to the complaints earlier made by the West Bengal Chief Minister, Mr Buddhadeb Bhattacharjee, against Coal India Ltd. West Bengal, the Chief Minister said, had faced problems while allocating lands to companies in the State's coal-bearing zones due to the non-cooperation of Coal India.

Indo-Bhutan power MoU

December 24, 2009. Bhutan and India have signed seven MoUs in the power sector. Bhutan Power Corporation (BPC) sources said the agreements include preparation of detailed project reports for Amochhu (620 MW), Kuvi-Gongi (1800 MW), Kholongchhu (486 MW) and Chamkarchu-I (670 MW) projects. In addition, an agreement has also been signed for setting up a master plan for a national transmission grid in Bhutan. The MoUs will help augment Bhutan’s power supply and India’s need for power. Under the 60 years umbrella agreement (2006) on power between the two countries which was later amended, India will now import 10,000 mw additional hydro power from Bhutan by 2020.

Power plants may get to sell unallocated output

December 23, 2009. The Union Cabinet will shortly take up a proposal for allowing existing power projects to sell a part of their unallocated generation capacity in the open market at market-determined prices. The Planning Commission is giving a final shape to a note prepared by the petroleum ministry on the issue which will be put up before the Cabinet for its approval, a government official has said. The open access system puts in place a transparent power market enabling consumers to source their electricity requirements from any source and from any part of the country without any geographical or regulatory restrictions on such sale. Though it is permitted in the country under the Electricity Act 2003, lack of clarity on pricing and other regulatory impediments has failed expand the new system beyond captive power (CPPs) units.

INTERNATIONAL

OIL & GAS

Upstream

Pertamina, Petrochina to turn on taps at East Java field

December 29, 2009. The Joint Operating Body (JOB) of state oil and gas company PT Pertamina and Petrochina in East Java will start producing crude oil from the Sukowati field in the regency of Bojonegoro, East Java. The Sukowati well is expected to turn out more than 2,000 barrels of crude oil pr day after a trial operation underway. The production from the Sukowati well will bring the total production of joint operating body from Bojonegoro to 40,000 barrels of crude oil per day.

Changqing Sulige gas field posts gas yield of 30MMcm/d

December 29, 2009. PetroChina's Changqing Sulige gas field has realized a daily production capacity of 30 million cubic meters on December 24, 2009, which could be translated into more than 10 billion cubic meters a year. The gas field's realized output for 2009 has amounted to 3.23 billion cubic meters by December 24. Sulige gas field, located in Inner Mongolia's Erdos, has an estimated geographic reserve estimated at 533.7 billion cubic meters, compared with 356.1 billion cubic meters of reserve and 10.5 billion cubic meters of annual capacity of Puguang gas field, a flagship gasfield owned by PetroChina's rival Sinopec.

Tindalo oil field drilling to start in April 2010

December 29, 2009. The consortium developing the Tindalo field in offshore Palawan has contracted a drill rig for the oil project's production well so that drilling can start by April next year. The vessel is a newly built jackup rig, which was delivered by the PPL Shipyard Pte Ltd. in Singapore in September 2009. Nido said the Tindalo field would be drilled by the Aquamarine by April 2010 under a two-month contract. Once it completes its drilling operations, the jack-up rig will remain on location to provide a stable weather-tolerant production platform using specially installed production equipment on board. Crude oil from the well will then be processed on the rig and then flowed into storage via a floating hose to a leased FSO vessel.

OGX sees oil volumes between 1-2 billion barrels at Brazilian well

December 23, 2009. OGX has completed the drilling of well 1-OGX-2A-RJS, located in the block BM-C-41, in the shallow waters of the southern part of the Campos Basin. OGX holds a 100% working interest in this block. Based on the well information associated with the 3D seismic data interpretation, OGX estimates a recoverable oil volume for all reservoirs of between 1 and 2 billion barrels. The tests confirmed the presence of high quality carbonate reservoirs. Preliminary analysis indicates lighter oil in the deeper reservoirs.

Downstream

Transfield to continue services at Conoco's U.S. refineries

December 29, 2009. Australia's Transfield Services Ltd has renewed its maintenance contract with US energy producer ConocoPhillips for a further three years. Transfield Services's US oil and gas maintenance company TIMEC will continue to provide ConocoPhillips with routine maintenance, turnaround and minor capital work services at its US oil refineries, the company said.

Sinopec's Zhenhai ethylene project completes construction

December 29, 2009. Sinopec held a ceremony in Ningbo of eastern coastal Zhejiang province to witness completion of construction of its Zhenhai ethylene project. The ethylene project, involving a total investment of 23.5 billion yuan (US$3.4 billion), comprises ten sets of equipment and supportive facilities, which enables the Zhenhai Petrochemicals to have 23 million tonnes of refining and one million tonnes of ethylene production capacity. After the completion, Zhenhai Petrochemicals becomes China's largest oil refinery in capacity. The formal operation of ethylene project is to bring additional 20 billion yuan of sales revenue per year for the company with downstream industrial chain valued at some 100 billion yuan.

Chevron confirms Angola LNG plant to cost $9 bn

December 24, 2009. Angola's first liquefied natural gas plant is set to respect its budget, the latest indication that project costs are now stabilizing amid lower oil and gas prices. The figure given by Sonangol was $9 billion. The statement is the latest indication that costs at large oil and gas projects are now under control after oil prices fell from a peak of $147 a barrel mid-2008 to about $75 a barrel. Rocketing oil prices led to spiraling costs in the oil and gas industry--in 2005, Royal Dutch Shell PLC unveiled a doubling of costs at its Russian LNG plant, to $20 billion.

InterOil clears hurdle for LNG plant in Papua New Guinea

December 23, 2009. InterOil Corp. announced that the PNG National Government has signed the Company's Project Agreement for the construction of a liquefied natural gas (LNG) plant in Papua New Guinea. The Agreement sets fiscal terms for a twenty year period, which include a 30% company tax rate and certain exemptions applicable to large scale projects of this nature. It also provides for a 20.5% ownership stake to be held by the Government of Papua New Guinea's nominee, Petromin PNG Holdings Limited. A further 2% ownership stake will be taken by landowners directly affected by the plant. The project targets a $5 to $7 billion LNG facility, with multiple trains. Additionally, the Agreement provides for the expansion of the plant up to 10.6 million tons per annum (mmtpa). While current plans call for first production of LNG towards the end of 2014 or beginning of 2015, InterOil is progressing a proposed liquids stripping plant, to be located in Gulf Province, in late 2011/early 2012, which would provide an attractive revenue stream prior to the commissioning of the LNG plant.

Transportation / Trade

Gazprom signs on for Uzbek gas supplies

December 29, 2009. According to the negotiation results, a contract for Uzbek gas purchase and sale was inked between Gazprom export and Uztransgaz for 2010 in the amount of up to 4.25 billion cubic meters. Pursuant to the agreements reached, the price formula for the natural gas supplied from Uzbekistan will meet the European gas market conditions. Taking into account the contracts signed earlier, Gazprom's portfolio will additionally receive 15.5 billion cubic meters of Uzbek gas in 2010. The Agreement of Strategic Cooperation in the gas industry between Uzbekneftegaz and Gazprom was signed on December 17, 2002. In particular, the Agreement provides for long-term procurement of Uzbek gas in 2003-2012, Gazprom's participation in natural gas production projects in the Republic of Uzbekistan on the PSA terms, as well as cooperation in the field of Uzbekistan's gas transmission infrastructure development and Central Asian gas transmission through the Republic.

S.Korea, China, UAE in $9.7 bn Turkmenistan gas deal

December 29, 2009. Firms from South Korea, China and the United Arab Emirates have won $9.7 billion worth of contracts to develop Turkmenistan's largest natural gas deposit. China's CNPC, LG International Corp, Hyundai Engineering Co and the UAE's Petrofac won the tender. The companies will drill and build gas refinery plants in the Yoloten region.

Russia's Transneft Q3 net more than doubles

December 29, 2009. Russian oil pipeline monopoly Transneft saw net profit more than double year on year in the third quarter to 37.7 billion roubles ($1.27 billion). Revenues increased by 23 percent to 89.2 billion roubles. State-controlled Transneft owns and operates most of the oil and refined product pipelines in Russia.

Policy / Performance

Indonesia's oil output falls short of target

December 29, 2009. The government estimated Indonesia will fail in meeting its crude oil production target of 960,000 barrels per day on the average set for this year. Lifting has been around 945,000 - 948,000 barrels only per day keeping the country a net importer with import averaging 400,000 barrels per day. Indonesia, therefore, could not hope to regain its seat in the Organization of Petroleum Exporting country (OPEC) of which the country was a member before quitting in 2008. At least until 2014, Indonesia will remain outside OPEC with production that year expected to average only 1 million barrels per day.

China plans natural gas storage bases to meet demand peaks

December 29, 2009. China has planned a batch of natural gas storage bases across the country to meet seasonal demand peaks in 2010. The total length of China's natural gas pipeline has reached 34,000 kilometers by now, 1,800 kilometers more than that in 2008. The government will also boost development of liquefied natural gas (LNG), as the LNG projects in Zhejiang, Shandong and Hainan have started preliminary works with the approval of the NDRC. Statistics from the National Bureau of Statistics (NBS) show that China's natural gas output and consumption saw year-on-year growth of 8 percent and 11 percent respectively in the first eleven months in 2009. Natural gas accounts for 3.95 percent of China's total primary energy consumption during the same period, about 0.18 percentage points higher over that in a year earlier.

Russia, Ukraine reach new deal on oil transit

December 29, 2009. Russia and Ukraine agreed new terms for oil transit to Europe, averting the threat of another year-end energy crisis after Russian Prime Minister Vladimir Putin accused Kiev of "abuse" on the deal. Officials in both countries said the agreement only covered 2010. The agreement came a day after the European Union announced that Russia had triggered an "early warning mechanism" advising European states of the possibility of disruption to Russian oil supply pumped via Ukraine. The Ukrainian state oil pipeline monopoly, which is owned by Naftogaz, acknowledged that it was seeking changes to terms of its 2004 oil transit contract with Russia. Dispute between Russia and Ukraine on natural gas prices last year led to a cutoff of Russian gas supplies to Europe and severe shortages in some countries amidst freezing winter weather.

EU welcomes Russian assurance not to cut oil shipments

December 29, 2009. The European Union's executive body praised Russia's use of an early-warning mechanism to prevent another stoppage in oil shipments to the EU as has happened at the New Year in the past. EU Energy Commissioner said he was pleased that Russian officials formally warned the EU of a potential cut-off of oil supplies sent to Western Europe via Slovakia at the end of 2009, if a new oil shipment contract between Kiev and Moscow was not signed.

Pertamina gears up to drill drill 25 new oil wells in Java

December 29, 2009. PT Pertamina EP will drill 25 new oil wells in Java to increase its oil production to 26,000 barrels of per day in that island in 2010. urrently the subsidiary of state oil and gas company PT Pertamina, produces around 25,000 barrels of crude oil from its operations in Java. The plan has been sanctioned by the oil and gas executive board (BM Migas).

Kazakhstan in talks over Karachaganak field stake

December 29, 2009. The Kazakhstan government is in talks with a BG Group PLC-led consortium over obtaining a stake in the Karachaganak development, one of Kazakhstan's largest oil and gas condensate fields, Kazakh prime minister Karim Masimov said. Government stake in Karachaganak could help resolve the current dispute over export duties between the consortium and oil and gas rich Kazakhstan, which has moved to boost its control over major natural resource projects in recent years. he consortium, Karachaganak Petroleum Operating, is seeking compensation for export duties it says it shouldn't have had to pay to the government under its final production-sharing agreement. The government has said the consortium has been seeking, through international arbitration, a refund of over $1 billion for oil export duties it has already paid.

BP Tangguh to ship 116 LNG cargoes in 2010

December 28, 2009. The Tangguh liquefied natural gas plant operated by BP Tangguh in Papua is expected to ship 116 LNG cargoes (around seven million tons) in 2010 depending on the market demand. BP Migas said the target is based on the contracts signed with foreign buyers in China, South Korea and the United States. Shipments will depend largely on the economic condition in the three countries. 116 cargoes include 28 cargoes for China, 24 cargoes for South Korea and 55 cargoes for US West Coast.

Kuwait pledges long-term crude supply to 2^ndVietnam refinery

December 28, 2009. Kuwait has committed to long-term crude oil supply to Vietnam's Nghi Son refinery after the plant becomes operational, Vietnam Petroleum Institute said. PIC, a unit of Kuwait Petroleum Corp., was also considering buying up 50% of the refinery's polypropylene output. Vietnam Petroleum Institute is owned by state-run Vietnam Oil and Gas Group, or PetroVietnam. The $6 billion Nghi Son refinery, to be located 180 kilometers south of Hanoi, is expected to be operational at the end of 2013. The 200,000-barrel-a-day refinery will be built and operated by a joint venture comprising Japan's Idemitsu Kosan Co., PetroVietnam, Mitsui Chemicals Inc. and KPC. Once completed, Nghi Son will be Vietnam's second refinery after Dung Quat, which can process 130,000 barrels of crude oil a day.

Petronas to help Pertamina distribute fuel oil

December 28, 2009. Indonesia's downstream oil and gas regulatory agency (BPH Migas) has declared PT Aneka Kimia Raya Corporindo Tbk (AKR) and PT Petronas Niaga Indonesia as partner companies in the distribution of subsidized fuel oil in 2010. The decision was made at a BPH Migas committee meeting on December 23, 2009. AKR and Petronas have met the administrative, technical, and financial requirements. The subsidized fuel oil quota for the two companies amounting to 129,602 kiloliters, of which AKR will distribute 109,162 kiloliters of diesel oil to 34 locations apart from the public gas stations in Medan, Deli Serdang, Binjai, Metro, Central Lampung, East Lampung, South Lampung, North Lampung, Bandar Lampung, Pontianak, and Banjarmasin.

S. Korea's carbon emissions rose 2.9 pc in 2007

December 28, 2009. South Korea's emissions of greenhouse gas rose 2.9 percent from a year earlier in 2007, a government statistics report showed, nearly three times faster than the growth rate of 2006. The Ministry of Knowledge Economy said the 2007 data was based on a calculating method required by the United Nations Framework Convention on Climate Change. It's the first time that South Korea used the U.N. method in calculating the nation's greenhouse gas inventory. The data showed South Korea's emissions of greenhouse gas stood at 620 million metric tons in 2007, compared with 602 million metric tons in 2006, which was up one percent from the year before. The ministry attributed a brief decline in nuclear-powered electricity and rises in the number of thermal power generators to the sharp rise of emissions in 2007.

First section of Siberian-Pacific pipeline flows oil

December 28, 2009. Russian Prime Minister Vladimir Putin launched the country's long-awaited Siberian oil export route giving energy-hungry Asia a new supply source from the world's largest crude oil exporter that is seeking to diversify its client base away from Europe. Putin pushed a button that initiated the first filling of an oil tanker bound for Hong Kong at a new oil terminal near the Russian Pacific port of Nakhodka, the projected terminus of the new Siberian oil pipeline. Earlier this year, Russian oil pipeline monopoly Transneft completed the construction of the first 2,694-kilometer section of the oil pipeline known by the acronym ESPO [Eastern Siberian Pacific Ocean] linking Taishet in eastern Siberia with Skovorodino in the Amur region. This portion of the project also included the construction of the Kozmino oil port inaugurated by Putin.

Peru to sign 20 hydrocarbon exploration contracts in '10

December 28, 2009. Peru's mining ministry is set to sign 20 new hydrocarbon exploration contracts in 2010. The new exploration contracts will be awarded by Perupetro, Peru's state licensing agency for hydrocarbon exploration, via a series of auctions. The first auction of 10 new exploration blocks is due to be held in January. In Camisea's natural gas blocks 88 and 56 in the central highland region of Cusco, operated by the Pluspetrol consortium, a projected $576 million would be spent on further production and exploration works. Pluspetrol Peru Corp. SA is the lead operator of the Camisea project, which includes U.S.-based Hunt Oil Co., South Korea's SK Corp., Tecpetrol, a unit of Argentina's Techint Group, Algeria's Sonatrach Petroleum Corp. and Spain's Repsol YPF SA.

Western Australia renews 2 Wheatstone retention leases

December 28, 2009. The massive Wheatstone gas project on Western Australia's North West Shelf took another step forward on December 24th with the offer to renew two retention leases. Chevron Australia is sole owner of lease WA-17-R, while it shares ownership with Shell Development Australia on the lease WA-16-R. Chevron had already signed a Heads of Agreement for the delivery of 4.1 million tonnes per annum of LNG with the Tokyo Electric Power Company.

China to continue oil product pricing reform

December 24, 2009. China announced that it will continue to reform its oil product pricing mechanism based on changes in the domestic and international markets. "The reform of refined oil pricing and affiliated fuel tax incentives has produced prominent results in the past year. The significant measures spell out China's resolution to save energy and balance energy consumption," the National Development and Reform Commission (NDRC), the nation's economic planning agency, said. On January 1, the government started to change benchmark retail prices of oil products when the international crude price rises or falls by a daily average of 4 per cent over 20 days.

POWER

Generation

France-based Areva plans California nuclear plant

December 29, 2009. French nuclear engineering company Areva SA said that it plans to work with Fresno Nuclear Energy Group on developing one or two new-generation reactors in California's Central Valley. Areva said FNEG is a group of investors that wants to acquire the so-called EPR, or European Pressurized Reactor, technology for California. EPR reactors are under construction in France, Finland and China, and the certification process is under way in the United States and Britain. Areva has been plagued by delays in Finland, where the first EPR was supposed to be online this year. The last deadline for the 1,600-megawatt EPR unit was 2012 but Areva has since said the project's final cost and completion date remain uncertain.

Policy / Performance

Egypt invites NTPC to set up gas-based projects

December 29, 2009. The Egyptian government has invited India's NTPC Ltd to set up power projects in the African nation in an attempt to meet an expected surge in electricity demand. According to the proposal from the African country, the government will provide the land for the projects and pledge the long-term purchase of power with its central bank guaranteeing transactions. NTPC is willing to set up the projects provided it is allowed to source gas for its domestic capacity which is running at low efficiency due to a fuel shortage. Egypt has proven gas reserves of 2,170 billion cu. m (bcm) of gas or 1.2% of the total gas reserves in the world.

Renewable Energy / Climate Change Trends

National

SBI banks on wind power

December 28, 2009. India's largest lender State Bank of India (SBI) has financed many wind power projects in the country: Now it is setting up a few of them as well. The country's largest lender will set up wind power projects in Maharashtra (9 Mw), Tamil Nadu (5 Mw) and Gujarat (1.5 Mw) - with a combined capacity of 15.5 Mw - for its captive consumption at various SBI offices and branches in these three states. SBI has called for competitive bids for establishing captive wind power projects on turnkey basis, including land, infrastructure and permissions. The operations and maintenance would also be handled by the project contractors. The plants are expected to be commissioned by the middle of March next year.

Bengal, Gujarat, Rajasthan to play major role in solar power

December 28, 2009. West Bengal, Gujarat and Rajasthan will be the major participants in the National Solar Mission (NSM) as these three States together will produce nearly 30 per cent of the targeted 20,000 MW solar power in the country by 2022. A total of 15 MW solar power was currently generated in the State and the total investment in this in last three years was Rs 8 bn. Gujarat and Rajasthan were expected to generate 130 MW and 100 MW solar power respectively in three years. The Union Minister for New and Renewable Energy, Mr Farooq Abdullah, recently declared the target of producing 1,300 MW solar power in the first phase of National Solar Mission by 2013.

Thermax to build solar power plant

December 28, 2009. Energy and environment management company Thermax Ltd is designing and building a 250-kW solar power plant at Shive village, near Pune. The project, due to go on stream in 18 months, is the first private public partnership of its kind. The Department of Science and Technology, is funding it to the tune of Rs 130 mn, Thermax is investing Rs 20 mn while the local Gram Panchayat has given the required land. It will cater to the power requirements of 1,500 people of the village.

For energy sector, alternate energy is in

December 27, 2009. From the ‘green push’ of the 80s to the ‘green shove’ today, the energy sector in India has come a long way. The year 2009 saw a number of initiatives for promoting renewable energy. This included the solar mission under National Action Plan for Climate Change (NAPC), new tariff regulations for electricity generated from renewable energy sources, draft guidelines promoting green Special Economic Zones (SEZs) and announcement of a five-point action plan for bringing down emission intensity (emissions per unit of GDP) by 2020. Experts say a quantum leap in development of greenfield projects in the sector will be required next year if India has to fill the gap between gross potential and capacity installed. However, on a positive note, a major development this year was the world’s first Clean Development Mechanism (CDM) registration of high efficiency fossil fuel based power generation project from India. To give a further fillip to harnessing green energy coal-based power generation needs to be modernised.

Global

Indiana lawmakers hopeful about renewable energy bill

December 28. 2009. Legislation that could bring more wind turbines and solar power projects to Indiana has a good chance of passing in the upcoming legislative session after failing in the last session's closing hours, two state lawmakers say. While the General Assembly seems unlikely to require Indiana utilities to generate a specific amount of electricity from renewable energy sources, it may expand the state's so-called net-metering policy. That rule allows some customers of investor-owned utilities to send excess electricity produced by wind turbines, solar panels and other renewable sources back into the electric grid and to be charged only for the net amount of power they actually use.

Vestas receives 140 MW turbine order for Bulgaria & Romania

December 28, 2009. Vestas has received an order for delivery of 50 V100 1.8-megawatt (MW) and 25 V90 2-MW wind turbines for projects that are set to be built in Bulgaria and Romania. The order was placed by Global Wind Power, and the contract includes delivery, installation and commissioning of the turbines, a VestasOnline Business SCADA solution as well as a 5 year-service agreement. Global Wind Power has developed four projects in Bulgaria in 2008 and 2009 with a total capacity of 52 MW - all of them with Vestas turbines. Installation of the turbines will start in 2010 and the projects are expected to be commissioned during 2010.

China introduces law to boost renewable energy

December 27, 2009. A new Chinese law requires power grid operators to buy all the electricity produced by renewable energy generators, in a move that will increase the proportion of energy that comes from renewable sources in coal-dependent China. The amendment to the 2006 renewable energy law was adopted by the standing committee of the National People's Congress, China's legislature. The amendment also gives authority to the State Council energy department, together with the State Council finance department and the state power authority, to ''determine the proportion of renewable energy power generation to the overall generating capacity for a certain period''. Many other countries also have requirements that grid operators prioritise the dispatch of power from renewable sources, even if it is more expensive than coal-fired baseload plants.

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