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India’s low carbon strategies; are they good enough?
Shankar Sharma, Power Policy Analyst
Preface
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he ‘expert group on low carbon strategies for inclusive growth’ which was set up under the Planning Commission to develop a strategy for
The main sectors examined in this report are power, transport, industry, building and forestry. It is very relevant to note this report indicates that it is feasible to exceed the target of bringing down the emissions intensity of its GDP by 10 -13 % by 2020 through aggressive efforts. In view of the huge deleterious impacts to vulnerable section and environment of high GDP growth strategy of the successive governments, and the looming crises associated with the inevitable climate change, the civil society has a special interest in effectively participating in exploring various options available to our society to reduce the total GHG emissions. In this regard an objective review of the menu of options recommended by this expert group to reduce GHG emission intensity becomes essential.
Salient features – towards unsustainable growth rate
A major concern with the approach of this expert group is that it starts with the base line assumption that
The net effect associated with high GDP growth target will be that the total GHG emissions will increase by considerable margin, even if reduced emissions intensity of country’s GDP is feasible. The desirability of this scenario to our society needs to be questioned in the context that the increase in total GHG emissions will be closely associated with the increased pollution of air, land and water; and the increased denial of access to natural resources to the vulnerable sections of the society. Reduced area and density of forests, dammed rivers, polluted air, forced displacements which will all be the consequences of a frenetic 9% GDP growth are bound to impact the vulnerable sections of our society. Since the vulnerable sections of the society are also the most impacted lot due to climate change, the civil society has a crucial role to ensure that their legitimate interests are protected adequately.
A quick look at the possible impact of 9% sustained growth on the critical sectors of the Indian economy can reveal a disturbing trend. The transport sector will demand much higher consumption of energy such as diesel, petroleum and LNG. These products which already have about 75% import content are projected to reach 85-90% soon with disastrous consequences on energy security. The pollution loading of vastly increased consumption of petroleum products, which has given rise to concerns in urban areas already, is likely to reach extremely unhealthy levels. Along with increased GHG emissions and much higher levels of suspended particulate matter, the pressure on the transportation infrastructure can become unmanageable. Increased use of private passenger vehicles, which is already a huge concern, will escalate to choke our roads and lungs.
Industrial activities, as a consequence of 9% sustained growth, will put unbearable demand on land, fresh water, energy and other raw materials. Such a demand on land (such as in SEZs, coastal industrial corridors, IT&BT parks etc.) have already given rise to a lot of concerns to social scientists, and already has witnessed social upheavals as in Singur, West Bengal. The industrial sector, which is already responsible for 22% of total GHG emissions, will contribute hugely to the increase in total GHG emissions of the country. Similarly, 9% GDP growth will lead to steep increase in demand for buildings in the form of factories, transportation infrastructure, offices, hotels, etc. which in turn will put huge demand for construction materials and energy. In this scenario can the increase in GHG emissions be far behind?
The most telling impact of frenetic economic growth of 9% over 20 years will be on forests, rivers and other natural resources. As against National Forest Policy target of 33% of forests & tree cover, the country has less than 20% of the same, which are considered to be the most important sinks of GHG emissions. The demand for additional lands and minerals for the increased activities in all the above mentioned sectors will further reduce the forest & tree cover, which in turn will severely impact the availability of fresh water and on the nature’s ability to absorption GHGs. The impact of vastly reduced forest & tree cover on human health and on all aspects of our society requires no further elaboration. Whereas the increased economic activities associated with 9% growth will certainly result in vastly increased GHG emissions, the same will reduce the ability of forest & tree cover to absorb GHG emissions from the atmosphere. In this scenario it is anybody’s guess as to how the country’s total GHG emissions can be reduced to an acceptable level.
The report seems to mimic the tall claims made under the Green India Mission (GIM). The objective of GIM is to double the area to be taken up for afforestation and eco-restoration in
Of various sectors of our economy energy sector has the highest contribution of emissions with 58% of CO2 equivalent in year 2007, as per this report. Within the energy sector the largest chunk of emissions was from electricity generation amounting to 65% of CO2 equivalent in that sector.
The report indicates that the compounded annual growth rate (CAGR) of emissions trend between 1994 and 2007 for electricity was one of the highest with 5.6% along with cement and waste. The report says: “Growth in these sectors can be attributed to tremendous increase in capacity of production during 1994 to 2007. Further, the emission intensity as expressed in grams of CO2 - eq per Rs. of GDP has fallen from 66.8 in 1994 to 56.21 in 2007, indicating the impact of government policies that encourage energy efficiency in various sectors of the economy”. In view of the huge CO2 – eq emission contribution of electricity to the total GHG emissions in the country, a cursory look at what the report recommends for this sector becomes important.
As in integrated energy policy (IEP), this Planning Commission report assumes that the country should have 8 - 9% GDP growth, because of which it projects gross electricity generation requirement of about 2,360 Billion kWH in 2020; as compared to 813 Billion kWH in 2007-08 (about 3 times increase). The report also indicates that aggressive efforts in bringing energy efficiency to domestic and commercial appliances can save about 150 Billion kWH by 2020. Whereas it has assumed that the energy saving potential in agricultural pump-sets though efficiency improvement and demand side management as 10 Billion kWH, the national level statistics on inefficiency of agricultural pump-sets indicates that the losses are about 10% of the total electrical energy consumption. Hence, if we consider net generation requirement of 2,210 Billion kWH in 2020, the energy saving potential in agricultural pump-sets can be as high as 50 Billion kWH if can reduce the losses even by 25%, which is technically feasible. Similarly, the report indicates that the savings feasible from efficiency improvement measures in industries as about 60 Billion kWH.
Despite all the suggested measures the GHG emissions within power sector is expected to increase from 598 million tons of CO2 – eq emissions in 2007 to about 1,620 million tons of CO2 equivalents in 2020 for the 9 percent GDP growth scenario; an increase of 2.7 times. Even with all the suggested aggressive efforts in the report the total installed power generating capacity is projected to increase to about 363,000 MW by 2020 as compared to the total capacity of about 160,000 MW in 2007; an increase of about 2.3 times.
Shortcomings of the report
The report assumes coal power to be the least cost option, and that the coal power capacity needs to be increased to 230, 000 MW from the present level of about 80,000 MW. It states: “… This will require an annual coal supply of at least 1,000 million tons, two and a half times the present. Domestic mining will have to increase considerably otherwise imports will have to meet a large fraction of coal demand.” To increase the domestic mining large tracts of thick forests have to be destroyed. The report while eulogizing how much GHG emission saving can be achieved by steps mentioned in the report, it completely ignores how much GHG absorption potential will be lost by destroying forests.
The projected increase in the installed power generation capacity poses almost insurmountable logistical problems. “… In other words, it translates to adding about 20,000 MW of new generation capacity per annum. As against this, in the recent years,
As in the integrated energy policy, the importance given to renewable energy sources is woefully inadequate. The report states: “Solar installed capacity if pursued with seriousness could grow to 20,000 MW by 2020. It is one of the critical technology options for
As in the integrated energy policy, this report too has failed to put adequate emphasis on DSM measures, which with effective strategies can bring down the power capacity projection to a level much below 363,000 MW by 2020. Report says: “It is clear that in the absence of implementing DSM measures,
A major problem for the Indian economy, as well as its environment, will be the unchecked growth of urban areas. The report states: “..The urban populations are predicted to rise to 550 million by 2030 or 42.0 percent of the total population….. This urban growth, combined with rapid growth in the economy, has resulted in putting enormous pressure on housing requirements, urban infrastructure and other services.” No measures have been contemplated to limit the growth of urban areas.
Way forward to ensure sustainable development of our masses:
1. The base line assumption that India needs to sustain an economic growth of 8 - 9 % over next 20 years to eradicate poverty and to meet its human development goals will lead to very many intractable problems for the society from social and environmental perspectives. Such a high growth rate has not been found necessary even in developed economies, where even at the highest growth period they are reported to have registered only 4-6 % growth. The so called “trickle down” benefits to vulnerable sections of our society through 8-9 % growth will be negligible as compared to the all round benefits associated with inclusive growth of a much reduced rate, say 4-6%, if we effectively harness our natural resources responsibly. Hence the obsession with target GDP growth rate of 8-9 % should be replaced by a paradigm shift in our developmental objective, which will give priority for inclusive growth aimed at sustainable and responsible use of natural resources.
2. We should dispense with the practice of projecting the total energy production capacity required to sustain 8-9 % GDP growth through the year 2020 0r 2030, and then aiming to attain that production capacity largely through conventional energy sources. Instead we should focus objectively in determining the lowest amount of energy required to wipe out the poverty, and how to meet that energy requirement at lowest overall cost to the society without compromising on the environmental well being on a sustainable basis.
3. The line of argument that the country has a right to emit more GHGs because its per capita emissions is one of the lowest may be suitable for the purpose of international negotiations, but it must be drastically modified to take into account the fact that it is the total GHG emissions which is relevant in the context of Climate Change, and not the per capita emissions. We cannot ignore the fact that the huge increase in total GHG emissions, which is inevitable with 8-9 % growth, will lead to heavy pollution of land, air and water, and will adversely impact the legitimate interests of various sections of our society while also leading to the exploitation of our natural resources in an unsustainable fashion.
4. We must appreciate that there is a limit to the nature’s ability to support the provision of products and services required by the increasing human population. Such a demand on the nature must be carefully managed, which is not possible if we set a target of 8-9 % GDP growth for such a huge population, which is growing every year.
5. In the global context of Climate Change, what is needed is the honest effort by every nation to reduce the total GHG emissions, and not exercising the individual right to increase emissions. While a target of 8-9 % GDP growth for
In this regard the menu of options to reduce GHG emission intensity in critical sectors of the Indian economy as recommended by ‘expert group on low carbon strategies for inclusive growth’ clearly falls short of the requirement, and hence much more proactive strategies to reduce the overall GHG emissions are needed.
Concluded
Views are those of the author
Author can be contacted at [email protected]
NEWS BRIEF
NATIONAL
OIL & GAS
Upstream
ONGC to invest $7.7 bn in KG basin
June 21, 2011. Oil and Natural Gas Corporation (ONGC) plans to invest $7.7 billion to develop its gas field in the KG Basin, adjoining Reliance's prolific D-6 block, and produce up to 30 million cubic meters a day in five years. The company plans to drill eight additional wells in the block to maximize output from the deep-sea field in the
ONGC in talks with BG, ENI to sell stake in
June 21, 2011. State-run Oil and Natural Gas Corp is in talks with BG Group and Italian oil major ENI to sell up to 30 percent stake in its gas block off
Transportation / Trade
Fuel leakage in
June 21, 2011. An incident of fuel spillage has occurred in the Gulf of Kutch region of
Reliance Gas goes slow on two pipelines from KG-D6
June 17, 2011. Reliance Gas Transportation Infrastructure (RGTIL) is reluctant to build two pipelines it had planned because no gas has been allocated, but it wants to hold on to the licence for the projects, which would become attractive if Reliance imports LNG. The company and other promoters of Reliance Industries, was planning to build the pipelines to transport natural gas from the Krishna Godavri basin to various industrial hubs in southern
Policy / Performance
Govt to keep tabs on oilfields, says Jaipal Reddy
June 21, 2011. The government will reinforce supervision of oilfields following the national auditor's sharp criticism of the way it handled private oil firms, Petroleum Minister Jaipal Reddy said as he sought to fend off attacks from opposition parties over the matter. A week after a draft report of the Comptroller and Auditor General (CAG) criticising the oil ministry was leaked in the media, Reddy said relentless criticism by the opposition was counter-productive as it would obstruct decision-making and hamper development. The draft report criticised the government for allowing Reliance Industries to raise capital expenditure in KG-D6 block as well as for alleged lapses in the Cairn-operated Rajasthan block and BG-operated Panna, Mukta and Tapti fields. The minister said he agreed with the CAG that the Directorate General of Hydrocarbons (DGH), which oversees oilfield development, should be strengthened. But he declined to respond to other issues raised by the auditor saying the oil and gas business was highly technical. He said the CAG itself admitted it was not in a position to quantify the loss to the exchequer. The draft report of the CAG rapped the DGH, for allowing an increase in estimated capital expenditure by RIL from $2.4 billion to $8.5 billion between May 2004 and December 2006.
Contracts like Reliance's KG-D6 are designed to benefit private players: Chawla Committee
June 21, 2011. After the CAG, the high-level Ashok Chawla Committee has criticised the system of Production Sharing Contracts like the one Reliance Industries signed for the gas-rich KG-D6 block, saying these contracts are designed to benefit private players at the government's expense. However, the Oil Ministry rejected the criticism saying the New Exploration Licencing Policy under which Reliance bagged the KG-D6 block was designed by the BJP-led NDA government in 1999 and the terms being deplored now are ones vetted and signed by the then Atal Bihari Vajpayee government. Reliance bagged the KG-DWN-98/3 block in the first round of NELP, which was pioneered by the NDA government, and signed the PSC for the block in 2000.
ONGC says merger of
June 20, 2011. Indian explorer Oil and Natural Gas Corp said it was in talks with
Is big private investment about to flee
June 19, 2011. India's oil sector investors are thinking this is probably the bottom of the barrel. Their response to the draft report by the Comptroller and Auditor General (CAG) - the report argued that the oil ministry allowed some oil majors to inflate costs of oilfield development and explore beyond contracted areas - is that this is another major blow to investor confidence.
US experts to help ONGC cap gas leak at Tripura well
June 18, 2011. State-owned exploration giant ONGC has sought US experts' help to plug a leaking gas well in western Tripura from which natural gas continued to gush out, five days after it was first detected. Experts from the US-based Boots and Coots have world class expertise in controlling such leaks. Experts from Ahmedabad and Mumbai arrived immediately after the accident and modern machineries from
Cabinet skirts Cairn-Vedanta deal: Oil min
June 16, 2011. Cabinet did not discuss the proposed sale of a stake of British oil explorer Cairn Energy's
ONGC may bear ` 123 bn subsidy burden
June 16, 2011. State-owned Oil and Natural Gas Corp (ONGC) may have to shell out a record ` 12,300 crore in fuel subsidies in the April-June quarter as the government deters from raising retail fuel prices. Retailers Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum are likely to see about ` 45,000 crore of revenue loss on selling diesel, domestic LPG and kerosene at government controlled rates in the April-June quarter. As per practise, at least one-third of these losses will have to be borne by upstream firms. So, ONGC, Oil India Ltd and GAIL India will together take a hit of about ` 15,000 crore. Of this ` 15,000 crore, ONGC's share is the biggest at around 82 per cent. As per this formula, ONGC will have to shell out ` 12,300 crore in fuel subsidy in the April-June quarter. But if the formula used in the January-March quarter, when upstream firms were made to bear 38.5 per cent of the total revenue loss, is applied, the share of ONGC will rise to a whopping ` 14,206 crore. Upstream firms, as per this formulation, would have to pay ` 17,325 crore in fuel subsidy. ONGC had in January-March quarter given discounts on crude oil it sells to refiners totalling ` 12,136 crore, the highest ever subsidy payout. The three fuel retailers are losing about ` 460 crore per day on selling diesel, domestic LPG and kerosene below cost. An Empowered Group of Ministers (EGoM), which decides on revising rates of the sensitive products, has not met since June last year even though crude oil prices have spiralled upward by about 50 per cent. State-owned oil firms had hiked petrol prices by a steep ` 5 per litre and are looking at another small increase. Petrol prices were freed from government control in June last year and IOC, BPCL and HPCL have the freedom to fix retail rates but retail prices are sill ` 1.98 per litre short of their imported cost. Oil firms are losing ` 15.44 on the sale of every litre of diesel at the current price of ` 37.75 per litre in
Oil Min calls for restraint on CAG report on KG-D6
June 16, 2011. Amidst a raging controversy over CAG's draft report severely criticising its role in approving Reliance Industries' KG-D6 field cost, Oil Ministry called for restraint and not jumping to conclusion saying the top auditor has not yet finalised its report. The Comptroller and Auditor General (CAG) in its draft report had alleged that the oil ministry and its technical arm DGH favoured Reliance but did not say if by doubling of cost of developing eastern offshore KG-D6 field had overbilled the government and thereby caused loss to the state exchequer. It also pulled up the ministry for going out of its way to grant nearly 1,700 sq km of additional area to Cairn
POWER
Generation
GAIL to study potential for two power plants in Uttarakhand
June 21, 2011. State-owned gas utility GAIL India said it has signed an initial agreement to evaluate the possibility of setting up two gas-fired power plants in Uttarakhand. GAIL said it has signed a Memorandum of Understanding with Uttarakhand Jal Vidyut Nigam Ltd (UJVNL) for evaluating the potential of setting up a gas-based combined cycle power plants in Haridwar and Kashipur in Uttarakhand under the joint venture route. Uttarakhand is facing a power shortage and no new hydro plant is coming up due to environmental issues. To improve the availability of power in the state, UJVNL intends to set up 300 to 500-MW gas-based power plants at Kashipur and Haridwar. Natural gas required for both power plants will be supplied by GAIL. As per current Central Electricity Authority (CEA) guidelines, allocation of domestic gas for new power projects will be considered to the extent of only 60 per cent of the total requirement, subject to meeting specified criteria and gas availability. As such, for the balance volume, these plants have to depend on other sources.
Lanco gets ` 3.6 bn order for
June 21, 2011. Indian construction and energy conglomerate Lanco Infratech Ltd said it won a contract worth 3.65 billion rupees to build a 250 mega watts gas-fired power plant in
RPower Krishnapatnam UMPP hits road block, may seek govt help
June 19, 2011. Reliance Power's 4,000-MW Krishnapatnam ultra-mega power project is facing road blocks due to various reasons, including a recent change in Indonesian law which mandates all parties to sell coal at market prices. Earlier, Indonesian coal mines had the freedom to bilaterally agree coal prices with buyers. The recent change in law will impact the viability of this project as well as others that are based on imported coal, especially from
Bakreswar thermal power plant unit shut down
June 17, 2011. A 210 MW unit of state government's Bakreshwar thermal power plant was shut down when a fuel pipeline next to it caught fire. The pipeline caught fire causing unit 5 of the power plant to be shut down.
Lanco plans power plants in Bangladesh,
June 16, 2011. Lanco Infratech, construction and energy conglomerate, is looking to build thermal power projects overseas, even as it has dropped plans to bid for Australian miner Premier Coal. The company has zeroed in on power projects in
Transmission / Distribution / Trade
Siemens wins ` 1.2 bn order from Indiabulls Infra
June 21, 2011. Siemens Ltd said it has won a ` 124 crore order from Indiabulls Infrastructure Company to build a switchgear substation for 5X270 MW Sinnar thermal power project at Nasik. The substation is scheduled for commissioning by October 2012. The scope of the project includes complete system, design, engineering, civil works, supply, installation, testing and commissioning of switchyards, including interconnecting transformer, reactor and cables. Sinnar thermal power project at
Consortium from
June 21, 2011. Engineering companies from the
Larsen & Toubro bags ` 13.6 bn orders in Gulf
June 21, 2011. Larsen & Toubro has bagged ` 1,366 crore contracts from Gulf region for construction of transmission lines and substations. The company's subsidiary -- Larsen & Toubro Saudi Arabia LLC -- has received ` 597 crore order for construction of 225 km transmission line from Saudi Electricity Company (SEC) connected with Haramain High Speed Railway.
Power Grid Corp to bid for ` 13 bn contract
June 15, 2011. Power Grid Corporation of
Probe to be ordered into explosion at power plant: Kerala govt
June 21, 2011. Kerala government said a comprehensive probe would be ordered to ascertain the reason behind the explosion in the control panel of a generator at Moolamattam power house in Idukki district. The power house was shut down immediately after the incident, following which supply across the state was disrupted and KSEB resorted to 30 minute loadshedding. Moolamattam power station comes under state's biggest Hydel power project-- the 780 mw Idukki project, which accounts for nearly 60 per cent of the state's domestic electricity production.
Fitch: Coal shortage impedes
June 20, 2011. Fitch Ratings says that
Fitch notes that coal will remain the dominant fuel for the Indian power sector, given the lower-than-expected gas production from existing fields and no new major gas discoveries. Additionally, the majority of the future generation capacity additions will be coal-fired. Coal accounted for 54% of total power capacity at end-April 2011 and 66% of total electricity generated in FY11.
India seeks $2.5 bn World Bank aid for power projects
June 20, 2011.
Tata Power commissions simulators at Trombay power station
June 20, 2011. Tata Power announced the commissioning of new personal computer-based training simulators for 250 MW and 500 MW thermal units at its Trombay Thermal Power Station.
Rajasthan govt inks MoU for setting up 1200 MW thermal plant
June 17, 2011. Rajasthan government has signed an MoU with Gujarat-based power company Siddhi EnerTech Limited for setting up a 1,200 MW coal-based super critical thermal power plant in Banswara. The project, to be set up under the policy for promoting private investments in the power sector, will be one of the three super critical power projects to be set up in the district at a likely investment of around ` 8,000 crore. As per the policy, the company will get 100% exemption on the stamp duty on paper execution and power purchase guarantee of at least 50% of the power generated in a year among other benefits which include infrastructure support and land acquisition facilitation.
Coal Ministry revokes licences of 5 NTPC,
June 17, 2011. The coal ministry issued orders to revoke mining licences of five blocks of NTPC, Damodar Valley Corp and Jharkhand State Electricity Board with combined reserves of 1,000 million tonnes. The power ministry would take up the issue with coal ministry and higher authorities. Three of the five blocks - Chatti Bariatu, Chatti Bariatu (South) and Kerandari - belong to NTPC.
The power ministry has already written to the coal ministry to review the decision. Chatti Bariatu and Kerandari coal blocks were allocated to NTPC in 2006, while Chatti Bariatu (South) coal block was given to public sector firm in 2007. The three blocks hold 836 million tonnes of reserves. The other two blocks are Damodar Valley Corp's Saharpur Jamarpani with 600 million tonne reserves and Jharkhand State Electricity Board's Banhardih with 400 million tonnes of coal. While Saharpur Jamarpani was allocated in 2007, Banhardih was given in 2006. The coal ministry had announced decision to revoke licences of 15 coal and lignite blocks, 12 of which belonged to state-run companies.
INTERNATIONAL
OIL & GAS
Upstream
Russia to explore for oil in Lanka
June 19, 2011. Russia has agreed to start oil and gas exploration in the seas off Mannar and send a group of experts to
IEA increases 2016 oil production forecast, says $100 crude a threat
June 16, 2011. The International Energy Agency raised its forecast for global oil demand growth to 1.3 percent annually over the next five years on economic expansion in
S.Korea KNOC to sell partial stake in
June 16, 2011. Korea National Oil Corp (KNOC) is seeking to sell part of its stake in the U.S. Ankor offshore oil project to fund a new deal. The stake sale may be made to pension funds or to private investors.
Khodorkovsky says corruption means
June 16, 2011. Russia’s failure to stop corruption and diversify the economy means it needs $200 a barrel oil to match the economic growth of
Libyan rebels seek $3.5 bn in financial aid as oil production stops
June 15, 2011. Libya’s rebel government is seeking $3.5 billion to cover its budget for six months as sales of crude stopped after oil fields were destroyed.
Downstream
Qaddafi tanks deprived of diesel as ships shunning
June 21, 2011. Libyan leader Muammar Qaddafi is facing a fourth month without the diesel cargoes needed to power tanks as he endures an 11-week air campaign led by NATO. No vessel delivered the fuel to Qaddafi-controlled ports since February. The country, once
Sinopec plans new refinery complex
June 18, 2011. China Petroleum & Chemical Corp, the country's biggest refiner by capacity, is planning to build a refining complex with an annual processing capacity of 32 million tons in
Transportation / Trade
TransCanada wraps up construction on $360 mn
June 20, 2011. TransCanada Corp. said it has wrapped up construction on its $360-million
Goldman Sachs fined by ICE exchange for ‘disorderly’ trading
June 20, 2011. Goldman Sachs Group Inc. was fined 25,000 pounds ($40,000) by the ICE Futures Europe exchange for “disorderly” oil trading. The ICE committee considered the behavior of Goldman Sachs and its client to be a clear case of disorderly trading, in that the distorting price impact of the placement of such large orders in close proximity was not considered.
U.S. oil supply highest for may since 1980
June 17, 2011.
Russia,
June 17, 2011. Russia and
China sends patrol into
June 16, 2011. China has sent its biggest civilian patrol ship across the
LNG shipments approach
June 16, 2011. The first tanker carrying liquefied natural gas was sitting offshore near the Gulf LNG terminal, waiting to deliver a load of the super-cooled product sometime. A second tanker is expected. The two are part of a commissioning process for the terminal. The liquefied natural gas in the tankers will be used to cool down the plant, acclimating the tanks and pipes to the temperatures.
S.Korea's May LNG imports jump 22 pc yr/yr
June 15, 2011. South Korea's imports of liquefied natural gas (LNG) jumped 22 percent in May from a year earlier.
Policy / Performance
China drafting 2011-2015 plan on shale gas
June 21, 2011. China is drafting a plan to develop domestic shale-gas reserves during the five-year period ending in 2015 as demand rises in the world’s largest energy consumer. The government may offer financial support and tax incentives to spur domestic explorers to extract shale gas. PetroChina Co.,
Weatherford to pay $75 mn to BP for oil spill
June 21, 2011. Oil services provider Weatherford, which provided equipment used in the Macondo well, has agreed to pay BP $75 million toward the cost of the
Deepwater Horizon Manager Harrell refuses to testify in oil spill lawsuits
June 21, 2011. Jimmy Wayne Harrell, Transocean Ltd. (RIG)’s highest-ranking drilling employee on the Deepwater Horizon rig before it exploded and sank, refused to testify in civil lawsuits over the accident, according to court records. Harrell, the rig’s offshore installation manager, was in charge of drilling activities on the Deepwater Horizon, which exploded April 20, 2010, while drilling a BP Plc well off the
Conoco, Occidental
June 21, 2011. ConocoPhillips and Occidental Petroleum Corp said they have received inquiries from the U.S. Securities and Exchange Commission related to the companies' operations in
Conoco and Occidental had received inquiries related to their Libyan operations. The SEC is asking oil companies for any type of communications they held with the government of Libyan leader Muammar Gaddafi.
Iran to double gas production capacity by 2015
June 20, 2011. Iran plans to double the capacity of its natural gas production in less than four years.
Iran had announced
POWER
China to speed up Jinshajiang hydro projects
June 20, 2011. China is speeding up the construction of four hydropower plants on the
Radiation spike halts work at
June 18, 2011. A rise in radiation halted the clean-up of radioactive water at
Progress to disclose
June 17, 2011. Progress Energy Inc will update
Transmission / Distribution / Trade
Australia cuts coal export forecast, may reduce again
June 21, 2011. Top coal supplier
Tanzania, US firm sign power pact
June 20, 2011. An American firm, Symbion Power signed an interim agreement in
China's
June 15, 2011. Power deficits in the in the central Chinese province of Hubei, home to the Three Gorges Dam, the world's largest hydropower station, could range from 1.8 to 3.8 billion kilowatt-hours during June to September, the worst summer crunch in recent years. The shortfall would be equivalent to 4-8 percent of expected on-grid power consumption of 46 billion kWh in the four months, and the expected maximum deficit would be about one week's consumption.
U.S. says Yucca nuclear dump not an option
June 21, 2011. A controversial
Japan needs nuclear as main energy
June 21, 2011.
French Industry Minister rejects poll backing nuclear withdrawal
June 20, 2011. French Industry Minister Eric Besson rejected the findings of an opinion poll that called for the gradual phasing-out of the country’s 58 nuclear reactors.
UN atom chief urges nuclear safety inspections, tests
June 20, 2011. The U.N. nuclear chief proposed international safety checks on reactors worldwide to help prevent any repeat of the
Court forces Vale,
June 20, 2011. Brazil's Vale and Aquila Resources will have to reach a compromise on how much Vale should pay
Nuclear lobby to challenge German exit plan
June 19, 2011. Germany's nuclear lobby is mulling plans to take the German government to constitutional court, to halt the country's nuclear exit and seek billions in damages. A legal opinion commissioned by utility E.On has concluded that the German government's plan to exit nuclear energy by 2022 is unconstitutional. The legal opinion, which was prepared for E.On by law firm Gleiss Lutz, says
Russia developing new generation nuclear power plants
June 18, 2011.
Renewable Energy / Climate Change Trends
National
Moser Baer may start
June 21, 2011. Moser Baer Ltd.,
Techno Electric Co Ltd achieves financial closure for 100 MW wind power project
June 20, 2011. Techno Electric & Engineering Company Ltd (TEECL), a company focused on power sector, has achieved financial closure for the first phase of 100 MW wind energy generation project in Tamil Nadu.
Simran Wind Project Pvt Ltd., a wholly owned subsidiary of TEECL, has brought in International Finance Corporation (IFC), the investment arm of the World Bank as major investor. IFC has made a total investment of $35 million, which is a mix of debt & equity. Equity investment by IFC is $5 million, which translates into a 3.38% stake in Simran Wind Projects. The remaining $30 million comes in the form of debt. TEECL's stake in the company will reduce to 96.62%. Along with IFC, leading foreign banks Standard Chartered Bank & DBS Bank are financing the project in the form of debt by investing $30 million & $20 million respectively. TEECL will be contributing $48.33 million (` 218 crore) in the equity portion. The agreements were signed by TEECL at Kolkata, which marked the financial closure of Phase I. The total project cost for generating 100 MW of wind energy is $133.33 mn (` 600 crore). Total debt financing amounts to $80 mn (` 360 crore) and $53.33 mn (` 240 crore) as equity investment. The debt-equity ratio for the project stands at 60:40, with Simran valued at $148 million approximately. Out of the total 100 MW, Simran has already commissioned 37.5 MW. The company has entered into a Power Purchase Agreement with the Tamil Nadu Generation & Distribution Company under the REC scheme for the 37.5 MW. The company is set to commission the entire 100 MW of the project by mid July 2011.
BHEL to set up 5 MW solar power plant for KPCL
June 17, 2011. The electronics division of Bangalore-based Bharat Heavy Electricals Limited has won a major turnkey contract for setting up an eco-friendly, grid-connected solar power plant of 5-MW capacity. Valued at ` 62 crore, the order for setting up a solar photovoltaic (SPV) power plant near Shivasamudram, in Mandya district, was placed on BHEL by Karnataka Power Corporation Limited (KPCL).
BHEL's scope of work under the contract involves the design, manufacture, supply, installation and operation and maintenance of the solar power plant. With this order, BHEL is presently executing SPV-based power projects of various capacities totalling 16 MW, the company said. Solar cells and modules manufactured by BHEL are also exported to countries like
India’s Tamil state to start repaying $267 mn to wind farms
June 16, 2011. The southern Indian state of Tamil Nadu, home to 40 percent of the nation’s wind capacity, agreed to make the first payment on part of the 12 billion rupees ($267 million) it owes wind farms for power supplies.
MBSL signs deal for solar modules distribution in US
June 15, 2011. Moser Baer Solar Limited (MBSL) has signed an agreement with Munro Solar for the distribution of its solar photovoltaic modules in the
India set to produce 700 MW solar power in 2011
June 15, 2011. India is on track to produce 700 megawatts of solar power at a cost of $2.2 billion by December, ahead of an initial target for an ambitious plan that seeks to boost green power generation from near zero to 20 gigawatts (GW) by 2022. Under
Konark Group eyes $30-35 mn private equity investment in power arm
June 15, 2011. Konark Group plans to raise $30 million-$35 million through private equity placement in its power projects business. The Mumbai-headquartered group's listed company Konark Synthetics has set up a subsidiary, Konark Infratech, for foray into power sector. It plans to invest ` 1,000 crore to set up 155 megawatts of solar and wind capacity by 2015. The expansion would be financed through internal accruals, debt and private equity. The company aims to commission 15 MW of solar power in 40 MW of wind energy by March 2012 and subsequently scale up the capacity to a total of 155 MW by 2015. To boost renewable energy in the country, the government, through the National Action Plan on Climate Change set a target of 15% share of clean energy in total generation. The Ministry of New and Renewable Energy subsequently brought down the target to 6% as against the current share of around 4%. The company plans to sell the power from its planned units to various state electricity boards.
Global
German energy plan endorsed by European Investment Bank
June 21, 2011. Germany’s plan to close its 17 nuclear plants and replace them with renewable-energy and gas- fired power stations by 2022 is “achievable,” European Investment Bank said.
Australia Senate will likely reject coalition carbon plebiscite
June 21, 2011. Australia’s Senate will likely reject the opposition Liberal-National coalition’s motion to have a plebiscite on Prime Minister Julia Gillard’s plan to introduce a tax on carbon emissions.
Climate Change lawsuit against utilities rejected by
June 21, 2011. States can’t invoke federal law to force utilities to cut greenhouse-gas emissions, the U.S. Supreme Court ruled, shutting off one avenue for groups that advocate bolder steps against climate change.
The unanimous ruling is a victory for five companies -- American Electric Power Co., Duke Energy Corp., Xcel Energy Inc., Southern Co. and the government-owned Tennessee Valley Authority -- that had been sued by six
Norway,
June 21, 2011. Norway and
Rich nations break $30 bn climate promise, poor world says
June 20, 2011. Richer countries have failed to supply the $30 billion of climate financing they pledged at the
IATA encourages
June 20, 2011. The International Air Transport Association said it encouraged
The EU decided in 2008 that flights to and from the bloc’s airports should be added from 2012 to its emissions trading system, known as the ETS, after airline discharges in
The EU is not considering a change in the regulation to include aviation in its cap-and-trade program. The 27-nation bloc is facing an escalating argument with countries including
Short sellers hammer ‘solarcoaster’ as glut of chinese panels sinks prices
June 20, 2011. Short sellers are flocking to solar power, dumping record levels of stock in First Solar Inc. (FSLR) of the
Softbank calls for increase in renewable energy output
June 20, 2011. Softbank Corp. said the world’s economies must boost energy generated from renewable resources, and craft policies looking 60 years ahead, given the cost of fossil fuels and the risks of nuclear power.
South Korea to form green technology center
June 20, 2011. South Korea said the government will form a “green technology” center to study technology related to energy, information technology, environment, and to share that knowledges with other emerging nations.
Suntech says to up wafer self-supply, sees further growth
June 20, 2011. Suntech Power Holdings, the world's largest solar cell maker, aims to boost its in-house wafer production to 50 percent of its total cell capacity. Suntech said the company would increase its solar panel capacity to 2.4 gigawatts (GW) by end-2011, raising funds for expansion through joint ventures, bank loans and its own capital.
Australia power cost may more than double on carbon
June 20, 2011. Australian electricity prices may rise 121 percent by 2020 if a carbon tax were introduced along with a plan of generating 20 percent of the country’s power from renewable sources.
Safran, Honeywell unveil "green" taxiing
June 19, 2011. Aerospace and defense suppliers Safran and Honeywell said they would join forces to offer "green" taxiing systems to slash fuel burn and carbon emissions, from gate to runway. Time spent taxiing on the tarmac is more than just a nuisance for passengers -- it costs airlines a lot of money and increases emissions which they are under pressure to curb.
Hopes fading for climate agreement
June 19, 2011. "Ask for a camel when you expect to get a goat," runs a Somali saying that sums up the fading of ambitions for United Nations talks on slowing climate change -- aim high, but settle for far less. Developing nations publicly insist the rich must agree far deeper cuts in greenhouse gas emissions, but increasingly believe that only a weaker deal can actually be achieved to keep the existing Kyoto Protocol, or parts of it, alive beyond 2012.
Modern methods, research will feed hungry world:
June 18, 2011. The surest way to reduce world hunger is to help poor nations grow more food, Agriculture Secretary Tom Vilsack said before a global meeting that will discuss food reserves and how to calm volatile markets. In a commentary released by the Agriculture Department, Vilsack said an emergency stockpile would not be needed if information about crop production and supplies was shared more widely. Agreement for better monitoring of crop information is one of the goals by host nation
EU states back rules on $7 billion CO2 reserve, prices fall
June 18, 2011. European Union governments approved a regulation that enables bringing forward sales of permits from a 5 billion-euro ($7.2 billion) reserve and boosts the security of the world’s biggest carbon market. EU carbon allowances dropped as much as 3 percent to a more than three-month low of 15.61 euros a metric ton after a vote on the regulation that will pave the way for the European Commission to create and transfer to the European Investment Bank 300 million permits around October.
CDM sapped by uncertainty, no plans to kill off: U.N.
June 17, 2011. Uncertainty about the fate of the U.N.'s Kyoto Protocol for slowing global warming has sapped investment in the Clean Development Mechanism but there are no plans to kill the CDM, the United Nations said.
The World Bank said investment in the CDM, which allows developed nations to invest in carbon-cutting projects in poor nations, fell in 2010 to just a fifth of its record high in 2007 of $7.4 billion. Christiana Figueres, head of the U.N. Climate Change Secretariat said that a "lull in the market" was understandable due to the uncertainty about
U.S. Senate votes to shut down tax break, tariff for ethanol
June 17, 2011. The U.S. Senate voted to eliminate a tax credit and a tariff that subsidize ethanol production, providing the strongest signal yet that Congress will curtail subsidies for corn-based biofuel. The 73-27 vote exceeded the 60-vote threshold needed to advance the measure as part of an economic development bill. The underlying legislation isn’t likely to become law, so the vote mostly indicated that it will be difficult for ethanol supporters to extend the 45-cent-a-gallon tax break and the 54- cent-a-gallon tariff beyond their scheduled Dec. 31 expiration.
U.S. offers $150 mn loan aid for solar wafers
June 17, 2011. The U.S. Energy Department offered a $150 million conditional loan guarantee to 1366 Technologies Inc to support development of the company's solar wafer technology. The company's technology could lower the cost of manufacturing solar wafers by about 50 percent. Solar wafers are used to make the cells that transform sunlight into electricity in panels.
Wall Street heads to
June 17, 2011. Wall Street is headed to
Chinese banks back $10 bn bid to build solar in
June 17, 2011. Two Chinese banks are providing as much as $10 billion in funding to a group of three Chinese makers of solar equipment to build sun-powered energy projects in
UN envoy urges EU to agree new curbs on co2 amid Greek crisis
June 17, 2011. European Union leaders should commit to further limits on their greenhouse gas emissions at the same time as they’re fighting to contain
UN climate deal to change voting ‘tall order’
June 17, 2011. A proposal to change the rules governing voting at the United Nations Framework Convention on Climate Change is unlikely to receive enough support to be passed.
U.S. Senate ethanol vote signals ill wind for other energy subsidies
June 17, 2011. The U.S. Senate’s vote to eliminate a tax credit and a tariff that subsidize ethanol production has lawmakers wondering which subsidies may be the next ones targeted.
The ethanol tax credit and tariff won’t end immediately, because the vote attached the repeal proposal to legislation that isn’t likely to become law. The ethanol tax credit is expected to cost $4.9 billion this year in forgone revenue, according to the congressional Joint Committee on Taxation.
U.S. says push for legal limits on carbon emissions deadlocked
June 17, 2011. The push to extend legal restrictions on carbon emissions is deadlocked, threatening the United Nations climate program based around the Kyoto Protocol.
Vestas Wind Systems wins order to deliver 58 turbines in
June 17, 2011. Vestas Wind Systems A/S said it has received an order with a combined capacity of 49.3 megawatts from China Datang Corporation Renewable Power Co., Ltd. Vestas will deliver 58 units of its V60-850 kW turbine to the Dayuanshan wind farm in Wuchuan County in Inner Mongolia.
EU plans limits on CO2-permit recovery under national laws
June 17, 2011. European Union regulators proposed a regulation that would limit carbon traders’ ability to use national law to recover specific carbon allowances.
Regulators are seeking to boost security in the market after thefts of allowances prompted the closure of spot trading on the BlueNext exchange in
The EU carbon market was set up to help the bloc achieve its emissions- reduction target under the 1997 Kyoto Protocol.
EU countries back emissions trade security changes
June 17, 2011. European Union countries have backed planned changes to emissions registry rules, aimed at increasing security after the theft of over 3 million carbon permits earlier this year.
Carbon permits called EU Allowances (EUAs) are traded under the EU's emissions trading scheme. Over 3 million spot EUAs were allegedly stolen from EU national registries at the end of last year and beginning of this year in cyber attacks.
The Commission shut down the bloc's registries and several EU emissions exchanges temporarily halted spot trade.
Germany scraps reductions for photovoltaic power planned for July
June 16, 2011. The German government scrapped plans to reduce subsidized power prices paid for photovoltaic energy in July because new installations fell short of the level needed to trigger a cut.
The government had planned in July to advance 3 to 15 percent of the cut scheduled January 2012 to prevent a similar boom. The new installation figures show that there is no room for further cuts to solar subsidies. The industry hopes to install 5 gigawatts of solar capacity in
Water resources entering agenda of UN climate talks,
June 16, 2011. Water resources have been explicitly highlighted in a United Nations draft text that may shape a future climate-change treaty. A UN panel known as the Subsidiary Body for Scientific and Technological Advice has agreed to discuss the impacts of climate change on water resources. Delegates from almost 200 countries are meeting in
Russia’s carbon surplus may let rich nations avoid emission cuts
June 16, 2011. The United Nations carbon permits issued to
UN rules may allow the
Australia power industry fears "even worse" carbon plan
June 16, 2011.
The Energy Supply Association of Australia, which represents coal-fired, gas and renewable energy suppliers, backs the concept of imposing a cost on carbon emissions but is lobbying
Italy solar power reform puts funding at risk
June 16, 2011. A reform of
Italy approved a long-awaited decree on the cuts in May, ending a period of uncertainty which had irked international investors and weighed on shares of major global solar companies.
Italy's solar market, the world's second largest after
Italy's booming solar sector has attracted the world's biggest photovoltaic module makers such as
U.S. solar capacity jumps 66 pc in first quarter on incentives, low prices
June 16, 2011. The amount of solar energy capacity installed in the
Chevron Wheatstone LNG project clears first environmental hurdle
June 15, 2011. Chevron was one step closer to getting final environmental approval for its $25 billion Wheatstone liquefied natural gas (LNG) project after
Shell says must explain CO2 storage better
June 15, 2011. Oil giant Shell says that it is working to explain to Canadians that underground carbon storage is safe, following rejection in the
The process is untested on a commercial scale, a factor behind vocal rejection from residents in the
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