Energy News Monitor I Volume VIII, Issue 13

Coal Imports & its Impact on the Power Sector

 

 

NEWS BRIEF

OIL & GAS

Cairn India board meet on royalty, cess payment in Rajasthan oilfields

September 13, 2011. Cairn India's board may concede to pay royalty and cess on its mainstay Rajasthan oilfields after parent firm Cairn Energy did a u-turn and accepted riders imposed by the government to clear its over $6 billion stake sale to Vedanta Resources. The board of Cairn India, which had in February opposed changes in the Rajasthan contract making it liable to pay royalty and a ` 2,500 per tonne cess, will meet, following which the results of a shareholder vote called by Cairn Energy on the twin riders will be out. Cairn Energy, which owns a 52.11 per cent stake in Cairn India, has voted to accept the two government conditions. Vedanta, which has already bought a 10 per cent stake in the company from Cairn Energy and another 18.5 per cent from Petronas of Malaysia and other minority shareholders, has also voted for acceptance of the conditions.

CAG casts oil & gas sector in negative light by picking on RIL's and Cairn's drilling ambitions

September 11, 2011. The latest report of the Comptroller and Auditor General of India (CAG) on production-sharing contracts in the hydrocarbon sector may well become a textbook case for new contracts in the oil industry. The report has - perhaps inadvertently - shined a light on some serious flaws in the contracts that govern oil exploration in the country. The report comes at a time when the exploration sector in India is at a crossroads, with few clear answers to most of the questions it raises. The National auditor Comptroller & Auditor General (CAG) castigated the Oil Ministry for allowing Reliance Industries to retain its entire eastern offshore KG-D6 block in contravention of the Production Sharing Contract, but did not comment on more than tripling of the field development cost & advised review of 10 contracts.

RIL shows experts audits to counter CAG charges on KG-D6 field

September 9, 2011. Reliance Industries (RIL) brought out independent expert audits to justify its work and cost in discovering the world's biggest gas find of the decade that was brought to production in a record time. The reports show that RIL proposal to declare the entire KG-D6 block as discovery area, which was accepted by the upstream regulator DGH and subsequently by the Oil Ministry, was supported by technical data and good international petroleum industry practice.

ONGC starts output from KG Basin block

September 7, 2011. ONGC has started pumping oil from a deep-sea field in KG Basin, marking its entry in the promising high-tech area and boosting its prospects to make more discoveries. The KG Basin, where Reliance operates India's biggest gas field, is rich in hydrocarbons, but the deep-sea region poses several technological challenges and extreme conditions. These blocks hold 21 million tonne of oil reserves plus oil equivalent gas.

BG Group to buy stake in ONGC gas block?

September 7, 2011. The Indian unit of Britain's BG Group is in talks with ONGC to acquire a stake in a gas block off the country's east coast. ONGC said in June the firm was in talks with BG and Italian oil major ENI to sell up to 30 per cent in the block to help investment of about $7.7 billion to develop the gas field.

Bharat Petroleum Corporation Limited to lift naphtha exports 12.5 pc in 2012

September 12, 2011. Bharat Petroleum Corp Ltd will increase its naphtha exports by 12.5 percent to 1.8 million tonnes when its new refinery ramps up operation. Exports will rise from 1.6 million tonnes this year as the Bina refinery started production. Bharat Oman Refinery Ltd (BORL) started its 120,000 bpd Bina plant in central India. The refinery is expected to reach full capacity. BPCL has signed term agreements with Saudi Aramco and Kuwait for the refinery's crude supply. BPCL processes 22 million tonnes per year (440,000 bpd) of crude, of which around 85 percent is term supply, including 6.5 million tpy of Mumbai High from ONGC. About half of its crude are heavy grades. The refiner is also expecting to receive soon a crude cargo from Iran as a payment issue for oil supplies between the two countries has been resolved. National Iranian Oil Co has a contract to supply 1 million tonnes of crude to BPCL annually.

MRPL to shut reformer in end Sept-Oct for 20 days

September 8, 2011. Mangalore Refinery and Petrochemicals Ltd. will shut a 500,000 tonnes a year continuous catalytic cracker from end September or early October for maintenance for 20 days. All shutdowns at the plant would be over by November. The company operates a 236,400 barrel-per-day (bpd) refinery in the coastal city of Mangalore in southern India. MRPL would go ahead with a planned shutdown of a 93,600 bpd crude unit for 45 day from Nov. 9 and a hydrocracker from Sept. 16 for 25 days for a revamp.

GAIL Gas signs agreement to pick up equity stake in APGDC

September 9, 2011. Gail Gas Ltd, a wholly owned subsidiary of state-run Gail India, has agreed to pick up 25% equity stake in Andhra Pradesh Gas Distribution Corp (APGDC), a city gas distribution firms operating in Andhra Pradesh. The company has signed a shareholders agreement with Andhra Pradesh Gas Infrastructure Corp (APGIC), the promoter of APGDC. APGIC will also hold 25% equity in the company while balance 50% stake will be kept for strategic partners, financial institutions and other private and public participants. APGDC was incorporated earlier this year as a wholly-owned subsidiary of APGIC with an authorized share capital of ` 100 crore for laying and maintaining natural gas pipeline infrastructure and city gas distribution (CGD) networks in Andhra Pradesh. The company plans to make use of the abundant natural gas resources available in the Krishna Godavari basin and to create the necessary CGD infrastructure to utilize these resources for the benefit of industry, transport and domestic sector in state. APGDC plans to take up CGD activities throughout the state by participating in the bidding process of Petroleum and Natural Gas Regulatory Board, including for Rangareddy-Medak, Nalgonda and Khammam districts for which bids have been invited in the fourth round. Gail has pipeline networks in Rajamundry and Kovvuru areas in the state. It proposes to develop other pipeline networks in Andhra Pradesh in the future.

BP to set up gas marketing JV with Reliance Industries, wants market to drive gas price

September 7, 2011. Oil major BP is bullish on India and will quickly set up its gas marketing joint venture with Reliance Industries and build an LNG terminal, but it wants gas price to be market-driven.

BP is upbeat about the deal in which it acquired a 30% stake in Reliance's 21 oil and gas blocks for $7.2 billion and decided to set up a 50:50 joint venture for gas marketing and infrastructure. BP would help Reliance Industries boost production from the KG D-6 field in about two years. The new joint-venture company plans to import liquefied natural gas (LNG) and is exploring the possibility of setting up its own LNG import terminal. LNG is being imported in India at a price of $14-15 per unit, while natural gas is sold at $4.2, but selling LNG would not be a problem. The JV will utilise the existing gas pipeline network of RIL pipeline company Reliance Gas Transportation Infrastructure.

EGoM meet on LPG scheduled

September 13, 2011. An Empowered Group of Ministers (EGoM) is likely to consider limiting supply of subsidised LPG cylinders to 4-6 per household in a year. The EGoM in its last meeting considered the recommendations of Task Force on Direct Transfer of Subsidies on Kerosene, LPG and Fertiliser but deferred a decision on limiting supply of subsidised LPG. If approved every household will get only 4-6 LPG cylinders at subsidised price of ` 395.35 in Delhi and they will have to pay market price of ` 666 per cylinder for any requirement beyond that. The limited supply of subsidised LPG would be for those who own a car, two-wheeler, house or figure in the income-tax list. Each 14.2-kg bottle of LPG normally lasts a household 45-60 days and based on this calculation a maximum of six cylinders are considered enough to see a family through the year.

At present, records of LPG distributors of public sector companies shows that a vast number of households are taking as many as 20 to 30 cylinders per household each year. This suggests that large scale diversion of subsidised cooking gas is taking place for use in commercial establishments, such as restaurants and dhabas and as auto fuel.

LPG for commercial use is sold at the market price and packed in different cylinders. Limiting supply of subsidised LPG cylinders would help cut down losses that state-owned oil firms incur now on selling the fuel at government controlled rates. Indian Oil, Bharat Petroleum and Hindustan Petroleum lose about ` 63 crore per day on selling domestic LPG below cost. The EGoM may also consider the revenue loss that state firms incur on selling not just LPG but also diesel and kerosene. The three firms lose ` 5.14 a litre on diesel and ` 24.42 per like on kerosene. At current rate, they are projected to post a combined revenue loss of ` 108,746 crore in the current fiscal.

The EGoM may decide on how this loss would be bridged. The Government currently roughly half the revenue loss and another one-third comes from upstream firms like ONGC. The panel may decide if the current revenue loss sharing formula should continue or be altered.

Oil ministry is expected to approve Cairn India's proposal to start pumping crude oil from the Bhagyam field

September 12, 2011. The oil ministry is expected to soon approve Cairn India's proposal to start pumping crude oil from the Bhagyam field that would ramp up the Rajasthan block's output by a third, to 165,000 barrel per day. Cairn had announced it would start crude oil production from the field, but the approval was delayed because of the company's dispute with partner ONGC over royalty and concerns about negative observations in the draft report of the CAG. The draft CAG report in June said the discovery was at the fringe of the contract area and Bhagyam south was discovered during the appraisal phase after the exploration phase was exhausted in May 2005. The approvals were also delayed because state-run ONGC, a 30% partner of Cairn in the block, did not want to raise output from the Rajasthan fields without resolving the royalty issue as an increased production would soar its royalty burden. ONGC accepts its royalty obligation according to a 15-year-old contract but cites the same contract that says the levy is cost recoverable. In other words, royalty is treated as expenditure before calculating profits of partners, making the stakeholders share the burden in the same proportion as their equity holding.

RIL bags British Safety Council award

September 11, 2011. RIL said it has received a five-star rating under a health and safety audit by the British Safety Council of its onshore plant at Gadimoga, in Andhra Pradesh, where gas from the KG-D6 field in the Eastern Offshore is processed. The British Safety Council audit is an internationally recognised system, used by leading organisations worldwide to benchmark their health, safety and environment (HSE) management systems against the best practices. This award recognises RIL's adherence to the best industry safety practices at its Gadimoga plant and compliance with the best industry practices worldwide.

Oil Ministry chides DGH for reopening RIL marketing margin issue

September 7, 2011. The Oil Ministry has rebuked its technical arm, the DGH, for reopening the issue of the marketing margin that RIL charges on selling KG-D6 gas, but may seek the Law Ministry's opinion to ascertain if the firm can be asked to share those revenues with the government. The ministry has conveyed its displeasure to the Directorate General of Hydrocarbons (DGH) at the highest levels over the reopening of a long-settled issue.

POWER

NLC to set up 4 GW plant in TN at a cost of ` 200 bn

September 12, 2011. Neyveli Lignite Corporation (NLC) said it plans to set up a 4,000-MW thermal power project in Tamil Nadu, with an investment of around ` 20,000 crore. The project would be implemented in two phases of 2,000 MW each. The company has approached the state government for according administrative sanction to acquire required lands. The company also plans to set up a 250-MW thermal power plant and develop a mine in Rajasthan with nearly ` 2,300 crore investment. The process was on to obtain lease from the Rajasthan government and environmental clearance from the Ministry of Environment and Forest. The company said that it plans to acquire coal blocks to fuel its proposed thermal power projects.

BSES, L&T tie-up to offer power leakage detectors

September 13, 2011. Reliance Infrastructure subsidiary BSES Yamuna Power Ltd said it has tied-up with Larsen & Toubro to provide electricity leakage detecting devices at discounted price to consumers. Consumers with over five-kilowatt hour electricity load are required to install such devices at their premises as per Indian Electricity Rules. The devices called earth leakage circuit breakers detect small earth leakages, automatically tripping and disconnecting electricity supply to the premises. As per the offer, Larsen & Toubro would install the leakage detectors free of cost and BSES would debit the device cost in next electricity bill.

NALCO temporarily cuts daily output on power shortage

September 10, 2011. Insufficient power supply has forced India's state-run National Aluminium Co Ltd (NALCO) to cut it's daily aluminium output by about 6 per cent. The disruption caused by a scarcity of coal however will not affect the company's quarterly or yearly output target although the production may decline slightly by around 2,100-2,400 tonnes for a month. The shortfall will be subsequently made up by enhanced productions after receipt of coal.

NALCO, the country's third-largest aluminium maker, produced 443,597 tonnes of aluminium solely out of the aluminium smelter at Angul in Orissa state in eastern India in 2010/11. It produces approximately 37,000 tonnes in a month. The smelter was operating 931 pots to produce between 1,200-1,300 tonnes of aluminium daily despite low power arrangement past several days. 60 pots were shut down to ensure safe operation for the remaining pots.

The power plant that feeds the smelter was producing only 600-720 MW power over past 8-10 days against 900 MW usually.

The company was receiving around ten thousand tonnes of linked coal daily for the past ten days from Mahanadi Coalfields Ltd (MCL)-a unit of state-run Coal India, against a daily operating requirement of about 16,000 tonnes. NALCO needs to maintain a buffer coal stock of about 15 days, but the plant currently has stock that can last only two and a half days.

GVK Power bid for Australia's Hancock delayed over valuation

September 8, 2011. Efforts to finalise a $2 billion-plus bid by India's GVK Power & Infrastructure for two Australian coal mines owned by Hancock Prospecting have been delayed due to differences over valuation. GVK had been due to announce the long-awaited deal but Hancock's owner had sought last-minute changes to the agreement.

Power ministry to defer planned initial bids for the upcoming UMPP in Tamil Nadu

September 13, 2011. The power ministry will have to defer planned initial bids for the upcoming ultra-mega power project (UMPP) in Tamil Nadu, as it does not meet all requirements under the new norms for prevention of coastal degradation. After delays in the Orissa and Chattisgarh UMPPs, the ministry had planned to invite requests for qualification (RFQ) for the 4,000 MW Cheyyur project this month. But this will now have to wait as the project does not fulfill all requirements of the environment ministry's new guidelines on Coastal Regulatory Zone (CRZ).

The government has not awarded any ultra-mega power project since Reliance Power bagged the Tilaiya project in 2009. Power Finance Corporation, the nodal agency that awards UMPPs, invited RFQs for two such projects in Orissa and Chhattisgarh in March last year, but both got delayed due to environment issues. While initial bids for the Orissa project closed in August this year, the Chhattisgarh project is still in limbo. To speed up the process, the ministry decided to go ahead with the Tamil Nadu project, which is to be fuelled on imported coal.

The project has all environmental clearances, except state government approval for the port that is be used to import coal. It will now also have to comply with the new CRZ policy notified in January, which has widened the scope of protected zone to territorial waters.

Private developers are likely to tread carefully, given that the other two imported coal-based UMPPs - one each in Gujarat and Andhra Pradesh - have run into trouble due to rising coal prices. The government has so far awarded four of the 16 planned ultra-power projects.

Power cos Power Finance, REC, Essar, Tata Power and Reliance Power may default on ` 1350 bn of loans

September 12, 2011. Indian power companies have slowed down project implementation and are unable to operate new plants at targeted capacity, which may lead to defaults of over ` 135,000 crore from the sector that is battling low tariffs, scarce fuel and land acquisition problems. The banking sector's exposure to power projects, according to Reserve Bank of India data, is a staggering ` 292,342 crore, about the same as India's total corporate tax collection last year. Half the loans sanctioned to existing power plants remain unutilised and fund flow to new projects has almost stopped. The power sector accounts for 7.8% of total non-food credit exposure, up from 4.8% at the end of March 2009.

Haryana farmers oppose land acquisition for nuke plant

September 9, 2011. Citing Fukushima, farmers in Haryana are vehemently opposing a proposal to set up a nuclear power plant in their midst. Fukushima was ravaged by a nuclear disaster after earthquake and tsunami devasted Japan in March, a dark prospect that farmers of Gorakhpur village in Fatehabad want to avoid.

OIL & GAS

Technip buys Global Industries for $937 mn to expand in subsea orders

September 12, 2011. Technip SA, Europe’s second-biggest oil services company, agreed to buy Global Industries Ltd. of the U.S. for $937 million in cash to expand in the market for underwater energy projects.

The global market for subsea oil and gas infrastructure is about $30 billion and the deal will expand the portion Technip can supply from about one-third currently.

Global Industries will add 14 vessels, bringing Technip’s fleet to 34, and will expand its market by around 30 percent in deep-to-shore subsea infrastructure. High oil prices, combined with increasing demand for natural gas, are driving investments according to Technip, which makes equipment for oil and gas exploration and builds liquefied natural gas installations. Its biggest competitor in Europe is Italy’s Saipem SpA.

Hayward to spark oil fight in Iraqi ‘last great frontier’

September 8, 2011. Tony Hayward’s $2.1 billion deal for oil assets in Iraq’s Kurdistan region may spark a battle for resources from the area as its export prospects brighten.

Gulf Keystone Petroleum Ltd. and DNO International ASA received the first payments for exports as the explorers tapped Kurdistan’s estimated 20 to 25 billion barrels of oil and gas, enough to meet U.S. demand for more than three years.

While post-Iraqi war tensions between the government in Baghdad and Kurdish authorities deterred entry by Exxon Mobil Corp., Royal Dutch Shell Plc and BP Plc, improved relations and a series of discoveries now may draw them in.

Kurdistan has 20 billion to 25 billion barrels of “oil in place” and the reserves are unlikely to exceed 40 billion to 45 billion barrels.

Hayward said that the company would use a third of the $2 billion in cash on acquisitions and another third to develop existing fields.

New York proposes throttle on Marcellus shale gas drilling

September 8, 2011. New York proposed moderating development of the natural-gas rich Marcellus Shale to ease the stress on small towns and rural communities from a drilling boom that may last 30 years. Some well permits may include time limits on construction to relieve pressure on housing, schools, roads and other government services from an influx of workers. The state is poised to issue permits to tap into the Marcellus Shale formation next year, once it adopts rules developed in a three-year review.

Jobs created by gas production in New York’s portion of the Marcellus may add as much as $2.5 billion in annual wages statewide by the time drilling peaks in 30 years. The industry may employ as many as 24,795 workers at the peak of development, with another 29,174 jobs created indirectly. Based on industry estimates, gas production might last 60 years.

ConocoPhillips apologizes for China oil spill

September 7, 2011. U.S. energy giant ConocoPhillips moved to repair its frayed relations with Chinese regulators, apologizing for an oil spill in northern China's Bohai Bay and saying it will establish a fund to address the company's responsibilities. The company said the proposed fund will be designed to benefit the general environment in Bohai Bay, but it did not say how large the fund would be. A ConocoPhillips subsidiary said that all operations at an oilfield in Bohai Bay have been shut down, as ordered by China's marine authority. The State Oceanic Administration ordered ConocoPhillips China to halt injection, drilling and production at the Penglai 19-3 oilfield -- China's largest -- because it had failed to seal leaks that have lasted for nearly three months. ConocoPhillips owns a 49 percent stake of the oilfield and acts as the operator, while China's top offshore oil and gas producer CNOOC has a 51 percent stake.

Sunoco worth 53 pc more sold in pieces as oil refinery exit looms

September 9, 2011. Sunoco Inc., the world’s least profitable owner of refineries under pressure to reward beleaguered shareholders, already has a valuation 53 percent greater broken up or sold in pieces. Sunoco, which said it will sell or shut its last two refineries and explore all options for the company, was the only oil refining and marketing company greater than $1 billion to lose money in the last 12 months. Breaking up the $4.06 billion company and valuing its operations separately, Philadelphia-based Sunoco may be worth as much as $2.17 billion more.

Oil pipeline fire kills 120 in Kenya

September 13, 2011. At least 120 people were burnt to death when a pipeline burst into flames in a Nairobi slum as local people were siphoning fuel from it, and more than 100 hospitalized. Scores of bodies, some burned to the bone, lay on charred grass near trenches and a filthy river in the Sinai slum following the accident.

Oil tanker sailing for Libya’s Mellitah as first cargo from west

September 12, 2011. An oil tanker is sailing to the Libyan port of Mellitah, a sign the nation may be resuming energy exports after months of fighting that led to the ouster of Muammar Qaddafi. The Newlead Avra, capable of hauling about 540,000 barrels, signaled about 30 miles from the Libyan coast. The 229-meter (750-foot) vessel is 7.9 meters deep in the water, compared with a maximum draft of 14.45 meters when fully loaded. It can carry crude or refined-oil products.

Libya wants to resume crude exports in two to three weeks. Shipments from the country, holder of Africa’s biggest oil reserves, plunged during a conflict that escalated in February and led to leader Qaddafi being deposed. An 80,000 metric-ton cargo of crude was being offered for shipment from Mellitah. The loading is likely the first from the nation’s west since March. The Newlead Avra is on a 12-month charter to Vitol Group and currently has no cargo onboard.

Libyan crude output slumped to 60,000 barrels a day in July from 1.7 million barrels in January. Operations resumed about two weeks ago at the 120,000 barrel-a-day Zawiyah refinery near the Libyan capital of Tripoli. The plant is processing 30,000 barrels a day and will reach full capacity in six to eight weeks. The crude-export facility in the eastern port city of Tobruk is undamaged. Libyan crude output increased to as much as 1.87 million barrels a day in 2008 from 1.38 million barrels in 2002.

TransCanada: Keystone XL route through Nebraska is safest choice

September 12, 2011. The Keystone XL pipeline will be constructed and operated at a safety level beyond that of any existing crude oil pipeline in the United States according to the recently released Final Environmental Impact Statement (FEIS). Nebraska State agencies, local officials, emergency responders and other stakeholders played a key role in helping to ensure the safest and most environmentally-protective route was chosen and that the pipeline would be built and operated in a safe and reliable manner, with a focus on protecting the Sand Hills and the Ogallala aquifer.

Argentina to import three times more natural gas than in 2010

September 8, 2011. Argentina is on schedule to import 66 liquefied natural gas cargoes in 2011, three times the amount it purchased in 2010. Argentina has two liquefied natural gas (LNG) import terminals and intends to build another two, one in partnership with Uruguay. The LNG terminals are intended to boost the country's import capacities as indigenous natural gas demand soars amid falling domestic production.

This year delivery of 45 LNG tanker cargoes has been confirmed: by mid-August, 39 cargoes of between 37,959 and 130,778 cubic meters each had been unloaded at the country's two LNG terminals.

Argentina's two current LNG marine import terminals are both in Buenos Aires province, in the country's southern Bahia Blanca area and Escobar. The Escobar LNG maritime terminal, 30 miles north of the capital Buenos Aires, was completed and will double the country's LNG import capacity.

Shell to supply LNG via Alberta truck stops

September 7, 2011. Shell announced that it plans to have Liquefied Natural Gas (LNG) available for heavy-duty fleet customers beginning in 2012 at select Shell Flying J truck stops in Alberta, Canada.

Shell is pursuing engineering and regulatory permits to produce LNG by 2013 at its Jumping Pound gas processing facility in the foothills of Alberta, Canada. Pending regulatory approval, it will be the first investment of its kind for Shell globally and will include production facilities and downstream infrastructure. Until then, LNG will be supplied to the Shell Flying J truck stops from third-party supply agreements.

Shell is also actively developing new business opportunities with Original Equipment Manufacturers (OEMs) to substitute LNG for diesel and propane in a number of industrial sectors such marine, on-road trucking, rail, mining and oil and gas drilling applications.

Iraq’s Kurdish region stops all crude oil exports

September 11, 2011. The semi-autonomous Kurdish region of northern Iraq halted all exports of crude. The Kurdistan Regional Government had been exporting 100,000 barrels to 150,000 barrels a day before the interruption. Iraq, the third-biggest producer in OPEC after Saudi Arabia and Iran, is struggling to boost oil exports, its main source of revenue for rebuilding an economy crippled by years of conflict and sanctions. It exported a total of 2.19 million barrels of crude a day in August.

Angola President dos Santos may be replaced by oil company head Vicente

September 7, 2011. Angolan President Jose Eduardo dos Santos may step down as leader of Africa’s second-biggest oil producer before or after elections next year. Dos Santos, 69, may be replaced by Manuel Vicente, chairman of the state-owned oil company, Sonangol EP, said Rui Falcao de Andrade, a member of the Popular Movement for the Liberation of Angola’s political bureau. The MPLA’s Central Committee will meet in December to lay out the party’s strategy for the 2012 elections and appoint a presidential candidate, he said, adding that “for now” dos Santos remains the party’s nominee. This is the first time the MPLA has signaled that the 32-rule of dos Santos, the second- longest in sub-Saharan Africa, may be nearing its end.

POWER

French nuclear-plant blast kills one; no leak detected

September 12, 2011. An explosion and fire at a French nuclear-waste processing site killed one person and injured four, heightening concern of safety risks from atomic energy following the disaster in Japan six months ago. There was no chemical or radioactive discharge from the Centraco plant in the town of Codolet in southern France.

Europe’s biggest power producer, which also operates France’s 58 nuclear reactors, treats low-level radioactive waste at the plant about 130 kilometers (81 miles) northwest of Marseille, the country’s second-biggest city.

France depends on nuclear reactors for about three-quarters of its power needs, the most of any country. This is the first time a “drama on this scale” occurred at the site. The explosion was in a building housing a furnace where metallic waste is treated by fusion. An investigation will be carried out. The accident happened as the nation’s nuclear regulator is carrying out safety checks at the country’s reactors and some of its treatment sites to determine whether they can withstand floods, earthquakes and loss of power and cooling. The inspections were triggered by Japan’s atomic disaster in March.

Ratchaburi buys 40 pc stake in Thai biomass project developer

September 9, 2011. Ratchaburi Electricity Generating Holding Pcl, a Thai power producer, bought a 40 percent stake in a developer of a 9.9-megawatt biomass power project in Songkhla province.

Ratchaburi will pay 80 million baht for the stake in Songkhla Biomass Co. The remainder of the stake is held by Precise Power Producer Co. The project will use rubber wood residue as feedstock and will be located at Chana district.

Laos to start building Mekong Dam, testing neighbors

September 9, 2011. Laos wants to start construction this year on the $3.8 billion Thai-financed Xayaburi hydropower plant on the Mekong River after changing the design to placate neighboring countries opposed to the project.

Laos completed a review of the dam initiated in April to ease concerns that it would harm rice production and fish catches downstream.

Vietnam recommended a 10-year delay for all hydropower projects on the river, which also runs through Myanmar, Thailand and Cambodia from its source in China’s Tibetan plateau. The hydropower plant is the first among eight that Laos plans to build on the Mekong to expand Southeast Asia’s smallest economy by selling electricity to neighboring countries.

The landlocked nation may have about 38,000 megawatts of installed capacity supply by 2020, about 15 times greater than its domestic needs. Laos presented the project review conducted by Switzerland- based Poyry Energy AG to Vietnam and plans to meet separately with Thai and Cambodian officials to discuss recommendations.

The government can decide whether to proceed with the project at any point. In April, Laos proposed to end a review of Xayaburi called for under a 1995 agreement between the Mekong countries requiring prior consultations before building hydropower plants on the river. Officials agreed then to hold a ministerial meeting to discuss the project, a gathering that has yet to take place.

Zambian power deficit continues to ease with the commissioning of works

September 8, 2011. Zambia’s power deficit continues to ease with the commissioning of works on 120 MW hydro power plant in southern Zambia.

Zambia launched the commencement of works for the $250 million Itezhi Tezhi hydro electricity project expected to produce 120 MW of electricity and create more than 450 jobs. And India has lauded government for the joint effort and that the program showed co existence between the 2 nations. The power project would reduce the country’s current electricity deficit once completed and some of the areas most likely to benefit from the increased power supply include parts of Central, Western, North Western and Southern provinces.

The project is being implemented under a private public partnership between ZESCO and TATA Africa Corporation. The project was under the Build Operate and Transfer mechanism and would be transferred to the government of Zambia after 25 years.

AEP to shut Unit 2 at Welsh coal-fired power plant in US

September 8, 2011. American Electric Power (AEP) has planned to shut the Unit 2 at the Welsh coal-fired power plant in the US state of Texas for maintenance work on auxiliary equipment. The Welsh coal-fired power plant, which has a total generating capacity of 1,584 MW, is owned and operated by AEP's Southwest Electric Power Co. The facility includes three generating units each with a capacity of 528 MW, and is equipped with Babcock and Wilcox boilers and Westinghouse steam turbines/generators.

Inter-American Development invests in Chile hydroelectric plants

September 7, 2011. Inter-American Development Bank will invest as much as $5 million in the Chilean Renovarum Renewable Energy Fund. The fund will use the money to support as many as eight hydroelectric plants with total capacity of 160 megawatts.

Iran connects first reactor to grid; plant to reach full output this year

September 12, 2011. Iran, which has been punished by international sanctions over its nuclear program, inaugurated its first atomic power plant, officially linking it to the country’s electricity grid. The Russian-built power station is seen as “a symbol of Iranian- Russian cooperation”. The 1,000-megawatt plant will start generating electricity at up to 40 percent of its capacity. The U.S. and the European Union say sanctions against Iran are justified because its nuclear program may be a cover for the development of atomic weapons. Iran rejects the allegation, saying it needs nuclear power to meet the energy needs of its growing population.

IAEA still sees "significant" nuclear energy growth

September 12, 2011. The U.N. atomic agency still expects significant growth in the global use of nuclear power over the next two decades, despite a slowdown in the wake of Japan's Fukushima accident. The number of operating reactors in the world is expected to increase by between 90 and 350 units by 2030. Currently, there are about 432 reactors worldwide, with the United States, Russia and France among countries with the most units. Increasing global demand for energy, climate change fears and dwindling oil and gas reserves were among factors behind growing interest in nuclear power before Fukushima and they had not changed because of the accident. The huge earthquake and tsunami that crippled the plant in March, causing the world's worst nuclear crisis since the 1986 Chernobyl disaster, prompted a global rethink of atomic power. Germany has decided to close all its reactors by 2022 and Italy voted in a referendum to ban nuclear for decades. Before the Fukushima crisis, the IAEA had expected up to 25 countries to bring their first nuclear power plants on line by 2030. Some 29 states have nuclear energy. The projected slowdown in global growth in nuclear power reflected the planned phase-out in Germany, some immediate shutdowns in Japan as well as "temporary delays" in an expansion in other countries. But interest in countries which are considering introducing nuclear power remained strong.

Africa’s new friend china financing $9.3 bn of dams for hydropower

September 9, 2011. When completed in 2013, Gibe III on Ethiopia’s Omo River will be Africa’s tallest dam, a $2.2 billion project that conservationists say will deprive birds and hippos of vital habitat.

Some 600 miles (965 kilometers) to the north, Sudan is preparing to build the $705 million Kajbar dam on the Nile, which would inundate historic towns and tombs of the Nubian people, descendants of the pharaohs of ancient Egypt. The $729 million Bui project on the Black Volta River, to be finished in 2013, will boost Ghana’s hydropower capacity by a third -- and flood a quarter of Bui National Park while displacing 2,600 people. What these megaprojects have in common is Chinese money and know-how. Companies such as Sinohydro Corp. and Dongfang Electric Corp. are key players in their construction, and they’re financed by Chinese banks with support from the government in Beijing.

The country’s engineering and manufacturing giants have recently completed or are participating in at least $9.3 billion of hydropower projects in Zambia, Gabon, the Democratic Republic of Congo, and elsewhere on the continent. A similar, if smaller, push is happening in newer renewable technologies. Chinese enterprises are now the top investors in African solar power,and China’s government in June earmarked $100 million for solar projects in 40 African nations.

South Korea should raise electricity prices

September 9, 2011. South Korea’s government should raise electricity prices to reflect higher generation costs and curb excessive demand. Prices should be boosted by another 10 percent, following a 4.9 percent increase in power tariffs on Aug. 1, to cover a surge in the cost of generation.

The government has restricted state-run Korea Electric Power Corp. from passing the increasing cost of coal, natural gas and oil to customers, causing the utility to post four straight years of operating losses. Electricity consumption has more than doubled in the past 12 years, compared with a less than 10 percent increase in most developed nations.

The government is revising its primary energy supply mix plan for the period to 2030 following the Fukushima nuclear plant disaster in Japan. The Energy Economics Institute aims to make recommendations after talks with energy researchers.

While Fukushima, the worst atomic crisis since Chernobyl in 1986, prompted Japan to reduce dependence on nuclear power and shift to liquefied natural gas and renewable energy sources, South Korea should continue to increase atomic-power generation.

In an energy plan announced in 2008, South Korea targeted 59 percent of its energy generation from nuclear plants by 2030, compared with 31 percent in 2010. The revised plan is unlikely to reduce or increase the supply targets on nuclear power while the portion of renewable energy is likely to increase from 12 percent. Dependence on renewable energy by 2030 may be between 12 percent and 15 percent. Use of LNG for power generation may rise 7 percent to 14.49 million metric tons next year. Use of thermal coal may be little changed and oil consumption may drop 11 percent.

Nigerian Govt dumps Oji River power plant

September 7, 2011. The Federal Government said it would not commit further funds to the revival of the moribund Oji River hydro-power plant located in Enugu state. Government had in its desire to prioritise its developmental agenda, discarded any plans or suggestions to finance the revival of the power plant, and would rather concentrate its efforts on the construction and commissioning of a new 1000 megawatts (MW) coal-fired power plant in Enugu. Government was also committed to diversifying Nigeria’s energy mix with the scheduled delivery of three 1000MW coal-fired plants in Enugu, Gombe and Kogi states upon conclusion of the re-evaluation of coal reserves in the country to establish bankable data for investment in the sector.

ADB to provide $100 mn loan for solar power project in Gujarat

September 13, 2011. The Asian Development Bank (ADB) will extend $100 million (about ` 475 crore) loan for solar power initiatives in Gujarat. The multilateral lender has approved the financing of $100 million for Gujarat Solar Power Transmission Project. The funds would be used for a substation, transmission lines and other equipment to collect and distribute solar power generated by plants in the Charanka Solar Park in Gujarat's Patan district.

Indowind buys Shanghai Electric Turbines, may set up JV in India

September 9, 2011. Indowind Energy Ltd. (IEL), an owner of wind farms in India, is buying turbines for its next project from Shanghai Electric Group Co. and said it may partner with the Chinese company to assemble the machinery locally.

Chennai-based Indowind placed the 28-megawatt order three months ago and expects Shanghai Electric to start shipments. Sinovel Wind Group Co. and Xinjiang Goldwind Science & Technology Co., which rank among the world’s top five suppliers, sell most of their turbines in China. The state-run China Development Bank has provided at least $12.5 billion in financing to help these Chinese manufacturers expand abroad as growth slows at home in the world’s largest wind market. Shanghai Electric is supplying its 2-megawatt turbines to Indowind’s project, slated to be completed by 2012. As part of the deal, Shanghai Electric will train Indowind employees to install the machines and service them so that the Indian company can get a vendor license.

REpower gets contract for turbines in Germany

September 8, 2011. REpower, a subsidiary of wind turbine maker Suzlon Energy received a contract to deliver turbines for seven wind farms. Northern Friesland is the stronghold of public wind farms in Germany. All seven wind farms have a full maintenance contract for 15 years, and are expected to be constructed at the end of 2012 or in 2013.

First Solar to supply 100 MW solar module for Reliance Power solar project

September 7, 2011. First Solar said it would supply 100 MW solar module to Reliance Power for the company's upcoming solar power project in Jaisalmer, Rajasthan.

A leading photovoltaic systems solutions provider, First Solar has entered into a supply agreement with Reliance Power for supply of 100 MW solar module. The delivery of the remaining 60 MW solar module is expected to be completed in 2012. The US Export-Import Bank approved an $84.3 million direct loan to Reliance Power's Dahanu Solar Power unit to purchase First Solar's panels for the first 40 MW of the project. First Solar said India is expected to become one of the world's major solar markets, due to the country's abundant solar resource and significant energy demand.

Climate change could increase hunger in Pacific

September 13, 2011. Climate change is seriously affecting food production in the Pacific region and could result in rise of hunger and malnutrition in the area, the Asian Development Bank (ADB) said. An ADB report urged Pacific nations to increase local food production, particularly of climate-resistant crops such as taro, yam and cassava, and to use new technologies to improve traditional production systems.

Japan to build floating wind farm off Fukushima

September 13, 2011. The Japanese government will build a floating wind farm off the coast of Fukushima, the site of the nuclear plant damaged by the March 11 earthquake. Mitsubishi Heavy Industries Ltd., Fuji Heavy Industries Ltd., Mitsui Engineering and Shipbuilding Co., IHI Corp., and Shimizu Corp. are among the companies that will join the project.

NTR sells one-third of stake in U.S. ethanol maker green plains

September 12, 2011. NTR PLC, an Irish developer of power and waste projects, will sell part of its one-third stake in ethanol producer Green Plains Renewable Energy Inc. Green Plains will pay $28 million for 3.5 million shares of its common stock, or $8 each. It will purchase half of the shares within a week and the remainder within 90 days. NTR currently holds 11.2 million shares of Green Plains, or about 31 percent of the total outstanding.

EU to classify spot carbon as financial instrument

September 12, 2011. The European Union’s regulator will propose classifying spot carbon-dioxide contracts as financial instruments to better protect the world’s biggest emissions market from fraud. The European Commission opted to extend its Markets in Financial Instruments Directive, or Mifid, to cover spot carbon deals rather than design a tailor-made regime.

California bill favors solar panels, thermal left out in cold

September 12, 2011. California is expected to sign a bill that simplifies the permitting process for solar photovoltaic projects and may prompt developers to reconsider solar-thermal plants, which aren’t included in the legislation. According to Senate Bill 267, which Brown has until Nov. 9 to sign, photovoltaic projects will no longer be required to demonstrate adequate water supplies. Wind farms are also included in the bill. Falling photovoltaic prices have made them less expensive than solar-thermal systems, which focus the sun’s rays to create steam that drives a turbine and generates electricity. Eliminating the paperwork will shave as much as six months from the approval process. Three California solar-thermal projects have switched to photovoltaic panels, which convert sunlight into electricity, and more may follow suit. A notable exception is BrightSource Energy Inc., which received $1.6 billion in U.S. Energy

Electric car hype hiding a quiet efficiency revolution

September 12, 2011. Electric cars and hybrids may be capturing headlines and the imagination of green-leaning consumers around the world as one automaker after another announces plans to push into the brave new world of fossil fuel-free mobility. But away from the spotlight, carmakers have been quietly delivering significant cuts in CO₂ emissions with some re-engineering of internal combustion engines, technology advances, weight reduction and aerodynamic improvements. Increasingly stringent fuel economy standards in Europe and the United States that were mandated due to climate change concerns have been the main catalyst. Yet with rising fuel prices and a waxing awareness of global warming, consumers have also been clamoring for more fuel-efficient vehicles. In the European Union, CO₂ emissions fell 3.7 percent to 140 grams per kilometer after dropping 5.1 percent in 2009. Average emissions are down from 186 grams in 1995. The EU is on track to meet a 130 grams target by 2015 set in 2008 in the face of heavy resistance. The limit will be 98 grams in 2020. In the United States, notorious around the world for its gas guzzlers, the Obama administration announced plans in August to raise fuel economy requirements by 53 percent by 2025. The proposal requires companies to reach an average fuel efficiency across their U.S. fleets of 54.5 miles per gallon by 2025.

Al Gore in 24-hour broadcast to convert climate skeptics

September 12, 2011. Former Vice President Al Gore will renew his 30-year campaign to convince skeptics of the link between climate change and extreme weather events this week in a 24-hour global multi-media event. The campaign also asks people to hand over control of their social networking accounts on Facebook and Twitter to it for 24 hours to deliver Gore's message. Gore tried to raise awareness about global warming in the 2006 documentary film "An Inconvenient Truth," which earned $49 million at the box office worldwide. The film was criticized by some climate change skeptics for being one-sided. Concern about climate change in the United States, the world's second biggest emitter, has fallen steadily to 48 percent in 2011, from 62 percent in 2007, an opinion poll showed in August.

Obama team backed $535 mn Solyndra aid as auditor warned on finances

September 12, 2011. Solyndra LLC’s workers making solar-power panels in a California factory subsidized by U.S. taxpayers showed “the promise of clean energy isn’t just an article of faith,” President Barack Obama said. The Obama administration stood by Solyndra through the auditor’s warning, the abandonment of a planned initial public offering and a last-ditch refinancing where taxpayers took a back seat to new investors. That unwavering commitment has come under increasing scrutiny since the company’s travails culminated in its filing for bankruptcy protection and a raid on its headquarters by the Federal Bureau of Investigation two days later.

Samsung, Pattern buy Ontario wind project

September 12, 2011. South Korea's Samsung and Pattern Energy Group have acquired a wind power project in Ontario for an undisclosed price. The companies, which bought the project from Spain's Acciona, will increase the planned capacity of the Armow project in Kincardine, Ontario, to 180 megawatts. Construction will begin in 2013 and finish the next year. For South Korea's Samsung, the project, located about 200 kilometers (125 miles) northwest of Toronto, is part of a major investment in Ontario's renewable energy sector. In January, Samsung C&T signed an agreement with the provincial government to lead a consortium investing C$7 billion in wind and solar in the province. The consortium will build four wind and solar clusters with combined capacity of 2,500 megawatts by 2016. Under the agreement, the province promised C$437 million in incentives. But the Liberal government is in the midst of a tough election campaign, and its Conservative opponents have pledged to scrap the deal. The Conservatives have also said that if elected they would cancel the province's feed-in-tariff, which sets above-market rates for renewable energy produced using locally-made equipment. The most comprehensive green energy subsidy in North America, it is meant to shift the province to renewable sources so it can close all of its coal-fired power stations by 2014.

Beijing to fund VCs to aid local hi-tech

September 11, 2011. The Chinese government will give money to some venture capital investment firms in its latest effort to boost the development of what it labels strategic emerging industries.

The government is prepared to be a minority shareholder in a venture capital fund if the fund focuses on startups in designated sectors from environment protection to new-energy vehicles. The central government will contribute up to 20 percent to such a fund, with the remainder being financed by local governments and other investors. Funds that receive government money must invest no less than 60 percent in small start-ups in designated industries. Critics have alleged that Beijing's zealous push for "indigenous innovation" and industrial upgrading has often been undermined by corruption, inefficiency and over-capacity.

The high-speed railway equipment sector, which was once treated as a strategic area for investment, has suffered a serious setback after a deadly train accident in July. Beijing warned clearly in the latest rules that public money must be used properly. Venture capital funds receiving government money cannot invest in stocks, futures or bonds, and are prohibited from offering loans, credit guarantees or property investment.

Switch from coal to natural gas no boon to climate

September 10, 2011. Relying more on natural gas than on coal would not significantly slow down the effects of climate change, even though direct carbon dioxide emissions would be less, a new study has found. Burning coal emits far more climate-warming carbon dioxide than natural gas does, but it also releases lots of sulfates and other particles that block incoming sunlight and help cool the Earth. Using more natural gas for fuel could also produce leaks of methane, a heat-trapping greenhouse gas more than 20 times more potent than carbon dioxide.

A global, partial shift from coal to natural gas would speed up global warming slightly through at least 2050, even with no methane leaks from natural gas operations. If there were substantial methane leaks, the acceleration of climate change would continue through as late as 2140.

Renewables outlook cloudy but not bleak

September 9, 2011. The outlook for renewable energy may be cloudy as governments scramble for solutions to a faltering global economy and financial markets suffer from uncertainty, but it is not bleak. Renewable energy sectors have lagged fossil fuel energy and wider global stocks over the past couple of months and so far this year, underperforming even as world shares slide on concerns about slow global growth.

Alternative energy is vulnerable in a downturn because it depends on subsidies from cash-strapped governments, while some technologies are viewed as risky, fossil fuel prices have fallen, and as climate change slips down the global agenda. However, as industrialized economies' prospects wane, HSBC sees emerging markets generating a larger share of renewable energy demand going forward. Offshore wind installations in the EU will grow by a 35 percent compound annual growth rate (CAGR) and Latin American wind by a 34 percent CAGR.

China WindPower postpones spinoff indefinitely

September 9, 2011. China WindPower Group Ltd, the largest non-state-owned wind farm developer in mainland China, said it is unlikely to spin off one of its manufacturing units as planned in 2011 because of market volatility. China WindPower, which designs, constructs and operates wind power plants, had announced in June that it was planning to spin off its tower tube manufacturing business, allowing it to expand into solar-energy equipment manufacturing.

Uruguay plans wind farms worth $1.3 bn to cut power costs

September 9, 2011. Uruguay may build $1.3 billion of wind farms in the next four years after developers said they could provide electricity cheaper than conventional energy sources. National power company Usinas Y Transmisiones del Estado may purchase electricity from 600 megawatts of projects that participated in an auction for new wind farms, four times more than expected. Companies including Spain’s Enerfin Sociedad de Energia SA offered to provide power for as low as $62.35 a megawatt-hour, prompting the government to consider buying more wind power. Aeolic energy is beating conventional power sources on price in head-to-head contests elsewhere in South America. Wind was the cheapest source of energy in a similar auction in Brazil. The average cost of electricity generation in Uruguay is $73 a megawatt-hour and this may drop to $45 in 2015 as the country gets more of its energy from wind, biomass and liquefied natural gas-fueled power plants. A stagnant market for new wind farms in Europe and the U.S. has offered Uruguay an opportunity to install cheap power projects as turbine makers try to outbid each other for supply contracts. This has allowed developers in Uruguay to offer their electricity at unprecedented low prices. Uruguay may have as much as 850 megawatts of wind farms online by 2015, about a third of what’s currently installed in the country. It has about 100 megawatts commissioned or under construction. Turbine prices in the first half of 2011 have fallen to 940,000 euros ($1.3 million) a megawatt-hour, 7 percent lower than the average for 2010. For some of these Uruguayan projects to be viable turbine prices, which comprise about 75 percent of a project’s cost, will have to fall to $1.2 million. It costs about $1.7 million to roll out one megawatt of wind farm in Uruguay currently. Seventeen companies proposed 1,097 megawatts of wind farms in last month’s auction. The auction was originally seeking 150 megawatts of wind farms. Bids were as much as 28 percent below those offered in a separate auction for 150 megawatts of wind farms completed in January, when prices varied between $85 and $87 a megawatt hour. Uruguay produced 51 percent of its electricity from hydroelectric dams in 2008. About 39 percent came from oil imports and the remaining from biomass.

U.S., EU, Japan to discuss rare earths in October

September 9, 2011. Officials from the United States, European Union and Japan will gather in Washington next month to find ways of cutting demand for raw materials whose supplies China is limiting. Experts and officials will discuss in early October how to team up to develop high-tech goods - such as electric car motors and wind turbines - that are less dependent on coveted rare earth minerals, and how to make better use of those minerals that are available. China produces more than 95 percent of global rare earth minerals -- used to make fiber optic cables and wind turbines among other high-tech goods -- and its efforts to limit production, citing resource depletion and environmental degradation, have alarmed its overseas customers. Talks may also broaden to include officials from producing countries such as Canada and Australia. Europe's need for secure sources of critical raw materials is particularly acute given the bloc's history of relying on imports as well as costly mining and environmental rules applied by its 27 states. EU lawmakers will issue recommendations to policymakers which, though non-binding, reflect industry and environmental concerns. The EU Commission published policy plans to improve the bloc's access to energy and energy goods, calling among other things for trilateral cooperation on rare earths with the United States and Japan.

UK energy investment is too slow to meet targets

September 8, 2011. Britain's energy sector needs to speed up its rate of infrastructure investment by around a quarter if the country wants to meet legally-binding climate targets. At least 15 billion pounds ($23.9 billion) of investments are needed in the power and gas sector every year until 2025 to meet targets to reduce carbon emissions and increase the amount of renewable energy generation. The industry spent around 8.5 billion pounds in Britain last year and roughly 11 billion are expected this year. Britain aims to reduce 2020 carbon emissions by 34 percent below 1990 levels and 15 percent of final energy demand has to come from green resources in the same year.

GE mulls Norway offshore wind project exit

September 8, 2011. General Electric is considering abandoning an offshore wind power turbine project in Norway. GE had originally planned to invest 600 million crowns ($111.4 million) in the flagship project, launched in March last year, after acquiring the small Norwegian wind turbine firm ScanWind. Norway's trade minister Trond Giske was among the project's most vigorous supporters. Hydro-power rich Norway had little to offer in terms of a home market for offshore wind, according to the report. Around 40 employees in Norway and Sweden could be affected if the project is cut.

EU to delay action on biofuels' indirect impact

September 8, 2011. The European Union's top climate and energy officials have agreed to delay by up to seven years rules that would penalize individual biofuels for their indirect climate impacts, details of the deal showed. The political compromise is designed to protect EU farmers' incomes and existing investments in the bloc's 17 billion euro-a-year ($24 billion) biofuel sector, while discouraging new investments in biofuels that do nothing to fight climate change.

World Bank considers second Kyoto permit purchase from Czechs

September 8, 2011. The World Bank said its carbon funds may buy greenhouse gas permits created under the 1997 Kyoto Protocol from the Czech Republic, the second such deal. In May 2010, the Washington-based development bank agreed to buy 2 million AAUs from the country on behalf of its Spanish Carbon Fund (Tranche 2) and its Carbon Fund for Europe, the institution’s only other AAU-purchase agreement. Assigned Amount Units were created under the protocol, an agreement between nations to curb global warming in the five years through 2012. The Czech Republic has surplus AAUs because it cut greenhouse gases as some of the country’s biggest emitters went out of business or shut operations.

U.S. awarding $43 mn to boost development of offshore wind

September 8, 2011. The U.S. Energy Department awarded $43 million to 41 wind-energy projects to accelerate the development of offshore power plants. The funding will be provided over five years to improve the technology of offshore wind turbines, including control systems and support-structure designs, and to eliminate market barriers that hinder development. The funding includes $4.5 million for the Gorham, Maine- based Biodiversity Research Institute, $4.1 million for Alstom SA’s U.S. unit Alstom Power Inc. and $4 million for Siemens AG’s U.S. unit Siemens Energy Inc.

U.N. Chief Ban urges world to redouble efforts on climate talks

September 8, 2011. The world needs to redouble efforts to fight climate change ahead of global talks in Durban, with time running out to save millions of lives in countries to be hit hardest, United Nations Secretary-General Ban Ki-moon said. Ban said critics of climate change science were wrong. Hopes have dimmed for a new global climate pact to replace the Kyoto Protocol, which expires at the end of 2012, after U.S. President Barack Obama and other leaders failed to agree in Copenhagen in 2009 on a new deal limiting global warming. Leaders of 193 countries are set to meet for the next annual U.N. climate summit in November in Durban, where talks could stall again if rich and poor nations renew squabbling over how to share out emissions cuts and whether to extend the existing protocol. Ban rejected criticism that little progress had been made so far in several rounds of global climate talks, most recently in Mexico, which he said had delivered climate adaptation measures to protect vulnerable people. The Durban conference must keep building on that progress, he said, and agree to ambitious mitigation targets that would ensure any increase in global average temperature remained below 2 degrees Centigrade. He said many countries were already taking steps to combat climate shift. China had pledged to reduce carbon intensity by up to 45 percent and now led the United States in clean-energy capacity, he said, while India was planning to lift clean energy investment by more than 350 percent in this decade. Australian's government has also taken measures to fight climate change and unveiled plans two months ago to impose a tax on carbon emissions from July 2012, before moving to a carbon trading system from mid-2015.

SolarCity gets U.S. guarantee for $1 bn military-building solar plan

September 8, 2011. SolarCity Corp., a closely held installer and owner of rooftop power systems, was awarded a U.S. Energy Department loan guarantee that the company says will allow it to double U.S. residential solar installations. The loan guarantee is intended to support installations on military residences and buildings in as many as 33 states. SolarCity, based in Foster City, California, is planning a $1 billion, five-year program to install 160,000 rooftop photovoltaic systems.

The Energy Department’s conditional commitment guarantees 80 percent of a $344 million loan to support part of the project. The loan is provided by USRG Renewable Finance, an affiliate of US Renewables Group LLC, in partnership with Bank of America Corp. The loan guarantee was necessary to make the initiative profitable, as SolarCity expands upon an initial installation at a military base in Arizona in 2009. SolarCity’s SolarStrong project may create up to 371 megawatts of new solar generation capacity. Construction is underway on an initial 4- megawatt system in Hawaii, and installations are expected to follow on military bases in Nevada, Kentucky, California, and Texas. The project will help the U.S. Defense Department meet its goal of providing 25 percent of its energy from renewable resources by 2025.

German solar incentives facing big cut

September 7, 2011. A pick-up in solar panel installations in Germany in recent months is likely to cut industry incentives more than expected next year. About 1,250 megawatts (MW) of solar power capacity was installed in June and July, more than in the first five months of the year combined. Germany's network regulator said it would soon publish figures for installations in June. Government said incentives for solar power will likely be cut by 15 percent in January as a result, 6 percentage points more than planned but still well below the maximum cut of 24 percent the government can make. The photovoltaic (PV) industry still relies on government so-called feed-in tariffs which solar power producers can use to offset against their energy bills.

Solar industry association EPIA said it could take until the end of the decade for solar energy in Europe to be cost-competitive with fossil fuel generation. Governments have been cutting back on support to force the industry to lower its costs at a faster rate, a move that has hurt companies in the sector including Germany's Conergy, Q-Cells and Solon. Germany's government scrapped a planned reduction of incentives in July, giving companies more time to whittle away their costs, after the volume of new solar panel installations in the country fell dramatically. Germany derived more than a fifth of its total power requirement from renewable sources in the first six months of the year and aims to raise that proportion to 35 percent by 2020.

China seeks Japan tech in rare earth deals

September 7, 2011. China told Japanese business leaders that it hoped their companies would bring technology to develop rare-earth products to China, while standing by its controversial decision to limit the metals' exports. China produces more than 95 percent of the world's rare earth metals and its efforts to bring the sector under greater control, citing resource depletion and environmental degradation, have alarmed its overseas customers.

Romania to pass renewable law by year end

September 7, 2011. The Romanian parliament may approve a law on renewable energy by the end of this year which will give incentives for investors. The government will amend the law, cleared by the European Commission, by the end of September and then seek approval from parliament. Romania plans to generate 24 percent of its energy from renewable sources and 42.62 percent of its gross domestic electricity consumption from renewables by 2020.

The European Union has a target to get 20 percent of energy from renewables within the same timeframe. The law change may mean consumer electricity prices increase by 10 percent next year to pay for renewable sources such as the building of wind farms.

Samsung SDI sees $70 bn global solar cell market by 2020

September 7, 2011. South Korea's Samsung SDI Co Ltd said it expects the global solar cell market to be worth $70 billion by 2020, more than double last year's $30 billion, with falling prices and government support expected to drive demand globally.

A growing aversion to nuclear power after the radiation crisis in Japan and rising oil prices would lift demand for solar energy. But the solar cell market, weighed down by excess supply amid aggressive expansion by Chinese cell manufacturers and weak global demand, would continue to face overcapacity until 2013. A brutal 2011 has left the solar industry damaged and on the cusp of a major shakeout of weaker players.

Solar subsidy cuts in top markets Italy and Germany prompted a 20 percent drop in the price of solar panels this year, bringing the fast-growing solar industry to a critical tipping point. And news of bankruptcies at solar companies in the United States highlight difficulties in competing in a sector dominated by low-cost Chinese producers. Despite a difficult market, Samsung SDI is unfazed, targeting to grow its solar cell production to 3 gigawatt by 2015 from about 150 megawatt now.

The company competes with some of the biggest solar producers such as China's Suntech Power Holdings and Trina Solar. It also has ambitions of venturing into thin-film solar making by next year at the earliest, an industry which counts U.S.-based First Solar Inc and Japan's Showa Shell Sekiyu KK's among its biggest suppliers. The company plans to initially market its solar products to the United States, Japan and Europe. It also has its eyes on emerging markets, including China and India. Samsung SDI, considered a latecomer in the sector, plans to focus on organic growth, eyeing synergies with Samsung group affiliates. The company has no plans to acquire thin film solar assets. South Korea's cap-and-trade scheme or emission trade system, planned for launch after 2015, is expected to buoy demand for renewable energy including solar as consuming renewable energy will offset their carbon emission. Samsung SDI, which has the world's top memory chipmaker Samsung Electronics as its largest shareholder, had announced it will spend 2.2 trillion won in the solar business by 2015. Samsung Electronics has transferred its solar business to SDI. Samsung Group has said it will invest $7 billion on building a green energy industrial park from 2021, which is the latest push by the country's biggest business group to cultivate new business areas such as renewable energy and help to diversify from its conventional memory chip and mobile phone making.

Hydro Tasmania seeks buyer for stakes in two wind-power projects

September 7, 2011. Australia’s Hydro Tasmania plans to sell off as much as 75 percent of its stakes in the 65-megawatt Bluff Point and 75-megawatt Studland Bay wind farms. Hydro Tamsania has called for expressions of interest and plans to complete the deal by the end of the year. The company will focus on building the 168-megawatt Musselroe wind farm.

CaliSolar to build $600 mn Polysilicon plant in Mississippi

September 7, 2011. CaliSolar Inc., a maker of polysilicon for solar cells, will build a factory in Mississippi after the state approved $75 million in incentives. The $600 million plant in Lowndes County will produce 16,000 metric tons a year. The company says its manufacturing process is less costly than other polysilicon providers. With prices falling for the main material of solar cells, lower manufacturing costs may help CaliSolar compete against the biggest polysilicon maker Hemlock Semiconductor Corp., China’s GCL-Poly Energy Holdings Ltd. and other established companies.

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