Coal: Ambitious Plans vs Uncertain Supply of Black Gold

 

 

 

NEWS BRIEF

OIL & GAS

Cairn makes second gas discovery in Sri Lanka's Mannar Basin

November 14, 2011. After prolific oil discoveries in India, Cairn India said it has made a second natural gas discovery in the offshore Mannar Basin of Sri Lanka. This is the second well in a three-well frontier basin programme. Cairn Lanka is the operator and has a 100 per cent participating interest in the block. The company had announced a gas discovery in the very first well it drilled in the block. It said the reservoirs are predominantly gas bearing, with some additional liquid hydrocarbon potential. CLPL-Dorado-91H/1z well was the first well to be drilled in Sri Lanka in 30 years and the first well to discover hydrocarbons in the country. The CLPL-Barracuda-1G/1 well is the second successive discovery, located 38 kilometres (km) West of the CLPL-Dorado-91H/1z discovery well and approximately 68 km from the Sri Lankan coastline. Cairn had in 2004 made India's biggest oil discovery in more than two decades in Rajasthan. It currently produces 125,000 barrels of oil per day from the Mangala oilfield in Rajasthan. Cairn India is the target of a $9 billion takeover by London-listed mining group Vedanta Resources. Vedanta is buying 40 per cent of UK-based Cairn Energy Plc's stake in Cairn India. The Sri Lanka block is the only overseas property Cairn India currently has. It has 10 oil and gas blocks in India. The Mannar Basin in Sri Lanka is a frontier petroleum province that is yet to be fully explored. Block SL 2007-01-001 was awarded to Cairn in a 2008 Sri Lanka bid round.

RIL, BP offer to share KG-D6 infrastructure with state-run cos

November 14, 2011. Reliance Industries and its partner BP have proposed that the infrastructure at the deep-sea D6 gas fields can be shared with neighbouring blocks of ONGC and GSPC to save development costs and raise government's revenue from new output from the gasrich block. Reliance's infrastructure can be used by state-run firms ONGC, which will start production from an adjoining block by 2015, and Gujarat State Petroleum Corp, which is expected to pump gas from the same basin within two years. BP has acquired a 30% stake in the country's biggest gas fields, KG-D6, in a $7.2-billion deal to buy stakes in 21 blocks of Reliance. RIL has so far spent $5.59 billion in developing the D1 and D3 fields in the D6 block, out of the approved capital expenditure of $8.8 billion. The company has also developed the MA fields in the block, for which the government had approved expenditure of $2.23 billion.

Aban Offshore bags ` 2.8 bn contract from ONGC

November 11, 2011. Aban Offshore has bagged an order worth ` 285 crore ($57 million) from ONGC for deployment of jack-up rig Aban II for a period of three years. The company said that the contract is expected to commence during the January-March quarter of 2012.

Reliance KG-D6 gas output dips below 42 mmscmd

November 11, 2011. Natural gas production from Reliance Industries' showpiece KG-D6 fields off the East Coast has declined to a one-year low of less than 42 million standard cubic metres per day. The Dhirubhai-1 and 3 gas fields and the MA oilfield in the KG-DWN-98/3, or KG-D6, block in the Bay of Bengal produced about 41.68 mmscmd of gas in the week ending October 30. The current output is a far cry from the 61.5 mmscmd level achieved in March last year and the production plan of over 70 mmscmd for 2011-12. The Dhirubhai-1 and 3, or D-1 & D-3, fields produced 34.71 mmscmd and the remaining 6.97 mmscmd came from the MA oilfield.

Bureaucratic apathy holds up any possible increase in oil & gas production

November 11, 2011. State-run oil companies appear caught between the devil and the deep blue sea -while rising price of crude and fuel price revisions threaten to render them bankrupt, bureaucratic apathy is holding up any possible increase in oil and gas production. Cairn India, which is developing three oilfields in the Rajasthan block, India's largest oilfields on land, has not been able to start production at Bhagyam for want of necessary approvals. The Bhagyam oilfield has a potential of producing 40,000 barrel per day (bpd), which can take Cairn's total output from up to 1,75,000 bpd. Cairn's other two fields in the Barmer region are Mangla, its only operational field that produces close to 125,000 bpd, and Aishwariya , which has a potential of about 10,000 bpd.

State oil firms get ` 150 bn compensation for Q2

November 14, 2011. The finance ministry has granted ` 15,000 crore compensation to state refiners in the second quarter of current financial year for selling fuel below market rates. Indian Oil Corp is expected to get about 50% of this amount as compensation for the second quarter and balance will go to Hindustan Petroleum and Bharat Petroleum. The ministry is calculating individual shares of the three state-run refiners. The three firms had recently reported a combined loss of about ` 23,000 corore in the first half of the current financial year. Companies expect only a "comfort letter" but actual cash transfer is not expected in the near future. IOC, India's biggest fuel retailer had warned about an impending fuel crisis in the country after December because of firm's deteriorating financial health. Announcing "the worst-ever" half-yearly performance of the company. The company's borrowings had surged to ` 73,296 crore and it was expecting problems in getting loans from banks after December that could hamper import of crude to run its refineries. Other two companies, HPCL and BPCL are facing the similar situation.

Impending fuel crisis in the country: IOC

November 9, 2011. Indian Oil Corp (IOC), India's biggest fuel retailer, has warned about an impending fuel crisis in the country after December because of firm's deteriorating financial health, unless the government honor its commitment of paying cash compensation for selling diesel, kerosene and cooking gas below market rates. Announcing "the worst-ever" half-yearly performance of the company, IOC's borrowings have surged to ` 73,296 crore and it is expecting problems in getting loans from banks after December that could hamper import of crude to run its refineries. IOC has posted a net loss of ` 7,486 crore in the second quarter of the current financial year after the government did pay it a penny to compensate its ` 11,757 crore revenue loss this quarter for selling diesel, kerosene and cooking gas substantially below market rates. The company's gross refining margin (GRM) also turned negative in the second quarter compared to $6.63 a barrel in the same quarter previous year. The company reported a net loss of 11,204 crore in the first half of current financial year, compared to ` 1,906 crore net profit in the same period a year ago. IOC's total revenue loss for selling fuel below market rates in the second quarter was ` 11,757 crore. According to convention, state-run upstream companies such as ONGC and OIL share 33.33% of revenue losses incurred by state oil refiners through discounts on crude oil. The government chips in one-third of the revenue losses through cash compensation while the retailers absorb balance losses. State-run refiners, IOC, Bharat Petroleum and Hindustan Petroleum are selling diesel at ` 8.58 a litre below market rate. They are losing ` 25.66 a litre on kerosene and ` 260.5 per cylinder on cooking gas. Both HPCL and BPCL, who declared their second quarter results recently, posted a combined net loss of over ` 6,500 crore.

GAIL wins rights to lay Surat-Paradip pipeline

November 15, 2011. GAIL India won rights to lay a 1,550-km natural gas pipeline from Surat in Gujarat to Paradip in Orissa, connecting west to east coast. GAIL beat Gujarat State Petronet Ltd (GSPL) to win the right to lay the pipeline when oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) opened bids. The PSU bid an astonishingly low pipeline tariff of ` 0.01 (one paisa) per million British thermal unit to bag the project. The aggressive bidding by GAIL followed the state-owned firm losing bid for the previous three major pipelines - Mehsana-Bhatinda, Mallavaram-Bhopal-Bhilwara and Panipat-Jammu-Srinagar, to GSPL. The bi-directional pipeline would have a capacity to transport up to 60 million standard cubic meters per day of gas.

JSPL to close gas supply deal for Bolivian plant in a month

November 13, 2011. Jindal Steel & Power said the work on his Bolivian project will start next year and is hopeful of closing gas supply within the next one month or so. Over the next five years, the company will spend around $2 billion. Next year the company wants to export about 1 million tonne.

BG Group to divest 65.1 pc stake in Gujarat Gas; falling supplies from fields and expensive LNG hit profitability

November 9, 2011. Britain's BG Group is divesting stake from its subsidiary Gujarat Gas Co (GCCL), India's largest and oldest private sector city gas distribution (CGD) firm, following a review of its global portfolio. BG, one of the first Western companies to invest in the energy sector in India, had bought 65% of the company for ` 170 crore in 1997. It plans to exit at a time when GCCL commands a market value of nearly ` 5,500 crore. The company was not considering divesting stake in its joint venture with Gail - Mahanagar Gas - that operates in Mumbai. BG has earned rich dividends from GGCL. GGCL distributes 3.5 mmscmd of natural gas to close to 3.5 lakh industrial, commercial, domestic and CNG consumers in three cities of south Gujarat.

GSPC Gas Company increases gas prices, CNG to cost more

November 15, 2011. The GSPC Gas Company (GGC), a subsidiary of state-run Gujarat State Petroleum Corporation (GSPC), announced a hike in the gas prices in various categories, impacting industry and end-users. The hike will come into effect November 16. This is the third hike announced by the company. The oil and gas PSU has raised the prices of CNG from ` 40.25 per kg to ` 45.25 per kg, while it has revised the prices of gas supply to industry from ` 21.80 per standard cubic meter (PSCM) to ` 26.70 PSCM. The company has hiked gas prices in commercial user category, comprising hotel and restaurants from ` 29.10 PSCM to 42 PSCM. The company operates with a network of around 119 CNG outlets in Gujarat. GGC supplies gas to industry based largely in South Gujarat region comprising Valsad, Vapi, Umbergaon, Hazira and Halol. It also supplies gas in Gandhinagar, Nadiad, Morbi, Thangadh, Sunredranagar and Rajkot. In spite of several representations by the Gujarat Government and repeated requests by GSPC Gas Company, there has been no allocation of any cheaper domestic gas by the Government of India. GGC depends entirely on imported gas, mainly through the Petronet LNG, a GoI promoted company, which delivers imported gas on a price formula that entails a price-increase every month. The situation has been further compounded, of late, with the value of the Indian Rupee steadily depreciating against the US Dollar. GGC, is amongst the seven city gas distributors -Gujarat Gas Company, Adani Energy Limited, Charotar Gas Sahkari Mandli, Vadodara Municipal Corporation, HPCL (has CNG stations only), operating in Gujarat. HPCL, had hiked the CNG prices in Gujarat around a month back taking its price to over ` 50 per kg.

India state oil companies cut gasoline prices by 3.2 pc

November 15, 2011. Indian state oil refiners will cut gasoline prices by about 3.2 percent, the first reduction since the government ended pricing controls nearly 18 months ago. With the latest cut of 2.22 rupees a litre, a litre of petrol in Delhi will now cost 66.42 rupees. Indian Oil Corp, the country's biggest fuel retailer, confirmed cutting petrol prices by 1.85 rupees a litre excluding local taxes. State oil retailers -- Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp -- raised gasoline prices, the sixth major adjustment since June 2010. The move, which raised the price of gasoline in Delhi by 1.80 per litre, spurred public backlash and criticism from political parties within and outside the government given high inflation and a bulging fiscal deficit.

Fuel subsidies are perverse: Jairam Ramesh

November 15, 2011. "Fuel subsidies are perverse," Rural Development Minister Jairam Ramesh said amid the uproar over petrol price hike, as he pointed out that government spends roughly ` 1,10,000 crore on such sops. Warning that the problem will intensify if petrol prices are hiked without touching diesel, he said ` 67,000 crore is the diesel subsidy which is more than the amount government spends on its flagship programmes like MNREGA and PMGSY. Favouring a change in government policy on the issue of fuel subsidy, Ramesh, who has been a vocal critic of fuel subsidies, however, admitted that no government could implement such a policy overnight in a country where millions of farmers depend on diesel engines to pump water for their crops. He also said car owners and captive power generators are the two major beneficiaries of Government's subsidy on diesel. Ramesh also revealed that there is a proposal to have a more "rational approach" to LPG subsidy.

Govt may offload 10 pc stake in OIL

November 14, 2011. The government may sell 10 per cent of its stake in state explorer Oil India Ltd (OIL) through a public offer next fiscal. The government owns 78.4 per cent stake in OIL India. The stake sale would happen after government's planned 5 per cent stake sale in ONGC. ONGC share sale is planned for December. The much-delayed ONGC share sale was to first happen in March but was postponed several times due to poor market conditions and lingering concerns over government fuel subsidies, part of which are borne by ONGC.

Punjab govt contemplating cut in VAT on petrol

November 12, 2011. Punjab government said it was "seriously contemplating" a cut in Value Added Tax (VAT) on petrol to cushion the impact of recent hike in the prices of the fuel by oil marketing companies. The state government had ignored demands from the public and the petroleum dealers association during its around four years and nine months rule even as taxes, including VAT, amount to a whopping 32.25 per cent in Punjab as compared with between 20.50 per cent and 24 per cent in neighbouring states of Haryana, Himachal Pradesh and Chandigarh.

PM hints at further fuel hike if international prices rise

November 12, 2011. Prime Minister Manmohan Singh indicated that the fuel prices may have to be hiked again if international oil prices escalate further. He also termed the double digit inflation rate "worrisome". When asked if there will be a review of a recent fuel hike which has been opposed by the UPA's ally Trinamool Congress chief Mamata Banerjee, he said the government currently provides ` 1.32 lakh crores as subsidy to mitigate the high international fuel prices and this burden is "unsustainable." The prime minister said if the international oil prices rise further than any more, subsidies can only aggravate inflation.

GAIL plans ` 30 bn floating LNG terminal in eastern coast

November 11, 2011. Gail is contemplating a liquefied natural gas (LNG) floating storage and regasification unit (FSRU) in Eastern India which could entail an investment of about ` 3,000 crore. The company is also considering Dhamra in Orissa for the terminal and initial-level studies are on. The terminal was initially planned in Haldia and Digha in West Bengal but they were delisted because of being low draft and cyclone prone area. West Bengal, however, would get a fresh city gas distribution project for which GAIL will sign a joint venture agreement with Hindustan Petroleum and the Greater Calcutta Gas Supply Corporation on November 17. Gail had planned a ` 7,600-crore pipeline from Jagdishpur to Haldia, but the project faced rough weather as a Reliance Industries promoted RGTIL was not able to set up the Kakinada-Haldia pipeline, on which the Jagdishpur-Haldia pipeline was dependent for KG-D6 gas. In the proposed gas JV, GAIL and Hindustan Petroleum will hold 37 per cent stake each, while Greater Calcutta Gas will hold 26 per cent equity with veto power. A FSRU is a floating storage and regasification facility, which receives LNG from offloading LNG carriers and the regasification system provides natural gas through pipeline to shore.

Oil cos ONGC, HPCL, OIL, IOC and others may run out of cash to buy oil by December

November 10, 2011. India is staring at an energy crisis after December as state-run refineries will start shutting down because they will run out of money to import crude oil. IOC posted the second successive quarterly loss because it has not been compensated for selling kerosene, cooking gas and diesel below market rates. This is forcing IOC to buy crude oil with borrowed money, but banks cannot endlessly support this as the company's borrowings have surged to over ` 73,000 crore and it is unable to raise prices of fuels. Oil companies are trapped between the government's political and economic compulsions, which are blocking moves to pay subsidy or to raise fuel prices: The government is under strong political pressure to freeze fuel rates as inflation is already high while the finance ministry, which is struggling to meet its fiscal targets, is looking for ways to raise revenue and reduce expenditure on subsidies. Brent crude was trading at $114, down from the previous day's high of nearly $116, but still too high for Indian companies. The International Energy Agency said oil prices would head towards $150 if adequate investments are not made in the Middle-East and North Africa. IOC had reported its "worst ever" loss of ` 7,486 crore in the second quarter of the current fiscal after the government did not pay it a penny to compensate its ` 11,757-crore revenue loss.

Petroleum Ministry seeks 2-yr extension of tax holiday for refineries

November 10, 2011. The Petroleum Ministry has asked for a two-year extension of the tax holiday for refineries under the Income Tax Act so that state-owned Indian Oil Corp's much-delayed, ` 29,777 crore Paradip refinery can avail the benefit. A tax holiday is currently available to units that are commissioned by March 31, 2012, under section 80IB(9) of the Income Tax Act (exemption from payment of tax on income earned from refining). IOC's 15 million tonnes a year Paradip refinery is running behind schedule because of several problems the company has faced in executing the mammoth project in Orissa. The biggest of these were law and order problems and issues related to land acquisition, which have delayed the project commissioning to September, 2013, from the previous schedule of the first quarter of 2012.

IOC had asked the Oil Ministry to seek a two-year extension of the tax holiday till March, 2014. The Oil Ministry, in turn, has written to the Finance Ministry requesting the same. Currently, refineries commissioned after March 31, 2012, will not be eligible for exemption from payment of income tax on revenues earned in the first seven years of operations. The seven-year income tax holiday for the refining sector ends next year. IOC plans to sell fuel produced at the Paradip unit in the domestic market, rather than export the products as was earlier planned, due to the rise in fuel demand at home. The refinery was originally planned to export at least 2.05 MT of petrol and 124,000 tonnes of naphtha out of its yearly output of 15 million tonnes. But double-digit growth in petrol and diesel consumption meant there would be very little left for exports. The Paradip refinery will produce 5.97 MT of diesel, 3.4 MT of petrol, 1.45 MT of kerosene/ATF, 536,000 tonnes of LPG, 124,000 tonnes of naphtha and 335,000 tonnes of sulphur, all of which will be for sale in the domestic market. Some of the 200,000-tonne propylene output of the plant may be exported. IOC had previously stated that the refinery will start producing fuel by March, 2012, when it will commission primary units like the Crude Distillation Unit. Secondary units will be commissioned by July, 2012, and operations stabilised by November, 2012. The Paradip refinery is being configured to process the toughest, heaviest and dirtiest crudes, which are cheaper than the cleaner and more easily processed varieties. The refinery will have a Nelson Complexity Index of 13, the highest in the world.

India's IOC may cut FY12 capex plan due to losses

November 9, 2011. Indian Oil Corp, the country's biggest refiner and oil retailing firm, may revise downwards its capital expenditure plan for the current fiscal year due to losses. Earlier in the day, IOC swung to a loss of 74.86 billion rupees in its fiscal second quarter and said it absorbed ` 78.37 billion ($1.6 billion) in the July-September quarter for subsidised sale of fuel.

POWER

Lanco Infratech commissions second 600 MW unit of Anpara project in UP

November 12, 2011. Lanco Infratech Ltd said its 1,200 MW would soon start supplying power to Uttar Pradesh. Uttar Pradesh chief minister Mayawati dedicated the company's 1,200 MW Anpara C thermal power plant to the state. Lanco Anpara Power Ltd synchronised first and second units of the plant in March and September 2011. The group's total generating capacity stands at 3,892 MW. Uttar Pradesh Rajya Vidyut Utpadan Nigam had awarded the coal based Anpara C project to Lanco in September 2006 through a tariff-based competitive bidding. The company constructed the project within a compact area of 257 acres located close to the Uttar Pradesh Rajya Vidyut Utpadan Nigam operating plants of Anpara A and Anpara B. Coal for Anpara C is being sourced from mines belonging to Northern Coalfields Ltd and water drawn from Rihand reservoir. The generated power would be sold to Uttar Pradesh.

MP power crisis: Generation to begin in two thermal plants

November 11, 2011. With semi-urban and rural areas in Madhya Pradesh reeling under severe power crisis, the state's power generating company is pressing hard to increase its capacity, with a view to meet the growing demands and save the ruling BJP from power blues in the 2013 assembly polls. Against a peak demand of 7500-8000 MW, the state is generating 2932.5 MW from thermal power plants and 915 MW from the hydel source to meet the requirements while trying to bridge the gap through other sources like the central pool and by purchasing power from other states. Besides, State Chief Minister Shivraj Singh Chouhan has also announced setting up of a 660 MW unit in place of the existing 62.5X5 (312.5 MW) units in Sarni which was over 40 years old. The Ministry of Environment and Forest had given conditional clearance to the under-construction 250X2 MW units at Sarni stating that once the generation commences from these units then the company has to dismantle the old five units. Therefore, the state government has decided to set up another unit of 660 MW at Sarni in place of the old ones. The proposal and the feasibility report to set up this unit has been sent to the Project Review Committee of the state government which is expected to give its approval soon to the project.

Nalco signs pact with NPCIL to set up nuclear power plant

November 10, 2011. National Aluminium Company Limited (Nalco) has entered into an agreement with the Nuclear Power Corporation of India Limited (NPCIL) to set up nuke power plants within the country in a joint venture. Nalco has plans for diversification to power sector and to harness the clean energy. Nalco's 50 mw wind power project is at an advanced stage of construction in Andhra Pradesh. The company has also plans to bid for 4,000 MW Ultra Mega Power Plant (UMPP) in Odisha.

Tata Power staring at ` 5 bn loss in first year from Mundra

November 9, 2011. Tata Power's 4,000-MW ultra mega project at Mundra, in Gujarat, is staring at an annual loss of ` 500 crore in the very first year of commissioning due to the high cost of coal to be sourced from Indonesia. The Tatas will be deprived of the cost advantage on coal imports from the South-East Asian country due to a new local law that requires benchmarking of coal sales to an index-based price linked to global rates. This will necessitate Tata revisiting its cost calculations on the Mundra UMPP. UMPPs were seen as a means to achieve leapfrogging of investment and capacity addition in the power sector. Out of the four ongoing UMPPs projects in the country, the Mundra project was slated to be the first to come onstream.

Power distribution companies trip up states' credit capacity

November 15, 2011. Bleeding power distribution companies threaten to trip up the creditworthiness of five Indian states in particular, Fitch Ratings said. The states include Rajasthan, Tamil Nadu, Madhya Pradesh, Uttar Pradesh and Bihar, which account for 70.6% of the power distribution losses in the country.

Coal importers face huge loss as stocks top 11 MT

November 15, 2011. More than 11 million tonnes of imported coal, enough to light up five cities as big as Delhi, are stacked at Indian ports for over four months as power producers refuse to buy costly coal despite acute fuel shortage. The importers face huge loss as the depreciation of the rupee and the recent fall in international coal prices add to their woes. Industry insiders said coal stockpile at various ports reached record level as traders were initially not willing to sell the commodity at loss. Disinterest among power generating companies to blend imported coal that increases electricity tariff also led to the glut. Industry sources said traders under pressure from creditors wanted to sell quickly.

Diamond Power bags transmission line order from Gujarat Energy Transmission Co

November 14, 2011. Diamond Power Infrastructure Ltd. said it had secured orders from Gujarat Energy Transmission Co. Ltd. for supply and erection of transmission 220kV DC line on Tower with AL-59 equivalent ACSR Zebra conductors aggregating to 380.15 kms on turnkey basis. The 220kV DC lines include Kalavad-Kangasiyali line 55.94 kms, Bhatiya-Kalavad line 118.37 kms; Chorania-Gondal line 24.376 kms, GPPC-Dhokadvaline 50 kms; BECL-Botad line 94.26 kms and Halvad-Sadla line 37.21 kms. All the projects are to be completed in the next 12 months, the company said.

PowerGrid plans smart grid to trim T&D losses

November 13, 2011. PowerGrid Corporation is exploring the possibility of setting up a `smart grid' on a pilot basis. Smart grid will reduce transmission and distribution loss besides controlling theft, ensuring better availability in rural areas and increasing reliability and quality of supply in urban areas. The country has one of the largest T&D losses in the world, with almost 30 percent of the installed capacity of 1,82,345 mw being lost in transmission. The transmission network of the country is 2,65,000 circuit km (ckm).

Siemens launches world’s first 1200 kV SF6 Circuit Breaker  

November 11, 2011. India’s growing economy needs an efficient power transmission system to meet the increasing demand for reliable and affordable power. The Power Transmission Division of Siemens announced the launch of the world’s first 1200 kV SF6 Circuit Breaker, from its manufacturing facility at Aurangabad. With the launch, Siemens reinforced its commitment to partner India’s National Grid Agenda and to drive the country’s energy mission. India’s growing economy needs an efficient power transmission system to meet the increasing demand for reliable and affordable power. With the 1200 kV system, India will leapfrog into a new transmission age that will contribute to the nation’s economic growth, with an objective to bring electricity across the nation.

State power distribution cos stare at steep losses; may be forced to buy power from short-term markets

November 11, 2011. State-run power distribution companies are staring at steep losses in the run-up to assembly polls in key states, ahead of which the state governments will seek continuous electricity supply to woo voters. This will accentuate the losses of the discoms that paid ` 14 for every unit of purchase while selling it at ` 14 during the coal crisis in October. The cumulative losses of the discoms are expected to swell from ` 80,000 crore to ` 1,15,000 crore within three years. The discoms in the states going to the polls will be forced to buy power from short-term markets and overdraw from the national grid at exceptionally high rates. NTPC said the states will not back out of their purchase commitments during elections. Discoms are likely to become proactive in purchasing power during this period. Industry experts say this will benefit power generating companies in general and come as a relief in particular to gas-based, imported coal-based and new hydro projects that produce costlier power. Tamil Nadu, for example, purchased power at ` 12.5 per unit during the elections in March, and paid a penalty of Rs 17 per unit for overdrawing from the grid. Haryana, Delhi, Punjab, Madhya Pradesh, West Bengal, Chhattisgarh and Karnataka also bought expensive power from the short-term open market or overdrew from the national grid inviting heavy penalties. The discoms may, however, not have to shell out as much during next year's polls. Uttar Pradesh has already gone into poll mode, with the peak demand touching an all-time high of 11,500 MW Diwali.

Power cos meet only 1/3 of coal import targets in current fiscal

November 10, 2011. Power companies have met just a third of their coal import targets for the current fiscal, worsening the fuel shortage in the country's thermal power plants. Most generators are unlikely to meet their targets while their projects continue to run with critical stock. Latest data from the Central Electricity Authority shows that of 89 coalbased projects, 38 were running with 'supercritical' fuel stock enough to run for less than four days. Another 11 projects have coal to operate for less than seven days against normative requirement of 22 days. Coal India said the coal shortage at power projects had aggravated as power companies were not importing coal as per the targets. Companies that have not imported coal as per targets include NTPC, Torrent AEC, CESC and state utilities of Gujarat, Maharashtra and Haryana. The firms imported just 13 million tonnes of coal against the targeted 38 million tonnes. Power companies including Tata Power, Damodar Valley Corp, NTPC-SAIL and state utilities of Madhya Pradesh, Uttar Pradesh, Chhattisgarh did not import any coal. NTPC said the company was blending 10-15% of imported coal at most of its stations but there were no buyers for expensive power generated by burning imported coal. About 8,00,00 tonnes of the company's imported coal was lying at various ports, while another 1,00,000 tonnes at project sites. Blending 10% of the imported fuel rises electricity tariff by 30 paise. A Gujarat State Electricity Corp Ltd official said availability of imported coal was not a problem but the distribution companies were backing out from their purchase commitments. The company placed orders for imported coal in May.

EMC Ltd bags ` 7.7 bn contract from PowerGrid Corp

November 9, 2011. Power system solutions provider EMC Ltd said it has bagged a ` 776 crore contract from central transmission utility PowerGrid Corp for setting up a transmission link at Tuticorin, in Tamil Nadu. Under the contract, EMC will supply, erect, test and commission a 765-kV double circuit transmission line worth ` 718 crore at Tuticorin within a period of 30 months. It will also supply, erect, test and commission a 400-kV sub-station worth Rs 58 crore, which has a contractual completion deadline of 24 months. The 410-km-long transmission line will be built between the Tuticorin Pooling Station and Salem Pooling Station, connecting the sub-stations at Salem and Madhugiri and the proposed 400 kV sub-station at Tuticorin. EMC Ltd offers complete turnkey solutions for power transmission, distribution and balance of plant (BOP). It also manufactures towers, conductors, hardware accessories, etc.

JSW Energy not looking to bid for Australia's New Hope coal assets

November 9, 2011. Power utility JSW Energy is not looking to bid for Australia's New Hope coal assets. The company expects to swing back to profit in the current quarter on back of coal prices correcting and tariff hikes.

Jindal Power gets green nod for 2,400 MW plant at Chhattisgarh

November 15, 2011. Jindal Steel and Power said its subsidiary Jindal Power has got environmental clearance for construction of 2,400 MW expansion project at Tamnar, Chhattisgarh, from the state environment authority. The green clearance will end the long wait for the implementation of the project, which was earlier scheduled to come up March, 2012. Jindal Power currently operates 1,000 MW at the site. The company had got the green clearance from Ministry of Environment and Forest for the 2,400 MW project in two phases. The project was later cleared by Ministry of Coal, which has also approved coal linkage for half of the capacity (1,200 MW).

Power Ministry asks MOEF to fast-track Sarguja coal block clearance

November 15, 2011. The Power Ministry has asked the Ministry of Environment and Forests to fast-track the process for grant of green clearance to coal mines attached to the 4,000-MW Sarguja ultra-mega power project in Chhattisgarh, failing which the invitation of bids may get further delayed. Initial bids for the Sarguja project have been postponed several times in the past eighteen months due to delays in the grant of environment and forest clearance for coal blocks attached to the project. The Ministry of Environment and Forests (MOEF) had classified coal mines into two categories -- "go" and "no-go" areas. As per the classification, mining in "no-go" areas was barred on the grounds that it would have an adverse impact on the environment. Coal mines allotted to this project fall in the Hasdeo-Arand mining area, which was classified as a no-go zone. Meanwhile, there has been progress on another power project -- the 4,000-MW Bedabahal UMPP in Orissa -- which was also facing delays in the development of coal blocks due to environment issues. Early this year, MOEF granted clearance for the plant to utilise three captive coal blocks -- Meenakshi, Meenakshi B and the dipside of Meenakshi. Initial bids for execution of the project were invited in June this year. As many as 20 companies evinced interest in development of the project. Power Finance Corporation, the nodal agency for the UMPPs in the country, is assessing the 20 bids. The government has so far allotted four UMPPs, of which Reliance Power has bagged three -- Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) -- while the Mundra UMPP in Gujarat is being executed by Tata Power. These UMPPs are likely to contribute a great deal to the planned capacity addition during the 12th Five-Year Plan (2012-17).

Future investments depend on solution to Mundra issue: Tata Power

November 13, 2011. Tata Power's ambitious plan to generate 25,000 MW, with about ` 1 lakh crore investment, will largely depend on sale price of electricity from its 4,000-MW Mundra project amid concerns that its costs could become commercially unviable due to higher price of coal. The Tata Group firm is staring at an annual loss of ` 500 crore from the very first year of Mundra Ultra Mega Power Project's operations, as higher prices of coal, which was to be imported from Indonesia, have derailed the company's cost calculations.

At current coal prices, the cost per unit of electricity generated from ` 17,000 crore Mundra UMPP, would go up by 60 to 65 paise from the present tariff -- fixed at ` 2.26 per unit through competitive bidding in 2006. The Tata Group firm, which currently has power generation capacity of 3,797 MW, has ambitious plans for 25,000 MW capacity by 2017. Of this, 4,000 MW will come from Mundra, the first Ultra Mega Power Project (UMPP) in the country.

According to industry standards of ` 4-5 crore cost for 1 MW power generation, the company would require investments of ` 85,000 crore to ` 1,00,000 crore to achieve the target. However, a new Indonesian law has deprived the Tatas from the cost advantage on coal imports from the East-Asian country as it will not be able to source the Indonesian coal at discounted rates. The Indonesian Coal Price Regulation (ICPR) of last year requires benchmarking of coal sales to an index-based price linked to global rates and entailed the modification of all sale contracts by September, 2011.

Banks set tough conditions for power bodies' debt recast

November 12, 2011. Commercial banks have laid tough conditions, such as regular review of power tariffs and a repayment guarantee from states, before they agree to restructure the mounting debt of state electricity boards (SEBs).

Distribution utilities in Rajasthan and Tamil Nadu have sought restructuring of loans but banks have made it clear that they would roll over the debt only if the state electricity boards abide by the prescribed fiscal discipline.

KNPP reactor's commissioning delayed by three months

November 10, 2011. Bogged down by the over month-long agitation by local people led by anti-nuclear activists, commissioning of the first reactor of the controversial Koodankulam Nuclear Power Project has been delayed by three months. After achieving 99.2 per cent of the physical progress to produce 1000 MW of power, the first unit was now expected to go for commercial operation by March next year.

Hike in power tariff unavoidable: CERC

November 10, 2011. Hike in power tariff looks inevitable given the shortage of coal in the domestic market and dependence of power companies on imported coal, Central Electricity Regulatory Commission (CERC) said. Higher cost of fuel reflects in fuel adjustment charge (FAC), which has to be passed on to the consumers in the form of increased tariff.

Power Finance Corporation board approves launch of $1 billion private equity fund

November 9, 2011. Power sector lender Power Finance Corporation said it has approved a proposal to launch a private equity fund of $1 billion, which could possibly be in place over the next six months.

PFC has entitlement for raising ` 6,900 crore from Infra bonds, and ` 5,000 crore from tax-free bonds. So far, it has raised ` 425 crore from tax-free bonds and ` 90 crore from Infra bonds in first tranche.

PFC, as part of Medium Term Note (MTN) programme has proposed to raise $1 billion through External Commercial Borrowings (ECBs) which is expected to get over by December next year.

OIL & GAS

Libyan oil output can reach 800,000 barrels by end of 2011

November 13, 2011. Libya, the holder of Africa’s biggest oil reserves, will produce as much as 800,000 barrels of crude a day. Libya’s oil industry will recover more quickly than the International Energy Agency predicted after suffering disruptions amid fighting that engulfed the country. The nation currently pumps 600,000 barrels a day. Libya’s output capacity will reach an average of 800,000 barrels a day in the first quarter of 2012, then rise to 1.17 million barrels a day in the fourth quarter of next year. Libya produced 345,000 barrels a day in October, more than triple the 100,000 barrels it pumped in September. The country produced almost 1.6 million barrels a day in January, before protests against the against Qaddafi’s regime flared into armed rebellion. Libya is using 140,000 barrels a day of the crude and exporting the rest.

Sinopec adds Brazil offshore oil reserves with purchase of Galp unit stake

November 12, 2011. China Petrochemical Corp. agreed to buy a 30 percent stake in Galp Energia SGPS SA (GALP)’s Brazilian unit, its second investment in offshore oil fields in Latin America’s largest economy in as many years. Sinopec Group said it will invest a total of $5.2 billion in Galp’s Brazil unit, including a subscription for new shares and a shareholder loan. Chinese energy companies have bid at least $16 billion for overseas oil and gas assets to expand reserves and supply the world’s largest energy consumer. Galp’s Brazilian holdings include a share in the biggest discovery in the western hemisphere since 1976. Sinopec agreed to invest $7.1 billion in the Brazilian unit of Spain’s Repsol YPF SA. Galp has stakes in four offshore blocks in Brazil’s Santos Basin, including a 10 percent share in Lula, the largest crude discovery in the Americas since Mexico’s Cantarell field in 1976. Lula, formerly known as Tupi, holds an estimated 6.5 billion barrels of recoverable oil and equivalents. Galp is also a partner with Petroleo Brasileiro SA, Brazil’s state-controlled oil company, in Cernambi, which holds 1.8 billion barrels of estimated reserves. Galp raised its 2020 output target after “exceptional” progress in Brazil and expects working interest production of more than 300,000 barrels of oil equivalent a day by the end of the decade.

213 billion barrels of oil in South China Sea

November 11, 2011. To China, the world’s biggest energy consumer, another Saudi Arabia of oil may lie beneath the ocean to its south. Escalating regional tensions mean large-scale drilling may be slipping further into the future. The South China Sea may hold 213 billion barrels of oil, or 80 percent of Saudi Arabia’s reserves. The world’s second-largest economy claims “indisputable sovereignty” over most of the sea, including blocks off Vietnam that Exxon Mobil Corp. and Russia’s Gazprom OAO are exploring.

Sinochem plans China’s biggest IPO this year

November 11, 2011. Sinochem Corp. plans to raise as much as 35 billion yuan ($5.5 billion) in an initial public offering to fund an oil refinery project, in what would be China’s sixth-biggest IPO. The country’s largest supplier of chemical products aims to sell as much as 26.5 billion new shares in Shanghai. The unit of Sinochem Group will use the proceeds for a refinery in Fujian. Companies have raised $37 billion in IPOs in China this year, more than double the proceeds in Hong Kong. The Sinochem IPO comes less than a month after Sinohydro Group Ltd., the country’s largest builder of hydroelectric dams, raised 13.5 billion yuan in what was the largest offering.

Gas exporters seek ‘high’ prices as they cooperate on supply, projects

November 15, 2011. The world’s largest natural-gas exporters aim to cooperate in developing projects for production and sale of the fuel to raise prices and boost supply. Qatar, Iran, Egypt and Algeria, among others, agreed in the Qatari capital Doha that the price of the fuel used to generate electricity is too low. They disagreed on how the Gas Exporting Countries Forum, a producers’ group set up to share market information and coordinate projects, could also help maximize the income of its 11 members. Producers need to narrow the gap between prices for gas and crude oil without trying to limit production. Gas prices vary between the U.S., Europe and Asia due to differences in supply. U.S. prices are lower than those in Europe, which relies on both pipeline and liquefied gas. Most LNG delivered by ship is sold under long-term contracts based on oil prices, while recent spot sales have driven some market prices lower.

Oil-tanker rates seen rising as scrap values speed up demolitions

November 15, 2011. Oil-tanker companies may demolish the most ships since 2003, lifting charter rates from their lowest in at least 14 years, as values of older vessels trade 36 percent above the price of scrap. The cost of 15-year-old tankers fell 48 percent to $23.5 million as scrap values advanced 3 percent to $17.25 million, the narrowest gap in at least five years. Owners may break up 5 percent of the fleet within 18 months, the most in nine years.

Petrobras profit slides 26 pc on currency, higher fuel imports

November 14, 2011. Petroleo Brasileiro SA, Brazil’s state-controlled oil producer, said third-quarter profit fell 26 percent as rising domestic demand forced it to increase imports and a weaker local currency boosted costs. Petrobras has boosted imports of gasoline amid rising domestic demand that outpaced capacity at its refineries and lower-than-expected output of ethanol, an alternative to gas. Profit was also curbed by a weaker Brazilian real that increased costs to import and made the company’s foreign-currency debt more expensive. The company’s gasoline imports quadrupled this year to about 30,000 barrels a day. The company reported a 3.12 billion-real loss in its supply business, compared with a 1.3 billion-real gain a year earlier, as imported fuel accounted for a greater portion of sales and average export prices fell. Petrobras also had a financial expense of 5.28 billion reais in the quarter.

Canada oil export hopes at risk after pipeline delay

November 14, 2011. The delay in a massive Canada-Texas pipeline project will inflame opposition to other export options for crude from Canada's oil sands and threaten the nation's aim of becoming a top global energy supplier. Industry experts say the United States' move, after 39 months of review, to seek a new route for TransCanada Corp's $7 billion Keystone XL pipeline away from a crucial water source in Nebraska could derail the project as shippers and customers grow impatient. The Canadian government and energy executives, expressing disappointment with the decision, say they will push even harder to advance an export route to the Asian market now that the Alberta-to-Texas alternative for crude derived from the oil sands is delayed for more than a year, adding to fears it could eventually be shelved. The industry will move quickly to tap Asian markets in the absence of the pipeline. Canada is already the biggest oil supplier to the United States, shipping more than 2 million barrels a day, much of it from oil sands. But the industry's promise - and problem - are projections that output from the tar sands alone could double to 3 million barrels a day by 2020 and jump to 3.7 million by 2025.

Frontline jumps most since 1998 as demand to Charter oil tankers builds

November 11, 2011. Frontline Ltd., the top global operator of supertankers, jumped the most in a week since December 1998 on signs of stronger demand to charter the largest crude-oil carriers. Bookings of very large crude carriers to load oil in the Persian Gulf climbed to 137 for this month. That exceeded the previous high of 129 in April. Charter rates on the industry’s benchmark trade route starting in the gulf climbed the most since February. Charter costs on the benchmark voyage from the gulf to Japan increased 19 percent. The price of ship fuel, or bunkers, advanced 1.1 percent to a 2011 high of $687.35 a metric ton.

Obama administration postpones keystone XL pipeline decision

November 11, 2011. The U.S. State Department said it is delaying a decision on TransCanada Corp.’s Keystone XL oil pipeline to study an alternative route for the $7 billion project away from environmentally sensitive areas in Nebraska. Evaluating a revised route will postpone a final ruling on the pipeline, which has drawn support from business groups and protests from environmentalists, until after the 2012 election. The 1,661-mile (2,673-kilometer) pipeline would deliver 700,000 barrels a day of crude from Alberta’s oil sands to the Gulf of Mexico by crossing Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

Tanker-derivatives may shift from half-century-old system to spur trading

November 10, 2011. Traders and investors who bet on the cost of shipping oil may decide to move pricing of derivatives away from a method dating back half a century in an effort to spur use of the contracts. About 50 users of the tanker derivatives will meet to vote on scrapping so-called Worldscale points as a basis for prices. If a consensus is reached, prices will be uniformly expressed in dollars a metric ton starting in January. Derivatives for tankers hauling crude oil and refined products such as jet fuel have been based on Worldscale rates since trading began nine years ago. Traders have used the dollars-a-ton basis for about 18 months to price contracts for settlement in the following year, and a vote in favor of change would extend that method to all of the derivatives. Oil companies and ship owners have used the point method of pricing since at least the 1950s. The points express hire costs for tanker voyages as a percentage of a nominal rate that changes annually. Contracts are settled against freight rates provided by the exchange.

Iraqi government says there is agreement with Kurdish region on oil pacts

November 13, 2011. Iraq, home to the world’s fourth- largest oil reserves, has reached a tentative agreement on crude exploration and revenue with the semi-autonomous Kurdish region. The central government and the Kurdish Regional Government have reached “mutually acceptable” solutions to long-standing disputes over oil, territory and Kurdish armed forces. Iraq’s 115 billion barrels in estimated crude reserves are exceeded only by those of Saudi Arabia, Venezuela and Iran.

LNG boom may prompt Russia to Court Qataris

November 11, 2011. Russia may use a meeting of the world’s largest natural gas exporters to forge partnerships with rivals designed to boost production as international trade in the fuel booms. The 11 members of the Gas Exporting Countries Forum, or GECF, are due to meet in Doha, Qatar and also hold their first heads of state summit. Global LNG export capacity has grown 48 percent in the past four years as producers anticipate rising demand for cheaper and cleaner-burning fuels. Seaborne cargo trade will keep increasing at least through 2035. The ability of Russia, the world’s biggest gas exporter, to supply customers from the Yamal peninsula may depend on Qatari support. Russia plans to discuss Qatar’s possible participation in the Yamal project in Doha.

Oil drilling plan to focus on Gulf of Mexico

November 9, 2011. The Obama administration will allow "robust oil and gas development" in the Gulf of Mexico starting in 2012, but will hold off on letting drillers into Arctic waters until more is known about spill response preparedness. The Outer Continental Shelf leasing plan includes 15 potential lease sales over 2012-2017, including 12 in the Gulf of Mexico and three off the coast of Alaska. The plan includes lease sales in the Beaufort and Chukchi Seas, but the areas would be opened up late in the five-year period to allow for more studies on spill response preparedness.

POWER

Ormin Power energizes power plant in Calapan

November 13 2011. Ormin Power, Inc., a subsidiary of listed company Jolliville Holdings Corporation, has recently inaugurated its 6.4-megawatt (MW) power plant in Calapan City, Oriental Mindoro. The plant is expected to produce up to 4,600,000 kilowatt hours per month.  Its power output will be sold to Oriental Mindoro Electric Cooperative, Inc. (ORMECO) for distribution to end users. ORMECO's current peak demand is 28 megawatts and its energy demand is 159,667,000 kilowatts per hour (kwh).  It distributes power to the entire province of Oriental Mindoro which consists of Calapan City and 14 municipalities including Puerto Galera, San Teodoro, Baco, Naujan, Victoria, Socorro, Pola, Pinamalayan, Gloria, Bansud, Bongabong, Roxas, Mansalay and Bulalacao. Ormin Power is now also developing a hydro-electric plant along the Inabasan River in San Teodoro municipality.

Russia may build more nuclear power plants in Iran

November 10, 2011. Russia is studying an Iranian proposal to build more reactors at the Bushehr nuclear power plant. The project, if approved, would require amendments to an intergovernmental agreement between Russia and Iran. The 1992 Russian-Iranian intergovernmental agreement envisaged the construction of four nuclear reactors in the country. The first unit at Bushehr has capacity to generate 1,000 megawatts. Under a bilateral agreement, approved by the International Atomic Energy Agency, Russia will operate the plant, supply its fuel and take away all the spent fuel for the next two or three years, but will eventually hand over full control to Iran. The construction of Bushehr has taken more than three decades and has been dogged by delays. Russia signed a contract with Iran in February 1995 to complete the plant, which German companies first began back in 1975.

Zimbabwe to have no electricity for another 4 years

November 15, 2011. Zimbabwe which has struggled with electricity supply in  recent years, is to yet brace up for a gruelling additional 4 years without adequate supply of electricity resulting in little or no electricity for many areas as load sheddings’ frequency is increased. Zimbabwe Electricity Supply Authority (ZESA) needs $125 million to repair Hwange thermal power station adding that Zimbabweans should brace for more power outages till 2014 because of the problem. ZESA said the challenges that include a huge debt overhang, low installed capacity and general dip in the availability of power in the region will see the power utility load-shedding to share the limited resources.

Massachusetts Company proposes 2 GW offshore transmission project

November 14, 2011. Anbaric Transmission has taken the first step toward building New England's first offshore transmission truck line, designed to accommodate 2,000 MW of offshore wind energy. The Massachusetts-based company, which is behind the construction of two other large submarine transmission projects in the Northeast, has filed an interconnection request with ISO New England for the new project. The fact that each project is over 25 miles from the shore makes it impractical and uneconomical for each of the ten developers to build individual direct current transmission lines. The project will use technology proven in Europe and target specific injection points in Massachusetts.

Vietnam needs $1 bn per year for power transmission projects 

November 13, 2011. Vietnam will spend around $1 billion each year to develop power transmission facilities and is dependent on foreign financing sources. According to the National Power Transmission Corp., Vietnam will develop between 300 and 350 transmission projects from 2011 to 2015. The corporation, said his company is charging the lowest transmission price in the world, at only VND77.5 per kilowatt-hour. As a result, it does not have enough capital for reinvestment. To arrange enough money for new projects, the company has to find loans from various sources, including the World Bank and the Asian Development Bank. Transmission projects cannot be delayed otherwise the country will face a serious power shortage. New power plant projects should not be implemented until transmission grids have been completed. Without money for new transmission projects, many power plants will be useless.

Basin Electric Power Cooperative plans transmission line in western North Dakota oil patch

November 11, 2011. A big player in North Dakota's coal country is moving into the state's oil patch. Bismarck-based Basin Electric Power Cooperative, which owns two coal-fired power plants, plans to build a 190-mile electrical transmission line to fuel a growing demand for power in the oil patch. Construction could start in 2014. The proposed line would run from the Antelope Valley Station near Beulah to the Williston and Tioga region, where nearly 90 oil rigs are tapping into the rich Bakken shale formation. Basin's in-house projections show that by 2025, demand for electricity in the oil patch will increase by an amount equal to one-fourth of all the power produced now in North Dakota. Basin supplies power to 135 rural electric systems in the Dakotas, Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico and Wyoming.

South Korea passes smart grid network law to start November 25

November 15, 2011. South Korean legislation on smart power grids will come into effect on Nov. 25 as part of a government plan to reduce carbon emissions. South Korea’s government in 2009 pledged a 30 percent reduction in carbon emissions from expected levels by 2020. Electricity generation accounts for about 40 percent of emissions. The nation, Asia’s fourth-largest energy user, may spend about 27.5 trillion won ($24 billion) by 2030 building smart grids. The grids use digital technology to reduce cost and save energy in power distribution.

Indonesia not ready to build nuclear power plant

November 15, 2011. Energy and Mineral Resources Deputy Minister Widjajono Partowidagdo says Indonesia is not ready to build a nuclear power plant due to levels of corruption and weak supervision in the country. It would be very dangerous if corruption was involved in the development of a nuclear power plant, he said. According to Widjajono, Indonesia should collaborate with other countries, for instance Singapore. Singapore doesn’t have any problems, but they might not agree to do it, he said.

Nigeria to subsidise power next year

November 14, 2011. Nigerian minister of power Barth Nnaji says the federal government is planning to introduce a three-year subsidy programme for the country’s power sector from the beginning of January next year. The federal government planned to earmark $630 million in the 2012 budget for the planned subsidy in the power sector. The Minister said the new tariff plan would last from 2012 to 2014 and would be suspended thereafter when there is stability.

Pak planning to purchase 2 N-power plants from China

November 13, 2011. Pakistan plans to purchase two atomic power plants with a combined capacity of 2,000 MW from China despite concerns expressed by the West over nuclear cooperation between the two countries. The new plants will be installed at the Karachi nuclear power plant complex to address the country's energy crisis. The China National Nuclear Corporation (CNNC) and Pakistan atomic energy commission are likely to enter into an agreement for a joint study to finalize design modifications for the new plants. After the joint study, a contract for establishing Kanupp-2 and Kanupp-3 will be negotiated. Pakistan's planning commission has said CNNC should be asked to grant intellectual property rights for the plants and suggest steps to help avoid violation of property rights. China and Pakistan have signed an agreement in 2009 to set up two nuclear power plants despite western concerns that it violated international nuclear regulations.

S. Africa, Congo plan pact on world’s biggest hydropower project

November 10, 2011. South Africa and the Democratic Republic of Congo will on Nov. 12 sign an agreement that may lead to the development of what could be the world’s biggest hydropower complex. South Africa’s President Jacob Zuma and his Congolese counterpart Joseph Kabila will preside over the signing of a memorandum of understanding on the Grand Inga hydropower project. The capacity of the project is equivalent to the total installed generation capacity in South Africa, the continent’s biggest producer of electricity. South Africa needs to boost its sources of energy to keep pace with projected growth in demand, while southern African nations including Namibia and Zimbabwe are in need of more electricity. The agreement will allow Eskom Holdings SOC Ltd., South Africa’s state-power utility, and Congo’s Société Nationale d’Électricité, known as Snel, to enter an agreement and a treaty between the countries should be signed within six months. The plans for the pact comes almost two years after talks between Congo, Angola, South Africa, Namibia and Botswana to invest $5.2 billion in a 5,000 megawatt hydropower project, known as Inga 3, collapsed. The World Bank has said the Congo River has the potential to generate more than 100,000 megawatts of power. China’s Three Gorges hydropower complex is the world’s biggest with a generating capacity of 22,400 megawatts while Brazil’s Itaipu, with a capacity of 14,000 megawatts, is the second largest.

Farooq Abdullah urges Indian industry to generate power from agro-industrial waste

November 15, 2011. Renewable energy minister Farooq Abdullah urged private sector to generate electricity from agro-industrial waste to reduce dependence on fossil fuels and combat environment pollution. The minister urged Indian industry to invest in green buildings which consume less energy. Mr Abdullah said the ministry of new and renewable energy will collaborate with ASSOCHAM to develop Chandigarh and Ahmedabad as model cities where these new technologies can be used extensively. Waste to energy projects will help reduce the gap between demand and supply of power and limit reliance of industrial units on grid-based electricity or fossil fuel-powered generators.

Tamil Nadu to add 8 GW Clean Energy in 5 years

November 13 2011. After leading the country in development of wind energy, Tamil Nadu seeks to make quantum leap in harnessing power through both wind and solar energy over next five years. The state is preparing to announce a separate renewable energy policy with a goal to add about 8,000 MW of capacity through wind and solar in the next five years. Tamil Nadu has a very good solar potential with longer and clearer sunny days as it receives very high solar radiation. The southern districts of the state have a high solar radiation and some locations have very high solar radiation of 5.8kw per hour a day. The transmission infrastructure of the state electricity board is able evacuate only 2,000-3,000 MW of wind power as against the required capacity of 6,000 MW. The state electricity board, which is under severe financial stress, has sought assistance to the tune of about ` 4,000 crore from central government’s clean energy fund.

GMR plans ` 17.5 bn investment in solar power projects

November 11, 2011. GMR Group plans to invest ` 1,750 crore over three years to take its renewable energy generation capacity, mainly solar, to 200 mw by 2014-15. The company, part of the Bangalore-based infrastructure major GMR Group, said its 25 MW solar power project in Gujarat is expected to be commissioned next month. It is looking to raise the renewable energy capacity to 200 MW at an estimated investment of ` 1,750 crore in three years. The company is pursuing solar power project opportunities in Gujarat, Rajasthan and Tamil Nadu. GMR will not venture into wind energy area as plant load factors are not high and good sites have already been occupied by other players.

India solar projects face financing crunch as banks near limits

November 11, 2011. Government-sponsored banks that funded India’s nascent solar industry when commercial lenders were wary may begin curbing financing. The Overseas Private Investment Corp. (OPIC), based in Washington, is close to its limit for lending to projects in India. The banks were some of the earliest to finance solar power generation in Asia’s third-largest energy consumer. Projects in India now account for 8.5 percent of OPIC’s total loan book, nearing its 10 percent limit for any one country. India aims to complete its first major round of solar photovoltaic plants by January and hold its second national auction of permits to build another 350 megawatts of capacity this month. Total solar installations reached 125 megawatts as of the end of October after more than doubling since June. The progress shows it may be time for development banks to start withdrawing support for the industry. Solar power proponents currently building plants that have been backed by the development banks include Reliance Power Ltd. (RPWR) and New Delhi-based Azure Power.

Biofuel firm Nandan targets 25 pc sales rise

November 10, 2011. India-based biofuel producer Nandan Cleantec expects to grow sales by at least 25 percent every year till 2014-15, on the back of strong demand for its high yielding variety of oilseeds. Nandan develops hybrid varieties of Jatropha, an oilseed plant with a high oil yield and an ability to grow on marginal land. The company has a 275,000 metric tonne per annum biofuel processing plant, as well as a Jatropha feedstock plantation base of about 51,000 hectares. It expects to use proceeds from the share issue to further develop its Jatropha supply. The company's in-house plant could process yields from up to 125,000-150,000 hectares of land, helping grow group sales by 25-30 percent annually. Nandan has the processing facilities to handle all the Jatropha it procures up to 2014-15, at which point it would reach capacity and the group would build another plant. The company, which generated $100 million in revenues last year, should touch $200 million in sales by 2012. While Jatropha is an attractive crop, some experts say its commercial promise is overstated as it needs fertilizer to thrive and its harvesting and processing are energy-intensive. Nandan countered that by developing a hybrid variety that has improved yields.

EU pledges to track post-2012 carbon credit supply loophole

November 15, 2011. The European Union pledged to track the flow of certain imported carbon credits to ensure they don’t exploit a loophole and come from fast-emerging countries that are not eligible to supply the bloc after 2012. The European Commission, the 27-nation group’s regulatory arm, said that if needed it had tools to restrict credits generated by so-called United Nations Programs of Activities, which allow investors to group small-scale emission-reduction projects of various types and from different countries. Any potential limits would eliminate legal loopholes and protect the EU rule that requires new projects in the next phase of the bloc’s carbon program, starting 2013, to be located only in Least Developed Countries as defined by the UN.

China shuts 90 pc of lead-acid battery makers

November 15, 2011. China has shuttered almost 90 percent of lead-acid battery makers in a government crackdown to curb lead poisoning cases, cutting sales and weighing on metal prices. Local environmental protection bureaus have inspected 1,744 lead-storage battery makers and only 229 are still operating. China is the world’s largest exporter of the batteries used in electric bicycles and hybrid vehicles.

U.S. expects "significant" APEC step on green trade

November 14, 2011. The United States expects Asia Pacific leaders to take a "significant step" toward reducing tariffs and other barriers that block trade in environmentally-friendly good and services. The United States has been pushing APEC countries to commit to cap tariffs on environmental goods such as solar panels, wind and hydraulic turbines, air pollution filters and sewage treatment pumps to 5 percent.

South Africa’s $12 billion renewable-power program gets 53 bids

November 14, 2011. South Africa received 53 bids to build 2,100 megawatts of renewable power capacity in the first phase of a program valued at as much as $12 billion, with projects split almost equally between wind and solar. About half the tenders for the plan, which will total 3,725 megawatts of capacity when completed at the end of 2016, were for wind farms, 48 percent for solar parks and 2 percent for small hydropower plants. Successful bidders in the first round will be announced by the end of November or early in December. South Africa plans to boost renewable power as a proportion of overall generation as it seeks to reduce dependence on coal, which is used to produce nearly 90 percent of the country’s electricity and is the worst fuel for carbon emissions.

Orbital solar power plants touted for energy needs

November 13, 2011. The sun's abundant energy, if harvested in space, could provide a cost-effective way to meet global power needs in as little as 30 years with seed money from governments. Orbiting power plants capable of collecting solar energy and beaming it to Earth appear "technically feasible" within a decade or two based on technologies now in the laboratory.

Former Obama campaign adviser warned on Solyndra in February

November 12, 2011. A former campaign adviser to President Barack Obama urged that Energy Secretary Steven Chu be replaced and warned of Republican attacks over "inside" deals including Solyndra LLC that went to Obama supporters. In a February e-mail circulated among administration officials, Dan Carol, who was an issues adviser in Obama’s 2008 presidential campaign, wrote that Obama’s clean-energy agenda was stalled because of ineffective management. Carol’s proposal to oust Chu was among e-mails the administration gave to a House Energy and Commerce panel investigating Solyndra, the solar-panel maker that filed for bankruptcy in September, two years after receiving a $535 million U.S. loan guarantee. The Republican-led panel issued a subpoena for White House documents on the company.

China plans to challenge EU over aviation emissions by year-end

November 11, 2011. Chinese airlines aim to take the European Union to court by the end of the year over its plan to enforce emissions curbs on flights to and from the region’s airports. The EU plan, part of a larger carbon-capping program, will be challenged in a lawsuit to be filed in Germany by airlines and the China Air Transport Association.

Euro crisis slowing solar panel installs, SMA Solar says

November 11, 2011. Europe’s debt crisis will cause global solar-panel demand to fall this year before returning to “moderate growth” in 2012, Germany’s biggest solar-power company by market value said. Installations will be 19 gigawatts to 21 gigawatts, down from a record 23 gigawatts in 2010, SMA Solar Technology AG said after posting third-quarter earnings that beat analysts’ estimates. SMA is the biggest maker of inverters, devices that connect electricity generated by panels to the transmission grid.

Cameron scored ‘own goal’ with solar subsidy cuts, CBI says

November 11, 2011. Prime Minister David Cameron’s government scored an “own goal” by cutting subsidies for solar energy four months earlier than planned, the U.K.’s biggest business lobby group said. John Cridland, director general of the CBI, said executives have lost trust in the administration after the decision on Oct. 31 to reduce the subsidy as much as 55 percent beginning on Dec. 12. Ministers previously said the current rate would be paid until April 2012. The comments are a blow to Cameron’s effort to be the “greenest government ever” by supporting clean energy technology and luring companies to build offshore wind farms and install solar panels. Cridland cited other examples of altered policies, including taxes on North Sea oil and gas and the conversion of the Carbon Reduction Commitment, a program to cut emissions from companies, universities and local authorities, from a revenue- redistributing system into a tax.

Biggest silicon maker slows expansion, cuts Tennessee workers

November 11, 2011. The Hemlock Semiconductor Group, the world’s biggest maker of polysilicon, is delaying plans to expand at a site in Tennessee. Hemlock, based in the Michigan town of the same name, has put off plans to add additional phases at its Clarksville, Tennessee plant because of a lack of demand. The company is cutting a “small percentage” of the 2,500 contractors working at the site. The company will complete the first phase of the project, a $1.2 billion polysilicon manufacturing facility that will be able to produce 10,000 tons of polysilicon a year. Hemlock currently has a plant in Michigan that can make 36,000 tons of the main raw material in solar cells.

Evergreen solar wins approval to sell most of its assets

November 11, 2011. Evergreen Solar Inc. a bankrupt solar-panel maker, won court approval to sell most of its assets, including a sale of its core wafer assets to a Hong Kong-based company. Evergreen will sell its core wafer assets to Hong Kong- based Max Era Properties Ltd. for about $9.2 million, comprised of $6 million in cash and $3.2 million in unrestricted ordinary shares of China Private Equity Investment Holdings Ltd. (CPEH). The core wafer assets consist of intellectual property for Evergreen’s so-called “wide wafer” technology used to produce solar panel cells, and interests in a Chinese joint venture. Three “Gemini patents,” in which the Department of Energy claims to hold rights and aren’t useful to the production of the wide wafer technology, aren’t included.

Democrats ax bill to block US EPA clean air rule

November 11, 2011. Senate Democrats defeated a bill that would have blocked federal environmental regulators from slashing power plant air pollution that blows downwind to other states and causes lung and heart problems. The bill, sponsored by Rand Paul, a Kentucky Republican and Tea Party favorite, needed only a simple majority of 50 to pass. The measure got only 41, while 56 voted against it. Only one Democrat, Joe Manchin from coal-rich West Virginia, voted for it. The measure would have blocked the Cross State Air Pollution Rule the Environmental Protection Agency finalized in July. The rule aims to slash air pollution from coal-fired power plants east of the Rocky Mountains. It would reduce sulfur dioxide emissions by 73 percent by 2014, from 2005 levels, when combined with state environmental laws. It would cut nitrogen oxide emissions by 54 percent by 2014.

S. Korea to build 10.2 trillion won offshore wind farm by 2019

November 11, 2011. South Korean companies plan to spend 10.2 trillion won to build a wind farm off the southwest coast by 2019. The wind farm will have a capacity of 2.5 gigawatts.

U.S. faces shale gas backlash without action: panel

November 10, 2011. A federal energy panel warned that rigorous action must be taken if government and industry hope to prevent major environmental damage and subdue the public backlash against the U.S. shale gas boom. Charged with helping to guide the future of U.S. shale gas development, the Energy Department subcommittee expressed disappointment that more had not been done on the 20 recommendations laid out in August in its initial report on the practice.

Vanadium miners ready, hoping for green tech boom

November 10, 2011. A little-known metal used in steelmaking could emerge as a game-changer for battery technology, raising the prospect of an investment boom like the one that lifted rare earths out of obscurity. Electric cars fueled by vanadium could one day travel hundreds of miles on a six-minute charge, while renewable energy sources like wind and solar could use vanadium batteries to rival coal in terms of reliability. The technology could boost demand for the metal by more than 35 percent in the next two or three years. Vanadium's special attributes have been known for decades. In small quantities it can double the strength of steel, and Henry Ford used it to build his Model T, a car that revolutionized the auto industry.

Phoenix Solar sees some year-end pick-up

November 10, 2011. German solar wholesaler Phoenix Solar sees higher sales and order intake in the current quarter but no marked year-end rally in what its chief executive described as the worst year the industry has seen so far. Customers rushing to buy panels ahead of cuts in subsidies for solar power led to ballooning demand, with installations of 2.3 gigawatts (GW). In the first nine months of 2011, installations stood at about 3.7 GW.

China "concerned" about U.S. solar dumping probe

November 10, 2011. China's Commerce Ministry said it was "greatly concerned" about Washington's investigation into whether Chinese companies are selling solar panels in the United States at unfair discounts. The U.S. Commerce Department said it would investigate whether Chinese companies sell solar panels in the United States at unfair discounts and receive illegal government subsidies. The trade dispute, one of several sensitive economic and trade issues between the United States and China, could lead to steep duties on imports of Chinese panels and help struggling domestic manufacturers. Chinese solar manufacturers, which will be most affected by the petition, include Suntech Power Holdings, Yingli Green Energy Holding and Trina Solar.

China approves plan to cut greenhouse gases 17 pc by 2015

November 10, 2011. China’s State Council approved a plan to reduce the nation’s greenhouse gas emissions in terms of carbon dioxide output per unit of gross domestic product 17 percent by 2015. The plan establishes tasks for local governments to reduce CO2 emissions.

UN urges green companies to help break ‘vicious’ climate cycle

November 10, 2011. United Nations climate chief Christiana Figueres called for more engagement from businesses that promote low-carbon strategies to help governments worldwide speed up the shift to a green economy. Almost 200 nations will meet in Durban, South Africa, from Nov. 28 until Dec. 9 to discuss climate-protection rules for the period after 2012, when the current emission-reduction targets for developed nations under the Kyoto Protocol expire. Ironing out a global agreement is a step-by-step approach, meaning the slow pace of international policy will continue, Figueres said. The UN talks to fix a post-2012 climate agreement, which involve extending emission-reduction goals under the Kyoto accord and creating a new globally binding treaty under the UN Framework Convention on Climate Change, have stalled amid differences between rich and developing nations.

U.S. wind market may ‘fall off a cliff’ in 2013

November 10, 2011. U.S. wind turbine sales may dry up in 2013 unless lawmakers extend tax credits supporting the market beyond the end of next year. The so-called production tax credit, or PTC, provides an incentive of 2.2 cents a kilowatt-hour for electricity from wind applied to operators’ tax bills. In the past, the termination of such policies has shown markets can “disappear”.

Solar glut worsens as supply surge cuts prices 93 pc

November 10, 2011. The cost of solar cells and microchips has nowhere to go but down because of a supply glut for the commodity they’re made from, a brittle charcoal-colored semiconductor baked in ovens at 600 degrees centigrade. Polysilicon has plunged 93 percent to $33 a kilogram from $475 three years ago as the top five producers more than doubled output. The industry next year will produce 28 percent more of the raw material than will be consumed, up from 20 percent this year.

Shell steps up involvement in UK carbon capture

November 9, 2011. Oil and gas major Shell stepped up its involvement in carbon capture and storage (CCS) technology by formalizing its partnership with Britain's SSE to install CCS technology at one of the utility's Scottish gas-fired power plants. The two companies signed a joint development agreement for the Peterhead CCS project, three weeks after the British government scrapped plans to fund a CCS project at Scottish Power's Longannet coal-fired plant.

Vestas scraps long-term targets, plans cost cuts

November 9, 2011. Vestas, the world's biggest wind turbine manufacturer, abandoned its long-term financial goals and pledged to cut costs and jobs as it struggles with weak demand for wind power plants and fierce competition. The Danish company, which confirmed third-quarter losses and a weakened full-year outlook given in a profit warning late last month, jettisoned its 2015 targets. Vestas said it aimed to cut fixed costs by at least 150 million euros ($207 million), with full effect from the end of 2012, to boost efficiency and help offset price increases on some components.

Warming limit risk if no climate action by 2017: IEA

November 9, 2011. The world may not be able to limit global temperature rise to safe levels if new international climate action is not taken by 2017, as so many fossil fuel power plants and factories are being built, the International Energy Agency said. If the world is to limit global warming to 2 degrees Celsius -- thought to be the minimum safety level before devastating effects of climate change set in -- emission volumes must not have more than 450 parts per million (ppm) of carbon dioxide.

Fossil fuel subsidies six times more than renewable energy

November 9, 2011. Fossil-fuel consumers worldwide received about six times more government subsidies than were given to the renewable-energy industry, according to the chief adviser to oil-importing nations. State spending to cut retail prices of gasoline, coal and natural gas rose 36 percent to $409 billion as global energy costs increased. Aid for biofuels, wind power and solar energy, rose 10 percent to $66 billion.

New Zealand proposes slower phase in of emissions trading plan

November 9, 2011. New Zealand is proposing a slower phase-in of its emissions trading plan if the government is re- elected on Nov. 26. Policies need to balance the cost of households and businesses with the need to reduce emissions, so the phase in over 2013 to 2015 will be slower than previously announced. Beyond 2015, Australia will look to align its plan with that adopted by Australia.

Denmark says higher EU carbon goal politically vexed

November 9, 2011. Persuading the European Union as a whole to accept an increase in its target for cutting carbon emissions to 30 percent by 2020 would be politically very difficult, Danish Climate and Energy Minister Martin Lidegaard said. Denmark takes over the rotating EU presidency at the start of next year and is expected to promote a green energy agenda, in contrast to the incumbent Poland which has been viewed as an obstacle to a more ambitious climate agenda.

Chinese solar companies say U.S. duties would threaten industry

November 9, 2011. Chinese solar-equipment makers said tariffs sought by U.S. competitors would make it harder to expand the use of renewable energy. China, the U.S. and other countries are all encouraging use of alternative energy sources, driving costs down across the board, so it would be unfair to penalize China, Richard Weiner, an attorney for the Chinese Chamber of Commerce for Import and Export of Machinery and Electronic Products, told investigators with the U.S. International Trade Commission in Washington.

Brazil may establish state-owned renewable-energy company

November 9, 2011. Brazilian lawmakers may propose a government-owned company to develop renewable-energy projects that have been sidelined by investors because of their high costs. The company may initially focus on solar projects and small ethanol plants, with daily output of as much as 10,000 liters (2,600 gallons). Renewable energy is popular in Brazil although investors have steered clear of more expensive technologies such as solar power. The nation gets more than two-thirds of its electricity from large dams and wind farms are spreading quickly.

European Investment Bank may raise cost of clean energy loans

November 9, 2011. The European Investment Bank may raise the price of loans to renewable energy projects to bolster capital as demand for funds rises. The bank, which loaned a record 19 billion euros ($25.8 billion) to climate-related projects, continues to offer a “significant funding advantage” to borrowers, especially for project financing. The European debt crisis made it harder for banks to raise money and squeezed their lending capacity. State-backed lenders almost by default increase funding for renewable energy activities when banking sector problems constrain private-sector lending.

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