Energy News Monitor |Volume IV, Issue 23

Inefficient Electricity Industry and Global Warming

Shankar Sharma, Consultant to Electricity Industry

 

1. Preface:

Since the release of 4th Assessment Report (AR4 Synthesis Report) released on 17th Nov. 2007, there are probably no serious deniers of the concept of Global Warming & Climate Change. While some skepticism is still being heard from some quarters, generally there is widespread acceptance of the causes and consequences of Global Warming & Climate Change.  Most importantly, most of the provincial and Union governments seem to have accepted the harsh realities of Global Warming & Climate Change.  Union govt. has even mentioned that the reduction of GHG emissions will be a priority task. 

However, there will always be a considerable gap between such an assurance from the govt. and its effective implementation. Since the issue of Global Warming & Climate Change concerns the entire world, at present and in the future, the civil society has to take the initiative of mitigating the impacts, without having to relying entirely on the govt.  IPCC / ORF had sought feedback from the public on various measures to mitigate the impact of Global Warming as apart of IPCC Outreach Activity on WG III Fourth Assessment Report, Mumbai, on 9th October 2007.  The efforts by IPCC / ORF to seek the feedback from the public are very laudable objectives.

In this feedback only the issues relevant largely to the electricity industry are considered.  In view of the fact that about 21% of all GHG emissions and about 40% of all CO2 emissions are known to be coming from the activities associated with electric power generation alone, adequate emphasis on this industry goes a long way in mitigating the impact of Global Warming & Climate Change.

2. Inefficiency in Indian electricity industry:

2.1 The high level of inefficiency prevailing in various aspects of the electricity industry in India is a major contributor to the present level of GHG emissions, even though India’s per capita GHG emissions is considered to be one of the lowest in the world. But it should be noted that there is a huge potential for phenomenal increase in such GHG emissions because of the hugely projected increase in population growth and largely unmet demand for electricity even at the present level of population.

In this regard the Union government’s stand that due to low per capita GHG emissions, the country should not be expected to spend considerable sum in reducing such emissions does not carry enough conviction. 

Since there is huge scope for improvement in the efficiency and decrease in the GHG emissions, our country should set itself a stiff target.

2.2 The civil society should do all that is possible to convince the government that the containment of GHG emissions to the lowest level possible, keeping in view the sustainable development activities of all sections of our society, is in the overall interest of our own people.  Whereas the per capita emission of GHGs can be a useful indicator in international negotiations, it is the total GHG emission which is important from the Global Warming perspective.

Even if India’s per capita emissions remains below the world average in next few decades, its total GHG emission can be still a major contributor to Global Warming. As a matter of fact International Energy Agency (IEA) has projected that India could be the third largest emitter of GHGs by 2015 after China and USA if the present trend continues. In addition, being a tropical country India also has the high risk from the impact of Global Warming. 

Besides, the high level of GHG emissions in the country will also have local impact on its own environment first, before it affects other parts of the world. Hence it becomes critical that the country, as a responsible member of the international community, must do all that is possible to minimize the GHG emission to the minimum levels possible within its constraints, without giving too much credence to the argument of per capita emission. 

There will be no possibility to reduce the total GHG emission at the Global level, if each of the developing countries attempts to match even half of the per capita electricity consumption as reported from USA.

2.3 The major areas where the electricity industry in India is exhibiting much lower level of inefficiencies, because of which the GHG emissions are high, as compared to the international best practices are:

• Low Plant Load Factor (PLF) of the order of about 60% at the National level (as low as 25% in some cases) in the operation of the older and smaller size coal based power plants; this PLF is in stark contrast of more than 90% in some of the modern power stations of NTPC;

• Aggregate Technical & Commercial loss of about 40% against less than 10% elsewhere;

• Utilisation loss in applications of about 15%;

Additionally there is huge scope to reduce the very demand for electricity by means of Demand Side Management & Energy conservation, which is of the order of about 15% and which are also techno-economically feasible.

2.4 Due to these inefficiencies more power generating plants, especially fossil fuel based, are being planned & commissioned than those which may really be necessary. There are techno-economically viable measures, which can improve such efficiencies to international best practice levels. As per the prevailing wisdom / experience these measures are expected to cost only about 25% of the cost of establishing new generating capacity.

2.5 In addition, the widespread use of non-conventional energy sources like solar, wind, bio-mass, wave energy etc. can reduce the current and future demand for grid quality electricity through large fossil fuel based or dam based power plants by a considerable margin. These measures will be able to reduce the need for fossil fuel burning and submergence of forests and vegetation in the form of large size electric power generation projects.  They will also assist in preserving certain natural resources like fertile land and water.

2.6 In summary, it can be said that about 50 to 60% more virtual capacity addition (than what is available now) is possible through various efficiency improvement measures, which is expected to obviate the need for new generating capacity of about 60,000 to 70,000 MW in the next few years.  These measures will reduce the GHG emissions not only from the existing coal power plants, but will also reduce the total GHG emissions in the future.

2.7 These measures will also have huge positive impact on economic, social and general environmental aspects of the society. While providing clear economic benefits, these measures will also result in reduced need for land acquisition, displacement of Project Affected Families, fresh water and other natural resources. At a conservatively estimated cost of new generation capacity of Rs. 4 to 5 Crores per MW the savings to the national economy could be more than Rs. 250,000 Crores in today’s prices.  If we also take the economic benefits associated with the carbon credits, which can be earned through these measures under CDM regime, the overall benefit to the nation will be huge.

2.8 Keeping these multiple societal benefits in mind there cannot be any reason why the governments should not like to invest adequately in these measures. Hence there is an urgent need for the civil society to persuade the state and central governments to put huge emphasis on efficiency improvement measures and the effective deployment of distributed renwable energy sources.

to be continued..

Shankar Sharma, Consultant to Electricity Industry

Thirthahally, Karnataka - 577 432

 

Note: Analysis article “Pricing of Natural Gas: Lessons from History” (part XI) will be published in the next issue.

 

China's Quest for Energy

Heinrich Kreft, Senior Foreign Policy Advisor, CDU/CSU Parliamentary Group in the German Bundestag

 

China's journey in just 25 years from the periphery to the center of the world economy is truly phenomenal. It took both Britain and the United States far longer to achieve the share of global output and trade that China has today.

 

China's huge appetite for energy and resources--it is the world's No. 1 consumer of coal, steel, and copper and as an oil and electricity consumer is second only to the U.S.--has contributed to the soaring of prices on global oil and commodity markets. At the same time, cheap Chinese goods of high and ever higher quality are flooding world markets and endangering jobs both in industrialized countries in the North and developing countries in the South. China features increasingly often on the agenda of U.S. congressional hearings and is an issue for politicians in European capitals as well as those of many developing countries. The Chinese challenge is of global dimensions. When Japan aspired in the late 1980s to take over from the U.S. as the world's leading economic player, Washington and Brussels lost no time in responding. The fact is, however, that China's growing economic and political clout poses a far greater challenge to the international status quo than Japan's ambitions, which by the early nineties had suffered a severe setback. The rise of China has a global impact in a host of different ways and requires in-depth analysis. The purpose of this article is to examine how China is attempting--notably through an "energy-driven foreign policy"--to secure the fuel supplies it needs and to reflect on the implications this may have for the international community as a whole.

 

Growing demand for energy

 

In terms of energy consumption, the People's Republic of China is now second only to the United States. Its growing appetite for energy is the product of the country's 25-year-long economic boom, which has seen expanding external trade, rising incomes, a growing population, and increasing urbanization. Demand for energy has soared across the whole spectrum--coal, oil, gas, electricity, hydropower, and other renewables, as well as nuclear power. Thanks to its own vast reserves, coal is currently China's No. I fuel and supplies two-thirds of its energy needs. The rapid pace of economic growth has led to spiraling demand, however, for oil in particular. Following the government's decision to expand natural gas production, gas is likely in future to play a larger role in meeting the country's energy needs. With dependence on fuel imports clearly set to increase, the government is making strenuous efforts to enhance security of supply. Beijing's biggest worry at present is the security of oil supplies. Until recently China was self-sufficient in oil and into the early nineties even exported limited quantities. The country first started importing oil in 1993, and since then imports have risen steeply. Since the mid-sixties China has been Asia's largest oil producer, producing in recent years some 3.5 million barrels per day (BPD). Despite the expansion of production, demand has continually outstripped supply. From 1984 to 1995 demand leaped from 1.7 million to 3.4 million BPD, and by 2005 it had doubled again to 6.8 million BPD. China overtook Japan as the world's second largest oil consumer in 2003 and is now the third largest oil importer after the United States and Japan. Today China imports over 40 percent of its oil supplies.

 

In response to this situation, China's leaders have launched an all-out program of domestic reform as well as a global import security strategy. Their aim is to keep production going on the traditional oilfields in the northeastern part of the country while at the same time expanding production in western China (a "stabilize-the-East, develop-the-West policy"). High priority is being given to developing offshore oil fields in both the South China and East China Seas, although results so far have been unimpressive. The country's own oil industry has been repeatedly restructured to make it more competitive and efficient as well as to allow a greater measure of price regulation through the market. As all observers agree, however, these measures are unlikely to result in any significant increase in oil production in the near future, while the rise in demand for oil and oil imports is set to continue unchecked. The International Energy Agency (IEA) forecasts a fivefold increase in China's oil imports, from around 2 million BPD in 2002 to almost 11 million BPD by 2030. This would mean China would have to import some 80 percent of its oil supplies.

 

 (1) That its dependence on oil imports is unavoidable and will become even greater over the years ahead is a fact China's leaders are already having to face.

(2) Like its Asian neighbors, China also relies heavily on oil imports from the Persian Gulf. By 2015 it will be importing some 70 percent of its oil from the Middle East, with the rest being supplied by pipeline, rail or tanker from Russia, Central Asia, Africa, and possibly from Latin America, too, in limited quantities.

 

In recent years, China's demand for electricity has soared as well. Its huge coal reserves are the mainstay of its power industry, and the country is the world's leading coal producer and consumer. Coal supplies two-thirds of its total energy needs and fuels 80 percent of its electric power generation. On present estimates, coal consumption is set to double between 2001 and 2025, a trend likely to cause enormous problems for health and the environment and make China responsible for one-quarter of the world's C[O.sub.2] gas emissions. Although small amounts of coal are currently being exported, China could--despite its vast reserves--be importing coal by 2015.

 

Soaring demand for electricity is also fueling ambitious plans to expand the nuclear power industry. Over the next two decades China is aiming to commission two new nuclear power plants each year. New hydropower capacity is to be developed and the use of other renewables (primarily solar and wind energy) expanded, although these are not expected to play a major role in meeting the country's electricity needs. The goal announced at last November's energy conference in Beijing--to raise the share of renewables in power generation to 10 percent by 2010 and as much as 15 percent by 2015--is probably too ambitious.

 

China is largely self-sufficient in gas, although its 3 percent share of the country's energy mix is extremely modest by international standards. The government is keen to see the share of gas-fueled generation increase at the expense of coal, with gas meeting 8-10 percent of the country's energy needs by 2020. It is investing heavily in gas exploration as well as new pipelines to bring the gas from the north and west of the country to the cities of the south and along the east coast and to supply private households and industry in these boom regions. Work was recently completed on a 4,000-km pipeline to transport gas from Xinjiang in the west to Shanghai. While the contribution of gas to meeting China's energy needs is important, especially from an environmental standpoint, and gas therefore plays a crucial role in national energy policy, this also serves to enhance its dependence on imported fuel. From 2010 onwards domestic gas production will no longer suffice to meet China's needs. It will begin importing liquefied natural gas (LNG) in 2007 as soon as its first LNG terminal in Guangdong Province has been completed. A whole series of terminals along the coast is due to follow. By 2025 gas imports are expected to account for 40 percent of China's total consumption. The bulk of its LNG imports are likely to come from within the Asia-Pacific region--Australia, Indonesia, Malaysia, Brunei, and East Timor--but some may also be shipped from Persian Gulf countries such as Qatar, Iran, Oman, and possibly Yemen as well. There is a high probability, too, that China will import natural gas from eastern Siberia, where Russia is planning to build a major pipeline network.

 

This all points to one conclusion: Despite China's systematic efforts to expand domestic fuel production, the trend towards increasing dependence on fuel imports is irreversible. While this dependence is most marked in the case of oil, dependence on gas imports, too, is set to increase steeply over the years ahead. This dependence, coupled with rising demand for electricity, may cause China to make policy choices that have major environmental and security implications and could also compromise nuclear nonproliferation.

(1) International Energy Agency, World Energy Outlook, 2004, OECD, Paris.

(2) Inside China this is the subject of a surprisingly broad and lively debate. See, for example, Erica S. Downs, "The Chinese Energy Security Debate," China Quarterly 177 (March 2004).

to be continued..

 

NEWS BRIEF

OIL & GAS

India, Russia to strengthen ties in hydrocarbon sector

November 27, 2007. National oil companies of the two countries will identify mutually beneficial projects in E&P, Refinery, Petrochemicals, Gas Processing and LNG. India and Russia have discussed various avenues of co-operation in the hydrocarbon sector. The emphasis is on the mutually beneficial projects in upstream, mid-stream and downstream sectors in India, Russia and other countries. Indian exports of refined petroleum products to some of the world's most sophisticated markets have touched US$40bn. The growing oil refinery sector in India also offers immense opportunities for the Russian companies to participate.

GGS-Spectrum kicks-off data processing project in India

November 26, 2007. GGS-Spectrum has been awarded a five-month contract by SeaBird Exploration and Oil and National Gas Corporation of India (ONGC) for on-board seismic data processing offshore the west coast of India. The on-board project is the first of its kind for GGS-Spectrum, and expected to finish in early spring 2008. The project involves the pre-processing of approximately 13, 500line km of long offset 2D survey data on board Seabird's Munin Explorer vessel. Sub-basalt reflections are typical of west coast offshore India making seismic acquisition and processing particularly challenging. GGS-Spectrum's expertise using multiple attenuation techniques, pre stack time migration and pre-stack depth migration means only the highest quality data set will result.

Hydrocarbon sector to fuel tie-ups with Turkmenistan

November 26, 2007. Petroleum minister Murli Deora met Baimurat Muradov, head of state agency for hydrocarbon resources, Turkmenistan and agreed upon a roadmap to take forward cooperation between the two sides in various activities in the hydrocarbon sector. The visiting Indian delegation was briefed about the Turkmen strategy to fulfill the commitments for gas export and oil production. The three directions in which the Indo-Turkmen energy co-operation can proceed include Production Sharing Agreement (PSA) in the off-shore Caspian Shelf for Oil and Gas blocks, service contracts for Indian Companies in the on-shore Hydrocarbon facilities as on-shore PSA is not allowed in Turkmenistan and Turkmenistan-Afghanistan-Pakistan-India gas pipeline project on which the 10th steering committee meeting will be held in Islamabad by end 2007. Turkmenistan invited the Indian side to participate and work in all these three spheres. It assured of full co-operation in completing the formalities for applying for PSAs in the Caspian sector. In on-shore facilities the Indian Companies should sign service contracts by participating in tenders. Turkmenistan is interested in Indian participation owing to India’s known expertise in these sectors.

RIL inks pact for two exploration blocks in Yemen

November 21, 2007. Reliance Exploration and Production (REP) DMDC, the subsidiary of RIL, has signed the Production sharing Agreement (PSA) for two Exploration Blocks in Yemen. The exploration block numbered 34 and 37 are located in Jeza basin of eastern Yemen. The exploration block numbered 34 and 37 are located in Jeza basin of eastern Yemen. The work program consists of conducting seismic survey and drilling of exploratory wells based on comprehensive geological and geophysical studies. In both the blocks Hood Energy has 30% participating interest with the balance held by RIL. RIL is present in Yemen since 2001 when it was allocated block no 9, where substantial reserves of hydrocarbon have been established and one of the discovery has been put on early production. In this block exploration is also continuing with a number of identified hydrocarbon prospects. RIL and Hood Energy hold 25% each in this block and Calvalley Petroleum Inc. with 50% are the partners in this Joint Venture.

Indian Oil talks on Turkey refinery inconclusive

November 27, 2007. Caught unaware in the midst of aggressive oil diplomacy between Turkey and its neighbouring countries Azerbaijan and Kazakhstan, the fate of Indian Oil’s plan to set up a 15 mt refinery in Turkey is hanging in the balance. The company’s recent effort to form a single consortium involving the national oil companies of Azerbaijan and Kazakhstan and Calik Holding and Turcas of Turkey has so far failed to reach any conclusion. All the companies had joined a meeting on November 23 to explore the possibilities to stop competing with each other (for setting up the refinery) and form a single consortium instead. The meeting ended inconclusively. Cross-country pipeline projects are opening up new opportunities for transportation of oil from the hydrocarbon rich land-locked CIS countries (such as Kazakhstan and Azerbaijan) to the Mediterranean. Later, KazMunayGas (KMG) the state oil company of Kazakhstan and ENI of Italy expressed interest to join the Indian Oil-led consortium.

SC refuses to stay notification on pooling of LNG prices

November 27, 2007. The Supreme Court has refused to stay a central government directive to Petronet LNG to pool LNG gas prices and charge uniformly from all existing and new customers so as to keep the fuel price for the Dabhol power project low. The nine petitioners, including Gujarat State Petroleum Corporation (GSPC), Gujarat State Fertiliser Corporation, Gujarat State Electricity Corp, Essar Power and Welspun India, have challenged the Gujarat High Court order dated October 17 that refused to stay the Petroleum Ministry's notification raising liquefied natural gas (LNG) prices. The notification had directed Petronet LNG Ltd, Indian Oil Corporation (IOC), GAIL and Bharat Petroleum Corporation (BPCL) to charge uniform prices from existing and new consumers. A bench headed by Justice Ashok Bhan, while refusing to stay the ministry's communication, issued notice to the Ministry of Petroleum, Petronet LNG, GAIL, IOC, BPCL, Ratnagiri Gas and Power Pvt Ltd, the Maharashtra government and Maharashtra State Electricity Distribution Company. It also tagged the matter with another similar batch of petitions filed by Petronet LNG, Indian Oil, Bharat Petroleum and the Centre and posted the matter for final hearing in January. Earlier, the apex court in August had vacated a stay granted by Gujarat High Court on a central government directive to raise prices of LNG. According to the petitioners, the action of the Centre amounted to giving subsidy to new customers at the cost of old customers who had contractual rights in their favour. 

Chevron may sell RPL stake

November 27, 2007. Chevron Corporation may pull out of Reliance Petroleum (RPL) by selling its 5 per cent equity to Reliance Industries. This follows Reliance Industries’ divestment of 4 per cent stake last week in RPL for over Rs 4,023 crore ($1 bn). Reliance Industries’ stake in RPL now stands at 71 per cent. Chevron bought 5 per cent in RPL at Rs 60 a share one-and-a-half year ago before RPL’s Rs 2,700-crore ($678.7 mn) public issue.  The US energy giant has the option to raise its stake to 29 per cent either three months after the RPL project is commissioned or three years from the date the agreement was signed, whichever is later. The agreement between the two was signed in April 2006.  RPL is setting up a refinery of 580,000 barrels per day at Jamnagar in Gujarat. Chevron is not keen to increase its stake in RPL at the current market price, which will cost it nearly Rs 22,000 crore ($5.5 bn).

HPCL to expand Vizag unit

November 27, 2007. Hindustan Petroleum Corp Ltd plans to invest $2.5 bn in expanding its Visakhapatnam refinery capacity to 16 mt. HPCL will increase the output to 10 million tonnes from the current 7.5 mt by the end of the 11^th plan in 2012. The company would then raise the capacity to 16 mt by the end of the 12^th plan in 2017.

High margins to keep refining story going

November 26, 2007. Refining capacity set to rise 75% as Indian refineries develop technology to process low grade crude. The refining capacity in the country is set to rise by 75 per cent over the next five years from 149 mtpa to about 260 mtpa. The average margins of refineries in the country are expected to remain high at $6-7 per barrel over the next five years. This will be at least around $2 per barrel higher than the benchmark Singapore refinery margins over the period. Average refinery margins in the country are $7-8 per barrel.

RIL, Essar refining hub to be world's largest

November 25, 2007. Reliance Industries and Essar Oil, India’s largest private sector oil refiners are set to create the world’s biggest petroleum refining hub as part of plans to expand their plants in Jamnagar, Gujarat.  Essar has announced a $6 bn expansion plan to more than triple capacity at its refinery, while Reliance, at its site a few kilometres away, is working on plans to almost double capacity. The expansion projects will bring their combined refining capacity at Jamnagar to 1.9 mn barrels a day (mbd), the largest in the world in a single location, outstripping hubs such as Rotterdam and Singapore and those in China and South Korea, according to figures compiled by Fesharaki Associates Consulting and Technical Services, Singapore. The plants at Jamnagar will mostly handle crude imported from the Middle East for refining and re-export, underlining India’s growing role as an off-shoring hub not only for computer services but also for more traditional industries. Essar announced it was lifting capacity at its plant to 700,000 barrel a day by 2010 from 220,000 barrel a day. Reliance is in the middle of a $6bn investment to expand capacity to 1.24 mbd from 660,000 mbd by next year. Once the expansion works are complete, the nearest comparable hub will be South Korea’s Ulsan at 1.35 mbd.

Indian Oil plans for pipeline expansion

November 27, 2007. The company mulls to invest Rs11.78bn in the 11mn tons Paradip-Haldia crude oil pipeline and Rs2.24bn in the 2mn tons Koyali-Ratlam pipeline for transport of petroleum products. Indian Oil Corp (IOC) plans to invest around Rs14.8bn on expansion of pipelines carrying crude oil and petroleum products. IOC plans to increase pipeline capacity from 61.71mn tons to 75.48nm tons by March 31, 2008. The company mulls to invest Rs11.78bn in the 11mn tons Paradip-Haldia crude oil pipeline and Rs2.24bn in the 2mn tons Koyali-Ratlam pipeline for transport of petroleum products. It will invest another Rs485.8mn in aviation turbine fuel (ATF) pipeline from Chennai refinery to Air ForceStation in Chennai city and Rs286.1mn in augmentation of Bongaingaon-Siliguri section of the Guwahati-Siliguri pipeline.

October crude oil imports down 1.4 pc yoy

November 27, 2007. Crude imports by private refiners were down 22.8% at 2.63 mt mainly due to 17.5% less processing at Reliance Industries’ refinery at Jamnagar. India's crude oil imports were down 1.4% last month from a year earlier as a crude unit of Reliance Industries' Jamnagar refinery was shut for maintenance, while domestic product sales grew 9.9%. Asia's third-largest oil consuming nation imported nearly 9.79 mt crude oil in October as against 9.92 mt in the same month a year ago. Crude imports by private refiners during the month were down 22.8% at 2.63 mt, mainly due to 17.5% less processing at Reliance Industries' 660,000 bpd refinery at Jamnagar.

GAIL wins right to market PMT gas

November 27, 2007. GAIL India has won the rights to market the gas jointly produced by Reliance Industries, British Gas and ONGC from the Panna-Mukta-Tapti (PMT) fields, a move that will boost revenues of the company by over Rs 5,000 crore. The oil ministry, after three meetings with GAIL and the PMT consortium, decided to nominate for life the state-run firm to market the gas. GAIL currently delivers about 5 mmscmd of gas from the fields lying in western offshore and is not entitled to marketing margin. The government has now allowed the company to charge a marketing margin of $0.12 per mBtu on the entire output of about 17 mmscmd from April 2008. Since 2006-07, GAIL gets about 5 mmscmd of PMT gas at $4.75 per mBtu. Reliance-BG-ONGC sold 4.8 mmscmd at $3.96 per mBtu (some of it to themselves) and another 6.5 mmscmd at rates ranging from $4.6 -5.7 per mBtu. GAIL will get the entire PMT output at $5.7 per mBtu, a move that will also boost revenues of BG Group of UK, Reliance and ONGC. For GAIL, the market margin would fetch a net income of about Rs 112 crore and transportation tariff would add another Rs 450 crore annually.

Crude shock for aviation in India

November 27, 2007. The hike in crude oil prices by 10 per cent could add close to Rs 790 crore of additional losses on an annual basis for the domestic aviation industry, which in 2006 suffered losses of around Rs 1,975 crore.  While the situation of the industry has been grim for a while, industry sources confirm that some of the lowest buckets of fares after the consolidation in the sector have now disappeared and that eventually but not before the middle of 2008 things may turn into a corner. What is irking the domestic industry even more is that though the crude prices have risen for airlines globally, local taxes and levies make it particularly difficult for them.  In fact, the international aviation industry is expected to rake in higher than expected profits in 2007, with IATA recently revising its forecast for 2007 upward from an industry profit of Rs 20,160 crore ($5.1 bn) to Rs 22,136 crore ($5.6 bn). According to data compiled by the US department of transportation, a group of 21 selected passenger airlines in the US reported a system operating profit margin of 8.8 per cent in the second quarter of 2007, the highest profit margin since 2000 and the first time since 2000 that airlines have had five consecutive profitable quarters. 

Videocon joins race for UK oil company

November 24, 2007. Videocon Industries, the oil-to-consumer durables company, has joined the race for the acquisition of the London-based Burren Energy, which recently rejected several approaches including one worth $3.5 bn (Rs 14,000 crore) from the Italian major ENI. Videocon has submitted an expression of interest for Burren, which produces oil in Congo and Turkmenistan. Analysts believe Burren could be worth around £14 a share. This means the successful acquisition would cost the buyer around $4 bn (Rs 16,000 crore). Videocon would face stiff competition from the likes of steel magnate LN Mittal and Korea National Oil Corporation, which have also reportedly shown interest in Burren.

115 CNG stations have been set up in various states

November 23, 2007. The expansion of CNG infrastructure in different cities in the country is being taken up in a phased manner. The Minister of State for Petroleum and Natural Gas Dinsha Patel informed the Lok  Sabha in a written reply that  115 CNG Filling Stations have been set up in various States during last three years from 2005-06.  This has taken total CNG stations to 373.  The state-wise details are as under:

Name of the State	CNG station opened during the last three years	Total CNG outlets
Delhi	18	153
Maharashtra	22	127
Andhra Pradesh	9	9
Uttar Pradesh	12	12
Tripura	1	1
Gujarat	53	71
Total	115	373

The expansion of CNG infrastructure in different cities in the country is being taken up in a phased manner. In order to promote investment from public as well as private sector for laying trunk natural gas pipelines and city/local natural gas distribution networks throughout the country, the Government of India has enacted, The Petroleum and Natural Gas Regulatory Board Act, 2006 and notified the ‘Policy for Development of Natural Gas Pipelines and City or Local Natural Gas Distribution Networks. Providing of CNG facilities depends upon availability of gas, setting up of necessary infrastructure and economic viability.

French oil firm explores new avenues in India

November 23, 2007. French oil company Total is exploring various marketing avenues in India including aviation, industry fuels and retail service stations segments as part of its growth strategy to enhance its presence in the country, particular in the south.  Besides, it also wants to grow its LPG business by 50 per cent in another five years.  Total, the world’s fourth-largest integrated listed oil and gas company, has operations in over 130 countries and engages in upstream and downstream operations, marketing and trading and produces base chemicals and speciality chemicals. 

Elf Gas starts sixth LPG storage sphere

Nov 21, 2007. Elf Gas India Limited (EGIL), a fully owned subsidiary of Total, announced the commissioning of its 6^th storage sphere at its importation, storage and bottling facility at Mangalore. The new sphere, with a storage capacity of 1400 mt of LPG, was inaugurated by Christian Chammas, Country Chairman for Total Refining and Marketing Group of Companies in India and was also attended by senior executives from Total, EGIL and various Government and statutory bodies associated with the company's operations. With the commissioning of this storage sphere, and the existing 5 spheres that are currently in operation, EGIL has a combined LPG storage capacity of 8400 mt at its Mangalore facility and also has a LPG bottling plant with a capacity to handle 25,000 mt of LPG per annum through cylinders. This investment, in line with Total's development strategy in India, will help the company serve its customers more effectively.

Mileage rally to promote better fuel use

November 27, 2007. The Petroleum Conservation Research Association (PCRA) under the Ministry of Petroleum and Natural Gas is organising a car rally to promote fuel efficiency and emission control. The PCRA in association with Western India Automobile Association (WIAA) is organising a car mileage rally on December 2 in Mumbai. Unlike the speed rallies, drivers who clock maximum kilometres per litre will be honoured. The Petroleum Minister, Mr Murli Deora will flag off the 65 km rally. It is open for petrol vehicles in three categories viz. cars up to 1100 cc, between 1300 and 1600 cc and above 1601cc.

India may get preference in Turkmenistan oil blocks

November 27, 2007. Turkmenistan has offered a preferential treatment to Indian oil companies, close on the heels of ONGC-Mittal Energy (OMEL) acquiring 30% stake in Blocks 11 & 12 in the Turkmen sector of Caspian Sea. In a recent meeting with petroleum minister Murli Deora, Turkmenistan’s head of state agency for hydrocarbon resources Baimurat Muradov outlined the three directions in which the Indo-Turkmen energy cooperation can proceed. These include production-sharing agreements (PSA) in the offshore Caspian Shelf for oil & gas blocks, service contracts for Indian companies in the onshore hydrocarbon facilities (as onshore PSA is not allowed in Turkmenistan) and the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline project.

The 10th steering committee meeting of Tapi is scheduled to be held in Islamabad by the year-end. India would require 250 mcm of natural gas per day by next year and Turkmenistan can be an ideal partner in this context. Delegations from Indian companies, namely ONGC, Gail and IOC, and a senior oil ministry official would visit Turkmenistan in the near future to apprise the Turkmen side about the potential and expertise of Indian side and prospects of co-operation. This would be followed by an MoU to be signed during the 2nd JWG meeting on energy in the first quarter of 2008.

Mounting oil bill to slow rupee rise

November 26, 2007. Record crude prices of close to $100 a barrel are inflating India’s current account deficit and will drag on the rupee, but won’t be enough to turn the currency lower in the face of strong investment inflows. The Indian crude basket the mix of imported crude has risen 15.5% since March and the government expects the oil bill to go up sharply this year, feeding into the current account deficit and creating a potential headwind for the rupee. The Economy, which grew 9.4% last fiscal year, is attracting enough foreign portfolio and direct investment to cover the current account shortfall, even if there is an economic slowdown in the US. The weakness in the US Economy will, on the contrary, lead to some of the flows coming into the growing Indian Economy once some of the turbulence is settled, because investors need to find avenues for better returns. India is relatively less dependant on global growth, compared with other economies in the region. The rupee has gained about 12% against the dollar so far this year making it Asia’s best-performing currency after the peso, fuelled by a wave of capital coming into Asia’s third-largest Economy.

Panna-Mukta sale contracts under lens

November 26, 2007. The gas sales contracts signed by the joint venture partners of the Panna-Mukta and Tapti (PMT) fields, including Reliance Industries, British Gas and ONGC, have come under the scanner of the petroleum ministry for violation of the production sharing contract (PSC) norms. As part of its discussions with the JV partners, the petroleum ministry had, in March 2006, allowed a direct sale of 5.6 mmscmd of PMT gas to consumers for a period of 2 years (up to March 2008). This was of the total gas availability of 10.6 mmscmd with the PMT JV partners in 2006. Another 4.8 mmscmd (of the 10.6 mmscmd) was given to the state-owned GAIL (India) Limited, with a direction that any further available gas will also be given to GAIL. However, a recent review by the ministry has revealed that while supplies to GAIL remained constant, the supply of PMT JV to its direct customers have risen to about 11 mmscmd, of the present total supply of around 17 mmscmd. The review further revealed that against the contract period, specified by the petroleum ministry (March 2008), the PMT JV partners have actually committed gas supplies to consumers under direct sales till 2019.

Deora urges Russians to explore India’s refining sector

November 26, 2007. Petroleum minister Murli Deora has invited Russian oil Companies to participate in the growing refining sector in India. Underlining that the country’s refined petroleum products exports to some of the world’s most sophisticated Markets have touched $40 bn. Both sides discussed various avenues of cooperation between the two countries. The emphasis was on the mutually beneficial projects in upstream, mid-stream and down stream sectors in India, Russia and third countries between the Companies of the two countries in the hydrocarbon sector.

Deora to pitch for OVL in Sakhalin III

November 23, 2007. Petroleum Minister Murli Deora will pitch for ONGC Videsh Ltd (OVL) getting a stake in the giant Sakhalin-III oil and gas project in far-east Russia when he visits Moscow next week. With ONGC Videsh Ltd's 20 per cent stake in Sakhalin-I fields fetching the nation 2.4 mtpa of crude, Deora will use his visit to Moscow to push for OVL's participation in the Sakhalin-III fields.

Sakhalin-I and II projects have already been decided and Russia is planning to invite bids in future for Sakhalin-III, IV, V and VI projects in the vast energy-rich region. OVL, the overseas arm of state-run Oil and Natural Gas Corp, owns 20 per cent stake in the Exxon Mobil-operated Sakhalin-I project. Texas, US-based Exxon Mobil Corp owns 30 per cent in Sakhalin-I fields that produce 250,000 barrels of oil per day. SODECO of Japan owns 30 per cent and Russia's Rosneft has 20 per cent. New Delhi wants OVL and Rosneft to jointly bid for the Sakhalin-III project.

ONGC approves redevelopment of Mumbai high south

November 22, 2007. Work’s cost estimated as Rs57.13 bn with completion schedule of 31.5 months from the date of approval. According to Minister of State for Petroleum and Natural Gas Shri Dinsha Patel, ONGC Board has approved the second phase of the redevelopment of Mumbai High South on October 3, 2007. Work’s cost estimated as Rs 57.13 bn with completion schedule of 31.5 months from the date of approval. The project envisages an incremental gain of 20.7 mmt of oil and 3.32 bcm of gas by the year 2030.

Pass burden of oil prices on customers: Montek

November 22, 2007. According to the Planning Commission (PC) the burden of rising oil prices in the international market will have to be passed on to customers without compromising the interests of the underprivileged. According to Commission's Deputy Chairman Montek Singh Ahluwalia the only sustainable policy is that while ensuring the needs of the poor, the burden of high oil prices should be passed on to the consumers. His comments assume significance in view of international crude prices nearing 100 dollar per barrel. The interest of the poor can be protected by providing targeted subsidy, and that increased energy cost would have to be shared by the consumers as the burden is currently being largely borne by public sector oil Companies. Prime Minister Manmohan Singh too had voiced concern over rising oil and food subsidy bill that is likely to cross Rs 1,00,000 crore during the current financial year.

POWER

Kulda coal project set to open in December

November 26, 2007. Mahanadi Coalfields Ltd (MCL) is set to start the operations at the Kulda open cast mine at Belpahad, under the IB valley coalfield, with an annual production capacity of ten mt of coal from December 1. The open cast mine along with Bhubaneswar and Kaniha deposits of MCL had received approval of the Union cabinet for starting operations in January 2005.  There was a minor delay in opening up the mine. The total estimated cost of the project with F grade coal reserve is slated to be Rs 303 crore.

NTPC to invest $1.4 bn in Mauda power project

November 26, 2007. State-run power utility NTPC said it will invest Rs 5,459.28 crore ($1.37 bn) in Mauda Thermal Power Project (2x500 MW) in Maharashtra. The firm would also undertake the renovation and modernisation works at Kawas Gas Power Station (645 MW) in Gujarat at an estimated cost of Rs 597.49 crore ($150  mn).

Reliance power in talks to raise debt for Sasan project

November 26, 2007. Reliance Power, a subsidiary of Reliance Energy, is in talks with banks and institutions to raise debt to the tune of over Rs 14,000 crore ($3.5 bn) to fund the Sasan Ultra Mega Power Project (UMPP) in Madhya Pradesh. The company, according to institutional sources, is eyeing a debt-equity ratio of up to 90:10 for the Rs 16,000-crore ($4 bn) pit-head based project, as against the normative 70:30 debt-equity ratio prescribed for power generation projects.

NTPC's project in Sri Lanka may begin early next year

26 Nov, 2007. The $500 mn thermal power project of Indian power behemoth NTPC Ltd at Trincomalee in Sri Lanka is expected to begin early next year. The work on the 500 MW project is expected to begin early next year and the site for the project will be decided at the earliest. The $500 mn power would to be implemented by a 50:50 joint venture company to be formed by NTPC and Ceylon Electricity Board (CEB). It would be set up on a build, operate, own and transfer basis and would have a debt to equity ratio of 70:30. NTPC and CEB had signed an agreement for this purpose in December 2006.

NTPC to set up 2,000 MW unit in Lalitpur

November 23, 2007. The National Thermal Power Corporation (NTPC) is likely to set up another thermal plant of over 2,000 MW at Lalitpur district in the Bundelkhand region. This thermal power project would be set up in Lalitpur. It is yet to be decided whether the Lalitpur project will be a joint venture with the UP government or the NTPC would implement on its own. 

NTPC, UP ink MoU for 1,320 MW plant

 November 23, 2007. The National Thermal Power Corporation (NTPC) and the UP State Thermal Power Generation Corporation signed a memorandum of understanding (MoU) to set up a coal-based power plant having a capacity of 1,320 MW, with two units of 660 MW each, at Koharar ghat in Allahabad district. The new Rs 6,000-crore   ($1.5 bn) power units are expected to be completed in four years.

Of the total power generated from this plant, UP’s share will be 75 per cent, or 990 MW, while the rest will go to the national grid. For the evacuation of power, the scheme will be prepared and implemented by the Power Grid Corporation of India Ltd.  UP and NTPC will have 50 per cent each in this joint venture, with UP investing Rs 1,080 crore ($272 mn). The project will require 2,500 acres. The land identified for this is mainly barren and some land is cultivating single crops. The plant will get its water 100 cusecs from the rivers Ganga and Tons.

Abhijeet Group to invest $14 bn in power, steel

November 22, 2007. Abhijeet Group, a steel and mining powerhouse, said it will invest Rs 55,000 crore ($13.9 bn) to build steel and power plants in various parts of the country, besides planning forays into other sectors. It will invest around Rs 40,000 crore ($10 bn) to build three steel plants with combined production capacity of 10 mt in Jharkhand, Maharashtra and West Bengal.

APGenco adds 210 MW

November 21, 2007. The state-owned APGenco added 210 MW more capacity to the grid as part of the state government’s efforts to increase the availability of power through various means. However, this is expected to provide little respite next summer. The peak demand, which touched 187 million units last August, is expected to go further up beyond 190 mu during the ensuing rabi season, giving a tough time to the authorities in managing the power situation. The state government had also prepared a back-up plan to meet the peak demand to the tune of 300 MW through the utilisation of idle capacity of gas power projects by using naphtha till May 2008. 

BHEL bags $534 mn contract

November 22, 2007. Power equipment maker BHEL said it has bagged a Rs 2,108-crore ($533.9 mn)   order to supply steam generators and turbines for the upcoming Maithon Right Bank Thermal Power Project in Jharkhand. The order for the greenfield project has been placed by Maithon Power Ltd, a joint venture of Tata Power and Damodar Valley Corporation.

BHEL's scope of work in the project envisages supply and commissioning of steam generators, turbine generators, electrostatic precipitators and associated auxiliaries, besides controls and instrumentation. The order has been clinched under international competitive bidding company and the company outbid a leading Chinese equipment supplier. The order involves two units of 525 MW each.

KISPL to acquire stake in Indonesian coalmine

November 27, 2007. Knowledge Infrastructure Systems Pvt Ltd (KISPL), a privately-held coal trading company, will be acquiring 50 per cent stake in an Indonesian coalmine by December. The company will be able to supply 9 mtpa of coal post-February 2008 and has right to mine 40 mt of coal. The mine is located in east Kalimantan, Indonesia’s second largest province. In the same province Tata Power Company (TPC) also has major mining interest.

Partial power tariff hike in Kerala

November 26, 2007. The Kerala State Electricity Regulatory Commission today announced a revision of power tariffs for some categories of consumers in the State. While there is no change in the power tariff for domestic consumers, most low-tension industries and electricity used for agricultural purposes, some categories of high tension consumers will pay more.

Extra high tension consumers and high tension industrial and commercial consumers will pay 50 paise more per unit. However, there is no change in the tariff for non-industrial and non-commercial high tension consumers.

Rajasthan government signs power agreement

November 26, 2007. The Rajasthan government has signed a power-purchase agreement (PPA) with the Tehri Hydro Development Corporation Ltd (THDC) for purchase of energy from 400 MW Koteshwar Hydro Electric Project and Vishnugad Pipal Koti Hydro Electric Project of 444 MW.

PTC India plans offshore arm for acquiring coal assets

November 25, 2007. PTC India Ltd plans to float an offshore arm, jointly with strategic partners, to pick up equity in coal mines abroad. The power trading major’s partners for the venture include a financial investor and a player with interests in the power sector, each of which would hold a 33 per cent stake. The company is carrying out due diligence for coal resources in Indonesia, Australia and Africa and has engaged consulting firm PricewaterhouseCoopers to identify the location where it could pick up equity in coal resources. PTC is eyeing up to 15 mtpa from overseas and plans to set up a special purpose vehicle in the country where an equity participation deal is eventually struck.

The proposed special purpose vehicle (SPV) will be a holding company registered abroad with subsidiaries that will invest in coal projects and in turn sell the extracted coal from the overseas assets to PTC India. PTC, in turn, would use the coal mainly for power projects where the company has entered into power off take agreements, while retaining the option of selling the balance. A part of the coal will also be provided to toll manufacturers who will produce power for PTC and get paid the conversion fee.

PowerGrid signs pact with Reliance energy

November 24, 2007. Power Grid Corporation of India Ltd (PGCIL) has entered into an agreement with Reliance Energy Ltd to set up a joint venture firm for executing transmission projects associated with two hydel projects. The two companies have signed the shareholders’ agreement and other agreements to this effect. The joint venture firm would evacuate electricity from NTPC Ltd’s Koldam hydel project as well as from National Hydroelectric Power Corporation’s Parbati-II project in Himachal Pradesh.

It would lay about 300 km of transmission lines from Parbati to Koldam and Koldam to Ludhiana in Punjab. The public sector firm would have 26 per cent equity in the joint venture while Reliance Energy would hold the rest. PGCIL also signed a letter of intent with Reliance Energy Transmission Ltd (RETL), a subsidiary of REL, for the Western Region System Strengthening Scheme-II (WRSS-II).

Coimbatore industry seeks staggered load shedding

November 23, 2007. The Tamil Nadu Electricity Consumers Association (TECA), Coimbatore, has requested that the TNEB should consider load shedding for a whole day in a week in a staggered manner rather than resorting to unannounced power cuts that upset the scheduled functioning of the industrial units. It also wanted all parts of the State be treated as equals while enforcing the power cuts. The acute power shortage had resulted in unscheduled power cuts, which hit the industries badly. The industries could survive only if the prices and delivery terms are strictly adhered to for which uninterrupted good quality power is a must.

Contingency plan to improve coal supplies

November 27, 2007. With the dwindling coal stock position at key thermal power stations worsening, the Centre is banking on a contingency plan aimed at improving the situation at critical power stations by redistributing coal supplies from domestic sources. The Power Ministry and the Infrastructure Constraints Review Committee in the Cabinet Secretariat have asked generation major NTPC Ltd to import coal through the western coast to ease the port congestion at Haldia and Paradip ports and to overcome constraints in transportation by the Railways from these ports on the eastern coast.

Also, all State Electricity Boards (SEBs) and generation utilities have been asked to expedite coal imports. As on November 22, the coal stock position at 29 thermal stations across the country, with a total installed capacity of 29,137 MW had been declared as critical, where coal stocks in these plants was expected to last less than seven days. Of these, the coal stock position at 18 stations has been termed as super-critical, with stocks expected to last less than four days. In comparison, on October 10, the situation was critical at 20 stations, while the coal stock position in only six stations had been declared as super-critical.

Krishnapatnam will be awarded to Reliance Power

November 27, 2007. Anil Ambani-led Reliance Power, which emerged as the lowest bidder for the 4,000 MW ultra mega power project at Krishnapatnam, will be awarded the contract in a few days. The company had placed a winning bid of Rs 2.33 per unit for the project, the third such after the Sasan and Mundra UMPPs. Reliance Power has already bagged the contract for the UMPP in Sasan, Madhya Pradesh, while Tata Power will execute the other project in Mundra, Gujarat.

The government, in the 11th Plan period, would add over 78,000 MW of power generating capacity, which is 28% more than the capacity added during the last three plans. The capacity addition does not include the ultra mega power projects and that another 12,164 MW capacity would be created through captive power plants during the period. Equipment for producing 56,067 MW of power has already been placed and another 12,250 MW contract would be awarded by March 2008.

Government receives 185 applications for 23 coal blks

November 27, 2007. The government has received 185 applications from various steel, cement, aluminium and iron companies for the 23 coal blocks earmarked for captive mining. Applicants include Tata Steel, ACC, Jindal Steel and Power, Ultratech Cement, JSW Steel, JK Cement. The screening committee of the coal ministry, headed by Coal Secretary HC Gupta, would be meeting on December 7-8 and December 17-18 for screening these applications. With total reserves estimated at around 3 bn tonnes, these blocks are situated in Chhattisgarh, Jharkhand, West Bengal, Maharashtra and Madhya Pradesh. According to a coal ministry official, the steel sector will be allocated six blocks while nine blocks are meant for the cement sector and remaining blocks will be shared between sponge iron and aluminium firms. The screening committee has representatives from the power, steel and environment and forests ministries, as well as from the state governments of Orissa, Jharkhand, Chhattisgarh, West Bengal, and Maharashtra. This round of allocation follows the allocation of 15 captive blocks, with estimated reserves of around 3.5 bn tonnes, to 31 power sector companies two months ago. Eight out of the fifteen blocks were allotted on a sharing basis, while the remaining seven blocks were given on a stand-alone basis.

Govt. may lower assured return for power sector

November 26, 2007. In a move that could potentially curb investments in India’s power sector and hurt state-owned power generation company NTPC Ltd’s ability to fund expansion, the government plans to reduce the assured return on equity (ROE) for some power projects. The Planning Commission has asked for reducing ROE (the after-tax profit of a company as a proportion of its equity, expressed in percentage) from 14% to 12% on so-called negotiated projects. These are projects that are negotiated between the power generation firm and the relevant government body and where there’s no competitive bidding, unlike the Centre’s ultra mega power projects, where the firm quoting the lowest cost per unit of power generated is awarded the project.

Coal shortage may cast shadow over NTPC plants

November 26, 2007. The issue of adequate coal supply for its existing and upcoming power plants has made NTPC worried. The power ministry, on behalf of the state-run firm, has taken up the matter with the coal ministry to work out a solution. The coal availability for NTPC’s power stations Farakka & Kahalgaon (stage-I) and for the upcoming expansion units at Kahalgaon, is posing a major obstacle in development and operation of these plants. The expansion at Kahalgaon by (3x500 MW) under Stage-II was based on sanction of long-term linkage, along with commitment from Coal India Ltd/Eastern Coal Fields (CIL/ECL), for supplying adequate coal to match the requirement of about 27 mtpa for Farakka (1,600 MW) and Kahalgaon Stage I&II (2,340 MW).

TN’s plea to Centre on power allocation

November 26, 2007. Faced with impending acute power shortage, Tamil Nadu has requested the Centre to allocate 500 MW of power from the unallocated share, besides negotiating with eastern states to draw 300 MW of surplus power from them. Tamil Nadu faced an immediate power shortage of 700 MW. The shortage was due to drop in power generation through windmills to the tune of 1500 MW. The state had also not received its share of 500 MW from the Central pool, while disruption in power generation in NLC due to monsoon rains had led to a loss of 500 MW. To tackle the power crisis, the state Government was holding talks with states like Assam and Haryana to draw 300 MW of power and an agreement would be reached by this month end. The state had also sought 500 MW from the Centre's unallocated share till May 2008 as a special allocation.

Punjab allocates more allocation on the power sector

November 25, 2007. Punjab, which has witnessed negative growth in agriculture (about 1.91%) and gross state domestic product (at 4.5%), is focusing on making the state power surplus during the Eleventh Plan period. Over one-third of the total allocation of about Rs 37,314 crore ($9.4 bn) will go to the power sector, at Rs 12,948 crore. Significantly, the allocation of Rs 37,314 crore ($9 bn) for Punjab in the 2007-2012 Plan represents almost a 100% increase over the Rs 18,657 crore ($4.7 bn) allocated in the 10th Plan.

Initially, the Plan size was Rs 28,805 crore. However, after chief minister Parkash Singh Badal met the Planning Commission deputy chairman, this was revised. At present, the state has 6,000 MW while the demand is 9,000 MW. The government plans to have 6,000 MW additional power within the next three years to make it surplus. The state will ensure 24-hour supply to all sectors. To make the state power surplus, many projects are under way a 600 MW project in Goindwal Sahib, 500 MW in Lehra Mohabbat, 250 MW in Shahpur Kandi and 500 MW in Bathinda refinery.

MahaVitaran to draw costly power

November 25, 2007. The Maharashtra government, under attack for its inability to tackle the rising mismatch between power demand and supply, is being forced to draw costly power, ranging from Rs 8.50 to Rs 12 per unit. The cabinet sub-committee, headed by chief minister Vilasrao Deshmukh, has given its approval to the Maharashtra State Electricity Distribution Company (MahaVitaran) to purchase such power in the months to come. The decision was taken after energy minister talked about the ground reality wherein the daily power deficit was around 5,000 MW and was expected to increase further.

Growth in power equipment industry dips

November 22, 2007. Growth in the Indian power transmission and distribution (T&D) equipment industry has halved from 26 per cent in the first half of last year to about 12.2 per cent this year due to the delay in execution of projects and increasing cost of raw materials. The industry grew by 22- 25 per cent in value terms and by 12.2 per cent in quantity terms in the first six months of 2007-08 compared with 26 per cent during the first six months of 2006-07 in quantity terms and about 45 per cent in value terms.

OIL & GAS

BPZ energy signs exploration contracts in Peru

November 26, 2007. BPZ Energy has signed two new license contracts for exploration and production of hydrocarbons, thus obtaining exclusive rights to Blocks XXII and XXIII located in northwest Peru. The license contracts were signed on November 21, 2007. The signing of Block XXII and Block XXIII completes the approximately 2.4 million acres, in conjunction with Blocks Z-1 and XIX, the Company initially plans to develop in northwest Peru.

Block XXII block covers approximately 948,000 acres and is located onshore in the Lancones basin, although its southern sector also covers the productive Talara basin of northwest Peru, near the Talara Refinery. Block XXIII block covers approximately 248,000 acres and is located onshore between the Company's offshore Block Z-1 and onshore Block XIX in northwest Peru. This block is located in the Tumbes basin, although in its southern section Talara basin sediments maybe found deeper.

Shell signs MoU for Ukrainian gas licenses

November 26, 2007. Shell Exploration & Production Ukraine Investments (I) BV signed a nonbinding memorandum of understanding (MoU) with Regal Petroleum PLC to acquire licenses for the Mekhediviska-Golotvschinska and Svyrydivske gas fields in Ukraine. According to the agreement, Shell will pick up a 51% interest for $410 million in Regal Petroleum (Jersey) Ltd., a wholly owned subsidiary of Regal Petroleum, which indirectly has the licenses. Shell would assume operatorship of the fields in the Dniepr Donetsk sedimentary basin where most of Ukraine's gas and condensate production is located. The deal would help to build the company's profile in Ukraine because of the growth potential from the fields.

Occidental & OMV boost ties in Libyan oil sector

November 26, 2007. Occidental Petroleum has signed agreements with the Libyan National Oil Corporation (NOC) to upgrade several of its existing petroleum contracts. The new agreements will be consistent with the newly established EPSA IV contractual framework now utilized in the Libyan oil industry. The term of the new agreements will be 30 years. This will enable NOC and Occidental to design and implement major field redevelopment and exploration programs in these contract areas in the prolific Sirte Basin.

The new agreements cover fields with approximately 2.5 bn barrels of recoverable high-quality oil reserves. Over the next five years, about $5 bn in capital investment is expected to be made to increase gross production to more than 300,000 barrels per day from the current level of around 100,000 barrels per day. The Austrian oil and gas company, OMV, will join the project with a 25% interest with Oxy retaining a 75% interest. Oxy and OMV will collectively contribute 50 percent of the development capital and NOC will contribute the remaining 50%.

Heritage Oil JV wins exploration license in Pakistan

November 26, 2007.Pakistan on Nov. 17 granted a petroleum exploration license for Block 3068-2 (Sanjawi) to a joint venture of Heritage Oil & Gas Ltd. 60%, Sprint Energy (Pvt.) Ltd. 30%, and Trakker Energy (Pvt.) Ltd. 10%. Heritage will serve as operator. Block 3068-2, which lies in Zone-II, covers 2,258 sq km in the Loralai and Kohlu districts of Balochistan. The JV intends to invest $10.1 mn in the block to carry out geotechnical studies; acquire, process, and interpret 330 km of 2D seismic data; and drill two exploratory wells during Phase I of the initial 3-year period. This is Heritage's first exploration license in Pakistan.

PT Medco wins Cambodian exploration license

November 26, 2007. PT Medco's subsidiary, Medco Cambodia Tonle Sap Limited, along with partners Cambodia National Petroleum Authority and JHL Limited have received approval from the Cambodian Government for an exploration license for onshore Block 12. The partners in Block 12 are Medco Cambodia as operator with 52.5%, CNPA with 40% and JHL with the remaining 7.5%. The permit has a three year exploration period and the second and third stages can each be extended for two years, subject to approval. The block is located in a frontier basin, Tonle Sap Basin, in northern Cambodia.

Murphy oil takes stake in australian acreage

November 26, 2007. Murphy Oil's subsidiary, Murphy Australia Oil PTY LTD, has finalized an agreement to acquire a 40% interest and become operator of the AC/P36 exploration permit in the Browse Basin offshore Northwestern Australia from Finder Exploration PTY LTD, a private company. The AC/P36 permit covers approximately one million acres and lies in water depths of 1,200 to 1,600 feet. The permit will be effective after receiving approval from the Australian government. Partners in the block are Finder Exploration PTY LTD, 40%, and PTTEP Australia Offshore PTY LTD, 20%.

New Zealand oil & gas boosts Tui reserves

November 26, 2007.  Oil Reserves for the Tui Area Oil Project have been increased to 41.7 mn barrels, 30% above the previous estimate and nearly 50% above pre-development predictions. The new figure for proved and probable (2P) reserves compares with estimated reserves of 27.9 mn barrels on which the Tui Area Oil Project in off-shore Taranaki was first sanctioned, and an interim re-estimate of 32 mn barrels following completion of the development drilling campaign. New Zealand Oil and Gas Ltd (NZOG) has a 12.5% share of the Tui Area Oil Project. NZOG’s share of the reserves has increased from 3.5 mn barrels (pre-development) to 5.2 mn barrels. Tui oil is a light sweet crude that is generally sold, with freight and quality differentials, against the Tapis benchmark crude, which has recently surpassed US$100 a barrel.

Juanambu discovery on stream in Colombia

November 21, 2007. Gran Tierra Energy, Calgary, has placed the Juanambu-1 discovery well on production on the Guayuyaco Block in the Putumayo basin of southern Colombia. Juanambu was discovered and tested in the first half of this year. It is currently producing about 1,400 b/d of oil, 450 b/d net to Solana. State-owned Ecopetrol recently approved Juanambu field commercial and exercised an option to back in for a 30% interest. Gran Tierra and Solana each will retain a 35% interest in the field.

Problems noted in new brazilian production

November 21, 2007. Brazilian officials have acknowledged that state-owned Petroleo Brasileiro SA (Petrobras) is having problems increasing production in existing fields with new offshore platforms and floating units. Petrobras Chief Financial Officer Almir Barbassa, in a conference call with investors, admitted that the firm has problems bringing the new units to full production and operating them at installed capacity.

Average production by Petrobras during January-September 2007 reached 1.796 million b/d, an increase of 33,000 b/d over the same period in 2006. New platforms and floating units installed over the past 21 months had been expected to add 440,000 b/d of production. The Petrobras Espadarte floating production and storage unit with a capacity of 100,000 b/d, launched in January, produced an average of just 28,000 b/d in the first 9 months of 2007.

Two Pakistani operators report gas strikes

November 21, 2007. Two Pakistani operators have reported gas discoveries in Pakistan. Oil & Gas Development Co. (OGDC) tested gas and condensate in its Moolan No. 1 exploratory well drilled to 2,421 m TD in the Hyderabad district of Sindh Province. OGDC tested two zones in Cretaceous Lower Goru sands. One flowed at rates of 4.44 MMscfd of gas and 64 b/d of condensate through a 32/64-in. choke with wellhead flowing pressure of 900 psi.

The other tested 6.02 MMscfd of gas and 165 b/d of condensate through the same choke with wellhead flowing pressure of 1,240 psi. Mari Gas Co. Ltd. (MGCL) has found gas in the Bhitai No. 1 exploratory well in its Mari Lease Area near Daharki, Ghotki Sindh District. The well flowed sweet natural gas from Lower Eocene Sui Upper and Sui Main limestone at a cumulative rate of 11.32 MMscfd. It encountered the Sui Main horizon at 1,202 m.

ConocoPhillips takes Whitegate off the market

November 26, 2007. ConocoPhillips (COP) has decided not to sell its 71,000 barrel a day Whitegate refinery in Cork, Ireland. After confirming plans to sell the refinery in January, ConocoPhillips had been in talks with potential buyers, without specifying which companies were bidders. Investment bank Goldman Sachs was thought to be interested in purchasing a stake in the facility. The refinery processes light, sweet crude, sourced primarily from the North Sea. According to ConocoPhillips reports, the refinery has the ability to produce 18,000 barrels a day of gasoline, and 30,000 barrels a day of diesel and jet fuel. Only 65% of the refinery's throughput yields clean product.

Gasification project planned in north Dakota

November 26, 2007. Great Northern Power Development LP (GNPD), Houston, and Allied Syngas Corp., Wayne, Pa., have developed a $1.4 bn coal gasification project in southwestern North Dakota. The project, designated South Heart, will use coal in a chemical process to create substitute natural gas. The South Heart project involves seven British Gas Lurgi gasifiers that will use North Dakota lignite to produce up to 100 mmcfd of pipeline-quality synthetic gas. Existing pipelines will transport the gas throughout North America. The BGL technology is owned jointly by Envirotherm and Advantica Ltd., both of which will provide the technology license, process design, and related technical support for the gasification process. GNPD owns much of the coal reserves that will fuel the project.

CNPC, Rosneft to build oil refinery in Tianjin

November 26, 2007. China and Russia have agreed to locate a planned oil refinery capable of processing 10 mtpa in the northern port city of Tianjin. China's top oil firm, China National Petroleum Corp. (CNPC), and Russia's Rosneft, have set up a joint venture in Tianjin to implement the project, which is still subject to approval by the National Development and Reform Commission. The refinery project is a concrete followup to the two companies' agreement reached in March 2006 to intensify cooperation in the oil sector. A possible site for the refinery will be the Tianjin Harbour Industrial Park, about 80 square kilometers off the Bohai Bay east of Beijing. The central government has listed Tianjin as a national base for the development of the oil industry.

Sumitomo to target China, Americas for oil export

November 21, 2007. Sumitomo Corp. will target markets in China, North America and South America for products made at a refinery in Okinawa, in which it has a 12.5% stake. According to Petrobras, it had agreed with Exxon Mobil Corp. to buy an 87.5% stake in the 100,000-barrels-a-day Nansei Sekiyu KK refinery from Exxon's Japanese unit TonenGeneral Sekiyu KK. Sumitomo Corp. will hold the remaining 12.5%. Sumitomo Corp. and Petrobras plan to upgrade the refinery, which currently can process only light sweet crude oil because of its old facilities. After the upgrade, the refinery will serve as an export base, mainly for China, where oil demand is expected to rise sharply.

Pakistan State Oil to stop fuel supply

November 27, 2007. Pakistan State Oil (PSO) is experiencing serious difficulties in making payments to oil refineries and other suppliers and has informed Wapda and the federal government that it would be constrained to stop fuel supplies. Likewise, since the government has not been able to liquidate petroleum differential claims (PDCs), estimated to cross Rs 41 bn by December 1, the oil marketing companies have also informed the government about their inability to make payments to the oil refineries due in the last week of the current month.

It is in that backdrop the government is reportedly considering proposal to create a Rs 29 bn rolling fund through a consortium of banks to resolve cash flow problems of oil companies and keep them afloat on the back of rising financial claims and inter-corporate circular debts, it is learnt. This is one of the measures the caretaker government is actively pursuing at the moment to melt down inter-corporate circular debt that has already crossed Rs 180 bn due to Wapda’s over Rs 70 bn arrears payable by the public sector and non-payment of over Rs 30 bn subsidy to Wapda by the government and build up of oil companies’ Rs 41 bn price differential claims.

A petroleum ministry’s proposal seeking Rs 7 per litre increase in diesel has been shot down and a revised case for Rs 5 per litre increase in diesel has been prepared for consideration by the Economic Coordination Committee (ECC) of the cabinet. Both these measures increase in price and rolling fund would be put in place before December 1.

Oil drops on possible OPEC output hike

November 26, 2007. Oil prices fell further on growing expectations that OPEC ministers will agree to raise crude production during a meeting next week. The sharp sell-off on Wall Street overnight also contributed to the decline in oil futures. Light, sweet crude for January delivery dropped 67 cents to $97.03 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell 48 cents to settle at $97.70. Oil reached a trading record of $99.29 last week and is within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more. Heating oil futures lost 1.26 cents to $2.6940 a gallon while gasoline prices fell 1.44 cents to $2.4270 a gallon. Natural gas futures rose 1.2 cents to $7.735 per 1,000 cubic feet.

Venture reports completion of GKA pipeline

November 26, 2007. Venture Production plc, the Aberdeen headquartered UK independent oil and gas production company, announced that the new export pipeline linking the Kittiwake platform to the Forties Pipeline System (FPS) has been successfully completed and is now fully operational. The new 10 inch, 33km pipeline has the capacity to flow up to 40,000 barrels of oil per day (bopd) and will process production from all the fields in the Greater Kittiwake Area (GKA), a central North Sea oil production hub operated and 50% owned by Venture.

Iraq reopens Kirkuk pipeline

November 21, 2007. Iraq has boosted its oil exports to almost 2 million barrels a day (bpd) after reopening a pipeline to Turkey and hopes to sharply raise output in 2008. Exports were now about 1.8 to 1.9 million bpd, boosted by the 300,000 bpd now going from the northern Kirkuk region to the Turkish Mediterranean port of Ceyhan. Security had also improved on the southern pipeline which runs through the port of Basra but gave no details. The northern pipeline reopened in August having been largely paralyzed by attacks and the decrepit state of Iraq's oil infrastructure since the US-led invasion of 2003.

TransCanada seeks $983 mn alberta expansion

November 21, 2007.  TransCanada Corp.'s wholly owned subsidiary, NOVA Gas Transmission Ltd. (NGTL), filed an application with the Alberta Energy and Utilities Board for a permit to construct a 300-kilometer, 42-inch natural gas pipeline and install 26 MW of additional compression and associated facilities on the northern section of the Alberta System. The estimated capital cost of this expansion is $983 mn. The North Central Corridor pipeline project is an expansion of the integrated Alberta System. It will provide capacity needed to address increasing gas supply in northwest Alberta, declining gas supply in northeast Alberta, growing intra-Alberta markets resulting largely from increased oil sands development and reduced delivery capability to interconnecting pipelines at the Alberta-Saskatchewan border. This expansion will allow NGTL to meet increased customer requirements for the 2009/2010 Gas Year and beyond. Subject to regulatory approval, construction is anticipated to begin in late 2008.

PetroChina considers 3^rd WE pipeline for Russian gas

November 21, 2007. PetroChina, the country's top oil and gas producer, is drafting plans for a third west-east gas pipeline to carry Russian gas to eastern market, the Oriental Morning Post reported. The route for the third pipeline is expected to run from the Altai area, where Russia and China share a border, to Bohai Bay on the eastern China coast. PetroChina completed the first west-to-east natural gas pipeline in October 2004 from Lunnan Oilfield in the Tarim Basin in Xinjiang, running 2,400 kilometers to Shanghai. It also plans to build second line next year, which will run south to the Pearl River region with an extension to the Yangtze River region. Preparations for the third line are likely to get into gear after line two starts operations at the beginning of next year. The third line, which will be at least 1 meter in diameter, will run for about 6,000 kilometers, although branch lines could bring the total length to 8,000 km. Work on the line could accelerate if Russia and China agree early on terms for the sale of up to 80 bcm of gas per year.

$3.2 bn to raise energy efficiency by Chinese govt

November 27, 2007. The government plans to spend 23.5 bn yuan ($3.2 bn) this year to raise energy efficiency and cut pollutant emissions. The pricing regimes for energy and resources will also be reformed, and charges raised for wastewater treatment. Of the fund, 7 bn yuan ($947.2 mn) will be earmarked as grants to encourage major energy-efficient projects. During the 2006-10 period, energy-efficient technological upgrading is expected to save 130 million tons of coal equivalent. The energy efficiency of the projects will be appraised by independent third-party institutions. Another 6.5 bn yuan ($879.6 mn) will be channelled to build or upgrade pipeline networks for waste water treatment in the central and western regions. The funds will be provided to provinces based on the total length of the networks and emission cuts in chemical oxygen demand (COD), a key water pollution index. The remainder of the fund will be used for elimination of out-dated production capacities, monitoring pollution and control of river and lake pollution. The government has set a goal of reducing energy consumption per unit of gross domestic product (GDP) by 20 percent during the 2006-10 period, or 4 percent each year, and cutting major pollutants by 10 percent by 2010.

Strategic oil reserve planned near Chongqing

November 27, 2007. China plans to build a strategic oil reserve near the southwestern industrial city of Chongqing to help assure supplies to its inland and western regions. The reserves would be part of a second phase of building up such strategic stockpiles. The program started with oil stored in eastern China near Shanghai, and other reserves are planned for the northeast and the south. The Sichuan Reserves Administration Bureau and local government in Wanzhou, a district in Chongqing, signed an agreement November 23 on building a reserves facility. China is the world's second largest oil consumer after the United States. Expansion of the strategic oil reserves reflects growing concern over the country's energy security as crude oil prices have surged to nearly US$100 a barrel.

Iraq kurds defy Baghdad on oil deals

November 26, 2007. The autonomous Kurdish regional government in northern Iraq defied Baghdad, vowing to sign more contracts with international oil firms despite the national government's opposition. Iraqi Oil Minister has declared all oil contracts between the Kurdish administration and foreign companies null and void, as these has been signed illegally in the absence of a national oil law. The Kurdish government has inked 15 exploration and export contracts with 20 international companies since it passed its own oil law in August, infuriating the Baghdad government. According to the regional government the contracts will benefit all Iraqis as 85 percent of the returns from the deals will be for Iraq and the rest will go to the contractor. Iraq's oil and gas bill is stalled in the national parliament amid bitter differences between rival factions. When approved, the new law will open up Iraq's long state-dominated oil and gas sector to foreign investment. It will also stipulate that receipts be shared equally between Iraq's 18 provinces, a key concern for the Sunni Arab minority that Washington says has fuelled the anti-American insurgency. Iraq's oil reserves the world's third largest, lie mainly in the Kurdish north and Shiite south and the Sunnis fear the two communities could monopolise future income.

Pakistan government planning to increase oil prices

November 26, 2007. Pakistan government has decided to increase oil prices as it is facing difficulties to absorb the Rs 13 bn per month loss on account of the continuing rise in oil prices in the international market. The government, had projected an impact of Rs 25 bn in the budget for 2007-08, keeping in view the increasing trend in the international oil prices. But since this impact had increased manifold, the government was forced to shortly announce certain increase in the oil prices.

UAE's $5 bn oil investment a big boost to Pakistan

November 25, 2007. UAE, the top foreign investor in Pakistan, has come out with the biggest investment in this country's history that will held boost Pakistan's economy. The latest agreement between UAE and Pakistan is to establish an unprecedented $5 bn oil refinery at Khalifa Point in district Lasbela, on Pakistan's Arabian Sea coast, from across the Gulf. It is the single biggest direct foreign investment (FDI) in Pakistan's history.  Pakistan is happy, too, because when the refinery goes on stream, after meeting the domestic demand, its surplus products will be exported. It will put Pakistan on the map of energy exporting countries. The refinery is planned to go on stream by December 2012. Islamabad has offered several tax breaks for the Khalia Point refinery. These include a 20-year tax free status. Pakistan has also provided 1,000 acres of land, cost free, to facilitate construction of the project. The location will be developed as a new city with all the necessary infra-structure. The building activity, itself, will generate 10,000 jobs. When the refinery goes on stream it will provide jobs to 1,000 persons. It will add 1.4 mt of additional POL storage capacity. The refinery will more than double Pakistan's oil refining capacity. Pakistan has an installed capacity to refine 12.8 mt annually that means 250,000 barrels per day, contributed by its five existing refineries. The country uses 15 mt of POL products a year. With a 7.0 percent plus growth of GDP, the demand for POL products is rising rapidly. It is projected to rise from the current annual consumption of 58 mtoe to 177 mtoe within the next 12 years.

Power

No steam ahead for Huaneng thermal power plant

November 27, 2007. China Huaneng Group, the nation's largest power producer has completed construction of the Yuhuan thermal power plant, the largest ultra super-critical power plant in the world. Located in Yuhuan in East China's Zhejiang Province, the power plant is the nation's first to use the most-advanced thermal power technology used in the world. The plant includes four 1000 MW generating units, with the total investment of 15.6 bn yuan (US$2.1 bn). The first phase of the plant, which includes two 1000 MW generating units, was finished in December 2006. With ultra supercritical technology, a power-generating unit operates under a mix of temperatures and pressures above the critical point, at which the boundary of water's liquid state and a vapor state disappears. By eliminating the transition of water into steam, the power units markedly increase fuel efficiency.

BPC invites proposals for a new power plant

November 26, 2007. The Botswana Power Corporation (BPC) says the country might get a new 250 MW peaking to a mid-merit power plant to cater for what it terms a supply gap. It is envisaged that an independent power producer (IPP) will develop the power station. In an invitation to show interest, BPC says the gestation period for the IPP power plant should not be more than two years from January 1, 2008. The BPC will buy the capacity and energy from the developer through a power purchase agreement. It might also consider a build, own, operate and transfer arrangement. The closing date for the expressions of interest is December 14. Current electricity demand in Botswana is estimated at 500 MW, which may rise to about 600 MW over the next three to four years. The BPC is worried about a supply gap, particularly during the 2010/11 period before its new generation investment, the four by 33-MW coal-fired Morupule power station, comes on stream in 2012. Imports contribute some 75 percent of total national energy consumption.

Areva announces 8 bn euro nuclear deal with China

November 26, 2007. France’s Areva had agreed to deliver two third-generation nuclear reactors to energy-hungry China as part of a package of deals worth eight bn euros ($11.9 bn). Areva signed the reactors agreement with China Guangdong Nuclear Power Corporation (CGNPC) in a ceremony in Beijing attended by French President Nicolas Sarkozy and his Chinese counterpart Hu Jintao. It ended months of expectations that China would buy two European Pressurised water Reactors, or EPRs, from Areva. They will be delivered by the end of 2013 and 2015, respectively. Areva also agreed to transfer third generation nuclear technology to CGNPC, which would market the equipment in China through a joint venture. Areva will deliver uranium for the two reactors until 2026. CGNPC also agreed to buy 35 percent of the uranium production from three African mines that Areva controls. This uranium will be used for the two new reactors, but also for CGNPC’s other reactors.

Peru for construction of 255 MW Santa hydro Plant

November 21, 2007. Peru's Electricidad Andina will start construction on the 255 MW Santa Rita Hydro plant in March 2008. The power firm is accepting bids for the civil works aspect of the $350 mn project, expected to boost the nation's effort to tap greener sources of energy like water resources. The construction work on the power plant is expected to end early 2011. On November 2006, the Energy Business group of global consulting and engineering firm Poyry won the design service contact of the Santa Rita project. It will provide basic design and tender services for the hydro plant. The entire project puts together a river hydro power plant, a regulation reservoir, 16 kilometers of underground waterways and an underground power house. It is finance by Andina and Trading Emissions of England.

Galilee hydroelectric plant construction begins

November 21, 2007. The $250 mn plant is based on pumped storage technology. Construction on the hydroelectric plant at Menara in the Upper Galilee has begun. The project is owned by Agira Shoeva Ltd., a consortium of Electra Ltd. and the Galilee Development Company Ltd., and Sheva Mizrakot Ltd., a joint venture of private investors and the Upper Galilee Regional Council. The $250 mn plant is based on pumped storage technology. The 300 MW plant will generate electricity by utilizing the 670-meter altitude difference between two reservoirs. The upper reservoir at Kibbutz Menara is 750 meters above sea level, and the lower reservoir is 80 meters above sea level in the Hula Valley. The water pressure in the pipe connecting the two reservoirs generates the power. Construction will take two years.

Duke wins southwestern Indiana coal gasification plant

November 21, 2007. Duke Energy has been granted permission by the Indiana Utility Regulatory Commission to build a $2 bn coal gasification plant in the southwestern Indiana town of Edwardsport. The new Knox County plant will serve all of Duke's Indiana customer base in 69 counties. Charlotte, N.C.-based Duke will receive about $460 mn in local, state and federal tax incentives to build the plant. Construction of the plant is expected to begin after Duke receives the proper air permit from the Indiana Department of Environmental Management. Duke anticipates that construction will begin in early 2008 and be complete by 2012. At that time, Duke's existing coal- and oil-fired plant in Edwardsport, which came online between 1944 and 1951, will be closed.

Czech residential power prices to rise 10 pc in ’08

November 26, 2007. Electricity prices for residential customers will rise on average by 10% on the year in 2008, Josef Firt, the head of the Czech Energy Regulatory Office, or ERU. This price rise follows the 16.9% annual increase in average price for residential customers that took place in 2007. Most Czechs get their electricity from domestic power giant CEZ AS. For households that get heat from regional heating companies, they should expect an average increase in the price of heat of 20% on the year in 2008. The ERU regulates distribution fees for electricity, natural gas and heat, but for the last two years has not regulated the price of the commodities of electricity and natural gas since the local energy market was deregulated.

Top China coal miner to buy Indonesia's No. 2

November 26, 2007. China Shenhua Energy shares rose more than five percent on Monday after a newspaper reported China's top coal producer was considering a US$4 bn bid for control of Indonesia's No. 2 producer of the hydrocarbon. But top executives at the Indonesian firm denied that it had any contact with Shenhua, which has declared regional acquisition ambitions to meet soaring demand for China's main source of energy. Shenhua, which raised US$8.9 bn via a September Shanghai listing, is pondering buying a controlling stake in unlisted PT Adaro Indonesia, controlled by the Soeryadjaya family and 36 percent-owned by investors including Goldman Sachs and Citigroup.

Hydro power at walters falls

November 23, 2007. The Falls Inn in Walters Falls is looking to establish a water-powered hydro generation facility. In a report from the Niagara Escarpment Commission, Owner John Hallman says the majority of the infrastructure needed for the project is already in place. The re-establishment of a power site which functioned until 1984 when it was partially destroyed by fire. The work involved will include clearing, butting and grading an access from the top of the escarpment down to the south side of the gorge to the creek. A steel pipe will extend from the existing millpond, down the access to the river at the base of the gorge. The pipe will be parallel to the observation deck at the falls and will be almost unnoticeable. The pipe junction on the standpipe will be above the level of the spillway at the dam, so the river and falls will never be in danger of drying up.

AEP to restart Texas Oklaunion coal power station

November 23, 2007. American Electric Power's 690 MW Oklaunion 1 coal-fired power unit in Texas was slated to restart Friday or Saturday from a recent outage. The unit, in Wilbarger County, Texas, about 190 miles northwest of Dallas, shut early in the week to repair a pipe hanger. The Oklaunion plant entered service in 1986. One MW powers about 500 homes in Texas. AEP's regulated subsidiary, AEP Public Service Co of Oklahoma, operates the station for its owners: Brownsville Public Utilities Board (18 per cent), Oklahoma Municipal Power Authority (11.7 per cent), AEP Public Service Co of Oklahoma (15.6 per cent) and AEP Texas North Co (54.7 per cent). AEP, of Columbus, Ohio, owns and operates more than 38,000 MW of generating capacity, markets energy commodities, and transmits and distributes electricity to more than 5 million customers in 11 states.

Wisconsin agrees to clean up coal-fired power plants

November 26, 2007. The Sierra Club and the state of Wisconsin agreed Monday to a settlement to clean up the 52-year-old UW Madison Charter Street coal-fired power plant and the 12 other state facilities that burn coal. The settlement comes three weeks after federal Judge John Shabaz ruled in a lawsuit filed by the Sierra Club that the state had violated the federal Clean Air Act by expanding the Charter Street plant without installing modern pollution controls.

Under the settlement, the state agreed to several initiatives, cutting coal use at the Charter Street power plant by 15 percent beginning Jan. 1, 2008, expanding its ongoing clean up study for the Capitol Heating and Power plant to include the clean up and replacement of the Charter Street plant and complete the study no later than July 2008 and conducting a public review of the compliance status of the 12 other state-owned coal-fired heating plants in Wisconsin and remedy any identified violations no later than December 2009. This plan achieves immediate health benefits here in Madison by cutting coal use at Charter Street and is a major step forward toward eliminating coal burning in downtown Madison.

UN checks Russian nuclear fuel for Iran

November 26, 2007. Inspectors from the U.N. atomic watchdog agency began checking uranium fuel that was produced at a Russian facility for Iran's first nuclear power plant. The International Atomic Energy Agency's experts will certify and seal fuel intended for the power station Russia is building in the Iranian port of Bushehr. The plant is Russia's main manufacturer of fuel for nuclear power plants. A date to deliver the fuel, needed for the long-delayed plant to begin operating, has not been set. Russia has warned that the plant would not be powered up this fall, as previously planned, because Iran has been slow in making payments.

State to force cities to spend on power plant in SA

November 23, 2007. The government will compel municipalities to invest a fixed percentage of their electricity revenue into electricity distribution infrastructure because of their own failure to do so. The move is likely to meet with stiff resistance from municipalities, which jealously protect their areas of jurisdiction. Huge backlogs in investment in municipal infrastructure exist and the dilapidated systems have been one of the main causes of power cuts. The other major cause has been the shortage of electricity supply relative to the consumption requirements of a growing economy. A regulation compelling municipalities to invest in infrastructure maintenance and rehabilitation would be published early next year.

Tougher rules on coal fly ash dumps not enough

November 22, 2007. State environmental officials will be applying tougher regulations to coal fly ash dump sites, but Anne Arundel’s county executive is not satisfied. The new regulations from the MDE came out a month ahead of time and will monitor and control the use of fly ash and other coal-combustion by-products.

The dumping of fly ash to reclaim gravel pits in Gambrills sparked the new regulations. Heavy metals, some of which are cancer-causing, leaked into the local water table and contaminated more than 20 wells. The new regulations may not affect the Gambrills site, though MDE, Constellation Energy owner of the fly ash and the mine operator have agreed to clean up the contamination. Fly ash dumping is illegal in Anne Arundel for one year, and Leopold said he plans to extend the ban or make it permanent when the provision ends. A public hearing will be held February 26 on the new regulations, which go into effect April 1. Controls such as truck covers and water tanks must be in place at the power plant and the dumping site to minimize dust. A layer of clay, earthen material or a synthetic material must be in place before fly ash is dumped. The liner will be similar to what is used in solid waste landfills. Fly ash cannot be dumped within 3 feet of the water table.

Regulators approve $1.3 bn coal plant despite environmental worries

November 21, 2007. A proposed $1.3 bn coal-fired power plant in southwest Arkansas was approved by state regulators Wednesday, avoiding the fate that similar projects have faced nationwide due to environmental concerns.

The Southwestern Electric Power Co.'s proposed John W. Turk plant in Hempstead County still must be approved by Louisiana and Texas, as well as the Arkansas Department of Environmental Quality and the U.S. Army Corps of Engineers. The Arkansas Public Service commission granted the application to build the facility by a 2-1 vote. SWEPCO plans to build the 600 MW plant on 2,875 acres by 2011.

The company estimates the plant will create 110 full-time jobs once it is operating, with an estimated annual payroll of $12 mn. The commission agreed with SWEPCO last year that the company needs more electricity to meet a nearly 2 percent annual increase in demand among its customers. But the commission asked SWEPCO in March why the company wants to build a coal-fired plant that will produce more greenhouse gases and potentially be in violation of anticipated federal legislation. The panel placed 12 conditions on the permit for the facility, most meant to address concerns about the environmental impact of the coal plant. Among other restrictions, the decision bars SWEPCO from placing any transmission lines in recorded archaeological sites or property owned by the Nature Conservancy.

If approved and built, SWEPCO would own 73 percent of the plant, and is working out part-ownership deals with Oklahoma Municipal Power Authority, Northeast Texas Electric Cooperative, and Arkansas Electric Cooperative Corporation. In Arkansas, the typical SWEPCO bill would climb $8.50 a month. SWEPCO is a subsidiary of American Electric Power of Columbus, Ohio. The utility has 464,000 customers in Arkansas, Louisiana and Texas.

 

SECR to use tracks for Jatropha planting

November 27, 2007. The South East Central Railway (SECR) has taken up jatropha plantation drive in Chhattisgarh to produce bio-fuel for use in the diesel engines after three years. The railway has earlier successfully experimented the use of bio-fuel in Raipur division to counter rising diesel fuel prices. According to sources, the Raipur division of the SECR has planted 20,000 saplings of bio-fuel yielding Jatropha saplings in two rail sections of Raipur and Durg districts.  The railway purchased the saplings in two phases from the department of forests.

While the railway has rooted about 10,000 saplings on the sides of Raipur-Dhamtari narrow-gauge rail line, rest were planted on Dallirajhara-Durg rail sections. The saplings were also planted in vacant land of railway near Charoda. The plantation of Jatropha is a part of railway’s plan to use bio-fuel in the diesel engines after three years.  The saplings planted would bear the oil-yielding seeds after three years. The railway has reached an understanding with the Chhattisgarh Bio-fuel Development Authority (CBDA) to purchase bio-fuel.

Earlier, SECR bought 800 litres of jatropha-based bio-fuel from the agency in July last year and used a mix of diesel and jatropha in the diesel engine on narrow lines between Raipur and Dhamtari. Jatropha-diesel mix used was 5:95 per cent. The Railways has successfully ran locomotives using the jatropha blended diesel.

Bio-diesel producers eye exports

November 27, 2007. There may not be a market for bio-diesel in India, as yet, but some enterprising firms are investing in bio-diesel plants with an eye on the export market.  At least four bio-diesel manufacturing plants, set to be commissioned in the next few weeks, will export the product to Europe. Three plants are coming up in Andhra Pradesh and one in West Bengal, at a total investment of around Rs 600 crore ($150.8 mn). They will import feedstock from Indonesia and Malaysia, since there is almost no availability of feedstock (like jatropha and pongamia) in the country.

 Europe has a huge demand for bio-diesel as the bio-diesel blending in diesel programme has been implemented in various countries. While domestic diesel is sold at a subsidised price of Rs 34 per litre in Delhi, for instance, the government wanted to procure bio-diesel at Rs 26 per litre. Bio-diesel manufacturers say that anything below Rs 34 per litre is not viable. Farmers in the country have been reluctant to cultivate jatropha as the period from planting to maturing of the seeds is around four years. Besides the gestation period of the crop, the farmers are also not seeing assured buyers for the crop. 

As far as the government initiatives go, a National Mission of Bio-diesel was recommended by a committee under the Planning Commission in April 2003. However, such a mission is yet to be launched. Meanwhile, a Bio-diesel Purchase Policy was formulated by the petroleum ministry on January 1, 2006, under which 20 purchase centres of the oil marketing companies were identified. No seller of bio-diesel has been registered at these centres so far. Nevertheless, there is a plan for 10 per cent bio-fuel blending by 2017. Considering that around one tonne of bio-diesel is produced from one hectare of jatropha plantation, the country would need to have at least 7 mn hectares of cultivation in order to replace 10 per cent of diesel.

Glitnir ties up with LNJ Bhilwara for geothermal plants

November 26, 2007. Glitnir, a Nordic investment bank, has tied up with the Rs 2,700- ($678.6 mn) LNJ Bhilwara Group to set up geothermal power plants in India and Nepal. The company has identified a couple of locations in Puga, Jammu and Kashmir, and in Tatapani, Himachal Pradesh. But the temperature in Tatapani is lower as compared to Puga as per the data available in the public domain. So a pre-feasibility study will be conducted to  understand the course of action in Tatapani. The company, however, has not decided on the exact location or the investments required for starting the work as more detailed research being done. To begin with, the company was looking at a 5-MW project, similar to the one it set up in China. Geothermal means earth’s heat and geothermal energy can be harnessed from underground reservoirs containing hot rocks saturated with water or steam. Boreholes, typically of one to three-km deep, are drilled into the reservoirs. The hot water and steam are then piped up to a geothermal power plant, where they are used to drive electric generators to create power for businesses and homes. It is also considered a renewable resource because it exploits the earth’s interior heat, which is considered abundant, and water, once used and cooled, is then piped back to the reservoir. A geothermal power plant emits 35 times less carbon dioxide than an average coal power plant does per kilowatt of electricity produced. This is because the geothermal plants’ cooling towers emit mostly water vapour and do not emit particulates, hydrogen sulfide or nitrogen oxides. Though the initial capital required may be more than what the other power plants might require, once a geothermal power plant is operational, the per kilo watt unit is much cheaper.

MSPL to up wind energy biz

November 23, 2007. Mineral Sales Pvt Ltd (MSPL), the second largest iron ore exporter from the private sector, plans to expand its wind energy business with an investment of Rs 1,100 crore ($277 mn) over the next three years. At present, MSPL, a Baldota Group company, produces 191.6 MW power from its windmills in Karnataka, Maharashtra and Gujarat. The company intends to increase the installed capacity to 400 MW by 2010 by commissioning more windmills in the three states. Most of MSPL’s windmills are located in Karnataka (130 MW). By the end of the present fiscal, it will add 40 MW. Next fiscal, the installed capacity will be 320 MW. The sites has been shortlisted to install the windmills.

Non-conventional energy fails to impress villagers

November 22, 2007. Green energy may have become a buzzword in the cities today but people in the hinterland of the country prefer conventional power grids for electricity, because while the standalone solar or bio-energy units would help light a few bulbs per household, grid power can provide electricity for various purposes, including running agricultural pumps and other household appliances. Villagers in such places feel that they also have a right to the grid-distributed power and they shouldn’t be discriminated.

According to a senior official of the Ministry of New and Renewable Energy (MNRE), political parties are also pushing for grid power for their people. The list of villages to be electrified under the remote village electrification (RVE) scheme is therefore getting tapered down every year. In the last list that the ministry was given, 9,000 remote villages were identified for electrification. While 3,000 have been taken away from the list by various states already, some more are also likely to be knocked off from the list. The final number would stand between 4,000 to 5,000. Those villages which cannot be electrified under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) because they are remotely located or it is an expensive proposition to provide power to them,are electrified using solar energy and/or bio-energy. About 95 per cent of the electrification under RVE has been done through photovoltaic technology that uses solar power. The concentration of such remote villages is high in Jharkhand, Assam, Madhya Pradesh, Orissa and Chhattisgarh. Assam has about 2,000 villages to be electrified using renewable energy. Under RVE, states are provided 90 per cent grant by the MNRE. So far, the government has spent about Rs 150 crore ($38 mn) (2005 to October 31, 2007) on RVE and about Rs 143 crore ($36.2 mn) has been earmarked for the current year, of which some amount has already been utilised.  This model, at the moment, hasn’t given any revenue to the government. The government was expecting Rs 22 to Rs 40 per household per month. Setting up power-generating capacity through solar photovoltaic technology cost Rs 15,000 to Rs 18,000 per unit.

Even after electrifying all villages through RVE, this would still be called interim solutions because ultimately the grid has to reach these places or the cost of renewable energy will have to come down. In an ideal situation, it would be a mix of renewable and conventional energy. Currently, around 7.7 per cent of the country’s total energy generation comes from renewable sources, mostly from wind energy, biomass projects and mini hydel projects. The country has an installed renewable generation capacity of 10,622.45 MW and the Centre is targeting the addition of another 14,000 MW of renewable energy capacity during the Eleventh Five Year Plan. 

US energy dept keen on bio-mass for India

November 22, 2007. The Energy Efficiency and Renewable Energy, (EERE) US Department of Energy, is in talks with several Indian government departments for creating a bio-mass road map for India similar to the one being planned with China. The US department has also begun to undertake pilot projects in West Bengal for setting up green buildings. The US department runs a biomass programme that works with industry, academia and their national laboratory partners for research in biomass feedstocks and conversion technologies.

It is known to be in preliminary discussions with the Department of Planning, Ministry of New and Renewable Energy (MNRE) and the Department of agriculture for planning initiatives to make India counted among the the Bio-mass economies. EERE has been involved with Indian institutions and bodies since a few years and has funded projects to the tune of US $ 6-7 mn through the Asia Pacific Partnership (APP). It has been assessing wind, thermal and geo-thermal projects for the Maharashtra government and for MNRE. The department has been conducting the assessment through satellite mapping and on-site resources. 

Nandan plans IPO for bio-diesel

November 21, 2007. Nandan Biomatrix Ltd, a Hyderabad-based company dealing with medicinal plants and bio-fuel, plans to tap the capital market by 2008 to expand its bio-fuel business. The company intended to raise about Rs 150 crore  ($38 mn)through the initial public offering.  The company has embarked upon an ambitious plan to invest about Rs 400 crore ($101 mn) in the next two years in setting up transesertification plants for oil-extraction in West Bengal and Uttar Pradesh. Each plant would require an investment of around Rs 200 crore ($50.8 mn). Apart from IPO, the company would raise funds by way of foreign-funding. Dubai-based, Istithmar Group has committed to invest Rs 250 crore ($63.5 mn) in the company. Last fiscal, the turnover of the company was close to Rs 99 crore ($25 mn). At present, the company has one transesertification plant in Andhra Pradesh. For jatropha cultivation, the company has identified around 2 lakh hectares of fallow land in Andhra Pradesh and about 100 acre in UP. The company is keen in initiating jatropha cultivation over 2,000 acre land in Purulia, Birbhum and Bankura districts of West Bengal.

President to release stamps on renewable energy

November 22, 2007. President Pratibha Patil will release a set of four commemorative postage stamps on renewable energy here this evening. The stamps depict the four common applications of renewable energy that solar energy, wind energy, small hydropower and biomass energy. President Patil will also give away the National Awards for Renewable Energy on the occasion of Silver Jubilee function of the Ministry of New and Renewable Energy Ministry. Union Minister of State for New and Renewable Energy, Vilas Muttemwar will preside over the function.

AP finalises sites for mini hydel projects

November 21 2007. The Andhra Pradesh government has decided to entrust mini hydropower projects to local tribal women organisations in order to benefit the development of tribal areas. The Andhra Pradesh Tribal Power Corporation has identified 90 locations to set up mini hydel power projects in the tribal areas, in partnership with local tribal women's organisations. The corporation will set up one mw hydro projects at these sites, depending on the viability, and by tapping the subsidy provided by the Union ministry of non-conventional energy sources.

Meanwhile, the corporation is identifying more locations for power projects by using energy generated from waterfalls and strong currents. APTRIPCO is already setting up three 1.2-mw mini hydel power projects across Yeleru river at an estimated cost of Rs 6.2 crore ($1.6 mn) each. Besides, tenders have been invited for two projects of 0.75 MW each at Devaramadugu and Jeedipalem in Visakhapatnam district across Yeluru river at an estimated cost of Rs 4.15 crore ($1.05 mn) each, and for another one of 0.35 MW at Valasampeta across Tandava river at a cost of around Rs 2.18 crore ($0.55 mn).

Lanco Infra’s wind project receives UN certification

November 21, 2007. United Nations Framework Convention on Climate Change has registered Lanco Infratech’s 3 MW wind power project at Chikkasiddavanahalli village in Karnataka’s Chitradurga district as a clean development mechanism project under the Kyoto Protocol. The project will help the company earn additional revenue by selling carbon credits generated by the units. Through this project there will be a reduction of around 4,823 tonne carbon dioxide equivalent greenhouse gas annually for 10 years ending November 18, 2017. Total number of Indian projects registered with the UN now is 291, the highest in the world.

Of the total 850 projects that have been registered, 34.24 per cent are from India. Developed countries are bound by the Kyoto Protocol to cut greenhouse gas emissions between 2008 and 2012 by a collective average of at least 5 per cent below their 1990 levels. One way to cut emissions is buying certified emission reductions, or carbon credits, that are generated by clean development mechanism projects, that reduce greenhouse gas emissions. A project becomes eligible to sell one credit if it reduces 1 tonne of its greenhouse gas emission. By 2012, India’s average annual greenhouse gas reductions are pegged at 27.60 mn credits, or about 15.84 per cent of the world’s total annual reduction average of 174.27 mn. 

Solar Power and Motech for 11 MW of cells in ’08

November 26, 2007. Solar Power, Inc. (SPI) has made arrangements with Motech, one of the world's top 10 producers of solar cells, for Motech to reserve 11 megawatts of 6" multi-crystalline photovoltaic (PV) cells. The cells will be used for the production of SPI's solar modules at the company's factory in Shenzhen, China.

In addition to the 11 megawatts for 2008, SPI and Motech are in discussions to develop a long-term cell supply agreement to meet the growing demand for SPI's PV modules. To date, Motech has been a primary supplier of cells for SPI. The new arrangement provides SPI with an additional supply of high-quality cells to meet anticipated production requirements of the company's 200 watt panels during 2008.

GE Energy’s engines power Poland’s largest plant

November 26, 2007. GE Energy will supply two containerized cogeneration power plants including its ecomaginationSM-certified Jenbacher biogas engines that will operate at an existing bioethanol plant in the city of Liszkowo, 250 kilometers northwest of Poland’s capital of Warsaw (Warszawa). The biogas cogeneration plant’s owner, Agrogaz Sp. zo.o, is eligible for Poland’s green certificates program, under which the country awards fixed feed-in tariffs for each MW hour generated from a renewable energy source. The 2.18-MW cogeneration plant will utilize biogas mainly created from the fermentation of the Gorzelnia Liszkowo factory’s own residual bioethanol production to generate electricity, hot water and steam, which will then support the factory’s production processes. The project, expected to be commissioned in July 2008, represents Poland’s currently largest biogas power plant. Agrogaz is a Polish joint venture between Regensburg-based KG Aufwind Schmack GmbH Neue Energien and Polish energy provider Polenergia. KG Aufwind Schmack, the factory power project’s developer, is a partner of Schmack Biogas AG of Schwandorf, Germany, a leading German supplier of biogas plants.

PPL partners with Vermont landfill to generate RE

November 26, 2007. PPL Renewable Energy, a subsidiary of PPL Corporation, will develop and install a 4.8 MW landfill gas power generation system at the Moretown Landfill in Moretown, Vt. Moretown Landfill, a subsidiary of Highstar Waste Holding Corp., will provide 2.4 mcf of methane gas every day to power Caterpillar generators to be installed at the 200-acre facility. Methane-to-energy systems at landfills have a dual benefit for the environment, they generate electricity from renewable landfill gas while also significantly reducing emissions of methane, a greenhouse gas that is over twenty times more potent than carbon dioxide. Methane is created under the anaerobic conditions found in landfill sites. The power plant is expected to be operational by December 31, 2008 and the company says that it will invest at least $100 mn in additional renewable energy projects in the next five years.

PPL Renewable Energy develops, owns, operates and maintains renewable energy projects in the north eastern United States. The power generated by the facility will be sent to the electricity grid and will power the equivalent of 3,000 homes in the US. PPL Corporation controls more than 11,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets and delivers electricity to about 4 million customers in Pennsylvania and the United Kingdom.

Offshore R.I. wind power projects proposed

November 26, 2007. Allco Renewable Energy Group said on Monday that it plans to develop up to four offshore wind power projects in Rhode Island. In a release, Allco Renewable, a New York based renewable energy investment firm, submitted eight preliminary permit applications to the Rhode Island Coastal Resources Management Council (CRMC) on September 21. The company proposed to install up to 338 wind turbines at the four sites one south of Block Island, two south of Little Compton in Rhode Island Sound and one east of Fishers Island. Allco applied for eight permits, four to install meteorological masts at the four sites to determine how much wind is actually available and four to install the turbines.

Ineos for JV for expansion of France biodiesel project

November 26, 2007. Ineos Enterprises on Monday announced further success in its ongoing project to more than double biodiesel capacity at its Baleycourt Site in Verdun, France from 110,000 to 230,000 tonnes by 2008. Following clearance by the European Commission, a new joint venture has been created that will move forward with the investment of more than EUR70 mn in a new oilseed crushing unit and vegetable oil refining plant at the site.

The new biodiesel facility, in the heart of France's second largest oilseed producing region, will allow around 400,000 tonnes of locally produced rapeseed to be transformed into oil and then biodiesel. The joint venture, to be known as Ineos Champlor, is comprised Ineos Enterprises, farming co-operative group SICLAE, and oil-seed crushing group C.Thywissen. In addition to the site based investments, local farming co-operative EMC2 is also investing in a dedicated silo at an adjoining site that will serve the needs of the facility.

Onsite renewables worth up to $3 bn a year by ’16

November 23, 2007. The market for domestic renewable technologies could be worth up to £3bn a year by 2016, but only if government policy does more to promote adoption. That is the conclusion of a new report from the Renewables Advisory Board (RAB) into the government's policy of ensuring all new homes are zero carbon from 2016, which yesterday claimed onsite renewables are essential to meet the government's targets even where homes are built to the highest levels of energy efficiency.

The study, which was carried out by consultants Element Energy, predicts that demand for technologies such as biomass combined heat and power generators and solar photovoltaic panels will soar, with the market worth between £1.4bn and £3bn a year from 2016. However, it warns that the development of the market could be hampered by the government's failure to demand more houses are built to zero carbon specifications prior to 2016. The report claims that based on current policy "the projected annual uptake of onsite generation [from 2016] is greater than UK manufacturing capacity for all renewable energy technology, and greater than global manufacturing capacity for a number of the most cost-effective technologies.

Biomass power plant proposed in watertown

November 23, 2007. Company representatives for an Essex-based energy company have applied to the Connecticut Siting Council to build a biomass power plant near Route 8 and Echo Lake Road. Tamarack Energy is proposing to build a 30 MW plant that will use scrap wood from forest-thinning projects, fallen tree limbs and wooden pallets. It is estimated the project will cost $80 mn. If approved it will be constructed on 30 acres in the industrial zone near Route 8.

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