Energy News Monitor |Volume V, Issue 32

Impact of Power Sector on Social and Environmental Issues: Remedies (part III) Shankar Sharma, Consultant to Electricity Industry

Continued from Volume V, Issue No. 31…

 

3.  ENERGY PROFLIGACY AND ENVIRONMENTAL EMERGENCY: SOCIAL IMPLICATIONS

ntil the onset of industrial revolution, the power available to human society was limited to solar power only in the form of energy trapped by green plants, which produced organic matter. In this era the minimum per capita energy requirements for the sustainability of the human race, which is considered to be about 2,000 kilo calories, could be easily fulfilled on a sustainable basis. Between Year 1900 AD and 2000 AD the per capita energy consumption has shot up by about 100 times in many of the technologically advanced countries. At present world’s affluent people forming about 20% of the population are consuming about 66% of the total energy produced, and the remaining 80% of the population has been forced to live with only 33% of the energy produced.

It is the continued energy profligacy in many parts of the world, and gross inequity in energy consumption pattern in other parts of the world, which have resulted in a sort of environmental emergency due to unsustainable level of pollution such as very high concentrations of Green House Gases (GHG) (gases such as CO2, Methane, water vapor, nitrous oxide, SF6, Ozone etc.), the suspended particulate matters etc. Substantial portion of these pollutants are a direct result of energy production and usage, and are causing a rapid increase in Global Warming towards a dangerous level of more than 2 degrees Celsius above that of the pre-industrial level. This phenomenon, if unchecked, is expected to completely upset the environmental balance along with disastrous consequences to the very existence of life on earth. Whereas it is estimated that about 2.5 tons of per capita global CO2 emission is sustainable, at present this figure for USA is about 23 tons, for India it is about 1.67 tons and about 0.83 for Bangladesh. Energy profligacy and inequitable energy consumption in different parts of the world is depicted in table 6 below. Because of such a skewed distribution of energy sources at different parts of the world, the societies around the world are forced to add power generation schemes, which in turn are resulting in ever growing GHG emissions.  

The four Assessment reports of Inter-governmental Panel on Climate Change (IPCC) have projected in no uncertain terms that unless the GHG presence in the earth’s atmosphere is not restricted to a level where the Global Warming is restricted to less than 2 degree above the pre-industrial level, there will be serious consequences for the entire planet before the end of this century.  Major consequences of Global Warming could be: famines and droughts threatening millions of lives; worldwide drop in food crops; up to 3 billion people at risk of flooding and without access to fresh water supplies; destruction of half the world's nature reserves and a fifth of coastal wetlands; Global sea levels could rise by more than 20 feet; significant effects on biodiversity and ecological productivity; potential for international conflicts, border disputes, war due to water and food shortages, forced migration, extreme weather events,  huge impact on general health etc. 

Whereas Indian government’s stand in international Climate Change negotiations is that it should have no obligations of  targeted reduction of GHG emissions because its per capita GHG emissions are much below the world average,  the energy profligacy and inequitable energy consumption pattern within India should be of a major concern.  Much of the population, which is in lower income group, have per capita CO2 emissions of about 335 kg, while a small section of the population with the highest income group have per capita CO2 emissions of about 1,500 kg.  This was the summary of a recent survey report by Greenpeace under the title “Hiding Behind the Poor”, wherein it was shown that in India the richest consumer classes produce 4.5 times more CO2 than the poorest class, and almost 3 times more than the average Indian (501 kg). The societal impact of such inequitable energy consumption pattern is that, the poorest will be the most affected by the Global Warming, while the energy profligacy of the rich is the main cause for Global Warming.

Table 6 Electricity Usage: Global Context

  (Inequitable Resource Usage)

Country	Per Capita Consumption of Electricity (kWH)
Sweden	15,397
USA	13,066
Australia	10,640
Japan	7,816
Germany	6,898
World Average	2,429
India	553
Indonesia	440

There is a growing section of the scientists, who believe that the humanity is already facing an environmental emergency not only because of the huge emission of GHGs since industrial revolution, but also because of the energy profligacy being witnessed in developed economies.  These scientists are also of the view that our societies must start taking steps immediately to reduce GHG emissions to avert human catastrophe.  Since GHG emissions associated with power sector of the world economy is predominant, it is imperative to accord priority to this sector.  IPCC has recommended that CO2 emission should peak latest by 2015, and thereafter it should reduce to half by 2050.  For this to happen the dependence on fossil fuels, especially the coal, must drastically reduce.

As far as India is concerned, the fast receding Himalayan glaciers, increase in sea level rise as experienced in Sundarbans, unpredictable weather patterns etc. as consequences of Global Warming have all been experienced and confirmed in recent years. These corroborate the findings of a report titled  “BLUE ALERT “commissioned by Greenpeace India, in which about 120 Million people from coastal regions in South Asia are estimated to migrate to larger cities towards the second half of this century because of the direct/ indirect effects of Global Warming in the business-as-usual scenario. The colossal impact of such large scale migration to large cities, whose infrastructures are already stretched to limits, is hard to imagine. This report concludes by saying that Climate Change is the most serious environmental problem South Asia has ever faced, and in the absence of early policy intervention, it is likely to cause devastating social and economic problems for the region.

The scientific community has also recognised that about 22% of all GHG emissions and about 42% of CO2 emissions on a global scale are associated with electricity generation activity.  This, in addition to heavy pollution of land, water and air, makes the relevance of electrical power sector in environment upkeep very obvious. In view of the serious issues associated with the planned addition of a large number of conventional power projects such as fossil fuel based or large dam based, there is a dire need to minimise electrical energy profligacy as a whole, and thereby to reduce the GHG emissions drastically.  Fortunately, there are many techno-economically viable alternatives to meet the legitimate electricity requirement of all sections of the society without compromising too much on the quality of life.

4. ELECTRICITY AND ENVIRONMENTAL CONFLICT: PRESSURE ON LAND AND WATER

All the conventional technologies of producing electricity, especially the fossil fuel based ones, are closely associated with heavy pollution and GHG emissions to the environment. Coal power stations are considered to be the worst polluters of air, land and water. Diesel, petrol, and natural gas also are associated with GHG emissions. There are serious environmental issues with each of these fossil fuels whether in mining, processing or end usage. Though nuclear power generation is touted as clean process, the mining and processing of nuclear fuels have huge environmental implications. The serious concerns about radiation effects have not made it easily acceptable to the societies all over the world.   The dam based hydro power projects may appear to be an environmentally friendly option, but the submergence of plant matter through reservoirs is a source of Methane gas which is more potent than CO2 as a GHG.

to be continued…

Views are those of the author                       

The Nuclear Illusion (part – XII)

AMORY B. LOVINS AND IMRAN SHEIKH

 

Continued from Volume V, Issue No. 31…

 

ll China’s new nuclear plants are commanded and funded by Beijing, while two-thirds of the new coal plants are “bootleg” units not authorized by Beijing. All are meant to meet burgeoning electricity demand that negawatts will increasingly soften and distributed sources will meet. That demand growth is driven largely by construction of inefficient buildings and factories made from inefficiently produced materials; half the demand growth is due to largely wasted air conditioning and refrigeration. And since Beijing still holds many economic levers, it’s easier to take a big bite out of demand than in the even more unruly U.S. economy, where most infrastructure is already built. In principle, a fast-growing economy can reduce its intensity even faster than its service demands rise: even the severalfold-more-efficient United States did so in 2005– 2006, reducing its absolute use of coal, oil, gas, and total energy. China’s top priority on energy efficiency reflects its leaders’ understanding that unless efficiency is the foundation of growth, supply-side investments will eat the capital budget and starve end-use investments.

On 24 January 2008, the European Union announced a climate strategy aiming by 2020 to slash CO2 emissions to 20% below the 1990 level, raise energy efficiency 20%, and get 20% of its primary energy from renewables (now 8.5%), displacing ~€50 billion of annual oil and gas costs.¹⁵⁴ The United States has less coherent policies but comparable or greater energy efficiency opportunities and huge micropower potential:

·          Rocky Mountain Institute has calculated the U.S. technical potential to save electricity at ~75%—4× the 19% nuclear share of power generation—at an average cost ~1¢/kWh, less than nuclear operating cost. The utility industry’s think tank, the Electric Power Research Institute, estimated negawatts’ potential at only 2–3× nuclear’s market share, at an average cost ~3¢/kWh (even less today)¹⁵⁵—less than one-fourth of new nuclear’s delivered cost (Fig. 1, please refer volume V, issue 25).

·          The U.S. industrial cogeneration potential is at least comparable to current U.S. nuclear capacity, excluding cogeneration potential in buildings, which use two-thirds of electricity. ¹⁵⁶

·          The U.S. windpower potential on available land is more than twice the entire U.S. annual use of electricity¹⁵⁷ (and likewise in China—the British figure is ~6×): worldwide, the global windpower potential onshore and nearshore, without land-use exclusions, is ~35× global electricity demand.¹⁵⁸

Empirical results carefully evaluated for hundreds of utility and business programs validate the practical potential for saving electricity:

·          Broad programs, especially those emphasizing the relatively costlier and highertransaction- cost measures common in the residential sector (notably home shell retrofits), tend to cost a few ¢/kWh;¹⁵⁹ the U.S. historic average is ~2¢/kWh. In striking contrast, many programs targeting commercial and industrial savings cost much less, and the best ones cost far less than 1¢/kWh.¹⁶⁰

·          Negawatt program costs tend to decline with experience, as shown by evaluations for the three California investor-owned utilities¹⁶¹ and the aggregate of the 79 Pacific Northwest utilities evaluated by the Northwest Power Planning Council.¹⁶² California has generally mild climates, high building and appliance efficiency standards, and a long history of world-class demand-side management efforts, so other places lacking those attributes should tend to have bigger potential at lower costs.

Very detailed bottom-up analyses for Danish buildings¹⁶³ and for all electricity uses in Sweden ¹⁶⁴ and the United States,¹⁶⁵ and EPRI’s moderately detailed estimate of U.S. potential savings,¹⁶⁶ show very large technical-potential savings (~40–75+%) at total societal costs similar to or below today’s broad-based utility program costs. But these studies used 1980s technologies that generally cost more and saved less than today’s. Moreover, few if any of the programs shown use truly modern technologies, and probably none uses modern integrative design techniques that typically “tunnel through the cost barrier” to achieve very large industrial, commercial, and residential kWh savings at negative marginal cost in most new installations¹⁶⁷ and some retrofits.¹⁶⁸

Thus full U.S. deployment of just three winning competitors—recovered-waste-heat cogeneration (conservatively excluding all cogeneration that uses fresh fuel), windpower, and endues efficiency—could provide ~13–15× nuclear power’s current 19% share of U.S. electric generation, all without significant land-use, reliability, or other constraints, and with considerable gains in employment.¹⁶⁹

Renewables other than windpower, not yet counted, also have immense potential.¹⁷⁰ Solar technologies aren’t resource-limited nor even, in practice, area-limited. For example, on conservative assumptions, just a 100×100-mile area of Nevada—less than one-fourth the nation’s paved road and street area—containing 10%-efficient photovoltaics in half its area could annually produce as much electricity as the United States uses.¹⁷¹ In practice, of course, PVs would be building-integrated, rooftop-mounted, and built into parking-lot shades, alongside highways, etc. to avoid marginal land-use and to produce the power near the load,¹⁷² and PVs would be complemented by other renewable sources (wind, geothermal, small hydro, etc.).¹⁷³

Notes:

154 L. Centrowicz, “EU Aims to Choke Carbon Emissions, Time, 24 Jan 2008, www.time.com/time/world/article/0,8599,1706123,00.html?xid=feed-cnn-topics; the EC’s press release is at http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/80&format=HTML&aged=0&language=EN&guiLanguage=fr. Some biofuels provisions are controversial.

155 RMI’s estimate is based on a detailed supply curve reflecting measured cost and performance data for ~1,000 technologies, documented in 1986–92 in the first-edition RMI/COMPETITEK State of the Art series (6 vols., 2,509 pp., 5,135 notes) later summarized in E SOURCE’s Technology Atlas series in the Electronic Encyclopedia (www.esource.com). EPRI’s estimate is in Efficient Electricity Use: Estimates of Maximum Energy Savings, CU- 6746, 1990, summarized in A.P. Fickett, C.W. Gellings, and A.B. Lovins, “Efficient Use of Electricity,” Sci. Am. 263(3):64–74 (Sept 1990). EPRI estimated that full application of late-1980s techniques to the expected 2000 U.S. economy could save (almost all cost-effectively) ~24–44% of U.S. electricity, not including a further 8.6% expected to occur spontaneously by then, nor a further 6.5% likely to be saved by utilities’ planned efficiency programs. The total potential saving found by EPRI was thus ~39–59%. These findings are compared with RMI’s (see previous note) by E. Hirst, “Possible Effects of Electric-Utility DSM Programs, 1990 to 2010,” ORNL/CON-312, Oak Ridge National Laboratory, Feb 1991. Hirst’s and the author’s comparisons, summarized in the 1991 Ann. Rev. En. article, ref. 143, showed that most of the difference came from EPRI’s assuming a drivepower saving 3× smaller and 5× costlier than EPRI found in our joint 1990 article (Fickett et al., op. cit. supra), and from a simple methodological difference: EPRI excluded, but RMI included, credit for maintenance costs saved by customers, so commercial lighting savings cost 1.2¢/kWh in the EPRI but –1.4¢/kWh in the RMI supply curves (see also A.B. Lovins, “Apples, Oranges, and Horned Toads,” El. J. 7(4):29–49 (1994), available through www.sciencedirect/com or as RMI Publ. #U94-16). Normalizing for these non-substantive differences makes the RMI and EPRI supply curves nearly identical. The remaining differences—believed to be due to the modernity, thoroughness of characterization, and disaggregation of the measures analyzed—are less important than the EPRI/RMI consensus that cost-effective  potential savings are many times larger than utilities, even in California, currently plan to capture, and that negawatts are getting bigger and cheaper.

156 O. Bailey and E. Worrell, “Clean Energy Technologies: A Preliminary Inventory of the Potential for Electricity Generation,” LBNL-57451, Apr 2005, http://repositories.cdlib.org/lbnl/LBNL-57451/.

157 D.L. Elliott, L.L. Wendell, and G.L. Gower, An Assessment of the Available Windy Land Area and Wind Energy Potential in the Contiguous United States, PNL-7789, Pacific Northwest Laboratory (Richland WA), Aug 1991, www.nrel.gov/wind/wind_potential.html, estimated the Dakotas’ Class III+ wind potential, net of environmental and land-use exclusions (50% of forest area, 30% of agricultural and 10% of range lands, 20% of mixed ag/range lands, 10% of barren lands, and 100% of urban, wetlands, and parks and wilderness areas), at 2,240 TWh/y, equivalent to 55% of total U.S. 2006 net generation. But they assumed 750-kW turbines with 50-m hub height, 25% efficiency, and 25% losses. Today’s 2–5-MW turbines have hub heights up to 100 m, efficiencies are up to the mid-40s of percent and rising, and losses have been at least halved. These turbine improvements, and improved wind prospecting and measurement, combine with the unexpectedly improved wind regime lately found at greater hub heights: C.L. Archer and M.Z. Jacobson, “Spatial and Temporal Distribution of U.S. Winds and Wind Power at 80 m Derived from Measurements,” J. Geophys. Res. 108(D9):4289–4309 (2003). Together, these factors appear to have increased the U.S. wind potential assessed in 1991 by a factor of at least two, including for windy lands in the Dakotas; yet NREL doesn’t yet seem to have published an updated wind resource assessment comparable to the 14-year-old PNL-7789. How important, then, are land-use exclusions? Most lower-48 states’ onshore wind resources are on very low-value land whose few residents are generally eager for such projects: Native American Reservations just in the Dakotas have ~300 GW of high-class windpower potential, and nearly all High Plains farmers and ranchers welcome the royalties; the main obstacle is limited access to transmission lines, which incumbent utilities sit on to protect themselves from competition. People who think onshore sites will be very limited then extrapolate from odd cases like the Cape Cod windpower controversy to argue that offshore wind is equally likely to be blocked by siting conflicts. It seems more plausible that offshore siting issues—coastal visibility, navigation and fishing compatibility, cable and structural cost, marine engineering —will be offset by free land and by stronger, steadier wind regimes (less surface roughness, hence lower gustiness). It also appears that siting options are far more constrained for new nuclear plants (by cooling water, seismicity, population, security, etc.) than for new windpower in high-wind zones.

158 C.L. Archer and M.Z. Jacobson, “Evaluation of global windpower,” calculated at 80 m hub height, www.stanford.edu/group/efmh/winds/global_winds.html. Class ≥3 sites, normally economic, could yield ~72 TWe. Contrary to the widespread impression that the best lower-49-states wind areas are only in the Great Plains, offshore East Coast, and certain West Coast sites, the Great Lakes wind resource, conveniently near upper Midwest load centers, is also Class 6±1. The underlying data are in J. Geophys. Res. 110 (2005), D12110, doi:10.1029/2004JD005462, www.stanford.edu/group/efmh/winds/2004jd005462.pdf. The global windpower potential will become far larger even just on land if tethered high-altitude wind-turbine R&D projects succeed.

159 For example, the Western Governors’ Association found in 2005 that typical total costs ~2–3¢/kWh, and that leading programs were achieving savings ~0.8–1%/y (~2%/y in California): Energy Efficiency Task Force, www.westgov.org/wga/initiatives/cdeac/Energy%20Efficiency-full.pdf.

160 E.g., S. Nadel, Lessons Learned: A Review of Utility Experience with Conservation and Load Management Programs for Commercial and Industrial Customers, NYSERDA 90-8, NYSERDA (Albany), 1990. Consistent with this, the 1–2-y average paybacks commonly observed from retrofits in U.S. heavy industry correspond to a levelized cost of 0.4–0.8¢/kWh at a typical 5¢/kWh tariff and a 5%/y real discount rate.

161 C. Rogers, M. Messenger, and S. Bender, Funding And Savings For Energy Efficiency Programs For Program Years 2000 Through 2004. Staff report for California Energy Commission, July 2005, www.fypower.org/pdf/CEC _Trends2000-04.pdf, updated 1976–2004, M. Messenger and C. Rogers (CEC), pers. comms., Nov.–Dec. 2005. Evaluation protocols have evolved over the period graphed, but have been modern and stable since the mid-90s; earlier evaluations may have been self-reported or less conservatively and completely included certain factors.

162 Northwest Power Planning Council, “Utility Conservation Achievements Reports: 2004 Survey,” www.nwcouncil.org/energy/rtf/consreport/2004/Default.asp, and “Utility Conservation Achievements Reports:  2002 Survey,” www.nwcouncil.org/energy/rtf/consreport/2002/Default.asp. A graphical time-series summary of these and other empirical and analytic findings on the cost of negawatts is in Lovins, ref. 61.

163 J.S. Nørgård, a leading expert at the Danish Technical University (DTH/Lyngby), showed in detail how half the electricity in Danish late-1980s buildings could be saved at an average cost of 0.6¢/kWh, or three-fourths at 1.3¢/kWh (1986 $): Husholdninger og Energi, Polyteknisk Forlag, København, 1979, updated and summarized in his “Low Electricity Appliances—Options for the Future,” at pp. 125–172 in T.B. Johansson, B. Bodlund, and R.H. Williams, eds., Electricity: Efficient End Use and New Generation Technologies and Their Planning Implications (Lund U. Press, 1989).

164 B. Bodlund et al., “The Challenge of Choices,” in Johansson et al., id., 1989, showed for Vattenfall, the Swedish State Power Board, how to save half of Swedish electricity at 78% lower cost than making more (i.e., at an average cost of 1.6¢/kWh in ~1986 $). Sweden, like Denmark, is already quite energy-efficient. Vattenfall’s CEO ordered removed from the paper the usual disclaimer saying it didn’t represent the organization’s official view.

165 E SOURCE (Boulder CO), Technology Atlas series (five volumes and numerous supplements, 1999–), www.esource.com, subscription products by various authors, condensing six volumes by the author’s  COMPETITEK team at Rocky Mountain Institute, 1986–92. Those encyclopedic works, totaling 2,509 dense pages cited to 5,135 source notes, assessed empirical cost and performance for ~1,000 technologies; showed how to combine them into optimal packages; remain the most detailed assessment to date of the potential for electric end-use efficiency; and found that upwards of three-fourths of U.S. electricity (vs. 1986 frozen efficiency) could be saved at an average cost of ~0.6¢/kWh (1986 $). The basic findings are summarized in Lovins (ref. 143), referencing similar sectoral findings by other analysts. The RMI analyses excluded fuel-switching lifestyle changes, load management, technological progress beyond the late 1980s, and some technical options. How much of the indicated potential actually gets captured is a policy and marketing variable, but some utilities have in fact captured 70–90+% of particular efficiency markets in months to years through skillful marketing, suggesting that most of the national technical potential could actually be captured over a few decades.

166 EPRI, Efficient Electricity Use: Estimates of Maximum Energy Savings, CU-6746, 1990, summarized in A.P. Fickett, C.W. Gellings, and A.B. Lovins, “Efficient Use of Electricity,” Sci. Am. 263(3):64–74 (Sept 1990). EPRI estimated that full application of late-1980s techniques to the expected 2000 U.S. economy could save (almost all cost-effectively) ~24–44% of U.S. electricity, not including an additional 8.6% expected to occur spontaneously by then, nor a further 6.5% likely to be saved by utilities’ planned efficiency programs. The total potential saving found by EPRI was thus ~39–59%. These findings are compared with RMI’s (see previous note) by E. Hirst, “Possible Effects of Electric-Utility DSM Programs, 1990 to 2010,” ORNL/CON-312, Oak Ridge National Laboratory, Feb. 1991. Hirst’s and the author’s comparisons, summarized in ref. 143, showed that most of the difference came from EPRI’s assuming a drivepower saving 3× smaller and 5× costlier than EPRI found in our joint 1990 article (Fickett et al., op. cit. supra), and from a simple methodological difference: EPRI excluded, but RMI included, credit for maintenance costs saved by customers, so commercial lighting savings cost 1.2¢/kWh in the EPRI but –1.4¢/kWh  in the RMI supply curves. Normalizing for these non-substantive differences makes the two curves nearly identical. The remaining differences—believed to be due to the modernity, thoroughness of characterization, and disaggregation of the measures analyzed—are less important than the EPRI/RMI consensus that cost-effective potential savings are many times larger than utilities, even in California, currently plan to capture. This was further confirmed by PG&E’s “ACT2” experiment, which the author co-founded and co-steered in the 1990s (with A.H. Rosenfeld, Ralph Cavanagh, and Carl Weinberg), but whose striking integrative-design successes are not yet reflected in California’s codes or its utilities’ programs.

167 See e.g. P.G. Hawken, A.B. Lovins, and L.H. Lovins, Natural Capitalism, Little Brown (Boston), 1999, summarized in Harv. Bus. Rev., May–June 1999, pp. 145–158, both free downloads at www.natcap.org; A.B. Lovins, “Energy efficiency—taxonomic overview,” Encyc. of Energy 2:382–401, Elsevier, 2004, RMI Publ. #E04-02, www.rmi.org/images/other/Energy/E04-02_EnergyEffTax.pdf; and other sources in the bibliography to Lovins (2005), ref. 60. A detailed methodological discussion, clarifying common misconceptions about the costs of utility programs and technical efficiency gains, is A.B. Lovins, “Apples, Oranges, and Horned Toads,” El. J. 7(4):29–49 1995).

168 For example, A.B. Lovins, “The Super-Efficient Passive Building Frontier,” ASHRAE J., June 1995, pp. 79–81, www.rmi.org/images/other/Energy/E95-28_SuperEffBldgFrontier.pdf, describes how to save three-fourths of the electricity used by a ~200,000-ft2 curtainwall office tower near Chicago, at a retrofit cost slightly below that of the normally required 20-year routine renovation that saves no energy. Comfort and value would also improve greatly.

169 Observed employment intensity in the United States and Europe, per unit of electricity produced, is typically much larger for renewables than for coal- or gas-fired plants, including all construction and fuel cycles: D. Kammen, “Green Jobs Created by Global Warming Initiatives,” testimony to U.S. Senate Committee on Environment and Public Works, 25 Sept 2007, http://rael.berkeley.edu/files/2007/kammen_senate_epw-9-26.pdf.

170 Including resources often overlooked: for example, Federal assessments indicate ocean-energy potential of 560 TWh/y offshore the lower 48 states plus 1,250 offshore Alaska and 300 offshore northern Hawai‘i. This total of 2,060 TWh/y is 74% of 2006 global and 2.6× 2006 U.S. nuclear electricity output.

171 J.A. Turner (NREL), “A realizable renewable energy future,” Science 285:687-689 (1999). The most efficient solar cells in the laboratory now exceed 37%, with major further improvements underway.

172 U.S. rooftops in 2025 could accommodate up to 710 GWp of PVs, net of orientation, HVAC equipment, and shading: Navigant Consulting, Sept. 2004, www.ef.org/documents/EF-Final-Final2.pdf.

173 Specious claims persist comparing (say) the footprint of a nuclear reactor or power station with the [generally miscalculated] land area of which some fraction—from about half for PVs to a few percent for wind turbines—is physically occupied by renewable energy and infrastructure. But ever since the International Institute for Applied Systems Analysis’s 1977 Energy in a Finite World, it’s been well known that properly including the relevant fuel cycles, land intensity is quite similar for solar, coal, and nuclear power. An update might even show a modest land advantage to solar. Interestingly, R.H. Williams (Princeton U.) and the author have separately calculated that a gram of silicon produces more lifetime electricity in amorphous solar cells than a gram of uranium in a light-water reactor. For the energy consumption to produce photovoltaics (another area rife with old fallacies), see V.M. Fthenakis, H.C. Kim, and E. Alsema, “Emissions from Photovoltaic Life Cycles,” Envir. Sci. & Technol. 42(6):2168–2174 (1998), http://pubs.acs.org/cgi-bin/abstract.cgi/esthag/2008/42/i06/abs/es071763q.html.

 

 

to be continued…

 

 

 

NEWS BRIEF

OIL & GAS

OMEL, KazMunaiGaz to jointly explore Satpayev Block in Caspian Sea

January 27, 2009. MONGC Mittal Energy Limited (OMEL) and KazMunaiGaz (KMG), National Oil Compay of Kazakhstan signed a Heads of Agreement (HOA) for exploration of oil & gas in Satpayev Block, Caspian Sea, Kazakhstan. OMEL is a joint venture between ONGC Videsh Limted (OVL) and Mittal Investments Sarl. The HOA was signed January 24, 2009, in the presence of the President of Republic of India and the President of the Republic of Kazakhstan, by Managing Director, OVL and the President, KMG.

The HOA signed is in pursuance to the Memorandum of Understanding that was signed between OVL and KMG in February 2005, for cooperation in the oil and gas sector of Kazakhstan. The two Companies are now actively pursuing together with the Government of Kazakhstan for finalization of the Exploration and Production Contract.

The Satpayev block, situated in the Pre-Cambrian Basin of Kazakhstan in Caspian Sea, covers an area of 1582 sq.km and is at a water depth of 5-10m. It is situated in a highly prospective region of North Caspian Sea and is in close proximity to major fields, like Karazhanbas, Kalamkas, Kashagan and Donga, where significant quantum of oil has been discovered. Kazakhstan is an important oil province of the world and contributes 3.2% of oil and 1.1% of Gas towards the World's share of Proved Reserves.

According to BP Statistical Review of World Energy, June, 2008,Kazakhstan's Proved reserves are estimated to comprise 39.8 billion barrels of Oil and Proved Gas Reserves are 67.20 tcf as on December,2007 and the Oil and Gas production are 1,490 thousand b/d (2007) & 27.3 bcm (2007), respectively.

Kazakhstan has the Caspian region's largest recoverable crude oil reserves and its production accounts for half of the currently being produced from the Caspian Sea region. The Major players, which are active in upstream sector of Kazakhstan are Karachaganak Petroleum Operating, TengizChevroil, KazMunayGaz, CNPC, North Caspian Consortium, and Lukoil.

December oil & gas production dips

January 24, 2009. The indigenous production of crude oil and natural gas dipped marginally in December, according to the Ministry of Petroleum & Natural Gas. Crude oil production fell by 0.3% while natural gas output was down by 1.6% when compared to December 2007. ONGC pumped 2.87MT of oil in December against 2.88 mt in the same month last year. December crude oil output missed the projected target by 6.3% due to a delay in production at some oil fields.

The natural gas output in December saw a decline of 1.6% to 2.8 bcm. This was below the Government’s target as production from Reliance Industries’ Krishna Godavari Basin was yet to begin.

OVL’s Cuban deepwater block yields two oil & gas leads

January 24, 2009. ONGC Videsh (OVL), the foreign investment arm of Oil & Natural Gas Corp (ONGC), has found two significant hydrocarbon (oil and gas) leads in a Cuban deepwater exploration block where it has a 30% stake.

The leads are likely to result into major hydrocarbon discoveries. Out of the two leads, one is expected to be drilled during the year 2009. The size of the finds can be ascertained only after the completion of the drilling work. The two prospects could be Yari and Jaguey in one of the six blocks held by the consortium where OVL is a partner.

Currently, blocks are under the third period of exploration with the completion of three-dimensional (3-D) seismic data for 3,000 sq km. One well is planned to be drilled after evaluation of G&G (geological and geophysical) data. Provisional plan has been made for the second well also.

OVL had acquired 30% participating interest in Spanish oil company Repsol-YPF’s Cuban deep water exploration blocks 25, 26, 27, 28, 29 and 36 in 2005. The other partner of the blocks, StatoilHydro (erstwhile Norsk Hydro) of Norway holds a 30% interest. Repsol is the operator of the blocks.

The acquisition had marked OVL’s foray into Cuba’s oil and gas industry. According to OVL’s website, the blocks are spread over nearly 12,000 sq km in exclusive economic zone of Cuba. The hydrocarbon resource potential in the blocks is estimated to be in excess of 4 bn barrels. An exploratory well, drilled in one of these blocks, had indicated the presence of hydrocarbons.

OVL also owns two other exploration blocks in Cuba. It signed production sharing contracts for the two blocks 34 and 35 in September 2006. The two deepwater blocks, spread over around 4,300 sq km, are at a depth of 200-2,000 metre.

ONGC-Mittal to pay $80 mn for 25 pc stake in Kazakh oilfield

January 24, 2009. Oil and Natural Gas Corp and its billionaire partner Lakshmi N Mittal will pay $80 mn signing bonus for taking a 25 per cent stake in Kazakhstan's prospective Satpayev oil field in the Caspian Sea. ONGC Mittal Energy Ltd, the joint venture of ONGC Videsh Ltd and Mittal Investment Sarl, OMEL will get 25 per cent stake in exploration phase and will have the option of increasing it by 10 per cent upon commercial discovery.

The agreement is culmination of nearly four years of negotiations during which Kazakhstan went back and forth on giving stake to the Indian company.

Kazakhstan had initially identified the Satpayev and Makhambet blocks in the Caspian Sea for giving 50 per cent stake in one of them to OVL, the overseas arm of state-owned ONGC. Later it reduced the stake on offer to 25 per cent on condition that the Indian flagship company teamed up with steel baron Lakshmi N Mittal for entry.

Kazakhstan wants GAIL, IOC to set up petrochem plant

January 27, 2009. GAIL India Ltd’s ambition to set up a petrochemical plant overseas has got a boost with energy-rich Kazakhstan inviting the state-run firm, along with Indian Oil Corporation, for talks to set up the mega chemical unit.

Kazakhstan President Nursultan Nazarbayev expressed his desire for Indian firms setting up a petrochemical plant in the Central Asian nation when he met Petroleum Minister Murli Deora over the weekend.

Kazakhstan is the second country after gas-rich Qatar to invite the home-grown gas transportation and petrochemical major for talks on the $1.3 bn plant.

GAIL has a tie-up with petrochemical-to-refining firm Reliance Industries for jointly setting up a mega gas-based petrochemical plant overseas. For Kazakhstan, IOC, which also harbours an ambition to grow big in petrochemical business, would tag along with GAIL.

GAIL and Reliance had signed an MoU on December 4, 2007, to explore the possibility of a 1.9-mt petrochemical plant in Qatar, Abu Dhabi, Bahrain, Vietnam, Australia, South Africa, Angola, Mexico, Russia and former Soviet Union.

Petronet to sign gas supply deal with Gorgan in February

January 26, 2009. Petronet LNG Ltd (PLL) will sign a gas supply contract with Australian consortium Gorgan Projects in February for supply of LNG to its 2.5 mtpa terminal in Kochi to be commissioned by March 2012.

The PLL chief has also expressed interest to set up a 500-MW power plant in Vypeen Island, adjacent to the LNG terminal, at an estimated cost of Rs 2,500 crore if the State Government made available 50 hectares. The LNG terminal project had been delayed for about nine years, resulting in heavy losses to the State, and hence it should be completed without any further loss of time. The Rs 3,000-crore terminal would become fully operational by March 2012, by the time Gorgan Projects would be able to supply the gas.

The work is progressing well and IHI Japan, the consortium which has been awarded the EPC contract, has already ordered two tanks, which will be among the largest in the world, and the construction is moving ahead at a fast pace.

SC allows GAIL to lay RLNG pipeline

January 26, 2009. The Supreme Court has allowed public sector GAIL (India) Ltd to lay a pipeline for transportation of natural gas to a power project that will supply electricity for the Commonwealth Games in Delhi next year.

The pipeline, which will transport regasified liquefied natural gas from Vijaipur to Dadri, will also supply gas to Madhya Pradesh, Rajasthan, Haryana, Uttar Pradesh and Delhi.

A special forest bench headed by Chief Justice K G Balakrishnan allowed the public sector to go ahead with its Rs 3,306-crore project, which required laying of the pipeline through wildlife sanctuary areas in Madhya Pradesh and Rajasthan, on certain conditions imposed by the Central Empowered Committee (CEC).

The bench passed the order after GAIL undertook to comply with the recommendations given by the apex court-appointed committee. Besides, it said the original topography of the area would be restored and the safety norms prescribed by the Oil Industry Safety Directorate would be strictly adhered to.

The 505-km pipeline, with a maximum diameter of 48 inches, will pass through Madhya Pradesh, Rajasthan, Haryana and Uttar Pradesh. CEC had recommended that the apex court may permit underground pipeline over a distance of two km in the National Chambal Sanctuary at Morena and 3.5 km in the Ramsagar sanctuary subject to certain conditions.

It recommended that GAIL should deposit five per cent of the estimated cost of more than Rs 36 crore (i.e. Rs 1.8 crore) in the compensatory afforestation fund for the conservation and protection works in the sanctuaries.

Besides, it said that the NPV at the rates applicable for the land use falling within the national park and sanctuary will be deposited by the applicant. Apart from this, GAIL would have to comply with the conditions imposed by the chief wildlife warden.

GAIL had moved an application in the apex court seeking permission to lay down the Vijaipur-Dadri pipeline parallel to its existing gas rehabilitation project, which had been acquired under the Petroleum and Minerals Pipeline (Acquisition of Right of User Inland) Act, 1962.

India to face gas crisis if Iran pipeline is scrapped

January 23, 2009. India could face an acute shortage of natural gas if the proposed pipeline from Iran and Turkmenistan are scrapped due to deteriorating relations with Pakistan, according to an Assocham study.

As the political tension with Pakistan heightens, disrupting the gas pipeline talks, the clean energy option for the Indian economy can become all the more challenging with demand and supply gap widening at 5.7 per cent. Energy-hungry nation needed the Iran-Pakistan-India and Turkmenistan-Afghanistan-Pakistan-India pipelines as the indigenous production target of 42.28 bcm for the fiscal was likely to be missed.

India's current gas availability of 104 million standard cubic meters per day (mmscmd) meets only 60 per cent of the industrial demand. This gap is projected to widen by 2011-12. The demand is likely to be pushed rapidly from the power and fertilizer sectors along with the city gas distribution system.

Gail may supply gas from KG-D6 field to fertiliser companies

January 23, 2009. The Government-owned Gail India may supply natural gas from Reliance Industries’ D-6 block in the Krishna-Godavari (KG) basin to the gas-starved fertiliser sector.

In order to enable fertiliser projects for conversion, expansion, de-bottlenecking and revival to attain financial closure and based on the request of department of fertiliser, Gail has sent a term-sheet to fertilisers companies proposing to make supplies from any of the available sources, viz, RIL’s KG-D6 field, other New Exploration Licensing Policy (Nelp) fields and regassified liquefied natural gas (R-LNG). GAIL and fertiliser companies should finalise the term-sheets, so that these projects are taken up for implementation.

The statement was issued on the basis of the January 8 decision of the empowered group of ministers (EGoM), which had decided issues pertaining to commercial utilisation of gas under Nelp. The statement said that priority should be given to power plants in Andhra Pradesh, as per the gas utilisation policy (GUP), while allocating RIL’s KG gas to the power sector. All the other power plants, which are connected to the KG-D6 field, should also be given gas to make them viable.

The ministry of petroleum will consult the ministry of power to ascertain plant wise requirement and proposed supply. EGoM took note of the production profile of KG basin’s D6 field, whereby production is expected to reach plateau of around 80 mmscmd by 2012 and start dwindling from 2017 onwards till 2020, and concluded that decisions regarding commercial utilisation of gas to be produced from KG-D6 field have to be taken in light of the same.

PSU oil companies may get a price band to fix auto fuel tariff

January 26, 2009. The Government is actively considering allowing public sector oil marketing companies a price band, linked to international crude prices, within which the latter will have the freedom to fix diesel and petrol prices.

The proposal effectively means that the Government would continue to exercise administrative control over retail prices of LPG and kerosene. The officials declined to give any numbers or what could be the possible modulations in the deregulation proposal. They added that the deregulation mechanism will be complicated to work out.

Currently, the Government controls fuel prices of PSU companies, while the private players are free to fix their own tariffs. If the Government allows the public sector oil marketing companies (OMCs) to decide the retail selling prices of auto fuels within a variable band, depending on the international price of crude, the Government will step in only when prices breach the band.

This is expected to take care of the political opposition to allow full pricing freedom to the OMCs. This is not a new idea. Something similar was proposed some years ago for a 10 per cent upper bound for the variation. Complete deregulation would mean good news for the private refiners, who had to incur heavy losses on the petroleum retail business due to subsidised sales by public sector OMCs.

The formula is expected to include budgetary support in the form of oil bonds, and possible changes in tax structure. With the softening of crude prices, the estimated under recovery on the four petroleum products – petrol, diesel, kerosene and LPG – for the current fiscal (2008-09) has come down to about Rs 1,01,445 crore from the original estimate of Rs 2,45,305 crore.

The year 2008-09 has witnessed unprecedented volatility in international oil prices, and price of Indian basket of crude oil reached its highest level of $142 a barrel on July 3, 2008. However, since August 2008, there has been a decline in international crude oil prices.

EGoM decides on commercial utilization of gas under NELP

January 22, 2009. The Empowered Group of Ministers (EGoM) met on 8th January 2009 to decide on issues pertaining to commercial utilization of gas under NELP.

The following decisions were taken:

i) The EGoM took note of the production profile of KG-D6 field, whereby production is expected to reach plateau of around 80 mmscmd by 2012 and start dwindling from 2017 onwards till 2020, and concluded that decisions regarding commercial utilization of gas to be produced from KG-D6 field have to be taken in light of the same.

ii) While allocating gas to the power sector, priority should be given to power plants in Andhra Pradesh, while all the other power plants, which are connected to the KG D6 field, should also be given gas to make them viable. MoP&NG and Ministry of Power would discuss the plant wise requirement and proposed supply.

iii) In order to enable fertilizer projects for conversion/expansion/de-bottlenecking/revival to attain financial closure and based on the request of Department of Fertilizer, GAIL has sent a term-sheet to Fertilizers Companies proposing to make supplies from any of the available sources, viz., RIL’s KG-D6 field, other NELP fields and RLNG. GAIL and Fertilizer Companies should finalize the term-sheets, so that these projects are taken up for implementation.

iv) Existing demand from Petrochemicals, Refinery and Steel sectors, including for downstream units of RIL, would be taken up when there is an increase in the production from KG-D6 beyond 40 mmscmd.

v) Subject to the availability of gas, necessary allocations from RIL KG-D6 field would be made to power projects, including Dadri Power Project, that are in the pipeline, after receiving necessary clearance and permission as and when they are ready to commence production. This will be without prejudice to the decisions of the Court cases.

vi) Actual requirement of natural gas for Kakinada-Hyderabad-Uran-Ahmedabad pipeline, constructed by Reliance Gas Transportation Infrastructure Limited would be met, as the pipeline is critical to evacuation of natural gas from KG-D6 field.

vii) In view of the softening of naphtha prices, Department of Fertilizer should examine the viability of some of its fertilizers plants using naphtha rather than natural gas.

POWER

Maytas lowest bidder for Bhutan hydropower project

January 27, 2009. India's infrastructure and construction firm Maytas Infra, promoted by the family of Satyam Computers' founder B Ramalinga Raju, may bag the construction rights of Bhutan's Dagachu Hydropower Plant as it emerged as the lowest bidder for the project.

In a tender floated in July last year among four Indian construction companies for the construction of civil package of the project, the controversy-ridden Maytas Infra appears to be the likely winner. With Maytas Infra quoting the lowest, the actual construction of the project, earlier scheduled to begin by February, will be delayed by two to three months. According to the newspaper, Maytas Infra quoted Nu 3.8 bn (Rs 380 crore). Hindustan Construction Company Ltd (HCC) quoted Nu 4.2 bn and Patel Engineering Nu 6 bn. The fourth company, Gammon India, was disqualified as it did not meet the tender requirements. If awarded the work, the integrity pact of the contract document can be a hitch to the company. According to the document, the bidder has to commit that it will not be involved in any form of corruption.

The document also states that the company which is awarded the work should not have been involved in any corrupt practice in the last three years. Since the firm has been promoted by Raju and his family, Maytas has come under scanner, particularly in connection with major infrastructure projects it secured from the Andhra Pradesh government.

Also, there were allegations that funds from Satyam were diverted to Maytas, causing government agencies to verify the infrastructure company's records as well. If Maytas Infra is not awarded the work, the tender committee will negotiate with the second highest bidder, the HCC. In case the negotiation doesn't work out, then there will be a re-tender which is expected to take another six months, further delaying the construction kick off deadline.

KSEB sanction for Kuttiadi hydel project

January 25, 2009. A full board meeting of the Kerala State Electricity Board (KSEB) has given administrative sanction of Rs 22.56 crore for implementing the 4 MW Kuttiadi small hydro-electric project.

The meeting decided to raise the connected load limit to 1,125 watts for purpose of exempting the below-the-poverty-line consumers from payment of minimum guarantee. The surcharge to be paid by government departments, public sector undertakings and panchayats for one-time settlement of arrears has been limited to 3 per cent.

The application for getting the benefit should be submitted to KSEB before February 15, 2009, and the one-time payment should be made March 31, 2009. Similarly, the surcharge for consumers, who make one-time settlement of arrears at the adalat to be held in February, 2009, has been reduced to six per cent.

The meeting also decided to purchase 8.75 lakh modern LCD single phase meters as part of the drive to replace faulty meters. The seven per cent dearness allowance lying as arrears for the board employees will be paid along with the March salary.

NTPC net up 26 per cent

January 25, 2009. NTPC, India’s largest power generator, has recorded a 26.4 per cent rise in net profit for the quarter ended December 2008 on the back of increased power generation. The increase in net profit is mainly attributed to better generation which has increased by 15 per cent as compared to same quarter last year. The state-owned power utility reported a net profit of Rs 2,250.9 crore in the quarter as compared to Rs 1,779.9 crore in the corresponding quarter last year, which was a 15 per cent decline in net profit, compared to the same quarter in the year previous to that (2006-2007).

Total income of the company has also increased 20 per cent at Rs 12,128.3 crore in the three months ended December 2008, compared to Rs 10,093.2 crore in the year ago quarter.

HCC-Halcrow consortium bags order

January 23, 2009. Infrastructure firm Hindustan Construction Co, along with UK-based Halcrow Group, has bagged a Rs 2,726-crore order from National Hydroelectric Power Corp for setting up a 330 MW project in Jammu and Kashmir.

The consortium comprising HCC and UK-based Halcrow Group has bagged the 330-MW Kishanganga hydro-electric project from NHPCL. HCC's share in the project is 98 per cent, while Halcrow Group holds the remaining. The project is scheduled to complete in 84 months. The scope of work includes a 37 m high dam, a 23.5-km tunnel and an underground powerhouse.

Power trading can be controlled by two regulators

January 27, 2009. Ahead of the hearing of PXIL's petition on electricity futures, the commodity market regulator, FMC, has said that the spot and futures trading of electricity can be controlled by two different regulators.

The spot market and forward markets in goods (including electricity) can be regulated by two different regulators. Forward trading in electricity comes under the purview of FCRA. This does not take away the jurisdiction of the CERC in respect of spot trading in electricity.

The dispute over the control of electricity futures arose when the NSE-NCDEX promoted Power Exchange of India Ltd (PXIL) filed a petition with the CERC questioning the authority of FMC in dealing with futures trading in electricity.

PXIL, which has kept FMC, Indian Energy Exchange (IEX) and its major promoter MCX as respondents, sought that the CERC should regulate the futures market of electricity. It requested CERC to restrain MCX from dealing in electricity futures.

PowerGrid to get $ 400mn loan from World Bank

January 27, 2009. PowerGrid Corporation of India Ltd, the government owned power transmission company, inked a loan agreement for $ 400 mn with World Bank. The loan will be utilised to fund power grids transmission projects during the 11th plan. The loan assistance, amounting to Rs 2000 crore will be used by Powergrid to implement regional and grid strengthening schemes for formation of strong and vibrant National Grid. It will strengthen the transmission system in various regions of country and also enhance the inter-regional power transmission capacity in the country. Powergrid has already taken loans from The World Bank for more than $ 2 bn for various transmission projects and a further assistance of $1 bn is under discussion.

Ministry of Power has accorded high priority to the development of power sector. It has set an ambitious task of providing power to all by 2012. Massive resources are required to carry out the expansion plan and meet the targets. Towards this, Powergrid has not only tapped domestic markets, but has also been arranging funds from multilateral funding agencies.

Power Grid completes double circuit transmission line in Afghanistan

January 22, 2009. Power Grid Corporation of India said today that it has completed the 202 Km long 220 KV Double Circuit Transmission line from Pul-e-Khumri to Kabul in Afghanistan and the line has been energized on January 20, 2009 initially at 110 KV and power flow has commenced. This line has capacity to carry 300 MW of power.

The project has been funded by Government of India under the assistance program to Afghanistan. Timely completion of this project has further strengthened Indian commitment and involvement in reconstruction of Afghanistan.

The above line is an important link for Transmission System built to bring power from the neighboring country of Uzbekistan to Kabul.

The transmission line is traversing through snowbound and tough hilly terrain with altitude ranging from 1800m to 4000m above sea level and temperatures as low as -30 deg C (in the part of Hindu-kush mountain range).

100 units free power for project-hit

January 27, 2009.  In a significant move, the Centre had said that every hydroelectric project will donate one per cent of power towards the local area development fund and 100 units to each family affected by it. Of the 13 per cent free power, the host state will get only 12 per cent. And in case the state government fails to comply with this, the Centre can take punitive action.

With giant dams like Tehri creating huge rehabilitation problems in the country, Shinde tried to give a healing touch by announcing 100 units of free power every month for each project-affected family for a period of 10 years. The family will also have the right to sell the unutilised power back to the state. The Centre will set up more hydro engineering institutes in the country in order to provide job opportunities to the youth. He also asked the state government to go for thermal electricity as the water in various rivers was gradually receding.

The engineering college and hydro institute, the first of its kind in the country, is being built by the Tehri Hydro Development Corporation (THDC), a joint venture between the Centre and Uttar Pradesh.

THDC is developing the Tehri hydel project, considered to be an engineering marvel. The institute will run a four-year BTech course in mechanical, electric and civil engineering. Besides, it will have a special BTech course for its THDC employees.

India, Kazakhstan sign civil nuclear pact

January 26, 2009. India and Kazakhstan have signed a civil nuclear pact under which the uranium-rich Central Asian country would be supplying the much-needed fuel to atomic plants in the country.

Kazakhstan has also offered five blocks for discovery of oil and gas to India. Kazakhstan would offer special economic zones (SEZ) to India. Once the construction of these industrial zones is completed, the Kazakhstan government would come up with a comprehensive taxation policy.

Both the countries have formed a strategic partnership for setting up joint projects in construction, oil and gas, minerals and metallurgy. Besides, Kazakhstan will supply uranium to India for peaceful purpose.

Coal companies urged to speed up imports to avoid power crisis

January 26, 2009. Power generation in the country may be hit if companies do not import coal expeditiously, the Minister of State for Coal, Mr Santosh Bagrodia, has warned. If there is a shortage of power next year, the blame must be on the power ministry and the power companies for not cooperating and not importing coal.

According to him, no power company has approached Coal India Ltd on its offer to import 4 mt coal in the current financial year. The Ministry has started issuing de-allocation notices to firms that have not commenced production according to the timeline. Out of 200 blocks allocated in last 10-12 years, hardly 20-22 have commenced production.

The Coal Ministry has already issued show-cause notices to public and private sector companies such as Monnet Ispat, Adhunik Group, Haryana Power Corporation and NCT Delhi for de-allocation of captive coal blocks.

NTPC has been allocated six captive blocks since 2004 with estimated reserves of about 4 billion tonnes, which it says is in the process of developing.

Villagers oppose hydroelectric power project in Rudraprayag

January 25, 2009. Many villagers of Rudraprayag district in Uttarakhand have protested against the setting up of a mega hydroelectric power project in their region.

These villagers have been skeptical about hydroelectric power projects built across River Mandakini. Considering this region being prone to earthquakes, the residents of Bhiri, Kund, Parkandi and several other villages are contending that the underground rigged tunnels can have adverse effects.

Rudraprayag, the smallest District in Uttarakhand, falls under the fifth degree of seismic zone. Villagers have forced work on the project to come to a standstill.

This area comes under fifth degree of seismic zone and is vulnerable to catastrophes. In the year of 1998-1999 lots of calamities happened in this area.

Uttarakhand Government had harnessed the vast resources of rivers and other streams by constructing several small dams and mini-hydel projects. However, the project across River Mandakini has not only invited the wrath of locals but environmentalists as well.

And the Government on its part is keen to go ahead with this project. Amidst these developments, the Government is of the view that mini hydropower projects are appropriate and profitable for the region whereas the local residents are opposing this by citing the consequential seismic factors.

Discoms to sign long-term PPAs

January 24, 2009. The four power distribution companies of the State are likely to sign long-term agreements with AP Genco at last to purchase power from the latter’s generation stations.

At present, the discoms are signing only annual power purchase agreements (PPA) with the Genco for the purpose, subjecting it to heavy loss of revenue.

The AP Genco nurtured grievance for a long time that it is not being treated on a par with the private power projects in respect of purchasing its power. This forced the Genco a lodge a serious complaint of discrimination with the AP Electricity Regulatory Commission.

At the public hearing held by ERC on the subject recently, the AP Genco managing director Ajay Jain made a strong plea that the discoms must sign the long-term PPAs with his undertaking power station-wise in a month.

The ERC was positively considering to issue an order, directing the discoms to comply with the request. If such order is given, the revenues accruing to AP Genco will go up steeply, covering its entire installed capacity of 7,000 MW available under both thermal and hydel stations.

Also, the Genco is all set to get a favourable order from the ERC to include Srisailam Left Bank Powerhouse and Jurala hydro-electric project in the list of generation stations to be considered for long-term PPAs. The discoms avoided payment of both variable and fixed costs towards these projects.

NHPC to assess downstream impact of Subansiri

January 24, 2009. The expert group engaged by the National Hydroelectric Power Corporation (NHPC) to assess the downstream impact of the Lower Subansiri Hydel Project will submit its interim report within the current month.

After submitting the interim report within four months of starting the work, the group has been asked to submit a progress report after another four months.

The draft report of the investigation carried out by the group is to be submitted after 12 months of starting the investigation. This will be followed by submission of the final report within 15 months from the award of the study contract.

The interim report is already prepared and it covers the aspects of ecological, geological, hydrological, hydro-biological, climatological etc impacts of the hydel power project.

The survey of the socio-economic impact of the project is going on and its findings would be incorporated in the final report. The group will also focus on the possibility of dam break like situation, cloud burst situation and the impact of the controlled release of water by the project authorities on the river and its basin area.

The changes taking place in the river because of the impact of the project and the impact of the project also on the tributaries of the Subansiri would also be studied by the expert group.

Besides, the scope of the group’s assessment also includes the impact of the project on the geo-morphological condition of the place where the dam is being built. This is needed to determine stability of the dam.

The group will make some recommendations too in its final report to avoid dam-induced calamities and to keep the original character of the river intact.

L&T inks reactor deal with Atomic Energy of Canada

January 23, 2009. Larsen & Toubro (L&T), the country’s largest engineering company, announced that it has signed an agreement with Atomic Energy of Canada (AECL) to build 1,000 MW nuclear reactor in India. This is L&T’s second announcement in the nuclear power space within 10 days.

It had earlier signed a similar agreement with US-based Westinghouse. L&T and AECL have joined hands to develop a competitive cost model for the ACR 1000 and both have agreed to begin discussions to develop nuclear power plants in India and utilise the capacity in global markets. While L&T’s agreement with Canadian company will focus on building advanced pressurised heavy water reactors, its deal with US-company will concentrate on advanced light water reactors. Both the agreements are subject to the government nod. 

Tripura power project gets PIB nod

January 24, 2009. The Public Investment Board (PIB) has given its approval to go ahead with the proposed Monarchak power project in West Tripura district.

The Ministry of Power is preparing its note for placing the proposal to the Cabinet Committee on Economic Affairs (CCEA) for final approval.

The PIB approval is not the final clearance for the long pending 104 MW power project. The CCEA approval is must for NEEPCO to undertake the project as its estimated cost crossed Rs 421 crore.

The NEEPCO could not take final decision on a proposal that involves more than Rs 150 crore. The power project had been pending since 2002.

A team of the Central Inland Water Transport Board would visit Dhaka next month to explore feasibility of using Ashuganj or Sherpur ports to bring heavy equipments for the mega power project.

NTPC clears investment for UP project

January 24, 2009. National Thermal Power Corporation Ltd’s Board has approved the investment proposal for the Rihand Super Thermal Power Project, Stage III (2 x 500 MW). The project will be set up in Uttar Pradesh at an appraised current estimated cost of Rs62.31bn.

Call to withdraw power cut, thermal surcharge

January 23, 2009. The Kerala High Tension and Extra High Tension Industrial Electricity Consumers Association has urged the Kerala State Electricity Regulatory Commission to review the present power position and take immediate steps to withdraw the power cut and thermal surcharge.

With the introduction of thermal surcharge, the Kerala State Electricity Board (KSEB) had earned around Rs 180 crore till date. In addition, by way of fall in Central Generating Stations (GGS) power cost and fuel cost, there was a saving of about Rs 260 crore, thereby a saving of a total of Rs 440 crore.

The power situation in the State has changed significantly and a realistic and complete review is required now. The KSEB had earlier projected an availability of 16 million units per day from CGS.

However, the CGS power availability has now improved to an average of 20 to 21 million units per day, a step-up of 4 million units per day, which is approximately 10 per cent of total daily requirement.

When the thermal surcharge was introduced, the naphtha cost was around Rs 65,000 per tonne and cost of LSHS (Low Sulphur Heavy Stock) was around Rs 40,000 per tonne. This has been reduced to Rs 17,000 per tonne and Rs 13,500 per tonne.

As a consequence, cost of power has come down. Taking into consideration the available 2,609 MU storage in hydro reservoirs at the end of December and an expected inflow of around 600 MU based on the 10-year average up to May end, the daily availability is 18 MU per day.

This is a considerable improvement compared to what was projected in July 2008. No generation was possible from Sabarigiri at the time of imposition of power cut and thermal surcharge. But now, 2 number 55 MW generators are in operation, generating 2.6 million units per day.

The Association said that power cut and thermal surcharge was introduced in July last year following failure of the South West monsoon, reduced availability of power from CGS, steep rise in prices of petroleum products and shutdown of Sabarigiri Power Project.

Later, power restriction of 20 per cent was extended to other consumers in October exempting those who consume up to 150 units a month and power restriction on HT and EHT was reduced from 25 per cent to 20 per cent.

New CERC tariff rules to benefit players

January 21, 2009. The new tariff regulations issued for power generation and transmission projects by the Central Electricity Regulatory Commission (CERC) may improve the profitability of companies such as NTPC, Neyveli Lignite and Power Grid Corporation.

The regulations propose to increase the return on equity for the period between 2009 and 2014 from 14 per cent to 15.5 per cent.

The enhanced returns for generation companies would flow directly to the bottom line as tariffs for power generation and transmission companies are fixed based on the sum of certain specified fixed and variable costs, to which the permissible return on equity of 14 per cent is added.

The regulations stipulate that 30 per cent of the capital cost of a project should be funded by equity and the rest by debt. Now the companies can increase their tariffs so that their return on equity is 15.5 per cent.

In addition, projects that are completed on time will enjoy extra incentive of 50 basis points, i.e. 16 per cent ROE. Though the increase in ROE will immediately benefit only companies that are subject to CERC, there may also be indirect benefits to private players in the future.

The new guidelines may also serve as a guiding principle to State utilities in fixation of tariffs. This may benefit other generating and transmission companies who have or plan power purchase agreements with State utilities.

OIL & GAS

PDVSA begins drill work in Bolivia at Vibora field

January 27, 2009. Petroleos de Venezuela SA, or PdVSA, one of its oil rigs began operations in Bolivia, as part of an energy accord between both nations. Drilling began in the Vibora field, roughly 170 kilometers north of Santa Cruz, with the aim of increasing production of oil and gas in the Andean country.

PdVSA PDV 08, a 2,000-horse-power drill, is one of several Chinese rigs the company purchased in its attempt to rely less on U.S. equipment. President Hugo Chavez has cemented strong ties with Bolivia's Evo Morales and has vowed to help the Bolivian president develop the country's oil and gas industry.

Petrobras to boost overseas production with April start-up at Akpo

January 26, 2009. Brazilian state-run energy giant Petroleo Brasileiro (PBR) will continue to boost its overseas oil production in 2009, with output at a promising oil find in Nigeria to start early in the second quarter. Production at the Akpo field, in which Petrobras holds an 11% stake, was expected to begin in April.

France's Total (TOT) is lead operator in the block, while China's Cnooc (CEO) holds a 45% stake. Petrobras announced its 2009-2013 investment budget.

The international area will see investments of $15.9 bn over the next five years. The company was sticking with its current portfolio of projects, and would be unlikely to pursue new opportunities overseas as the company focuses on expensive subsalt oil development at home.

Petrobras expects to produce an average of 244,000 barrels of oil equivalent, or BOE, a day at overseas operations in 2009. That's expected to rise to an average of 341,000 BOE in 2013.

In 2008, Petrobras produced an average of 224,062 BOE a day at its international operations. Petrobras will initiate drilling at five blocks in Angola in which the company holds stakes. In addition, the company contracted drilling rigs earmarked for prospects in the U.S. Gulf of Mexico and West Africa.

Mitsubishi applies for production development at new Gabonese oil field

January 26, 2009. MPDC Gabon Co. Ltd., a wholly owned subsidiary of Japan's Mitsubishi Corporation, has discovered an oil field in the Ebene license, offshore the Gabonese Republic.

The discovery was named Loche East Marine field and was immediately applied for development and production authorization, which is expected to be approved by Gabonese administration in a few months time.

Currently producing around 1,000 barrels per day with 1 well, the Loche production is expected to reach more than 2,000 barrels per day with maximum reserve potential of 7,500,000 barrels according to MPDC Gabon. Oil show has been observed through an exploratory drilling in March 2007 and has been verified by an appraisal well completed in November 2008.

French large independent Perenco, who is the 3rd largest oil producer in Gabon, owns 50% in the license with operatorship, and a partner MPDC Gabon holds remaining 50%. The production and export is planned to utilize the adjacent production platform owned by Perenco to optimize the project economics and bring early production.

MPDC Gabon currently has interests in 4 offshore licenses, including 1 exploration block with 100% operating interest, and produces 6,000 to 7,000 barrels of equity oil per day.

West Africa, one of the fastest growing and highly potential oil producing areas in the world, has always been a main focus area for Mitsubishi Corporation and today it also produces oil in Angola, besides Gabon.

Gabonese Republic, producing oil since 1957, is one of the oldest oil producers in Africa. Although not a major oil producer in Africa today in terms of volume of oil produced, its well established industrial infrastructure has been attracting various international oil producers and regarded as one of the most important countries by them.

Talisman produces first gas from North Sea's Rev Field

January 26, 2009. Talisman has announced first gas production from the Rev Field in Norway. The Field is expected to produce at a plateau rate of 100 mmcf/d of gas and 6,000 bbls/d of condensate and natural gas liquids from two subsea wells. A third producer, the Rev East well, is expected to be brought on-stream later in 2009.

Talisman's share of proved and probable reserves in the Rev Field at year end 2007 is estimated at 26 mn boe, with proved reserves of 16 million boe. Talisman Energy Norge AS, a wholly-owned subsidiary of Talisman Energy Inc., has a 70% interest in the Field, with Petoro AS holding the remaining 30%.

Production is transported via a nine kilometer pipeline to the Armada platform in the UK, operated by BG International (CNS) Limited, for processing and final export to the UK.

Sibir, Shell JV sets new crude oil production record at Salym fields

January 26, 2009. Sibir has announced that the crude oil production rate at its Salym fields exceeded 150,000 barrels per day (bopd), a new record. The Salym fields are located in western Siberia and are operated by Salym Petroleum Development NV (SPD), Sibir's 50:50 joint venture with Shell.

The new SPD production record brings Sibir's 50% share of production at Salym to over 75,000 bopd. Combined with production from Sibir subsidiary, Magma, at the Yuzhnoye fields in western Siberia, Sibir's total daily production now exceeds 81,000 bopd.

Sibir is very gratified by achievement of the 150,000 bopd production mark at Salym just over three years since the start of commercial production as it marks the fulfillment of the production forecasts upon which the decision to develop the Salym fields was based.

A record 45.5 million barrels of oil were produced at Salym in 2008, representing a nearly one-and-a-half fold increase over 2007 total production. We congratulate the SPD team on these hard-won achievements which were accomplished through professionalism and dedication to task.

Infrastructure investment: Eni OKs 2 greater Longhorn developments

January 26, 2009. Eni has sanctioned two new development projects named Longhorn Phase II and Appaloosa field in the Greater Longhorn Area (US Gulf of Mexico).

The Greater Longhorn Area lies in the region of central Mississippi Canyon (MC), approximately 60 miles offshore Louisiana and also includes both the Eni-operated Corral Platform, previously known as Crystal Platform, and the Longhorn field currently under development.

The development of Longhorn Phase II, sanctioned by Eni in December, 2008 with total investments of $112.9 mn, provides for an additional sub-sea well that will be tied in to Corral Platform. Expected peak rate will range from 30 to 50 million standard cubic feet per day.

The Longhorn gas development project, operated by Eni with a 75% interest and Nexen Petroleum USA Inc. with 25%, is located in MC Block 502 & 546 at a water depth of 2400'. Production at Longhorn is expected to start in July, 2009. The nearby Appaloosa Unit, entirely held by Eni, consists of MC Block 459, 460 and a portion of MC 503 & 504 in 2,800' of water.

Appaloosa unit development was sanctioned in December, 2008 with a total investment of $228.1 mn. Oil processing capacity at Corral Platform will be upgraded to accommodate Appaloosa's first oil, which is expected to flow in January 2010 with a peak rate of 7,500 bopd.

The Longhorn Phase II and Appaloosa development projects will provide Eni with a further opportunity to increase production and reinforce its operating presence in the Mississippi Canyon area.

The Eni-operated Corral platform will become a significant oil and gas processing hub at the edge of the Shelf region in the Gulf of Mexico with further synergies available in the Greater Longhorn area from an appraisal campaign planned to commence in 2nd half 2009.

Eni estimates that the potential of the Greater Longhorn Area in terms of reserves and exploration resources is approximately 100 million boe. In the USA, Eni owns lease interests in 403 blocks in the Gulf of Mexico and is among the leading producers with a daily net production capacity in excess of 100,000 barrels of oil equivalent (60% operated).

Eni is also present in Alaska, where it owns interests in 173 leases on the North Slope and is currently advancing with the development of the operated Nikaitchuq project.

Russia's Tatneft sees slight drop in '09 oil output

January 26, 2009. Russian mid-sized oil firm Tatneft may cut oil output slightly this year as it adjusts its investment plans. Tatneft, which is developing mainly depleted fields in the Volga region republic of Tatarstan, said it had approved a stage-by-stage programme to ensure financial stability and cut costs in 2009.

It is necessary to keep production at a base level of no less than 25.4 mt (510,100 barrels per day) in 2009. It did not give details of its investment programme, saying only that it would continue to develop high viscosity oil deposits in Tatarstan and its fields outside Russia. Tatneft produced 25.77 mt of oil last year, 25,000 tonnes more than in the previous year.

Petrobras unlocks gas in shallow waters of Santos Basin

January 26, 2009. Petrobras has made a discovery in the shallow waters at the southern end of the Santos Basin, in the state of Sao Paulo. The discovery is a thick gas column in reservoirs above the post-salt section as a result of drilling the exploratory well by the Consortium established by Petrobras (63%, Operator) and Repsol (37%) to explore Block BM-S-7.

The block is located 210 km southeast of the city of Santos, off the coast of the state of Sao Paulo in a water depth of 214 meters.

Approved by the ANP (the National Petroleum, Natural Gas and Biofuels Agency), this drilling is part of exploratory activities in accordance with the Evaluation Plan at well 1-BSS-68 where natural gas had been identified in post-salt section reservoirs. The find was confirmed through cable tests conducted in the sandstone reservoirs situated at a minimum depth of 3,970 meters.

The Consortium is to proceed with its exploratory activities through formation testing to be executed at levels where gas has already been found, thus making it possible to assess the commercial viability of this discovery. This find is of major importance due to the potential for gas production in the shallow offshore area of the southern Santos Basin.

Iraq's oil exports exit 2008 at 56 mn barrels

January 26, 2009. Iraq’s oil exports reached 56.2 mn barrels in December last year. According to the statement, 43.4 mn barrels were exported through Basra terminals in the Gulf, while 12.8 mn barrels were exported through Turkey's port of Ceyhan, and the oil was purchased by 23 international oil companies.

The month's revenues from the country's crude oil exports were about $1.943 bn, with an average price of about $34.57 per barrel. However, the revenues from December have fallen from $2.299 bn in November, when the average of the oil price was about $43.54 a barrel.

Iraq oil reserve is reportedly to be the world's third-largest, which needs billions of dollars investment to overhaul its oil industry infrastructure and increase oil and gas output after 13 years of sanctions and war.

Bow Valley's '08 production increased

January 22, 2009. Bow Valley's fourth quarter 2008 production averaged approximately 4,800 boe/d representing a 300 boe/d increase above previous guidance. The year-end exit production capacity was running at approximately 5,400 boe/d.

Sales volumes, which differ from production volumes due to the timing of tanker liftings, averaged approximately 5,200 boe/d during the fourth quarter 2008.

Production from the Chestnut field has continued to exceed expectations since the field commenced production in September 2008.

A second production well was recently drilled in the fourth quarter and scheduled work is underway to tie this well into the Sevan FPSO production facilities.

This well should add approximately 7,500 gross (1,135 net) barrels of production per day by mid-February. Development of the Ettrick field is also nearing completion.

Chevron says committed to Indonesia gas project

January 22, 2009. Chevron Corp is reviewing its business plans in Indonesia, but remains committed to developing natural gas fields offshore from East Kalimantan, Borneo island.

The Gehem and Gendalo natural gas projects in the Makassar Strait would be the deepest offshore gas fields in Indonesia, at water depths ranging from 2,500-6,000 feet (760-1,800 metres).

Chevron, planned to invest about $6 bn to develop gas fields off Borneo, including the Gehem and Gendalo projects, which would help Indonesia to crank up its flagging gas output.  

Oil companies throughout the world have been reevaluating energy developments given a collapse in oil prices, which has made some projects uneconomic.

Deepwater projects are particularly expensive to develop. The combined natural gas reserves in the area covered by the plan are estimated at more than 3 tcf.

Indonesia, which has far more gas than oil, has pushed companies to move faster in developing areas as the country badly needs the gas for domestic industries and exports. Chevron currently produces gas from several other fields in East Kalimantan, but the output is in decline.

Mexican oil production falls

January 22, 2009. According to state-owned Petroleos Mexicanos, Mexico's oil production declined by 9.2 percent last year to just under 2.8 mn barrels per day.

The fall was mainly due to the continuing gradual depletion of the nation's richest oilfield, Cantarell, and to Hurricane Ike, which disrupted production at offshore platforms in the Gulf of Mexico. Though output at Cantarell dropped by 461,000 bpd in 2008, the giant offshore deposit still accounted for 36 percent of Pemex's total production.

The gradual exhaustion of Cantarell was partly offset by increased output at the Ku-Maloob-Zaap field in the Gulf. KMZ produced an average of 702,000 bpd last year with a peak of 802,000 bpd on December 29.

Mexico, the No. 2 supplier of crude to the United States, exported 1.4 mn bpd of oil last year, down 16.8 percent from 2007, but Pemex still made a record $43.32 bn from foreign oil sales thanks to soaring global petroleum prices.

The median price per barrel for Mexico's blend of crudes last year was $84.35, nearly 37 percent higher than the previous year. With recent energy sector reforms, Pemex would produce between 2.7-2.8 mn bpd in the 2009-2010 period, or similar to the current output.

Beginning in 2011, a gradual increase in production will begin until we reach levels near or slightly superior to 3 mn barrels a day in 2015.

Argentine oil output continues downward trend

January 21, 2009. Argentina's oil production fell for the seventh consecutive year in 2008, declining 1.8 percent to 230 million barrels. The study by Economia y Regiones found that natural gas output also fell, from 1.79 bcf in 2007 to 1.77 bcf in 2008.

Argentine oil production peaked in 1998 at 309 million barrels, while natural gas output reached a high of 1.84 bcf in 2004. Argentina has proven crude oil reserves of 2.6 billion barrels and natural gas reserves of 15.77 tcf.

Valero: Industry downturn could be drawn out

January 27, 2009.  Valero Energy Corp. (VLO), the largest U.S. refiner, announced Tuesday its first quarterly earnings loss in six years, due to the falling value of its refineries. Valero is recognized as one of the most stable companies in an industry that depends upon volatile commodity prices.

The largest refiner's mounting concerns could be a harbinger of problems for its peers, particularly the smallest refiners, with less operational flexibility and more limited financial reserves.

Valero took two refineries off the block in 2008 when they failed to fetch desirable bids. A third refinery, in Aruba, remains for sale. Valero does not currently plan any closures nor has it set a metric for evaluating potential plant closures.

Another large refiner, Sunoco Inc. (SUN), announced in December that it will convert its Tulsa, Okla. refinery to a terminal if a buyer is not found in 2009.

Sunoco said the refinery did not merit the investment required to comply with new environmental regulations. Outside of the U.S., refiners are also being pressured to shut plants.

Japan's Nippon Oil Corp. has accelerated its plans to take capacity offline, and will shut one refinery this month. Refiners were pinched during 2008 due to high oil prices and weak demand for fuels like gasoline and diesel.

Falling gasoline demand has continued to cut refiners' profitability in 2009, and Valero said it continues to run its key gasoline-producing units at about 70% to 75% of their total capacity.  

Valero and its peers have largely cut back on capital spending, canceling some projects and postponing others by several years. These repeated delays suggest that the companies do not anticipate a rapid recovery.

Valero reduced its capital spending for 2009 from $3.5 bn to $2.7 bn, and cautioned that it could make deeper cuts.

Kazakhstan to build refinery on Caspian Coast

January 26, 2009. Kazakhstan plans to complete the construction of a Caspian oil refinery in the oil-bearing western region of Mangistau in 2012.

There are plans to implement the project during 2009-2012. The production capacity of the plant is up to 1m tonnes of oil annually.

Once the plant is put into operation, it will make it possible to reach at least 80 percent refining of oil after the first phase, and at least 90 percent at the second stage.

Saudi Aramco, total eye $1.2 bn cost cut on new refinery

January 26, 2009. Saudi Aramco and France's Total want bidders for a new joint venture refinery to chop at least $1.2 bn from costs due to the global economic downturn.

Top oil exporter Saudi Aramco has sent bidders back to the drawing table on several mega-projects to expand energy capacity as it looks to take advantage of the slide in prices for commodities and to drive down costs.

The tight credit market may also encourage contractors to lower bids, as they look for access to Aramco's cash. The Saudi state company funds the majority of projects from its balance sheet, rather than through credit.

When commodity prices were near their peak last year, the 400,000 barrels-per-day refinery to be built on the Saudi east coast at Jubail had an estimated cost of around $12 bn.

Satorp has delayed the bid round for refinery construction contracts by another month to March to give bidders time to rewrite proposals to reflect cheaper prices for commodities and raw materials.

The bid round has already been delayed from November as Satorp looked to force down costs. Aramco and ConocoPhillips have also delayed bidding on a 400,000 bpd joint venture refinery to be located at Yanbu.

Aramco has also put contracts for its 900,000 bpd Moneefa field under review. Moneefa will pump heavy crude to feed the two joint venture refineries.

ExxonMobil renews partnership with NASCAR for oil and lubricant products

January 23, 2009. As a reflection of the value of the relationship with the nation's number one motorsport, ExxonMobil announced the renewal of a long-standing official partnership with NASCAR for its Mobil 1 motor oil and Mobil brand of lubricant products.

The 2009 NASCAR season will mark the seventh consecutive season in which Mobil 1 is the Official Motor Oil of NASCAR and the Mobil brand of lubricant products are the Official Lubricants of NASCAR. The new agreement extends that official partnership through the 2012 season.

Turca not giving up oil refinery plans

January 23, 2009. As per the Turkish fuel retailer Turcas, it has not canceled plans to build a $4 bn refinery on the Mediterranean coast.

Turcas and its partner Socar, Azerbaijan's state oil company, have postponed the refinery project amid the squeeze on financing during the global economic downturn.

Polish PGNiG plans to join Nabucco

January 27, 2009. Polish Gas Company PGNiG plans to join the Nabucco pipeline project, Hungary's government. The government quoted Polish Prime Minister Donald Tusk as saying in a letter to his Hungarian counterpart, Ferenc Gyurcsany, that Poland supported the Nabucco project which could help diversify Europe's gas supply.

It did not specify how the Polish company would take part in the project. The overall cost of Nabucco project is seen at 7.9 bn euros ($10.43 bn).

It is due to span 3,300 km (2,051 miles) and meet 5 percent of Europe's gas needs. Nabucco will bring 31 bcm of Caspian or Middle Eastern gas annually from Turkey to an Austrian gas hub via Bulgaria, Romania and Hungary.

Consortium members, who include Austria's OMV, MOL of Hungary, Romania's Transgaz, Bulgargaz, Turkey's Botas and RWE of Germany have said the European Union should provide either prefinancing or guarantees to convince commercial banks and suppliers the project is viable.

El Paso files App to build Ruby pipeline

January 27, 2009. El Paso Corp. has filed with the Federal Energy Regulatory Commission (FERC) an application, under Section 7(c) of the Natural Gas Act, for a certificate of public convenience and necessity to construct and operate the Ruby Pipeline.

The proposed 675-mile, 42-inch interstate natural gas pipeline will access growing sources of supply from multiple Rockies' basins and make those supplies available to Nevada, California, and Pacific Northwest markets.

Ruby is expected to have an initial design capacity of up to 1.5 bcf per day. El Paso Corp. owns North America's largest interstate natural gas pipeline system and one of North America's largest independent natural gas producers.

Iraq tenders to sell fuel oil via Southern Port

January 26, 2009. Iraq's State Oil Marketing Organization, or SOMO, invited foreign companies to bid for lifting fuel oil produced from the country's southern oil fields.

SOMO set the closing date for receiving bids at 12 noon  February 15.   It said the fuel oil should be exported via the southern Khor al-Zubair terminal on the Arabian Gulf.

Last September, SOMO invited bids to sell 40,000 metric tons of fuel oil produced by Baiji refinery 200 kilometers north of Baghdad. The fuel oil offered for sale is believed to be produced from Al Shaaba refinery near Basra.

BW Gas to buy LNG vessels for $720 mn

January 26, 2009. Norwegian gas shipper BW Gas Limited has agreed to buy four liquefied natural gas (LNG) carriers from World Nordic SE for $720 mn and will pay for the vessels by issuing new shares.

BW Gas would issue 273.58 mn new shares at 18.5 Norwegian crowns ($2.65) per share to the seller in exchange for shares in Bergesen LNG, the company owning the four vessels.

BW Gas will offer shareholders, other than the seller, rights to subscribe for new shares at the same 18.5 crowns price, aiming to raise up to 1.58 bn Norwegian crowns ($226.4 mn). The company, which has a fleet of 70 vessels, expects the offering to take place before the end of the first quarter 2009.

The acquisition is expected to be completed simultaneously with the Offering. The acquisition and offering are subject to approval by a shareholders' meeting on February 26.

ND okays funding for pipeline interconnect study

January 22, 2009. The North Dakota Industrial Commission awarded a $89,750 contract to two companies Kadrmas, Lee, & Jackson and Rooney Engineering, Inc. for a feasibility study on constructing a pipeline to connect with one of TransCanada's Keystone pipelines.

The study will determine whether a connecting pipeline can be economically built by a third party, address quality concerns of transporting Bakken crude in the same pipeline as oil sands crude, provide route options, and establish a project timeline.

This is the first step in the process that can assist in transporting our valuable crude oil to the market. The 2,148-mile Keystone Pipeline will transport up to 590,000 barrels of crude oil daily from Alberta to U.S. markets in Illinois and Oklahoma.

Henry Hub operator declares force majeure

January 22, 2009. The operator of the Henry Hub, the benchmark trading point for U.S. NYMEX natural gas futures, declared force majeure due to a compressor outage its north booster station.

For the duration of the force majeure, compression capabilities will be reduced by 20 percent. Repairs were expected to be completed within 24 hours and the company did not expect firm transportation services to be affected.

Sabine, a unit of oil major Chevron Corp, operates a 131-mile (210-km) pipeline that transports natural gas between Erath, Louisiana, and Port Arthur, Texas.

Bulgaria says to import Azeri gas from 2010

January 26, 2009. Bulgarian Prime Minister Sergei Stanishev reached an agreement with Azeri President Ilham Aliyev to import 1 bcm of Azeri gas a year from 2010.

The agreement follows last year's memorandum of understanding between Bulgaria and Azerbaijan on the exports of 1 bcm of gas to the Balkan country, which is trying to ease its dependence on Russian gas.

Next week, Bulgargaz (Bulgaria's state gas monopoly) and the Azeri gas company will start technical talks on the concrete parameters of the future agreement.

Stanishev and Aliyev met in Budapest, where both will attend a conference on the European Union-backed Nabucco pipeline project on Tuesday, which aims to bring Caspian and Middle Eastern gas to Europe to reduce the continent's reliance on Russian energy.

But to import Caspian gas, Bulgaria will need to build a 250 mn euro ($328.6 mn) 80-km stretch to link its gas network to an existing Turkey-Greece pipeline, which is already carrying Azeri gas to Europe. Sofia is yet to raise money for the plan and receive Athens' and Ankara's consent, which could take well over a year.

Bulgaria, which is almost fully dependent on Russian oil and gas, was one of the worst hit in a Moscow-Kiev gas row which cut Russian supplies to Europe via Ukraine for two weeks earlier this month.

Uzbek leader Quells Russian gas fears, secures deal

January 23, 2009. Uzbekistan pledged to support a new trans-Russian gas pipeline, easing Moscow's fears it would succumb to European pressure to bypass Russia with its energy supplies and reduce its influence in the region.

Uzbekistan had offered to sell 16 bcm of gas to Russia this year and could double that amount within the next decade. The former Soviet republic has troubled Moscow by seeking better ties with the West.

The European Union, alarmed by a two-week disruption in Russian gas supplies via Ukraine this month, wants Central Asia to feed its Nabucco pipeline project, which would bypass Russia. It would also use gas from the Caspian.

Uzbekistan was happy with a new price formula offered by Moscow and would back the new pipeline. The two pipelines are not mutually exclusive, and Uzbekistan last year started work on another route to China. Gazprom, Russia's state-controlled gas export monopoly, buys Central Asian gas and sells it on to Europe.

Moscow wants to protect its control over these flows and relies on a steady supply of Uzbek, Turkmen and Kazakh natural gas. Actual sales of Uzbek gas to Russia this year would be lower than the 16 bcm offered due to technical limitations.

Uzbekistan could export twice as much in future, once Russia's second-largest oil firm, LUKOIL, starts producing 16 bcm of gas per year there by 2015.

Russia is a country which has always been present in this region and a country which has defined politics and the balance of forces here.

Uzbekistan became Moscow's closest ally in the region after the West imposed sanctions in 2005 in response to a security crackdown in the Uzbek town of Andizhan.

Indonesia may sell LNG to China at old contract price

January 23, 2009. The government may sell liquefied natural gas (LNG) from Tangguh in Papua to China at the old contract price of US$3.35 per mmBtu.

The government and China have not finalized negotiations to set a new price. If no agreement is reached until the first shipment is made in May 2009, the government may have to use the price set in the old contract.

With the oil prices soaring in 2008, Indonesia demanded renegotiation of the price set in the old contract signed by the previous government. The old contract was signed when oil price to which the LNG price is tied, was US$25 a barrel.  

BG, Anadarko won't bid for Iraq oil tenders

January 22, 2009. BG International of the U.K., U.S. Anadarko Petroleum Corp. and Germany's Wintershall Holding AG's BASF SE are not planning to submit offers to develop Iraq's oil and gas fields announced in the first bidding round.

Out of the 35 prequalified international companies eligible to bid for developing Iraqi oil and gas fields, only three didn't buy information packages.

According to procedures announced by the oil ministry, any company which didn't buy one of these oil and gas fields' packages, couldn't submit bids to compete for the six oil and two gas fields included in the first bidding round which Iraq announced last June.

The remaining 32 companies, including the world's oil majors, are expected to submit offers to compete for long-term service contracts to develop one of the world's largest oil fields. 

POWER

National Grid to spend $1.7 bn on US power projects

January 27, 2009. National Grid Plc (NG.L) expects to spend up to $1.7 bn over the next five years to improve its electric transmission system in New York and New England.

National Grid awarded contracts to design and build substations and transmission lines to two joint ventures NorthEast Power Alliance for work in New York and New Energy Alliance for work in New England.

NorthEast Power Alliance is a joint venture of engineering firms AMEC Plc, Michels Corp and RG Vanderweil Engineers. New Energy Alliance is a joint venture between Balfour Beatty Infrastructure Inc and Quanta Services Inc's MJ Electric LLC.

National Grid expects to finalize the contracts by April 1. The investment of up to $1.7 billion over five years does not include the money the company plans to spend on its distribution system in New York and New England during that time.

National Grid, headquartered in London, owns and operates more than 4,000 MW of generation in New York and transmits and distributes power to about 3.3 million customers and natural gas to about 3.4 million customers in New York and New England.

Britain starts search for new nuclear build sites

January 27, 2009. Budding nuclear power plant builders have two months to nominate sites for the next generation of nuclear power stations in Britain.

Europe's biggest utilities, which have been clubbing together this month in readiness to build the nuclear power plants Britain hopes will replace an aging fleet of state built reactors, have until March 31 to submit their site proposals.

Britain's publicly-run Nuclear Decommissioning Authority plans to nominate four of its facilities, including the Sellafield nuclear fuel processing plant.

French nuclear energy giant EDF, which is buying the owner of most of Britain's nuclear power plants, British Energy, plans to build two reactors at Sizewell in Suffolk and two at Hinkley Point in Somerset.

It also plans to nominate sites at Heysham in Lancashire, Hartlepool in northeast England and Dungeness in Kent. Subject to a robust investment framework being put in place in the right timescales, EDF Energy intends to build four new EPR nuclear reactors in the UK, with the first to be operational by the end of 2017.

Earlier this month German utilities RWE and E.ON joined forces to build nuclear power stations in Britain, while Scottish and Southern Energy and Spain's Iberdrola also plan to work together on new reactors.

Sri Lanka grants concessions for LNG-fired power plant

January 26, 2009. Sri Lanka has given tax concessions to an Australian consultancy to develop a 488 MW liquefied natural gas (LNG) fired power plant for the state-run electricity grid.

The Board of Investment of Sri Lanka (BOI) which gives tax concessions for foreign investors said a US$600 mn investment deal has been signed with Lanka Alokha AB (Pvt) Ltd. The firm is sponsored by ARC Development International of Australia, headed by Paul McMohan. ARC is a consultancy operating in Australia and Malaysia.

The LNG plant sited in Kerawalapitiya, north of Sri Lanka's capital Colombo would eventually be expanded to a 1,000 MW facility. LNG power would be clean and cheaper than other private power projects supplying Ceylon Electricity Board.

The LNG plant would not be paid a capacity charge, indicating that it would come as a 'merchant plant'. There was no mention whether a minimum volume has been guaranteed or whether a formal power purchase agreement has been signed yet.

Loadshedding reduced for industrial sector in Pakistan

January 27, 2009. Loadshedding for industries has been reduced after electricity shortfall dropped to 1,600 megawatts from 3,500MW in the beginning of the current month. The shortage during daytime had dropped to 900MW and during peak consumption hours to 1,600MW.

Loadshedding for the textile sector has been reduced from eight hours a day to four and for small and medium enterprises to between four and six hours.

Uninterrupted power supply was being provided to ‘continuous process industries,’ including cement, paper, chemical, plastic and pharmaceutical factories which have committed to reduce their consumption by 25 per cent during peak hours.

The supply to agricultural tubewells is being ensured from 5pm to 6 am. A release of R7.5 bn by the finance ministry on January 4 on the directives of President Asif Ali Zardari had helped increase supply of furnace oil to thermal units.

The generation capacity of independent power producers had increased because of the liquidity created by the government. The situation has considerably improved as compared to last month.

Public weighs in on Xcel transmission project

January 27, 2009. Xcel Energy presented a $20 mn transmission project to the public. The plan includes building a new substation in Lake Hallie and new transmission lines from that substation to Chippewa Falls.

Xcel may need to put power lines on private property, but the company does not expect to use eminent domain for the land it needs. Other lines would be rebuilt, including some in Eau Claire and the town of Wheaton.

Electricity may be rationed in Tajikistan

January 26, 2009. Energy officials in electricity-starved Tajikistan say strict rationing of power supplies may soon be introduced in the capital city, Dushanbe. According to deputy Energy Minister Pulodov Muhiddin, limits on power consumption have been tightened to compensate for a shortfall caused by the suspension of electricity supplies from Turkmenistan. The country is taking unusually high volumes of water from its main reservoirs to generate hydropower. Water levels at the key Nurek reservoir may reach critical point by mid-February, causing further shortages. Electricity is currently limited to just three hours daily across the country, except in the main cities.

Kosovo NGOs against electricity price hike

January 21, 2009. A group of Kosovo NGOs has sent a letter of complaint to the electricity regulator, asking them not to go ahead with a planned increase in the price of electricity but take into account the poverty and unemployment plaguing the new country.

The group is made up of the Civic Action FOL 08 and other non-governmental organizations in the country. This is the first time that Kosovo NGOs have protested about a purely economic issue, so far having been preoccupied with the political questions of Kosovo’s status.

Kosovo's power infrastructure was damaged in the 1998-99 conflict between ethnic Albanian guerrillas and Belgrade, and in the NATO bombing to expel Serb forces. One year after its formal declaration of independence from Serbia, Kosovo still suffers blackouts.

Beside the technical problems, the power company's main woes stem from the thousands of illegal connections stealing power from the grid, and from consumer's refusal to start paying for electricity which they got for free throughout the 1990s, when Serbian authorities, and bills, had little formal reach in Kosovo. For the Serbian minority, an additional reason is that they refuse to support Kosovo's new independent institutions.

Railways to invest Rs 70 crore in Gujarat wind farm

January 27, 2009. The Railways’ investments in the wind energy sector are on the upswing. After setting up wind farms in Tamil Nadu, it is considering to set up a 10.5-MW wind farm in Saurashtra region of Gujarat with an investment of Rs 70 crore.

Western Railways is planning to set upseven wind turbines of 1.5 MW capacity at the wind farm, which would be operational by the end of fiscal 2009-2010. The investment could be scaled up and turbines of about 100 MW could be set up across various locations in the zone.

Indian Railways spends about Rs 5,500 crore annually for electricity procurement. Wind farms set up by the Railways are connected to the State grid and the generated power is supplied to the grid. The equivalent power is drawn by the Railways from the grid by paying wheeling charge.

Suzlon enters Sri Lankan market

January 22, 2009. Suzlon Energy Ltdhas announced its entry into Sri Lankan wind energy market with an order to supply 10 MW of wind turbines.

The project would be developed by Senok Wind Power Pvt. Ltd, the company said in a press release. It involves supplying eight units of Suzlon's S64 - 1.25 MW wind turbines and it would be installed in the Kalpitiya region. Supply of turbines will commence in FY09 and will be completed in FY10.

Refex Energy plans Rs 1,000-cr solar plant in Gujarat

January 21, 2009. Refex Energy Ltd, a Mumbai-based company,  said it would invest Rs 1,000 crore for setting up a 50 MW solar power plant in Gujarat.

The company signed a memorandum of understanding (MoU) with the Energy and Petrochemicals Department, Gujarat Government, at the Vibrant Gujarat Global Investors Summit (VGGIS) 2009 here in this connection.

Of the total investment proposals worth Rs 12 lakh crore received during the two-day summit, more than a fourth was for the energy sector alone – Rs 3.82 lakh crore.

These included alternative energy sources such as wind, geothermal and solar power (Rs 1.02 lakh crore), nearly 30 per cent of the total investments promised in energy sector.

Refex Energy is likely to carry out the plan in phased manner and may commence the first phase of the project this year. This project will include design, supply, implementation and maintenance of solar installations. Refex Energy had recently partnered with IBC Solar, Germany, for solar system integration projects in India. IBC Solar is one of the largest solar photo-voltaic (PV) system integrators in the world and Refex’s partnership with IBC Solar will help them to cater to the growing Indian solar industry.

TEPCO plans 10-MW solar plant to cut CO2 emissions

January 27, 2009. Tokyo Electric Power Co (TEPCO) plans to build a 10 MW solar power plant in central Japan, as Asia's biggest utility works to meet targets for reducing greenhouse gas emissions.

TEPCO's emissions have jumped since it had to indefinitely shut down Japan's biggest nuclear plant after a July 2007 earthquake, as it has been forced to increase output from oil-fired and other thermal power plants.

TEPCO has agreed with the government of Yamanashi prefecture, west of Tokyo, to construct the plant with the aim of beginning partial operations in the year starting in April 2011.

They aim to generate about 12 mn kilowatt-hours of electricity a year, helping to reduce CO2 emissions by about 5,100 tonnes annually.

TEPCO did not reveal the projected costs for building the plant. Yamanashi prefecture will provide the land for the facility.

The move marks TEPCO's second multi-megawatt solar project, as Japanese utilities aim to cut CO2 emissions per kilowatt-hour by 20 percent over the five business years that started in April 2008, compared with 1990 levels.

TEPCO announced in October that it and Kawasaki city, near Tokyo, would work to build two solar plants with combined capacity of about 20 MW.

Japan is the world's second-largest solar power generation market behind Germany. Japan's top 10 utilities plan to build enough solar power facilities to have the capacity to produce 140 MW of electricity by March 2021, an industry body has estimated.

Pittsburg to adopt solar power

January 27, 2009. A solar-fed hot water tank will be installed in the city firehouse by fall the first of many sun-powered upgrades to slim the city's bulging energy costs.  Dozens of city employees learned how to use and maintain photovoltaic panels and other solar-harnessing gadgetry.  

The cost of installation isn't known because bids haven't been solicited yet. Money for the equipment, but not installation or maintenance, likely will come from a $100,000 renewable energy trust fund Ravenstahl created in 2008. Consultants with the DOE and Sandia National Laboratories in New Mexico helped the city select the firehouses from a list of more than 300 city facilities. Large buildings in which solar panels would do little to lower energy consumption were eliminated from contention. Pittsburgh is one of 25 Solar America Cities that received $450,000 from the DOE to study how to use solar energy. The city contributed another $200,000. Pittsburgh received the money in 2007, but used only a small portion by late 2008 to educate officials and nine volunteers on a solar technology task force.

Nacel Energy to build 20 MW wind farm in Texas

January 27, 2009. Wind power generation company Nacel Energy has entered into two wind development rights agreements covering an aggregate of 1,573 acres of farm land located in Swisher County, Texas. At project build-out, Nacel Energy anticipates 20MW-plus of power generating capacity.

According to the company, collection of site specific wind data has commenced at Swisher with the installation of a 60m NRG Systems meteorological tower transmitting data back to Nacel Energy, via an Iridium satellite uplink. The company said that project commissioning was not expected until at least the end of the company's fiscal 2009-2010 year, or later depending upon future events.

SWEPCO to buy electricity from Texas wind farm

January 21, 2009. A utility under fire by environmentalists and landowners for construction of a $1.5 bn coal-fired power plant in southwest Arkansas has announced plans to buy all the electricity generated by a Texas wind farm. The farm is to enter service by the end of this month. SWEPCO has a goal to add 1,000 MW of wind power between 2007 and 2011.

The company, based in Shreveport, La., has begun construction of a 600 MW coal-fired power plant near Fulton in Hempstead County. At the same time, SWEPCO is fighting ongoing legal challenges from opponents who say the plant will degrade the environment and wildlife habitat, as well as threaten public health. Coal-fired power plants are among the chief sources of greenhouse gases, which are blamed for global warming.

According to Energy Information Administration, about 7 percent of all energy used nationwide in 2007 was from renewable resources. Biomass accounted for slightly more than half of that, while hydroelectricity generated roughly one-third. Wind and geothermal energy each provided about 5 percent, and solar energy accounted for 1 percent. SWEPCO is a subsidiary of Columbus, Ohio-based American Electric Power, among the largest electric utilities in the country.

Dear Reader,   You may have received complimentary copies of the ORF Energy News Monitor. Our objective in bringing out the newsletter is to provide a platform for focused debate on India’s energy future. You could be a partner in this effort by becoming a subscriber. You could also contribute recommendations for India’s energy future in the form of brief insightful articles.   We look forward to receiving your patronage and support.   ORF Centre for Resources Management

 

ORF ENERGY NEWS MONITOR   Subscription Form Please fill in BLOCK LETTERS

Subscription rate slabs for Commercial entries, Research Institutes, Academics and Individuals will be provided on request. The subscription can be made for soft copy or for hard copy or for both. Selected ORF publications as well as advertising space in one issue of the ORF Energy News Monitor are offered as introductory free gifts for Commercial Sector only.

Yes! I/we would like to receive copies of the weekly ORF Energy News Monitor for a period of ______year(s).  I/we shall be entitled to one hard copy along with the option of soft copies to a list of e-mail addresses provided by me/us for the period of subscription.  I/we also note that I/we shall get select ORF publications brought out during the period of subscription free.    Name……………………………Address…………….………………………Telephone……………………Fax………………….E-mail………………… Please find enclosed cheque/Bank Draft No.........................dated …………………drawn at New Delhi for Rs.........……….favouring ‘Observer Research Foundation’   Please fill in this form and mail it with your remittance to   ORF Centre for Resources Management OBSERVER RESEARCH FOUNDATION 20 Rouse Avenue New Delhi - 110 002 Phone +91.11.4352 0020 extn 2120 (Vinod Tomar) Fax: +91.11.4352 0003 E-mail: [email protected]

 

 

• Energy
• China
• India
• Remedies

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.