energy news- june 2013

7/28/2019 Energy news- June 2013.

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Copyright 2012-13, Energy Review Top

Energy Digest

Power & Coal

SCCL has its hands full for the time

Power bidding norms to be changed Australia to do away with coal Southern states concentrating on ensuring power supply for key services by

August

Delay in allocation of gas causes Rs. 40,000 crore blockage

Oil & Gas

Oil subsidy math goes for a haywire Natural gas price may hike up ONGCs subsidy bill may rise 22% this year Cap on subsidized cylinders causes reduction in LPG usage in the country Niko increases proved reserves by 160%

Renewable Energy

Renewable energy attractiveness index slipping in the country Tata Solar plans on over $1 Billion Opportunity in India Solar Bill that could add 2.2GW by 2023 New Clean Energy Test Centre in US Latin America and the Caribbean brimming with Renewables: Might be an

investment opportunity


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Power and Coal

SCCL has its hands full for the time

India's second biggest coal producer Singareni Collieries Co. Ltd. (SCCL) willinvest Rs.10,360 crore over the 12th Plan period (2012-17) to enhance production,

open new mines and build a 1,200 megawatt (MW) coal-based power plant inAndhra Pradesh's Adilabad district. Singareni Collieries is jointly owned by theAndhra Pradesh and the Union governments, with the state holding acontrolling stake of 51%. Spread across 612.21 km over Adilabad, Karimnagar,Khammam and Warangal districts in the Godavari Valley Coalfield in AndhraPradesh, Singareni Collieries holds estimated reserves of 9877.68 mt.

Of the total investment, SCCL will spend Rs.5,276 crore to expand its core miningbusiness. This will include opening nine mines, of which three are undergroundmines with a combined capacity of 3.47 million tonnes per annum (mtpa); the

rest are opencast mines with 12.60 mtpa combined capacity. These mines willreplace nine ageing mines that are expected to be shut by end of 2017 as theirreserves get depleted.

Increase in production cost is a key concern for Singareni Collieries, analysts say."Our operational cost structure is quite high because of higher stripping ratio,"said Bhattacharya, a senior bureaucrat in the Andhra Pradesh government whotook over charge of Singareni Collieries in May last year from S. Narsing Rao,now the chairman of Coal India Ltd. SCCL's average cost of production atRs.1,850 per tonne is 76% higher than that of Coal India's, largely due to deeper

deposits that require costlier underground mining methods and higheroverburden removal at its opencast mines. SCCL produces 22% of its coal fromunderground mining, while Coal India produces just 8% of its coal through thismethod. "There is a concern of increase in cost, though the (coal) prices meet thecost at the moment, but there is pressure on the system," Bhattacharya said. "Thethrust of the company is to improve profit-turnover ratio."

Singareni Collieries supplies most of its coal to the state-owned Andhra PradeshGeneration Corp. Ltd (APGENCO) and NTPC Ltd; it sells the rest to cement,steel, pharma, ferro alloys and other industries at spot prices. Its price of coalranges from Rs. 420 - Rs. 3,896 a tonne for 17 grades of coal.

It is also heard that Singareni Collieries, which makes its bread and butterthrough coal mining, wants to diversify its basket by entering allied areas likepower production, contract mining and consulting services. The state-ownedmining company is setting up a 1,200 MW power project in Adilabad district inthe vicinity of its Srirampur area mines at an estimated cost of Rs. 6,500 crore.The first unit of 600 MW is expected to go into production in mid-2015, followed


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by the commissioning of second unit in the later half of that year. "We will beinvesting around Rs. 2,000 as our equity from internal accruals," Bhattacharyasaid. With SCCLs plans to enhance production, open new mines and build a1,200 megawatt (MW) coal-based power plant the company seems to beextremely busy in the coming future.

Power bidding norms to be changed

Amid electricity producers facing issues with fuel price volatility, government islooking to ensure necessary "risk mitigation" measures are in place for upcomingprojects where location and fuel are already decided.

The Power Ministry has finalised the changes to Case II competitive biddingnorms for new projects. In Case II, the location of the project and fuel to be usedare already decided before start of competitive bidding. The revised guidelineswould be in place once it is approved by the Empowered Group of

Ministers (EGoM) headed by Defence Minister A.K. Antony. "We will focus onrisk allocation and risk mitigation measures (in revised Case II bidding norms)...In the new bidding norms, we will try to balance risks faced by power producersand power procurers," a Power Ministry official said.

The official did not elaborate on whether higher fuel costs would be made passthrough to the consumers. With significant volatility in fuel prices, especially inimported coal costs, many power generators are adversely impacted since theydon't have the option to pass through the higher costs to end consumers.

Indian power sector, which is projected to see a capacity addition of about 88,000

MW in the current Five Year Plan (2012-17), is grappling with multiple woesincluding fuel scarcity, environmental hurdles and weak financials ofdistribution companies. Meanwhile, for upcoming projects to be awardedthrough Case I route -- where developers have the choice to decide on location,fuel and technology to be used for the plant -- higher fuel costs is expected tomade pass through. Experience has shown that it might not be feasible for powerproducers to have stable fuel costs for the entire period of the project, expertssaid.

In the context of Case I norms, a Power Ministry official had said that fuel costs

cannot be made a basis for bidding and it has to be pass through to theprocurers. "Once made pass through, there should be certain efficiencyparameters and safeguards are in place to ensure balance between the interests ofpower producers and procurers," the official had said recently.
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pre-industrial conditions, with the Arctic experiencing 9-12 degrees Celsiusregional warming - way beyond the official target of 2 degrees Celsius -worsening an already very dangerous situation. This would result in a world ofone billion people, not the present seven billion, as death and destruction ensuefrom a combination of heat stress, escalating extreme weather disasters, sea levelrise, disease, food and water scarcity with consequent social disorder andconflict. Australia will be severely affected, probably with major population

decline, unless emission reductions are accelerated. Yet notwithstanding the 20per cent limit on burning the world's proven fossil-fuel reserves if catastrophicclimate change is to be avoided, by 2025, the Australian coal industry is planningto more than double coal exports, and the gas industry to quadruple gas exports,which will make us one of the top five global emitters, exports included.

Southern states concentrating on ensuring power supply for keyservices by August

All the southern states are expected to implement by August the islandingschemes that would ensure power supplies to essential services in the event ofgrid disturbances. The idea of islanding scheme gained prominence after themassive failure of electricity grids last July that affected more than half ofcountry's population.According to latest update from the Central Energy Association (CEA), theplanning body for the power sector, the four Southern states Andhra Pradesh,Tamil Nadu, Karnataka and Kerala - would have islanding scheme by August2013. As of now, six islanding schemes have been envisaged for the South. Theseschemes also come at a time when the government is making efforts to connect

the Southern grid with the National Grid.

In the South, the biggest islanding scheme - having a capacity of 18,545 MW -would ensure essential power supplies to major cities in the four states. It wouldcover Andhra Pradesh, Karnataka, Chennai and Hosur (Tamil Nadu), and NorthKerala. Another scheme of 7,380 MW would cover the rest of Tamil Nadu andKerala. Islanding schemes are already in place in many parts of the countryincluding Maharashtra.

The enquiry panel that looked into the reasons for the collapse of power gridslast year had suggested the creation of electricity islands. "Efforts should bemade to design islanding scheme based on frequency sensing relays so that incase of imminent grid failure, electrical islands can be formed."These electricalislands can not only help in maintaining supply to essential services but wouldalso help in faster restoration of grid," the committee had said in its reportsubmitted to the Power Ministry last year.


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UPDATES

1. Govt to set up 600MW coal-fired power plant

The PML-N government is all set to announce that it will set up a 600MW coalfired power plant in the country, sources close to the policy making circles.

Sources maintained that the Nishat Group is likely to be assigned this task alongwith being the first in line to convert its IPP, AES Lalpir, to coal. This phase isexpected to last between two-and-a-half and three years. The financing for it islikely to come from the Chinese engineering and construction companies that arelikely to get the contracts for coal-conversion. Significantly, western firms andwestern finance institutions no longer finance coal-fired power plants owing totheir negative environmental impact. In the initial phase, the proposed 600MWpower plant will consume imported coal. The necessary modifications will becarried out later to convert it on Thar coal. No one could be contacted in theNishat Group to comment on the issue. The Council of Common Interests (CCI),on January 23, 2013, approved a new 600MW coal-based power project atJamshoro. The plant will use a mix of imported and Thar coal and will be set upwith a $900 million loan acquired from the Asian Development Bank (ADB). Dueto the ADBs reservations, the CCI decided to start the 600MW power plant with80% imported coal and 20 % Thar coal, and gradually increase the content ofThar coal when it is able to enhance supplies. The ADB had expressedreservations on a government decision to utilise its loan for development of Tharcoal and subsequent power generation. The bank said that setting up theJamshoro plant based on domestic coal is not workable as it had approved thefinancing of power plants to be run on imported coal. Therefore, it was decidedthat the project would be initiated with larger imported coal content and

supplies from Thar would be gradually increased.

2. Newcastle coal workers strike

More than 200 workers at a Newcastle coal terminal will embark on a week ofstrike action in a bid to secure better workplace conditions. Port Waratah CoalServices (PWCS) employees will conduct protected four-hour stoppages, from11pm to 3am, every night from Thursday until next Wednesday. The MaritimeUnion of Australia says the stoppages will occur because a number of conditionshaven't yet been agreed upon after more than nine months of negotiations. "We

are close to agreement," MUA national assistant secretary Ian Bray said."However, there remain a few unresolved issues that the workers considerimportant enough not to walk away from and, as a result, the workers are takingthis protected industrial action." He says the union hopes for a speedy resolutionto the standoff so workers can "get on with the business of shipping coal toPWCS clients". A PWCS spokesman says the company is disappointed by thelatest action but the stoppages won't halt operations over the next week. "We'vegot contingency plans in place and we'll be unloading trains and loading ships
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according to that plan safely using trained staff," he told AAP. He saidnegotiations had been carried out in a "good spirit", adding PWCS was hopefulof finally reaching an agreement.

3. Teck appoints VP for coal as new COO

Canada's largest diversified miner Teck Resources on Thursday appointed its VP

for coal, Ian Kilgour, as its executive VP and new COO, as the company focuseson cost management amid dwindling commodity prices. Kilgour joined Teck inFebruary 2011 as Teck's senior VP for coal, and would now be responsible for allof Teck's mining operations and joint ventures in its steelmaking coal, copperand zinc business units. Teck also announced that Dale Andres would lead itscopper division, following the retirement of Roger Higgins. Andres previouslyheld an executive role in copper strategy and North American operations andwas responsible for developing the growth plan for Teck's copper business unit.During Higgins' five years at Teck, the company's copper production had grownfrom some 300 000 t in 2008, to a yearly rate of 400 000 t in the last half of 2012.

4. Coal scam: CBI books Udit Rathi, directors for fraud, corruption

The probe into the coal scam is gathering pace, with the CBI lodging a caseagainst Delhi-based Rathi Steel & Power Ltd, charging the company and its brasswith fraud and corruption for misrepresenting facts to secure allocation of KeslaNorth coal block in Chhattisgarh in 2008. The CBI on Wednesday booked chiefexecutive Udit Rathi and directors of the private company, which was issued ashow-cause notice by the coal ministry on June 6 for the gross delay in thedevelopment of the coal block, a spokesperson of the agency said. The CBI hascarried out raids at the company's office on Delhi's Mathura Road and eight

other locations, the spokesperson added. In its show-cause notice issued to thecompany, which was earlier called Rathi Udyog Ltd, the coal ministry said therewas no sign of any mining activity at the Kesla North coal block site and gave thecompany 20 days to explain the delay. The ministry also threatened to takeappropriate action for de-allocation of the block. The company's managingdirector Pradeep Rathi could not be reached for comments through the day. Anexecutive declined to comment, saying, "There have been raids on the companyand we will not be able to respond to any queries." As per the CBI's firstinformation report or FIR, the 13th so far registered by the agency in connectionwith the coal blocks allocation scam, Rathi Steel & Power Ltd misrepresented its

state of preparedness in terms of possession of land to secure the coal block. "It isalso alleged that the company was favoured for allocation of coal block overother better placed applicants," the FIR says. The company was allotted the coalblock, which was expected to have an annual production of three lakh tonne, forits own sponge iron plant in Orissa.

5. WCL denies alleged supply of inferior quality coal to MahaGenco
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Coal India Ltd (CIL) and its subsidiary Western Coalfield Limited (WCL) havedenied the allegation levelled by the Maharashtra State Power Generation Co.Ltd (MahaGenco) that they supplied sub-standard quality of coal to the state-owned power company. In the affidavit filed before the Nagpur bench ofBombay High Court, the companies said that there was "no basis" toMahaGenco's allegation that it was "forced to import coal due to less quantityand poor quality of coal supplied by WCL". It asserted that joint sampling done

by WCL and MahaGenco had endorsed the quality of coal and there was nosubstance in the allegation of poor quality of coal supplied by WCL which wasaffecting the power scenario in the state, the affidavit claimed. The PIL allegedthat due to the ongoing turf war between WCL and MahaGenco, all theconsumers of Maharashtra were forced to shell out more money for electricity."The primary reason was steep hike in generation cost due to less supply ofdomestic coal and import of costly coal by power utilities," it said. "Instead ofresolving the dispute, everybody is happy to import high-priced coal or purchasecostly power produced by private players and burden the state exchequer andconsequentially common man of Maharashtra," the PIL said.However, the WCL has blamed MahaGenco for the "mess" asserting that it wasfollowing FSA and adhering to agreed quality of coal as per the rate fixed by theCentre. "Even the Coal Controller found no substance in MahaGenco's complaintabout quality of coal," the affidavit said. The sampling of coal was conducted atDumrikhurd, Umrer and Ghuggus sidings of WCL thrice and proximate analysiswas conducted at CIMFR, Dhanbad and by a letter dated April 5, 2013, the CoalController rejected MahaGenco's demand to change grades, it said. The CIL andWCL also denied allegation of colluding with washery operator and supplyinginferior quality of coal. The division bench of Justice A.P Bhangale and JusticeArun Choudhary had issued notices to all the respondents the case - the CIL,WCL, Ministry of Coal, Government of Maharashtra through Chief Secretary and

Energy Secretary on Jan 11, 2013.

6. Sixty-nine power plants yet to sign fuel supply pacts with Coal India

The coal ministry has informed the Prime Minister's Office (PMO) that of the 69power plants which are yet to enter into fuel supply pacts with state-run CoalIndia (CIL), 29 cases belong to NTPC and its joint ventures. The power plants ofNTPC and its joint ventures (JV) which have not signed FSAs include Dadri,Korba, Farakka, Simhadri, Bhilai JV and Sipat. Though these power plants of thepower PSU have not signed pacts with CIL, most of them are drawing coal under

MoU (Memorandum of Understanding), the ministry said. "There are 131 casesof power plants/units which are... for signing of FSAs (Fuel Supply Agreements)by CIL (Coal India) and its subsidiaries. Out of these 131 cases... FSAs for 62cases have already been executed... Out of 69 cases, 29 cases belong to NTPC andits JVs," the Coal Ministry has informed the PMO. Principal Secretary to theprime minister, Pulok Chatterjee, had in December last year directed that theremaining FSAs should be signed within a month's time. The PMO's directive inDecember 2012 came after its November 2012 deadline for signing of FSAs was
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missed. Earlier, the government issued a Presidential Directive to CIL to signFSAs with the power producers assuring them of at least 80 % of the committedcoal delivery. NTPC has not entered into FSA with CIL as it had raised concernsabout quality of coal being supplied to its power plants

7. Chinese coal imports may drop in June

Xinhua reported that China's coal imports fell 3.9% in May from April due toweakening demand and worries over a government policy to curb low qualitycoal and may drop again this month. Coal imports, including lignite, totaled27.57 million tonne, down from 28.69 million tonne in April, according toCustoms data. Still, imports were up 5.6% from a year earlier. Analysts said that"The National Energy Administration said last month China may ban imports ofcoal with low heating value, potentially affecting lignite, which is considered thelowest type of coal. The ban may affect miners in Indonesia, Vietnam and theUS." The MoM fall in imports also comes as China reported a slowdown inpower consumption growth and amid a steady decline in domestic coal prices,which made imports less attractive. The China Coal Transport and DistributionAssociation said that "As the price gap between domestic and imported coal isnarrowing and coal inventories at most ports are near full, coal imports may fallagain in June from May." Coal imports rose 9.7% in April MoM, and 12.5% inMarch. China, the world's largest coal producer, has become a net importer ofthe fuel due to a bottleneck in railway transport which caused supply constraintsat power plants.

8. Coal of Africa sees 12.6 million mt/year ROM production at Makhado

South African junior miner Coal of Africa Limited (CoAL) said Wednesday a

definitive feasibility study has determined 12.6 million mt/year of run-of-minecoal production at its flagship Makhado coking coal project over a 16-year mine-life.A coal processing plant will be built to handle the 12.6 million mt/year of ROMcoal, producing an estimated 2.3 million mt/year of hard coking coal (HCC) --with 10% ash, 31% volatile matter and 1% sulfur -- and 3.2 million mt/year ofdomestic and export quality thermal coal with 30% ash, the miner said in astatement. CoAL said the DFS determined that Makhado -- in the Soutpansbergcoalfield in South Africa's Limpopo province -- has 344.8 million mt of mineabletons in-situ, which will be mined on an opencast basis, with the potential to

expand into an underground operation. It said the HCC is expected to have amine average gate cost of Rand 865/mt ($88.71/mt) after thermal coal by-product credit. CoAL added that the HCC should produce a metallurgical cokewith high coke strength after reaction value of over 60. The miner added that theproject also has the advantage of existing infrastructure such as rail, road, powerand 3 million mt/year port allocation at Terminal de Carvao da Matola inMaputo, Mozambique to supply the domestic and export markets. CoALchairman David Brown said the miner has started the financing stage of the
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project and has also begun discussions with black economic empowermentgroups as potential partners, as well as seeking other strategic partnerships. Headded that CoAL aims to complete its regulatory approval and fundingrequirements by the first half of the 2014 calendar year, with full productionfrom 2017. Analysts from investment bank Investec commented in a noteWednesday that, although CoAL has now demonstrated the value of Makhado,securing funding would be a key challenge in bringing the asset into production.

9. Power producers may be allowed to pass fuel cost to consumers

The government is likely to consider a mechanism on Friday to allow powercompanies pass on the burden of expensive imported coal to electricityconsumers. This mechanism would benefit power plants owned by companieslike Reliance Power, Adani Power and Lanco Infratech and having total capacityof 78,000 mw. The plants, commissioned after 2009, will secure 80% of their coalrequirement from Coal India Ltd. As per latest fuel pacts, Coal India Ltd hasagreed to supply 65% of the requirement from domestic mines and the rest 15%through imports. Under the mechanism, the entire cost of imports is proposed tobe passed on to the consumers. This is against an earlier proposal of averagingprices of imported and domestic coal. "The cabinet committee on economicaffairs is likely to discuss a price pass-through mechanism for power plants thathave fuel pacts with CIL. The cost of imported coal will be borne by theconsumers," a power ministry official said

10. Jakson Power to double revenue by March 2016

Jakson Power Solutions, a power solutions company, today announced plans todouble its revenue by March 2016 to Rs. 2500 crore. As part of its strategy to

double revenues, the company will increase its market share in diesel-basedpower generation in India. It plans to manufacture 12,500 generating sets by theyear 2016 compared with 8,000 units now. Jakson Power has startedmanufacturing generating sets at its Kalsar plant in Gujarat apart from Damanand Jammu units. This plant will be India's largest integrated DG Setmanufacturing facility and it will also focus on manufacturing of specialapplication generating sets like defense. The company currently manufacturesAcoustic Enclosures at the facility for Cummins India Ltd, besides using them forits captive consumption. The Greater Noida plant focuses on manufacture ofSolar & Power Distribution Products. The range of diesel generators spans from

7.5 KVA to 3000 KVA. The plants at Kalsar and Daman would be manufacturinggenerating sets upto 250 KVA capacity and higher capacity would be producedat Jammu plants. Sameer Gupta, managing director, Jakson Power Solutions,"The generating set market in India would continue to grow at 10% to 12% perannum and as a leader in this segment, Jakson has proactivelymade investments in doubling up the manufacturing capacity. Jakson who hasmore than 3 decades old relationship with Cummins remains committed toproviding technologically efficient, non-polluting generators to the consumer."


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Going forward with its overall business strategy, the company has also recentlyinvested in Solar Power Plant and has commissioned its own 20 MW IPP in Bap,near Jodhpur in Rajasthan with the investment of around Rs. 200 crore. Thecompany has signed 25 years power purchase agreement (PPA) with NVVN(NTPC Vidyut Vyapar Nigam Limited) for this project. The company is planningto increase the overall generation capacity from 80 MW to 100MW within nextthree to four years with an investment of Rs. 750 crore.

TENDERS

1. NTPC has invited Expression of Interest (EoI) from short listing agencies fortransportation of fly ash. The interested agencies having experience oftransporting fly ash through railway wagons may participate. Dry fly ash shallbe made available from the DAES (Stage II) silo on as available basis for aperiod of 5 years. For further details visitwww.ntpctender.com

2. BHEL invites tender for procurement of 3 tons Electrically operated hoist forvarious projects. For further details please visitwww.bhel.com

3. BHEL invites bids for supply of constant Load Hangers as per BHELsrequirements. Interested candidates may visitwww.bhel.com.

4. NTPC invites sealed tenders for various supplies in two parts (Part A & B)from eligible international/domestic bidders. Please visit www.ntpctender.comfor further details.
http://www.ntpctender.com/http://www.ntpctender.com/http://www.ntpctender.com/http://www.bhel.com/http://www.bhel.com/http://www.bhel.com/http://www.bhel.com/http://www.bhel.com/http://www.bhel.com/http://www.ntpctender.com/http://www.ntpctender.com/http://www.ntpctender.com/http://www.bhel.com/http://www.bhel.com/http://www.ntpctender.com/


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Oil & Gas

Oil subsidy math goes for a haywire

Just when finance ministry officials had dropped their guard on subsidies, the

near-10% fall in the rupee against the dollar has compelled them to pull out theircalculators. After all, finance minister, P Chidambaram had gone public sayingthat the government will pay only Rs 20,000 crore as under-recoveries, a movethat would have meant that the Centre stayed within the Budgeted subsidy level.

Between the time Chidambaram made the statement four weeks ago and mid-June, the cost of crude for Indian refiners has increased by $3 a barrel to $104now. During this period, under-recoveries on diesel alone have shot up byalmost 70% to Rs 6.30 a litre as the under-recovery on the motor fuel goes up by78 paise the moment the price of crude rises by $1 a barrel.

Similarly, with a $1 increase in the price of crude petroleum, annual under-recoveries for oil retailers rise by 8,000 crore. So, a $3 increase in the cost ofIndian basket of crude would mean a Rs. 24,000 crore impact on oil retailers.Although crude price eased on Thursday, the fall in the rupee against the dollarwould negate the gain. While the finance ministry would want upstream playerssuch as ONGC and Oil India and retailers to bear the burden, officials admit thatthe task won't be easy, given the fragile finances of the state run companies. Atthe same time they also recognize that passing on the entire burden to theconsumer is not simple either. "It will definitely impact profits and under-recoveries," said Indian Oil Director (Finance) P.K. Goyal, although he rules out

the need for any package, at least just yet.

Oil companies would simply want flexibility in increasing fuel prices, especiallydiesel that is a politically-sensitive issue. While Chidambaram's subsidycalculations were based on the assumption that the under-recovery on the fuelwould be wiped out by the time elections in five states take place later this year,the rising gap between local and international fuel prices is making the tasktougher. There is every chance that the government will have to allocate morefunds for oil subsidy, putting pressure on overall finances.

Of the Rs. 65,000 crore allocated this year, Rs 45,000 crore has already been usedin clearing last financial year's arrears. Even the food subsidy allocation maycome under strain if the proposed policy is implemented. But as officials say,there is always the possibility of squeezing expenditure, something that they didlast year.


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Natural gas price may hike up

The Cabinet may consider next week across-the-board hike in natural gas pricesafter key finance and fertiiser ministries have endorsed Oil Ministry proposal fora 60 % increase in rates immediately. The Ministries of Finance, Power andFertiliser have sent their comments on a revised note floated by Oil Ministry forpricing natural gas, as per the formula suggested by Prime Minister's economic

advisor C Rangarajan headed panel.

The panel had suggested pricing domestic gas at an average of rates at three keyinternational hubs - US Henry Hub, National Balancing Point of UK and well-head prices of supplies into Japan, and the actual cost at which India importsliquid gas (LNG). The price as per the formula in the current quarter comes toUSD 6.775 per million British thermal unit as against the current rate of USD 4.2per mmBtu.

Ministry of Finance wanted some changes in the pricing methodology by

excluding international hub rates and pricing domestic gas at rate equivalent atthe actual cost of LNG to India on a long-term contract. The gas price, if theFinance Ministry's suggestion is accepted, would come to USD 6.79 in theimmediate future and USD 8.93 by the end of current fiscal. It would rise to USD10.29 in 2014-15 and USD 10.92 in the subsequent year. Price of gas as per OilMinistry proposal formula would be close to USD 12 in 2014-15 and USD 14 inthe next year.

The power ministry pitched for a gas price of no more then USD 5 and no changein rates of gas produced by state-owned firms like ONGC, called APM gas. Oil

Ministry has rejected the suggestion of no change in APM price saying producersneed to be incentivized to raise output. The Fertiliser Ministry was largely inagreement with the proposal for revising rates every quarter. Oil Ministry hasproposed raising gas price for state-run firms immediately and that for RelianceIndustries from April 2014 when it is contractually due.The hike in natural gas price by USD 1 would result in Rs 3,155 crore per annumhit on fertiliser plants for producing 23 million tonnes of urea this fiscal and Rs4,144 crore a year for 32 million tonnes of urea production from 2017-18, sourcesadded. The impact of every dollar hike in gas price would be about Rs 10,040crore per annum on the power sector.

ONGCs subsidy bill may rise 22% this year

State-run Oil and Natural Gas Corporation (ONGC) expects its subsidy burdento rise 22% to Rs 60,000 crore this fiscal, which threatens to offset the gains fromthe rupee's fall. The rupee's recent fall is expected to bring windfall profits toenergy companies like ONGC when they sell natural gas in US dollars. However,


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for ONGC this is likely to get diluted by the expected rise in its subsidy bill. Theentire upside of the rupee devaluation gets shaved off as the company's seniormanagement now expects ONGC's subsidy payments to rise to Rs 60,000 crorethis fiscal, as it expects to shell out more discounts to PSU fuel retailers, given theway the rupee is behaving currently.

"Even with the recent hike in petrol prices, and the upcoming revision in diesel

prices, we expect our subsidy burden to increase substantially this year," anexecutive said. Executives of OMCs said that with the rupee in free fall, theunder-recovery on diesel has risen to Rs. 7 per litre from Rs. 3 at the beginning ofthe year. They also said that after the Rs. 2 increase in petrol prices last week,there is no under-recovery on petrol at present. Investors and industry expertshad been expecting huge gains for ONGC after the rupee's fall to an all-time lowlast week, as it would have benefited from selling natural gas in dollars.

"A simple back-of the-envelope calculation suggests that on 50 mscmd of gasoutput, ONGC could see a daily gain in excess of 1 crore," said another seniorexecutive. Pricing of domestically produced gas was changed from the Indiancurrency to the USD at the oil ministry's behest in May 2010 when rates wererevised to $3.818 per million British thermal units ($4.2 per mmBtu afterincluding royalty) from Rs 3,200 per thousand cubic metres (equivalent to $1.79)."On a full year basis, at the current rate of output of 50 mscmd, ONGC couldgain close to Rs. 500 crore," said the market source. The subsidy burden hasalready taken its toll on ONGC's profits.

For 2012-13, the energy giant's profit after tax dropped 16.7% to Rs 20,926 croreon a subsidy outgo of Rs. 49,421 crore, compared with Rs. 44,466 crore in theprevious year.

Last month, with the softening of oil prices to $97-100, ONGC had written to thegovernment seeking a reduction in the discount it offers to PSU refiners on crudepurchases, but it did not yield a response. The company has sought a $60 perbarrel realization on sales, up from the current $47 per barrel.

Cap on subsidized cylinders causes reduction in LPG usage in thecountry

A tight vigil against diversion of subsidized fuel meant for domestic use seems tobe paying off. The consumption of liquefied petroleum gas (LPG), commonlycalled cooking gas, has started to dip since the government capped the sale ofsubsidized cylinders to every household and for the first time ever, sales havefallen for two successive months in comparison to the corresponding period ofthe previous year. Consumption fell 0.7% in April 2013 over April 2012 while inMay the decrease was pronounced to be at 5.2%. The government capped thenumber of LPG cylinders for a household to six a year effective September 2012,


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but later enhanced the limit to nine per year in January 2013 under pressure frompolitical allies. Each subsidized 14.2 kg LPG cylinder is priced at Rs. 398 inChennai and Rs. 410 in Delhi, while the price of non-subsidized refill costs Rs.792 in Chennai and Rs. 802 in Delhi. Any consumption beyond nine cylinders isnot subsidized.

During April-May 2013, cooking gas consumption in India fell to 2.4 million

tonnes from 2.5 million tonnes in April-May 2012, a fall of 3.3%, according toprovisional data from the three state-owned oil marketing companies. Thisincludes both piped as well as bottled LPG. Oil planners had anticipated a 4-6%growth in LPG consumption for the 2013-14 fiscal. But, early figures suggestgrowth may be slower. LPG consumption grew around 10% in 2011-12 before itdropped sharply to 1.8% in 2012-13. "Households now realize the need to holdback LPG cylinders only for cooking purposes as any usage more than stipulatedlimits will cost them significantly," oil industry sources told TOI.

Interestingly, while sales of the 14.2-kg cylinder meant for domestic use hasdipped, officials said consumption of the 19-KG cylinder meant for commercialpurposes has grown around 10% since September 2012 (when the order to capsubsidized cylinder was announced). "The growth in consumption of auto LPGhas been nearly 20% since September," the official said.While it is evident that diversion of subsidized LPG for commercial andautomotive purposes has halted, some analysts also attribute it to a slump inindustrial activity. "Consumption of all petroleum products in May 2013 was ameager 1.7%, as per provisional data. That is because of economic slowdown.LPG consumption could also be low because of slowdown effect," an analystsaid.

Not just LPG, a combination of factors including a slowdown in sales of dieselvehicles, drop in prices of furnace oil and overall sluggishness in economicactivity has resulted in a dip in diesel consumption too. During April-May 2013,diesel consumption grew 5.9% at 12.5 million tonnes as against 11.8 milliontonnes in the comparable period in 2012. In fact in April, diesel consumption wasa poor 4.2%. Overall diesel consumption growth for 2012-13 was at 6.8%compared to 7.8% during 2011-12.

Niko increases proved reserves by 160%

The Company has received the final draft of the reserve evaluations for the D6and NEC-25 Blocks in India and Block 5(c) in Trinidad and Tobago, and the finalreserve evaluation for Block 9 in Bangladesh from independent petroleumengineering firms. The evaluations for the D6 and NEC-25 Blocks in India andBlock 5(c) in Trinidad and Tobago are subject to final review and signoff by theindependent reserve engineering firm. These evaluations have been prepared inaccordance with National Instrument 51-101 - Standards of Disclosure for Oil


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and Gas Activities and the Canadian Oil and Gas Evaluation Handbook, with aneffective date of March 31, 2013.

"This is a very positive reserve story for Niko. And not reflected in these reservesis the recently announced MJ-1 gas condensate discovery in the D6 Block inIndia, which we feel could add significantly to future reserves," said EdwardSampson, Chairman, President and CEO of the Company.

The Pananda-1 exploration well in the North Makassar block, located offshoreKalimantan in the deepwater Makassar Strait of Indonesia, was drilled in waterdepth of 7,433 feet to a total depth of 19,685 feet in 50 days, and an 80 foot gasinterval was identified in the upper section of the well. Drilling confirmed thepresence of hydrocarbons in a previously untested Middle Miocene turbiditepackage in a basin floor setting. A thick package of over 700 feet of very finegrained distal turbidites was drilled, although poor reservoir properties indicatenon-commerciality at this location. The Pananda-1 well is situated approximately40 kilometres southeast of the Chevron-led deepwater development project atGehem field.

Additional prospectivity in the Middle Miocene turbidite play remains to beevaluated in the vicinity of Pananda-1. Niko holds a significant acreage positionin this play trend along with joint venture partners Statoil, Eni, GDF Suez andBlack Platinum Energy.

The Ocean Monarch drilling rig is mobilizing to the Cendrawasih PSC in EasternIndonesia, where it will spud the Elang-1 well in early July, 2013. The Companyhas reached an agreement with Repsol SA in which a Repsol subsidiary companywill become a joint venture participant in the Cendrawasih PSC. As a result of

the farmout, Niko will operate with a 70% interest and Repsol will have a 30%working interest in the PSC. The transfer of interest is subject to approval by theGovernment of Indonesia.

UPDATES

1. Statoil makes second Flemish Pass basin oil discovery

Statoil has made the companys second discovery of light, high-quality oil in theFlemish Pass basin offshore Newfoundland but said it cannot yet judge the findsresource potential. The company encountered oil while drilling its Harpoonprospect in 1,100 m of water on EL 1112 about 500 km northeast of St. Johns,Newf., and 10 km southeast of the 2012 Mizzen oil discovery that Statoilestimated to hold 100-200 million bbl of oil. As part of its 2013 three-wellexploratory program off Newfoundland, Statoil is currently drilling itsFederation prospect in the Jeanne dArc basin. The company will then return to


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the Flemish Pass basin to drill the Bay du Nord prospect southwest of theHarpoon and Mizzen discoveries. Statoil is operator of Harpoon with a 65%interest, and Husky Energy has 35%.

2. Vietnam: Vinh Thuan discovery well sub-commercial

Mitra Energy Ltd. will plug and abandon its 45-VT-1X Vinh Thuan well on Block

45 offshore Vietnam as a sub-commercial oil and gas discovery. The Ensco 107jack up drilled the well to 2,245 m true vertical depth subsea, and MDT andminidrillstem tests validated the presence of oil and gas. 45-VT-1X is the secondin a three-well Mitra-operated program on the Block 45 and Block 46/07 PSCs.Upon plugging, the rig will move to Block 46/07 to drill the 46/07-HC-1X HonChuoi well. Mitra holds a 35% operated working interest in the PSC. TalismanEnergy has 35% subject to government approval and Petrovietnam Exploration& Production has 30%.

3. Total obtains stake in Bokhtar PSC in Tajikistan

Total E&P Tajikistan BV has finalized acquiring a 33.33% stake in the Bokhtarproduction-sharing contract in Tajikistan from Kulob Petroleum Ltd., asubsidiary of Tethys Petroleum Ltd., and held jointly with CNPC Central AsiaBV, a subsidiary of China National Petroleum Corp. Tethys Petroleum noted thatthe Amu-Darya basin in neighboring Uzbekistan and Turkmenistan containssome of the worlds largest gas and gas-condensate fields and that the samereservoirs have yet to be drilled in the basins Afghan-Tajik extension insouthwestern Tajikistan. This Tajikistan government approved the transaction.The Bokhtar PSC covers 36,000 sq km at the northern end of the prolific Afghan-Tajik basin. The PSC area is 300 km from China. Operations will be conducted

through an operating company, Bokhtar Operating Co. BV. BOC plans a largeseismic survey, and tentatively expects to make a decision on a first explorationwell by yearend 2014.

4. FPSO en route to Papa Terra heavy oil field offshore Brazil

The P-63 floating production, storage, and offloading vessel left theQuip/Honorio Bicalho shipyard in Rio Grande, Brazil, after the modules wereintegrated, and the platform was commissioned, Petroleo Brasileiro SA(Petrobras) said.

The FPSOen route to Papa Terra heavy oil field 68 miles off Rio de Janeiro in3,940 ft of waterwas converted from the BW Nisa tanker at Cosco shipyard inChina. Petrobras operates Papa Terra field, which has 14-17 gravity oil in theCampos basin. Petrobras believes the P-63 FPSO will help increase oil productionto reach the companys overall production target of 2.75 million b/d by 2017.With a capacity to process 140,000 b/d of oil and compress 1 million cu m/day ofgas, the unit is going to the Papa Terra field in the postsalt Campos basin. PapaTerra is operated by Petrobras with a 62.5% interest. Chevron Overseas of Brazil


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Ltd. holds 37.5%. The unit arrived in Brazil in January for its final constructionstages.

5. CNOOC resumes normal operations at Zhuhai gas terminal

CNOOC Ltd. has restored normal operations on the subsea natural gas pipelineserving the Zhuhai terminal, which leaked in December 2011. The Zhuhai

terminal is also now operating normally. CNOOC completed temporary repairsof the third-party damage to the pipeline mid-January 2012, and has beensupplying gas to customers since. Severe environmental conditions at the leaksite delayed repairs. Zhuhai terminal, on Hengqin Island, Zhuhai city, is the gasprocessing terminal for joint development of both the Panyu 30-1 gas field andHui Zhou 21-1 oil field in the eastern South China Sea off Guangdong Province.

6. Cabinet may consider hike in gas price next week

The Cabinet may consider next week across-the-board hike in natural gas pricesafter key finance and fertiliser ministries have endorsed Oil Ministry proposal fora 60% increase in rates immediately. The ministries of Finance, Power andFertiliser have sent their comments on a revised note floated by Oil Ministry forpricing natural gas, as per the formula suggested by C Rangarajan panel. Thepanel had suggested pricing domestic gas at an average of rates at three keyinternational hubs US Henry Hub, National Balancing Point of UK and wellhead prices of supplies into Japan, and the actual cost at which India importsliquid gas (LNG). Sources said the price as per the formula in the current quartercomes to $6.775 per million British thermal unit as against the current rate of $4.2per mmBtu. Ministry of Finance wanted some changes in the pricingmethodology by excluding international hub rates and pricing domestic gas at

rate equivalent at the actual cost of LNG to India on a longterm contract.

7. GSPC, Adani Gas hike CNG prices

Citing failure of the Centre in supplying natural gas at cheaper rates, GSPCGas has increased prices of CNG and PNG, prompting Adani Gas, too, to followsuit. In a statement, GSPC Gas said it has increased prices of compressed naturalgas (CNG) by Rs 2 per kilogram with taxes effective from June 19, from theexisting Rs 60.15 to Rs 62.15. In the case of piped natural gas (PNG) for domesticuse, the prices have been increased from the existing Rs 21.50 per standard cubic

metres (SCM) to a bimonthly slab as per consumption. Accordingly, the rates forthe first 30 SCM will be Rs.25.50, for 31 to 40 SCMs Rs 34.10 and for 41-plusSCMs Rs 40. Close on heels of GSPC Gas, Adani Gas Ltd also revised CNG pricesby Rs two per kg, in Ahmedabad and Vadodara, on Wednesday, from Rs 63.80 toRs 65.80, citing depreciation in Indian rupee against the US dollar and theupward revision in imported LNG price. In the absence of allocation of gas bythe Centre under administered price mechanism (APM) to Ahmedabad, Adani


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Gas has to depend on expensive R-LNG supplies to fulfill the growing demandby the CNG users, the company said in a statement.

8. Reliance's oil imports down 12% in May y/y

Reliance Industries, owner of the world's biggest refining complex, importednearly 12 % less oil in May compared with a year earlier, tanker arrival data

made available to Reuters showed. Reliance, which has a diversified crude slateand shifts purchases to maximise revenue, bought about 1.17 million barrels perday (bpd) of oil in May, a decline of nearly 18% from April, the data showed.Reliance's two advanced refineries in western Gujarat state can together process1.2 million bpd of oil, about 28% of India's overall capacity. In the first fivemonths of 2013, the private refiner shipped in about 1.22 million bpd of oil, a 3percent decline from a year ago, the data showed. In January to May, it boughtabout 48% of its oil needs from Latin America, with Venezuela maintaining itsposition as top crude supplier, which it has held since May 2012, followed bySaudi Arabia. The Neutral Zone, a border area whose production belongs toSaudi Arabia and Kuwait, was the third-biggest oil supplier to Reliance in thefirst five months of this year. Reliance has an annual deal with Saudi Aramco tobuy about 240,000 bpd oil, including 60,000 to 65,000 bpd from its fields in theNeutral Zone. Reliance's imports from outside the Middle East included Mereyand Leona from Venezuela, Jubarte and Roncador from Brazil, Maya fromMexico, Castilla from Colombia, Lokele from Cameroon, Mandji and Olendefrom Gabon, Dalia from Angola and Gharib Blend from Egypt.

9. Shell to resume Niger oil spill compensation talks

Oil company Shell will resume talks next week in London with lawyers

representing 15,000 of the poorest people in the world who are claiming millionsof pounds compensation for oil spills on the Niger delta. But Martyn Day, ofLeigh Day law firm which is acting for the communities, said the case could stillgo to a full high court trial in London in 2014. The Shell Petroleum DevelopmentCompany of Nigeria (SPDC) has admitted liability for two spills from a pipelinein the Niger delta in 2008, but the company disputes the quantity of oil that wasspilled and the damage that was done to livelihoods and the environment nearthe coastal village of Bodo in Rivers State. Oil spill experts working for thecommunities estimate that nearly 500,000 barrels leaked from the companypipeline over several months, Shell claims it was far less. The legal action,

represents the first time Shell or any oil company has faced claims in the U.K.from a community from the developing world for environmental damage. Wehave agreed to negotiate over the next two to three weeks. Probably the talks willgo on into the autumn when a deal will become more likely, said Mr. Day. Thelegal development came as Netherlands National Contact Point (NCP), whichoversees the implementation of OECD guidelines on the human rights andenvironmental records of multinational companies, broadly backed claims byAmnesty International and Friends of the Earth International that Shells


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repeated assertions that sabotage is responsible for most of the oil spilt in Nigeriais based on flawed investigations which rely on information provided by thecompany itself. The two organisations offered NCP video evidence of seriousflaws in the system used by Shell for investigating oil spills.

10. Chevron Says Cost Pressures in Australian Resources Still IntenseChevron is leading development of the Gorgon liquefied natural gas project and

the nearby Wheatstone terminal as it looks to meet Asia's rising demand forclean-burning fuels, but has repeatedly warned that labor costs and red tape ismaking investments in Australia less attractive. In December, the U.S.-basedcompany unveiled a 21% cost overrun at Gorgon to 52 billion Australian dollars(US$48.4 billion). Wheatstone, which is at an earlier stage of construction,remains within its US$29 billion budget. "The cost pressures remain-there is nolet-up, obviously, in wage demands," said Colin Beckett, Chevron's generalmanager of the Greater Gorgon area. Many in the industry think "we cancontinue to increase wages, at the same time as having declining productivity",but this is misguided given Australia's emerging gas-export sector facescompetition from new East African and North American suppliers in future, Mr.Beckett said at an industry conference. "When it comes to the costs of goods andservices I don't see any falling off in terms of costs," he said. Resource companiescontribute more than 120 billion Australian dollars (US$115 billion) a year toAustralia's economy, with coal and iron the country's largest exports and Chinathe largest buyer. However, most recent investment has been focused ondeveloping the country's vast resources of natural gas for export, with Gorgonand Wheatstone among seven projects currently under construction.

TENDERS

1. GAIL (India) Limited invites online bids (E-bids) from eligible bidders forProviding of Security care taking and Loss Prevention Services along theNatural Gas Pipeline Network and Installations of KG Basin under GAIL,Rajamundry in Andhra Pradesh. Bid due date and time are 05.07.2013 and 14:00hrs resptly. Bid opening date is 05.07.2013 at 15:00 hrs resptly. For further detailsplease visitwww.etender.gail.co.in.

2. Worley Parsons on behalf of HPCL, invites bids under two bid system fromeligible bidders for On-line Sulphur Analyser System. The bid due date is

17.07.2013 till 15:00 hrs and bid opening is in the same day at 15:30 hrs. Forfurther details visit the companys website or contact Manager, Procurement &Contracts [email protected].

3. Indraprastha Gas Limited (IGL) invites sealed bids under single, two envelopesystem form eligible candidates for Rate contract for fabrication of MRS workand internal piping work. The bid due date is 05.07.2013 at 14:30 hrs. For furtherdetails please visit the companys website.
http://www.etender.gail.co.in/http://www.etender.gail.co.in/http://www.etender.gail.co.in/mailto:[email protected]:[email protected]:[email protected]:[email protected]://www.etender.gail.co.in/


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4. Indian Oil invites tender for Periodic repair and maintenance of various waterfacilities like drinking/flushing water supply system with CPVC/GI piping,water fountain system, sensor controlled wash basin and integrated urinalsystems etc along with misc. plumbing services at corporate office, Delhi. Forfurther details please visit the companys website or contact Mr. R.K Roy, ChiefProject Manager (Contracts) [email protected]

5. HPCL invites bids through two bid system from bidders for Transportation ofPacked Bitumen by road in Open Body Trucks Ex-Vishakhapatnam BitumenCOD/Hincol COD to various locations Please visit the companys website todownload the NIT and for further details.

6. Carin India Limited invites global EoI for Procurement Of Straddle Gas LiftSystem And Isolation Patch System And Provision Of Running/Retreiving ToolsAnd Personnel On Rental Callout Basis for CB-OS/2 and Ravva offshore block.Please visit forwww.cairnindia.comfor further details.
mailto:[email protected]:[email protected]:[email protected]://www.cairnindia.com/http://www.cairnindia.com/http://www.cairnindia.com/http://www.cairnindia.com/mailto:[email protected]


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Renewable

Renewable energy attractiveness index slipping in the country

High entry-barriers for foreign investors and the rising cost of financing have ledto the India slipping to a low eighth position on the renewable energy country

attractive index in the first quarter of 2013. According to a report 'RenewableEnergy Country Attractiveness Index' by Ernst & Young, India's ranking slippedfrom fourth position to eighth this period, due to several challenges, includinghigh cost of finance, entry-barriers for external investors, among others.

"A high barrier to entry for external investors causes India to score lower thanmost of its top 10 rivals. Also, bankability is jeopardized by the high cost offinancing and significant infrastructure barriers here," E&Y India partner andnational leader for clean-tech said. However, the index sees the country gainingthe 'hot spot' as the market with increased focus on the role of renewable energy

driving new levels of power sector investment and aiming to nearly double theamount it generates from renewable sources. "While the country's rating mayhave slipped, there are significant positives. India is only behind Belgium in thepriority the renewable sector receives," he said.

At the operational level, E&Y said, "Withdrawal of accelerated depreciation,caused the overnight disappearance of the wind retail market. However, this hasalso brought to the fore the independent power producers, mostly backed bylarge PEs. The wind sector's size has therefore shrunk, but it has also arguablyresulted in a stronger market, with IPPs committed to setting up quality assets".

On the solar energy front too, there has been active interest in the bids acrossstates, the phase-II of the national mission is eagerly awaited, Chakrabartisaid. Chakrabarti, however, said the country is embroiled in trade wars that aresweeping through the global solar market. In February, the US lodged acomplaint with the WTO that domestic content requirements attached tothe National Solar Mission allegedly discriminate against US solar equipmentimports.

"India is currently in talks with the US over the complaint, but the governmentinsists that more than 70 % of the 551 mw solar capacity installed since the startof the mission has been built using imported modules. Last November, thecountry began its own anti-dumping investigation for solar cells from the US,mainland China, Taiwan and Malaysia," Chakrabarti said. The index includes arevised methodology to reflect the shifts in investment drivers and the maturingof the sector. The ranking is made based on increased focus on the rolerenewable energy plays in country's energy mix, energy supply and demand, thecost competitiveness of renewable energy, the importance of de-carbonization


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and an increased emphasis on the economic and political stability of eachparticular market.

Tata Solar plans on over $1 Billion Opportunity in India

Tata Power Solar Systems, a division of India's biggest company Tata Group,

sees installing solar systems in India as a $1.3 billion opportunity. That's becauseit will cost more for commercial and industrial customers to get their electricityfrom the grid by 2016 than from their own solar systems. "We're seeing a hugeuptake as we get closer and closer to grid parity," CEO Ajay Goelsaid. "Corporate customers are coming to us to install solar on their rooftops orland on the side of their factories because it can provide energy cheaper thanfrom the grid."

Formerly a joint venture with oil company BP, the company has beenmanufacturing solar panels, but it needs to move beyond that because of the

world glut caused by Chinese manufacturers. So far, Tata has developed andinstalled solar systems for Indian divisions of Dell and IBM, among others. Thepayback period can be just a year if a company can depreciate the systems ontaxes and four years if it can't. And the economics look even better if the cost ofdiesel is included to cope with daily blackouts, says Goel. Using dieselgenerators costs double that of solar.

Solar is cheaper than grid-based electricity now in about 10% of India's states forhotels, shopping malls and other commercial enterprises that pay the highestrates (electricity rates differ depending on the type of business and its location).Rates have risen 15% since 2010, while solar electricity dropped 39%, accordingto Bloomberg New Energy Finance. By 2016, solar will be cheaper than grid-based electricity in 60% of states and by 80% if government subsidies areincluded in the calculation, Goel said.

In 2009, India set a target of building 20 gigawatts (GW) of solar capacity by2020, under its National Solar Mission, or 10% of electricity. For renewableenergy, the target is 80 GW by 2020. Last year, Tata Power, India's largest utilitysaid it's giving up on new coal plants and focusing on renewable energy instead.

Ratan Tata, Chairman Emeritus of Tata Group is one of the leaders involved in

launching The B Team, which wants to transform businesses into a "force forgood," instead of focusing solely on profits.

Solar Bill that could add 2.2GW by 2023

New York state legislators gave their resounding approval to a solar bill thatcould see 2,200 MW of new installations by 2023. The New York Solar Bill


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(A.5060b/S.2522) was passed by the state Assembly by 76 to 16 votes and wouldenact Governor Andrew Cuomo's 10-year solar programme proposed earlier thisyear, building on the success of the NY-Sun Initiative, a public-privatepartnership designed to drive growth in the states solar industry and lowersolar costs.

Solar has gained increasing attention from state lawmakers following the

devastation caused by Hurricane Sandy, which exposed New Yorks energyinfrastructure as grossly outdated and unable to weather the effects of climatechange. Lawmakers must now prepare the final bill for signing by GovernorCuomo's desk before the summer recess. Dave Gahl, Executive Director ofEnvironmental Advocates of New York, said: Lawmakers should not leavetown this month before giving final passage to the New York solar bill andsending agreed-to legislation to Governor Cuomo for his signature. New York'ssun is underemployed, and by passing this bill the legislature can put it to work."

The Senate version that was passed in April had an additional manufacturing taxcredit piece that is not contained in the Assembly version. A Vote Solarspokeswoman said: "We're urging lawmakers to focus on what they agree on -the 10 year extension of NY Sun - and deliver a single bill to the Governor. Theprimary job and investment opportunity is on the installation side of the solarequation, so we think it's important that they focus on the NY Sun programmeextension and the jobs will follow."

The bill represents New York's second milestone achievement for solar policythis month. The New York Public Service Commission approved a decision totriple the states net metering cap from 1% to 3% of 2005 system peak load foreach of the state's five utilities. This could add a further 462MW of distributed

generation (DG) in New York. Jason Keyes, lead attorney for the InterstateRenewable Energy Council said: "With solar projections expected to continue torise sharply in the near future, this decision comes at a particularly crucial time.As NEM capacity in three of the five utilities is over 75% subscribed, New York'scurrent 1% cap would have presented a major hurdle to future development inthe state."

New Clean Energy Test Centre in US

The US Energy Department and National Renewable Energy Laboratory (NREL)are to develop a US$135 million test centre in Colorado for new utility-scale cleanenergy grid integration technologies.

Colorado-based Advanced Energy Industries (AEI) has already signed up as thefirst private partner for the Energy Systems Integration Facility (ESIF) and plansto develop improved solar inverters at the centre. Located at NRELs campus inGolden, ESIF will explore how different renewable energy technologies interact


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with each other and the grid at a utility scale. Its aim is to overcome thegeneration, transmission and distribution challenges arising from theincreasingly large volumes of renewable energy generation being integrated intothe grid. Technologies under examination include energy storage batteries andmicro-grids.

The new US energy secretary Ernest Moniz said: Our National Laboratories are

a national treasure that helps Americas entrepreneurs and innovators toaccelerate the development of new technologies. This new facility will allow foran even stronger partnership with manufacturers, utilities and researchers tohelp integrate cleaner, renewable energy into a smarter, more reliable and moreresilient power grid.

As ESIFs first industry partner, AEI will use the facilitys utility-scale gridsimulator to test the performance of its latest PV inverter technology.

Latin America and the Caribbean brimming with Renewables:Might be an investment opportunity

Latin America and the Caribbean's renewable energy endowment is widespreadenough to cover its projected 2050 electricity needs 22 times over, according to anew report commissioned by the Inter-American Development Bank (IDB).The report, rethinking our Energy Future, argues that lower prices and newtechnologies are making renewables a viable alternative. Solar, geothermal,wave, wind and biomass sources in this region could produce up to 80 petawatt-hour of electricity. One petawatt-hour is equivalent to one trillion kilowatt-hours,roughly three times the amount of electricity Mexico consumes in one year. Atpresent, Latin America generates 1.3 petawatt hours. By 2050, demand isexpected to grow to between 2.5 to 3.5 petawatt-hours.

The report addresses a series of myths surrounding renewable energies, notingthat several of these alternative technologies have become price competitive withconventional technologies, offer good investment opportunities and should betaken into consideration by policymakers aiming to diversify their nationalenergy matrixes, reduce fuel supply vulnerabilities and cut greenhouse gasemissions. "Though Latin America uses more renewable energy than any otherregion in the world, it faces difficult choices as it seeks to generate the electricity

it needs to grow without harming the environment," said IDB President LuisAlberto Moreno. "Renewables are becoming a viable and attractive option thatneeds to be explored."

"With this study, we seek to promote concrete action and public-privatepartnerships, by putting into perspective the magnitude of available renewablesources, outlining their broadened benefits and illustrating policy options," saidWalter Vergara, head of the IDB's Climate Change Division and lead author of


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the report. In 2012, global investments in alternative renewable technologies(solar, wind, geothermal, ocean, small-scale hydropower and advanced bio-energy) and traditional hydropower amounted to $244 billion, of which LatinAmerica represented a modest 5.4 %. To tap into its vast potential, the regionmust modernize its policy and regulatory frameworks and scale up investments.

While investments in renewable energy have been limited so far, the major new

developments are underway in Latin America. Wind is the fastest-growing non-traditional renewable source in the region. Mexico is the fifth largest producer ofgeothermal energy in the world and Colombia, Panama and Ecuador areexploring their own resources. Biomass, solar and wind are increasingly beingused in Brazil, Mexico, Guatemala, Argentina and Chile.

The study concludes that, regardless how each country may shape its energypolicy, increasing the penetration and use of non-traditional renewables makessense for Latin America and the Caribbean. The Inter-American DevelopmentBank supports programmes to improve energy efficiency, foster cross-borderenergy integration, and diversify the energy matrix by sustainably exploitingrenewable and non-renewable energy sources. At present, the IDB is financinglarge-scale wind farms, solar power systems for rural areas, biofuel facilities thatco-generate electricity and programmes to promote efficient lighting. It alsosupports retrofitting hydroelectric facilities with more efficient turbines andensuring that new dams and natural gas projects meet stricter social andenvironmental standards.

UPDATES

1. Hydel power plants in Uttarakhand, Himachal operational

Hydel power generation from the projects affected by rains and floods inUttarakhand and Himachal Pradesh has been restored, according to anofficial. Due to heavy landslides many Hydro Electric Projects had stopped workon account of high silt content in water. The company in a statement said: "Dueto recent heavy rainfall, the water inflow in Tehri Dam from Bhagirathi and itstributaries reached about 7,000 cumecs, of which a mere 500 cumecs was releasedfrom Tehri Dam Reservoir and remaining 6,500 cumecs of water stored in the

reservoir." Tehri reservoir recorded the rise of 25 meters within 48 hours ofrainfall on 16-17 June, the statement said.

2. JinkoSolar Supplies 25.8 MW of Solar Modules to First Private Solar Park inIndia

JinkoSolar Holding Co. Ltd., a leading global solar PV power productmanufacturer, announced that it has supplied 25.8 MW of high-efficient solar PV


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modules to the first private solar park in India. Located in Mandrup Village,Solapur District, Maharashtra State, India, the project was developed by EnrichEnergy Pvt. Ltd. on a turnkey basis, a pioneer in India focused on developinglarge scale private solar parks."JinkoSolar's high-efficient polycrystallinemodules were used in our first private PV solar park as they will help us tominimize the use of land and maximize the amount of reliable, emission-freesolar power generated per dollar invested - which is one of our priorities" said

Mr. Ankit Kanchal, Enrich Energy Pvt. Ltd's Director - Commercial. "This is thefirst project of its kind in Maharashtra State developed under the Average PooledPurchase Cost (APPC) / Open Access Mechanism & Solar Renewable EnergyCertificates (REC) Mechanism.""Enrich Energy is one of our key strategicpartners in India and we appreciate their efforts to pioneer the model of turnkeysolutions for medium and large-scale solar investors," said Mr. Arturo Herrero,Chief Marketing Officer of JinkoSolar.

3. Welspun agrees funding for 20MW Mumbai solar project

Indian renewable energy generator Welspun Energy has finalized the financingof a 20MW solar project in Solapur, Maharashtra. A consortium of unnamedfinancial institutions have committed to long-term project funding of INR135crore, with a debt-equity ratio of 75:25. The project will be taken forward byWelspun subsidiary Welspun Energy Maharashtra. Electricity from the projectwill be sold to Brihanmumbai Electric Supply & Transport Undertaking,Mumbais transport and electricity body. The project will go some way towardsaddressing the state of Maharashtras annual peak energy deficit, which runs atjust under 15%. Welspun Energy has plans to install 1.75GW of solar acrossIndia.

4. Intersolar EU 2013: Intersolar AWARD winners recognized

Companies across the PV supply chain were recognized for innovation at theIntersolar AWARDs ceremony on the first day of the Intersolar Europeexhibition. Belectric Solarkraftwerke was a winner with its 128MWp PV powerplant in Templin (Brandenburg), which used 1.5 million thin-film modules and114 inverters. Recognition was given due to the plants dynamic controls thatenabled a stable operating voltage and compensation for grid fluctuations at alltimes of the day. Galaxy Energy was also a winner with its design of an energysystem for a carbon-neutral building, which does not require gas, oil or wood for

heating. Conergy was also recognized for a roof-mounted PV system (8 kWp) ata restaurant in the Spanish city of Barcelona, which was designed for maximumon-site consumption. Winners in the Photovoltaics category included LGElectronics, which had developed the Mono X NeoN.SMA Technology wasrecognized for its Sunny Boy Smart Energy system.

5. Intersolar EU 2013: Silevo launches 355W 72 cell module


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US based PV module manufacturer, Silevo has launched the industrys firstgreater than 350 Watt-peak (Wp) solar module made with 72 of Silevosproprietary Triex 156mm solar cells. The company said the development of thehigh output module was made possible by scaling up Silevos Triex solar celltechnology to a larger cell substrate of 156mm, compared to 125mm substratesusually used in high efficiency solar cells. Cost savings across manufacturing andfinal installation were touted by the company. Silevo has collaborated with

SunEdison to optimize its cell-processing steps to create high-efficiency solarcells that were then packaged into this 355 Wp module. Silevo said that duringthe first half of 2014 it would have dedicated 156mm cell lines, which willprovide greater than 350Wp modules in the marketplace.

6. TTD solar plant to produce 1.5 lakh units per annum

Tirumala Tirupati Devasthanams (TTD) executive officer LV Subramanyam onWednesday inaugurated the solar photovoltaic roof-top power plant at the TTDadministrative building. Speaking on the occasion, he said that the TTD isalready utilizing the wind mill energy to meet the partial needs of the holy hills,adding that the new solar power plant will generate approximately 1.5 lakh unitsof power per annum. The L&T Limited, Aeon Renewable Energy solutions (P)Limited and Crux Industries India (P) Limited from Chennai installed the 100KW solar power plant on TTD administrative building at a cost of `1.25 crore, hesaid, adding that that the eco-friendly plant will save approximately 100 tonnesof carbon emission annually. He said that the TTD trust board member L SivaPrasad took keen interest behind this non-conventional energy project.Subramanyam felicitated the representatives of the three firms who haveinstalled the 1.25-crore power plant at free of cost. He felicitated the TTD chiefengineer Chandrasekhar Reddy and energy manager Somasekhar.

7. Sunrun launches third party leasing in Connecticut

Sunrun, a California-based solar company, announced that it would be able tooffer third party lease agreements to 90% of utility customers in Connecticut.Sunruns solar power service is available immediately to residents withinterritories serviced by Connecticut Light & Power and The United IlluminatingCompany, representing almost all residential customers in the state. In 2012,Connecticut installed 11MW of solar electric capacity, ranking it 21st nationally,according to the Solar Energy Industries Association.

8. GE wins 105MW Michigan order

Consumers Energy, one of several large electricity suppliers in the US state ofMichigan, has signed a contract to buy 62 of GEs 1.7MW turbines for its 105MWCross Winds project. Cross Winds, in the east Michigan county of Tuscola, willbe Consumers second wind farm in the state, following on from the 100MWLake Winds project commissioned last year in Macon county which used


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Vestas machines. The turbine contract was tendered out via a competitive bidprocess.Consumers, owned by parent company CMS ENERGY, says it expectsconstruction to kick off later this year, as it looks to avail itself of the latestextension of the federal Production Tax Credit. The project is slated forcompletion in late 2014.

9. China, Japan Driving Africa Renewables Investment

Chinese power companies and Japanese trading houses are emerging as majorfinanciers of African renewable energy projects, which saw investmentquadruple to $9.3 billion last year, Baker & McKenzie LLP said. Asian investorsare increasingly targeting African renewable energy projects, attracted by betterreturns and strong wind and solar resources on the continent, the Chicago-basedlaw firm said in report today based on a global survey of 140 industry executives.Recent deals include the 20-billion-yen ($205 million) Dorper wind farm in SouthAfrica that sold a 60 percent stake to Sumitomo Corp. (8053) and was partiallydebt financed by Sumitomo Mitsui Banking Corp., it said. The Export-ImportBank of China also provided $315 million of loans for a 360-megawatthydropower station in Zambia, according to the report. Last year, Asia-Pacificcompanies and investors announced $6 billion of acquisitions of renewableenergy assets outside of their region, compared with $1.9 billion in 2011,according to the report.

10. Geothermal Power Tanzania Plans First Steam Generation Next Year

Geothermal Power Tanzania Ltd. plans to invest as much as $350 million to drillsteam fields in the countrys south and build its first geothermal plants with the

capacity to generate up to 140 megawatts by 2018. The company began drillingtwo wells in Tanzanias southwestern Mbeya region this year and found therespotential to create power from steam within at least two systems in the area,Chairman Graeme Robertson said in an interview today. Tanzania, whichdoesnt currently produce any geothermal energy, lies in the same Rift Valleyfault system as Kenya, Africas biggest geothermal-power producer with anestimated untapped resource of as much as 10,000 megawatts. Geothermalenergy harnesses steam and hot water from underground to power turbines infacilities that generate electricity.


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Sources:

Our researchers and editors keep track of all the sectors of Indian economy from crediblesources. Our expertise on news, analytics is based on facts that appear in BusinessStandard, The Economic Times, The Hindu Business line, Live Mint, The Hindu, TheTimes of India, Business World, Business Today, Government of Indias PressInformation Bureau, companyAnnual Reports and releases.

Copyright 2012-13, Energy Review

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energy news- june 2013

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