Post on 21-Mar-2020
MINERS’ STRIKE DISRUPTS COAL SUPPLY Monthly Coal News Commentary: September - October 2019
India
high level committee, comprising cabinet secretary,
Department of Economic Affairs secretary,
revenue secretary, coal secretary and Niti Aayog vice-
chairman, has recommended some sweeping policy
changes to reform the coal sector. Government said that
a high-level panel has recommended reforms to privatise
the coal sector. One of the biggest recommendations is
to move away from any allocation of captive coal mines.
A one-year roadmap has been recommended to shift all
concessions to commercial mining. All new auctions or
allotments of coal mines has been recommended for
commercial purpose only. The committee recommend
removal of private sector’s disadvantageous position by
doing away with the direct coal allotment to PSUs. Other
recommendations included privatising CIL’s washeries to
reduce India’s 80 percent import dependency on coking
coal for steel, in addition to incentivise the private sector
by auctioning coking coal linkages for 20 years. CIL
should auction 222 non-operational, loss making mines
on production sharing basis, the committee
recommended.
In a bid to liberalise the coal sector, the government is
planning to invite global players for the roll out of auction
plan for commercial mining by December this year. The
maiden move aimed at cutting coal exports is set to end
the monopoly of domestic giant CIL that accounts for
over 80 percent of the India’s dry-fuel output. The
country’s coal imports increased by 28.7 percent to 24.14
mt in June as against 18.75 mt in the corresponding
month of the previous fiscal. Total imports of thermal
coal rose to 56.23 mt during the quarter as compared with
the year-ago period. The country’s coal imports swelled
by about 13 percent to 235.2 mt during the year-ended 31
March 2019. CIL along with the PSU SCCL are the only
companies that till now were allowed to mine and sell coal.
CIL is the single largest coal producer in the world,
operating through 82 mining areas with seven wholly
owned coal producing subsidiaries and a mine planning
and consultancy company, it accounts for about 600 mt
annual production.
A day long strike by the trade unions of CIL has not
impacted the current coal stock availability at the thermal
power plants. According to the National Power Portal,
there are 114 power plants (out of 131) in the country
with 12 days of coal stock available in September. There
are only three plants with less than four days of coal stock.
Two plants have less than seven days of stock. This
means that most of the thermal power plants in the
country have adequate coal available with them. The
situation will be normalised after the day-long strike,
called by five CIL trade unions, namely the Indian
National Mineworkers’ Federation, Hind Khadan
Mazdoor Federation, Indian Mineworkers’ Federation,
All India Coal Workers’ Federation and All India Central
Council of Trade Unions. The unions are demanding that
roll back of the decision to allow 100 percent FDI in the
coal mining sector. Coal production in Telangana’s SCCL
A
18 October 2019, Volume XVI, Issue 19
Energy News Monitor
was affected as the miners went on a day-long strike
called by various unions. The coal production in almost
all the mines spread across six districts of Telangana was
hit as majority of the over 50,000 employees joined the
strike. The strike might result in production loss of nearly
200,000 tonnes. The company is estimated to suffer a loss
of over `500 mn. MCL said at least 6,000 tonne coal
supply and 5,000 cubic meter of overburden removal
work were affected due to two incidents of work
disturbances recently at its Talcher colliery. Overburden
removal at Ananta OCP was affected after a man of
Burdabanpur village unauthorisedly entered the mine
premises and damaged equipment to stop dewatering
operations from the sump to the external mine area, the
company said. Coal transportation was obstructed at
Biswal Chhak near Dera village in Talcher, due to which
the supply of about 6000 tonne coal from Bhubaneswari
OCP was affected. Estimated loss due to this was ̀ 24 mn.
South Eastern Coalfields Ltd is supplying only 47 percent
of the 12 mt coal sanctioned for Rajasthan, while
Northern Coalfields is supplying only 69 percent of the
sanctioned 4.15 mt because of the strike of trade unions.
CIL will manage to step up production to near its targeted
level despite floods hitting mining operations. Ratings
agency ICRA estimates CIL’s production is likely to fall
short of its current year target by 55-75 mt. Its target for
this year is 660 mt. Existing coal stocks have helped meet
coal demand and production has picked up. ICRA said
CIL has registered a year-on-year production fall of 23.5
percent in September 2019, as operations were impacted
by flooding of key mines due to heavy rains and labour
issues. ICRA said in order to achieve the targeted annual
production or come anywhere close to the annual
guidance, CIL would have to step up to an average run-
rate of 2.3 mt coal production per day for the rest of the
year. The company will start producing 1,500,000 tonnes
of coal by the end of October.
Economic slowdown has impacted coal import cargo in
the H1 of this fiscal, as overall cargo growth at major
ports registered a marginal growth of 1.9 percent to 294
mt rating agency ICRA said. Healthy volume growth in
container, crude and iron ore segments was offset by the
decline in coal and some other bulk cargo volumes, it said.
Coal volumes at major ports grew 11 percent in FY19.
Over the long-term, a sustainable pick-up in industrial
activity and power demand will be crucial for the
sustenance of healthy coal imports as domestic
production also ramps up to meet the incremental
demand, it said. ICRA said CIL’s supply is likely to
increase every year by 5-7 percent at least and this will
continue to be a risk for port players that are highly
dependent on coal volumes for optimal utilisation of their
port capacities. In FY19, total cargo handled at Indian
ports had registered a moderate increase of 5.9 percent to
1,280 mt from 1,209 mt during FY18. Major ports
handled 699 mt, whereas non majors handled 581 mt.
The government has launched a portal for better
coordination among the ministries of power, coal and
Indian Railways for coal supply to power plants. The
Prakash portal – ‘Power Rail Koyla Availability through
Supply Harmony’ – will enable all stakeholders to
monitor coal right from mines to transportation. This
project will ensure adequate availability optimum
utilisation of coal at thermal power plants. The Portal is
designed to help in mapping and monitoring entire coal
supply chain for power plants, viz - - coal stock at supply
end (mines), coal quantities/ rakes planned, coal quantity
in transit and coal availability at power generating station.
Through the portal, coal companies will be able to track
stocks and the coal requirement at power stations for
effective production planning. Indian Railways will plan
to place the rakes as per actual coal available at siding and
stock available at power stations while power stations can
plan future schedule by knowing rakes in pipe line and
expected time to reach.
GIDC has applied for yet another coal block as part of
the sixth tranche of coal mines opened by CIL. If
successful in its bid, the corporation will mine both the
additional coal block along with the Dongri Tal II coal
block already allocated to Goa. GIDC intended to rope
in validated consultants to help the state with the coal
block utilisation and with the auction of the industrial
land returned by the special economic zone promoters.
After the Centre recently offered a coal block at the
Singrauli coalfield in Madhya Pradesh to Goa
government there was a demand for a whitepaper on the
allotment. This is the second time that the Centre has
allocated a coal block to Goa. GIDC, on behalf of Goa
government, had applied for two tranches that are part of
the Dongri Tal Phase II coal block of the Singrauli
coalfield. The coal block, if accepted by the GIDC, could
address Goa’s power needs for the next 15 to 20 years
due to the high coal reserves at the Dongri Tal Phase II
tranche 5.
SCCL has acquired the ‘New Patrapada’ coal block in
Odisha, which is three times bigger than the already
acquired ‘Saini’ coal block. The block was allotted by the
coal ministry. Once all permissions are sought and
production starts ‘New Patrapada’ will be considered to
be one of the biggest coal blocks in the country. Presently
Singareni extracts 68 mt of coal from its 48 mines but 20
mt of coal can be extracted from this mine alone, SCCL
said. ‘New Patrapada’ is one of the many coal blocks in
Chandipada Thahasil area in Odisha and is approximately
15 km away from Saini Coal block which has already been
allotted to it. The coal ministry responded favourably to
Singareni’s request to allot more coal blocks in Orissa
along with Saini Block. The area of ‘New Patrapada’ is 31
square km which is almost 3108 hectares. Coal reserves
in this area are 1040 mt. Singareni will start coal extraction
at Saini Block from 2021 onwards and arrangements are
being made to start extraction at ‘New Patrapada’ at the
same time. Presently Singareni was producing 67 mt of
coal and in the next seven years the target was to achieve
100 mt.
The coal ministry inked an agreement with WBPDCL for
allotment of Deocha Pachami Dewanganj-Harinsingha
coal block. The project is expected to address the
immediate and future coal and power requirements of the
region. In accordance with the provisions of Coal Block
Allocation Rules, 2017, made under the Mines and
Minerals (Development and Regulations) Act, 1957, the
WBPDCL has been allocated the coal block located in
West Bengal containing an area of 12.28 square kilometre
with estimated reserves of 2102 mt for power generation.
With the Odisha government losing huge revenues due
to non-revision of royalty on coal, it once again urged the
Centre to revise the royalty on coal, which is due since
April 2015. Responding to state’s demand the federal
government said increase on coal royalty may lead to hike
in the prices of power. While royalty on coal at present is
14 percent, the state government has been demanding to
revise to 20 percent. Royalty on coal was last revised in
April 2012. Though the Centre should revise the rate in
every three years, the rate remained unchanged for the
past six years. In 2018-19, the state government has
earned `19.48 bn as royalty from coal. Odisha produces
about one-fifth of the total coal production in the country.
The Centre had constituted a sub-group to study coal
royalty revision which has submitted its report in
February 2018.
Adani Power said power regulator MERC has allowed
pass through of higher coal prices for its Tiroda plant.
The coal mine allocated to Tiroda plant was de-allocated
and the company had to make arrangement for fuel
supplies at higher cost. Adani Power arm APML runs
Tiroda plant. As per the referred order from the MERC,
the de-allocation of the Lohara coal block by the coal
ministry would qualify as Change in Law, and APML is
entitled to compensation for alternative coal used to meet
the shortfall from the commencement of power supply
under the PPA. Adani Power said APTEL has allowed its
subsidiary Adani Power Rajasthan to charge a higher cost
of coal regarding a 1,200 MW power supply agreement
with discoms of Rajasthan. The tribunal has allowed the
compensation due to the shortage of domestic coal, the
company said. APTEL has allowed compensation for
domestic coal shortfall arising from change in law
pertaining to the New Coal Distribution Policy, 2007, and
the Scheme for Harnessing and Allocating Koyala (Coal)
Transparently in India policy of the Government of India
(SHAKTI Policy).
Rest of the World
China will aim to shut a total of 8.66 GW of obsolete
coal-fired power capacity by the end of this year, its
energy regulator said, part of its efforts to curb smog and
greenhouse gas emissions. The National Energy
Administration didn’t say how much of the target, equal
to just under 1 percent of total capacity, had already been
met. All provinces and regions have been ordered to shut
coal-fired power units with a capacity of less than 50,000
kW the regulator said. Larger units of up to 100,000 kW
in regions covered by large-scale power grids will also be
eliminated, along with those that have reached the end of
their designed service period, it said. China has promised
to ease its dependence on coal, and it has also forced
most of its coal-fired power plants to install ultra-low
emissions technology in a bid to curb smog. But while
China has cut the share of coal in its total energy mix
from 68 percent in 2012 to 59 percent last year, overall
consumption has continued to increase and
environmental groups estimate that it still has more than
200 GW of new coal-fired capacity in the pipeline. The
China Electricity Council, which represents the country’s
power industry, predicts that total coal-fired capacity
could eventually peak at 1,300 GW, up from around
1,000 GW now. China’s coking coal futures prices fell for
a sixth straight session to hit an over five-month low due
to weak demand for the steelmaking raw material, amid
production curbs on steel and coke ahead of China’s
National Day celebrations. The most-traded coking coal
on the Dalian Commodity Exchange, for January 2020
delivery, slumped as much as 3.8 percent to
$175.12/tonne, its weakest since 19 April this year.
China’s coking coal purchases, meanwhile, have been
“quite strong”, surging 20 percent to 53 mt in the first
eight months of this year, after a brief period of import
control in November and December last year.
South Korea should close up to a quarter of its coal-fired
power plants between December and February and
nearly half in March in a bid to tackle pollution, an
advisory body headed by former UN Secretary General
Ban Ki-moon said. South Korea operates some 60 coal-
fired plants, generating about 40 percent of the country’s
electricity, but is facing growing calls to improve air
quality, rated as the worst among its peers in OECD in
2017. South Korea has halted some ageing coal-fired
power plants in recent years to reduce air pollution. The
committee also recommended capping operations at
other coal-fired power plants during those months at 80
percent.
Local authorities in Poland’s Silesia coal-mining region
urged the nationalist Law and Justice (PiS) government
to drop proposed legislation that would give it the option
to open new mines without their consent. Facing an
election, PiS has maintained its strong support for coal
mining as a key energy source for Poland, which
generates 80 percent of its electricity from coal. But there
is growing opposition to mining in Silesia, one of the
most polluted coal regions in Europe, potentially putting
pressure on PiS. Opinion polls show the party is likely to
win vote with about 40-44 percent.
Cerrejon, one of Colombia’s largest coal mines, will
reduce its operations by up to 18 percent because of a fall
in international prices and amid an ongoing court case.
Colombia, the world’s fourth-largest exporter of coal,
faces a potential spending crunch next year as royalties
from the fuel decline amid a supply glut and slowing
economic growth in China. Cerrejon, owned by BHP
Group Ltd, Anglo American Plc and Glencore, will have
output of just 26 mt for the next five years, compared to
the more than 30 mt it was regularly producing until last
year.
The South African government is in talks with coal firms
that supply struggling power utility Eskom to reduce coal
prices in a bid to lower energy costs and boost the mining
sector. In March, energy regulator Nersa granted Eskom
average tariff increases of 9.4 percent, 8.1 percent and 5.2
percent over the next three years. Eskom owns and
operates more than 13 coal-fired power stations and has
supply agreements with firms including Exxaro
Resources and South32.
Russian steel and coal producer Mechel agreed to pay
around $461 million for Gazprombank’s 34 percent stake
in the Elga coal project. Elga is one of the world’s largest
coking coal deposits with reserves of 2.2 bt. In 2016,
Gazprombank paid 34.4 bn roubles to buy a 49 percent
stake in Elga from Mechel, which owns the remainder of
the project, as part of the coal producer’s debt
restructuring.
German climate protection plans involving the closure of
some coal plants might cost €1.2 bn ($1.32 bn) by 2030
without achieving the desired reductions in carbon
emissions, an independent study said. A draft law
detailing the plan to shut hard coal fired power plants by
offering operators fiscal incentives in auctions, showed
Germany will start shutting coal plants from next year,
under a long-term exit plan up to 2038.
Australian coal producer New Hope Corp Ltd said coal
markets would likely remain volatile in the near term
though demand is strong for high-quality thermal coal
across Asia, as it posted a 41 percent rise in annual net
profit. New Hope in the past year signed a $600 mn debt
facility to fund its Bengalla purchase and to develop the
Acland mine and Burton project, based on expectations
of demand for its higher-quality thermal coal.
CIL: Coal India Ltd, PSUs: Public Sector Undertakings, mt:
million tonnes, bt: billion tonnes, mn: million, bn: billion,
SCCL: Singareni Collieries Company Ltd, FDI: foreign direct
investment, MCL: Mahanadi Coalfields Ltd, OCP: opencast
project, H1: first half, FY: Financial Year, GIDC: Goa
Industrial Development Corp, WBPDCL: West Bengal Power
Development Corp Ltd, MERC: Maharashtra Electricity
Regulatory Commission, APML: Adani Power Maharashtra
Ltd, PPA: power purchase agreement, APTEL: Appellate
Tribunal for Electricity, discoms: distribution companies, kW:
kilowatt, GW: gigawatt, UN: United Nations, OECD:
Organization for Economic Cooperation and Development
NATIONAL: OIL
After Iran sanctions, India ups crude oil imports
from US, Nigeria and Russia
13 October. India’s top sources of crude oil have gone
through a marked change over the last year, primarily due
to the US (United States)’ sanctions on Iran. With oil
supplies from what had been India’s third-largest supplier
mostly cut off, other countries have begun climbing up
the list. Not least of these is the US itself, with crude oil
imports from the country nearly doubling. According to
data from the Directorate General of Commercial
Intelligence and Statistics (DGCIS), crude oil imports
from the US stood at 4.49 million tonnes (mt) during the
April-August period of this year, a 72 percent jump from
the 2.6 mt imported during the same period last year. The
country is now India’s sixth-largest oil supplier by volume.
Iran, on the other hand, is no longer among India’s top
ten crude oil suppliers with just 1.97 mt shipped during
the period, an 85 percent decline from last year’s 13.3 mt.
Other countries that have increased crude oil supplies to
India include Nigeria and Russia. Data from DGCIS for
this fiscal year shows that Nigeria has taken Iran’s
erstwhile spot on the list, becoming India’s third-largest
oil supplier with a 22 percent increase in crude oil
shipments from 5.8 mt in April-August 2018 to 7.17 mt
this year. Imports from Russia have also risen
significantly. The period saw India buying around 2.13 mt
from the Eurasian powerhouse, a two-fold increase from
973,389 tonnes it supplied during the same period last
year.
Source: The New Indian Express
Indian refiner RIL to resume Venezuela oil
loadings after 4-month pause
9 October. Indian refiner Reliance Industries Ltd (RIL)
is scheduled to resume loading Venezuelan crude in
October after a four-month pause, according to sources
and internal documents from PDVSA, a move that could
help Venezuela’s state-run company drain its large oil
inventories. The United States (US) in January imposed
the toughest sanctions yet on Venezuela’s oil industry,
depriving the OPEC member of the main destination for
its crude exports. China National Petroleum Corp and its
units stopped taking Venezuelan oil in August. Others,
including RIL, have recently been buying Venezuelan
crude from Russian major Rosneft. RIL needs the type of
heavy sour crude that Venezuela sells because its
refineries are configured to process it. US sanctions on
both Venezuela and Iran have made it harder for the
refiners to find supplies of these crude grades. The Indian
firm is sending at least two vessels, the very large crude
carriers Antonis I. Angelicoussis and Maran Castor, to
Venezuela’s Jose port for loading in late October,
according to the PDVSA documents. The tankers are
currently passing the Suez canal.
Source: Reuters
NATIONAL: GAS
GAIL offers 2 US LNG cargoes and seeks one for
India delivery
15 October. GAIL (India) Ltd has issued a swap tender
offering two cargoes of liquefied natural gas (LNG) for
loading in the United States (US) and seeking one for
delivery to India. The offer is for two cargoes loading
from the Cove Point plant on 10-12 November and 16-
18 December. The sought cargo is for delivery to either
the Dahej or Dabhol terminal in India on 20-23
November. The tender closes on 16 October, with
validity expiring on the same day.
Source: Reuters
Cabinet to consider splitting GAIL, pipeline
business not to be sold before 2022
15 October. The Union Cabinet may by next month
consider a proposal to hive off gas utility GAIL (India)
Ltd’s pipeline business into a separate entity but its sale
to a strategic investor may not happen before 2022.
GAIL is India’s biggest natural gas marketing and trading
firm and owns more than two-thirds of the country’s
16,234 kilometre (km) pipeline network, giving it a
stranglehold on the market. Users of natural gas have
often complained about not getting access to GAIL’s
11,551 km pipeline network to transport their fuel. To
resolve the conflict arising out of the same entity owning
the two jobs, bifurcating GAIL is being considered. A
proposal is likely to be moved before the Union Cabinet
for transferring the pipeline business into a 100 percent
subsidiary. The proposal may be considered and
approved by the Cabinet this month or latest by
November. After the Cabinet approval, a consultant will
be appointed to transfer the pipeline business into a
separate subsidiary. This would take 8-10 months to
accomplish. However, selling off the pipeline subsidiary
to a strategic investor is not likely before 2022 as the
thinking in the government is that the gas market will not
be mature before that and state support would be needed
for GAIL to accomplish building a national gas pipeline
grid. GAIL will continue to own the marketing business
as also the stakes in liquefied natural gas (LNG) terminals.
GAIL already keeps separate accounts for its gas pipeline
and marketing businesses, making it easier to split them
into two entities. By unbundling GAIL and opening the
sector, the government hopes to increase gas use to 15
percent of the energy mix by 2030 from current 6.2
percent. When talk of splitting first started in January last
year, Oil Minister Dharmendra Pradhan had stated that
GAIL should focus on laying pipelines, suggesting hiving
of the marketing business.
Source: Business Standard
India’s 100 tcf gas reserves enough to meet half of
demand till 2050: BP
14 October. UK (United Kingdom) supermajor BP plc
Chief Executive Officer (CEO) Bob Dudley said there
are 100 trillion cubic feet (tcf) of yet-to-be-discovered
natural gas reserves in India that would be enough to
meet half of the nation’s gas demand till 2050. BP in
partnership with Reliance Industries Ltd (RIL) is
investing about $5 bn to bring about 1 billion cubic feet
a day of new domestic gas onstream beginning mid-2020,
he said. India, he said, has the right policy framework of
providing a higher cap price for natural gas produced
from difficult areas such as deepsea. The government
mandates a cap price based on alternate fuels for gas from
difficult areas, which for the October 2019 to March 2020
period is $8.43 per million metric British thermal unit
(mmBtu), more than double the $3.23 per mmBtu rate
for other domestic gas.
Source: Business Standard
Total to buy 37 percent stake in Adani Gas for $600 mn
to expand India footprint
14 October. French energy giant Total SA is spending
$600 mn to expand its presence in one of the world’s
fastest growing natural gas markets. Total agreed to
purchase a 37.4 percent stake in India’s Adani Gas Ltd, a
distributor of the fuel that is developing import terminals
and a national chain of vehicle-filling outlets. Total said
that the acquisition will cost about $600 mn taking into
account its divestment in another Indian LNG (liquefied
natural gas) terminal earlier this year. The deal will give
Total access to India’s natural gas market and support its
drive to become one of the world’s top LNG players.
India’s annual LNG demand will hit 28 million tonnes
(mt) by 2023, making it the world’s fourth largest
importer of the fuel. Adani is developing the Mundra and
Dhamra LNG import terminals in India. It plans to
expand its distribution network in the next decade to
about 6 mn homes and 1,500 retail outlets for natural gas
vehicles.
Source: Business Standard
Dispute-hit Mundra LNG terminal to be
commissioned by December
14 October. More than a year since its inauguration,
Gujarat government-backed LNG (liquefied natural gas)
project at Mundra, built at an estimated cost of `55 bn,
may finally get commissioned by December. A
commercial dispute between the partners Gujarat State
Petroleum Corp (GSPC) and Adani Group had stalled
commissioning of the 5 million tonnes (mt) a year
liquefied natural gas (LNG) import facility. The terminal
was mechanically completed in mid-2018 and was
QUICK COMMENT Increase in domestic gas reserves is a pleasant surprise!
Good!
inaugurated by Prime Minister Narendra Modi. However,
the commissioning has been stalled due to delay in
finalisation of certain lease and sub-commission
agreements between the promoters and the Gujarat
government. A commissioning cargo from the US
(United States) had arrived at Mundra LNG terminal last
November, but it had to be diverted to Hazira after it was
not allowed to discharge at Mundra. The Mundra
terminal, whose capacity will be expandable to 10 mt per
annum in the future, is designed to have a berth for
receiving LNG tankers of sizes 75,000 cubic metres to
2,60,000 cubic metres, two LNG storage tanks of
capacity 1,60,000 cubic metres each, facilities for
regasification and gas evacuation.
Source: Business Standard
IOC, ExxonMobil sign MoU for collaboration in
LNG business
14 October. American oil and gas firm, ExxonMobil,
said it has signed a Memorandum of Understanding
(MoU) with Indian Oil Corp (IOC), India’s largest fuel
retailer, to expand liquefied natural gas (LNG) initiatives
in the country. The MoU was signed between IOC and
ExxonMobil India LNG Ltd, an affiliate of ExxonMobil.
It said that the MoU builds on the long history of
productive cooperation between IOC and ExxonMobil
in the LNG space.
Source: The Economic Times
India to invest $60 bn in developing gas supply,
distribution: Pradhan
13 October. India is investing over $60 bn in developing
natural supply and distribution infrastructure as it chases
the target of more than doubling the share of natural gas
in its energy base to 15 percent by 2030, Oil Minister
Dharmendra Pradhan said. Natural gas currently
constitutes 6.2 percent of all energy consumption in the
country. The government is giving special impetus to
develop gas infrastructure across the length and breadth
of the country connecting north to south and east to west
parts of India, he said. City gas distribution network will
soon cover 70 percent of India’s population, he said.
Source: Business Standard
RIL puts off gas bid to 6 November on bidders
request due to festive season
10 October. Reliance Industries Ltd (RIL) has put off
bidding for the new gas it plans to produce from eastern
offshore KG-D6 block to next month following a request
from potential bidders. RIL and its partner BP Plc of the
UK (United Kingdom) had put out Notice Inviting Offer
(NIO) seeking bids from potential users for the 5 million
metric standard cubic meter per day (mmscmd) of natural
gas they plan to produce from the R-Cluster Field in KG-
D6 block from the second quarter of 2020. The bidding
was to happen on 11 October, according to the bid
document. However, the bidding has been postponed
based on requests of some bidders given the
holiday/festival period during October. Bidding will now
happen on 6 November. The rate sought compares to the
government-mandated $3.23 price that its currently
producing D1 and D3 fields in KG-D6 block get. The
government gas pricing policy, however, provides for a
higher cap price for future gas produced from difficult
fields like those in deepsea. This cap currently is fixed at
$8.43 per million metric British thermal units (mmBtu).
RIL-BP is developing three sets of discoveries in KG-D6
block -- R-Cluster, Satellites and MJ -- by 2022 that can
produce a peak of 30 mmscmd of gas. The quantity
offered for bidding in the NIO is 5 mmscmd from R-
Series fields which will start production in mid-2020.
Peak output from R-Series is 12 mmscmd, while Satellites
will produce another 7 mmscmd beginning mid-2021. MJ
field, which will start production in the second half of
2022, also has a planned peak output of 12 mmscmd. The
NIO said the gas price would be lower of the quoted rate
or the government-mandated ceiling for the difficult
fields. The formula RIL is using to price gas for R-Series
fields is different from its last price discovery it made for
the coal-bed methane (CBM) from its Sohagpur coal-bed
methane blocks in Madhya Pradesh. RIL ended up
buying the CBM gas from its block after it bid deducting
$1.836 per mmBtu, lower than $3.156 bid by rival Piramal
Glass and $3.495 bid by GAIL (India) Ltd.
Source: Business Standard
NATIONAL: COAL
India readies policy to attract foreign investment in
coal mining
15 October. India expects to have formulated a policy
within the next two weeks to attract foreign investment
to its coal mining industry, the country’s Coal Minister
Pralhad Joshi said. The country planned to invite bids for
coal mining blocks by the end of 2019. It is also creating
a coal price index as part of plans to open the sector to
outside investment. India’s recently concluded thermal
coal mine auctions received a tepid response, with 15 out
of 21 attracting fewer than three bidders. Joshi said the
government was looking to make investing in coal mines
more attractive to bidders. Joshi said he expects India’s
coal demand to rise more than 21 percent from current
levels to 1.2 billion tonnes in 2023, adding that coal would
be necessary for the next three decades.
Source: Reuters
Private companies may have easy criteria for
commercial coal mining auction
14 October. The government plans to keep minimal
qualification criteria for companies to participate in the
auction of coal blocks for commercial mining. The
government has identified 15 large blocks for the pilot
round of bidding in December, adding that rules, bid
documents and agreements for commercial mining are
likely to be finalised soon. Each of the 15 identified coal
blocks will have a capacity to produce 4 million tonnes
per annum. The government plans to cap the upfront
payment for some large blocks which might otherwise
run into a huge amount. Many private steel and cement
companies did not participate in the latest round of
auction for captive coal mines because they wanted to
hold on to their cash for commercial coal auctions.
However, the companies said the blocks were too far
from the end use plants. The Coal Mines Nationalisation
Act of 1973 mandates that only companies registered in
India can participate in auctions. The Coal Mines Special
Provision Act 2015, which provides for opening up of
commercial coal mining to private and public entities, is
an offshoot of the 1973 Act.
Source: The Economic Times
Agitations hit coal supplies from MCL mines in
Odisha
13 October. The coal supplies from Talcher and IB valley
collieries under the Mahanadi Coalfields Ltd (MCL) in
Odisha were severely hit due to the ongoing agitations by
local people demanding employment. At least 60,000
tonnes of coal could not be supplied to various
consumers from Balram open cast project (OCP) at
Hingula area in Talcher coalfields due to the "illegal"
stoppages by the residents of Danara village since 6
October, the MCL said. Coal dispatch of around 15,000
tonnes is also affected due to which MCL has been losing
around `14.7 mn of revenue directly while the
government exchequer is losing `20.58 lakh per day.
Similarly, the residents of Ubuda village stopped mining
operations at a mine of Lakhanpur OCP of Ib Valley
Coalfields in Jharsuguda district, demanding employment.
The Lakhanpur OCP is supposed to produce around
65,000 tonne of coal daily but it has now come down to
QUICK COMMENT Privatisation of coal mining will not necessarily
commercialise coal mining! Ugly!
26,000 tonnes due to disturbances. The Odisha Power
Generation Corp (OPGC) is one of the major consumers
of coal from Lakhanpur OCP.
Source: The Economic Times
Agreement for Madhya Pradesh coal block after
financial approval: Industries Minister
12 October. Industries Minister Vishwajit Rane said that
the state government was yet to grant financial approval
for the acceptance of the coal block allotted to Goa
Industrial Development Corp (GIDC) at Singrauli,
Madhya Pradesh. Once the financial approvals come
through, GIDC would go ahead and ink an agreement
with the Union coal ministry to take over the allocated
coal block for utilisation, Rane said. The Dongri Tal II
coal block at Singrauli has been allocated to Goa and
Rane had earlier announced that the state would ink the
agreement on 10 October. Coal mines have been allotted
to state governments for sale of coal under the Coal
Mines (Special Provisions) Act, 2015. The Dongri Tal II
coal block has been allocated to the GIDC from the fifth
tranche of the allotment by the coal ministry. Rane had
earlier announced that GIDC would rope in validated
consultants to help the state with the coal block utilisation.
Source: The Economic Times
HC refuses to stay coal handling at Goa port
11 October. The Bombay High Court (HC) Bench in
Goa refused to stay coal handling operations at the
Mormugao Port Trust (MPT). It also sought pollution
data on the port town of Vasco, before making a call in
the case. The court was hearing a petition filed by Goa
Foundation, a non-government organisation, and others
seeking end of coal and coke handling operations at the
MPT. The next hearing is scheduled for 11 December.
Vosco residents fear increase in coal and dust pollution.
Source: The Economic Times
Coking coal shipments rise 15 percent to 29 mt at 12
state-run ports in April-September
9 October. Coal shipments handled by India’s 12 major
state-run ports during April-September rose by 15.25
percent to 29.29 million tonnes (mt), according to a ports'
body. The state-run ports had handled 25.41 mt of coking
coal cargo in the corresponding period of the previous
fiscal. Shipments of thermal or steam coal, however,
declined by 13.20 percent to 44.87 mt, the Indian Ports
Association (IPA) data showed. The IPA said these ports
handled 51.69 mt of thermal coal in the April-September
period of the previous fiscal. According to rating agency
ICRA, the country’s overall thermal coal import is likely
to cross 200 mt mark in 2019-20. It said that Coal India
Ltd (CIL)’s production might fall short of its 2019-20
target of 660 mt by around 55-75 mt. CIL accounts for
over 80 percent of the country’s domestic coal
requirement. Overall, the 12 major ports recorded a
marginal 1.48 percent upswing in cargo handling at
348.44 mt in April-September this fiscal against 343.37
mt in the year-ago period. These 12 major ports are --
Deendayal (erstwhile Kandla), Mumbai, JNPT,
Mormugao, New Mangalore, Cochin, Chennai,
Kamarajar (earlier Ennore), V.O.Chidambaranar,
Visakhapatnam, Paradip and Kolkata (including Haldia).
These ports handle about 60 percent of the country’s
total cargo traffic.
Source: The Economic Times
NATIONAL: POWER
Over 2.5k held in last 18 months for power theft in
Delhi
13 October. As part of a crackdown on electricity theft
that causes annual losses running into hundreds of crores
of rupees, the power distribution companies (discoms) in
Delhi have filed over 5,500 complaints in the last one and
half years leading to arrest of more than 2,500 violators.
Over 4,500 FIRs were registered on the basis of the
complaints and there have been more than 200
convictions in the same period, discom said. There are
three power discoms - BSES Yamuna Power Ltd (BYPL),
BSES Rajdhani Power Ltd (BRPL) and Tata Power Delhi
Distribution Ltd (TPDDL) - providing electricity to over
6 mn consumers in Delhi. Power theft attracts heavy
penalty along with jail term of up to five years. In August-
September this year, the special electricity court of
Karkardooma had directed attachment (and sealing) of 21
properties in East Delhi in connection with power theft
cases. Since privatisation of power distribution in 2002 in
Delhi, the discoms have been able to bring down
aggregate technical and commercial losses from as high
as 55 percent to 8 percent currently.
Source: The Economic Times
Andhra Pradesh government seeks Centre’s assistance
to resolve power-related issues
13 October. Andhra Pradesh government requested the
Central government to constitute a committee to resolve
the power-purchase related issues as it is incurring a
financial burden on the state. State Power Minister
Balineni Srinivas Reddy, in a letter to Union Power
Minister R K Singh, said that the power tariffs, power
purchasing agreements in the state are a matter of
concern. The Minister claimed that the abnormal
integration of Variable Renewable Energy (VRE) into the
grid is causing heavy financial burden to the state
government. The Minister, thereby, sought the Centre’s
co-operation in the matter to resolve the issue.
Source: The Economic Times
Power discoms ramp up ratings with better service,
less losses
12 October. Power distribution companies (discoms),
which are gearing up to ensure round-the-clock supply
during festive season, have registered improvement in
their ratings, according to the 7th annual integrated rating
report published by the power ministry. Principal
secretary (energy) and chairman of Uttar Pradesh Power
Corp Ltd (UPPCL) Alok Kumar said discom rating had
improved on account of reduction in aggregate technical
and commercial losses, timely finalisation of audit
accounts, improvement in consumer service and
increased power supply. Kumar said the rating of all
discoms, except Paschimanchal Vidyut Vitran Nigam Ltd
covering west UP, had been upgraded by a notch. Rating
of Purvanchal distribution company, covering east UP,
has increased by two notches. Kumar said around 46,000
consumer service centres for payment of electricity bills
were running across the state to improve consumer
service. Kumar said discoms successfully installed around
5.3 lakh smart meters in urban areas.
Source: The Economic Times
BSES allows users to recharge prepaid metres using
e-wallets
11 October. The BSES discoms (distribution companies)
will let users recharge their pre-paid electricity metres
through e-wallets or its mobile application and website.
The BSES discoms—BYPL (BSES Yamuna Power Ltd)
and BRPL (BSES Rajdhani Power Ltd) have extended the
facility to recharge pre-paid metres online through e-
wallets like Paytm and PhonePe and also through
company’s mobile app and website. The company is
leveraging technology and digital platforms to provide a
hassle free experience to its consumers in a big way.
Consumers can connect with the discom and apply for a
host of services, including applying for new connections,
registering complaints, from their homes and offices
using online platforms of the BSES.
Source: Business Standard
Union Power Minister directs states to clear dues of
power generating companies
11 October. Union Power Minister R K Singh directed
the state governments to clear dues of power generation
companies, a step which he said will boost investor
sentiment and attract investments. He said that attracting
investments is one of the major challenges that is being
faced by the sector. He said state departments owe about
`490 bn to electricity distribution companies (discoms),
so if this amount is recovered then a large portion of dues
will be cleared which will ultimately lessen the burden on
the power producers.
Source: Business Standard
Large consulting rooms attached to houses will
attract commercial power tariff: TNERC
11 October. Tamil Nadu Electricity Regulatory
Commission (TNERC) has clarified that a consulting
room attached to a residence will attract commercial tariff
if its size is more than 200 square feet. Commercial tariff
is much more than domestic tariff. Professionals like
advocates, doctors, engineers, chartered accountants and
others have small rooms attached to their residence.
Some have a separate meter for the consulting room. In
most of the cases, the rooms are part of the residence and
only domestic tariff is charged. In case of consulting
rooms attached to a house, the substantial use of
electricity would be for domestic use. In case of
consulting rooms not attached to the residence of
professionals, power is used for non-domestic purposes,
according to TNERC. The clarification has been issued
based on a directive from the Madras high court.
Source: The Economic Times
NIIF, EESL partner for deployment of smart
meters pan India
10 October. The National Investment and Infrastructure
Fund (NIIF) has joined hands with Energy Efficiency
Services Ltd (EESL) to implement, finance and operate
the smart meter roll-out programme of power
distribution companies. NIIF and EESL announced a
new joint venture, IntelliSmart Infrastructure Private Ltd
(IntelliSmart), for the smart meter roll-out programme.
This comes against a backdrop of the government
planning to install 250 mn smart meters in the next few
years. With the replacement of 250 mn conventional
meters with smart meters, billing efficiency can improve
from 80 percent to 100 percent, and has the potential to
increase revenues of electricity distribution companies
(discoms) by `1,104 bn. IntelliSmart will work
collaboratively with all stakeholders to procure, deploy
and provide operations and maintenance for the smart
meter infrastructure.
Source: Business Standard
Delhi government’s free-electricity scheme an
example of smart governance: CM
10 October. The Delhi government’s free-electricity
scheme will be an example of "smart governance" as it is
encouraging Delhiites to reduce their power
consumption, Chief Minister (CM) Arvind Kejriwal said.
In August, the Aam Aadmi Party (AAP) government had
announced free-electricity of up to 200 units for domestic
consumers and later extended the scheme to tenants
residing in the national capital. He said residents of the
city were trying to consume less than 200 units of
electricity to avail the benefit. He further claimed that 14
lakh consumers in the city who consumed less than 200
units of electricity received zero bill. There are around 48
lakh domestic consumers in the national capital. Under
the scheme, people consuming electricity between 201
units and 400 units are eligible to avail 50 percent subsidy
from the government on their bills. He had announced
'Mukhyamantri Kirayedar Bijli Meter Yojna' under which
tenants can also avail the free-electricity scheme.
Source: Business Standard
UP Power Department working on zero-tolerance
for corruption
10 October. With zero-tolerance against corruption, the
Power Department in Uttar Pradesh (UP) has ordered a
special audit of the e-tenders in Bahraich, Balrampur,
Shravasti and Gonda. Based on the audit reports of these
districts, inquiries will also be ordered into e-tenders of
other districts to ensure transparency in working. In order
to ensure that inquiry in these cases of corruption is
completed without any delay and strict action is taken
against those found guilty, the department has done
constant follow-up at the higher level as well. The Uttar
Pradesh Power Corp Ltd (UPPCL) has a vigilance unit
working under an Additional Director General of Police,
who has recommended registering of cases against those
found guilty in different inquiries. The Power
Department undertakes services through outsources in
large number and in the past, there have been large
number of complaints for payment of dues to such
employees and labourers.
Source: The Economic Times
Power ministry asks state to expedite reforms,
advises to stick to PPAs
9 October. With the country achieving electrification for
all households, the Union power ministry is gearing up
for another set of reforms – to improve the availability
and quality of power. As the Centre passes the baton to
the states to take forward the reforms, payment delay by
power distribution companies (discoms), resulting in over
dues to power generators, is a major cause of worry. At
the same time, several states are reviewing or cancelling
power purchase agreements (PPAs) with renewable
power projects. In its agenda note, the Centre has issued
an advisory, asking states not to reopen power purchase
agreements. To strengthen last-mile transmission and
distribution network of the state to ensure seamless
power supply, the Centre has set the deadline of March
2020 to complete all IPDS (Integrated Power
Development Scheme)-related strengthening work.
States must ensure metering of feeders and distribution
transformers, along with centralised collection of the
meter data for monitoring and analysis by next year.
Source: Business Standard
Punjab discom agrees to revised tariff plan for
Tata’s Mundra unit
9 October. Tata Power Company that is awaiting a
compensatory tariff nod from four procurer states —
Punjab, Haryana, Rajasthan and Maharashtra — for the
Mundra UMPP (Ultra Mega Power Project), said the
Punjab discom (distribution company) has agreed to the
tariff plan recommended by the high level committee,
and the matter is now awaiting state cabinet approval.
The Supreme Court allowed the CERC (Central
Electricity Regulatory Commission) to amend the PPAs
(power purchase agreements) of the imported-coal based
power plants as per the recommendations of a high-
power committee (HPC) constituted by the Gujarat
government in 2018. The HPC had recommended
reduction in fixed charge by `0.20/unit, which would
necessitate banks to reduce debts by `42.40 bn for Tata,
`38.21 bn for Adani and `23.24 bn for Essar Power.
Source: The Financial Express
Average spot power price falls to two-year low of
`2.77 per unit in September: IEX
9 October. The average spot power price fell to a two-
year low of `2.77 per unit in September owing to factors
like low demand, improved coal supply and higher power
generation, according to the Indian Energy Exchange
(IEX). The price at `2.77 per unit was 41 percent lower
than September 2018’s rate of `4.69, the IEX said. All-
India peak demand at 173 GW in September 2019
declined 1 percent over the demand of 175.6 GW in the
same month last year. Energy met at 105 billion units
declined 5 percent year-on-year, according to data issued
by National Load Dispatch Centre (NLDC).
Source: Business Standard
QUICK COMMENT Low spot price for power signals stagnant demand!
Bad!
NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE
TRENDS
Indian Railway to become world first ‘net-zero’
carbon emitter by 2030: Railway Minister
15 October. Indian Railways will become the world first
“net-zero” carbon emitter by 2030, Railway Minister
Piyush Goyal said. As per the NITI Aayog data, Carbon
Dioxide emission from Indian Railway was around 6.84
million tonnes (mt) in 2014. Amid global concern over
climate change, Indian railways is also working to reduce
the carbon emission. Goyal said that the Indian railways
will be 100 percent electrically run by 2023.
Source: Hindustan Times
IIT Madras, ExxonMobil Research join hands for
biofuel research
14 October. The Indian Institute of Technology Madras
(IIT Madras) said it has entered into an agreement with
ExxonMobil Research and Engineering Company
(EMRE) for research on energy and biofuels. IIT Madras
said it will be a five year joint research agreement focusing
on biofuels, data analytics, gas conversion and transport,
and is intended towards finding low-emission solutions.
Source: The Economic Times
India to install 2.9 GW wind capacity in 2019
14 October. India is likely to install more wind capacity
in 2019 than it did last year, but it will still be well below
what it used to be earlier. The country will install 2.9 GW
in 2019 against 2.3 GW in 2018. In 2016-17, 5.4 GW was
added, while 3.4 GW was achieved in 2015-16. Auctions
were conducted for 5.2 GW until August 2019 but only
2.9 GW was awarded because of lack of developer
interest. In the latest wind auction conducted by the Solar
Energy Corp of India (SECI), the nodal agency of the
Ministry of New and Renewable Energy (MNRE), only
two developers took part. Even though the original size
of the tender was 1800 MW, allotment was reduced to
440 MW. The new YSR Congress government in Andhra
Pradesh has been attempting to renegotiate wind and
solar PPAs (power purchase agreements).
Source: The Economic Times
India recognises the need for environmentally
sustainable development strategy: IMF
13 October. The International Monetary Fund (IMF)
looks at India as a country that recognizes the need for
an environmentally sustainable development strategy as
the global community gears up for a decisive fight against
climate change. Noting that India is particularly
concerned about prospects for the poorest segments of
its population in the context of this process of
development, he explained how does climate change fit
into the framework. India is fully committed to the Paris
agreement. It has made its nationally determined
contribution pledges, and that implies reducing emissions
of carbon dioxide (CO2) by a third below 2005 levels that
is relative to the energy intensity of GDP and India seems
to be on track to deliver on its pledges, the IMF’s Fiscal
Affairs Department director Vitor Gaspar said. He said the
IMF make the point that the nationally determined
contributions that were made by countries for the Paris
agreement will not deliver safe levels of temperature
increases. He said the IMF has shown that for a $50 per
tonne carbon tax, the net benefits for India would be more
than 2 percent of India’s GDP (Gross Domestic Product).
Source: Business Standard
Bharathidasan University plans to double solar
power generation
12 October. Bharathidasan University plans to double solar
power generation from the existing 500 kWp (kilowatt peak)
on its main campus at Palkalaiperur on the outskirts of the
city. Utilising funding under RUSA (Rashtriya Uchchatar
Shiksha Abhiyan), the university has established a grid
interactive 500 kWp Solar PV (photovoltaic) Power Plant at
a cost of ₹ 48.5 mn in 2016. While the RUSA funding was
₹40 mn, the university chipped in with the rest. The solar
plant generating 2,300 units electricity per day with an
average of 69,000 units per month has reduced the
monthly energy bill to the tune of ₹5.5 lakh.
Source: The Hindu
Renewable energy sector adds 4.2 GW in H1
11 October. Even as industry analysts warn of slowdown
in the renewable energy sector, the segment has added
4,273 MW of new capacity to the grid during the first half
(H1) of this fiscal, which is one of the highest additions
in a first-half year period in the last several years.
However, the addition to capacity during the April-
September 2019 is only 36 percent of the target (11,802
MW) set for the fiscal. Solar power segment continues to
be the major contributor of new capacity growth in the
renewable energy sector with a share of more than two-
thirds of the new capacity. 2,921 MW (includes 2,479
MW ground-mounted and 442 MW rooftop) capacity
during April-September 2019, according to the Union
Ministry of New and Renewable Energy (MNRE). Wind
sector continues to show progress and it added about
1,304 MW of new capacity. During the last fiscal, this
segment added 1,481 MW and this year it is expected to
add more capacity. As on 30 September 2019, total grid-
connected installed renewable power capacity in India
stood at 82,589 MW. Industry analysts have warned that
the clean energy sector is slipping into slowdown mode
though the government is ambitious about its targets in
the sector. MNRE said that the government of India has
set a target of installing 175 GW of grid connected
renewable power capacity by 31 December 2022.
However, a CRISIL report has warned that India’s
installed capacity in renewable energy could increase by
just 40 to 104 GW by fiscal 2022 from 64.4 GW in fiscal
2019, because of enduring policy uncertainty and tariff
glitches. This means the sector will be 42 percent short
of target.
Source: The Hindu Business L ine
Assam steps up efforts for strategic lower Subansiri
hydro project in Arunachal
11 October. In an attempt to ensure that India’s efforts
to revive work on the long-pending 2,000 MW Lower
Subansiri project in Arunachal Pradesh doesn’t get
derailed, Assam has constituted a high power state level
task force to facilitate work on the strategic project. Any
delay in building hydropower projects in Arunachal
Pradesh on rivers originating in China will affect India’s
strategy of establishing its prior-use claim over the waters,
according to international law. India and China have a
dispute over the diversion of the Brahmaputra river,
which originates in Tibet. Even as India explores a
diplomatic option, accelerating hydroelectric projects
such as Lower Subansiri would give it user rights. In order
to facilitate transportation of equipment to the NHPC
Ltd’ project, it is imperative that law and order situation
is in control in Assam.
Source: Livemint
175 GW renewables by December 2022, clarifies
government
10 October. The Ministry of New and Renewable Energy
(MNRE) clarified that the deadline for installing 175 GW
of renewable energy is 31 December 2022. Thanks to the
devaluation of the rupee, rising finance costs,
government-mandated tariff caps in reverse auctions and
cancellation of renewable project tenders, the pace of
adding renewable generation capacities already slowed
down in FY19, when the country added 8.6 GW against
11.3 GW and 11.8 GW added in FY17 and FY18,
respectively. The installed renewable capacity now stands
at 81.3 GW. Prime Minister Narendra Modi announced
in the United Nations General Assembly that the country
aims to have 450 GW renewable energy capacity.
Source: The Financial Express
Solar thermal players eye 10 percent growth after
GST rate cut
10 October. Solar thermal industry players are confident
of getting back into the boom trajectory and expect the
sector to clock a growth of 10 percent after the reduction
of GST (Goods and Services Tax) rate on inputs for solar
components from 18 percent to 5 percent. Solar Thermal
Federation of India (STFI) secretary general Jaideep
Malaviya said they approached GST directorate general
and the finance minister and convinced them to consider
solar thermal components as part of solar energy and
apply 5 percent GST on them. Almost 1.5 mn evacuated
tubes for solar water heater were imported during 2018,
Malaviya said.
Source: The Financial Express
INTERNATIONAL: OIL
OPEC, allies to sustain oil market stability beyond
2020: Barkindo
15 October. The Organization of the Petroleum
Exporting Countries (OPEC) and its allies are committed
to sustaining oil market stability beyond 2020 with global
physical supplies currently relatively tight, OPEC
Secretary-General Mohammad Barkindo said. He said
that compliance with production quotas among OPEC
and its allies was at 136 percent.
Source: Reuters
Shell consortium, Petronas win oil blocks off
Brazilian coast
10 October. A consortium of Royal Dutch Shell Plc,
Chevron Corp and Qatar Petroleum won oil exploration
and production rights in the C-M-713 block off the coast
of Brazil, paying the government a signing bonus of
roughly 551 mn reais ($133 mn). Shortly before, Petronas
won a separate offshore block, C-M-661, with a signing
bonus of roughly 1.116 bn reais.
Source: Reuters
Russian President to discuss stabilising oil prices
during Saudi visit
10 October. Russian President Vladimir Putin plans to
discuss stabilising world oil prices when he visits Saudi
Arabia for talks with Saudi King Salman and Crown
Prince Mohammed bin Salman. Russia hopes to expand
its joint investments with UAE (United Arab Emirates)
to $7 bn from $2.3 bn.
Source: Reuters
Several Asian refiners to get full Saudi oil supplies
in November
10 October. At least seven Asian refiners will receive the
full crude volumes they requested from Saudi Arabia for
November loading, a sign that Saudi production has
stabilized after disruptions last month. Most of the
refiners are getting the crude grades that they want,
adding that there was no request from oil company Saudi
Aramco for them to change grades. Saudi Aramco’s oil
processing facilities at Abqaiq and Khurais were attacked
by missiles and drones on 14 September, shutting down
5.7 mn barrels per day (bpd) of its production, or more
than 5 percent of global supplies.
Source: Reuters
South Sudan to launch auction of licenses for 8 oilfields
9 October. South Sudan will kick-start an auction of
licenses to develop eight oilfields around the country, the
oil ministry said. South Sudan’s oil production has
reached 178,000 barrels per day (bpd) and the country
aims for output to reach 200,000 bpd within the next two
years, the ministry said. Long-term, South Sudan aims to
ramp up production to 350,000 bpd, Arkangelo Okwang
Oler, director-general for planning, training and research
at South Sudan’s oil ministry, said. South Sudan made a
small oil discovery in Northern Upper Nile State in
August, its first since independence in 2011. Oler said Oil
Minister Awow Daniel Chuang would officially launch
the tender for the licenses at a conference in the capital
Juba on 29-30 October, and that South Sudan would
declare the results in the first quarter of 2020.
Source: Reuters
INTERNATIONAL: GAS
Iran discovers gas field near Gulf
14 October. Iran has discovered a gas field near the Gulf
with enough reserves to supply the capital for 16 years.
The Eram field contained 19 trillion cubic feet (538
billion cubic meters) of natural gas, the National Iranian
Oil Company said. The oil ministry said the field was
located in Fars province, about 200 km (kilometre) south
of Shiraz.
Source: The Economic Times
CNOOC looks to replace COSCO-linked LNG
tankers after US sanctions
11 October. China National Offshore Oil and Gas
Company (CNOOC) is on the hunt for liquefied natural
gas (LNG) tankers to charter, looking to replace ships it
had previously hired that are linked to a Chinese company
sanctioned by the United States for allegedly transporting
Iranian oil. Now, prompt demand by Chinese state giant
CNOOC for LNG ships has caused freight rates for such
tankers to nearly double to $130,000-$150,000 a day from
about $80,000 late, shipbrokers said.
Source: Reuters
Brazil’s Petrobras, Oslo-based Equinor tie up for
natural gas projects
10 October. Brazil’s oil company Petroleo Brasileiro SA
(Petrobras) said it has signed a Memorandum of
Understanding (MoU) with Oslo-based Equinor ASA
focussed on the joint development of natural gas business
projects. The companies aim to maximize downstream
value through thermoelectric generation as well as
feasibility studies related to gas processing assets and
pipelines owned by Petrobras in the Rio de Janeiro region
where a natural gas processing plant is being built in
Itaboraí. The companies intend to combine efforts in
investment in the natural gas, liquefied natural gas (LNG)
and power generation segments.
Source: Reuters
INTERNATIONAL: COAL
China’s September coal imports slip 8.1 percent
from previous month
14 October. China’s coal imports in September dropped
8.1 percent from a month earlier, as traders held up
purchases amid an increase in domestic supply and
slowing demand for the fuel from power generation
companies. Arrivals of coal, including thermal and coking
coal, last month were 30.29 million tonnes (mt), the
General Administration of Customs data showed.
Shipments stood at 32.95 mt in August. Imports were up
20.5 percent from 25.14 mt in September last year. In the
January to September period, China, the world’s top coal
consumer, took in 250.57 mt of coal, up 9.5 percent from
the same period in 2018, the customs data showed.
Source: Reuters
Australian state water utility objects to South 32
coal mine extension
11 October. Australia’s New South Wales water authority
has lodged a strong objection to a planned extension of
the life of a coal mine operated by South 32 because of
its predicted impact on water resources that support
Sydney. The Dendrobium metallurgical coal mine is part
of South 32’s Illawarra metallurgical coal division in the
southern coalfields of New South Wales, Australia’s most
populous state, about 75 km (kilometre) south of Sydney.
Source: Reuters
Australia’s NAB trims coal price forecast for 2020
9 October. National Australia Bank (NAB) has trimmed
its forecasts for metallurgical coal and thermal coal for
next year given weakening longer term demand prospects,
it said. It now sees thermal coal prices averaging at $70 a
tonne in 2020, from $76 previously, and hard coking coal
averaging at $150 a tonne from an earlier forecast of $156
a tonne, it said. Australia is the world’s biggest coal
exporter.
Source: Reuters
China completes major railway transporting coal
from north to south
9 October. A major railway in China transporting coal
from the country’s northern production hub to
consumers in the south has gone into operation. The
Haoji railway, which links China’s biggest coal
production region Inner Mongolia to Jiangxi province in
the south via central provinces including Hubei and
Hunan, will significantly cut coal transportation times.
Source: Reuters
INTERNATIONAL: POWER
South Africa’s Eskom challenges latest power tariff
decision in court
11 October. South Africa’s struggling power utility
Eskom said it was challenging in court the regulator’s
latest tariff decision, a move it said was necessary to avert
financial disaster. Eskom, which produces more than 90
percent of the country’s electricity, implemented some of
most severe power cuts in several years this year and is
reliant on government bailouts to survive. In March,
regulator Nersa granted Eskom tariff increases of 9.4
percent, 8.1 percent and 5.2 percent over the next three
years, far below what the utility had sought. At the time
Eskom said the tariff awards left it with a projected
revenue shortfall of around 100 bn rand ($6.7 bn). Eskom
said its board of directors had decided to challenge the
tariff awards after reviewing the reasons for Nersa’s
decision.
Source: Reuters
VPower Group wins Myanmar’s emergency power
tender
11 October. Hong Kong-listed VPower Group said its
consortium with Myanmar’s Zeya & Associates had been
provisionally awarded four of the five emergency power
projects tendered by the energy ministry in June. The
consortium said it won three projects that would use
imported liquefied natural gas in Rakhine’s Kyaukphyu,
Yangon’s Thanlyin and Thaketa, totalling 900 MW. It
also secured a 20 MW project that would use gas supplied
by the government in Kyun Chaung. Letters of
acceptance for each of the projects have been issued by
the Ministry of Electricity and Energy’s Electric Power
Generation Enterprise, VPower said. The consortium
still needs to negotiate terms of the contract - including
the power purchase agreement - with the government. As
of 2018 Myanmar’s electricity generation capacity totalled
3539 MW, according to ministry estimates, making
VPower an important player in the power market. After
failing to attract private investment in power generation
over the past few years, the government tendered these
emergency projects to ensure Myanmar could avoid
serious power shortages next hot season, which would be
some months before the 2020 general elections. Demand
for power consumption in the country is increasing
annually by 15-17 percent, while less than 40 percent of
the national population has access to electricity. VPower
has already completed several emergency power projects
in Myanmar and together with Zeya & Associates it
started operating a 90 MW plant in Myingyan in March
under a five-year contract.
Source: Myanmar Times
Power cut to millions as California faces
heightened wildfire risks
9 October. Electricity was shut off to nearly 750,000
California homes and workplaces as Pacific Gas and
Electric Co (PG&E) imposed a string of planned power
outages of unprecedented scale to reduce wildfire risks
posed by extremely windy, dry weather. The power cut
knocked out traffic signals, forced school closures and
shut businesses and government offices across northern
and central California. Some of California’s most
devastating wildfires were sparked in recent years by
damage to electrical transmission lines from recurring
bouts of high winds that then spread the flames through
tinder-dry vegetation into populated areas.
Source: Reuters
Zimbabwe quadruples electricity prices, pummelling
impoverished consumers
9 October. Zimbabwe hiked its average electricity tariff
by 320 percent to ramp up power supplies at a time of
daily blackouts, but the move will anger consumers
already grappling with soaring inflation that is eroding
their earnings. The southern African nation is
experiencing its worst economic crisis in a decade, seen
in triple-digit inflation, 18-hour power cuts and shortages
of US (United States) dollars, medicines and fuel that
have evoked the dark days of the 2008 hyperinflation
under late President Robert Mugabe. The second increase
in the price of electricity inside three months follows
sharp rises in fuel and basic goods prices. The Zimbabwe
Energy Regulatory Authority (ZERA) said it had
approved an application by Zimbabwe Electricity
Transmission and Distribution Company (ZETDC) to
raise the tariff to 162.16 cents (10.61 US cents) from
38.61 cents.
Source: Reuters
INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE
TRENDS
German renewable power levy to rise by 5.5 percent
in 2020
15 October. A fee levied on German consumers to
support renewable power will rise by 5.5 percent to 6.756
cents per kWh (kilowatt hour) in 2020. The levy is a key
part of Germany’s policy to switch to lower carbon
sources of energy, known as Energiewende, but has
sparked criticism from consumers because it makes up 21
percent of their final bills.
Source: Reuters
Climate change activists target BlackRock in
London
14 October. Climate activists targeted BlackRock, the
world’s biggest asset manager, in London, demanding
that major financial institutions starve fossil fuel
companies of the money they need to build new mines,
wells and pipelines. Extinction Rebellion, which uses civil
disobedience to highlight the risks posed by climate
change and the accelerating loss of plant and animal
species, is midway through a new two-week wave of
actions in cities around the world. Extinction Rebellion
wants to cause enough disruption to force governments
to rapidly cut carbon emissions and reverse the collapse
of ecosystems to avert the worst of the devastation
scientists project if business as usual continues.
Source: Reuters
EDF Renewables commissions 130 MWp in solar
energy capacity in Egypt
14 October. EDF Renewables said it had commissioned
130 megawatt power (MWp) worth of solar energy
capacity in Egypt, as it steps up the pace of its
development in North Africa. EDF said the latest plants
moved it closer to meeting its goal of doubling its net
renewable energy capacity in France and worldwide to a
net amount of 50 GW between 2015-2030.
Source: Reuters
Russia ready to work with US to build Saudi
nuclear power plant: Rosatom
14 October. Russia’s state nuclear corporation Rosatom
would be ready to cooperate with partners from the
United States, Europe and Asia to build a nuclear power
plant in Saudi Arabia, Rosatom’s CEO (Chief Executive
Officer) Alexey Likhachev said.
Source: Reuters
Dubai utility gets record low bid to build solar
power plant
13 October. Dubai Electricity & Water Authority
(DEWA) selected a contractor that submitted a “record”
low bid to build a 900 MW solar power plant in the
emirate, Chief Executive Officer Saeed Mohammed Al
Tayer said. The contractor bid 1.7 cents per kWh
(kilowatt hour) for the photovoltaic plant. The decision
requires a lengthy evaluation before DEWA can publicly
announce the winner, he said. DEWA required offers of
less than 2.4 cents per kWh. The plant will be the fifth
phase of a sprawling facility in in the desert outside Dubai
-- the Mohammed bin Rashid Al Maktoum Solar Park,
which will have 5 GW of installed capacity by 2030 if
DEWA completes it as planned. The United Arab
Emirates, of which Dubai is the financial hub, had 594
MW of installed solar capacity at the end of 2018 -- more
than any other country in the Persian Gulf region,
according to the International Renewable Energy Agency.
Dubai is on track to produce 7 percent of its electricity
from solar power by 2020 and targets meeting 75 percent
of its needs from solar and other renewables by 2050,
according to the UAE (United Arab Emirates)’s clean
energy strategy.
Source: Bloomberg
China begins new environmental probe in smog-
prone Hebei province
11 October. China has launched a new audit into
environmental compliance in the northern industrial
province of Hebei surrounding Beijing, as it looks to
ensure officials are not dodging efforts to combat
pollution. China launched countrywide audits in 2015 to
help ensure compliance with efforts to curb pollution,
with many local authorities accused of turning a blind eye
to pollution in order to guarantee growth and
employment. Hebei, which produces a quarter of China’s
steel and is responsible for much of the smog drifting
over the capital, was the test site for the first probe. Hebei
has already been under pressure to curb industrial output
over the past month in order to reduce air pollution
across China’s coastal regions.
Source: Reuters
Equinor to invest nearly $550 mn in floating wind
power off Norway
11 October. Equinor said it will invest nearly 5 bn
Norwegian crowns ($549 mn) to build floating turbines
to supply power to several North Sea oil and gas
platforms, in a move that will allow the Norwegian firm
to cut carbon emissions. The 88 MW capacity project,
called Hywind Tampen, consisting of 11 turbines, would
meet about 35 percent of electricity needs at the Gullfaks
and Snorre fields, Equinor said. The project will allow
Equinor to reduce CO2 (carbon dioxide) emissions from
gas turbines on offshore installations by about 200,000
tonnes per year, an equivalent of emissions from 100,000
cars every year, it said.
Source: Reuters
British Airways owner IAG commits to net zero
carbon emissions by 2050
10 October. British Airways owner IAG said it will
achieve net zero carbon emissions by 2050, becoming the
first major airlines group to make such a commitment.
The aviation industry is under intense pressure from
climate change activist such as Extinction Rebellion,
which is aiming to shut down London’s City Airport.
IAG said it would achieve its target with steps such as
carbon offsetting for British Airways’ domestic flights
from 2020, investing in sustainable aviation fuel and
replacing older aircraft with more efficient jets over the
next five years. IAG said the steps would help the airline
contribute both to Britain’s goal for a net zero carbon
economy by 2050 and a United Nations objective to limit
global warming to 1.5 degrees. IAG said that aviation
represented only 2 percent of global CO2 (carbon dioxide)
emissions, and that the airline group’s steps were one part
of a broader solution to make aviation less polluting.
Source: Reuters
Indonesia launches agency to manage environment funds
9 October. Indonesia launched an agency to manage
funds for climate change management as part of its
efforts to meet its climate goals. The new agency is
expected to start operation on 1 January 2020 and will
have an initial fund of around 2 tn rupiah ($141 mn). The
funds will come from land reclamation payments and
fines the government collects from environment criminal
cases, as well as from donors. Finance Minister Sri
Mulyani Indrawati said the agency could potentially raise
up to 800 tn rupiah ($56 bn) in environmental funds.
Indonesia aims to cut carbon emission by 29 percent by
2030 by its own efforts and 41 percent with international
assistance.
Source: Reuters
Poland plans to triple solar energy capacity this year
9 October. Poland, which generates most of its electricity
from coal, is planning to triple its solar energy capacity
this year, Prime Minister Mateusz Morawiecki said.
Morawiecki said that Silesia, which is still largely
dependent on coal despite a recent contraction in the
industry, will be one of the regions hardest hit by
measures taken to combat climate change. In June Poland
led a handful of eastern EU (European Union) states in
blocking a push by France and others to commit the bloc
to net zero emissions by mid-century. Morawiecki said at
that time that Warsaw wanted a strong compensation
package for its industrial sector in exchange for agreeing
to commit the target. Earlier in October the Polish energy
minister put the cost of reaching a net zero emissions
economy in Poland at €700-900 bn.
Source: Reuters
DATA INSIGHT Scenario of Coal Transportation through Railways
Coal Loading through Railways
Year(s) Average number of rakes per day sourced from CIL
2016-17 253.1
2017-18 265.5
2018-19 280.7
Coal Loading through Railways for Power Sector
Source: Compiled from Parliament Questions for Ministry of Coal
217.3
229.8
255.6
190
200
210
220
230
240
250
260
2016-17 2017-18 2018-19
Average no. of rakes sourced from CIL
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