Energy News Monitor · 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

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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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).


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.


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).


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).


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.


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.


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.


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

This is a weekly publication of the Observer Research Foundation (ORF). It covers current national and

international information on energy categorised systematically to add value. The year 2019 is the sixteenth

continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper

for India under No. DELENG / 2004 / 13485.

Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted

and edited from reliable sources. ORF does not accept any liability for errors therein. News material belongs

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(ORF Energy Team).

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