The Environment or the People: Who is important?

Ashish Gupta, Observer Research Foundation

The definition of ‘electricity access’ as per the International Energy Agency estimating 50 kilowatt hour (kWh)/person/year for rural household and 100 kWh/person/year for urban dwellers is drastically low compared to parameter set by Lawrence Livermore National Laboratory. The Lawrence Livermore National Laboratory parameter described in its study ‘Global Energy Futures and Human Development: A Framework for Analysis’ concluded that a nation will require at least 4,000 kWh/ per capita/ year electricity consumption rate to even have chance for development. This chance of development is not limited to only energy access but to the overall elevation of the human development. The correlation between electricity and human development is not rocket science and does not require complex computer modelling; it is just a universal fact.

The UN conference on Human Environment that took place on June, 1972 in Stockholm brought forth one very important declaration: the ‘environment’ is really about people. Since then United Nations has stressed on the importance of human environment:

  • Of all things in the world, people are the most precious. It is the people that propel social progress, create social wealth, develop science and technology, (Stockholm, 1972)
  • Social and economic development and poverty eradication are the first and overriding priorities of developing countries, (Copenhagen, 2009)
  • Eradicating poverty is the greatest global challenge facing the world today and an indispensible requirement for sustainable development, (Rio, 2012)
    • Reducing modern energy supply in developing nations in the name of ‘environment’ contradicts Stockholm declarations for the ‘environment’.

In all the above stated objectives, poverty eradication and human development were given utmost importance. This clearly indicates the human being is more important than the protection of the ‘environment’ that is limited to protection of rivers, forests, air, oceans etc. Cheap and affordable energy supply is essential for improving human development. A shocking fact that was brought out by a study by Columbia University’s Mailman School of Public Health was that there were only 446 deaths due to extreme weather in 2013 in United States, compared to 900,000 deaths/ year from poverty and other social factors. It is not the environment, but the poverty, that is a greatest threat developing nations face today. A lack of cheap energy is the silent killer that leads to poverty, hunger and easily preventable diseases.

As per the World Population Prospects: the 2012 Revision by United Nations Department of Economic and Social Affairs, by 2050, there will be rise of 87% in population in developing nations which indicates that more people will be deprived of energy. This energy deprivement has a devastating effect on women and girls in particular. As per a Water.Org report, women and girls in the developing world spend an estimated 200 million hours each day simply collecting water – the number of work hours to build 29 Empire State Buildings in a single day. This also indicates that female life expectancy in these developing nations is not going to improve if the same situation prevails. The development index for women is not likely to improve in an energy starved scenario because women will spend most of their time gathering fuel and other basic necessities in the developing world, instead of learning, making money, and bettering their situation. China, on the other hand which tripled its energy consumption since 2000 lifted female life expectancy from 73 years in 2000 to around 78 today.

Contrast to the picture shown above, most developed nations having higher electricity consumption with higher per capita CO2 emissions has the highest living standards. The carbon emission chart is given below:

Region Population (Millions) Per Capita CO2 Emissions (Tonnes)
World 6609 4.38
USA 302 19.10
UK 61 8.60
Japan 128 9.68
Germany 82 9.71
South Africa 48 7.27
France 64 5.81
China 1327 4.58
India 1123 1.18

Source: Interim Report of the Expert Group on Low Carbon Strategies for Inclusive Growth, 2011

Cheap and abundantly available fossil fuels which is criticised nowadays on account of carbon emissions, actually laid the foundation for the world richest economies. Stockholm, 1972 demonstrated why the goal to restrict energy sources is the real anti-environment movement because less modern energy is equal to more dependence on the environment. Coal, for instance, is now the backbone of the fastest growing economies, China and India, both of whom, importantly, have seen their life expectancies surge. Over 50% of the developing world’s electricity comes from coal; a cheap energy source that vitally increases the disposable income has a direct correlation with health. As per the Lawrence Livermore National Laboratory Analysis of Human Development Index, critical indicators of health improve when access to modern energy is provided. Increased life expectancy has a 72% correlation with access to electricity; the correlation is strongest for the lowest-income countries.

The US’s coal-based electricity, oil-based transport era since 1900, increased the life expectancy dramatically from 32 years to 79 years. Coal-electricity has played an enabling role in the plummeting of the US infant mortality rate, from 160 per 1,000 births in 1900 to around 5 today. Ethiopia which consumes a meagre 70 kWh/person/ year has an infant mortality rate of 56 per 1,000 births and Nigeria which consumes 150 kWh/person/year has a life expectancy of 52 years only.  In a nutshell, people are healthier and live longer when their energy is cheaper and therefore have more money to take care of themselves.

The enforcement of ‘environment’ focussed approach that marginalises people is an artificial way of restricting energy supplies in the developing nations which can increase their energy cost significantly. The effect will be devastating for the nations having the least ability to pay, thereby impacting the rate of economic developing and living standards in these developing nations. As per the International Macroeconomic Data of United States of Department of Agriculture Research, the developing world, for instance, has an average GDP/capita of just $3,000 (real 2005 $), compared to $40,000 in the developed nations, which is an indicator that they cannot absorb the higher cost of less reliable, naturally intermittent energy.

Also as per the World Bank, International Debt Statistics, 2013, the total external debt outstanding of the developing countries is around $5 trillion (compared to $2.6 trillion in 2005), mounting by approximately $300-400 billion per year. Debt significantly affects global poverty because borrowed money accrues interest, which augments that debt and quickly erodes a country’s ability to invest in much-needed infrastructure. The message is that the advocacy for more expensive energy in developing nations is not the solution to problems of developing nations but contribution to their problems.

Views are those of the author                    

Author can be contacted at ashishgupta@orfonline.org

Courtesy: Energy News Monitor | Volume XI; Issue 24

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RE INVESTMENTS OVERTAKE FOSSIL FUEL INVESTMENTS

Monthly Non-Fossil Fuels News Commentary: July 2018

India

Investment in India’s renewable energy sector overtook those made in the country’s fossil-fuel based power generation projects for the first time in 2017, Paris-based IEA has said in its World Energy Investment 2018 report. It added the investment case for thermal power generation has grown more uncertain and investments associated with coal plants coming on line in 2017 fell by one-third to under $15 billion. Investments in power projects using coal, gas and oil as a fuel in India was at $16 billion in 2017. China, along with US, Europe and India accounted for nearly two-thirds of global investment in electricity networks in 2017.

India’s trade ministry recommended imposing a 25 percent duty on imports of solar cells and modules from China for one year to try to counter what it sees as a threat to domestic solar equipment manufacturing. Falling prices of solar cells and modules, over 90 percent of which India imports from China, have triggered a decline in the cost of solar power generation and led Indians increasingly to adopt the technology. India plans to make renewable power account for 40 percent of its total installed capacity by 2030, from 20 percent currently. The proposed safeguard duty, which would apply for two years in total to imports from China and Malaysia, would be reduced in the second year to 20 percent for six months and then 15 percent for six months. The proposed duty is less than the 70 percent recommended by Indian authorities in January. The recommendation, contained in a report published by the ministry and to be submitted to the government for approval, is intended to address a serious threat to the domestic solar manufacturing industry from Chinese imports, the directorate general of trade remedies said in the report. Indian solar cell and module manufacturers said cheap Chinese imports were hurting the domestic industry, while Chinese manufacturers say imports are helping India accelerate its renewable energy adoption program.

The government plans to make local manufacturing of equipment a key element in tenders for large solar power projects, even as the country aims to add close to 500 GW of renewable energy capacity by 2030. The MNRE plans to design the bids in a way to bring manufacturing into the country while taking care of the interest of small and medium developers. It would be difficult to attract manufacturers with smaller bid sizes. While around 80% of the equipment used in wind power projects are manufactured locally, in the case of solar projects about 90% of the equipment are imported and 85% of which come from China. The cost of solar equipment is expected to fall further after Chinese government recently decided to put brakes on its solar capacity addition. The power ministry, MNRE and the Central Electricity Authority have worked out the country’s installed capacity till 2030. Of the total power requirement of 862 GW, as much as 350 GW will come from solar and another 140 GW will come from wind projects. To reach there, the ministry plans to bid out 30 GW solar and 10 GW wind projects every year till 2028. Solar Energy Corp of India floated a global tender for setting up 5 GW manufacturing capacity linked with Inter-state transmission system-connected solar project for 10 GW aggregate capacity. As part of the tender, developers will be allowed to import polysilicon, but will have to manufacture solar modules locally. The government, however, has not mandated use of locally manufactured solar panels in the project as part of the tender, thereby steering clear of landing into trouble at WTO. Industry experts said that while these tenders look compliant with WTO norms at the outset, they could be potentially challenged, as developers are allowed to bid higher tariffs for the power projects.

Following multiple requests from the industry, the MNRE has extended the timeline for implementation of solar parks and Ultra Mega Solar Power Projects with total capacity of 40 GW by two years, from the initial deadline of FY2020 to FY2022, the MNRE said. The timeline has been extended without any additional financial implication, the Ministry order noted. This new order will provide more time to all parties in the development of solar parks and ultra-mega parks, including agencies responsible for tendering the projects such as SECI and NTPC Ltd and private developers facing challenges with land acquisition and securing power evacuation from the plants. The programme approved by the government in March 2017 aimed at enhancing solar park capacity from 20,000 MW to 40,000 MW by setting up at least 50 parks of 500 MW and above by FY20 with the government sanctioning ₹ 81 billion. Projects of around 21,000 MW have already been approved under this programme.

For the first time, coaches on the Indian Railways would be powered by solar energy, with the national transporter retrofitting its passenger trains with flexible solar panels. This will operate fans, light and mobile charging slots on the coaches. Developed by the IROAF, such solar panels were earlier fitted in DEMU trains last year. After the success on these coaches, it was felt that solar energy can also be harnessed in railway’s main line coaches for the comforts of common man. Such fitment of solar panels has started to operate in Sitapur-Delhi Riwari Passenger train. These panels are light weight and easy to fit and most of these panels have been manufactured in India by CEL Ltd. The total weight of solar panel on these coaches is approximately 120 kilogram. Along with generation of electricity, these coaches are also fitted with sensors which will monitor parameters of the solar energy being generated. Out of this, IROAF will undertake the fitment of flexible solar panels in three more passenger trains which face the problem of poor battery charging due to slow running.

Delhi announced the ‘Mukhyanmantri Kisan Aaye Badhotri Solar Yojna’ which aims to increase the income of farmers by three to five times in the national capital. As per the scheme approved by the Delhi Cabinet, maximum of one-third surface area of the agriculture land can be used for installation of solar panels in such a way that agriculture activity is not affected. Present estimated annual income of farmers is ₹ 20,000 to 30,000 per acre per year. Minimum height for installing solar panels will be 3.5 metres to ensure that agriculture activity is not affected. Delhi government’s departments will also buy electricity from companies which have installed solar panels on the agriculture land. At present, departments buy electricity for ₹ 9/kWh, but with this scheme, departments will buy electricity for ₹ 4/kWh due to which government will save ₹ 4 to 5 billion annually.

In order to make rooftop solar power plants more affordable to the people of Uttar Pradesh, the state government has announced an additional subsidy of ₹ 15,000/kw or a maximum of ₹ 300 for installation of solar plants after the Centre announced 30 percent subsidy on the same. To take benefit of this scheme, one has to submit an online application form, which will be available from the website of UPNEDA. Also, the applicant has to take a no objection certificate from a local power distribution company and the UPNEDA. Within one week of the submission of online application, the processing for installation of solar power plant will be initiated. Under the scheme, there is also scope for installation of a common solar power plant of up to 25 percent capacity of the electric transformer in residential areas. Moreover, the UPNEDA— with the help of power department, on orders of the state government— has identified 716 poor families in the district living without electricity. The agency is working on a plan to light by these houses with solar energy.

The DMRC will start getting green power from the Madhya Pradesh-based RUMSL in the next two months, the first project in the country to supply power to an inter-state open access customer. The 750 MW project in Rewa district, spread over an area of 1,590 acres, is among the largest single-site solar power plants in the world. The DMRC had signed a PPA with the RUMSL to get green power from the latter to run its trains in the national capital. DMRC would get around 25 percent of the total power generated by the RUMSL, which would meet around 90 percent power demand of the DMRC. RUMSL has started generating 10 MW power from July 6 this year. DMRC would pay around ₹ 3.67/kWh including the transmission charge. The DMRC is currently buying power at ₹ 7/kWh. The Madhya Pradesh Power Management Company Ltd, which supplies power to the state discoms, will get 76 percent of the power produced from the Rewa solar power plant, while the DMRC will benefit from the remaining 24 percent. RUMSL will go full steam by this year-end. Under the plant, three units of 250 MW each will produce a unit of green energy for less than ` 3/kWh.

Efforts from state governments such as those of Maharashtra and Uttar Pradesh to develop floating solar plants might hit the financial-viability hurdle. Companies like JSW Energy have been planning to get into this business, while the Tatas and NTPC have already done pilots. Limited domestic availability of floats, however, is a big challenge. The industry has to depend on European or Chinese suppliers, which is not cost effective. The differential between a ground-mounted and a floating solar project does not make it viable in terms of product pricing, JSW Energy said. The company has plans to set up a combined floating solar capacity of 250 MW across various locations. In June, the Maharashtra government said that it had set up a committee for the development of a floating solar plant. Uttar Pradesh was another state where the process to call for bids to develop a similar solar capacity on the Rihand dam was underway. Floating solar plants are considered an alternate option to tackle land availability issues. The concept involves setting up solar panels on floats placed on dams, lakes and similar water bodies. However, the indigenous production of floats, which substitutes land in a floating solar power set-up, at present, is minimal. In addition to the cost of imported floats, the logistic costs involved in transporting them to India are seen as a bigger challenge. The group is currently consulting Maharashtra’s state power generation company for setting up 250 MW of floating solar capacity. The country is yet to see bids submitted for a floating solar plant from potential power companies. JSW Energy will join the list of power producers like NTPC and Tata Power that have already experimented with floating solar.

In a bid to eliminate indoor pollution caused by cooking, Centre plans to introduce solar cooking facilities with induction oven for every rural household in the next 4-5 years. The Centre has fixed a target to produce 100 GW solar power in the coming years.

IOC is harnessing solar power to make cooking gas refills available to homesteads and security establishments dotting the cold desert of Ladakh – also known as ‘roof of the world’ – in Jammu and Kashmir as India’s largest oil refiner and fuel retailer moves to reduce its carbon footprint. The company has switched its LPG bottling plant at Leh, the headquarters of the country’s largest district by area, from diesel generating set to an on-site 100 kilowatt solar power plant built at cost of over ₹ 10 million. Since the plant needs uninterrupted power all through the year, IOC has been running the plant on generators, burning 45,000 litres of diesel annually. Solar power will help avoid emission and help in air quality management. The construction of the solar power plant was hampered by weather when an avalanche blocked a truck carrying vital parts at Zoji La, the gateway to Ladakh from Srinagar in December last year and remained stuck through the icy winter. The parts were moved once the road opened this year and the plant was built in 45 days. This is the latest in a series of steps IOC has initiated for greening its business. The company has set a target of running 10,000 retail outlets on solar power. IOC already has two other solar-powered retail outlets operating at Choglamsar and the Leh-Manali road in Ladakh region. But both are at a slightly lower altitude than Leh. These outlets operate under extreme weather conditions but solar systems function smoothly as the region gets bright sunlight due to dry weather conditions for the most part of the year.

Solar power tariffs touched ₹ 2.44/kWh once more, the lowest they have ever reached, in the latest 2000 MW auction conducted by SECI. ACME Solar, one of the biggest domestic solar developers, with around 875 MW of commissioned solar projects, won 600 MW with this bid. The tariff had fallen to ₹ 2.44/kWh only once before, in a SECI auction for projects at the Bhadla Solar Park in May 2017, but had been climbing significantly in subsequent auctions, the highest reached being ₹ 2.94 to ₹ 3.54/kWh in an 860 MW auction across different talukas of Karnataka, held by the Karnataka Renewable Energy Development Ltd in February this year. Other auctions by Gujarat, Maharashtra and NTPC too have seen winning tariffs of well over ₹ 2.50/kWh. The other winners at the auction were Shapoorji Pallonji, which won 250 MW bidding ₹ 2.52/kWh, along with Azure Power, Hero Solar and Mahindra Susten, all three of which bid ₹ 2.53/kWh. While Azure Power won 600 MW, Hero and Mahindra got 250 MW each. The remaining 50 MW was awarded to Mahoba Solar at ₹ 2.54/kWh. All 2000 MW of projects will be connected directly to the Inter State Transmission System. Solar tariffs had been rising for the past year due to two main reasons – the rising cost of solar panels from China, and the possibility of safeguard duty being imposed on Chinese solar imports ever since domestic manufacturers complained to the Director General, Safeguards that Chinese imports were seriously hurting their industry. However, domestic manufacturers do not have the capacity to meet India’s solar equipment requirements, sparked by its ambitious programme of achieving 100 GW of solar capacity by 2022. A decision on safeguard duty is expected shortly. But the trend of rising Chinese panel prices has clearly been dramatically reversed.

Under an ambitious project to manage the biodegradable waste, 10 biomethanation plants will be set up across the city to generate biogas that will generate electricity and enriched organic manure from waste. North corporation will set up four such plants of 5 tonnes per day capacity each. Similarly, south corporation will also set up 4 plants and east Delhi will get two. The overall project for waste management under the corporations has been sanctioned by the ministry of housing and urban affairs, and is being carried out under urban development fund. Each plant is expected to cost around 3 to 5 billion. Corporations will now have to focus on making the residents segregate their waste into dry and wet category. Biomethanation plants are much more compact and could be a solution for waste management in the capital. Around 60% of the waste generated in Delhi falls under the category of wet waste but despite laws making it mandatory, only minimal segregation at household level is taking place. The cities that are leading in waste management have devised strategies like compositing. Kerala’s Alappuzha has focused on biogas model and thousands of homes have constructed biogas plants in their homes, and use it for part of their cooking. Alappuzha now has no landfills — the dump yard for waste is no longer used, and the municipality is now planning to build a sports stadium there.

Karnataka is the new national leader in renewable energy generation, US-based IEEFA said. It has overtaken Tamil Nadu that had long been India’s top renewables market. With a population of more than 60 million, Karnataka has a total of 12.3 GW of renewable capacity installed till March, after having added five GW in 2017-18 alone, it said. IEEFA’s report “Karnataka’s Electricity Sector Transformation”, talks about a trend driven by state and national energy policies that have encouraged less reliance on imported energy and how declining costs have helped build momentum around the uptake of renewables, especially solar. IEEFA conducts research and analyses on financial and economic issues related to energy and the environment.

India’s wind energy sector will offer two million new jobs by 2022 as the country looks to double its overall manufacturing capacity in the wind space in the next four years, Suzlon said. Suzlon has 35 percent share in India’s installed wind capacity. The ₹ 82 billion company has so far supplied 8,503 turbines with a cumulative capacity of 11,919 MW in the Indian market. Pune-based Suzlon delivered 1,100 MW of equipment — including 231 MW of solar — in FY18 and expected its revenues to jump 56 percent to ₹ 130 billion in the fiscal year ending March 2019. Tanti, who is also the chairman of the local industry body Indian Wind Turbine Manufacturers Association, said high margins in exports coupled with an increase in domestic demand would help double the country’s manufacturing capacity from the current 12 GW to 25 GW by 2022. The country’s total installed power generation capacity would have to grow to 850 GW if the GDP grows at a rate of 6 percent. Projects of 7 GW installed capacity have already been bid out, while those of 11 GW are in the pipeline for FY19. India currently has 70 GW of installed renewable energy generation capacity, including 22 GW of solar and 34 GW of wind capacity.

The West Bengal government has taken “a bold stand” on renewable energy by deciding it will not chase the ambitious target set by the centre to generate 5,336 MW of solar power by 2022, experts said. The state currently has an installed capacity to generate 70-80 MW of solar power, which would be ramped up to around 200 MW in a year, West Bengal Green Energy Development Corp said. West Bengal has taken a bold decision at a time when most states are blindly following the centre’s diktat over renewable energy at great risk to their own finances. West Bengal does not have as much arid land as other states such as Rajasthan and Gujarat. So it is almost impossible to set up large solar power plants in West Bengal. As a rule of thumb, it takes 4-5 acres to generate 1 MW of solar power.

The Union power ministry is no longer looking at formulating a new scheme for reviving hydropower projects in the country. The existing policy had involved a financial implication of ₹ 167.09 billion for 40 projects with a capacity of 11,639 MW. This is opposite to the earlier position that the government has had on a scheme for aiding stressed hydropower projects. According to the proposal, all hydropower (irrespective of size) will be categorised as Renewable Energy. Further, the scheme for revival of hydro power sector had provided for a 4 percent interest subvention during the construction period (maximum 7 years) and 3 years post the COD to all hydropower projects above 25 MW. This benefit will be extended for all projects attaining COD for up to 5 years after the notification of this policy. During March this year, in its report tabled in the Parliament, the Standing Committee on Energy had also asked the power ministry to formulate a new hydro power policy.

As India and Bhutan mark 50 years of diplomatic ties this year, the two sides reaffirmed their commitment to cooperation in the hydropower sector. India is a leading development aid partner for the Himalayan kingdom. New Delhi has set up three hydroelectric projects in Bhutan with a total capacity of 1,416 MW, which are operational. About three fourth of the power generated is exported to India and the rest is used for domestic consumption.

India’s neighbour Bangladesh is exploring the possibility of expanding electricity trade between the two countries using capacity generated from renewable sources. Currently, Bangladesh brings 500 MW through Bheramara-Bherampur inter-connectivity and is readying to bring another 500 MW through the same transmission line. It is also importing 160 MW electricity using Tripura-Comilla interconnection. As Bangladesh aims to provide 100 percent household access to electricity by July 2019, the country is actively growing its generation capacity as well as investing in grid expansions and upgrade. Bangladesh’s installed capacity, including captive plants, currently stands at 18,700 MW, although the highest amount generated so far is 11,000 MW.

Rest of the World

Strong oil prices and a spike in demand has allowed Avril’s biodiesel plants to run at full capacity since June but Argentine imports could force the EU’s largest biodiesel maker to return to part-time work. Europe’s biodiesel industry has been struggling since the EU reduced duties on imports from Argentina last year after Buenos Aires mounted a successful challenge at the WTO. Avril implemented a six-month plan to reduce production at its oilseed processing unit Saipol in March, blaming huge Argentine biodiesel imports for exacerbating poor market conditions. European producers are hoping that the European Commission will implement new taxes on biodiesel imports in September following renewed allegations that Argentina unfairly subsidised its biofuel sector. Avril produced of 1.4 million tonnes of biodiesel in 2017, from a capacity of 1.8 million. Production was expected to fall this year due to the reduced output implemented in March but the recent pick-up should allow it to make up for most of the shortfall. The increase in biodiesel demand was also linked to growing diesel consumption and rising blending mandates in some EU countries.

Imposing a tax would leave 85 percent of the country’s biofuel exports without a viable market and may force suppliers to close shop. The industry had previously avoided EU sanctions by redirecting its biodiesel shipments to other markets. In late 2017, Washington imposed tariffs and stopped Argentine biodiesel imports after similar accusations of subsidies and “dumping.” The EU’s threat has already put a damper on sales to Europe, trimming Argentina’s biodiesel exports to no more than 700,000 tons this year, down from 1.65 million tons shipped in 2017, according to Argentina’s Chamber of Biofuels.

Indonesia, the world’s biggest palm oil producer, is offering incentives to developers of a new 100 percent palm oil-based “green diesel”, which the net oil importer hopes can replace costly fuel imports within three years. Biodiesel for land transportation in Indonesia currently consists of a 20 percent bio component that is mixed with petroleum diesel. That component is expected to be raised to 30 percent in 2020. In Indonesia, the bio portion of biodiesel is made with FAME from palm oil, but efforts to increase FAME concentrations in biodiesel have faced resistance from regulators as well as the automotive and oil industries. While biodiesel can cut fuel costs and reduce emissions, higher blends of FAME require special handling and equipment as the fuel has a solvent effect that can corrode engine seals and gasket materials, and it can solidify at cold temperatures. Indonesia has found a new way to produce biodiesel that is not based on FAME that can avoid these problems. A biorefinery owned by Elevance Renewable Sciences and Wilmar International is currently producing “green diesel” in a pilot project, and has been given a corporate tax discount to develop full-scale output. Indonesia’s biodiesel program was already reducing Indonesia’s fuel import demand by $21 million per day. The Indonesia Biofuel Producers Association expects unblended biodiesel exports to reach 800,000 kilolitres this year.

Renewable energy sources satisfied more of Germany’s power demands than coal during the first half of 2018, marking a shift towards clean power as the Bundesrepublik continues to debate how best to phase out coal. According to data released by the German Association of Energy and Water Industries (BDEW) data, wind, solar, hydropower and biogas met 36.3% of Germany’s electricity needs between January and June 2018, while coal provided just 35.1%. Although renewables have hit notable benchmarks in the past, outstripping fossil fuels on certain days or even weeks, this is the first time coal has fallen by the wayside during such a long period of time in Germany. In comparison to the same period in 2017, renewables only met 32.5% in the first six months of last year, with coal generating 38.5%.  The energy minister refused to consider anything above a 32% renewable energy target for 2030, cutting down any hopes that national capitals could be convinced to back the European Parliament’s proposed 35% mark.

A drop in the number of new German wind power projects coming on stream in 2019 and the early 2020s could make it harder to achieve economies of scale and hit investment, according to the country’s VDMA mechanical engineering group. That in turn could jeopardize Germany’s target of producing 65 percent of power from renewable sources by 2030, which is expected to require 20 GW of total offshore wind capacity, four times the current number, VDMA said. Policymakers have recently shifted the industry away from fixed feed-in tariffs towards auctions for new building permits, hitting the profitability of wind power companies. VDMA believes the transition may have been too drastic, leading to a slowdown in new projects already this year. Industry figures show 5.6 GW of capacity were added in the onshore German wind industry last year, while that figure could fall to 3-4 GW in 2018 and 2.8 GW in 2019. Offshore wind construction in Germany’s North and Baltic Seas last year came in at 1.25 GW while, from this year, only 2.3 GW are under construction up to 2020.

Saudi Arabia’s ACWA Power has signed a deal with Central Energy Fund to build renewable energy complexes in South Africa. The project will be a 100 MW solar power plant called Redstone CSP, and its construction will begin this year. Located in the Northern Cape, the CSP plant will produce clean energy for 210,000 South African homes. ACWA Power said its projects in South Africa would create thousands of jobs in the country. The complex will be built with a CSP central tower that captures sunlight. Using this design will help the plant generate competitively priced electricity compared to other forms of renewable energy that cannot serve evening peak demand unless they are linked to “extremely expensive” utility scale batteries, ACWA Power said.

Ireland committed to divesting public funds from fossil fuel companies after parliament passed a bill forcing the €8.9 billion ($10.4 billion) Ireland Strategic Investment Fund to withdraw money invested in oil, gas and coal. Members of Ireland’s Dail (Parliament) passed the Fossil Fuel Divestment Bill, which requires the fund to divest direct investments in fossil fuel undertakings within five years and not to make future investments in the industry. The bill said indirect investments should not be made, unless there is unlikely to be more than 15 percent of an asset invested in a fossil fuel undertaking. As of June last year, the fund’s investments in the global fossil fuel industry were estimated at €318 million across 150 companies. Ireland was ranked the second-worst performing European Union country, in front of Poland, in terms of climate change action in June by environmental campaign group Climate Action Network Europe. The world’s top oil, gas and coal companies face rising pressure from investors to shift to cleaner energy and renewables to meet international greenhouse gas emissions cut targets. Fossil fuel divestment has gained traction over the past few years as pension funds, sovereign wealth funds and universities, have sold oil, gas and coal stocks, especially after the 195-nation Paris climate agreement set a goal in 2015 of phasing out the use of fossil fuels this century. Norway’s $1 trillion sovereign wealth fund, the world’s largest, is barred from investing in firms that get more than 30 percent of their business from coal and it has also proposed to drop its investments in oil and gas. The government will give its opinion about that broader divestment in October. In the US, New York City announced a goal earlier this year to divest its $189 billion public pension funds from fossil fuel companies in five years.

Myanmar’s government must ensure the protection of ethnic communities amid hydropower projects that have “weak social and environmental safeguards,” activists said. The Myanmar government must undertake reforms in its hydropower sector to prevent dam projects from negatively impacting rural ethnic minority communities in southeastern Kayin state, where electrification rates are lowest in the nation, according to a report issued by two ethnic Karen NGOs. The findings of the report, based on information collected in districts in Kayin state, discussions with focus groups, individual interviews with villagers, and legal research, conclude that instead of benefiting local communities, hydropower development in ethnic minority areas has diminished the livelihoods of those who rely on their land to secure their food and income. Residents are usually forced from their land by companies involved in dam-building or by armed forces, are given little or no opportunity to give their input on the projects, and are later permitted limited access to natural, religious, or cultural sites where the dams are constructed, the report said. The report said that hydropower development in southeastern Myanmar often occurs without adequate consultation with ethnic communities or due process of law, and that villagers receive inadequate or no compensation for the land, homes, and possessions they are forced to give up. Myanmar plans to build 50 large hydropower projects, 42 of which will be located in ethnic minority areas of the country, the report said. And of the 26 largest already built, 12 are situated in such regions.

China will open an electricity trading market for hydropower and nuclear power generators, and accelerate the process for coal-fired power plants to join the market, the NDRC said. The NDRC also urged local authorities and grid companies to remove barriers on cross-regional power trading and encouraged all types of power generators that can meet energy consumption and emission standards, including captive power plants at industrial plants, to participate in the trading market. China plans to remove power consumption and generation restrictions for coal, steel, non-ferrous and construction materials companies from this year, allowing them to fully trade in the power market. The NDRC also asked local authorities to reduce intervention during power trading, as it is part of the country’s years-long efforts to liberalize the country’s electricity market.

A US judge dismissed a lawsuit by New York City seeking to hold major oil companies liable for climate change caused by carbon emissions from burning fossil fuels. In dismissing the city’s claims against Chevron Corp, BP Plc, ConocoPhillips, Exxon Mobil Corp and Royal Dutch Shell Plc, US District Judge in Manhattan said climate change must be addressed through federal regulation and foreign policy. The oil companies moved to dismiss the case on numerous grounds, including that the federal Clean Air Act authorizes only the Environmental Protection Agency to bring lawsuits over pollution.

Italian oil major Eni has pulled out of a race to buy Terra Firma’s solar power assets in Italy. The British private equity firm is looking to sell its Rete Rinnovabile, known as RTR, solar portfolio in Italy in a deal expected to fetch more than €1 billion ($1.17 billion). If successful, the transaction will be Italy’s largest solar energy sale in a fragmented industry that has come under pressure to consolidate to counter the withdrawal of generous state subsidies. Eni was working on a joint bid with Qatar Petroleum for 130 plants for a total of 330 MW of solar energy put up for sale by Terra Firma. Italian investment firm Tages was considering making an offer without Abu Dhabi’s Masdar Clean Tech Fund, with which it had initially partnered.

Britain’s nuclear regulator said it has approved a request from EDF Energy to increase the maximum operating temperature in the reactors at its Hartlepool and Heysham 1 nuclear plants to avoid reducing reactor power. In 2014, the two plants were shut down for several months after cracks were found in the reactor boilers. When they restarted, they did so at reduced output to stop high temperatures causing more cracks. EDF Energy has asked the Office for Nuclear Regulation for permission to raise the operating limit for the upper surface of hot box domes inside the reactors to 390 degrees Celsius from 380 degrees. In May, a reactor at EDF Energy’s Hunterston B nuclear plant in Scotland was taken offline for additional safety checks after cracks were found in its core. The development of such cracks is a side effect of ageing but has raised concerns about other old reactors in Britain and Europe.

Japan’s government pledged to modestly boost the amount of energy coming from renewable sources to around a quarter in a new plan that also keeps nuclear power central to the country’s policy. The plan aims to have 22-24 percent of Japan’s energy needs met by renewable sources including wind and solar by 2030, a figure critics describe as unambitious based on current levels of around 15 percent. The European Union agreed to raise its renewable energy target to 32 percent by 2030. Japan’s policy also envisions nuclear providing more than 20 percent of the country’s energy needs by 2030, reflecting the government’s ongoing commitment to the sector despite deep public concern after the 2011 Fukushima disaster. The government has reduced Japan’s reliance on the sector, but defends nuclear as an emissions-free energy source that will help the country meet its climate change commitments. Japan currently generates around 90 percent of its energy from fossil fuels, and the plan calls for that figure to drop to just over half, with energy efficiency policies to cut demand. Reliance on fossil fuels like coal increased in Japan after the Fukushima disaster, as public anger over the accident pushed all of the country’s nuclear reactors offline temporarily. Six reactors are currently operating, and utilities face public opposition to activating more despite political support for the nuclear industry. Japan’s TEPCO, which operated the Fukushima plant, signalled last week that it was ready to resume work on the construction of a new nuclear plant in the country’s north.

IEA: International Energy Agency, US: United States, MNRE: Ministry of New and Renewable Energy, MW: megawatt, GW: gigawatt, WTO: World Trade Organisation, SECI: Solar Energy Corp of India, FY: Financial Year, IROAF: Indian Railway Organization for Alternate Fuels, kWh: kilowatt hour, UPNEDA: Uttar Pradesh New and Renewable Energy Development Agency, DMRC: Delhi Metro Rail Corp, RUMSL: Rewa Ultra Mega Solar Ltd, PPA: power purchase agreement, discoms: distribution companies, IOC: Indian Oil Corp, LPG: liquefied petroleum gas, IEEFA: Institute for Energy Economics and Financial Analysis, COD: commercial operations date, EU: European Union, FAME: fatty acid methyl esters, CSP: concentrated solar power, NDRC: National Development & Reform Commission

Courtesy: Energy News Monitor | Volume XV; Issue 8

Global CO2 Emissions from Fuel Combustion: Gloomy Picture from the IEA

K K Roy Chowdhury, Energy & Environment Expert, Delhi

The International Energy Agency (IEA), Paris has specially designed a publication, titled, “CO2 EMISSIONS FROM FUEL COMBUSTION HIGHLIGHTS”-2014 Edition and released it for delegations and observers of the twentieth session of the Conference of the Parties to the UN Climate Change Convention (COP 20), in conjunction with the tenth meeting of the Parties to the Kyoto Protocol (CMP 10), held in Lima, Peru from 1 to 12 December 2014.

Key findings include:

  • Global CO2emissions increased by 51% since 1990, reaching 31.7 Giga tones of Carbon-di-oxide (GtCO2) in 2012. Despite some decoupling between economic growth and energy use, increasing wealth and population, with a practically unchanged carbon intensity of the energy mix, drove this dramatic emissions increase.
  • In 2012, two-thirds of global emissions originated from just ten countries, with the shares of China and the United States far surpassing those of all others. Increased coal and oil consumption drove emissions increases in developing countries, while developed countries slightly decreased their emissions compared to 2011.
  • CO2emissions for the group of countries participating in the Kyoto Protocol were collectively about 14% below 1990 levels in 2012, although large differences were observed at an individual country level.

The full-scale study CO₂ Emissions from Fuel Combustion 2014 includes even more comprehensive information, such as tables and graphs by country and region. Complete time series of CO2 emissions data and indicators are also found at the IEA online data services.

The IEA estimates of CO2 emissions from fuel combustion are based on the IEA energy balances and the Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories.

In the lead-up to the UN climate negotiations in Lima, the latest information on the level and growth of CO2 emissions, their source and geographic distribution will be essential to lay the foundation for a global agreement as input to and support for the UN process.

This annual publication contains, for more than 140 countries and regions:

  • estimates of CO2 emissions from 1971 to 2012
  • selected indicators such as CO2/GDP, CO2/capita and CO2/TPES
  • a decomposition of CO2 emissions into driving factors
  • CO2 emissions from international marine and aviation bunkers, and other relevant information.

Recent years have witnessed a fundamental change in the way governments approach energy-related environmental issues. Promoting sustainable development and combating climate change have become integral aspects of energy planning, analysis and policy making in many countries, including all IEA member states. The IEA’s energy data are the figures most often cited in the field making it appropriate for them to publish this information in a comprehensive form.

The IEA has also reported that these data are only for energy-related CO2, not for any other greenhouse gases. Thus they may differ from countries’ official submissions of emissions inventories to the UNFCCC Secretariat. However, the full-scale study contains data for CO2 from non-energy-related sources and gas flaring, and emissions of CH4, N2O, HFC, PFC and SF6. In addition, the full-scale study also includes information on ‘Key Sources’ from fuel combustion, as developed in the IPCC Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories.

The estimates of CO2 emissions from fuel combustion presented in this publication are calculated using the IEA energy balances and the default methods and emission factors from the Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories. There are many reasons why the IEA Secretariat estimates may not be the same as the numbers that a country submits to the UNFCCC, even if a country has accounted for all of its energy use and correctly applied the IPCC Guidelines.

A summary of the recent trends in CO2 emissions from fuel combustion as given in the IEA publication is stated below.

The growing importance of energy-related emissions of CO2, given the concentrations of Carbon Dioxide (CO2) in the atmosphere that have been increasing significantly over the past century and also much reported, need not be over-emphasised. Significant increases have also occurred in levels of methane (CH4) and nitrous oxide (N2O). The Fifth Assessment Report from the Intergovernmental Panel on Climate Change (Working Group I) states that human influence on the climate system is clear (IPCC, 2013). Some changes in the climate system would be irreversible in the course of a human life span.

Given the long lifetime of CO2 in the atmosphere, stabilizing concentrations of greenhouse gases at any level would require large reductions of global CO2emissions from current levels. The lower the chosen level for stabilisation, the sooner the decline in global CO2 emissions would need to begin, or the deeper the emission reduction would need to be over time. The United Nations Framework Convention on Climate Change (UNFCCC) provides a structure for intergovernmental efforts to tackle the challenge posed by climate change. The Convention’s ultimate objective is to stabilize GHG concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. The Conference of Parties (COP) further recognised that deep cuts in global GHG emissions are required, with a view to hold the increase in global average temperature below 2°C above pre-industrial levels, and that Parties should take urgent action to meet this long-term goal, consistent with science and on the basis of equity.

Energy use and greenhouse gases: Among the many human activities that produce greenhouse gases, the use of energy represents by far the largest source of emissions.

Within the energy sector, CO2 resulting from the oxidation of carbon in fuels during combustion dominates the total GHG emissions. CO2 from energy represents about three quarters of the anthropogenic GHG emissions for Annex I countries, and almost 70% of global emissions. This percentage varies greatly by country, due to diverse national structures. Increasing demand for energy comes from worldwide economic growth and development. Global total primary energy supply (TPES) more than doubled between 1971 and 2012, mainly relying on fossil fuels.

Despite the growth of non-fossil energy (such as nuclear and hydropower), considered as non-emitting, the share of fossil fuels within the world energy supply is relatively unchanged over the past 41 years. In 2012, fossil sources accounted for 82% of the global TPES.

Growing world energy demand from fossil fuels plays a key role in the upward trend in CO2 emissions. Since the Industrial Revolution, annual CO2 emissions from fuel combustion dramatically increased from near zero to almost 32 GtCO2 in 2012.

Recent emissions trends: In 2012, global CO2 emissions were 31.7 GtCO2. This represents a 1.2% year-on-year increase in emissions, about half the average annual growth rate since 2000, and four percentage points less than in 2010, year of initial recovery after the financial crisis.

Emissions in non-Annex I countries continued to increase (3.8%), albeit at a lower rate than in 2011, while emissions in Annex I countries decreased by 1.5%. In absolute terms, global CO2 emissions increased by 0.4 GtCO2 in 2012, driven primarily by increased emissions from coal and oil in non-Annex I countries.

Emissions by fuel: Although coal represented 29% of the world TPES in2012, it accounted for 44% of the global CO2 emissions due to its heavy carbon content per unit of energy released, and to the fact that 18% of the TPES derives from carbon-neutral fuels. As compared to gas, coal is nearly twice as emission intensive on average.

Those shares evolved significantly during the last decade, following ten years of rather stable relative contributions among fuels. In 2002 in fact, oil still held the largest share of emissions (41%), three percentage points ahead of coal.

In 2012, CO2 emissions from the combustion of coal increased by 1.3% to 13.9 GtCO2. Currently, coal fills much of the growing energy demand of those developing countries (such as China and India) where energy-intensive industrial production is growing rapidly and large coal reserves exist with limited reserves of other energy sources.

Emissions by region: Non-Annex I countries, collectively, represented 55% of global CO2 emissions in 2012. At the regional level, annual growth rates varied greatly: emissions growth in China (3.1%) was lower than in previous years, however, emissions grew strongly in Africa (5.6%), Asia excluding China (4.9%) and the Middle East (4.5%). Emissions in Latin America (4.1%) and Annex II Asia Oceania (2.5%) grew at a more moderate rate, while emissions decreased in Annex II North America (-3.7%), Annex II Europe (-0.5%) and Annex I EIT (-0.8%).

Regional differences in contributions to global emissions conceal even larger differences among individual countries. Nearly two-thirds of global emissions for 2012 originated from just ten countries, with the shares of China (26%) and the United States (16%) far surpassing those of all others. Combined, these two countries alone produced 13.3 GtCO2. The top-10 emitting countries include five Annex I countries (United States, Russian Federation, Japan, Germany, Canada) and five non-Annex I countries (China, India, Korea, Islamic Republic of Iran, Saudi Arabia). As different regions and countries have contrasting economic and social structures, the picture would change significantly when moving from absolute emissions to indicators such as emissions per capita or per GDP.

Emissions by sector: Two sectors produced nearly two-thirds of global CO2emissions in 2012: electricity and heat generation, by far the largest, accounted for 42%, while transport accounted for 23%. Generation of electricity and heat worldwide relies heavily on coal, the most carbon-intensive fossil fuel. Countries such as Australia, China, India, Poland and South Africa produce over two-thirds of their electricity and heat through the combustion of coal.

Between 2011 and 2012, CO2 emissions from electricity and heat increased by 1.8%, faster than total emissions. While the share of oil in electricity and heat emissions has declined steadily since 1990, the share of gas increased slightly, and the share of coal increased significantly, from 65% in 1990 to 72% in 2012. Carbon intensity developments for this sector will strongly depend on the fuel mix used to generate electricity, including the share of non-emitting sources, such as renewables and nuclear, as well as on the potential penetration of CCS technologies.

As for transport, the fast emissions growth was driven by emissions from the road sector, which increased by 64% since 1990 and accounted for about three quarters of transport emissions in 2012. It is interesting to note that despite efforts to limit emissions from international transport, emissions from marine and aviation bunkers, 66% and 80% higher in 2012 than in 1990 respectively, grew even faster than those from road.

Reference: IEA STATISTICS/ CO2 EMISSIONS FROM FUEL COMBUSTION Highlights (2014 Edition)

The author may be contacted at roychowdhury1@gmail.com

Courtesy: Energy News Monitor | Volume XI; Issue 25

POWER SECTOR STRESS CAUSING BANKING DISTRESS

Monthly Power News Commentary: June – July 2018

India

Rating agency ICRA has estimated a subsidy dependence of ₹ 850 billion amid low tariff hikes allowed for discoms in 2018-19, and expects improvement in thermal plants capacity utilisation or PLF in near to medium term. The all India electricity demand growth slowed down to 3.1 percent on a year-on-year basis in the first two months of FY2019 against the growth of 7.5 percent reported in Q4 FY2018 and lower than the growth of 5.9 percent witnessed in the first two months of FY2018, it said. However, May-2018 witnessed the highest ever monthly electricity demand at all India level. With respect to the distribution segment, the SERCs in 21 out of the 29 states have issued tariff orders for FY2019 so far, reflecting reasonable progress in the issuance of tariff orders for the year, it said. According to ICRA, the median tariff hike based on the tariff orders issued in the 21 states remained low at 2 percent, with the SERCs in seven states not approving any tariff hike and the downward revision in tariff in two states.

Gujarat, Maharashtra, Rajasthan, Bihar and Jharkhand together want to buy 3,000 MW of power under a government scheme to promote purchases from plants without PPAs. Under the scheme, PFC Consulting will conduct the auction for 2,500 MW capacity and PTC India will sign three-year (mid-term) PPAs with successful bidders and contract with discoms sell electricity. The development comes at a time when states are buying more power from the spot markets, indicating a rise in demand. The power ministry has recently suggested to make it mandatory for electricity discoms to tie up long- or medium-term PPAs to meet their ‘annual average power requirement’ in their areas of supply. Short-term power volumes grew 8% year-on-year to about 129 billion units, comprising about 15 GW capacity in FY18, and the spot market trading at the Indian Energy Exchange grew at 14%, trading more than 46 billion units from 5.3 GW of power plants. Maharashtra, Tamil Nadu, Bihar, Gujarat and Uttar Pradesh were the largest buyers from the short-term market. The Central Electricity Authority has reported that there was a more than 10% annual increase in electricity demand in Uttar Pradesh, Chhattisgarh, Telangana, Arunachal Pradesh, Manipur and Tripura in FY18. The pilot plan proposes that a single entity, which quotes or matches the lowest bid in the auction, will be allocated a maximum capacity of 600 MW. A company cannot quote part capacity from different power stations in the same bid. If PTC procures power less than 55% of contracted capacity in a month, the plant would be paid compensation, the quantum of which would be linked to spot power prices at the Indian Energy Exchange.

Stressed power projects of Adani, Tata and Essar groups may get a favourable package soon as a panel headed by a former Supreme Court judge has been appointed to resolve issues of ₹ 400 billion of projects idling or underutilised because they are unviable. The panel’s recommendations, which may include making tariffs viable by reviewing the power purchase agreements, or acquisition of the projects, are expected in two months. The government of Gujarat, where the plants are located, says reviving these plants will help consumers get much cheaper electricity and has asked the panel to submit its recommendations in two months. With such a large capacity shut down, Gujarat, Haryana, Punjab, Rajasthan and Maharashtra, which would together get 8,000 MW of power from these plants, are facing a huge shortage. Gujarat had to purchase costly electricity from the spot market at an additional cost of ₹ 30 billion in the last few months.

NTPC Ltd announced it has acquired two power projects with combined capacity of 2,590 MW at Nabinagar and Muzaffarpur in Bihar. The 1,980 MW Nabinagar Super Thermal Power Project is being set up in Aurangabad district by Nabinagar Power Generating Company Pvt Ltd in which NTPC and BSPGCL already own equal stake. NTPC has now acquired BSPGCL’s 50 percent stake in the project. The currently operational 610 MW Muzaffarpur Thermal Power Station is developed by Kanti Bijli Utpadan Nigam Ltd, a subsidiary of NTPC in which BSPGCL holds 27.36 percent stake. NTPC has now bought BSPGCL’s entire equity interest.

The government is looking at a proposal to allow neighbouring nations like Bhutan to participate in domestic electricity exchanges including Indian Energy Exchange, the largest platform for spot power trade. The idea is to deepen the country’s market for sale and purchase of electricity by boosting volumes. The government expects more supply to come into the system and an increase in the number of registered consumers on the exchange. The country generates around 1,200 billion units of power annually, around 10 percent of which is transacted in the short-term market. This includes bilateral trade (4.7 percent); day-ahead transactions on the exchanges (4 percent) and Deviation Settlement Mechanism accounting for 1.7 percent. India imported 5,600 million units of power from Bhutan last financial year.

MERC has given its approval to the proposed 100% stake sale of Reliance Infrastructure’s integrated Mumbai power business to ATL. Following the commission’s nod, the transaction is expected to be closed in July 2018. MERC had concluded its hearing into the matter and reserved its order on 14 June 2018. Reliance Infrastructure has already received the approval of Competition Commission of India and its share-holders for the deal. Reliance Infrastructure and ATL had signed Definitive Binding Agreement for 100% stake sale of the integrated business of generation, transmission and distribution of power for Mumbai in December 2017. The total consideration value of the deal is estimated at ₹ 188 billion.

Axis Bank has put up for sale Lanco Kondapalli Power, which owns and operates 1476 MW gas based power plants as the power producer failed to pay dues. Without mentioning the name of the company Axis Bank called EoI for the sale of three gas-based power projects with a combined capacity of 1476 MW. The power projects are of Lanco Kondapalli, which was once a subsidiary of beleaguered Lanco Infratech Ltd. The lenders have to find a suitable resolution for their debts before September 16, lest the creditors approach the National Company Law Board for a resolution. Lanco Kondapalli a 368 MW gas-based plant is operational since October 2000. Phase-II 366 MW is operational since December 2009 and Phase-III 742 MW is operational since January 2016. While Phase-I is operating with limited gas supplies, Phase II and III are not producing any power due to lack of gas supplies. Axis Bank sought in case of strategic investors, sought bids from parties who have net worth of ₹ 3 billion as on March 2017 or later. It wanted the financial investors with ₹ 10 billion worth of Assets Under Management or ₹ 5 billion committed funds available for investment in future on the plants.

The power ministry is mulling a reward of ₹ 500,000 for state utilities employees and a grant of ₹ 500 million for discoms which will meet household electrification target under Saubhagya scheme at the earliest. Under the ₹ 163.20 billion Pradhan Mantri Sahaj Bijli Har Ghar Yojana – ‘Saubhagya’ scheme launched last year in September, the government aims to electrify all 36 million un-electrified households by December-end. The ministry will form different group of states based on the parameters like geography and number of households to be electrified. Among each group, the state completing the task of 100 percent household electrification at earliest will be rewarded. In each group, only the top performer will be rewarded. The move is aimed at incentivising state discoms to compete against each other to give a push to achieve the objective of 100 percent household electrification under ‘Saubhagya’ Scheme. According to the Saubhagya portal, 81,41,950 families have been provided electricity connection so far under the scheme, while the work is on to energise 27,846,217 households across the country. The largest number of 14.9 million unelectrified households are in Uttar Pradesh out of which 1,999,000 have been provided electricity connection so far. At the second place, there are 3,344,000 un-electrified households in Bihar, out of which 1,555,000 have already been electrified.

TPDDL will start its ambitious project to install smart meters covering all its 160,000 consumers in the national capital from this month. The discom (distribution company) is set to install smart meters and also launch a mobile app for consumers to access real time energy consumption. In the first phase, 200,000 smart meters would be installed in North and North-West Delhi in the next one year. 500,000 meters are planned to be installed in the next two years and in the third phase all 1.6 million consumers are to be covered by 2025, said a spokesperson of TPDDL. The project has already started with installation of communication and back-end IT infrastructure last year and now metre deployment is commencing from this month, the discom said. A smart meter is equipped with a display screen that shows consumption of power and also communicates with the power supplier for metering and billing.

Tata Power Company has filed a mid-term review petition before the electricity regulator, proposing to reduce tariff for high-end consumers by up to 20% and increasing rates for low-end residential users by 7%. For the first time, the utility firm has proposed a new category for ‘electric vehicle’ (EV) charging instead of clubbing it under a different category. Tata’s petition indicated that the special tariff will be ₹ 5.16/kWh which includes basic energy charge of just ₹ 3/kWh — applicable for those wanting to drive battery operated cars / two-wheelers in Mumbai. A single full charge of battery can run a car for as long as 120 kilometre (km) and the cost could come to  ₹0.60-0.70/km. The MERC petition indicated that the tariff for low-end residential users, especially in the 101-300 units consumption category will go up by 0.44/kWh from the existing ₹ 6.44-₹ 6.88/kWh (7% increase). This cost will include the wheeling charges and the RAC. The RAC is a charge for past recoveries of Tata Power, which could not be recovered since the approved tariff was not sufficient to recover the costs incurred. If one goes by the break-up of the charges that all residential users will pay, the basic energy charge has not been hiked at all. In fact, the proposed energy charge component has dropped by an average 5.5%, but there is a corresponding increase of 19% in wheeling charges and another increase in the RAC, which consumers will have to pay in their bills.

Ahead of assembly polls scheduled to be held this year end, Madhya Pradesh government waived power bills and dues amounting to ₹ 51.79 billion and announced the implementation of fixed power tariff scheme in a bid to benefit 16 million labourers and BPL families. Poor families can avail electricity connection at a fixed rate of ₹ 200 per month. Besides this, the government has also waived off their power dues and announced to withdraw cases of power theft and illegal connections against them. Consumers availing flat rate power benefit of ₹ 200 per month will be allowed to use four bulbs, two fans, a water cooler and a television. Those who have not applied for new electricity connections will be given connections free of charge.

Himachal Pradesh sought the Centre’s intervention in settling electricity arrears with neighbouring Punjab and Haryana pending for over half a century in three Bhakra Beas Management Board projects in compliance with a Supreme Court order. The differential energy quantum of 13,066 million units would fetch ₹ 32.66 billion to the hill state at an average rate of ₹ 2.50/kWh.  The Union government was urged to help provide state’s royalty of ₹ 32.66 billion on the water used for power generation on rivers flowing through the state. Major power projects such as the Bhakra and Pong dams were located in the state but it was unfortunate that it had been deprived of its legitimate share from these projects as compensation. Special grants and liberal financial assistance was sought from the centre for mini and micro hydroelectric projects in remote areas. Of the total 27,000 MW power generation potential, Himachal has tapped only 10,547 MW till date mainly due to limited resources.

Power production in the 800 MW seventh unit of KTPS in Telangana has commenced. The construction of the plant at an estimated cost of ₹ 5700 billion commenced on February 1, 2015 and the project has created a record of sorts with its completion within 40 months. Telangana State Power Generation Corp Ltd formally launched the power production in Paloncha and synchronised to the power grid last night. The Central Electricity Agency has stipulated a condition that any new power plant that is taken up shall be completed in all aspects within 48 months of its commencement. This plant was completed in less than that period and within 40 months and thus created a record. With commencement of power at the seventh phase of KTPS, the total availability of power in Telangana crossed 16,000 MW. The state government is all determined to take the state from a deficit power state to surplus state and with the same spirit the Bhadradri and Yadadri plants will be completed.

NTPC said it has recorded its highest quarterly power generation of 69.2 billion units in April-June this fiscal which is 7.45 percent more than that in the year-ago period. NTPC Group recorded the highest quarterly generation of 76.9 billion units against the previous highest of 76.1 billion units (in Q4 of FY2017-18). NTPC joint venture stations also recorded the highest quarterly generation of 7,701 million units. The company’s highest renewable energy generation of 411.24 million units is also a highlight of this quarter. The company has total installed capacity of 53,651 MW from its 21 coal based, 7 gas based, 11 solar PV, 1 hydro, 1 small hydro, 1 wind and 9 subsidiaries/joint venture power stations. NTPC is currently implementing an additional capacity of over 20,000 MW at multiple locations across the country.

Electricity consumers across the country will soon be able to pay their bills in small instalments. Prepaid meters are said to be a pro-poor step as smart prepaid meters will enable the poor to pay in small instalments as per convenience without the fear of connection being cut. The move will also eliminate the issue of wrong bills.

Haryana has accorded approval for installation of 1 million smart power meters in five districts of the states. A Memorandum of Understanding between EESL, a joint venture of PSUs under Union Ministry of Power, and Haryana Power Distribution Utilities would be signed soon. The decision was taken to improve the financial condition of power distribution companies, to encourage energy conservation and to tackle problems relating to payment of electricity bills. In the first phase old meters of five districts–Panipat, Karnal, Panchkula, Faridabad and Gurugram would be replaced with smart meters by EESL. Under the prestigious Mhara Gaon Jagmag Gaon scheme initiated by the state government in 2015, 400 feeders of 2,310 villages including district Panchkula, Ambala, Faridabad, Gurugram and Sirsa are getting round-the-clock power supply.

The PSPCL and the Haryana power utilities have improved their ranking in the sixth integrated rating for state power discoms that have been issued by the union power ministry. Punjab has been placed at the 11th position rising two slots from 13th the previous year and is yet to regain A+ grade which it held for two consecutive years 2014 and 2015. In 2016 was at the fifth slop and slipped to 13 in 2017. In the case of Haryana, there has been a marked improvement from 22nd and 24th to 9th and 13th Positions (B to B+ grade). Earlier these power utilities had been in C grade in a list of 41 state power utilities across the country. The previous year, their number was at 28th and 31st and was placed in the C+ category. For the sixth year in a row, the four state power utilities of Gujarat along with Uttarakhand Power Corp topped the annual rankings. At the same time, four out of five power distribution companies of Uttar Pradesh have not moved out of the lowest grade as per the report. All the three discoms of Rajasthan are in the B category due to high power purchase costs and low bill collection efficiency. The PSPCL performed well in the key area of lowering the AT&C losses while it floundered in revenue collection because of its absolute dependence on the state government for the release of subsidy being given in lieu of free power to agriculture and delay in receipt of same. Besides, it also lost points due on account of high employees cost. However, the utility consolidated its standing with the timely revision of power tariffs. In case of Haryana’s UHBVN and DHBVN, the key concerns were high AT&C losses which were calculated at 32% for UHBVN and 29.09% for DHBVN. Besides, low billing efficiency, high power purchase cost at ₹ 4.76/kWh and high employees cost pushed the two power utilities down on the ranking. The strength of the power utility was the timely collection of subsidy amount and reduction in its debt liabilities. Out of 41 state power utilities, there are five utilities with A+ grade, two with A grade 13 with B+ grade 11 with B grade, two with C+ grade and 8 with C grade.

Punjab government was accused by the federal BJP government of discontinuing free electricity scheme for ‘gaushalas’ (cow shelters). PSPCL is apparently sending bills worth ₹ 53.2 million to the 472 gaushalas registered in the state despite getting cow cess on electricity bills. The bills should have been waived off according to the state policy.

In a city that loses much of its electricity in theft, the PSPCL has shown a way out by pushing distribution cables underground and deploying technology to track illegal connections. With the introduction of underground cables, illegal usage of electricity and power losses will reduce. PSPCL is undertaking many projects to make Ludhiana a smart city and more efficient in terms of power. The reason why the electricity department wanted to go for an underground cable network is to prevent instances of electrocution, which are common when cables snap during rains and windy conditions. Underground cables also help avoid low voltage complaints, a persistent issue among residents of suburbs in the city. Underground cables are one of the major tasks undertaken by the PSPCL department. Now, 66Kb cables are installed underground from Amlathas to Kakowal — a distance of around 2 kilometre. This is the first time this type of project has been completed in Ludhiana city. The reason for starting underground cables is because there are many problems that occur when high wattage wires start functioning on poles. The central government has sanctioned ₹ 370 million under the Smart City project for better infrastructure in terms of electricity in Ludhiana. In this project — expected to begin soon — the distribution of underground cables will take place on National Road, Ghumar Mandi, and Phase 2 within a few months.

While the Delhi government has raised an alarm over an imminent power crisis in the capital due to depleting coal reserves, sources in the NTPC said that coal rakes had started coming in and enough power was available in the grid to tackle any crisis. The coal stock availability at Delhi’s thermal power stations increased a bit and stood at 101,985 mt. Delhi requires 56,000 mt coal daily for generation from the Badarpur, Aravali and Dadri thermal plants. Ideally, the coal stock should be for 15 days, i.e 840,000 mt. But NTPC said the stock situation was improving.

DERC has slapped a ₹20,000 penalty on a distribution company for “violation” of rules in a 10-year-old case of power theft. DERC imposed the penalty on BRPL on a petition filed by director of A K Mehta and Company, alleging violations of provisions of the Delhi Electricity Supply Code and Performance Standards Regulations, 2007. The Commission in its order on June 14 found that respondent BRPL has violated provisions of Regulations 52(viii) and 53(ii) of the Delhi Electricity Supply Code and Performance Standards Regulations, 2007. Regulation 52 (viii) of Supply Code, 2007, said that in case of suspected theft of power, the authorised officer will remove the old meter under a seizure memo and seal it in the presence of the consumer or his representative. The Commission observed that the personal hearing was held on October 06, 2009. However, the speaking order was issued on December 4, 2009 -after one month and 28 days from the date of personal hearing. However, the Commission observed that the regulation must be complied with whether it contains a mandatory or a directory direction.

An SNDL survey has found out that over 5,000 government and civic employees are not paying power bills and some are also pilfering power. SNDL said the survey was done in Tajbagh Teachers’ Colony, Borkar Colony, Sweeper Colony, Thakkargram, Police Line Takli, CPWD Quarters and Gandhibagh Police Colony. Not only were these employees not paying bills, many of them were pilfering power too. MSEDCL also faces problems due to erring government employees. Many of them stop paying power bills when they get transferred and then MSEDCL has problems in recovering the amount. Meanwhile, a serious failure by SNDL has come to light. There are over 4,600 old electro-mechanical meters still in use in the city. These meters are slow and cause a huge revenue loss to SNDL. On its failure to replace them with electronic meters, SNDL said the consumers had resorted to violence when franchisee teams went to their residence to install new meters.

The use of LED bulbs and tube lights has been made mandatory in all offices of Haryana. In this direction, all Administrative Secretaries, Head of Departments and Managing Directors of Boards, Corporations and Public Undertakings have been directed through a written communication to ensure replacing all inefficient lighting with LED lamps or tube lights by August 15, 2018, the new and renewable energy department said. All halogen, sodium bulbs and tube lights will be replaced with energy-efficient LED bulbs and tube lights. Use of incandescent lamps and purchase of sodium vapour lamps by government sector, government aided sector, boards and corporations and autonomous bodies have already been banned.

The government will consider making 24 degrees Celsius as mandatory default setting for air conditioners within a few months. AC makers were also advised to have labelling indicating the optimum temperature setting for the benefits of consumers both from financial and their health points of view, the power ministry said. The temperatures settings in ACs will be in the range of 24 to 26 degrees Celsius. Singh launched a campaign to promote energy efficiency in the area of air-conditioning. Some countries like Japan have put in place regulation to keep the temperature at 28 degrees Celsius. Under the guidance of ministry of power, the BEE has carried out a study and has recommended that the default setting in the air-conditioning should be at 24 degrees Celsius. The new campaign will result in substantial energy savings and also reduce greenhouse gas emission. After an awareness campaign of 4 to 6 months, followed by a survey to gather public feedback, the power ministry would consider making this mandatory. The power ministry estimates indicate that if all the consumers adopt, this will result in savings of 20 billion units of electricity in one year alone. BEE informed that, considering the current market trend, total connected load in India due to air conditioning will be 200 GW by 2030 and this may further increase as today only about 6 percent of households use ACs. As per the BEE’s current estimate total installed air conditioner capacity is 80 million TR in the country, which will increase to about 250 million TR by 2030. Considering this huge demand, India can save about 40 million units of electricity usage every day. The targeted commercial buildings will include airports, hotels, shopping malls, officers and government buildings.

Rest of the World

The World Bank has approved a $455 million loan to Tanzania under its IDA programme to support financing of power projects in the East African nation. The financing from IDA, which gives grants or low-interest loans to the world’s poorest countries, will also fund construction of high voltage transmission infrastructure to connect Tanzania to regional power markets in southern and eastern Africa. Tanzania boasts reserves of over 57 trillion cubic feet of natural gas, but faces periodic power shortages as it relies on hydropower dams in a drought-prone region. Last year President John Magufuli said the country needed to invest $46.2 billion over the next 20 years to revamp its ageing energy infrastructure and meet soaring electricity demand. Tanzania plans to boost power generation capacity from around 1,500 MW currently to 5,000 MW over the next three years by building new gas-fired and hydroelectric plants, according to the country’s energy ministry.

Zambia plans to introduce electricity tariffs that reflect the cost of power production by the end of 2018 and move away from a flat tariff of 9.30 US cents/kWh for mining companies. The permanent secretary for energy Emelda Chola said that the government had implemented the first phase of the migration by raising the price of electricity last year.

Nigeria has raised $1.57 billion for the rehabilitation of its transmission infrastructure from international backers. TCN was acquiring Supervisory Control and Data Acquisition System, a new energy management platform, which would help in providing transparency, as the industry activities can be monitored by operators of distribution, generation firms and other stakeholders, including online real-time fault detection and clearance. Two attempts by previous administrations failed but he raised a committee in 2017 to review the process and engaged EDF of France which raised a feasibility report on their installation and is being reviewed at the two day workshop. The company’s goal is to achieve 20,000 MW, through its Transmission Rehabilitation and Expansion Programme in the next four years was going according to plan and that the funding was raised from the World Bank, Japan International Cooperation Agency, African Development Bank among others. TCN had standardized its procurement process as incompetent contractors had abandoned 800 container shipments of transmission equipment for about 15 years at the ports. The transmission wheeling capacity had risen to 7,124 MW from the 5,000 MW. The Federal Government has called on international customers who receive electricity from Nigeria to either pay their bills or be disconnected. Nigeria sells power to the Republics of Togo, Niger and Benin, and classifies the West African countries as international customers. International customers, who pay for the power they receive from Nigeria in dollars, owed the country. Nigerian Bulk Electricity Trading Company has been approved to go ahead and collect its money from the international customers.

ADB will provide Bangladesh a $500 million loan to set up an 800 MW power plant in the southwestern region of Khulna. The plant, operating on the latest technology, will help meet the south Asian country’s growing demand for clean energy, ADB said. The total cost of the project is $1.14 billion, with the Islamic Development Bank contributing $300 million in financing and the government contributing $338.5 million over and above the ADB loan. Peak demand in Bangladesh, which faces recurring power generation shortages, is estimated at 10,400 MW while available capacity in 2017 was 9,479 MW. Net peak demand is expected to exceed 13,300 MW by 2020 and 19,900 MW by 2025, while existing generation facilities will gradually retire and need replacement. The plant, due to be completed by end-June 2022, will use the most advanced water treatment processes to purify and recycle liquid waste, leaving zero discharge. So far, ADB has provided around $5 billion in loans to Bangladesh’s energy sector.

Dubai Electricity and Water Authority has started testing the turbines in the M-Station expansion project in Jebel Ali, which is the largest electricity generation and water desalination plant in the UAE. The cost of the expansion project is AED1.47 billion and testing includes an initial operation of turbines and power generators and connecting them to the grid. Tests are scheduled to continue until the completion of the project in the fourth quarter of 2018. When completed, the project will increase the station’s total capacity to 2,885 MW, adding 700 MW.

Flying robots that can travel dozens of kilometres without stopping could be the next big thing for power companies. Utilities in Europe are looking to long-distance drones to scour thousands of miles of grids for damage and leaks in an attempt to avoid network failures that cost them billions of dollars a year. However the technology faces major safety and regulatory hurdles that are clouding its future in the sector.  Snam and EDF’s network subsidiary RTE have tested prototypes of long-distance drones that fly at low altitudes over pipelines and power lines. Italy’s Snam, Europe’s biggest gas utility, said it is trialling one of these machines – known as BVLOS drones because they fly ‘beyond the visual line of sight’ of operators – in the Apennine hills around Genoa. It hopes to have it scouting a 20 km stretch of pipeline soon. France’s RTE has also tested a long-distance drone, which flew about 50 km inspecting transmission lines and sent back data that allowed technicians to virtually model a section of the grid. The company said it would invest €4.8 million ($5.6 million) on drone technology over the next two years. At present, power companies largely use helicopters equipped with cameras to inspect their networks. They have also recently started occasionally using more basic drones that stay within sight of controllers and have a range of only about 500 metres. Power grid companies are expected to spend over $13 billion a year on drones and robotics by 2026 globally, from about $2 billion now, according to Navigant Research.

The negotiations with the Turkish energy company, Unit International, to build two natural gas combined cycle power plants in Iran are in the final stage. The projects, with an investment of $1.2 billion, include building a 1,200 MW plant in the central city of Saveh, and an 800 MW plant in Zahedan near the Pakistani border. Negotiations have dragged on since June 2016 when Unit International reached a deal to build seven natural gas power plants in Iran before the two sides cut down the scope of the agreement to two plants.

Ethiopia inaugurated a 458 km 230 kV electricity transmission line that will transport electricity from Alamata in the north to Legetafo in central Ethiopia near the capital city Addis Ababa. The transmission line was built jointly by two Chinese firms, including Sichuan Electric Power Transmission & Transformation Construction Ltd and Jiangsu ETERN Company Ltd. Li Xiaodong, Project Manager of SPTTC, said the project will help Ethiopian consumers receive reliable power supply. Girma Zeleke, Transmission, Substation, Rehabilitation and Upgrading Project Manager of Ethiopia Electric Power on his part, said the 230 kV electricity transmission line built by the two Chinese firms is a first of its kind as it will work alongside another nearby 230 kV transmission line, helping end sporadic power cuts in Addis Ababa and other major cities.

Azerbaijan has been hit by a massive blackout affecting most of the country, the worst power outage since the 1991 collapse of the Soviet Union.  A government commission has been set up to investigate the accident at a power plant in Mingechavir that caused the blackout. The emergencies ministry said a transformer’s breakdown in Mingechavir sparked a fire that was put out in 20 minutes and inflicted no casualties. The blackout came amid a heat wave in the Caspian Sea nation, with temperatures exceeding 40 degrees Celsius (104 degrees Fahrenheit) resulting in a power consumption surge that plunged the capital, Baku, and nearly 40 other cities and regions into pitch darkness. It took several hours to fully restore power in Baku but efforts to restore power in other regions continued.

The ERC of Kenya has restructured the subsidised tariff currently targeted at low income electricity consumers in a move that will see many that have enjoyed the low-priced power locked out. They will instead pay higher charges. Under a new billing structure by ERC, the lifeline tariff has been capped at 15 units of power per month from the current regime where low-income earners had a leeway of up to 50 units, and pay at subsidised rates. Poor households will also pay a higher rate for energy consumed in the new harmonised tariff of Sh12 per unit, compared to the current rate of Sh2.50 per unit. ERC has however scrapped the fixed charge that currently stands at Sh150 per month. It has instead factored it in the per unit cost of power. The new tariff, which ERC expects to be used for August billing, has also reduced power prices for the wealthy domestic power consumers. Households that consume over 1,500 units a month are charged Sh20 per unit but will now pay Sh16.50 a unit. The same charges will apply for people with less spending capability – consuming more than 15 units. The new tariff that will take effect in a month’s time is expected to be much simpler, and will give clarity to power consumers on how they are charged for their electricity. Under the proposed tariff, the energy industry regulator said prepaid customers would not get varying number of tokens whenever they spent the same amount. For example, if one spends Sh1,000 for the prepaid units, they will always get a constant number of units. The regulator however does not expect the changes to affect revenues for Kenya Power and the other sector players. It projects an average 10 percent increase in revenues for the sector, growing to Sh131.4 billion in the 2018/19 financial year. This is adequate to meet the financial obligations of the sector, including power infrastructure expansion and returns to shareholders that own power companies.

Norway will force big power consumers and producers to pay more for grid upgrades and extensions under a new regulation from 2019, the country’s water resources and energy directorate (NVE) said. The plan is widely opposed by Norway’s energy industry, which says it will have to foot a significant part of the bill, with grid investments of around $17 billion planned between 2016 and 2025. NVE decided to adopt the regulation in an amended version, effective from 1 January 2019, for consumers and producers of more than 1 megawatt per hour. The new regulation requires big consumers and producers to pay up to half the cost of any grid investment they require, in a move to encourage building power facilities in locations that already have strong grids, cutting the overall connection cost. In its amended version, NVE said grid companies can ask for an advance payment of up to 15 percent of the construction fee and a transition period will only include projects already granted a license. Existing customers that have filed requests for connection or increased capacity before July 1, 2018, will also be included in the transition period. In the amendments adopted, NVE has waived the requirement that the customer must have entered into a binding financial agreement with a network company or third party. The regulator has the authority to impose the changes unilaterally. Norway’s largest power consumer Norsk Hydro warned that the regulation would make grid costs a challenge for new project investments.

The leaders of the Baltic states and Poland signed a long-awaited deal to connect their power grids to the EU by 2025 and break their dependence on Russia, a Soviet legacy. Nearly ten years in the making, the politically fraught, technically challenging and costly plan to unplug Estonia, Latvia and Lithuania from Russia comes amid mounting concerns over Russian posturing in the region. The Baltic States, once ruled from Moscow but members of the EU and NATO since 2004, view being linked into Russia’s power network as a threat to their national security. Under the deal, states would use the existing overland LitPol Link between Lithuania and Poland, as well as a new high-voltage direct current cable to run under the Baltic Sea, looping around the territorial waters of Russia’s Kaliningrad exclave. The underwater cable will offer 700 MW capacity and could be completed by 2025. It will be used both for power trading and synchronisation purposes. Brussels is to negotiate with Moscow over how to maintain the power supply to Kaliningrad, which is currently synchronised with mainland Russia through the Baltic states. The deal proposes connecting Kaliningrad with two back-to-back power converters. Russia, on which the Baltic states currently rely to balance their power flows, has never cut power or threatened to do so, but the three EU nations fear it might and say there is a lack of transparency on upkeep of the network in Russia. Lithuania expects Baltic states to test their ability to work autonomously from Moscow in June 2019, before formally switching by 2025.

Britain’s exit from the EU could leave companies planning to build more power interconnections at the mercy of possible new trading arrangements and potential tariffs, Norway’s state-owned grid operator Statnett said. Statnett and Britain’s National Grid agreed before the Brexit vote to construct the first interconnector between the two countries by 2021. A separate consortium of Norwegian energy companies and Sweden’s Vattenfall is seeking to build a second cable by 2022-2023 for about €2 billion ($2.33 billion). Brexit could mean that new trading arrangements may be required to sell power via the interconnectors as Britain might not be allowed to participate in the European spot and intra-day power trading market, according to the Norwegian grid. Brexit could also mean that Britain will no longer be bound by EU competition rules, which currently allow interconnectors to seek British subsidy payments for providing supply capacity. Statnett said that plans to build NorthConnect by 2022 were unrealistic given the time.

Spanish oil major Repsol said it had bought the electricity generation and marketing assets of fellow Spanish firm Viesgo for €750 million ($868.73 million). With the deal, Repsol will add 2,350 MW of production capacity, 1,650 MW of which will be in two combined cycle plants and 700 MW of which will be hydro-electric, the company said.

The organization responsible for reliability of the North American power grid issued a report that identified risks to the US and Canadian electric systems that have been driven in part by changes in the generation fuel mix. The NERC said in its State of Reliability 2018 report that the power grid overall was reliable in 2017. NERC, however, provided several recommendations for the electric industry and regulators to adopt to improve future resilience. Resiliency became an issue after US Energy Secretary Rick Perry in September 2017 asked federal energy regulators to adopt rules to protect so-called fuel secure coal and nuclear plants from early retirement. The US Federal Energy Regulatory Commission rejected that proposal in January and said they would conduct a study on grid resilience. As dependence on electric infrastructure increases daily, NERC said resilience will become a more critical element of bulk power system reliability.

FY: Financial Year, PLF: plant load factor, discoms: distribution companies, SERCs: state electricity regulatory commissions, PPAs: power purchase agreements, PFC: Power Finance Corp, MW: megawatt, GW: gigawatt, BSPGCL: Bihar State Power Generation Company Ltd, MERC: Maharashtra Electricity Regulatory Commission, ATL: Adani Transmission Ltd, EoI: Expressions of Interest, TPDDL: Tata Power Delhi Distribution Ltd, kWh: kilowatt hour, RAC: regulatory asset charge, BPL: below poverty line, KTPS: Kothagudem Thermal Power Station, EESL: Energy Efficiency Services Ltd, PSUs: Public Sector Undertakings, PSPCL: Punjab State Power Corp Ltd, AT&C: Aggregate Technical and Commercial, UHBVN: Uttar Haryana Bijli Vitran Nigam, DHBVN: Dakshin Haryana Bijli Vitran Nigam, mt: million tonnes, DERC: Delhi Electricity Regulatory Commission, BRPL: BSES Rajdhani Power Ltd, MSEDCL: Maharashtra State Electricity Distribution Company Ltd, LED: light emitting diode, BEE: Bureau of Energy Efficiency, TR: ton of refrigerator, IDA: International Development Assistance, US: United States, ADB: Asian Development Bank, UAE: United Arab Emirates, km: kilometre, kV: kilovolt, ERC: Energy Regulatory Commission, EU: European Union, NERC: North American Electric Reliability Corp

Courtesy: Energy News Monitor | Volume XV; Issue 7

Open Letter to the Prime Ministers of Nepal and India

Rt. Hon. Sushil Koirala, Prime Minister of Nepal

His Excellency Narendra Damodardas Modi, Prime Minister of India

We, the undersigned concerned citizens, who have been keenly observing and following developments in the water resources sector including the award of the water related projects for hydro power generation to the national and external private sectors, have had our attention drawn to the recently signed (19th September 2014) Power Development Agreement (PDA) between the Investment Board of Nepal (NIB) and the GMR-ITD Consortium of India, allowing the latter to develop a 900 MW Upper Karnali Project, as a run-of-river (RoR) project.

We feel that the proposed project, as it stands, remains deeply flawed technically, economically, environmentally and socio-politically; and, therefore, if implemented in the present form, would directly undermine the vital interests of the people and economies of Nepal and India and would also set an unpardonable precedent with long-term consequences. The following are some of the major technical and institutional deficiencies built into the current project design:

  1. Displacement of “jewel in the crown” multipurpose project

1.1 With the potential of building 2 sites in Karnali Bend, KR1A (240 MW) and KR1B (main power plant 3,532 MW and second power plant 408 MW) total potential capacity stands at 4,180 MW. As a reservoir storage project, this scheme will generate economically and financially valuable peaking power compared to flood energy with a peaking RoR plant. These are mutually exclusive options; hence, building the 900 MW RoR plant would produce relatively expensive 1,000 GWh firm energy annually while the storage option with redesign would produce 9,000 GWh. The current option thus constitutes “killing” the full potential of this site. Due to the ever increasing carbon content and resulting climate change the world is required to reduce generation and use of electricity from unclean/un-renewable sources and increase generation and use from clean/renewable sources. Against this backdrop, it doesn’t make sense to harness this site at one-fourth of its full potential.

1.2 In the Karnali Bend there is a natural head of 140m and the required tunnel length between dam and powerhouse is less than 2km due to which the construction cost will be commensurately lower. Given the unique and highly advantageous topography of the region, reputed international consultants such as the US energy giant, Bechtel International, and those from Canada have dubbed the project as a “jewel in the crown” and one of the most attractive hydro development sites. The current version would thus be a crime of debasing this gift of nature.

1.3 The storage option (with live storage of 4 billion cubic meters) will reduce flood peak on Karnali River by 50 percent with significant flood control benefits for the Open Letter to the Prime Ministers of Nepal and India re UKP downstream reaches of Karnali River in both Nepal and India. The reservoir will also generate 500 m3/s lean season augmented flow that can irrigate and additional 1.2 million hectares of agricultural land. Nepal is land-limited and, after irrigating about 200,000 hectares of land in Nepal, India can irrigate an additional 1 million hectares of agricultural land. While reservoir projects are generally accompanied by huge environmental and social costs, the impact of this storage project is relatively minimal for its capacity with positive benefits being relatively much larger.

  1. Potential social and environmental disaster

2.1 Nepal’s power planning of the last several decades has bequeathed the country a “flood-drought” syndrome whose recurrent feature is electricity glut of a few years upon the implementation of a single large (for its system) project followed by years of chronic load-shedding. This pathology has become acute in the last few years with power cuts of fifteen hours per day in the roughly 700 MW sized Nepal Integrated National Grid. Currently, the “suppressed demand” in Nepal is between three to five thousand MW, much of which is needed for a transition to a carbon-neutral Nepal fuelled by renewable energy to accelerate her industrialization and provide jobs to her youth at home. This “suppressed demand” is being partially met by almost 700 MW of expensive private diesel generators that have skyrocketed import of petroleum and therefore, makes little economic sense. Against such a backdrop, pursuing an export oriented strategy as underlined by this project and its PDA is suicidal in its very intent, and is, therefore, already provoking adverse public reactions towards not only its own government but also against a friendly neighbor. However, once Nepal has achieved its requirements in power generation, all of the undersigned would see export of surplus power as eminently sensible.

2.2 Designed as a peaking RoR project, the current option is slated to interrupt the river flow for 20-21 hours a day and to discharge the pent up volume for 3-4 hours a day during the lean season. This daily flood pulse and drought will have a devastating impact on downstream irrigation projects, on the local communities and on the wildlife reserves of Bardia National Park in Nepal and Dudhwa National Park in India. The project was initially conceptualized as a 300 MW RoR further 2 kms downstream, which was later changed to the current capacity of 900 MW at the present location. While both the IBN and GMR seem to have acknowledged these problems and have suggested the possible construction of another re-regulating dam immediately downstream within six months, It fundamentally calls into question the technical and financial feasibility and viability of the current project at its very core, thus rendering it evidently unworthy of implementation in its present shape on technical as well as ethical grounds.

2.3 We also find it necessary to point out that the current UKP PDA and related agreements have been entered into by bypassing Article 156 of the Nepal’s current Constitution that requires their endorsement by its parliament. We note that a procedure that is not supported by the requirements of the fundamental law of the land constitutes a rather shaky foundation on which to build enduring trans-boundary cooperation in this vital sector for both Nepal and India. Besides, we could not also fail to notice a strange Open Letter to the Prime Ministers of Nepal and India re UKP and unfortunate veil of secrecy surrounding the making of the current project that would otherwise mark the historic onset of power trading cooperation between two friendly countries, Nepal and India.

  1. Possible way ahead

3.1 As upstream and downstream riparian neighbors, Nepal and India are destined to cooperate in the multipurpose development of the water resources in the Ganga basin for the multi-dimensional benefits for the people of both the countries such as hydropower, irrigation, flood control, navigation, tourism and fisheries. To this end, we are convinced that a more sagacious development of the UKP is crucially in order, and it would also go on to constitute a very healthy precedent for other projects too in future. We also find it necessary to recall that the bane of most of the projects in Nepal in recent years have been enormous cost and time overruns, mainly due to severe disjuncture between the interests of the project developers, local stakeholders as well as the general power consumers. We sense early warning signs of this malaise overtaking UKP as well if the current shortsighted option is not corrected at the earliest.

3.2 In view of the enormous loss that the implementation of the UKP in its present form would cause to the people of both Nepal and India, four alternative options – which had also been submitted to the Government of Nepal and IBN for their consideration earlier – are being proposed, so that even as GMR goes ahead with its maiden undertaking in Nepal, the potential of a better project as mentioned above would not be compromised. These options are: a) building high dam and reservoir by Nepal, and GMR to tap water from tailrace of powerhouse; b) building diversion structure downstream of Ramagad for a capacity of approximately 850 MW that would prevent backwater rising up to the high dam site; and c) building a single project to generate 4,200 MW with GMR sharing the costs and benefits. In case these options do not work, the fourth option would be to have the government of Nepal build the high dam project on its own and to compensate GMR for necessary costs incurred so far.

In the light of the above, we are seeking your statesmanlike intervention for a more rational use of Upper Karnali Project site in the Karnali Bend in such a way that bigger optimal benefits could be reaped by the people of Nepal and India.

Kathmandu

22 November 2014

Civil Society Alliance for Rational Water Resources Development in Nepal

Signatories

  1. Prof. Dr. Hari P. Pandit, Institute of Engineering, TU
  2. Mr. Bihari Krishna Shrestha, anthropologist/former Additional Secretary
  3. Dr. Prakash Chandra Lohani, former Minister of Finance/Foreign Affairs
  4. Dr. Ananda B Thapa, former Executive Secretary, WECS
  5. Dr. Dwarika Nath Dhungel, former Secretary Ministry of Water Resources
  6. Mr. Dipak Gyawali, Academician, NAST, former Minister of Water Resources
  7. Prof. Dr. Mohan P Lohani, former Ambassador
  8. Mr. Bharat Basnet, The Explore Nepal
  9. Mr Ajit Narayan Singh Thapa, former MD, NEA
  10. Mr. Lok B Rawat, Chair, KARBACOS
  11. Mr. Ratna Sansar Shrestha, former member, NEA board of directors
  12. Mr Lila Mani Pokhrel, UCPN (Maoist)

Courtesy: Energy News Monitor | Volume XI; Issue 25

Solar or Grid: To Choice is ‘Yours’!

Ashish Gupta, Observer Research Foundation

Solar roof top power is propagated as energy for the poor people. In this light it is interesting to analyse the case of two hypothetical persons from the Below Poverty line category and see who will be in a better position, the one who uses power from the grid or the one who opts for solar roof top? As you may be aware, at a bare minimum level at least 1000/ kWh per capita/ year consumption is required to have decent quality of life.  Therefore, in the case given below, Person A is assumed to fulfil his per capita electricity consumption through grid based electricity and Person B by installing a 1 kilowatt solar plant at his residence. Assume that both are identical having same small income for the sake of simplicity. Again for the sake of simplicity, the fixed charge for grid based electricity is taken as nil and cost of maintenance and repair for solar plant is also taken as nil. Since most of the poor people do not own their homes, they may have to pay a charge for using the roof top but this is taken as nil.

  Cost of constructing power plant

 

Consumption Tariff Monthly bill Savings = Difference between monthly instalment – actual bill
Person A consuming grid based electricity Nil  1000 kWh / per capita/ year consumption kWh taken as the benchmark criteria

 

Monthly consumption = 1000 kWh/ 12 =  83 kWh/ per month

 

Per day consumption = 83 KWh/ 30 = 2.8 kWh

Retail supply tariff schedule for FY 2013-14 (51 units – 100 un its) in Delhi

 

Rs 2. 60

83 kWh x Rs 2.60 = Rs 216 Monthly saving= Rs 934 – Rs 216 = Rs 718 (since he has not invested in the plant)

 

Yearly saving = Rs 718 x 12 = Rs 8616

 

Deposited the amount in the savings bank account at 4% compounded annually.

 

Savings at the end of 25 years = Rs 8616 (invested annually at 4% = Rs 3,73,174 (rounded figure)[1]

Person B having Solar roof top power Plant Initially investment for installation of 1 kWp solar rooftop plant = Rs 80,000 (benchmark capex cost as per CEA is Rs 8 crore/ megawatt)

 

The person take personal loan from Public bank at the rate of 10.10 % for 25 years (life of the Plant)

 

Total initial cost= 80000 x 110.10/ 100 = Rs 88, 080

 

Yearly instalment = Rs (Rs 88, 080+24 x 8000 (app. Figure of Rs 8, 000 taken for calculation rather than Rs 8, 808) / 25  = Rs 280080/25 = Rs 11203

 

Monthly instalment will be = Rs 11203/ 12 = Rs 933.6 or Rs 934 (eventually this will be his  monthly bill)

1000 kWh / per capita/ year consumption kWh taken as the benchmark criteria

 

Monthly consumption = 1000 kWh/ 12 =  83 kWh/ per month

 

Per day consumption = 82 KWh/ 30 = 2.8 kWh

 

On an average, 1 kW solar plant can generate 4 kWh energy / per day

Tariff is nil. After consuming his 2.8 kWh, he will sell 1.2 kWh at Rs 9.56 (KERC solar tariff order 2013 for roof top & small solar plants)

 

Monthly Revenue from the sale = 1.2 x 9.56 x 30 = Rs 344 (rounded off)

 

Monthly revenue – monthly  instalment = Rs 344 – Rs 934 =  – Rs 590 (rounded off) Yearly loss = Rs – 590 x 12 = Rs – 7080

 

Money lost in 25 years = – Rs 7080 x 25 = – Rs 1,77,000 + Plus interest

 

Conclusion: return on investment -Negative

 

Plus he has to buy new solar roof top setup

 

 

CEA = Central Electricity Authority

For those who do not want to go through the calculations here is a summary of the result. Person A using grid based electricity will be better off by Rs 3,73,174 in 25 years compared to the person installing roof top solar system who will be in debt.  Some may argue that is a subsidy is given for purchase of roof top and if the cost of avoided carbon is taken the tables will turn in favours of Person B. This raises the question as to why people who barely consume any electricity should be shouldering the burden of securing a loan/installing a roof top etc to save few grams of carbon when others who consume electricity even to brush their teeth just have to flick a switch for electricity and emit kilograms of carbon. We will ignore this for the moment and only pose the question: What would the poor choose purely on the basis of value?

Views are those of the author                    

Author can be contacted at ashishgupta@orfonline.org

Courtesy: Energy News Monitor | Volume XI; Issue 25

[1] 936 (1 + 0.04)25

 

COAL IMPORTS TO MEET GROWTH IN DEMAND

Monthly Coal News Commentary: June – July 2018

India

According to some reports, imports by power stations fell about 15 percent from a year ago in the first two months of the fiscal year to March caused mainly by a 32 percent drop in overseas purchases by plants designed to use imported coal, according to calculations based on data from CEA, a unit of the power ministry. Higher coal prices and a weaker rupee forced them to cut generation. At the same time, plants that use domestic coal saw a 35 percent spurt in imports as they tried to bridge a shortfall in domestic supply. A court order last year barred some Indian power plants that use imported coal and have fixed-tariff contracts from passing on an increase in fuel costs to customers. Adani Power Ltd.’s 4.6 GW plant at Mundra in Gujarat, which runs mostly on imported coal, used merely 6 percent of its capacity during April and May, power ministry data show. Essar Power’s 1.2 GW imported coal-fired generator in the same state was closed during the months. Average thermal coal prices at Australia’s Newcastle port, considered an Asian benchmark, have risen about 25 percent in the period from a year ago. While the government seeks to discourage imports of thermal coal and sees the decline as an achievement, rising domestic supplies are failing to keep pace with demand. Plants designed to run on Indian coal are now increasingly importing the fuel for blending, as state miner CIL fails to meet requirements. The Power Minister asked state generators, who had earlier been advised to curtail coal imports, to buy from overseas if they needed to as shortages continued to persist. India’s power plants imported 8.64 mt of coal in the two months ended May, compared with 10.13 mt a year earlier. Plants that run exclusively on imported coal, accounted for most of the imports at 5.07 mt while those using domestic coal purchased 3.57 mt from overseas during the period this year.

The advisory from the power ministry to import coal comes in the wake of states demanding more coal to run their thermal units in face of growing demand. In Tamil Nadu, power demand shot up by 2383 MW this summer. If TANGEDCO is to import five mt of coal to meet the shortage, it would cost the state discom around $5,000. The coal consumption during April 2018 increased by 3.9% compared this year. TANGEDCO started importing coal regularly from 2004-05. The imports started in 2004-05 at one mt but as the demand for power increased and more thermal units were commissioned, the amount of coal imported also increased. In 2016, Coal India Limited requested Tamil Nadu government to advise TANGEDCO to stop imports and use indigenous coal available with CIL.

Increasing coal import by power plants to compensate for supply shortages by CIL would lead to a rise in electricity tariffs, analysts said. Absorbing higher imported fuel costs by electricity discoms, instead of raising tariffs, would add to losses of such state-owned entities. Reining in costs of electricity generation at state-owned power plants was a major factor which enabled discoms under the UDAY to halve their financial losses to ₹ 173.52 billion in FY18. Power plants which blend domestic and imported coal to increase efficiency imported 3.6 mt of coal in the first two months of FY19, which is 39% more than the same period in FY18. The development comes at a time when global coal prices have gone up by more than 23% CAGR from FY16 to about $100/tonne. Research firm India Ratings estimates that if there is a 6-7% rise in electricity demand, imported coal needs to increase to 62 mt in FY19 from 56 mt, even if coal availability to the power sector increases by the standard 4% rate. Overall coal imports are, however, lower than last year because a number of power plants designed to run only on imported coal have shut down their units after the Supreme Court ruled in April 2017 that imported coal price hikes cannot be passed on to discoms through higher tariffs. However, power plants with supply contacts with CIL can claim compensation for higher costs for coal imported due to less than contracted supply. CIL has increased its supplies to the power sector by 15.4% to 122.8 mt in the first three months of FY19, backed by a 15% growth in rake loading to 217 rakes per day. However, supply shortages remain. CIL said it has registered a 15.2 percent growth in coal production during the first quarter ended June 2018 to 136.87 mt.  While the offtake was spurred by higher rake loading, the overall coal offtake zoomed to 153.43 mt at the end of June, translating into a growth of 11.7 percent. CIL announced that the number of power stations having critical stock has come down from 30 at the beginning of the fiscal to 16 as of June 2018. Of the overall coal supplies of the company during the first quarter ending June, supplies to the power sector accounted for 80 percent and CIL said that a request has been made to thermal power plants to boost their coal stocksData available with the Central Electricity Authority shows that seven power projects have less than seven days coal, while eight are operating with less than four days stock.

Power sector accounted for 80 percent of coal supplies during the period. CIL has been working with the Coal and Railways ministries for enhanced rake loading of 217.04 rakes per day on an average to the power sector during the first quarter of FY’19 against 189.9 rakes in the same period last year, registering a growth of 14.9 percent. The company produced 44.88 mt in June 2018, reflecting an increase of 5.20 mt in absolute terms over corresponding month of last year. The company liquidated 16.56 mt of its pit head coal stock during the first three months of the current fiscal.

Ahead of the paddy season during which power generation at privately-owned case II projects has been hit by shortage of coal, the Punjab government has written to the union ministry of coal to consider these plants at par with the state-owned thermal stations while allocating the fuel stocks. The state government stated that being case II projects, the 1,400 MW Rajpura thermal plant and the 1,920 MW Talwandi Sabo thermal plant sell entire electricity generated to meet the state’s demand and forced shut down of these affects the availability of power forcing the corporation to go in for regulatory measures, including power cuts. Punjab State Power Corp Ltd has allowed the Talwandi Sabo plant and the Rajpura plant to import 3 lakh and 2 lakh metric tonnes of coals to meet the fuel requirements during the paddy season.

Delhi has warned of blackout in the national capital claiming that in Badarpur and Dadri I and II power plants just two days coal reserve was left. The railways and the Coal India were claiming that the fuel was being supplied. Load shedding faced in June was the “lowest” when the city’s electricity demand hit an all-time high. The power subsidy scheme for tenants is also likely to be announced soon. Delhi’s peak electricity demand had hit an “all-time high” of 6,934 MW this summer at 3:28 pm on June 8.   The city government has been planning to extend power subsidy scheme to tenants through “prepaid electricity meters”. Under the power subsidy scheme, the Delhi government provides 50 percent subsidy on electricity tariffs up to 400 units on domestic electricity connections for all residents of Delhi.  About 600 transformers have been installed in and “150 more transformers would be installed till year end”.

On the other hand MAHAGENCO, the state-run power generation company that regularly complains of coal shortage is now selling its share of coal to private companies. Its own plants are generating at half load even as private companies are making hay. These claims apart, four power plants of MAHAGENCO— Bhusawal, Nasik, Paras and Parli — have alarmingly low coal stock at present. When power plants have very less coal they do not generate at full capacity. Bhusawal has two days stock and its coal is being sold to private companies. Nasik has only one day’s stock. A public interest litigation in the high court on coal shortage in Mahagenco power plants, expressed shock over this revelation.

Customs, Excise and Service Tax Appellate Tribunal has set aside an order that imposed penalties of ₹ 175 million and ₹ 12.5 million on Delhi-based Knowledge Infrastructure Systems Private Ltd and its promoter respectively. They are accused of inflating the value of coal imports from Indonesia. In February 2017, the company appealed in the tribunal against the order passed by the adjudicating authority.

The GSPCB granted fresh consent to operate to SWPL, a unit of Jindal Steel Work, to handle 400,000 tonnes of coal per month at MPT. The board restricted Adani Mormugao Port Terminal Pvt Ltd to handle 400,000 tonnes of coal per month at the port.  The decision to allow coal handling was taken in view of the source appropriation study conducted by IIT-Mumbai to ascertain the cause of pollution in the port town. Coal operations should commence in the port town so that the cause of air pollution in Vasco can be ascertained. The board has permitted SWPL to handle 0.4 mt of coal for next nine months at berths 5A and 6. Adani will also handle 400,000 tonnes of coal at the port. Adani had never exhausted its permissible limit. Adani used to earlier handle 520,000 tonnes. The board has reduced 25% of coal handling of Adani, and they have approached the board to enhance their coal handling limit. The board allowed MPT to handle varied cargo at its offshore cargo handling facility, mooring dolphin, barring coal. GSPCB also allowed the port to handle varied cargo at berth 9. MPT used to handle iron ore at this berth and as a result of iron ore stoppage, the port had approached the board to grant them consent to operate other cargo for financial stability.

The government is planning to offload a stake in state-run CIL to speed asset sales. The Department of Investment and Public Asset Management is finalizing the amount of stake to be offered in the financial year ending March 31. If needed, the government could explore the option of staggering the sale offer in two tranches. The government’s plan to raise about $12 billion in the current year from asset sales is at risk after a high-profile plan to sell Air India ground to a halt as no prospective suitors emerged. CIL has reported strong shipment numbers in recent months due to demand from power plants. The government holds more than 78 percent in CIL. It had previously sold a 10 percent stake in January 2015, mopping up ₹ 225.5 billion.

Coal Mine Surveillance and Management System and the mobile App “Khan Prahari” designed to prevent pilferage of coal and its illegal mining has been launched.

Rest of the World

A vessel carrying a shipment of coal from the US switched its destination to Singapore from China, according to ship tracking data, amid an escalating trade row between the world’s top two economies. The cargo was loaded on the Navios Taurus in Mobile, Alabama, on May 28 and had been due to arrive in China on July 18, but is now due to land in Singapore on July 13, data shows. One of the other vessels, called Partnership, reached China. China has threatened hefty import tariffs on 659 US products. Duties will start on some 545 items, but the government has not specified when coal and the remaining products could be hit.

Earlier, a vessel carrying 164,000 tonnes of coal from the US reached Caofeidian port in northern China, ship tracking data showed. The vessel named Partnership is on schedule, while Beijing plans to impose steep tariffs next month on a list of US products, including thermal coal and coking coal due to mounting trade friction between the world’s two leading economies. At least three US coal shipments, including Partnership, are on their way to China, but traders are worried they may end up casualties of the escalating trade dispute. The other two vessels, Navios Taurus and West Trader, are expected to arrive at Jingtang port on July 18 and August 10 respectively, according to data.

US coal mining companies are worried President Donald Trump’s intensifying trade dispute with China could hurt their booming export business, one of the ailing sector’s most important lifelines, according to industry players. Beijing added coal and other energy products to a list of US goods facing import tariffs in retaliation for Trump administration levies. For instance, traders said China National Building Material International, one of the biggest metallurgical coal importers in China, pulled back from supply talks with US coal broker XCoal and miner Consol Energy shortly after Beijing’s announcement. Consol had been in talks with China to supply up to 1 million tons per year of metallurgical coal but would not confirm whether the deal would be delayed. The US Energy Information Administration said US coal exports to Asia doubled from 15.7 mt in 2016 to 32.8 mt in 2017. Exports to China totaled 3.2 mt in 2017, up from zero in 2015 and 2016, according to the Energy Information Administration. The coal industry’s concerns mirror the unease spreading in US farm country over unintended consequences of the Trump administration’s protectionist stance, which has roiled foreign market for American crops. The farm and coal industries are critical Trump supporters that the president and his Republican party are relying on to help them retain control of Congress in the mid-term elections in November. The addition of coal to the list of more than 650 items facing higher tariffs from China also came as a shock to Chinese steel mills and trading firms. Just last month, Beijing had been encouraging them to buy more US coal to narrow the trade gap. Coal operators like Pennsylvania’s Consol had been in talks with Chinese buyers, and hope those talks revive.

Australian thermal coal prices have broken through $120/tonne for the first time since 2012, driven up by strong consumption in Asia and spot market buying by Japanese utilities to meet demand through the rest of 2018. Thermal coal cargoes for prompt export from Australia’s Newcastle port last settled at $120.10/tonne. That’s the highest close since November 2012 and up by 140 percent from record contract lows in late 2015/early 2016. The price surge has been driven by strong demand from China to feed healthy power demand and industrial growth, despite a drive to shift industry and millions of households from coal to cleaner natural gas.

The major coal producing province of Shanxi in northern China will impose special emissions restrictions on big industrial sectors by October as part of its bid to curb smog. The province produces more than 900 mt of coal a year, a quarter of China’s total, and is also a major gas and petrochemical producer. China promised in January to impose “special emissions restrictions” on major industrial sectors in 28 cities in northern China, including the four in Shanxi. It said firms that failed to comply with the deadlines would be fined, ordered to renovate or shut down completely. The 28 cities were all part of a special winter anti-smog campaign that began in October last year and imposed tough restrictions on traffic, coal consumption and industrial output. In its air quality plan for 2018, Shanxi promised to close down 22.4 mt of annual coal capacity and 1.9 mt of steel capacity this year. It will also create “no-coal zones” and convert thousands of coal-fired boilers to cleaner-burning gas.

Coal companies need to make a “fundamental shift” in how they control exposure to coal dust in underground mines to address the recent surge in black lung disease rates, according to the National Academies of Sciences, Engineering and Medicine report. The report found that even though coal operators largely comply with recently tightened rules requiring monitoring for coal dust, those measures may not be sufficient. The Government Accountability Office report said that the federal fund to help coal miners disabled by black lung disease will require a multibillion-dollar taxpayer bailout if Congress does not extend or increase the tax on coal production that funds it. The coal industry has been lobbying Congress to ensure that scheduled reduction in the tax it pays into that fund goes forward, arguing the payments have already been too high.

The Mongolian government submitted plans to parliament to list a chunk of the state-owned company that holds the giant Tavan Tolgoi coal mine. The IPO comes as the country looks to kickstart the long-delayed development of one of the world’s largest coking coal deposits, with international coal prices picking up after years in the doldrums. Mining Minister Sumiyabazar Dolgorsuren presented a bill to parliament proposing the sale of up to 30 percent of the project on domestic and international stock markets. The government said that it would also speed up plans to build a $1 billion coal-fired power plant near the mine, as well as a 247-kilometre railway that would help deliver Tavan Tolgoi’s coal to the Chinese border. Tavan Tolgoi, in the Gobi desert about 250 kilometres from the Chinese border, has an estimated 7.4 billion tonnes of reserves and is considered one of Mongolia’s flagship mining projects. It is run by state-owned Erdenes Tavan Tolgoi. However, it has been held back by poor infrastructure and weak coal prices as well as disputes over the role foreign investment should play in Mongolia’s economic development.

KOSPO bought 160,000 tonnes of coal for loading between September and October via a tender that closed, the utility said. KOSPO originally sought to buy a total of 480,000 tonnes of coal but declined to buy 320,000 tonnes due to high prices, the utility said. It had not yet decided whether to re-issue a tender for the cancelled amount. The utility purchased 160,000 tonnes of coal from Indonesia, the source said, without giving price and supplier information.

The World Bank said it has not yet decided whether to support a planned 500 MW coal-fired power plant in Kosovo, the first major energy project in the Balkan country in more than two decades. Kosovo’s government signed a deal with US based but London-listed power generator ContourGlobal to build the plant at a cost of around €1 billion ($1.2 billion). Kosovo is struggling with power shortages. Around 90 percent of its electricity is produced in two ailing coal-fired plants that are seen as among the worst polluters in Europe. Environmentalists have complained the plant could lock Kosovo into a future powered by lignite – the dirtiest form of coal.

CEA: Central Electricity Authority, GW: gigawatt, MW: megawatt, CIL: Coal India Ltd, mt: million tonnes, TANGEDCO: Tamil Nadu Generation and Distribution Corp, discoms: distribution companies, UDAY: Ujwal Discom Assurance Yojana, FY: Financial Year, MAHAGENCO: Maharashtra State Power Generation Company, SWPL: South West Port Ltd, MPT: Mormugao Port Trust, GSPCB: Goa State Pollution Control Board, US: United States, KOSPO: Korea Southern Power Co Ltd

Courtesy: Energy News Monitor | Volume XV; Issue 6