At the 26th Conference of Parties (COP 26) at Glasgow in November 2021, the phrase “phase out” of coal in the final text of the declaration was changed to “phase down” of coal on India’s insistence. Since then, much has happened to influence India’s outlook on coal. The crisis in Ukraine has increased the price of fossil fuels. This has meant higher prices for imported oil, natural gas and coal strengthening India’s perception of imported energy as a source of uncertainty and insecurity. During the summer of 2022, the demand for power increased to such an extent that the government of India mandated the use of imported coal. Inadvertently, imported energy turned into a source of India’s energy security. Though the Ukraine crisis and summer power demand are short term events, they have influenced India’s long-term position on coal.
In late 2022, the Union Minister for Power observed that it was wrong to expect India to start reducing its coal capacities and that India will continue to set up new coal-fired power plants to meet its growing electricity needs. He made it clear that the promised phase-down of coal will happen in terms of its declining share in the overall fuel mix and not as an absolute cut in existing capacities. He observed that as per the targets set for 2030, the fossil fuel-based capacity for power generation would come down from the current level of about 60 percent to about 35 percent. In another platform, the Union Minister highlighted the fact that electricity generated from coal and gas will form the base load as round-the-clock supply of renewable energy (RE) is not viable as RE plus storage remains unaffordable at INR 14/kWh (kilowatt hour) [solar tariffs of INR 2-2.5/kWh plus storage at INR10/kWh and system integration cost of about INR 2/kWh]. According to the Government affordable energy storage is essential to replace coal and industrialised economies are to blame for not investing enough in storage technology.
India had earlier concurred with the opinion of climate activists from within and outside India that old coal-based power plants should be closed down in a phased manner. However, the Union Ministry of Power recently proposed that a pool of efficient thermal power units that are more than 25 years old should act as balancing source for the increasing share of RE in the electricity grid. Speaking at an event, the Union Minister for coal stated that India will stop import of thermal coal by 2024-25 and that coal will play an important role in India until at least 2040. Addressing a Parliamentary Committee meeting he said that coal was an affordable source of energy and that demand for coal is yet to peak in India. He reiterated the view of the Union Minister for Power stating that no transition away from coal is happening in the foreseeable future in India. In meetings with the World Bank and the International Monetary Fund (IMF) the Finance Minister pointed out that the Western world has seen countries moving to coal and that in India coal was back as gas had become unaffordable. The Finance Minister also has launched the country’s biggest ever coal mine auction comprising of 141 mines in 11 states with the observation that under past governments, little thought was given to better the country’s domestic coal production and that cumulative annual growth rate of coal imports had been brought down by the current government.
Domestic non-coking coal production increased by over 8 percent to about 729 million tonnes (MT) in 2021-11 compared with production in 2020-21. This is consistent with the growth in power demand of roughly 8 percent in the same period. Since 2019-20, import of non-coking coal has fallen substantially. In 2019-20 roughly 196 MT of non-coking coal was imported. In 2020-21, import of non-coking coal fell to 164 MT, a fall of over 16 percent. In 2021-22, it fell to 157 MT a fall of over 7 percent compared to a year earlier. Though import of non-coking coal is showing a declining trend, total non-coking coal consumption in 2021-22 at about 878 MT was more than the pre-COVID non-coking coal consumption of 874 MT in 2019-20. The Indian government has announced a production target of over 1 billion tonnes (BT) of coal in 2023-24. Coal India Limited (CIL) and its subsidiaries are expected to produce 855 MT and while captive and commercial mines contribute 162 MT. Setting targets for coal production is aspirational and it covers huge shortfalls in production from captive and commercial mines. More than 200 blocks with resources estimated at 28 BT have been given away for captive mining. Annual production from these blocks is less than 0.2 percent of resources. A third of captive blocks already auctioned can produce more than 400 MT which raises some questions over additional coal blocks being auctioned. But all auctioned mines don’t come on-stream. Risk sharing between the government and developer is skewed against the developer and this has lowered probability of mine development. The probability of mine abandonment has also increased as the mine developer has to bear all the cost of developing mines and in addition bear the risk of change in market conditions.
Thermal power generation (mostly coal with a small share of natural gas) increased by over 9 percent in the period April-December 2022. This was 14 times faster than any other country in Asia Pacific since the Ukraine crisis. However, RE generation (including hydro) grew by over 13 percent in this period while generation from non-fossil fuels increased by over 11 percent. The PLF (plant load factor) for thermal power plants increased from 58.87 percent in 2021-22 to 63.23 percent in April-Dec 2022. A 10 percent increase in PLF will mean additional demand for 100 MT of coal. If stranded coal plants of total capacity 40 gigawatts come on stream to meet growing demand that will increase demand for coal by another 200 MT.
The slow phase of coal phase down in India has climate activists worried. Globally less than half the coal fleet is less than 20 years old. Two thirds of the Indian coal fleet is less than 20 years old. Half the coal-based capacity was added in the last 15 years. Roughly 80 percent of India’s coal fleet is sub-critical. 50 percent of the coal fleet is expected to be supercritical by 2040 with overall technical efficiency increasing from 34 percent to 38 percent. Under a technology agnostic decarbonisation policy, India could potentially replace all the sub-critical coal plants under construction with ultra-super critical technology that would save nearly 60 MT of carbon-di-oxide (CO2) each year. This will be almost double the avoided emissions of all solar plants in the European Union (EU).
The all-India electricity demand is expected to grow 7 percent to 1,480 BU in the on-going financial year, according to the ratings agency ICRA. In the preceding 2021-22 fiscal, the all-India power demand was at 1,380 BU, the ratings agency said. The estimates are based on the fact that all-India electricity demand increased 10.6 percent year-on-year in first eight months of FY23, amid a severe heat wave in north and central India, it said.
India’s power consumption logged a double-digit growth of 13.6 percent to 112.81 BU in November 2022 compared to the year-ago period, according to government data. The robust growth of power consumption in the month mainly indicates an increase in economic activities as generally, it remains subdued in November. Experts said power consumption and demand will further increase in the coming months due to the use of heating appliances, especially in the northern part of the country, and a further improvement in economic activities on account of the beginning of the new rabi crop season. Farmers use electricity to run tubewells for the irrigation of new crops. In November last year, power consumption was 99.32 BU, higher than 96.88 BU in the same month of 2020, the data showed. The peak power demand met, which is the highest supply in a day, rose to 187.38 gigawatt (GW). The peak power supply stood at 166.10 GW in November 2021 and 160.77 GW in November 2020.
Central Electricity Authority (CEA) said peak power demand may shoot up by nine percent to 235 GW in April 2023 and called for proper planning to avoid recurrence of energy crisis. In April this year, the peak power demand was around 215 GW. The country had witnessed unprecedented coal demand from the power sector during the summer this year after COVID curbs were eased. Noting that the thermal power capacity of the country will go up till the transition period, CEA chairperson Ghanshyam Prasad said the energy security for the country is the primary concern though India is committed to renewable sources. India currently has close to 210 GW of thermal power capacity.
The total electricity trade volume on Indian Energy Exchange (IEX) has registered a 9 percent year-on-year growth to 7,392 million units (MU) in November 2022. The overall consumption of energy has grown 13 percent year-on-year (y-o-y) to 113 billion units (BU) during November 2022, IEX said in a report. However, the overall electricity trade volume including the Green Power trade and RECs stood at 7,764 MU in November 2022, a fall of 16 percent y-o-y, it said.
Adani Transmission Ltd (ATL) invited suggestions and objections from the public for grant of a power distribution licence in more areas of the Mumbai Metropolitan Region, including Mulund, Bhandup, parts of Thane district, Navi Mumbai, Panvel, Kharghar, Taloja and Uran. ATL’s new subsidiary, Adani Electricity Navi Mumbai Ltd (AENML), recently filed an application before Maharashtra Electricity Regulatory Commission (MERC) for grant of a distribution licence in the newly identified areas. The application was admitted by MERC. It plans to cater to over 500,000 new consumers in five years. At present, Adani Electricity caters to 3.1 million consumers in Mumbai suburbs. An investment of INR57 billion (bn) (US$693 million (mn)) has been envisaged for ATL to erect the new parallel distribution network.
Tata Power announced a INR60 bn (US$729 mn) capital investment by the company in Odisha. He said the four power discoms of Odisha, where Tata Power has a majority stake, are committed to INR60 bn capex investment in the next five years. The company has been engaged in power distribution across Odisha and is committed to ensure ease-of-doing business through quality power supply. Tata Power is also working with Bhubaneswar Smart City Limited (BSCL) in deploying charging infrastructure at multi-level car parking lots and public utilities like hospitals, universities, malls, and at important city hubs. Tata Power is working towards the electrification of remote villages by setting up microgrids. A technical feasibility study has been carried out in several villages in the Mayurbhanj District to set up microgrids for transformation of the rural/ tribal economy.
According to Electricity Minister V Senthil Balaji, the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) will issue a tender for the installation of smart meters across the state by 15 December. He said, and promised that TANGEDCO would fund the meters and wouldn’t charge consumers for them. As of 31 March, a total of 1,00,900 smart meters had been installed in Chennai’s Thyagaraya Nagar under the smart city project. These were postpaid smart meters. To make them prepaid ones, the state government will have to take a policy decision. The centre’s Revamped Distribution Sector Scheme (RDSS) aims to reduce aggregate technical and commercial losses across India by 12-15 percent by 2024-25 with a financially sustainable and operationally efficient distribution sector.
According to Union Power Ministry, the total outstanding dues of states are reduced by INR246.80 bn (US$3 bn) to INR1132.69 bn from INR1379.49 bn (US$16.76 bn) in June 2022. The ministry said that this happened due to the timely payment of just four EMIs. For payment of EMI of INR246.80 bn, five states have taken a loan of INR168.12 bn (US$2.04 bn) from Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) and eight states have opted to make their own arrangement. Presently, only one distribution utility i.e. Jharkhand Bijli Vitran Nigam Limited (JBVNL) is under regulation for non-payment of current dues. Outstanding dues of distribution companies on the trigger date have been reduced to INR2.05 bn from INR50.85 bn (US$618 mn) as of 18 August 2022. The ministry said that the strict implementation of the Late Payment Surcharge (LPS) rules will bring back the financial viability of the power sector in the country and would attract investment to ensure reliable 24×7 electricity to consumers.
The Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) has commenced linking the Aadhar cards of consumers with their consumer numbers. The central government has directed all the Discoms to link the Aadhar card of customers to the electricity consumer numbers so that subsidies are directly transferred to their accounts. The central government has also directed that only those power utilities that complete the Aadhar linking of consumers would be provided with support for new power projects. TANGEDCO has already given guidelines to the consumers to link the Aadhar number to the consumer number by visiting the website of Tangedcco and then registering using a one-time password.
The power plants in Punjab are running on maximum load as the state power utility has been “banking power with other states”. The demand in the state has witnessed a slight jump as compared to last year. In Punjab, 12 out of 15 thermal units were operating, including three of the four units at Ropar thermal plant and three available units at Lehra Mohabbat plant, generating 1,013 MW (megawatt) of power. In the private sector, all three independent power producers (IPPs) were generating 2,958 MW of power – 674 MW at Rajpura thermal plant, 1,788 MW generation at Talwandi Sabo, and 497 MW at GVK power plant. The total hydro generation is around 445 MW.
More than 4 million of the national capital’s 5.76 million domestic power consumers have applied for subsidies under the Delhi government’s free electricity scheme, government data showed. The data also showed 4.7 mn consumers received subsidies when consumers didn’t need to apply for the scheme. The Delhi government revamped its subsidy scheme to make it mandatory for domestic consumers to apply to avail of the benefit. Chief Minister (CM) Arvind Kejriwal had earlier announced that from October, only those consumers who apply for power subsidy would get it. 40,28,915 consumers have applied for the subsidy. These include 988,000 consumers of BSES Yamuna Power Limited, 1.828 million BSES Rajdhani Power Limited consumers and 1.128 million Tata Power Delhi Distribution Limited consumers. Another 13,882 consumers under the New Delhi Municipal Council area have also applied. More than 3.7 million consumers had opted for subsidy up to 15 November. The last date to apply for the subsidy was earlier set at 31 October. Over 3.5 million consumers had applied for the scheme by the last date, which was later extended to 15 November. Of the 4.7 million consumers who received subsidies earlier, nearly 3 million used free electricity up to 200 units per month. The government provided 50 percent subsidy (up to INR800) to around 1.6-1.7 million consumers with monthly consumptions of 201-400 units. Any consumer who fails to apply for the subsidy can get it from the next bill cycle after submitting an application. For the current financial year, the Delhi government has set aside INR32.50 bn (US$0.39 mn) for the subsidy scheme. The amount earmarked for the scheme in 2021-22 was INR30.90 bn.
The government will take all possible measures to meet the 230 GW single-day peak demand expected in April 2023, according to Power Secretary Alok Kumar. Power Minister R K Singh presided over a meeting to review the preparation to meet the high electricity demand expected in April next year. On the outcome of the meeting, the secretary said there are two parameters on which the government will work. Firstly, it will ensure there should be enough power generation capacity, and for that companies have been directed to carry out maintenance work of their plants so there is no issue at that time, he said. According to Kumar, the demand in April next year could be as high as 230 GW. As per official figures, the maximum all-India power demand met at 2:51 pm on 26 April 2022 was 201.066 GW. Earlier this year, the power minister had asked state power generation companies (GENCOS) to import 10 percent of coal requirement for blending purposes and lift the entire quantity of coal offered under rail-cum-road (RCR) mode expeditiously to build coal stock to avoid shortage during monsoon.
Bihar CM Nitish Kumar, called for a ‘one nation, one power tariff’ policy, stating that some States have to purchase power at a higher rate than others. Unveiling power department projects worth INR158.71 bn (US$1.93 bn), he said, Bihar gets electricity from the Central Government’s power plants at a higher rate compared to other States. He said that his Government has decided to install smart prepaid electricity meters in the State to ensure transparency. Kumar said that his Government ensured electricity connection to every household of the State in October 2018.
The power ministry has launched a scheme for the procurement of aggregate electricity of 4,500 MW for five years under of the SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) policy. Under the scheme, the PFC Consulting Ltd has invited bids for the supply of 4,500 MW. The supply of electricity will commence from April 2023. The utilities that have evinced interest for the scheme are Gujarat Urja Vikas Nigam Ltd, Maharashtra State Electricity Distribution Company Ltd, Madhya Pradesh Power Management Company Ltd, New Delhi Municipal Corporation and Tamil Nadu Generation and Distribution Corporation Ltd. The last date for the bid submission is 21 December 2022.
Privatisation is not the only solution to problems being faced by many power discoms (distribution companies) in the country as many state-owned entities are running efficiently and making profit, NTPC Ltd Chairman and Managing Director (CMD) Gurdeep Singh said. The union government has been taking initiatives to privatise the discoms. But since electricity is in the concurrent list of the Constitution of India, the union government could take steps to privatise discoms in the Union Territories only. Some states including Gujarat, Odisha, West Bengal have privatised the power distribution. He said private discoms are running efficiently and making a profit and also mentioned that at the same time there are state-owned discoms which are running efficiently and also making profits.
Punjab CM Bhagwant Mann claimed that more than 95 percent families in the state will get zero electricity bills in the coming months, which will give major relief to them. The CM said the government was providing 600 units of free electricity to people in every cycle. Mann said for the first time, 86 percent households in Punjab had received zero electricity bill. He said the move had also helped reduce power consumption as several families in the state had started using less power, so that they could avail 600 units of free electricity. He added efforts were being made to enhance the production of electricity in the state.
The Tripura government has embarked on a plan to bring fresh investments of nearly INR19.5 bn (US$0.24 mn) to ensure uninterrupted power supply in the state besides upgrading infrastructure. Brijesh Pandey, secretary of the state power department, said the government has already brought investments worth INR20 bn in the last five years to strengthen the transmission and distribution system in the power sector, which has helped substantially reduce transmission loss. Pandey said the Asian Development Bank is implementing a project of INR11.5 bn to revamp the state’s power sector infrastructure. At least 140 kilometre (km) of underground cables are targeted to be laid and as many as 120,000 smart meters will be installed under the project.
The Puducherry government’s bid to privatise electricity distribution in the union territory suffered a setback with Madras HC (high court) restraining the administration from finalising the tender. The court passed the order on a plea moved by Electricity Department Certificate Holders (ITI) Welfare Union, Puducherry and six others. According to the petitioners, they are representing about 1,500 engineers and workers employed in the Puducherry electricity department which includes Karaikal, Mahe and Yanam. The Puducherry government has unilaterally decided to privatise power distribution in the union territory, which is a profit-making service for the government. The electricity department which undertakes power distribution is a government department and not a company to sell its shares.
Haryana CM Manohar Lal Khattar flayed the concept of free electricity supply like sops in the state. The CM said that in the last 8 years, Haryana has done remarkable work in the power sector, which has paved the way for Haryana to become one of the leading states in the country in terms of providing electricity. He said that with the objective of providing 24-hour electricity to the villages, the state government initiated ‘Mhara Gaon-Jagmag Gaon Yojana’ from Kurukshetra in 2016. He said that the state government has taken stringent steps to check non-payment of electricity bills. He said that the government started an initiative and appealed to the citizens across the state to pay the bills, which garnered public cooperation and Haryana is setting up new dimensions in the power sector. He said that in order to strengthen the power sector, the state government provided relief to the consumers by waiving off the overcharge. He said that the state government has not increased the electricity rates in the last 8 years, and has instead brought relief to the people by reducing the power tariffs. He said that the Fuel Surcharge Adjustment (FSA) was 37 paise, which was abolished.
The Maharashtra State Electricity Distribution Company Limited (MSEDCL) has unearthed 175 power theft cases worth INR35.6 mn (US$0.43 mn) across Pune regional division of. The MSEDCL said that a large number of power thefts that were exposed involved industrial and commercial consumers. The investigation has revealed that in four cases there was large-scale electricity theft. According to the rules, if these customers do not pay the amount of electricity bill within the prescribed period, action will be taken against them as per Electricity Act 2003. The MSEDCL said that depending on the power theft amount after the assessment, these consumers are given a deadline to pay the amount, which could vary from consumer to consumer.
Australia’s competition watchdog, Australian Competition and Consumer Commission, warned that power bills are going up because smaller energy retailers, unable to cope with soaring and volatile wholesale markets, are shutting down, reducing competition. The report landed just as the government is hunting for ways to cap wholesale gas and coal prices, which have rocketed due to the Ukraine crisis, aiming to finalise a plan before Christmas. Power competition has dwindled as six retailers have folded since May, while other retailers have encouraged customers to switch providers or refused to take on new customers, the Commission said in a report.
Japan began a power saving scheme in a bid to ensure a stable electricity supply throughout the winter months amid concerns over a possible power crunch. The government is asking people and businesses to make efforts to reduce their power consumption by wearing warmer clothes and turning off lights, among others, through March, reports Xinhua news agency. The government and utilities are offering a point reward program to households who sign up, to incentivise the reduction of electricity use. During the winter period, the government is expected to secure a reserve supply capacity rate of 3 percent. Power supply, however, is expected to reach its tightest in January when reserve supply capacity could reach 4.1 percent in eastern and north-eastern Japan and top 3 percent in other parts of the country.
Bangladesh has decided to hike the electricity price by 19.92 percent at the wholesale level from next month. The increase was approved by the Bangladesh Energy Regulatory Commission (BERC) and the decision was announced by its chairman Abdul Jalil. The new tariff will come into effect from 1 December 2022, Jalil said. According to the announcement, the retail power tariff has been increased from 5.17 taka to 6.20 taka per kilowatt-hour unit at the wholesale level. BERC said it made the decision in responding to a review petition filed by the Bangladesh Power Development Board (PDB) to increase the electricity price at the wholesale level. The BERC chairman said the new price will be effective only for power distribution companies and some other bulk consumers.
Philippine President Ferdinand Marcos Jr. hopes the country’s Court of Appeals will reconsider a decision that raises the possibility of electricity rate hikes in the capital. The court allowed South Premiere Power Corp., a unit of San Miguel Corporation to suspend a power supply agreement with Manila Electric Company (Meralco) after the companies were prevented from raising tariffs by the regulator. South Premiere and Meralco had sought to raise prices amid higher costs of coal, which the Energy Regulatory Commission rejected in September citing fixed prices set under power supply agreements. Marcos, who began his six-year term in June, has promised lower electricity rates, which are among the highest in Asia. Higher electricity prices would put further pressure on Philippine inflation, which hit the fastest pace in nearly 14 years last month.
Construction has begun on an underground electrical transmission line that will bring Canadian hydropower to New York City as part of an effort to make the Big Apple less reliant on fossil fuels. Once complete, the Champlain Hudson Power Express will stretch 339 miles (546 kilometres) through New York state to deliver power produced by the company Hydro-Québec. The transmission line, which is scheduled to be finished in 2026, would run beneath Lake Champlain and the Hudson River and along existing highways as it makes its way south. Transmission lines, which move power from where it is generated to where it is consumed, are crucial to that effort, the project’s backers said. Transmission Developers, who spent about a decade planning this project, will begin construction near Whitehall, an upstate New York village about 79 miles (127 kilometres) north of Albany.
Ukrainian President Volodymyr Zelensky has said that about 6 mn households across the war-torn nation are without electricity as a result of Russian strikes hitting critical power infrastructure. The latest large-scale Russian missile attack on 23 November resulted in temporary power outages at all nuclear power plants and most thermal and hydroelectric power plants, while power transmission facilities were also damaged. Due to the widespread power outage, water and heat supply to households was also interrupted. The continued Russian attacks have damaged almost half of Ukraine’s energy system and millions of people are without power as temperatures drop for winter.
Britain’s energy watchdog, Ofgem, has proposed price controls for electricity distribution network companies for the next five years that it said would drive investment in homegrown supplies and deliver cheaper power without increasing consumer bills. Energy disruption and wider market turmoil linked to gas and oil exporter Russia’s invasion of Ukraine has this year led to a surge in prices, straining business and households across Europe.
Much of Ukraine remained without heat or power after the most devastating Russian air strikes on its energy grid so far, and in Kyiv residents were warned to brace for further attacks and stock up on water, food and warm clothing. Zelenskiy said that while power, heat, communications and water were being restored gradually, problems still existed with water supplies in 15 regions. Ukrenergo, which oversees Ukraine’s national power grid, said 50 percent of demand was not being met. In the capital Kyiv, a city of three million, 60 percent of residents were without power amid temperatures well below freezing, mayor Vitaly Klitschko said. Since early October, Russia has launched missiles roughly once a week in a bid to destroy the Ukrainian power grid.
European power prices are likely to remain high in the medium term, Moody’s Investors Service said in a report, citing technical problems at French nuclear plants, low water levels after droughts and risks to gas supplies. In France, average power prices have been at a 23 percent premium to the German benchmark since January 2022 due to the problems at operator EDF’s nuclear plants. France and Germany account for two-thirds of western Europe’s power consumption in an interconnected market.
Zimbabwe’s prolonged power shortage is set to worsen after the entity that manages southern Africa’s biggest dam ordered suspension of electricity generation at its main hydro plant because of a water shortage. The Zambezi River Authority (ZRA) told the Zimbabwe Power Company that the Kariba South hydropower station had used more than its 2022 water allocation and that the Kariba Dam’s usable storage was only 4.6 percent full. Zimbabwe has suffered acute power shortages for several years, as successive droughts have resulted in poor inflows into the Kariba Dam and as ageing coal-fired power stations have repeatedly broken down.
19 December: The reduction in oil import bill resulted in narrowing of India’s trade deficit in November as compared to October, said Prabhudas Lilladher Pvt Ltd. The trade deficit narrowed month-on-month (MoM) in November to US$23.89 billion as against US$27.58 billion in October, while up only 13 percent year-on-year (YoY), Amnish Aggarwal, Head-Research, Prabhudas Lilladher, said. According to Aggarwal, the dip was largely on account of decline in imports led by sequential decline in oil imports from US$18.2 billion to US$15.7 billion. On a YoY basis, imports grew by 5 percent while exports remained flattish. India’s exports exhibited a positive YoY growth in 15 out of 30 sectors in November and imports surged in 19 out of 30 sectors YoY. Oil imports growth slowed down to 11 percent YoY to US$15.7 billion, while down 13 percent MoM.
16 December: India is preparing to launch sales of 20 percent ethanol with gasoline and will look to gradually raise its share of the cleaner fuel in its energy mix, the country’s Oil Minister Hardeep Singh Puri said. India currently mixes 10 percent ethanol with gasoline, but the world’s third-biggest oil importer and consumer is keen to cut its carbon footprint to aid Prime Minister Narendra Modi’s goal for net zero carbon emissions by 2070. The government funding bill US (United States) lawmakers are trying to pass cancels “certain” congressionally mandated sales of oil from the Strategic Petroleum Reserve, a summary showed.
16 December: India has cut windfall tax on crude oil and aviation turbine fuel (ATF) and reduced export tax on diesel, according to a government order dated 15 December. It cut the tax on locally produced crude oil steeply to INR1,700 (US$20.52) per tonne from INR4,900, the order said. The federal government cut export tax on diesel to INR5 per litre from INR8, while slashing the windfall tax on ATF to INR1.5 per litre from INR5, the document showed. The move comes amid a 14 percent slump in global crude since November. India is the world’s third largest consumer and importer of oil. Meanwhile, India has bought Russian crude barrels at well below a US$60 price cap agreed by the West. India’s fuel demand climbed to an eight-month high in November, government data showed. On 1 July, India imposed the windfall tax on crude oil producers and levies on exports of gasoline, diesel and aviation fuel after private refiners sought overseas markets to gain from robust refining margins, instead of selling at lower-than-market rates in the country.
15 December: India is considering building several refineries instead of a single mega plant planned with Saudi Aramco and Abu Dhabi National Oil Company (ADNOC), due to challenges in acquiring land, three sources familiar with the matter said. Hurdles in land purchases are one of the key reasons for sluggish infrastructure development in Asia’s third-largest economy. Aramco and ADNOC joined a consortium of Indian state-run firms in 2018 to set up a 1.2 million barrels-per-day coastal refinery and petrochemical plant in western Maharashtra, seeking a reliable outlet for their oil. Delays in acquiring a 15,000-acre land parcel have almost stalled the project, initially planned for 2025, and boosted costs by 36 percent to US$60 billion, as per estimates made in 2019. Attempts to acquire land failed due to issues including farmers’ refusal to surrender their land, fearing the project could damage the Ratnagiri region famed for its Alphonso mangoes, cashew plantations, and fishing hamlets. Aramco and ADNOC own 25 percent each in the joint venture Ratnagiri Refinery & Petrochemicals Ltd (RRPCL), a company named after the region where the refinery was initially planned. State-run refiners Indian Oil Corp, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) hold the remaining stake in RRPCL.
15 December: Petronet LNG Ltd, India’s largest liquefied natural gas importer, will set up a floating LNG receipt facility at Gopalpur port in Odisha at INR23.06 bn. The company has signed an agreement with Gopalpur Ports Ltd for the facility that will have a capacity of about 4 million tonnes per annum, it said. The company’s board had accorded investment approval for setting up the floating storage and regasification unit (FSRU)-based LNG terminal at Gopalpur. LNG is a natural gas that has been supercooled, changing it from a gas into a liquid that is 1/600th of its original volume. This helps in easy transportation through ships. At the receipt facility, it is turned back into gas before being supplied to factories to produce fertiliser, generate electricity at power plants, or turned into CNG for running automobiles. Petronet’s project in the Ganjam district in Odisha, which is expected to be operational before the end of 2025, will be financed by a combination of debt and equity. Gopalpur will be the third LNG terminal on the east coast — Indian Oil Corp (IOC) operates a 5 million tonnes a year facility at Ennore in Tamil Nadu while Adani Group in partnership with TotalEnergie of France is building a facility at Dhamra port. Petronet management had previously stated that the FSRU-based receiving and regasification scheme has the provision to be converted in the future to a land-based terminal – with an expected capacity of 5 million tonnes per annum. The firm is planning to charter hire an FSRU for the Gopalpur terminal with a target to meet the increasing gas demand of the eastern and central parts of the country. It, currently, operates the 17.5 million tonnes per annum terminal at Dahej in Gujarat and a 5 million tonnes facility at Kochi in Kerala. The Dahej terminal is undergoing expansion to a capacity of 22.5 million tonnes. Petronet is adding 5 million tonnes of extra capacity at Dahej – already the world’s largest LNG import facility – by constructing a new jetty that will also able to handle propane and ethane shipments, plus more LNG storage tanks and bays for loading trucks. State-owned IOC, Oil and Natural Gas Corporation (ONGC), GAIL (India) Ltd and Bharat Petroleum Corporation Ltd (BPCL) each hold a 12.5 percent stake in Petronet.
20 December: The government said that it has extended the deadline to submit bids for the coal blocks under sixth round of commercial mine auction till 13 January. The biggest tranche of 141 mines covering eleven coal-bearing states are being offered in the sixth round of commercial coal mine auction. The earlier due date for submission of online and offline bids was 30 December. The coal ministry had recently organised investor’s conclaves in Mumbai, Bengaluru and Indore, for which tremendous response was received. Several pleas for extension of bid due date were received during conclaves and also in writing at the office of the nominated authority, coal ministry. The coal ministry had launched the process for auction of 133 coal mines under sixth round of commercial auctions, of which 71 are new coal mines and 62 blocks are rolling over from earlier tranches of commercial auctions. Additionally, eight coal mines under second attempt of fifth round of commercial auctions were also launched as those mines had received single bids in the first attempt. The coal ministry has successfully auctioned 64 coal mines in the first five tranches of commercial mines’ auction.
19 December: India’s coal production will touch one billion tonnes in the next financial year from 900 million tonnes this fiscal ending March, as the country gears up to stop the import of thermal coal by 2024-25, Union Coal Minister Pralhad Joshi said. He said India’s domestic coal requirement will reach 1,500 million tonnes (MT) by 2030, for which the nation needs to scale up its production. As per demand projections, coal mines are planned and their operations are run to ensure the energy security of the country. Development of new mines is also required towards Atmanirbhar Bharat to reduce import dependence. Coal demand of 1500 million tonnes per annum is projected by various agencies by 2030. Operations of coal mines are monitored by the Government on regular basis.
19 December: A total of 3.58 lakh tonne coal has been imported by Coal India Ltd (CIL) from Indonesia through the vendor namely GHV-BDE-DIL (JV) during this year on behalf of Thermal Power Plants (TPPs) of state GENCOs and Independent Power Plant (IPPs). Union Coal Minister Pralhad Joshi said that orders for the supply of imported coal were placed by CIL based on the firm orders. He said that considering the increasing electricity demand and for building up of coal stock at power plants before the onset of monsoon, the Ministry of Power (MoP) on 28 April advised power plants to import coal for blending purposes to meet 10 percent of their coal requirement. Subsequently, after reviewing the coal stock position, MoP on 1 August 2022 decided that the states, IPPs and Ministry of Coal may decide the blending percentage after assessing the availability of domestic coal supplies.
20 December: The national capital’s peak power demand this winter can go up to a record 5,500 MW. The power demand peaked at 5,104 MW last year and 5,021 MW in 2020. The peak winter power demand in BRPL and BYPL discom areas reached 2,140 MW and 1,122 MW, respectively, during the last winter. This year, Delhi’s peak power demand during winter can go up to 5,500 MW. It is expected to reach 2,289 MW and 1,159 MW for BRPL and BYPL respectively, BSES said. BSES discoms are geared to ensure adequate power availability for its around 47 lakh consumers during the winter months. BSES discoms will also bank surplus power with other states, which need additional power during the winter months. This banked power will be available during the summer months. BRPL will bank up to 415 MW with states like Himachal Pradesh, Goa, Kerala and Tamil Nadu. BYPL is expected to bank up to 300 MW with states like Meghalaya, Maharashtra, Tamil Nadu and Kerala. In case of any contingency, BSES discoms will buy short-term power from the exchange which is available at economical rates. Advanced load-forecasting statistical and modelling techniques will help them accurately forecast the power demand.
20 December: Fitch Ratings expects India’s power demand to be about 8 percent in the financial year ending March 2023 (FY23), against 8.2 percent in FY22. In a report — India Power Watch 1HFY23, Fitch said it expects demand growth to moderate in the second half of 2022-23 (H2FY23) as the strong 18.5 percent year-on-year growth in the first quarter of fiscal 2022-23 (Q1FY23) was from a low base a year earlier when demand dived due to a resurgence of Covid-19 infections. Fitch said it expects the average thermal power plant load factor (PLF) to remain above 60 percent (H1FY23: 64.5 percent), supported by power demand and improved local coal supply. According to the report, the government expects discoms to clear all dues by 2026.
16 December: Punjab Chief Minister (CM) Bhagwant Mann said his government will review the power purchase agreements (PPAs) signed with the private power-producing companies by the previous governments, asserting that his government does not want people to get costlier electricity. When the Aam Aadmi Party was in opposition, several party leaders including Bhagwant Mann demanded scrapping of PPAS signed with independent power producers. Meanwhile, CM said the state will not face any shortage of coal required for producing electricity with the operationalisation of the Pachhwara coal mine in Jharkhand.
14 December: The Uttar Pradesh (UP) government is running a campaign to raise consumer awareness about the advantages of paying power bills online. A consumer would get a reduction of up to one percent if he pays the electricity bill in full before the due date. Customers in rural areas who are unable to use online payment methods can pay their electricity bills in person at the closest electricity office, electrical substation, public service centre, or government ration distribution centre. Women of self-help organisations known as Bijli ‘Sakhis’ are engaged in electricity bill collection in rural areas on the initiative of the Yogi Government. This has made it simpler for rural residents to pay their electricity bills. Consumers can determine for themselves if the power bill they receive each month is accurate or incorrect by checking the meter number displayed on the bill they got.
16 December: ACME Group announced its foray into the wind power business with a 50 MW project in Gujarat. At present, ACME operates solar power plants in 12 States and supplies electricity to 13 state distribution companies (discoms). The company was awarded the project through a tariff-based competitive bidding process for the procurement of power from grid-connected wind power projects. The project should be commissioned within 24 months from the signing of the power purchase agreement. Electricity from the project will help light up nearly 6 million homes. In addition to the new wind power projects, ACME is in the process of setting up and commissioning solar power projects of 2,600 MW in Rajasthan. It also set up the world’s first integrated pilot project for green hydrogen and green ammonia plant at Bikaner in Rajasthan.
14 December: The country plans to commission 20 nuclear power plants by 2031 and will add nearly 15,000 MW to its power generating capacity, the department of atomic energy minister Jitendra Singh said. Singh said that the first two reactors of the 20 nuclear power plants, a 700 MW unit each, is expected to be commissioned next year in Gujarat’s Kakrapar, which already has three atomic power generating units operational. As per a physical progress report till October this year, the nuclear plant is nearing completion with 97 percent of the work done. The 500 MW Prototype Fast Breeder Reactor at Kalpakkam is likely to be operational in 2024 and the reactor is also 97.6 percent complete. It will be followed by two 1,000 MW units at Tamil Nadu’s Kudankulam nuclear plant in 2025. Two 700 MW units at Rawatbhata in Rajasthan are likely to be completed by 2026, while another two 1,000 MW units are likely to be completed at Kudankulam by 2027, he said. Two 700 MW units are expected to be completed at Gorakhpur in Haryana by 2029, he informed. He said nuclear power can provide the country with clean base load power and reduce dependence on coal and traditional sources of energy in the long run. Nuclear Power would also supplement clean renewable energy, he said.
20 December: Asia is expected to be flooded with more fuel oil supplies in 2023 as Kuwait’s new Al-Zour refinery ramps up output and as Russia diverts record volumes from Europe to the East ahead of sanctions. Higher supplies are expected to weigh on Asia’s fuel oil prices and refiners’ margins next year amid steady demand from the ship fuelling and power generation sectors. The 615,000 barrels per day (bpd) Al Zour refinery, which started exporting products in November, is poised to be a major supplier of very-low sulphur fuel oil (VLSFO), commonly used for ship refuelling, known as bunkering. Once fully operational, the refinery will export between 400,000 to 500,000 tonnes of VLSFO per month, meeting 8 percent to 10 percent of Asia’s demand if the supplies flow East, according to industry sources and Reuters calculations. Asia’s fuel oil imports from Russia rose to a record of 736,000 bpd in October and were at 410,000 tonnes as of 13 December, data from Kpler showed, ahead of a complete European Union ban on Russian imports on 5 February.
20 December: Russia’s Transneft has received requests from Poland and Germany for oil in 2023. The European Union (EU) has pledged to stop buying Russian oil via maritime routes from 5 December, with Western nations also imposing price caps on Russian crude oil, but the Druzhba pipeline remains exempt from sanctions. Polish refiner PKN Orlen said it will not extend a contract for Russian oil which expires in January 2023, while a second long-term agreement for Russian crude will cease to be implemented once sanctions are in place. Germany had ordered Russian crude oil were false and the mineral oil companies at the eastern German refineries in Leuna and Schwedt are no longer ordering Russian crude for the next year. Berlin aims to eliminate Russian oil imports by the end of the year and has for months been working with Poland to try to secure supply for Schwedt, which provides 90 percent of Berlin’s fuel. Germany’s economy ministry is optimistic Kazakh oil, which would come through the Druzhba pipeline via Poland, can help supplement replacement crude oil shipments for Schwedt. Transneft, which handles more than 80 percent of total oil produced in Russia, has cranked up oil exports by a fifth this year. Russia expects to reduce oil production next year to 490 million tonnes (MT), or 9.84 million barrels per day (bpd), from the 525 million to 530 MT (10.54 million bpd to 10.64 million bpd) expected this year in the face of Western sanctions over Ukraine.
19 December: Japan is sounding out major oil refiners about buying Russian ultra light crude from the Sakhalin-2 gas and oil project to ensure that the plant can continue to operate smoothly. The oil, a byproduct at the plant known as Sakhalin Blend, needs to be shipped out regularly for production to continue. The government’s move signals a potential restart of Russian oil imports by Japan for the first time since June. This is not likely to upset its allies in Group of Seven (G7) as they have agreed to exempt the Sakhalin-2 oil from a price cap placed on Russian crude exports this month. Refiners in the world’s third-largest economy, which is heavily reliant on energy imports, suspended Russian oil purchases after Tokyo agreed to phase them out with other G7 countries in response to Moscow’s invasion of Ukraine. Eneos Holdings, Japan’s biggest oil refiner, is exchanging views with the government regarding Sakhalin-2 crude purchase, a company spokesperson said, but declined to comment further. Japan’s second biggest refiner Idemitsu Kosan would consider whether or not it would buy the oil if requested by the government. Japan imported 452,519 kilolitres, or 7,797 barrels per day, of Sakhalin Blend crude in 2021, just 0.3 percent of its annual crude imports. Japan has imported 327,939 kilolitres or 5,650 bpd, of Sakhalin Blend crude so far this year.
15 December: China’s daily crude oil throughput rose to a one-year high in November, as refiners churned out more fuel for exports and two greenfield plants started up. Refinery output came in at 59.61 million tonnes (MT) last month, according to the National Bureau of Statistics (NBS), equivalent to 14.505 million barrels per day (bpd), just off 14.512 million bpd in the same period last year which was the second-highest on record. The peak was inked at 14.8 MT in June 2021. Throughput in the first 11 months of 2022 was 615.99 MT, equal to about 13.46 million bpd, a level that remained 4 percent below the level a year-ago owing to eight months of year-on-year production drops between January and August. State refiners that control most of fuel export quotas started ramping up productions, of diesel fuel in particular, to capture robust exports profits. Total November refined fuel exports – including diesel, gasoline, aviation fuel and fuel oil – hit the highest monthly rate since June 2021. November production was also supported by the start-up of PetroChina’s new 200,000 bpd crude facility and Shenghong Petrochemical’s 320,000-bpd plant, although it may take another few months for them to reach commercial operations. NBS data showed natural gas production rose 8.6 percent last month from a year ago to 18.9 billion cubic metres, an eight-month high, as state oil majors ramped up drilling to supply winter heating demand. Year-to-date output was up 6.4 percent over the corresponding period of 2021.
20 December: The US (United States) Energy Department approved permits for Sempra Energy to send US natural gas to Mexico for re-export from LNG terminals, which a source said led a Republican senator to lift holds on four Biden administration nominees. The permits allow Sempra to ship natural gas via pipeline to western Mexico in coming years where it will be converted to liquefied natural gas at the company’s terminals and sent to consumers in Asia and other markets. The LNG will be exported from Sempra terminals Energy Costa Azul – which is being built in two phases, the first of which is expected to be completed in mid-2025 – and Vista Pacifico, which has not yet begun construction. The department allows Sempra to export an LNG equivalent of 475 billion cubic feet (bcf) per year of gas from the proposed Costa Azul facility, and 200 bcf a year from Vista Pacifico. Proponents of natural gas have been pressuring President Joe Biden’s administration to quickly boost export permits for the fuel after the 24 February invasion of Ukraine by Russia, the world’s biggest exporter of fossil fuels. While the permits will do nothing this year to help Europe while it faces an energy crisis, they will add alternatives to LNG from Russia for consumers, particularly in Asia.
19 December: Hungary’s Foreign Minister Peter Szijjarto said that Budapest will not have to notify or consult with the European Commission if it wants to modify its long-term gas contract with Russia should an EU-wide gas price cap be approved. Hungary, a European Union (EU) member that largely relies on Russian gas and oil imports, has repeatedly said that it opposes a price cap on Russian gas. EU ministers were meeting in an effort to agree the cap on prices. Szijjarto said that if the gas price cap was approved, Hungary would need to adjust its deal with Russia, which was open to a possible change. Under a 15-year deal signed last year, before Russia’s invasion of Ukraine, Hungary currently receives 4.5 billion cubic meters (bcm) of gas per year via Bulgaria and Serbia under a long-term deal with Russia. Szijjarto said that at the Brussels meeting he suggested that the European Commission work out a proposal that would ban certain oil pipeline operators from demanding transit fees that are above those of the EU average. The operator of the Adria pipeline transporting oil from Croatia towards Hungary wants to raise transit fees by 80 percent next year for Hungarian oil and gas company MOL, Szijjarto said.
15 December: Dutch energy firms have been forced to tap into the country’s gas reserves as the cold wave is boosting demand. As a result, the gas consumption of Dutch households and companies has risen significantly recently and the country has had to resort to its stored gas reserves to satisfy demand, Dutch energy network operator Gasunie said. Gasunie estimated that the Netherlands consumed 1.5 billion cubic meters (bcm) of gas over the last cold week, more than doubling the average weekly usage of about 0.61 cubic meter this year until the end of November. Hence the need to tap into the reserves. Despite the cold, the Dutch have used less gas than they normally would in cold weather in order to save costs. About 20 percent less gas was used than in previous years under the same winter conditions. Energy prices have remained at high levels in the Netherlands since the beginning of this year.
14 December: Australia’s plan to control domestic natural gas prices, which producers say will deter development of new supply, is expected to boost the prospects for proposed LNG (liquefied natural gas) import terminals but potentially defeat the government’s aim to cut energy bills. Parliament is set to pass legislation to cap gas prices at A$12 per gigajoule (GJ) for a year and then require a “reasonable price” for domestic sales after the cap expires. Industry players say the plan, which surprised producers, will hurt investment in new supply as the “reasonable” price based on cost of production plus an agreed return on capital would fail to reflect exploration and development risks – which in turn would open a window of opportunity for LNG imports. Australia, despite being among the world’s top two LNG exporters, faces gas shortfalls from 2026 in its most populous states, New South Wales and Victoria, as supply is drying up in the offshore fields that have long supplied them. LNG supply, potentially from Western Australia, Papua New Guinea or the United States, for example, would however raise energy prices as LNG is more expensive, analysts cautioned.
20 December: China’s coal imports from Russia in November rebounded from a four-month low in the prior month despite transport bottlenecks in Russia, as utilities increased purchases to meet rising winter heating demand. China brought in 7.16 million tonnes (MT) of coal from Russia last month, data from the General Administration of Customs showed. That compared with 6.43 MT in October, and 5.11 MT in the same period a year earlier. Most Russian coal exports to China are seaborne cargoes, typically transferred to Russia’s Far East ports from coal mines by rail and then shipped to northern Chinese ports. There is also small volume of cargoes transported directly to China by rail. China’s domestic thermal coal prices were high in November as tight curbs on movements imposed under Bejing’s then-zero COVID tolerance policy clogged transportation. That made lower-quality Indonesian coal more attractive to Chinese utilities. But as China eases COVID controls and the logistics situation improves, domestic coal prices could fall and compete with imported cargoes, traders said. The customs data showed China’s coal imports from Mongolia stood at 3.77 MT in November, compared with 3.81 MT in October.
16 December: Global coal consumption is set to rise to an all-time high in 2022 and remain at similar levels in the next few years if stronger efforts are not made to move to a low-carbon economy, International Energy Agency (IEA) report said. High gas prices following Russia’s invasion of Ukraine and consequent disruptions to supply have led some countries to turn to relatively cheaper coal this year. The IEA’s annual report on coal forecasts global coal use is set to rise by 1.2 percent this year, exceeding 8 billion tonnes in a single year for the first time and a previous record set in 2013. It also predicts that coal consumption will remain flat at that level to 2025 as falls in mature markets are offset by continued strong demand in emerging Asian economies. The largest increase in coal demand is expected to be in India at 7 percent, followed by the European Union at 6 percent and China at 0.4 percent. Europe’s coal demand has risen due to more switching from gas to coal due to high gas prices and as Russian gas has reduced to a trickle. However, by 2025 European coal demand is expected to decline below 2022 levels, the report said.
15 December: After Chinese state firms won a string of large state contracts in Guyana, an American company has sealed a US$760 million deal to build two plants for using natural gas from offshore oil fields to produce electricity. Houston-based Lindsayca and CH-4 of Puerto Rico are partnering to construct a 300 megawatt (MW) power plant on Guyana’s west coast and a plant to provide it with gas now being mostly burned off by a consortium led by ExxonMobil developing commercial quantities of oil and gas found in 2015. Once the plants are completed over the next two years, much of the gas from at least three oilfields scheduled to be in operation would be piped ashore to be converted to electricity. That should help Guyana’s residents who have experienced decades of rolling blackouts and it will cut costs by lessening the need for expensive fuel imports to fire current power plants, President Irfaan Ali said.
19 December: Zimbabwe has proposed incentives to accelerate 1,000 megawatt (MW) of privately owned solar energy projects worth about US$1 billion, Finance Minister Mthuli Ncube announced, as the country scrambles to plug an electricity deficit that threatens to compound its economic woes. The southern African country is currently generating about a third of its 2,000 MW peak power demand and experiencing up to 18 hours of power outages daily after its main Kariba hydropower plant cut electricity generation due to low water levels. Zimbabwe’s drive towards generating 1,100 MW from renewable energy sources by 2025 has been slowed by lack of investment by independent power producers (IPPs) spooked by the country’s currency volatility and uneconomic tariffs.
15 December: Brazilian power company Eletrobras and Shell have signed a cooperation agreement to exchange information as they mull a potential co-investment in offshore wind power in the South American country, Eletrobras said. The move marks another step for Shell in the sector in Brazil, where it already has several offshore wind projects pending approval from environmental authorities. The company, which is mostly focused on hydroelectric power plants, noted that offshore wind farms have been recently boosted by energy policies related to environmental concerns.
This is a weekly publication of the Observer Research Foundation (ORF). It covers current national and international information on energy categorised systematically to add value. The year 2022 is the nineteenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.
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