Rooftop solar target of 40 GW by 2022 ‘unrealistic’: Parliament panel
A Parliamentary panel today said the rooftop solar target of 40 GW by 2022 is “unrealistic” and it needs to be “reconsidered”. “The Committee feels that the rooftop solar target of 40 GW by 2022 is unrealistic and it is highly unlikely that this target will be achieved,” the Standing Committee on Energy (2016-17) of the Ministry of New and Renewable Energy said in its latest report tabled in Parliament today. The panel further said the Centre should give the scheme a “serious relook”, else, it will derail the target achievement of the National Solar Mission. “The Committee, therefore, recommends that the target of 40 GW through rooftop solar projects should be reconsidered,” the report said. The panel was of the view that rooftop systems were not remunerative for the consumers on account of cost of maintenance being high, the report said. “The Committee noted that out of the 100 GW solar power, 40 GW is to be achieved from grid connected solar rooftops in residential, social, institutional and government sectors in the country,” it said. The government had earlier announced raising the solar power generation capacity addition target by five times to 1,00,000 MW by 2022, which will entail an investment of around Rs 6 lakh crore. Damian Jones Jersey
Polish power demand hits summer record as heatwave persists -operator
Polish electricity demand set a record for a summer morning at 23.82 gigawatts (GW) on Tuesday, the grid operator PSE said adding there is no threat to the system despite the increased use of air conditioning as high temperatures persist. The previous record for a summer morning (GW) was 22.88 gigawatts on June 28 2017. “We are carefully watching the system, but there is no threat and as of today the system is balanced,” PSE spokesman said. Poland, which generates electricity mostly from outdated coal-fuelled power stations, faces the risk of power shortages when temperatures reach extreme levels as increased demand overloads the system. Weather forecasters said some areas of Poland face temperatures of over 30 Celsius (86 Fahrenheit) degrees this week. Also, Poland’s two biggest power plants were closed last month for planned maintenance. Polish energy ministry said in June the electricity network would be able to handle a heatwave this summer, after a European power network lobby group ENTSO-E warned that prolonged heatwaves may cause problems for Poland’s and Italy’s electricity networks. Pierre-Edouard Bellemare Womens Jersey
OPINION: Open up LPG market to private enterprise
It is welcome the Centre has asked oil companies to raise domestic LPG (cooking gas) prices by Rs4 per cylinder every month until the entire subsidy of about Rs87 per cylinder is wiped out. Following the implementation of direct benefits transfer for LPG to below poverty line (BPL) households, it makes no sense to provide such consumption subsidies for the non-poor. We do need to better allocate resources, for much-needed social and physical infrastructure. Note that the amount involved in providing subsidies on household fuels is huge and rising, about Rs30,000 crore per annum. Subsidised kerosene, a sooty pre-modern fuel and a poor source of light, needs to be promptly replaced with aids like solar lanterns. It should hugely improve public health. We also need to revamp market design for domestic LPG, complete with norms for sharing bulky infrastructure for supply and storage. What’s required is proactive policy to have parallel marketing of LPG, instead of simply mandating the trio of public sector oil companies to monopolise and corner the market. The efficiency gains from a more competitive LPG market would be very significant indeed. It would boost entrepreneurship, step up supply and is actually likely to reduce costs and prices going forward, transparently. Piped supply of gas in towns would be cheaper than distribution via cylinders. Composite cylinders would lower costs, as compared to steel ones. The government had earlier asked the LPG retailers to revise prices by Rs2 per month, to gradually remove the subsidy involved. The move now is to fast-track the price revision, so as to better allocate scarce resources. The upfront subsidy distorts the market, breeds corruption and comes in the way of efficiency improvement. Jordan Reed Authentic Jersey
GAIL under CCI scanner for breaching competition norms
The Competition Commission is investigating at least seven cases of alleged abuse of dominance by GAIL in dealing with its customers, the outcome of which could potentially redraw the rules of the gas marketing business in India. The Commission has clubbed for investigation two cases from this year and five from the previous year in which customers – Rathi Steel, Mohan Meakin, Rico Auto, Omax Autos and Rico Castings -have alleged GAIL abused its dominant position by incorporating unfair terms and condition in the Gas Sale Agreement (GSA) and imposing take-or-pay (ToP) liability. ToP requires customers to pay for 90% of the contracted volume even if it lifts less in a year although the unlifted amount can be taken later. GAIL has denied allegations by customers. “GAIL reiterates that obligation of contract termination and other contractual terms under the GSA reflect the obligation entered into by GAIL under its upstream contracts. Therefore, it is not correct to allege that GAIL has imposed arbitrary/unfair terms & conditions and/or abused dominant position,” GAIL said in an emailed response to ET. The investigation would examine almost every aspect of GAIL’s procurement, price determination, the way company imposed take-or-pay liability on all customers in 2015, and how it commits ToP liability to its upstream customers. The complainants have alleged that many of the provisions related to the quality of gas or the purchase terms favour GAIL more than customers. The most important dispute is linked to the imposition of the take-or-pay liabilities on customers for the year 2015, when changes in the global market had made long-term gas more expensive than spot, encouraging more consumers to switch to spot where possible. “The conduct of Opposite Party (GAIL) in implementing such Take or Pay liability from the year 2015 appears to be a modus to ensure de facto exclusivity of the contractual arrangement. This, besides prohibiting the buyers from shifting to alternatives or terminating the GSA in the event of closure of their business, also appears to create entry barriers for alternative suppliers to enter the market or build up a viable customer base,” the Commission has said in its order in the case filed by Rathi Steel. “While imposition of ToP liability as per contractual terms cannot per se be regarded as abuse of dominant position, the same being imposed in an exploitative manner without justification or to ensure de facto exclusivity thereby hurdling potential entries or expansion of competitors warrants investigation under the provisions of the Act prohibiting abuse of dominant position,” the commission said. It would make sense to have norms to separate cross-country gas supply from distribution. We need to overhaul market design in natural gas. To have a system of competitive prices, we require gas hubs to better match demand with supply. And pending a more extensive pipeline network, what’s required is forward-looking price regulation to incentivise supply in a scenario of huge, unmet gas demand. The downstream oil and gas regulator needs to be suitably empowered. Delon Wright Womens Jersey
India refiners outshine Asia peers with new output, rising local demand
Indian refiners are outperforming their competitors in South Korea and Thailand as they have ramped up output from new fuel and chemical capacities to meet rising domestic demand that could further lift their earnings over the next two years. Asia is adding net refining capacity of 360,000 barrels per day (bpd) this year, according to Wood Mackenzie, with units coming online in China and Vietnam that could keep most of Asia well-supplied and weigh on refining margins for export-oriented refiners in South Korea and Thailand. India, though, where refiners have already ramped up capacity that has come online, will likely be shielded from the pressure on margins by strong local demand, analysts said. “Indian refiners are a bright spot in Asia because of rising fuel demand,” Hindustan Petroleum Corp Ltd’s Chairman M K Surana told Reuters. Surana expects Indian demand growth of about 5 percent a year up to 2030 as a rising population and increasing affluence drive up oil use in the world’s third-largest crude importer. Indian oil minister Dharmendra Pradhan on Monday indicated a slower growth pace, but still said the country would consume 226 million tonnes (4.95 million bpd) of refined products in fiscal year 2021/22, up from 205 million tonnes in 2017-2018. “We expect India to lead global oil demand growth, contributing to one-third of the growth expected in 2017-2030,” Goldman Sachs analysts told clients last week. Indian refiners Bharat Petroleum Corp Ltd, HPCL and Reliance Industries could see their shares rising, with gains between 11 percent for Reliance and 25 percent for BPCL over the next year, the analysts said. Among the refiners that have recently added capacity are BPCL, which is ramping up output after an expansion at its Kochi refinery, and Indian Oil Corp, which is planning to run its Paradip refinery at full capacity this year. Indian oil refiners are being undervalued, the Goldman Sachs analysts said. “Multiple re-rating could continue as investors give more credit for diminishing regulatory headwinds and sustainable earnings growth,” the analysts said. Regulatory changes in India that allow refiners to charge market rates for fuels, they said, have also improved the profitability at domestic refiners. Analysts at Japanese investment bank Nomura said in July that their top investment recommendations for Asian refineries were IOC, BPCL and HPCL, “owing to refinery volume increase, deregulated petrol and diesel prices, and undemanding valuations.” In contrast, Goldman said added capacities across Asia could dampen gross refining margins. The bank expects Singapore complex refining margins to drop to $7.70 and $7.30 in 2018 and 2019, respectively, from $8 this year. That means valuations for Asian refiners are stretched, it said, and recommended investors sell SK Innovation, owner of South Korea’s largest refiner, S-Oil Corp, and Thailand’s Thai Oil PCL and IRPC PCL. With low oil prices helping to drive India’s demand, though, and capacity additions slowing, its market is likely to remain snug, said Tushar Tarun Bansal, director at consultancy Ivy Global Energy. “Only a few secondary units are expected to come onstream in the next five years,” he said, while India’s strong economic growth will continue to drive rising oil demand going forward. Jamal Adams Authentic Jersey
India’s LPG imports likely to rise 10% in fiscal 2017-18: traders
India’s LPG imports are expected to rebound from July onwards and is on track for a 10% annual increase in the current fiscal 2017-2018 (April-March), after plunging to the lowest in two years in June, trade sources from four oil and gas companies in India said recently. India, which is competing with China and Japan to be the world’s largest importer of LPG, imported 597,000 mt in June, down about 25% year on year, the lowest since June 2015, data from India’s Petroleum Planning and Analysis Cell, showed. “India’s domestic LPG production is not rising at the same pace as consumption; hence, imports will go up by at least 10% this fiscal,” one of the trade sources said. The other trade sources agreed with his projection. Domestic LPG production in April-June 2017 increased 0.2 million from April-June 2016, but domestic consumption over the same period rose 0.5 million mt, data published by PPAC showed. Half of India’s LPG demand last year was met by imports, S&P Global Platts data showed. The June LPG imports were 20% less than the imports of 748,000 mt in May, as domestic production rose 10% from June last year to 1 million mt this June, PPAC data showed. Traders also attributed the dip in June to healthy imports in the months before, which led to congestion at the ports. Indian buyers looked to first dispose of their cargoes, due to the backlog of ships waiting to discharge at Indian ports, before taking in fresh imports. “The ships standing in Indian ports for more than 15-20 days did not make economic sense”, an Indian oil company source said. India is one of the biggest buyers of butane in Asia. The lower imports in June has led to a narrowing of the propane-butane in April when June cargoes were traded. The propane-butane spread narrowed to minus $3/mt on April 26, the narrowest in eight months due to little demand for butane. The spread was last narrower on August 1, 2016, when it was at parity, Platts data showed. The propane-butane spread widened again to minus $26/mt on June 28, as buyers sought bargains for butane. The recovering butane market had also prompted Saudi Aramco to set its latest contract prices for August with a wider propane-butane spread at minus $40/mt, as Indian buyers emerged before the market recovered further at the onset of the North Asian winter in Q4. “[The] spread was quite low in June, so many people bought butane,” a South Korean trader said. The spot price of FOB Arabian Gulf butane came off from this year’s peak of $611/mt on February 2 to $351/mt on June 23, the lowest in nine months. The price for CFR Japan butane plunged from this year’s high of $643/mt on February 2 to $374.5/mt on June 23, the lowest since September 29 last year. The FOB Arabian Gulf and CFR Japan butane prices have since increased to $466/mt and $487/mt respectively, on Monday. India’s imports of LPG, which is mainly used for cooking, rose by 23% year on year in fiscal 2016-2017 to about 11 million mt, the PPAC data showed. The propane-butane-mix in India’s LPG consumption is now about even, compared to 60% butane and 40% propane in earlier. In April 2017, India overtook Japan as the world’s second-largest importer of LPG, as Prime Minister Narendra Modi pledged in May last year to provide cooking-gas cylinders to every household. The Prime Minister’s ambitious scheme, Pradhan Mantri Ujjwala Yojana, led to a record 31.6 million new cooking-gas connections during fiscal 2015-2016, Indian oil minister Dharmendra Pradhan said. Total LPG consumption in India has increased for 46 months in a row, with a 15.9% rise in June from May, the PPAC data showed. Guy Lafleur Jersey