Piyush Goyal urges states to clear arrears of renewable energy companies
The central government is persuading states to clear their arrears to renewable energy companies, which are faced with the challenge of repaying debt amid muted cash flows, power minister Piyush Goyal said The government’s thrust on clean energy enthused private players and lured big corporate houses like the Tata and Mahindra and several independent power producers into the sector. But state-run power distribution companies have been delaying payments, sometimes due to their own financial constraints but in some cases also because of their unwillingness to pay for renewable energy which is not as stable in supply as that from conventional sources, power producers told ET. “One or two discoms have been delaying. We are working with them to resolve the issue. It is a state issue and we can only persuade them,” Goyal told ET. ET spoke to green energy companies which said while the delays by state discoms have reduced, that continues to be high, making cash management difficult. Sector players list Tamil Nadu, Maharashtra, Madhya Pradesh, Andhra Pradesh and Rajasthan among the ones delaying payments. “States like Rajasthan and Tamil Nadu are delaying payments due to their inherent financial stress. Counterparty credit risk is anyway high for renewable energy companies and cash flow problems make it worse,” said Sabyasachi Majumdar, group head for corporate sector ratings at ICRA. In a recent interview to ET, Tata Power Renewable Energy’s chief executive, Rahul Shah, said while the government was pushing for more renewable energy, there were “subtle pulls” from state discoms discouraging these generators. He had said given the financial constraints these discoms operate with, they were “prioritising” payments to generators who offered firm supply of electricity, which meant the thermal power generators, over the renewable energy. Two other industry executives agreed with him, adding that wind energy makers were worst hit as some discoms contracted power at higher tariff and as electricity prices fall, they were not keen to buy power. “Maharashtra was an outlier last year with delays of 12 months but it has improved somewhat now. In general, payments from discoms have improved since March with average overdue being around two to three months. “Only in worst case the delays are around six months. This too may not be to discriminate against a particular class, for instance wind power, but more due to their own financial constraints,” said Sumant Sinha, chairman of ReNew Power, a solar and wind energy company. Johnny Bucyk Jersey
No nuclear power for states that oppose it: Power minister
States where governments or people oppose nuclear power projects are unlikely to get it, said Union power minister Piyush Goyal, toughening the Union government’s stand against opposition to nuclear power reactors. Tamil Nadu will get more power from the upcoming units 3 and 4 of the nuclear power reactor in Kudankulam in Tirunelveli district of Tamil Nadu, the minister told reporters on Monday after meeting chief minister K Palaniswami at the secretariat. “We are working on a new power allotment formula for states. When the Kudankulam units 3 and 4 are ready, Tamil Nadu will get more power. This was discussed during the meeting with the chief minister,” said Goyal. The minister assured the chief minister of allotting a separate coal block for Cheyyur thermal project. A special purpose vehicle will be floated for setting up an ultra mega thermal power project in Cheyyur with a total capacity of 4,000MW. There will be four units of 800MW each. The total cost of this project is Rs 18,000 crore and Tangedco will get 1,600MW once all four units are up and running. The other issues which were discussed between Goyal and Palaniswami include a separate corridor for green power. “The green corridor was discussed and I can assure you Centre will do everything to extend cooperation for setting up a separate corridor for green power. I am happy to know that Tamil Nadu has surplus green power,” said the minister. In the last three years, a transmission capacity of 3,450MW has been added and in 2020, the total transmission capacity for south India will be 18,000MW so that states can either evacuate power to other states or get power from other states. “Due to goods and service tax (GST), the coal tax rate has come down to 5% and because of this NLC will save Rs 508 crore each year. Similarly, Tangedco must also save money on purchase of coal. NLC will be allowed to use its old thermal unit till 2018,” said Goyal. On solar pumps for farmers, the minister said discussions were on with various people to provide solar pumps for farmers. The minister said the meeting with the chief minister was fruitful and recalled that he sat on the “same chair in the same room” when he met former chief minister J Jayalalithaa last year. “It is only after my meeting with her, Tamil Nadu decided to join the Uday scheme,” said Goyal. The minister said barring one state in the eastern region, all other states in the country have joined the Uday scheme. “The losses of Tangedco has fallen from Rs 14,000 crore to Rs 3,500 crore. This will help Tamil Nadu power consumers to get quality power,” said the minister. Carlos Santana Womens Jersey
Shell sees rising investment in renewables
Royal Dutch Shell will be spending up to $1 billion a year by 2020 on projects within its new energies division, Chief Executive Ben van Beurden told an industry conference on Monday. Shell set up the division to focus on renewable energy and new technologies to help lower carbon emissions. “Shell is determined to find solutions and will be spending up to $1 billion a year on our new energies division by the end of the decade,” van Beurden told the conference. Aaron Donald Womens Jersey
China tops in renewable energy production: BP Statistical Review of World Energy
China surpassed the US as the top producer of renewable energy in 2016, according to the latest BP Statistical Review of World Energy released on Monday. Renewable power, excluding hydro power, in the world grew by 14.1 per cent in 2016, the biggest increment on record, Xinhua news agency cited the report as saying. Although the share of renewable power within primary energy was just 4 per cent, its strong growth meant it accounted for one-third of the increase in primary energy, the report indicated. China continued to dominate renewable growth, contributing about 40 per cent of global growth — more than the entire OECD — and surpassed the US as the largest producer of renewable power last year, said BP chief economist Spencer Dale. China also provided the main source of world growth for both hydro and nuclear power. Global hydro power rose 2.8 per cent in 2016 from a year ago, with more than 40 per cent of growth from China. In the meantime, global nuclear power went up by 1.3 per cent or 9.3 million tonnes of oil equivalent, with China contributing almost all the growth. Carbon emissions were essentially flat over the past three years, Dale said, with China again the key player. The BP data showed carbon emissions in the world rose slightly by 0.1 per cent in 2016, while in China, the emissions fell 0.7 per cent from a year ago. “China’s carbon emissions are estimated to have actually fallen over the past two years, after growing by more than 75 per cent in the previous 10 years, and some of the improvements reflects structural factors that are likely to persist,” Dale said. Jimmy Graham Authentic Jersey
Govt may sell Air India in parts to attract potential buyers
India is considering selling state-owned Air India in parts to make it attractive to potential buyers, as it reviews options to divest the loss-making flagship carrier, several government officials familiar with the situation said. Prime Minister Narendra Modi’s cabinet gave the go-ahead last month for the government to try to sell the airline, after successive governments spent billions of dollars in recent years to keep the airline going. Air India – founded in the 1930s and known to generations of Indians for its Maharajah mascot – is saddled with a debt burden of $8.5 billion and a bloated cost structure. The government has injected $3.6 billion since 2012 to bail out the airline. Once the nation’s largest carrier, its market share in the booming domestic market has slumped to 13 percent as private carriers such as InterGlobe Aviation’s IndiGo and Jet Airways have grown. Previous attempts to offload the airline have been unsuccessful. If Modi can pull this off, it will buttress his credentials as a reformer brave enough to wade into some of the country’s most intractable problems. His office has set a deadline of early next year to get the sale process underway, the officials said, declining to be named as they were not authorized to speak publicly about the plans. The timeline is ambitious and the process fraught, with opinion divided on the best way forward: should the government retain a stake or exit completely, and should it risk being left with the unprofitable pieces while buyers pick off the better businesses, officials said. Already, a labour union that represents 2,500 of the airline’s 40,000 employees has opposed the idea of a sale even though it is ideologically aligned to Modi’s Bharatiya Janata Party. JaVale McGee Authentic Jersey
UP nudges solar companies to cut power tariff on older pacts
Following a steep fall in solar tariffs in the last two years, Uttar Pradesh is pressuring solar power project developers to cut rates of electricity agreed upon in earlier contracts even though the pacts were signed when equipment prices were high. Winners of an auction conducted in September 2015 have been urged to voluntarily lower power tariff of plants nearing completion. Uttar Pradesh’s nodal agency for renewable energy New Energy Development Agency (NEDA) declared results of the auction in 2015, after which contracts were signed with 15 developers at tariffs ranging between Rs 7.02 per kwH and Rs 8.60 per kwH. The biggest winners were Adani Green Energy which bagged a 50-MW project at a tariff of Rs 8.43 per kwH and Essel Infra Projects which also won a bid for 50 MW at a tariff of Rs 7.02 per kwH. However, they have all recently received the pro-forma of a letter the UP Electricity Regulatory Commission (UPERC) wants them to sign by which they would voluntarily agree to lower solar tariffs to Rs 7.02 per kwH, the price that was proposed by the lowest bidder during the auction. “Subsequent to approval of the tariff quoted by the firm by the UP cabinet, PPA [power purchase agreement] was executed by the firm with UPPCL [Uttar Pradesh Power Corporation Ltd],” the suggested letter says. “On adoption of tariff, UPERC directed for reducing the quoted tariff. As per the direction of UPERC, we give our consent for tariff of Rs 7.02 per kwH.” This has put the project developers in a fix. “The project was won at a particular price but now they are asking winning bidders to lower it and match the price of the lowest bidder,” said a source close to the development. “Bidders have been given a standard letter on a piece of blank paper and told to sign or else quit the project. How can they quit? Most of the plants have already been built.” The PPAs are for 12 years, not 25 years as is the usual practice. Officials of UPERC and UP NEDA were not available for comment. Solar tariffs have fallen drastically throughout the country due to improved technology for solar module manufacturing as well as excess production in China, from where most Indian developers source solar equipment. The lowest solar tariff reached so far has been Rs 2.44 per kwH in an auction conducted by the Solar Energy Corporation of India (SECI) for the Bhadla Solar Park in Rajasthan in May. The solar tariff compares well with the price of power supplied by coal-fired plants. Bhadla has the highest solar radiation in the country. Though solar radiation in UP is weaker in comparison, tariffs have fallen there too. The last solar auction of 125 MW conducted in the state in March 2016 by SECI saw winning tariff of Rs 4.43 per kwH. UPERC thus seems reluctant to adhere to PPAs where the state discom will have to pay almost double for solar power. Jung-ho Kang Womens Jersey
Aramco CEO sees oil supply shortage as investments and discoveries drop
The world might be heading for an oil supply shortage following a steep drop in investments and a lack of fresh conventional discoveries, Saudi Aramco’s chief executive said on Monday. Unconventional shale oil and alternative energy resources are an important factor to help meet future demand but it is premature to assume that they can be developed quickly to replace oil and gas, Amin Nasser told a conference in Istanbul. “If we look at the long-term situation of oil supplies, for example, the picture is becoming increasingly worrying,” Nasser said. “Financial investors are shying away from making much needed large investments in oil exploration, long-term development and the related infrastructure. Investments in smaller increments such as shale oil will just not cut it,” Nasser said. About $1 trillion in investments have already been lost since a decline in oil prices from 2014. Studies show that 20 million barrels per day of new production will be needed to meet demand growth and offset natural decline of developed fields over the next five years, he said. “New discoveries are also on a major downward trend. The volume of conventional oil discovered around the world over the past four years has more than halved compared with the previous four,” Nasser said. State oil giant Aramco, which is preparing to sell around 5 percent in itself next year in an initial public offering, is continuing to invest in maintaining its oil production capacity of 12 million barrels per day. “We plan to invest more than $300 billion over the coming decade to reinforce our pre-eminent position in oil, maintain our spare oil production capacity, and pursue a large exploration and production program centering on conventional and unconventional gas resources,” Nasser said. Nasser said that one of Aramco’s priorities was “direct conversion of crude oil into petrochemicals” while adding the company was also focusing on solar and wind projects. Giovanni Fiore Authentic Jersey
LNG exports to India, China, others not affected by Gulf rift, says Qatar
Qatar’s exports of liquefied natural gas (LNG) to Japan, India, South Korea and China have not been affected by a boycott of Doha by four Arab states, Energy Minister Mohammed al-Sada said in a statement on Monday. He said Qatar’s exports to the four Asian countries accounted for nearly three-quarters of the country’s total exports. Exports to the United Arab Emirates, Saudi Arabia and Bahrain accounted for less than eight percent, the statement said, citing comments made by the minister at an energy conference in Istanbul. Qatar remains “committed to all its agreements with its partners and is determined to maintain this status despite the illegal and unjust embargo imposed on it,” the statement said, referring to LNG exports. Magic Johnson Jersey
BPCL plans to buy first U.S. crude via tender Document
Indian refiner Bharat Petroleum Corp Ltd plans to buy its first ever cargo of crude oil from the United States, a tender document showed on Monday. BPCL is seeking at least 1 million barrels of crude either for loading on Aug. 16-Sept.5 or delivery on Sept. 26-Oct. 15, it said. Part 1 of the tender closes on July 11 and part 2 on July 14. Offers will remain valid until July 14. Orlando Pace Jersey
Reliance Industries pulls the plug on Peru oil block, trims overseas assets
Reliance Industries has pulled out of the last oil block it held in Peru, trimming its overseas assets to just two properties in Myanmar. The billionaire Mukesh Ambani-led firm had in 2007 set up Reliance Exploration and Production (REP) DMCC primarily for acquiring overseas assets. It had steadily acquired 16 conventional oil and gas assets, including four in Peru, three in Yemen (one producing and two exploratory), two each in Oman, Kurdistan and Colombia and one each in East Timor and Australia. It last bagged two oil and gas exploration blocks in Myanmar in 2014. But the company slowly exited most of its international assets. In its latest annual report for 2016-17, RIL says it has “withdrawn from Block 39” in Peru. RIL held 10 per cent interest in the block. Anglo-French oil and gas company Perenco held 55 per cent stake in the block while PetroVietnam of Vietnam held the remaining 35 per cent. RIL said it is awaiting formal assignment of its interest to the existing partners. The company now is left with just two exploration blocks in Myanmar — M17 and M18. RIL holds 96 per cent stake in each of the two blocks with the remaining 4 per cent being with a local company. For Block M17, the company has sought an “extension for study period” from Myanma Oil and Gas Enterprise or MOGE, the annual report said. RIL’s domestic oil and gas business portfolio, which at one point of time comprised of 42 blocks or fields, has shrunk to five conventional oil and gas assets and two coal-bed methane (CBM) blocks. As part of its upstream (hydrocarbons exploration and production) portfolio rationalisation, the company has been exiting those assets which it feels are not going to give good return on investment. According to the annual report, the company’s present domestic portfolio comprises the flagging KG-D6 block in the Krishna Godavari basin, Mahanadi basin block of NEC-25, CB-10 in Cambay and GS-01 in Saurashtra basin. Besides, it also has stake in Panna/Mukta and Tapti oil and gas fields in the Arabian Sea. However, Mid and South Tapti fields have been abandoned after production tapered, it said. Also, it has two CBM blocks in Madhya Pradesh. RIL had in February 2011 announced a “transformational” deal when UK’s BP picked up 30 per cent stake in its 23 oil and gas blocks for USD 7.2 billion. However, in August that year the government allowed them to form a partnership in only 21 blocks. Since 2012, RIL and BP have been pruning their portfolio, shedding not so viable acreage. They are now left with just three blocks — the producing KG-DWN-98/3 or KG-D6 block in Bay of Bengal, gas discovery areas of NEC-OSN-97/2 (NEC-25) and CB-ONN-2003/1 in Cambay basin. In US, it also has stake in three shale gas producing properties. Kyle Emanuel Womens Jersey