Strong pipeline of solar projects aided by policy support; but regulatory challenges persist: ICRA
The solar project pipeline in the country remains strong supported by policies but regulatory challenges persist arising out of factors such as non-enforcement of renewable purchase obligations (RPOs) and likelihood of more stringent scheduling and forecasting norms, research agency ICRA said in report. About 6,100 Megawatt capacity of solar projects were awarded during the 8-month period of CY2016 (January – August), supported by policies at both the Central and the state level. “About 2,520 MW capacity of solar PV projects, awarded in CY2016 so far (January till August 2016), have a tariff of less than Rs. 5/kWh, which could face challenges in achieving financial closure. Viability of such tariffs hinges on structuring of debt with longer tenures, competitive funding costs and the ability of the project developers concerned to keep the cost of modules within the budgeted levels,” said Sabyasachi Majumdar, Senior Vice President, ICRA. Simultaneously, however, a fall in solar module prices coupled with aggressive bidding by developers leading to declining solar PV bid level has resulted in an improved tariff competitiveness of solar PV projects. This in turn remains beneficial for the state distribution utilities which are key off-takers. Weighted average competitively bid solar PV tariff has declined to Rs. 5.0/kWh for CY2016 (till August 2016) from Rs. 6.5/kWh for CY2014. ICRA further takes note of the recently reported concerns of solar project developers on the forced back-down by the state utility in Tamil Nadu. While the solar generation project is supposed to operate on the “must run” principle basis under the grid code, any forced back down by the state, on the grounds of inadequate transmission capacity and/or grid stability, remains a concern for solar projects, in ICRA’s view, given the absence of any deemed generation clause in the tariff structure. Notwithstanding a positive demand outlook, the solar sector continues to face several challenges like regulatory challenges arising out of inconsistency in RPO norms; and poor compliance with RPO norms by the obligated entities and weak enforcement of such norms by the State Electricity Regulatory Commissions (SERC). “Despite the revision in solar RPO to 8% from 3% till FY2022 in the National Tariff Policy in January 2016, the SERCs in majority of the states are yet to re-align their solar RPO norms and trajectory in line with the revised target,” Majumdar said. Further, solar PV projects remain exposed to regulatory challenges arising from requirement of scheduling and forecasting framework, which is likely to be approved by SERCs, subsequent to CERC’s framework, which has been effective since August 2015. The Karnataka Electricity Regulatory Commission (KERC) in May 2016 had approved similar regulations and similarly, SERCs in a few other states have put in place draft regulations. For the solar projects in Karnataka, the forecasting framework would thus have a negative impact on cash flows and project IRR, particularly if the actual overall deviation (mix of over-generation and under-injection) exceeds 30% of the scheduled generation, though the extent of the impact for solar energy generation projects is likely to be relatively lower due to lesser variability in solar generation, as compared with that for wind energy projects. Ryan Braun Jersey
Prices of solar energy down by 40%: Piyush Goyal
Power minister Piyush Goyal said that by consistent efforts made by the government the prices of solar energy have come down by 40% in just 18 months. He was speaking at the distinguished gathering of Industry stalwarts from Energy sector at a media event, ‘Energy Conclave, 2016 – Securing India’s Green Future’, organized here. The Minister noted that India has its own developmental imperatives in the near future, hence it cannot shun the use of fossil fuels completely from its energy basket. It is important to strike a balance between the conventional & renewable sources of energy and rapid societal development & environmental concerns, he added. Goyal expressed happiness to see renewable energy taking centre stage in discussions on power sector recently. He noted that it is of prime importance to achieve the goal of ‘One Nation, One Grid, One Price’ at the earliest and create a robust transmission grid network where affordable power is seamlessly available to the common man throughout the Nation, at one price. The minister pointed out that the Government, after taking charge, has made the solar power target five times to 100 GW by 2022. Moreover, concentrating on other sources of renewable energy, this year has been dedicated to hydro and wind energy and talks with international gas suppliers are on, he added. Greg Lloyd Jersey
Social security incomplete without energy security: Goyal
Minister of State (Independent Charge) for Power, Coal, New and Renewable Energy and Mines, Piyush Goyal has noted that India has its own developmental imperatives in the near future; hence it cannot shun the use of fossil fuels completely from its energy basket. Addressing a distinguished gathering of Industry stalwarts from energy sector at a media event, ‘Energy Conclave, 2016 – Securing India’s Green Future’, organized here yesterday, Goyal said it was important to strike a balance between the conventional and renewable sources of energy and rapid societal development and environmental concerns. He also expressed happiness to see renewable energy taking centre stage in discussions on power sector recently.The Minister noted that it is of prime importance to achieve the goal of ‘One Nation, On Grid, One Price’ at the earliest and create a robust transmission grid network where affordable power is seamlessly available to the common man throughout the nation, at one price. Goyal pointed out that the government, after taking charge, has made the solar power target five times to 100 GW by 2022. Mike McGlinchey Womens Jersey
Pune to get new greenfield international airport at Purandar
Chief minister Devendra Fadnavis has approved land at Purandar for a new greenfield international airport for Pune. The proposed airport will be spread over 2,400 hectares and the site has already been approved by the Airports Authority of India (AAI), Fadnavis told reporters in Mumbai on Thursday after attending a meeting of the Maharashtra Airport Development Corporation (MADC). The airport would commence in three years, he said. Fadnavis announced that the new airport would be named after Chhatrapati Sambhaji Raje as Purandar was his birthplace. “We decided to grant permissions for carry ing out a detailed project report (DPR) as well as an obstacle limitation surface survey for the proposed site,“ the chief minister said. “The site is around 15-20 km away from Pune city . Located on the south of the city, the proposed airport will be connected with six different routes including national highways 4 and 17. There will be a special ring-road connecting major industrial establishments with the proposed airport from Hadapsar. The proposed airport will have two airstrips, each having a length of 4 km. It will handle cargo along with passenger traffic,“ Fadnavis said. Asked about earlier proposed sites like Chakan and Rajgurunagar, Fadnavis said except Purandar, no other site has been approved by the AAI.“Most of the farmers have expressed their willingness for the project (at Purandar). The farmers whose land will be acquired for the project will become partners in the airport developing company which will ensure some steady inco me source for them. This model has been used in the state earlier for land acquisition of the (proposed) Navi Mumbai International Airport,“ Fadnavis said. Asked about the proposed airport in Kolhapur, Fadnavis said “The state government is spending Rs 40 crore for this airport and it will be a domestic one.“ A new airport for Pune was proposed more than a decade ago but the project has been delayed for want of suitable land. Two weeks back, a 15-member team comprising revenue officials and representatives from the Airports Authority of India (AAI) and MADC had conducted a review of the Purandar site in villages Pargaon Memane, Ikhatpur, Rajewadi and Waghapur. The team had found the site most appropriate for the airport. The AAI has since given its in-principle approval to the site and the state now has to initiate the process for land acquisition. Keanu Neal Jersey
India to set up LNG terminal, City Gas network in Sri Lanka
India is working on a slew of proposals aimed at strengthening bilateral energy engagement with Sri Lanka including setting up an Liquefied Natural Gas (LNG) terminal and a dedicated City Gas Distribution (CGD) network in the neighbouring nation. Petroleum minister Dharmendra Pradhan today met his Sri Lankan counterpart Chandima Weerakkody here and discussed the Indian proposals, the oil ministry said in a statement. “During the meeting, both the ministers discussed various Indian proposals including joint development of Upper Tank Farm by Lanka IOC (LIOC) in Trincomalee; setting up of LNG terminal at Kerawalapitiya, near Colombo by Petronet LNG Ltd; setting up of CGD network by GAIL and use of CNG in the automotive sector of Sri Lanka,” the ministry said. The Sri Lankan government is trying to promote the use of clean fuel in that nation, including for power generation. Pradhan also said the Indian oil ministry has offered to work with the Lankan government for developing gas infrastructure there. He added Indian companies had engaged a reputed consultant for assessing LNG demand and are developing related infrastructure in Sri Lanka. The consultant’s report would be shared shortly. Weerakkody welcomed India’s cooperation and said though India’s gas-based business and infrastructure is only 20 years-old, it has the requisite experience and expertise in the sector which is ready to be shared with Sri Lanka. Pradhan also discussed LIOC activities in Sri Lanka including increasing the number of its retail outlets and bunkering operations and granting license to LIOC for marketing Aviation Turbine Fuel (ATF) and LPG. Both the sides also discussed refurbishment of Sapugaskanda refinery and possibility of setting up of a refinery in Sri Lanka as a joint venture to address the local needs. India also offered to assist Sri Lanka in building oil and gas pipeline networks. During the meeting, the two ministers also exchanged notes on the exploration and production activities in the Sri Lankan Mannar basin. Pradhan said ONGC Videsh Ltd (OVL) and its parent company ONGC had the expertise and knowledge of the geological conditions that exist in the Cauvery basin. “These conditions are similar to Mannar basin in Sri Lanka and, hence, OVL could be a natural partner in carrying out exploration and production activities in this area,” he said. Pradhan also expressed India’s commitment to work with Sri Lanka to develop Trincomalee as a regional energy hub. The petroleum ministers also discussed the possibility of creating South Asian Association of Regional Cooperation (SAARC) Energy Initiative to create sub-regional hydrocarbon infrastructure, particularly gas network, to fuel the two economies. The ministers also discussed cooperation in bio-fuel sector including training of Sri Lankan energy professionals in India. Anthony Davis Jersey
ONGC to pick stake in Gujarat State Petroleum Corp’s KG basin block
ONGC has signed a preliminary pact to acquire a stake and operate the KG Basin block of Gujarat State Petroleum Corp. (GSPC), which had announced a major natural gas discovery and spent $3 billion to develop it but hasn’t been able to start commercial production in the technically challenging field. “Yes, we have signed an MoU (memorandum of understanding) on October 4. This is a preliminary thing and we are looking into various possibilities. We have shared report (about gas reserves) of our consultant Gaffney Cline & associates with ONGC,” GSPC managing director JN Singh told ET. ONGC declined comment. GSPC had announced the gas discovery in the Deen Dayal block with much fanfare when Narendra Modi was Gujarat’s chief minister. Subsequently, the company faced unexpected hurdles such as extremely high temperature and pressure, which can damage equipment. This contributed to the rise in development expenditure, debt and delay in execution. Official sources said the pact provides for a panel of three experts to oversee the transaction. This includes Vijay Kelkar, former oil secretary, and P Shankar, former chief vigilance commissioner. The third slot is yet to be filled but sources said MA Pathan, a former chairman of Indian Oil Corp., may get the job. ONGC and GSPC currently have differences over the quantity of reserves in the KG block, the amount of capital and operating expenditure needed, the prices gas and condensate from the KG block can obtain, and the discount rate that should be used to calculate the net asset value, sources said. Singh said the commercial matters could easily be resolved between the two state-run firms. “As the minister had earlier pointed out, ONGC and GSPC are not India and Pakistan. We are both government bodies, and various possibilities are being looked into,” he told ET. The expert panel will take a final call on all the differences. In the MoU, the two companies have agreed to accept the expert panel’s recommendation on valuation and seek their respective boards’ approval, sources said. ONGC has appointed Ryder Scott, a consultancy, to independently assess the reserves in the GSPC’s block. The consultant’s assessment of the Deen Dayal West (DDW) field has to be presented to the expert panel by November 15and for other discoveries latest by December 31, sources said. The MoU is non-binding and valid for six months. It doesn’t mention the extent of stake ONGC may acquire but sources said it could be a majority holding. If a definitive agreement is signed, GSPC will offer ONGC suitable indemnity, sources said. GSPC’s stake in the KG block and future income from the block is hypothecated to lenders, sources said. The Comptroller and Auditor General (CAG) had criticized GSPC this year for the way it handled the block. The investments in the block drove up GSPC’s debt 180% in four years to Rs 19,700 crore by March 2015, the auditor said. The CAG had cited deficient implementation, cost overruns and inability to induct a strategic partner in time. GSPC owns an 80% participating interest in the KG block while Jubilant and Geo Global Resources have 10% each. One official said that in late August, the Prime Minister’s Office called a meeting with top executives of the two firms including ONGC chairman DK Sarraf to review progress in the matter and to make sure the MoU’s terms would be acceptable to both companies. GSPC joint managing director T Natrajan had earlier confirmed to ET about the meeting held on August 24 and the sharing of data with ONGC. “ONGC has the capability and resources to develop DDW field. They have also done their internal study,” he had said. “This is a high pressure and high temperature field. Further, DGH has made its assessment about it, which is in the public domain. Our technical consultant Xodus is also working on this.” A senior PMO official told ET that ONGC’s board would decide on buying a majority stake in GSPC. “Our role is only to facilitate talks and ONGC’s board is free and fully independent to decide on this deal,” said this official. Petroleum minister Dharmendra Pradhan had earlier told ET that the two companies were commercially discussing the matter for mutual benefit and that his advice to the firms was to use common facilities and make a joint strategy, just like global firms such as BP, BG, Chevron and Exxon do. Curtis McElhinney Authentic Jersey
GE Opens New Oil & Gas R&D Center in Oklahoma, Showcases Smart Sensing Drone, Advanced Labs and Emerging Digital Technology
Providing a present and future glimpse of promising new technologies in the pipeline for the Oil & Gas industry, GE (NYSE:GE) today held the grand opening of its new Oil & Gas Technology Center in Oklahoma City. The new Center will become a central hub for GE scientists and engineers to closely collaborate with the Oil & Gas industry on cutting-edge digital and hardware solutions to advance the industry. Lorenzo Simonelli, President and CEO, GE Oil & Gas said, “We believe a strong commitment to R&D will help our oil and gas customers find new efficiencies to work through tough market conditions and lead to transformational opportunities for the industry to thrive long-term. The new technology center in Oklahoma City will accelerate innovation; it’s where we can bring the full power of digital solutions and technology from across GE’s industrial businesses to advance the Oil & Gas industry.” At the Center opening, GE unveiled a prototype drone, nicknamed “Raven,” engineered to detect emissions precisely and cost-effectively, to help customers reduce environmental impact and improve operational efficiency in the Oil & Gas industry. Southwestern Energy Company successfully piloted the technology to detect emissions from oilfield equipment at well sites in Arkansas in July. Vic Abate, Senior Vice President and Chief Technology Officer, GE said, “At our new research center in Oklahoma City, customers benefit from the collective global brain of technologists from our 10 GE global research centers around the world, as well as our 50,000 global GE engineers who span multiple industry sectors. We call it the GE Store, and it allows us to bring innovation from other GE industries such as Aviation, Power, Healthcare and Transportation to transform and strengthen the Oil & Gas sector.” About GE’s Oil & Gas Technology Center GE’s new Oil & Gas Technology Center is five stories, with 125,000 sq. ft. of lab and office space that includes: • 400-foot and 60-foot deep test wells • Two 30-ton overhead cranes for moving large testing equipment • An entire floor dedicated to customer collaboration with embassy offices Michael Ming, General Manager of GE’s Global Research Oil and Gas Technology Center, said, “To the greatest extent possible, we are bringing the oilfield and our customers directly into our lab space. When you couple that with the world-leading scientists and engineers based here in Oklahoma City and at GE’s other global research centers around the world, you have a winning formula for driving transformational technologies the industry will need.” Ming noted the research focus at the new Center will span across all areas of oil & gas from production solutions and well construction systems to oilfield facilities and systems and reservoir performance. Although the new Center just recently opened, temporary offices were established more than two years ago in the City Place Tower in downtown Oklahoma City. With 120 employees today, the Center can accommodate as many as 230 people. GE’s new Oil & Gas Technology Center has established several programs and partnerships with industry and academia, including Oklahoma State University and the University of Oklahoma and has R&D agreements in place with many of the leading operators in North America. John Hannah Womens Jersey
ONGC, OIL in a spot over dipping gas prices
Per dollar decrease in gas price will have an impact of Rs 42 billion on its gross revenue, according to ONGC. With the domestic natural gas price dipping by 51 per cent in 24 months to $2.5 per million metric British thermal unit (mmBtu), downstream companies like Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) are now batting for a floor pricing of at least $4.2 per unit, claiming that at current price there will be no margins for producers. According to ONGC, at current volume, per dollar decrease in gas price will have an impact of Rs 42 billion on its gross revenue. On the other hand for OIL India, the loss on revenue is to the tune of Rs 3.50 billion. ONGC has already requested the government to set a floor pricing or protection pricing insulating it from further drop in international prices. “We have requested the government to set a floor pricing, which is at least equal to the pricing in 2010, which is $4.2 per mmBtu. One dollar decrease in gas price will have an impact of Rs 42 billion on our gross revenue and Rs 24 billion post tax per annum,” said A K Srinivasan, director (finance) of ONGC. According to Srinivasan, the average cost of production for the company comes to about $3.5 per unit, which will zoom to $ 5 per unit, if returns are also taken into account. It was in June 2010 that the government increased the prices of natural gas to $4.2 per unit, which continued till November 2014 till a formulae suggested by a panel led by C Rangaranjan. Echoing his words, OIL chairman and managing director Utpal Bora said, “At current prices of $2.5 per unit, we are left with zero margins and you need profits to invest in our future projects.” However, government was not keen on responding to the demands by the companies. Addressing the media on Wednesday, petroleum minister Dharmendra Pradhan hinted that rather than thinking about protection pricing, companies should focus on more innovations. “When Rangarajan formulae was adopted by us in 2014, these market fluctuations were taken into account. The pricing will continue as per that formula only,” Pradhan added. Since November 2014, domestic natural gas price has dropped four times from $5.1 per unit to $2.5 per unit now. After the Rangarajan formulae was implemented, the prices were first fixed in at $5.1 per unit on gross calorific value basis on November 2016, this got revised again on April 2015 to $4.7 per unit. The prices again dropped in October 2015 to $3.8 per unit and further to $3.1 per unit on April 2016. This again dropped for the fourth time, in tandem with the international prices on October 2016 to $2.5 per unit. As per the current formulae, prices are revised after every six months and calculated on the basis of a weighted average of rates in countries like the US, Canada and Russia, based on the 12-month trailing average price with a lag of three months. However, the companies are upbeat about the future of gas price. “The prices are bound to come up. Once it increases, we will be reaping benefits as well,” Srinivasan added. According to Fitch Ratings, the cut in prices will not have a significant impact on OIL standalone credit profile of ‘BBB-‘, although the company’s upstream gas operations will incur losses. “We expect that the price of $2.50 per mmBtu to be just sufficient to cover the costs of bringing the gas to the surface and that OIL will incur cash losses due to taxes and levies. Fitch estimates are duction in gas price by $0.5 per mmBtu will result in about a INR2.5bn fall in EBITDA over the next six months for OIL,” Fitch Ratings added. Gas accounts for about 40 per cent of the company’s total oil and gas production in terms of barrels of oil equivalent. Jack Johnson Jersey
BP India gets license to sell jet fuel in India, says company
The Indian arm of British oil giant BP Plc has received a license from the government to sell jet fuel in India, its country head said on Thursday. “India is a huge market … Obviously we are a very large player globally in the aviation business, so it makes sense for us to be here,” said Sashi Mukundan, regional president and India country head for BP. Mukundan said BP will soon start local sales of aviation turbine fuel (ATF). He declined to elaborate on whether BP will sell fuel on its own or tie up with an Indian partner. Danny Etling Womens Jersey
DGCA unearths major scam; maintenance violations found in personal, charter planes
The Directorate General of Civil Aviation (DGCA) has unearthed a major scam that would have certain top industrialists, corporates and chief ministers worry about the airworthiness or safety of the private or charter aircraft they fly in. After investigations revealed several aircraft maintena-nce violations, the DGCA, last week, suspended the licences of three aircraft maintenance engineers of Indamer Aviation Pvt Ltd, an aircraft maintenance and repair overhaul (MRO) firm. It also initiated action against the director and CEO of Indamer and four other officials belonging to the said MRO and two aircraft charter firms. Indamer did not respond to calls. “The general aviation industry has about 250 aircraft that belong to private individuals, charter firms and flying clubs, and Indamer carries out MRO work for about 70 of these. The violations, some of which were blatant, could not have been carried out for without the tacit support of the top management and even some DGCA officials,” claimed an industry insider. The MRO, which is headquartered in Juhu airport’s hangar no 1, occupies another hangar in Mumbai airport and has a nationwide presence with operations in Delhi, Ahmedabad and Chennai. Amo-ng its board of directors is Kanu Gohain, a former director general of civil aviation. The DGCA probe revealed that signatures of engineers were forged in a number of documents, including the entries made in the flight report books, all of which bring to question the quality of work carried out by the MRO.A flight report book contains serially numbered pages on which an operator has to mandatorily document in indelible ink the engineering record of the life of the aircraft concerned, its engines, propellors, etc. It should have full particulars of all the accidents, overhauls, replacements, repairs and modifications, along with the date, location and signature of the aircraft maintenance engineer who certified the work. Among the violations found was that under the same date, Indamer’s base maintenance manager, an aircraft maintenance engineer, had signed and certified the work carried out on two Sikorsky S76C helicopters, one belonging to the state government (VT-CMM) and the other to Eon Aviation (VT-DBH). “Though on that day, one helicopter was in Surat and the other in Raipur, the manager has signed the flight report books of both the aircraft,” said a source. Both places are located about 1,000 kms apart and are not linked by direct flights. Adrian Kempe Womens Jersey