India to touch 15 GW solar power production by March 2017
India is expected to add 6 GW of solar production this fiscal to take the total solar power generation capacity to 15 GW by March 2017, said a senior official of solar energy equipment association. Speaking to the journalists in Hyderabad on Thursday, Surender Pal Singh Saluja, president of Solar Energy Equipment Manufacturers Association of Telangana (SEEMAT) and chairman of Premier Solar Systems, said, “We currently have an installed capacity of 8-9 GW and will be adding another 6 GW to take the total to 15 GW by March 2017. This is in line with the government’s ambitious National Solar Mission to attain a solar power generation of 100MW by 2022.” He was speaking on the sidelines of announcement of UBM’s Renewable Energy India 2016 in Noida to be held from September 7-9. India is also likely to double its module and cells manufacturing capacity to 10,000 MW and 2,000 MW in the next couple of years. However, “lack of easy and cheap funding, expectations of a high GST rate and increasing cheap imports from China and Taiwan is hurting the domestic industry,” said Singh. While the industry, after a lot of tax exemptions, on an average pays 5% tax, the Goods and Services Tax is likely to be over 18 per cent that could sound the death knell for the domes and render it uncompetitive, said another industry representative, who did not want to be named. “We have also been approaching the government for exempting solar from GST ambit,” said Singh.
Oil glut to ease by 2017, clean energy investment to rise – IEA’s Birol
The International Energy Agency (IEA) expects oil markets to reach a balance between supply and demand in 2017 as the current oil glut slowly eases, IEA chief Fatih Birol said during meetings in South Korea. The head of the Paris-based agency also exchanged views with energy minister Joo Hyung-hwan on the direction of the world’s energy markets in the wake of the renewed commitment to tackle climate change after last year’s Paris climate talks, South Korea’s Energy Ministry said in a statement on Thursday. The IEA forecast in its August report that oil markets will slowly tighten in the second half of 2016 as global demand growth declines and non-OPEC supplies rebound. “Oversupply of oil markets will gradually be eased and (oil markets) will find a balance between supply and demand in 2017,” Birol said in the statement. In a separate interview with Reuters after the statement was released, Birol said he saw two drivers for the rebalancing of the oil market. The first is a drop in production from countries outside of the Organisation of the Petroleum Exporting Countries (OPEC) of about 900,000 barrels per day (bpd), especially in the United States in 2016. The second is “demand that is growing in a healthy way” and that the IEA expects to climb by 1.4 million bpd this year. “We may be on a higher side compared to others (forecasts), this is mainly because we’re more upbeat when it comes to Europe and emerging Asia demand in demand growth,” he said. In the statement, Birol also said there is concern that a decline in upstream oil and gas investments because of the prolonged low oil prices could increase oil price volatility. The statement added that Birol believes the start of the new climate regime after Paris would spur research and development investments on clean energy technology, with fast growth expected from the solar, wind power and electric car sectors. Birol noted in the interview that solar energy costs have dropped by 80 percent over the last five years and wind power costs have declined by 35 percent which means more countries can afford them. “Several years ago renewables were considered to be a romantic story but now it’s becoming a business,” he said. Birol also commented in the interview on how changes in the global liquefied natural gas (LNG) markets could affect South Korea, the world’s second-largest LNG buyer, and other countries, particularly regarding destination clauses that restrict LNG sales to the country of delivery. “A lot of gas is coming to markets … and this creates a historic opportunity to push for flexibility in gas contracts, especially destination clauses,” he said. Jimmy Howard Jersey
Petroleum sector could face over Rs 2.4 lakh crore impact of project delays
hat could be the total size of the price paid by the petroleum sector due to unwanted delays in implementation of oil and gas projects? The price could be a staggering over Rs 2.4 lakh crore through 2040, according to a study by Project Management Institute (PMI), a research and education institution. The Mumbai-based institute said in a report on project management practices in the oil and gas sector the country faces the humongous cost overruns and additional investment outlay over 2015-40 period if the existing project implementation scenario in the petroleum sector continues to prevail. The report was based on a survey of industry professionals. “With the new trend of fast growth, a lot of project managers are being assigned cases without on field experience. Becoming a project manager in the oil and gas sector requires in-depth knowledge about the Industry as opposed to other sectors that require only good people management skills,” said Partha Purkayastha, Managing Director, Amec Foster, speaking at a conference organized by PMI today in Delhi. The oil and gas sector has witnessed an average delay of 1.5 years in implementation of projects with average cost escalation of 6.2 per cent in the past, according to the PMI report. An average of 15-month delay has been noticed in projects worth Rs 100-999 crore each while the delay increases to 18 months in projects worth Rs 1,000 crore and more. Also, an average cost overrun of 6.9 per cent has been noted in projects worth Rs 1,000 or more across all PSU petroleum projects. Delays in petroleum projects occur at two stages — The Planning Stage and The Execution Stage. At the planning stage delays occur due to lack of detailed planning, poor risk management and lack of flexibility. Issues like change of scope of work, procurement delays and manpower allocation occur at the execution stage, the report stated. The report said only 25 per cent of the surveyed oil and gas companies had a dedicated independent risk management vertical and only 28 per cent of the respondents mentioned about organizational practice of drawing detailed response plan for each of the major identified risks. The report, released today, also talks about cost overruns occurring due to lack of planning, or continuous growth in a project’s scope and lack of management skill. “The Oil and Gas sector is expected to create a huge investment opportunity of $542 billion by 2040. We believe this can be achieved by improving the project management practices, identifying the gaps in organizational structure, practices, skill sets etc,” said Raj Kalady, Managing Director at PMI. He added there is a need to look at ways to bridge the gaps in project management through better organizational planning and manpower capability building. India is the 4th largest consumer of oil and petroleum products in the world with 216 million metric tonnes per annum (MMTPA) of refining capacity. Jerome Murphy Authentic Jersey
Japan may invest $10 bln in Russian oil firm Rosneft – Nikkei
Japan will propose a broad cooperation in the energy sector with Russia that could include a nearly $10 billion investment in Russian state-owned oil giant Rosneft, the Nikkei newspaper reported on Friday. The report comes as Prime Minister Shinzo Abe plans to meet Russian President Vladimir Putin on the sidelines of a two-day business conference beginning Friday in Vladivostok. The two are expected to discuss closer cooperation in such areas as energy and technology, with Japan hoping to strengthen economic ties and create a breakthrough in a decades-long territorial dispute. The Nikkei said the Ministry of Economy, Trade and Industry (METI) is considering investing as much as 1 trillion yen ($9.7 billion) to buy 10 percent of Rosneft through the government-backed Japan Oil, Gas and Metals National Corp, or Jogmec. In addition, Japan will consider joint surveys for oil and gas projects in Eastern Siberia and the Russian Far East. It will also seek technical cooperation in decommissioning the Fukushima Daiichi power plant, the site of the 2011 nuclear disaster, the paper said. METI was not immediately available for comment. Rashard Robinson Womens Jersey
Pradhan hopes to spread cheer with Centre’s LPG scheme
The Narendra Modi government’s thrust on subsidised LPG to women in rural households has helped the oil ministry shed its image of a profit-making wing into a social welfare one, Union petroleum minister Dharmendra Pradhan said here on Thursday. “LPG has been so far seen as a commercial product in India and never considered as a catalyst for social change earlier,” Pradhan said adding that his government hopes to change this, bringing clean fuel to millions of households in the country. The minister was speaking at the inaugural session of a two-day international conference on ‘LPG: a catalyst for social change’, which commenced here on Thursday. Experts from over 10 countries discussed the best practices on accelerating access to LPG and evolved strategies to create a thriving market for the clean fuel. Quoting a WHO report, Pradhan said 15 lakh people die every year in the world due to indoor air pollution, with five lakh of them in India alone. “Indoor air pollution is responsible for significant number of acute respiratory diseases in young children. Traditional sources of cooking are causing indoor household pollution leading to serious health implications particularly on women and children. During the course of collection of these fuels, they face inclement weather, snakebite, bad terrain and backache. LPG is going to change all that,” the minister said. Around 4 crore new households got LPG connections after the Modi government took over in 2014, raising the total number of families using LPG to 17.4 crore, a whopping 26 per cent, Pradhan said while talking about his ministry’s social welfare scheme Ujjwala, one of the Modi government’s biggest political initiatives. The oil ministry is also preparing itself to create a SAARC grid by providing LPG to neighbouring countries. “Now we are providing LPG to Nepal and Bhutan. We are engaged in talks with Sri Lanka and Bangladesh for supplying LPG. Slowly we are trying to connect the living standards of the neighbourhood with the LPG movement,” Pradhan added. Several African countries have already evinced interest in replicating India’s models of Pahal, Sahaj and Ujjwala, the minister claimed. Jharkhand governor Droupadi Murmu recounted her own troubled experience as a teenager as her village did not have access to LPG connection. Tom Compton Jersey
Moody’s downgrades credit rating of DIAL
Moody’s Investors Service today cut the credit rating of DIAL, which operates the international airport here, citing concerns over “cash flow generation” level. DIAL’s (Delhi International Airport Pvt Ltd) corporate family rating as well as senior secured ratings have been revised downwards to ‘Ba2’ from ‘Ba1’ while the outlook is stable. ‘Ba’ indicates substantial credit risk. Cash flow squeeze Moody’s vice-president and senior analyst Abhishek Tyagi said, “The downgrade reflects continued concerns about the level of cash flow generation.” This follows regulator AERA’s previous tariff order, “which will see regulated revenues reduced materially over the 2015-19 regulatory period to levels that were not incorporated in our previous expectation,” he said in a release. The rating downgrade has also taken into account DIAL’s new expansion programme that is planned over the next 3–5 years, which according to Moody’s will “further pressure financial metrics.” Announced in December last year, the tariff order by the Airports Economic Regulatory Authority (AERA) will be applicable on DIAL over 2016–19. It will lead to a substantial decrease in annual aeronautical revenue by around ?2,000 crore, or about 70 per cent, from 2018 fiscal year, Tyagi noted. “This will also alter the revenue mix, with the proportion of higher risk non-aeronautical revenues increasing to a higher level than previously anticipated,” he added. The Airports Economic Regulatory Authority Appellate Tribunal (AERAAT) is reviewing the previous tariff order (covering the period 2010 to 2014). Adequate liquidity Moody’s said the stable outlook reflects DIAL’s adequate liquidity. Upward rating movement is unlikely in the near term, given the planned expansion programme and the uncertainty associated with the regulatory process, it added. DIAL is a three-way joint venture between GMR group, which is the majority stakeholder, the state-owned Airports Authority of India (AAI) and Germany’s Fraport Mike Adams Jersey
Biodiesel producers seek legislation to tap used cooking oil from restaurants
Biodiesel producers are seeking policy that will give them more access to used cooking oil from the food processing industry. Used cooking oil can be processed to make biodiesel, which is derived from renewable bio-mass resources. In India, cooking oil accounts for 20% of the total output of biodiesel. “A legislation to ensure supply of used cooking oil from food processing industry and restaurants would boost biodiesel output by 3-4 million litres,” said Sandeep Chaturvedi, president of Biodiesel Association of India. Such a move will also check used oil from coming back for human consumption, he said. “Biodiesel is less polluting than fossil fuel-based diesel and more conducive for automobiles due to higher lubrication and calorific strength,” Chaturvedi said. In 2015-16, domestic production of biodiesel increased to 110 million litres, mainly due to favourable government policy. It was 8-9 million litres in 2014-15. “Already the output is around 8-9 million litres this fiscal,” he said. Biodiesel manufacturers attribute the increase in production to the Centre’s decision to allow up to 5% biodiesel in diesel used by the railways. The decision to remove excise duty on inputs for making biodiesel is another factor. Biodiesel manufacturers say all states needs to come on board to promote biodiesel by allowing a favourable VAT policy. At present, VAT levy on biodiesel is at par with fossil fuel-based diesel and ranges between 24% and 26% in states, according to the association. “It is a major deterrent as it makes biodiesel blending a revenue-losing proposition for oil marketing companies,” said Chaturvedi. The association welcomed the Haryana government’s recent announcement to reduce VAT by 5 % on biodiesel. “Such decisions need to be implemented sincerely and other states needs to follow,” manufacturers said. Austin Hedges Authentic Jersey
Shah panel report on RIL-ONGC dispute puts government in a fix over compensation
The official panel’s report on the Reliance-ONGC gas dispute has left the government in a fix as the report has not quantified the compensation to be paid for the gas that flowed into RIL block. This can further delay the resolution of a key issue for which the committee was set up, sources familiar with the development said. Industry executives said the report has also created consternation in ONGC, which faced stern words from the committee although the company which had gone to court against Reliance and the oil ministry alleging that Reliance was illegally pumping out its gas. Company executives resent the panel’s view that ONGC deserves no compensation from RIL. “For the government, the main issue in the terms of reference of the committee was to quantify ‘unfair enrichment, if any’, but the committee has thrown the ball back to the ministry’s court,” an official source said. The panel, which had a purely advisory status, said lack of data and “inherent technical limitations” prevented it from quantifying ‘unfair enrichment’. When the panel was appointed, RIL and Niko said it had no power to adjudicate, its decisions were not binding, and that the government’s intervention in the matter meant that the dispute could be resolved only by arbitration. Reliance has not reacted to the panel’s report but its position has been that all its drilling and field development decisions were taken with the prescribed regulatory and official approvals, and that it had extracted natural gas from wells drilled strictly within the boundaries of its own block. It said ONGC had no basis to claim a compensation. ONGC was seeking compensation for the gas that flowed out of its block, while Reliance had contested that claim. The panel said only the government could claim compensation, and criticized ONGC for not developing its own block. It suggested proper scrutiny of the company’s role in India’s oil and gas sector. ONGC declined comment on the matter, but its former chairman, RS Sharma, who led the company for five years from the middle of 2006, slammed the committee. “It’s extremely disappointing,” said Sharma, whose stint partly coincided with the period during which Reliance allegedly made “unjust enrichment” from gas that flowed into its block. “The contention of the committee that compensation should go to the government, not ONGC, is absolutely wrong. The committee has made a gross error of judgement. If the government agrees to this part of the recommendation, it will send a negative signal to all investors. ONGC by virtue of having the mining lease owns the rights to all revenues from sub-surface production,” Sharma said. The Directorate General of Hydrocarbons had initially made a similar plea to the Shah panel, arguing that ONGC possessed a “right to the economic benefits” under the contract for the gas that migrated beyond its block. Subsequently, its advocate put forth a different argument that “ONGC had no right to any restitution,” since ONGC has not produced any gas. The government later told the panel to take an independent view on the issue. “What is the sanctity of the contract if all revenues were to go the government?” said Sharma, who also heads the hydrocarbon committee of FICCI, an industry lobby. Ashok Varma, who retired as director at ONGC last year, said the panel has established two key things that the gas has migrated and that it was pumped out. “This is a key step in the long battle forward,” he said. But the resolution won’t be easy, he said. “The ministry will take a long time in quantifying the gains made by Reliance. And Reliance is not going to accept the findings anyway,” he said. Sharma vehemently denied the panel’s observation that ONGC probably had prior information about gas migration but didn’t act promptly. “The ONGC management at any level had no prior knowledge about the connectivity of the reservoirs, or that the gas was migrating from one field to the other, or that it was being siphoned off. That was a shock to me when I heard about this in 2013,” he said. ONGC had first flagged the issue in 2013. The panel has also criticized ONGC for delaying projects and recommended a further enquiry into it. Responding to this, Sharma said the deep water discovery in the KG Basin was ‘not commercially viable’ at the then prevailing price and which is why its development was delayed. “ONGC needed $6-7 per unit of gas price to make it commercially viable. But the domestic gas price was $4.2/unit. This government has now given a higher pricing for deep water gas which will now help develop this block,” he said. Case Keenum Womens Jersey
GMR subsidiary will pay 36.9% of topline for 38 years to operate new airport in North Goa
GMR Airport Ltd will pay 36.9 per cent of the topline during the concession period for managing the greenfield airport in Mopa, Goa. During a call with analysts late on Monday, senior GMR officials said that though the concession period is for 40 years, the pay-out will for 38 years as there is a two-year moratorium on the payment. GMR Airport Ltd, a subsidiary of GMR Infrastructure Ltd, won the international competitive bid for the development and operation of Mopa airport in North Goa late last Sunday. BOT mode The airport is to be built through Build Operate Transfer (BOT) initially for a period of 40 years after which it will be thrown open for bidding. The winner of the bid will get to run the airport for another 20 years. At that time, The Right of First Refusal will be with the GMR Group which will be allowed to match the bid for the airport in case it is not the winner in that round. Mopa airport is likely to become operational in late 2020 or early 2021 and will have a capacity to handle 7 million passengers. The existing airport at Dabolim and the one in Mopa will operate simultaneously and compete with each other for traffic. Operational hours “The new airport will be operational for 24 hours and unlike the existing airport where there are restrictions on the hours that it can be used by commercial airlines this problem will not exist in Mopa. Passengers will get a better airport experience,” a senior official said. Mopa is 35 km from Panjim while the existing airport is about 20 km. At the existing airport no flights are allowed between 8 a.m. and 1 p.m. Last year there was a demand for 12 charters from an international company but due to restrictions at the existing airport only five could be operated. The GMR Group already operates and controls the airports in Delhi and Hyderabad as also Cebu airport in the Philippines. Capex plans For the first phase of the project, a capex of ?1,500-1,800 crore is expected and this will be funded through a mix of debt and equity in the ratio of 70:30. While the design of Mopa airport is yet to be finalised, it is being planned as a tourist destination on the lines of Koh Samuai airport in Thailand where the sea and its cool breeze welcome passengers. Nate Hairston Authentic Jersey
Karnataka tweaks Aerospace Policy
Karnataka Cabinet has approved amendments to the Karnataka Aerospace Policy 2013-23 to make the state a favourable destination for maintenance, repair and overhaul (MRO) investments. Briefing reporters after the Cabinet meet, State Law and Parliamentary Affairs Minister TB Jayachandra said, “The amendment pertains to providing special incentives for the development of the MRO sector to complement the incentives provided in the Civil Aviation Policy and also provide incentives for the first two MROs in the state on case-to-case basis.” The policy also offers incentives for an exclusive defence park. A fully integrated defence and aerospace infrastructure facility is also planned in Bengaluru. “This is being planned in view of the Centre opening up the defence production sector through exclusive defence parks. The state plans to tap huge investments in the sector,” he said. For the development of MRO centres in the state, the state government had earlier planned the cluster approach, making Bengaluru the hub. In the amended policy, the state government is planning south cluster (Bengaluru, Mysuru, Managaluru and Tumkuru). Tumkuru hub Tumkuru is an emerging hub where HAL is building its helicopter plant at Gubbi. Bangalore Aerospace Park at Devanahalli and MRO centres at BIAL and Mysore, and a defence manufacturing cluster at Managaluru are also being planned. The amendments have been made in view of the 33 project proposals received at ‘Invest Karnataka’ meet held early this year. The proposals are to the tune of ?14,520 crore with the potential to generate over 10,000 jobs. Jayachandra said state government is determined to demolish all buildings, including massive malls and apartment blocks, built on major storm water drains in Bengaluru. It also includes massive apartment block built by Prestige Developers in Bellandur area. The demolition drive by the BBMP to clear encroachments on storm water drains during recent rains had come under criticism as people alleged that while homes of the poor were being demolished, large buildings belonging to the rich and influential builders were spared. “We will demolish all buildings illegally built on such drains, be it a massive apartment blocks, malls or an ordinary house,” he said. Borje Salming Jersey