Brent climbs above 7-year high on Mideast tensions, tight supply
Oil prices rose more than $1 on Tuesday to a more than seven-year high on worries about possible supply disruptions after Yemen’s Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition. The “new geopolitical tension added to ongoing signs of tightness across the market,” ANZ Research analyst said in a note. Brent crude futures rose $1.01, or 1.2%, to $87.48 a barrel by 0316 GMT, after earlier hitting a peak of $87.55, their highest since Oct. 29, 2014. U.S. West Texas Intermediate (WTI) crude futures jumped $1.32, or 1.6%, from Friday’s settlement to a three-month high of $85.14 a barrel. Trade on Monday was subdued as it was a U.S. public holiday. After launching drone and missile strikes which set off explosions in fuel trucks and killed three people, the Houthi movement warned it could target more facilities, while the UAE said it reserved the right to “respond to these terrorist attacks”. UAE oil firm ADNOC said it had activated business continuity plans to ensure uninterrupted supply of products to its local and international customers after an incident at its Mussafah fuel depot. CommSec analysts said oil prices were being supported by colder winter temperatures in the northern hemisphere which were driving up demand for heating fuels. The tight supply-demand balance is unlikely to ease, analysts said, as some producers within the Organization of the Petroleum Exporting Countries are struggling to pump at their allowed capacities, due to underinvestment and outages, under an agreement with Russia and allies to add 400,000 barrels per day each month. “That should continue to be supportive for oil and increase talk of triple figure prices,” said OANDA analyst Craig Erlam.
Sri Lanka to hold talks with Indian Oil to tide over energy crisis
Sri Lanka will hold talks with the Indian Oil Corporation on Tuesday as part of a desperate measure to tide over the current fuel and energy crisis faced by the island nation, Power Minister Gamini Lokuge said on Monday. Lokuge said that the talks with the Indian Oil Corporation’s local entity would be held for a solution to the fuel crisis. The Lanka IOC, the Sri Lankan subsidiary of India’s oil major Indian Oil Corporation (IOC), has been in operation in Sri Lanka since 2002. I have asked my officials to start talks with the LIOC tomorrow (Tuesday), I will join if necessary, the power minister said. He said that the continuous electricity supply could be assured until January 22. Previously, he said the supplies could be ensured until January 18. Energy Minister Udaya Gammanpila had said that there was no point in discussing with the power ministry on continued supplies of diesel and furnace oil required to generate power. They must find their own dollars to pay for the supplies and order their requirements well in advance, Gammanpila said. He said that the country’s national carrier, Srilankan Airlines, had found dollars on their own to pay for fuel supplies. Sri Lanka is currently facing a severe foreign exchange crisis with falling reserves. The country is grappling with a shortage of almost all essentials due to the lack of dollars to pay for the imports. Additionally, power cuts are imposed at peak hours as the state power entity is unable to obtain fuel to run turbines. The state fuel entity has stopped oil supplies as the electricity board has large unpaid bills. The only refinery was recently shut as it was unable to pay dollars for crude imports. Early this week, the Indian government announced a billion dollar assistance package in addition to other balance of payment support to Sri Lanka. The billion dollar loan credit facility is to be used to avert a food crisis while allowing for the import of items and medicines. Additionally, there will be USD 500 million for importing fuel from India.
Reliance to invest Rs 5950 billion in green energy, other projects in Gujarat
Reliance Industries Ltd (RIL) has proposed to invest Rs 5000 billion in Gujarat, over the next 10 to 15 years, to set up 100 GW renewable energy power plant and green hydrogen eco-system development, to make Gujarat net zero and carbon free. RIL will also develop an eco-system for assisting small and medium enterprises (SMEs) and encourage entrepreneurs to embrace new technologies and innovations, leading to captive use of renewable energy and green hydrogen, RIL stated in a release. RIL’s initiatives for decarbonisation and creating a green ecosystem emanate from the vision of Prime Minister Narendra Modi, it added. RIL said the company, in consultation with the Gujarat government, has started the process of scouting land for 100 GW renewable energy power project in Kutch, Banaskantha and Dholera. The company has requested for 4,50,000 acres of land in Kutch. RIL on Wednesday signed a memorandum of understanding (MoU) with the government of Gujarat for a total investment of Rs 5955 billion as part of investment promotion activity for Vibrant Gujarat Summit 2022. RIL will invest another Rs 600 billion in setting up New Energy Manufacturing-Integrated Renewable Manufacturing, which include Solar PV Module (manufacture of Polysilicon, wafer, cell and module), Electrolyzer, Energy-storage battery and Fuel Cells. RIL said it would make a further Rs 250 billion investments in existing projects and new ventures over the next 3 to 5 years. RIL has also proposed to invest Rs 75 billion over 3 to 5 years for Jio Network upgradation to 5G and another Rs 30 billion over 5 years in Reliance Retail. These projects together will create 1 million direct and indirect employment opportunities in the state, the company stated.
India’s gasoil sales ebb in Jan 1-15 as COVID-19 spread deters retail spending
India’s gasoil sales declined in the first fortnight of January as rising COVID-19 infections hit consumer spending and truck movement in the country. Gasoil sales by the country’s state fuel retailers amounted to 2.47 million tonnes during Jan. 1-15, data compiled by state-owned refiners showed, down by 14.1% from the same period in December and about 5% from a year ago. Sales were down about 8% from the same period in 2020. “Truck movement declined to 75% in January 1-15 from 85% in December,” said S.P. Singh, senior fellow at Indian Foundation for Transport Research and Training. He said local cargo movement has been restricted as the rising number of COVID-19 infections has added to the fear of job losses, hitting consumer spending and retail sales. State retailers Indian Oil Corp IOC.NS, Hindustan Petroleum Corp HPCL.NS and Bharat Petroleum Corp Ltd BPCL.NS own about 90% of the country’s retail fuel outlets. Sales of gasoil, which account for about two-fifths of India’s overall refined fuel consumption, are directly linked to industrial activity in Asia’s third-largest economy. The Manufacturing Purchasing Managers’ Index INPMI=ECI, compiled and collected by IHS Markit, fell to 55.5 in December from November’s 57.6. Gasoline sales during the period was at 964,380 tonnes, a decline of about 14% from the first fortnight of December and 2.8% lower than a year ago, the data showed. The sales of gasoline however continued to stay above pre-COVID-19 levels, rising by about 5.66% from 2020, as people continued to prefer using personal vehicles over public transport for safety reasons.
IndianOil to invest Rs 70 billion in new gas distribution projects
Indian Oil said on Sunday that it secured nearly 33 per cent of the potential demand in the recently concluded round of the city gas distribution (CGD) bidding by the Petroleum & Natural Gas Regulatory Board (PNGRB). The energy major bagged nine out of the 15 high potential geographical areas (GA). Indian Oil plans to invest over Rs 70 billion in these new CGD projects, over and above the Rs 200 billion already marked for the vertical, it stated. The recently acquired GAs include major districts such as Jammu, Pathankot, Sikar, Jalgaon, Guntur (Amravati), Tuticorin, Tirunelveli, Kanyakumari, Madurai, Dharmapuri and Haldia (East Mednipore) that contain high demand customers for piped natural gas (PNG) and compressed natural gas (CNG). The oil major said that during the bidding the nearest competing bidder was left with less than 20 per cent of the demand potential in the bidding round. With the win, Indian Oil and its associates will service almost 28 per cent of the combined CGD potential in the three rounds so far – substantially ahead of the next major player. “IndianOil has a proud legacy of always aligning its growth agenda with the national priorities. And our concerted efforts to expand the Gas business across the length and breadth of the country reflects our commitment to realise the Government’s vision of raising the share of Natural Gas to 15%. Gas will play a significant role in India’s march towards a low carbon future as part of its Panchamrit pledge during COP-26 summit to reduce total carbon emissions by one billion tonnes from now till 2030,” said Chairman IndianOil Mr Shrikant Madhav Vaidya. The energy major said that after the latest round, Indian Oil along with its 2 JV companies is now present in 49 GAs and 105 districts across 21 states and UTs. When it comes to a standalone basis, Indian Oil will now be present in 26 GAs and 68 districts across 11 states and UTs covering nearly 20 per cent of the total CGD market potential. (Source: Business Today) IOC’s expansion in city gas distribution a positive; strong refining, marketing outlook add to prospects January 18, 2022: Indian Oil Corp. Ltd. (IOCL) plans to expand its city gas distribution (CGD) business, looking to invest ₹70 billion over and above the ₹200 billion already planned for the vertical. In the recent round auctions by the Petroleum and Natural Gas Board, the company bagged 9 of the 15 high potential GAs (Geographical Areas). Analysts say that these investments can create value and will be earnings accretive, but the gains will accrue only over time. The pipeline infrastructure and expansions will take some time to complete while the bidding has been aggressive. There may be more upfront investments in terms of capex. All these are key factors to look out for, as per analysts. Also, since the geographical areas are relatively large, the company’s earnings can see upside of 4-5% but only over a period of time, said analysts. Since benefits will accrue over time, the stock reaction has been relatively muted following the announcement on investments. IOCL’s shares had risen by up to 1.46% in morning deals, but gave up most gains to trade 0.3% higher by noon. The stock, nevertheless, has been on an uptrend of late. From closing lows of ₹108.75 seen on the 20 December, it has risen more than 13%. The outlook on the company’s refining and marketing business is improving. Refining margins which significantly corrected post the first wave of pandemic have continued to do well. The benchmark Singapore Gross Refining Margins (GRM’s) averaged at $6.0/barrel during the December quarter, up $2.2 a barrel sequentially, primarily led by improvement in diesel and ATF cracks. The near-term outlook for petrochemicals realisations is also firm. The closure of facilities and thus lower supplies from the US in the harsh winter season is likely to support petchem realisations. Meanwhile, demand for auto fuels has continued to rise. While the Omicron spread may trigger some challenges in the current quarter, overall volume outlook remains strong. Crude oil prices, too, have come off peak while companies have been continuously passing on higher crude costs to consumers, keeping intact their margins. With state elections in sight, though, investors have become cautious on the ability of state-run oil marketing companies (OMCs) to pass on higher crude prices to consumers. Analysts at HSBC Securities and Capital Markets (India) Pvt. Ltd. in their note said, “we believe OMCs will surprise on its ability to retain higher marketing margins despite election interventions”. Also, analysts at Antique Stock Broking said that “historically OMCs have subsequently recovered any margin squeeze during elections and in the current case, cushion already exists as marketing margins have had a strong run since November’21 averaging closer to ₹8/liter and ₹5.1/litre, much higher than the ₹3.6/litre and ₹4.1/litre over the last two years.”
CNOOC’s Bohai overtakes Daqing as China’s largest oil field
China’s offshore oilfield cluster Bohai, run by state-run CNOOC Ltd , has become the country’s largest crude oil producer with output hitting 30.132 million tonnes (602,640 barrels per day) in 2021, state news agency Xinhua reported. Bohai field, off north China, overtook the country’s flagship onshore producer Daqing, in northeast China, which pumped 30 million tonnes last year as reported by state media a week earlier. CNOOC Ltd, the listed vehicle of China National Offshore Oil Company, produced 48.64 million tonnes of crude oil last year, up by 3.23 million tonnes, which accounted for up 80% of the national increment in crude oil production. Developed in 1965, the Bohai cluster fields are considered marginal assets with relatively high development cost and poor crude oil quality. But CNOOC has in the past two decades sharpened its exploration and development know-how, such as shortening the average drilling time to under 10 days from 57 days, and has made several major discoveries like Kenli 10-2 and Bozhong 19-6 fields. In response to Beijing’s call to boost energy supply security, national producers – CNOOC, PetroChina and Sinopec – have in the past several years accelerated drilling more challenging terrains at home, including shale oil, to make up for depleting mature fields like Daqing. China, the world’s second-largest oil consumer which imports three quarters its oil needs, eked out a 2.5% increase in domestic crude output in the first 11 months of 2021 over a year earlier, official data showed.
Shrink to fit: The year Big Oil starts to become Small Oil
Europe’s Big Oil companies are planning to spend their windfall from high energy prices on becoming Small Oil. Surging oil and gas prices in 2021 delivered billions of dollars in profits to top oil companies, in stark contrast to the previous year when energy prices collapsed as the coronavirus pandemic hit travel and economic activity. Typically, companies would invest the lion’s share of that cash in long-term projects to boost oil and gas production and reserves after the previous year’s deep cuts. But unlike any other time in their history, BP, Royal Dutch Shell(RDSa.L), TotalEnergies , Equinor (EQNR.OL) and Italy’s Eni are focusing on returning as much cash as possible to shareholders to keep them sweet as they begin a risky shift towards low-carbon and renewable energy. “All of the large oil companies are managing decline to a degree,” by shifting to fields that provide larger investment returns for shareholders and leaving more mature assets behind, said Ben Cook, portfolio manager with BP Capital Fund Advisors. The growing pressure from investors, activists and governments to tackle climate change means that European oil giants are turning off the taps on spending on oil even as the outlook for prices and demand remains robust. The two-pronged strategy of reducing oil output and boosting shareholder returns was underscored when Shell sold its Permian shale oil business in the United States for $9.5 billion in September, promising to return $7 billion to investors. Investors in U.S. companies can also expect their payouts to rise to record amounts, but Exxon Mobil (XOM.N) and Chevron (CVX.N), the top U.S. oil and gas companies, plan to continue ploughing money into new oil projects, encouraged by White House calls for more oil output to tackle high energy prices and inflation. read more In 2022, European firms are set to return to investors a record $54 billion in dividends and share buybacks, according to analysis by Bernstein, while Exxon and Chevron are set to pay more than $30 billion combined. SMALLER OIL As investments in new oil projects dwindle, oil production by Europe’s top five energy companies is set to drop by over 15% to below 6 million barrels per day (bpd) by 2030 after reaching a peak of around 7 million bpd in 2025, data from Bernstein Research showed. Britain’s BP has said it will cut its oil output by 40%, or roughly 1 million barrels per day, by 2030 from 2019 levels. Shell has said its oil output peaked in 2019 while Eni said its output will plateau in 2025. With the energy transition entering full swing, investors have welcomed the renewed focus on their returns. Having trailblazed oil and gas extraction for over a century, from drilling in the Middle East to pioneering deepwater production, oil majors have a history of pouring billions of dollars into huge, complex projects which ran over budget and behind schedule, leading to a decade of poor returns after 2010. “Strategies for the energy transition are becoming more defined, but investors won’t buy a story given the failures of the past, so the companies will need to prove they can deliver on these strategies effectively and profitably,” said Alasdair McKinnon of the Scottish Investment Fund. HARVEST TIME Some oil production will remain a key fuel in the energy transition and natural gas output is set to increase as countries such as India and China look to substitute gas for the most polluting fossil fuel – coal. At the same time, European oil majors are diverting spending to renewables such as wind and solar power, promising that returns from their low-carbon businesses will match or even grow beyond those of oil and gas in the long run. That is in contrast to U.S. companies, where Exxon and Chevron have largely stayed away from renewables. Chevron Chief Executive Mike Worth has said renewables “don’t generate the double digit returns that investors want.” The sharp drop already seen in investments in new oil developments by European companies in recent years has helped push long-term oil prices higher on the expectation of supply falling short of demand. “Such caution could underpin hydrocarbon prices, since energy demand looks set to continue to grow… and supply could be restrained, especially as renewable and alternative sources of power do not yet look ready to take up the baseload slack,” said Russ Mould, investment director at online platform AJ Bell. Demand for oil is expected to peak around 2030 according to the U.S. Energy Information Administration. “Oil executives are aware of public pressure, their environmental responsibilities and the opprobrium that any major new work could bring,” Mould said, adding that companies will resist the temptation to ramp production back up. Shell’s Chief Executive Officer Ben van Beurden said the company is looking longer term and while it wants to enjoy the strong oil prices, “we are not minded to invest in a big way in a rising market because we believe that by the time we can start to harvest it, we will be beyond that peak again.” Europe’s strategy will be a test case, said BP Capital Fund’s Cook. “It is hard to say who is right in the pace of the transition. Time will tell if Europe went too fast.”
Why BPCL sale is unlikely this fiscal, and what it means to the govt
The Centre is looking to disinvest a nearly 53% stake in energy PSU Bharat Petroleum Corp Ltd. When the Centre first announced the privatisation of oil & gas company Bharat Petroleum Corp Ltd (BPCL), it triggered a lot of angst. Employees of the public sector undertaking (PSU) were worried about job losses. There were concerns that foreign entities may end up holding a majority stake in a domestic energy major. Queries rose on why the Centre was walking away from a profit-making PSU. Now, with less than three months to go for the financial year to end, it is increasingly evident that the disinvestment is not happening immediately. Media reports indicate that BPCL has attracted just three bids till date; of these, two are yet to arrive at a financing plan for the estimated Rs. 600 billion purchase. The non-sale of BPCL hits the Centre’s disinvestment plan in two ways. One, the Centre is likely to miss its ambitious FY 2021-22 disinvestment target of Rs. 1750 billion, which in turn may hurt its fiscal deficit target. Two, it pulls down the morale around its privatisation proposals. What it gained in selling off Air India to the Tata Group after several years of struggle could be undermined by the apparent lack of bidder interest in BPCL. Pandemic and other disruptions On April 10 last year, the Centre gave interested parties access to BPCL data. The initial plan was to call financial bids by August, so that an agreement would be signed by September, and the sale completed by March 2022. The second wave of COVID, however, put paid to the plan, as physical inspection of BPCL’s plants could not be carried out. The PSU operates a refinery each in Mumbai, Kochi, Bina (Madhya Pradesh) and Numaligarh (Assam). (Later in the year, BPCL sold off its stake in the Numaligarh refinery.) This apart, the year saw volatile crude prices, and a decline in production as well as capital expenditure. Now, March 31 does not seem a viable deadline for the BPCL disinvestment. Among several elaborate processes, the buyer may need to get approval from the lenders to PSU, which typically takes a few months, said media reports. Private players who have expressed interest in BPCL so far include mining and energy billionaire Anil Agarwal’s Vedanta group, private equity company Apollo Global, and Think Gas Distribution, which is backed by I Squared Capital. Why did the sale not go through? Corporate observers say the size of the stake on the block may have put off bidders for BPCL. In earlier disinvestments, such as Balco and Hindustan Zinc, the Centre had sold a 26% stake with management control. However, in BPCL’s case, a 52.98% stake was offered. This made the deal size so big that several players could not arrange the finances; not many were keen to undertake such large debt either. Also, amid rising climate concerns, oil & gas is increasingly viewed as a risky play, which again worked against BPCL. The initial public offering (IPO) of Life Insurance Corporation (LIC), also slated for the current fiscal, is now all the more critical to the Centre. The insurance behemoth is expected to file its draft prospectus with the Securities and Exchange Board of India (SEBI) by the third week of January and get listed by March 31. The IPO, estimated at Rs. 1000 billion, would be India’s largest ever, and considerably bolster government finances.
RIL’s Jamnagar refinery to soon get 500 MW renewable power
The Central Electricity Regulatory Commission (CERC) has given Reliance Industries permission to approach Power Grid (PGCIL) for connectivity to the inter-State transmission system (ISTS) for supply of 500 megawatt (MW) renewable energy (RE) as a bulk consumer for the oil-to-telecom conglomerate’s Jamnagar refinery in Gujarat. The power sector regulator in an order on Wednesday said: “Petitioner (RIL) is at liberty to approach PGCIL for implementation of the said transmission line from RIL refinery (Jamnagar) to Jamkhambaliya S/S (pooling station) of ISTS, with the cost of construction of transmission lines for connectivity to ISTS to be borne by the Petitioner”. RIL is also at liberty to approach other licensees for laying down transmission lines. Charges for the transmission line shall be mutually agreed between the company and PGCIL or other licensees, it added. The Jamnagar refinery has a total load of 1,450 MW and captive generation capacity of 1,750 MW. It has been operating in island mode from the local grid since last 20 years. The company had approached the regulator to direct PGCIL for connectivity to the ISTS. The development is part of RIL’s efforts to turn net carbonzero by 2035.Reliance has increased the use of renewable energy to power its operations. The company used 6,91,217 giga joule (GJ) of RE for its operations. It has also installed rooftop solar panels, conducted trials of co-firing biomass with coal and invested in alternate energy solutions such as fuel cells and biofuels. Besides, the company has also announced plans to invest Rs 750 billion in RE to build 100 gigawatt (GW) capacity and aims to set up four large manufacturing units involving an investment of Rs 600 billion in three years at Jamnagar. The remaining Rs 150 billion will be utilised for developing value chains, partnerships and technologies. In June last year at RIL’s annual general meeting billionaire Mukesh Ambani announced, “We have started work on developing the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar. We will build an integrated solar photovoltaic module factory. We will build an advanced energy storage battery factory, an electrolyser factory, and for converting hydrogen into motive and stationary power, we will build a fuel cell factory. Reliance will thus create a fully integrated, end-to-end renewables energy ecosystem”. To that effect, RIL has already announced partnerships worth around Rs 90 billion with REC, NexWafe, Faradion, Sterling and Wilson, Stiesal and Ambri for developing a RE ecosystem comprising of solar modules, battery storage and green hydrogen.
Govt okays Rs. 120.31 billion in green energy push
The government on Thursday cleared a Rs. 120.31 billion plan to set up infrastructure to transmit electricity from renewable energy projects as it seeks to boost the output from green sources and meet half of the nation’s energy requirement from them by 2030. The investment approval by the Cabinet Committee on Economic Affairs (CCEA) is for the second phase of the green energy corridor, which will help supply 20 gigawatts (GW) of renewable energy to the national grid from Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu and Uttar Pradesh. The project is expected to help India meet the climate commitments it made at the COP-26 summit in Glasgow. At the November summit, Prime Minister Narendra Modi pledged to increase the country’s non-fossil fuel power generation capacity to 500GW and meet 50% of its energy requirements from renewable sources by the end of this decade. The Central Electricity Authority estimates India’s power requirement will rise to 817GW by 2030. The second phase of the green energy corridor project will involve adding approximately 10,750 circuit km (ckm) of transmission lines and 27,500 mega volt-amperes (MVA) transformation capacity of substations, the ministry of new and renewable energy said in a statement. “This will promote ecologically sustainable growth and contribute to the long term energy security of the country,” Union power and new and renewable energy minister Raj Kumar Singh said in a tweet. “Today’s CCEA decision adds strength to India’s efforts of achieving the target of 450GW in the renewable energy sector. Other benefits include a boost to energy security and environment friendly growth,” Modi said in a tweet. The corridor is expected to help ensure that the huge injection of electricity into the national grid from intermittent energy sources such as solar and wind doesn’t threaten the grid. The corridor forms an important component of the plan to maintain the grid frequency within the 49.90-50.05 Hz (hertz) band. An automatic generation control recently made operational sends signals to power plants every four seconds to maintain frequency, ensuring the power grid’s reliability. The project will receive central financial assistance of Rss. 39.7034 billion, or a third of the project cost. The transmission systems will be created over a period of five years through 31 March 2026, the government said. The first phase of the green energy corridor is under implementation in Andhra, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu. It will help supply around 24GW of renewable energy by 2022. The first phase will add 9,700ckm of transmission lines and 22,600MVA capacity of substations at an estimated cost of Rs. 101.4168 billion, the statement said. Recently, Union ministries of power and new and renewable energy approved 23 inter-state transmission system projects at an estimated cost of Rs. 158.93 billion. India has achieved its nationally determined contributions target with a total non-fossil based installed energy capacity of 157.32GW, which is 40.1% of the total installed electricity capacity. Of this, solar, wind and hydropower account for 48.55GW, 40.03GW and 51.34GW, respectively. India’s nuclear energy-based installed electricity capacity stands at 6.78GW.The government on Thursday cleared a Rs. 120.31 billion plan to set up infrastructure to transmit electricity from renewable energy projects as it seeks to boost the output from green sources and meet half of the nation’s energy requirement from them by 2030. The investment approval by the Cabinet Committee on Economic Affairs (CCEA) is for the second phase of the green energy corridor, which will help supply 20 gigawatts (GW) of renewable energy to the national grid from Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu and Uttar Pradesh. The project is expected to help India meet the climate commitments it made at the COP-26 summit in Glasgow. At the November summit, Prime Minister Narendra Modi pledged to increase the country’s non-fossil fuel power generation capacity to 500GW and meet 50% of its energy requirements from renewable sources by the end of this decade. The Central Electricity Authority estimates India’s power requirement will rise to 817GW by 2030. The second phase of the green energy corridor project will involve adding approximately 10,750 circuit km (ckm) of transmission lines and 27,500 mega volt-amperes (MVA) transformation capacity of substations, the ministry of new and renewable energy said in a statement. “This will promote ecologically sustainable growth and contribute to the long term energy security of the country,” Union power and new and renewable energy minister Raj Kumar Singh said in a tweet. “Today’s CCEA decision adds strength to India’s efforts of achieving the target of 450GW in the renewable energy sector. Other benefits include a boost to energy security and environment friendly growth,” Modi said in a tweet. The corridor is expected to help ensure that the huge injection of electricity into the national grid from intermittent energy sources such as solar and wind doesn’t threaten the grid. The corridor forms an important component of the plan to maintain the grid frequency within the 49.90-50.05 Hz (hertz) band. An automatic generation control recently made operational sends signals to power plants every four seconds to maintain frequency, ensuring the power grid’s reliability.