Energy Efficiency

Using energy more efficiently can reduce our energy needs by 20 per cent; it is a strategy we must pursue even as we promote renewables.

India needs to grow at 8-10 per cent for the next two decades if the country is to eliminate poverty. This will require our energy consumption to grow four- to five-fold. Our power capacity has to increase from around 170,000 Mw, including captive plants, to 800,000 Mw or 1,000,000 Mw by 2030. With the full development of hydropower, an optimistic nuclear development scenario and improved availability of natural gas, we will need around 500 million tones (mt) of oil products, 200 billion cubic metres (bcm) of gas and around 2,000 mt of coal by 2030. This compares with an oil consumption of 133 mt, gas consumption of 37 bcm and coal consumption of about 525 mt (Indian coal equivalent) in 2008. Even with the nuclear agreement, the nuclear capacity is not likely to reach more than 100,000 Mw by 2030. Our import dependence may grow as high as 90 per cent for oil, 30 per cent for gas and 30 per cent for coal. We can reduce this by promoting energy efficiency and renewable resources. 

Coal will remain our main energy source. It is generally believed that we have very little oil and gas, but large coal reserves. However, the currently known extractable coal reserves will run out in 45 years if our coal consumption keeps growing at 5 per cent per year, as it has in the past 25 years. Thus, it is important to promote energy efficiency, including in coal use. The growing threat of climate change also requires this.

The first task in saving energy is to increase the efficiency of electricity use. A unit saved at the consumer end saves 1.25 units of generation and saves further energy, as coal does not have to be transported. The Bureau of Energy Efficiency has taken a number of steps. An efficient lighting programme to replace incandescent bulbs by compact florescent lamps (CFLs), labelling of electrical equipment, a pilot programme to promote energy-efficient pumps for farmers, the launching of an energy conservation building code, standards and benchmarks for designated industries, etc, have been initiated. These will reduce energy, particularly electricity, consumption.

To get the full benefit from the labelling programme, public sector procurement officers should be enabled to purchase equipment based on life cycle cost instead of initial cost, without inviting Vigilance Commission investigation. The government should issue an order specifying the price preference that may be given to equipment with a higher star rating. Thus, for example, an air conditioner with a three-star rating that saves Rs 1,500 per year in electricity bills over a two-star-rated air conditioner, may be given a price preference of Rs 3,600, which is the present discounted value of savings over three years at a 12 per cent discount rate.

While economic incentives are important, setting energy efficiency standards for equipment can play a very important role. By periodically tightening standards, the average annual energy consumption of refrigerators in the US was brought down from 1,825 kwhr in 1974 to 476 kwhr by 2001. Such efficiency gains are even more important for us, as with an 8 per cent growth rate, we will nearly double our capital stock in nine years. Energy-using equipment and appliances will also spread rapidly. Thus, the manufacturers of equipment and appliances should be targeted to force the pace of improvement in energy efficiency.

Major opportunities also exist in cutting energy use in other areas.

n Increasing the efficiency of coal-based power plants: The fuel conversion efficiency of the existing population of thermal power stations is on average around 30 per cent. Super-critical boilers can provide an efficiency of 38-40 per cent. No new thermal power plant should be allowed without a certified fuel conversion efficiency of at least 38 per cent. The pace of efficiency improvement needs to be forced.

n Shifting freight traffic to railways: Improve railway service to win back the long-distance freight traffic carried by trucks today that consume five times as much diesel per net tonne kilometre of freight carried. The construction of dedicated freight corridors should be completed as soon as possible. Carrying 3,000 billion tonne kilometres (bt-km) of freight (half of the projected freight traffic in 2030) by rail instead of trucks can save approximately 50 mt of diesel per year. 

n Promoting urban mass transport: Promote urban mass transport by providing quality services which may be partially financed by imposing congestion, pollution and parking charges on those who use personalised motor transport. Plan for future mass transport corridors in smaller cities and acquire right-of-way. As the city grows, the permissible built-up area may be gradually increased. However, the additional right to build should remain with the local government, which it can auction to finance mass transport and other urban infrastructure.

n Increasing the fuel efficiency of vehicles: By promoting hybrid vehicles that are already available commercially internationally and flexi-fuel vehicles that can burn varying proportions of ethanol-blended fuels, we can improve efficiency by 20 per cent or more. Fuel efficiency standards should be imposed on vehicle manufacturers to force the pace.

Promoting renewable energy such as solar is critical for our long-term energy security. Presently commercially available solar photovoltaic cells of 15 per cent efficiency covering 10 million hectares can more than meet all our energy needs projected for 2030. The cost of solar electricity today is about Rs 20 per kwhr, compared to around Rs 4 at the consumer end from coal power. The solar mission to be launched has the target to make solar cost-competitive to coal power by 2020. 

There are, however, applications that use solar energy that are economical today that can reduce the need for energy from conventional sources. Solar water heaters are a case in point. With 50 million home water heaters we can save 95 billion units of electricity generation, which means a saving of 65 mt of coal.

We are short on fossil fuels. Energy efficiency can reduce our energy needs by 20 per cent and is a major resource that we must use even as we promote renewables. n

The author, a former member of the Planning Commission, is Chairman of Integrated Research and Action for Development (IRADe). E-mail: kparikh@irade.org

Source: http://www.business-standard.com/energy/storypage.php?autono=80037

Wind energy in Asia

In 2010, for the first time ever, more new wind power capacity was installed in developing countries and emerging economies than in the traditional wind farm markets of the OECD.

This puts an end to the assertion that wind power is a premium technology only for rich countries which cannot be deployed at scale in other markets. It is also testament to the inherent attractiveness of wind power for countries striving to diversify their energy mix, improve their security of supply in the face of rapidly growing demand, and relieve national budgets of the burden of expensive fossil fuel imports at volatile prices. 

Environmental factors such as improving air quality and public health, and carbon reductions to fight against climate change also play an important role in many of these new markets. There is also a noticeable shift in attitudes towards wind turbines in many countries. While the technology would have been dismissed as too expensive by many developing country energy planners just a few years ago, the continuing success of the technology in an ever widening group of countries has changed that attitude to one of dramatically increased knowledge about wind farm generation and the role that it can play in a country’s power mix.

The growth of wind power outside of the OECD has been primarily driven by the continuing boom in China, which is now the country with the largest installed wind power capacity in the world. The Chinese government has a clear commitment to developing the country’s massive wind resource, partly driven by the need for increasing its power generation capacity to fuel a growing economy and to spur rural economic development. 

Furthermore, the Chinese government is committed to slowing down the country’s increasing greenhouse gas emissions and reducing air pollution. This political commitment was underpinned by favourable policies to boost wind power development, and this has led to exceptional growth in this sector. After four years of doubling its installed wind farm capacity from 2006-2009, a record capacity of 16.5 GW was added to the Chinese wind fleet in 2010, taking the total up to 42.3 GW. 

Wind power now represents nearly a fifth of all yearly net power generation capacity additions in China, nearly on par with hydro. Beyond wind power’s environmental and energy security benefits, the Chinese government also recognises the economic opportunity of building a strong domestic manufacturing base. 

In 2009, out of the world’s top ten wind turbine manufacturers, three were Chinese (Sinovel, Goldwind and Datang), and annual domestic production capacity is now at least 30 GW. Chinese manufacturers are increasingly looking at international markets, and it is expected that Chinese wind turbines will soon be fully competing in the global market place. 

A similar picture is emerging in India, albeit on a smaller scale. A rapidly growing economy and expanding population create a growing demand for power, and supply struggles to keep up with demand. Electricity shortages are common, and a significant part of the population has no access to electricity at all. In order to address this problem, the Indian government created a target of an additional 78.7 GW of generation capacity from 2007-2012, 10.5 GW of which will be new wind generation capacity. 

The Indian Ministry of New and Renewable Energy (MNRE) estimates that there is a potential of 48.5 GW of wind power development, but industry experts estimate that a minimum of 100 GW could be realised in India. At the end of 2010, India had 13.1 GW of installed wind capacity, with 40% operating in the southern state of Tamil Nadu.

Like in China, India’s wind power development has spurred domestic manufacturing, and the Indian company Suzlon is now a global leader. 17 companies now manufacture wind turbines equipment in India, with a production capacity of 7.5 GW per year. Thanks to new market entrants, it is expected that this will rise to 17 GW or more by 2013, according to the World Institute for Sustainable Energy (WISE). Wind turbines and turbine blades made in India have been exported to the USA, Europe, Australia, China and Brazil. 

While wind markets in the rest of Asia are only at the early stages of development, there is considerable potential and some promising signs. Across the region there are at least a dozen vibrant and rapidly growing economies in which wind energy could play a significant role, and there is increasing interest in the technology from policymakers and utility executives.

While wind energy in South Korea is still in its infancy, the Korean government recently introduced a Renewable Portfolio Standard (RPS) scheme and set an ambitious target of developing 2.5 GW of offshore wind power by 2020. Several Korean heavy manufacturers such as Samsung, Hyundai and Daewoo have started to include wind turbines in their portfolio in order to compete both domestically and in the international marketplace. In 2010, installed wind farm capacity increased by 30 MW to reach 379 MW. 

In the Philippines, 33 MW of wind power are currently operating, but the technical potential is estimated at around 55 GW, over three times the country’s current total installed generation capacity, according to UNEP’s Solar and Wind Resource Assessment (SWERA). The government has set a target for 40% of its electricity to be generated by renewable sources by 2020, up from the current 33%. Both the Philippines government and the Asian Development Bank (ADB) have set up funds to help with this process.

Vietnam has 18 MW of operating wind power capacity, but strong winds could support 642 GW of wind energy development, according to SWERA. In addition, Vietnam has a fast-growing economy and a growing demand for electric power. The Vietnamese government is aiming for renewable power to provide about 5% of the nation’s electricity by 2020. Investor interest in the Vietnamese wind market is

considerable, and various wind power projects are reported to be in the pipeline.

Thailand’s growing affluence has led to a startling rise in per capita electricity consumption, which has grown by almost 25% in the past five years. An estimated 30.2 GW of new generation capacity will be needed by 2021. The government has announced a target of increasing the share of renewable energy from 6.4% in 2008 to 20% in 2022, with an 800 MW target for wind farm capacity. According to SWERA, Thailand’s technical wind resource could support the development of 190 GW of wind power.

Prosperous Taiwan imports 98% of its fuel needs, and has set a target for renewables to meet 10% of its electricity by 2010, up from 5.8% currently. Wind power is expected to meet 80% of that, and a feed-in tariff was introduced in 2009. During 2010, Taiwan installed 83 MW of new wind power, bringing its total to 519 MW.

In Pakistan, the far-reaching implications of the flood disaster of 2010 on infrastructure in general, and the power infrastructure specifically, have worsened the supply situation and led to acute power shortage. Most of the country’s power needs to date are met by fossil fuels. To support the addition of renewable capacity, the Asian Development Bank set up a 510 million USD financing facility in 2006, and a feed-in tariff was introduced. 

In addition, USAID is co-funding a public-private partnership to develop a 150 MW wind project in the Gharo Corridor. The potential for wind power is estimated to be around 350 GW, according to both the Pakistani government and SWERA.

Other countries in the region have also set ambitious targets for wind power development, but this has not always been followed up by the introduction of effective policy frameworks. Bangladesh, for example, has set a target of reaching 5% of its electricity to come from renewables by 2015; Mongolia plans to increase its share of renewable electricity from the current 3% to 20–25% by 2020; Sri Lanka wants to go from the current 5% to reach 10% by 2017 and 14.1% by 2022, and Indonesia is planning to build 255 MW of wind capacity by 2025.

www.gwec.net/

Source: http://www.evwind.es/noticias.php?id_not=11005

DHL to set up more FTW zones in India

DHL Global Forwarding, the freight forwarding division of DHL, plans to invest around 90 crore ($20 million) over the next two years on setting up more free trade warehousing zones in India. DHL is scouting for large multiuser facilities along the trunk routes. Mumbai, Chennai, Bengaluru and Delhi are slated to be among the first cities to have these large warehouses. 

As of now, the company has selected Mumbai and Delhi to set up the new FTWZ. The Mumbai facility, expected to come up near JNPT, is likely to attract an investment of 45 crore ($10 million) and be operational by December 2011. The Delhi FTWZ will be located close to the Haryana-Punjab border. It will entail a similar investment and is expected to commence operations by 2012. 

In May 2010, DHL had announced the setting up its first free trade warehousing zone at Sriperumbudur in Tamil Nadu, which is expected to be operational in January 2011. The FTWZ, spread across 1.50 lakh sq. ft, will cater to multiple industries including automobile, engineering and manufacturing. This FTWZ will have a dedicated life science hub to service transit cargo as well as inbound and outbound domestic needs. It is expected to be operational by mid-2011.

Source:-http://www.projectsmonitor.com/MISC/dhl-to-set-up-more-ftw-zones-in-india

India and Finland cement cooperation in clean technologies

The Government of Finland has expressed its desire to strengthen ties with India in clean technology development. At the occasion of the Delhi Sustainable Development Summit in the Capital, Ms. Paula Lehtomaki, Minister of the Environment of Finland stated that Clean technologies lead the way for stronger ties between India and Finland and an increasing number of Finnish companies are leaping at the opportunities India has to offer. She attended the conference together with a delegation of Cleantech Finland comprising of leading Finnish companies engaged in clean technologies. 

“The global challenges we are facing today can be turned into opportunities with the right technologies and know-how. What is needed is enhanced cooperation and sharing of knowledge,” said Ms. Lehtomaki at a press conference organised by Cleantech Finland where Finnish companies discussed how Finnish technologies can contribute to creating a green economy. “Green economy is essentially about integrating environmental aspects into all sectors of the society - and simultaneously boosting economic growth by, for example, creating new green jobs. The rapid development and introduction of clean technologies has a crucial role in creating a green economy,” she added. 

Clean technology has become a driver for India-Finland economic and innovation cooperation. Finnish cleantech companies explore various business opportunities in India’s booming market while strengthening their cooperation with local companies. Key focus areas are water and energy. According to the Finnish experts, Finnish cleantech expertise can strongly contribute to the economic, social and environmental development of India. 

Kemira Oyj, a world leader in water chemicals, and the Promoters of IVRCL have agreed to form a joint venture in India. In addition, Kemira, Hindustan Dorr-Oliver (HDO) and IVRCL are forming a strategic alliance to serve Indian water treatment markets. IVRCL and HDO are leading water infrastructure companies in India. Kemira’s estimation is that the Indian market potential relevant to the company is approximately USD 300 million. 

“This cooperation is well-aligned with Kemira’s strategy to grow profitably in India. Through this cooperation Kemira will have a strong manufacturing base in India and an opportunity to broaden our business. Combining Kemira’s water chemistry know-how and IVRCL’s expertise in building water infrastructure we are able to meet the rapidly growing water demand,” says Hannu Virolainen, Senior Vice President, Industrial customer segment, Kemira Oyj. 

The Switch, a leading supplier of wind power and new energy applications, who entered the Indian market in 2010 regards India’s growing wind and solar power market highly attractive. “Through the recent deal signed by Chinese Dongfang Electric and KSK Energy of India, The Switch will be contributing to the export of 166 1.5MW permanent magnetic direct-drive wind turbines to India by providing technology and key components. We are already also finalizing contracts with Indian manufacturers. We intend to be the partner of choice to our Indian customers and help them to develop the country’s vast potential for clean energy,” says Pertti Kurttila, VP, Supply at The Switch.

Source:-http://www.projectsmonitor.com/CEMENT/india-and-finland-cement-cooperation-in-clean-technologies

Capacity addition failure haunts NTPC

The power ministry has asked NTPC Ltd to add 5,000 megawatt (MW) capacity annually from next year. For now, it seems like a pipe dream.

Also See | Keeping Pace (PDF)

That number is a tad less than the approximately 6,000MW it has added since fiscal 2008. In the past couple of years, the firm’s execution record has been poor. Take the 11th Plan (fiscal 2008-2012), during which NTPC was expected to add some 22,400MW. Even if it installs 5,000MW in the year to April 2012, it will have fallen some 50% short of its target.

Yet, for a company that enjoys regulated 15.5% return on equity (RoE), it is capacity addition that will make it more attractive for investors.

The delay in building new factories is roughing up its profits as well. For the quarter ended December, NTPC’s power generation grew by a measly 0.2% from a year ago. Grid problems and the parlous finances of state electricity boards, its main consumers, also meant that some of them could not take delivery of contracted power. As a result, energy units actually delivered rose 0.8%. However, revenue grew 20% from a year ago. This was due to a 23% rise in fuel costs (a pass through in the assured RoE model), due to a price hike by main supplier Coal India Ltd at the end of December 2009.

A rise in employee and other costs means that earnings before interest, tax, depreciation and amortization grew 10%. Higher taxes (moving to minimum alternate tax due to an increase in RoE) have also hit the profits and net profit grew 0.3% from a year ago. Shorn of some one-offs, such as prior period sales, the new tax norms and a change in depreciation policy, the adjusted profit after tax shows a growth of 11%, in line with estimates.

But that isn’t overly impressive. Many brokerages have cut down their earnings estimates for the next two years. That, coupled with the execution track record, has meant that investors are not very gung-ho about NTPC. For a stock that is considered a defensive bet, its returns mirror those of the Sensex since the beginning of this year. The numbers are more telling since the firm declared its results. Since then, NTPC has underperformed the benchmark index by 7.5%.

Source:-http://www.livemint.com/2011/02/21230306/Capacity-addition-failure-haun.html

Wind power India 2011 to chart roadmap for additional 50 GW by 2020

Wind energy which has witnessed a phenomenal growth in India over the past few years. The country’s current cumulative installed wind farm capacity is 13 GW (as on Dec 2010), reaching 64 GW by 2020.

The National Action Plan on Climate Change (NAPCC) announced in June 2008 by the Govt. of India proposes increasing the share of renewable energy in the total energy mix to 15% by 2020. In order to achieve this, NAPCC recommends pegging the minimum share of renewable energy in the national grid at 5%, starting from 2009-10, to be increased by 1% per annum in the following years so as to reach 15% by 2020.

‘WIND POWER INDIA 2011’ TO CHART ROADMAP FOR ADDITIONAL 50 GW BY 2020 Chennai, 24 February 2011 

The National Action Plan on Climate Change (NAPCC) announced in June 2008 by the Govt. of India proposes increasing the share of renewable energy in the total energy mix to 15% by 2020. In order to achieve this, NAPCC recommends pegging the minimum share of renewable energy in the national grid at 5%, starting from 2009-10, to be increased by 1% per annum in the following years so as to reach 15% by 2020. 

This requires a quantum jump in renewable energy generation across the country. Wind energy which has witnessed a phenomenal growth in India over the past few years could make a significant contribution towards the shift to a low-carbon and energy secure future. 

The country’s current cumulative installed wind farm capacity is 13 GW (as on Dec 2010), reaching 64 GW by 2020 (as per GWEC estimates). The current annual wind power market is about 2200 MW with forecasts predicting a 5000 MW annual market by 2015 (research done by the World Institute of Sustainable Energy). As per NAPCC, if India needs to achieve 15% RE by 2020, wind’s contribution to the total energy mix would need to transcend even greater heights, requiring an additional installed capacity of almost 50 GW by 2020, over and above the present level! 

This poses several challenges for policy makers and regulators, and wind industry stakeholders in India, who would need to rise up to the occasion and develop suitable strategies, policies and regulations to meet the NAPCC target. This includes a major focus on augmenting the power evacuation/grid facilities and transmission planning, availability of non-recourse project financing and skilled manpower, speedy and appropriate implementation of the latest policy/regulatory measures such as renewable energy certificates (RECs) [linked with state-specific renewable purchase specification (RPS) with penal provisions for non-compliance], the Indian Electricity Grid Code (IEGC) 2010, etc.

To understand, deliberate and discuss all these critical issues and challenges related to the role of wind power in attaining the 50 GW mark by 2020, the World Institute of Sustainable Energy (WISE), Pune, in association with the Global Wind Energy Council (GWEC), and the Indian Wind Turbine Manufacturers’ Association (IWTMA) is organising WIND POWER INDIA 2011 from 7–9 April 2011 at the Chennai Trade Centre, Chennai. 

The event would witness the presence of 1000+ delegates, around 100 exhibitors and nearly 100+ renowned speakers from the national and international wind industry. The opening day of the conference is highlighted by the main panel discussion on the role that wind power would play in achieving the 15% RE target by 2020. The theme paper on the subject would be presented by G M Pillai, Founder Director General, WISE, and the panel discussion on the topic would feature distinguished personalities including V P Raja, Chairperson, Maharashtra Electricity Regulatory Commission (MERC); Jan Declercq, Chief Business Development Officer, CG Power, Belgium; and Jose Donoso, Director–Business Development, Gamesa, and President, Spanish Wind Energy Association. 

Some other major distinguished speakers who would be present at the conference include, Hans Jorgen Koch, Dy. Secretary of State, Danish Energy Agency; Steve Sawyer, Secretary General, Global Wind Energy Council (GWEC), Belgium; Dr Klaus Rave, Chairperson, GWEC; Christian Kjaer, CEO, European Wind Energy Association (EWEA), Belgium; Stephen Miner, Sr. Vice President, American Wind Energy Association (AWEA), Dr Andrew Garrad, CEO, GL-Garrad Hassan, UK; Deepak Gupta, Secretary, Ministry of New and Renewable Energy (MNRE), Govt. of India; and Dr Pramod Deo, Chairperson, Central Electricity Regulatory Commission, New Delhi. 

The opening day would also feature the CEO’s Forum, wherein chieftains of the wind industry would congregate on one single dais to discuss wind power development in south and south-east Asia. In addition, the conference would also focus on issues related to the role of wind power in climate mitigation; policy, regulation and market development of wind; technology, project development and operation of wind. 

The official side event, a ‘One-day conference on Small Wind Power’—aimed at tapping the huge opportunities for expansion of the small wind and hybrid market in the country—would be organised on 8 April 2011. The main objective of the side-event is to demystify the small wind and hybrid sector so as to increase transparency, infuse investor confidence, and overall, change the dynamism of the ‘small’ wind market into a ‘big’ investment opportunity. 

The conference would also feature Knowledge Fora—a series of official side events comprising customised business meets and workshops offering unique networking opportunities. Under the Business to Business meet format, select suppliers and service providers will have the opportunity to present cost optimisation opportunities and strategies, customised business proposals, technology updates, product ranges, and service solutions in their area of specialisation in the wind industry. 

The topics for the fora include: Structuring optimization: wind turbine tower and hub; Gearing up: mechanical drive train; Generating savings: wind turbine electricals, electronics and services; Wind power forecasting in India; and Design, testing and certification of wind turbines. A major highlight of the conference would be the presentation of ‘Wind India Awards’. 

These awards are an initiative of WISE and were first instituted during WIND INDIA 2006 in Pune. The awards are recognition of the contributions made by the Indian wind industry and associated stakeholders in shaping a ‘clean and green India’, and would be presented in 17 different categories for the FY 2008–09 to 2009–10. The major categories include ‘Best capacity addition by manufacturer’; ‘Best service provider among manufacturers’; ‘Best O&M independent service provider’; Best performing wind turbine’; ‘Best wind power developer state’; “Best wind power project financier’, Best media report/publication on wind power, etc., including select awards for the small wind and hybrid sector in India. For more information on the conference and exhibition, you may visit the conference website www.windpowerindia.in or email to info@windpowerindia.in. 

WISE The World Institute of Sustainable Energy (WISE) is a not-for-profit institute committed to the cause of promoting sustainable energy and sustainable development, with specific emphasis on issues related to renewable energy, energy security and climate change. Since its inception in 2004, WISE has pioneered many important initiatives. 

Some of these include, piloting a model Renewable Energy Law for India, proposing a roadmap for generation-based incentives (GBI) for wind and solar power, developing state-level action plans for clean energy technologies, etc. Website:www.wisein.org

GWEC The Global Wind Energy Council (GWEC) is the credible and representative forum for the entire wind energy sector at the international level. With a combined membership of over 1,500 organisations, GWEC’s member associations represent the entire wind energy community. GWEC’s mission is to ensure that wind power establishes itself as one of the world’s leading energy sources, providing substantial environmental and economic benefits. www.gwec.net

The Indian Wind Turbine Manufacturers’ Association (IWTMA) is the only body representing the country’s wind turbine manufacturers, providing a single contact point for policy makers, regulators and utilities at the national and state level. IWTMA’s main objective is to promote wind energy in India, facilitate the extension of knowledge in the field and interact with national and global energy bodies. IWTMA is a founding member of the Global Wind Energy Council (GWEC) alongside other national and regional associations.

Source:-

Essar Energy set to acquire Shell refinery for $350 mn

Essar Energy on Friday announced that it has entered into an exclusive agreement with Shell UK for the proposed purchase of an oil refinery and other associated assets at Stanlow, near Ellesmere Port in Cheshire, for $350 million in cash.

The deal brings Essar Energy and Shell to the penultimate stage of two-year negotiations that also saw a brief hiatus last year, only to be revived after Essar Energy completed its $1.3-billion IPO and subsequent listing on the London Stock Exchange.

The deal will be the third largest by an Indian group in the UK, following Tata’s acquisition of Corus ($8.1 billion in 2006) and Jaguar Land Rover ($2.3 billion in 2008).

Successful conclusion of the deal, even at the current capacity utilisation of around 75 per cent, should give Essar an additional $7-8 billion in revenues at current crude prices, said Essar Group CEO Prashant Ruia, in a telephone interview from Mumbai.

He said the company would continue to keep its strategies open for further acquisitions in the oil sector, provided there is a clear fit in its scheme of operations.

According to the new deal, Shell has granted Essar Energy exclusivity to the acquisition until April 1, 2011. Essar Energy has the option until March 31, 2011 to enter into an asset purchase agreement.

If by that date Essar Energy decides not to proceed with the acquisition, it will pay Shell a break fee of $50 million. Similarly, Shell has agreed to pay Essar Energy a break fee of $10 million if it chooses not to go ahead with the sale.

In a statement issued here, Essar said that the acquisition of the Stanlow refinery, which is the second-largest in the UK, will give it direct access to the UK market. Naresh Nayyar, Essar Energy's chief executive, said, “Stanlow fits very well with our strategy of providing options for the export of high-quality products from our Vadinar refinery in India. After completion, we look forward to working closely with the refinery management and employees to develop the business and we will be investing in operational improvements to optimise the facility and enhance production.”

Essar Energy said it is acquiring the Stanlow refinery at a competitive price, compared with other recent similar transactions. The price of $350 million for the 296,000-barrels-a-day plant translates to $1,182 a barrel of daily throughput, compared with BP’s Coryton refinery sold in 2007 to Petroplus for $8,140 a barrel, Total’s Milford Haven refinery sold to Murphy Oil in 2007 for $3,307 a barrel, PDVSA’s Ruhr Oel refinery in Germany sold to Rosneft in 2010 for $3,376 a barrel and Total’s Vlissingen refinery in the Netherlands sold to Lukoil in 2009 for $8,439 a barrel.

With the completion of the acquisition, Essar will also take on board 960 workers at Shell’s Stanlow refinery. In the first six months of 2010, the facility reported earnings before interest, tax, depreciation and amortisation (Ebitda) of $62.7 million and a gross refining margin of $4.90 a barrel.

Average industry benchmark gross refining margins were $2.73 a barrel in the first half of 2010.

Under the terms of the agreement, payment for the Stanlow refinery will be made in two stages, with $175 million payable on completion of the acquisition and a deferred payment of $175 million plus interest payable on the date of the first anniversary of the completion of the acquisition. Payments from Essar Energy to Shell for the acquisition will be funded from existing cash resources and potentially from a new debt facility.

The Stanlow refinery currently accounts for around 15 per cent of production from UK refineries. It produces approximately 3.5 billion litre of petrol a year, which is one sixth of the UK total, plus it produces around 1.5 billion litre of kerosene a year, used for aircraft fuel.

Deal size could touch $1.3 billion

There was some confusion about the actual size of the proposed Essar Energy-Shell deal for the Stanlow refinery in the UK. While Essar said it was paying $350 million, the Shell website stated, “Shell on Friday confirmed it has received an offer from Essar Energy to buy its 272,000 barrel-per-day Stanlow refinery and associated local marketing businesses in the UK for a total expected consideration of some $1.3 billion.”

Frantic calls between Mumbai and London helped clarify that the deal size is in fact only $350 million, which is the price Essar will be paying for the refinery assets. The balance, which Shell at this stage believes to be $900 million, is for the inventory lying on site, including crude, work in progress and finished products. “You don’t expect us to buy a working refinery drained of its inventory, do you,” asked a senior Essar executive in Mumbai.

A Shell spokesperson here later confirmed that the $1.3 billion it is claiming to be the deal size includes the inventory along with the refinery assets that Essar plans to buy. “Beyond this, I cannot say anything,” said the spokesperson.

Successful conclusion of the deal will be subject to employee consultation, in which both Essar and Shell will participate

Source:-http://www.business-standard.com/india/news/essar-energy-set-to-acquire-shell-refinery-for-350-mn/425748/

India is fifth largest wind power producer

Asia leads the growth in global wind power, which grew 35.8 GW in 2010 bringing total wind farm capacity to 194.4 GW – up 22.5% from 2009, the Global Wind Energy Council (GWEC) says.Commerce and Industry Minister Anand Sharma said that India is today fifth largest wind energy producer in the world and 8th in terms of investments made in clean energy technologies.

Inaugurating 7th edition of Eco-Products International Fair (EPIF 2011) and 19th International Engineering Trade Fair (IETF), Sharma informed that globally, investments in clean energy have growth by as much as 230 per cent in the last four years and are touching 200 billion dollar.

"Within the manufacturing sector, we need to pay special focus to the development of green technologies which will be one of the dominant themes over the next two decades, providing both challenges of adaptation and opportunities of growth for manufacturing," he added.

Sharma said that if we look at the overall scenario of engineering exports, we are one of the fastest growing exports in the world at nearly 30 per cent, well above the global average of 13 percent.

"The engineering exports are already touching 40 billion dollar and I expect that it should be nearly 50 billion dollart his year. We have remained mindful of the fact that we need to align government policies with the ambitious target of tripling India's engineering exports of 120 billion dollar by 2015", the Minister added.

Sharma also informed that India is making a major contribution in the growth of manufacturing and high-value engineering and added that this decade will be particularly significant in the development and growth of this sector even as the global focus shifts on clean energy technologies and processes.

"It is indeed appropriate that the Eco-Product International Fair which focuses especially on green productivity for sustainable energy is being organised as a concurrent event within the ambit of International Engineering and Technology Fair," he said.

"This becomes important and relevant in contemporary times as the world is grappling with the challenge of finding a new model for sustainable development new solutions for and addressing the issue of energy security and climate change in ensuring that we continue to grow on a low carbon growth path", he added.

Asia leads the growth in global wind power, which grew 35.8 GW in 2010 bringing total wind farm capacity to 194.4 GW – up 22.5% from 2009, the Global Wind Energy Council (GWEC) says.

Global wind energy installations increased by 35.8 GW in 2010. Wind farm capacity up to 194.4 GW, a 22.5% increase on the 158.7 GW wind turbines installed at the end of 2009. This brings total installed wind energy capacity up to 194.4 GW, a 22.5% increase on the 158.7 GW wind farm installed at the end of 2009. The new capacity added in 2010 represents investments worth EUR 47.3 billion (US Dollars 65 bn).

For the first time in 2010, more than half of all new wind power was added outside of the traditional markets in Europe and North America. This was mainly driven by the continuing boom in China, which accounted for nearly half the new wind installations (16.5 GW).

“China now has 42.3 GW of wind power, and has surpassed the US in terms of total installed capacity,” said Li Junfeng, Secretary General of the Chinese Renewable Energy Industry Association (CREIA). “This puts China firmly on a path to reach 200 GW of installed wind power by 2020. At the same time, China has become the world’s largest producer of wind energy equipment.”

But other developing countries also expanded their wind capacity, including India, which added 2.1 GW in 2010, Brazil (326 MW), Mexico (316 MW), and 213 MW were installed in North Africa (Egypt, Morocco and Tunisia).

“Wind power is now rapidly expanding beyond the traditional ‘rich country’ markets, a clear sign of its growing competitiveness,” said Steve Sawyer, GWEC’s Secretary General. “This is a trend we are expecting to see developing further in the future, not only in Asia. We are also seeing encouraging signs in Latin America, especially Brazil and Mexico, and in both Northern and Sub-Saharan Africa.”

Overall, however, the annual 2010 wind market was down for the first time in 20 years, shrinking by 7% from 38.6 GW in 2009, mainly due to a disappointing year in the US, as well as a slowdown in Europe. This was a result of the financial crisis, low levels of wind turbines orders working their way through the system, a depressed OECD electricity demand, as well as policy uncertainty in the US.

The US, traditionally one of the strongest wind markets, saw its annual installations drop by 50% from 10 GW in 2009 to just over 5 GW in 2010.

"Our industry continues to endure a boom-bust cycle because of the lack of long-term, predictable federal policies, in contrast to the permanent entitlements that fossil fuels have enjoyed for 90 years or more,” said Denise Bode, CEO of the American Wind Energy Association. ”Now that we're competing with natural gas on cost, we need consistent federal policies to ensure we have a diverse portfolio of energy sources in this country."

In Europe also, new installed capacity in 2010 (9.9 GW) was 7.5% down on 2009 (10.7 GW), despite a 50% growth of the offshore market in countries like the UK, Denmark and Belgium, and new developments in Eastern Europe, mainly in Romania, Bulgaria and Poland.

"These figures are a warning that we cannot take for granted the continued financing of renewable energy" said Christian Kjaer. "Better access to financing is urgently needed, and the European Union must act without delay to prevent Europe losing its leadership in wind power and other renewable technologies.

“2010 was a tough year for most industries, and wind power was no exception,” concluded Steve Sawyer. “2011 will be better. Orders picked up again in the second half of 2010, and investments in the sector continue to increase.”

9.3 gigawatt (GW) of new wind power capacity was installed in the EU during 2010, reaching a total of 84 GW by the end of 2010, according to figures released by the European Wind Energy Association (EWEA) and coinciding with today's publication by the European Commission on financing renewable energy.

While offshore wind power installations grew 51% from 582 MW in 2009 to 883 MW last year, onshore wind power installations (8.4 GW) were down 13.9% compared to 2009 (9.7 GW).

"These figures are a warning that we cannot take for granted the continued financing of renewable energy" said Christian Kjaer. "Better access to financing is urgently needed, and the European Union must act without delay to prevent Europe losing its leadership in wind power and other renewable technologies. Today's communication from the Commission on the financing of renewables is a start, as long as it is followed up quickly by the Commission putting its proposals into action."

Total investments in new wind power plant was unchanged at € 13 billion, compared to 2009, due to the larger share of offshore wind capacity.

Newly installed capacity in 2010 (9.3 GW) was 10% down on 2009 (10.3 GW).

"Remarkable growth in the onshore wind markets of Romania, Poland and Bulgaria could not make up for the decline in new onshore installations in Spain, Germany and the UK. Strong development of the offshore wind market was led by the UK, Denmark and Belgium," said Christian Kjaer, Chief Executive Officer of EWEA.

The overall market for renewable power capacity, including wind, solar, hydro and biomass, reached record levels in 2010, increasing 31% from 17.5 GW in 2009 to 22.6 GW in 2010. Renewable energy accounted for 41% of all new installations.

Wind power installations accounted for 17% of new electricity generating capacity in 2010, the first year since 2007 that the EU did not install more wind power than any other generating technology. The EU continues to move away from fuel oil and nuclear power for electricity production, decommissioning more old capacity than installing new capacity. However, for only the second time since 1998, the EU installed more coal power capacity than it decommissioned in 2010. 28 GW of new gas capacity was installed last year, compared to 6.6 GW in 2009. Gas represented 51% of all new power capacity in 2010.

The wind power capacity installed by the end of 2010 will, in a normal wind year, produce 181 TWh of electricity (up from 163 TWh), meeting 5.3% of overall EU electricity consumption (4.8% in 2009).

With 308 new offshore wind turbines installed in 2010 - an increase of 51% in installed wind power capacity on the previous year - offshore wind power experienced a new record growth in Europe.

In total, 883 Megawatt (MW) of new capacity, worth some €2.6 billion, were installed in 2010 in nine wind farms in five countries, making a total of 2,964 MW.

The installed offshore wind power capacity now supplies the equivalent of 2.9 million average EU households with electricity –comparable with the amounts of power consumed by the cities Berlin and Brussels together – from a total of 1,136 offshore wind turbines. In a normal wind year they would produce 11.5 Terawatt hours (TWh) of electricity.

These figures are published by the European Wind Energy Association (EWEA) in its “European offshore wind industry - key trends and statistics 2010” today in Brussels.

They show the United Kingdom to be European (and world) leader, with a total installed offshore wind capacity of 1,341 Megawatt (MW). The UK is followed by Denmark (854 MW), The Netherlands (249 MW), Belgium (195 MW), Sweden (164 MW), Germany (92 MW), Ireland (25 MW), Finland (26 MW) and Norway with 2.3 MW.

EWEA’s Chief Executive, Christian Kjaer commented: “With over 50% percent market growth, 2010 sets a new record for European offshore wind energy. Meanwhile, the 29 new offshore turbine models announced during 2010 show a growing commitment to the offshore wind energy sector by large, global industrial players, offering a real boost for Europe’s economy, its efforts to tackle climate change, create green jobs and exports while reducing our dependence on imported fuel”.

During 2010, 29 new offshore turbine models were announced by 21 manufacturers: 44 new turbine models have been announced by 33 manufacturers over the last two years.

2010 saw an improving financing environment with private banks, financial institutions like the European Investment Bank (EIB), utilities and pension funds backing the sector. Two major deals completed in 2010 highlighted the brighter financial outlook: Thornton Bank C-Power and Trianel Wind Farm Borkum West both came to financial close.

“Finance remains a big challenge but we are seeing improvements with more banks and other financing institutions ready to invest in large offshore wind projects,” commented Kjaer.

EWEA forecasts continued strong growth next year. Between 1,000 and 1,500 MW of new offshore wind power capacity is expected to be fully grid connected in Europe during 2011, compared with 883 MW of new capacity in 2010.

Ten European wind farms are currently under construction with a total of 3,000 MW – these will more than double the installed capacity in the 45 already grid connected offshore wind farms.

EWEA research shows that a total of 19,000 MW of offshore wind capacity is already fully consented. If constructed, it would generate 66.6 Terawatt hours of electricity in a normal wind year - enough to supply 14 of the largest capitals in Europe with electricity, including Paris, London and Berlin. Not included in this figure is large additional offshore wind energy capacity planned but not yet fully consented in the UK.

U.S. wind energy industry finishes 2010 with half the installations of 2009, activity up in 2011, now cost-competitive with natural gas

Industry weathers latest boom-bust cycle as utilities move to lock in more wind power at favorable long-term rates

Washington, D.C. - America's wind industry built 5,115 megawatts of wind power last year, barely half of 2009's record pace, but entered 2011 with over 5,600 megawatts currently under construction - and with wind cost-competitive with natural gas for new electric generation, utilities are moving to lock in favorable rates.

"Wind power is a great deal right now in many areas of the country," said Denise Bode, CEO of the American Wind Energy Association (AWEA). "However, our industry continues to endure a boom-bust cycle because of the lack of long-term, predictable federal policies, in contrast to the permanent entitlements that fossil fuels have enjoyed for 90 years or more.

"Now that we're competing with natural gas on cost, we need consistent federal policies to ensure we have a diverse portfolio of energy sources in this country, and don't become overreliant on one source or another."

AWEA reported today that 3,195 megawatts (MW) of wind-powered electric generating capacity came online in the fourth quarter of 2010. That performance was below the 4,113 MW installed in the same period in 2009, but a leap from the third quarter of 2010, when only 670 MW were installed. The U.S. finished the year with a total of 5,115 MW of new wind power.

Buoyed by a one-year extension of the 1603 Investment Tax Credit for renewable energy in the final days of the 111th Congress, the industry entered the new year with over 5,600 MW of electric power currently under construction, well above the same time a year earlier. Further projects are expected to start up in time to meet the new construction deadline for the tax credit, now set to expire at the end of 2011. The industry is likely to finish 2011 ahead of 2010 numbers, according to Elizabeth Salerno, AWEA Director of Industry Data & Analysis.

"Wind's costs have dropped over the past two years, with power purchase agreements being signed in the range of 5 to 6 cents per kilowatt-hour recently." Salerno said. "With uncertainty around natural gas and power prices as the economy recovers, wind's long-term price stability is even more valued. We expect that utilities will move to lock in more wind contracts, given the cost-competitive nature of wind in today's market."

Total U.S. wind capacity now stands at 40,180 MW, an increase in capacity of 15% over the start of 2010, AWEA reported today. For the first time, U.S. capacity fell second to China's; China now has 41,800 MW in operation, an increase of 62% in capacity over a year ago, according to a Jan. 13 report from the Chinese Renewable Energy Industries Association.

With uncertainty over national policies still holding back the U.S. industry, state targets for renewable energy continue to drive wind installations in many areas of the country. "We'll continue to work for a strong federal energy policy that drives the deployment of renewable energy technologies in the 112th Congress," Bode said, "but we'll also be defending and improving on state renewable targets, as well as promoting other sources of demand - such as more distributed and community wind projects, and corporate purchasing under the new WindMade trustmark."

Texas, the leading wind power state in America for several years running, achieved a major milestone by surging past the 10,000-megawatt mark for total installations, a quarter of all wind capacity in the U.S., with the addition of 680 MW in 2010. Known as the hub of the oil-and-gas industry, Texas achieved the mark thanks to aggressive pursuit of renewable energy and a renewable electricity standard passed in 1999 and strengthened in 2005. On average, wind now generates 7.8% of the electricity in the Electric Reliability Council of Texas (ERCOT) which covers most of the state, peaking as high as 25%.

Other states active in pursuing targets for renewable energy last year were Illinois (498 MW added), California (455 MW), South Dakota (396), and Minnesota (396 MW). Five more states, which generally began tapping their inexhaustible wind resources more recently than the leaders, showed growth rates above 100%. With the addition of Delaware and Maryland, 38 states now have utility-scale wind projects, and 14 of those have now installed more than 1,000 MW of wind power.

Zorlu Enerji Elektrik Uretim to Expand Capacity of Wind Energy in Pakistan

Turkish power utility, Zorlu Enerji Elektrik Uretim has announced that the company would deploy more wind turbines to enhance the output capacity of its wind power project in Sindh province from 6 MW to 56.4 MW.

The wind farm, which is situated 100 km northeast of Karachi, is anticipated to be finished by 2012. The expansion of the wind farm will require an investment of about $147 million.

The Asian Development Bank has granted a $36.8 million loan to Zorlu Enerji Elektrik Uretim to augment the output power of its wind farm in Pakistan. Zorlu Enerji has to payback the loan amount with interest within a period of 12 years with an extension of two years.




Source:-http://www.evwind.es/noticias.php?id_not=10161

India gets 1st green rly station

New Delhi: Railways has inaugurated India’s first green station at Manwal on the Jammu-Udhampur rail route. 

With the tiny station facing frequent power cuts, it has been a provided a supply of solar power. “A request was made to J&K SEB for providing reliable electric power supply to this station...it was planned to generate onsite renewable energy through solar panels, said A S Negi, spokesperson, Northern Railway. 

Sources said that now station lighting and fans are working on solar power. The state electric supply is a standby source, which can be used in case of any failure of solar system. Electric Load of S&T installations and one water cooler is on state electric supply. Additional Solar panels for increasing backup for power supply and standalone lights for complete platform lighting are planned to be provided for further improvement in the system after the trials are successful. 

To reduce the existing load at the small station, some surplus fittings have been removed and energy efficient T-5 fittings, 60W fans, new exhaust fans (55 Watt) and CFLs have installed. 

‘‘We have used 28 solar panels (Each 12V, 70W) have been used in two groups of 14 panels each,” said Negi. 

“Station building load has been segregated in two portions. Each portion is being fed by one group of solar panels. The complete work has been done departmentally by arranging solar panels from Kapurthala rail coach factory and Solar charge controllers have been purchased from market. All wiring, installation, commissioning has been done departmentally without any outside assistance,” he said.

Source: Article Window

Mercator to invest Rs 2.5 bn in Indonesian coal mine

Mumbai-basedcompany Mercator Lines, plans to invest about 2-2.5 billion in developing a coal mine in the Batuah region of Kalimantan province in Indonesia. as part of its strategy to increase its presence in the high-margin mining industry. The company will form a joint venture with an PT United Coal of Indonesia to develop the infrastructure for the mining project. Mercator so far owns four coal mines in Indonesia with total reserves of about 70 million tones. The company plans to raise the total deposits capacity to 100 million tonnes.

Source:-http://www.projectsmonitor.com/COAL/mercator-to-invest-rs-25-bn-in-indonesian-coal-mine

IN BRIEF - 17 JAN 2011

The Himachal Pradesh cabinet has given the 420-mw Reoli Dugli HEP in Lahaul-Spiti, which was earlier allotted to Moser Baer Projects Ltd, to L&T Ltd. The state cabinet decided to allot the project to L&T as it agreed to match the H1 highest bid of 80 crore. 

Indian Oil Corporation Ltd laid the foundation of the first state-of-theart Styrene Butadiene Rubber plant at the Panipat petrochemicals hub. The plant, which will produce 120 kt of rubber annually, will be set up in a joint venture with Taiwan State Rubber Corporation (30 per cent) and Marubeni Corporation of Japan (20 per cent) with IOCL holding the remaining 50 per cent stake. 

NEEPCO Ltd plans to restart work on the Tuirial HEP in Mizoram. The Cabinet Committee on Infrastructure has revised the cost of the 60- mw HEP from 369 crore to 914 crore owing to the delay. The project is scheduled to be commissioned within three months. 

Two power projects—1,200-mw North Chennai TPS and 1,000-mw Vallur TPP—in Ponneri taluk in Tiruvallur district of Chennai are expected to be commissioned within a year. While the 2x600 mw North Chennai project of Tamil Nadu Electricity Board will start generation by January next year, the 2x500 mw Vallur project of NTPC Tamil Nadu Energy Company Ltd is scheduled to be completed by year-end.

Source:- http://www.projectsmonitor.com/MISC/in-brief--17-jan-2011-2

ONGC announces framework agreement with Sistema

ONGC Videsh Ltd, the overseas arm of ONGC Ltd, has signed a framework agreement with Sistema, the largest diversified public financial corporation in Russia and the CIS, for cooperation in the hydrocaron sector. 

The two companies have agreed to consider opportunities for a potential transaction involving (i) Sistema's majority stake in JSC Bashneft and 49 per cent stake in RussNeft, each of which owns and operates numerous fields and refining assets in Russia, (ii) ONGC Videsh's 100 per cent stake in Imperial Energy Corporation, which owns and operates fields in Russia, and (iii) Any other oil and gas assets which the above companies may acquire before definitive agreements are signed.

The parties further agree to consider joint investments in each other's existing and future exploratory assets in certain third countries. 

ONGC proposes to lead a consortium of Indian oil sector PSUs to consider acquiring the stake offered by Sistema under the agreement. The two companies have agreed upon the milestone date of June 30, 2011, by which to formulate the terms for potential transactions. 

ONGC Chairman R.S. Sharma said that Sistema had been scouting for a strategic partner with experience in oil and gas sector and given that ONGC had a proven track record of over 50 years in the oil and gas business worldwide, the partnership should establish synergistic value to the growth plan of the two groups in Russia's oil sector. 

Meanwhile, ANP, the regulatory authority of Brazil, has given approval for farming out in block BM-S-73 in which ONGC Campos Limitada, a wholly owned subsidiary of OVL, had acquired 100 per cent stake in 2007. Similar approval for block BM-S-74 is expected shortly.

The offshore concession is located in the Santos basin and covers an area of 160.04 sq. km. The concession is a part of Brazil's ninth licensing round and is currently in exploration phase. 

ONGC Campos Limitada, Petroleo Brasileiro S.A., Petrobras and Ecopetrol Oleo Gas do Brasil LTDA had entered into an agreement under the terms of which Petrobras will get 43.5 per cent share, Ecopetrol will get 13 per cent and 43.5 per cent will remain with ONGC Campos Limitada, the operator of the block. 

ONGC Campos Limitada also gets 43.5 per cent share from Petrobras (43.5 per cent) and Ecopetrol (13 per cent) in their block BM-S-74.

Source:-http://www.projectsmonitor.com/OILGAS/ongc-announces-framework-agreement-with-sistema