Never ending problem: Major load-shedding looms for two Indian states as CIL grapples with coal supply issues

Fossil Fuels: Perry prods India towards fossil fuels, Power cut alert over coal supply crunch, NEP revised to include new thermal power plants, Shell too knew about climate consequences

US to India: Don’t forget ‘reliable’ fossil fuels

As part of the US’ continuing efforts to secure external markets for its fossil fuels – and keen to profit off of India’s anticipated surge in energy demands – US Energy Secretary Rick Perry is prodding India to not be lured by “cheap renewable power” alone.

Instead – speaking at the inaugural US-India Strategic Energy Partnership summit – he wants India’s energy portfolio to also include coal, oil & gas and nuclear power, that he stressed were much more reliable and predictable sources of energy. Perry’s comments derive from the intermittency of power supply by solar and wind energy, and India’s currently miniscule renewable energy storage capacities.

Critically low coal stocks, high spot prices spell trouble for state utilities

Amidst expectations of a surge in power demand during summer, utilities in Maharashtra and Rajasthan are staring at a major shortfall in power generation if their critically low coal stocks – worth merely 2-7 days of power generation, as opposed to the CEA mandated 25-30 days – are not replenished and boosted in time by Coal India Limited (CIL). The utilities have also warned of extensive load-shedding if they are unable to procure enough power to make up for their loss in generation.

However, with critically low coal stocks affecting both Central and Independent Power Producers (IPPs), spot prices for the energy market have soared by as much as 24%, pushing up the average Market Clearing Price (MCP) to Rs. 4.02 (NTPC’s avg. tariff is Rs. 3.20/kWh), and may potentially cause the highest spot prices to even breach last year’s Rs. 11/kWh.

CIL’s persistent inability to supply enough coal – caused primarily by the inadequate availability of railway rakes to transport coal – could lead to a sharp spike in power tariffs as the affected utilities try to (partly) recover their expenses from end consumers.

NEP revised, makes away for more coal-fired thermal power

Reiterating conventional wisdom that coal-based thermal power is necessary to service baseload and peak power demand, the Central Electricity Authority (CEA) has made way for up to 6,440MW (6.4GW) of coal-fired thermal power to be added to the nation’s energy mix (by 2022) under the revised National Electricity Plan (NEP).

This is in addition to the roughly 50GW of similar capacity already under construction, and contradicts the draft NEP’s assertion that no new coal fired power units would be needed till 2022. CEA’s revision is being linked to the need to tide over falling energy generation from hydropower units in case of poor monsoons, as well as to account for the coal-fired capacity that will go offline in the next decade.

Proposed Ratnagiri mega-refinery ‘threat to mango, cashew orchards’

The agreement between Saudi Aramco and the Indian consortium of IOC, HPCL and BPCL for setting up a mega-refinery and petrochemicals complex in Ratnagiri (Maharashtra) has attracted stiff opposition from locals, who have called for the estimated Rs. 3 lakh crore ($44bn) project to be moved away from their 15,000 acres of fertile mango and cashew orchards. The locals have alleged that the complex is being “imposed upon them” against their will, and its sizeable water demands will also be a point of contention.

The proposed project is part of Saudi Aramco’s strategy to evolve from simply being a crude oil supplier, and it would be one the largest refinery complexes in the world – capable of processing nearly 1.2 million barrels of crude oil each day. It will also produce India’s much needed BS-VI standard petrol and diesel fuel, besides providing a wealth of feedstock for an estimated 18 million tons of petrochemical products annually.

Shell caught red-handed, Exxon suffers major setback in court

A Dutch news team has unearthed a stash of incriminating evidence against Royal Dutch Shell – one of the world’s biggest oil & gas extractors – that suggest that even during the 1980s, the driller was well aware of the climate change potential of burning fossil fuels.

Shell’s internal management however chose to ignore the warnings of its scientists, and instead continued to publicly question the scientific underpinnings of the findings – perhaps to protect its multi-billion dollar business interests.

The revelation places Shell in the same category as ExxonMobil – which too was found to have known the dangers of burning fossil fuels – and which has now been ordered to submit in courtdocuments on why it chose to ignore its own scientists’ warnings.

New Zealand bans all new offshore oil exploration

In another major blow to Big Oil, New Zealand has decided to not offer any new offshore oil exploration permits to its oil & gas industry – in an effort to not just tackle the issue of climate change well in advance, but also as a massive step towards its goal of a carbon neutral economy by 2050. The country’s 22 existing permits – some valid for decades to come – will however remain unaffected.

The New Zealand oil & gas lobby has predictably reacted with sharp criticism, labeling the move as “economic vandalism“, and has called into question the future of around 8,000 jobs supported by offshore exploration.

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