Softening its stance on mining in heavily-forested areas, the Environment Ministry on Wednesday gave its nod for clearing six coal blocks, including five in 'no go' areas, for three major power plants in Orissa."All the six coal-blocks are part of the IB Valley coalfield and only one (Meenakshi-A) is presently in the 'go' area, the other five being in 'no go' areas...All six blocks will now be considered by FAC (Forest Advisory Committee) as 'go' areas," Environment Minister Jairam Ramesh said in a statement.Giving green signal to clear coal-blocks linked to UMPP, NTPC and OPGC power plants, the Minister said the Power Ministry should give "special focus" on ash disposal and water availability.Three coal-blocks (Meenakshi-A, Meenakshi-B and Meenakshi Dipside) have been allocated to the 3960MW/4000MW Ultra Mega Power Plant (UMPP).Coal-blocks (Manoharpur and Manoharpur Dipside) have been allocated to the 1320 MW power plant of Orissa Power Generation Corporation (OPGC). One coal-block (Dulanga) has been allocated to NTPC's 1600 MW power plant.Hailing the Environment Ministry's move, the Power Ministry said it will now pave way for raw material security for the project."We are delighted... We will immediately go for further process of the Orissa UMPP," Power Secretary P Uma Shankar said.Ramesh, who last week granted a stage-I forest clearance to three blocks in dense forests in Chhattisgarh, said the Environment Ministry's intervention will help reduce biodiversity impacts on the forests where coal blocks will be opened up.After a developer gets stage-I forest clearance, it needs to demonstrate and provide requisite documents that the project will be restricted to the area for which the clearance has been given.Ramesh said both the Power and the Environment Ministry had a relook into the three projects to assess biodiversity impact and also took satellite imagery of the forest areas to be mined.He said the power units which will set up with the coal mined in these six blocks will use supercritical technology, "which will result in a saving of around five to eight per cent in terms of carbon dioxide emissions from each of the generating units as compared to a comparable sub-critical 500 MW unit".The additional condition that will be imposed over and above the usual conditions governing forest clearance is that the project proponents will bear the cost of regeneration of an area of open, degraded forest land equivalent to the amount of medium density forest land being diverted, Ramesh said. (PTI)
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India will receive a loan of 200 million euros from the European Union to finance private sector projects for the development of renewable energy resources.The EU's assistance comes as part of its "strategic partnership" with India and will be made available by the European Investment Bank (EIB) to ICICI Bank, India's largest private bank, in the first-ever cooperation between the two financial institutions.It is intended to provide long-term financing for investments on a number of electricity generating projects, especially in the areas of solar photovoltaic, biomass and onshore wind power by private companies, thereby making a contribution to India's efforts to reduce greenhouse gas emissions, the EIB said on Monday in a press statement.The loan is being provided under the EIB's Energy Sustainability and Security of Supply Facility (ESF), a 4.5 billion euro programme designed to reinforce the EIB's goal of promoting renewable energy and energy efficiency in non-EU countries.This is the first cooperation between the long-term financing institution of the 27-nation EU bloc and India under the ESF programme, the statement said.The ESF is used when the bank does not need a credit guarantee from the EU because the recipients are investment-grade countries or where appropriate security can be provided. In addition to the ESF, the EIB has an external lending mandate to implement the EU's lending operations outside the bloc as part of its cooperation with those countries and since 1993, the bank has carried out four successive lending operations for Asia and Latin America.Under the current mandate, covering the period between 2007 and 2013, the EIB is authorised to lend up to 3.8 billion euros for financing projects that contribute to the avoidance or reduction of greenhouse gas emissions through foreign direct investment or technology and know-how transfer.The lion's share of the funds, amounting to 2.8 billion euros, are earmarked for Latin America, while the Asian region will receive 1 billion euros.The EIB's loan for India will "support the EU-India strategic partnership, which provides for cooperation in curbing climate change", the statement said.The projects eligible for financing will bring economic benefits to the region by enhancing the production of energy from renewable resources, reducing the costs for imported energy, expanding the use of domestic resources and curbing greenhouse gas emissions and other airborne pollutants."The EIB will ensure that the projects are economically and financially viable, technically adequate and in compliance with the bank's environmental and social requirements," the statement said. (PTI)
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During the 1880s the European traders sought great concessions from China for trading at the Chinese ports. It was called the cutting of the Chinese Watermelon. Mostly these concessions were granted because the European powers at that time were both economically and militarily strong. Note this as we will come back to this later.The Chinese economic engine among other things heavily depends upon its power generation and its farm outputs. China's farmlands are crucial to feed its billion people and also to keep up its food export which by the way runs into billions of dollars. China also derives roughly one-fifth of its power from hydropower plants. When the recent drought reduced the reservoir levels in Chinese dams, China had to cut power supply to industrial belts. The importance of water-energy nexus cannot be understated in the Chinese economy.Water resources also have been an important part of China's state agenda. Not only have they been tapped for increasing China's farm production but also for its industrial expansion. China is today both the world's largest producer of wheat and rice. In recent years China has also shown the highest activity level in hydro power sector in the world. The relative share of hydro power generation has been falling in many countries in the world including India. Yet China's share has been growing in spite of it adding a coal plant to its grid each week.The fixation of the Chinese administration increases the Chinese vulnerability to any adverse effect on its water resources. China went ahead with the Three Gorges dam, the largest hydropower plant in the world inspite of grave environmental and social concerns the dam raised.The adverse effect of this massive water dependence is visible in the severe drought China faced the last and this year which affected both its food and power production. For the first time China had to import corn. But the administration for ubiquitous reasons seems to see answer not in less dams but more dams. Now it wants to build four more super dams on Jinsha River, Shanghai Daily reports and on other rivers, one of which includes the Zangmu Dam on Brahmaputra- the one which has been raising concerns in India.In spite of the recent assurances by the Chinese government to India that the dam will not restrict the flow of water to India, the assurance can only be taken with a pinch of salt. For both the adverse climate conditions that China has been facing in the past year threatening to pull down its water-energy strategy and the lack of knowledge that India possess of the Chinese-Brahmaputra region, it may actually go ahead with its plan to divert or manipulate Brahmaputra's flow. For the past one year China has faced the worst drought in last 50 years. Parts of south, central and north China suffered severe shortage even though the region is considered water rich. Hubei province one among many affected saw 55,000 Hectares of farmland affected and disruption of drinking water supply to 300,000 people. However in the past one month the situation has completely flipped now many of the drought affected provinces face a 56 years worst flood. Hangzhou province has seen 250,000 hectare of farmlands destroyed and industrial production halted in two thousand factories, Zinhua reports. While the drought in north continues where 2.4 million hectare cropland stands affected. The situation has been very crippling for vast parts of China and it is not looking to get better.Very likely that these climatic disasters are evidence of climate change but China seems determined to tackle this with more structures. China has enormous stakes in its water-energy nexus. Beyond the super dams it also plans a number of smaller dams. It has 28 projects lined up on Brahmaputra alone including one that could be the world's largest, Guardian reports and some other projects on upstream Kosi.Chinese assurances alone can't be trusted in this situation. A recent intelligence report by RAW says, "Beijing is not responding to India's concerns on the Brahmaputra dam. There is an urgent need to take up this issue with China as these dams will 'severely impact' the flow of water into India." That is not a surprise given that it is the scale of Chinese dependence upon its water-energy nexus that will decide its actions. The dire situation of drought and floods inside China is not something that can be expected to subside. Infact with the climate change in action, such situations can only get more frequent and worse. These might force China to make use of its water resources wherever available- which includes the Brahmaputra and Kosi. If the situation keeps degrading we might see India and China on a negotiating table in a couple of years deciding what concessions can India and Bangladesh can make for China, 'given' its situation. And how that will play out reminds me of the story I quoted in the beginning about the Chinese watermelon. Yash Saxena is a sustainability consultant with Emergent Ventures, a climate change mitigating consultancy. He also works on innovation evangelism with Techpedia
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Despite the recent steep fuel price hike, state-owned oil firms will lose a whooping Rs 122,000 crore on diesel, domestic LPG and kerosene sale this fiscal, Oil Minister S Jaipal Reddy said on Thursday."We were compelled to increase prices," he said in Lok Sabha where members criticised the recent Rs 3 per litre hike in diesel, Rs 2 a litre increase in kerosene and Rs 50 per cylinder hike in LPG rates.Price of international oil, on which India is 80 per cent reliant to meet its needs, is rising, he said, adding the average price of crude for the current financial year is $113 per barrel.The government has cut customs and excise duties on crude oil and products coupled with a "moderate increase", he said adding that in spite of the increase the oil companies' under recoveries would be Rs 1.22 lakh crore for the current fiscal.Replying to a supplementary, he informed the House that in last three years, the prices of diesel have been increased four times while prices came down twice.Similarly, in case of LPG, prices were increased four time and reduced only once.Giving a comparison of prices in the neighbouring countries, he said petrol price is highest in India. It is currently Rs 63.70 a litre (Delhi) compared to Rs 41.81 in Pakistan, Rs 50.30 in Sri Lanka and Rs 44.80 in Bangladesh and Rs 43.59 in the US.Prices, however, in European nation are much higher as compared to India.In case of LPG and Kerosene, prices in India are lowest compared to neighbouring nations. While diesel prices are comparable.(PTI)
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India finalised the structure of infrastructure debt funds, an instrument it wants to use to source long-term debt to finance the country's infrastructure needs, saying they could be set up as companies or trusts, according to a finance ministry statement.India plans to pour $1 trillion from next year to 2017 to expand its clogged road and rail network, build more power plants and ports, so it can overhaul its creaking infrastructure, long seen as hobbling faster growth in Asia's third-largest economy.Finance Minister Pranab Mukherjee had in his budget speech for fiscal year 2011-12 announced the setting up of infrastructure debt funds (IDFs) to source long-term debt from both foreign and domestic investors, and also eased taxation rules to make IDFs more attractive to off-shore funds.If an IDF was set up as a trust, it would issue rupee denominated units which will mature in five years and will have to invest at least 90 percent of its investible resources in debt securities of infrastructure projects, the finance ministry statement said on Friday.Such IDFs would be regulated by the capital markets regulator, the Securities and Exchange Board of India.They could also be set up as companies, in which case they would be regulated by the Indian central bank and could raise resources through rupee- or dollar-denominated bonds with a minimum maturity of five years.Non banking financial companies, infrastructure finance companies and banks can set up an IDF as a company."The structure of IDFs would be closely reviewed for its efficacy and further refinement," the statement said.Indian commercial banks face difficulties in lending to infrastructure projects that have long payback periods as the banks mostly lend short-term funds, which creates an asset liability mismatch. Most banks are also nearing the maximum limit that they can lend to the infrastructure sector, the statement added.IDFs will take over these exposures and commercial banks are then free to lend money to other infrastructure projects and deploy their funds in other productive avenues of the economy.IDFs will also help tap long-term resources through pension and insurance funds and, thereby, help create a deeper secondary market for long-term paper, which is lacking sufficient depth, it said."IDFs through innovative means of credit enhancement is expected to provide long-term low-cost debt for infrastructure projects by tapping into source of savings like insurance and pension funds which have hitherto played a comparatively limited role in financing infrastructure," the statement added.(Reuters)
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GMR Infrastructure is considering a bid to operate airports at Barcelona and Madrid, after the Spanish government authorised a stake sale in the two aerodromes, a company spokesman said on Thursday."We are considering to bid for these airport projects," said the spokesman, who declined to be named.GMR group, which has built and is operating Istanbul airport in Turkey and is also building an airport in Male, has also been qualified to bid for Zagreb airport project in Croatia which might be finalised in 3-4 months, he said.GMR is also looking at bidding for airport development projects in Puerto Rico and Southe Korea, while it has initiated discussions with Kenyan and Tanzanian authorities for setting up of new new airports in these countries, he said.In India, the group has built and operates the Delhi and Hyderabad airports.(Reuters)
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Asian nations moved to release emergency oil stockpiles on Friday as part of a rare global coordinated action by consumer countries to prevent high energy prices from stunting a stuttering economic recovery.The move, led by Washington and criticised by the oil industry as an unnecessary distortion of markets, suggests a fundamental shift on the part of industrialised nations toward intervention in commodity markets as an economic policy tool.Brent oil prices tumbled to a four-month closing low on Thursday and after rallying early on Friday, turned and fell again.Some doubts emerged that the unexpected decision by the International Energy Agency to release 60 million barrels over the next month would have a long-term impact.Japanese Economics Minister Kaoru Yosano said the IEA move was a warning to speculative buyers but India's Oil Minister S. Jaipal Reddy doubted the action would have an impact."Even if there is a slight increase in production (supply), those gains will not be made available to us because of unbridled speculation in the financial markets of the world," he said. "We don't know whether this (weaker oil prices) is a stable trend."The stock release is only the third in the 37-year history of the agency that was set up as a counter weight to exporting group OPEC.IEA Asian members Japan and Korea said that from next week they will start releasing oil reserves in line with the agency's targets.Japan will cut the reserve requirement for oil companies by 7.9 million barrels over the next 30 days and South Korea will release 3.46 million barrels, together providing about 19 percent of the IEA target.Australia and New Zealand, the remaining members from the Asia-Pacific region of the 28-nation grouping, are not participating.The news follows a Group of 20 agreement, struck in Paris on Thursday, to tackle high food prices by boosting farm output, food market transparency and policy coordination.The G20 deal is another sign that global policymakers are reaching beyond traditional economic policy tools to sustain global growth.The world economy, recuperating from the 2008-2009 global financial and economic crisis, has shown signs of losing traction in recent months and the Federal Reserve acknowledged that this week by cutting its forecasts for growth in the world's biggest economy.High commodity costs that sap consumers' spending power and squeeze manufacturers' profit margins are blamed for much of the slowdown.Scare OptionsIndustrialised nations managed to pull their economies from the brink of depression by dishing out trillions of dollars in stimulus packages and slashing borrowing costs to record lows.But that left rich economies from Japan to the United States with huge debt and few policy options if their economies were to weaken again.While the release of oil was spearheaded by the United States and other developed nations, booming emerging powerhouses such as China and India are also set to benefit as they try to contain stubbornly high inflation without sacrificing too much growth."To some extent, it will help lessen some inflation pressure facing Asian countries and it is also good news for the global economic recovery," said Gong Jialong, former chairman of a body representing China's petroleum industry body.Gong and others, however, compared the move that will increase daily supply by nearly 2.5 percent to currency market intervention. It is not something that could reverse a broad trend but it could help prevent excessive price moves."The hoped-for impact is not to induce a downward trend in commodity markets, but instead to head off potential price increases stemming from the increase in third quarter demand," said PFC, a Washington-based energy consultancy.Seasonal oil demand ramps up in the third quarter as refineries prepare for the northern hemisphere winter when heating consumption peaks.Another factor suggesting that the IEA decision will only have a short-term impact on prices is that oil faces an incremental increase in demand now that several countries are turning away from nuclear power generation following Japan's crisis, a Japanese government official said."Demand for fuel will rise globally with more countries unable to rely on nuclear power as much as that had initially hopes. That means prices have more reason to rise further than decline," he said. He declined to be identified because he is not authorised to speak to the media.JPMorgan Chase said even some cooling effect on prices would prove a boon to the world economy."If our projections are realised, the IEA release provides the equivalent of a $140 billion stimulus to consumers," it said in a note. "The release will prove stimulatory to the global economy, particularly for emerging markets and the U.S."Indeed, the oil market may be missing the key point of the IEA decision, said Frederic Neumann, co-head of Asia economic research at HSBC."Markets appear to be shrugging off the long-term implication of this move. But they are wrong," he said. "The real message from yesterday's announcement is that policy risk is back in a huge way in the oil market."Deepening Consumer ConcernsThe IEA decision was the culmination of a plan that President Barack Obama put into motion more than a month ago, and shows the deepening concern among rich nations over the economic damage from high energy costs.Obama drew immediate criticism from the oil industry and Republicans, who called it an ill-timed misuse of stockpiles that risks leaving the government with less ammunition should a deeper supply crisis emerge.Oil prices have risen 20 percent over the past year, pushing U.S. retail gasoline prices to $4 a gallon.While Brent crude peaked above $125 in April, it has since fallen sharply. After dropping a further 6 percent on Thursday, prices are only a little higher than mid-February, just before the Libyan conflict began.The IEA said the action would fill shortages caused by the Libyan conflict and get oil quickly to market while Saudi Arabia makes good on a pledge to pump more oil.The previous two releases followed abrupt shortages caused by the first Gulf War in 1991 and by Hurricane Katrina in 2005.(Reuters)
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A sharp slowdown in economic growth, particularly in the United States, is hitting consumers and companies and forcing economic forecasters and analysts to slash estimates for global oil demand.In a report to be published in the next few days, Barclays Capital has cut its estimates of world oil demand growth for this year and 2012 to reflect the dramatic slowdown in the United States and elsewhere.The investment bank, which has been one of the most bullish forecasters of oil prices this year, now sees global oil demand increasing by 1.1 million barrels per day (bpd) this year to 88.68 million bpd.Barclays Capital previously forecast a rise in oil demand this year of 1.56 million bpd and two months ago expected the increase to be as much as 1.7 million.Analysts say they expect other investment banks to follow Barclays Capital and cut their own estimates further.Barclays Capital has also cut its forecast for oil demand growth next year, expecting an increase of 1.34 million bpd in 2012, compared with its previous forecast of 1.4 million bpd."Given the general state of the macro-economy, the state of oil demand does not seem particularly healthy," Barclays Capital oil analyst Amrita Sen said."Moreover, US GDP is 2 per cent lower than what everyone expected (or) knew of due to the revisions issued last week and our economists have reduced a cumulative 1.8 per cent of US growth over this year and next. Hence the revision."Washington has cut sharply its estimates of growth this year and now says the U.S. economy stumbled badly in the first half, coming dangerously close to contracting at one point.The Commerce Department said last week that the US. economy expanded by just 0.4 percent in the first quarter, a sharp downward revision from the previously reported 1.9 percent gain, and grew at only a 1.3 percent annual pace in the second quarter as consumer spending barely rose.More RevisionsUS consumer spending, which accounts for about 70 percent of US economic activity, decelerated sharply in the second quarter, advancing at only a 0.1 percent rate. In June, U.S. consumer spending dropped for the first time in nearly two years.Barclays Capital said it now expects real U.S. gross domestic product (GDP) to increase by an average of 1.7 percent in 2011 and global economic growth to average 3.8 percent.Barclays Capital's projections for oil demand growth this year are now below estimates from the world's top oil market forecasters, the International Energy Agency (IEA), the Organization of the Petroleum Exporting Countries (OPEC) and the U.S. Energy Information Administration (EIA).Both the IEA and EIA last month cut their oil demand growth forecasts for 2011, to 1.2 million bpd and 1.43 million bpd respectively, and analysts expect further revisions when they publish their latest estimates this month.Christophe Barret, global oil analyst at Credit Agricole, has already cut his estimate of global oil demand growth to 1.0 million bpd from 1.25 million bpd and says high oil prices are eating into fuel consumption across the world."Our estimates may still be too optimistic," Barret said.Olivier Jacob at oil consultants Petromatrix said lower economic growth and consumption were likely to lead eventually to lower oil prices.North Sea Brent crude oil futures hit a two-and-a-half-year high of more than $127 per barrel in April, but have since slipped back to near $112."Even Barclays, a perma-bull, is forced into revising down its forecast for oil demand growth for 2011," Jakob said. "High oil prices do have an impact on the global economy."(Reuters)
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