Big Solar Company Profitable

It has been a pioneer of solar photovoltaic cells for the commercial market in India, via its joint venture with the Tata Group called Tata BP Solar.

Globally, like it has become fashionable of late, BP Global, is distancing itself from its past. It's earlier name was British Petroleum, but of late it says BP stands for "Beyond Petroleum". Whatever the merit of that statement, BP Solar, their solar division, is among the largest solar companies in the world. In 2004, the solar industry grew 40% overall, and perhaps riding the boom, BP Solar was finally profitable. This is great news because if BP can keep this up, it points to an impending flood of new companies into the field, which will further drive the prices down.

We already have these new generation technology companies knocking though.

World's First Wave Farm

They said it would come up in China. But that did not make sense as technology leadership in the field was in the UK and in Australia. So fact proved to be otherwise.

They did it in Portugal. The world finally has a commercial electric power plant that generates power solely from ocean waves. The UK connection comes in the form of the company that provided the technology to set up the plant.

The waters in the oceans dont move as much as the winds, but energy density is much higher in the water, because it is much denser than air. Thus the mechanical power of the waves holds much potential for renewable energy researchers. If this plant is successful it could trigger off a series of other such plants in the region. Currently though wave power costs about 3 times as much as wind power.

However, one important barrier for renewable energy remains technology maturity. This is of course a problem in any area where a lot of technological developments are taking place fast. Setting up a renewable energy plant is like buying a PC - you already know it would not be technologically state-of-the-art, if not obsolete, long before it is up and running.

Renewable Energy in India - the Ministry's Scorecard

Via WorldChanging: Renewable Energy Access is carrying a roundup of renewable energy efforts in India based an update by the Ministry of Non-Conventional Energy Sources.

Not too many surprises there but there are some useful figures for reference.

India has become the fourth largest wind power producing nation in the world with a capacity of 3500 MW, over 1600 MW of which has come in just the last two years. Other nations though are fast catching up. In the UK just one plant is expected to have a capacity of 10 GW.

Last year apart from 1000 MW added via wind power, 200 MW were added through small hydro and biomass power projects. Further 10% of the new power addition in the the country is to come from renewable energy sources.

Other highlights:

• 100,000 biogas plants were installed in 2004-05. In the same period biomass power projects with a total capacity of 140 MW were added.
  
• A 1 MW power plant from cow dung and a 3 MW poer plant from palm oil industry waste were commissioned as pilot projects to pave the way for many more.
  
• "A District Advisory Committee (DAC) on Renewable Energy headed by the District Collector is being constituted in every district to oversee the implementation of renewable energy programs in the district, integrate these with other rural development programs and address barriers to the accelerated switch over to renewable energy."
  
• There is a mention of the Village Energy Security Program for providing electricity to rural villages via biomass and other renewable energy sources.
  

Rainwater Harvesting

Treehugger reports on a rainwater harvesting workshop held in Toronto. Some important points were made here.

We assume that rain water harvesting is needed only in seriously water starved communities and areas. Those theories stand bunked. Here is why:
1. Even if a town is sitting right beside a giant fresh water lake, pumping the water out of the lake and into people's homes involves huge expenditure in the form of investment in infrastructure and the ongoing expenses in terms of personnel and power to keep that infrastructure running.
2. Rain water harvesting reduces the load on public drains - hence no water clogged roads and reduction in infrastructure and maintenance costs for urban infrastructure.
3. Rain water is usually safer to drink than the mains water supply in many cities. Even if you dont drink the rain water you can still use it for 95% of the needs - only 5% of the water is for drinking/cooking.

There is a difference between the kind of rain water harvesting (RWH) that is practised in the West and what it implies in India. In the West (it is actually most popular in Australia), you directly take the water falling on your roof and collect it in a giant tank - like in this example - to be reused whenever required. Works for regions where it rains little but through out the year. However, since most of the rainfall is concentrated in just 3-4 months in most regions in India, rain water harvesting for us usually refers to using the rain water to charge the water table or ground water level. So the water level in our wells, borewells, lakes and ponds rises, and we still have the other benefits of reducing strain on public infrastructure. And maybe some Karma too, who knows?

New World Record for Mileage at almost 4,000 kmpl

via GCC: 3,836 kmpl - that was the mileage (or more correctly the petrol equivalent energy) returned by a prototype at the Shell Eco-marathon in France last weekend. Predictably that was a new world record. If automobiles the world over had one tenth of that mileage, oil prices would easily fall to half.

200 cars participated in this week's eco-marathon, only six of which were fuel-cell cars. Yet one of those 6 topped the overall rankings. The best for a petrol car was 2560 kmpl, for diesel 1807 kmpl and for LPG it was 1804. The victory for the hydrogen car is causing more participants to consider a switch to hydrogen next year.

Hydrogen Superhighway Closer to Reality

Via GCC: Small car major ZAP (Zero Air Pollution), with a technology partner Apollo, has managed a technological (or engineering?) breakthrough that will allow fuel cell cars to carry ammonia instead of liquid or gasseous hydrogen as fuel.

To start a little from the beginning, fuel cell cars use hydrogen as fuel. Hydrogen though a very clean fuel (it's combustion produces water) is very volatile. So it has to be properly insulated because it can react with almost every constituent of air. Thus the technology to build an appropriate fuel storage capacity has been a key challenge for fuel cell cars. Strong (and expensive) tanks to store liquid hydrogen, and nanotechnology-based porous material to store hydrogen were some of the options that have been the most promising thus far. The new technology altogether bypasses the challenge.

The new car will store hydrogen in the form of ammonia(NH₃), which will be passed through an onboard "ammonia cracker" that will pull out hydrogen from it and pass it to the Alkaline Fuel Cell (AFC). The technology offers several advantages over conventional PEM fuel cell vehicles.

Firstly savings in costs and logistics resulting from the elimination of hydrogen storage. Ammonia can be produced (to start with at least) at the same refineries where fossil fuels are produced, and can be transported in pretty much the same manner. Plus the actual vehicle becomes lighter and cheaper.

Secondly, AFC's are very efficient and not requiring expensive precious metal catalysts are cheaper than PEM's. They also operate well at room temperature and have a good cold start capability. ZAP-Apollo have solved a major technological problem related to CO₂ poisoning that has prevented popularity of AFC cars thus far.

This could be a real breakthrough in achieving California governor Arnold Schwarzenegger's purported target of a Hydrogen Superhigway in California by 2010.

Bio-diesel Commitments

Green Car Congress points to a news report that the Haryana government has decided, on the basis of a pilot project on 20 buses, that all buses at the Gurgaon bus depot will run on a 5% bio-diesel mix - starting this June. This makes it the first bus depot in the country to issue this directive. Apart from cutting down on pollution and saving foreign exchange, this initiative also gives added impetus to agricultural employment in the state. Haryana farmers apparently are taking to growing Jatropha in a big way.

Though initially the mix is going to be just 5% bio-diesel and 95% conventional diesel, this could be increased to 20% in a few months. Though the report claims other concerns, the core concern should be the cost of the fuel.

Some years back the Vajpayee government had called for global tenders to produce and sell bio-diesel in India in a big way. Only two tenders came up and the lowest price quoted was Rs 100 per litre of bio-diesel. Currently the railways buy or produce bio-diesel and the cost works out to be in the band of Rs 50 to Rs 78 per litre. While this is substantial improvement over the price quoted above we still have a pretty long way to go before biodiesel can compete with petro-diesel on cost.

The biggest avanue for cost-cutting would be the Jatropha seeds, which currently sell at Rs 30 a kg (you need at least 3 kg to make one litre). At this rate the profit per acre is about Rs 80,000 which is much higher than what is got with horticultural products that need much higher maintenance and investment. Considering the low investment and costs, it is likely that that the costs could fall by as much as 80% once Jatropha growing becomes really popular.

Wind Power Map of the World

Via Alt-e and WorldChanging:
For the first time in a NASA-funded study, researchers from Stanford have produced a map that identifies locations around the world where the wind is strong enough to generate electricity. The best place apparently is the North Sea region in Northern Europe for the strong winds. The southern tip of South America and the Australian island of Tasmania also recorded significant and sustained strong winds at turbine blade height. I wonder where India figures, but with a total estimated capacity of just 40 GW (Indian Govt figures) it cannot be very close to the top.

While world-wide electricity usage was less than 1.8 terawatts, the potential for generating electricity from winds was estimated to be 72 terawatts. One terrawatt is equal to a trillion watts and it would take hundreds of nuclear reactors to produce that much power. The Dabhol thermal power plant at full capacity would produce about 2 gigawatts, so you would need 500 such projects.

There are problems with wind energy too, but a lot of those problems are to do with placement of turbines. The study suggests that offshore installations are likely to be more efficient than more inland ones. The biggest wind turbines in the world generate about 5MW of power, and you would need less than 200,000 of these to serve electricity to the whole world in 2004.

India Petroleum Update

Refineries for Rajasthan

Rajasthan, home to some of the biggest onshore oil fields in the country, wants to have more refineries in the state, instead of sending the crude to other states for refining. It is planning a bouquet of incentives on this. Cairn Energy meanwhile plans to invest $1.3 bn in its Rajasthan discoveries.

Woe for ONGC...

It was a bad week for ONGC. Following a Petroleum Ministry directive to appoint additional executive directors to the board, ONGC is risking delisting by SEBI. ONGC is the biggest company in India in terms of market capitalization. The easy way out would be to appoint more independent or non-executive directors on the board to maintain the required proportion. Other policies remain violated though.

Meanwhile ONGC will continue to lose Rs 3000 crore every year in underpricing of natural gas sales to fertilizer and power companies - simply because the ministry concerned does not want to raise power tarriffs.

Student protestors in Assam shut down ONGC's operations in the state for a "100 hours bandh". Operations were resumed but only after the 100 hours were up. Fears of another flare-up remain. ONGC is already said to be overstaffed in Assam.

... And some cheer

After First Calgary Petroleum, it is another Canadian company this week. After successfully reaching the second round of bidding, ONGC arm OVL, "has bid $1.4 billion for buying out Canadian firm Encana's stake in a cluster of oilfields in Ecuador". If successful this would be OVL's second largest overseas investment after Sakhalin-I. Encana's Amazon assets have a combined output of 66,891 barrels a day.

Oil Hike Update

The Left wants to target the very high refining margins of refineries, particularly stand-alone refineries, who earn as much as $12 per barrel (consumers of petrol and diesel pay around $100). Other cost saving measures suggested are cutting down on advertising and public displays. In lieu of these suggestions, the Left thinks the price hike (per litre) should be in the range of Rs 1.50 to 2.00, when the oil companies are asking for Rs 4.84/4.52 and the ministry is mulling Rs 2.6/3.75 on petrol/diesel. A final formula might involve the Govt, the oil cos and the consumer sharing the burden.

India International

In volume terms, India's exports of petroleum products went up 25% while imports went up just 5.4%. The devil in the details of course is the stupendous increase in cost of imports, while there was no proportional increase in price of exports. Oil minister Aiyar is pretty upbeatthough on prospects of India becoming a major petro products exporter. "India's crude oil import bill in 2004/05 was 1,170 billion rupees, while earnings from exports amounted to 284 billion rupees". This number does not take into account the increased import of natural gas that has also been responsible for freeing refinery capacity for exports.

The Saudis brought India down to earth by refusing both Indian bids for a stake in Saudi Aramco's Yanbu refinery. Aramco said they were looking at "western partners". India had offered a barter deal via Aramco taking a stake in an Indian PSU refinery. The refusal does not have any major significance except when seen in the context of the recent bonhomie.

Pipeline Politics Update

Pakistan will decide by Dec 31 on its pipeline options. It will choose between Qatar, Iran and Turkmenistan, and wants at least two pipelines. Further Pakistan has, "offered India use of those pipelines to fulfil its gas needs". It would be interesting to observe whether the Pakistani market is deemed big enough to absorb the costs of two rather expensive pipelines. It is also widely believed that India has decent leverage with the Baloch rebels who will then not be restrained if the pipeline does not go all the way to India. Even if the pipeline comes all the way to India apprehensions on commercial viability remain.

Hindi-Chini Oil-Bhai

India's petroleum ministry is finalizing a strategy paper on cooperation between India and China in international oil exploration. Despite the recent bonhomie, here is an article that reiterates why this nature of cooperation is highly unlikely.

The Five Millionth Patent

The US Dept of Commerce selected it to become the Landmark Patent No 5,000,000. That is indeed some honor, and it seems not without good reason.

The patent was granted to Lonnie Ingram, a microbiology professor at the University of Florida, for being able to use E-Coli bacteria to convert biomass into ethanol. The highlight is that his process can use biomass residue like "sugarcane residues, rice hulls, forestry and wood wastes and other organic materials".

We have already seen how TA Sugars in Tamil Nadu are already using bagasse (sugarcane residue) to make electricity. And this Rajasthani dude is using "agricultural wastes" to produce electricity. The E-Coli process is better because you are converting the biomass into ethanol with a 90% plus efficiency. Plus ethanol can directly replace fossil fuels in petrol automobiles.

The greatest advantage is that it brings to the table a whole new world of renewables as raw material for converting into ethanol. And the technology is rather simple too - which means it can be replicated quickly and rather cheaply. So what are the immediate outcomes of this technological breakthrough?

For a start, we are likely to see a doubling of the ethanol production in the US. In the longer term, this technology has the potential to replace half of all petroleum imports into the US using renewable agricultural and forest waste. In India a lot of these biomass residues are not really "wasted" but conversion-to-ethanol could turn out to a more lucrative market for straw, rice husk and dry leaves. This could give fresh impetus to rural economies. On their part enterprising sugar mills like TA Sugars could start contributing to the electricity grid in a bigger way. It also depends on how the technology is made available.

The downside is it could lead to large-scale tree-cutting, thus depleting the same environment green technologies are trying to save. After all how do you define "waste" wood?

Update: Here's another wood-to-ethanol technology - this time from the State University of New York researchers.

Indexing The Indic View

India Petroleum Updates

Saturday, May 07, 2005
India Petroleum Update
NELP-V attracting interest, Reviving oil wells in Assam, ONGC announces three discoveries
Pipeline Update: Indo-Iran pipe by 2010, India offers $2.50 per mBtu, China interested in the pipe, Oman pipe still on?
Elsewhere: ONGC's private security in NE, progress on coal gassification project, BPCL moves on Bina refinery, HPCL divestment officially off.

Sunday, May 01, 2005
India Petroleum Update
Foreign Oil Equity - Interesting Developments: Freeing PSU investing abroad. Footprint now in 4 countries.
Gas On The Domestic Front - Tapti gas field, RIL's KG Basin, Iran LNG for Petronet.
Downstream On The Domestic Front - negative growth in petro products, Cairn crude for IOC, JV with ONGC, ONGC's troubles in NE
India's Oil Barons - India's Top Ten Oil Men
Dubya-speak - offers clean tech to India

Saturday, April 23, 2005
India Petroleum Update
The Venezuelan Angle: ONGC talking to PDVSA
Domestic Sources: Cairn upgrades reserves estimates, ONGC new tech in Assam, India's oil output dips
The Pipeline Saga...: Bangladesh pipeline, Uzbek link to TAP, Energy Charter Treaty
The Hinduja Connection
The Black Gold's Curse

Saturday, April 16, 2005
India Petroleum Update
Videocon - New Kid On The Block
The Qatari Angle
Burmese Gas
Elsewhere...

Saturday, April 09, 2005
India Petroleum Update
Pipeline Politics - The Eastern Front
The Saudi Front
The Domestic Front - Oil, Politics and Business: price hike demand, OIL gives up Louisiana field, haggling over IPO proceeds, IOC tops ATS ranking, freed from SCI, glut in Jamnagar

Saturday, April 02, 2005
India Petroleum Update
Re-visiting the North-East
The Saudi Angle
Pipeline Politics
The View From Here

Friday, March 25, 2005
India Petroleum Update
Action on the refineries front: Mid-East interest in setting up refineries in India
Foreign Oil Equity Quest: IOC-OIL formally acquire field in Libya
Domestic Exploration: positive signs of gas in the Sunderbans
Retail: ONGC and Reliance

Friday, March 18, 2005
India Petroleum Update

Friday, March 11, 2005
India Petroleum Update
The Russian frontier
The happenning ONGC! - discoveries KG Basin, Egypt, Nigeria. Stake in Venezuela, to buy VLCC
Reliance on the prowl too - International Refiner of the year, stake-hunting in Africa, Mid-East, Lat-Am.
Restructuring options - Synergy for Energy
NELP-V lures Talisman and Shell
Aiyar this week - EOU Refineries
Moot Point: Are Indian reserves hyped up?

Thursday, March 03, 2005
India Petroleum Update
The oil equity quest: Qatar, Iran, Burma, Russia, Bangladesh, Angola, Chad, Nigeria
Aiyar's Third Front: Longer-term contracts
Domestic compulsions on strategy: Under-pricing costs $15 bn

Tuesday, February 22, 2005
India Petroleum Update
Kazakhstan (Kashagan), Russia (Yukos), ONGC in Sunderbans

Tuesday, February 15, 2005
India Petroleum Update
GAIL - DPC, China, Burma, Infosys
Asian Gas Grid
Yugansk stake for India not China
Euro-III fuel, Chemtech 2005

Alternate Energy

Saturday, April 09, 2005
The Kyoto Windfall

Wednesday, May 04, 2005
World's First OTEC facility - in India!
Brief Introduction: what is OTEC?
The big story: OTEC plant commissioned in India

Tuesday, May 03, 2005
Some Clean Power Trends
Statistics show that wind power is getting more economical.
Microbial Fuel Cells can convert waste water to hydrogen or electricity.

Thursday, April 28, 2005
World's first Solar-City - in India!

Wednesday, April 27, 2005
More on the Kyoto Windfall
Carbon Development Mechanism and resultant benefits for industry

Tuesday, April 19, 2005
Reva - set for big time

Monday, April 11, 2005
"Garbage Power" Initiatives
Biomass initiatives - a mechanic in Rajasthan and a plant in Delhi

Friday, April 08, 2005
Windy Trends For Power In India

Friday, March 11, 2005
Alternate Energy is happenning in India...
Wind Power
Bio-diesel

Thursday, February 24, 2005
GAIL guns for gas from coal

Wednesday, February 02, 2005
Biodiesel - disagreement between champions

The Rest

Thursday, April 07, 2005
New trends in robotic warfare

Wednesday, March 30, 2005
The Simputer making progress

Wednesday, March 30, 2005
India's tallest building in the World

Thursday, March 24, 2005
India's indigenous aircraft carrier

Wednesday, March 16, 2005
Towards a handheld future

Wednesday, March 16, 2005
Scorpio going places

Monday, March 07, 2005
Israel builds "Weapon Next" in robotic warfare
Robotic eye in the sky

Monday, March 07, 2005
An alternate route to Central Asia

Thursday, March 03, 2005
ISRO's biggest overseas deal
350 kg Italian satellite called Ajile, to be launched early next year.

Wednesday, March 02, 2005
Developing new trading avenues: Port access to NE via Burma

Friday, February 25, 2005
A Big Boost to Construction

Thursday, February 17, 2005
The Akash SAM comes of age?

Wednesday, February 16, 2005
Europe's most powerful rocket launched successfully

Friday, February 11, 2005
Pipeline Progress

Wednesday, February 09, 2005
Water body revival plan

Sunday, February 06, 2005
Research into 'Sumo' rats at Hyderabad

Friday, February 04, 2005
More nano transistors per chip

Thursday, February 03, 2005
A tale of two helicopters

Tuesday, February 01, 2005
Indian oil firms successful in Libya

Monday, January 31, 2005
Iraq polls a success!!!

Monday, January 31, 2005
Pipeline Politics Update

Friday, January 28, 2005
Marina takes Tata past Hyundai

Thursday, January 27, 2005
Recording India's biodiversity

Thursday, January 27, 2005
Right to vote negative

Monday, January 24, 2005
US to roll out war robots in Iraq

Friday, January 21, 2005
Soyuz to be launched from Kourou

Tuesday, January 18, 2005
India, Japan collaborating on the telecom stage

Monday, January 17, 2005
A movement to revolutionize PCO's?

Friday, January 14, 2005
Internet for the rural masses

Thursday, January 13, 2005
Iran cosying up to India a little more

Wednesday, January 12, 2005
Nanotechnology driven efficient Solar Cells

Wednesday, January 12, 2005
Burmese Gas pipeline to India

Sunday, January 09, 2005
India's bid for Yukos asset

Friday, January 07, 2005
Will the Reliance magic work on Arabia?

Friday, January 07, 2005
The Simputer's latest avatar - SATHI

Friday, January 07, 2005
Flyover in 36 hours - in India!

Thursday, January 06, 2005
Christmas Bonanza for Infrastructure in Bangalore

Thursday, January 06, 2005
India emerging a power in the Clinical Trial space

Wednesday, January 05, 2005
Chandrayaan to have "landing" component too!

Wednesday, January 05, 2005
The Broadband Village

Wednesday, January 05, 2005
Introduction

Eco-friendly transport system for Delhi

New Delhi is preparing for the Commonwealth Games in 2010. With transport infrastructure creaking despite the metro, new alternatives are being sought. Electric buses are one of the transport options being thought of.

---

In a move that found its way to posts on Green Car Congress and Worldchanging (and lots of discussion groups), central minister for S&T announced that Bangalore based Reva was being considered for providing 16-seater battery-cum-solar powered transport buses for a transport solution to ease congestion in the capital city.

The proposed size of the order for Reva is around Rs 260 million, in addition to which, "the Department of Science and Technology (DST) has offered to fund further research for developing a 20 and 32-seater bus prototype, as also three-wheelers, through the Technology Development Board."

The good news is, it appears that Reva might not be the only contender for an electric future for mass transit in Delhi. BHEL has been making electric buses and vans (Electravan) for years, though a comparison with the Reva product is not available.

IIT-Delhi however appears to have come up with an interesting solution: convert the 9000 discarded diesel buses to diesel-electric hybrids. Working on a Rs 56 million grant from the petroleum ministry, the battery operated bus can carry 150 people, has a top speed of 65 kmph and can cover 160 km at a go, and does not generate vibration, noise, heat or emissions (as long as it is run on electricity). The battery has a life of 25 years, and is charged using an on-board diesel motor (thats why they call it a hybrid).

Now for the finances. A new bus using this technology would cost Rs 2.1 million. A diesel bus costs just Rs 1.4 million, whereas a CNG bus would cost at least Rs 1.6 million. Not sure about the fuel charges, but if you use the grid to charge the batteries, the charges will be pretty low. The Reva bus runs at Rs 1.20 per km, though it is just a 16 seater. What does it cost? Rs 2.6 million (more than the IIT-D bus that can carry many, many more people).

Of course there is a difference between technology demostration and commercialization, but Delhi could do well with a combination of solutions to start with, and decide on the actual path once they stabilize.

India Bio-diesel Update

There has been a lot of action on the bio-diesel front in India of late. Let me try and re-cap some of it:

First a couple of links from the Green Car Congress, which reports that the Chief Minister of Chhattisgarh, Raman Singh, has become the first head of an Indian state to start using bio-diesel to power his official car, a Tata Safari. In three months it is hoped that all government vehicles will run on bio-deisel and in ten years the state will be self-reliant in bio-diesel production. By then the state would also supply "bio-fuel to other states at Rs 20 a litre". It is not clear what percent of the biodiesel is diesel though - it could be anywhere from 0 to 98%.

The next post states that India is planning a Comprehensive National Biodiesel Policy. The aim is to start using a 20 per cent biodiesel blend (80% diesel) all over India which will result in savings of 20,000 crores, Jatropha plantation on 11 million hectares of land, 11 million jobs and 13 million tonnes of alternate fuel produced each year. Bio-diesel processing/extraction costs one third in India as compared to Europe and exports are being looked at in a big way.

Labland Biotechs is a Mysore-based company that is becoming a sort of an export oriented unit for Jatropha oil. It sources high quality tissue culture derived jatropha plants from D1 Oils, a global leader in the field of bio-diesel, and supplies them to the farmers. It will then buy the seeds from the farmers, and produce and sell the oil to D1 Oils. D1 will then refine the oil and sell it to European countries. Labland is also working on actively spreading awareness on jatropha to farmers in the region, as also to train farmers on all aspects to cultivating and maintaining the jatropha plants.

Europe has developed a deep love for jatropha and biodiesel. D1 Oils is one of the leading companies that are trying to fufill that demand. The foundation stone for India's first biodiesel plant was laid one day after the Kyoto Protocol was signed.

Getting back to the national biodiesel mission, the government has noted the lack on action on this front and is thus planning to shift responsibilities. Out of the small amount of Rs 9 crore that was assigned to the project last year, the Rural Development ministry managed to spend just Rs 20 lakhs. Now that the fund allocation has been increased to Rs 45 crores the government is mulling giving the agricultural ministry the charge on the mission.

India Petroleum Update

ONGC looking at very lucrative buy

ONGC (via OVL) is trying to get buy a Canadian company, First Calgary Petroleum. FCP has 49% stake in two blocks in Algeria which have a combined potential of around 13 trillion cubic feet of gas and some 100 million barrels of oil. The oil assets are clearly very attractive, and ONGC has stiff competition in the form of Statoil, Total and Gaz de Franz. The bid has seen some interesting twists and turns thus far. Soon after news that ONGC had bid for FCP, came news that ONGC's bid had been rejected. But it so happenned that all international bids had been rejected, for being below the reserve price. OVL plans to bid more aggressively when re-bidding opens next month. First Calgary however denied the bid rejections. Let the waters settle down...

Domestic Exploration

Meanwhile the number of companies bidding for blocks under NELP-V has reached 30. Justifiably, oil minister Mani Shankar Aiyar is rejoicing.

The Kazakh Angle

Though India did not get any stake in the giant Kashagan or the Kurmangazy oil fields, Kazakhstan is offering India a stake in one of two medium size blocks. India continues to also lobby for some stake in two pipelines to take Kazakh oil to the Mediterranean and China respectively.

Domestic Policy

Here's another reason why I only invest in upstream majors among Indian companies. I am not complaining, because my petrol bill does not bloat with international trends. Still something has to give, and I wonder what that is...

The Economist Ignores Peak Oil

Rajesh Jain at Emergic, has a post pointing to this article from The Economist. The article talks about why oil prices are high and takes a pragmatic view based on economic reason with no mention of peak oil. There are some interesting points being made though:

1. The 16% increase in Chinese demand for oil last year was a temporary phenomenon. It could be a more sedate 4-5% this year.

2. It is not just OPEC that has a stake in keeping oil prices high. The big western oil companies that are investing in non-OPEC regions with tough terrain - they need high oil prices to make a profit.

3. Saudi is rebuilding the oil buffer which could help further cool down oil prices.

4. The joker in the pack could be the financial sector - big investors have invested heavily in oil expecting prices to remain high if not reach much higher. These investments have some of the makings of a bubble. If this bubble collapses we might have cheap oil again.

Finally in the post, Rajesh quotes from another article (which is premium content) on how alternate energy sources are making headway into the automobile world. Mentioned are bio-diesel, natural gas and hydrogen-based fuel cells. GM it seems is betting on fuel cells.

Peak Oil - A Messiah?

For decades, since they got control over world oil prices, OPEC has kept oil prices high, limited by only one factor: preventing the rise of renewable sources of energy. This fact is even more obvious now, when the high cost of oil is making renewable sources look more attractive than ever before - and importantly fueling a lot of research.

Renewable sources have two promises:
1. They come theoretically free. Just like you have to drill for oil and set up the infrastructure, you have to set something up for wind, solar or ocean power generation. However as the days, months and years go by, the cost of getting oil out, increases, whereas the cost of getting power from renewable sources comes down (the source is still free, inflation and depreciation do the rest). As research goes on, and equipment gets mass-produced, the cost of the initial equipment will also come tumbling down.
2. They last forever and dont pollute. Forever is a very long time, but for us it is simply the foreseeable future. Or at least till commercial nuclear fusion becomes a reality. Then one glass of water will power New York City for a week (ok that dialog was from the movie Chain Reaction!). But if we can keep up the current pace of research, nuclear fusion might not even be needed any more.

Together these two promises could easily drive the OPEC thugs out of business relevance and into perpetual obsolence. If we stop using petroleum for fuel and only for petrochemicals, India would be easily self-sufficient in petroleum, and so would most of the world. In any case the cost of your mobile phone would probably not increase even if the cost of petroleum went up five or ten times - it is that insignificant.

OPEC consciously kept the price of oil at absurdly high levels, but just low enough to discourage research into commercial usage of renewable sources of power. Then 2004 happenned, when people all over the world began to talk of Peak Oil, saying that production of oil had peaked the world over, and now production would stagnate and decrease, leading to $100 or $150 per barrel. Unlike previous oil price spikes, this one was not created by OPEC, but rather by production constraints.

I personally disagree with that assumption. OPEC nations have enough oil to double production any time they want. The problem is that they would have to invest billions to do that, and once they do that, the price of oil might come tumbling down to half. The tumble might even happen just on the announcement that they want to do that. But that is not the point.

If OPEC decides to sit back and enjoy the high prices, and they are content to do that for just 5 more years, I think energy utopia would be upon us. Wind power should get cheaper than fossil fuel power some time this year, which should see an exponential increase in wind power generation. Ocean tidal power is far more promising than wind power, and at the current rate of research should be at least as economical in 3(?) years. Between 5 and 7 years from now, a major technological break is likely to make commercial production of solar hydrogen a reality. In addition we have a slew of other path-breaking technologies, some of which have been reported on this blog, which are likely to make their presence felt in the near future. Just five more years then.

Wind power attracting Indian businesses

Indra had a post pointing to this article on how Indian corporates are taking to wind power to tide over the power crisis.

Investments in wind power are tax-free. Thus setting up wind power plants for captive power generation is a balance-sheet-friendly both in terms of investment as well as returns. Among the companies for which Suzlon (the leading equipment provider in India) has installed capacity are "Bajaj Auto, Tata Power, Aditya Birla group, Godrej, RE Agro, Ajanta group, RPG Enterprises and a host of textiles companies at Tirupur."

India is currently the fifth biggest wind energy producer in the world. However it must be noted that the top 3, Germany, Spain and the US are adding capacity at a (relatively) frenetic pace. And so is the UK, and probably soon will be China. It is good for India either way because growing wind power world wide will reduce competition in the global oil markets for India. Wishful thinking? :-)

GE firmly in the clean, green camp

Joel Makower reports that GE is pushing into clean technologies in a big way. Apparently, "$150 billion company is hitching its future to the growth of clean energy, clean water, and other clean technologies through a commitment to what GE is calling 'ecomagination.'"

Ecomagination should be good for the world. Over the decades GE, which is either the biggest or second biggest company in the world in terms of market cap, has set itself only one target in every market it is in: be one of the top two or dont be in that market. They have also been behind a lot of the big trends in business today and probably were the pioneers of the offshore outsourcing movement.

Thus Ecomagination represents the biggest ever committment given to clean. green technologies by any entity - corporate or government.

Infrastructure Watch

The Volkswagen investment ping-pong ball has now landed in Vizag, AP. The AP government is offering Volks 350 acres of land. In addition Volks wants all arbitration to be in London, not in the local courts (who can blame them?), and are seeking a Special Export Zone status for unit. Does that mean that Volks will only manufacture to export? Suits us fine anyway I guess. Importantly they have decided to go in for manufacturing and not assembling CKD kits.

Tata Motors launched a much awaited sub-tonne commercial vehicle called ACE in the Indian market. It is aimed at becoming the critical last mile connector in the hub-and-spoke model of an Expressway based transportation system. Meanwhile Ratan Tata told The Week magazine that the Rs 1 lakh car should be out by 2008. Way to go buddy!

The world's richest Indian is finally coming into India. Decades ago when Laxmi N Mittal broke up with his father's Ispat group, the deal was that the father and brothers would concentrate on the Indian buisness while Laxmi would grow his business abroad - a pact they both broke recently. Laxmi went on the build the biggest steel empire in the world, while the Ispat group grew sick and was a small player even in India. LNM investment in India would build a bigger capacity than any steel company in India currently has (5 mtpa versus Tata Steel's global turnover of 6 mtpa).

A consortium of Indian companies led by The Chatterjee Group (TCG) has bought Basel NV a JV between Royal Dutch/Shell and BASF. Interestingly the deal is valued at $5.16 billion which would make it the biggest foriegn investment by an Indian corporate entity (at least till the ONGC $6 bn stake purchase in Yugansk happens). I wonder why the papers are not reporting that.

You can now party smart with PartySmart, a herbal solution for hangovers, now available from The Himalaya Drug Company. Talking of herbal solutions, growing of medicinal plants appears to be becoming a highly organized business. Contract farming is coming in, in a big way and promises to become a win-win situation for the corporates who provide the seeds and a purchase guarantee, the land owners who provide the land, and the landless laborers who provide the labor. Banks are eager to give loans and insurance companies to provide cover.

Talking of power, to override a major power crisis in the state, the Maharashtra government wants to quickly add a capacity of 12,500 MW - probably the biggest fast track power capacity addition in India ever. They have however run into trouble with the Centre on the process of selecting the developers. Irrate consumers in Maharashtra can console themselves with the drive towards corporate honesty, during power cuts. Lets at least hope that the new efforts to get Dabhol off the ground quickly enough succeed.

Update: Apparently the media is going gaga over the Basel deal, and it is the biggest by an Indian corporate ever. Congratulations Mr Purnendu Chatterjee!

India Petroleum Update

Big names in the global oil business are showing interest in the 20 oil and gas exploration blocks (12 onshore and 8 offshore, including 6 deepwater) that are up for bidding under the latest (5th) round of the New Exploration Licensing Policy (NELP).

"Oil majors Petronas of Malaysia, Total of France, Statoil of Norway, Talisman of Canada and BP and BG Group of UK have envinced interest in exploring oil and gas in India....The recent discoveries of gas in the Bay of Bengal and oil in the deserts of Rajasthan led Statoil, Eni Spa, BP, Petrobras of Brazil, Merlin Energy, Talisman and Total to buy data packages of several blocks on offer in the latest round....Besides the new players, ONGC, Reliance Industries, Cairn Energy of UK, Niko Resources of Canada, Gujarat State Petroleum Corp, Oil India, Gail, Bharat Petroleum and NTPC have explored investing in the blocks on offer." via Business Standard

Petronas alone could be looking at 8 blocks to bid for. Cairn Energy is planning to ramp up investment in India anyways. No wonder.

OIL and ONGC are looking at reviving over a 1000 oil wells in Assam that have stopped production, by getting foreign experts to find secondary recovery methods. The biggest explorer in the North East, Oil India Ltd (OIL) currently produces 3.2 million tonnes from Assam, which it plans to increase to 11 million tonnes in 5 years.

ONGC announced three new offshore discoveries, one South-South-West of Mumbai High in the Panna formation, and the other two in the Krishna-Godavari basin. The Panna discovery is being called "significant" but no estimated reserves have been mentioned for any of the fields.

Pipeline Update

At a meeting, the Petroleum Secretary S.C. Tripathi told ASSOCHAM that the Iran-India pipeline would become a reality by 2010. He expected one year to be spent merely on "tough negotiations". An example of this was the latest bargaining salvo by India - a refusal to pay more than $2.50 per mBtu for gas coming in through the pipeline. Iran has asked for at least $4.00.

Meanwhile it seems the Chinese are favorable to an extension of a gas pipeline from India all the way to Southern China, and not just in helping construct it. Indian Oil Minister (currently at least!) Aiyar's dream of an Asian Grid for oil and gas may need solid diplomacy and effort over the years, but at least it looks like the vibes are good.

The Daily Times presents an overview of the three pipeline proposals to get gas into India via Pakistan. Interesting because I thought the Oman proposal was long dead. (link sent by Nitin - thanks!)

Elsewhere on the Domestic Front

While ONGC's trouble with militants in Nagaland continues, it has decided to raise its own security force in Assam and Tripura. ONGC made progress on a pilot underground coal gassification project with Coal India Limited.

BPCL recieved government clearance to move ahead on the 6 million tonnes per annum Bina refinery, where Oman Oil will hold a minority stake. Work will restart after 10 years.

HPCL is now officially off the divestment list.

World's First OTEC facility - in India!

Brief introduction

OTEC stands for Ocean Thermal Energy Conversion and is a process to generate energy by tapping the difference between the top layer of an ocean (which is exposed to the sun and is warm) and the lower layers (which are isolated from the sun and hence pretty cold). The idea is over a hundred years old, and so far no one has been able to make it economically viable (the French, Americans and Japanese have been trying hard though). If the Indian scientists and engineers succeed, there are billions of watts out there in the ocean just waiting to be tapped.

The Big Story

Via this link from this page at atkisson.com:

The world's first ocean thermal energy conversion facility has been commissioned off the west coast of India. The 1 MW plant is housed on a 65 m barge anchored off the port of Tuticorin, and uses a ‘reverse’ refrigeration cycle that relies on the temperature differential of deep sea water at 7°C and surface water at 28 °C. The project was developed by the National Institute of Ocean Technology and Dempo Shipbuilding. Once stabilised, the process is self-sustaining and continues in an infinite loop, say officials, and the demonstration plant will collect data on all aspects of design and operation. The deep-sea water is collected through a pipeline that is 1.2 km long and the OTEC barge has one of the deepest single point mooring systems in the world.

Technorati Tags: OTEC

Some Clean Power Trends

Wind Power

A heartening statistic for clean power enthusiasts would be that wind-power has now become the fastest-growing new source of electricity worldwide. The annual growth in wind power based electricity is around 20-30%. At the current rate of growth the industry will be 10 times its current size in a decade. Further the cost of wind power has come down from 40 cents per kilowatt hour to between 4 and 6 cents now. Just a little lower and it will be cheaper than fossil fuel power - at least at current rates. Finally since wind does not cost anything, unlike fossil fuels that have to be pulled out of the ground, the theoretical limit for the cost of wind power is zero.

WorldChanging has a post that points to the declining cost of generating wind power. The idea being discussed here is the growing size of the blades in wind turbines. Obviously there is a limit to this which should be reached eventually. The immediate target though is close enough, "The goal of industry and federal researchers is to create wind farms that produce electricity for about three cents per kilowatt-hour, down from about 4.5 cents today". The next round of improvements could target the shape and design of the blades or maybe the turbines themselves. Maybe the foundations need some work too.

MFCs - beyond biomass

Again via Worldchanging: Microbial fuel cells are looking like the next big thing. They can be used to treat waste water in a much cheaper way than current technologies permit. While they are doing that they can also be made to generate either electricity or hydrogen, depending on the exact process. Also unlike conventional fermentation techniques, microbial fuel cells can use any biodegradable, dissolved, organic matter and not just carbohydrate-based biomass. At least one killer app for this process would be as a replacement for electrolysis to get hydrogen out of water. At current count it is ten times more electricity-effective.

India Petroleum Update

Foreign Oil Equity - Interesting Developments

An important aspect of letting the Indian global oil equity warriors take on their foreign counterparts on a more equal footing has been autonomy. The decision making speed of the Indian Cabinet does not lend itself favorably to bring a competitive edge in business - except to the competitors perhaps. That is being further rectified now. Apart from increasing the limit of money (which stands at a measly Rs 300 crores) investment for which they will not need a nod from the bosses in the Cabinet, they will also get substantial decision-making powers that would allow them to float companies abroad (some countries insist on a locally registered entity while bidding). These measures are still in the proposal stage however.

The Indian PSU global oil equity warriors viz ONGC, IOC, OIL, GAIL now have a presence in the hydrocarbon sector in 47 countries worldwide. This includes upstream (E&P), downstream (refining), retail (marketing) and pipelines. Currently proposals are being pursued in 14 countries.

Gas On The Domestic Front

The Tapti gas field, offshore Bombay, will see fresh investements from BG India, ONGC and RIL, the consortium partners. The consortium has been selling gas at market-driven prices from April 1, 2005, which is a first-of-sorts in India.

RILs commercialization of its giant gas find in the Bay of Bengal took one more step towards fruition with a government nod for a plan to begin production of natural gas.

As discussed earlier, Petronet LNG is builing new LNG recieving capacity in Dahej and Kochi. While Qatar has offered to increase production and supply of gas to India, in the absence of a supplying agreement for the additional capacity, Iranian gas (for which a 25-year agreement has already been signed) is being considered too.

Downstream On The Domestic Front

The petroleum refining segment registered a negative growth in March to pull down the overall infrastructure growth index. The Prime Minister seems to think that the coal sector is the root cause of the problem though.

The play for Cairn's crude in Barmer, Rajasthan has taken a new turn with IOC getting nominated to buy it. ONGC had earlier proposed setting up a refinery to process the crude, but IOC believes that since the peak output will last only 4-5 years, a new refinery would not make sense. ONGC is however getting thicker with Cairn in Rajasthan via a 50:50 joint SPV that will be into specialized refining facilities, power generation and petro-product marketing, among other things.

Not all was smooth sailing for ONGC this week though - they got warned to stop exporation in Nagaland by Naga rebels, and plans to buy a VLCC look like they will take a while to fructify.

India's Oil Barons

An international magazine has published a list of 'India's Top Ten Oil Men'. The list predictably features, Oil Minister Mani Shankar Aiyar, Reliance Industries Chairman Mukesh Ambani and ONGC Chariman Subir Raha. "Apart from these three, the newspaper has also included President of Reliance Petroleum business, PMS Prasad, Petroleum Secretary, MS Srinivasan, Advisor to Reliance Industries, Atul Chandra, and CMD of Indian Oil Corporation, Sarthak Behuria."

Dubya-speak

Blowing hot and cold, US President George W Bush, first blamed China and India for skyrocketing oil prices, and then offered to help them develop clean energy technology. The US needs to help itself first I guess, and take a decisive leadership in clean energy. Once the big breakthroughs are achieved, economics will mandate that the rest of us help ourselves. Still this is significant because there is nothing like a global partnership on technology development - and maybe a buyers' cartel too?