Thursday, July 28, 2005

India in Six-Nation clean technology pact

The US joined 5 Asia-Pacific nations, Australia, China, Japan, India and South Korea to build a six-nation grouping that aims at reducing global greenhouse gas emissions through new technology. The member nations account for about half the world's population - and half the greenhouse gas emissions too.

On the Action Agenda

"Technology that enables coal to be burned more efficiently and captures carbon dioxide before it reaches the atmosphere is top of the agenda" - Guardian

"... the six countries might work on developing benign technologies related to bio-energy, geothermal power, liquefied natural gas, methane, non-polluting coal, nuclear power, rural energy, and solar and wind power. Long-term projects could include creating safe energy from nuclear fission and fusion." - Times

So you will cooperate on nuclear power? Isnt this announcement suspiciously close to the US announcing that they will share nuclear power technology with India?

"...[Member] countries will focus on developing low emissions technologies and transferring them from developed to developing countries. Private industry will be given incentives to invest. A fund will also be established by partner members to help develop technology-based solutions." - The Australian

Is this treaty about undermining Kyoto?

Of the six, Japan has committed to a 6% reduction under Kyoto. India and China, as developing countries did not have reduction targets. Australia and the US did not sign up for reductions alleging... whatever.

Further, "Talks on the pact have been going on in secret for 12 months but it was only at the last minute that Japan was approached and decided to join. Suspicion of US motives was fuelled by the fact that the EU and Tony Blair were not informed of the plan, even though climate change was a big item on the agenda of last month's G8 meeting".

This is what The Australian had to say: THE Kyoto Protocol is over. Get over it. It doesn't have a future if the US-inspired Asia-Pacific Partnership for Clean Development and Climate gets off the ground. The ballast on the issue of global warming and climate change is shifting to the New World - now including China and India - and away from the punitive system of limits and targets set by Old Europe for 2008-12.

Among others, Rueters called it the "Beyond Kyoto" pact.

Now this new pact has no emission reduction targets - good intentions are all that count. So if it manages to become as big as the Kyoto pact, then its members will not look so bad for not having signed Kyoto, and yet will be under no signed obligation to reduce emissions. It is thus getting called, "Self-Serving".

Monday, July 25, 2005

The Sunflower Solar Concentrator

I got to this Wired article via Emergic

Bill Gross, a dotcom millionnaire and survivor, is the force behind another potentially revolutionary solar concentrator called the Sunflower. The revolution aspect relates to the fact that this device moves all its concentrator panels to always point to the sun, using a novel method that uses only two motors for all the huge panels. The device is currently undergoing stringent stress testing to ensure it survive 15 years or so.

Some interesting points are made in the article.

Even in sunny places like California, the pre-rebate cost of PV-generated electricity is roughly 21 cents per kilowatt-hour. Coal (from 4.74 cents per kilowatt-hour), natural gas (5.15 cents), nukes (5.92 cents), even windmills (5.15 cents) offer cheaper ways to keep the lights on.

Solar panels are small enough to fit on has the potential to cut out the middleman...

[so] instead of competing with wholesale power from distant power plants, rooftop solar competes with retail kilowatt-hours delivered by the local electric company, which often are marked up as much as 1,000 percent over their original generating cost.

...retail prices typically peak on hot, sunny summer days...precisely when solar panels are most productive.

"Right now, PV solar has a 20-year payback, but people are still buying it," he [Gross] says. "Our target for California is five. In Phoenix we could do 3.3."
Here is how it works

Sunday, July 24, 2005

Coal To Oil - the Next Big Thing?

India has coal to last us the next few centuries, while the oil reserves will last us only a few more years. But coal is dirtier on the environment and bulkier on the transporters. So what is the solution? Simple - convert coal to oil.

South African SASOL, is the leading coal-to-liquids (CTL) technology and producing company in the world. Since the 1950's the South African government has been promoting the Fischer-Tropsch process that Germany used during WW-II, to get oil from its massive coal reserves. Germany however was facing a global supply blockade, while in SA it was a political decision, though SASOL could never bring its products to within range of commercial oil rates - till oil hit $40 (now its $60).

Four Indian corporate houses are holding talks with SASOL to set up such plants in India. All four are big names in the Indian steel industry - Jindal, Essar, Tata and Bhushan Steel. The talks are at a preliminary stage, but Jindal and Essar are also exploring the Coal-to-Gas technology.

How big can CTL get?

China has huge coal reserves, and SASOL is setting up two plants in China at a total cost of $6bn. Alright $6 bn is a lot of money, but for that kind of money China gets an annual output of 60 million tonnes of oil, which is 60% of the current annual import of 100 mn tonnes. India currently imports roughly the same amount.

Any potential catches?

The process is capital intensive, and scale is important. So China gets an output of 10 mtpa for every billion dollars invested. If the total investment is lower though, the output will be lower still. In India it is doubtful whether state economic muscle will help the four private sector companies. On their part PSU's like ONGC and GAIL are already exploring CTG technologies like Underground Coal Gassification, with Russian and Canadian partners respectively. ONGC however suffered a setback recently when CIL refused to be a part of the project.

Also the fact that all the private sector companies here are steel majors is no coincidence. They hope to use their existing coal licenses/expertise on this. So it maybe unlikely that they would see great synergies from working together on this.

Also CTL needs a certain quality of coal and it is not clear whether such coal is available in the country in huge quantities. Apparently, SASOL "has examined some samples of Indian coal, and found one of them promising."

Renewables in India - A Tale of Two States

Tamil Nadu, India's southern-most state, hopes to consolidate its position as the number one state as far as using renewable energy sources goes.

At 2,317 MW, 20% of Tamil Nadu's electricity comes from renewable energy sources. The national average is 4.8%. The share of the state in the total renewable energy produced in the country stands at 30%, further validating its leadership position.

The state is actively pursuing a variety of renewable sources including wind, biomass, biofuels and solar power.

In wind power the state already has 61% of the total capacity in the country, owing to inherent advantages resulting from it getting winds from both the south-east as well as the north-east.

In biomass, the Tamil Nadu Energy Development Agency recently recommended 37 bio-mass projects to generate a total of 260 MW, of which 15 projects with a total capacity of 145MW have been approved by the government. Biomass gasifiers were also being promoted for thermal and electrical applications.

The state has mandated the installation of solar water heating systems on certain types of buildings. Another proposal "to make mandatory the installation of solar lighting system in the common area of multi-storied residential apartments", was awaiting State Government approval.

Way up north, the government of Jammu and Kashmir, recently announced a new state hydro power policy, which had an arrangement for Independent Power Producers. Several private sector companies have thus come forward to install hydel projects in the state. The Chief Minister recently laid the foundation stone for the first such project - the Arhabal Power Project which will generate 15 MW of power and cost Rs 105 crores to construct. The cost per megawatt is rather high because of the lack of scale, but that only means that payback will take longer. Still the government hopes to start about 25 mini and micro hydel projects with a cumulative capacity of 2000 megawatts during the current year.

Strictly speaking while hydro-power is renewable, it is often considered environment unfriendly and thus does not qualify for the clean sobriquet.

Indo-Iran pipeline in focus again

“... I am realistic enough to realise that there are many risks because, considering all the uncertainties of the situation there in Iran, I don’t know if any international consortium of bankers would probably underwrite this. But… we desperately need the supply of gas that Iran has.”

So said Dr Manmohan Singh to The Washington Post. The Acorn sees it as an endrosement of a long-held stand.

Dr Singh might have just been a good host, as I pointed out here. But Oil Minister Mani Shankar Aiyar followed up with this: "The Iran-Pakistan-India gas pipeline is fraught with terrible risks. It will be extremely difficult to put together an international consortium to finance the project". For good measure he also said, "God willing, we'll succeed".

Now look at the PM's statement for a while. He plainly states that the project is frought with risks. Nothing new. If it was not, the pipeline would have been ready in the last millenium. Aiyar reiterating the difficulty in getting the international guarantees in place is also straight talk. So far so good. What bugs me is something else.

India has consistently maintained that unless all security risks are mitigated, which means we have adequate and economically viable insurance policies against them, India will not go ahead with the project. However, this is probably the first time that the difficulties being faced in this direction are being publicly announced. And that despite the fact that construction start dates, and commercial commencement dates have already been bandied around.

Does this mean that India is preparing to go ahead with the project without adequate guarantees? That would be suicide.

Friday, July 22, 2005

India Petroleum Update

ONGC joins hands with LN Mittal

The bringing together of India's most profitable company, and the country's richest citizen, to bring some steel into India's quest for energy security, has been correctly called "pathfinding".

It all started in early June, when Oil Minister Mani Shankar Aiyar, probably frustrated with India's inability to bag anything of substance in Kazakhstan, called up LN Mittal to ask him if he could use some of his clout in Kazakhstan for the purpose. Rightly so because, "Mittal commands tremendous goodwill in the Kazakh establishment for resuscitating the Temirtau area after taking over and turning around the sick steel complex there in 1995."

Mittal might or might not have had a hand in Kazakhstan offering India a stake in one of two medium sized blocks some time in May, but Mittal showed his business acumen by converting call into a business opportunity.

So sometime this weekend, two MOU's will be signed by Mittal International Sarl, a Luxembourg-based subsidiary of flagship Mittal Steel. The first will be signed with ONGC, and will for setting up a company called ONGC-Mittal Services Ltd. This company will invest in projects for trading and transporting oil and gas. The second will be with ONGC subsidiary, ONGC Videsh Ltd, and will be for setting up a company called ONGC Mittal Energy. This one will invest in overseas oilfields.

ONGC will hold 51% in both companies, and they will be registered in some European tax haven - possibly Luxembourg again?

Incidentally LN Mittal is not the only private infusion of strength for ONGC's forays. While Mittal provides strength to Indian forays in Central Asia, the Khemkas of Russia's Sun Group could be roped in similarly for Russian projects, while a deal between ONGC and Reliance back home, has been in the works for a while.

The Synergy for Energy committee meanwhile has suggested Oil India Videsh Ltd. The committee had also rejected the idea of public sector oil monopolies, here is a small "myth-buster" on the purported evil of monopolies.


Despite the recent hike in petrol and diesel prices, international prices have been keeping up the pressure, as result of which oil companies are likely to ask the government for a hike in prices again. Under-realization has reached Rs 3 and Rs 5.30 per litre of petrol and diesel respectively, and the subsidy burden is mounting. Petrol prices in India are already higher than in Nepal, Bangladesh and Pakistan.

An informative interview with India's director-general of hydrocarbons (DGH), V K Sibal. He further reinterates that India remains largely unexplored with huge opportunities. True. Tiny Cairn through its finds in India so far stands to make £82bn at current oil prices.

The award of blocks under NELP-V will be done by July 31st, pending a Cabinet clearance.

There is some traction on the policy front. Apart from the possibility of converting the DGH into an upstream regulator, the Prime Minister also set up the Energy Coordination Committee to guide energy policy. Here is why it should not be dsimissed as “yet another committee”.


While India and Myanmar explore a bypass to Bangladesh, that country remains keen to milk India by getting involved.

More Solar Breakthroughs

Two new potentially revolutionary technologies for generating solar electicity from WorldChanging:

Electrolytic Bacteria: Researchers in Stanford have stumbled upon anaerobic bacteria that electrolyte water releasing hydrogen and oxygen. Since they are anaerobic, the oxygen kills them. So researchers are breeding them for a species that is aerobic.

Novel Solar Concentrator: This one is more of a here-and-now solution. This new solar concentrator from Pyron Solar, is called the Boeing-Spectron-Pyron Solar Generator and uses Spectrolab solar cells that are upto 37% efficient. (Spectrolab is a leading supplier of solar cells for space craft). Their only prototype thus far is 23 feet in diameter, which works out to 7.01 metres. So the total surface area is 38.59 sq m. Now this generates 6.6 kW. 100% efficiency is considered to be 1 kW/sq m - for photovoltaic cells. So that makes this new device 17% efficient as a whole, which is still pretty good.

Importantly concentrators cost significantly less than photovoltaic cells per sq m. Independent estimates of the installation cost puts it as between $2.00 to $3.00 per watt. Even at the higher end that makes it reasonably competitive. These costs are mostly based on informal estimates, and not on actual commercial project costs, so accuracy is not entirely reliable. But Pyron themselves put the cost at just $1.24 per watt for large plants - significantly lower than the cost of fossil fuel-based plants.

It just keeps getting better and better...

Thursday, July 21, 2005

Indian Company Powering the Jatropha Revolution

D1 Oils, a British company, is making news the world over as a leader in Jatropha based bio-diesel production. D1 Oils basically procures Jatropha oil or the trans-esterified version which is bio-diesel. Thus an important strategy for D1 is contract farming.

As part of contract farming, the company gives Jatropha plants to farmers. Now an Indian company could become the global hub for providing Jatropha plants to D1 Oils.

Mysore-based Labland Biotech, which has been in the news for its Jatropha oil procurement JV with D1 Oils, will initially produce 10 million tissue-cultured Jatropha plants, and is in a Rs 60 lakh deal with D1 oils to promote the cloned plants globally. The linked story provides some useful pointers.

Jatropha provides about 1000 barrels of diesel per square mile annually. The entire process for producing bio-diesel from Jatropha is pretty low-tech and it thus has the potential to become an important grass-roots movement as a cottage industry. Jatropha is ideal for an estimated 50 to 130 million hectares of wastelands, which for a variety of reasons like salinity are unavailable for agriculture.

Wednesday, July 20, 2005

Plastic Solar - Threshold of Revolution

While we were going all ga-ga over nanotech based solar photovoltaics, a major comeback of sorts has been achieved from a less celebrated source - plastic solar cells.

Researchers at a Danish group Risø claimed they have built plastic solar cells that cost less than 2% of silicon cells. So where one square meter of silicon cells would cost $800, plastic solar would cost only $15. Of course the revolution is still not on us, and here is why.

Plastic cells are not new and have been around for a while. But while earlier they only had a life span of a few days, the researchers at Risø claim their cells last two and a half years. So that is still workable. The problem remains the efficiency. While silicon cells manage 12% to 15% efficiency (in labs they have managed 50%), the plastic cells only manage 0.2% to 5%.

But come to think of it, even at 0.2% 5% efficiency with a life span of just 2.5 years, at $15 a sq m, it is still close to being competitive. As Jamais Cascio comments on his own post, "Assuming 50 watts power for a pessimistic average of 2 usable hours/day x 200 usable days/year, for 2.5 years and $15, the result is (by my calculations) thirty cents/kilowatt-hour. A place with better sunlight patterns would be close to competitive (e.g., 5 usable hours x 300 days/year, otherwise the same, equals 8 cents/kwh)."

A lot of places in India would fall in the "place with better sunlight patterns" category. 8 cents/kwh translates to about Rs 3.5 per unit. So even if the average efficiency is increased from 0.2% (the lower limit) to 0.4% (still very far from the current upper limit) 5% to 10%, we get power at Rs 1.75 per unit, which is less that say the Rs 2.25 that MSEB will pay Dabhol. And Rs 2.25 is almost considered a steal at current world gas prices.

Some years from now, will you remember that you read about it here first (or at least at all!)? :)

Monday, July 18, 2005

A Nanotech-based Photovoltaic Future

Over at Trends..., Myke has a post on how nano-technology could be the next big boost that could finally get solar energy past "just around the corner" status. Currently solar energy costs $4 - $5 per unit, whereas the market would pay only around $2 - $2.5.

Currently photovoltaic cells are made in facilities almost as expensive and sophisticated as those used to make micro-chips. However, "With nanotechnology, tiny solar cells can be printed onto flexible, very thin light-retaining materials, bypassing the cost of silicon production. The companies also say that the printed rolls of solar cells would be lighter, more resilient and flexible than silicon photovoltaics."

An interesting point is made in this post. Imagine that every structure in the US is linked to the electricity grid. And then photovoltaics are made cheap enough that everyone can afford them. Now if every rooftop in the US is covered with photovoltaics, the total power generated will be 710 GW, slightly less than the current total electricity capacity 950 GW. And built-up area is usually a miniscule fraction of a percentage of the total land area in a country.

Distribution is automatically solved, because every grid connected household can sell excess power back to the grid. And if you dont want to cover your entire roof with photovoltaics because you cannot afford it, someone else could do it for you for a small consideration.

But this is a rather unlikely direction for the future, because if photovoltaics become affordable, you would have huge photovoltaic power plants bringing power to your homes using the very same power lines that now power your homes.

Sunday, July 17, 2005

India Petroleum Update

The roundup this week will concentrate on Indian moves to secure energy supplies through a range of initiatives in various parts of the world.

ONGC Videsh Ltd has opened a regional office in the capital city, Astana. This will be followed by ONGC selecting one of two blocks in the luctrative Caspian region - Satpayev and Makhanbet - for exploration.

Also OVL will spearhead Indian initiatives for involvement in oil infrastructure development in that country, especially in two pipelines, one to the Black Sea and the other to China.


There has been further traction on the idea of excluding Bangladesh in the Indo-Myanmar pipeline proposal.

"New Delhi and Rangoon have formed a techno-commercial committee to examine the possibility of laying a pipeline from Burma to India bypassing Bangladesh.

The joint group will also explore the possibilities of importing gas by ship in its liquefied (LNG) or compressed (CNG) state, Indian Petroleum Minister Mani Shankar Aiyar said after the talks with his counterpart in New Delhi.

They have also assigned Italian Snam Progetti for a feasibility study for taking gas from Burma to India without using Bangladesh territory, sources in Dhaka said...

... Industry sources said that India is now trying to bypass Bangladesh from the project as New Delhi is not willing to give into Dhaka's conditions for allowing right of way for the cross-border pipeline over the territory of Bangladesh."


Sudan could be the oil world's best kept secret, and India could be a major player in the development of the oil industry there. So says an article from the Sudan Tribune. Still the comparisons with Saudi Arabia are almost ridiculous. Sudan has proven reserves of 563 million barrels of oil - Saudi puts its reserves in the 200,000 million barrels range.

Turkey and Romania

On a visit to Turkey last month, Oil Minister Mani Shakar Aiyar, met his turkish counterpart Hilmi Guler, and agreed upon several avenues where the two nations could cooperate.

While Turkey does not have any hydrocarbon reserves to boast about, it is a critical state for accessing Western Caspian Sea and Northern Persian Gulf nations' reserves, due both to its cultural links to these states and also its strategic location that leads to a lot of pipelines from these regions to end up going through Turkey. Some the deals will result in India and Turkey investing in E&P in the other country, and forming joint ventures to invest in third countries. While Turkey would lead the consortia in Central Asia, India would do the same for South East and East Asia, Africa and Latin America. On the issue of cross-investment, while India was invited to invest in pipelines connecting Central Asia to Europe via Turkey, Turkey was invited to invest in Indian EOU-refineries in the coastal regions.

With Romania the cooperation would relate more to development of capabilities in the area of oil and gas equipment, including drilling rigs and refinery equipment. This includes tie-ups between organizations (trade, research and academic) in the two countries.

New World Warrior

GSPC, the latest entrant to the list of Indian corporates with big oil and gas reserves, via particularly its K-G Basin find, will now forage into the world market to get oil/gas equity and/or other cooperation in the field. Apparently it is, "Close to inking deals with companies in Libya, Oman and Qatar".

Thursday, July 14, 2005

Jatropha Targets - India on track

ET reports that the cost of Jatropha-based bio-diesel in India has gone below the cost of regular diesel.

This is great news. In the past Indian Railways would pay as much as Rs 70-80 for a litre of bio-diesel to meet its trial requirements. For a pilot in 2003, BEST and HPCL paid as much as Rs 78 per litre to Lubzoil India Ltd for 20,000 litres. Now with the price of jatropha seeds down to Rs 5 a kilo, from Rs 30 a kilo earlier, bio-diesel cost has come down to just Rs 24 a litre.

Regular diesel vehicles can run on diesel blended with upto 20% of bio-diesel. Vehicles on slightly modified engines can run on 100% bio-diesel too.

Now India uses about 45 million tonnes of diesel every year. So with 20% bio-diesel, which the government will likely mandate as a target under the National Biodiesel Policy in August, about 9 million tonnes of bio-diesel produced within India will mean an India bio-diesel industry as big as Rs 250 billion, or $6 billion. That is only about 7 years away. But is that just another number for the future that is thrown at us?

There are already indications of huge commitments from corporates in India. For example a single Mohan Breweries-D1 Oils JV in Tamil Nadu is into contracting farmers for Jatropha production, and is already working on an immediate aim of 120,000 tonnes of jatropha oil annually. This could go up to 300,000 tonnes based on the plantations targets for this year alone. In Mysore, Labland Biotech is in a deal with D1 Oils to procure upto 50,000 tonnes of jatropha oil a year, from contract manufacturing farmers.

There are other names too. Among the earliest big adopters is likely to be the Indian Railways. Then there are oil PSU's like HPCL and MNC's like Diamler Chrysler.

Sunday, July 03, 2005

India Petroleum Update

Bangladesh to be bypassed for Myanmar gas

India just might call Bangladesh's buff in the Myanmar-India pipeline deal. In addition to a rather high $125 million transit fee, Bangladesh was asking for free access to Nepal and Bhutan, for allowing India to use its territory to get a gas pipeline from Myanmar (where India owns gas equity in some pretty lucrative fields).

If India decides to build the pipeline in its own territory, the length and hence cost increases, but the transit fee saving compensates for that. In addition it will allow gas from the North Eastern states to be sold to the rest of India, proving a boon for those states. Why did anyone think of Bangladesh in the first place? :)

YAOCOC (Yet Another ONGC-Chinese Oilco Confrontation)

Another Canada-based company that ONGC will fight it out with a Chinese company to takeover. This one is called Petrokazakhstan, and as the name suggests it has huge interests in Kazakhstan. This property is expected to be on the agenda when Chinese President Hu Jintao visits Kazakhstan today for talks. China has huge advantages here as it already has some oil equity (unlike India) and is in the process of building an oil pipeline from that country to China. Of course ONGC and the Chinese CNPC are not alone. Among others there is Chevron Corp with which another Chinese company is in battle for Unocal.

Pakistan has meanwhile refused to buy diesel from India. Pak had agreed to consider the proposal, after Aiyar's recent visit to that country. Even though petroleum product prices in India are much higher than in Pakistan, the reasons for refusal on grounds of cost remain flimsy.

India's oil reserves

When India's oil reserves were last assessed almost 10 years ago, the estimate was 30 billion barrels. A re-assessment is being planned and the results should be interesting.

Follow-up on India's Biggest Gas Find

Size Disputes

First the Indian Director General of Hydrocarbons, VK Sibal, and then the Canadian partner in the consortium, GeoGlobal Resources, came out against the size claims on the find. Both said that current data is rather premature to decide the size of a reserve.

Trivia and Implications

Apparently GSPC almost did not get to bid for the K-G Basin block back in 2002, and Gujarat had to increase the net worth of the company by Rs 300 crore within 48 hours at the height of the Akshardham crisis.

Here are some calculations on possible implications on other gas projects in India.

The deal with Iran is to import 5 tonnes of LNG every year. This works out to 13,700 tonnes a day, which is slightly less than 19 million cubic meters per day.

As per current plans, in 2008 (2006?), Reliance will start commercial production of a little over 14 million cubic meters (mcm) of gas per day, from their KG Basin find. Estimates say that this could go up all the way to 40 mcm per day - within months. The ONGC find in the KG basin stands between 4 and 8 tcf (Reliance's is anywhere between 9 and 14 tcf) based on who you ask. So ONGC could produce another 10 mcm. The GSPC find at current estimate stands at a giant 20 tcf. But because it is from older sediment, compared to the Reliance find, the ultimate flow per day would be around 40-50 mcm per day. Cairn also made a 1 tcf find in the KG Basin.

So sometime around 2009, when the pipeline from Iran would start bringing gas to India, the KG Basin will be supplying almost 100 mcm of gas to Indian consumers everyday, at competitive and maybe even lower cost. By then Iran (7.5) and Qatar(10) together could be supplying India almost 17.5 mcm of gas per day in the form of LNG. Piped gas is about 40% cheaper than LNG, and if we include the Iran pipeline, it looks like there will surely be a shortage of demand for LNG in the country by then. Also consider this then.