India industries confident of 2030 renewable energy aim

Spanish Market: Coal, Electricity, Hydrogen, Metals
14/10/24

Indian industries are confident about reaching the country's renewable energy target of 500GW by 2030, senior executives said at the Financial Times' Energy Transition Summit in New Delhi last week.

This is especially given strong capacity installation of solar and wind projects in the coming years, delegates heard. India's renewable energy capacity stands at 199.5GW as of August, a rise of 12pc on the year, data from the Central Electricity Authority show.

"India's [renewable] power sector has already grown at a [compound annual growth rate] of nearly 20pc in the last 10 years … The pace at which some of the bids are coming, we should reach 500GW by 2030," said domestic utility Tata Power's chief executive officer Praveer Sinha.

A record 69GW of renewable energy tenders were issued during the April 2023-March 2024 fiscal year, surpassing the government-mandated target of 50GW.

Tata Power is operating 4.5GW installed capacity of renewable energy that produced 64.6Th of electricity in the April 2023-March 2024 fiscal year. It aims to add another 5GW of installed capacity in the coming years, underscoring its commitment to providing round-the-clock renewable energy through solar, wind, and pumped hydro storage projects, Sinha added.

Indian steel manufacturer ArcelorMittal Nippon Steel (AMNS) also plans to add 1GW/yr of renewable energy capacity for its captive power consumption, managing director Dilip Oommen said.

AMNS has developed a 975MW hybrid renewable energy project at Alamuru village in India's southern state of Andhra Pradesh. The project will generate 661MW of solar and 314MW of wind power capacity, which will be integrated with a pumped hydro storage facility owned by renewables developer Greenko to overcome the intermittent nature of wind and solar power generation, ensuring round-the-clock power. Power generated from the solar and wind sites will be connected from Andhra Pradesh's Kurnool district via a 400kV interstate transmission system up to AMNS' Hazria facility.

The firm is also considering using hydrogen in its electric arc furnace, but remains skeptical about the cost economics. "At present, the cost of hydrogen is $3.50/kg," Oommen said, adding that if this falls below $2/kg, it would be feasible for commercial use at its facilities.

The reduction in the cost of renewable power generation over the last few years has also raised interest in the sector, incentivising the coal-dominated eastern regions of India to adopt renewables, said Indian independent power provider Ampin Energy's chief executive officer Pinaki Bhattacharya.

The domestic steel sector, one of the country's largest carbon emitters, is looking at ways to reduce emissions in light of the policies under the EU's carbon border adjustment mechanism (CBAM), which will take effect on 1 January 2026.

This was echoed during a session on 9 October when India's finance minister Nirmala Sitharaman noted that India has been consistent in promoting domestic investment in renewables and establishing transmission lines. But she described CBAM as "a trade barrier" that could hurt investment in India's heavy industries and hinderthe country's transition away from fossil fuels. CBAM is a "unilateral" and "arbitrary" measure, which would "not be helpful" for India, she said, adding that India's concerns "would definitely be voiced" with the EU. Her sentiments were in line with that of commerce minister Piyush Goyal, who said last year that India will not accept any unfair taxes on steel that the EU imposes under the CBAM.

Coal to renewables switch

"We are not on track yet to displace coal," said Indian not-for-profit thinktank Centre for Science and Environment's director general Sunita Narain, when asked about India's transition from coal to renewables, considering that coal still dominates the country's electricity mix.

Renewable energy generation capacity has currently increased to 13pc of the total electricity mix, but the country needs to hit the 35pc target by 2030, she added.

India's power generation continues to rely on coal because of an abundant supply of the fuel as well as its cheaper price over other alternatives. Out of India's total installed capacity of 451GW, coal comprises 48.27pc, followed by solar at 19.84pc and wind at 10.47pc, as of August, data from government think tank Niti Aayog show.

By Ankit Rathore

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16/10/24

Rio Tinto’s iron ore shipments edge higher in 3Q

Beijing, 16 October (Argus) — UK-Australian mining firm Rio Tinto shipped 84.5mn t of iron ore in July-September, up by a slight 1pc compared with a year earlier. The firm maintained its guidance for iron ore shipments from its Western Australia (WA) mines at 323mn-338mn t for 2024 on a 100pc basis, but lowered its equity guidance for output from the Iron Ore Company of Canada (IOC) to 9.1mn-9.6mnt from 9.8mn-11.5mn t previously. IOC production totalled 2.1mn t in the third quarter, 11pc lower than a year earlier because of an 11-day sitewide shutdown caused by wildfires in July. This resulted in a revised mine plan and maintenance schedule, Rio Tinto said. Low-grade SP10 iron ore made up 19pc of the company's WA shipments during July-September, 2pc higher than in the first half of 2024. SP10 levels are expected to remain elevated until replacement projects are delivered, which is subject to approvals and heritage clearance, it said. The firm's Chinese portside sales rose to 20.4mn t in January-September from 17.5mn t in the same period of 2023. Around 90pc of this year's portside sales were either screened or blended in Chinese ports, up by 3pc from a year earlier. Rio Tinto's realised average iron ore price was $99/dry metric tonne (dmt) during July-September, down by 11pc on the second quarter. The company maintained its Pilbara cash operating cost guidance at $21.75-23.50/t for 2024, based on an Australian-US dollar exchange rate of 0.66. The Argus ICX iron ore index was assessed at $105.70/dry metric tonne (dmt) cfr Qingdao on a 62pc Fe basis on 15 October, up from $92.55/dmt on 16 September. Argus assessed the 58pc Fe fines price at $92.85/dmt on 15 October, up from $79.30/dmt on 16 September. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Tax credit delay risks growth of low-CO2 fuels

15/10/24

Tax credit delay risks growth of low-CO2 fuels

New York, 15 October (Argus) — A new US tax credit for low-carbon fuels will likely begin next year without final guidance on how to qualify, leaving refiners, feedstock suppliers, and fuel buyers in a holding pattern. The US Treasury Department this month pledged to finalize guidance around some Inflation Reduction Act tax credits before President Joe Biden leaves office but conspicuously omitted the climate law's "45Z" incentive for clean fuels from its list of priorities. Kicking off in January and lasting through 2027, the credit requires road and aviation fuels to meet an initial carbon intensity threshold and then ups the subsidy as the fuel's emissions fall. The transition to 45Z was always expected to reshape biofuel markets, shifting benefits from blenders to producers and encouraging the use of lower-carbon waste feedstocks, like used cooking oil. And the biofuels industry is used to uncertainty, including lapsed tax credits and retroactive blend mandates. But some in the market say this time is unique, in part because of how different the 45Z credit will be from prior federal incentives. While the credit currently in effect offers $1/USG across the board for biomass-based diesel, for example, it is unclear how much of a credit a gallon of fuel would earn next year since factors like greenhouse gas emissions for various farm practices, feedstocks, and production pathways are now part of the administration's calculations. This delay in issuing guidance has ground to a halt talks around first quarter contracts, which are often hashed out months in advance. Renewable Biofuels chief executive Mike Reed told Argus that his company's Port Neches, Texas, facility — the largest biodiesel plant in the US with a capacity of 180mn USG/yr — has not signed any fuel offtake contracts past the end of the year or any feedstock contracts past November and will idle early next year absent supportive policy signals. Biodiesel traders elsewhere have reported similar challenges. Across the supply chain, the lack of clarity has made it hard to invest. While Biden officials have stressed that domestic agriculture has a role to play in addressing climate change, farmers and oilseed processors have little sense of what "climate-smart" farm practices Treasury will reward. Feedstock deals could slow as early as December, market participants say, because of the risk of shipments arriving late. Slowing alt fuel growth Recent growth in US alternative fuel production could lose momentum because of the delayed guidance. The Energy Information Administration last forecast that the US would produce 230,000 b/d of renewable diesel in 2025, up from 2024 but still 22pc below the agency's initial outlook in January. The agency also sees US biodiesel production falling next year to 103,000 b/d, its lowest level since 2016. The lack of guidance is "going to begin raising the price of fuel simply because it is resulting in fewer gallons of biofuel available," said David Fialkoff, executive vice president of government affairs for the National Association of Truck Stop Operators. And if policy uncertainty is already hurting established fuels like biodiesel and renewable diesel, impacts on more speculative but lower-carbon pathways — such as synthetic SAF produced from clean hydrogen — are potentially substantial. An Argus database of SAF refineries sees 810mn USG/yr of announced US SAF production by 2030 from more advanced pathways like gas-to-liquids and power-to-liquids, though the viability of those plants will hinge on policy. The delay in getting guidance is "challenging because it's postponing investment decisions, and that ties up money and ultimately results in people perhaps looking elsewhere," said Jonathan Lewis, director of transportation decarbonization at the climate think-tank Clean Air Task Force. Tough process, ample delays Regulators have a difficult balancing act, needing to write rules that are simultaneously detailed, legally durable, and broadly acceptable to the diverse interests that back clean fuel incentives — an unsteady coalition of refiners, agribusinesses, fuel buyers like airlines, and some environmental groups. But Biden officials also have reason to act quickly, given the threat next year of Republicans repealing the Inflation Reduction Act or presidential nominee Donald Trump using the power of federal agencies to limit the law's reach. US agriculture secretary Tom Vilsack expressed confidence last month that his agency will release a regulation quantifying the climate benefits of certain agricultural practices before Biden leaves office , which would then inform Treasury's efforts. Treasury officials also said this month they are still "actively" working on issuing guidance around 45Z. If Treasury manages to issue guidance, even retroactively, that meets the many different goals, there could be more support for Congress to extend the credit. The fact that 45Z expires after 2027 is otherwise seen as a barrier to meeting US climate goals and scaling up clean fuel production . But rushing forward with half-formed policy guidance can itself create more problems later. "Moving quickly toward a policy that sends the wrong signals is going to ultimately be more damaging for the viability of this industry than getting something out the door that needs to be fixed," said the Clean Air Task Force's Lewis. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Lignite displaces gas in German power mix

15/10/24

Lignite displaces gas in German power mix

London, 15 October (Argus) — Rallying German gas prices have pushed a significant amount of gas-fired generation out of the country's power mix this month, opening space for lignite. Average daily gas-fired generation in Germany has slipped to 3.8GW so far this month from 4.2GW in September and August and 4.1GW in July. During that time, lignite-fired generation climbed to 9GW from 7.2GW in September and August and 7.4GW in July. Coal-fired generation has also edged down to 2.9GW so far this month from just over 3GW in September, but higher than the averages of 2.3GW in August and 1.4GW in July. Meanwhile, supporting demand for thermal-fired generation, German renewables output has fallen to 30.3GW so far in October from just under 32GW in September when wind generation stepped up, but slightly above the 29.5GW in August when wind output was lower. Remaining German power demand in recent weeks has been covered by imports, which have risen to a net 3.8GW so far this month from 3.4GW in September, but remained well below the 6.2GW in August. Electricity imports from neighbouring countries such as France are occasionally cheaper than domestic generation and can help fill in gaps between German power demand and supply. A combination of changing renewable output, higher gas prices, stable lignite prices and lower emissions prices have spurred changes in the German power mix. The German THE day-ahead has risen strongly since late July and prices have rallied in recent weeks against a backdrop of rising geopolitical tensions in the Middle East. Meanwhile, German lignite-fired plants typically source fuel from nearby mines, substantially insulating domestic lignite prices from external market forces. German regulator Bnetza assumed earlier this year that domestic lignite would cost about €3/MWh in 2024-25. At the same time, near-term prices in the EU emissions trading system (ETS) — a key driver of competitiveness for German lignite-fired generation — have fallen. Prompt ETS allowances closed at €65.36/t of CO2 equivalent (CO2e) on Monday, down from €72.14/t CO2e on 19 August, boosting the profitability of lignite-fired plants, which are the more CO2 intensive than coal and gas. Those recent price shifts have made output from lignite-fired plants with a typical efficiency of 36pc more profitable than normal 55pc-efficient gas-fired plants as well as coal-fired stations operating at 40pc efficiency, which have also become more profitable . By contrast, in the first eight months of this year, 36pc-efficient lignite-fired plants had competed tightly with 55pc-efficient gas-fired plants even as gas prices fell to the bottom of the coal-to-gas fuel-switching range ( see fuel-switching graph ). Buffer zone More competitive lignite-fired generation has also started acting as the domestic buffer to cover gaps between supply and demand left by renewable generation ( see power generation graph ). After Germany renewable generation dropped to 26.8GW on 2-9 October from a strong 45.5GW on 26-28 September, lignite-fired generation jumped to 10.1GW from 6.4GW — a 57pc gain — while gas-fired output only rose to 3.5GW from roughly 3GW and coal-fired generation increased to 2.9GW from 2.3GW. In December-July, when the gas and lignite fuel-switching range was tight, generation from both fuels reacted similarly to fluctuations in renewable output and both plant types buffered their generation based on demand ( see power generation graph ). And forward prices assessed by Argus suggest that lignite-fired generation could remain competitive against gas and coal-fired output in the German power mix next month. As of market close on Monday, November-dated fuel and emissions prices would place the operating costs of a 36pc-efficient lignite-fired plant during that time below those of a 55pc-efficient gas-fired plant and a 40pc-efficient coal-fired plant. That said, Germany's decreasing lignite and coal-fired generation capacity limits how much of the national power mix those plant types can provide. As of April, Germany had 82.4GW of gas-fired capacity, but just 15.1GW of lignite-fired capacity and 11.5GW of coal-fired plants, according to Bnetza. By Lucas Waelbroeck Boix Fuel switching range €/MWh Power generation by fuel, 7 day average GW Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan's 2MW Susono biomass plant starts construction

15/10/24

Japan's 2MW Susono biomass plant starts construction

Tokyo, 15 October (Argus) — Japan's 2MW Susono biomass-fired power plant in Shizuoka prefecture has started construction today, with the aim to begin commercial operations in October 2025. The Susono plant will burn 27,000 t/yr of wood chips secured in Shizuoka to generate around 15 GWh/yr of electricity. Operating company Susono Biomass Power is held 50pc by Japanese utility Chubu Electric Power, 40pc by energy company ML Power, which is a subsidiary of financing firm Mizuho Leasing, and 10pc by renewable energy developer Prospec AZ. Those companies plan to build three other biomass-fired power plants in Gunma, Nagano, and Niigata prefectures. Each plant is expected to come on line in November 2025, April 2026, and May 2027. The three 2MW plants will burn 27,000-29,000 t/yr of locally gathered wood chips to generate around 15 GWh/yr. Chubu has invested in a number of biomass-fired power plants, including the 112MW Tahara in Aichi prefecture , which is currently under construction and aims to start commercial operations in September 2025. By Takeshi Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India plans to quadruple power capacity to meet demand

15/10/24

India plans to quadruple power capacity to meet demand

Singapore, 15 October (Argus) — India plans to raise its electricity generation capacity by more than fourfold over the next two decades to cater to rising domestic demand, although the focus would be on boosting power production from cleaner sources of energy as the country takes steps to cut emissions. The goal is to collaborate with all the stakeholders and achieve a generation capacity of 2,100GW by 2047, power minister Manohar Lal Khattar said at the launch of National Electricity Plan for power transmission in Delhi. India has a current installed capacity of about 453GW, with nearly half of it coming from coal and lignite. The country anticipates peak power demand to reach 708GW by 2047, from an anticipated 257GW in the current financial year that ends in March 2025. The South Asian nation wants to aggressively grow its renewable and non-fossil fuel-based power generation capacity and steadily trim reliance on coal, in line with international commitment to reduce emissions and achieve net zero by 2070, the minister said. The plan includes raising non-fossil energy capacity to 500GW by 2030 and further to over 600GW by 2032, he added. The plans envisage a subdued role of coal in India's energy mix, although much would depend on the execution of the ambitious strategy given that developing countries, including India have prioritized energy security over international commitment to lower carbon emissions. India's non-fossil fuel growth plan stipulates the integration of 10GW of offshore wind farms, 47GW of battery energy storage systems, and 30GW of pumped-storage plants to address the power needs of green hydrogen and green ammonia manufacturing hubs with cross-border interconnections, the power ministry said. The pumped-storage capacity would be increased to 116GW by 2047 from 4.7GW at present, while the country would see a solar power capacity of 1,200GW and wind-power-generation capacity of 400GW over the same period. India has a solar power capacity of 91GW at present, while wind power capacity stands at 47GW. The overall generation growth would also include "flexible operation" of thermal and nuclear plants, the ministry said. The country also plans to add 190,000 circuit kilometres of transmission lines and boost its power transformation capacity over the next decade at an estimated investment of 9 trillion rupees ($107bn). The aim is to have a transmitting capacity to supply expanded renewable power capacity over the next six to eight years and grow the overall grid capacity. The power transmission plan also covers cross-border interconnections with Nepal, Bhutan, Myanmar, Bangladesh, and Sri Lanka as well as potential interconnections with countries like Saudi Arabia and the UAE. By Saurabh Chaturvedi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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