Menu

EnergySecurity

Adani Power to Build 2,400-MW Thermal Plant in Bihar
business update, Economy, Equities, Markets - September 15, 2025

Adani Power to Build 2,400-MW Thermal Plant in Bihar

Adani Power to Build 2,400-MW Thermal Plant in Bihar

Adani Power signs a 25-year supply deal with Bihar State Power Generation Company. The $3 billion investment aims to boost energy security, create jobs, and stabilize tariffs.

A Game-Changing Power Project for Bihar
Adani Power Ltd., one of India’s largest private sector power producers, has announced plans to build a 2,400-megawatt (MW) thermal power plant in Bihar’s Pirpainti, Bhagalpur district. The company has signed a 25-year Power Supply Agreement (PSA) with the Bihar State Power Generation Company Ltd. (BSPGCL), securing long-term electricity supply for the state.
This project is set to become one of the largest private sector power investments in Bihar, with an estimated cost of $3 billion (₹26,500 crore). It is expected to accelerate industrial growth, improve household power availability, and support the state’s expanding urban infrastructure.

Project Details and Execution Timeline
• Capacity: 2,400 MW (three units of 800 MW each)
• Technology: Ultra-supercritical, offering higher efficiency and lower emissions compared to conventional coal plants
• Coal Linkage: Allocated under the Government of India’s SHAKTI policy, ensuring stable fuel supply
• Execution Timeframe: Fully operational within 60 months (5 years)
• Employment Impact: 10,000–12,000 jobs during construction and ~3,000 permanent roles post-commissioning
The project will be developed under the Design, Build, Finance, Own, and Operate (DBFOO) model, providing Adani Power complete ownership and operational responsibility throughout the plant’s lifecycle.

Competitive Tariff Advantage
A crucial highlight of this deal is the tariff of ₹6.075 per kWh, the lowest bid under a competitive tender. For Bihar, this translates into affordable electricity supply over the long term, reducing power purchase costs for the state government.
The fixed tariff structure also gives Adani Power predictable revenues and cushions it against volatility in market electricity prices.

Economic and Employment Boost for Bihar
The scale of this project will have significant spillover benefits for Bihar’s economy.
• Direct Impact: Thousands of new jobs during the construction phase and stable long-term employment once operational.
• Indirect Benefits: Boost to local suppliers, contractors, and infrastructure services in Bhagalpur and surrounding areas.
• Industrial Push: Reliable power will attract industries in sectors such as textiles, agro-processing, and manufacturing, helping Bihar reduce its dependence on imports of electricity from other states.
This investment also signals renewed confidence of private investors in Bihar’s power sector reforms.

What It Means for Investors
Revenue Visibility
The 25-year PSA ensures steady and predictable cash flows for Adani Power, strengthening its balance sheet. The tariff security lowers risks from fluctuating energy prices.
Capacity Expansion
With this 2,400-MW addition, Adani Power’s total capacity will expand by nearly 13%, cementing its position as a dominant player in India’s fast-growing energy market.
Government Backing
The coal linkage under the SHAKTI policy guarantees uninterrupted fuel supply, reducing operational risk. Rising electricity demand in Bihar, fueled by urbanization and industrialization, ensures a robust customer base.
Capital-Intensive Risk
The ₹26,500 crore capital outlay comes with significant funding needs. Investors should monitor financing costs, debt load, and execution risks such as construction delays or cost overruns.
ESG Considerations
While the plant will use cleaner ultra-supercritical technology, it remains coal-based. This may pose challenges for ESG-focused investors, as global markets increasingly favor renewable energy projects.

Strategic Importance in India’s Power Landscape
Bihar has historically faced energy shortages and relied on imports from neighboring states. This project will reduce dependence, enhance power security, and improve reliability for millions of households.
At the national level, it underscores India’s balanced energy strategy — where renewable energy continues to expand rapidly, but coal-based ultra-supercritical projects still play a key role in ensuring base-load stability.

Conclusion: Balancing Growth and Responsibility
Adani Power’s decision to build a 2,400-MW ultra-supercritical thermal plant in Bihar marks a major milestone for the state’s energy future. With a $3 billion investment, 25-year supply agreement, and lowest tariff in competitive bidding, the project promises affordability, job creation, and energy stability.
However, it also raises questions about the long-term environmental footprint, given the global shift toward renewable energy. For investors, the project offers revenue visibility and growth prospects but requires careful monitoring of execution and ESG factors. If executed efficiently, this project could redefine Bihar’s power landscape and strengthen India’s energy security for decades to come.

 

 

 

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

Semiconductor Market Set to Cross $1 Trillion by 2030

, , , , , 0 Comment
Read More
China Curbs LNG Amid Rising Russian Energy Imports
Economy, Markets - July 9, 2025

China Curbs LNG Amid Rising Russian Energy Imports

China Curbs LNG Amid Rising Russian Energy Imports

As China steers clear of expensive LNG spot purchases, its pivot toward Russian pipeline gas reshapes global energy markets and may bring price relief to Europe.

Summary:
Despite being in the middle of peak summer demand, China is resisting the purchase of expensive spot liquefied natural gas (LNG). Instead, the country is increasingly relying on cheaper pipeline gas from Russia. This strategic shift is easing pressure on the global LNG market, potentially lowering prices for energy-hungry European nations and reshaping the dynamics of international energy trade.

China Avoids the Spot Market Despite Soaring Demand
In a surprising yet strategic move, China—the world’s second-largest economy and one of the top LNG importers—is staying out of the global LNG spot market even as temperatures soar and energy demand peaks. Historically known for its aggressive energy acquisition during seasonal spikes, China’s recent silence in the spot market has caught the attention of global energy analysts.
The primary reason? Price. Spot LNG prices have surged in recent months, making them economically unviable for Chinese buyers who are under pressure to maintain cost efficiencies amid a sluggish domestic economic recovery. The decision to sidestep the spot market highlights China’s shifting priorities and the increasing viability of alternative sources like Russian pipeline gas.

Russian Pipeline Gas Gains Ground
China’s decision to pivot away from LNG spot deals is deeply tied to its growing reliance on Russian pipeline gas. Despite geopolitical tensions surrounding Russia’s global energy trade, the Sino-Russian energy partnership continues to flourish. The Power of Siberia pipeline—a strategic project that became operational in late 2019—is now playing a crucial role in China’s energy mix.
As Russia redirects its energy exports away from European markets due to sanctions and diplomatic fallouts, China has emerged as a primary customer. Pipeline imports from Russia have not only increased in volume but also come at a lower cost compared to volatile spot LNG prices.
The economic and logistical advantages of pipeline gas—combined with long-term contracts and stable pricing—make it a more attractive option for Beijing.

Implications for the Global LNG Market
China’s lack of participation in the spot LNG market is already causing significant impacts on the global energy landscape.
1. Reduced Competition in Spot Markets
With China—the largest LNG importer in 2023—pulling back, other nations, especially in Europe and South Asia, face less competition. This dynamic could stabilise or even reduce spot LNG prices during what is traditionally a high-demand period.
2. Relief for European Buyers
Europe, still reeling from the energy shock following the Russia-Ukraine war and the subsequent loss of Russian pipeline gas, has been heavily reliant on LNG to bridge the gap. The easing of Asian demand, led by China, provides a much-needed breather for European nations scrambling to fill gas reserves ahead of the next winter.
3. Supplier Diversification Accelerates
As Chinese demand shifts, LNG exporters like Qatar, the United States, and Australia may pivot their focus more toward Europe and Southeast Asia. This redirection might influence long-term supply contracts and future infrastructure investments.

Strategic Balancing Act for China
China’s approach reflects a broader strategy of diversification and price discipline. While the country remains committed to LNG through long-term contracts—particularly with suppliers like Qatar—its spot market activities have become increasingly selective.
Key factors influencing this cautious stance include:
Domestic Economic Slowdown: With its manufacturing and construction sectors still underperforming, China’s overall energy demand hasn’t surged as strongly as in previous years.
Sustainability Goals: China’s ongoing efforts to decarbonise and integrate renewables into its energy mix may be moderating the need for aggressive fossil fuel procurement.
Inventory Levels: Reports suggest that Chinese LNG inventories remain at comfortable levels, reducing the urgency for costly spot purchases.

What This Means for Energy Traders and Investors
For both traders and investors, China’s purchasing behaviour regarding LNG serves as a key indicator of worldwide energy trends. The following insights emerge:
Short-Term Volatility Could Ease: Spot LNG markets may see less volatility this summer, assuming no unexpected supply disruptions.
Pipeline Projects Gain Appeal: As pipeline gas proves more resilient and cost-effective, other nations may consider strengthening cross-border gas infrastructure.
Russian Energy Strategy Reinforced: Russia’s pivot to Asia is bearing fruit, ensuring a continued cash flow despite Western sanctions. This might encourage Russia to speed up energy agreements with nations such as India and Pakistan.

The Bigger Picture: Global Energy Recalibration
The ongoing shift signals a larger rebalancing of global energy flows. China’s strategic pullback from the spot market isn’t just about short-term cost savings—it’s about long-term energy security, diversification, and geopolitical manoeuvring.
While Europe continues to invest heavily in LNG import terminals to replace Russian gas, China is doubling down on pipeline connections and long-term LNG contracts, reducing reliance on unpredictable spot pricing. This divergence in strategy could define the future of global energy trade, with Asia and Europe forming distinct procurement patterns.

Conclusion
China’s reluctance to make expensive spot LNG purchases during the peak summer demand period is altering the global energy landscape. By leveraging pipeline imports from Russia and focusing on long-term contracts, China is safeguarding its energy security while inadvertently easing market pressure for other buyers.
This move underlines Beijing’s pragmatic approach to energy management and reinforces the importance of flexible, multi-channel procurement strategies in an increasingly volatile geopolitical environment.
As the global LNG market adjusts to these shifts, energy-dependent economies, traders, and suppliers must recalibrate their expectations and strategies accordingly.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

Mangalam Cement Skyrockets: Promoter Buys 4.7 Lakh Shares!

, , , , , , , , , 0 Comment
Read More
Oil Prices Slip as Investors Remain Cautious Over Possible U.S. Role in Iran-Israel Dispute
Market News - June 20, 2025

Oil Prices Slip as Investors Remain Cautious Over Possible U.S. Role in Iran-Israel Dispute

Oil Prices Slip as Investors Remain Cautious Over Possible U.S. Role in Iran-Israel Dispute

Oil prices witnessed a slight decline as global investors carefully evaluated the likelihood of the United States getting directly involved in the ongoing conflict between Iran and Israel. The market, currently influenced by both geopolitical tensions and economic policy signals, remained sensitive to potential developments that could either worsen or ease the situation.

Marginal Dip in Crude Oil Prices

On June 19, 2025, Brent crude ended the day close to $76.50 per barrel, reflecting a minor decline of about 0.26%. Meanwhile, the U.S.WTI crude, another key benchmark, experienced a mild decline, ending at approximately $75.10 per barrel. Despite this minor decline, oil prices still carry a significant geopolitical risk premium, estimated at nearly \$10 per barrel. This premium reflects the market’s concern over possible supply disruptions if the situation in the Middle East escalates.

Unclear U.S. Stance Fuels Market Uncertainty

A primary factor contributing to market caution is the ambiguity surrounding the United States’ potential military response. President Donald Trump recently remarked that the U.S. “may or may not” become involved, leaving investors uncertain about the country’s next course of action. This indecision has added to market volatility, with traders remaining on edge about the potential for a wider conflict.

A significant worry for the oil market is the potential threat to the Strait of Hormuz, a critical maritime route where approximately 19 million barrels of crude oil pass daily. Any disruption in this area could have immediate and substantial effects on global oil supplies, making the region’s stability crucial for energy security.

Fed Maintains Interest Rates, Indicates Potential Future Easing

Alongside geopolitical concerns, recent decisions from the U.S. The Federal Reserve is also influencing the current direction of oil market trends. The Fed has chosen to keep interest rates unchanged while indicating the possibility of two rate cuts later in the year. When interest rates decline, it often stimulates economic activity, which can increase the demand for energy.

However, potential rate cuts also raise the prospect of increased inflation, which could complicate long-term market forecasts. For now, the Fed’s position offers some reassurance to investors, providing a counterbalance to the uncertainties stemming from the Middle East.

Gulf Markets Reflect Regional Anxiety

While oil prices only dipped slightly, stock markets across Gulf nations showed more significant reactions. Indices in countries such as Saudi Arabia and the United Arab Emirates declined, as regional investors became increasingly cautious about the risk of a broader conflict. The prospect of heightened instability has impacted both energy and non-energy sectors in these markets.

Investors also shifted their funds toward safer assets. Gold prices strengthened, and the U.S. dollar gained, both typical moves during periods of geopolitical tension. This flight to safety underlines the global financial community’s sensitivity to the potential for conflict escalation.

International Responses and Diplomatic Movements

The possible consequences of the Iran-Israel conflict have captured international focus. Shell’s CEO has expressed worry about the potential effects of a large-scale conflict on global trade, especially if access to the Strait of Hormuz is limited or blocked. Disruptions in this vital shipping lane would not only push oil prices sharply higher but could also hinder global trade routes and shipping timelines.

European nations have stepped up their diplomatic efforts to ease tensions. Reports indicate that European leaders are actively engaging Iranian officials to encourage de-escalation. The success or failure of these diplomatic attempts will likely have a direct impact on oil markets in the coming weeks.

Outlook: Waiting for Clarity

Looking ahead, the oil market is expected to remain highly sensitive to updates regarding U.S. involvement and Iran’s next moves. President Trump is anticipated to clarify his administration’s position within the next two weeks, a decision that could significantly influence market directions.

Iran has issued warnings about possibly restricting access to the Strait of Hormuz if military aggression against them continues. If this step is implemented, market observers predict oil could breach the $100 per barrel level. Alternatively, positive diplomatic developments could reduce market stress and result in a downward price movement.

At present, the oil market is balancing on a tightrope, caught between the potential for escalating conflict and hopes for a peaceful resolution. Investors are likely to maintain a cautious approach until clearer signals emerge from both Washington and Tehran.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

Adani Power Eyes Butibori Thermal Plant in Rs 3,000 Crore Acquisition Deal

, , , , , , , , , 0 Comment
Read More
BluPine Energy Secures ₹2,416 Cr to Build Hybrid Clean Power Project in Karnataka
Market News - June 16, 2025

India's Wind Energy Sector Accelerates Amid Renewable Power Expansion

India’s Wind Energy Sector Accelerates Amid Renewable Power Expansion

India has made substantial progress in its renewable energy journey, with wind power becoming a critical component. In the past year, the country’s wind energy capacity surged by 10.5%, taking the total to 51.5 gigawatts (GW). This advancement demonstrates India’s persistent efforts to expand its clean energy footprint and curb carbon emissions.

India’s Rising Influence in the Global Clean Energy Space

India currently ranks as the third-largest producer of renewable energy and holds the fourth spot globally for wind energy capacity. This growth underscores India’s growing influence in the international renewable energy landscape.

Marking Global Wind Day, Union Minister Pralhad Joshi highlighted wind energy’s pivotal role in fulfilling India’s ambition of becoming self-reliant (Atmanirbhar Bharat). He emphasized that expanding wind energy is vital for achieving environmental goals, creating jobs, promoting local manufacturing, and minimizing dependence on imported fuels.

Strong Growth Across Renewable Energy Segments

India’s cumulative renewable energy capacity has now climbed to 226.74 GW, representing a 17.1% year-on-year increase. Solar energy has been the primary growth engine, showing an impressive 31.5% rise to reach 110.83 GW.

Despite solar’s rapid advancement, wind power continues to provide essential diversification and stability within India’s renewable energy framework.

Policy Backing Fuels Wind Energy Expansion

Policy measures from the Indian government have played a decisive role in advancing wind energy. Initiatives like waiving inter-state transmission charges for renewable projects have significantly lowered operational costs, enhancing wind power’s attractiveness.

Further, Renewable Purchase Obligations (RPOs) mandate that power distributors acquire a specific share of their energy from renewable sources, maintaining steady demand for wind energy.

The sector’s openness to full foreign direct investment (FDI) has drawn international capital, which has been instrumental in scaling wind energy initiatives. Additionally, the Union Budget’s 53% increase in renewable energy allocations has added further momentum to project development.

Future Targets and Offshore Wind Potential

India aims to achieve 500 GW of renewable energy capacity by 2030, with wind energy expected to contribute 100 GW. Offshore wind installations are set to play a significant part in this expansion, supported by India’s extensive coastline and favorable wind profiles.

However, the development of offshore wind farms will require heavy investments in port upgrades, grid infrastructure, and specialized offshore equipment.

Environmental Benefits and Energy Independence

Wind power is integral to India’s strategy for lowering greenhouse gas emissions and cutting reliance on coal-powered plants. This transition supports the country’s climate commitments and is likely to result in cleaner air and healthier urban environments.

At the same time, expanding renewable energy reduces the nation’s dependency on expensive imported fossil fuels, strengthening India’s energy autonomy.

Promising Outlook for India’s Wind Sector

The outlook for wind energy in India remains highly positive, bolstered by proactive policy support, growing investor interest, and the national commitment to renewable expansion. The sector is also contributing to employment growth in areas like equipment manufacturing, logistics, construction, and project maintenance.

Wind energy is expected to retain its central role in India’s renewable roadmap, supporting the creation of a sustainable, affordable, and low-emission energy system.

Conclusion

India’s wind energy capacity rose by 10.5% in the past year, reaching 51.5 GW. This progress, driven by favorable government policies, robust investments, and aggressive renewable targets, solidifies the importance of wind power in India’s green energy transformation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

Port of Los Angeles Records Significant Drop in Imports Due to U.S. Tariff Impact

, , , , , , , , 0 Comment
Read More
China Curbs LNG Amid Rising Russian Energy Imports
Economy - June 12, 2025

India Set to Invest \$600 Million in Crude Tankers

India Set to Invest \$600 Million in Crude Tankers

India’s oil giants now want their ships homegrown.

India’s government-owned refining companies are preparing to spend approximately *\$600 million* on a fleet of crude oil tankers built for domestic operations, signaling a major move toward energy transport independence. This purchase forms part of a broader plan to manufacture more than 100 vessels in India under the *Make in India* vision, a strategy valued at nearly *\$10 billion* and aimed at strengthening the country’s control over its maritime logistics.

In recent years, leading oil refiners such as *Indian Oil Corporation (IOC), **Bharat Petroleum Corporation Ltd (BPCL), and **Hindustan Petroleum Corporation Ltd (HPCL)* have largely depended on foreign-leased tankers. These arrangements have left Indian firms vulnerable to external cost volatility and restrictions imposed by international sanctions. To counter this reliance, Indian ministries overseeing oil and shipping are now actively working on a new direction—ownership of key transportation infrastructure.

A central part of this shift is a proposed joint venture between Indian Oil and the *Shipping Corporation of India, which would focus on building large-scale crude carriers within the country. This would help reduce long-term shipping expenses while boosting local shipbuilding capabilities. The idea reflects the Indian government’s **Aatmanirbhar Bharat (Self-Reliant India)* campaign and seeks to turn the tide for a domestic shipbuilding industry that currently captures less than 1% of the global market.

In the immediate future, the plan is to place orders worth \$600 million with Indian shipyards to construct vessels for the exclusive use of state-run refineries. These tankers would replace expensive foreign-leased options and help standardize costs while improving logistical control.

India’s renewed focus on domestic production is largely driven by increasing concerns over the global oil supply chain’s unpredictability. By owning and operating its own *Very Large Crude Carriers (VLCCs)*, India would gain greater flexibility in transporting oil, reduce dependence on outside entities, and shield its operations from international shipping disruptions.

Experts, however, point out that the process of setting up infrastructure to build these massive ships will take time. It will require significant capital investment, skilled workers, advanced engineering expertise, and purpose-built shipyards. Until then, public sector refiners may continue to hire foreign vessels, though they might opt for longer-term leases to secure better deals and more consistent pricing.

If successful, this strategy could help India achieve multiple goals at once: reinforcing energy logistics autonomy, boosting indigenous manufacturing, cutting operational expenses, and stimulating related sectors such as steel, engine manufacturing, and port services. It also presents an opportunity for India to establish a presence in a global shipbuilding market currently ruled by nations like South Korea, China, and Japan.

With the right partnerships and policy support, this initiative could become a cornerstone of India’s industrial policy. Not only will it make Indian refiners more self-sufficient, but it will also turn the country into a more competitive player in the oil transportation and maritime manufacturing spaces.

Summary

This move aligns with the Make in India initiative and aims to reduce foreign reliance, enhance energy transport independence, and develop a strong local shipbuilding industry for long-term strategic gains.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

Nvidia Joins Forces with AI Firms to Rewire Europe

, , , , , , , , , , 0 Comment
Read More
Coal India Reopens 32 Mines as Clean Energy Progress Falters
Market News - June 10, 2025

Coal India Reopens 32 Mines as Clean Energy Progress Falters

Coal India Reopens 32 Mines as Clean Energy Progress Falters

The state-owned mining company shifts focus to coal, restarting idle mines and initiating new developments to address India’s growing energy needs.

India’s Energy Crunch: Renewables Lag, Coal Steps In
India’s energy consumption is soaring, driven by rapid economic growth and industrialization. In 2023, the country consumed nearly 40.5 exajoules of energy, with industry accounting for almost half of this demand. The government’s ambitious clean energy targets—500 GW from renewables by 2030—require $68 billion in annual investments, but last year’s investment was only $13 billion, highlighting a significant shortfall.
Despite aggressive solar and wind expansion, renewables have yet to deliver the scale and reliability needed to power India’s growing economy. As a result, coal still underpins 74% of the nation’s electricity generation as of 2024. Although coal’s share is expected to drop to 55% by 2030 and further to 27% by 2047, it remains crucial for meeting near-term energy needs.

Reviving Defunct Mines: Policy and Execution
The decision to restart 32 abandoned mines is rooted in a December 2024 policy from the Ministry of Coal, which aims to boost domestic supply and cut reliance on imports. These mines, previously shuttered due to outdated machinery and manual operations, will now be modernized and operated through revenue-sharing agreements with private partners. At least six are expected to be operational in FY 2025-26, with five new greenfield projects also in the pipeline.
As of 2025, contracts for 27 of the mines have already been granted, with the rest anticipated to be allocated in the near future. Coal India’s Chairman and Managing Director, PM Prasad, emphasized that this strategy is essential to bridge the gap until renewable capacity can catch up with demand.

Coal India’s Production Ambitions
Coal India currently operates 310 mines and supplies about 75% of the country’s coal needs. The company is targeting an annual production increase of 6–7%, with an ambitious objective of reaching 1.5 billion tonnes by 2030. This expansion is critical as India’s primary energy consumption is projected to more than double by 2050.
Despite the renewed focus on coal, Prasad reaffirmed Coal India’s commitment to India’s net-zero target by 2070, stating that coal production is expected to peak by 2035 before gradually declining as clean energy sources ramp up.

Mine Closures: A Slow and Complex Process
While reopening mines, Coal India is also grappling with the formal closure of old sites. In the last ten years, 299 mines have been classified as abandoned, non-operational, or closed, including 130 that have been shut down since 2009. However, only three have been formally closed under government guidelines as of early 2025, due to administrative, financial, and environmental challenge.
To address these delays, the Ministry of Coal has introduced revised closure guidelines and a centralized digital portal to streamline the process and ensure environmental and community welfare.

Conclusion
Coal India’s reactivation of 32 inactive mines reflects a practical adjustment in India’s energy approach, focusing on urgent power demands while the nation works toward strengthening its renewable energy framework. While the long-term goal remains a clean energy transition, coal will continue to play a crucial role in powering India’s growth for the next decade. The challenge ahead is to balance energy security with environmental responsibility as India navigates its complex energy future.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

Sanlayan Technologies Secures ₹186 Crore in Series A to Power Defence Electronics Growth

, , , , , , , , , 0 Comment
Read More
Grainspan Boosts Ethanol Output with ₹520 Crore Investment in Gujarat Plants
Market News - June 9, 2025

Ethanol Blending in India Faces Challenges from Distillers and Automakers

Ethanol Blending in India Faces Challenges from Distillers and Automakers

India has set an ambitious target to increase ethanol blending in petrol from the current 19% to as high as 27% by 2025, with long-term goals extending even further. This move aligns with the government’s broader agenda to reduce the country’s reliance on imported fossil fuels, curb pollution, and promote renewable energy sources. However, despite the clear environmental and strategic benefits, the plan to boost ethanol blending is encountering significant challenges, primarily from distillers and automakers, along with concerns from farmers and consumers.

Background and Government Goals

The Indian government has been actively promoting ethanol blending as a way to enhance energy security and reduce carbon emissions. Ethanol, produced primarily from sugarcane molasses and other biomass, can be mixed with petrol to lower greenhouse gas emissions and decrease crude oil imports. The government’s goal to reach 20% ethanol blending by 2025 is part of the Ethanol Blended Petrol (EBP) programme, which encourages oil companies to procure ethanol from domestic distilleries.

Currently, ethanol blending stands at approximately 19%, a significant increase from just a few years ago. The government’s plan involves scaling this up further, potentially even reaching 27% or beyond. This increase is expected to be achieved by ramping up ethanol production from molasses and introducing new feedstocks such as corn and damaged grains. However, this escalation faces resistance and practical hurdles.

Challenges from Distillers

Distilleries, which are the primary producers of ethanol, have expressed reservations about the aggressive blending targets. A large number of distillers depend primarily on molasses, a by-product generated during sugar production, as their main feedstock. The availability and price of molasses are closely linked to sugar production cycles, which can be volatile due to weather and market conditions.

One of the major concerns for distillers is the lack of firm procurement commitments from oil marketing companies. While the government promotes ethanol procurement, distillers have faced uncertainties around pricing, payment delays, and purchase volumes. Without guaranteed off-take agreements and timely payments, distillers find it risky to invest in expanding ethanol production capacity.

Additionally, the government’s push to include corn-based ethanol as a feedstock adds complexity. Corn ethanol production is less established in India, and some distillers are wary of relying on imports or unfamiliar raw materials, fearing supply chain disruptions and cost implications.

Automakers’ Concerns

Automobile manufacturers have also raised concerns about the impact of higher ethanol blends on vehicle performance. Ethanol has a lower energy content compared to petrol, which could lead to reduced fuel efficiency and increased consumption. More importantly, automakers worry about engine durability and warranty issues with higher ethanol concentrations.

The majority of vehicles in India today are engineered to operate on petrol containing ethanol blends of up to 10%. Moving beyond this level requires adjustments in engine design and fuel system components to handle the different chemical properties of ethanol, such as its corrosiveness and higher volatility. Automakers caution that without proper standards and regulations, widespread use of high-ethanol blends could lead to engine problems and customer dissatisfaction.

Furthermore, automakers emphasize the need for clear labeling and consumer awareness to avoid misuse of fuel blends that may not be compatible with all vehicles.

Impact on Consumers and Farmers

From a consumer perspective, ethanol-blended fuels generally have lower energy density, meaning drivers might experience slightly lower mileage compared to conventional petrol. This could translate into higher fuel expenses, which may affect the popularity of ethanol-blended petrol unless offset by subsidies or lower ethanol prices.

Farmers play a critical role as ethanol feedstock suppliers, particularly sugarcane growers. While ethanol blending offers them an additional revenue stream through molasses sales, fluctuations in sugar prices and production impact their earnings and willingness to supply feedstock consistently. The introduction of alternative feedstocks like corn may shift demand patterns and affect farmers differently, creating socio-economic implications.

Import Dependency and Energy Security

Another challenge comes from India’s potential reliance on imported ethanol, particularly corn-based ethanol from the United States. As domestic production of corn ethanol is limited, importing becomes necessary to meet ambitious blending targets. This raises concerns about energy security, as dependence on foreign supplies could expose India to global market volatility and geopolitical risks.

The government aims to balance import dependency by encouraging domestic production diversification and incentivizing local feedstock cultivation. However, scaling up domestic corn ethanol production requires investments, infrastructure development, and policy support, which take time to materialize.

Way Forward

The government’s ethanol blending programme has commendable environmental and strategic objectives, but its success hinges on addressing the concerns of all stakeholders. To make higher ethanol blending viable, the following steps are crucial:

Strengthening Procurement Mechanisms: Ensuring clear, transparent, and timely ethanol purchase agreements between distillers and oil companies can encourage investment in ethanol capacity expansion.

Technological Adaptation: Supporting automakers in developing vehicles compatible with higher ethanol blends through research, standards, and incentives will ease the transition.

Consumer Awareness: Educating consumers about ethanol blends, fuel compatibility, and benefits can increase acceptance and smooth market adoption.

Supporting Farmers: Providing stable pricing and diversified feedstock options for farmers will help secure a steady supply of raw materials for ethanol production.

Reducing Import Reliance: Promoting domestic ethanol production from varied feedstocks and developing supply chains will enhance energy independence.

Conclusion

India’s goal to raise ethanol blending levels highlights its proactive dedication to sustainable energy and environmental care. However, balancing the interests and concerns of distillers, automakers, farmers, and consumers is essential for these ambitions to translate into reality. Collaborative efforts between the government, industry, and stakeholders will be key to overcoming headwinds and advancing towards a greener, more energy-secure future.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

RBI Rate Cut Spurs Banks to Slash Lending Rates, Boosting Borrowers

, , , , , , , 0 Comment
Read More
GAIL's ₹844 Crore Investment Boosts Gas Pipeline Capacity!
business update - May 14, 2025

GAIL Secures Five U.S. Bids for LNG Project

GAIL Secures Five U.S. Bids for LNG Project

 

India’s state-owned gas company GAIL is progressing in securing 1 MTPA of LNG through 15-year supply agreements established via strategic partnerships with U.S. equity firms.

Summary:

GAIL (India) Ltd. has received five bids from U.S.-based energy companies offering equity stakes in their LNG export projects, each linked to long-term supply agreements. The Indian state-owned gas major is seeking to lock in 1 million tonnes per annum (MTPA) of liquefied natural gas (LNG) for 15 years, beginning in 2029-30, to bolster the country’s energy security. The move is aligned with India’s long-term decarbonization strategy while ensuring fuel availability for its growing gas-based economy.

GAIL Strengthens Its Global Energy Strategy with a Strategic Investment in LNG

In a significant step towards strengthening India’s future energy security, GAIL (India) Ltd., the nation’s largest gas utility, has received five binding bids from U.S.-based companies offering equity stakes in their liquefied natural gas (LNG) projects. The proposals are strategically tied to long-term LNG supply contracts, allowing GAIL to secure 1 million tonnes per annum (MTPA) of LNG over a 15-year term, possibly extending beyond that.
The delivery of LNG under these agreements is anticipated to start in 2029-30, coinciding with India’s objective of establishing a stable and diverse fuel supply as it shifts towards a gas-centric economy and works to lower its carbon emissions.

Bidding Process Attracts Robust U.S. Interest

The five proposals are in response to GAIL’s Request for Proposals (RFP), which was floated earlier this year. The RFP sought long-term LNG supply deals through strategic equity investments in U.S. LNG terminals. According to industry insiders, the offers include participation in brownfield and greenfield LNG export projects, indicating the growing confidence of American energy companies in India’s natural gas market.
While GAIL has not yet disclosed the names of the bidding companies, sources suggest participation from prominent U.S. LNG developers with existing or under-construction facilities along the Gulf Coast. These may include companies like Cheniere Energy, Venture Global, Tellurian, and NextDecade, which have actively sought Indian buyers for long-term contracts in recent years.
The equity-linked supply structure ensures alignment of interest between supplier and buyer, making the LNG procurement more cost-efficient and strategically secure for GAIL.

GAIL’s Strategy: Securing Future Supplies for a Gas-Based Economy

This development is part of GAIL’s broader strategy to diversify its LNG sourcing portfolio and reduce dependence on spot markets, which have exhibited extreme volatility over the past two years due to geopolitical tensions and global supply disruptions.
India currently imports over 50% of its LNG requirements. GAIL, which has long-term contracts with suppliers from Qatar, the U.S., and Australia, seeks to enhance supply certainty for the future. India aims to boost the proportion of natural gas in its energy mix from 6.3% to 15% by 2030, which is projected to lead to a more than twofold increase in the country’s LNG demand over the next ten years.
A senior GAIL executive stated, “These bids represent a significant milestone in our efforts to build long-term supply security. Equity participation in upstream LNG projects ensures better pricing, stronger supply assurance, and closer collaboration with global partners.”

Shipment Timeline: Aligning with Domestic Infrastructure Development

The 2029-30 start date for LNG shipments is particularly strategic, as it aligns with GAIL’s projected expansion of its LNG import terminals, regasification capacities, and pipeline network across India. With the upcoming Jafrabad FSRU terminal, expansions at the Dabhol and Kochi terminals, and the proposed East Coast LNG facilities, GAIL ensures that both upstream sourcing and downstream infrastructure are in sync.
Furthermore, India’s city gas distribution (CGD) rollout, industrial fuel switch policies, and hydrogen blending plans rely heavily on robust gas availability, which this deal is expected to support.

Global Context: India Deepens LNG Ties with U.S. Amid Changing Energy Geopolitics

The United States has rapidly emerged as one of the top LNG exporters globally, and India has been a key destination for U.S. LNG since 2018. With this new round of strategic tie-ups, GAIL is poised to strengthen its position as a reliable long-term partner for American LNG suppliers.
These equity-linked supply deals come when traditional suppliers like Russia and the Middle East become less predictable due to shifting global alliances, sanctions, and supply-chain risks. Thus, the GAIL-U.S. LNG partnership signals a broader realignment of India’s energy diplomacy, focusing on diversified, democratic, and economically aligned partners.

Challenges and Considerations

Despite the positive outlook, GAIL must thoroughly assess various key factors before finalizing the equity-linked agreements:
– Timelines for projects and regulatory approvals in the U.S.
– Pricing frameworks connected to Henry Hub or mixed indices
– Currency risk and hedging approaches
– Provisions for sharing risks and force majeure protection
– Options for exiting if supply does not commence
The due diligence process is anticipated to be completed in the coming months, following which GAIL may identify one or two projects for final discussions and board approval.

Conclusion: A Forward-Looking Energy Play for India

GAIL’s receipt of five U.S. bids marks a significant step in India’s energy transition journey, showcasing a proactive strategy to secure long-term, clean fuel supplies through international collaboration. With LNG demand set to rise in sectors ranging from power and fertilizers to mobility and industry, such forward-looking agreements are not just business deals—they are critical instruments of national energy security.
As the country prepares for a more resilient, low-carbon future, GAIL’s global outreach and strategic positioning in the LNG ecosystem ensure that India remains well-prepared for tomorrow’s energy needs.

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

Pharma Index Recovers After Trump’s Drug Pricing Order Shock

 

, , , , , , , , , , , 0 Comment
Read More