Staff Reporter

Australia's main opposition party vowed on Monday to repeal a carbon pricing scheme expected to become law next month as a key plank for polls due by 2013, threatening to prolong uncertainty in energy investments. "We will absolutely deliver on our mandate. So the first thing we'll do is we'll seek a mandate for repeal," Greg Hunt, opposition climate change minister, said in an interview. Labor Party Prime Minister Julia Gillard, who lags the opposition Liberal Party in opinion polls, has staked her minority government's future on sweeping economic reform such as taxes on mining and carbon. But voters have been concerned over industry fears the plan to tax carbon emissions will lead to higher costs and job losses, prompting Liberal Party leader Tony Abbott to announce a "blood oath" to repeal the scheme should his party and partners win the next election. The government on Monday labeled the repeal pledge absurd, underscoring the divisive nature of plans to fight climate change by pricing carbon emissions in Australia, the United States and elsewhere. "Of all the blatantly absurd claims we have heard from Abbott in recent months, this 'blood oath' on carbon pricing is the least credible and the most hysterical," Climate Change Minister Greg Combet wrote in a commentary in The Australian newspaper on Monday. "The investment community knows that if Abbott's threat were ever realized it would increase sovereign risk. Consequently, Australia would suffer as an investment destination." The program will impose a carbon tax on around 500 of the country's biggest polluters from July 2012, before moving to a carbon trade scheme in 2015. It also includes more than A$13 billion in support for green energy investments, compensation for households against higher prices and firms that export goods to countries without carbon costs. The Senate began discussing the package of bills on Monday. A vote is expected by late next week and the government, backed by the Greens, has a majority in the Senate. PROFOUND CONCERN Hunt said the opposition would fight on with their own scheme, despite failing to scuttle the government's program. "I deal with Australian business each day and there is a huge body of deep profound concern about the impact of the tax, particularly since it is an electricity tax," Hunt said in a telephone interview from Canberra. "It's not difficult to repeal. All that happens is that people stop paying the tax." The opposition backs a scheme that rewards polluters for low-cost steps to cut emissions from business-as-usual levels but the government and some policy analysts say a national cost on carbon is needed to drive change in investment. Combet labeled the opposition policy a fantasy but the ongoing bickering and uncertainty could delay investment decisions needed to achieve a 5 percent cut in emissions by 2020 from 2000 levels. "Everyone is just keeping their options open while all this political uncertainty plays outs," said Tony Wood, leader of the energy program at the Grattan Institute in Melbourne, an independent think tank. He said a stable outlook for carbon prices could trigger investment in high-efficiency gas power plants. "In the absence of that, other things happen, which are almost certainly either higher costs or more of a threat to security to supply and I think it most likely to be a threat to cost," he told Reuters. Reuters  

Fitch Ratings has affirmed Datang International Power Generation Co. Limited's (DIPG) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB' with a Stable Outlook. The agency has simultaneously affirmed its senior unsecured ratings at 'BB' and Short-Term Foreign and Local Currency IDRs at 'B'. "The affirmation of the ratings reflects the stable position of DIPG and the parent China Datang Corporation in the face of continued disparity between high coal prices and artificially low electricity tariffs," notes Steve Cox, Director in Fitch's Asia-Pacific Energy and Utilities team. Both DIPG and China Datang Corporation remain a notch above their standalone credit profiles, reflecting potential state support. Fitch applies its parent and subsidiary rating linkage methodology to assess the links between DIPG and China Datang Corporation, and between China Datang Corporation and the sovereign. The standalone credit profile of DIPG and the consolidated profile of its parent are assessed as equivalent to 'BB-' before any assessment of state support provides the single-notch uplift. The Stable Outlook reflects Fitch's expectation that the Chinese government will take adequate steps to support Chinese independent power producers such as DIPG - as evidenced in the retrospective tariff rises for 2010 production in some plants, and April 2010 tariff rises in certain provinces. The Outlook, however, also incorporates Fitch's view that the disparity between coal prices and tariffs will continue and the burden will be primarily born by power producers. Fitch expects DIPG's total adjusted debt/operating EBITDAR to remain above 8.5x over the medium term. However, DIPG and the parent remain exposed to financial deterioration due to a weak thermal power industry and lack of a transparent pass-through mechanism for rising coal prices. However, the risk is partly mitigated by the group's own coal production business. Fitch may take negative rating action if the financial profile of either DIPG or China Datang Corporation deteriorates. Reuters  

Fitch Ratings has downgraded Huadian Power International Limited's (HDPI) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'BB-' from 'BB'. The Outlook is Stable. The agency has simultaneously affirmed its Short-Term Foreign and Local Currency IDRs at 'B'. "The downgrade reflects the weakened financial profile of Huadian Power International and its parent, China Huadian Group, in the face of continued disparity between high coal prices and artificially low electricity tariffs. The impact from slow tariff adjustments is highest for Huadian among Fitch-rated Chinese thermal power producers," notes Steve Cox, Director in Fitch's Asia-Pacific Energy and Utilities team. HDPI and China Huadian Group have, overall, worse interest coverage and leverage profile compared with their respective peers in China, as well as a heavy debt-funded capex programme. Based on Fitch's parent and subsidiary rating linkage methodology, HDPI continues to be notched one level above its standalone credit profile, reflecting potential state support through China Huadian Group. The same methodology is being applied to China Huadian Group, which assesses its links to the sovereign. On a standalone basis, both the credit profiles of HDPI and China Huadian Group have been downgraded to 'B+' from 'BB-', before any assessment of state support. Under current market conditions, the group's asset portfolio has greater exposure to the fundamental problems affecting all thermal power producers in China: a combination of tariff controls, rising coal prices, exposure to non-fulfilment of contract coal, and volatility in the non-contract coal spot market. The company's interest coverage is also negatively affected by the impact of base rate rises on floating-rate loans, and high borrowing costs in the CNY bond market. In FY10, HDPI's funds from operations (FFO) interest coverage fell below 2.0x from 3.0x in FY09. Fitch continues to expect HDPI's total adjusted debt/operating EBITDAR to remain above 10x in the medium term. The Stable Outlook reflects Fitch's expectation that the Chinese government will take adequate steps to support Chinese independent power producers such as HPDI - as evidenced in the retrospective tariff rises for 2010 production in some plants, and April 2010 tariff rises in certain provinces. The Outlook, however, also incorporates Fitch's view that the disparity between coal prices and tariffs will continue and the burden will be primarily born by power producers Reuters

Fitch Ratings has affirmed China Power International Development Limited's (CPI) Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'BB' with a Stable Outlook. The agency simultaneously affirmed its Short-term foreign and local currency IDRs at 'B'. "The ratings reflect CPI's strategy of investment in the hydro-power segment to reduce its exposure to the fundamental problems facing the thermal power segment," says Steve Cox, Director in Fitch's Asia-Pacific energy and utilities team. CPI reported an EBITDA margin of 27.5% for H111, and for H110 its EBITDA margin was the highest among Fitch-rated Chinese thermal independent power producers (IPPs). The company has also mitigated some of the disparity between high coal prices and government controlled on-grid tariffs by high levels of contract fulfilment - around 90% of coal supply - and tying in coal supply with two thermal stations by offering minority equity stakes to the coal producer. Fitch applies its parent and subsidiary rating linkage methodology to assess the linkages between CPI and its parent China Power Investment Group (CPI Group). CPI Group benefits from an investment portfolio vertically integrating coal, power and aluminium business units. The parent's consolidated credit profile is weaker than CPI's stand-alone 'BB' rating by one notch. Due to the lack of ring fencing of CPI from its parent, CPI 's rating, before any consideration of state support, is constrained by the credit profile of its parent. However in view of CPI Group and CPI's strategic importance to China, Fitch has applied a one-notch uplift in arriving at CPI's final rating of 'BB'. The agency notes that CPI's capex plans, although still aggressive and partly debt financed, are weighted toward hydro power and will further increase the company's protection against low margins or losses in the thermal power segment. These projects include the Baishi and Tuokou hydro projects which will add installed capacity of 1.85GW upon completion. However, CPI is exposed to hydrological risk from concentration of its assets on the Yuanjiang river. The Stable Outlook reflects Fitch's expectation that the Chinese government will take adequate steps to support the Chinese IPPs, as evidenced in the retrospective tariff rises against 2010 production in some plants, and April 2010 tariff rises in some provinces. But it also incorporates Fitch's view that the disparity between coal prices and tariffs will continue and the burden will be primarily born by power producers. Reuters  

Kansai Electric Power Co is facing the most severe power shortage this winter among the nine Japanese utilities that operate nuclear plants, as opposition to restarting idled reactors limits its power generation, the Nikkei business daily said on Monday.        The government's National Policy unit is expected to compile utilities' winter power supply/demand outlook as early as Tuesday, projecting a 9.5 percent power shortage in areas served by Kansai Electric in February, the report said.        A July estimate by the central government showed Kansai would have an 8.4 percent shortfall this winter. Kansai, which has the highest reliance on nuclear power among Japan's power providers, has yet to announce its winter supply/demand outlook because of uncertainty over reactor restarts.         The government is expected to ask Kansai's customers to curb power use by around 10 percent this winter, compared with cuts of 15 percent sought in the summer.        Kansai has only four of its 11 reactors running, with three of them set to be closed for maintenance by the year-end, which would limit its ability to genera Reuters

 Standard & Poor's Ratings Services said today that its ratings on Thailand-based power companies Electricity Generating Authority of Thailand (EGAT; BBB+/Stable/--, axA+/axA-1) and Ratchaburi Electricity Generating Holding Public Co. Ltd. (RATCH; BBB+/Stable/--; axA+/--) are unaffected by large-scale flooding in the country. We understand that the flooding has not significantly affected EGAT's power generation plants and transmission networks. Nevertheless, we expect the company's sales will decline in the last quarter of 2011. The flood-related shutdown of several factories and warehouses will lower electricity demand from the industrial segment in the last quarter. RATCH's power generation plants are primarily located in Ratchaburi province, which has not been affected by the floods. In addition, the company's cash flows are protected from any demand-side risk because its power purchase agreements with EGAT ensure steady capacity payments against agreed levels of electricity availability and heat rate. Reuters

Alstom Grid has entered into a cooperation agreement with China Electric Power Equipment and Technology (CET) to develop ultra-high-voltage direct current (UHVDC) power transmission systems in China. Under the terms of the agreement, CET and Alstom will assist in the development and manufacture of 1,100kV and 800kV converter transformer technology. The development of UHVDC transmission systems will allow efficient transmission of bulk electricity over longer distances in China. CET is a wholly owned subsidiary of the State Grid Corporation of China, holding a 100% stake.  

Yes they have more hydro projects on stream but there’s no way that hydro power will catapult the demand for more gas and coal, says the Malaysian government. “We predominantly rely 46% in gas,44% in coal and remaining in hydro and other renewable shares are bit of pieces. When we look at our own refinement, our use of gas and energy is depleting as a way of our demand, very soon we will now see our demand outstripping supply,” Dato’ Sri idris Jala, minister in Prime Minister’s Office and chief executive officer of PEMANDU said during the Singapore International Energy Week.

Green Rock Energy has entered into an agreement to develop geothermal exploration permits in the North Perth Basin, Western Australia.

ADB is providing a $36.8m loan to increase the capacity of a wind farm in Sindh, Pakistan.

It’s not really about subsidy, but financial assistance to the marginalized sector, says Philippine Energy Secretary Jose Almendras. 

The world aims for 50% reduction in CO2 by 2050 but after the Fukushima disaster, the goal seems difficult to achieve already, said Former IEA director Nobuo Tanaka during the Singapore International Energy Week.

Shocking news as no power plants being restarted after maintenance will see Japan off all Nuclear by June 2011.

China's dam-building ambitions and alleged lack of transparency were front and centre yesterday during a roundtable discussion on Mekong River development held in the capital. Representatives from the Chinese embassy defended their country's record, claiming that China was "eager to participate" in regional cooperation mechanisms. "We aren�t dominating this river," embassy representative Xu Daizhu said. "We want to cooperate with other countries in this region, and we want to cooperate with each other to use the water resources in this region." However, panelists accused the Asian power of irresponsible development. "Chinese dams cause unprecedented social and environmental problems, causing damage to agriculture, fishery forests and ways of life," said fellow panelist Pou Sothirak, former minister of industry, mines and energy. China is now the top builder of dams in Cambodia, Ame Trandem, Southeast Asia Program Director for International Rivers, said yesterday. Currently, five large Chinese dams have been approved in the Kingdom and another four are under consideration, Trandem said, adding that four dams constructed on the Mekong in Chinas Yunnan province were undertaken without consulting China�s neighbours. During yesterday's discussion, China�s transparency also came under assault. "The Chinese government in the past has been keeping all the information on the dams confidential," Pou Sothirak said. "If your government would be so kind as to join the Mekong River Commission, that would be a big gift, because joining means you need to release everything openly." Trandem supported allegations of a lack of transparency, saying that, "to date, China has failed to meet international standards of accountability, transparency and public participation." However, Xu Daizhu upheld China's commitment to regional cooperation. "China is willing to listen, we aren�t closing our doors and doing our own thing," she said. "That�s why I am here and learning about your concerns."  

HCM City Energy Conservation Centre collaborated with Dong Nai Industrial Consultancy Center to hold the conference energy efficiency workshop in Dong Nai.

 Infineon AG announced another reshuffle of its structure and management help it tap into growth in China.