Newsletter - June 18, 2021
Even with falling tariffs, growth in the sector is slowing, and a rising number of firms are cutting costs and even exiting the market
At first glance, all seems well in India’s solar sector. Its tariffs continue to crash. At the Solar Energy Corporation of India (SECI)’s auction last November, Saudi Arabia’s Aljomaih Energy and Water Co and Green India Wind Energy, one of Sembcorp’s India investments, won after bidding ₹2 per unit. State-run NTPC wasn’t too far behind. It bid ₹2.01 per unit for the two bids, adding up to 600 MW of solar generation.
The auction underscored, once more, the sheer competitiveness of solar power. “Coal-based power costs between ₹4 to ₹5 a unit. Wind is at ₹3. Hydro and nuclear are much costlier,” said Vinay Rustagi, managing director of Bridge To India, a Gurgaon-based advisory firm focusing on India’s renewables sector.
It has been a quicksilver rise. “In 2012-13, if anyone had said solar tariffs would fall so low, people would have dismissed that as foolish talk,” a mid-level manager at NTPC told CarbonCopy on the condition of anonymity. “Now, no one wants to set up thermal power plants. Only renewables are in. There is no viability for anything else.” And yet, look beneath these bids and you will find chaos and tumult.
Something new under the sun
To take one instance, investments into the sector are slowing. In 2020, they stood at $2.8 billion, down 66% from the $8.2 billion pulled in 2019. The rate of capacity addition has slowed down, too. In 2020, while countries like Vietnam added–despite COVID-19–13 GW of fresh capacity, India added 3.2 GW–down 56% from 7.3 GW in 2019. Even after COVID-19, industry executives do not expect growth to accelerate dramatically.
“India will add no more than 6-8 GW of fresh solar capacity a year from now on,” said Santosh Khatelsal, the former managing director of Bangalore-based Enerparc Energy. Among other things, this means India will miss Prime Minister Narendra Modi’s promise to push India’s solar capacity to 100 GW by 2022–from around 37 GW today. As growth slows, a rising number of solar firms are cutting overheads, selling off parts of their business, even exiting the market.
In 2020, Acme Solar sold projects worth 400 MW to UK-based Actis and 100 MW to Petronas-subsidary Amplus Power. In all, it’s looking to sell 4.84 GW of its 5 GW capacity. More recently, Azure Power sold its rooftop portfolio to Eversource Capital, a joint venture between Singapore-based private equity firm Everstone Group and British solar green energy major Lightsource. Japanese investment giant SoftBank has sold SB Energy, its Indian renewables business with 4,954 MW in installed capacity, to Adani Green and announced its exit from the country. Renew Power is in talks with Amplus Power to sell its rooftop business as well.
These trends are intensifying. In 2020, M&A transactions in the sector amounted to about $2 billion, a 75% jump from $1.2 billion in 2019. In terms of capacity, according to JMK Research, a consulting firm focusing on the renewable sector, no less than 5% of India’s solar capacity–2 GW–has changed hands in the last one-and-a-half years alone.
Even in 2021, M&A activity continues to be strong. In the first five months of this year, India has seen at least nine deals.
|A brief timeline of M&As in the solar sector|
25 January: Adani Green buys 20 MW project from Hindustan Cleanenergy and Peridot Power Ventures
22 March: Adani Green buys a 50 MW project from Skypower Global.
24 March: Adani Green buys a 75 MW project from Sterling & Wilson.
26 March: Edelweiss Infrastructure buys majority stake in Engie’s Solar Portfolio.
13 April: Amplus buys 13 projects from Sterling & Wilson.
5 May: SHV Energy buys majority stake in SunSource.
7 May: KKR buys 76 MW from Sindicatum.
19 May: Adani Green buys SB Energy, owned by SoftBank and Bharti Group.
4 June: Norway’s Scatec buys 50% in Acme Solar’s 900 MW Rajasthan project.
Similar processes are afoot in the engineering, procurement and construction (EPC) segment. This February, Mahindra Susten sold its EPC business along with 1,200 MW of solar assets to Canada’s Brookfield Asset Management.
What’s going on?
A clutch of hypotheses seek to explain why the sector is slipping. The high cost of rural land has pushed up project costs. So has a rise in module prices and shipping and freight charges. The slowdown in the economy–exacerbated by COVID-19–and the government’s response to it, has depressed demand. The rooftop sector has slipped into crisis as DISCOMs, wary of losing their most profitable customers, push back. DISCOMs, badly cash-strapped, have also delayed payments and fresh PPAs (stranding about 17-18GW worth of projects), pushing developers into their own cash-flow crisis. At the same time, falling tariffs have put margins under additional pressure. That is one reason why SoftBank decided to exit. It wanted higher returns. (As developers go slow on fresh projects, EPC firms have found their project pipelines dry up.)
In tandem, the industry is seeing the entry of newer players with access to cheaper money. This includes global pension and sovereign funds, a handful of Indian business groups and fossil fuel energy majors trying to create a renewables business. Unable to compete with them, older firms are trying to reduce costs, restructure operations or just leave. There is truth in all these explanations. And yet, as CarbonCopy found while working on this series, they do not capture the complete story.
They do not explain why, for instance, unlike EPC firms and developers, solar manufacturers in India are bullish on the sector. Private companies are racing to set up fresh manufacturing lines, as are public sector enterprises like BHEL and Coal India.
It adds up to a paradoxical moment. Developers and EPC firms are bearish. The solar manufacturers selling to them, however, are bullish. The immediate reason for that paradox: India’s push for solar manufacturing. One fallout: Companies like Waaree Solar and Premier Energies see growth in import substitution. But even that explanation doesn’t fully clarify the puzzling drift in India’s solar sector.
What’s going on
In trying to understand why the sector is slowing, three spots of dissonance become clear
1. The rooftop segment is slowing because DISCOMs are placing curbs on it. They run on cross-subsidisation, charging high rates from industrial and commercial users and providing cheaper (even free) power to poorer segments of India. The introduction of rooftop solar, where large firms generate their own power, was bound to eat into their revenues. Why did the country amp up its targets for rooftop solar without preparing DISCOMs for this switch?
2. Take ground-based solar for instance. In the absence of rooftop solar, growth in solar installed capacity has to come from here. The sector, however, depends on tenders put out by state bodies like NTPC and SECI. Effectively, their limited capacity to produce fresh tenders is a chokepoint for solar capacity addition in India. “Capital is far in excess of the opportunities,” a senior manager working on renewable investments from Macquarie’s London office told CarbonCopy. “Even if India were to double its number of solar tenders, there would be enough demand.
3. SECI doesn’t check with DISCOMs before floating tenders. Instead, it shops around for buyers after conducting its bids. Whenever DISCOMs stay away–due to stretched finances or the hope for lower bids in the next round of auctions–PPAs don’t get signed.
If the first of these is a case of poor planning, the other two betray poor market design. As this series will show, two global factors–the falling cost of capital and ever-cheaper solar equipment, largely due to China–have pushed solar tariffs down in India. What remained missing, however, was a roadmap for integrating solar into the country’s energy system. What we had were ad hoc measures.
The sector’s consequent vulnerability stands testimony to this.
This is the first in a four-part series on India’s solar sector which will be published over the following week.
Even though the southwest monsoon arrived two days late in Kerala at the beginning of the month, it has now covered two-thirds of the country. Mumbai was waterlogged on Wednesday after heavy rain lashed the city. The southwest monsoon arrived in the city a week before, on June 9, two days ahead of schedule and wreaked havoc with parts of the city completely submerged under water. Goa also reported heavy showers in the past week. Pune and Karnataka reported light, but steady showers on Wednesday.
The India Meteorological Department (IMD) had predicted monsoon to reach the Capital by June 15, but approaching westerlies will slow down the progress, it said. According to the IMD, the northern limit of the monsoon has so far passed through Diu, Surat, Nandurbar, Bhopal, Nagaon, Hamirpur, Barabanki, Bareilly, Saharanpur, Ambala, and Amritsar.
Melting glaciers of Hindu Kush may cause food, water shortage for 2 billion people: UNDP
The melting glaciers of the Hindu Kush mountains could lead to food and water shortages for up to two billion people, a new study backed by the United Nations revealed. The research warned that the mountain range could lose two-thirds of its ice by 2100. The glaciers feed around 10 major river systems that are linked to the region’s agriculture, drinking water and hydroelectricity production.
The United Nations Development Programme (UNDP) report stated the glaciers were melting as a result of “larger anthropogenic modifications of the atmosphere” as a result of pollution. It recommended moving away from fossil fuel use for energy and transport, changing diets and agricultural practices to reduce the greenhouse gas emissions.
Large-scale afforestation threatens biodiversity: Global panel
A global biodiversity panel said in a report that large-scale afforestation and bioenergy plants are likely to hinder the progress of sustainable development goals such as reduction of hunger and poverty. The report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) stated large-scale afforestation could be harmful because of competition for land, which can lead to displacement of local communities. It could also reduce existing carbon storage capacities. Planting single species could lead to an increase in pests and diseases, the report added. It urged the government to instead focus on preventing the destruction of existing forests.
Global CO2 levels hit record high despite pandemic
Global carbon dioxide levels reached the highest levels in human history last month. This despite a reported dip in fossil fuel burning because of the COVID-19 pandemic. Technology placed on the Mauna Loa volcano in Hawaii recorded CO2 levels of 419 parts per million in May 2021, which is about half a percentage higher than the 417 parts per million recorded at the same location in May 2020.
India likely to lose 10% of GDP due to climate change by 2100: Study
India may have lost around 3% of its Gross Domestic Product (GDP) because of global warming of 1°C over pre-industrial levels, according to a new report. At an increase of 3°C, the risk could rise to as much as 10%, stated the report by London-based think-tank ODI. The study added that India is already experiencing impacts at 1°C of global warming. Extreme heat waves, heavy rainfall, severe flooding, catastrophic storms and rising sea levels are damaging lives, livelihoods and assets across the country, it stated.
Food systems generate one-third of all human-induced GHGs: Study
Global food systems generate one-third of all human-induced greenhouse gas emissions, a new study revealed. The study published in the journal Environmental Research Letters found that between 1990-2018, one quarter of the food system emissions are produced during the process of converting natural ecosystems into agricultural land. Three-quarters of the emissions were generated “within the farm gate or in pre- and post-production activities”. The study also found food systems’ per capita emissions “decreasing during 1990–2018 from 2.9 to 2.2 t CO2eq cap−1, with per capita emissions in developed countries about twice those in developing countries in 2018”.
In April this year, the Supreme Court asked for power transmission lines in a large swath of grassland between Rajasthan and Gujarat to go underground. The ruling was an effort to save the almost extinct bird species, the great Indian Bustard, which often finds itself in fatal collisions with these transmission lines. Green energy firms, including Adani Green, Tata Power Renewables and Renew Power, however, are set to seek a revision to this order.
They want the earlier order to be restricted to a smaller area. The companies said it will cost an additional $4 billion and put at least 20GW of solar and wind energy in jeopardy. Industry experts said there was a larger environmental issue to look at as the order is likely to create a setback for India’s green energy goals. This is because renewable energy projects rely on grasslands like the ones where bustards reside for installing wind turbines and solar panels and restricting access could create long-term hurdles, they argued.
G7 recommits to $100 bn a year in climate finance to help poorer nations cut emissions
At the G7 summit held this past fortnight, developed nations reaffirmed their 2009 pledge to contribute $100 billion a year to help poorer countries cut emissions and fight climate change. They also vowed to help developing nations move away from coal. Climate experts, however, expressed their disappointment and said these announcements lacked any concrete details. The nations also endorsed a ‘Nature Compact’ that seeks to reduce and stop biodiversity loss by 2030. As part of the agreement, the nations vowed to protect 30% of land and 30% of ocean globally by the end of this decade.
EU gives final nod to flagship green transition fund
The EU approved a flagship green transition fund that will help the region move away from fossil fuels and help affected communities. The €17.5 billion Just Transition Fund includes money from the EU budget and the COVID-19 recovery fund. The approval was the final hurdle before the fund came into force. Countries seeking funding will have to submit plans to the European Commission that show how they intend to use the money for a green transition.
Keystone XL pipeline project officially cancelled
The $9 billion Keystone XL pipeline, which was first proposed in 2008, was officially cancelled this past fortnight. The project aimed to transport Western tar sands in Canada to US refiners. The project was cancelled by developer TC Energy Corp a few months after US President Joe Biden revoked a permit needed for the US stretch of the project. Environmentalists had previously argued the project would hinder US’ efforts towards a clean energy transition.
Meanwhile, Biden’s plans to fight climate change may take a serious hit after talks between his administration and Senate Republicans over an infrastructure bill collapsed. The proposal earmarked billions of dollars to help the US end fossil fuel use through measures such as a clean electricity standard, tax incentives for renewable energy projects and a nationwide network of EV charging stations.
In separate but related news, the Biden administration received its first setback in its efforts to push through environmental regulation as a matter of priority. A district judge in New Orleans blocked an executive order by Biden to suspend all new oil and gas leases on federal lands.
Black carbon (BC) released from incomplete burning of petrol, diesel, coal and biomass, including wood and crop stubble, is getting deposited on Himalayan glaciers and it can be brought down 23% if South Asian countries implement the emission norms, said a new World Bank Group report. Black Carbon reduces the light- and heat-reflection capacity of the snow, making it melt from the increase in temperature because of the absorbed heat energy. This accelerates the melting of snow and glaciers. Scientists said BC is responsible for as much as 50% of the increase in glacier and snow melt worldwide.
They said the glaciers in the Hindu Kush, Himalayan and Karakoram ranges are retreating at a rate of 0.3 metre per year in the western regions, and one metre per year, three times faster, in the eastern regions. Glaciers in the Mount Everest region might reduce by 39-52% by 2050, states the study.
Experts pointed out that glacier melting in the Himalayas and erratic rainfall in the mid-mountains always lead to landslides, floods and inundation in the lowlands.
Delhi moves top court seeking closure of 10 polluting coal power plants
The Delhi government moved the Supreme Court seeking closure of 10 coal-fired power plants near the city using outdated polluting technology. The thermal power plants located in Punjab, Haryana and Uttar Pradesh have been polluting Delhi-NCR, environment minister Gopal Rai said.
Rai said the Centre refused to help in the matter so have asked the Supreme Court to direct closure of these plants on an urgent basis. The 10 power plants are Dadri NCTPP, Harduaganj TPS, GH TPS (Lehra Mohabbat), Nabha TPP, Ropar TPS, Talwandi Sabo TPP, Yamunanagar TPS, Indira Gandhi STPP, Panipat TPS and Rajiv Gandhi TPS.
Meanwhile, new research has revealed that 11 coal-fired power plants in the National Capital Region contributed just 7% to Delhi’s PM2.5 pollution on an average between October 2020 and January 2021, while vehicles contributed 14%.
A 2018 study by TERI said over 60% of the PM 2.5 pollution in Delhi originates from sources outside the city. The Centre had amended rules allowing thermal power plants within 10km of the NCR with more than 10 lakh population to comply with new emission norms by the end of 2022.
Fourteen new pollution hotspots identified in Delhi
Local pollution sources have added 14 new pollution hotspots in the National Capital region of Delhi, a Centre For Science and Environment study found. The new hotspots recorded PM2.5 concentrations higher than Delhi’s hazardous winter average of 186 micrograms per cubic metre. The new locations registered a higher seasonal average than the mean of the recognised hotspots, that is, 197 micrograms per cubic metre. The study identified Nehru Nagar and DTU as the most polluted among the 14 emerging locations. Experts called for intense micro-planning and region wide action at scale. In 2019, the state and central pollution control board had identified 13 pollution hotspots.
The Delhi Pollution Control Committee along with the National Green Tribunal conducted raids against pollution units in the pollution hotspots and sealed two units engaged in bottle cleaning and water packaging in pouches.
Satellite data reveals global spike in NO2 levels a year after first Covid-19 lockdowns
A year after the first COVID-19 lockdown, the levels of toxic NO2 have bounced back globally, a new Greenpeace study based on satellite images revealed. Scientists said lockdowns cleaned air temporarily during the first half of 2020, but now we must implement long-term solutions to keep the air safe and clean regardless of how much we move around our cities. Wind and solar energy and clean transport solutions are often more cost-effective than fossil fuel alternatives, the study said.
Research showed that South Africa’s Johannesburg saw the most dramatic increase in air pollution relative to pre-Covid conditions. NO2 pollution fell by approximately 30% in April 2020, but pollution during the same period in 2021 exceeded pre-pandemic levels by 47%. Similarly, in Bangkok and Jakarta, NO2 had returned to pre-Covid levels one year after initial lockdowns. Although all cities saw NO2 pollution rebounds in April 2021, in some cities, including Los Angeles and Wuhan, NO2 pollution remained below pre-COVID levels.
India, China counted maximum number of deaths from PM2.5 emitted from burning coal in 2017: Global study
A new study of the sources of air pollution in over 200 countries found that the world could have averted 1.05 million deaths by eliminating fossil-fuel combustion in 2017. The study stated that more than half of the 1.05 million deaths were because of PM2.5 emitted from burning of coal that year.
According to the study published in Nature Communications, the largest number of deaths in 2017 due to PM2.5 occurred in China and India. Complete elimination of burning coal, as well as oil and natural gas, in China and India could reduce the global PM2.5 disease burden by nearly 20%, the study said.
The study used the GEOS-Chem tool, which divides Earth’s surface into 30-by-36-mile blocks and allows each square to be analysed individually. This combination of emissions and modelling helped scientists to identify different sources of air pollution – power, oil and gas and dust storms.
Ratings agency ICRA warned that earnings of solar developers will be hit by a sharp rise in prices of solar imports. Prices of imported photovoltaic (PV) solar modules have risen to 22-23 cents per watt, which is a 15 to 20% rise over the past few months. The prices have shot up because of the increase in price of polysilicon.
Most affected would be developers who won the bids over the past six to nine months at tariffs ranging largely between ₹2.00 per unit and ₹2.25 per unit, and scheduled to be commissioned over the next 12-15-month period, ICRA said. The PV module component comprises about 50-55% of the project cost. To offset this, tariffs would need to be raised by 55-60 paise per unit, if basic Customs duty is also included, experts said.
Centre proposes to set up central pool of power at market prices for states
For “cheap power supply to states and consumers” the Centre proposed to set up a central pool, which will allocate power based on market prices. The new market-based economic dispatch mechanism (MBED) is expected to cut down the cost of power for distribution companies (DISCOMs), who source power from within the state.
The Centre sees the MBED as a step towards ‘One Nation, One Grid, One Price”. India generates 1,393 billion units at an average power price of ₹2.36 ($0.032)/kWh. The savings from the proposed mechanism are expected to be 3.74%, i.e ₹122.95 billion ($1.69 billion), Mercom reported.
The mechanism is also expected to enhance renewable energy integration and reduce renewable energy curtailment. The government proposed to introduce MBED in phases, with Phase 1 involving the thermal fleet of NTPC to test the efficacy of the MBED mechanism from April 1, 2022.
Production linked incentive scheme will kill smaller domestic solar manufacturers?
India’s recently launched performance-linked incentive (PLI) programme, to support gigawatt-scale manufacturing of high-efficiency solar modules, is meant for bigger players, and won’t allow smaller manufacturers to mushroom, according to the domestic manufacturing sector.
The Niti Aayog is looking for the latest technology, economies of scale, and a solid supply chain. It does not want to incentivise sub-optimum technologies, domestic manufacturers told Mercom.
The PLI scheme requires manufacturers to pay a security deposit. Why pay a security deposit when a company is investing in production, manufacturers asked. They pointed out that very few companies will be eligible to apply for the programme. With obligatory vertical integration and the capacity cap, only those having large manufacturing capacities will survive. If the government wants to create a manufacturing ecosystem, it should allow standalone factories of modules, cells, and other raw materials to thrive, Mercom reported.
Govt’s new financial instruments will benefit renewable energy developers, DISCOMS: IEEFA
According to the Institute for Energy Economics and Financial Analysis (IEEFA), India’s launch of a short-term power market will make it easier for renewable project developers to enter into offtake arrangements with DISCOMS. The new financial instruments will enable developers to hedge their offtaker risk without requiring the signing of long-term contracts with discoms for the financial closure of projects, IEEFA said.
Nearly 90% of transactions between power producers and DISCOMS are run on long-term contracts. Currently, around 16GW of auctioned capacity is yet to be signed by DISCOMS as they are struggling with huge financial losses and have become reluctant to enter into long-term PPAs.
Zomato, one of India’s largest food delivery apps, announced that it would transition its fleet of vehicles to fully-electric by 2030 to reduce its carbon footprint. The move is also a part of it joining the EV100 collective, under which corporates in India, like Amazon competitor Flipkart, have agreed to use only EVs in their fleets to support climate action. Zomato currently makes 35% of its deliveries by bicycles in Delhi and when extended to Mumbai and Bangalore, bicycles make up 20% of its operations.
Meanwhile, the government of India upgraded the subsidy available to electric two- and three-wheelers under FAME-II by 50%, which now means that the quantum of subsidy cover for each unit goes from ₹10,000/kWh to ₹15,0000/kWh.
CESL to procure 500,000 EVs for India, halve the ownership cost of two-wheelers
The Convergence Energy Services Ltd. (CESL) consortium announced that it would procure 500,000 new EVs for India (200,000 of which would be two-wheelers) to improve their visibility and accelerate their adoption. A part of the plan is to order 30,000 electric two- and three-wheelers for the states of Goa and Kerala, and Kinetic Green Energy, Hero Electric and Mahindra Electric Mobility have each expressed interest in being the vehicle suppliers. CESL could also lease out electric three-wheelers as garbage collection vehicles across a number of municipalities.
Delhi plans single-window clearance for EV charging points
One year after the Delhi government rolled out its EV policy, it has now announced plans to introduce single-window clearances for the installation of charging points. The decision is expected to help accelerate the setting up of a charging network in private and semi-public places such as hospitals, malls, parking lots and apartment complexes. The call to ease the red tape was taken during a multi-stakeholder meeting chaired by Delhi’s Dialogue and Development Commission vice-chairperson Jasmine Shah.
US: EVs getting cleaner despite previous government’s focus on coal
A new analysis from the University of Southern California revealed that EVs had gotten considerably cleaner in the US when comparing data between 2018 and 2019. The study found that their average miles per gallon (MPG) equivalent rating (versus a traditional, 20 MPG gasoline car) went up from 88 MPG for 2018 to 93 MPG by 2019, despite the Trump administration championing coal. Yet, the carbon footprint of the cars varied widely based on which region of the US they were driven in. The cleanest were upstate New York and California with MPGe of 255 and 134 because of their minimal intake of coal power. The dirtiest was the state of Ohio, where the same EV would only average 41 MPGe due to its heavy reliance on coal power. In Hawaii as well, which is powered almost exclusively by oil, the MPGe rating stood at an average of 43.
In a major new development, the state of Maharashtra declared that it would not install any new coal capacity, and would instead invest in 25GW of solar power for its incremental energy demand. Maharashtra is one of the most industrialised states in the country, but a new report by Climate Risk Horizons also found that its coal power plants had been running at below 55% PLFs for the past four years — which indicates flatlining energy demand and ample scope for retiring surplus units.
The report estimated that the state would save ₹16,000 crore (~$2 million) in the next five years by retiring old units, and that it was the best course of action, instead of retrofitting them to help them comply with the stricter emissions standards by December 2024. It also cautioned against an upcoming plant in Bhusawal because of its high operating costs, and because Maharashtra is expected to be in a 15% power surplus till 2025.
IEEFA: Proposed new coal power units in India will be uncompetitive with renewables
A new report by IEEFA stated that almost all of India’s 33GW of new coal power plants under construction, as well as 29GW of pre-construction projects, would end up stranded as their tariffs would be uncompetitive against renewables. The report found that solar tariffs were below the fuel costs of India’s existing coal plants and the lack of movement on the 29GW capacity clearly indicated little demand for new coal power. Yet, the Central Electricity Authority (CEA) indicated that the country will add 58GW of new coal capacity by 2030, and Coal India’s e-auction bookings have grown by 52.5% since April 2021.
Another new report by Global Energy Monitor also found that 432 new coal mine development and expansion projects were currently in the works globally, which would together quadruple the supply of coal over the limit needed to keep global warming under 1.5°C. Crucially, 1.7 billion tonnes per annum (BTPA) of the 2.277 BTPA capacity would come from Russia, India, China and Australia alone, despite global calls to rapidly scale back the use of thermal coal.
Norwegian government proposes new oil and gas licences for economic growth
The Norwegian government invited 84 new bids that would authorise more licences for oil and gas exploration, saying that it would “facilitate long-term economic growth in the petroleum industry”, even though the country’s sovereign wealth fund has been pulling out of fossil fuel investments. The proposed offshore licences will likely be awarded in the North Sea, the Barents Sea and the Norwegian Sea, but the move comes soon after the IEA’s damning new report that called for an immediate stop to all new fossil fuel extraction. Climate activists are already protesting the development and plan to drag the Norwegian government to the European Court of Human Rights after having repeatedly failed to stop the drilling licences at the country’s Supreme Court.
Canadian tar sands oil extractors form alliance for “net zero” barrels of oil by 2050
The five biggest Canadian oil companies came together under the Oil Sands Pathways to Net Zero alliance, which they say will produce net zero oil by 2050, despite oil extracted from tar sands being four to five times more emissions intensive than crude oil. The Alliance claimed that globally oil will continue to be relevant till 2050 (and beyond), and thus the tar sands’ $3 trillion in revenues for the Canadian government must not be throttled. Instead, the alliance plans to invest heavily in carbon capture and storage, hydrogen production and electrification of operations to effectively negate emissions.
However, there was no mention of scaling back operations by 4% every year till 2030 — as would be necessary under the UN Environment Programme — and the alliance failed to detail the emissions from their product’s end users, which are reportedly several times worse than from the extraction process itself.