Newsletter - September 7, 2017
- Hurricane Harvey wreaks Big Oil refineries, tons of toxic chemicals, pollutants leaked
- Climate scientists warn the disaster could well be repeated in the near future
- Floods in South Asia kill 1400, experts point to clear links to climate change
Poor Flood InsuranceTo guard against the impacts of climate change, India’s Economic Survey has pitched for greater climate insurance. India incurs around $9-10 billion worth of losses annually due to extreme weather events, 80% of which are uninsured.
- Govt. keen to back only EVs, not hybrid vehicles
- Only 222 charging stations across India severely hampering EV sales
- Global plans to phase out conventional cars forcing Big Oil to invest in renewables instead
Only electric vehicles (EVs) will be sold in India by 2030, and there will be no support for hybrid vehicles in the interim – that is the message by the government.
However, EV sales are at a mere 1% of total vehicle sales in India at the moment, which makes the deadline seem highly ambitious.
This is because lithium-ion batteries – which contribute to nearly 60% of the cost of EVs – are expensive to make, and are mostly imported from China, which commands about 55% of global li-ion battery production.
What’s also keeping buyers away is the presence of very few charging stations, only 222 all over India, and their fear of getting stranded is real.
The situation is improving though, as Tata Power has announced plans of setting up 1000 charging stations in Delhi. The government has also floated a tender to acquire 10,000 electric cars and 4,000 charging stations for certain ministries to boost EV uptake.
The government is also considering the standardisation of EV charging infrastructure, introducing swappable battery packs and improving public transport to cut emissions. A shift to e-mobility could save India nearly $60 billion in oil import bills annually.
Threat to oil companies?
Oil companies, however, could be staring at significant drop in revenue, as four other countries have announced their deadlines to phase out conventional cars: Norway (2025), Germany (2030), and France and the U.K. (2040). In fact experts say traditional cars will not disappear only because of climate concerns, but also because electric cars are both cheaper and safer.
Several of the biggest oil firms are therefore beginning to diversify, and are investing billions into wind farms, solar power stations and EV charging stations instead.
- Exxon accepted man-made climate change studies internally, while ‘casting doubt in ads’
- 17 state attorney generals to probe if Exxon broke consumer protection laws
- Exxon ads overwhelmingly ‘promoted doubt’ about Greenhouse effect
Exxon Mobil Corp. misled the public for 40 years about climate change, even as its own scientists concluded that man-made global warming was a serious threat, according to Harvard University researchers.
The researchers alleged that Exxon Mobil contributed to advancing climate science – by way of its scientists’ academic publications – but deliberately promoted doubt about it in its advertorials.
Exxon, one of the world’s largest producers of fuels responsible for climate change, produces 10 million gallon of gasoline and other fuels every hour.
Exxon rejected the charge and instead alleged that the Harvard researchers were looking for money.
- Survey: social cost of renewable energy far higher than what their tariffs reflect
- Survey: solar tariffs do not account for cost of integration with the grid
- Rues over possibility of fossil fuel plants turning into stranded assets, blames renewables
In a boost to coal, a report by India’s NITI Aayog has declared that coal will power India for ‘decades to come’. Meanwhile, recently released Economic Survey Vol 2 has warned that India’s shift to renewable energy may worsen banks’ bad loans.
The survey added that the ‘social costs’ of producing renewable energy are three times that of producing coal-fuelled electricity, at Rs 11 per kilowatt-hour (kWh).
It also argued that the low solar and wind power tariffs do not reflect the costs of integration with the grid, and those of stranded assets and land acquisition.
The survey asked the government to go slow on solar as the status of 34 coal power projects – running Rs 1.77 trillion debt – is under review.
Experts have slammed the survey’s logic as ‘bizarre’ and ‘wrong’. The survey’s ‘land acquisition costs’ argument against solar parks has been debunked before, as utility scale solar is mostly put on unusable lands.
Bridge to India said that coal-fired power stations were down due to poor planning by government and private developers and lenders, and that it is completely wrong to blame renewables for their failure.
Big win for coal, govt eases norms
Meanwhile, the environment ministry has allowed the expansion of coal mine production by up to 40% in 2-3 phases without a public hearing, after the coal ministry branded the process of forest clearance as ‘time-consuming’.
Environmentalists are calling this dilution of norms the last nail in the coffin.
- Centre makes solar procurement guidelines transparent, States can deviate
- Termination compensation for buyers and payment security mechanism for generators
- Minimum PPA duration of 25 years that cannot be cancelled unilaterally
The government has released new guidelines for buying power from grid-connected solar projects through competitive bidding to standardise auctions and build confidence in solar sector.
The new rules come at a time when the sector was reportedly slowing down over falling tariffs, increasing competition and states cancelling power purchase agreements (PPAs) with firms over tariff disagreements.
The guidelines provide for termination compensation by securing investment by the generator and lenders against any arbitrary termination of a PPA.
Also, the risk of power generator’s revenue getting blocked due to delayed payments or non-payment has been addressed through instruments like Letter of Credit (LC), Payment Security Fund and State Guarantee.
The PPA will be signed for a minimum of 25 years. States can deviate from new guidelines with the approval of the power regulator.
- One of India’s fastest growing sectors has come down crashing
- Only around 250-odd MW added in 2017 Q1
- Experts blame govt’s auction route for declining capacity addition
The booming Indian wind energy industry – which added 5,400 MW last year – has come down crashing. Only around 250-odd MW was added in the first quarter of 2017. The sector is ‘in a mess’.
Industry experts blame the government’s decision to move to the auction route for the slump. Previously, power distribution companies (DISCOMS) would sign PPAs at predetrmined rates and offer a feed-in tariff with wind power developers. Under the new auction policy, developers fear the falling tariffs may cause DISCOMS to backtrack on their PPAs.
Without PPAs, the developers would have no one to sell power to, while the cashstrapped DISCOMS look for the lowest rates possible.
The crisis could jeopardise the target of 60 GW of wind power by 2022. With 32 GW currently installed, the sector needs to add 6 GW to the grid annually. This year, however, only 2 GW has been added.
Tamil Nadu, Gujarat, Andhra Pradesh and Rajasthan – which have planned to hold auctions – are yet to do so because of the lack of guidelines from the Central Electricity Regulatory Commission (CERC).
Renewable revolution imminent
Meanwhile, new research has shown that wind power costs could drop by a further 50%, while solar PV could provide 50% of global power by 2050.
- Environmental clearance to no longer apply to solar power projects
- Solar projects will however be subject to other relevant laws
- Agricultural, forest and bio-diversity rich areas are off limits
In a relief to solar power developers, the 2006 law which mandates environmental clearance for various projects, will no longer apply to solar PV (photovoltaic) power projects, solar thermal power projects and solar parks.
Disposal of PV cells will be covered under the provisions of Hazardous and Other Waste (Management and Trans-Boundary Movement) Rules, 2016. The development of solar parks will be covered under the Water (Prevention and Control of Pollution) Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981.
However, solar projects cannot be set up on any agricultural land, wetlands and biodiversity- rich areas. A proper resettlement and rehabilitation plan should be in place for the displaced. Projects around forest land would need forest clearance and a site should conform to coastal norms if it falls in such an area.
- New GST rates on scrap materials have lessened recyclers’ margins
- Rag pickers are the hardest hit, as their meager earnings will go down further
- Lower margins on recycling could lead to more unrecycled waste piling up
Environmentalists have warned that the new Goods and Services Tax (GST) that imposes higher rates on scrap material than before may be a major setback for India’s recycling sector.
Before GST, there was no tax on scrap material except on e-waste and metals (6% Value Added Tax). Under the new GST regime, all categories of scrap now have a high tax rate of mostly 18%.
Scrap-sellers complain that their work has reduced because the waste generators are now getting lesser rates for their recyclable waste.
Inclusive climate action is more effective
The large scale scrap dealer is now is buying scrap at lower prices and in turn, the mid and small level dealers are also buying it at lesser prices – thus reducing the rates rag pickers get. Also, big waste dealers may lay off their employees to cut costs.
A 2009 study by Chintan found that Delhi’s recycling efforts saved 3.6 times more emissions than any project receiving carbon credits in India at the time. India’s fight against emissions has to be an inclusive one if it must be effective, experts say.
Women, Children worst hit
Women waste pickers are paid less money, and with prices falling they will be further marginalised. A decline in the adults’ incomes will impact children as well. A 2013 study showed that 63% of the children of an impacted site dropped out of school when their parents were unable to access waste.
GST impact on the environment
Experts are worried that GST rates will lead to more waste piling up in our landfills now as recycling activities may fall. The customer/waste generator and the informal sector will see no economic benefit in it. They recommend rolling back of GST levied on scraps of plastic, paper, cardboard and glass.
- Goyal: companies want to sell climate technology for a profit
- Minister: Seeking low cost financing to scale up renewables in India
- Government to standardise specifications for EV charging stations
At the recently concluded Business Climate Summit in New Delhi, minister Piyush Goyal said businesses are profiting over climate change which is not in the right the spirit.
He added that the country was engaging with universities across the globe to develop carbon capture technology and open up the technology to all. “However, this idea did not find takers as companies wanted to sell technology for a profit,” he said.
Goyal also said the government was working on a mechanism to standardise specifications for EV charging stations, and seeking low cost financing to scale up renewable energy capacity in India.
Actor Deepika Padukone these days wears an unflattering mask when out at a gym or while partying. That’s her new paint ad that comes with a message against air pollution.
The ad opens on a movie set where Padukone puts on a mask immediately after shooting a scene, leaving the crew perplexed. She is shown wearing the mask everywhere she goes.
The voiceover says that not many people are aware that the air inside our homes can be five times more polluted than the air outside. According to a study by the World Health Organization (WHO), of the 20 most polluted cities in the world, 13 are in India.