Justice a tricky prospect in India’s low-carbon push

Newsletter - December 27, 2020

Future tense: Undermining justice in India's transition to clean energy will carry severe implications for India's massive and largely informal coal economy | Photo: Lacuna.org.uk

Justice a tricky prospect in India’s low-carbon push

India’s context and developmental agenda expose unmistakable fault lines in the search for an equitable and fair transition to clean energy

The year 2020 will live on in infamy as the year of the great pandemic. But while the public health emergency dominated headlines, our era’s other big headache, climate change, will find prominence in the footnotes. As countries scrambled to contend with the economic fallout of COVID-19, the world also floated into the Paris Agreement era, perhaps the most critical juncture in human history.

In somewhat tacit recognition of the moment, several large economies have announced intent to undertake decarbonisation pathways that achieve net-zero emissions by 2050 or 2060. But immediate fiscal revival measures are still dominated by support to traditional emission intensive sectors. This year’s Climate Transparency Report, for example, found that almost 55% of all G20 stimulus spending is going towards fossil fuels, much of it unconditional, and just about 30% is going towards “green” sectors. The report found that apart from India, which has invested heavily in renewables, no other country, including top emitters US, EU and China, are on track to fulfill their Paris commitments. 

As plans of transition hopefully translate into action over the next few years, the contours of a new challenge are likely to come into sharper focus – one which intimately involves the realities of a multitude of stakeholders in the transition process. The questions of who gives up and who gains are likely to accompany any objective of transition.

Just Transition

In the international arena, climate change has been contextualised within inequality and uneven extents of development from the beginning. In recognition of this heterogeneity, equity and justice were used as central planks as the guiding principles of the UNFCCC were being framed following the 1992 Earth Summit in Rio de Janeiro, Brazil. The concept of ‘just transition’ represents the evolution of these planks as nations lumber on towards pathways to decarbonise.

A just transition framework situates the climate action within the realms of the people who stand to be most affected by processes of change, including the foot soldiers of conventional energy systems and the communities that depend directly or indirectly on the emission-intensive footings of current global economics.

Any form of transition is never easy. With energy transitions, there are social, political, geographical and cultural contexts at play. Therefore, taking the various stakeholders, which may include workers, businesses, governments and communities, into account at an early stage dilutes any negative impact that a transition may have, and creates more opportunities in the long term. It requires vision and an avenue for effective dialogue.

India’s unique predicament

In the years since the Paris Agreement was signed, India has slowly, but surely, earned the distinction of being among the best performing large economies when it comes to climate action. While the energy sector has been the primary front of assault in India’s low carbon push, its developmental agenda, which includes ensuring improved energy access to millions of energy-scarce regions, puts an added spin to the implications of its shift to low carbon energy. The prerogative of ensuring the delivery of modern services and improving energy access makes India’s clean energy transition a balancing act unlike that seen in the developed world.

“The western conceptualisation of just transition does not fit for the Indian contexts. In India, the challenge is not only to shift a highly informal workforce but to also formalise it, which is much different from the discourse in developed countries. Every parameter is different in the Indian context, and the framing of just transition in India has to be very different from the western norm,” says Chandra Bhushan, president and CEO of the International Forum for Environment, Sustainability & Technology (iForest), an independent environmental research organisation in New Delhi.

While advocates of clean energy have long argued for the exit of coal, a fuel that, by most measures, is quickly approaching obsolescence, disruptions during the COVID-19 pandemic provided a worrying glimpse at the real-world implications of such a move.

India’s estimated coal reserves amounted to 319 billion tonnes in 2018, which is the fifth-largest in the world. At present, the coal-mining sector provides 300,000 formal jobs through Coal India Ltd (CIL), according to government data. An iForest report, however, estimated there were around 15 million people who were directly or indirectly connected to the coal sector. The sector is, therefore, an employment multiplier. Its demise would have multifold impacts. Already, the number of jobs in the sector have fallen. According to a Cobenefits study, increased mechanisation has led to the loss of around 105,000 jobs between 2000 and 2015.

“All the debate surrounding a just transition is very theoretical, especially in India. Nobody has really cared to go to the ground to try and build some empirical basis for the theory. This rings especially true for India where many variables surrounding dependence of individuals and communities on coal mines is not being captured at the national levels. When you zoom in a little, the situation at the sub-national and local levels is world’s apart from national assessments of employment and dependence on mining,” adds Bhushan, who is also the lead author of the iForest study.

The COVID-19 lockdown has only worked to accelerate this transition. Unorganised and informal jobs were the worst hit in the lockdown period, which includes small traders and labourers. According to the Initiative for Sustainable Energy Policy (ISEP), simply transitioning coal plants to renewable energy generation plants is not enough. This is because of the size of the coal mines, which may not have the required renewable power generation capacity. Besides, an RE job requires an assessment of skill transferability and worker mobility.   

The commercial complication

India has long maintained that coal would form an important part of the country’s energy mix going into the next few decades. India’s justifications have often rested on the country’s low per capita energy demand and emissions, and historically low contributions to global warming. While India’s recent opening of coal mining to commercial interests can be seen as a last ditch effort to capitalise India’s vast coal reserves while also bolstering its energy security, the move could also carry implications for labour in the country’s energy sector and possibly for chances of a just transition moving forward.

“We still do not know for certain how India’s foray into commercial coal mining will pan out. It will, however, likely have some complicated implications on employment in coal mining and the transition process. While this is not to argue that nationally owned sources of energy are fundamentally better, there are very legitimate concerns when commercial interests take precedence over public interests, especially when it comes to job generation. Without effective regulation that addresses dependencies in the entire coal supply chain, along with allied economic activity upstream and downstream from the mines, there is a risk that India hangs on to coal but undermines the questions of public interest,” says Sabina Dewan, executive director of the Just Jobs Network, a private, non-partisan organisation working on the issue of just transition and decent work in the new economy.

A bigger concern though, than the direct implications of commercial mining, is the simultaneous mechanisation and closure of existing mines, says Bhushan. “New commercial mines are likely to be highly mechanised, so the numbers in terms of direct employment generation may not be very significant when talking about a transition. The larger problem is the mechanisation of large publicly owned mines, and the closure of smaller ones. It is clear that in the current economics of coal, large mechanised mines offer a greater competitiveness compared to smaller unmechanised ones. With most of Coal India Limited’s coal coming from a few large mines, there is little profit incentive to keep smaller mines operational. The closures, that we’ve been seeing for a few years now, are likely to cause massive economic disruptions in India’s coal producing districts, and complicate any just transition process,” he elaborates.

The RE vs Coal employment computation

One of the major advantages of employment in the renewable energy sector over the coal sector is the socio-economic benefits that it provides – this includes higher income, fixed salaries, healthcare benefits and skill-building opportunities. A direct result of this would be the elevation of India’s poverty-stricken rural economy. The Cobenefits study estimated at least 3.2 million people can be employed in this sector by 2050 – that is five times more people than what the fossil-fuel sector employs currently.

While studies have highlighted clean energy employment potentials, few have paid heed to the fundamental differences in the nature of jobs and dependencies in the RE and coal sectors | Photo: Twitter/@miladmosharraf

These numbers and projects though are highly speculative and offer little in terms of solid insights warn experts. “I am always wary of long term employment projections and comparisons which are subject to significant assumptions and selective mapping, and often fail to paint real world scenarios,” explains Dewan, who is also a senior visiting fellow at the Centre for Policy Research in New Delhi.

But as of today, renewable energy is concentrated mainly to the southern and western parts of India. This is primarily because of the lack of land and the pro-coal stand of the governments in power in other states. Coal power, however, is generated mainly in the central and eastern states in India and it shows no signs of slowing down. This dichotomy makes just transition a mountainous challenge.

According to a study published in Environmental Research Letters, India would need a solar power capacity of 1,000 GW in order to replace coal mining jobs. This is a huge task with the main challenge acquiring sufficient land.

While wind energy is also a fast-growing segment of the renewables energy sector, the study highlighted a complete mismatch in areas that are viable for wind power and areas where coal mining is currently being undertaken. Therefore, the government would have to rely on the solar market to make up for the gap.

The study found that in order to absorb all coal mining workers, at least 2GW of solar power would need to be installed around each of the 500 operational coal mines in states such as Jharkhand, Chhattisgarh, Orissa, West Bengal and Telangana.  

But even if this were to be achieved, a study published in Springer Link found there was insufficient personnel to train, demonstrate, maintain and run these renewable energy structures.

One way of ensuring this, according to the study, would be to establish a connection between training institutes and renewable power companies. Investigations, by way of field surveys, would give the government more insight into the ground realities that need be accounted for.

But while several comparative studies have rationalised a shift to clean energy through employment generation potentials, there is scepticism around the ‘apples to apples’ comparative approach that most employ. “Most of these studies do not capture the fundamental difference in the nature of jobs generated by RE and coal, or the multiple variables and spill off effects on the many allied local economies that have established around coal centres. RE jobs are mostly service sector jobs, and these may be able to replace the formal employment in coal. But this simplification neglects the large informal economies dependent on coal. RE cannot support this informal economy,” says Bhushan.

The importance of unions

Unions carry a lot of weight in the coal sector. There are five currently, which are included in all major decision-making processes at the district, state and central government levels. They oversee issues related to wages, pensions, health, education and infrastructure development. They were also out in full force when the government recently announced the coal block auctions this year. The lack of unions in the clean power sector, therefore, is a glaring gap in the level of bargaining power that might become crucial for a just transition.

Recognising the fact that coal workers will have to contend with productivity losses as temperatures rise along with a loss of jobs, advocates of workers’ unions have called for a greater role of worker organisations in the transitioning process. “The strategic transition towards renewables also calls for a simultaneous approach to training workers to manufacture, install, operate, and dispose of renewable energy and low-carbon technology. This will require a well-coordinated worker training programme, aimed strategically towards building a lower carbon economy. The existence of a renewable energy PSU would make this process much more manageable, in terms of skills identification, methodology, and absorption after retraining. As a result of the existing density and organization of unions in the coal industry (estimated at close to 90 per cent in state-run coal mines), trade unions are uniquely placed to help foster this transition and retraining for renewables,” it says in a chapter on the implications of the low-carbon shift and the role of Indian labour in the 2019 Oxford publication India in a warming world. The authors quickly admit this to be a “distant vision in the current market oriented (RE) sector.”

According to the authors of the chapter, central to the transitioning process is the democratisation of energy, which would also reduce the vulnerability of communities that are most affected by the transitioning process.

But while the significance of workers’ unions in India’s energy landscape is undeniable, there is also a danger in over-representing unions in policy according to Chandra Bhushan. “Unions dominate energy policy considerations in India currently, however the role of unions in the new energy sector is much lesser compared to traditional sectors. Unions are effective in collective bargaining against single large employers. Unlike in coal, this is not the scenario in the new energy sectors. In my opinion there is a clear danger that unions dominating discussions around a just transition could impede the process rather than reinforce it,” says Bhushan.

The path to a clean energy future for India is rocky and narrow. India’s challenge is first and foremost one of managing the political economy of energy in a way that weighs public interest holistically. This balancing act over the next decade or so will likely become a crucial aspect of how India manages its low carbon shift, and will also decide the fates of millions of people currently suspended in animation.

Climate Science

In a fire storm: 2020 earned the distinction of being the second hottest year on record as massive wildfires and prolonged heatwaves devastated large parts of the Australia, US and the Arctic | Photo Earthjustice. org

The 2020 Climate news round up

Yet another year for the record books

India’s monsoon flooding wreaks havoc, Atlantic records most dramatic hurricane season in history; 

India, this year, reported an ‘above normal’ monsoon season that was the second-most active in 30 years. Large-scale flooding due to heavy rainfall and swollen rivers caused at least 1,500 deaths across the country. The north-eastern state of Assam experienced some of the worst flooding that killed over 100 people and affected some 5.6 million people.

The Atlantic in the US witnessed its most dramatic hurricane season this year. The region recorded this highest number of storms ever – 30 between June 1 to November 30. They were also the earliest storms in history. Another rare occurrence was a five-storm system that occurred in the Atlantic Ocean was brewing for only the second time in history. Hurricane Eta and Iota also made landfall in the region.

In Asia, cyclones Amphan, Nisarga and Burevi made their presence felt in India, while Cyclone Gati in Somalia washed out parts of the country by bringing in two years’ worth of rain in just a couple of days. 

Heatwaves, wildfires devastate parts of Australia, USA and Arctic

The year began with reports of Australian wildfires that had continued into the new year thanks to a prolonged and severe heatwave that lasted throughout the country’s summer season. There were reports of animals perishing and the scorching of more than 11 million hectares of land. Australia is bracing for another wildfire season, which some experts believe could be even more devastating than before.  

In western USA, record dry weather in the latter half of 2019 led to a series of major wildfires across California, Oregon and Washington that began in April. Thousands were evacuated and more than 8.2 million acres of land was destroyed in the wildfires.

Russia’s fire season began early this year because of an unusually hot winter and spring. The Arctic town of Verkhoyansk recorded the highest-ever temperature reading north of the Arctic circle at 38°C. The Siberian fires began in February and picked up speed in March, burning through 20 million hectares of land.  

Rapidly melting Ice in Antarctica could lead to large-scale coastal flooding, warn scientists

A study published in Nature Climate Change in August this year warned that the rising rate of melting ice sheets in Antarctica and Greenland could expose 16 million people living in coastal areas to flooding by the end of the century. It predicted a further sea level of 17 cm, which was enough to increase storm-surge flooding in the largest coastal cities in the world, researchers said. 

In the Arctic, the Milne Ice Shelf, in Ellesmere Island, which was Canada’s last fully intact ice shelf, melted into the sea. The St Patrick’s Bay ice caps on the other end of the island also completely melted this year. According to scientists, the Greenland Ice Sheet has also melted to the point of no return.   

This year, scientists also discovered frozen methane deposits in the Arctic Ocean have started to release near the east Siberian coast. They found toxic levels of the greenhouse gas in the Laptev Sea in Russia. This is cause for concern because methane has a warming effect that is 80 times more than CO2 over a two decade period.   

CO2 emissions drop during lockdown just a blip in the long-term scenario: Studies

A report called the Global Carbon Budget, published in December, estimated the total CO2 emissions for the year 2020 were 34 billion metric tonnes – about 7% lower than than 2019 — mainly because of the COVID-19 lockdown.  

But while there was a clear drop in emission levels during the COVID-19 lockdowns across the world, the State of the Global Climate report by the World Health Organisation (WHO) dashed any optimism that arose from this dip. The report, published in December, stated that the reduction was at best a blip when it came to long-term GHG emission trends. The report went one step further to state that CO2, methane and nitrous oxide emissions were, in fact, on the rise in 2020.

The United Nations Environment Programme (UNEP) also released its Emissions Gap report this year. The report found 2020 would be one of the warmest years on record. The global mean temperature was 1.2°C above the 1850-1900 baseline, which is marginally more than 2019, the WMO said, adding that more than 80% of the world’s oceans also experienced a marine heatwave.

Locust outbreak wreaks havoc in Africa, parts of Asia; linked to climate change

New locust swarms continue to form in Kenya and threaten crops. These swarms wreaked havoc this year in dozens of countries, including Ethiopia, Uganda, Somalia, Eritrea, India, Pakistan, Iran, Yemen, Oman and Saudi Arabia.

In India, which was already battling the COVID-19 pandemic, these large unusual swarms destroyed crops in Rajasthan, Gujarat and Madhya Pradesh, a state where these pests had not been seen for decades. According to experts, the reason for this plague was a change in the cyclonic patterns in the Arabian Sea.

Climate Policy

Dubious decisions: The Indian government's proposal to environmental regulation spurred nationwide protests despite COVID-19 lockdown restrictions | Photo: Twitter/@LetIndiaBreathe

The 2020 Climate Policy news round up

While 2020 brought an upswing in political momentum for climate action, immediate plans still lack teeth

Controversy erupts over draft EIA 2020 notification

Just as the lockdown was enforced this year, the Indian government introduced a controversial draft Environment Impact Assessment (EIA) notification, which was vehemently opposed by environmentalists. Chief among their concerns was the setting aside of provisions such as public consultations and the implementation of ex-post facto clearance for several projects. Since then, the government had extended the deadline for stakeholders to give their suggestions or objections until August of this year. The draft has still not been implemented because the Karnataka high court has restrained the central government from publishing the final notification.   

Several countries announce carbon neutrality deadlines

In a major win for the environment, by January of next year, countries emitting more than 65% of the total greenhouse gas emissions and representing more than 70% of the world economy would have pledged to become carbon neutral by the middle of this century. The EU led the way this year. But what was most encouraging was super polluter China’s announcement of achieving net zero emissions by 2060. Several other countries such as Japan, South Korea, the UK and 110 other countries have made similar announcements. 

Significantly, Europe’s largest economy, Germany, has commenced its planned coal exit, while the continent’s largest coal consumer, Poland, has also announced a coal phase out.

Covid stimulus packages still prefer fossil fuels over green recovery 

The EU, once again, led the way as far as green initiatives in recovery packages are concerned. It has set aside 30% of its $830 billion recovery package on initiatives that aim to reduce dependency on fossil fuels. It is followed by Germany and France, who announced their own individual packages as well. The EU, US, Japan and Germany have together announced stimulus spending of more than $1 trillion. But in terms of green recovery, the US and Japan have failed to make sustainability a priority, according to a new paper by the World Economic Forum.

In fact, the latest Climate Transparency Report found COVID-19 economic recovery packages from the world’s largest economies rely heavily on support and subsidies to fossil fuels and could set back gains made through progressive efforts pre-pandemic.   

India’s own $260 billion recovery package was ranked the fifth-worst performer on the ‘Green Stimulus Index’. The study found that even though there were some green incentives in the package – such as setting aside funds to create green jobs for tribal communities –  it also offered substantial support to carbon-intensive industries.

Legal recourse gains popularity as activists push for greater climate action

Over the past decade, the courts have become an important battleground in the climate change arena. Despite disruptions from the COVID-19 pandemic, this year yet again saw an uptick in climate accountability litigation around the world. Notably, in Europe, six Portuguese youth recently garnered attention for taking all 33 EU nations in a landmark human rights case for not doing enough on climate action. In January, youth in Germany filed a constitutional lawsuit against the German government for failing to protect the rights of young citizens in the face of the climate crisis. Youth groups in South Korea, Mexico, UK, Australia and the US have also sought legal action to target their respective governments on inadequate action on climate change.

Big Oil also found itself in legal crosshairs as a spate of lawsuits across the US targeted the industry, and notably oil major Exxon Mobil, for alleged deception and disinformation campaigns that have worsened the climate change problem.

In terms of outcomes, the year was a mixed bag for activists with some setbacks in the courts of the US and Canada. Supreme Courts in France and Ireland though have moved to hold their national governments accountable for inadequate plans and measures to tackle climate change. 

UN’s Climate Ambition Summit: Intent clear, action unclear

Hosted on the five-year anniversary of the historic Paris Agreement, the UN Climate Ambition Summit did indicate a change in tide, but there was very little announced in terms of concrete action. 

The summit saw the submission of eight new long-term strategies, showing the path to achieve net zero emissions by 2050: among them South Korea, Ethiopia. More confirmed they will submit their strategies by the end of 2020 – Argentina confirmed they will institutionalise a net zero by 2050 goal into their long-term strategy, expected mid-next year. China also remained non-committal on how it plans to achieve its net-zero by 2060 target.

Air Pollution

A glimpse of blue: Lockdowns enforced to clamp down on the spread of COVID-19 had the unintended consequence of temporarily cleaning up the air even in regions with some of the worst air in the world | Photo: Free Press Journal

The 2020 Air Pollution news round up

The year in which a global pandemic forced a reassessment of the complex implications of toxic air on public health

Lockdowns: Indian cities meet 2024 clean air targets, rare view of Himalayas, historic drop in global CO2 emissions

Restricted economic activity saw pollution levels plummet across the country. The lockdown offered researchers an opportunity to track baseline pollution levels in major Indian cities – crucial information that had so far remained elusive. The lockdown measures resulted in Delhi, Mumbai, Kolkata and Bengaluru achieving 95% of their 2024 NCAP targets in just 74 days. The restrictions cleaned the air enough for people to witness, for the first time in decades, a view of the Himalayas from their houses.  

As a result, global carbon dioxide (CO2) emissions from fossil fuel and industry could drop by 7% in 2020 – 34 billion tonnes of CO2 (GtCO2) this year – a fall of 2.4GtCO2 compared to 2019,  Global Carbon Project (GCP)  stated. The CO2 emissions fell by 12% in the US, 11% in the EU, 9% in India and 1.7% in China.

India announced another air pollution law, but country remains worst in PM2.5 pollution  

A new law was announced to tackle air pollution, but there was little relief from toxic air. A “permanent authority” was created to check air pollution in the National Capital Region (NCR). But farm fires in Punjab and Haryana reached new peaks. Experts called the new law a distraction.  The newly appointed Commission for Air Quality Management vowed to take steps to lessen air pollution.  

India had the worst exposure to PM2.5 in the world this year, according to the State of Global Air 2020 (SOGA 2020) report. In addition, the country remained the world’s largest emitter of sulphur dioxide (SO2), but its levels dropped significantly by 6% in 2019, compared to 2018, according to Greenpeace India and the Centre for Research on Energy and Clean Air (CREA) study. India’s green court, the National Green Tribunal (NGT), ordered the Central Pollution Control Board (CPCB) to set up 175 air quality monitoring stations across the country using the environmental compensation fund (EC). 

In a major setback to laws that seek to improve ambient air quality, new environment norms allowed power plants to use coal irrespective of ash content. The environment ministry dropped the 2014 notification that mandated coal plants located 500km from the pit-head to use coal with less than 34% ash content. 

And lastly, a majority of India’s coal plants (70%) will miss the 2022 deadline to follow new emission norms that were set way back in 2015. 

LG CEO, directors arrested in styrene gas leak case, Madras HC seals Vedanta smelter

The Andhra Pradesh police arrested 12 people, including the CEO and two directors of South Korean firm LG Polymers Ltd, two months after styrene gas leaked at their plant in Visakhapatnam, killing 15 people and injuring 500 others. Three officials have been suspended for negligence. 

The company’s managing director and CEO Sunkey Jeong, technical director DS Kim (both South Korean nationals) were among those who were arrested a day after the state panel submitted a report to chief minister YS Jagan Mohan Reddy, blaming the LG Polymers management for its negligence. India’s green court held the South Korean firm LG Polymers “absolutely” liable for the deaths. The Union ministry of Environment, Forest and Climate Change (MoEF&CC) said the company was operating without environmental clearances.

In Madras, the high court refused Vedanta’s plea to reopen the company’s copper smelter two years after it was closed following the deaths of 13 unarmed anti-pollution protesters in police firing. Vedanta, accused of polluting the environment, had denied the charges saying the unit was shut in “political response” to deaths in police firing. However, the court centred its verdict on the issue of pollution saying the polluter pays principle needs to be applied.

India leapfrogs to Euro VI fuel, makers of Merc fined by US over cheat device 

Two years after Delhi switched to Euro VI, or BS VI (Bharat stage VI) grade fuel,  which is ultra-low in sulphur content, petrol pumps in the rest of India this year switched to the world’s cleanest petrol and diesel as oil companies rolled out Euro-VI emission compliant fuels without disruption or a price increase. India jumped from BS-IV grade fuel straight to BS-VI grade, equivalent to Euro-VI fuel. Earlier, petrol pumps supplied Euro IV (BS IV) grade petrol and diesel, which has a sulphur content of 50 parts per million (ppm). BS VI emission grade has sulphur content of only 10 ppm. 

In the diesel emissions cheating software case, German car company Daimler, makers of Mercedes Banz, reached a nearly $3 billion settlement with US regulators and vehicle owners. 

Air pollution linked with COVID-19 deaths, Indians lose 5.2 yrs life expectancy to dirty air 

In two separate researches, it was found that 15% of all COVID-19 deaths around the world are attributable to dirty air, and most significantly, a small rise in long-term exposure to air pollution is associated with an 11% increase in deaths from COVID-19.  The researchers said the evidence was now strong enough that levels of dirty air must be considered a key factor in handling coronavirus outbreaks.

An average Indian loses 5.2 years of life expectancy to air pollution, while the average north Indian loses it by eight years, concluded the study by Energy Policy Institute at the University of Chicago (EPIC), which used the 2018 pollution levels as a base. Life expectancy of an average person in Delhi is reduced by 9.4 years and those living in Lucknow by 10.3 years, the study stated. 

India ranked second on the global list in terms of lost life years behind Bangladesh, while Nepal, Pakistan and Singapore made up the top five on the list.


'Sunshine' sector: Despite disruptions from the COVID-19 pandemic, investor appetite has been buoyed by falling prices | Photo: Mercom India

The 2020 Renewables news round up

Disruptions due to the COVID-19 pandemic proved to be temporary hiccups, with all signs pointing to strong sectoral growth

Solar tariffs fall to a new record low of ₹2/unit India; but ACME cancels contract of India’s previous record-setting deal

India’s solar power tariff continued to decline in 2020. The latest all-time low was of ₹1.99 per kWh bid in the Gujarat auction. This came within a month of Solar Corporation of India (SECI) tender in Rajasthan auction wherein a tariff of ₹2 per kWh was quoted.

Before that, India set a low tariff of ₹2.36/kWh in a 2GW auction by SECI. This was about 3.3% lower than the previous lowest bid of ₹2.44 (~$0.032)/kWh, which was won by ACME in 2017 and 2018. Even before that, low tariffs of ₹2.50 to ₹2.87 per unit, were 20-30% cheaper than the cost of coal-generated power. 

India’s ACME Solar cancelled its record ₹2.44  ($0.0323)/kWh tariff contract over land acquisition delays coupled with delays over disruptions in supplies from China because the pandemic forced them to claim an exit under “force majeure”.

And lastly, an IEEFA study this year said solar tariffs in UAE and Saudi Arabia work out less than a rupee per unit, which is far cheaper than India’s lowest tariffs of ₹1.99, because they offer long-term loans at low interest rates, they don’t have corporate taxes, their duties on equipment are negligible and land costs are low.

India-China border dispute pushes domestic solar manufacturing, delay projects 

The COVID-19 pandemic coupled with border tensions between India and China proved an impetus for India’s solar manufacturers. India extended the safeguard duty (SGD) on solar imports from China, Thailand and Vietnam by another year to boost manufacturing.  

Border tensions impacted Indian solar energy projects. The consignments that the developers have already paid were stuck at the ports, delaying the projects across the country, which imports around 65% of the panels from China. India decided to raise basic Custom duties on Chinese solar products by 40% in a year. Experts said the country requires solar modules worth ₹15,000 crore per year, and  80% of it is imported.

Resilient renewables: Despite COVID-19, renewables overtake coal, wind-solar hybrid projects rise globally

This year, IEEFA and IRENA reported that there was plenty of appetite among domestic and foreign investors to build renewable infrastructure despite COVID-19. The pandemic added to the decline in the capital cost of solar and the cost of funding. So COVID-19, in fact, hastened the switch from polluting coal power to renewable energy in India, the reports stated.  

The COVID-19 lockdown also forced India to extend deadlines to complete renewable energy projects. It also agreed to consider the pandemic-related disruption in the supply chains as force majeure

India seems to be emerging as a strong renewables market with the IEA’s World Energy Outlook stating that the country will lead the demand for energy globally over the next 10 years when solar power is expected to lead the surge in renewable power supply

On the ground, an analysis of tenders by the centre and states by IEEFA revealed India’s total wind-solar hybrid capacity is expected to reach 11.7 GW by 2023. The report stated the wind-solar hybrid capacity will rise at a compound annual growth rate of 223% from 2020-2023. 

Meanwhile, according to the European Commission’s draft plan, the off-shore wind energy capacity of the EU in the North Sea, the Baltic, the Atlantic, the Mediterranean and the Black Sea will increase 25-fold. Once backed by subsidy, the offshore wind power farms in the UK will soon be paying to produce power after a dramatic drop in the offshore wind power costs. 

India sets new RE target of 220 GW by 2022, green-term market to buy and sell RE launched

This year, India announced it will increase its clean energy capacity from 134 GW now to 220 GW by 2022. The government said India’s state-owned oil companies will be able to operate at least 50% of their fuel stations on renewable energy by 2025.

In keeping with the growing momentum, India also launched the Green Renewable Energy Term Ahead Market (G-TAM), which will help states with surplus renewables to sell, while the buyers will be able to procure energy as well as meet the renewable purchase obligations (RPOs). 

Scientists reach magic 30% efficiency limit through perovskite/silicon tandem solar cells, Green Hydrogen makes a strong debut 

Scientists set the current world record this year of 29.15% efficiency for a tandem solar cell made of perovskite and silicon. Solar cells consisting of two semiconductors with differing band gaps can achieve much higher efficiencies when used in tandem compared to the individual cells on their own. The tandem cell provided stable performance for 300 hours – even without encapsulation. 

Earlier in 2020, China proposed to increase the solar quality standards, which required solar mono cells to have 21% efficiency and modules to be 17.8% efficient, to 23% and 20% respectively. 

Hydrogen produced from renewable energy-powered electrolyzers, also called green hydrogen, took off globally this year. Seven international companies announced a global coalition that will accelerate the scale and production of green hydrogen 50-fold in the next six years. Green hydrogen plants are being built in a number of nations, with US power giant NextEra becoming one of the latest companies to join the movement. Green hydrogen could even help us decarbonise the steel industry  through disruptive technology breakthroughs in the heavy industry sector.

Electric Vehicles

Important breakthrough: BYD's Blade line of li-ion batteries are fire and puncture resistant, which is a huge step forward in addressing electric vehicles' safety concerns | Photo: Auto Devot

The 2020 EV news round up

Major technological breakthroughs and policy initiatives drive bright forecasts

Delhi, Telangana adopt EV policies, Ola to build world’s largest scooter factory

Delhi and Telangana formally adopted their EV policies in August and both lay an emphasis on expanding EVs in public transport. Delhi’s comes with an additional pollution tax on petrol and diesel vehicles and a focus on ‘electrifying’ two- and three-wheeler delivery vehicles. Telangana, on the other hand, will allow for ICE vehicles retrofitted with EV kits to be registered with its transport authority. 

Rideshare firm Ola, meanwhile, will invest $327 million to set up the world’s largest scooter manufacturing facility in Tamil Nadu. The firm is determined to expand the reach of electric mobility to India’s smaller cities and towns, and the facility will be capable of manufacturing two million units a year. It has already acquired Dutch scooter manufacturer Etergo, which builds high-tech electric scooters with long range, swappable battery packs. 

Fire-resistant and million-mile EV batteries  

China’s BYD announced its “Blade” line of li-ion batteries that can withstand being penetrated by nails, bending, crushing and overcharging of up to 260% without catching fire. Very impressive, considering li-ion batteries catching fire have raised questions about EVs’ safety. Also, CATL (Contemporary Amperex Technology Co. Ltd.) was ready to start manufacturing li-ion batteries that would run for two million kilometers (1.2 million miles) over their 16-year lifespan. Replacing contemporary li-ion packs after about eight years and 100,000 kms is a major expense associated with EV ownership. 

Li-ion breaches $100/kWh threshold 

BNEF reported that prices for China’s li-ion batteries for some electric buses have dropped to below the much-touted $100/kWh mark. The figure is used as the threshold beyond which EVs would be cheaper to manufacture than ICE vehicles and BNEF thinks that it could reach a low of $58/kWh by 2030. However, the price reduction may be driven by manufacturers ramping up their output of solid-state or Lithium Iron Phosphate battery packs, which can be churned out at up to 40% less cost. 

California and the UK announcing deadlines to stop ICE vehicle sales 

The US state of California joined 15 countries when it announced that it would only sell zero emission passenger vehicles from 2035. The executive order by its governor was significant in that it specifically acknowledged petrol and diesel vehicles’ role in driving up greenhouse gas emissions and worsening climate change. The state is also one of the US’s biggest car markets — with nearly two million new car sales in 2019 — and has for years led the country in setting stricter vehicle emission norms despite the lack of support from the White House.

The UK, too, revised its target to ban new ICE vehicle sales from 2040 to 2030 — and was even supported by none other than BP (British Petroleum). The timeline brings it in line with Germany, the Netherlands and Ireland and is aimed to steer the country to being carbon-neutral by 2050. Its aviation industry has also pledged to achieve net zero emissions by 2050, even though cutting 30 million tons of annual CO2 emissions while increasing passenger numbers by 70% is quite the challenge. 

GM commits to expanding electric models, resurrects Hummer as all-electric pickup truck

Automotive giant GM (General Motors) will up its commitment to building EVs to $27 billion and will launch 30 new electric models by 2025. The figure will exceed its investment in ICE vehicles and has been revised upward from the previous quantum of $20 billion. Most importantly, CEO Mary Barra has said that “climate change is real” — unlike the Trump Administration — and that EVs are the right strategy for growth. 
The automaker will also resurrect one of the most fuel inefficient vehicles ever built, the Hummer, as a 100% electric pickup truck. It will go into production in 2021 and the decision goes to show that the electric powertrain is viable even for the heaviest of cars. The electric Hummer’s base model alone may retail north of $79,995 but the first edition sold out in 10 minutes flat, and it will use GM’s Ultium line of long-range batteries to offer more than 350 miles (~560 km) of range per charge.

Fossil Fuels

Unprecedented: Oil tankers moored offshore at the height of the Covid 19 pandemic were a bad sight for the industry that may never fully recover and breach its pre-lockdown highs | Photo: Reddit

The 2020 Fossil Fuel news round-up

A year that left the world wondering “blip or a new normal?”

Oil industry rocked by negative prices

Crude oil prices dipped to below zero in April (-$37.63 a barrel for future contracts, to be exact) as countries went into complete shutdown and demand for oil evaporated. Hordes of tankers were moored offshore as ports were shuttered and customers had no use for the shipment. The tussle between Saudi Arabia and Russia to flood the market with cheap oil had already worsened the situation and together they exposed how acutely vulnerable oil is to price wars and economic ups and downs. While Brent Crude is back up now to trading at around $50 a barrel, analysts fear that with countries determined to adopt climate-conscious policies and growing competition from ever cheaper solar and wind power, demand for the commodity may never again breach the highs of 2019. 

Gas leaks and oil spills further damage local ecosystems

A gas leak that happened in Assam, India, on May 27 caused a sudden explosive blowout of natural gas from well number 5 in the Baghjan oilfields, which was being explored by Oil India Ltd. (OIL). By June 9 the well was caught in an out of control fire after crude oil flooded out, and subsequent rains and wind conditions contaminated the nearby Dibru-Saikhowa National park. Dead fish washed up in the rivers, as did the carcass of a Gangetic Dolphin. Three OIL employees also tragically lost their lives. Strangely, OIL had been exploring the oilfields without mandatory environmental clearances. It had also skipped the public hearings that would allow for local residents to voice their concerns with the operation.

In Russia, melting permafrost in the Arctic caused a storage tank in its far north to sink and collapse on May 29, spilling out 21,000 tonnes of diesel into Lake Pyasino. Rapid cleanup operations were launched to prevent the oil from flowing into the Arctic ocean, but it had already contaminated local water systems. Mauritius, on the other hand, reported one of its worst environmental disasters when on July 25 a Japan-registered cargo ship that had run aground on its pristine coral reefs discharged around 1,000 tonnes of fuel oil of unusual composition. Several marine animals died within a few miles of the accident and even though the cleanup is on track to be completed by January, the contaminants — including carcinogens — may have accumulated in the country’s coastlines.   

IFC mandates coal exit, China drops “clean coal” from green bonds list 

The World Bank’s financial arm, the International Financial Corporation (IFC), issued a new set of rules under which commercial banks must exit their Asian and African coal investments by 2030. IFC’s policies carry enormous influence and the new directive could soon throttle many new coal projects in the works, such as in Bangladesh, Laos and Vietnam, that are financed by China, Japan and South Korea. 

Progress was reported from China as well as it dropped “clean coal” from its list of projects eligible for green financing. Cleaner burning coal made its list in 2015 but drew criticism from the international climate community for attracting billions of yuans from Chinese banks, as campaigners argued that green financing should exclusively support renewables and zero carbon alternatives. China is the world’s largest coal consumer and its government was lobbied hard to allow for hundreds of new coal plants to be built under its 14th five-year plan, but the country has since also announced that it will phase out coal power “around 2050”. 

Coal’s fortunes worsen in India despite every effort 

India’s public financing for coal dropped by a whopping 126% for 2019 over 2018, clearly indicating that investors are seeing little value in the fuel going forward. The Centre also put in a lot of effort to garner interest in the auction of 41 coal blocks, but the response was lukewarm at best as 15 of the 38 blocks eventually auctioned received no bids at all. This was despite the government removing all captive end-use restrictions on coal mining and relaxing the entry criteria to allow bids from entities with no prior experience or qualification to mine coal. So while Coal India’s annual output target has been revised to one billion tonnes by 2024, demand for coal seems to be going south. 

The pandemic-induced lockdown also saw coal plant PLFs across the country plummet to a lowly average of 45%. Meanwhile, the issue of coal-fired stranded assets remains to be resolved and some DISCOMS reportedly want to exit their coal power PPAs for cheaper alternatives. 

Singapore-Qatar LNG deal to detail emissions

The LNG deal signed between Qatar and Singaporeset an industry first by agreeing to detail the emissions from each cargo load of the fuel delivered under its 10-year term. The LNG will be delivered by Qatar’s Pavilion Energy, which will detail the shipments’ emissions all the way from the gas well to the import terminal, even though the deal does not obligate its parties to offset their emissions. Nevertheless, the trend may be replicated and emissions from LNG will need to be monitored closely as natural gas assumes global importance as a replacement for coal, despite predictions that, similar to oil, its consumption figures may never outpace that of 2019.