Newsletter - February 26, 2021
Last week, Prime Minister Narendra Modi doubled down on India’s target of installing 40GW of rooftop solar by 2022. “Already, 4 GW solar capacity is installed through rooftop solar projects… 2.5 GW will be added soon. 40 GW solar power is aimed in the next one-and-a-half years through rooftop solar projects,” he said during a webinar address on the implementation of budget provisions in the power sector. The target now implies a ten-fold expansion in rooftop solar over a timeframe of just 20 months. The PM’s optimism notwithstanding, just last month, a Parliamentary standing committee shot down the target as “unrealistic” given the tepid uptake of rooftop solar in the country.
The 40 GW rooftop solar target is part of India’s aim of installing 100 GW by 2022. But as things stand today, only utilities are expected to achieve their 60 GW target, not rooftop solar. While successive misses of yearly targets have cast major doubt about the viability of this target, the Ministry of Power’s new rules for electricity consumers has sparked fresh concerns regarding its implications on rooftop solar installations.
The contentious provision vs checks and balances?
The new rules, published in the Gazette of India on December 31, 2020, for the first time, specify limits for net metering for energy generated through rooftop solar installations being fed into the national grid. According to the rules, net metering is mandated for projects up to a capacity of 10 kW, beyond which gross metering shall be applicable. This contentious threshold to check the big players from milking their surpluses of rooftop solar power generation has ignited a debate around the prudence of such a move and its implications on the progress regarding solar installations.
Let’s first understand what net metering and gross metering mean and how they affect consumer decisions on rooftop solar. Net metering allows grid-connected solar rooftop plant owners to supply and receive power from DISCOMs through the same meter and pay fixed tariffs only for extra units consumed. Depending on the state and DISCOM operator, this tariff increases progressively along with the quantum of consumption. Gross metering, on the other hand, treats energy being fed into the grid and that being demanded from it as parts of separate balance sheets with compensations and payments made in accordance with different rates for both set by the state.
According to a recent analysis published jointly by IEEFA and JMK research, the introduction of the 10 kW threshold could hinder the growth of rooftop solar in the country as it mostly affects corporate and industrial consumers, who are responsible for the bulk of installed capacity thus far. The analysis, which looked at net and gross metering tariffs across states leading in solar rooftop capacity, found that gross-metered consumers are compensated for the export of solar power to the grid at rates of ₹2-4/kWh. However, current rooftop power purchase agreements (PPAs) signed by large developers have tariffs in the range of ₹3.5-4/kWh.
“Until a few years ago, DISCOMs were power-deficit so there was a strong push to promote rooftop solar in order to increase the efficiency in power supply. The net metering mechanism was an attractive prospect for consumers who could sell back surplus generation to the grid at retail tariffs,” says Vibhuti Garg, Energy Economist at the Institute for Energy Economics and Financial Analysis (IEEFA) and a co-author of the analysis paper.
Under a gross-metering regime, lower rates of compensation relative to PPA-determined rates would essentially mean that large consumers would not be able to avail the commercial benefits of generating energy for their own consumption. This effectively translates to longer payback periods and riskier investments for large consumers and rooftop solar developers. This difference between the two rates is what will make rooftop solar unattractive to corporate and industrial consumers, who will fall under the gross metering regime under the new rules.
Net metering: Not all rosy
Net metering, which effectively provides equal rates of compensation as it charges for consumption, on the surface seems like a fair alternative. But the concept, although not new, has failed to deliver any serious growth in rooftop solar adopters. Neither has it been able to generate enthusiasm amongst DISCOMs. Experts see the variable nature of renewable energy capacity in India as one of the reasons, because India still lacks storage capacity. Consider this: Consumers buy when they fall short of power, and sell when their rooftops solar generate surplus. That would typically mean that they would buy during evening when the demand is at its peak and power is expensive, and sell during the day when there’s hardly any demand and power is essentially cheaper. This imbalance is disadvantageous for the DISCOMs, who end up in losses.
The fact that the biggest gains from a net-metering regime are cornered by large consumers, and corporate and industrial entities adds a further layer of complexity to the debate. DISCOMs supply power to industry at higher costs compared to residential and agricultural users. There is further differentiation within user categories in rates according to the sanctioned load, with higher consumption typically attracting higher rates. Under a net-metering regime, large consumers are able to milk the benefits of surplus generation, while also limiting their demand from the DISCOM to peak evening hours. In essence, this becomes very expensive solar power for DISCOMs, explains Tongia. “If they (DISCOMs) were interested in increasing green power, they could have simply procured wholesale grid-scale solar at ~₹2/kWh (or ₹2.25 including transmission and distribution losses), instead of effectively paying, say, ₹8-10 per kWh via offsets through net metering (based on the retail tariffs for selected sets of consumers),” writes Rahul Tongia, Senior Fellow at Centre for Social and Economic Progress (CSEP).
The opinion among experts though is split on the real financial impact of net-metering on DISCOMs. According to Neeraj Kuldeep, programme lead working on rooftop solar energy at the Council on Energy, Environment and Water (CEEW), the impact of net-metering right now is marginal compared to potential gains in distributed energy generations. “Rooftop solar currently occupies less than 2% India’s total generation capacity and relative to DISCOM revenue, the cost of procuring rooftop solar is fractional. Further, other benefits to DISCOMs such as reductions in transmission and distribution losses, reductions in peak demands and contributions to Renewable Purchase Obligations (RPO) have not been quantified or included in assessments,” he says. “The losses to DISCOMs from rooftop solar are relatively marginal. Given the small size of the rooftop solar market, introducing a 10 kW limit for net metering at this time would hinder the growth of the market before it hits maturity,” adds Garg.
Where do the states fall
The new rules, however, are subject to implementation by state governments. Experts believe that many states will be tempted to do so in an effort to address concerns around the financial health of DISCOMs. West Bengal, last month, issued amendments that allow net-metering for sanctioned loads of up to 5 kW and gross-metering for contract demands above 5 kW. Karnataka, too, has proposed a gross-metering regime for projects over 10 kW capacity at a ₹2.84/kWh tariff.
States are also seeking to introduce other kinds of limitations on compensations to be paid out by DISCOMs. Punjab State Power Corporation Limited (PSPCL), last month, submitted a petition seeking amendments on the state’s net-metering regulations from 2015. The proposal specifies a nominal procurement rate for surplus rooftop power of ₹2.25 (~$0.031)/kWh from domestic or government consumers and ₹1.75 (~$0.023)/kWh from other consumers. Surplus power to be procured by the DISCOM, however, is not to be more than 10% of the total annual generation.
A way out
A viable resolution to the debate, according to the IEEFA-JMK Research analysis, is a ‘net feed-in’ mechanism, which is effectively a combination of the net-metering and gross-metering regimes. Under such a mechanism, rooftop solar power used for self-consumption would be calculated at retail tariffs, while surplus energy fed into the grid would be compensated at rates determined by states. This, the authors of the analysis believe, will create a “win-win” situation for consumers and DISCOMs, while also pushing growth of rooftop solar in the country. “The feed-in mechanism offers a middle path that generates benefits for all stakeholders,” explains Garg.
Irrespective of differences regarding implications on India’s rooftop solar capacity additions, experts across the board agree that the need of the hour is to fix prices so that they reflect the true costs of generation in both retail and rooftop PV. “We are still in the dark when it comes to the true costs and benefits that come from expanding rooftop solar. These factors are important in fixing prices and tariffs, and determining a clear policy direction. This assessment is necessary for any dynamic pricing mechanism which would be needed to determine the true value of energy being generated. The market ought to reach this stage before regulations and limitations are issued,” says Kuldeep. “Even if gross metering is applied, states should have time-of-day pricing where day-time and off-peak hour tariffs are relatively low, while peak hour tariffs are higher,” says Garg.
Rare deep freeze leaves millions without power in southern, central US
The icy storm that froze southern and central US last week is being linked to global warming. Previous research suggested that Arctic warming is weakening the jet stream – which prevents frigid polar vortex in the northern hemisphere. This is allowing cold air to escape to the south. The plunging temperatures seen in usually frost-free regions of Texas, Gulf of Mexico and southern Louisiana.
Texas, especially, battled extreme cold that it hadn’t seen in decades. The state reported major power outages and flight cancellations, with authorities urging residents to stay put in their homes and reduce their power consumption. The massive power outage in the state, attributed largely to the national gas-powered grid in Texas being isolated from the larger regional grid, has prompted the US energy regulator to undertake fresh evaluations of the threat posed by climate change to the country’s power reliability.
Flash droughts likely to increase in India towards end of century: Study
India, which is already grappling with poor management of extreme weather events, will see more flash droughts towards the end of the century, a new study revealed. This will threaten not only the country’s agricultural sector, but also its ecosystems and water availability, the study, by the Indian Institute of Technology (IIT), Gandhinagar, stated. Greenhouse gas emissions coupled with extreme hot and dry periods during the monsoon season will increase the frequency of the flash droughts 7-8 fold, according to the report.
Globally, GHGs from material production shot up 120% between 1995 and 2015: Study
A new study found that between 1995 and 2015, the greenhouse gases emitted by the production of materials, such as iron and steel, cement, chemicals and petrochemicals, aluminium, and pulp and paper, increased by 120%. This rise was directly proportional to the rise in material production, which rose from 15% to 23% in that period, the study found, with China accounting for nearly 75% of the growth. The study attributed two-fifths of the carbon footprint from first use of the materials to construction, two-fifths to the manufacturing of machinery, vehicles and other durable products.
Magnetic pole reversal 42,000 years ago led to environmental crises, major shifts in atmosphere, extinction events: Study
Around 42,000 years ago, Earth witnessed its last major magnetic inversion called the Laschamps Excursion. Very little was known about the global impact of this event, if any, until now. A new study attempted to create a detailed record of atmospheric radiocarbon levels across the Laschamps Excursion using ancient New Zealand kauri trees. The study found the event caused substantial changes in atmospheric ozone concentration and circulation, the environment, and also led to extinction events and transformations.
NGT upholds ₹57.96 lakh penalty imposed on NTPC for damaging environment
NTPC’s plea seeking a review of a ₹57.96 lakh pollution fine imposed on it by the Uttarakhand Pollution Control Board (PCB) was scrapped by the National Green Tribunal (NGT). The state PCB ordered the penalty under the ‘polluter pays’ principle after finding the NTPC in violation of muck disposal site maintenance rules at its Tapovan Vishnugad hydropower project site, thereby damaging the environment.
India vital towards success of COP26: Alok Sharma
COP26 president Alok Sharma said India would be vital in ensuring the success of the 2021 climate talks. Sharma, who is also a UK minister, made the comments on his visit to the country, nine months ahead of the crucial talks to be held in the UK. On his two-day visit, Sharma met Prime Minister Narendra Modi along with various other political leaders and think-tanks. He also praised India’s efforts to move towards a greener transition.
EU members split over green reforms in energy investment treaty
EU member states are divided over green reforms for the Energy Charter Treaty (ECT). While France and Spain are pushing for drastic reforms of the treaty, which allows fossil fuel companies to sue countries where climate policies are eating into their profits, eastern European countries are against any changes. According to think-tank Open Exp, if companies were to sue – German utility RWE has already sued the Dutch government for €1.4 billion in damages over its coal phaseout plan – it could cost taxpayers globally around €1.3 trillion by 2050. Half of these costs would be borne by the EU.
EU’s post-pandemic recovery fund allows ‘limited exceptions’ for gas projects
Even though the EU’s post-pandemic recovery fund is aiming to exclude projects that drive climate change, it does leave some room for investment in gas projects. While Brussels is planning to use the fun to become climate neutral by 2050, Germany and Poland are looking to use natural gas as a ‘bridge’ between the transition from fossil fuels to renewable energy. Concerns have been raised previously about how methane leaks from gas infrastructure cancel out any benefits from its use. But the fund allows ‘in some circumstances’ for gas investments, for example where it may help reduce carbon emissions quickly by replacing coal.
World Bank, IMF consider factoring in climate change in debt reduction talks
The World Bank (WB) announced it would work with the International Monetary Fund (IMF) on ways to include climate change as a factor during negotiations on reducing the debt burden on poorer countries. Ethiopia. Chad and Zambia are already negotiating with creditors to reduce their debt burden. The WB expects more countries to request a restructuring post the COVID-19 pandemic. According to experts, factoring in climate change while writing of some parts of their debt will help poorer countries progress towards their sustainable development and climate goals.
Facebook to start trial in UK that targets climate misinformation
Social media giant Facebook announced plans to start labelling misinformation on climate change. It will begin doing this in a small trial that will be limited to the UK. Posts deemed to be carrying incorrect information will be attached with labels that will direct users to Facebook’s Climate Science Information Centre, which will include fact-checked claims about the environment. While the process to assess misinformation in posts remains unclear, it will be similar to the one used during the recently held US elections, where Facebook used algorithms to determine such harmful posts.
Eight out of India’s 10 most polluted cities in Uttar Pradesh
Real-time data from 99 cities showed that smaller and upcoming cities are India’s pollution hotspots, a recent analysis by the Centre for Science and Environment stated. This past winter, eight out of the 10 most polluted cities were from Uttar Pradesh, with Ghaziabad and Bulandshahr topping the list. The top 23 polluted cities were in North India, the analysis found.
Delhi occupied the fifth position. Bhiwandi in Rajasthan was at number 10. Mysuru’s air quality was the cleanest, followed by Satna in MP and Kochi in Kerala. PM2.5 levels worsened significantly this past winter in 43 cities compared to previous years, especially in smaller cities such as Gurugram, Lucknow, Jaipur, Visakhapatnam, Agra, Navi Mumbai, and Jodhpur.
In 2020, over 120K died due to air pollution in India: Greenpeace
A study by Greenpeace and Swiss firm IQAir said air pollution caused around 54,000 premature deaths in New Delhi last year. This was the highest number of deaths compared to any other big global city. Over 120,000 people died all over India, according to the report. In Delhi, PM2.5 peaked in November at 30 times above the World Health Organization’s safe limit, the study showed.
Earlier, a Lancet study had said 1.67 million lives were lost in India as a whole in 2019 due to toxic air. Pollution also led to around 25,000 premature deaths in India’s financial hub Mumbai in 2020, according to the report. Air pollution caused economic damages to the tune of ₹2 lakh crore in India, the report stated.
Factories burning coal is making Mumbai’s air as bad as Delhi’s: Study
Factories in the Mumbai Metropolitan Region (MMR) burn two million tonnes of coal annually, altering the city’s coastal trait of clean air through the year, a new study by Centre for Science and Environment (CSE) found. The CSE studied four out of 13 industrial areas, namely Trans-Thane Creek (TTC), Taloja, Ambernath and Dombivali, covering 70% of the industries in MMR. The study estimated the air pollution load from various industrial sectors. An indicative ambient air quality monitoring for particulate matter was also conducted to calculate impact on locals. Trans-Thane Creek was the most polluting, contributing about 44% of the total load from the studied areas, followed by Taloja Industrial Area with a contribution of about 26%.
Despite complaints by locals, Centre allows expansion of Odisha coal mine
The Centre allowed the expansion of the capacity of the Kulda opencast coal mine in Odisha’s Sundargarh district by 20%, despite complaints by residents about the project’s impact on their health, agriculture and water bodies. The mine’s output will now increase from the current 14 million tonnes per annum (MTPA) to 19.60 MTPA, HT reported.
The green clearance was recommended on the condition that mine owner, Mahanadi Coalfields Limited (MCL), will plant 100,000 native trees with broad leaves along the villages and 50,000 trees along the transportation route in two years to prevent air pollution. The mining company will also have to operationalise three air quality monitoring stations by March, and post real-time updates on their website. Residents of nine villages in Himgiri Tehsil of Sundargarh district had complained that the MCL did not comply with conditions of the green clearance recommended in February 2018 for capacity expansion from 10 MTPA to 14 MTPA. A new study, meanwhile, reiterated that coal burning is responsible for heavy air pollution in India.
Pollution control boards to decide which brick kilns will run in Delhi NCR
India’s green court, the National Green Tribunal (NGT), restricted the use of brick kilns using zig-zag technology in the National Capital Region (NCR). The court said between March and June, the number of brick kilns would be allowed to work depending upon the carrying capacity of the area and its air quality, which should be below severe.
A joint committee of Central Pollution Control Board (CPCB) and state pollution control boards (SPCB) will decide which kilns will be allowed to operate. The joint panel will factor in conditions such as distance from sensitive locations and compliance of brick kilns.
‘Lowest in 5 years’: India added just 3GW solar capacity in 2020
According to a Mercom study, India’s solar capacity addition in 2020 at 3.2 GW, was down 56% compared to 7.3 GW it installed in 2019. India’s total solar installed capacity was at 39 GW gigawatt (GW) as of December 2020, in which big utilities accounted for 78% of installations with 2,520 MW, down 60% year-on-year.
The rooftop solar additions were at 719 MW also down 22% compared to the installation in 2019. Andhra Pradesh, Rajasthan, and Gujarat topped with large-scale solar capacity additions, representing around 51% of 2020 installations. The report said besides COVID-19, the reasons for decline included the rise in module prices, increased shipping and freight charges in the range of 500%-800% and a surge in raw material costs. Government agencies also failed to get distribution companies (DISCOMs) to sign power sale agreements (PSA), resulting in about 17-18 GW of projects without a PSA, the report said.
Centre clarifies: Only grid-connected solar rooftop owners eligible for incentives
The Centre issued clarification that only the grid-connected rooftop solar systems installed in the area of the DISCOM would be considered for the calculation of incentives. The projects off the grid called ‘behind-the-meter’ systems, won’t get incentives. The incentives will be applicable as per the benchmark cost issued by the Ministry of New and Renewable Energy (MNRE) for the capacity of above 10 kW up to 100 kW or the lowest bidder for that state or union territory, whichever is lower.
The developers had sought clarifications to the operational guidelines the MNRE had issued way back in August 2019, to implement the second phase of its grid-connected rooftop solar photovoltaic programme. The Centre also clarified that the state and private discoms would be eligible for advance central financial assistance (CFA) up to 30% of the total CFA.
Tariff war: In a win for companies, Gujarat discom told to extend validity of scrapped auction
In a breather for developers, the Appellate Tribunal for Electricity (APTEL) directed the discom Gujarat Urja Vikas Nigam Limited (GUVNL) to extend the validity of bids placed by developers in its scrapped 700 MW solar auction by two weeks. It also directed the state distribution company (DISCOM) not to allocate the capacities awarded to the developers to third parties if it decided to float the 700 MW tender again.
Companies such as SJVN Limited, Tata Power, TEQ Green Power (a subsidiary of O2 Power), and Vena Energy Renewables had approached APTEL seeking relief following GUVNL’s decision to reissue its 700 MW solar tender. The Gujarat Electricity Regulatory Commission (GERC) had allowed GUVNL to cancel the auction and re-tender it to discover a lower tariff for the projects. The industry severely criticised this move since the tender was scrapped over five months after the auction was concluded and letters of award were issued. The state DISCOM wanted to discover lower tariffs in another auction.
Wind energy developers approach HC, say Andhra Pradesh discoms have not paid since March 2020
Wind energy companies have now filed interlocutory appeals in the Andhra Pradesh high court against the state discoms for not making payments since March 2020. The Andhra Pradesh government attempted to renegotiate solar and wind Power Purchase Agreements (PPAs) signed and sealed by the previous state government, saying it maintains the erstwhile government had signed them at disproportionately high rates, alleging there was corruption involved.
In late 2019, the court directed the discoms to pay a tariff of Rs2.43 per unit to all wind developers henceforth, the record low wind tariff at the time, till the matter was resolved. But developers complained that they have not received any payment after March 2020 even at the interim rate.
BSES discoms install over 3,000 rooftop solar net metering connections
Pushing rooftop solar in Delhi, discoms BSES Rajdhani Power Limited (BRPL) and BSES Yamuna Power Limited (BYPL) installed over 3,000 rooftop solar net metering connections with a connected solar load of 106 Mwp (Megawatt peak) since 2015. The discoms are aiming to install 1,000 solar rooftop connections by 2022. The discoms said consumers, including residential and commercial establishments, have accepted rooftop solar net metering in a big way.
According to BSES data, the highest number of rooftop solar net metering connections are in the domestic segment (1,805), followed by educational institutions (655), commercial establishments (554), industrial (35) and others (91).
UN regional meet to focus on energy transition in Asia Pacific during COVID-19
The United Nations Economic and Social Commission for Asia and the Pacific ESCAP Committee on Energy along with 53 countries, including India, will discuss energy transition in the context of the COVID-19 pandemic, focusing on policy solutions for a greener and inclusive energy future in Asia and the Pacific.
From February 24 to 26, the committee will review the draft regional roadmap on power system connectivity along with regional and national policies to support energy access, renewable energy, and energy efficiency. ESCAP reviews progress made towards achieving Sustainable Development Goal 7 (SDG7) on energy in the region.
Africa’s solar ‘gigawatt club’ adds 9 more countries
The first annual African Solar Energy Outlook 2021 report was released by the Africa Solar Industry Association (AFSIA). According to the report, nine more African countries joined South Africa and Egypt to become part of the solar ‘gigawatt club’, which has 37 countries. The ‘gigawatt club’ includes countries with installed capacity to produce 1 GW of solar power. The nine countries that are developing their solar infrastructure are Algeria, Zimbabwe, Zambia, Democratic Republic of Congo, Angola, Namibia, Ethiopia, Morocco and Botswana, the report said.
Nearly half the world’s population without access to electricity (591 million) is in sub-Saharan Africa, according to the International Energy Association.
Three-wheelers top EVs sold under ‘Switch Delhi’ campaign
At least 5,534 electric three-wheelers have been sold so far under the ‘Switch Delhi’ campaign, making them the top-selling EV across all categories made available to manage the city’s air pollution. Under the scheme, the Delhi government mandated that all electric three-wheelers be covered under a Rs30,000 subsidy — that was previously only available to e-rickshaws — and the extension reportedly saves electric auto owners up to Rs29,000 per year by lowering their operational costs by 26%. For e-rickshaws, data suggests that the owners are able to save up to 33% on operational costs, and several more are expected to be sold under the eight-week long campaign.
NTPC to run fuel cell buses between Delhi, Jaipur and Agra
India’s largest power developer, NTPC, will soon launch hydrogen fuel cell buses between the cities of Delhi, Jaipur and Agra under the national “Go Electric” campaign. Each bus is expected to save up to Rs30,000 in monthly operational costs and the project’s announcement was also accompanied by the Union minister for power, RK Singh, saying the ministry would look to source green hydrogen in 4-5 months.
Moscow’s public transit vehicles to go fully electric by 2030
All of Moscow’s buses will reportedly go electric by 2030 as the city plans an overhaul of its current petrol- and diesel-powered public transport vehicles. The plan will expand Moscow’s 600-strong electric bus fleet to 2,000 buses by the end of the decade, and the city’s extensive tram network will also move to more power-efficient units. The city alone accounts for 10% of all of Russia’s electric vehicles, and a Russian university has also developed a novel way of recycling used li-ion batteries — that involves a cryogenic vacuum installation — to recover valuable metals “without the risk of explosion”.
Ford to sell only fully-electric cars in Europe by 2030
Ford Motors Corp. announced it would only sell electric passenger cars in Europe by 2030, which makes it the second large American automaker after GM to double down on its commitment to move away from the IC engine. Ford will be spending $1 billion to update its manufacturing facility in Cologne, Germany for the transition, and it has tied up with VW’s modular EV platform to develop some of its new all-electric models. Two-thirds of the automaker’s commercial vehicles — which include vans and trucks — will also go plug-in hybrid or fully-electric by 2030 as, again, like GM, Ford admitted that EVs were key to “future growth and profitability”.
Maersk’s new ships to stop burning fossil fuels
Shipping giant APM-Maersk announced that its newly constructed ships will no longer run on only fossil fuels, and instead “have to be able to” run on lower carbon alternatives, such as bio-methanol, cooking oils and ammonia. The firm’s CEO categorically stated that “we don’t need another fossil fuel”, which is a departure from other shipping lines that are moving to LNG to lower their emissions. While the cost and adequate supply of Maersk’s chosen alternatives will likely be a concern, it has calculated that even at double the costs, switching to cleaner fuels will raise prices of its common consignments, such as TVs, by only up to $1.
Maersk’s decision is based on its relationship with its clients, around 100 of which are targeting net zero carbon emissions for their supply chains by 2050, and could be a decisive shift for the industry as a whole as the firm is the world’s leading shipping line with a market share of 17%.
BlackRock: Oil and gas firms must declare emissions or face divestment
The world’s largest asset manager and investor, BlackRock Inc., stated that the oil and gas firms it is invested in must disclose and lower their carbon emissions from their Scope 1 and Scope 2 emissions, and also endeavour to cut emissions from the use of the products (Scope 3 emissions). BlackRock’s exposure to oil at the end of September 2020 stood at $90 billion, but Sandy Boss, its global head of investment stewardship, has clearly acknowledged that BlackRock was keen to engage with the largest companies on their climate action policies, since it intends to stay with them over the long term.
BlackRock’s global assets portfolio tops $8.7 trillion and its influence as a shareholder in some of the largest drilling firms will likely mount additional pressure on them to be more transparent on their plans to lower emissions. This is apart from the pressure exerted on them by activist groups such as ShareAction, that are engaging with prominent financiers like HSBC to stop their support for fossil fuels.
Travellers Europe opts out of supporting Adani Carmichael mine
In further deserting of support for the controversial Adani Carmichael project, Lloyd’s of London syndicate Travellers Europe announced that it would not support the thermal coal mine. The announcement comes as part of a change in strategy for Lloyd’s, which up until late 2020 had been silent on its support for coal mining despite several influential insurers in Europe, such as Allianz and Munich RE, pulling their support for the fuel.
Construction on the 10 million tonnes-a-year Carmichael mine has nevertheless started, but under Lloyd’s updated policy, no cover will be extended to new thermal coal, oil sands or Arctic energy projects from January 1, 2022. The group will also phase out all existing fossil fuel coverage by 2030.
Mexico pedalling backwards on climate action under new president’s disdain for clean energy
A new story by the Guardian revealed that Mexico was heading decidedly backwards on climate action under its new president, whose apparent disdain for renewables was amongst the key factors stalling investment in the country’s once-healthy clean energy sector. The story says that under President Andrés Manuel López Obrador (known popularly as Amlo), Mexico’s vision for energy security will include re-starting old coal plants, buying millions of tons of coal from small mines to salvage local jobs and the curtailment of clean energy mandates for utilities, who will instead have to buy more coal power. The plan will, however, refurbish existing hydroelectric facilities to help meet the country’s commitment of generating 35% of its power from renewables.
The changes are particularly notable as the country was the first from the developing world to table a climate plan before the Paris Agreement, and Amlo is reportedly determined to channel at least 80% of government spending into reviving fossil fuel projects — in sharp contrast to the rest of the G20 nations and the new US government.