Newsletter - May 27, 2020
The questionable business of weakening India’s environmental regulation
When Indian finance minister Nirmala Sitharaman announced that India’s economy will be revived through a review of laws, along with labour, liquidity and land, there was little doubt that environmental regulations would be a prime target. Even though the FM may have been alluding to forthcoming changes, she is only providing a COVID-tinge to a movement that is well in motion. India’s push for improving its ‘ease of doing business’ indices has come at the cost of environmental regulations and implementation for a while now. While economists have continued to argue over the true value of the Indian government’s purported ₹20 lakh crore economic stimulus package, there is little doubt about which way the wind is blowing when it comes to environmental considerations in matters of economic revival.
What makes the Centre’s lack of appetite to make sustainability a feature of any economic revival even more worrisome is the quiet, but rapid relaxation of environmental regulations in the country. Experts are concerned about the rushed manner in which environmental and forest clearances were given in a virtual meeting of the Standing Committee of the National Board for Wildlife (NBWL) on April 7, 2020, to 31 proposals affecting 15 tiger reserves, sanctuaries, notified eco-sensitive zones, deemed eco-sensitive zones and designated wildlife corridors. The projects were cleared after considering each for a grand total of 10 minutes. Environmentalists and conservationists even wrote to environment minister Prakash Javadekar in early May, urging him to stop the clearances during the COVID-19 pandemic.
But the Modi government has been approving such projects ever since it first came to power in 2014. In the past six years, the government has approved more than 270 projects in and around Protected Areas (PAs), according to an IndiaSpend analysis. The same report mentions how the Ministry of Environment, Forest and Climate Change (MoEFCC) has approved 2,256 of the 2,592 proposals that it received for environment clearance, including the 278 projects in PAs, between July 2014 and April 24, 2020 – that adds up to a clearance rate of 87%, according to the analysis. For comparison, environmental clearance rates between 2003 and 2014 was around 70%. Ironically, the high approval rate of projects has featured in lists of achievements of the MoEFCC, reaffirming the transformation of regulatory authorities into mere clearance desks.
The uncertainty surrounding the national lockdown over the past two months has only seemingly catalysed project clearances further. According to the meeting agendas posted on the ministry website, 191 projects have been identified for clearances by various expert appraisal committees. The proposals include Etalin hydropower project in Arunachal Pradesh, mining blocks in Dehing Patkai in Assam and the Central Vista project in New Delhi, among several other big-ticket infrastructure, mining and energy projects. The railways, too, has been exempted from environmental clearances for 13 of its projects that are likely to adversely impact a national park, a tiger reserve, a tiger corridor and wildlife sanctuaries across the states of Uttar Pradesh, Madhya Pradesh, Karnataka and Goa.
States, too, seem to have taken the cue and are rushing to push through approvals even as the country is hobbled by lockdown restrictions. In Hyderabad, for example, the State Environmental Impact Assessment Authority (SEIAA) issued clearances to 57 projects in its first meeting since the lockdown this month. The projects include real estate ventures, stone and metal quarrying projects, and sand mining projects. The Karnataka government, too, cleared the controversial Hubbali-Ankola railway line, for which close to two lakh trees are expected to be cut in the biodiversity-rich Western Ghats region. Interestingly, the central government is yet to notify eco-sensitive zones in the Western Ghats despite finalising the area in 2018..
On the procedural front, new Environment Impact Assessment (EIA) norms put forth by the government conveys the Centre’s intentions regarding environmental regulations. The timing of issuing the draft, which waters down provisions laid down in the 2006 EIA notification, is curious considering that the amendments had been first proposed a year ago. While the notice period for public consultations has been reduced from 30 days to 20 days, the draft notification also includes the relaxation of the provisions for submissions of self-compliance reports from six monthly to yearly. Further, almost all categories of construction activity have been exempted from conducting assessments and ‘detailed scrutiny’ by expert appraisal committees.
The most significant change in the draft notification, however, is the ex post facto clearance. What this means is projects that have already started operations without getting necessary clearances – which includes construction, installation, excavation and production – can be legalised when the draft notification comes into effect. Experts describe this as an attempt to legalise the violations committed by the project proponents. While the government has extended the deadline for sending in objections and suggestions to the draft notification from May 22 to June 30, it is hard to imagine how stakeholders, such as the tribal and coastal populations, can register their objections considering their limited access to technology and other means of communication, especially amidst the chaos of the lockdown.
This move to dilute environmental norms is compounded by India’s abysmal record on implementation and monitoring. An audit of the MoEFCC by the Comptroller and Auditor-General of India in 2016 found serious deficiencies in the monitoring of conditions attached to the provision of environmental clearances. The audit also revealed that not a single project proponent had been penalised for violating such conditions. The likely failure to implement emission standards for thermal power plants, which have also been now allowed to use coal with high ash content, even five years past the first deadline of 2017 is case in point. Incidentally, LG Polymers, source of the recent deadly gas leak in Visakhapatnam, was found to be operating without a valid environmental clearance as well.
The dilution of India’s environmental norms is steeped in the logic that environmental protections are a deterrent to investment. However, this premise itself has been found to be unproven if not fallacious upon closer analysis. “We should currently be focused on how to alleviate the immediate crises for migrants and the loss of livelihood, and how to do that in a way that gives us better environmental and social outcomes in the long run. I don’t see how environmental regulations are the constraints to get back our economy on track and diluting them may not give us desired economic results in the short term and definitely not in the long term,” said Navroz Dubash, a professor at the Centre for Policy Research.
An extensive study of empirical evidences of the economic impact of environmental regulations, included in the 2016 Handbook of Environmental and Sustainable Finance, concluded that the adverse economic impacts of environmental regulations are not only exaggerated, but they could also have positive impacts by spurring efficiency, innovation and competition in industry. In fact, there isn’t much in terms of evidence to show that dilution of environmental regulations leads to any spike in investments either. “There should be no roll back of environmental laws and regulations. In fact, it might turn out to be counter-productive as I believe environmental regulations and implementations might actually be good for business in many ways,” noted Mahindra Group’s chief sustainability officer Anirban Ghosh, when asked how industry viewed recent developments. India’s progressive erosion of environmental laws since 2014, including the introduction of major structural changes to expedite clearances and industry-friendly amendments to key pieces of legislation, have not translated to any noticeable growth in investments in the country.
The flip side though, in terms of environmental damage and vulnerability, could be considerable, especially considering the likely increase in intensity and frequency of natural disasters and other impacts of climate change. From a climate perspective, dilution of environmental norms is a double whammy. On the one hand, lax regulations and unvetted clearances could pave the way to diminished mitigation potential with incremental losses of forest lands and continued violation of industrial emission standards. At the same time, degradation of ecosystems due to lack of protection will likely increase the destructive potential of climate impacts such as extreme weather events and sea level rise. Biodiversity and habitat loss due to development projects will also likely add up in the absence of robust regulatory safeguards, potentially raising risks of zoonotic infections in the country. The floods in Uttarakhand in 2013 and in Kerala and Karnataka in 2018 are the most destructive in an exhaustive list of recent examples where poor environmental planning compounded the damage of extreme events.
Assaults on environmental regulation by India’s government over the past six years betrays an abject lack of understanding of the conception of these protections. Environmental regulations are after all nothing but legislative responses to the risks that society faces from any development. The erosion of these safeguards serves only to transfer the costs on to society in terms of assumed risks. While India might still cobble together the numbers to satisfy international climate commitments, any gains will be wiped out several times over if regulations fail to address and account for the risks of industrial development borne by the environment and society. Unfortunately, in its desperation to woo industry, India is overlooking a hefty and compounding cost on its future.
Cyclone Amphan wreaks havoc in West Bengal, Bangladesh; scientists blame climate change for increased intensity
At least 85 people have died in West Bengal, while 22 lost their lives in Bangladesh as Cyclone Amphan ripped through the region on May 20. Kolkata was badly hit as well as several districts in Odisha with several people rendered homeless with no means of communication as telephone lines were down as were power connections. Officials said at least 1.5 crore people have been affected by the cyclone, which had a wind speed that went up to 150-160 km per hour in coastal areas.
Scientists have concluded that climate change is to blame for the rise in high-intensity cyclones of late. According to them, the damage caused by cyclones, including Amphan, has risen because of human activities that have increased sea surface temperatures, thereby pushing up the maximum potential energy that cyclones can reach.
Scientists also believe that a reduction in air pollution in South-East Asia because of the COVID-19 lockdown could have also had an influence on the intensity of the storm. Aerosols, which are a product of human-related air pollution, have the ability to decrease the intensity of storms. This is because aerosols reduce the amount of sunlight reaching the Earth’s surface, thereby cooling sea surface temperatures. But with the lockdown in place, aerosol levels have drastically reduced, which means sea surface temperatures have risen, thereby increasing the intensity of the cyclone.
The India Meteorological Department (IMD) said several parts of India will feel the after-effects of the cyclone. It predicted a two-four degrees Celsius rise in maximum temperature over northwest, central and west India immediately after the cyclone mostly because of the change in wind patterns.
Heatwave grips North India, conditions likely to expand in East and Central India over coming days
Parts of northern and central India are currently reeling from a severe heatwave with temperatures ranging from 42°C to 45°C over Punjab, Rajasthan, Haryana, Delhi and Madhya Pradesh since May 25. Churu in Rajasthan recorded the highest temperature of 47.5°C on May 25. The India Meteorological Department (IMD) has said that the conditions are likely to persist until May 28, and has forecast an easing of heatwave conditions May 29 onwards. The Met department has also said that conditions are likely to expand eastwards towards Bihar and Jharkhand and southwards up to parts of Andhra Pradesh over the next few days.
Locust invasion reported in India’s heartland
Locusts have invaded different parts of India. The city of Jaipur, Rajasthan, woke up to an unusual sight on Monday morning – a swarm of locusts flying in the sky. According to officials, the invasion has affected half of the 33 districts in the state. The locusts entered the state through Pakistan in April. Madhya Pradesh also reported its worst locust attack in 27 years. According to experts, if the invasion isn’t contained soon enough, the locusts will destroy moong cereal crop worth Rs5,000 crore. The Uttar Pradesh government has declared a state-wide alert after locusts invaded farms in around 17 districts. A few villages in eastern Maharashtra have also reported an invasion in the past few days.
Expect above-normal hurricane season, say US forecasters
Hurricane season is about to begin in the US and the National Oceanic and Atmospheric Administration’s (NOAA) Climate Prediction Center is expecting an above-normal 13-19 named storms this year. This would be in keeping with the 18 named storms recorded last year and 15 in 2018.
In central Michigan, as floodwaters after severe storms began to recede, President Donald Trump declared a state of emergency. The flooding, which came as a result of two dam failures, plunged parts of the city underwater, forcing thousands to evacuate. Making the situation worse was the fact that some of the water spread into a Dow Chemical Co plant and were confirmed to have reached the plant’s on-site containment ponds.
Scientists concerned about growing threat of ‘ozone-friendly’ chemicals
The levels of ‘ozone-friendly’ chemicals that are used in almost all new cars are increasing in the environment gradually and may lead to cancer, decreased fertility and liver damage, according to researchers. Scientists have found vast amounts of these long-lasting chemicals called short chain perfluoroalkyl carboxylic acids (scPFCAs) in Arctic ice samples from as far back as the 1990s. While scientists are not aware of the levels of toxicity of these chemicals, they are certain that they are contaminating the environment.
India announces plan to privatise power distribution in UTs; experts express doubts
As part of the ₹20 lakh-crore economic package, India’s finance minister Nirmala Sitharaman announced the government’s decision to privatise the power distribution sector in the country’s Union Territories (UTs). The government hopes this will become a model for other states to follow suit.
According to experts, however, the lack of a concrete strategy to implement such reforms, which are not new and have been announced before, would mean failure, much like in the case of the Modi government’s first bailout and reform programme for DISCOMs, Ujwal DISCOM Assurance Yojana (UDAY).
Moody’s Investor Service has changed its outlook of the Indian power sector from stable to negative citing payment delays, decline in power demand, and adverse impact from government measures that favour consumers more than utilities as some of the factors for the downgrade.
Decide on pending claims before making policy changes, Niti Aayog tells mining ministry
The mines ministry has received a stern warning from government think-tank Niti Aayog not to go ahead with any policy changes until pending mining applications are resolved completely. The think-tank believes not taking a decision on pending claims could adversely impact investor confidence.
Niti Aayog’s warning was in response to reports that the Centre is considering major mining reforms, including the deletion of a provision in the Mines and Minerals (Development and Regulation) Act, 2015 that guarantees a successful explorer the right to move ahead –from a reconnaissance permit to a prospecting licence, or from a prospecting licence to a mining lease. The mining ministry hopes this move would free up at least 500 mineral areas that can then be put up for auction.
Don’t envisage any damage to environment, Dibru-Saikhowa National Park while drilling: OIL
Oil India Limited (OIL) has publicly stated there will be no damage to the environment and the Dibru-Saikhowa National Park in Assam when the company begins drilling for hydrocarbon resources up to 3.5km underneath the surface of the national park.
OIL, which has stated it has received environmental clearance from the Ministry of Environment, Forest and Climate Change (MoEF&CC) for extension drilling & testing of Hydrocarbons at seven locations under the park, cited the use of latest technology called Extended Reach Drilling (ERD) technology to ensure no environmental damage.
EU’s green COVID-19 recovery plan includes clean power, hydrogen fuel
The EU’s recovery plan from the Coronavirus pandemic promises to be environment friendly. The package will focus on building renovation, renewable energy and clean hydrogen fuel. The European Commission will set aside 91 billion euros each year for renovations including rooftop solar panels, insulation and renewable heating systems. The EU also plans to tender 15GW of renewable energy capacity in the next two years, with expected investments of €25 billion. A €10 billion fund, to be overseen by the European Investment Bank, will offer loans to renewable energy and clean hydrogen projects.
UK proposes a full year delay for COP26
The UK government has proposed delaying the COP26 climate negotiations by a full year to November 1-12, 2021. Co-hosts, UK and Italy, had jointly on April 1 decided to postpone the meeting, which was originally to be held in November 2020 in Glasgow due to disruptions from the global COVID-19 pandemic. The delay in the upcoming round of negotiations comes as the enforcement of the Paris Agreement enters a crucial phase, and is likely to cause further delays in future meetings.
EU aims to halve use of chemical pesticides by 2030
The European Commission unveiled ambitious plans this past fortnight in a bid to align the European Union’s (EU) agriculture sector, which accounts for 10% of its greenhouse gas emissions, with its climate policy aims. The commission said it would halve the use of chemical pesticides by 2030, and aim to ensure at least 25% of agricultural land is reserved for organic farming. This stands at 8% currently. The EU also plans to reduce the use of antibiotics for fish and animal farming by 50%.
China’s carbon-intensive economic recovery plans a concern, say experts
China’s post-COVID-19 recovery plan has worried experts, who say the country is relying majorly on heavy industry and carbon-intensive projects to boost its economy. China had pledged to cut the amount of CO2 emissions it produces per unit of GDP – by 40%-45% from 2005-2020 as per the Paris Agreement. But the COVID-19 crisis has caused much damage to the country’s economy, especially its less carbon-intensive sector, making the target difficult to meet.
China’s state planning agency, the National Development and Reform Commission (NDRC) has already announced plans to focus on traditional infrastructure projects such as railways and water treatment and new high-tech infrastructure such as more efficient ultra-high voltage (UHV) power transmission lines. It also approved five coal power plants in March to provide power to two UHV lines.
This won’t be the first time China has relied on carbon-intensive growth, according to the Helsinki-based Centre for Research on Energy and Clean Air (CREA), while citing SARS and the global financial crisis as previous instances.
Brazil defers vote on controversial land bill
Brazil’s lower house of Congress last week delayed voting on a land bill that critics claim will lead to deforestation in the Amazonian rainforest. The legislation, which seeks to provide land deeds to illegal settlers in the rainforest has led to several European companies threatening to boycott Brazilian exports. Environmentalists have opposed the bill stating that it will serve to reward illegal land grabbing and deforestation, mainly for agriculture. The current version of the bill is a watered down version of a 2018 draft that sought to open up the rainforest to farming activity.
Power plants allowed to use dirty coal, with high ash content
In a major setback to laws that regulate PM 2.5 levels in ambient air, new environment norms will allow power plants to use coal irrespective of its ash content. Environment ministry has dropped the 2014 notification that mandated coal plants located 500 km from pit-head to use coal with less than 34% ash content. Now it is up to the power plants to meet the pollution and emission norms of the Central Pollution Control Board.
The new norms make it mandatory to transport coal in covered vehicles and stresses on installing technologies to cut emissions at thermal power plants. The government also spelt out norms for washeries, management of ash ponds and disposal of ash by power plants.
In connected news, the Centre has also announced its decision to eliminate coal imports for use in India’s thermal power plants. The demand will now be met entirely through domestic supplies via Coal India Ltd.
Most coal plants to miss 2022 emission deadline, state-owned units worst performers: Study
Yet again, 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, says the latest report by Centre for Science and Environment (CSE). Analysts said even after they were given a five-year extension in 2017, most of the coal plants will not be compliant with the crucial sulphur dioxide (SO2) standards by 2022.
Experts say coal power plants account for 60% of all the particulate matter emitted by the industry, 45% of SO2 emissions, 40% of oxides of nitrogen (NOx) and 80% of mercury emissions.
It takes two years to install Flue Gas Desulphurization (FGD) at a unit to cut emissions. To meet the 2022 deadline, that process should have begun in 2019, the report observed. As per the CPCB’s assessment, nearly 50 GW of thermal power capacity requires the technology. The CSE report said compared to units owned by the Centre and private industry, the state-owned units have been the worst performers – only one has initiated the procedure of installing the technology to curb emissions so far.
Punjab farmers burn crop stubble, break 2-yr record despite ban, 322 farmers booked
Despite a ban, Punjab farmers burnt the stubble of their wheat crop to prepare fields for paddy crop. The fires broke a two-year record this season between April 15 and May 24. With a week more to go for the season to end on May 31, Punjab farmers have already lit over 13,026 field fires. There were a total 11,698 and 11,510 fires recorded in 2019 and 2018, respectively, for the season.
Coal power plants, idling ships main cause of SO2 spike in Mumbai during lockdown?
Most pollutants in Mumbai’s air fell drastically during the three phases of the COVID-19 lockdown, except the level of sulphur dioxide (SO2), which increased because of coal power plants and shipping industry as possible sources, an analysis of CPCB data revealed. The Central Pollution Control Board (CPCB) data, from March 25 to May 18, showed that the levels of five out of six pollutants fell in the past two months compared to pre-lockdown levels.
The average PM2.5 levels reduced from 45 µg/m3 during pre-lockdown to nearly half (22.6 µg/m3) by the third phase. The NO2 levels, emitted from burning coal and oil, fell most drastically from pre-lockdown levels of 37.5 µg/m3 to 9.8 µg/m3 in the third phase.
The levels of SO2, that causes asthma, bronchitis and emphysema, fell from 15.4 µg/m3 pre-lockdown to 12.5 µg/m3 during the first phase, then surged during the second (24.6 µg/m3) and third phases (36.2 µg/m3). Experts said with industrial activity coming to a stop, the possible main SO2 sources were coal-based power plants and idling ships burning heavy fuel oil.
Poisonous heavy metals, hazardous PM2.5 levels in Chhattisgarh districts alarm researchers of new study
A new air quality report of Chhattisgarh’s coal and industrial districts of Korba, Champa and Raipur revealed hazardous levels of PM2.5 (nearly 9 times the national permissible limit) and presence of heavy metals in the air samples, including neurotoxins such as manganese and lead, cancer-causing nickel and crystalline silica, a respiratory irritant, which leads to the fatal disease silicosis on long-term exposure.
The report ’Poison in Air – II’ released by Chhattisgarh’s State Health Resource Centre (SHRC) studied air samples from nine strategic locations: seven sites, including MP Nagar, Chimney Bhatta, Darri, District Hospital and Rani Dhanraj Kumar PHC, were in Korba. Air samples from Maruti Township in Champa and Priyadarshini Nagar in Raipur were also part of the study.
Major spike in air pollution post lockdown, China vows to extend clampdown
China’s air pollution rose sharply in April after the country lifted restrictions. The study by the Finland-based Centre for Research on Energy and Clean Air (CREA) shows that within 30 days, (April 12 to May 8) pollution exceeded the levels during the same period last year. The researchers analysed the data from 1,500 air quality monitoring stations to find a spike in particulate matter (PM 10, PM2.5), nitrogen dioxide (NO2), sulphur dioxide (SO2), and ozone during the period. Heavy industrial activity was seen as the main reason behind the spike.
The report said the industrial areas with a large number of factories and coal power plants showed greater increase in NO2 emissions, compared to residential areas where vehicles are the main source of NO2 emissions.
Meanwhile, China vowed to strengthen anti-pollution controls, but warned its energy goals would depend on the impacts of COVID-19. China said it will continue to back less polluting heating systems by replacing coal with gas or electricity, and will impose ultra-low emission standards at more steel mills. The government announced it will allocate 407.3 billion yuan ($57 billion) to environment protection in 2020, up from 390.6 billion yuan last year.
Locked down world cut daily CO2 emissions to 2006 levels in early April: Study
As countries imposed lockdowns, CO2 emissions, each day, fell by average 17% globally and by 26% on average in individual countries, during early April 2020, compared with average 2019 levels, says the latest study. Such low levels were last recorded in 2006, the study says. Depending on the intensity of confinement imposed by various countries, the study estimates a fall of 2,729MtCO2 (7.5%) by the end of 2020. The peer-reviewed research is the first to quantify daily CO2 emissions globally and for 69 countries separately. The researchers said that access to a daily CO2 emissions data would be “incredibly useful” for campaigners and policymakers.
ACME cancels record ₹2.44 tariff Rajasthan contract citing COVID-19 uncertainties
Project delays and uncertainty over COVID-19 are why India’s ACME Solar cancelled its record ₹2.44 rupees ($0.0323) per unit, lowest tariff, contract with the Centre-backed Solar Energy Corp of India (SECI). The company said land acquisition delays coupled with delays over disruptions in supplies from China because of the pandemic forced them to claim an exit under “force majeure”.
In 2017, ACME’s winning bid of ₹2.44 ($0.0323) per unit to set up a 200 MW project in Rajasthan helped India attain low solar energy prices. The company told the regulator Central Electricity Regulatory Commission (CERCI) that uncertainty over COVID-19 would further delay projects that had already been delayed by 15 months.
SECI rejected ACME’s claims of delays saying there was nothing that prevented the company from implementing the projects. SECI also threatened to encash ACME’s bank guarantee, but later decided to resolve the issue “by mutual discussion”.
Meanwhile, COVID-19 related delays have actually shifted 2020 solar project timelines to 2021, resulting in an estimated 5,000 MW capacity addition in 2020, which is 32% lower than 2019, a Mercom report said. However, a new report by Paris-based IEA estimated India’s solar PV deployment to fall by 23% in 2020 compared to 2019, with the largest drop anticipated in distributed PV installations. IEA, however, expects solar projects to bounce back in 2021 with capacity additions exceeding 2019 levels.
India’s solar tariff is 30% cheaper than current coal power cost: IEEFA
Despite tumbling tariffs and uncertain returns, why are global investors backing solar projects in India? That’s because the country’s current solar tariffs, oscillating between the lows of ₹2.50 to ₹2.87 per unit, are 20-30 % cheaper than the cost of coal-generated power, says the latest joint study by IEEFA and JMK Research. Experts say the 10-12% returns are very competitive compared to coal plant tariffs and profitable for discoms entering long-term power-purchase agreements.
Analysts say the developers factor in the risks while assessing the cost of every component. Factors such as sources of funds, risk-taking appetite, the project pipeline, interest rates, module costs, and capacity utilisation factors (CUF) have a hand in tariff costs and returns, according to experts.
Since 2016, India’s solar installations have jumped from 6 GW to almost 35 GW, covering a third of the ambitious 100 GW by 2022 solar target.
Nearly 6,00,000 clean energy jobs were lost to COVID-19 lockdown in the US
According to an analysis of US unemployment data, the country lost nearly 6,00,000 jobs in the clean energy sector since the lockdowns stopped production of components used in the solar industry, electric cars and installations in homes and offices. In March itself, when the lockdowns started, 1,47,100 clean energy jobs were lost. After that, an additional 4,47,200 jobs have been lost in the sector. The numbers have exceeded the projections made by BW Research Partnership last month, which was 5,00,000 clean energy jobs by June. That figure has been revised to 8,50,000 now.
Analysts expect unemployment in the clean energy sector to only rise. According to US federal data, unemployment claims touched 33.5 million since mid-March. The sudden unemployment has been a rude shock for what had been a growing clean energy industry. The analysis said nearly 6,00,000 lost jobs is more than double the number the sector has created since 2017.
Australia’s Reserve Bank study triggers calls for stimulus to renewables
Will Australia provide stimulus to its much-ignored renewables energy sector as part of its economic recovery post lockdown? A March study conducted by the Reserve Bank of Australia (RBA) exposing a huge decline in investments in renewables energy sector in the wind and sun-rich country in 2019 has triggered calls for the central and state governments to revive the sector as part of the post-pandemic recovery.
According to RBA, in 2018, Australia witnessed an increase in renewables investment amounting to 5% of non-mining business investments then. But a year later, only 50% of the large-scale clean energy projects could be launched. Experts say the sectoral decline may continue since the country doesn’t have fresh targets and issues of integrating solar and wind farms to the national grid in far-flung areas haven’t been resolved.
US is world’s most favoured RE destination in 2020, not China: EY
Consultancy firm Ernst & Young (EY) has designated the US as the world’s most favourable RE market, followed by China, in its annual list of 40 most favourable RE business destinations. The US bagged the top spot after 2016. EY said the US won mainly because of its short-term extension of a production tax credit for wind projects and $57 billion investment plan to install up to 30 GW of offshore wind by 2030, the report said.
Analysts are expecting a huge surge in RE investments in the US this year since wind projects, which began construction in 2016, need to be operational by the end of the year to qualify for the US tax credit. EY reported that China RE growth slowed because it gradually withdrew RE subsidies. China also witnessed a fall in demand, which impacted its global ranking.
Denmark to build two “energy islands” of offshore wind capacity
Denmark has decided to build two ‘energy islands’ of 40 GW of offshore wind capacity as part of its 2030 target to reduce emissions by 70% from 1990 levels. Denmark has also pledged to be carbon neutral by 2050. The legally binding target, which was approved by parliament six months ago, is one of the most ambitious globally. The energy island proposal is subject to parliamentary clearance.
The two islands will be capable of generating more power than Danish households’ annual consumption. The government plants to export its green power to neighbouring European countries. One of the two islands would be artificially built in the Northern Sea (connecting to Netherlands) and the other at the natural island of Bornholm in Baltic Sea (connecting to Poland).
New study backs used EV batteries for grid energy storage
An important new study published in the journal Applied Energy has backed the use of depleted EV batteries for second life as storage capacity for utility-scale solar power. The study found that even though such batteries were left with only about 80% of their rated capacity, they could be connected in an array to provide sufficient storage capacity for a hypothetical 2.5MW solar farm in the US. More importantly, they were also the more economical option as compared to new batteries, as long as they cost up to 60% of the latter.
Tesla unveils plans for million-mile batteries, GM close behind
Tesla Motors’ CEO Elon Musk has unveiled plans to launch low-cost EV batteries that could last for one million miles worth of driving, or be used for energy storage. The advancement would make them the longest lasting in the segment since current EV batteries typically last between 100,000-200,000 miles. The new batteries are being developed in partnership with China’s CATL, but they may see competition from GM, which also has announced that it is “almost there” in launching its own line of million-mile batteries.
Hero Electric offers three-day return on e-scooties, VW trials online EV bookings
Hero Electric has offered its online customers a first-of-its-kind return policy for its e-scooties, under which they can return the vehicles within a three-day window for a full refund. The offer is possibly a way to get more customers to try an electric two-wheeler — which dominates EV sales in India. Meanwhile, the head of India’s EV manufacturers’ association, SMEV, has commented that in light of the costlier BSVI vehicles entering the fray, electric scooters should see better sales figures as the country steps into economic recovery.
In Europe, German automaker VW Group may be following Tesla’s footsteps as its ID.3 electric cars will only be available online going forward. The idea is gradually reshaping the car-buying experience as it taps into EV customers’ certainty of what they want in their cars. It could also help some dealerships earn better margins as the vehicles’ prices will no longer be up for negotiation.
South Africa’s Mellowcabs possibly headed to India
An innovative new “tuk tuk” developed in South Africa may be headed to Indian cities soon, as the product claims to be the world’s first metered electric cab and is certified to be fully road-legal in all countries. Called the Mellowcab, it can run for 120km on a single charge and is designed to operate within a 3-4 km radius.
It features regenerative braking and also comes with an onboard solar panel, which can supply up to 35% of the cab’s power. The product may be especially suited to the Indian market due to the roughly 300 million “tuk tuk” trips made across the country every day — several of which are increasingly serviced by locally made e-rickshaws.
India approves ‘no eligibility’ commercial coal mining, PFC & REC funded 8.8GW of new capacity in 2019
The Indian government has approved a new mechanism for commercial coal mining under which any entity — even without any prior expertise or qualification — will now be eligible to mine coal. The directive is aimed at boosting the country’s domestic coal output and will offer 50 new blocks to commence operations with immediate effect. Furthermore, the Centre will also switch from a fixed charge per tonne model to a revenue sharing model to attract more players and bring transparency to the process.
However, India is also weighing its support towards coal gasification and liquefaction to reduce the fuel’s overall climate impact, and to gradually build its stake in a ‘gas-based economy’.
On the other hand, the Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), two of India’s largest public sector lenders, continue to lend huge sums to new coal power plants despite their tariffs already being 60-70% higher than the average renewables’ tariff of ₹2.5-2.8/kWh.
As of December 2019, PFC and REC together had lent ₹343.746 crore (~$49 billion) — 54% of their spending — to coal plants, which in turn has increased the share of non-performing assets on their balance sheets to ₹47,454 crore (~$6.8 billion). The two firms also together financed all of the 8.8GW of India’s new coal capacity, even though IEEFA has questioned how they expect to recover their investment in light of the mounting challenges.
India’s coal PLFs plummeted to 42% under COVID-19, may stay below 53% for FY21
The average plant load factor (PLF) for coal plants in India dropped by nearly 22% year-on-year to go from 63.1% in April 2019 to 41.9% for last month. The sharp drop is due to fall in power demand over the country-wide lockdown, and private coal plants have suffered the sharpest decline as their average PLF was down to a mere 44%. Government-owned plants, such as NTPC’s, fared better at 49.9% — even though that too was a drop of 22.6%.
The PLF for Adani’s Mundra plant dropped from 84.7% to 51.6% and for Tata’s Mundra unit, the figure shrunk nearly 20% to come down to 61.4%. The numbers highlight the precarious health of coal power plants in India, and to put it into context, the lowest PLF ever recorded in India was during 1985-86, when it stood at 52.4%. Going forward, CARE Ratings estimates that the national average PLF will stay below 53% for FY21 due to lower economic activity and the expanding share of renewables.
Spain’s proposed net-zero law could ban all new coal, oil and gas projects
The prime minister of Spain has proposed a new net-zero law that, if passed, would immediately ban all new coal and oil & gas projects in the country. The draft bill is currently with the Spanish parliament and may be passed before the end of 2020, following which targets such as ending direct fossil fuel subsidies, switching to 100% renewable energy by 2050 and even using alternative fuels for aviation will become mandatory. Interestingly, the country may also introduce the subject of climate change in its school curriculum.
OIl Change International: G20 funneled $77 billion to oil & gas every year since 2017
Oil Change International’s latest analysis has found that $77 billion were funnelled to oil and gas projects around the world by the G20 nations every year since 2017, despite their climate commitments in light of the Paris Agreement. The quantum is still three times as much as that going to renewables, and is mostly handed out via govt. backed loans and guarantees to corporations or under the garb of developmental projects.
Also, the report highlights three important findings: that China, Japan, South Korea and Canada were the worst offenders — together accounting for $50 billion a year, that because the channel differs from the roughly $80 billion a year in fossil fuel subsidies, the financing is harder to track, and that large drillers, under the media attention on Covid-19, were buying out smaller oil and gas firms to consolidate their market shares before oil prices stabilise.
Australia’s new emissions reduction plan to fund coal and gas through clean energy fund
Australia has unveiled a new climate action plan to meet its Paris Agreement obligation by 2030, under which the county will prioritise carbon emissions reduction while staying away from setting a price on carbon. The country has the highest CO2 emissions per capita at around 17 tonnes/person, and the plan comes after a review of its Climate Solutions Fund, which will use the money to not switch fully to renewables. Instead, it will finance the yet unproven approach of carbon capture and storage (CCS), while simultaneously exploring more power through coal and natural gas.
However, the review does recommend that 200 of Australia’s biggest industrial facilities, which together account for 25% of the country’s emissions, be given credits for fast-tracking emissions reduction. These could then be purchased by other businesses. Individual households may also be made to disclose their energy efficiency figures.
Greenpeace exposes advanced cloud computing for BIg Oil, only Google offers exit
Greenpeace USA’s latest report has exposed how some of the largest tech firms have won billions of dollars worth of contracts to assist oil and gas drillers optimise every stage of their operations through cloud computing and AI. The report shows how Microsoft, Google and Amazon are using advanced, AI-assisted analytics to help the drillers find deposits around the world and extract them at lower costs.
Big Oil is expected to spend around $15 billion on the service over the next decade, while Accenture estimates that cloud computing’s advances could help it generate as much as $425 billion in revenue by 2025. Yet, the practice highlights how the tech giants, even though they are publicly committed to going carbon-neutral and/or zero-carbon — mostly within 20 years, continue to profit from the very industry they are distancing themselves from.
However, while Google has issued a statement that says it will not assist any such services to the sector (but honor its existing contracts), Microsoft, in an oblique statement, has stated that it will remove all the carbon it has ever emitted from the air by 2050. Amazon, meanwhile, has stressed that ”the energy industry should have access to the same technologies as other industries.”