New entrants in the automobile space are keen to pull off a repeat of their two-wheeler success in four-wheelers
India’s EV market is going through a churn. Even as a silent battle rages on between manufacturers behind the scenes in the two-wheeler segment, the four-wheeler segment is showing signs of heating up. Despite the low share of EV sales as compared to conventional vehicles, doubts around the technology are rapidly evaporating.
And the new kids on the block have taken note. After successfully shaking up the two-wheeler market and catching established brands by surprise, new entrants in the automobile space are keen to pull off a repeat in four-wheelers. In August last year, two mobility start-ups announced within a week of each other that they plan to manufacture and on-road their debut electric car models within the next couple of years.
The $5 billion privately held Ola Electric—seemingly unaffected by a delayed launch of its first electric scooter and dogged by reports of these scooters spontaneously catching fire—announced that its first electric car would hit Indian roads in 2024.
Exactly a week later, Ahmedabad-based Gensol Engineering, a recently listed company that primarily provides engineering and construction services to solar power plant owners and electric vehicle leasing services, announced it would create a new vertical that would manufacture electric vehicles at Chakan, India’s auto manufacturing Mecca located just outside Pune. The Gensol group has other unlisted businesses, including the Delhi-NCR electric cab-hailing start-up Blu Smart, but chose to enter the fairly fraught business of car manufacturing through its single listed subsidiary. On the BSE, Gensol Engineering’s share price has risen steadily since the start of 2022. Following the announcement of the EV manufacturing, company shares briefly spiked almost 1800% from the price at the start of 2022 before coming back down. Currently, Gensol Engineering shares are priced at around ₹890, about 800% higher than a year ago.
Playing with the big boys
When it comes to the manufacturing of electric vehicles (EVs) in India, the story so far is a mix between the brazen confidence of recent upstarts and a prolonged reluctance to engage from established original equipment manufacturers (OEMs) with decades of engineering experience behind them. India’s transport minister Nitin Gadkari made note of this, too, in a recent interaction with the media. “I had the founder of India’s largest two-wheeler company admitting that they didn’t take my prophecy seriously three years ago and made the mistake to assume that EVs won’t work in India, due to multiple challenges,” recalled Gadkari.
The reluctance on the part of established manufacturers, whether due to disbelief in the technology or the enormous institutional heft that hindered the nimbleness required for a swift pivot, opened wide a window of opportunity for new entrants in the two-wheeler automotive space. And start-ups have not looked back since.
A report by global consultancy firm Arthur D Little found that India has 592 start-ups in the EV industry, as of March 2022, spread across battery manufacturing, charging infrastructure, and battery recycling. But the big guns, like Ola Electric, Okinawa Autotech, Ather Energy and Tork Motors, are choosing to go down the manufacturing route, hoping to displace incumbents such as Bajaj Auto, TVS Motor, Tata Motors, Maruti Suzuki, and Hyundai in a future where everything will be electric.
“The advantage that start-ups have over legacy OEMs now is the backing of private investors and venture capital firms willing to risk big on untested technology and new products,” Suraj Ghosh, director – Mobility, S&P Global, told CarbonCopy. “Legacy automakers who have been in the business for decades have to focus primarily on their traditional businesses (vehicles with internal combustion engines) since they need these profits to plough some back into R&D. Besides, racing to the market with new EV technology that is not thoroughly tested is a giant reputational risk they can’t afford.”
This explains why companies like Okinawa, Ola Electric, Pure EV and Ather Energy can continue to announce new launches despite their electric scooters being in the news through 2022 for catching fire. In fact, the Ministry of Road Transport and Highways has said that the first three companies had to recall up to 6,700 defective scooters from the market last year.
“No business being in EV”
“I am amazed; I know of some people, they have no R&D, no engineering, no purchase function; nothing more than just a half assembly facility; they are importing stuff, which has not been validated for the marketplace, and are putting it out. That is perhaps why you see fires, mishaps and accidents.”
Last June, Rajiv Bajaj, managing director of one of India’s largest two-wheeler manufacturers Bajaj Auto, made the above comments, throwing down the gauntlet to the new kids on the EV block. He was inaugurating the company’s maiden EV manufacturing factory at Akurdi, also outside Pune.
“Why are people who have no business being in the EV business trying to be in the EV business? It is partly because of the incentives,” Bajaj said.
Bajaj’s charge might hold some merit. Under the central government’s first phase of the Faster Adoption and Manufacturing of Electric Vehicles scheme, the eligibility requirements and product specifications were so lax that there were not enough quality checks on who was manufacturing or selling what product, Ghosh of S&P said.
“There were new players coming to the market every day and choosing vehicles from a catalogue of options they could import,” Ghosh said. “This is why there were so many fly-by-night operators selling e-rickshaws in India. On the one hand, the bulk of EVs on India’s roads today are e-rickshaws and they’ve driven the acceptance for electric mobility. But on the other hand, many of these brands are not reliable.”
Last year, the Indian government put a halt on FAME payouts to two-wheeler EV manufacturers, alleging that several manufacturers were misappropriating the subsidies for products that did not meet requisite conditions. In January, The Economic Times reported that the central government plans to recover some of these wrongly claimed subsidies by manufacturers who didn’t meet the quality and localisation requirements under FAME.
The subsidies offered to the electric mobility industry are numerous and generous, distributed to both manufacturers and consumers. Data compiled in a July 2022 research report by Climate Trends-JMK Research found that in addition to the central government’s incentives under the FAME programme, 19 states in India have rolled out their EV policies in the last three to four years, and a few more are in draft stage. “They have stated targets for EV adoption in these policies with varying timelines, either as a percentage of new vehicle registrations (ranging from 10-30% by 2025), or absolute number of EVs to be added on roads (ranging from 2-10 lakh).
Many states have also established clear targets for the procurement of EVs for government-owned vehicle fleets, either as cars for government officials or buses for public transport. Some states are offering OEMs reimbursement on state goods and services tax (GST), exemptions from road tax and registration charges, and capital interest subsidies ranging from 15% (Tamil Nadu) to 50% (Punjab) for setting up EV manufacturing units locally while Andhra Pradesh and Uttar Pradesh are pushing for the development of industrial parks that operate exclusively within electric mobility, manufacturing cars, battery management systems, etc.
Motorists in the market for a new ride receive government-supported discounts at the showroom. In July, the GST on EVs was cut to 5%, the lowest indirect tax slab. The lowest GST rate for an ICE (internal combustion engine) vehicle starts at 28% and can go up to 50% for the luxury segment.
How long these benefits will continue though is anyone’s guess. Gadkari, last month, opined that subsidies granted to the EV industry might not be needed before long. Although the statement was attached to the expectation of falling battery prices, the recent halt on FAME subsidy payouts to EV manufacturers might be giving us a teaser of what this future might look like. The halt has had an immediate impact on sales. With manufacturers forced to raise prices, demand for EV two-wheelers has slowed.
The short-term pain from this, however, might prove to be an equaliser as far as competition in the segment goes, giving legacy two-wheeler manufacturers much needed time to catch up.
EVs and a price-sensitive market
Despite the many advantages heaped on EVs at both central and state levels, the price gap between ICE and EVs is hard to bridge. The Honda Activa, one of the most popular motorcycle lines in India, has a starting price of ₹72,000; the electric Ola S1 comes at an introductory price of ₹99,999 while the Ather 450 Plus costs ₹1.17 lakh (all prices at ex-showroom in Delhi).
The difference is even more stark when it comes to four-wheelers. The Nexon EV, from Tata Motors, is the most popular electric car in India. The basic manual transmission Nexon in its petrol variant costs ₹7,60,000, while the diesel variant costs ₹9,90,000. The Nexon EV costs close to ₹16 lakh. (All prices are ex-showroom in New Delhi.)
These price differences influenced India’s largest car seller, Maruti Suzuki’s reticence so far about offering an electric product line for its faithful customers. Maruti knows its customer base unlike any other auto manufacturer and believes that an entry-level electric car needs to be priced at par with its ICE counterparts, in the ₹7 lakh-8 lakh segment, to mount a serious challenge to the dominance of cars burning fossil fuels.
In this context, Gensol’s recent announcement to start manufacturing EVs gains significance. Anmol Jaggi, the group’s founder, said in a conversation with Carbon Copy that his EVs that will launch in 2024 will be priced in the ₹5-6 lakh segment. Maruti first delayed, and then shelved plans to launch the electric WagonR by 2020. It has now said it will launch its first EV only in 2025. By then, if the Gensol launch succeeds, it will have to fight to protect its turf in the entry level personal vehicle segment.
Piecemeal policy push
In her Union Budget speech earlier in February in Parliament, finance minister Nirmala Sitharaman dismantled the Custom duty on capital goods used to locally manufacture lithium-ion cells for EV batteries. She also announced a greater outlay for the FAME-II subsidy scheme (up from ₹2,898 crore to ₹5,172 crore) and a scrappage policy for ageing combustion vehicles.
“While the focus on EV manufacturing and adoption is commendable, a larger green industrial policy strategy is missing as research and development investments to develop indigenous capabilities to climb the EV value chain are non-existent,” Dr. Easwaran Narassimhan, associate professor at the New Delhi-based public policy think tank Centre for Policy Research said.
Tech on wheels
An electric vehicle is, in essence, a computer on wheels. Designing these vehicles and building them demands more of software and less of automotive engineering abilities. For instance, an ICE car’s drivetrain (the transmission, axles, driveshaft etc that interact with the engine and propel the car into motion) can have as many as 2000 moving parts, compared to its electric counterpart’s 20.
For companies building purely electric vehicles, the need to perfect the software platform that supports their EVs is far more imperative. And this is far easier for a start-up to do without the legacy burdens of multiple existing ICE models that need to be retrofitted to turn electric. Some of the largest pure electric automakers globally, think Tesla or Rivian, have stolen a march over legacy ICE firms with precisely this advantage.
Securing supply lines
The other, of course, is soothing the EV convert’s range anxiety. Luxury EVs in India, like the Mercedes EQS and the Kia6, are already offering ranges comfortably over 600 km on a single charge. The future EV market will belong to those who can bring these batteries to the mass market models.
Again, this gets tricky for legacy auto makers of ICE vehicles who have traditionally outsourced battery making to third party suppliers. They are now scrambling to readjust to modern mobility where batteries will be a core competency.
Automakers in India are trying to secure these supply lines in-house, mimicking how global powerhouses like Ford, General Motors and Volkswagen are shifting to build EV capabilities. This February, Ola Electric signed a memorandum of understanding with the Tamil Nadu government to build a 20 gigawatt battery manufacturing unit, ahead of its 2024 four-wheeler launch.
A couple of years ago, the Japanese automaker Suzuki Motor Corp started producing lithium-ion batteries for electric cars in Gujarat in a joint venture with Denso Corp and Toshiba. Last year, Suzuki announced it would build a second battery plant adjacent to its auto manufacturing plant in Hansalpur, Gujarat.
Competition for capital
As it stands, who pulls ahead in the EV race depends a lot on how deep the coffers are. Indian EV start-ups raised $1.6 billion in 2023, a 117% rise over 2021, the market intelligence platform Tracxn reported. While this fund-raising drive is across the spectrum, from manufacturing to components and auto financing, OEMs are getting the biggest share of the pie.
Softbank-backed Ola Electric raised $200 million last year from Tekne Private Ventures, Edelweiss, and Alpine Opportunity Fund in Series-C, valuing itself at $5 billion. Ampere Vehicles raised $220 million in a Series-B fund and Ather Energy raised $128 million in Series-E.
The legacy players are looking to build their own partnerships too, although at a slower pace. In 2022, Tata Motors raised a billion dollars for its EV subsidiary from private equity financing by TPG Capital and the Abu Dhabi Development Holding Company. Recent news reports suggest it’s in the market for more PE infusion this year. Also last year, Mahindra and Mahindra and British International Investment agreed to jointly pool $500 million into the former’s new EV unit to launch its “born electric” line of sports utility vehicles. TVS Motors, India’s third largest two-wheeler company by sales, is in the market as well this year to raise up to $350 million for its electric mobility subsidiary.
Hare and tortoise races
“How the EV industry is positioned in India at the moment, with delayed entry from legacy players and several missteps by start-ups, I think the future can belong to either,” Ghosh of S&P said. “The wait-and-watch phase by the legacy players is over; we’re seeing Bajaj, TVS starting manufacturing lines, the car OEMs are ramping up performance and safety testing, getting supply chains for batteries in place, and launching electric-ICE hybrids to make the transition easier for their customers.”
The overhaul for a legacy OEM is far more complex than a blank state at a start-up. For all we know, new EV manufacturers are probably praying that their older established competitors will keep selling petrol and diesel models. Government revenues from the sales of these vehicles cross-subsidise the tax breaks propping up private investments in EV technology. And nobody is willing to give these up just yet.
India, this year, witnessed its hottest February since formal record-keeping began in 1901, with average maximum temperatures reaching 29.5°C across the country. The unusually early onset of high temperatures has sparked fears of dangerous heatwaves during Summer. Experts believe the unusually high temperatures over parts of India are because of weak western disturbances that haven’t brought adequate winter rain.
In December, there was a countrywide winter rainfall deficit of 14%. The dryness continued into 2023, with 27 out of the 36 states and Union territories receiving deficient, large deficient or no rainfall from January 1-February 15. India, as a whole, recorded a rainfall deficit of 30% in this period. If the trend does not change anytime soon, it could have a significant economic impact as winter crops may need to be harvested sooner than normal, and the warm, dry conditions could leave irrigation reservoirs depleted. The Centre set up a panel to deal with the problem in case of a heatwave. State-employed farm scientists from institutions such as the Indian Institute of Wheat and Barley Research, and Krishi Vigyan Kendras (crop advisory centres) have been deployed to fields in five states to apprise farmers of crop protection measures.
In addition, rising temperatures could also lead to an increased risk of forest fires and rapid glacier melt. The high probability of the El Nino climate pattern this year might lead to a potentially warmer summer, although assessing its impact on the annual monsoon rains is premature. There is an almost 50% probability of El Nino conditions prevailing during the summer months of June, July and August, and a 58% probability in July, August and September, according to the latest probabilistic estimates of the US National Oceanic and Atmospheric Administration (NOAA).
Antarctic sea ice hits record low, El Niño might cause irreversible damage: Study
The impact of the climate crisis is evident with the area of sea ice around Antarctica hitting a record low. According to scientists at the National Snow and Ice Data Center, the Antarctic sea ice extent fell to 1.91m sqkm on February 13, in comparison to the previous record set on February 25, 2022. The ice extent is expected to shrink even further before this year’s summer melting season ends. There has been a rapid decline in sea ice over the past six years and this development is worrying as the ice cover hardly changed at all in the 35 years before. The melting could be due to “unusually high air temperatures to the west and east of the Antarctic Peninsula, which were about 1.5°C above the long-term average”. Furthermore, there have been strong westerly winds, affecting the increase in sea ice retreat.
A new study published in the journal Nature Climate Change by CSIRO researchers also found that stronger El Niño events may accelerate the irreversible melting of the Antarctic ice sheet and ice shelves and the rise in sea levels. Researchers believe stronger El Niños could have a “double whammy” effect as it would lead to worsening extreme weather—heat, drought and bushfire risk in eastern Australia and floods in California, Peru and Chile—and accelerate sea level rise, causing more extreme coastal inundation.
A separate study by the National Centre for Polar and Oceanic Research (NCPOR) found that the Antarctic sea ice extent (SIE) is showing a sustained loss since 2016, and this could be a start of sea ice loss reported in the Arctic over the satellite period. In Antarctica, sea ice forms and grows freely in cold waters without land barriers. Thus, sea ice becomes thinner and weaker, which can be easily drifted by the strong winds, especially in the regions of the Amundsen Sea. If the Antarctic sea ice loss continues to decline at this rate over the next few years, then it will equate to the rate of sea ice loss over 30 years in the Arctic, resulting in various global warming events.
9 Indian states among world’s top 50 vulnerable regions due to climate change
Nine out of 50 regions in the world facing high climate risk due to unstable and fragile physical infrastructure fall under India, according to a recent ranking released by the Cross Dependency Initiative (XDI), a global organisation specialising in climate risk analysis for regions, banks and companies. The report, titled Gross Domestic Climate Risk, indicates that Mumbai is at high risk, while Bihar (22nd spot), Uttar Pradesh (25th), Assam (28th), Rajasthan (32nd), Tamil Nadu (36th), Maharashtra (38th), Gujarat (48th), Punjab (50th) and Kerala (52nd) are the most vulnerable. It also states that “provinces will witness an average of 110% increase in damage risk by 2050. Currently, with a 0.8° rise in temperature, India’s 27 states and more than three-quarters of its districts are extreme event hotspots, accounting for a 5% loss in GDP”. If global warming is not limited to 2°C, states like Assam, Bihar, and Tamil Nadu, among others, will lose more than 10% of their gross state domestic product (GSDP).
Ocean disturbances could be a major threat to global internet connectivity
New research published in the journal Earth-Science Reviews by scientists from the United Kingdom’s National Oceanography Centre and the University of Central Florida found that fibre-optic cables—that aid the flow of global internet connectivity—lining the sea floor could be compromised by climate change. The ocean and nearshore disturbances caused by extreme weather events have exposed hot spots along the transglobal cable network, increasing the risk of internet outages. The damages caused by such outages could be far-reaching and enormous for governments, and banks whose operations rely on the safe and secure flow of digital information. For instance, the researchers found that intensifying tropical cyclones in the northern Pacific Ocean are stressing submarine cables off the coast of Taiwan. “Ocean conditions are highly likely to change on a global basis as a result of climate change, but the feedbacks and links between climate change, natural processes and human activities are often complicated, resulting in a high degree of geographic variability.”
This month, India wrote to the World Trade Organisation (WTO) and raised its concerns about the carbon border measures being implemented by some countries. Calling them discriminatory and protectionist, India said these rules were selectively applied to “trade-exposed industries” such as steel, chemicals and fertilisers, and reflected on the competitiveness concerns these countries may have regarding these sectors. India said that measures taken to fight climate change “should not constitute a disguised restriction on international trade”.
The US recently introduced an Inflation Reduction Act that set the rules for green industries, while the EU also has a global carbon tax on imports called the Carbon Border Adjustment System.
India finalises list of technologies eligible for carbon credit trading
The central government released a list of activities that are eligible for international trading in carbon credits under Article 6 of the Paris Agreement. Some of the activities include carbon capture and storage, renewable energy generation, solar power, off-shore wind and green hydrogen. According to sources, India has chosen these specific emerging technologies in order to attract more investments in them. India will give carbon credits to countries or companies willing to invest in these technologies. These credits can then be used for mitigation. The list is applicable for only three years and may change after that, HT reported.
UNSC not the right forum to discuss rising sea levels, say India, Russia and Brazil
The topic of rising sea levels and their implication on global peace and security was discussed at a United Nations Security Council (UNSC) meeting held this month. But India, Russia and Brazil protested saying the Council was not the platform to discuss climate change. Ruchira Kamboj, representing India at the UN Security Council meeting argued that there was little scientific evidence or correlation of the impact that climate change has on global peace and security, which was echoed by Russia.
Kamboj suggested a more appropriate forum to address this issue would be the United Nations Framework Convention on Climate Change (UNFCCC) process. Brazil’s representative João Genésio De Almeida Filho said the climate change issue doesn’t fall within the Council’s mandate.
India’s electricity regulator gives nod to separate market segment for ‘expensive’ power
The Central Electricity Regulatory Commission (CERC) approved a proposal to introduce a new spot market segment for expensive power. This segment will be for power derived from costlier oil and gas imports as well as battery storage. Power plants running on low-cost fuel will not be allowed to sell electricity under this segment, according to an order by the Indian Energy Exchange. The segment is likely to start by mid-March, before the expected rise in power demand this summer. A ceiling of Rs50 ($0.6042) per unit of electricity (kWh) has been fixed by the regulator.
US nominates Ajay Banga to take over from Malpass as World Bank president
The US nominated former MasterCard Inc chief Ajay Banga to take over as president of the World Bank. If confirmed, Banga will replace David Malpass, who stepped down from his position almost a year before his term was set to expire. He was appointed by former US president Donald Trump. Malpass created controversy because of his personal views on climate change, which clashed with the World Bank’s overall vision to tackle the issue. During an event during the UN general assembly, Malpass was asked whether he agreed to the scientific consensus on climate change. After ignoring the question, Malpass eventually replied saying he was not a scientist.
Banga will have his work cut out as the World Bank is under pressure to make climate change a focal point of its agenda. Recent research by Oxfam found 40% of the institution’s climate spending in 2020 could not be verified independently. Under Banga, MasterCard became one of the first companies to set net-zero goals under the Science Based Targets Initiative.
India’s green court, the National Green Tribunal (NGT), warned the Haryana State Pollution Control Board (HSPCB) over inaction against violators because of the shortage. The NGT said “explain as to why inaction on account of alleged shortage of staff as well as strengthening of laboratories and monitoring capabilities be not treated as collusion with polluters”. The NGT sought a response in two months stating why environmental compensation “not be imposed upon them and/or criminal action be not directed, under environmental laws, against them”.
According to the plea in the court, there are 481 sanctioned posts in HSPCB, but only 178 of them are filled across the 22 districts of the state. No reason has been assigned either by the state of Haryana or HSPCB as to why vacant posts are not being filled in to have an effective control over polluters who are causing pollution and affecting not only the environment but also the health of people.
Haryana pollution board plans to set up another 22 stations to monitor air quality taking the total in the state to 51. Delhi has 38 such monitors, the highest for all NCR states. Haryana State Pollution Control Board (HSPCB) chairman P Raghavendra Rao told TOI.
Air pollution: Mumbai reports 25-30% jump in cases of skin allergies among young people
Cases of skin allergies because of air pollution have seen a marked rise in Mumbai recently, TOI reported. General physicians and dermatologists at various hospitals have noticed a rise in cases of skin allergy urticaria, caused by pollution and a sudden change in weather. “Environmental factors such as air pollution, humidity, and temperature play a significant role in triggering and aggravating symptoms,” the report said, adding that there is a 25-30% jump in outpatient footfalls, in hospitals.
An increase in airborne pollutants like PM2.5 and nitrogen dioxide are known to trigger hive outbreaks among some people, Dr Saurabh Shah, a dermatologist from Bhatia Hospital, told TOI.
Lokayukta orders SIT probe into chemical industry pollution
The stench and complaints of health issues caused by the release of obnoxious gases by chemical industries in the Taloja MIDC area, near Mumbai have reached Maharashtra Lokayukta. The court directed the state environment department to constitute a special investigation team (SIT) to monitor the level of pollution and submit a report within three weeks.
In a hearing held on February 17, Lokayukta Justice VM Kanade directed the Maharashtra Pollution Control Board (MPCB) to find out which chemical industries are responsible and direct them to install air pollution control devices.
Exposure to air pollution during training affects race performance, new study finds training and completing at higher levels of air pollutants leads to slower race times. Study asks coaches to consider approaches to reduce air pollution exposures while training athletes.
Chennai to clean air with integrated traffic management plan, bio-mining of dumpyards
Chennai is planning to launch an integrated traffic management system and bio mining of dumpyards to fix the problem of air pollution in the metro. Integrated traffic management system project is expected to improve air quality by reducing the idling time of vehicles through a dynamic artificial intelligence system and consequently reduce the pollution at 184 junctions across the city, reported The Hindu.
The city will integrate and monitor data from 30 pollution sensors, installed by the integrated command and control centre (ICCC), with data from pollution sensors managed by various civic agencies, universities and private agencies. On biomining of legacy waste at the dumpyards, experts pointed out that the process generated bio aerosols when bio inoculum is sprinkled on the legacy waste, stated the Hindu report adding that the bio digested waste needs to be mechanically screened for the PM2.5 in the form of aerosols. The biomining site should be barricaded and the entire process should be carried out in a closed atmosphere, the report said.
Mumbai reduced to being a ‘city of haze’, AQI touches 500 in some areas
Construction in the Mumbai suburb of Mulund recently recorded AQI levels at 500 in some areas. Editorial in Mint states the situation needs policy clamps on the building spree of private builders as well as a huge digging project by BMC.
The newspaper said authorities must deploy a dust-reduction mandate. Builders could cloak sites in cover-up material, spray surfaces with water to dampen them and use vacuum cleaners with HEPA filters, together with special polymers and other dust-control agents. The adoption of such methods would add to costs, no doubt, but these bills must be borne in accordance with the principle of ‘polluter pays’. Municipal authorities could place AQI caps on project sites, let managers pick their mix of dust-busters, and then upload data to an online dashboard for locals to access, corroborate and mount a vigil if they want.
According to Mercom, India installed a record 13 GW of solar capacity in 2022, up 27% YoY compared to 10.2 GW in 2021, but it’s not even half of the 28 GW required to meet its target of 280 GW by 2030. India’s cumulative solar capacity now is 63 GW. Developers are battling high costs of solar projects in 2023, the web portal said, adding that the projects delayed in 2021 due to COVID restrictions were completed and added to the installed capacity of 2022. In 2022, rooftop solar installations decreased by 3.7% compared to 2021.
Sebi sets norms for issuers of green bonds to tackle greenwashing
The Securities and Exchange Board of India (Sebi) released norms for issuers of green bonds to avoid greenwashing (falsely claiming that a company’s products, services, or business operations are more environmentally friendly than they actually are).
Sebi said an issuer of green bonds shall not use misleading labels, hide trade-offs, or cherry pick data from research to highlight green practices, while obscuring others that are unfavourable. Issuers will also have to continuously monitor the transition to a more sustainable form of operation and assure that funds raised through green bonds are not used for purposes that would not fall under the definition of ‘green debt security’.
The wide range of eligible projects include wind, solar, and bioenergy. Investing in public transportation, energy efficient buildings, biodiversity conservation, sustainable waste management, and climate change adaptation, sustainable land use, sustainable forest and agriculture, afforestation, and sustainable water management.
MNRE asks PSUs to black list developers if they don’t meet RE deadlines
The Centre said it will blacklist renewable energy developers for 3-5 years if they fail to complete their project on time. The government directed Public Sector Undertakings such as Solar Energy Corporation of India (SECI), NTPC and NHPC to blacklist erring developers, the three issue tenders to private developers.
The Ministry of New and Renewable Energy also asked the three PSUs to encase the bank guarantees in case of delay. Developers said encashing bank guarantees was a norm but the move to black list was extreme. Industry sources told Mercom that the delays have also been caused by demand-supply mismatch due to the approved list of Modules and Models (ALMM) that the government adopted to boost domestic manufacturing.
The government said it gave several extensions to developers and even lifted ALMM restrictions, but they have not responded in kind, Mercom reported.
IEEFA study: SECI’s solar, wind energy tenders too few to meet 450 GW by 2030 deadline
Is the Solar Energy Corporation of India (SECI) struggling to keep up the pace of issuing new solar and wind tenders? According to IEEFA, Variable Renewable Energy (VRE) tenders issued annually in India have fallen to about 28 gigawatts (GW) in 2022 from 40GW in 2019. SECI issues new tenders, conducts auctions, but it requires more tenders to meet India’s target of 450 gigawatts (GW) of renewables by 2030, IEEFA said.
According to the study, poor financial health of state DISCOMs and rising solar module costs are keeping developers away from recent tenders. Distribution companies (DISCOMs) are no longer seeking plain vanilla solar and wind projects and instead want wind-solar hybrid or renewable energy coupled with storage.
The research states that renewable energy-rich states, like Karnataka and Andhra Pradesh, have slowed tender issuance as they have achieved their renewable purchase obligation (RPO) targets.
Following the success of two pilots of e-way projects between Delhi and Agra and Delhi Jaipur, the govt is planning to upgrade 5,500 km of existing highways into the National Highways for Electric Vehicles (NHEV) spanning across 23 cities in 12 states. Made through a public-private partnership, there will be 111 stations with charging outlets and other amenities on the e-highways as a whole. The route between Bengaluru and Goa will be the longest (558 km), with 11 stops along the way. The shortest route, with only two stations, will be between Ahmedabad and Vadodara (111 km).
Ease of Doing Business (EODB), a tech piloting agency for the government, worked on the pilots. According to the EODB’s plan, each stop (with an area of 1.5 to 2 acres) for NHEV will have restaurants, restrooms, last-mile logistics facilities, charging and swapping stations, and more. Additionally, money will be spent on installing geo-fencing, setting up backups for breakdowns, and buying a fleet of electric vehicles and buses.
Lithium reserves found in Jammu to be auctioned by Centre
According to Business Standard, the Centre is anticipated to call for bids for the recently found lithium reserves in Jammu by the end of June. The action may grant India access to the strategic mineral, which is used, among other things, in electric cars (EVs) and mobile devices. According to an official familiar with the development, the discovery is of the G-3 level, and substantial reserves are certain to exist. As a result, mining for the essential non-ferrous metal will shortly begin. The source also said that the Center would mandate the reserve to be refined domestically. Currently, there is no facility in India to refine lithium.
The discoveries are categorised by the United Nations Framework Classification (UNFC) into four stages: G4 (reconnaissance), G3 (prospecting), G2 (general exploration), and G1 (detailed exploration). The finding of 5.9 million tonnes of the metal in Reasi in Jammu and Kashmir has made the country the seventh-largest holder of lithium reserves.
Policy implementation lagging in states, need better mechanisms
Out of the 36 states and union territories in the country, 26 have released EV policies over the last five years, with 16 of them released between 2020-2022. Andhra Pradesh, Bihar, Karnataka, Kerala, Madhya Pradesh, Tamil Nadu, Telangana, and Delhi are the eight states that released their policies before October 2020, and have policies in circulation for two years or more. A new study by Climate Trends that assessed the comprehensiveness of all state EV policies found that none of the eight states where policies have been active for two years or more is on track to meet their targets of EV penetration, charging infrastructure, or investments.
Maharashtra, Haryana, Delhi, and Uttar Pradesh have the most comprehensive policies whereas Arunachal Pradesh, Manipur, Himachal Pradesh, Ladakh, Kerala, and Uttarakhand have the least comprehensive policies. Additionally, only nine states have mandated the creation of charging infrastructure in new residential buildings, offices, parking lots, malls, etc. The report added that the states have scored significantly less compared to their set targets. For example Madhya Pradesh aims for 25% of all newly registered vehicles to be electric by 2026, but its current penetration stands at 2.2%, Delhi’s EV penetration stands at 7.2% against its target of 25% by 2024. Penetration of electric buses is also far below policy targets in several states.
World’s first EV running on sodium-ion battery unveiled
The world’s first electric car (EV) powered by a less expensive sodium-ion battery was unveiled by Chinese EV manufacturer JAC, reported the Economic Times. This battery could help future EVs cost less by 10%. Since sodium-ion batteries use less expensive raw materials, they can provide EV manufacturers with an option to current technologies that primarily use lithium and cobalt. A 25 kilowatt-hour (kWh) battery powering the JAC EV allows it to travel up to 250 km on a single charge. Sodium-ion batteries have a lower density than their lithium-ion counterparts. These batteries have benefits like efficiency in low temperatures and quick charging.
India’s Ministry of Power has issued a notification that all coal-based power plants starting commercial operations between April 2023 and March 2025 must have renewables as 40% of their generating capacity, The Economic Times reported. Thermal power stations that are unable to equip themselves for co-generation with renewables will be required to procure and supply an equivalent quantity of renewable energy. Power stations beginning operations before March 2025 will have until April 2025 to comply with the new mandates, while new power plants after April 2025 will be required to be compliant at the time of operationalisation.
Adani Group’s ₹7,017-crore acquisition of coal-fired power plant falls through
After the massive loss from US short-seller Hindenburg’s report on Adani Group’s alleged accounting fraud and stock manipulation, the conglomerate is looking to preserve cash and not go ahead with bidding for a stake in state-backed energy trading firm Power Trading Corporation, according to a report by Bloomberg. State-owned entities such as NTPC Ltd, NHPC Ltd, Power Grid Corp of India Ltd and Power Finance Corp Ltd are working with an adviser to weigh selling their stakes of around 4% each, with bids due as soon as the end of the month. The report comes days after Adani Power’s ₹7,017-crore acquisition of coal-based electricity generating units of DB Power Ltd collapsed as the deadline to sign the pact expired. The date to complete the process of acquisition was extended four times after the initial deal was signed in August last year. DB Power, which currently operates a 2×600 MW coal-fired power plant in Chhattisgarh, has long and medium-term power purchase agreements for 923.5 MW of its capacity, backed by fuel supply agreements with Coal India Ltd. It recorded a turnover of ₹3,488 crore for FY22.
Fuel, power costs rose by 57% between January 2021 and August 2022: RBI
According to the Consumer Price Index (CPI) published by the Reserve Bank of India (RBI), the fuel and power costs in India rose nearly five times more than overall consumer prices in the country, which increased by 12 per cent over the same time period. In addition, India’s fuel and power prices rose by 57 per cent between January 2021 and August 2022, as per the ‘Fuel and Power’ price index. RBI publishes two categories related to fossil fuels — ‘Fuel and Light’ and ‘Transport and Communication’. While it is not possible to “disentangle the impacts of fossil fuel prices from other prices included, the figures for ‘Transport and Communication’ and ‘Fuel and Light’ suggest that fossil fuels currently make a disproportionate contribution to consumer price inflation in India.”
Coal Ministry auctions ten mines under commercial auction
The bids for 10 mines under the Commercial Auction were launched by the Coal Ministry earlier this week. Of the 10 coal mines put up for auction on the first day of the e-auction, six were under the Coal Mines (Special Provision) Act, l, and four were part of the Mines and Minerals (Development and Regulation) Act. In this round of the auction, the Ministry made a number of reforms, including allowing the sale of a portion of the mine, lowering the upfront payment and the bid security, introducing the National Lignite Index, and delaying the revision of the National Coal Index until the mine is operational.
To name a few, Dalmia Cement (Bharat) got a block in Madhya Pradesh out of the 10 mines up for auction while Shree Cement won the bidding war for a coal pit in Chhattisgarh. Samlok Industries placed the highest offer for a mine in Maharashtra, while Rungta Sons won the auction for an Odisha coal mine. The total geological reserves for these 10 coal mines are 1,866 million tonnes, reported Mint. On November 3, 2022, the government began the sixth round of its auctions for commercial coal mining, as well as the second try of the fifth round.
Govt committed to greening marine fisheries sector
The Centre has expressed its intentions of working towards greening the marine fisheries sector. Sagar Mehra, Joint Secretary to the Department of Fisheries, Government of India said, the country is determined to set the stage for using renewable energy in the fisheries sector. “In terms of global greenhouse gas emission, India’s fishing sector has a low impact. However, the country will mobilise support to transform the sector and tackle the environmental issues.” He pointed out that Kerala has shown an example in this regard with some fishermen groups taking efforts to greening fishing vessels by moving from the use of petrol to natural gas. Gujarat and Tamil Nadu too have taken such initiatives.
India paces oil supply discussions with US prior to further sanctions on Russia
India has stepped up talks with the US to ensure that its oil supply strategy does not run into obstacles or disruptions in the event that Russia faces additional sanctions for its war in Ukraine. This is a sign that New Delhi wants to balance its energy ties with both the USA and Russia, S&P Global reported. Government officials and analysts said that Russian oil provided the nation with a window of opportunity to increase imports over the previous year due to its competitive pricing. Nevertheless, if additional limitations are imposed on Russia, the scenario can change. India must therefore continue to work with alternative suppliers, they added.
Iraq signs deals to push oil and gas output
As part of attempts to increase both crude oil and natural gas output, Iraq struck a number of agreements with international businesses. Iraq is currently extremely dependent on its neighbour Iran for its gas needs. The country has signed contracts with two Chinese firms and one Emirati firm with the goal of increasing natural gas production by 800 million cubic feet per day and increasing oil production by a quarter of a million barrels per day. At 4.5 million barrels per day of oil production, Iraq is OPEC’s second-largest oil producer. Political instability in the country and companies prioritising low-cost, fast-return projects had slowed the country’s production in recent times. Exxon was among the major oil companies that completely withdrew from Iraq in recent years due to the country’s oil industry’s uncertain future. Despite the OPEC+ output restrictions, succeeding governments continued to pursue plans for significantly increased natural gas production as well as higher oil production.