India has stepped into the global race to dominate the “industries of the future”. Its instrument, however, is the untested PLI programme. Starting today, CarbonCopy looks at the promises and perils that come with it.
Not once but twice, India had a chance to lead the world in solar technology.
Photovoltaics were first discussed in the country’s third five-year plan (1961-66), a time when the young republic wanted an indigenous solar sector to meet developmental imperatives like rural electrification.
That beginning, which could have seen India export solar technologies to the third world, went nowhere. India’s next two five-year plans (1969-78) ignored solar and focused on hydel, tidal and geothermal energy. Solar reappeared in the 6th five-year plan (1980-85). In the years that followed, the country created an indigenous solar manufacturing sector as well as developmental technologies like solar cookers, pumps and electrification.
The country was in step with the rest of world. Globally, attempts to commercialise solar photovoltaics had started in the 1950s and 1960s – and accelerated further during the 1970s’ oil crisis. By 1995, solar R&D was being driven by the US, Germany, Japan and Australia. India was one of the countries where manufacturing had started – courtesy firms like Premier Energies.
China lagged far behind. In 2006, when China’s first solar installation – a 1MW project atop six buildings in Shenzhen – came up, India had about 40 solar manufacturers and an installed manufacturing capacity of 4,000 MW.
That beginning too, however, went nowhere. China entered solar panel manufacturing. At a time when different firms made polysilicon, ingots, modules, wafers and cells, it set up integrated manufacturing complexes. Set up at large scale and subsidised by the government, these drove photovoltaic prices so low other countries couldn’t compete. European solar manufacturing died. So did Indian firms like Moser Baer.
Instead of supplying solar panels to the world, India became an importer.
In March, 2020, India unveiled a new government policy which seeks to make the country a global manufacturing powerhouse.
Among other things, the Production-Linked Incentive (PLI) scheme, as it’s called, wants to bring sunrise sectors like semiconductors and renewable energy manufacturing to the country.
It’s an ambitious undertaking. Take renewables. China’s position across these manufacturing supply chains seems unassailable. Its share in the global production of each manufacturing stage of solar panels – polysilicon, ingots, wafers, cells and modules – stands above 80%. The country exercises similar dominance in lithium-ion batteries and is gaining in wind.
Compounding matters, other countries are eyeing these sectors as well. Not only has Covid-19 exposed the risks of high geographical concentrations in supply chains, the global push for clean energy and decarbonisation has offered countries a fresh chance to carve out competitive advantages for themselves. Hitherto energy-importing countries can become exporters – of new technologies; the equipment used to produce renewable energy; or the energy itself – and dominate the emerging energy landscape.
For both reasons, countries are trying to decouple from China. The US has announced the Clean Energy Manufacturing Initiative and, now, the Inflation Reduction Act. As CarbonCopy reported last year, Germany has offered €700 million as research grants for firms working on offshore wind, hydrogen production, gigawatt-scale electrolyzer production, and hydrogen transport options. France has announced a $35 billion investment to build “the technological players of tomorrow” as a part of its drive to revive the country’s industrial sector.
In March 2020, India tossed its hat into the ring as well. With the PLI scheme, the country seeks to boost manufacturing competitiveness – to replace imports; to wrest some supply chains away from China; and to dominate some of the industries of the future.
An introduction to PLI
Over the last seventy years, India has waged a losing battle on manufacturing competitiveness.
In the years after independence, the country initially banked on the public sector for export competitiveness. For steel exports to take off, as the late Abhijit Sen, a former member of the erstwhile Planning Commission told CarbonCopy in July. PSUs were to make raw steel cheaply.
When that tact didn’t work, the country tried other approaches. To protect domestic industry, it hiked import tariffs. For exports, it launched capital subsidies like TUFS (Technology Upgradation Fund Scheme) and M-SIPS (Modified Special Incentive Package Scheme, for electronics design and manufacturing). When exporters complained about high taxes making them uncompetitive, the government offered tax refunds.
These didn’t work either. Capital grants did not always result in exports. Tax refunds failed as well. All taxes couldn’t be refunded (like the cost of energy). Also, taxes aren’t the only reason companies’ costs go up – other factors like poor infrastructure, weak investments into R&D, an untrained workforce, high input and energy costs and political rent-extraction contribute as well. Other attempts, like the SEZ policy, have not delivered per planners’ expectations either.
In essence, after 75 years of independence, not only have exports remained hamstrung, domestic manufacturers have struggled against imports as well.
For a number of reasons, the PLI scheme is a significant departure from these past attempts. Instead of addressing the root causes of uncompetitiveness, it pays a disability cost to chosen companies to compensate for the inefficiencies of manufacturing in India. It works with far fewer firms than its predecessors. In photovoltaic, the PLI programme chose just three companies. In batteries, four. The government also wants to use PLI to indigenise entire value chains.
As India’s previous misfires with solar manufacturing tell us, the costs of failure can be high – the loss of an economic engine; import dependence on another country. How do disability costs, the intensification of import tariffs, the focus on sectoral champions, and the drive to indigenise entire value chains fare against other nations’ attempts to capture the industries of the future?
The three things that set PLI apart
To understand these departures, CarbonCopy studied the very first PLI – for cellphone manufacturing.
By 2014, India needed to rebuild its cellphone manufacturing sector. Nokia had exited. High-end phones were coming, fully-assembled, into the country. As for cheaper phones, they were being assembled locally but most components came in from outside. By 2015, as a senior bureaucrat in the Ministry of Commerce, who did not want to be identified, told CarbonCopy, India was importing phones worth $13 billion from China every year.
The previous day, CarbonCopy had met RP Gupta. As additional secretary at Niti Aayog, the now-retired bureaucrat was a part of the team that developed the PLI Scheme. In that conversation, Gupta said: “No one in the government wants only assembly to be done in India. If more value is captured in India, you will create more jobs.”
CarbonCopy also met Subhash Chandra Garg. As finance secretary, the former bureaucrat was involved in the discussions that resulted in the cellphone PLI. In that conversation at his house, Garg, who has recently written The $10 Trillion Dream: The State of the Indian Economy and the Policy Reforms Agenda to offer reform options, described the underlying rationale of PLI. “In the world, 85-90% of phones are made by 4 or 5 companies,” he said. “It’s they who decide where to manufacture – and they will go wherever there is the biggest margin.” These include Samsung, Foxconn Hon Hai, Rising Star, Wistron and Pegatron. Of these, three companies – Foxconn, Wistron and Pegatron are contract manufacturers for Apple iPhones.
“We spoke to companies like Foxconn and Vistron,” said the Commerce Ministry mandarin. “Foxconn was making phones in Vietnam and Thailand. Those countries however are heavily influenced by China. In India, such investments would stay protected.”
To offset fears about the higher cost of manufacturing in India, disability costs came into the frame. “What is the iPhone’s cost of production in Taiwan or China? What is it in India?” explained Garg that afternoon. “If we can take care of that delta, companies will come.” In effective terms, if it costs Foxconn $200 to make an iPhone in China – but $210 in India – we will give the company $10 per iPhone as an incentive to expand to India. This incentive, however, will be linked to production – not front-loaded, as in the past.
Those were the first two building blocks – localising value chains, and compensating disability costs. The third? Like Korea did with the Chaebols, the Indian government wants to groom sectoral champions. Unlike previous schemes, PLI doesn’t favour all companies in a given sector. In Cellphones, it extended PLI support to 5 global companies and 5 local ones.
As the press reported: “These companies are expected to expand their manufacturing operations in a significant manner and grow into national champion companies in mobile phone production.” In sectors like polysilicon and batteries, the number of sectoral champions is even smaller – three and four respectively. This is to build scale, Gupta said. “Unless you create scale, you won’t get the benefits of economies of scale. A minimum scale has to be there. That way, you are also dealing with less number of companies.”
PLI: A look at the critical sectors in the bid to rebuild Indian manufacturing
Clean Energy: Solar Photovoltaic, Advanced Chemical Cell Batteries.
In the pipeline: Offshore wind turbines, electrolysers.
Others: Mobile manufacturing, Pharma, Medical devices, IT hardware, White goods, Specialty steels, Telecom, Food products, Automobiles and auto-components, Textiles, and Drones.
This design, created initially for cellphones, was first extended to sectors the government considered critical. “What are these new age industries where you want to create competitive advantage? Semi-conductors, Photovoltaic and Batteries are fundamental to our growth,” said Garg. Polysilicon has been on our agenda for long, he added. “Even in 2005-06, we had wanted to bring fabs to India.”
Then, a clutch of other sectors followed.
The bigger question about PLI
Each of these building blocks comes with large questions.
Take disability cost. For the first time, a government is, instead of addressing root causes of inefficiency, attaching a monetary value to it – and paying that to manufacturers. Can industries become globally competitive in the period – five years, as in the case of solar – they get PLI support?
Or take the insistence on grooming a few sectoral champions. At its best, like MITI did in Japan, this will dramatically alter the face of India Inc, creating Indian equivalents of Toshiba and Sony. And yet, as venture capitalists will tell you, finding the technological players of tomorrow isn’t easy. Can the government do it?
I posed that question to Gupta. He said the government was not making bets on technology. “We are technology-agnostic. There is no pressure that companies should use a particular technology.” Instead, he said, the government will track companies on outcomes. “In the battery sector, for instance, bidders shall be evaluated in terms of cost, domestic value addition, and the quality matrix (energy density and number of lifetime cycles).” A company which finds its technology turning obsolete and finds itself slipping behind is free to switch to another technology. The value chain question comes with its own complexity. India wants sectoral champions to straddle entire value chains. Is this practicable? Firms like China’s Daqo New Energy focus only on polysilicon – and build massive scale there. Can a vertically-integrated firm compete with more specialist players? China did that once – while displacing solar manufacturing from Europe. Can India do an encore?
To answer such questions, CarbonCopy took a closer look at the solar and battery PLIs, the details of which will be carried in Parts 2 and 3 of this three-part series.
Editor’s note: Renowned economist and member of the Planning Commission from 2004 to 2014, Abhijit Sen, passed away on August 29, 2022.
Videos of massive flooding in Pakistan sent shockwaves across the world. At least 1,162 people died and 33 million have been affected since June. Satellite imagery showed how an overflowing Indus river created a 100-km inland lake in a part of Sindh province. The United Nations called the incessant rain a “monsoon on steroids”. According to the Pakistan Meteorological Department, this year has been the country’s wettest since records began in 1961.
India reports ‘wild swings’ in rainfall patterns; floods sweep away villages in north, east
This year’s monsoon season is still characterised by stark differences in regions, with wild swings between no rain and incessant rainfall. This month, at least 50 people were killed after torrential rain triggered floods and landslides in northern and eastern India, especially Himachal Pradesh and Uttarakhand, in a span of three days. Village residents were left stranded after rains washed their houses away.
In Bengaluru this week, residential areas were waterlogged after torrential rain. The city is close to breaking its all-time high record of 387.1 mm made in 1998. Stranded residents were seen being evacuated in rafts.
According to the India Meteorological Department (IMD), however, the monsoon season has been a mixed bag, with eight states reporting excess rain, while eight others reported a deficit. Experts warned that while the monsoon usually begins receding from north India in the third week of September, this year, it may not recede until October, creating a confusion between summer monsoon and winter monsoon rain. They blamed the warming of the La Niña and the Arctic region over the past three years for the delay.
Around 163 districts, including in Tamil Nadu and parts of the Indo-Gangetic Plain, also reported a sudden swing in rainfall patterns—from excess to deficient—between August 10 and 17. In the same time period, 167 districts in Gujarat and Maharashtra, Madhya Pradesh and Chhattisgarh, reported a swing from deficient to excess rain.
11 more wetlands get international tag, taking tally to 75; highest in Asia
Eleven more wetlands in India were deemed internationally important under the Ramsar Convention. The convention is an international treaty that aims to conserve and sustain the use of wetlands.
At 75, India now has the most number of Ramsar sites in Asia, surpassing China’s 64. Of the 11 wetlands, four are in Tamil Nadu, three are in Odisha, two are in Jammu and Kashmir and one each are in Madhya Pradesh and Maharashtra.
Heavy month of flooding kills 180 in Afghanistan
A month of heavy flooding in Afghanistan has killed more than 180 people, according to a Taliban spokesperson. Rain also damaged more than 3,000 houses and injured more than 250 people, officials said. Flash floods between August 16 and 31 alone killed 65 people and injured 115 others, including women and children, according to a UN report. The UN also estimated 256 people have so far been killed this year by flash floods in the country.
China issues first drought alert of the year amidst extreme heatwave
Amidst an extreme heatwave, China issued its first drought alert of the year. Across the Yangtze river basin, officials are struggling to contain forest fires and protect crops from the scorching heat. Government officials blamed climate change for the incessant heat. The warning is two warnings short of its more severe alert. Poyang lake, one of the most important flood basins in the Yangtze region, has reduced to a quarter of its normal size this year, according to state news.
Doomed ice more than doubles sea level rise risks from Greenland’s ice sheet
Greenland’s melting ice sheets, according to a new study, will cause global sea levels to rise by at least 10.6 inches. The worrying projection is more than double previous forecasts. The reason for the increase in estimates is “zombie ice” or accumulated ice mass that is still attached to thicker areas of ice but is no longer being replenished by parent glaciers due to reduced snowfall in the region. The lack of replenishment and the resulting imbalance in Greenland’s ice mass, the scientists say, point to locked-in sea level rise of 10.6 inches or 27.4 cm, regardless of 21st century climate and decarbonization pathways.
The new estimate, which pegs resultant sea level rise of up to 78.2 cm (~30 inches) if conditions of the 2012 “high-melt year” are applied in perpetuity, is significantly higher than the 2-5 inch range (6-13 cm) included in the last year’s IPCC WG1 report. The study is the first time scientists have calculated minimum ice loss — and accompanying sea level rise — for the Greenland ice sheet.
India submitted its Nationally Determined Contribution (NDC) to the United Nations (UN) ahead of time. The United Nations Framework Convention on Climate Change (UNFCCC) set a September 23 deadline for countries to submit their NDCs ahead of its NDC synthesis report that will analyse the impacts of the submitted NDCs in order to determine whether the world is on track to meet its Paris Agreement goals. Last year’s NDC synthesis report concluded that the NDCs would not limit warming to 2°C.
RBI steps up efforts to assess climate risks to India’s financial system
The Reserve Bank of India (RBI) is looking to make the country’s financial system climate resilient. To begin with, it put together a discussion paper on sustainable finance and climate risks. It asked relevant stakeholders to give their feedback. It also released a survey report that assessed how prepared commercial banks were to take on climate risks. These steps are significant considering just two years ago, a global survey by the Bank of International Settlements (BIS) found the RBI had no initiatives to assess climate risks.
US climate bill: China asks US to end trade sanctions on Chinese solar panels, contribute more climate finance
China’s suspension of climate cooperation with the US continues despite the latter’s recent climate bill. Soon after the bill was passed by Congress, the US’ ambassador to China Nicholas Burns tweeted that his country was acting on climate change and it was China’s turn to do so by reconsidering its suspension of climate cooperation.
China, however, responded questioning whether the US could deliver on the promises put forth in the climate bill. It also asked for a lifting of trade sanctions against Chinese solar panels and criticised the US’ failure to put forth its share of climate finance. Relations between the two countries took a further hit after congressional leader Nancy Pelosi visited Taiwan, an independent democracy, which Beijing considers to be part of China.
Air quality in India is one of the worst in the world, but over the past decade (2011-2020), air pollution cases formed less than 8% of the cases that were taken up by India’s green court, the National Green Tribunal (NGT), stated a new study, reported by The Bastion. Analysis of NGT data revealed complaints of air pollution were far too few compared to those of water pollution and waste.
A subset of data was assessed from a recent study that analysed the NGT’s judgments related to urban environmental issues and 420 case hearings were reviewed, of which none involved dismissals and procedural adjournments. The news portal reported that amongst the hearing, only 31 addressed urban air pollution-related matters (less than 8% of the total case hearings reviewed).
This is far short of the representation of other ‘visible’ domains like waste management and water pollution, which have had over 230 (over 50%) and 130 (over 30%) hearings respectively, The Bastion reported.
Delhi, Kolkata top global PM 2.5 pollution, Shanghai, Moscow have worst NO2 levels
Delhi and Kolkata are the world’s most polluted cities when it comes to content of the very fine and hazardous particulate matter PM2.5, whie Shanghai and Moscow are the worst carriers of NO2 in the world, according to a new report by the US-based Health Effects Institute’s (HEI) State of Global Air Initiative.
Most cities globally far exceed the World Health Organisation’s (WHO) pollution limits set in its air quality guidelines, the report pointed out. The data from 2010-2019 revealed that while the high particulate matter was found in the air of low-, and middle-income cities, across the globe, cities with higher concentrations of NO2 were of high income.
US law defines CO2 produced by fossil fuels as air pollutant, gains power to regulate it
In a move that boosts anti-fossil fuel legislation, the US amended a law to define carbon dioxide produced by the burning of coal, oil and gas as an “air pollutant”. According to analysts, Biden administration did this by passing the Inflation Reduction Act, which addressed the Supreme Court’s decision in June to restrict the powers of the Environmental Protection Agency (EPA). Analysts told NYT that the new law amends the Clean Air Act, the country’s main air-quality legislation, to define CO2 emitted by the burning of fossil fuels as an “air pollutant.” Thus, clearly giving the EPA the authority to regulate greenhouse gases and to use its power to push the adoption of wind, solar and other renewable energy sources, experts told the NYT.
India’s renewable energy production is expected to be impacted by climate change, according to a recent study by researchers at the Indian Institute of Tropical Meteorology (IITM), Pune. The study warned that in a business-as-usual scenario, climate change is likely to impact the potential of solar and wind energy in India in the next 50 years. The modelling data showed the solar radiance diminishing in most of India. The wind speed showed a decreasing trend in north India, but an increasing trend in south India. Mongabay reported that the study claimed that time is ripe for development of efficient technologies to combat the negative effects of climate change on the renewable energy sector.
The study used climate models such as Coordinated Regional Climate Downscaling Experiment (CORDEX), Coupled Model Intercomparison Project phase 5 (CMIP5) and CMIP6 to understand climate projections for various parts of the country over five decades. The data from the models helps analyse the availability of renewable energy sources in the future.
Annual investment in solar up 25%, SECI paid $119.6 million in July to solar and wind developers
Investments in India’s solar sector jumped 25% at $2.82 billion year-on-year in Q2, 2022. Last year, it was $2.26 billion. Compared to the last quarter, the increase was marginal. Adani and Tata received the largest amount of investments.
The Solar Energy Corporation of India (SECI) paid $119.6 million to solar and wind power generators for the power it bought from them in July 2022. In June, the amount SECI paid was $114.78 million. The main beneficiaries for the July payment were Adani, Sprng Renewable energy, Green Infra and Azure Power.
Parliament panel to govt: Wind energy sector lagging, get it back on track
A Parliamentary panel on energy urged the government to bring the wind energy sector back on track in India. It said the government gives priority to solar over wind, even when solar is heavily dependent on imports. Mongabay reported that since 2014, the solar sector has surpassed the wind energy sector in India. The report pointed out that the introduction of bidding in 2017, is one of the reasons that have stalled the growth of wind energy in the country. The House panel recently recommended giving a push to wind energy. Mongabay stated that repowering old turbines is one option to improve energy production but it needs further discussion about investment and old agreements.
Government is also pushing off-shore wind projects in India, with a target of 30 GW by 2030. Experts say India can potentially generate 194GW of offshore wind power along its 7,600km coastline.
Solar module prices to fall in 2023: CEA
Prices of solar modules are likely to fall, globally, along with forecasted polysilicon price reductions by 2023, according to new research by Clean Energy Associates (CEA) reported by IEEFA. This year the prices of modules have remained unchanged because of higher than expected demand in Europe and limited polysilicon supplies, prices are expected to fall next year.
CEA recommended buying modules around two to three quarters from delivery as the current market environment will impact future long-term orders, IEEFA reported.
The report stated that in the US, module prices increased significantly from CEA’s previous forecast due to the threat of an anti-dumping and countervailing duty (AD/CVD) extension to several Southeast Asian countries.
India added 1.9 GW RE open access capacity in 2022: IEEFA
India added nearly 2GW of renewable energy open access capacity in 2022, reported IEEFA. Falling costs of renewable energy and decarbonisation targets of industry is driving the uptake of open access (OA) power, the report said. The report pointed out that the lack of central and state tender activity has led many utility-scale project developers who only sold electricity to DISCOMs to venture into this space.
IEEFA says the Green OA Policy, issued in June 2022, has the potential to completely reform the renewable energy OA market landscape if states implement the policy efficiently and in a timely manner.
According to a report in the Economic Times, the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME)-II scheme is about to change. The government is also aiming to place more emphasis on domestic value addition (DVA). The FAME-II scheme is being modified in order to eliminate loopholes in the ways that EV original equipment manufacturers availed the benefit of the incentives provided by the scheme, while importing all of their components from China and only assembling them in India.
In a statement and presentation to vehicle manufacturers, the Ministry of Heavy Industry said digital methods are being used to determine DVA. “DVA data is required to be calculated and stored into the Enterprise Resource Planning (ERP) system of Original Equipment Manufacturers (OEMs) at granularity level,” the presentation said. This occured just two weeks after the ministry introduced an automated online data transfer to capture crucial information about DVA from the ERP system of PLI applicants to PLI Auto Portal. FAME-II scheme, also known as phase-II of FAME, was introduced in 2019 with an investment of INR 10,000 Cr, with an objective to promote demand for EVs by establishing EV charging infrastructure and offering upfront subsidies.
Govt releases new Battery Waste Management Rules, sets recycling targets for spent EV batteries
The Ministry of Environment, Forests and Climate Change last week notified the Battery Waste Management Rules, 2022 under the ambit of India’s Mission for Circular Economy. The new rules, for the first time, specifically covers EV batteries. The rules introduce Extended Producer Responsibility for EV battery producers along with explicit functions and targets for various stakeholders, and are expected to bring clarity to an otherwise poorly-defined space. The rules now specify an ambitious recovery target of 90 per cent by 2027 for EV batteries. They also mandate a minimum use of 5 per cent of recycled material in new batteries manufactured from 2027, which will be ramped up year on year to 20 per cent by 2030-31.
Additional safety norms for EV batteries to come into effect from 1 Oct
Addressing the EV fire incidents in different parts of the country, the Union Ministry of Road Transport and Highway said additional safety requirements for battery safety would come into effect from October 1, 2022. An expert committee was constituted by the ministry to recommend additional safety requirements in the existing battery safety standards notified under CMV Rules. Based on the recommendations of the expert committee report, the ministry, on August 29, 2022, issued an amendment to requirements for motor vehicles with less than four wheels running on electric powertrain, and amendments to specific requirements for four-wheeler EVs carrying passengers and goods. These amendments include additional safety requirements related to battery cells, battery management system, on-board charger, design of battery pack, thermal propagation due to internal cell short circuit leading to fire etc.
Hero Electric and Okinawa subsidies put on hold for claiming wrongful incentives
The government put the subsidies of Hero Electric and Okinawa on hold for allegedly claiming incentives for products not made in India, CNBC-TV18 reported. After receiving complaints that EV players were improperly claiming subsidies without manufacturing the components or products in India, the government introduced an application programming interface to ensure compliance with domestic value addition criteria in the FAME and the public-linked incentives (PLI) schemes. Approximately Rs60-70 crore will be adjusted against future payments to Hero Electric and Okinawa. Thanks to the new application programming interface, wrongdoings are already being stopped in their tracks, a govt source told CNBC-TV18. It is also making it easier for the government to obtain the company’s digital footprint in the event of a complaint.
Mandatory standards for EV batteries to come into effect in 2-3 months
The Indian government will soon notify the new mandatory standards for battery components and their testing, including cells, of two- and four-wheeler EVs, which will come into force in two-three months.. The government will also make it mandatory for vehicle manufacturers to sell EVs with only standard-compliant batteries. The provision on penalty against companies failing to comply with the standards and regulatory norms will kick in only after these standards are notified.
According to officials, the government will announce the standards for “conformity of production (CoP)” of batteries. This means that as EV models are produced in large quantities, random samples of finished batteries will be taken from factories and tested to determine whether the companies are adhering to the standards. There is currently no CoP provision for EVs.
California to ban sales of petrol-only vehicles by 2035
The state of California will prohibit the sale of new petrol-only automobiles by 2035 as an additional measure to reduce emissions. BBC news reported that under the rules issued by the California Air Resources Board (CARB), 35% of new vehicles sold in the state must be electric, hybrid or hydrogen-powered by 2026. The regulations would apply to 68% of vehicle sales by 2030, and 100% by 2035. The new regulations are designed to compel automakers to speed up the release of cleaner automobiles on the market. Late last week, state regulators gave their approval to the scheme. California is the biggest US state by population, with more than 39m residents. However, the Alliance for Automotive Innovation—which represents carmakers including General Motors, Volkswagen and Toyota—said more needed to be done to boost demand for electric vehicles (EVs).
Volkswagen seals the deal to source tariff-friendly batteries from Canada
German companies Volkswagen and Mercedes-Benz sealed agreements with Canada to secure access to raw materials, such as nickel, cobalt and lithium for battery production. German Chancellor Olaf Scholz said Germany and Canada plan to work together in “areas such as critical raw materials.” A VW representative stated that the automaker is focusing on accelerating its battery activities, “particularly reliable and sustainable supply chains,” together with PowerCo, its specialised subsidiary for its battery business. The memorandums of understanding are to be signed during Scholz’s current Canada trip. The German leader wants to enlist Canada to help the country reduce its reliance on Russia for energy and raw materials.
India’s second-largest oil refining and retailing company, Bharat Petroleum Corporation Ltd, followed up earlier announcements of pursuing net-zero emissions by 2040 with new details of the strategy. Addressing the company’s annual shareholders’ meeting, chairman Arun Kumar Singh revealed that the company will lean heavily on renewable energy and electric vehicles. The company will seek to expand its RE portfolio 20-fold in three years from 50 MW currently to 1GW by 25, and 200-fold by 2040. BPCL will also look to deepen its imprint on the EV charging space with new facilities planned across 200 highway corridors.
Meanwhile, India’s public gas distributor GAIL announced its own 2040 net-zero emissions target during the company’s annual shareholders’ meeting. The company also revealed its target to increase the share of gas in India’s energy mix from the current 6.2% to 15% by the end of the decade. In line with India’s vision to achieve net zero by 2070, GAIL completed a comprehensive study on science-based net zero ambition and intends to achieve 100% reduction in scope-1 and scope-2 emissions and a 35% reduction in scope-3 emissions by 2040,” chairman and MD Manoj Jain said at the meeting.
Chattisgarh to build new 1.3GW thermal power plant in Korba
Chhattisgarh chief minister Bhupesh Baghel announced last week that state-run power company Chhattisgarh State Power Generation Company Ltd’s (CSPGCL) will set up a new mega thermal power plant with 1,320 MW capacity in coal district Korba. The plant will be the largest such facility and will be built using ultramodern technique and employ super critical technology. The proposal, which includes two units of 660 MW each will bring the state power company’s generation capacity by almost 45% percent to 4,300 MW.
ONGC, ExxonMobil agree to collaborate on deepwater oil and gas exploration in India
Energy majors ONGC and ExxonMobil signed a heads of agreement (HoA) that will see them explore deepwater oil and gas fields on India’s west and east coast. The two companies will work together on exploration, primarily focusing on the offshore areas of the Krishna-Godavari and Cauvery basins and the offshore area of the Kutch-Mumbai region. “Collaboration between ONGC and ExxonMobil will be a strategic fit where ONGC’s knowledge and past experience in these areas will be coupled with ExxonMobil’s global insights,” ONGC said in a statement.
Amid price spurt, big plans afoot for KG-D6 gas basin
Reliance Industries chairman and MD Mukesh Ambani, earlier this week, announced that the company will start natural gas production from the last of its three discoveries in the offshore area of the Krishna-Godavari delta (KG-D6) by the end of the year. The MJ field, which is being developed jointly with BP, will see output from the fields rise from 19 million standard cubic metres per day to 30 million standard cubic metres per day, and meet up to 15% of India’s gas demand.
Meanwhile, public oil and gas company ONGC sought to capitalise on the surge in gas prices this year by relaunching a tender for the sale of 0.75 million standard cubic metres per day from the basin at a higher price of $15 per mmBtu.
South African court upholds ban on offshore oil and gas exploration
Oil and gas major Shell has been prohibited from using seismic waves for oil and gas exploration off South Africa’s eastern coast as a high court in the country upheld its interim order stating the same from December 2021. Environmental groups had argued that the seismic waves would be disruptive and detrimental to the rich marine life that inhabits the Transkei and Algoa exploration areas.
Europe’s floating LNG terminals raise lock-in risks
Scrambling to replace Russian gas in time to meet winter energy-demand, Europe turned to floating LNG terminals to be fed mainly by natural gas from North America. With over 20 floating terminals rapidly moving through the pipeline, scientists have raised alarm that these terminals run the risk of perpetuating gas use in the continent and locking-in future climate change, through the release of CO2 and methane during production, transport and combustion.