MonitorsPublished on Sep 30, 2021
Energy News Monitor | Volume XVIII, Issue 12

Quick Notes

Local pollution and the politics of urban outrage


Now that the World Health Organisation (WHO) has issued higher standards for ambient air quality and most of India has fallen outside the limits for safety, the economic elite will indulge in the politics of outrage to grab disproportionate share of policy attention—time and money. The outrage over how policymakers, especially those in charge in urban areas such as Delhi, have failed to address the health of the elite will reverberate in all media. This outrage will be presented as a collective concern over health of all, but in reality, it is synthetic outrage arising out of the narcissism of the educated and wealthy elite.

Unlike the response to climate change for which there is no historic precedent, the response to local pollution has historic precedents. Cities such as New York and London were highly polluted when they were industrialising and relatively poor. They cleaned up as they got richer. This led to the adaptation of the Kuznets curve to the problem of local pollution. Simon Kuznets, an economist, observed in 1955 that income inequality would grow in the initial stages of development and fall after a peak. Kuznets’s arguments, originally advanced under more limited conditions was transformed into overarching theoretical, empirical, and political constructions by development economists in the 1990s. The inverted U-shaped curve between income and inequality became known as the Kuznets curve and is now widely used in development studies. The environmental Kuznets curve (EKC) investigated first in a paper on North American Free Trade Agreement (NAFTA) by Gene M. Grossman and Alan B. Krueger, in 1991 was later popularised through the World Bank’s World Development Report of 1992.

According to the EKC hypothesis, in the early years of economic growth, local environmental pollution increases but beyond a level of income per person, which is different for different types of pollution the trend reverses. In other words, local pollution follows an inverted ‘U’ shaped function of income per person. This means that economic growth may be the cause of local pollution in the early years of development but beyond a certain point, it becomes the means to reduce pollution. The income level that initiates concern over pollution is put at about US $4,000 per person which is twice the amount of India’s current per person income that is around US $2,000.

In the early years of rapid economic growth, scale effects of local pollution and environmental degradation dominate over the time effect of pollution reduction efforts.  In later years, growth slows down or shifts from heavy manufacturing to services and consequently the time effect of pollution reduction efforts dominates over scale effects of pollution and environmental degradation. Despite its logical clarity, the EKC has not been accepted as the last word on local environmental pollution and a rigorous academic debate continues over its validity.

The EKC influenced the idea of ‘sustainable development’ which essentially said that ‘we can have the cake and eat it too’ when it comes to the environment. Under this perspective, environmental degradation is framed primarily as a problem of poor environmental management. The environment can be ‘managed’ using technology along with economic or legal techniques such as making the polluter pay or mandating limits to pollution (what the WHO has just done). The 1992 World Development report of the World Bank endorsed this view.  According to the report:

The view that greater economic activity inevitably hurts the environment is based on static assumptions about technology, tastes and environmental investments…As incomes rise, the demand for improvements in environmental quality will increase as with resources available for investments’

This observation explains why the first to complain about an environmental problem are not the poor, who are most affected by it but by the wealthy who have few other survival issues (food, water and shelter) to worry about.  For example, the complaint over population pressure is not raised by the poor who live in crowded slums where 10 persons share 100 square feet of space but by those who live in large homes with more than 1,000 square feet of space for each member. Likewise, the pavement dweller or the street vendor in Delhi who almost exclusively breathes air polluted by vehicle exhaust and road and construction dust does not raise the issue of pollution.  It is the wealthy who occasionally go out.

The Politics of Outrage

It was the wealthy expat community which wanted to breathe clean air when they went out of their well-insulated and comfortable homes (or cars) to exercise or play that initially raised the issue in the 1990s in Beijing followed by Delhi in the 2000s. They installed air quality monitors in their premises and sent out press releases on the pollution levels in Delhi and Beijing. They coined words such as ‘Beijing cough’ to name and shame the cities which, in their view, were ignorant of pollution management techniques and technologies. The urban economic elite of the respective countries followed up with well-articulated outrage.

Based on a study by Gilens and Page, noted economist Dani Rodrik showed that when the elite manage to frame issues ,such as immigration or pollution, as concerns of the poor, such as presenting the impact of immigrants on entry level jobs and wages or linking pollution to deaths, it had a strong positive influence on government response. He cautioned that this could give a misleading positive impression of the representativeness of the government, especially over policies on strong national defence or a healthy economy where interests of the economic elites and the economic destitutes converged. Rodrik pointed out that when the preferences of the economic elite and the economic destitute diverged, it was the economic elites that counted. Rodrik highlighted the powerful impact of well-organised interest groups, which only economic elites and business groups can afford on government policy.

Gordon Tullock, who pioneered work on lobbying for rent-seeking observed that the influence of lobbyists came from their ‘ability to become an essential part of the policymaking process by flooding understaffed, under-experienced and overworked government offices with enough information and expertise to help shape their thinking’.  Think tanks funded by wealthy countries conduct studies on domestic and global pollution that influence environmental policymaking in developing countries.  Tullock’s partner in research, James Buchanan, a Nobel Laureate, coined the term ‘politics without romance’ to capture the sentiment of politicians and bureaucrats who as rational actors strive to do what is in their best interest just as market actors do. What is in their best interest is to follow the elite.

Urban Pollution and Electricity Demand

A recent study has found that a significant and hitherto ignored determinant of home energy demand is ambient particle pollution. Throughout the developing world, particle concentrations in outdoor air fluctuate in the visible range—PM2.5 (particulate matter) between 20 and 200 µg/m3 (micrograms per cubic metre). Particles cause smog or haze, which is visible. The naked eye can detect differences in PM2.5 concentrations below 10 µg/m3 vs. above 50 or 100 µg/m3. The hypothesis is that higher PM2.5 induces households to stay indoors more and, instead of naturally ventilating their home, they close their windows and use defensive capital, ranging from portable air purifiers to more powerful wall mounted ACs or heaters. This defensive behaviour, which is a response to ambient pollution, increases energy demand and the greenhouse gas emissions that are typically coproduced to meet that demand. The defensive behaviour has environmental justice implications. Poorer households are less willing or less able to invest in defensive capital, from windows that close to air conditioners and purifiers that to some degree abate indoor particle levels.

Academic Support

Studies that suggest a strong causal link between pollution levels and health generally use statistical and graphical techniques dependent on questionnaire-based surveys conducted amongst a small group of people. These studies essentially establish a link between the health of urban dwellers and urban pollution levels by pointing out that the number of visits to the doctor or events of death were above normal during the periods of pollution.  Critiques of such studies point out that the procedures used in these studies are inadequate to establish a clear link between pollution and health problems and that extreme care is required when interpreting such small sets of data. Studies also questioned the use of questionnaires and other voluntary responses to measure the effect of air pollution. They argued that as awareness of high pollution levels is increased by news media, survey responses were likely to be influenced by the nature of news coverage. For example, after the release of the revised air quality norms by WHO and wide coverage of the issue in the media, complaints about health effects of pollution are likely to increase.  Some studies also pointed out that people who ‘died’ of pollution would have to have a serious prior illness and that pollution would have merely hastened death by a few days.

The point being made here is not that urban pollution is not a problem. It is a serious problem, but it gets the attention that it gets because it affects the wealthy. Poverty that stunts growth, results in malnutrition, and ultimately causes disease and death does not get the attention it deserves because it is not a concern of the wealthy. Political leadership that tries to address concerns of the poor are very likely to be voted out because the wealthy are averse to redistributive policies. Elite outrage over urban pollution is more about ‘us’, the rich who are less affected by pollution than about ‘them’ the poor. It will shift scarce public finances raised by taxing consumption of fuels and other goods, a burden that falls most heavily on the poor as it accounts for a large share of their income towards subsidising urban pollution reducing measures such as the purchase and use of electric cars. This is essentially a subsidy from the poor to the rich.

Source: WHO for WHO revised air quality guidelines and Central Pollution Control Board (CPCB) for India

Monthly News Commentary: NON-FOSSIL FUELS

Solar Manufacturing Investment Picks Up


Solar Manufacturing

First Solar, a US-based solar panel manufacturer, plans to invest US $684 million (mn) (INR 50.3 billion (bn)) in a fully vertically integrated photovoltaic (PV) thin-film solar module manufacturing facility of 3.3 Giga Watt (GW) capacity in Tamil Nadu, India. As per the company, upon permissions and pending approval of Indian government, the facility is expected to commence operations in the second half of 2023.

Solar Pumps

To achieve the aim of installing 100,000 solar agricultural pumps in Maharashtra, an impetus has been given to the Chief Minister’s Solar Agricultural Pump Scheme to provide day-time power supply to farmers for irrigation. According to MSEDCL (Maharashtra State Electricity Distribution Company Ltd), a total of 85,963 farmers in the state have been given 3, 5, and 7.5 horsepower solar agricultural pumps. As the warranty period of installed solar pumps and panels is five and ten years respectively, the cost of maintenance for farmers is zero.

Despite the fact that Punjab has witnessed the worst of power crisis this paddy season and the state government’s burden on account of free power being provided to farmers for operating water pump sets or tube wells has touched INR 67.35 bn (US $916 mn) this year, the state hasn’t fallen back on solar-powered water pumps too much, which would have otherwise helped tide over the crisis to a great extent. Punjab is way behind its neighbour Haryana in the installation of solar water pumps. Against a total of 14,254 solar water pumps installed in Haryana, Punjab has got hardly 2,925 till date. Under the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) scheme of the MNRE, 121 such solar water pumps have also been installed in the neighbouring state of Himachal Pradesh. As per the MNRE, to install these solar power pumps, the Central government has released INR 620 mn (US $8.4 mn) financial support to the Haryana government, INR 200 mn (US $2.7 mn) to the Punjab government and nearly INR 30 mn to the Himachal Pradesh government. In all, a total number of 47,726 solar power pumps have been installed in 13 states till June 30 for which the central assistance of INR 3.08 bn (US $41.9 mn) has been provided. Rajasthan has installed the highest number of 15,549 solar power pumps followed by 14,254 by Haryana and 7,234 by Madhya Pradesh.

RE Policy and Market Trends

India is shining in energy transition by treading a strong renewable energy path post-2015 Paris Agreement as it witnesses a step-up in investments in solar energy. Additionally, there’s a significant slowdown in investments in thermal power plants. Recently, the Ministry of New and Renewable Energy (MNRE) announced that the total installed renewable energy capacity in India, excluding large hydropower, has crossed the milestone of 100 GW or 100,000 Mega Watt (MW), about 26 percent of the total capacity, a turning point in the history of renewables as India is celebrating 75th Independence Day. Coincidently, this milestone came at a time when the Intergovernmental Panel on Climate Change (IPCC) report was launched citing the need for urgent climate actions collectively to keep global warming under 1.5 degrees. The IPCC report paints an even bleaker picture of a planet at risk of seeing dramatic changes in its fundamental parameters which have made human civilisations possible, if emissions from fossil fuels and other sources are not immediately contained. India has taken several initiatives, including setting up of the International Solar Alliance, for raising the domestic renewable energy target to 450 GW by 2030 and putting in place an ambitious National Hydrogen Mission and continuing efforts to decouple its emissions from economic growth. With the total installed renewable energy capacity reaching 100 GW, India now stands fourth in the world in terms of installed renewable capacity, fifth in solar and fourth in wind in terms of installed capacity. While Gujarat, Maharashtra, Chhattisgarh, and Karnataka have stated their intention not to build further coal fired generation and expand their generation through renewables, given India’s commitment to achieve 450 GW by 2030 a rationalisation of coal use is now a must. According to Central Electricity Authority (CEA) projections, instead of 40 percent, India will have 63 percent of installed capacity from non-fossil fuel sources by 2029-30. Now, India has a target of installing 175 GW of wind and solar energy by 2022. If achieved, that would be close to 50 percent of India’s current total installed power capacity.

Roof Top /Distributed Solar Projects

By next March, South Delhi Municipal Corporation is targeting to install solar panels at most of its schools, community halls and office buildings. The civic body claims it will generate a revenue of around INR90 mn annually with the 13 MW solar panels, in addition to eliminating the electricity cost at the selected buildings. As of now, 209 school buildings have the solar facility to generate 7.3 million kWh) of electricity and the total generation capacity stands at 9.3 MW.

Gujarat Urja Vikas Nigam Ltd (GUVNL) has withdrawn subsidy to small-scale distributed solar projects, affecting about 4000 projects with an aggregate capacity of around 2500 MW signed power. The purchase price of power produced was fixed at INR 2.83/kWh which was already far lower than other states like Rajasthan and Maharashtra, where they set Power Purchase Agreements (PPA) tariff rates at higher than INR 3.15/kWh. In March 2019, the ‘Policy for Development of Small Scale Distributed Solar Power Projects’ was first announced by the government with the aim of encouraging the distributed generation of solar energy. This scheme was intended to support Prime Minister’s ambitious renewable energy goals.

Utility Scale Solar Projects

The huge investments being made by companies in the solar energy sector have opened up great opportunities for permanent employment in Uttar Pradesh (UP). The UP government’s Solar Energy Policy 2017 is not only dispelling darkness from every village of the state, but also creating plethora of opportunities for people to earn their living from it. In UP, according to the government, in the last four and a half years, solar power projects of 1,370 MW capacity have been commissioned while projects of another 417 MW capacity are under construction. Big investors are coming forward to invest in solar energy sector in the state. Besides, several investment proposals for solar power projects are currently under government’s consideration. With these efforts, thousands of people have got employment in solar energy projects in UP while power supply has become more regular in rural areas and the environment is also benefiting with increasing use of renewable solar energy. The business of solar panels, solar lights, solar batteries and solar cookers has also picked up in the state. The Solar Energy Policy 2017 provides open access to companies for the establishment of solar park and third-party sale of solar energy.

Torrent Power has inked an agreement with Lightsource India Ltd and Lightsource Renewable Energy (India) Ltd for acquisition of a 50 MW solar plant. The enterprise value for the deal is around INR 3.17 bn (US $43.1 mn). The SPV (special purpose vehicle) operates a 50 MW solar power plant, commissioned in April 2018, situated in Maharashtra. It has a long-term power purchase agreement with Solar Energy Corporation of India Ltd for full capacity for a period of 25 years. Torrent Power currently has an aggregate installed generation capacity of 3,879 MW comprising 2,730 MW gas-based capacity, 787 MW renewable and 362 MW coal-based capacity. Further, renewable power projects of 815 MW are under development. With the acquisition of the 50 MW solar power plant, Torrent’s total generation capacity, including under construction portfolio, will exceed 4.7 GW with renewable portfolio of more than 1.6 GW.

In a unique project, the Maharashtra government’s power generation and distribution arms have commissioned a 7 MW solar power plant in Dhule district purely for the farmers’ agriculture pumps and their domestic uses, which otherwise attract huge cross-subsidy from ordinary consumers (such as in Mumbai) to subsidise their (farmers’) billing. Set up close to agriculture feeder Degaon village, the solar power plant has not only reduced transmission and distribution losses for some 2000 to 3000 farmers spread over Shindakhede taluka (of Dhule district), but also the wheeling charges mounted on the billing against bringing electricity from distantly located thermal power plants. The plant is spread over 50 acres of land and has solar modules ‘Made in India’ along with string inverters to maintain high uptime. Panasonic Life Solutions India has built this plant for Gro Solar Energy Pvt Ltd, the original contractor of the project appointed by Mahagenco and Mahadiscom under the government’s ‘Mukhyamantri Saur Krishi Vahini Yojana’. This project will add approximately 15,891 MWh (15.89 MU) of solar energy and assist in eliminating a total of 14,300 tons of carbon dioxide emissions over the lifetime of this plant.

The BSES discom has signed a 510 MW solar and hybrid power agreement with the Solar Energy Corp of India (SECI), a move that will help provide green and clean electricity to Delhi at “economical rates”. The Reliance Infrastructure-led BSES discoms—BRPL and BYPL—are the first in Delhi to ink an agreement for hybrid power which is a pooled mix of solar and wind power co-located at the same site. The company is of the view that hybrid power will lead to optimum cost utilisation and enable BSES discoms fulfil their renewable power obligations. The BSES discoms have already started the process to come out of costly power purchase agreements by petitioning the Delhi Electricity Regulatory Commission (DERC), to allow it to exit seven power plants that have completed 25 years of operation or about to do so within a year. As per the company, inked for a period of 25 years, the solar and hybrid power is expected to be available to Reliance Infrastructure led BSES discoms 18 months after signing of the agreement at a “very competitive tariff” of INR 2.44/kWh for solar and INR 2.48/kWh for hybrid.

NTPC Ltd ‘s renewable arm has emerged winner at the Rewa Ultra Mega Solar Ltd auction for 450 MW solar projects at the Shajapur Solar Park in Madhya Pradesh (MP). NTPC Renewable Energy has won a capacity of 105 MW and 220 MW, quoting the lowest tariff of INR 2.35/kWh and INR 2.33/kWh respectively. The tender received overwhelming response from the bidders with a total of 15 bidders being shortlisted. As a part of its green energy portfolio augmentation, NTPC aims to build 60 GW renewable energy capacity by 2032. Currently, the state-owned power major has an installed capacity of 66 GW across 70 power projects with an additional 18 GW under construction.

The Bengaluru Metro Rail Corporation Ltd (BMRCL) is making a fresh attempt to exploit the potential of solar energy at its properties by partnering with private firms. The corporation had announced similar plans in Baiyappanahalli and Peenya depots but the project did not take off. BMRCL confirmed that all stations proposed under Namma Metro’s Phase II, Phase II-A (Outer Ring Road) and Phase II-B (connecting airport) are designed for the installation of solar panels. The BMRCL’s annual report also states that the stations and depot areas will have solar-based power systems. Most Metro corporations across the country including New Delhi, Mumbai, Kochi, and Chennai have already installed solar plants in the stations and depots for drawing electricity to meet the day-to-day power demands for lighting and other auxiliary requirements.

Kolkata-based mining and minerals group Atha plans to exit their clean energy business by selling 365 MW assets spread across seven states. The proposed deal is likely to value the assets at an enterprise value of INR 20 bn (US$ 272 mn). Atha has 200 MW assets in Tamil Nadu, 15 MW in Telangana, 20 MW in Karnataka, 50 MW in Maharashtra and the rest is in Rajasthan and Madhya Pradesh. The bids are expected to be in by 25 of this month. In 2017, Atha Group companies – Narbheram Vishram and NVR Energy had won the bid to supply 200 MW of solar power to Tamil Nadu Generation and Distribution Corporation (TANGEDCO), out of the 2000 MW capacity sought to be developed by TANGEDCO. The 60-year-old Atha Group is diversified into iron-ore mining, power & steel and Calcined petroleum coke, besides renewable energy.

Hydro Power

Public sector hydropower major SJVN Ltd reviewed the operational performance of its two mega facilities — the 1,500 MW Nathpa-Jhakri Hydro Power Station and the 412 MW Rampur Hydro Power Station. As per the company, the SJVN has set record power generation from all its generating units, including renewable projects, in July with 1,580 MU surpassing the previous record of 1,563 MU during this month in 2020. The SJVN operates all of its power stations with the highest level of competence of international standards.

With rains in the past few days leading to a rise in water level in the dams in the district, Kerala State Electricity Board (KSEB) has increased power generation at power stations in Idukki and Edamalayar to their maximum capacities. As per the KSEB, the storage levels in hydel dams are higher due to lower power generation. Due to the pandemic and the subsequent lockdown power consumption has largely reduced in the state resulting in an increase in water levels in the hydel dams.

Wind Power

High wind speed across coastal regions of Gujarat has pushed up electricity generation from wind energy close to record-level. The average wind power generation in Gujarat shot up 106 MkWh or 4,432 MW, which was in striking distance of the all-time high wind power generation of 108 M kWh or 4,600 MW recorded across the state in July 2019. The average generation was just 552 MW (13 MkWh). According to the Western Regional Load Dispatch Centre (WRLD), a central government entity, the daily peak of wind power generation in Gujarat was recorded at 4,712MW, when the state’s maximum electricity demand was recorded at 14,758 MW. In fact, the state produced more power from wind farms than conventional thermal power plants. Electricity generation from wind energy sources is growing at a faster rate with new projects coming up across Gujarat, which is the second largest producer of wind power (with total installed capacity of 7,542 MW) in India after Tamil Nadu. Despite challenges posed by the COVID-19 pandemic, Gujarat witnessed the highest addition of wind power generation capacity in the country during 2020-21. As per the Indian Wind Turbine Manufacturers Association (IWTMA), wind power projects having cumulative generation capacity of 1,020.3 MW were installed and commissioned in Gujarat from April 2020 to March 2021.


MNRE has launched a loan interest subvention scheme in association with UNIDI and GEF to provide financial assistance for innovative waste to energy bio-methanation projects. The industrial organic waste-to-energy bio-methanation projects are generally capital intensive and financially sensitive to both operating costs, including waste availability, and revenue, particularly biogas yield and its utilisation scenario.

Rest of the World


China’s non-fossil fuel power generation capacity is expected to exceed coal-fired power capacity for the first time in 2021, according to China Electricity Council (CEC). CEC estimates China’s total power generation capacity will reach 2,370 GW by end-2021. Of which, coal-fired power capacity will stand at 1,100 GW, while capacity of non-fossil fuel sources, including solar, wind, hydro, nuclear, and biomass, will be around 1,120 GW. China’s solar manufacturing association had forecast that up to 65 GW of solar power capacity will be added in the country this year. China had about 980 GW of non-fossil fuel power capacity in 2020, accounting for 44.8 percent of the country’s total power capacity. The world’s biggest coal consumer has vowed to promote renewable energy use and lower the share of coal consumption in its energy system. But coal will retain a significant role in China’s energy security and power supply during the peak demand season, partly due to intermittent renewable power generation and inadequate energy storage facilities to guarantee stable operations on the grid.


IKEA, the world’s biggest furniture brand, is branching out into selling renewable energy to households, starting with home market Sweden in September. Ingka Group, the owner of most IKEA stores worldwide, is of the view that households would be able to buy affordable renewable electricity from solar and wind parks, and track their usage through an app. Ingka’s partner Svea Solar, which produces solar panels for IKEA, will buy the electricity on the Nordic power exchange Nord Pool and resell it without surcharge. Households will pay a fixed monthly fee plus a variable rate. According to IKEA, which also sells solar panels for households in 11 markets, those buyers would be able to track their own production in the app and sell back surplus electricity. Ingka’s plan was to offer electricity from solar and wind parks five years old or less, as a way to encourage the building of more parks.

Other Asia Pacific

Indonesia will begin work on a 145 MW floating solar power project, the largest in Southeast Asia, after state power utility Perusahaan Listrik Negara (PLN) and Masdar of United Arab Emirates agreed financing for the project. Indonesia aims to have 23 percent of its energy from renewable sources by 2025 and the country will try to reach net zero emissions by 2060 by moving away from coal. A joint venture between a unit of PLN and Masdar in West Java, the Cirata floating photovoltaic power plant is expected to be the largest of its kind in Southeast Asia and is scheduled to begin commercial operation in November 2022.

Korea Southern Power started commercial operation of the Jordan Tafila Wind Power Project. Jordan Tafila Wind Power Project is the first overseas wind power project conducted by Korea Southern Power. It is a project that Korea Southern Power and DL Energy invested 50 percent of shares each to build and operate 15 wind power generators, which have a generation capacity of 3.45 MW each, in Tafila, Jordan. A total of 120 bn won (US$ 102 mn) was invested in this project. The company will supply electrical power to more than 50,000 households in Tafila through the wind farm. Korea Southern Power predicted that it will generate a total of 360 billion won (US$ 307 mn) in sales through an electricity supply contract with Jordanian National Electric Power Company (NEPCO) for 20 years after the completion of the wind power plant.

Indonesia plans to make the co-firing of biomass in power stations mandatory as part of its efforts to phase out coal power plants, which account for more than 60 percent of its electricity supplies. The Southeast Asian country is the world’s biggest thermal coal exporter and relies heavily on the fuel domestically, but authorities have pledged to start phasing out coal under climate change commitments. The government is preparing a regulation to implement the mandatory co-firing, which would apply to state electricity utility PT Perusahaan Listrik Negara (PLN) as well as independent power producers. According to PLN, it is planning to gradually retire its coal power plants as part of its ambition to reach carbon neutrality by 2060. The state power company plans to start co-firing at 52 of its biggest coal power plants and has estimated it could replace 9 million tonnes (mt) of coal per year with biomass.

Japan will raise its target for renewable energy in the country’s electricity mix for 2030 as it pushes to cut emissions to meet commitments under international agreements on climate change, according to a draft of its latest energy policy. The country’s revised basic energy strategy leaves unchanged its target for nuclear power, even though the country has struggled to return the industry to its former central role after the Fukushima disaster of 2011. The industry ministry’s policy draft released said renewables should account for 36-38 percent of power supplies in 2030, double the level of 18 percent in the financial year to March 2020. The earlier target was for renewables to contribute 22-24 percent of electricity in 2030. The use of coal, the dirtiest fossil fuel, will be reduced to 19 percent from 26 percent under the new plan. Gas, which comes to Japan in the form of imported LNG will make up most of the rest of the fossil fuel portion of the target energy mix, which was set at 41 percent, down from 56 percent. Japan’s nuclear target was left unchanged at 20-22 percent. New fuels like hydrogen and ammonia will account for about 1 percent of the electricity mix in 2030. The draft highlights Japan aims to reduce its reliance on nuclear power as much as possible while it boosts renewable power capacity, but nuclear power will remain as an important base-load power source.

News Highlights: 18 – 24 August 2021

National: Oil

India’s crude oil production continues to fall, dips 3.2 percent in July

24 August: India’s crude oil production continued its declining trend, falling by over 3 percent in July as ONGC (Oil and Natural Gas Corporation) produced less than the target. The country’s crude oil production declined by 3.2 percent in July to 2.5 million tonnes (mt) when compared with the previous year, and by 3.37 percent in April-July to 9.9 mt, according to data released by the Ministry of Petroleum and Natural Gas. ONGC produced 1.6 mt of crude in July. This was 4.2 percent lower than last year and 3.8 percent less than the target of 1.7 mt. During April-July, ONGC’s oil output fell 4.8 percent to 6.4 mt. As fuel demand rebounded, oil refineries processed more crude oil in July. At 19.4 mt, crude processing in July was 9.6 percent higher than the year-ago period. The crude throughput in July was the highest in three months, as the easing of coronavirus restrictions boosted economic activity and fed demand for fuel. Public sector refineries processed 5.6 percent more crude at 11 mt while private refiner Reliance Industries Ltd (RIL) turned 14.4 percent more crude into fuel. Refineries produced 6.7 percent more petroleum products in July at 20.7 mt and 13 percent more in April-July at 80.6 mt. Overall, the refineries operated at 91.34 percent of their installed capacity.

Source: Business Standard

AIADMK government raised petrol prices multiple times, alleges DMK

24 August: Tamil Nadu Finance Minister, PTR Thiagarajan has said that the previous AIADMK government had raised petrol prices by five times during its one-decade rule from 2011 to 2021. The Finance Minister (FM) said that while the previous government had raised the petrol prices five times, it did not have the courage to reduce it even once. After the Tamil Nadu government under Chief Minister MK Stalin reduced the price of petrol by INR 3 per litre, it was welcomed across the state. The FM had then said that the government’s move was aimed at two wheeler riders and small car users and that the consumption of petrol has increased after the government reduced its price by INR 3 per litre.

Source: The Economic Times

Priyanka Gandhi attacks Centre over rise in price of LPG cylinders

23 August: Congress leader Priyanka Gandhi attacked the central government over the rising prices of liquefied petroleum gas (LPG) cylinders. Earlier on 11 August, Priyanka Gandhi had slammed the Central Government over the issue of inflation and also asked the Centre to give subsidies to the poor on Ujjwala LPG cylinders. On 10 August, Prime Minister Narendra Modi launched the Ujjwala 2.0 (Pradhan Mantri Ujjwala Yojana – PMUY) by handing over LPG connections at Uttar Pradesh’s Mahoba through video conferencing.

Source: The Economic Times

National: Gas

Vedanta makes gas discovery in Gujarat

24 August: Vedanta said it had made a natural gas discovery in a block in Gujarat that it had won in the open acreage licensing policy (OALP) round. The approval of the management committee has also been sought. The block was awarded to the company in October 2018 and is one of the 41 areas awarded to it in OALP-I round of bidding.

Source: The Hindu

India’s surging domestic gas output to dent LNG import, but not for long: Wood Mackenzie

20 August: Helped by new output from KG-D6 fields of Reliance-BP, India’s domestic gas production, which had been falling for more than a decade because of declining output from legacy fields, now looks in rude health, according to energy consultancy Wood Mackenzie. Reliance Industries Ltd (RIL) and its partner BP Plc of UK in December last year started putting the second wave of gas discoveries in eastern offshore KG-D6 block to production with R-Series started flowing gas. In April they started output from the Satellite Cluster fields. This helped raise India’s gas production by almost 20 percent, oil ministry data showed. In the weekly blog ‘APAC Energy Buzz’, the energy consultancy’s Asia Pacific vice-chair Gavin Thompson said India’s domestic gas production has been in a sorry state for years. In 2020, LNG (liquefied natural gas’ demand increased by around 14 percent to reach 25.7 million tonnes (mt), with India climbing the ranks of the world’s most important LNG markets. Last year’s low traded LNG prices saw India import over 9 mt of spot LNG as the country’s price-sensitive buyers came in from the cold. With the KG-D6 deepwater projects ramping up and new output from onshore blocks in Rajasthan of Vedanta and coal bed methane projects, India’s gas producers are reversing years of decline. Supporting this has been changes in government policy across gas pricing, marketing, and pipeline tariffs. The rising availability of competitively priced domestic gas is injecting fresh life into India’s gas market. But beyond the projects of Reliance-BP, ONGC and Vedanta, India’s pipeline of pre-FID (final investment decision) domestic gas supply is perilously thin. LNG demand, it said, is expected to grow by around 5 percent annually between 2024-2030, reaching almost 37 million tonnes per annum.

Source: The Economic Times

National: Coal

2.38 lakh tonnes coal missing in Chennai: TN Electricity Minister

21 August: Alleging discrepancy between records and the stock on hand, Tamil Nadu Electricity Minister V Senthil Balaji claimed that about 2.38 lakh tonnes of coal, meant to fuel the thermal power plant in North Chennai, has gone missing. Expressing shock over the purported irregularities, the Minister who inspected the North Chennai Thermal Power Station at Ennore, said the inconsistency came to light during an inspection by senior officials.

Source: The Economic Times

Rajasthan power generator runs out of money to pay for coal

20 August: Rajasthan Vidyut Utpadan Nigam Ltd (RVUNL) has run out of cash to pay for coal and keep running the state’s power plants. It shut down 600 MW unit of Kalisindh Thermal Power Plant on 11 August and switched off the second unit of same capacity on 15 August. Now, it seems the 1,500 MW Suratgarh Thermal Power Station could be next in line. Most of the power plants of the state have coal for a day or two and it takes 2-3 days to transport them from the mines in the eastern part of the country. The state power generator company (RVUNL) owes INR 8.50 bn to Coal India and INR18.50 bn to Parsa Kanta Collieries Ltd (PKCL). Recently, both the coal suppliers had sounded out RVUNL that supply would be disrupted if dues are not paid. In fact, Coal India Ltd (CIL) had stopped supply in the past few weeks and only resumed with one rake recently. PKCL started supplying with restricted capacity after it was paid INR 3.75 bn in recently. RVUNL paid INR 1.25 bn to CIL to resume the supplies. But CIL has decided to supply only 3 rakes. All the government power plants require 16 rakes of coal per day (One rake contains 4000 tonne). PKCL has also reluctantly agreed to supply 4-5 rakes a day.

Source: The Economic Times

National: Power

Government expects INR 398.32 bn from sale of power generation assets by FY25

24 August: Government’s think tank NITI Aayog has valued state-owned power generation assets at INR 398.32 bn which can be monetised by the financial year 2025, according to the National Monetisation Pipeline (NMP). Finance Minister Nirmala Sitharaman announced a INR 6k bn NMP that will look to unlock value in infrastructure assets across sectors ranging from power to road and railways.

Source: The Economic Times

Andhra farmers give consent for installation of electricity meters under DBT scheme

23 August: About 92 percent of the total farmers in the state have given their consent to the power utilities to implement the DBT (direct benefit transfer) scheme and signed agreements for the installation of meters in the farmlands, according to the state energy department. Under the DBT scheme, the government will deposit the entire amount of electricity bill(s) into the accounts of farmers, and the farmers would pay to the discoms (distribution companies). The state government has introduced the DBT for the free power scheme, which the Union government also suggested implementing to improve the quality of power with accountability. The DBT scheme, which was implemented as a pilot project in Srikakulam district, was successful with 98.6 percent of the farmers giving their consent voluntarily. As of now, there is no practical assessment or accurate measurement of the electricity load in the agriculture sector in the state.

Source: The Economic Times

24×7 power supply to every village in India soon: Singh

21 August: Union Minister for Power and New and Renewable Energy R K Singh said all villages in the country will get 24×7 electricity supply soon. He said the ministry of power has started working on the plan to ensure 24-hour electricity availability in all the villages. He said, in the year 2015, only 10 to 12 hours of electricity was available in the villages. He said in urban areas of the country, electricity is available 24 hours at some places and work is on to ensure power availability for 24 hours. He said there is a demand of 2 lakh MW power in the country while the total power generation capacity has reached 3,84,000 MW.

Source: The Economic Times

Farm use drives power demand across Gujarat to new high

19 August: Power demand across Gujarat soared to a record high, thanks to the increased consumption of electricity in the agriculture sector amidst the stalled monsoon. With more and more farmers drawing groundwater using pumps to save their crops, the electricity demand from the agriculture space, too, has reached near its all-time high level. The state’s maximum power demand stood at 19,431 MW, which is the highest so far, shows the daily data compiled by the Western Region Load Dispatch Centre (WRLDC), which is a central government entity. Previously, the power demand had touched a high of 19,360 MW in April this year. The surge in demand is primarily attributed to the growing usage of electricity by farmers for irrigation purposes. The state government also raised the time for supply of power to farmers to 10 hours a day, which has also contributed to the higher consumption.

Source: The Economic Times

CESC to focus on power distribution biz for growth

19 August: RPSG group flagship CESC would focus on distribution for growth as electricity generation, especially thermal power, will not remain its core area of focus. This was disclosed by RPSG group Chairman, Sanjiv Goenka, at the annual general meeting of the company. The group chairman made it clear that the company will be a greener one and regressive thermal power will not be the growth driver. He added that most of the subsidiaries of CESC which are in distribution business have made a turnaround except the one in Kota, Rajasthan. Recently, Eminent Electricity Distribution, the power distribution arm of RPSG group, had its own distribution licence for Chandigarh beating the likes of Tata Power, Adani, NTPC, Vedanta and others. The company was floated after consolidating all non-Kolkata power distribution business of the company earlier this year as part of the group restructuring of the distribution business. Besides Kolkata, different subsidiaries of CESC had distribution licences in other cities. These include Noida, Malegaon, Kota, Bharatpur, Bikaner. Chandigarh would be the latest addition in the list. The RPSG group had planned to demerge CESC’s distribution and generation business as well along with other businesses but later that plan was put on hold following regulatory issues.

Source: The Economic Times

National: Non-Fossil Fuels/ Climate Change Trends

Gautam Solar installs 1k solar pumps in Haryana

24 August: Solar power equipment maker Gautam Solar said it has installed 1,500 solar pumps at various locations in Haryana under the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme. By May 2021, the company had installed 1k solar pumps in Haryana. According to the company, by August, the company bagged an order of about 1,500 more solar pumps from Haryana farmers. The government has set a target of installing 22,000 standalone solar pumps in Haryana within the first year of the scheme. Under this scheme, the farmers only have to bear 40 percent of the pump’s cost, while the Central and state governments subsidise the remaining 60 percent for solar pumps.

Source: The Economic Times

Himachal Pradesh lights up rocky villages with solar power

23 August: Remote rocky villages of Himachal Pradesh, where snowfall often damages electricity transmission lines for days and breathing kerosene fumes is the only option, are coming out of darkness with the government installing solar lights for individuals and community places. Also it is providing solar-run pump sets, cookers and lamps across the hydropower surplus state. The state’s tribal areas—Lahaul-Spiti and Kinnaur districts and some pockets in Chamba district—are often deprived of electricity due to breakage of transmission lines during winter. To scale up action on energy efficiency and to mitigate power crisis in winters, the government is setting up off-grid solar power plants and micro hydropower projects in remote areas. The Pangi Valley in Chamba district is one such tribal area where an initiative has been taken to provide electricity to poor families, under which an off-grid solar plant of 250 Watt is being provided to each of them.

Source: The Economic Times

GAIL scouts for acquisition to augment renewable portfolio, to foray into hydrogen

​​23 August: India’s top gas company GAIL (India) Ltd will foray into hydrogen generation and take the acquisition route to scale up its renewable energy portfolio as it pivots business beyond natural gas to align with energy transition being witnessed across the globe. As part of a push to embrace cleaner forms of energy, GAIL will be laying pipeline infrastructure to connect consumption centres to gas sources while also augmenting its renewable energy portfolio, GAIL Chairman and Managing Director Manoj Jain said. To accomplish a cleaner primary energy mix for India, the government is emphasising the expansion of the natural gas sector so as to achieve a gas-based economy along with growth in renewables. GAIL as a leading integrated energy major has aligned with this vision, he said. The firm is laying around 6,000-kilometres of pipeline, including a west coast to east coast pipeline from Mumbai to Jharsuduga in Odisha via Nagpur, he said. It currently has around 13,700-km of natural gas pipeline network.

Source: The Economic Times

Jaisalmer, Pushkar to be developed as solar cities: Energy minister

19 August: Jaisalmer and Pushkar will be developed as solar cities in the state, according to state Energy Minister B D Kalla. The Minister said rooftop solar power systems, solar parks, solar street lights and solar powered-power electric vehicles will be key features of the cities. The programme aims at reduction in projected demand of conventional energy which can be achieved through a combination of energy efficiency measures and enhancing supply from renewable energy sources. The programme assists urban local governments in preparation of a master plan for increasing energy efficiency and renewable energy supply in the city, setting-up institutional arrangements for the implementation of the master plan and creating awareness and capacity building activities.

Source: The Economic Times

India adds 1.5 GW utility-scale solar capacity in Q2 2021

18 August: India added 1.5 GW of utility-scale solar capacity in the second quarter (Q2) of 2021, about 30 percent less than the previous quarter installations, according to a recent market report. It said that India is estimated to add about 3.1 GW of solar and 1 GW of wind capacity in Q3 2021. According to the report released by JMK Research, as of 30 June 2021, India’s installed renewable capacity reached 96.95 GW. Projects of 25 GW capacity are still under the bidding phase. The report said that the country will add about 10.3 GW of utility-scale solar capacity and 2.8 GW of wind capacity in 2021. It said that in the first half of 2021, about 3.5 GW of new utility-scale solar capacity was added, which was 63 percent higher than the installations in the same period last year. Rajasthan, Uttar Pradesh, Gujarat, and Andhra Pradesh were the leading states with most of the large-scale solar installations during this period.

Source: The Economic Times

International: Oil

US holds largest oil reserves sale in 7 years

24 August: The US (United States) is holding its largest sale of oil from strategic reserves since 2014 at a time when the outlook for fuel demand is darkening amidst the resurgent COVID-19 virus. The Energy Department plans to auction off 20 million barrels of crude, twice as much as it offered for sale three and a half months ago. The oil will be delivered during the fourth quarter, when US demand for gasoline and other fuels typically falters and refineries slow down oil purchases while they shut down equipment for repairs and maintenance. The sale comes after crude prices have dropped 15 percent since touching a six and a half-year high in early July as the spread of the delta variant threatens to derail the economic recovery and return to business as usual. Companies including BlackRock Inc. and Jefferies Financial Group Inc. are postponing plans to return workers to offices. But the US won’t have problems to sell the barrels because production hasn’t entirely caught up with demand, according to John Coleman, an analyst for North American crude markets at Wood Mackenzie Ltd. The market will still be in a deficit in the fourth quarter, and the 20 million barrels released from the nation’s emergency reserves should be absorbed.

Source: Rigzone

Libya budget battle could imperil oil output

18 August: Libya will struggle to sustain its levels of oil production unless lawmakers overcome a lengthy dispute and pass the Organisation of the Petroleum Exporting Countries (OPEC) member’s first nationwide budget in about seven years, the Energy Minister Mohamed Oun said. The North African nation is pumping roughly 1.3 million barrels of crude per day, and aims to increase that to 1.5 million by the end of 2021, Mohamed Oun said. Oun said his ministry has requested 7 billion dinars (US$1.5 billion) for projects to develop the oil sector, but only 3 billion dinars have been earmarked in the draft budget. The state-run National Oil Corporation has long complained it needs more money to fix Libya’s aging infrastructure.

Source: Rigzone

International: Gas

China’s Sinopec adds new tanks at east China gas receiving terminal

24 August: China’s Sinopec Corp said it has completed adding two new tanks for liquefied natural gas (LNG) at its receiving terminal in the eastern province of Shandong, two months ahead of the winter heating season starting mid-October. The tanks, each sized 160,000 cubic meters, were ready for use this month since construction began in November of 2018, bringing the terminal’s annual handling capacity to 7 million tonnes (mt), or equivalent to 9.6 billion cubic metres a year, Sinopec said. This would be 17 percent more than its current annual capacity of 6 mt. The state oil and gas major also said it is aiming to double the Qingdao terminal’s capacity to 14 mt annually by end of 2023, making it the largest in the country by then.

Source: The Economic Times

Papua New Guinea resumes talks with Exxon on gas field agreement

23 August: The Papua New Guinea government and US (United States) oil major Exxon Mobil Corp plan to resume talks on the P’nyang natural gas project, nearly two years after their negotiations halted, Oil Search Ltd, a partner in the project, said. The government has been pressing for better returns for the impoverished country than it obtained in the original PNG LNG agreement in 2008. The talks are focused on developing the P’nyang gas field. Exxon and its partners, including Oil Search, had intended to develop P’nyang to feed a new processing unit, or train, at the two train PNG LNG plant. However, since the talks collapsed, the thinking has moved toward developing P’nyang further down the track to feed the existing trains as the current gas sources dry up, rather than expanding PNG LNG, Oil Search has previously said.

Source: The Economic Times

Just 15 km of Nord Stream 2 gas pipeline to go: Russian President

21 August: There are only 15 kilometre (9 miles) left to finish the Nord Stream 2 gas pipeline from Russia to Germany that bypasses Ukraine, Russian President Vladimir Putin said. The US $11 billion project doubling the capacity of the first Nord Stream pipeline to 110 billion cubic metres a year has been a focal point of tensions between Moscow and the West. Despite US (United States) sanctions, Nord Stream 2 is almost complete and the key question is how Russia will ship its gas to Europe once a current transit deal between Kyiv and Moscow expires in 2024. After meeting German Chancellor Angela Merkel in the Kremlin, Putin said Russia planned to fully comply with its obligations on gas transit via Ukraine. He said Moscow was ready to send gas via its neighbour even after 2024 but Russia needed to understand the scale of demand for its fossil fuel first. The European gas market is eagerly awaiting Russian flows via Nord Stream 2 as European gas prices have reached record highs due to low liquefied natural gas supplies. Putin said future gas supplies were a matter for talks given Europe’s green energy drive.

Source: The Economic Times

International: Coal

Indonesia reverses coal export ban for three companies

24 August: Indonesia has reversed coal export bans for three companies after they complied with domestic market obligations, the energy and natural resources ministry said. Indonesia suspended coal exports from 34 coal mining companies earlier this month after it said the companies failed to sell an obligatory 25 percent of their production to the domestic market, mainly to state power utility PT Perusahaan Listrik Negara (PLN). Three companies, including PT Arutmin, a subsidiary of the country’s top coal producer PT Bumi Resources, have been given their coal export licenses back. The other two companies were PT Bara Tabang and PT Borneo Indobara.

Source: The Economic Times 

International: Power

Thousands without power as tropical storm hits US

23 August: Tropical Storm Henri made landfall near Westerly, Rhode Island, with winds of 60 mph, the US (United States) National Hurricane Center (NHC) said, leaving thousands without power. Tropical storm warnings were extended from coastal Connecticut and Rhode Island to the luxurious oceanfront estates of the Hamptons on the eastern end of Long Island, New York, with over 100,000 power outages reported for customers up the northern East Coast, most in Rhode Island.

Source: The Economic Times

International: Non-Fossil Fuels/ Climate Change Trends

South Africa aims to bring pilot carbon capture project online in 2023

23 August: South Africa has started geological mapping at the country’s first carbon capture and storage (CCS) site, where it plans to inject vast quantities of carbon dioxide (CO2) deep underground from 2023. The project will be based around the town of Leandra, Mpumalanga province, in South Africa’s north east, a carbon emissions hotspot and home to several coal-fired power stations as well as Sasol’s Secunda coal-to-liquids fuel plant, the world’s largest. Releasing around 470 million tonnes (mt) of CO2 a year, South Africa is the continent’s biggest emitter of greenhouse gases, and coal provides the bulk of its electricity. CCS is controversial, with environmentalists saying it risks becoming an excuse to continue burning fossil fuels, and could lead to neglect of nature’s own carbon capture system, forests, which also sustain biodiversity and rainfall. Others however see it as essential to meeting the goal of a net carbon zero world economy by 2050. Its most enthusiastic backer is the global coal industry. The South African government has repeatedly defended its right to tap into abundant coal deposits even as the country increases its use of renewable energy. The deadline for tapping a US $23 million World Bank grant to fund the CCS project was originally set for December this year, but has now been pushed out to June 2023.

Source: The Economic Times

National Grid starts planning 1.8 GW offshore wind interconnector with Norway

21 August: British transmission system operator National Grid is in the early stages of planning a new electricity cable connection to Norway, which would also connect North Sea wind farms in both countries. The 1.8 GW “Continental Link” high voltage direct current cable could connect 3.6 GW of offshore wind capacity and provide power for 1.8 million homes in the UK, according to documents National Grid Ventures has provided to the Department for Business, Energy and Industrial Strategy (BEIS). The European Commission is targeting 60 GW of offshore wind by 2030 and 300 GW by 2050, prompting a debate about a North Sea grid to connect wind farms across borders.

Source: The Economic Times

Israel gets 11 bids for solar-powered electricity plant

20 August: Israel has received 11 bids to finance, build and operate a 300 MW solar-powered electricity generation plant and storage farm in the southern part of the country, the finance ministry said. The project planned for the city of Dimona will be a public-private one and, according to the ministry, will be the largest solar power plant in Israel and one of the largest in the world. The selected developer will be responsible for planning, financing, building and operating the solar power plant, it said. Construction is expected to be completed by the end of 2024, at which time the use of “polluting fuels” will be reduced, the ministry said. Over the next three months the tender committee will complete the bidding process, it said. The latest tender is part of a series of solar farms being developed, as the ministry seeks more solar production and storage to meet government targets of 30 percent of the total energy production from renewable sources by 2030. The 11 bidding groups included companies from the United States, Norway, Spain, and France.

Source: The Economic Times

Solar could be 40 percent of US power by 2035: Biden administration

18 August: Solar could supply more than 40 percent of the nation’s electricity by 2035—up from 3 percent—if Congress adopts policies like tax credits for renewable energy projects and component factories, according to a memo published by the Department of Energy. The memo is part of a push by the White House to pump up solar as a jobs engine and pivotal pillar in the climate change agenda of President Joe Biden. To propel solar to nearly half of US (United States) generation, the industry needs to grow at three or four times its current rate, creating up to 1.5 million jobs, according to an analysis by the National Renewable Energy Laboratory. The study supports Biden’s argument that a transition away from fossil fuels can create millions of good-paying union jobs while countering climate change. The US US $1 trillion infrastructure plan approved by the US Senate is expected to support solar through investments in modernising the electricity grid. But the White House is zeroing in on tax credits and a clean electricity payment program for utilities – which may be included in a separate US $3.5 trillion spending package – to supercharge industry growth. Solar projects are currently eligible for a 26 percent tax credit that is in the process of being phased out. Biden has pushed for a 10-year extension, as well as new incentives for manufacturing solar components.

Source: The Economic Times

This is a weekly publication of the Observer Research Foundation (ORF). It covers current national and international information on energy categorised systematically to add value. The year 2021 is the eighteenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.

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