Hello and welcome to this week’s edition of Lights On, a newsletter that brings you the key stories on energy and climate change in South Asia.
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Charting a post-Covid energy future
- The International Energy Agency’s much-awaited report charts a clean recovery path for the global energy sector
- India has a strong vision for its energy transition, but red tape and reluctance to cooperate with international partners may throw a spanner in the works
One Solar Thermal Power Plant in Rajasthan - Brahma Kumaris
What would a green recovery look like in India? Is it even a realistic prospect for a developing country whose economy was struggling even before the pandemic?
Analysts at the International Energy Agency (IEA), who compiled a special report on global sustainable recovery out today, say it’s up to each country to decide what to do, but if there is the will, rebooting the economy in a sustainable manner is possible. The study details a menu of 30 policies ranging from expanding and modernising electric grids to reforming fossil fuel subsidies and investing in hydrogen technologies and batteries:
Our Sustainable Recovery Plan shows governments have a unique opportunity today to boost economic growth, create millions of new jobs and put global greenhouse gas emissions into structural decline.
While the pitch sounds great, the reality on the ground is a little messier. Let’s see how the IEA’s findings square with India’s current situation.
A costly business
According to the researchers, investing in a green recovery would boost global economic growth by 1.1% per year between 2021 and 2023, create 9 million jobs worldwide and reduce annual emissions from the energy sector by a total of 4.5 billion tonnes by the end of this period.
The operation would cost around $1 trillion per year over the next three years, equivalent to 0.7% of the global GDP. Sounds like a huge amount? The emergency plan approved by the US government in March amounted to $2.2 trillion and India’s own stimulus package, worth about $307 billion, covers 10% of the country’s GDP. Much of that money had already been earmarked in the Union Budget earlier this year and the government seems to have just re-labelled it to inflate its figures, but the commitment remains significant.
How much will be used to just patch things up after the crisis, and how much will be spent to deliver structural change, is still unclear. Early measures for the energy sector point to the former approach. Last month, the Finance Ministry promised the equivalent of $12 billion to the national distribution companies, in the form of loans. As I discussed in this post, observers were not impressed by what looks like just a quick fix to a chronic financial struggle.
Low hanging fruit
“Public financial support is an essential part of dealing with the fallout of the health crisis, so what we are proposing should not be seen as an alternative to that,” says Christophe McGlade, one of the lead authors of the IEA report. “Making sure that companies didn't go bankrupt causing massive job losses is obviously important,” he says, “But we want to highlight that it’s possible to integrate long term thoughts into short term measures.”
Construction and manufacturing jobs created per million dollars of capital investment - IEA
When it comes to the car industry for example, avoiding immediate job losses is obviously a priority, but the support can be ‘tailored’ to align to long term objectives. In the case of cars, by introducing emission standards or promoting the expansion of electric vehicles, and in the case of energy access, the government could invest in decentralised solar to serve rural areas on the cheap. “What our work is trying to do is [to show how to] achieve more than one objective at the same time” he says.
Choking red tape
While the report mentions ambitious ideas such as the deployment of carbon capture and storage and small modular nuclear reactors, much of it is low hanging fruit, McGlade says. For example improving efficiency in any sector, from transportation to heating and cooling buildings, is relatively easy to do because countries already have the right technologies. Often it’s just a matter of designing the right rules for the green economy to take off. Easier said than done!
India has no dearth of policies to promote sustainable growth, says Bansidhar Bandi, former officer with the Energy & Climate Change Division at NITI Aayog, the policymaking branch of the Indian government. “But what it lacks is a proper mechanism to enforce and implement them.” For example, the report mentions material and waste recycling:
Implementing economically viable recycling technologies can shorten supply chains, increase resilience and create new jobs, while reducing additional demand for virgin materials.
In India, a comprehensive National Material Recycling Policy was submitted to the Cabinet over a year ago to address the growing waste problem and reduce the need to import raw materials, “but hasn't yet seen the light of day,” Bandi says. “At the same time work began on the formulation of the National Resource Efficiency Policy, which is essentially a duplication of efforts.” Same goes for other key policies including this year’s Electricity Amendment Bill, which has been stuck in draft form since April and with any luck is expected to receive the final approval next year (but may drag on much longer).
Friends or enemies at the border?
India also struggles with international cooperation, at least in the region.
“International collaboration is one of the key areas we identify in the report,” McGrath says, “because a lot of clean energy technologies rely on quite extended supply chains, which have been disrupted during the crisis.” He says that while wind and solar production have weathered the lockdown, “the supply chain for developing new capacity has suffered more, and we are likely to see a drop in the amount of new wind and solar installed this year.” If we want to achieve our long term objectives, McGrath says, “We need to reverse that as quickly as possible.”
Bandi agrees that international cooperation is key for India on many fronts, including energy and climate change. The recent campaign for a ‘Self Reliant India’ (Aatma Nirbhar Bharat in Hindi) and the border dispute with China suggest that India may not be a good team player. However, he says, “I'm sure the Indian leadership recognises the need to have China as a partner. There is simply no way we can just cut ties with them overnight and expect all of India's ambitions to succeed.” Right now cooperation may be tricky, Bandi concedes, but with targeted investments and policies over the next couple of years in areas such as solar module manufacturing, rare earth processing, EV components and electronics manufacturing, India can find its footing on the international stage.
Hot in the region
Extreme weather events in India on the rise, Jayashree Nandi, Hindustan Times
India’s first national climate assessment paints a bleak future for the country. In a worst case scenario, the frequency of summer heat waves is likely to be three to four times higher and their duration is likely to double. Only if you live in India can you appreciate how dreadful this prospect is.
The return of the mega hydropower projects across India, Mayank Aggarwal, Mongabay India
State governments across party lines are joining hands to boost mega hydropower projects, some of which have been pending for decades. Despite concerns over its impacts, big hydro has been declared a renewable energy source by the central government, which is now promoting it as a way to help meet India’s renewable targets.
Environment ministry unlocked many protected areas during the lockdown, Mayank Aggarwal, Sahana Ghosh, Mongabay India
India’s environment ministry has recently cleared multiple infrastructure projects in protected areas in the country. Not only are scientists and researchers concerned over the loss of natural habitats, but they also point out that their destruction can contribute to the emergence of zoonotic diseases such as Covid-19.
India Underreports Heatwave Deaths. Here’s Why This Must Change, Bhasker Tripathi, IndiaSpend
In India, there are not enough resources available to build resilience against heat waves because they are not recognised under the National Disaster Management Act, 2005, making them ineligible for money from national or state disaster response funds. But as the climate changes, policies need an urgent upgrade.
New in the industry
IESA Rallies for Inclusion of Energy Storage Policy Framework in Electricity Act, Anjana Parikh, Mercom India
India’s latest attempt to design a robust regulation framework for the energy sector is stuck in draft form since April 18. Among the various comments and proposals still pouring in, a letter signed by more than 100 industry leaders puts a spotlight on the energy storage sector, which is key to deliver India’s energy transition but has so far been neglected.
The report tracks the growth of the EV sector around the world and discusses key challenges to the uptake of electric mobility, including vehicle and battery prices; battery materials and the integration of electric transport into existing power systems. More on this and on the future of EV in India next week - stay tuned.
Hot from the World
Six EU countries lead push for clean hydrogen support, Kate Abnett, Reuters
Six European Union countries have called for EU legislation and increased funding to support hydrogen, currently in line for cash from the bloc’s coronavirus recovery fund. The EU consumes around 8 million tonnes of hydrogen each year, most of which is produced from fossil gas, rather than renewable power.
Climate crisis: alarm at record-breaking heatwave in Siberia, Damian Carrington, The Guardian
A prolonged heatwave in Siberia is pushing the world towards its hottest year on record, despite a temporary emission reduction during the lockdown. The high temperatures in Siberia have been linked to wildfires, a huge oil spill and a plague of tree-eating moths.
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