Happy Monday and welcome to today’s Lights On, a newsletter that brings you the key stories and exclusive intel on energy and climate change in South Asia.
In India, all eyes are on the Union Budget announcement that was released earlier today – I’ll go through it so you don’t have to. Meanwhile, catch up with yesterday’s weekend read on how international donors failed Nepal.
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Image credit - Pxhere
Chaos at the ports (again!)
Ongoing hostilities with China and Covid-led disruptions might be behind the spike in shipping prices that is leaving solar developers scratching their heads. The cost of importing solar through the sea route has shot up by 500 to 800 percent, according to an investigation by Mercom India. According to an executive speaking on condition of anonymity, freight cost used to be between $800 and $1,000 per container, but now it’s up $4,500 per unit. While the spike seems to be a global trade issue rather than a policy one, the problem adds to the woes of Indian solar developers who are already facing high custom duties when importing from China.
IEA membership within reach
India inches closer to becoming a member of the world’s apex energy monitoring body, the International Energy Agency (IEA). The government entered a strategic partnership with the Agency, which says the move could pave the way to full membership. The two partners will cooperate on clean energy transition and, crucially, energy security, a core pillar of the IEA strategy. In order to become an IEA member, a country must be able to maintain at least 90 days of net oil import as an emergency reserve. Currently, India is storing 10 days worth of crude oil, with the government planning to add another 12 soon.
A ‘Green Tax’ for polluting cars
The Minister of Road Transport and Highways wants to introduce a ‘Green Tax’ on old cars that don’t meet pollution and efficiency standards. The proposal is currently with the states before being formally notified. The tax will apply to trucks and other transport vehicles that are more than 8 years old, personal vehicles that are more than 15 years old and will be lower for buses and other public transport vehicles. The idea, the ministry said, is to motivate people to switch to less polluting models, particularly in cities that are already highly polluted, where the tax will be doubled.
Targeted green lending
The UK development finance institution, CDC Group, announced a $30 million credit facility to Tata Cleantech Capital through its green lending facility. The idea is to enable the Indian financial company to lend directly to specific sectors across the country, particularly e-mobility as well as water and energy efficiency. The partners hope that targeted lending will enable the mass deployment of clean technologies in India and ultimately help combat climate change.
Dam of war
A deal for the construction of a large hydropower project with a capacity of 679 MW has been bagged by the Indian company Satluj Jal Vidyut Nigam, after being eyed by Chinese developers. The Arun Hydro Project will be built in the Sankhuwasabha and Bhojpur districts of Province 1, part of a cluster of hydroelectric projects upstream and downstream. Nepal, as well as other mountain countries sandwiched between India and China, is emerging as a new battlefield for energy dominance between the two superpowers.
Connecting the region
Pakistan launched the construction of a 113 km segment of the mammoth regional connectivity project, the Central Asia-South Asia Regional Trade and Transmission Project (CASA-1000), worth $1.17 billion. The segment currently under construction will connect the town of Torkham on the Pakistan-Afghanistan border to the Nowshera district. The CASA-1000 project will lay a 1270 km power transmission line to export hydropower generated in Kyrgyzstan and Tajikistan to Pakistan through Afghanistan. The project is expected to provide as much as 4,500 GWh of clean energy, helping Pakistan tackle its chronic power shortages, particularly during summer.
A boost to green finance
The central bank has earmarked $125 million for a revolving fund - which doesn’t expire because the bank will keep replenishing it as it depletes - to finance green technology, including the import of machinery for the energy, waste, water, wind and heat management sectors. The scheme will charge entrepreneurs low interest rates, up to 5 percent.
According to senior bank officials, the initiative responds to a trend seen among Bangladeshi entrepreneurs, who are increasingly setting up energy efficient factories, often powered by renewable energy.
As it battles increasingly erratic weather and heightened disaster risk due to climate change, Bangladesh adds a new forecasting system to its preparedness toolbox. The new system will warn people living in vulnerable regions of any impending landslides with nearly a week of advance notice, using satellite imagery, rainfall measurements and other meteorological data. The new tool, which is expected to be up and running by next May, will replace informal systems based on rain-gauge readings.
This week on Twitter
A SIGNIFICANT move that bears HUGE political implications for China's envi governance, air pollution, & coal development. On Jan 29, the central environmental inspection group (CEIP) released findings on its inspection at the National Energy Administration (NEA). Thread.
175 Retweets346 Likes
Research and other readings
- Analysis: What India's Key Environmental Programmes Get, And How They Spend It: Budget - With the new Union Budget freshly introduced, take a look at how the government has been allocating money for environmental projects so far, which sectors have benefitted the most and what more needs to be done for financing to go where it’s needed the most.
- Long read: Afghanistan Wanted Chinese Mining Investment. It Got a Chinese Spy Ring Instead - A gripping long read charting the evolution of China’s friendship with Kabul, from the promise of investments in resource extraction to the busting of an alleged long standing espionage ring set up to hunt down Uighur Muslims.
- Long read: Over 214,000 trees to make way for Ujh hydropower project in J&K - Over 214,000 trees are slated to be felled to enable the development of a large hydroelectric project in the Jammu and Kashmir region. The project, which envisages the construction of a 116-metre dam and will involve a diversion of 4,350 hectares of land, is part of India’s endeavour to step up use of the water available under the Indus Water Treaty.
- Analysis: Nation Plagued by Power Shortages Suddenly Has Too Much Electricity - Pakistan is known for its energy shortages and frequent blackouts, but due to new coal and natural gas fired plants mostly financed under China’s Belt and Road Initiative the country may now have to deal with having as much as 50 percent too much electricity by 2023. This will become a problem because the government is the sole buyer of electricity and pays producers even when they don’t generate due to overcapacity.
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