Lights On Briefing: Cross border energy trade, Pakistan's clean targets and more

What you need to know to start the week

Lights On Briefing: Cross border energy trade, Pakistan's clean targets and more

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.

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Energy marketplace crosses borders

India’s power trading platform, the India Energy Exchange (IEX), is expanding its activities beyond the country's borders for the first time, in an effort to build an integrated regional power market. The development is in line with the government’s efforts to bring South Asian countries closer through cross-border energy trade. Earlier this year India, which already trades power with neighbouring countries through bilateral agreements, issued a new set of detailed guidelines for cross-border energy exchange. In January, the government formed a high level group bringing together top civil servants and business leaders to foster regional cooperation on matters of energy.

These measures support PM Modi’s vision of a South Asian grid: the One Sun, One World, One Grid (OSOWOG) project is still in its infancy, but India is investing heavily in an effort to build its soft power in the region and counteract China’s influence.

Chinese solar makers give up on India

Solar module manufacturers from China such as Longi Solar and Jinko Solar are scrapping the contracts they had signed with Indian developers due to rising commodity prices, a trend affecting deals dating back to as early as last September, with delivery expected in March, according to The Economic Times. With India’s efforts to boost local manufacturing still to bear fruit, the solar industry depends on foreign imports, mostly from China, for 80 percent of its components. Now Indian developers, including giants such as ReNew Power, Adani Green and Acme, for which solar modules account for about 60 percent of the total expenditure, face severe disruption to their projects’ timelines.

A new India-US climate agenda

At last week’s Leaders’ Summit on Climate, US president Joe Biden and PM Narendra Modi launched a new platform for cooperation, the “India-US Climate and Clean Energy Agenda 2030 Partnership”, which will help mobilise finance and boost clean energy development through scaling innovative clean technologies. The announcement is light on detail, but for now we know that the scheme will target carbon-heavy sectors such as industry, transportation, power and construction.

A nuclear future for India

The French energy firm EDF and the Nuclear Power Corporation of India (NPCIL) may soon team up to build the ‘largest power plant in the world’ comprising six nuclear reactors in Maharashtra which would provide clean energy to up to 70 million households. The company has submitted its final offer for the engineering studies and equipment needed to build a cluster of European pressurised water reactors (EPR), a proposal that could result in a final agreement in the coming months, according to the French embassy. The government owned NPCIL would be responsible for building the reactors and seeking the necessary permits and safety certifications.


New clean energy targets

At the Leaders’ Summit on Climate, to which it was invited after being initially left out, Pakistan said it will achieve 60 percent renewables in its energy mix, and 30 percent electric vehicle penetration by 2030. The Special Assistant to the Prime Minister on Climate Change Malik Amin Aslam reminded developed nations that they must now walk the walk on climate finance to help make this happen. It remains unclear how the country plans to meet the target given renewable generation currently accounts for a tiny fraction of its basket, currently dominated by natural gas, biofuels and oil.


Energy bargains

As Bangladesh moves away from coal and tries to incorporate more clean energy in its mix, Dhaka is trying to access a greater share of Indian hydroelectricity. The government plans to do so by offering an easy route to move the energy produced in the remote Indian North East to the mainland - a task that would require laying power lines around Bangladesh through impervious terrains. The proposal had been first discussed in 2014, but the potential for fresh finance coming from the United States, after the special envoy for climate John Kerry visited Bangladesh and promised new aid, has revived the appetite for the plan.


Apple adaptation

Apple farmers in Nepal risk being pushed out of business by climate change, which causes warmer winters not suited to the trees. Now farmers in the Himalayan district of Manang are turning the challenge into an opportunity, moving their cultivations to higher terrains close to the Chinese border, previously inaccessible during the cold season. To do so, they are experimenting with a new apple variety, the Red Jonaprince, which they grow in mostly barren areas around 500 metres higher than the usual farming areas.

The annual apple production in Nepal is of nearly 31,400 tonnes, and the small pilot is expected to yield 45 tonnes by next Autumn.


New hydropower policy seeks international partners

The new policy regulating hydropower – the main driver of Bhutan’s economy – is a radical update of the existing regulations dating back to 2008. It proposes boosting regional market access for electricity produced in the country, and shifts the focus from run-of-the-river hydropower projects, which involve little storage and take advantage of the waterflow to power electric turbines, towards hybrid projects involving a combination of hydropower capacity and other renewables. While encouraging international cooperation, the policy remains firm in its requirement that a foreign partner must be responsible for financing the projects they want to realise in the country.

This week on Twitter:

Monsoon Chronicles #1. India receives about 850 mm of rain every year. That's about 2 million liters of water per person. However, every year goes through a crisis of depleting groundwater, drying rivers. Water security is more of a management issue than a climate change issue. 21, 2021

Research and further readings:

  • Report: Air pollution in India and the impact on business - Air pollution is not just a health crisis, it also costs Indian business about $95 billion every year, around 3 percent of India’s total GDP. This major report was compiled by Dalberg Advisors in partnership with the Clean Air Fund and the Confederation of Indian Industry.
  • Report: The state of global climate 2020 - The annual report from the World Meteorological Organisation uses seven indicators to assess how the climate is changing globally and how human led factors such as the accumulation of greenhouse gas in the atmosphere affects land, oceans and ice.

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