Lights On briefing: The politics of petrol, struggling rooftop solar and more

What you need to know to start the week

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Lou Del Bello

Feb 22 2021

6 min read

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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.

If you haven’t already, take a look at this weekend’s interview, where I talk to climate policy expert Navroz Dubash on whether India should launch its own net zero target, and what it would look like.

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Petrol is political

Saudi Arabia’s new voluntary oil production cuts, applied as part of an agreement with its allies in the Organization of the Petroleum Exporting Countries (OPEC) has caused oil prices to shoot up to $63 per barrel. In India, this has meant consumers paid over 100 rupees per litre in some places. For comparison, in February 2019 a litre of petrol cost ~71 rupees

But it’s not just the Saudis’ fault. Last year, when oil prices were low during the pandemic, the government decided to raise taxes on petrol - consumers didn’t enjoy cheaper fuel but India raised much needed funds to fight Covid. Now that prices have bounced back, the government is keeping taxes at a record high, contributing to the hike. The petroleum minister blamed Covid and the greed of oil producers for the situation.

Government claims gas revenues

In an effort to increase the share of natural gas from 6.3 to 15 percent of the energy mix, Prime Minister Modi has reiterated his intention to bring natural gas under the common goods and services tax (GST), which taxes sales across the country eliminating disparities between states. The reform would be inconvenient for states, which rely on gas revenues, but would benefit the consumer who currently pays state level duties plus central government duties. 

Green hydrogen gets set 

Within the next three to four months, India will kick off the first green hydrogen auctions under the newly launched Hydrogen Mission. The power minister RK Singh said that he’s in discussion with the ministries of oil and gas, fertiliser and steel to work out a bidding framework. One option being considered is to specify mandatory purchase obligations for green hydrogen on oil refineries, fertilisers and steel factories. Globally, the hydrogen industry could be worth $300 billion by 2030, according to a new report by the Hydrogen Council in collaboration with McKinsey & Company.

Solar rooftop on the chopping board

Criticism is mounting against the recent decision of the power minister to cap net metering to solar rooftop plants smaller than 10kW - this week, the minister of small and medium enterprises Nitin Gadkari urged his colleague to reconsider. Under net metering, any excess electricity generated by the rooftop solar system is injected into the grid. When demand exceeds the solar rooftop generation the consumer imports electricity from the grid - and at the end of the settlement period they only pay the difference between what they imported and what they exported. 

The new measure will be beneficial to distribution companies because their profit would be diminished by a greater influx of cheap solar energy, but would discourage consumers from investing in rooftop solar - something that industry associations say would cause a market collapse. While rooftop installations are growing, there is still a shortfall of about 34GW which needs to be fulfilled in the next two years to achieve the Indian government’ rooftop solar target of 40GW by 2022.  

World Solar Bank to be launched in Glasgow

The International Solar Alliance (ISA), co-founded by India and France ahead of the Paris climate talks in 2015, will introduce the World Solar Bank at the next round of talks in Glasgow, UK. The bank, which will be headquartered in India, plans to disburse around $50 billion to ISA members over the next ten years. India is expected to become the lead stakeholder with a $600 million equity.

Bangladesh


Tighter solar standards

Imported solar equipment including foreign made panels, inverters, charge controllers and batteries will now need to be certified by the Bangladesh Standard and Testing Institution (BSTI) before entering the country’s market. The government took the decision after local solar manufacturers complained that sub-standard solar imports from China and India outprice them as well as reducing public confidence in the solar technology.

Currently, Bangladesh has nine solar manufacturers accounting for 20 percent of the country’s solar market, with a combined output of 100MW per year.

 

Pakistan


Green bond to accelerate hydro

Pakistan’s government plans to accelerate the development of hydropower in the country by issuing a $500 million green bond in the next few months. The bond will be the first to fund environmental goals specifically, according to Malik Amin Aslam, an adviser to Prime Minister Imran Khan on climate change. Pakistan’s environmental woes include having some of the most polluted cities in the world, and the government is trying different strategies to clean up the country’s air and stabilise the economy, including investing in renewables, banning new coal and planting 10 billion trees.

This week on Twitter

Research and further readings

  • Report: 1800 deaths per million estimated due to PM2.5 air pollution in Delhi - Despite clear skies during lockdown, in 2020 air pollution claimed around 54,000 lives in the capital alone. To calculate these figures, Greenpeace teamed up with the Swiss air quality technology company IQAir to develop an online tool that tracks the real-time health impact and economic costs of air pollution in major world cities.  
  • Long read: On Thin Ice: How climate change is wrecking the Himalaya - As climate change gathers pace, the Himalayan region is already facing the impacts of global warming. The Mint’s Bibek Bhattacharya takes stock of the recent changes that have shaken mountain communities, and looks at what science can tell us about the present and the future of the world’s tallest mountain range, whose glaciers are melting faster than anywhere else in the world.
  • Long read: Flash droughts set to increase in India, finds study - Flash droughts, which typically intensify faster than normal, will happen more often in India towards the end of the century, according to new research. This climate change driven phenomenon is likely to have negative impacts on crop production, irrigation demands, and groundwater availability.


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