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Lights On Briefing: Ukraine-Russia war bites South Asian energy, Nepal’s controversial $500 million and more

What you need to know to start the week

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Lou Del Bello

Mar 07 2022

6 mins read

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Happy Monday and welcome to today’s edition of Lights On, with this week’s key stories on energy and climate change in South Asia.

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What the Ukraine crisis means for South Asia

As Russia’s war in Ukraine enters its second week, South Asian countries are bracing for soaring oil and gas prices and a supply crunch. Russia, the world’s third largest producer of oil and the second largest producer of natural gas, is already facing brutal financial sanctions which are expected to escalate and affect Russian oil and gas flows, something that the west has avoided so far. 

In Bangladesh and Pakistan, the existing shortage of liquefied natural gas (LNG) is being exacerbated by the conflict, leading the two nations to ramp up the use of diesel, a major setback for their energy transition plans. Bangladesh’s state-owned energy companies are already counting their losses, while Pakistan’s Prime Minister Imran Khan announced steep cuts in gasoline and diesel prices by the equivalent of about $0.22 a gallon. 

The measure comes amid criticisms of Khan’s handling of the economy and Pakistan’s weak energy security. In recent months, fuel prices have been rising sharply due to the strict reforms adopted by the government as a condition for the $6 billion bailout package granted by the International Monetary Fund (IMF) - bringing fuel prices down again will provide a relief that is only temporary, analysts warn, exacerbating Pakistan’s deficit.

In India, which imports 80 percent of its oil, the government is going in the opposite direction and has announced it will raise petrol and diesel prices to match the growing cost of imported crude and ease the financial burden on the state-owned companies distributing these fuels at home. Knowing that costlier petrol will not sit well with the public, the government appears to have waited until the conclusion of voting in key state elections before going ahead with the price hike.

India

Climate pledges lost in the pipeline

At the Glasgow UN climate conference last November, India’s prime minister was quick to announce ambitious decarbonisation targets, but months later his administration is yet to formally submit them to the UN secretariat, making them official. At the climate talks, Mr Modi promised India would reach net zero by 2070, and that half of the country’s energy would come from non-fossil fuel sources by 2030. But when asked about the matter in a meeting, the environment minister Bhupender Yadav, whose ministry is tasked with submitting the goals to the UN climate change branch, said that various departments are still discussing a potential roadmap.

Make in India vs rooftop solar

The government will include rooftop solar under a policy designed to promote Indian solar makers, but which developers said will stifle the already struggling rooftop market. The approved list of models and manufacturers (ALMM) requires that solar developers choose from a pre-approved portfolio of module makers who meet certain quality standards, and originally applied to government or government sponsored projects. Now that the government is expanding its mandate to rooftop projects, developers say, customers will face higher prices as well as limited choice of technology and output.

Bangladesh

Japan ditches Bangladesh’s coal

The 1200MW Matarbari coal fired power plant just lost a major investor. The Japanese trading house Sumitomo has announced it will withdraw from a planned expansion of the plant, which would have added two new units by July 2024, following its strategy to move away from all coal-related business by mid century. Japan’s involvement with coal projects has faced criticism as it was seen as being at odds with Tokyo’s climate and clean energy commitments.

Nepal

A new climate change census

In an effort to scientifically monitor the impacts of climate change in the country, Nepal’s Central Bureau of Statistics, which conducts a national agriculture census every ten years,  will start collecting data on climate related risks in the agricultural sector. The first-of-its-kind survey will initially probe farmers’ awareness of the issue and the challenges they face as a result of changing weather patterns.

Game changing US grant approved

After a years-long political battle, the Nepalese parliament has formally accepted a controversial $500 million grant from the United States meant to radically transform the country’s electricity and road infrastructure. Opponents wary of the donor’s influence through the grant, which Washington says comes with no strings attached, have taken to the streets to protest the agreement, saying that “[it] will bring Nepal under the security umbrella of the United States and it should be rejected”. 


On Twitter this week

Research and further readings


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