Lights On Briefing: India’s battery swapping bet, looming energy crisis in South Asia and more

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. In case you missed it, check out yesterday's weekend read which asks whether India can afford to decouple its economy from fossil fuels.

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India

New battery swapping policy

India has a new policy to incentivise the adoption of electric vehicles (EV) in cities across the country. While existing schemes target sales, the government now wants to promote battery swapping, a system whereby drivers purchase a vehicle but only rent the battery, swapping it for a full one once it’s flat. The idea is to save parking space and charging time compared to conventional systems, where every vehicle needs to stop for a few hours to fill up the battery. A vehicle without a battery is also considerably cheaper, and may restore trust in customers after the recent streak of deadly accidents involving EV batteries.

The policy details technical requirements and sets the rules for future subsidy schemes and end-of-life treatment, specifying that “improper disposal of EV batteries in landfills or scrap will not be allowed”.

Looming energy crisis

A combination of coal shortages and exceptionally high energy demand, due in part to the unseasonal heat wave that is driving up cooling needs, could lead to grid collapse. Coal stocks at India’s major plants are at historic lows, leading state-run Coal India, the country’s main coal producer, to cut supplies to the non-power sector, namely industries such as aluminium smelter or steel mills. Several states have now requested idle thermal power plants to resume operations, and are happy to pay higher prices for coal and gas power to stave off a crisis.

Pure green hydrogen enters India

A small pilot in the northeastern state of Assam is the first to produce pure hydrogen - a combination of just two hydrogen atoms, virtually non-existent in nature due to the reactive nature of the gas - from renewable sources. The unit is able to produce 10kg of fuel a day, from a 500kW solar plant, an output that its managers say could treble in future, depending on the operation’s success. The pilot is the latest in a flurry of experiments and investments geared towards India’s nascent hydrogen economy, a segment that the government deems key to the country’s energy transition.

India taps into cheap Russian oil

Indian conglomerate Reliance Industries has procured at least 15 million barrels from Russia, sources told Reuters. The conglomerate, which operates the world’s largest refinery, has likely taken advantage of the low prices resulting from an international ban on Russian fuels after Vladimir Putin ordered the invasion of Ukraine. The move reflects India’s neutral stance on the conflict, with the government calling for a ceasefire but refusing to openly condemn Russia.

Pakistan

US backed energy reforms

The US aid agency USAID and the Pakistani government have announced a large-scale programme to improve the reliability of the country’s power sector and increase the share of renewables in the energy mix. The programme comes with a $23.5 million budget to be spent over four years on actions such as better management and operations of power transmission and distribution systems.

Addressing Chinese debt

As China grows restless on its energy deals with Pakistan, which has failed to clear more than $1.6 billion of dues within the China-Pakistan Economic Corridor (CPEC), the newly appointed administration wants to show the message has been heard. After China shut down 1980MW of production capacity, the prime minister Shehbaz Sharif has been advised to scrap the CPEC Authority, set up by the previous administration to deal with the Pakistani side of the project. The planning minister Ahsan Iqbal told The Express Tribune: “It is a redundant organisation with a huge waste of resources which has thwarted speedy implementation of the CPEC.” It’s unclear whether the change will satisfy the Chinese partners.

Fate of tree planting programme hangs in the balance

The new administration doesn’t seem keen on keeping the previous prime minister’s legacy alive, and this may be true even when it comes to trees. The flagship Ten Billion Tree Tsunami afforestation plan has been lauded for its ambitions, while facing criticism for its lack of transparency and accountability. Now policymakers in Pakistan fear it will be put on the chopping board by a ruling party that historically hasn’t made climate action a priority.

Bangladesh

Trading power with India

Bangladesh is joining India’s energy marketplace, the Indian Energy Exchange (IEX), which was opened up to foreign trade last year, and already serves Nepal and Bhutan. The country already imports energy from India on a contract basis, but once the agreement is finalised it could also sell its surplus electricity to India. However, given imported energy is expected to be cheaper than that produced domestically, the plan is likely to face some opposition from Bangladeshi power producers whose business may be impacted.

Nepal

India’s power crisis bites Nepal

India’s power crisis is affecting its northern neighbour, which depends on Indian electricity for more than half of its energy needs during the dry season, from December to April. When water levels in the country’s streams decrease, electricity production from the local dams is affected, increasing Nepal’s dependence on foreign power. This year, despite offering higher prices, authorities were not able to secure sufficient energy from the marketplace, leading to industry disruptions.

AI to enhance forest monitoring

A new monitoring system will use cloud computing and artificial intelligence to collect and analyse data on how much land is covered by forest, wetlands, agriculture or water bodies, helping Nepali lawmakers design better policies to improve land management and conservation. The National Land Cover Monitoring System (NLCMS) is a collaboration between the government’s Forest Research and Training Centre, the US aid agency USAID, NASA and the International Centre for Integrated Mountain Development (ICIMOD).

On Twitter this week

Scorching & dangerous heat on the way for India & Pakistan.

Temperatures will approach April record levels. The high 40s Celsius are expected, parts of Pakistan close to 50°C.

It has been hot here for a very long time now... since early March. pic.twitter.com/EuxZQR45RcApril 24, 2022

Research and further readings

• Newsletter: Why does Bengaluru have so many power cuts? - The always insightful Finshots on how power cuts and energy shortages are not always what they seem, and more often than not there is a multitude of causes behind a crisis.
• Report: Natural gas reliance poses risks to country's climate, health goals - A new study by the non-profit Rocky Mountain Institute casts a shadow on Bangladesh’s gas-based energy transition strategy. It warns that while gas may be less polluting than oil and coal, its related emissions could make up 95 percent of the country’s emissions, adding that if methane emissions from the gas value chain are not managed properly, they could have the same impact as coal.

Business of the week

Borosil Renewables - India’s sole solar glass manufacturer, with a large presence in the US and the Netherlands, has forked out $55.8 million to acquire two solar glass manufacturers and distributors active in Europe, Interfloat Corporation and Glasmanufaktur Brandenbur. The company wants to take a step further from the vision of a self-reliant India, strengthening its international customer base as well as boosting India’s solar manufacturing capacity.

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