Heatwaves, Coal Imports, and India's Hydel Energy Plans - Issue #2
The Big Picture
It’s just April and the heat across India is unbelievable.
The average maximum temperature in March was the highest in 122 years. April followed suit. By the 29th, temperatures in a clutch of states – Rajasthan, Haryana, Uttar Pradesh, Bihar, Chhattisgarh, Jharkhand, Odisha and West Bengal – had crossed 45 degrees celsius. In Banda, Uttar Pradesh, the mercury touched 47.4 degrees. Allahabad saw 46.8 degrees. Delhi saw 45.3 degrees. To put that number in perspective, between 1981 and 2010, the average maximum temperature was 39.5 degrees in the capital.
Instead of making banal observations like an “early-onset” of summer, India’s policymakers need to recognise what confronts us. India is edging towards the wet-bulb temperature. The phrase alludes to, as The Wire wrote this week, “the lowest temperature an object can reach when it’s in a hotter environment and is simultaneously cooling down by having water evaporate from its surface.” The highest temperature humans can tolerate while simultaneously cooling down by sweating is 35 degrees.
India is getting there. As The Wire writes: “At least one assessment has found that the maximum wet-bulb temperatures in parts of the Central Americas, North Africa, the Middle East, Northwestern and Southeastern India and Southeast Asia have already approached or crossed the 35º C threshold – contrary to our understanding in just 2010 that such values are further in the future.” In India, given higher humidity, “eastern coastal India” and “northwestern India” are especially vulnerable. These regions are also zones of high poverty, with proportionately dismal public health infrastructure.
Given such a backdrop, India’s response to the heatwave is unnerving. As temperatures rose, so did power consumption. The government, desperate for good news on the economic front, took that as a sign that economic growth is perking up. As coal stocks ran low, power cuts started and so did the blame game between the centre and the states. What we are seeing now is a mix of short-term panic and long-term stupidity. Having failed to plan for rising temperatures, the centre has cancelled 657 passenger trains to move coal faster.
In tandem, it has told states to step up coal imports. A clutch of states is making their own arrangements for coal. Maharashtra wants to import coal as well as get a new coal block in Chhattisgarh. Rajasthan has just gotten permission to start mining in the state’s Hasdeo Arand forest. Tamil Nadu is looking for coal transporters.
Some will argue coal is necessary for the short term. But it’s equally true that the long-term is shaped by the decisions we take in the short-term. India has no dearth of gas-based power plants lying idle. The government could have fired them up, even running them on expensive gas as long as the heatwave lasts instead of cutting already-decimated forests and digging open new coal blocks in this age of accelerating climate age.
It’s ironic. The country’s primary response to the climate change-induced heatwave is to burn more coal. It draws to mind those oilcos which welcomed the warming of the Arctic, saying it would open up fresh oilfields for exploration and new routes for oil tankers.
News of the week
On other fronts too, this has been an eventful week.
Russia’s invasion of Ukraine has pushed gas prices so high that South Asia is cutting back on consumption. Pakistan’s energy costs have doubled. India’s projections, that gas will account for 15% of the country's energy mix by 2030, are unlikely to materialise as well, reported Bloomberg. What compounds this mess is India’s dropping production of both crude oil and natural gas. Not only have key fields under-delivered in the country, writes Business Standard, the sector has also seen a “consistent lack of investment”.
That, however, is not the only hydrocarbon shock India is seeing. Indonesia, which accounts for 45% of India’s palm oil imports, which in turn accounts for 63% of all our edible oil imports, has banned exports of both refined and crude palm oil. With sunflower oil imports halving as well – Putin, again – India looks set for a cooking oil shortage. To a large extent, this is a mess India made for itself. It yielded to edible oil lobbies, dropped palm oil import duties, and scuppered the country’s national oilseeds mission. The chickens are coming home to roost now.
Now for renewables. As PV-Magazine reported, solar module prices have begun rising across the world. Between August 2020 and November 2021, they have climbed globally by as much as 42%. In India too, prices have climbed by 40%. A range of factors – including Covid-19 induced shocks to supply chains and energy crises in manufacturing hubs like China – were at work globally. In India, additionally, the introduction of basic customs duty has resulted in domestic manufacturers starting to hike prices.
From Solar to Hydel, where the Indian government is readying a large push. This push spans not only run-of-the-river projects and multi-purpose dams but also pumped storage. The catch is, as CarbonCopy reports in a series rolling out from today, India wants to use hydel for storage and grid stabilisation. Given that the country is also seeing large pushes on rival storage technologies – like batteries and electrolysers – we will see hydel competing with these newer technologies. How will that competition play out? Answers in the second and third part of our series, out next week.
In the meantime, the hydel sector is attracting some private sector investment. Norway’s Scatec announced plans to enter the sector in India. Interestingly, apart from mooting its own greenfield projects, the company also plans to expand by picking up distressed assets. This is an under-recognised trend. A clutch of other companies, like Kundan Energy, are also buying hydel firms from India’s bankruptcy courts and commissioning their projects.
German firm SFC Energy wants to produce hydrogen and methanol fuel cells in India.
Elsewhere in the country, the EV sector continues to make headlines. A 40-year-old man died in Andhra Pradesh after the battery of his electric bike exploded. Ola is now recalling over 1,400 scooters. Even as the company faces questions about its batteries discharging abruptly, new areas of concern are emerging. Videos show the bike moving forward when the dashboard says the vehicle is in ‘park’ mode. Apart from these, the company is now facing questions around data privacy – and about Etergo, a company from the Netherlands it acquired while trying to build up its engineering capacities.
As Inc42 reported: “Lauded as the ‘Tesla of e-scooters’by the European and Dutch media, Etergo was a crowdfunded initiative that raised millions of euros in two crowdfunding rounds. But after raising around €21 Mn ($24.8 Mn) in equity financing from more than 6,000 individual investors... the company got sold to Ola Electric for €3.75 Mn ($4.44 Mn).” The result? “More than 900 investors who put their money into Etergo through crowdfunding campaigns are now in the process of filing a lawsuit in a European court to recover their money from Etergo and its current owner Ola Electric.”
Undeterred by all this, Ola has announced plans to build an autonomous car.
The company’s confidence notwithstanding, all this raises a large question about how India’s PLI scheme is working. As Bloomberg columnist Andy Mukherjee wrote in March, Ola got more money out of the Indian government even though Reliance had made greater progress in batteries. What adds to the puzzlement is the other firm which has won PLI support for chemistry cell batteries – Bangalore-based gold refining firm, Rajesh Exports, has pipped established firms in the battery trade like Exide and automotive firms like Hyundai despite its lack of experience in this field.
According to Business Standard, the firm won because it promised the most localisation. An executive working with a rival bidder said: “The localisation commitments made by them beats me, especially when far more established players say that even in 2030, it won’t be more than 50-60 per cent.”
There is yet more news from the EV sector. The Niti Aayog’s draft EV battery swapping rules have triggered concerns that they might stifle innovation. Tata has launched Avinya, its concept electric car. Mercedes has produced a car, the EQXX, which can run over a 1,000 kms on a single charge.
Finally, India is thinking of creating its own carbon market. Easier said than done. Such markets came up in China but found themselves grappling with dodgy data from emitters.
Long Reads of the Week
The New Yorker writes on renewable storage, while looking beyond pumped hydro. “There’s room for many kinds of solutions in the clean grid to come; at the same time, the landscape is hyper-competitive. “Everyone’s competing against pumped-storage hydro and lithium-ion.”
The Morning Context finds an odd case of related party transactions in the Adani Group. In tandem, Gautam Adani overtook Warren Buffet to become the 5th richest person on the planet.
Assessment of Climate Change over the Indian region, a report by the Ministry of Earth Sciences.
Climate Clickbait
In case you want to calculate wet-bulb temperature where you are: https://www.omnicalculator.com/physics/wet-bulb
Book pick of the week
The Ministry Of The Future
, by Kim Stanley Robinson
Set in the near future, the book falls in the genre of climate fiction. It’s 2025. And the north Indian state of Uttar Pradesh sees a lethal heatwave. As Andreas Malm writes in this review: “The combination of heat and humidity is such that the air feels like a sauna, impossible to escape for days on end. Human bodies cannot take it for that long. In a town near Lucknow where one of the characters, the American volunteer Frank, finds himself, families sleep on the roofs and wake up to discover that elders and children have expired during the night.” The rest of the book details the fightback that follows. On one hand, an eco-vigilante group, called the Children of Kali, starts in India and spreads across the world, attacking fossil fuel infrastructure across the globe. In tandem, countries come together to create “The Ministry of The Future” under the Paris Agreement, which seeks to reverse climate change using any and all means at humanity’s disposal – geoengineering, carbon credits, carbon taxes, crypto-currency, it’s all here.
Here is a longer review of the book.