On energy; And on a very good book on Autism – #140-141
The two weeks edition
News of the week
This newsletter didn’t go out last week.
One of our team members was travelling in northern Uttar Pradesh, in the areas near Sravasthi close to India’s border with Nepal, and both time and phone connectivity were in short supply. This week’s newsletter, ergo, will weave in developments from the past fortnight.
A key space to watch is India’s trade deal with the USA. Over the past fortnight, the country has seen reports saying trade talks with the US have run into rough weather. More recent reports, however, have Trump saying India is close to a deal even as others say negotiations might now continue till August. “A CNBCTV18 report had stated on July 6 that the two countries are likely to wrap up trade talks within the coming 48 hours,” reported Economic Times. “The report had further noted that the negotiators from both sides have concluded talks on mini trade, while larger deals will be discussed post July 9.”
In the meantime, as the newspaper wrote, Trump’s administration has issued formal notices to 14 other countries, including South Korea, Japan, South Africa, Laos, and Myanmar, informing them of the substantial new tariffs that will be enforced starting in August. The element of coercion here is striking. “In letters shared on his Truth Social platform, the two-time US President warned trading partners that any retaliatory tariffs would be met with equivalent hikes,” wrote ET. Trump is making similarly threatening sounds about the BRICS, saying he will slap an additional 10% tariff on members after BRICS Plus issued a statement condemning US air strikes on Iran. (While on this, do read the FT longread on “How trade tensions are really affecting the global economy”).
In all this, two things are worth watching. One, as the link above shows, India’s attempts to get closer to the US while being a part of BRICS are drawing flak. The second is about the eventual trade deal. “India has been pressing for tariff reductions and expanded access to the American market for its labor-intensive sectors,” as the Economic Times wrote. “In return, the United States has pushed for permission to export genetically modified (GM) crops and cattle feed to India.” Hardwired into this tussle, as rural economist Himanshu wrote, is a very real likelihood of Indian farmers getting hurt.
Such are our times. As this newsletter has said earlier, a clutch of countries are using Trump’s tariffs as a chance to junk trade relations imposed during colonialism and the Cold War — and to forge fresh ones. India is not thinking audaciously enough. One cost of its acquiescence—growing marginalisation within BRICS.
In the fortnight gone by, the trade talks weren’t the only consequential event. There was also the US’ decision to halt funding for GAVI, the international vaccine alliance, which provides free jabs for meningitis, malaria and other diseases.
The news has been described as calamitous. “The impact of these cuts on children in the world’s poorest countries will be devastating, likely leading to an uptick in disease and death from vaccine-preventable diseases,” said Janeen Madan Keller, deputy director of global health policy at the Center for Global Development, a US-based non-profit group. As things stand, other countries like Norway and the UK have cut their pledges as well. The Gates Foundation, one of the biggest donors to Geneva-based GAVI, said it would not fill the gap in funding.
And yet, in 2024, GAVI had received no more than $300 million from the USA. That is Rs 2,400 crore. It’s astonishing that the global south cannot stump up such sums to secure the well-being of their populations. As economist Jayati Ghosh had told CarbonCopy in May: “There is an absence of global strategic thinking. Trump has starved WHO for funds. All it needs is $2.1 billion for two years. The EU could give this sum without blinking an eye. So could India or China. The World Food Programme needs even less — just $400 million. But no country is stepping up to fill these gaps.” We now get to add GAVI to that list.
Why don’t they step up? States like Bihar might have an answer. For long, the state has underfunded healthcare, with some of the resultant slack taken up by international charities like the WHO, the Bill and Melinda Gates Foundation, and so on. The net outcome was one where charities’ preferences (IMR reduction? Population control? Kala Azar?) determined local health coverage. With different charities working in different districts, Bihar ended up with a patchwork quilt of health coverage. In all this, however, the state government, pleased that a part of its development functions were being handled by others, diverted its expenditure budgets elsewhere.
This has to change. As Trump imposes his cuts, states like Bihar — like the rest of the world — have already lost access to the WHO’s disease surveillance unit. As this newsletter wrote last month: “In states like Bihar, where the health system passed away years ago, it is this team that tracked the spread of outbreaks like dengue.”
What are the other major headlines from the fortnight gone by?
Bihar is getting an SMR and BESS (Battery Energy Storage System) projects worth 1,500 MWh. The numbers, again, are interesting. “The government will provide viability gap funding of Rs 18 lakh per MW for this initiative,” wrote the Indian Express. Going by Saur Energy, the tariff for this project is Rs 4.44 lakh/MW/month. Kundan Green, a firm which is little-known, but is scaling rapidly in hydel and renewables, is amongst the winners.
There is something odd here. Previous BESS tenders, even those in Bihar, have been bagged by firms like ACME for Rs 2.22 lakh/MW/month. This one costs twice as much and gets viability gap funding.
This is Solar/Adani/Jaganmohan Reddy redux. Late last year, Reddy had been accused of buying expensive renewable power from Adani in return for a bribe. In other states, too, some of the projects (and PPAs) feel overly expensive. Here is one instance from Haryana where an 800 MW TPP is costing Rs 8,470 crore. As this newsletter wrote in April: “(By 2021), fixed costs for TPPs had climbed to Rs 5 crore/MW. How can the Haryana plant cost Rs 10 crore/MW after just four years? It’s coming up on 233 acres of land. How much can the government be paying for this land? Even at Rs 10 crore/acre, that still works out to Rs 6 crore/MW.”
Or take this transaction where Andhra, under Chandrababu Naidu, is spending Rs 49,000 crore for a 7,000 MW unit. Equivalent projects in Chhattisgarh and even rain-drenched Assam, however, are clocking in at Rs 5 crore/MW and Rs 6 crore/MW.
Continuing with the power sector, India scrapped the waiver for the inter-state movement of renewable electricity. “Solar or wind power projects commissioned after June will have to start paying 25% of the cost of transmitting power from one state to another,” wrote Economic Times. “The charges will rise for future plants, according to a plan prepared by the federal power regulator.”
The implications run deep. “One potential consequence is the greater localization of green energy production, undoing the concentration of recent years, when cheaper transmission has led to most renewable projects being built in the five states with the best solar radiation, strong winds and abundant land,” wrote ET.
In other energy sector news, Adani and Ambani have agreed to share their fuel pump network. “Under the partnership, Reliance Industries’ Jio-BP will add petrol and diesel pumps at compressed natural gas (CNG) stations operated by Adani Total Gas, which will then install CNG pumps at Jio-BP’s fuel stations,” reported Forbes. While on Adani, the group began logging at its power plant in Raigarh, Chhattisgarh. It also saw a fresh investigation, by The Morning Context, into its links with Gujarat-based Adi Group.
Other news
NSE is about to launch electricity futures. This has to be understood. India is planning to boost its strategic petroleum reserve. At SB62 in Bonn, the third world again raised the issue of climate finance accountability. Himachal Pradesh's Kullu and Kangra districts got lashed by cloudbursts. On the whole, the state saw 23 flash floods, 16 landslides and 19 cloudbursts. As ever, the videos were daunting. Once again, dams in the state got hammered. Gujarat got heavy rains as well. Surat got flooded. The last of these developments is odd. The city has an action plan meant to ward off flooding. In other words, just as Delhi’s air worsens despite GRAP, Surat continues to flood. Videos emerged of locals complaining about the lack of state responsiveness. In yet other news, after a big kerfuffle, Delhi decided to scrap its drive to ban old vehicles.
Climate longreads
This FT report on the evolutionary changes triggered by overfishing in the Eastern Baltic Cod is worth reading. “The median mature length of eastern Baltic cod has halved from 40cm to about 20cm since the 1990s… faster-growing specimens (have) almost disappeared, while fish that grew slowly but reached reproductive maturity at a smaller size predominated.”
Earlier in June, the True Story Award was announced. One of the winners, on atrocities at TotalEnergies’ natural gas plant in Mozambique, dwells on the energy sector.
In Rural Bengal, Microfinance Loan Traps Are Created Out of Circumstance and Lack of Information (The Wire)
“Wir nehmen fast alles!” The second part of SZ’s investigation into Vantara looks at Martin Guth, one of the biggest animal suppliers to Reliance’s wildlife collection.
A standout report last fortnight came from the BBC, which used GPS trackers to see where waste from Kumbh had been taken. Its report blasted the state government’s claim that all the waste had been safely disposed of.
And continuing with the processes shaping our modern world, this report. “Google, Palantir, Microsoft: UNHRC Report Highlights How Corporations Aided Israel's 'Ethnic Cleansing' and Displacement Efforts” (The Wire). As you read, imagine it wasn’t Gaza but climate refugees. Do you think these businesses would behave any differently?
No, India Is Not the Fourth Most Equal Country. Here’s the Real Data (The Wire)
Surviving a heat stroke, against all odds (Mongabay)
Why Adani’s Dharavi redevelopment plan has run into resistance from some residents (Scroll)
‘A dry future powered by the sun’: Solar water pumps are draining India’s groundwater reserves (Scroll)
How the next financial crisis starts: The climate shocks that could trigger wider market turmoil (FT)
What kind of world does Trump want? Global leaders struggle to understand the impulses and stratagems of the US president (FT). While on Trump, you should also read this FT report on how the tariff war is shaping up.
The hunt for greener steel stutters: ArcelorMittal's scrapping of green steel plans in Germany signals an uncertain future for decarbonizing the heavily polluting sector. (The Morning Context)
Why the price is still not right for green hydrogen (The Morning Context)
“Experts say that the only sustainable solution is to reinvent discoms. Instead of being universal suppliers, they must evolve into netcoms – network-centric entities focused on grid reliability, energy accounting and last-mile delivery to small consumers,” ET Prime looks at discoms. “In this model, large consumers procure power competitively from the open market. Discoms merely facilitate the transaction by maintaining the grid, managing energy flows and ensuring standby supply.”
3 critical hurdles in India’s quest for rare earth independence (ET Prime)
And, finally, the previous instalment of this newsletter had cited a Substack account which fisked Britannia’s sustainability claims. Turns out there is an update. Britannia responded to author Polina Zabrodskaya and got a scolding again. Do read.
Book of the week
Aamir Khan’s Sitaare Zameen Par has finally been released. In the same week, this newsletter found a copy of John Donvan and Caren Zucker’s “In a Different Key: The Story of Autism”. We are reading it now and the book, a history of how Autism came to be identified as a medical condition, in large part due to indefatigable parents, is absolutely unputdownable. We are 100 pages in, and this is already shaping up as one of our best reads this year. Here is its Wikipedia page.