On Track for a Solar Redux – Issue #51-52
Note: We couldn’t send the newsletter last week as both the writer and editor fell ill. This issue covers the fortnight in lieu of our absence last week.
News of the week
In the final days of April, India’s mobility space saw a large development. The small car which turbo-charged China’s pivot towards electric cars – the Wuling Air – has just been launched in India. Priced at Rs.8 lakh, the MG Comet (its name for India) is the cheapest electric car in India right now.
One wonders how it will fare. On one hand, India’s lower and middle income households are struggling. News reports tell us that while tractors are selling well in the country’s hinterland, two-wheeler sales are flagging. A similar pattern is seen in urban India as well. While large cars are selling well, smaller ones are not. Part of the reason has to do with India’s weak recovery after Covid. Given this backdrop, will MG Comet’s price tag be too high? Or will India’s high petrol and diesel prices see car buyers – like their peers in Indonesia and elsewhere – gravitate towards the car?
There is a yet bigger question here. China’s EV market is in the throes of a price war. As its companies build scale, slash costs and ride on China’s dominance over rare earth metals and semiconductors, they will gain competitiveness over rival electric makers in other parts of the world. In which case, are we in for a repeat of the solar panel story? Following aggressive expansions in manufacturing capacity and rapid price cuts, China has come to dominate the solar manufacturing supply chains – servicing almost 80% of the world's demand for solar panels and almost 95% of the demand for polysilicon wafers.
Other reports further underscored the quickening pace of this race to dominate global EV manufacturing. General Motors and Samsung said they will invest over $3 billion to build a joint electric vehicle battery manufacturing plant in the US. Vietnam is gaining the most from global manufacturers’ China Plus One strategy. China, however, is expanding as well. It’s cutting prices on EVs, as we saw above, and moving into newer markets. Changan, for instance, is setting up a new EV plant in Thailand and an anode plant in Sweden. Indonesia’s Merdeka Battery Minerals is considering working with Volkswagen to develop an EV battery ecosystem in the country. Incidentally, Chinese battery giant Contemporary Amperex Technology (CATL) is a minority shareholder in Merdeka.
CATL also made headlines last week when it announced a new “condensed” battery with 500 Wh/kg which it says will go into mass production this year. To put that in perspective, the new “battery will have almost double the energy intensity of Tesla’s 4680 cells, whose rating of 272-296 Wh/kg are considered very high by current standards”. As Elon Musk had said: “electric flight starts to get interesting once you hit 400wh/kg”.
The past fortnight saw other big developments. Moscow might soon account for half of India’s oil exports. “That figure is up from less than 2% in January 2022, just before Russia invaded Ukraine and when India at the time primarily relied on the Middle East for its oil,” reported Reuters. In tandem, OPEC’s share of India’s oil imports has touched a 22-year low. Chalk it up to price. “With a series of Western sanctions and price cap mechanisms imposed on energy supplies coming out of Moscow, Russia's benchmark Urals crude is trading at about $65, about 20% lower than Brent crude, the international benchmark.”
Russia, however, is wondering what to do with all the rupees it’s collecting.
Continuing with fossil fuels, Coal India is planning to open more mines to meet its annual production target of 1 billion tons. Not only does this push involve further forest loss, it also sits poorly with the draft of the National Electricity Policy. The draft, awaiting cabinet approval, reportedly says India will not build more coal-based power plants beyond the ones already in the pipeline. Celebrations are premature, though. This is just a draft. And drafts have been known to change dramatically by the time they get approved.
Last week came confirmation from the Indian Meteorological department that rainfall patterns are changing across India. After analysing records from 1901, the department found a redistribution of rainfall across India. Low rainfall zones, like Saurashtra, Kutch and Rajasthan, are now receiving more rainfall. At the same time, once-high-rainfall zones like Assam, Meghalaya, Bihar and Jharkhand are getting less rainfall.
As this newsletter gets written, there is further evidence of freak weather patterns. In the middle of summer, large parts of India saw a fortnight of rain and cool weather. Delhi has, astonishingly enough, seen fog and the third coldest morning in 122 years. The unusual spell has been attributed to three consecutive western disturbances, an uncommon occurrence in summer months, flowing eastwards from Iran toward eastern India.
Other parts of the country reeled under heat. Goa is seeing forest fires again. Not only are parts of the country – like Bundelkhand – facing a drought, the faster-than-expected onset of summer has put the water supply of cities like Bangalore and Mumbai under strain. “The seven lakes that provide potable water to Mumbai have only 25% stock,” reported the Free Press Journal. “The BMC has written to the state government and requested permission to use reserve water stock of Upper Vaitarna and Bhatsa lakes in case of delayed monsoon.” Other parts of the world, like Bangladesh, are seeing heatwaves as well.
In other news, the Ratnagiri Petrochemical project continues to see resistance and oppression. Gas production from Reliance’s KG Basin seems to be inching up. Tesla has tied up with Indian Oil to sell batteries in India.
Gujarat has set aside 1.99 million ha for green hydrogen projects. India is about to get its first green hydrogen fuel cell-based microgrid – in Alchi, Ladakh. Meanwhile, Tata Steel has begun injecting hydrogen at its blast furnace in the company’s flagship Jamshedpur plant. This is an experiment to see whether hydrogen can reduce metallurgical coke usage and cut carbon emissions. CarbonCopy had written about the company’s decarbonisation drive earlier. See that report here. Also see this ET Prime report on the company’s attempts to decarbonise.
SECI has awarded 1.2 GW of hybrid wind-solar projects, paired with energy storage for assured peak power supply, at tariffs between Rs 4.64-4.73/kWh. The centre has told states to not charge water cess from hydel projects.
Avian influenza is spreading. Nepal, however, seems keen on moving ahead with plans to allow commercial farming of wild animals.
Finally, the Adani group’s attempts to recover from Hindenburg continue. Last week, Vinod Adani seemed to be removing overt links between him and the group – he stepped down from three companies connected to Adani’s Australian coal project. The group also bought back bonds worth $650 million and announced plans to raise $800 million for its green energy projects. In tandem, Indian markets regulator SEBI asked the SC to extend its deadline for probing Hindenburg’s allegations. News also emerged about the group’s persistent links with Myanmarese Junta. Shortly after the report, the group announced it was exiting its port project in the country. The buyer, however, is an unknown firm called Solar Energy Ltd.
Energy Stories of the Week
1. Two massive gravity batteries are nearing completion in the US and China
Have you heard of grid-forming inverters?
And a report on small and modular reactors. Are they coming to India?
The unknown Indian company shipping millions of barrels of Russian oil
The Nuclear-Hydrogen Conundrum: What happens when America’s biggest source of clean energy pivots to hydrogen?
Climate Long-reads of the Week
Adani crisis puts India's winner-take-all economy on trial (Nikkei)
Asia’s Richest Tycoon Is Gung-Ho. His Investors? Not So Much. Bloomberg’s Andy Mukherjee wrotes on Reliance’s Hydrogen foray.
How Mr Miyawaki broke my heart (The Wire)
Ponds and Climate Crisis in the Bengal delta (Places Journal)
Eni chased ‘profits at any cost’ to fuel Pakistan energy crisis (Source Material)
Haryana’s desperate bachelors bought wives. They turned out to be ‘loot-and-scoot’ brides (The Print). The story of female infanticide, it turns out, has a most-unexpected denouement.
G20: What Is India Bringing to the Table on Climate? (The Wire)
The 'chilling effect' of Ritwick Dutta's case could stifle the fight for environmental justice (Bar and Bench)
13 lessons from a climate change diplomat with months left to live
Finally, some good news for the Amazon!
Lula has recognized six indigenous people territories in the rainforest, fulfilling a campaign promise to reverse the policy of his far-right predecessor Jair Bolsonaro who said Brazil's original people had too much land.
Book of the Week
Activist-researcher Siddharth Kara’s Cobalt Red: How the blood of the Congo powers our lives is a must-read.
In the age of hydrocarbons, the world saw winners and losers. Now, as the world pivots from hydrocarbons to renewables, how will this arrangement of winners and losers change?
In Cobalt Red, Kara reminds us that the green economy, as it stands today, might be decarbonised but is not environmentally and socially benign. He establishes this point by travelling to the Cobalt mines of the Congo, easily one of the most mineral-rich – and most abused -- countries in the world.
One reads the book and thinks the new world might not be all that different from the old one. It might be greener – but not environmentally or socially just.
Green energy or not, the resource curse looks set to continue.