We are back! Issue #82
COP28 set precedents with the "UAE Consensus," addressing loss and damage but recognising "transitional" fuels. Solar capacity additions in India dropped, and Tesla missed an import duty cut.
Happy New Year!
The first issue of Energy Trends in 2024 will have to start with an apology. We have been AWOL for long. The previous instalment of this newsletter went out on 30 November. The first three weeks of December were filled with manic activity as one tried to finish as much pending work as possible. And the final week was filled with a proportionately mulish unwillingness to work.
Anyway. 2023 is done. 2024 is here. It will be a consequential year. And so, here is wishing us all good luck!
News from December 2023
December was a month of intrigue.
COP28 was all about precedents -- the ones that were broken and the ones that were set. Multilateralism lost out as technical dialogue ceded to political hardball. The resultant "UAE Consensus" made available, among other things, token capital to initiate a fund for loss and damage; acknowledged the need to move away from fossil fuels; but also insisted on recognising the role of “transitional” fuels, which is interpreted as a backdoor for sources such as gas, biofuel and non-green hydrogen. COP29, to be hosted by Azerbaijan, doesn’t look all that promising either.
The Adani group recouped almost all its losses caused by Hindenburg’s short-selling attack. Its stocks are rallying. The group is back in fund-raising — and acquisitions — mode. It acquired a controlling stake in news agency IANS, and is now eyeing Odisha’s Gopalpur port. Its RE plans are proceeding apace — as are its Copper plans.
Worrying news came from the solar sector where capacity addition has fallen by 25% between 2022 and 2023. India decided against an import duty cut which would benefit Tesla.
Climate News of the Week
Researchers at the Indian Institute of Science have found that forest loss and climate change have resulted in bird species in the Eastern Himalayas shifting to higher elevations to avoid rising temperatures. The study was conducted in Arunachal’s Eaglenest sanctuary, the only home to a recently discovered bird called Bugun liocichla.
Elsewhere in the country, paradoxes loom large. North India is in the grip of an extended cold wave. Travel higher up towards J&K, however, and there is no snowfall.
News of the Week
The new energy economy takes shape
We will start with some good news. Tesla's rival — and Vietnamese auto giant — VinFast, is setting up an EV and battery plant in Tamil Nadu. The state also roped in investment from FirstSolar, which is setting up a 3.3 GW production line for solar modules.
Hardwired into such announcements are larger questions about how India’s economic landscape is changing. Gujarat has pulled large investments from Adani and Ambani to set up their RE gigafactories. Last year, CarbonCopy reported on Telangana’s plans to emerge as a manufacturing hotspot for EVs and EV components. Tamil Nadu, as the hyperlinks above show, is very much in the race as well. Meanwhile, Reliance’s RE gigafactory is expected to go live in the middle of this year.
This evolving economic geography — one implication of decarbonisation and the country’s make-in-India push — has to be understood.
Globally, there was good news as well. Global capacity for renewable power grew by an incredible 50% last year, with solar accounting for 3/4ths of that. China continues to lead here. It commissioned an amount of solar PV in 2023 equivalent to the entire world’s additions in 2022. One key driver for this quicksilver expansion was rooftop solar. In India, however, rooftop solar has been lagging. Now comes news that the government has entrusted REC with the mandate to kickstart growth in rooftop solar.
Adani goes the domestic bonds route
Turning to the Adani Group, it entered the domestic bond market for the first time in two years, aiming to raise Rs 1,000 crore through two bond issues. The news is interesting. Adani had been looking to tap global bond markets for much of its growth. Post Hindenburg — and the exit of auditors like Deloitte — the group has lost some of its sheen in those markets.
One fallout? A greater reliance on domestic bond markets. Another fallout? A higher interest rate on these bonds will attract investors. “The company offered a coupon that was 15-20 basis points higher than those of similarly rated companies,” reported Reuters.
The age of ecological crises resumes
Turning to darker matters, the first ecological crisis of 2024 has arrived. Heavy fuel from a defunct power plant in Manipur has leaked out and is flowing towards Loktak Lake. The visuals are awful. Another ecological crisis is looming in the Lakshadweep islands where, after PM Modi’s visit amidst the diplomatic brouhaha with Maldives, there is rising talk about boosting tourism in this sleepy archipelago off Kerala. See this report on tourism and carrying capacity at the islands. Also, see this old profile of Praful Patel, the controversial administrator of Lakshadweep.
In other news
The Union government is looking to set March 2025 as the deadline for 24x7 electricity supply across the country, reported Business Standard.
India wants to build a 2 billion ton coal stock by 2032. Only after that will it hit a pause on coal production. While on Coal India, see this Moneycontrol interview with coal minister Prahlad Joshi.
Continuing with this track of fossil fuels and islands, ONGC is readying oil exploration plans for the Andamans.
And finally, gut-punching news from Bangalore. The city has, despite its legendary traffic jams, overtaken Delhi to become the city with the largest number of cars. Talk of doubling down.
Longreads of the Week
1. Boeing's legacy vanished into thin air. Saving it will take years (Bloomberg). While on this topic, we cannot recommend Peter Robison’s Flying Blind highly enough. It explains how and why Boeing lost its way.
2. This review of Surinder Jodhka’s book on the Indian village (The India Forum)
3. A $290 Billion Investment Cements Natural Gas’s Relevance for Decades (Bloomberg)
4. How Adani built a $15 billion bulwark against Hindenburg attack (ET)
5. Can democracy survive 2024? (FT)
Books of the Week
The first two weeks of 2024 have gone into three books on technology, disinformation and autocracy.
The first was Maria Ressa’s excellent How To Stand Up To A Dictator. The book, which talks about Facebook’s unwillingness to rein in disinformation — a cheque that Duterte duly cashed — clearly sets out why social media is resulting in a breakdown of societies’ sense of a shared reality. This was followed by The Ugly Truth, which looks at how Facebook broke the news media model — but failed to come up with a better alternative for transmitting information to users. And then, there was If Then. The book is a history of Simulmatics. The first firm to try and use computing to predict how people will behave.