We bring to you the eighth edition of Energy Recap, an editorial newsletter by TA to track and report on major policy developments in India’s energy sector. Here are some of the key energy highlights from the week (19 July to 25 July).
No fuel price hike for the seventh day in a row
The fuel prices in the country held steady for the seventh consecutive day on 24th July. It is said to be the longest break in weeks in the constant rise of fuel prices. With no changes in prices, petrol continues to be sold for Rs 101.8 per litre in Delhi, Rs 107.8 in Mumbai, Rs 102 in Kolkata, Rs 102.4 in Chennai, Rs 104.3 in Patna.
Interestingly, in reply to a question asked in Lok Sabha in the ongoing monsoon session, the Ministry of Petroleum & Natural Gas (MoPNG) informed that the prices of petrol have been increased 63 times between 1st January 2021 till 9th July 2021 in Delhi.
IOC to build country’s first green hydrogen plant
Indian Oil Corporation (IOC), India’s largest oil firm has announced plans to build the country’s first ‘green hydrogen’ plant at its Mathura refinery. IOC chairman, SM Vaidya has said that the company selected Mathura because of its proximity to Taj Trapezium Zone (TTZ). The idea is that the green hydrogen will replace carbon-emitting fuels used in the refinery to process crude oil into value-added products such as petrol and diesel.
According to Financial Express, the company will not set captive power plants at all in its future refinery and petrochemical expansion projects and instead use the 250 MW of electricity it produces from renewable sources like solar power.
Source: Financial Express
Only half of India’s tendered solar power contracts are under construction, says new report
According to a report published by JM Financial Institution Securities, only half of India’s tendered 53 GW solar power contracts are under construction. “We find only 50% of contracts actually under construction as 35% lack power supply agreements (PSA), while another 14% has been cancelled. Of the remaining 27 GW, about 44% includes PSAs with discoms (electricity distribution companies) while 56% includes state tenders that have an implicit PSA with respective discoms,” the report noted.
The report further emphasised that falling tariff prices and slow demand growth has caused unwillingness of the fund starved state’s discoms (electricity distribution companies) to sign PSAs with electricity intermediary producers like Solar Energy Corporation of India (SECI).
This development comes at a time when India’s power demand is growing aggressively post the COVID-19 induced lockdown and recently breached the 200 GW mark. In terms of renewable capacity, India currently has an installed capacity of 89 GW with a further 49 GW under execution. India has set the target to install 175 GW of renewable energy by 2022.
Global electricity demand growing faster than renewables
A report released by the International Energy Agency (IEA) titled ‘Electricity Market Report – July 2021’ states that global electricity demand is growing faster than renewables, driving a strong increase in generation from fossil fuels. The IEA’s report sees a 5% rise in electricity demand in 2021, with almost half the increase met by fossil fuels.
According to the said report, fossil fuel based electricity generation is set to cover 45% of additional demand in 2021 and 40% in 2022. As a result, carbon emissions from the electricity sector which fell in both 2019 and 2020 are estimated to increase by 3.5% in 2021 and by 2.5% in 2022, which would take them to an all-time high.
Source: International Energy Agency
Net zero could require 455 GW of new solar capacity each year by 2030
At least 455 GW of new solar capacity will need to be installed each year by the end of this decade for the world to reach net zero status by 2050, finds an analysis by BloombergNEF titled ‘New Energy Outlook’.
The report further states that global energy related emissions need to drop 30% below 2019 levels by 2030, and 75% by 2040, to reach net-zero in 2050.
Looking at the sector-wise emission cuts, it has been estimated that the power sector needs to reduce emissions by 57% from 2019 levels by 2030 and 89% by 2040. The emission from the road transport sector needs to reduce emissions by 11% by 2030 and 80% below 2019 levels in 2040. For industries, it’s 16% down by 2030 and 58% reduction by 2040 to reach net-zero in 2050.
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