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India’s energy transition hinges on power sector

  • Market: Coal, Emissions
  • 17/09/24

India's rapid economic growth has led to surging power demand, which the country aims to meet through expanded renewable energy capacity. But for now, coal remains firmly in its energy mix.

Indian GDP grew by 6.7pc last year, according to energy watchdog the IEA, with emissions growing at a slightly faster 7pc, or about 190mn t, to 2.8 gigatonnes of CO2. Accelerating the transition to cleaner power generation is imperative for the country to meet its development and climate goals. But it is still heavily reliant on coal for energy security. India's coal-fired capacity stands at almost 218GW for the 2024 fiscal year, according to government think-tank Niti Aayog, accounting for a 49pc share of the country's total installed power mix. And it aims to add 80GW more coal-fired capacity by April 2031-March 2032.

Coal-based power makes up 94pc of India's thermal power generation at present, and is likely to account for at least a 60pc share by 2030, reducing only slightly to 50pc by 2040, state-controlled producer Coal India business development director Debasish Nanda says. India's thermal power generation also includes natural gas, naphtha and diesel. India and more than 200 other countries reiterated a pledge to accelerate "efforts towards the phase-down of unabated coal power" at the UN Cop 28 climate summit in Dubai last year.

To reduce its reliance on coal, the Indian government has outlined plans to become a gas-based economy. It aims to increase the share of gas in its energy mix to 15pc by 2030 from about 6pc in 2022. And it plans to expand its renewable energy capacity to 500GW by 2030 from 197GW now. Solar power currently makes up the highest share of this, with 43pc or 81GW, followed by wind power with 46GW. India is set to add a further 6GW of solar-based capacity and 1.2GW of wind-based power by March 2025, according to Niti Aayog.

The power sector accounted for more than half of the increase in India's total emissions in 2023, the IEA says. Accelerating the transition is essential, but progress in individual states is highly uneven, according to a report by US-based think-tank the Institute of Energy Economics and Financial Analysis and UK think-tank Ember. States such as Karnataka and Gujarat have effectively integrated renewable energy into their power sectors, but others have not. India has many central and state-level policies to encourage energy independence, but implementation has not been adequate or transparent, the report says.

Power move

Firms are taking steps to boost renewable capacity. India's largest power producer, NTPC, primarily relies on coal but its 2032 plan to become a major diversified energy supplier includes renewable and nuclear power generation, chairman and managing director Gurdeep Singh says. It expects to have about 60GW of renewable energy capacity by 2032, and is looking to add 10GW of nuclear capacity, with an additional 4GW in a joint venture with a nuclear power corporation, Singh says.

India also aims to electrify as much of its industrial sector as possible. State-controlled power transmission company Powergrid has set a target to meet 50pc of its internal energy needs through renewables by 2025 and achieve net zero emissions by 2047. Industry experts predict India's energy-related emissions are likely to increase up to 2028 and recede thereafter.

But funding still poses a challenge, especially for a country so large. India earlier this year submitted to UN climate body the UNFCCC a call for developed countries to provide at least $1 trillion/yr in climate finance to developing countries from 2025, in reference to the so-called new collective quantified goal. The government says India alone requires $70bn-80bn/yr to fund its green energy goals.

By Rituparna Ghosh and Prethika Nair

CO2 emissions by sector, India, 2021

India power capacity sources

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California LCFS set for key decision Friday: Update

California LCFS set for key decision Friday: Update

Adds comments from meeting. Houston, 8 November (Argus) — Fuel producers today urged California regulators to preserve incentives in a newly uncertain market as residents asked them to start over with greater ambitions for a zero-emission future. California regulators may toughen carbon-slashing targets and raise hurdles for crop-based fuels to participate in North America's largest Low Carbon Fuel Standard (LCFS). On Friday California's Air Resources Board heard hours of final testimony on a rulemaking that has been underway for nearly a year — and on the verge of running out of time — to restore shrinking incentives in the state's program to decarbonize road fuels. The decision comes amid growing outcry over the cost of diversifying the state's fuel portfolio passed on to drivers. Choices made on incentives in the largest US renewable fuels and electric vehicle charging markets may offer some clarity to markets now roiled by uncertainty over the approach an incoming second Donald Trump administration will take. "The tools in our toolbox may become much more limited going forward," board chairwoman Liane Randolph said in opening remarks. "While we will do everything we can to protect our authority in California and our existing programs that we have to clean the air, we know that we must do all we can to use our existing state authority to bring clean fuels to California." Board consideration was not expected until late in the day. LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuels that exceed the annual limit incur deficits that suppliers must offset with approved, lower-carbon alternatives. California's program has helped spur a rush of new renewable diesel production that quickly overwhelmed the deficits generated from petroleum gasoline and diesel use in the state. LCFS credits do not expire, and leftover credits available for future compliance grew to 29.1mn metric tonnes by July. The program generated 22.4mn deficits in all of 2023. Tougher targets on tap Board approval of amendments considered today would immediately toughen program targets for 2025 by 9pc. The one-year drop would nearly double reductions first proposed last year, and require cuts six times deeper than the typical year-to-year change in targets. Regulatory staff published models in April suggesting such a target could thin a smothering inventory of excess credits available for future compliance by 8.2mn — roughly a third of the available excess credits. Other proposals would take longer to begin. California would require new attestations about land use for crop-based feedstocks by 2026, shifting toward tougher verification requirements for such feedstocks by 2031. Regulators would limit credit generation for existing suppliers of biodiesel and renewable diesel made from soybean oil or canola oil credits to only 20pc of such fuels they supply to California by 2028. And CARB would begin phasing out outsized credit generation from renewable natural gas used in transportation in 2040, after locking-in incentives for current projects regardless of any regulations that would mandate methane reductions. The program has faced a late push of opposition from fuel suppliers and environmental critics highlighting costs to previously unaware drivers. The campaign inspired an unusual volume of public comment filings in October from residents focused on gasoline costs. Hours of public comment included numerous residents near dairies and other infrastructure critical of incentives that continued operations worsening their air quality, as well as environmental groups opposed to incentives not focused on electric transportation. "This proposal is simply not worthy of your vote," Earthjustice staff attorney Nina Robertson said. "It represents a grab bag of giveaways to polluting special interest that have turned what was once a program for climate progress into a piggy bank for their false climate solutions." But CARB faces a 5 January deadline to approve the proposals. Missing it would restart the regulatory process, which staff has said could take another two years to complete. Credits available for future compliance nearly tripled over the past two years. Renewable natural gas, electric vehicle and even biofuels groups wary of elements of the proposal have issued statements of support this week. "While there is always room for improvement, in our view, there's no reason to delay adoption of this proposal today," Neste US president Peter Zonneveld said. "There is no time to waste." Randolph has repeatedly defended the program in public appearances as the temperature on fuel costs concerns rose. Board member Dean Florez said ahead of the meeting that he would vote against the amendments, citing what he considered a lack of clearer information on potential cost and emissions impact. "The opacity has eroded confidence in our intentions and planning," Florez wrote in a guest editorial. CARB's choices will ripple across fuel supply strategies around the world. California used two thirds of the renewable diesel consumed in the US during the second quarter, and access to the market can determine feedstock margins. With immediate federal choices on biofuel tax incentives or possible feedstock sanctions uncertain, clarity on California's may offer suppliers one of the fuel planning footholds this year. By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Canada climate plans not equally at risk post-Trudeau


08/11/24
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08/11/24

Canada climate plans not equally at risk post-Trudeau

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Talks to restart as port of Vancouver lockout drags


08/11/24
News
08/11/24

Talks to restart as port of Vancouver lockout drags

Calgary, 8 November (Argus) — A labour disruption at the port of Vancouver is now into its fifth day, but the employers association and the locked-out union are to meet this weekend to try to strike a deal and get commodities moving again. Workers belonging to the International Longshore and Warehouse Union (ILWU) Local 514 on Canada's west coast have been locked out by the BC Maritime Employers Association (BCMEA) since 4 November. This came hours after the union implemented an overtime ban for its 730 ship and dock foreman members. The two sides will meet on 9 November evening with the assistance of the Federal Mediation and Conciliation Service (FMCS) in an effort to end a 19-month long dispute as they negotiate a new collective agreement to replace the one that expired in March 2023. The FMCS was already recruited for meetings in October, but that did not culminate in a deal. Natural resource-rich Canada is dependent on smooth operations at the port of Vancouver to reach international markets. The port is a major conduit for many dry and liquid bulk cargoes, including lumber, wood pellets and pulp, grains and agriculture products, caustic soda and sodium chlorate, sugar, coal, potash, sulphur, copper concentrates, zinc and lead concentrate, diesel and renewable diesel liquids and petroleum products. These account for about two-thirds of the movements through the port. Grain operations and the Westshore coal terminal are unaffected while most petroleum products also continue to move, the Port of Vancouver said on 7 November. As the parties head back to the bargaining table, the ILWU Local 514 meanwhile filed a complaint against the BCMEA on 7 November, alleging bargaining in bad faith, making threats, intimidation and coercion. "The BCMEA is trying to undermine the union by attempting to turn members against its democratically-elected leadership and bargaining committee, said ILWU Local 514 president Frank Morena on 7 November. "They know their bully tactics won't work with our members but their true goal is to bully the federal government into intervention." But that is just "another meritless claim," according to the BCMEA, who wants to restore supply chain operations as quickly as possible. The union said BC ports would still be operating if the BCMEA did not overreact with a lockout. "They are responsible for goods not being shipped to and from BC ports — not the union," Morena says. The ILWU Local 514 was found to have bargained in bad faith itself already, according to a decision by the Canada Industrial Relations Board (CIRB) in October. Billions of dollars of trade are at risk with many goods and commodities at a standstill at Vancouver, which is Canada's busiest port. A 13-day strike by ILWU longshore workers in July 2023 disrupted C$10bn ($7.3bn) worth of goods and commodities, especially those reliant on container ships, before an agreement was met. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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California LCFS set for key decision Friday


08/11/24
News
08/11/24

California LCFS set for key decision Friday

Houston, 8 November (Argus) — Today California regulators will consider toughening carbon-slashing targets and raising hurdles for crop-based fuels to participate in North America's largest Low Carbon Fuel Standard (LCFS). California's Air Resources Board will weigh rulemaking underway for nearly a year — and on the verge of running out of time — to restore shrinking incentives in the state's program to decarbonize road fuels. The decision comes amid growing outcry over the cost of diversifying the state's fuel portfolio passed on to drivers. Choices made on incentives in the largest US renewable fuels and electric vehicle charging markets may offer some clarity to markets now roiled by uncertainty over the approach an incoming second Donald Trump administration will take. LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuels that exceed the annual limit incur deficits that suppliers must offset with approved, lower-carbon alternatives. California's program has helped spur a rush of new renewable diesel production that quickly overwhelmed the deficits generated from petroleum gasoline and diesel use in the state. LCFS credits do not expire, and leftover credits available for future compliance grew to 29.1mn metric tonnes by July. The program generated 22.4mn deficits in all of 2023. Tougher targets on tap Board approval of amendments considered today would immediately toughen program targets for 2025 by 9pc. The one-year drop would nearly double reductions first proposed last year, and require cuts six times deeper than the typical year-to-year change in targets. Regulatory staff published models in April suggesting such a target could thin a smothering inventory of excess credits available for future compliance by 8.2mn — roughly a third of the available excess credits. Other proposals would take longer to begin. California would require new attestations about land use for crop-based feedstocks by 2026, shifting toward tougher verification requirements for such feedstocks by 2031. Regulators would limit credit generation for existing suppliers of biodiesel and renewable diesel made from soybean oil or canola oil credits to only 20pc of such fuels they supply to California by 2028. And CARB would begin phasing out outsized credit generation from renewable natural gas used in transportation in 2040, after locking-in incentives for current projects regardless of any regulations that would mandate methane reductions. The program has faced a late push of opposition from fuel suppliers and environmental critics highlighting costs to previously unaware drivers. The campaign inspired an unusual volume of public comment filings in October from residents focused on gasoline costs. But CARB faces a 5 January deadline to approve the proposals. Missing it would restart the regulatory process, which staff has said could take another two years to complete. Credits available for future compliance nearly tripled over the past two years. Renewable natural gas, electric vehicle and even biofuels groups wary of elements of the proposal have issued statements of support this week. Chairwoman Liane Randolph has repeatedly defended the program in public appearances as the temperature on fuel costs concerns rose. Targets must get tougher, she said earlier this year . She reiterated the need for the standard in response to media questions about the lack of information about potential cost increases. CARB's choices will ripple across fuel supply strategies around the world. California used two thirds of the renewable diesel consumed in the US during the second quarter, and access to the market can determine feedstock margins. With immediate federal choices on biofuel tax incentives or possible feedstock sanctions uncertain, clarity on California's may offer suppliers one of the fuel planning footholds this year. By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Zambia UN carbon market focus on VCM transition


08/11/24
News
08/11/24

Zambia UN carbon market focus on VCM transition

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