Energy

Sumitomo enters India’s renewable energy market with $711.54m investment

Japan’s Sumitomo Corporation has set its foot on India’s renewable energy sector through its joint venture with AMPIN Energy Transition Private Limited that will invest $711.54m (JPY100b) to develop clean power sources in the South Asian country. The parties have established holding company AMPIN C&I Power Private Limited, wherein Sumitomo holds 49%, and AMPIN 51%. Through the new company, the parties will also supply renewable energy, primarily solar and wind, to corporate clients through power purchase agreements (PPA). They aim to supply one gigawatt of power to industry within the next few years, with plans for future expansion. Seiji Kitajima, general manager, Energy Innovation Initiative Strategic Business Unit of Sumitomo Corporation, said this project is one of the largest corporate PPA projects undertaken by a Japanese company in India. “By combining our expertise and resources, we aim to co-develop and co-own renewable energy projects that will provide substantial long-term returns whilst significantly contributing to the nation’s energy transition goals,” said Pinaki Bhattacharya, founder, MD, and CEO of AMPIN Energy Transition. India aims for net-zero emissions by 2070, targeting 50% renewable power by 2030. Its growing corporate PPA market, which is now the world's third-largest after the US and Spain, is supported by regulatory reforms such as open access to transmission and distribution networks for operators, and improvements in the business environment.

India signs green ammonia offtake agreement with Japan

Union Minister of New and Renewable Energy Prahlad Joshi chaired the signing ceremony of the first-ever agreement for the export of Green Ammonia from India to Japan. The project offtake agreement, marks a significant step forward in India’s journey to becoming a global leader in green hydrogen and ammonia production.

The Heads of Terms (HoT) agreement was signed between Sembcorp Industries, Sojitz Corporation, Kyushu Electric Power Co., and NYK Line, solidifying a cross-border green ammonia supply partnership from India to Japan. This agreement represents the first such collaboration between the two nations, underscoring India’s growing prominence in the global green energy landscape.

Sembcorp Industries will lead the production of green ammonia in India, utilizing renewable energy sources. Kyushu Electric Power Co. has committed to integrating this green ammonia into their energy mix, partially replacing coal consumption at their thermal power plants in Japan. Sojitz Corporation will act as the business intermediary, facilitating the connection between the ammonia producer and the offtaker. NYK Line will oversee the maritime transportation of the green ammonia from India to Japan.

Speaking at the event, Joshi emphasized the importance of this partnership, stating, "Today is a historic day as we mark the first-ever agreement for the supply of Green Ammonia from India to Japan. This agreement will help establish a robust supply chain from production in India to consumption in Japan, paving the way for future collaborations in the green energy sector."

The Minister highlighted India's rapid progress in green hydrogen and renewable energy under the leadership of Prime Minister Narendra Modi. He reiterated India’s commitment to becoming a global leader in green hydrogen and ammonia production, leveraging partnerships, building robust regulatory frameworks, and making substantial investments in the sector.

Joshi also announced that a tender for 7.5 lakh TPA of Green Ammonia is currently live, with additional tenders for 4.5 lakh TPA capacity also floated. These efforts are part of India’s broader strategy to award incentives for the production of over a million tonnes per annum of Green Hydrogen, demonstrating India’s capability and intent to scale up green energy production at an unprecedented pace.

The Minister further spoke about the deep cultural and people-to-people ties between India, Japan, and Singapore, noting that the three countries are collaborating on energy efficiency and renewable energy technologies. He expressed confidence that this agreement is just the beginning of India’s expanding capabilities in the green energy sector, with future endeavors expected to be even more ambitious and impactful.

Five trends in India's energy transition in 2024

India is likely to see one of the biggest transformations in the world when it comes to energy transition. There is little debate in the third-largest emitter of greenhouse gases about choosing between fossil fuels and renewables. Rather, India plans to accelerate growth of all fuel types to cater to the rising energy demand. In doing so, its main aim will be to keep balancing energy security, affordability and sustainability. India's strategy is seen as a test case and a blueprint for other emerging economies. The strategy aims to achieve net zero by 2070 and includes several short-term and medium-term targets to enhance renewable energy supply and utilization. These targets include reaching 500 GW of renewable power capacity by 2030 (currently at 179 GW) and 5 million mt of renewable hydrogen production by the same year. Simultaneously, the strategy also includes plans to add large new fossil fuels capacities, with 80 GW of new coal power capacity by 2032 and open exploration blocks for oil and gas finds which will result in continued rise in emissions for decades to come. Here are five trends that stand out in India's energy transition journey this year.

1. More support for supply side with subsidies, policies

A $2.4 billion subsidy is chasing renewable hydrogen developers, while a $2.8 billion production-linked investment scheme is reserved for solar panel producers. Additionally, a viability gap funding is in store for those venturing into battery storage development, with a 4 GWh capacity. In addition, policies are framed for easy land availability, concessional power supply and offering low-cost loans. These policies serve as some of the biggest support features of India's energy transition strategy. However, most of the incentives are designed to boost the supply side of the new energy business with the demand development is not being adequately stimulated, says the industry. For instance, mandatory consumption targets for renewable hydrogen are yet to be introduced. New energy developers, like, ReNew have said until there is demand certainty, it will be hard to start building renewable hydrogen plants. Industry members say when emissions reduction rules are imposed on hard-to-abate sectors such as steel, cement and chemicals, they are likely to demand their own set of financial and policy incentives to facilitate their energy transition.

2. Fertilizer, steel, refining sectors take lead in decarbonization

With the world moving towards regulations to account for emissions such as EU's Carbon Border Adjustment Mechanism, Indian industries are initiating hydrogen adoption, carbon capture, utilization and storage and shadow carbon pricing, as part of their decarbonization plans. In June, Solar Energy Corporation of India, the government's tendering arm, released an aggregated tender for buying 539,000 mt/year renewable ammonia for several fertilizer plants. Additionally, JSW Energy signed an agreement with the group firm JSW Steel to supply 3,800 mt/yr renewable hydrogen for seven years at its plant in Karnataka. Around 15 of the 100 renewable hydrogen projects in India involve oil and gas companies such as BPCL, Indian Oil and GAIL with a projected production of 35,627 mt/year. ONGC said in July, it will spend Rupees 2 trillion ($24 billion) in new energy and decarbonization projects to reach its net-zero target (Scope one and Scope two) by 2038. The hard-to-abate industry is seen participating in the government's carbon market stakeholder consultations and working on their respective shadow price for carbon.

3. Renewable ammonia hubs develop, non-binding deals signed

Partnerships such as ReNew-JERA, ACME-IHI, Greenko-Uniper and AM Green-Yara are in the limelight for being the front runners in signing non-binding agreements for supply of renewable hydrogen and its derivatives to Japan, Germany and Singapore. The hydrogen developers are based in hubs on India's eastern coast in Odisha and Andhra Pradesh state and are yet to be commissioned. However, for the non-binding agreements to turn into binding sales and purchase contracts, policy clarity and uniform certifications would be required. India's hubs will also face competition from Middle East and the US that are developing as low-cost, lowcarbon ammonia-supplying zones. Additionally, Australian hubs are ready to sign deals and secure finances to jump-start their projects, posing further competition. In such a case, the trade believes India's renewable hydrogen/ammonia business may benefit from the diversification strategies of the largest global buyers.

4. National carbon market policy formulation in spotlight

India is currently developing its carbon market policy and after registration of carbon credits domestically, the market is likely to be ready for trade by 2026-2027. The success of the carbon market will depend on factors like having robust system for price discovery, a transparent mechanism of reporting GHG emissions and drawing enough participants to create a sustainable and liquid trading system. In addition, industry members are closely monitoring the development of the policy, particularly to see how the compliance and offset markets will be integrated and how India's national market will align with the global carbon market, where the country is a large supplier of carbon credits. Specifically, concerns over the export policy of carbon credits have sprung up time and again and participants are closely watching any policy move that could adversely impact India's sale of carbon credits in the global voluntary carbon market.

5. Changing policies to factor in evolving market dynamics

Policies in the energy transition space are seen being tweaked to make them more suitable for the changing market dynamics. For example, in June, Solar Energy Corporation, amended the subsidy scheme guidelines issued in January for allocation of renewable ammonia for the fertilizer sector, by raising the quantity to 750,000 mt/yr from 550,000 mt/yr as the scheme "gained traction." In May, the Ministry of New and Renewable Energy exempted renewable energy plants in Special Economic Zones that supply power to renewable hydrogen projects in SEZs, from the Approved List of Models and Manufacturers -- a list of domestic producers of solar PV modules. The move, designed to lower renewable hydrogen prices, opens the door for these renewable energy plants to import cheap solar PV modules instead of buying from the ALMM firms. The government has also advanced the date for 20% ethanol blending in gasoline to 2025-26 from 2030. It also said natural gas contracts can be reworked or reimagined so that the share of natural gas in the energy mix grows from about 7% now to 15% by 2030. In line with this, at India Energy Week in Goa in February, Secretary Pankaj Jain from the Ministry of Petroleum and Natural Gas, said India would "fix the plane while flying it," implying policy changes would be a regular feature in India's energy transition.

Source: S&P Global Commodity Insights

Power consumption rises 1.3% to 34.23 billion units in 1st ten days of December

India's power consumption grew by 1.3 per cent in the first ten days of this month from December 1 to 10 to 34.23 billion units (BU) over the same period a year ago, according to power ministry data. In 2020, power consumption was 33.78 BU during December 1 to 10. In the entire month of December 2020, consumption was 105.62 BU, up from 101.08 BU in December 2019.

Experts are of the view that power consumption as well as demand would grow at a steady pace in December with improvement in economic activities across the country.

During the first 10 days of December this year, the peak power demand met or the highest supply in a day, touched 169.12 Gigawatt (GW) compared to 165.42 GW in the same period in 2020. The peak power demand met in December 2020 was 182.78 GW up from 170.49 GW in December 2019.

In November this year, the power consumption grew by 2.6 per cent to 99.37 BU. Last year in November, power consumption stood at 96.88 BU and in the same month in 2019, it was at 93.94 BU.

The country's power consumption had grown by 3.3 per cent in October this year to 112.79 BU compared to 109.17 BU in the same month last year.

Many states had imposed lockdown restrictions after the second wave of the pandemic hit the nation in April this year and affected the recovery in commercial and industrial power demand as states started imposing restrictions in the latter part of the month. Curbs were gradually lifted as the number of COVID cases fell

China releases five-year green development plan for industrial sectors

China's industry ministry on Friday unveiled a five-year plan aimed at the green development of its industrial sectors, vowing to lower carbon emissions and pollutants and to promote emerging industries so as to meet a carbon peak commitment by 2030.

The world's top greenhouse gas emitter is aiming to bring its carbon emissions to a peak by 2030 and become "carbon-neutral" by 2060.

The Ministry of Industry and Information Technology (MIIT) reiterated the targets of cutting carbon dioxide emissions by 18%, and energy intensity by 13.5%, by 2025, according to the plan which covers the period between 2021 and 2025.

It also said it will strictly control capacities in steel, cement, aluminium and other sectors.

The MIIT said it will increase clean energy consumption and encourage the use of hydrogen energy, biofuels and refuse-derived fuels in steel, cement, chemical and other industries.

The plan also looks to promote the "rational" exploitation of mineral resources such as iron ore and nonferrous, and to develop the use of recycled sources, said the ministry

Power ministry asks all ministries, states to join Centre's e-mobility drive

The union power ministry has advised all ministries and state governments to join the Centre’s initiative on transformative electric mobility, union power and new and renewable energy minister Raj Kumar Singh said on Thursday.

In response to a query in the Lok Sabha about whether the government proposes to use electric vehicles instead of gas-,diesel-powered vehicles, Singh said, “Ministry of Power, Government of India has already advised all the Ministries and the State Governments to join the Government of India’s initiative on transformative electric mobility and advise their respective Departments to shift their fleet of official vehicles from present Internal Combustion Engine (ICE) based Vehicles to Electric Vehicles." Implementation of the plan will burnish the government’s green credentials after India agreed to achieve net-zero emission by 2070. The government is planning to leverage the ₹10,000 crore Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (Fame) scheme, which is designed to support the electrification of public and shared transport and help build charging infrastructure for this transition. 

The scheme is an important part of the government’s strategy to reduce vehicular emissions and dependence on fossil fuels. Money allocated under Fame-2 is to be spent to subsidize 500,000 electric three-wheelers, 1 million electric two-wheelers, 55,000 electric passenger vehicles and 7,090 electric buses

Indian states suffer power cuts as coal-fired plants shut to lower pollution in Delhi

India's northern Haryana and Punjab states have suffered electricity cuts after a directive to stop operating six of the 11 coal-fired power plants around national capital New Delhi in a bid to reduce pollution, government officials told Reuters.

New Delhi was the world's most polluted capital for the third straight year in 2020, with air quality in the region hitting hazardous levels in November, putting many people including children at risk https://www.reuters.com/world/india/india-temporarily-shuts-five-coal-fired-power-plants-around-new-delhi-2021-11-17.

The federal government-appointed Commission for Air Quality Management (CAQM) issued a directive on Nov. 16, asking six power plants to "remain inoperative at least till 30th November" to improve air quality.

POSOCO, the federal power grid regulator, in a letter dated Nov. 28 to state government-run utilities in Punjab And Haryana, said the companies were reporting power supply shortages when electricity demand peaked during the evening.

Two senior officials at the Punjab utility and one senior official at the Haryana utility acknowledged the power outages, saying the unscheduled power cuts were largely due to an inability to operate coal-fired power plants in the state.The officials declined to be named because they were not authorised to speak to the media

India September crude imports touch 5-month high as business activity picks up

India's crude oil imports in September hit a five-month high, government data showed on Wednesday, as a pickup in economic activity and mobility led to higher fuel demand.

Crude oil imports in the world's third largest oil consumer and importer rose 16% to 17.61 million tonnes from a year earlier, according to data on the website of the Petroleum Planning and Analysis Cell."India's September crude oil imports climbed to highest levels since April, a sign that the reopening of the economy continues," said Edward Moya, senior market analyst at brokerage OANDA.

"Indian refiners see crude demand roaring back as driving picks up and on expectations for a strong return of international travel in November."Reliance Industries Ltd, the operator of the world's biggest refining complex, imported nearly 12% more oil in September than in August.

Factory activity in Asia's third-biggest economy improved last month, with recovery expected to continue for at least a few more months supported by ultra-easy monetary policy.

On a monthly basis, crude oil imports increased 1.3% versus August.Earlier this month, data showed fuel consumption and refiners' crude oil throughput ticked higher in September from the preceding month

Coal shortage easing at plants, power price falls on exchange

The average market price of power traded on the India Energy Exchange Day Ahead Market (IEX DAM) fell to Rs 2.4 per unit (kilowatt hour) on Friday from a peak of Rs 16.4 per unit on October 11, with states rushing to the exchange to buy power as thermal power plants struggled to meet demand due to low coal stocks.

The average coal inventory across the nation’s thermal power plants has improved to seven days worth of stock from an average of four days in the first half of October, when a number of states including Punjab, Uttar Pradesh and Rajasthan imposed load shedding as thermal plants ran out of the dry fuel.

Thermal power plants are required to maintain minimum reserves of 15-30 days of coal stock based on the distance of the plant from the source of coal. The total volume of power sold on the IEX DAM has also fallen to 1,47,308 MWh (megawatt hour), from a peak of 2,81,823 MWh on October 12.

A number of states were forced to buy power from the exchange at prices of Rs 20 per unit during the coal shortage.A sharp uptick in power demand with the economy recovering from the Covid-19 pandemic, coupled with above average rainfall in September impacting coal production and supply, had contributed to a drawdown in coal stocks

IMF welcomes India’s announcement at COP26 on renewables, net zero target by 2070

India's significant investment in renewables and climate change adaptation policies suggest it is well positioned to take further steps to reach this new target," IMF Director Rice said .The International Monetary Fund (IMF) on Thursday welcomed India’s announcement with regard to addressing the climate change challenges at the recently concluded COP26 summit in Glasgow.

“We welcome India’s announcement at the COP26 of new targets to increase reliance on renewables and reduce the carbon intensity of its economy, including to adopt net zero target by 2070,” Gerry Rice, Director, Communication Department, IMF, told reporters at a news conference.

“As you know, India is currently one of the world’s largest emitters, still heavily reliant on coal for electricity generation. And so, its actions may help catalyse action in other emerging market economies as well,” he said. “India’s significant investment in renewables and climate change adaptation policies suggest it is well positioned to take further steps to reach this new target,” Rice said responding to a question.

“We are heartened by India’s focus on achieving progress in the current decade given the urgent need for global mitigation action. And as with other countries, it will be important to follow through with specific actions to contain emissions over the current decade,” he added