Category Archives: Energy

Battery systems gear up for power grid applications

By Aditya Chhatre

Let’s sit back and think about how many things we have used today need a battery – a phone, laptop, computer, watch, television, car, bike and other household electronic appliances. Basically, this is a non-exhaustive list and we are all surrounded by batteries. Batteries represent a 113.4-billion-dollar market and is expected to grow to 310.8-billion-dollar market till 2027. As a product batteries have been revolutionary for mobilizing most of the electronic devices we use today. Moreover, electric vehicle, which once considered commercially non-viable, have now reached a comparable scenario with the conventional internal combustion engine vehicles. Now, batteries are set to bring a change in the energy landscape of the power sector. Electricity has one of the largest supply chains in the world in the form of power grids, however with no inventory for storage. Storing electricity has never been a common phenomenon considered for grids. Power plants and grid operators always have been critical about matching the electricity generation with its demand. There are also fines levied upon power plants if they do not abide by the regulations for generation. A new application, energy storage for power grid services, has created a surge in battery demand in recent years. Future power grids are on their way to be flexible and more stable. The journey of batteries from a non-viable and costly solution to this newly found use case in the power grids has not been an easy one. Although it has lot of interesting caveats to explain the evolution of battery applications of almost 200 years.

Batteries – a revolution

A battery is a device governed by a chemical reaction which generates electricity. It is a simple electro-chemical device. It requires two different metals and an electrolyte to work. This all started in 1799 when Alessandro Volta invented the first modern battery. It was nothing but a stack of silver and zinc coins separated but a brine-soaked cardboard. The higher number of such coins, resulted in higher amount of electricity generation. Things changed with the invention of dynamo in 1831 which gave an opportunity to generate electricity on demand. Even though the battery technology has been the same as Alessandro Volta’s invention, modern-day battery innovations are carried out by scientist swapping the metals with other metal chemistries and electrolyte. This resulted in designing of rechargeable batteries in 1859. These rechargeable batteries were nothing but the robust lead-acid batteries. Then after world war-II nickel based batteries (cadmium, hydride) showed up powering the early camera flashes and some of the electric vehicles. Finally, in 1991 Sony introduced the first commercial lithium-ion battery. This invention of lithium-ion batteries have had a revolutionary effect on the markets of consumer electronics and electric cars. Electronics such as laptops and mobile phones were enabled to be compact and light weight. This transformation created huge demands of lithium-ion and the battery market sprung up. Although this was just the beginning of the journey. The features these battery technologies were still amicable only for low-capacity applications and yet were not ready to be considered for large capacity applications such as electric vehicles or grid energy storage.

It is usually not straightforward to explain the growth of any sector or industry as there are number of elements associated with it. Each factor plays a specific role and the result is the combination of these efforts. Although, it is interesting to narrow down these factors and analyze the evolution of the technology. The grid application for batteries is one such sector which has been influenced by diverse factors. Each of these elements are intriguing and worth to be narrowed down further.

The climate demands

During the mid-20th century, the greenhouse gases became a major topic of concern in many fields. Eventually scientist believed that this effect was mainly due to carbon intensive human activities. The effects were distinctly visible in cities due to its concentrated population and because of significant increase in the use of fossil fuel driven cars. Along with the climate effect, the realization of finite source of crude oil alarmed governments and sectors such as oil and vehicle manufacturers. Rethinking was needed on fossil-fuel based vehicles. As businesses had to survive, they focused their investments in sectors of auto industry for electric vehicles and also in clean energy technologies such as solar and wind. Both these technologies depend upon powerful batteries which store energy for a long amount of time. In those days the prevalent technologies like lead-acid and nickel-based batteries which were designed for robust application and were not suitable for electric vehicle market. A new battery chemistry was desperately needed which could serve powerful and lightweight applications. Also, this technology needed to meet the standards of being environmentally friendly.

Why is lithium a winner?

A complex product like battery has large number of technical parameters. Although, these parameters are useful as batteries are sensitive to the user behavior and the working conditions. Acknowledging these guidelines and parameters ensure maximum efficiency. Amongst these there are 4 of such factors which can be considered as primary parameters for evaluation of a battery technology. Energy density and power density define the electricity a battery can store and provide based on the chemistry of the metals used. Energy efficiency is the second parameter which is crucial for any electrical appliance. Lastly, life of a battery is usually counted by the charging and discharging cycles it serves.

Fig. 1 explains the dominance of Li-ion batteries for all 4 considered primary parameters compared with other battery types. Certainly, there are application wherein other battery types are preferred such as lead-acid which are suitable for car starter batteries or inverters. However, the untapped potential of lithium brought Li-ion batteries to the forefront for further research. With consistent and combined efforts from scientist and manufacturers, a stable lithium-ion battery was designed and commercialized in 1991 by Sony. Since then, there were attempts to construct a stable and better chemistry than the Li-ion batteries. But these attempts are not yet successful. As this invention has given humans an opportunity to transition to a fossil free society, in 2019, John Goodenough, Stanley Whittingham and Akira Yoshino were awarded the Nobel Prize in chemistry for ‘development of lithium-ion’.

Figure. 1 – Key parameters of electrical energy storage

Growth of the clean tech

After lithium-ion battery technology revolutionized the industry of mobile phones and laptops, they still were behind for the user levels with respect to the technology and also with the prices. In 2003, Tesla emerged as a pioneer in the auto industry and had the vision to comprehend the idea of electric vehicles. After 5 years, in 2008, Tesla commercialized its first ever electric vehicle ‘Roadster’. It was the first time that such high number of batteries were stacked up and used for an intensive application such as electric vehicles. This gave other manufacturers a sense of belief in the technology. Gradually businesses increased their investments in research and development of lithium-ion batteries for electric vehicles. In the next years the patents filed for lithium-ion batteries increased(Fig 2). The technology has been improving since then. Besides that, the demand of Li-ion batteries made the supply chains of raw materials stronger and more efficient. This led in reduction of prices of Li-ion batteries from 1128 $/kwh in 2008 to around 140 $/kwh in 2020. As the demand of electric vehicles and Li-ion batteries is nowhere near its peak, the price reduction trend is expected to continue and the prices are anticipated to get even below 100 $/kwh in the next years.

Figure. 2 Number of patents filed related to battery cells

A similar shift to the low carbon intensive techniques was a need in the 1990s in the sector of electricity generation. Most of the electricity generated was with fossil fuels such as carbon and oil. This urgency to get the emissions in control resulted in deploying resources for the generation of electricity through solar and wind plants. By nature, these renewable energy power plants are highly dependent on weather conditions. This leads to inconsistency in generation resulting in situations of shortages or abundance of electricity. Power grids are the means of transmission for carrying electricity from the generation locations to the consumer location. Voltages and frequencies for the grid are to be maintained at a certain value for functioning of the grid. Any changes could lead to failure of grid with load shedding. Such variability caused by these renewable energy resource makes the grid unstable. To compensate to this variability, energy storage plants are required to compensate and maintain the stability in electricity grid. Conventionally hydro power is the most common energy storage power plant used to maintain these imbalances of the grid. These hydro power plants require large amount of land. Also, it is not convenient to build hydro power plants at specific locations where the grids are congested. With these constraints hydro power plants are probably not the solution for the need of decentralized energy storage facilities.

The more the share of renewables in the grid, higher the possibility of instabilities in the grid. This has led to increase in deployment of energy storage facilities. Lead-acid batteries were previously used for grid applications to support operations to maintain voltage and frequencies. Even though this application was comparatively on a small scale, the need of such ancillary services is predicted to increase in the future. But as lithium-ion batteries have proved to be more efficient, they have come up as a dominant solution with the market share more than 90% for power grid applications. Along with system operation applications, storing the extra power generated by solar and wind power plants is another important application which is economical for the plant owners. Plant owners can now unleash the full capacity of the plant by storing the extra electricity generated. This stored electricity can then be used to sell at situations when electricity prices are high giving plant owners additional monetary benefits. Fig. 3 shows the four different services, a utility scale battery system can provide.

Figure. 3 Services offered by utility-scale battery storage systems

Conclusion

Large scale lithium-ion battery systems, even though they are dominant today, have questions such as recyclability and fire breakouts to be answered. But the change is that manufacturers are already thinking about recycling during its design stage. This has helped recycling to go global right from the beginning. Tesla co-founder, JB Straubel, had quit Tesla in 2019 and joined a startup to build battery recycling facilities. Also, research is been carried out and the systems are built taking into account the safety precaution for fires problems. Surely, there are alternate technologies such as lead-acid and redox flow batteries for similar grid applications. In some cases, these battery chemistries might be even better. However, these alternate technologies would take time to establish and meet such high demands in such a small span of time. Especially when the climate targets are so urgent. On the other hand, lithium-based batteries are already matured and hence are predicted to be dominant choice for batteries for the next 10-15 years.

Certainly, various policies are designed to support existing sectors with energy storage technologies. Many countries are investing in large scale battery storage applications and relying on it to strengthen solar and wind power plant portfolios as they increase their dispatchability, and allow revenue stacking from arbitrage and ancillary services offered to the power grid. According to the new policy scenario of IEA, the installed of battery storage systems globally is predicted to be 218 GW in 2040 which is just 23 GW in 2020. These battery systems will surely play a key role in energy transition from the fossil fuels.

Why Bitcoin is energy intensive

By Aditya Chhatre

Humans have specific beliefs and subjective ideologies. Historically, there are very few things which have unanimously wired large number of humans in the world. Yuval Noah Harari explains in his book “Sapiens”, that monetary, imperial and religious orders are the three constructions that have successfully unified humankind. The definition of a financial systems has evolved from brass, silver or gold coins to the newest form of notes with national leaders and symbols printed on it. Money in the form of gold, notes, coins or whichever prevalent form, is a platform to value an object or a service. It is only valued because humans as a community accept commodities in the form of ‘money’ and believe the exchanged commodity shall be valued. With cryptocurrencies around the corner for a decade, do we have another structural shift in its form?

Our lives revolve around digital systems and finance systems are not far off. Governments have implemented policies to make financial systems digital and cashless. This has raised speculations on hard cash gradually might decelerate and go extinct. The centralized financial system has an alternative now to be decentralized in the form of cryptocurrencies. The first cryptocurrency was Bitcoin developed in 2008-09 by Satoshi Nakamoto. Within the last decade many such cryptocurrencies were created and the concept of decentralized financial system has been put in use. Although, in recent times, as bitcoin got popular, there are discussions that the working of these cryptocurrencies is energy intensive and with more users it will make things worse. It is essential to unfold this big debate to understand the energy consumptions of cryptocurrencies and figure out a way to find the electricity consumption of bitcoin.

Understanding bitcoin mining in 4 setups

The energy consumption of any cryptocurrency lies in the way a cryptocurrency works with its algorithm. This algorithm which runs in a processor, consumes energy for creating the blockchain. Cryptocurrencies(crypto) have mainly 2 components – its algorithm which creates a block for the blockchain. It is important to understand the structural concept behind creating a blockchain. In these decentralized systems users have individual ledgers and all transactions for that specific cryptocurrency are updated in every user’s ledger. Each transaction is converted in a block after its verification. This verification and creation of a block is the role of a miner and this is popularly known as mining. In return miners are rewarded with transaction fees in the form of crypto coins.

4 steps of bitcoin mining can be classified as:

  1. Transaction of the payment
  2. Digital signature
  3. Miner verifies and creates a block
  4. Adding the block to the Blockchain
Figure 1. Blockchain and bitcoin mining

Algorithms and its energy consumption

Algorithms for creating the blockchain are termed as consensus mechanisms. The most prominent algorithm for mining the bitcoin is ‘proof-of-work’ which is also the algorithm used by bitcoin. This algorithm is a method where every miner gets the transaction and starts with a premutation to find the number to achieve a specific output. Large number of processors are required to carry out these combinations. The one who gets it first creates the blocks and earns coins. This algorithm is energy intensive because it is designed such that all miners need to run their processors simultaneously for creating a block and only one of them is incentivized with coins. This is more of a processing competition which accounts for a lot of energy waste. Recent debates about bitcoin being energy intensive is mainly because of this nature of its algorithm.

There are many such consensus algorithms which are gaining some space within cryptocurrencies. An alternative approach which has been popular to counter the energy intensive approach of bitcoin is ‘proof-of-stake’. In this method every miner has to bid currencies at the beginning to take part. The one bidding higher has better chances to get the opportunity to create the block and earn rewards. The main difference between these two types is the one following proof-of-stake algorithm only needs a single processor to work which reduces the electricity required. Comparing based on the electricity requirements, ‘proof-of-stake’ clearly consumes way too less energy than ‘proof-of-work’ mainly because of the structure of its algorithm.

Figure 2. Proof of work vs Proof of stake

What do miner’s say?

The electricity consumption of bitcoin mining is a central issue which miners have to face. Although, miners believe that the energy needed for mining has advantages and it is worth the amount of electricity it consumes. Miners claim that the mining facilities have a supplementary role in energy transition and utilizing the excess generation from the renewable energy resources. Renewable energy resources such solar and wind are highly dependent on weather conditions which makes them volatile. There are instances of excess electricity generation wherein these plants have to be shut down. Generation from hydro power plants also face the same issue of excess electricity generation. Miners affirm that this shut down of plants and electricity waste can be avoided by using the excess electricity for mining which makes these plants more efficient and improves grid stability. Also, they claim a high share of renewables in the electricity used for mining. For this reason, recently, the bitcoin mining council has agreed to publish the renewable energy share in the electricity used for bitcoin mining globally.

To figure out the electricity needed by the mining pools globally, we need a brief understanding of various elements affecting bitcoin mining. As we discussed, energy consumption of the bitcoin is majorly dependent on its blockchain algorithm. The speed of the transaction depends on the processing power of the miner to make permutations as fast as possible. Every permutation or attempt to create a block is termed as a hash and the speed of a processor is measured in hash rate. So, the hash rate could give a clearer picture about the amount of energy consumed at any given moment. The highest electricity demand of global bitcoin mining in the past has been 125 TWh. In Fig.3 we see a strong co-relation between the hash rate and the energy consumption of bitcoin.

The technological shift in the processors for mining has been drastic within the years 2009-2012. The energy needed for central processing units (CPUs) in 2009 for mining was huge and its improvement in 4 years to Application-specific integrated circuit (ASIC), made mining a realistic option. Since then, there are improvements in the speed of ASIC processors but there has not been a significant technological change. If bitcoin is intended to grow the proof-of-work algorithm inherently would need higher hash rates and this would result in higher energy consumptions. This is a concern, especially now when discussions in all fields are about reducing energy consumption and moving towards greener sources.

Figure 3. Bitcoin Hash rates and energy consumption

Incentives of cheap electricity

The mining pools are sensitive to the cost of electricity. Following monetary incentives, geographically the mining of bitcoin has been concentrated in the regions where the electricity is cheaper. China has one of the cheapest markets of electricity which and helped to have a share of 65% of bitcoin mining in 2020. Germany, on the other hand, has the highest electricity prices in the world and has only 3% of bitcoin mining. Fig. 4 shows a clear trend wherein the share of bitcoin mining is inversely proportional to the average electricity prices. The prices of electricity are found to be low where the markets have higher percentage of electricity from fossil fuels and low contribution from renewable energy resources. The price has been low in China because the grid still has 71% of its electricity generated through fossil fuels.   A group of universities, examined that 40% of the electricity used by mining of bitcoin in China is from coal power plants. Although, in China, the mining share has dropped to from 65% in 2020 to 50% in 2021. This drop in the share is because Chinese authorities speculated power concerns in the last couple of months and regulated to shut down some of the mining pools. Similarly, in Iran, during summer months the power department was overburdened and the additional burden was concluded to be caused by bitcoin mining. As a result, all bitcoin mining facilities were shut down for 4 months in the country till the summer ends. The claim of renewables as a source for mining brings up a question about how the electricity prices vary with the increasing share of renewables in the energy market.

Figure 4. Bitcoin mining and average electricity price

Paradox of low-cost renewables and high electricity prices

With the reducing cost of solar panels and wind turbine blades, one can surely be misled to conclude that the electricity prices would drop with higher share of renewables in the grid. Apparently, the increasing share of renewables has been found to cause rise in the electricity costs in the market. This paradox of renewable energy getting cheaper and the electricity prices getting higher is critical to understand. According to the analysis by Forbes,  the transmission and the ancillary costs in this phase of transition accounts for more than 50% which makes the price higher than expected. The energy to land ratio of solar and wind plants is low compared to conventional resources. So, as energy transition needs high number of renewable power plants, it also needs grid expansion to access the electricity from power plants. The costs of grid expansion has been included in the electricity prices. This effect of higher prices of electricity due to higher share of renewables is expected to be play a significant role to decide electricity prices till the grid connects all renewable power plants in the future. Germany, with high share of solar and wind installations, has reached a 45% share of renewables in its electricity mix. With the effect discussed, the grid expansion has made the electricity price in Germany to be highest in the world. So, the high prices do not appeal bitcoin miners and this reflects with just 3% of the bitcoin mining done in Germany.

Figure 5. Annual electricity consumption (in TWh)

Conclusion

Through these energy debates, the conventional ‘proof-of-work’ strategy, has faced a lot of criticism. The coins working with ‘proof-of-stake’, an alternate less energy intensive approach, have become popular. Some established coins such as Ethereum have officially decide to migrate from proof-of-work to a proof-of-stake consensus mechanism mainly to reduce the electricity consumption in mining the cryptocurrency. Although, at the moment it is difficult for Bitcoin to migrate to ‘proof-of-stake’ considering the imposed cost and the risks on individual miners by the changes in the ecosystem.

Energy use of the bitcoin mining is a function of inter-related factors such as mining hardware, hash rates, complexity of blocks and electricity prices. There are published graphs (Fig. 5) depicting extreme scenarios of bitcoin consuming electricity more than some of the countries. Even though bitcoin mining needs a lot of electricity, comparing a technology to countries electricity consumption might not be a fair comparison. A better approach would be to compare the bitcoin mining energy use to the energy consumption of our current financial system. The electricity use of data centers, as shown in the figure, is higher than bitcoin, which means we consider data centers worth the energy it uses. A collective belief in these decentralized solutions in the form of cryptocurrency could be another prominent change. Even tough the issue of energy consumption of the first cryptocurrency, bitcoin, is a matter concern, through constant improvements and with alternate algorithms these decentralized financial systems, would adapt to better opportunities in the future.

Prospect of Green Hydrogen in Nepal

By Vidushi Dembi

Among the latest technological developments in the energy sector, the discussion on powering economies using Hydrogen technology is gathering considerable limelight for past couple of years. After the first major wave of popularity in the 1970s, the recent Hydrogen wave that started picking up in early 2000s has gained considerable momentum since 2017. Hydrogen technology, more importantly Green Hydrogen, is being considered a key component of decarbonization plans for many countries in Global North, especially targeting sectors where renewable electricity isn’t feasible, such as heavy industries and long distance transportation. Notably EU in accordance to their ‘Fit for 55’ plan targeting a 55% reduction in emissions by 2030 and climate neutrality by 2050 have set separate targets for hydrogen. Germany alone has allocated a budget of €9 billion for their national hydrogen strategy. The technology and market mechanisms still being in their early stages of development render green hydrogen prices quite high as compared to other mainstream renewable sources such as solar and wind; cost parity being predicted in some countries only by 2030. Amidst this debate, Nepal, a ‘developing country’ that contributes mere 0.027% to global GHG emissions and is among the list of countries most susceptible to climate change, is interestingly keen on making an early beginning.

Nepal’s present energy scenario

Around 72% of Nepal’s energy demand is met by biomass and waste, other prominent sources being oil, coal and hydropower (Figure 1) for the country’s population of 29 million.

Figure 1. Nepal’s Total Energy Supply (TES) in 2018 [Source: International Energy Agency (IEA) 2021. https://www.iea.org/countries/nepal]

Nepal Electricity Authority (NEA) in its Annual report 2019-20 reports a total installed capacity in the country of 1332 MW for a peak electricity demand of 1408 MW as shown in Figure 2. Country’s final energy consumption 2017 recorded the share of electricity as merely 3.66%. Almost all of the electricity produced in Nepal is from hydropower. The generation capacity is owned by public as well as private enterprises with around 22% of electricity being imported from neighbouring India as of 2020. Almost 94% of the electricity is supplied to the residential sector and around 2% goes for commercial or industrial applications. IEA reports that today only 6% of the country’s population remains unelectrified. As per Nepal’s Ministry of Finance, the country is getting electrified at a rate of 4.3% per year against the global average of 0.8%. NEA has declared that there has been no load shedding in households after 2017 and in industrial sector after 2018. In spite of the progress in electrification, Nepal stands low at a position of 102 out of 108 countries listed in the Energy Trilemma Index 2020. Country’s per capita electricity consumption remains low, one of many reasons being electricity price is still high for a major section of the population (0.069 USD per kWh). Sector-wise energy consumption is topped by the residential sector (75%) followed by transport (12%) and industry (8%). The country is majorly dependent on imported fossil fuels especially crucial for transport sector which entirely runs on oil. Nepal also has largely unexplored but high potential of other renewables such as solar PV, solar thermal and micro hydro.

Due to various reasons such as high import dependency, insufficient storage capacity, inadequate infrastructure and financial constraints of the energy institutions, Nepal faces an energy shortage. The abundant hydropower potential remains largely untapped and the country continues to face challenges to maintain reliable and sustainable energy security.

Figure 2. Total energy available and peak electricity demand 2011-2020 in Nepal (Source: Nepal Electricity Authority, 2020. https://www.nea.org.np/annual_report)

The case of ‘surplus’ hydropower

Reliable electricity access goes hand in hand with GDP growth and hence increasing the share of electricity in the total final consumption forms a major focus for the government. Situated in the Himalayan region with almost 220 billion cubic meters of annual water runoff from the rivers, a 2020 report by Asian Development Bank (ADB) estimates a potential of 83 GW of hydropower in Nepal out of which 43 GW is techno-economically feasible as of now. As of 2019 however the installed capacity of hydropower stood at only 1113 MW which means only 2.5% of the total potential is currently being utilised. Recent estimates by Kathmandu University suggest more than 20 GW of hydropower projects are under various stages of development. NEA owned hydropower plants generated a total of 3021 GWh of electricity in FY 2019-20, an increase by 18.57% over the generation of 2548 GWh in FY 2018-19. Interestingly, provided that the current plans of hydropower development follow through, there is a scope of energy surplus, with figures indicating an excess of 3500 MW of hydroelectricity by 2028. Hydropower plants in Nepal also generate maximum output during rainy season from June to September. However, country’s energy demand is actually low during the time leading to large energy curtailment. NEA estimates hydroelectricity wastage between 53 – 840 MW in 2021 due to low consumption in rainy season. Since the electricity can’t be utilised locally, Nepal also plans on expanding its export options to neighbouring countries of India and Bangladesh experiencing high growth in energy demand. The exports plans have failed to fully materialise yet due to variety of reasons such as infrastructure unavailability, legal issues and geo-politics. Other renewables such as solar are abundantly available in India which are much cheaper than hydroelectricity making the option economically unattractive for India. Transfer to Bangladesh means setting up infrastructure through the Indian mainland that lies in between, impeding any major action. Some development was seen recently in this regard with the three countries in talks to finalise the process of exporting 200 MW electricity to Bangladesh by end of this year. Going a step forward, since 2020 Nepal has initiated the dialogue on utilizing their surplus hydroelectricity and untapped solar potential to establish the country as a major green hydrogen producer for local use as well as international markets.

A case for Green Hydrogen

Hydrogen can be used in either gaseous or liquid form as fuel or for generating electricity. It isn’t freely available in nature hence has to be produced using other energy sources. On the basis of production technique, hydrogen is often classified into colour categories of black, brown, grey, blue, green; even turquoise and purple hydrogen. Today approximately 70 million tonnes of hydrogen is produced globally for use in the industrial sector, most of it being produced by using fossil-fuel sources. The latest centre of attention – Green Hydrogen – is produced using electrolysis of water that splits water into oxygen and hydrogen using renewable electricity, generating two useful end products without contributing emissions to the atmosphere. ADB’s 2020 report ‘A study on the prospect of Hydropower to Hydrogen in Nepal’ studies the country’s scope of green hydrogen production with different levels of assumed hydroelectricity curtailment along with exploring costs of production and energy storage. The report suggests that given Nepal’s conditions of abundant hydropower potential ultimately expected to produce electricity more than the demand, yearly curtailed/wasted hydroelectricity during rainy season due to lower demand, and complications associated with developing hydropower projects as per plan, generating green hydrogen and storing it to fulfil the energy demand during seasons of higher demand is an option worth exploring. Another area of interest for the country is their rapidly growing transport sector which is currently 100% oil dependant and can be potentially powered using hydrogen fuel-cells.

The government in 2020 conceived the ‘National Hydrogen Initiative’ (NHI) to explore the possibilities in a concrete way and establish policy foundations. The main targets of NHI include policy interventions and financing, establishing pilot projects, supporting business for more commercialisation and developing institutional arrangements to support related activities. The government has initiated a collaboration with Kathmandu University and their recently established ‘Green Hydrogen Lab’, whose contributors include the Nepal Oil Corporation and the Norwegian government. Nepal has a potential of becoming a hotspot for cheap green hydrogen production in the future, which is also beneficial for countries in the Global North such as Norway, Denmark and Germany who have elaborate plans for transforming into hydrogen economies but don’t necessarily have the most economically feasible ways to produce the required hydrogen themselves.

Challenges for Green Hydrogen

Even as the share of traditional energy resources in Nepal has slightly decreased, the corresponding energy is being filled in by fossil-fuel sources such as coal and oil. These fossil fuels are largely procured from imports, with the import trends drastically increasing since 2013. Electricity affordability is still a major concern with a consumption of only 238 kWh per capita per year which is one of the lowest in the world. Limited institutional capacity has often led to unfulfilled targets in the past, which is most evidently seen in case of the country’s EV targets. Nepal’s 2016 Nationally Determined Contributions (NDC) for UNFCCC set an aim of increasing the share of EVs up to 20% as compared to the 2010 levels and 50% reduction of dependency on fossil fuels in the mobility sector by 2050. The share of EVs actually stood at less than 1% by 2020, leading to a target revision of 20% EV share in private passenger vehicles by 2025 in their second draft of NDCs. Especially when many have argued (famously Elon Musk) that electric vehicles make more sense than hydrogen-powered vehicles, perhaps focussing on EVs for decarbonizing mobility sector could be more beneficial for the country. The sophisticated hydrogen plan could be a long shot given the history of difficulties with materializing their more abundant primary renewable energy sources such as hydro and solar.

Despite high developments in electrolysis technology, electrolysis still remains a highly expensive process which can be a major challenge in the country’s hydrogen plan. Green hydrogen is still 2-3 times more expensive than blue hydrogen and is expected to match blue hydrogen costs only by 2030. For a country with population struggling with affording fossil-fuel generated electricity, hydrogen technology for local use can appear a distant dream. Another frequently cited crucial barrier for hydrogen technology is its low efficiency of around 30% by the time it crosses multiple conversion stages to finally reach the motor or battery. Moreover, even if GHG emissions aren’t a direct end product of the process, exporting green hydrogen internationally would involve generation of a huge carbon footprint.

Conclusion

As Nepal is still facing challenges to decrease the dependency of traditional energy sources, a dialogue about Green Hydrogen is somewhat unexpected but nevertheless worth exploring. A strong political commitment and institutional support along with eagerness from the industrial sector would be essential. Also important is planning out models of possible value chains and carrying out detailed cost analyses. The country has already initiated the consolidation of a Hydrogen action plan. If successful, it could have the potential to transform Nepal into a highly profitable manufacturer of the green fuel for global markets e.g., for regions like Europe spearheading carbon neutrality and neighboring country India also increasingly focusing on hydrogen. International collaborations could hence be a huge benefit with Global North assisting with technology and capacity development. Ultimately, the basis of this scenario is Nepal’s highly underutilized Hydropower (and other renewables) which, in parallel to the Green Hydrogen plan, should be given prime attention.

Achilles heel of Renewable Technology

By Aditya Chhatre

The first ever paper on the variations of atmospheric carbon dioxide contributing to long term climate changes was written in the year 1896 by a Swedish physicist Svante Arrhenius. For the analysis in this work, he uses the term ‘carbon acid’ to describe fossil fuels as a source of carbon emissions. The paper mentions fossil fuels to be a potential source for the carbon dioxide. Although later in his works, he articulates fossil fuels being the major contributor to global warming. As the electrical industry is highly based on fossil fuels, the concept of energy transition has carved its way in seeming as the unavoidable solution to most of the climate problems. Parallelly, research and development in solar and wind energy technologies had its advancements which created a sense of optimism. These renewable technologies with their high costs and having generation inconsistencies, were quite a dream to become reality in 1950s. But the urge to achieve energy transition has been only growing. Eventually, the price of electricity from renewable energy technologies dropped lower than electricity from conventional fossil fuel resources. Countries started to aim for targets of 70-100% share of renewables in their energy mix as fast as possible. Fossil fuel-based electricity is one of the largest contributors to carbon emissions. Also, various sectors such as transport, agriculture ought to increase the electricity consumption. Given these circumstances, energy modelling has been useful for forecasts future scenarios and requirements. We can call this century as the century for ‘Energy Transition’. Few countries have achieved and many are deploying solar and wind farms with their maximum capacity to achieve the transition. The global urgency is such that 2050 is set as the year to achieve carbon neutrality by most of the countries.

In these times where humans are trying to realign their carbon dependency, the focus has majorly been on energy resources such as solar PV, wind and batteries. Let’s look into the case of plastics – a light, durable and cheap product which turned out to be a game changer in our everyday life. Visiting grocery stores in 1950s, it was hard to find something which can keep the products more durable, increasing their shelf lives. 70 years later, it is really hard to find any product without plastic rapped around it in a grocery store. Immoderate amount of plastics made it difficult to handle turning the situation undesirable. Moreover, various types of plastics, made it worse for organized recollection. Recycling plastics has caught the eye of several start-ups but as the material is a composition of complex elements it makes it hard for the recyclers to separate the plastic which could be recycled in one facility. Countries such as US, Kenya, EU have banned the use of single use plastics. On the other hand, countries such as UK have tried introduction of tax on plastics bags with fines for breaking rules. It is a big task to get such a useful product out of the supply chain. There are lessons to be learnt for our energy transition. Renewable energy technologies are surely beneficial than the high carbon generation technologies. Concern here is to avoid the energy transition being the same story of starting a revolution with optimism and in 2050 finding a clueless heap of materials to deal with. This rapid change has vulnerabilities which are easy to miss out and it is better to assess and act on them. One of such weakness in the renewable industry is lack of circularity.

To have an estimate of the amount of recycling capacity needed, we have to look at the material requirements for individual energy resources. The material required for the different sources of energy are shown in Figure 1. Solar and wind power plants have the highest material use per Tera watt hours (TWh) of electricity production. Even though these power plants are not carbon intensive, they need a lot more material than conventional sources per TWh. After the designed life of a panel or a wind turbine, the challenge is recollection and then creating a business model which use the recycled material back in the economic chain. Renewables have a characteristic challenge when it comes to recollection of panels or turbine blades. Solar and wind power plants need much more space for the same amount of electricity generation than the conventional thermal power plants. The non-concentrated designs, increases costs and scheduling time to transport the waste to the recycling centres. Another thing which needs to be taken care is that the life of these resources is 20-25 years compared to the conventional plant of 40-50 years. Because of these reasons it is very likely that the solar panels, wind turbines and batteries have higher chances of being mishandled and landing up in the landfills without proper processing. It now becomes a need to increase the recycling capacities, ideally targeting recycling capacity to be consistent with the installed capacity. It is important for designers, policy makers and entrepreneurs to already align recycling techniques, predict the expected timeline and deploy the recycling facilities at necessary geographical locations.

Figure 1. Range of material requirements for various electricity generation technologies

Solar & Wind


Solar PV and wind power plant’s rising trend is expected to grow even further as the technology progress. As of now 629 GW of solar PV and 742 GW wind has been installed globally. To achieve energy transition, models recommend the growth to be 10-12 times of the current installations till 2050. The average life span of solar panels designed by the manufacturers is for 25 years. Also there have been cases, maintaining panels regularly, increased solar plants life up to least 30 years or even more in some applications. Recently, a study from Harvard reviewed the market PV panel replacement rate. The study shows that the utility and residential customers connected to the grid replace the modules after their mid-life period (15-20 years) which makes an economically beneficial decision considering the current technology improvements, panel prices and electricity prices. In 2021, we can expect that the panels from 1990-2000s have already started to be decommissioned and replaced. Similarly, the wind turbine blades which have a life of 15 years. Working on the yearly installation rate, Figure 2 shows the cumulative million tonnes of panels which are expected to be out of service till the year 2046. The graph gives a clear picture of the expected timeline and the quantity of the renewable waste. Solar panel and wind turbine blade waste is calculated according to the installations and assuming average weights. Also, wind technology saw an earlier installation phase even before the solar technology deployment started extensively. Therefore, we can expect a higher quantity of turbine blades as waste before high number of solar panels are decommissioned. But eventually, as solar plants have higher material to electricity densities than wind farms, solar PV waste would cross over wind waste around 2040. If renewable recycling processes are not in place, the waste would be 50 and 30 million tonnes till 2046 for solar panels and turbines blades respectively. To have a comparison, these quantities are way more than Australia’s one-year solid waste of 13 million tonnes. We can expect a boost from the year 2030 where we need to be prepared with the recycling  sectors supply chain which can handle this amount of the renewable wastes.

Figure 2. Solar and wind waste quantities 2021-2046 – (Self)

Photovoltaic panels have glass, aluminum and silicon as dominant materials. Project owners usually take the easy way to send the panel to a glass recycler who uses the glass and scraps the rest. Globally, photovoltaic panels are broadly of 2 types, Silicon based and Thin-film based. As silicon based solar panels are common, the processes are developed for its recycling and is comparatively less energy intensive than recycling thin film based solar panels. After removal of the glass the solar cells are retreated with thermal processes and the silicon is reused in the form of modules and other applications. Laws for collection of solar panels are inconsistent even in developed countries. Such as in US there exists a state wise plan which is not consistently stringent nation-wide . In 2012, EU WEEE included solar panels in their electronic waste category. According to this regulation, it is mandatory for the manufacturers and companies in EU to collect the panels after their use and put them back in the recycle chain. The companies are also allowed to charge extra for the post product life activities. This framework has helped the EU solar industry to recycle 80% of their panels. This is a great way to make the authorities responsible for handling the waste and making the recycling market profitable. Similar regulations are been drafted in various countries and would soon be implemented to make solar industry more circular.

Wind turbine blades are made up of composite materials which are highly durable and light. Apart from wind turbines, composites are also used extensively in sectors such as constructions, transport, aeronautics and electrical components. So, a viable solution for recycling composites will have a positive impact on all these sectors in the terms of circularity. There are composites recycling options such as solvolysis and pyrolysis. But particularly in the wind sector it is not possible to shred the blades on site because of size and feasibility of the cutting processes. This is the reason for high costs for transporting back the blades to the recycling centers. Freight costs being high, this makes recycling an economically non-viable leading to the convenient decision to dispose the blade in a nearby landfill. Currently unlike solar panels, there has been absence of recycling regulations and laws for wind turbine blades. Even countries within EU like Germany and France are still in the research stage to implement wind blades recycling policies mainly due to the site shredding blades and transport issue. However, a project, ‘zero waste blade research’ (ZEBRA), is a 24 months project launched in September 2020 for 100% recycled wind turbine blade. This project is been regarded as an opportunity to have a full-scale opportunity for achieving technical, economic and environmental solution necessary for recycling wind turbines and reducing the blades waste.  

Batteries

The stagnant lead acid batteries market, have seen a steep rise with the advancement of lithium-ion technology in this decade. The demand of portable device and electric vehicles (EV) have bolstered the additional investment in the development of the technology. Along with it, the current trends of compatibility of batteries and renewable energy power plants for residential and grid applications has put pressure on its manufacturing capabilities. There are also questions to be answered about the end-of-life of such huge number of batteries. To consider the EV industry there are studies claiming the batteries after their life in an electric vehicle still have 70-80% capacity. These secondary applications of batteries are particularly used at charging stations or connected to the grid for ancillary applications. This improves life of EV batteries by at least 7-10 years. After a certain threshold there has be recycling tie-ups of battery manufactures for their specific battery type. The lithium-ion technology all together is a broad concept with different anode and cathode chemistries involved. Each battery application employs a different technology, which raises serious concerns over type of material used, its availability and recycling these new used batteries. Battery technology is still undergoing huge transformations; hence the topic of its recycling is still of secondary priority, but is nevertheless important.

Conclusion

We need a conceptual change where products need to have more recycled material percentage and use lesser raw material at the design stage focusing on energy efficiency and recyclability. This is a sectoral challenge where not only recyclers but manufacturers and customers have to play an active role together. Bad handling would weaken the advantages of using renewable technologies. For project owners and users, recycling can be a demanding extra step, which is also currently non-economical. We need to act pro-actively by taking steps such as not scrapping the panels, batteries and wind turbines blades to a convenient local with no expertise of recycling, but contact recycling authorities/companies and make this energy transition truly effective. There are scenarios wherein countries within EU have better recycling rate for batteries and solar panels compared to other developed nations. Hence, recycling rates are variable and eventually they would be less dependent on the technology rather more on the geographical location.

The volume of renewable waste is expected to increase exponentially and even go over the board from 2030 if recycling facilities are not in place till then. A business model should include the amount of renewable waste streamed back into the economy and in due course should make recycling profitable. Whether be it a company or a country the task is to have a 100% close loop system reusing and recycling materials. National and governmental policies are key to incentivize this market. It is crucial for governments and regulators to introduce and fund organizations working in this field to strengthen them to be efficient by the end of this decade. The recycling industry is that the sector will have a swooping growth as an effect of the market demand at the point when recycling of these products gets cheaper than mining the needed raw materials. This could be the point where market needs and the environmental needs meet.

The light bulb conspiracy: Phoebus Cartel, 1924

By Aditya Chhatre

The light bulb at the fire station of East Avenue, Livermore, California has been operational since 1901. This incandescent light bulb has seen both the World Wars and is operational for 120 years now for more than 1 million hours. This 60W hand-made carbon filament light bulb was manufactured by Shelby Electric Company in Ohio.  The decades of 1880 and 1890 were revolutionary for various incandescent light bulb designs and patents. Towards the start of 1920s the operational hours of these lights were over 2500 hours. Today, the average life of the similar incandescent light bulb is 1000 operational hours. How did we land up at such a design?

The invention of light bulbs dates back to 1878, the year when Thomas Edison had filed a patent with a vacuumed glass bulb with carbonized filament. This filament, when supplied with a voltage across it, after a threshold temperature, would emit light. After improvements in the filament material, the incandescent light bulb was in the market for use from 1880. The next technological development in the light bulb industry was from 1940-1980s where mercury-vapor lamp was used to produce visible light using fluorescence. These fluorescent tubes would excite the mercury when supplied with electric current, leading the inner phosphor coating to glow. Further at the end of the 20th century, a P-N junction-based light emitting diode (LED) technology was determined to be more efficient than the earlier ones. The LED light bulbs have been in the market since 2010. In 2020, the light bulb industry stands at a point of ‘socket-saturation’, a term used in lighting industry which describes the decline of incandescent bulbs and fluorescent bulbs as a whole, getting replaced by Light Emitting Diodes (LEDs). Light bulbs with LED technology, within just a decade, have growth to a market share of around 50%. At this point, it is interesting to look behind to a significant event in the evolution of the light bulbs. It is worth visiting this incident, which shows the pitfall when a better technology grows over the older one.

The Phoebus Cartel

In 1923, the sales of a major lightbulb manufacturing company based in Germany, OSRAM, dropped from 63 million to 28 million. The cause of the reduction in the growth was linked to the increase in the product life of the light bulbs which was about 2000 hours. A similar pattern was also felt by other bulb manufacturing companies. In 1924, the head of OSRAM was one of the first to propose a meet in the city of Geneva, Switzerland. Major lightbulb manufacturers met in Switzerland, including OSRAM, Philips, Compagnie des Lampes, and the General Electric. This body of bulb manufacturing companies was named as “Phoebus SA Industrial Company for the Development of Lighting”. Eventually this took form of a planned obsolescence by deciding to devalue the design of the light bulbs and limit them to 1000 operational hours. All light bulb manufacturers were obliged to send samples to the test facility at Switzerland. A deviation from the decided limit of 1000 hours resulted in heavy fees. This cartel achieved success within 15 years. The average operational life of the light bulbs was dropped from about 2500 hrs. in 1923 to 1200 hrs. in 1934. During the process, the increased volume reduced the manufacturing prices. Profits increased and as planned, the bulb manufacturing companies grew by 25% from 1926 to 1934.

Figure 1. Designed operational hours of incandescent light bulbs from 1879-1934

Although new technologies were given pathways after the failure of the cartel in 1940 due to the tension between countries during World War II, even after almost a century, in 2021, the average life span of incandescent lamps still stands at 1000 hours.

Closely looking at the companies of the Phoebus Cartel, after the penetration of LEDs, most of them have moved away from the front-line light bulb manufacturing. Philips dropped off the Philips Lighting into a stand-alone company, forecasting the decline of the conventional lamps market. OSRAM and G.E. took the similar path of moving out by separating the lighting business into an independent company. Not that these companies have moved out completely; they have found other markets with LEDs such as ‘smart’ applications and street light with sensor applications. LED technology has risen from such times, which have a life of 10,000 to 50,000 operational hours. Principally, the point of concern is the lack of a business model of lasting products such as the centennial light bulb. The increased life of the products, surely creates a hiccup for the economic growth. Moreover, it could also possibly impact the society by lowering down the employment rates as there would be less need of factories and its workers. The choice is between an ever-growing economy and an everlasting product market. With the inclusion of LED technology, have we found the model to move from the short-lived to long-lasting products?

Course of action

In spite of the increased importance of concepts such as energy-efficiency, recyclability and biodegradability, the repetitive sales business model which became popular in the last decade of the 20th century still appears dominant today. However, we’re seeing shift in trends for a few decades now with concepts such as circular economy emerging in the limelight. Many big businesses of today acknowledge the need of more sustainable economic models. This change would partly be driven by regulatory bodies which would support longer lifetime of the products. It would be difficult for the highly durable product market, having slower economic growth, to penetrate into the countries which use economic growth as their performance indicator. Tim Cooper, a sustainable-consumption researcher and a professor at Nottingham Trent University, suggests solutions for the systemic change for increasing the durability of the products and having economic stability:

  • Premiums: Premiums are currently used as a marketing technique for product placements and achieving higher profits. The higher premiums could be on the basis of uniqueness, limited edition products or could be on brand name. Premium products are believed to be having higher quality than a standard one. Based on products durability, an equivalent to the costs of conventional products, a premium can be charged to the products with higher life. The economic slowdown due to increased durability could be neutralized by such a strategy.
  • Second hand sector: A parallel business market shall be important to increase the use of products. A platform for second hand market will be beneficial to help for maximum circulation of products. This idea has started to take its shape, with big companies taking initiative. One of the such initiative is from Ikea, launching a program of taking back used furniture. The program is called ‘Buy back’, encouraging customers to hold up against aggressive consumption.
  • Rating schemes: Ecolabels such as Norway’s-Nordic Swan, EUs-Blue Angel have given a significant importance to the durability criteria for approval of a product. These schemes will make customers aware of products life, providing them information to compare products and make a better choice.
  • Tax: To incentivize products, the transferring the taxes of the labor segment to the use of energy and raw materials could aid the program, with the aim to have high prices for manufacturing new products and reduced cost for repair of the older ones. Also, a strategy with the sales tax could help similarly, by allocating a portion of the sales tax linked to the lifetime of the products, making short-lived products costly to buy.

From the learnings of the Phoebus Cartel, LEDs have overcome the limitation by increasing energy efficiency and lifetime of the light bulb. But it is still a long way for the markets to transform to an economy which could sustain products such as the centennial light bulb. Finally, it is a cultural shift of the mind-set from the newest and latest to the oldest and best.

India’s Renewable Energy policy 2020

By Aditya Chhatre

India, currently nearing the population of 1.4 Billion, is a critical energy market in the global energy scenario. India’s growth is also closely linked with its growth in the demand of electricity. Satisfying the needs of such a growing country, India has made progress in recent years in implementing various reforms and energy policy objectives. Along with the need of generating additional energy, there are also other global challenges which India is bound to tackle. On the path of enhancing the energy system, the Indian government is focusing on energy security, energy affordability and energy transition to cleaner resources.

International Energy Agency(IEA) is a platform for global energy dialogues, providing analysis, policy recommendations to governments. It is an autonomous inter-governmental organization opening doors for emerging economies such as India, China and Russia. The main objective of IEA is to work with governments and industry to shape a secure and sustainable energy future for all. IEA broadens the focus on energy policy by extending support with in-depth policy review. This article is a review of the IEA report on renewable energy which highlights India’s current practices and further recommendations in the ambitious energy transition, policy development from international experience.

Overview

As of 2020, India has an installed grid capacity of 373 GW, with installed renewable energy capacity of 87 GW. By 2022, which would be the 75th year of India’s independence, the country aims to have 175 GW of installed renewable electricity capacity. Further plans pan out to be having targets of 275 GW up till 2027. Prime Minister of India also announced an ambitious goal of 450 GW in 2019 during the UN Climate Summit, New York.

Figure 1. Percentage Share of energy resources of electricity generation

Analyzing the trends of electricity from renewable energy resources, it displays an uneven trend from 1990 with 25% of share of renewables to approximately 21% in 2019. During the 1990s, strongly increasing electricity demand was met with increasing generation capacity with coal, oil and gas power plants. This reduced the share of renewable energy resources to 15% during the early 2000s. However, this trend has improved within the last 5 years wherein the rapid expansion of solar and wind power plants has kept the share of renewables above 20%. Government of India (GoI) has set on the individual targets to achieved 175 GW of renewable electricity installed capacity by march 2022, wherein wind and solar have the highest potential targets of 60 GW and 100 GW respectively.

Figure 2. India’s 2022 renewable energy targets

Finance and Policy

The roadmap for India’s renewable energy journey seems opportune, although there are many financial hurdles which needs to be carefully resolved. According to the IEA the hurdles of investments in renewables sector are mainly related to small size of energy projects, credit rating of the off-taker, the absence of clear business models for rooftop solar and the disaggregated markets. Having identified the sectors to work upon, GoI has executed various schemes and policies to tackle each issue.

Distribution companies (DISCOMs) are the roots of the growing tree when considering investment in solar. DISCOMs are the entities buying electricity from the generators and selling it to the customers. The financial stability of these bodies is a necessity to achieve solar PV targets. The finances of such entities are volatile in India because of the reasons such as poor metering and poor payment discipline. To address this issue GoI in 2015 had introduced UDAY scheme in which 75% of the utility debts were taken over by the state and in return DISCOMs were expected to improve their financial and operational systems and making grid more efficient. Although, this scheme’s success was varied across states, Maharashtra and Uttar Pradesh were the states which got the most benefit from the scheme. Many states like Kerala and Bihar are struggling even today.

When it comes to decentralized projects such as solar rooftop, irrigation solar pumps, mini-grids it is difficult to find funding from local banks. Local banks prefer to fund large scale projects such as utility, the reasons being fair, that the smaller customers usually lack framework and also it takes time to evaluate the valuation. Hence, even though there is huge potential in volume in such projects, it is not possible for local banks to fund small-scale projects. Acknowledging the problem in the system, RBI has included renewable energy projects in the priority sector funding and advised all public sector banks to provide loans to rooftop solar systems as home/home-improvement loans.

The markets in various Indian states are met with strong development risks. The development risks start with land acquisition problems in the states such as Jharkhand, Uttar Pradesh, Bihar and Odisha. These land issues may be due to outdated and disintegrated records. Further renewable energy projects face problems in availability of infrastructure in rural areas and then grid connection is always a risk to be considered while developing the project. The Green Energy Corridor was a project started in 2013 to get rid of these disaggregated markets by enabling intra and inter-state transmission. Also, the policy to relax transmission taxes for 25 years on commissioned renewable energy projects until 2022 has facilitated wind and solar power plants. India to overcome land acquisition and connectivity issues has implemented a concept of 47 solar parks with combined capacity of 25 GW across the country. Solar parks are expected to contribute approximately 50% of its total state solar installation. The instrument of solar parks has experienced some delays, so a similar strategy for wind projects will require high resourced land and its lack of availability will lead such a plan being a challenge for implementation for on-shore wind power plants.

Besides development risks, there are also operational risks of renewable energy projects which can also be an obstacle and hence needs pre-planning. The operational risks are closely related to the power prices. The prices from renewables are expected to be lower than INR 3/kWh by the states, but these expected prices may vary after the states perceive lower price in other states. In 2018, to protect national manufacturers of PV panels an import duty tax of 25% was imposed on the panels from China and Malaysia. This created cost uncertainties within ongoing projects for various developers. Increased investments and continuous R&D is helping to improve technology like Solar PV and Wind. This has an positive impact on the cost of the equipment and products. Although this reduction in cost could create chances of renegotiation of CAPEX for contracts leading towards changes or cancellations. In July 2019 the price drop of solar panels caused the government of Andra Pradesh to take a decision to cancel and renegotiate unilaterally the Power Purchase Agreements (PPA) in pipeline. Such unsteady prices may lead to delay or cancellation of PPAs. To avoid such scenarios, instead of the having the conventional ‘one plan forever’ approach, ‘portfolio approach’ to projects where we decide upon portfolio of plans within the process which evolve over time when preconditions change, could be enforced before the commissioning of the project. Along with it, long term equipment provider contracts and the sanctity of the contracts by the regulators should be taken care of. Moreover, rapid timelines and standardization of PPAs would help to speed up the projects.

Policies are the catalyst for implementing and driving the system towards achieving these levels of renewable energy installations. Policies are dynamic in nature and have to be regulated in a different manner for specific sectors. The continuous evolving policies and strong political support could enhance the growth of renewable electricity of India and help to meet the energy policy objectives. India has focused on some prime sectors which in a longer run will be helpful to uplift the share of renewables.

Utilities 1. Renewable Energy Certificates (RECs) were implemented in 2010 to increase the use of renewables and trade for discrepancy

2. In 2018, the renewable purchase obligations (RPO) obligatory criteria’s were raised from 17% to 22%

3. In 2019, hydropower sector included in renewables

4. SECI auctioned 47 solar parks with 25 GW combined capacity


5. Renewables energy projects commissioned until 2022 are exempted from transmission charges for 25 years
Rooftop Solar1. Target of 40 GW until 2022 in 100 GW solar target

2. Central financial assistance for residential, institutional, social and government buildings

3. Regulations implemented for net metering systems in 28 states

4. Agreement of CAPEX for governmental rooftop projects

5. 6.5$ Billion approval for promoting solar among farmers
Offshore wind1. Collaboration with European Union to find bottlenecks
Off-grid solar1. In 2015, Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) adopted to support decentralization

2. In 2017, Off-Grid and Decentralized Solar PV Programme implemented for lighting and water pumping application in rural areas

3. In 2018, Atal Jyoti Yojana (AJAY) implemented for installing 3 million solar street lights

4. In 2019, KUSUM scheme implemented to replace diesel pumps
Bioenergy1. Promotion of Biomass-Based Co-generation in Sugar Mills

2. Policy to instigate low-level biomass co-firing (5-10%)

Recommendations

After a comprehensive analysis of targets, energy policies, schemes and implementation burdens, IEA bottles down the review to the recommendations which could be beneficial and supportive to the Government of India in the journey of achieving energy goals and emerging as a leader in renewables. India needs an integrated strategy including electricity, heat & cooling demands and transport sector to tap the large potential of renewable energy in the country. Supporting distribution systems by incentives and standardization of rooftop solar projects will turn as a realistic business model strengthening the growth of the market. The business model also can be advised by including the best practices and learnings from the international and national players in the market. India should focus on complete implementation of the UDAY scheme which has proven financially strengthening the DISCOMs for some states and further also ensure the compliance of RPOs which increase the share of renewables in the grid. For building such a strategy, the intensive auction strategies of Solar Energy Corporation of India (SECI) which was a successful attempt, can be adopted to meet the goals of 175GW of renewables until 2022. The plan which India is working on till 2020 needs to be supported by also the longer agenda of 275GW and 450GW eventually, creating conviction and trust in this sector for investors.

The Norwegian success story of Electromobility

By Aditya Chhatre

Carbon Dioxide (CO2) once released into the atmosphere could stay around for 300 – 1000 years. Around one-fifth of the global CO2 emissions come from the transport sector (passenger + freight), in which 75% can be accounted to only road transport. Hence, popularizing electromobility could have a significant impact in reducing those CO2 emission and reduce environmental risks. Looking at countries with maximum number of electric vehicles, USA and China stand on top of the chart. But when it comes to market share of electric vehicles within a country then Norway is the winner by a large margin. The journey of EVs in Norway started in 2011 with share of passenger cars at just 1.6% and now Norway has the world’s largest market share for EVs with 61.5%. With this astounding success Norway has set a benchmark for all the aspiring nations to achieve better electromobility goals. A number of factors helped Norway to achieve this feat.

Secure Pre-conditions

Looking a few decades back, till the 1950s Norway’s economy was mainly dependent on fishing. In 1959, Shell – a Dutch oil and gas company – discovered little gas sources around Norway. With further explorations, one of biggest oil fields was discovered near the Norwegian waters. In 1972 Norway founded its national oil company ‘Statoil’, now known as Equinor. That is how the oil boom started in the country, and today Norway is the fourth largest oil producer in the world. After sufficing the domestic needs, natural gas and oil form a major part of their exports. With reference of electromobility, increasing the use of electric vehicles will reduce the domestic consumption of oil and gas. This was a perfect blend for an oil and gas intensive country, and promoting electromobility technology at home eventually increased the high-in-demand oil and gas exports globally, generating higher revenue for the country.

Norwegian state owns a major share in the company Equinor, so in a way Norway’s economy is significantly controlled by the state. The Norwegian administration was prudent enough in investing this oil wealth in a global fund called the sovereign wealth fund. Some other progressive countries, in particular China, Singapore, United Arab Emirates and many more varied countries, are co-investors in this fund. However, Norway has the largest of the all sovereign wealth fund which stands at $1.17 trillion providing a strong financial backbone. Moreover, the government uses only the interests/profits of this fund and not the capital for public use. It is the one of the few countries of the world which does not have a significant debt which makes it net a positive economy. Having a strong and stable economy allows a country to push new technological boundaries and bear the potential risk involved. The Norwegian government had ample scope to invest and take risks in new technologies such as electric vehicles.

Managing to manufacture such high quantities of vehicles could be tricky as setting up manufacturing factories and predicting the initial demand can be a tough task. Along with the imperative of economic security, Norway ranks at 119 globally with regards to population. Because of comparatively low population their demand-supply threshold is low. Taking into consideration lower population manufacturing facilities to meet the EV demand was manageable which made penetration in the country achievable compared to other highly populated countries.

EV attributes

It is only environmentally viable to adapt to EV and reduce combustion engine vehicles only if the electricity generated in the country has higher share of renewables; promoting EV and charging them from fossil-fueled electricity would not be as efficacious with regards to the aim of reduction of CO2emissions. In Norway, 98 percent of all electricity production comes from renewable sources. Hydropower is the basis of renewable energy sector of Norwegian industry with around 95% of the electricity generated in Norway being from flexible hydro power plants. There was a large installation of wind power as well in 2019. With such high shares of hydro and wind power, Norway is electricity surplus country. This surplus of renewable energy fits in perfectly for supplying added electricity demand from the EV market with clean electricity.

Even after all these pre-conditions which support the idea, its actual implementation is always a challenge. Charging infrastructure needs planning and high investments. Strategically, for establishing infrastructure for electromobility there is a dilemma between whether to increase the number of electric cars as a first step or the first step as making charging stations widely available. Norway targeted areas with higher population density to tackle this dilemma. The population in the country is concentrated in the southern part of Norway, with the counties of Oslo and Viken being the most inhabited regions of the country. Initial focus of developing the necessary EV infrastructure was laid in these regions. This made majority of the people familiar with the technology and eventually believe in it. Once the demand of cars increased in these regions, multiplying the infrastructure to other regions of the country was done with efficacious planning. Now, there are hardly any regions without charging stations to be found in Norway.

Governance and incentives

Technology alone cannot meet success; it needs favourable laws and incentives in the initial phase to have an exponential growth. It simultaneously needs to flatten the use of the previous technology in the market to replace it. Norway levied massive taxes on the ICE vehicles and reduced the sales and import tax on electric vehicles making it pocket friendly for the customers buying cars. Along with it, the government awarded free parking and free toll roads for EVs and such plans for electric vehicles turned out to be a much easier choice for the buyer for long term investment too. Commuting was also made faster by permitting EVs to access the bus lanes which has comparatively lesser traffic.

The investments and the plans for electromobility in gaining ground were implemented mainly between 2009 and 2011. Approximately 7 Million Euros were invested during these 2-3 years in building infrastructure for manufacturing and charging. Since then the percentage of market share of electric vehicles have seen constant growth by maintaining technological and governmental upgradations in the schemes and policies.

Figure 1 : Elements of EV Success for Norway

Conclusion

The efforts to make electromobility a success for Norway took focused efforts for longer than a decade. This EV success story for Norway continues to progress. The next goal for Norway is to have all new cars sold from 2025 be electric or hydrogen-fueled to achieve zero emissions. Learnings from Norway shows that transition from ICE to EV is surely possible. For countries looking up for implementing plans for electromobility, it is absolutely possible to adapt similar corresponding plans in their respective countries. The key fundamentals elements which need to be at place are share of renewable energy, revenue for the infrastructure and governance support for execution. An overall effort, wherein the fundamental, economic and systemic factors incorporate and evolve gradually for longer goals should be roadmap of all countries for transitioning the transport sector to a low emission sector with electromobility.

Indian Government’s Plan to auction off 41 coal blocks to private sector

India standing in the forefront of developing countries has a continuous increase in energy demands. In the race of energy generation technologies, we have come a long way to rely on coal as the more dominant resource. India is the second largest producer of coal with 716 million tonnes after China with 3523.2 million tonnes [1]. Analysing India’s coal usage, with the reserves of 319 billion of tonnes of coal [2], India uses 966 million tonnes of coal every year [3]. Although, 246 million tonnes of coal are imported mainly from Indonesia, Australia, South Africa and Russia. [4]

On 18th June, 2020 PM Modi addressed the event in which 41 coal mines (later changed to 40) were auctioned for commercial mining. Currently India has 83 operational coal mines with producing around 450 Mt of coal with Coal India Ltd. (CIL) being the largest coal producer of India [5]. Here, the roadmap started in 2015, where changes were made to make the laws in the coal mining sector so that private companies carry out mining as a captive requirement not for sale or other purpose. But this news has come with a further change with the removal clause of captive use being removed.

Considering Coal as a sector, this story can be linked to the target of increasing the GDP by 10%. (Federation of Indian Chambers of Commerce & Industry) FICCI in 2019, bolstered the increase of revenue from the mining sector to achieve this target. The mining sector now contributes approximately less than 3% to the GDP, NITI Aayog wants it to be 25% [6]. Moreover, this sector also provides around 355-500 thousand jobs, which are bound to increase with this auction adding more 280 thousand. All in all, this is a big thumbs up for the economy. [7]

Regarding the future of energy, renewable energy is the clear winner because of the cost and increasing efficiencies. Also, foreign investment and acceptability is more in renewable energy so we should not expect FDI in the mining sector. Moreover, various countries in the world are moving away from thermal power plants in the next 15 years. Having all this in the background, digging more 41 coal mines could turn out to be a risk. It is true that coal is our base load, but we can surely get rid of old and not efficient power plants. Also, the quality of coal from India has higher ash content making it non-compatible with highly efficient boilers in thermal power plants (example: Mundra, India). This deal can be helpful for making India independent and reducing imports, investing the funds in your own country. But rather, there are hidden costs to make these 41 coal power plants operational, which is 33 thousand crore rupees [7]. This money could also be invested in the renewable energy sector and try to shut down some thermal plants.

Talking about coal and mining, the environment is always a major parameter. Even though India should already start it’s plan of shifting its dependency on coal and ideally no more coal mines need to be explored, this system is complex and India even actively striving to be a pioneer in renewable energy has no concrete plans of phasing out coal. Geographically, coal and iron are found in dense forest regions. Out of the 41 blocks, some of the blocks have a forest cover of 50-80% [8]. These can turn in a setback for India with the targets of reducing carbon emission. There also exist tribal communities in the marked areas which would need to be displaced. So, these 41 blocks have reserves of approx. 17 billion and if India needs the coal to compensate with the imports of .2 billion/year, then these reserves would last for around 85 years [9]. This shows that there are no plans of phasing out coal from the government, instead to rely on coal for a long time of 85 years. Also, on a longer run, we would still face similar issues after 85 years. We need permanent solutions for reducing our dependency on coal.

Practical solution for the current situation is balance and delineating a plan for an optimum solution. As of today, 67% of the allotted coal mines are not even operational[10]. Firstly, we need to align with the renewable energy capacity targets of 175GW till 2020 and 450GW till 2030[11] and secondly, expanding and optimizing the use of existing blocks to its maximum efficiency. We then would be in a better position to decide upon only some of these blocks for mining, which are not so densely forest covered and meet the demand of imports. This would suffice the energy demand along with preserving the biodiversity and the tribal communities living there.

References:

[1] https://en.wikipedia.org/wiki/List_of_countries_by_coal_production

[2] https://coal.nic.in/content/coal-reserves

[3] https://www.worldometers.info/coal/india-coal/#coal-consumption

[4] https://www.theglobaleconomy.com/India/coal_imports/

[5] https://timesofindia.indiatimes.com/business/india-business/pm-modi-launches-auction-process-for-coal-mines-for-commercial-mining-key-points/articleshow/76438373.cms

[6] https://energy.economictimes.indiatimes.com/news/coal/mining-sector-key-to-indias-double-digit-growth-rate-ficci/69094627

[7] https://energy.economictimes.indiatimes.com/news/coal/auction-of-41-coal-mines-will-make-india-self-reliant-in-energy-sector-create-more-than-2-8-lakh-jobs-amit-shah/76455612

[8] https://www.hindustantimes.com/india-news/coal-mine-auction-opens-up-vast-stretches-of-forests-in-central-india-for-mining-show-documents/story-1SdToixA4Dcomld0op8lzH.html

[9] https://www.financialexpress.com/economy/new-model-privatisation-kicks-in-with-auction-of-41-coal-assets/1996250/

[10] https://youtu.be/dRi5u22FIYQ

[11] https://www.cnbc.com/2020/03/03/india-has-some-huge-renewable-energy-goals-but-can-they-be-achieved.html