Global energy transition is on a fast track and India is not far behind. India’s absolute commitment towards carbon neutral economy is well appreciated. Prime Minister Narendra Modi is one of the biggest supporters of expanding green and sustainable sources of energy, thereby mitigating risks of damaging the environment. 
 
With reference to energy transition, countries like Iceland, Costa Rica, Nicaragua, United Kingdom, Sweden, Germany, Morocco, Denmark, China and the United States are setting benchmarks for the rest of the world.

Noticeably strong policy interventions along with heightened investment in sustainable energy remain the major catalysts of energy transition in these countries.&nbsp;

India’s rise to the occasion is noteworthy and quite exciting for local and global stakeholders. Not long ago, coal was considered the ‘backbone’ of India’s power sector, but today renewable sources like solar and wind are well placed to change that narrative. Currently, grid-connected renewable installation capacity driven by wind and solar exceeds 75 gw. Solar with 26 gw is strongly poised to surpass wind (35 gw) as the largest renewable source within a couple of years

During April-December 2018, India added 4,374 mw of grid-connected solar power against the target of 11,000 mw for the financial year.&nbsp;

By the virtue of expanding domestic solar market base and greater emphasis on ‘Make in India’, domestic manufacturers are becoming competitive to counter Chinese import threat. Interestingly, India’s average monthly solar component import reduced from $349 million in 2017-18 to $193 million during April-December 2018. In the context of coal-fired plants being the biggest and cheapest suppliers of power to grid, renewable sources desperately wanted “grid parity”.&nbsp;

No longer do solar and wind power face the burden of high tariff. Near monopoly of coal as a cheaper source of power is under severe threat—even long term existence of coal power is a big question. Market-discovered pricing and mega-scale installations of renewable projects has brought down tariff of renewable power below the so-called conventional ‘grid-party’. Through the auction process, the Solar Energy Corporation of India and Gujarat Urja Vikas Nigam Ltd discovered solar and wind tariff of Rs 2.44/kWh and Rs 2.43/kWh respectively.&nbsp;

As the coal and renewable story unfolds, coal -- the frugal source of power - loses the coveted tag of the ‘cheapest’ but retains the undesirable tag of `dirtiest’ power.&nbsp;

Despite renewables making significant inroads in the direction of price rationalisation, other factors like long- term price sustainability and efficiency are under relentless scrutiny. Industry analysts pose relevant questions: Are the renewable producers playing to win bids? Will they be able to sustain the low prices?&nbsp;

The renewable power industry is at the growth stage and within the next five years, the real battle might unravel true survivors.

The emerging competition, market structure and customer preferences will decide the winner between the ‘cheapest’ and ‘finest’. It may so happen that the ‘finest’ would be one amongst the cheapest; then, what would happen to the rest?&nbsp;

Till 2022, the domestic renewable market will remain buoyant, subject to continued thrust of government at the helm of affairs. Beyond 2022, many renewable firms may face financial stress; therefore a phase of consolidation is natural.&nbsp;

In India’s energy transition, road transport deserves the utmost attention. Policy makers are clearly pushing for much greener and cleaner technologies.&nbsp;

Lately, electric vehicles (EV) have received government thrust, investors’ interest and consumer acceptance. For the last couple of years, many stakeholders have backed electric cars, which called for a reality check as limiting factors outstripped the enablers.

However, mid-course corrections and reactive measures are being undertaken to strengthen the EV transition. The two-wheeler segment that was not on the immediate radar, started to gain attention.

Faster adoption of EV could be achieved through advancement in storage technology, reducing the cost of EV acquisition, creating adequate charging infrastructure and offering convenient charging facilities. &nbsp;

Natural gas – the cleanest fossil fuel - is destined to impact energy transition in a much bigger way than ever anticipated in India.

(This article was originally published on The DNA. Read the <a href="https://www.dnaindia.com/analysis/column-energy-transition-is-on-smooth-road-and-fast-track-in-india-2723961">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

Global energy transition is on a fast track and India is not far behind. India’s absolute commitment towards carbon neutral economy is well appreciated. Prime Minister Narendra Modi is one of the biggest supporters of expanding green and sustainable sources of energy, thereby mitigating risks of damaging the environment.

Global energy transition is on a fast track and India is not far behind. India’s absolute commitment towards carbon neutral economy is well appreciated. Prime Minister Narendra Modi is one of the biggest supporters of expanding green and sustainable sources of energy, thereby mitigating risks of damaging the environment. With reference to energy transition, countries like Iceland, Costa Rica, Nicaragua, United Kingdom, Sweden, Germany, Morocco, Denmark, China and the United States are setting benchmarks for the rest of the world. Noticeably strong policy interventions along with heightened investment in sustainable energy remain the major catalysts of energy transition in these countries. India’s rise to the occasion is noteworthy and quite exciting for local and global stakeholders. Not long ago, coal was considered the ‘backbone’ of India’s power sector, but today renewable sources like solar and wind are well placed to change that narrative. Currently, grid-connected renewable installation capacity driven by wind and solar exceeds 75 gw. Solar with 26 gw is strongly poised to surpass wind (35 gw) as the largest renewable source within a couple of years During April-December 2018, India added 4,374 mw of grid-connected solar power against the target of 11,000 mw for the financial year. By the virtue of expanding domestic solar market base and greater emphasis on ‘Make in India’, domestic manufacturers are becoming competitive to counter Chinese import threat. Interestingly, India’s average monthly solar component import reduced from $349 million in 2017-18 to $193 million during April-December 2018. In the context of coal-fired plants being the biggest and cheapest suppliers of power to grid, renewable sources desperately wanted “grid parity”. No longer do solar and wind power face the burden of high tariff. Near monopoly of coal as a cheaper source of power is under severe threat—even long term existence of coal power is a big question. Market-discovered pricing and mega-scale installations of renewable projects has brought down tariff of renewable power below the so-called conventional ‘grid-party’. Through the auction process, the Solar Energy Corporation of India and Gujarat Urja Vikas Nigam Ltd discovered solar and wind tariff of Rs 2.44/kWh and Rs 2.43/kWh respectively. As the coal and renewable story unfolds, coal -- the frugal source of power - loses the coveted tag of the ‘cheapest’ but retains the undesirable tag of `dirtiest’ power. Despite renewables making significant inroads in the direction of price rationalisation, other factors like long- term price sustainability and efficiency are under relentless scrutiny. Industry analysts pose relevant questions: Are the renewable producers playing to win bids? Will they be able to sustain the low prices? The renewable power industry is at the growth stage and within the next five years, the real battle might unravel true survivors. The emerging competition, market structure and customer preferences will decide the winner between the ‘cheapest’ and ‘finest’. It may so happen that the ‘finest’ would be one amongst the cheapest; then, what would happen to the rest? Till 2022, the domestic renewable market will remain buoyant, subject to continued thrust of government at the helm of affairs. Beyond 2022, many renewable firms may face financial stress; therefore a phase of consolidation is natural. In India’s energy transition, road transport deserves the utmost attention. Policy makers are clearly pushing for much greener and cleaner technologies. Lately, electric vehicles (EV) have received government thrust, investors’ interest and consumer acceptance. For the last couple of years, many stakeholders have backed electric cars, which called for a reality check as limiting factors outstripped the enablers. However, mid-course corrections and reactive measures are being undertaken to strengthen the EV transition. The two-wheeler segment that was not on the immediate radar, started to gain attention. Faster adoption of EV could be achieved through advancement in storage technology, reducing the cost of EV acquisition, creating adequate charging infrastructure and offering convenient charging facilities. Natural gas – the cleanest fossil fuel - is destined to impact energy transition in a much bigger way than ever anticipated in India. (This article was originally published on The DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

Energy transition is on smooth road and fast track in India

The ongoing tariff war initiated by the United States has started to show ripple effects in China and is poised to disturb global trade dynamics. Already major global currencies, including the Chinese yuan, have been weakening against the US dollar. However, President Trump does not have much reason to rejoice as the strengthening of the dollar against the yuan will assist exporters from China.&nbsp

The rising trade deficit between US and China has been the major bone of contention for some time now. At the beginning of this century, US’s trade deficit with China was just $83.8 billion which widened to reach $375.5 billion by December 2017. During 2000-2017, US’ export to China registered an eight-fold growth compared to China’s five-fold growth. Trade statistics indicate that the Chinese economy became more “liberal” but the quantum of US exports to China is a big concern for Washington. Many argue that the Chinese economy is still protected therefore accessing the Chinese market remains a daunting task for many.&nbsp

On the other side, the US market is the most lucrative for Chinese exporters. Despite the ongoing threats of tariffs, China’s exports to the US during January-June 2018 bulged to $249.7 billion, which is 8.6 per cent higher than the previous year. China’s ascendancy in exports rests on cost competitiveness owing to factors of endowment. As a result, analysts believe that in the event of a trade war China stands to lose more than the US, because of its higher exports. Statistics show that in 2017, China exported $505.4 billion to US as compared to its import of $129.9 billion. Washington has so far demanded Beijing brings down its trade surplus by importing more energy and agricultural products from the US but so far Beijing has been unwilling to do so.&nbsp

What is also an irritant between the countries is that Beijing’s closeness to Tehran ensures that China is likely to continue to buy Iranian oil in defiance of dictates of the US. Beijing may also crack down on US oil imports altogether. Already, China’s possible imposition of 25 per cent import tariff on US crude may lead to import curtailment by Chinese refiners. Platts has reported that Chinese import of US crude is likely to shrink around 6 million barrels in August compared to 14.65 million barrels in June this year.&nbsp

So where does India fit in? China’s stance, is likely to force the US to divert crude to other destinations like India, South East Asia and the European Union. Considering India’s growing appetite for oil the US may find India as the best alternative market to China. Delhi could also look to take advantage of the situation and import more crude oil and natural gas from the US at a reduced rate. This of course has to be weighed carefully as the country is currently the second largest buyer of Iranian crude and giving it up has consequences, especially with regard to the country’s huge investment in the Chabahar Port. On the other hand, importing more crude oil and natural gas from the US may be less expensive and create a feel good factor, as the Trump administration would certainly feel very happy to see the trade deficit between India and the US narrowing.&nbsp

In any case, India’s import of crude oil from US has already taken a quantum jump. During April-June 2018 US crude crossed $450 million mark compared to $609 million in FY 2017-18. In fact, Indian Oil Corporation (IOC) is the largest beneficiary of US crude and other refiners are also likely to join the race to capitalise on the availability of cheaper US crude. Indian refiners must seize this opportunity to secure crude supply at competitive prices.&nbsp

At the same time, India’s swelling import of US crude sends a strong signal to OPEC for revisiting its ‘Asia Premium’ policy. India for a long time, has been arguing for more “responsible pricing” by OPEC which so far has met limited success. A subtle switching of suppliers to protect its economic, social, and diplomatic interest may send the right signals. Besides, over-dependence on a single supplier country for a long period of time is not in the nation’s long term interests. Today, Iraq is the largest supplier of crude to India followed by Saudi Arabia. This has squeezed India.&nbsp

The country needs to look ahead and in the upcoming 2+2 dialogue this issue could be discussed. Surging crude imports from the US should help India to increase total trade with US make Trump comfortable on trade matters with India reinforce its ties with the US diversify the crude purchase basket improve access to the US market for exporting finished products and negate OPEC dominance on crude sales. It is an avenue worth considering, especially for a country whose crude oil import bill is rising by the day.

(This article was first published on The DNA. Read the <a href="https://www.dnaindia.com/analysis/column-crude-benefit-for-india-in-ongoing-us-china-trade-war-2658835">original article</a>.)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) 
&nbsp

Considering India’s growing appetite for oil the US may find India as the best alternative market to China.

The ongoing tariff war initiated by the United States has started to show ripple effects in China and is poised to disturb global trade dynamics. Already major global currencies, including the Chinese yuan, have been weakening against the US dollar. However, President Trump does not have much reason to rejoice as the strengthening of the dollar against the yuan will assist exporters from China. The rising trade deficit between US and China has been the major bone of contention for some time now. At the beginning of this century, US’s trade deficit with China was just $83.8 billion which widened to reach $375.5 billion by December 2017. During 2000-2017, US’ export to China registered an eight-fold growth compared to China’s five-fold growth. Trade statistics indicate that the Chinese economy became more “liberal” but the quantum of US exports to China is a big concern for Washington. Many argue that the Chinese economy is still protected therefore accessing the Chinese market remains a daunting task for many. On the other side, the US market is the most lucrative for Chinese exporters. Despite the ongoing threats of tariffs, China’s exports to the US during January-June 2018 bulged to $249.7 billion, which is 8.6 per cent higher than the previous year. China’s ascendancy in exports rests on cost competitiveness owing to factors of endowment. As a result, analysts believe that in the event of a trade war China stands to lose more than the US, because of its higher exports. Statistics show that in 2017, China exported $505.4 billion to US as compared to its import of $129.9 billion. Washington has so far demanded Beijing brings down its trade surplus by importing more energy and agricultural products from the US but so far Beijing has been unwilling to do so. What is also an irritant between the countries is that Beijing’s closeness to Tehran ensures that China is likely to continue to buy Iranian oil in defiance of dictates of the US. Beijing may also crack down on US oil imports altogether. Already, China’s possible imposition of 25 per cent import tariff on US crude may lead to import curtailment by Chinese refiners. Platts has reported that Chinese import of US crude is likely to shrink around 6 million barrels in August compared to 14.65 million barrels in June this year. So where does India fit in? China’s stance, is likely to force the US to divert crude to other destinations like India, South East Asia and the European Union. Considering India’s growing appetite for oil the US may find India as the best alternative market to China. Delhi could also look to take advantage of the situation and import more crude oil and natural gas from the US at a reduced rate. This of course has to be weighed carefully as the country is currently the second largest buyer of Iranian crude and giving it up has consequences, especially with regard to the country’s huge investment in the Chabahar Port. On the other hand, importing more crude oil and natural gas from the US may be less expensive and create a feel good factor, as the Trump administration would certainly feel very happy to see the trade deficit between India and the US narrowing. In any case, India’s import of crude oil from US has already taken a quantum jump. During April-June 2018 US crude crossed $450 million mark compared to $609 million in FY 2017-18. In fact, Indian Oil Corporation (IOC) is the largest beneficiary of US crude and other refiners are also likely to join the race to capitalise on the availability of cheaper US crude. Indian refiners must seize this opportunity to secure crude supply at competitive prices. At the same time, India’s swelling import of US crude sends a strong signal to OPEC for revisiting its ‘Asia Premium’ policy. India for a long time, has been arguing for more “responsible pricing” by OPEC which so far has met limited success. A subtle switching of suppliers to protect its economic, social, and diplomatic interest may send the right signals. Besides, over-dependence on a single supplier country for a long period of time is not in the nation’s long term interests. Today, Iraq is the largest supplier of crude to India followed by Saudi Arabia. This has squeezed India. The country needs to look ahead and in the upcoming 2+2 dialogue this issue could be discussed. Surging crude imports from the US should help India to increase total trade with US make Trump comfortable on trade matters with India reinforce its ties with the US diversify the crude purchase basket improve access to the US market for exporting finished products and negate OPEC dominance on crude sales. It is an avenue worth considering, especially for a country whose crude oil import bill is rising by the day. (This article was first published on The DNA. Read the original article.) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Opinion: 'Crude' benefit for India in ongoing US-China trade war

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Zee News Rajasthan

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Sanjay Kumar Kar

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