India’s transition from fossil-fuel to green economy on track: Hardeep Puri
Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, asserted on Wednesday that India is on the right track as far as its transition from a fossil-fuel based economy to a green one is concerned. Interacting with the media at Expo 2020 Dubai’s India Pavilion, the minister said: “What is happening (right now) in India is truly remarkable. In the coming decades, the transition from a fossil-fuel based economy to a green economy will come from within the existing structure, and the oil companies will facilitate that.” This comes just days after the COP26 climate summit, where India pledged to cut emissions to net zero by 2070, reduce carbon emissions by one billion tonnes by 2030, and raise the share of renewables in the energy mix to 50 per cent, among others, before staging a last-minute climbdown opposing a commitment to “phase out” coal. Yet the minister held that India is moving ahead with its plans on bio-fuel and green energy, stating that when Narendra Modi became the Prime Minister in 2014, “only 1 per cent or less of ethanol blending was taking place”. “Today, we are already at 8.5 per cent and I am sure that the 2030 target for 20 per cent ethanol blending, which we have now brought forward to 2025, would lead to 20 per cent blended fuel being available at the pumps, I think from January 2023,” Puri said on the sidelines of inaugurating the Ministry of Petroleum and Natural Gas section at the India Pavilion. During his address, he also invited the Gulf Cooperation Council (GCC) countries and others to invest and participate in India’s journey of transition to a green economy. “If there is opportunity in the world, it is in India. We are extending an open invitation to everyone operating in the oil and gas sector to come to India. The transition from fossil-fuel to green energy has to be organised in a way that it is a win-win for all,” the former Minister of State for Civil Aviation said while emphasising that India’s strategic relationship with the UAE is very important. “The real growth will now come from India,” he said. Puri also gave a thumbs to Expo 2020 Dubai, calling it a “huge opportunity” to strengthen India-UAE relationship. “This Expo is taking place at a very interesting time, when India is celebrating 75 years as an Independent country. And very soon, the UAE, which is a close friend and a strategic partner, will also celebrate the 50th year of its foundation,” said Puri, who earlier took time out of his schedule to visit the construction site of the BAPS Hindu Mandir in Abu Dhabi, UAE’s first traditional Hindu temple, where he also participated in a ceremony to lay a brick over the foundation.
India’s oil minister says volatility could hurt energy transition
India’s oil minister said on Monday he was concerned about high oil prices, and price volatility could harm the world’s energy transition. Hardeep Singh Puri told Reuters on the sidelines of an oil and gas conference in Abu Dhabi that when “petrol prices are – and diesel prices – are going literally through the roof, obviously, we are concerned”. India has been at the forefront of efforts to urge the Organisation of Petroleum Exporting Countries (OPEC) to ensure “responsible pricing” of oil that suits both producer and consumers. “Does it have to be affordable? Yes. If energy is not affordable, you’re going to have a problem,” he said. He said it was up to OPEC and allies led by Russia, known as OPEC+, whether to quicken the pace of increasing output, but “you cannot have a situation in which the transition is not orderly, stable, and predictable.” Puri said despite underinvestment in the sector, excess capacity of some 5 million barrels per day was available that could be pumped into the market and stabilise prices, but is being held back by producing countries. “Those decisions, they are taking for whatever reason, maybe they think it’s a good time to make up for the low prices that were there during the economic lockdown, he said. “I have a very different take on it. Sometimes when you take decisions for short-term gain, you may unleash other forces.” He said he expected oil demand to fall if prices “go beyond a point”. “Already, one big country, which is a 20 trillion-dollar economy, has the highest inflation figures in the last 30 years. So there is reality staring you in the face.” He said producers also need the energy transition to be orderly and would be hurt if prices became too high.
BP’s venture capital arm looks to India in clean mobility drive
BP’s venture capital division could put up to a third of its new investments into India as it looks for deals in a clean mobility drive, a managing partner at bp ventures told Reuters. The British oil company’s investment arm is in talks with Indian firms in areas such as electric vehicle (EV) charging infrastructure, battery swapping, energy storage, electric scooters and last mile logistics, BP’s Sophia Nadur said. So far, bp ventures only has one Indian investment – it put $13 million into EV ride-hailing firm BluSmart in September – and the country makes up about 2% of its $800 million portfolio. But Nadur expects to close a second deal in four months. “India is a bubbly market so we shouldn’t be too slow about this, and we are not intending to be. It could be as much as a third of our investments in a few years,” she said. Big oil firms such as BP are diversifying their investments as the transition away from fossil fuels threatens long-standing business models. It set up bp ventures over a decade ago to invest in game-changing tech firms across the energy spectrum. In the clean mobility sector, it has invested in U.S. mobile EV charging company FreeWire and Israeli fast-charge battery firm StoreDot, among others. While it does not have an allocated budget for India, the fund typically invests in five to eight deals a year of between $2 million and $20 million each, Nadur said. Like many other countries, India is pushing automakers to build EVs and wants at least 30% of new car sales to be electric by 2030. But EVs make up only a fraction of sales now, mainly due to high battery costs and a lack of charging infrastructure. Nadur expects the fund’s BluSmart investment to kick-start India’s EV ride-hailing sector, with more money flowing into charging infrastructure and battery swapping. BluSmart has teamed up with BP and its joint venture partner Reliance Industries to set up charging stations across the country. Tata Motors, India’s biggest electric carmaker, meanwhile, has a deal with BluSmart to provide 3,500 EVs for its fleet. BP is also looking to invest in India’s EV charging infrastructure to support BluSmart, as well as battery storage and energy management to solve India’s challenges around peak power demand. “We are very much focused on kick-starting the new disruptive areas which could be meaningful to BP in the future,” Nadur said. The story corrects title in first paragraph to managing partner from managing director.
Can India Transition To A Clean Energy Economy?
India is optimistic about its new green economy, striving for net-zero by 2070, later than many developed countries but still a huge commitment for a country with such a heavy reliance on oil and gas. The government has already made several changes to the country’s energy industry, by introducing electronic vehicle (EV) infrastructure in major cities and encouraging consumers to adopt EVs, as well as leading a new international solar project. But will this be enough to allow India to make the shift away from fossil fuels? At present, India is the world’s third-largest greenhouse gas emitter, with its emissions increasing by approximately 335 percent since 1990, producing around 2,597.4 million tonnes of CO2 waste every year. So, it came as a shock when Prime Minister Modi announced the COP26 summit this month that India would be aiming for net-zero carbon emissions by 2070. India had previously rejected the net-zero proposal when encouraged by the IEA and other states that have agreed to the pledge for net-zero by 2050. Just the week before COP26, India’s environment secretary R.P. Gupta stated that net-zero was not the best way to tackle climate change, explaining “It is how much carbon you are going to put in the atmosphere before reaching net zero that is more important.” So the sudden turn of events shocked many participants at the summit. However, India has gradually been shifting its energy sector to include both fossil fuels and renewable energy sources for years. India is already adopting EV technology and encouraging consumers to make the switch, slowly transforming its major cities to become more EV-friendly. This week, state-owned Indian Oil Corporation Ltd alongside Bharat Petroleum Corporation Ltd announced they would be installing 17,000 EV charging points across their fuelling stations. Indian Oil expects to install its share, 10,000 charging points, within the next three years. Fitch Solutions suggested that EV purchases in India between 2021 and 2023 could increase by a rate of 26 percent annually, thanks to the recent national push for greater EV uptake. Although the country’s limited manufacturing capacity under rencet pandemic restrictions has meant that domestically produced EVs are lagging. The Indian government aims for all new vehicles sold by 2032 to be electric, using higher taxes on petrol and diesel as well as tax incentives on EVs to encourage consumers to make the shift. India has also announced it will be leading the Green Grids Initiative – ‘One Sun One World One Grid’, an international solar project that hopes to provide the first network of internationally interconnected solar power grids, harnessing the sun’s energy across multiple continents. The initiative, also supported by the U.K., Australia, France, and the USA, will rely on the contribution of several state governments to build the infrastructure required to allow the grid to span several regions across the world. The aim is to provide renewable energy from countries that have an excess to those that have not yet fully developed their renewables sector or do not have access to the same level of renewable power. For example, a solar farm positioned in a desert location could provide a huge quantity of solar power not available in other areas. Phase one of the initiative aims to connect West, South, and Southeast Asia, which will be expanded to regions of Africa in the second phase, and eventually to a global grid system. This will be a significant test of the global will to work towards a cross-border solution to energy security in the future. India and the U.K. established the joint program in May this year, waiting for COP26 to announce their plan and foster support from other countries. The Green Grids Initiative is just part of India’s solar ambitions. At the COP26 summit, Modi announced, “First, India will increase its non-fossil energy capacity to 500 gigawatts … Second, by 2030, 50 percent of our energy requirements will come from renewable resources.” India is already home to the Bhadla Solar Park, the world’s largest solar farm, with 80 individual solar plants and covering an area of 160km2 in India’s Rajasthan state. The park is situated on extremely arid land, profiting from the region’s 325 sunny days every year, with the anticipated projected capacity upon its completion totaling 3.5 GW. However, while there is significant hope for India’s renewable energy development, the fact that India continues to rely on coal for 70 percent of its electricity production, as well as its heavy reliance on oil for vehicles and industry should not be overlooked. India’s population of 1.3 billion could eventually expand to overtake China as the most populous country in the world. This coupled with India’s continued reliance on fossil fuels makes it one of the world’s biggest consumers of oil, coal, and gas, as well as one of the largest emitters of greenhouse gasses. India’s oil demand is expected to peak around 2040, significantly later than many countries across Europe and North America. But the government must invest heavily to ensure that its renewable energy sector is well-developed enough to meet the country’s ever-growing energy demand if it hopes to achieve net-zero by 2070. The potential for India to make the shift to green energy is significant, thanks to rising investments in the sector, the push from the government to expand the renewable energy sector, and the increasing consumer uptake of EVs. However, the Asian giant will not decrease its reliance on oil and gas any time soon, requiring ongoing production to meet national needs until at least 2040, after which time India’s renewable energy sector will have to be well-established enough to provide power to potentially the world’s biggest population if it hopes to meet its climate goals.
Opec should release excess capacity to bring down oil prices
Opec should release excess capacity of five million barrels per day into the market and make the prices affordable, a top Indian minister said. The international oil benchmark has risen by more than 60 per cent this year and petrol prices in India have crossed 100 rupee-mark. “The prices of petrol and diesel, which have been set by Opec+, have not been set because there is a shortage in the market that can be addressed if available five million barrels capacity will be used to calm the market. It is a conscious decision by them individually and collectively as part of Opec+,” Indian Minister of Petroleum and Natural Gas Hardeep Singh Puri told Khaleej Times. “I don’t go to oil producing countries and ask them to reduce the prices. It’s not my job to tell them,” he said. While participating in the Abu Dhabi International Petroleum Exhibition and Conference (Adipec), Puri has held meetings with his counterparts from Saudi Arabia, UAE, Kuwait and Russia to name a few. Asked about the flurry of closed-door meetings, he clarified that there is no difference of opinion. “I tell you very frankly, many of the countries, which are constituents of Opec+ totally agree with me when I talk. They realise that if they don’t do it, there will be a price to pay. Energy today is a critical component of economic activity. Especially when you are in a process of economic revival, after a debilitating lockdown, which became a slowdown and resulted in calibrated opening, energy as a critical component and the price becomes a critical factor.” India net-zero plan by 2070 The minister termed India’s plan to go net-zero by 2070 as a “very ambitious, bold” but it is not a choice any more but an “imperative” target to meet. Puri noted the energy transition will be a gradual process and has to be jointly managed. “It is in the interest of the consumers to have an orderly transition, which is predictable and stable, and for the producers as well. If the transition is not orderly or not according to the predictable line, the volatility and disruption, which will take place in the markets can result in all manner of other consequences. You are already seeing some of the results of that,” Puri said during his visit to the Abu Dhabi office of Engineers India Limited, which is marking 25 years. Puri underlined India will have massive additional areas for oil exploration and production by 2025. “We are going to be stepping up on the accelerator on exploration and production in a very big way.” Also, India aims to expand its gas pipeline network to 34,000 kilometres. “In gas pipeline alone, we are expecting a $60 million investment. We are increasing the area under exploration from 0.25 million sqkm to 0.5 million sqkm and then to one million sqkm.” The minister underlined that the bilateral relations with the UAE continue to get stronger. “It’s very positive. This relationship is set to intensify and grow stronger.” He added that the Engineers India Limited have served well in the UAE. “They have got lot of projects. I will encourage them to scale up, broaden their horizons, the best is yet to come,” Puri added.