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Coal shortage, battery fires, and more | Energy Trends — Issue #1

Energy Trends Weekly
Coal shortage, battery fires, and more | Energy Trends — Issue #1
By Energy Trends Weekly • Issue #1 • View online
Hello there,
Welcome to Energy Trends!
Seen up close, India’s energy sector presents a bewildering picture. Headlines about fresh investments in the country’s EV space, to take one instance, rub shoulders with those on coal-mining expansions. In this granularity, deeper trends and larger directions get missed. And so, from the Climate Trends team, a new weekly newsletter that seeks to provide an overview of the major developments in the country’s energy/climate sector.
Energy Trends will land in your inbox every Monday. We hope you find it useful. Feedback would be especially welcome.
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The Big Picture:
Once more, chatter about #CoalShortage is doing the rounds.
News reports talk about dwindling coal stocks at thermal power plants and warn of looming blackouts. In ecological circles, such reports always trigger the alarm. In the past, #CoalShortages have been used to legitimise decisions to auction coalblocks, paint India’s environmental clearance process as anti-development, and support decisions to import more coal.
Given this history, claims about #CoalShortage need to be parsed carefully. Here is what we know. In the first half of April, Coal India’s supplies to thermal power projects were 14% higher than the same period last year. Total power generation, however, was only 9.5% higher. This needs to be understood. India has seen a faster onset of summer this year – large parts of the country are seeing heatwaves. Power demand has risen fast, resulting in some discoms drawing so much power that the grid is in danger of collapse. A clutch of power plants seems to have been caught unawares.
There is also connivance. Take Rajasthan. The state is amongst those complaining about dwindling coal stocks, and consequently lobbying the Chhattisgarh government to expedite clearances for expanding its coal block in the state – Parsa East Kente Basan, in the Hasdeo Aranya forest. This isn’t as straightforward as it looks. Adani, the Mine Developer and Operator (MDO) for Rajasthan’s coal blocks in the state, faces charges of “over-mining” the existing coal block – running through a 15-year mining plan in just 8 years, and selling the surplus coal as rejects to a subsidiary. In the process, not only has it precipitated the current shortage of coal for Rajasthan and created revenue losses for Chhattisgarh, it has also set the stage for an expansion of its mining operations.
Instances like this are the reason why Indians should be wary of overarching narratives like #CoalShortage. Different power plants will have different reasons for low coal stocks – not enough coal rakes, poor planning, lower imports than before.
News of the week:
The hydrogen market continues to attract new players: The latest is the district of Chamba, in the hill state of Himachal Pradesh. It has tied up with NHPC, formerly National Hydro-Electric Power Corporation, to produce green hydrogen which will be used for running buses. It’s an intriguing development. NHPC has been a laggard at diversification – unlike NTPC, formerly National Thermal Power Corporation, which forayed into hydel, solar and is now contemplating nuclear. And yet, it’s hard to shrug off the feeling that all energy PSUs will slowly blur into facsimiles of each other.
Other news: India has floated its first tender for a standalone Battery Energy Storage System. The Ministry of New and Renewable Energy said in its statement: “It will provide Discoms with storage facilities to be used on an ‘on-demand’ basis.
This was a mixed week for the country’s EV sector: Maruti Suzuki will unveil its first electric car in 2025 but the company is not very bullish about the Indian market. Electric vehicle sales in India will account for 8% to 10% of total sales in 2030, Maruti Suzuki President and CEO Hisashi Takeuchi told Nikkei, well below the Indian government’s goal of 30% by 2030.
Kia is less bearish: It’s working on a small SUV EV for India. So is Hero Electric. It has announced plans to set up 50,000 charging stations in the next 12 months. LML is bringing Germany’s eRocket to India. This is a pedal-powered electric motorcycle. As the rider spins the pedals, the motor adds its own power – creating a pedal-powered machine with a top speed of over 90 km/h. As a colleague said, this looks like it will be fun to ride.
For now, though, more than setting the market on fire, electric scooters are immolating themselves. Multiple scooters – including those made by Jitendra New EV Tech, Ola Electric, Okinawa and Pure EV – have caught fire. There are complaints too that batteries are abruptly losing all power. Another company, Okinawa Electric, has recalled 3,215 scooters to check their batteries.
Complaints, however, transcend batteries: An Ola Electric user fractured both his hands after, as his father alleged on Twitter, the scooter accelerated during regenerative braking. In its response, the company blamed the user for reckless riding.
The union government, however, has told scooter makers to get their act together.
These glitches need to be understood. India wants only electric two-wheelers by 2030 – and is pouring subsidies into companies like Ola.
If we see decarbonisation as green creative destruction, are these investments resulting in a sustainable competitive advantage for India?
Elsewhere in the world, things are moving faster: Mercedes, for instance, wants to go fully electric by 2030.
And now, fossil fuels: India continues to buy Russian oil. BPCL’s privatisation is, well, back on the backburner. City gas distributors – who supply piped natural gas to households and run CNG pumps for vehicles – have landed in trouble.
Not only is the Union government supplying less gas than they need, it has also more than doubled domestic gas prices for the sector. The outcome? As firms invest – and expand – incrementally, India’s distinctly hopeful plans of boosting gas to 15% of its energy mix will take another hit.
Over time, an industry watcher told us, the sector will see consolidation. He expects no more than four or five private sector firms to remain in the sector – Adani Gas, Torrent Power, AG&P, Think Gas and Megha. Over time, he said, a couple of these might sell out to the rest as well.
Climate Clickbait
The good folks at the Financial Times have managed to build a game out of net-zero. Play it here and see if you can restrict global temperature increase to below 1.5 degrees.
Book pick of the week
Published in 2014, The New Kings Of Crude tells a tale India’s financial media missed.
Over the last 30 years, the global oil market has seen countries like India and China not only become massive consumers of energy, it has also seen them try to boost their energy security. India, for instance, created ONGC Videsh, with a mandate to invest in oilfields across the world. With most of the ‘easier’ oil-fields already signed up, this search for energy security has taken both countries into riskier parts of the world, with implications not just for these firms but also for the regions where they seek to invest. In this book, Patey looks at the race between China and India to access the oil reserves of Sudan, how they got ensnared in – and contributed to – the country’s civil war, and what all this tells us about the emerging oil and geopolitics game as emerging economies set up extractive value chains of their own.
Read a review here.
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