In A Year Of Extreme Events, Govt Pushed Coal, Diluted Green Laws
New Delhi: Much of 2020 was lost to the lockdown but the environment sector did not remain dormant in India. The solar sector, for example, touched new benchmarks with tariffs plummeting to Rs 1.99 per kWh (or 1 unit of electricity). The coal sector stumbled despite renewed government interest.
The lockdown gave city-dwellers some respite from outdoor air pollution but exposure to indoor pollution--a silent killer--increased. Also, erratic weather and extreme climate events were reported from across the country.
Amidst all this, India diluted several laws that have acted as environmental safeguards during fast-paced economic growth.
As the year draws to a close, we take a look at the major events that affected India's energy, climate and environment policies.
New solar benchmarks
Despite a slowdown in installation caused by the lockdown, solar tariffs in India touched several benchmarks in 2020. In a December 2020 auction, solar tariffs fell to Rs 1.99 per kWh (1 unit of electricity). This is 18% lower than the price of Rs 2.44/unit that India had reached in 2017, kicking off a global solar price race. The tariff drops have been attributed to several new players entering the market and expectations of further fall in the price of solar modules.
In June, solar tariffs had dropped to Rs 2.36/unit and in November, they fell again--to Rs 2/unit.
So far, the only advantage that fossil fuel-generated electricity had over renewables was the ability to provide round-the-clock power. But this too is changing: In a tender finalised in early May, the tariff for round-the-clock electricity from renewables stood at Rs 2.90 per unit, a highly competitive rate compared to fossil fuel sources--currently, a source of over 80% of India's electricity.
India installed about 1.73 GW of solar over nine months to September 30, 68% less than the 5.84 GW installed in the same period in 2019. India's overall installed solar capacity stood at 36.91 GW by the end of November, making for about 41% of its installed renewable energy capacity of 90.39 GW, and nearly 10% of its total installed electricity capacity of 374.19 GW.
Solar installations and other renewable sources are critical for India in its mission to fulfil its climate pledges: To help the world curb global warming, in 2015, India promised to quadruple its installed renewables capacity for electricity generation to 175 GW in five years. About 100 GW of this has to come from solar alone.
But there is a downside to this flurry of low bids, experts have been warning. The low tariffs discovered by bidding competitions (through 'reverse bidding') are affecting the quality of the infrastructure, a central government agency recently said in a report.
Low bids shrank profit margins and also made some projects ultimately unviable--solar developer ACME, once famous for bringing down India's solar prices to Rs 2.44/unit, announced in May that it was cancelling a project that it had won by quoting a similar low price. The reasons cited included issues with land allotment, pandemic-led delays in module supplies, and delays in creation of power evacuation and transmission infrastructure.
Fluctuating tariffs on import of solar parts, irregular flow of finances, shortage of land, unavailability of transmission infrastructure and the distressed finances of electricity distribution companies are slowing down the growth of the solar sector in India, IndiaSpend reported on July 29. If these key issues are not addressed, India's ambitious renewable energy targets may remain out of reach, we reported.
Despite government push, bad year for coal
Though it disrupted growth trajectories the world over, COVID-19 also provided an opportunity to some important sectors, including power, to restructure and switch to low-carbon pathways, IndiaSpend explained in May. But most big economies including India failed to leverage the opportunity and locked their economic recoveries onto pollution-intensive pathways.
India relied on choices that were heavily centred on coal--an energy source whose business model is increasingly becoming unviable as energy choices change in most parts of the world, IndiaSpend reported on June 5. Despite their unviability, the Indian government plans to build more such plants and mine more coal. The expectation is that coal will provide at least 50% of India's energy supply in 2030.
Up to 34 coal power plants of about 40 gigawatt (GW) capacity in India have been designated as stranded assets, projects that have lost their economic value ahead of their anticipated lifespan, IndiaSpend reported on May 25. Further, as funding dried up, India's coal-fired power project pipeline started shrinking rapidly with 46 GW-worth of cancellations in 12 months to March 2020. This added to over 600 GW-worth of cancellations over the preceding decade, said a briefing note published on March 23, by the Institute for Energy Economics and Financial Analysis (IEEFA), a think-tank.
Currently, the Power Finance Corporation (PFC), a non-banking lender for the electricity sector, is the only public financial institution funding coal power plants in India. Before the economic recovery package was announced in May, close to 54% of PFC's loan books were dedicated to coal assets. Of this, 14% were already non-performing assets (NPAs, or defaulted loans)--valued close to Rs 47,454 crore ($6.8 billion). Forcing public and private financial institutes to fund unprofitable and financially unviable coal projects will only result in increased NPAs and bad loan problems within the financial sector, said an IEEFA report launched on May 7.
Focussing on coal holds many disadvantages for India, including the threat of weather extremes in the future, warned a government report in June.
Other than adding to global warming, coal power plants also add to local air pollution. India has been trying to get its coal power plants to install anti-pollution technologies, but despite multiple extensions, 70% of India's coal plants may still fail to clean up by 2022, the deadline set by the Union power ministry.
Air pollution kills a newborn every five minutes in India, said a global report released in October. About 116,000 infants in India died within the first month of being born due to air pollution, the study estimated. Air pollution contributed to over 1.67 million annual deaths, across age groups in India in 2019.
In October this year, the National Capital Region of Delhi and adjoining states got an 18-member committee to oversee efforts to deal with air pollution. The committee is yet to start work.
Extreme weather events
In India, January 2020 was the second warmest since 1919 in terms of average minimum temperatures, according to India Meteorological Department's (IMD) data going back to 1901. Against a long-term average minimum temperature of 20.59°C for January, temperatures for January 2020 stood at 21.92°C. The month was excessively rainy as well with Delhi recording its wettest January in a decade. Rains were also recorded across other swathes in northern India.
March 2020 recorded 47% more rains than usual with central India recording a surplus of 219%. Delhi recorded 589% excess rainfall in March making the month the city's wettest on record.
India recorded about 354 heavy rainfall events--rainfall above 64.5 millimetre (mm)--across India in March and April. Of these events, 224 occurred in April, and 130 in March, according to an analysis by Down To Earth and Colombo-based research institute International Water Management Institute (IWMI). The heavy rain and storms led to cooler-than-normal temperatures early this summer across north, central and east India, the analysis said.
Due to climate change, India's annual average temperature rose by 2°C over 200 years to 2006. It is predicted to rise further by 1.5°-2°C by 2030. Within 50 years, 1.2 billion people in India could be living in areas as hot as the Sahara if greenhouse gas emissions do not abate. Churu in Rajasthan recorded a temperature of 50°C on May 26. Several other parts of the country experienced high heat in later months. On average, in six years to 2019, India has had 114 days of heat wave conditions every year.
A growing percentage of India's population is being exposed to heat waves as the average duration of such waves increased by 150% in four years--from two days in 2012 to almost five days in 2016. In 2012, just under 20 million people were exposed to heat waves compared to 60 million in 2016, a 200% increase, IndiaSpend reported in November 2018.
Several cities in India are drafting action plans to deal with the rising heat, but with heavy underreporting of heatwave deaths a solution seems distant, IndiaSpend reported in June. Heat will cause more deaths in future than major diseases combined, we reported in September.
In 2020, four cyclones hit different coastal parts of India: Amphan hit Odisha and West Bengal in May, Nisarga landed in Maharashtra in June, Nivar swept coastal Andhra Pradesh, Tamil Nadu and Puducherry in November, and Burevi impacted Tamil Nadu and Kerala in early December.
Overall, cyclonic activity is increasing in the northern Indian Ocean, which includes the Arabian Sea and the Bay of Bengal. Frequency of cyclones in all oceans surrounding India is also increasing: for two consecutive years, 2018 and 2019, India recorded seven cyclones each, higher than the annual long-period average (1961-2017) of 4.5.
Also, more cyclones are turning severe. Tropical cyclones draw their energy from the ocean surface, and higher temperatures are supercharging cyclones making them more intense, we reported.
A study published in December showed that over 75% of Indian districts, home to 638 million people, are hotspots for extreme climate events such as cyclones, floods, droughts, heat, and cold waves. And the frequency of such extreme events is rising: over 35 years between 1970 and 2005, India had 250 extreme weather events. Post-2005 and up until 2020, India has had 310 such events.
A year of environmental law dilutions
Despite all the grim climate warnings India decided to dilute some of its most critical environmental laws. In January, IndiaSpend reported how the ruling National Democratic Alliance government has weakened environmental protection rules covering 70% of polluting industry categories in a bid to improve the ease of doing business.
The report explained how between early 2015 and late 2017, state pollution control boards (SPCBs), on instructions from the Centre, exempted 146 of 206 classes of polluting industries from routine inspections. Industrial units in these categories can now self-certify their compliance status or obtain 'third-party certification'. Earlier, these checks were conducted by the SPCBs.
In February, an IndiaSpend investigation revealed how the India government diluted the Coastal Regulation Zone (CRZ) Notification, the law that governs the development of the country's 7,500-km coastline, disregarding over 90% of comments/objections received from over 3,000 fishing collectives, environmental groups and citizens. The dilutions allowed for the intensifying of construction activity in urban coastal areas and development of airports in wastelands/non-arable lands in rural coastal areas, we reported.
In March, in the early days of the COVID-19-induced lockdown in India, the Centre released a new draft of the Environment Impact Assessment notification which allows the government to make an environmental assessment of impending projects. The draft seeks to allow post-facto approval of projects that took off even before they got an environment clearance, IndiaSpend reported.
The new EIA draft also exempts certain activities, such as extraction, sourcing or borrowing of ordinary earth for linear projects such as roads and pipelines from seeking an environment clearance. It also proposes to exempt activities such as dredging and desilting of dams, reservoirs, rivers and canals.
In May, the Ministry of Environment, Forests and Climate Change (MoEFCC) removed the mandatory coal washing clause. This clause made sure that the coal that is being transported to power stations located at the distance of 500 to 1,000 km is properly washed and does not have ash content more than 34%.
In October, the government of India diluted the air pollution norms for over 60% of India's coal-based power plants that came up between 2003 and 2017. IndiaSpend explained in detail why this move is problematic. The next demand of the power lobby is to dilute the norms for new plants, those that came up after 2017, said our investigation.
In November, the MoEFCC again did away with another set of rules that required power plants to seek an amendment in their environment clearance every time there was a change in the source of coal used by thermal power plants.