Open Letters / Notes
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| Letter sent to Indian policy makers and scientists on the impact of climate change on monsoons, April 2009 Dear Friend, We know that climate change could well impact our monsoons, which could have devastating impacts on our agriculture and our economy. Clearly, the science of these changes is nascent and uncertain. But unless we are prepared to understand the signs of this emerging science and changing trends, we will not be prepared to take action or change policies. My colleagues have compiled information from different research studies and this is presented in the attached copy (pdf) of our magazine, Down To Earth (March 1-15, 2009) The highlights of the trends seem to suggest: 1. Extreme rainfall events are increasing: December 2006, study by Indian Institute of Tropical Meteorology (IITM) showed that incidents of extreme rainfall were increasing and moderate rainfall was decreasing. September 2008, a study by National Atmospheric Research Laboratory, Tirupati found a decadal increase of 14 per cent in extreme rainfall incidents in the last 50 years. The study also found a strong correlation between increase in extreme rainfall incidents and the increase in sea surface temperature. It also found that the moisture levels above the sea surface and speed of winds were increasing. 2. The monsoon period and rainfall is decreasing in parts of the country: 2005 study by Cochin University of Science and Technology showed that active monsoon periods are decreasing in India. The number of days with more than 12 mm of rainfall had decreased by 78 per cent in the last 53 years. IITM 2008 study showed that the monsoon is decreasing in 68 per cent of India. Another recent study by IITM showed that the temperature difference between land and sea is decreasing above the surface, which affects the movement of monsoon winds from sea to land. However scientists are not sure if this is a long-term trend. A study by Indira Gandhi Agricultural University showed a decreasing trend in rainfall in Mahasamund, Kanker and Raigarh districts of Chattisgarh between 1906 and 2000. 3. There is uneven temperature rise in different parts of the country and temperatures over the oceans are increasing: 2007 IIT-Delhi study found winters in northern India are warming faster than in southern parts of the country. It also showed that winters are warming faster than summers. It also noted that the rise in sea surface temperature over Arabian Sea and the Bay of Bengal is 50 per cent greater than the average global rise in sea surface temperature over the last 100 years. The bottom-line seems to be that the increase of extreme rainfall and decrease of moderate rainfall will impact farmers, as the available and useful water will reduce. But by how much and how badly, we are still not clear. But it seems more definite now that the erratic rainfall and extreme variability is making predictions more and more difficult. There is also evidence to show changing in crop production – decreases in crop yields and changing crop patterns. It is obviously difficult to explain these changes and to make links with climate change, but clearly farmers are struggling to find answers. Our story also looks at how farmers are responding or coping with these climatic changes. We believe these issues are critical and we need a strong focused research effort to track these changes. To begin with we are putting together all the research papers and details of the scientists who have done this work on our portal (indiaenvironmentportal.org.in). We hope this will begin a discourse on the issues between the researchers. In addition, please do send us links and research papers related to these issues, which we can post and write about. This will keep information flowing and the conversation going. We are also working on a message board to collect local perceptions on the changes in local climate. This will help us understand the changes as people are seeing them. We will also hope to convene a meeting to discuss these issues – in an interaction between formal and informal science -- later in the year. We look forward to keeping in touch with you on these matters. With regards, Yours cordially Sunita Narain, Pradip Saha |
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| Letter sent to policy makers and industry on biomass energy as a new and important source of renewables in the country, May 2009 Dear friend, It is clear that we have to find alternatives to fossil fuel energy – for energy and climate security. Therefore, it is important to understand what a country like India is already doing to adopt renewable energy sources and what more can be done. In this case, we have researched efforts in the country to move towards modern biomass- based energy – using cogeneration technologies. We were amazed to find that already cogeneration, only from sugarcane factories, produces as much as 2000 mw of power annually, which is roughly equivalent to what is generated from the wind mill sector in the country (see enclosed Down To Earth, June 1-15 2009). It is also clear that biomass based energy can be further increased in India. The International Energy Agency has estimated that this sector can produce over 7,500 mw of power, of which the bulk will come from burning bagasse – the residue of sugarcane – in boilers. But even this may be an under-estimate, as technology and production improves, more biomass based energy can be produced and used in the country. This energy source is an important win-win solution, as it brings value-addition and additional funds to agricultural resources, which in turn will give better payments to farmers and improve productivity. The question is what can be done to increase this energy source for the future? As our article (see Down To Earth, June 1-15, 2009) explores, India launched its biomass power (bagasse-based cogeneration) policy in the early 1990, to provide subsidies and capital support to sugar mills. This policy took off in the mid-1990, with technology innovation in boiler design and then as the shortage of power grew in many sugarcane states. In 2006, the policy was revised and provides both capital subsidy (Rs 15 lakh per mw) and tax rebates (including 80 per cent depreciation in the first year for selected equipment). The 2003 Amendment to the Electricity Act also provided the necessary framework for promoting renewable energy sources – asking states to fix a minimum limit for energy utilities to buy green energy. However, this done, there is still a long way to go. The renewable purchase obligation (RPO) is too low and it is not mandatory. As a result of this the feed-in tariffs (premium cost of green power) differs from state to state and is based on scarcity, not policy. For instance, we have found that in some states the tariff could be as high as Rs 7 per unit in Tamil Nadu, but as low as Rs 3 per unit in UP. In Maharashtra, the tariffs have not been revised for the past some years. It is clear therefore, that this green energy source needs a strengthened policy framework. As we had pointed out in the case of wind energy, another renewable energy source, it must be as follows: a. The policy must incentivise the generation of power, not capital investment. According to experts the cost of capital for biomass energy is roughly Rs 4-5 crore per mw, which is half the cost of installing wind energy. But unlike wind, the raw material – bagasse or other agricultural residues – have competing uses and value. This price must be paid, as it helps local farmers to improve their returns and so incentivises production of biomass as well. The price for this preferential green power must take this into account. b. The RPO must be made mandatory so that it becomes a tool to push for preferential markets for green energy. To do this, the limits set by all states must be revised; made mandatory and must allow for inter-state sale so that green power deficit states can purchase from others. c. In addition, we should consider how biomass based energy can be used to feed local grids for local and decentralized distribution. It is clear that there is a considerable cost to supply energy through the grid and in addition, there is a cost (never computed) of operation and maintenance and revenue collection. Local energy supply should be given preferential tariffs so that energy un-served villages get power. We do believe this is an area, which requires policy attention and action. We hope you will share our interest in this green energy source and will take the necessary action to make it a viable alternative for the future. We will look forward to hearing from you Yours cordially Sunita Narain |
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| Notes on a framework for a National Solar Mission by Sunita Narain, Centre for Science and Environment, May 2009. 1. Objective: The objective of the mission has to be to bring about cost reduction to achieve grid parity in solar technologies. This, in fact, is a global mission as the cost of solar is the single biggest obstacle to its large-scale deployment. Yet, it is also well know that the penetration of solar technology cannot happen without a steep learning curve – in which large amounts of solar technology is deployed at higher costs and little experience, so that it can create conditions for diminishing costs with increased experience. We should make it clear that this is the objective of our mission. But that it will come at a high cost – both financial costs and costs of technology innovation. However, the Indian Solar Mission is being created to build the conditions for this massive deployment and learning so that the entire world can benefit. 2. Target: The mission should make it clear that it is for this reason that we have set our sights high, in terms of generation capacity. We have ambitious targets – perhaps the most ambitious in the world – to realize this global objective. The solar generation capacity targets should be maintained – 20,000 mw by 2020; 100,000 mw by 2030; 200,000 mw by 2050. 3. Funding: However, the mission paper, must be much more explicit in building a viable framework for funding of solar energy. a. We cannot assume that the cost of solar energy will decrease so sharply as given in figure 1 of the paper. This assumes that the cost of generation from solar technologies will reduce by roughly 9 per cent every year – going from Rs 16.50/kwhr to Rs 2.5/kwhr in 20 years. The Mission document projects that the likely parity of solar power tariff with grid tariff will be achieved during 2017-2020. This is a definitely a desirable scenario, but it is also an unlikely scenario, as of now. The source and assumptions made in this scenario are not clear and need to be checked. I have seen a reference to a similar figure in the McKinsey Report on India, but even that report does not explain how it can assume an average tariff of Rs 5-6 kwhr for our solar programme. b. I would suggest that the Indian solar mission should elaborate that we are working towards this scenario of rapid learning and cost reductions, but that we cannot base our programme and its economics on this assumption. There is no guarantee that this cost reduction will happen. In fact, we will be taking a huge risk, if we use this technology-learning scenario to estimate our financials for the future. c. We also need to check our financial estimates (see Annex III of the paper). This table spells out the financial requirement over the next 31 years. According to it the total incentive for 18,000 mw (check why 18,000 mw and not 20,000 mw) by 2020 (11 years) will be Rs 82,000 crore. We know that the global best plant load factor is 25 per cent (in fact it would be prudent to plan for 20%) of installed capacity. If the proposed subsidy of Rs 82,000 crore is computed against this generation target then it comes to an average subsidy of Rs 1-1.50/kwhr, which looks unlikely and completely unrealistic. In this way we will end up grossly underestimating our costs. Worse, the budget assigned for the mission will get expended without meeting its objectives. Clearly, we must rework our costs to reflect the true costs of the solar transition. d. The Mission document (first draft) had cited that the current price for solar power is between Rs 17-19 kwhr. This is comparable to the costs across the world: France, which has recently revised its feed-in tariff pays 42 c/kwhr (roughly Rs 20/kwhr); Greece 50-75 c/kwhr (Rs 25-35/kwhr). If we take the generation cost at Rs 17-19 kwhr and the amount that the power utilities can pay – Rs 3.50/kwhr, then the costs, which will have to be paid by the Centre/state to subsidy solar energy will be Rs 14-15.50/kwhr. We will have to estimate our subsidy bill based on this tariff support. The objective to bring down cost through deployment will require high costs at the initial stage. e. The question then is can we afford this bill? If not, what are the options to reach the stated objective of meeting the solar energy generation capacity with our financial resources and capabilities? f. The affordability of power is critical and must be discussed in the Mission document. It is also important to explain that already the cost of energy/power in India is high (perhaps the highest in the world), which makes the cost of economic growth also high. In this situation, clearly, our capacity to use expensive power will be limited. 4. Funding framework: The mission must set out the framework for financing this transition. The financial burden cannot be under-estimated as it is clear that no country in the world has reached these targets, because of costs. The ‘pain’ of the transition must be clearly spelled out, with our determination to achieve it. The following options can be discussed/explored: a. Indian government sets up the policy-enabling framework, to support manufacture of technology (as already detailed in national mission document). b. Indian government will set a target for solar hot water heaters and will make the necessary policy changes to meet this target, including making the introduction mandatory and enabling certification and measurement; The Solar Mission sets a target of 20 million sq meters (China target for 2020 is 50 million sq meters). The capital cost of this deployment will be paid by millions of households in the country and will spur huge investment and innovation in this segment. c. Indian government will fully finance the decentralized off-grid applications for rural areas. This is a leapfrog solution as these areas as not connected to the grid and people are energy deprived, which is not acceptable. This is also area where the market will not work, as people cannot pay the capital costs. The Solar Mission sets a target of 3000 mw by 2020. This domestic financial spend will create conditions for deployment of commercial systems as well. d. Indian government will create the enabling framework – preferential feed-in tariff and net-metering for roof-top PV (captive and grid connected) systems. However, it will only initiate and fund an inception programme for roof-top PV – 500 mw out of the target of 3000 mw by 2020. The domestic target should spur investment in this area and global financing. e. Indian government will also create the enabling framework – preferential feed-in tariffs, renewable energy portfolio and measurement tools – for utility solar power – PV and CSP. It will initiate and fund an inception programme in this sector – 5000 mw out of the targeted 12000 mw. It will also fast-track this programme so that deployment experiences can be gained quickly. The 5000 mw at current costs will be substantial investments for the government however this is being done with the aim to spur innovation and global investment. Targets/domestic commitments and financial requirements to meet 20,000 mw target by 2020  5. Enabling management and regulatory framework: The Indian regulations provide for a renewable energy feed-in law, under which utilities are required to purchase a certain proportion of their energy needs from renewable sources. Currently, each state determines the renewable purchase obligation (RPO), which gives renewable producers preferential rates. The national guideline provides for 5 per cent of total demand of the state should be renewable. We should use the RPO framework to manage the introduction of solar energy. This will require mandating the RPO at the national level and perhaps even increasing it to 10 per cent by 2020; allowing for inter-state sale of renewable quotas; payment of Central/state preferential feed-in tariffs for early starters. We should also consider how we can incentivise early projects and also provide for declining subsidies over the 20-year period to improve efficiency. 6. Research framework: The Solar Mission document needs to expand its section on research and technology deployment. Currently, research on solar energy is disaggregated and ill-funded. We need a high-profile coordinated programme, with much higher levels of funding. The programme must come up with clear road map and funding directions of research and report publicly on its outcomes. For instance, the Pan-IIT mission to bring down costs of delivered solar power to Rs 9/kwhr should be supported and monitored. 7. Institutional framework: Creation of an autonomous Solar Energy Authority of India needs to be carefully planned so that it can ensure delivery. In the current proposal, the authority will manage the solar fund from the solar energy cess. However, if such a cess is not put in place, how will the authority manage and coordinate with the RPO framework? We must make the Authority accountable and give it a tough delivery schedule or it must be wound up. |
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