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Tag Archives: India

The price of solar in India could fall below that of coal within 5 years

By Dr Anthony Horton

According to a KPMG report published this month, the price of solar power has declined more than that expected by many analysts since January this year. In India currently, the price of solar is within 15% of coal process on a levelised basis. In the report titled “The Rising Sun-Disruption of the horizon”, KPMG contends that while the current price of solar doesn’t include grid integration costs, even after taking them into consideration, solar would still be competitive with coal. By 2020, they forecast that the price of solar power could be approximately 10% less than that of coal.

By 2020, KPMG forecasts a generation price of INR 4.2/kWh and INR 3.59 kWh by 2025 (at today’s prices), and that wind and solar generation could constitute 20% of India’s energy supply mix by 2025. The biggest potential factor in solar power pricing in India could be rooftop solar, especially if it is supported by the continuing evolution of storage technologies. KPMG predicts that rooftop solar could provide 10 GW within 5 years and 49 GW within 10 years, and could mitigate as much as 275 million tonnes of carbon emissions in 2025. Thus it would make a sizeable contribution to India’s INDC which included a 33-35% reduction in emissions intensity of its GDP by 2030 from 2005 levels.

In addition to price forecasts, the KPMG report pointed to the need for stakeholders to understand the possible extent of the impact of falling solar prices on the coal industry, and to the need to face it. A new planning paradigm that takes into account a significant renewable energy input scenario (including storage and smart grids) going forward was needed in India, and the report also suggested that the Government focus on bolstering planning policy, institutions, resources and protocols. Appropriate incentives for investment in the integration of solar into the grid and balancing services should be implemented early, and consideration should be given to storage technologies being promoted in a similar fashion to the way solar power was encouraged through the National Solar Mission in 2009.

In flagging the significant competition utilities are likely to face from distributed rooftop solar, KPMG suggests they get into rooftop solar themselves and develop new revenue models based on the relationships they have with existing customers. If they don’t confront the competition, they could face losing customers and may need to rely on subsidies to remain solvent. They will also need to examine their power procurement portfolio and look at how they contract incremental capacities. The cost structures of new capacities should be scrutinised closely prior to committing.

On the basis that solar power in India would be at a sufficient scale from 2022, the coal sector would come under pressure. To meet that challenge, the sector should focus on cost efficiency and flexibility, according to KPMG. Imported coal prices could be influenced by a number of factors including slowing growth in China, energy efficiency (on the demand side) and a fall in the commodities cycle. KPMG further recommended that Coal India Limited conduct a study of long run costs and add flexibility to its operations so it can adjust to different demand and price scenarios as they arise.

A framework for encouraging private investment in ancillary services needs to be urgently addressed, according to KPMGs report. The solar sector represents significant investment opportunities, including storage solutions, demand response and grid balancing, however the significant ramp up needs are such that the availability of sufficient domestic capital may represent a challenge. International funds and domestic bond markets should be investigated by investors, according to KPMG. Given that solar is approximately four times as capital intensive as coal on a per kWh basis, a global economic recession could have a potentially significant impact-not just in terms of the availability of capital but also in terms of falling fossil fuel prices which would make solar potentially less attractive. If shale gas or clean coal technologies become more prominent they could also pose a threat.

In KPMGs opinion, solar power has the potential to be a significant part of India’s energy mix in the next decade. Solar is clean and will reduce coal consumption over time, which will help India’s fight against climate change. Rooftop solar can take the pressure off distribution grids, which are of lower quality especially in rural areas according to KPMG. The continued evolution of storage technologies could lead to further development of electric vehicles in India, which in turn would reduce oil consumption and could possibly increase energy self-reliance. From a global point of view, reduced oil consumption and storage technologies offer the potential for increased energy security which is critical for every nation.

rWdMeee6_peAbout the author: Anthony Horton holds a PhD in Environmental Science, a Bachelor of Environmental Science with Honours and a Diploma of Carbon Management. He has a track record of delivering customised solutions in Academia, Government, the Mining Industry and Consulting based on the latest wisdom and his scientific background and experience in Climate/Atmospheric Science and Air Quality. Anthony’s work has been published in internationally recognised scientific journals and presented at international and national conferences, and he is currently on the Editorial Board of the Journal Nature Environment and Pollution Technology. Anthony also blogs on his own site, The Climate Change Guy.

 

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Australia beckons India: more antagonism from the Abbott Government toward China

Is the Abbott Government playing a major part in inflaming and destabilising the security of the Asia-Pacific Region? Dr Strobe Driver reports.

Prime Minister Abbott’s quest for the attention of right-wing nationalists’ that are seeking to contain China has swung from the United States of America (US), to Japan and is now making its way further West into the Indian Ocean. This time to increase a military attachment to another forgotten ‘ally’: India. This is a circle of madness and it will be to Australia’s detriment that this government has continued the cycle started by the Rudd-Gillard governments with the deployment – and then ongoing rotation – of US marines through the Northern Territory. There is a reason for this ongoing madness which needs to be addressed in light of history in the Asia-Pacific (A-P) region.

With the knowledge that Australia has punched far above its weight in the region since the end of World War Two, consecutive governments have sought to keep this modus operandi alive; and as a continuum in their foreign policy objectives. As a result of this, Australia has regularly invested itself in military collisions either directly in the region or external to the A-P in order to bring about enhanced ‘security’ and ‘stability.’ The eventual aim of these incursions has been, and no doubt will continue to be, that countries which Australia decides to intervene into should convert to the Western liberal-democratic model of government; and governance.

Australia has entered the fray of regional collisions in places such as Central Asia (Afghanistan), the Middle East (the Persian Gulf), Southeast Asia (Vietnam), East Timor/Timor Leste and of course numerous other regional locations that have ‘needed’ Australia’s presence – the Butterworth Air Force Base in Malaysia and Australia’s use of it as a forward-defence locale is an example of involvement without an actual collision of forces taking place. Whether or not Australia’s involvement in the aforementioned has been beneficial to those that have experienced Australia’s direct (read: military) assistance and whether Australia entered these places voluntarily or was coerced by other state actors – the US in particular – are moot points and beyond the scope of this essay, suffice to say Australia has made its presence known and continues to believe that actual force and/or the threat-of-force remain apparatuses that ensure stability.

As with many a country that has experienced the thrill of exercising extramural power due to either location or military transport capabilities, the days of Australia utilizing forward-defence and/or embarking upon actual incursions should be disbanded, as it encourages continual usage of a governance mechanism that is backed by force, and this model generates backlashes. More to the point, the world has changed from the days of Western Eurocentric and European-models of government and governance being passively accepted by other nation-states.

Regardless of the heart-warming feelings the Western/Eurocentric world may have toward the model that has been successfully executed since 1648 through mercantilism, trade, suzerainty, protectorates, colonialism, forced alliances, post-colonialism state-making – Kuwait, Israel, and the dividing up of the spoils of Africa amongst Europe is to mention only several examples of deliberate state-making – with the addendum of brute force, will not alter the coming inevitable and unpalatable truth. The time is fast approaching to acknowledge the overarching and heretofore unquestioned influence of the West is in decline, and hence the rise of China is taking place. The era pax-Sino is the new reality.

Extrapolating on the abovementioned, the new problematics for the West, and for Australia in particular, is that the Abbott government, by actively seeking out these new alliances is also indulging in the suppression of this reality. Raging against the military, economic, geo-political and geo-strategic rise of China signals a fear of disengagement from the superlative-version of Western history which was one of having control of the high seas and (in later years) the airspace above for centuries.

This will not remain the case into the future and holding onto history signals an unwillingness to admit to the reality of the situation-at-hand: the era of pax-Sino is not only the new reality, it is fast-arriving. Therefore, no amount of foreign policy enmity shown to the People’s Republic of China (PRC) through scrambling around trying to find new Asia-Pacific allies will change this and moreover, it is sending a supercilious message to a country that will exercise the most control over the A-P region regardless of whether there are policies of containment directed toward it or not.

Overt messages toward India by the Abbott government is foolhardy and is disavowing China’s place in the region, which in turn will encourage China to ignore Australian input into regional machinations. The dismissal of China’s input into regional ministrations by Australia in recent times has succeeded in infuriating China. This has been reflected in newspaper headlines such as, ‘Australia and India to strengthen military ties’[1] with regard to India, and ‘Defence alliance to anger China’[2] with regard to Japan.

These references are evidence that there is a renewed commitment to the containment of China by Australia in all spheres and is signalling to the Chinese government that the only role that Australia accepts of China is it being a compliant (and growing) trading partner. The pressure the Abbott government is feeling and its desire to not upset America is also dangerous as the Americans are also not happy with Australia. This should encourage the Abbott government to be more respectful of China and not antagonise it further. If China reacts militarily, the possibility that America would come to Australia’s aid becomes even more remote. The veiled threats of ‘president-in-waiting’ Hillary Clinton that Australia should not ‘two-time’[3] America in negotiations should be taken as a clear signal that America will judge any escalation at the time of it happening and it will not necessarily default to its historic alliances.

This as a stand-alone issue should be enough to alert the Abbott government to understanding that any moves to contain China in the region will be to the detriment of Australia. Perhaps the most frightening undertone to Clinton’s statement is that it mimics the George W. Bush mantra of a country being either ‘with us or against us,’[4] or in simpler terms, Australia must choose between America and China. From the aforementioned, and with regard to China, the evidence suggests Australia is actively moving toward the containment of China even though there is no evidence America will support this position; Japan has been newly-befriended and embraced with a military/information exchange deal; and India’s status has been upgraded. This is a combination of events that is fraught with danger for Australia; and is tantamount to an invitation to disaster.

What however, does India have to offer Australia and the region that may dissipate what could be defined as a ‘coming storm.’ Perhaps it will balance the region by the Abbott government adopting a newfound friend and ally? A perspective is needed here. Unfortunately, the answer to the above is the elevation of India will do nothing for stability in the region, as has the exchanges with Japan. These sudden ‘recognitions’ will only inflame Australia-China relations beyond the required modicums of civility that trading partners have to indulge. China will be furious at Australia’s new-found alliances. Moreover, the PRC will observe it as a direct insult and another geo-strategic move which further destabilizes an already fractious region.

The new dynamics that Australia is attempting to set in place, beyond the trading commodities such as iron ore and gold – about 40% of Australia’s exports to India are of gold[5] – are however misguided at best and flagrantly antagonistic to China at worst. If Australia is counting on India to exercise a naval military presence in order to be yet another bulwark to China, Australia is being profoundly imprudent as India simply does not have the military-stretch to extend beyond South Asia. India is also beset with regional political issues such as poisonous border issues with China; ongoing political and geo-strategic issues with Pakistan; and ongoing difficulties with China-Pakistan relations. Domestically, India also has enormous problems.

Chronic poverty being the most overt- India’s Economic Advisory Council deemed 363 million people to be living in poverty in 2014[6] – and according to the Asian Development Bank it also has ‘rampant corruption and [is an] ineffective and corrupt state.’[7] Perhaps the least acknowledged issue however, and one that drains vast amounts of India’s time and energy is ‘a guerrilla war in twenty states covering 40 per cent of the country’s land mass.’[8] The nationalistic fervour shown by the people of India in their electing of Narendra Modi will not change these endemic problems that have (and are) facing India in the short term. Therefore, and regardless of India’s resentment of China’s growing influence, India’s sway in the region therefore, will remain ‘rhetorical and potential rather than actual.’[9]

The inclusion of India as an incremental-increase in the containment of China in an A-P ‘triangle of defence’ is yet another simplistic foreign policy alternative to actually engaging with China on deeper more meaningful geo-political and geo-strategic levels. Australia will come to deeply regret recent moves to elevate India beyond that of a valued trading partner. Furthermore it actually signals Australia – in the current government and in the previous one – is fundamentally incapable of looking beyond trade for its meaningful geo-strategic and political relationships, and is weak-willed when trying to negotiate its way through the regional (and ever-increasing) maize of potential conflict-probabilities – that is, unless the US demands it, and Australia should dispense with this historical cloak which consecutive Australian governments in particular, have been unable to throw off.

The military move toward India when it has in fact been ignored by Australia for decades, the cut backs in Australia’s foreign aid which must impact on India notwithstanding, also signals a panic on behalf of India in its desire to offset China’s influence in the region. This has become a lightning rod with which Australia – as poorly constructed as the foreign policy has been – has been able to capitalize on. The Abbott government is expanding on the Gillard governments’ approach to the A-P belonging to America, and in doing so is seeking to default to the containment of China at the behest of America. A significant part of this driving force and reasoning is because the Abbott Conservative government is unable and/or unwilling to unshackle Australia from its British-colonial ruler-of-Asia mentality. The fusing together of these elements will incrementally and then dramatically increase the chances of an exchange of fire between military forces happening.

The irresponsible attitude and opportunistic intent Australia is exhibiting by embracing Japan and now India, is another stepping-stone into a war breaking out and of Australia having to concede that it played a major part in inflaming and destabilising the region: it may take a decade from 2014, but the signs of war are already on the horizon. Whether the mechanisms of previous Australia’s foreign policy continue to be employed, and if they remain mired in their colonial past in the new ‘age of pax-Sino,’ they will be given, in the first instance short shrift by the PRC; and in the second will heighten the chances of a military response from China.

The well-trodden historical colonialist-path that Australia is attempting to engage with by allying with India directly impacts on the chances of there being peaceful outcomes in the A-P region. If the PRC adopts the British model of rule in the region, that of using force to reinforce their superiority – as Great Britain did throughout the 1800s – a war will come sooner rather than later and India, like Japan and America, will put its interests first and once again, due to the foolhardy military-driven foreign policies being adopted by the Abbott government, Australia will be found wanting. India is simply not capable of being a bulwark against China regardless of the elevated status Australia offers it in the region. Essentially, all the additional recognition is achieving is the inflaming China’s sense of humiliation; and China’s tolerance of this will not be indefinite. A war with China is ever-closer due to the Abbott government’s ill-thought through and shambolic foreign policy.

[1] John Garnaut. ‘Australia and India to strengthen military ties.’ The Sydney Morning Herald. Sydney: Fairfax Media, July 1, 2014.

http://www.smh.com.au/world/australia-and-india-to-strengthen-military-ties-20140701-zss9o.html

[2] Mark Kenny and David Wroe ‘Defence alliance to anger China.’ The Age. Melbourne: The Age Company,July 9, 2014, 7.

[3] Paul McGeough. ‘Hillary Clinton criticises Australia for two-timing America with China.’ The Sydney Morning Herald. Sydney: Fairfax Media, June 27, 2014.

[4] ‘You are either with us or against us.’ CNN.com. November 6, 2001.

http://edition.cnn.com/2001/US/11/06/gen.attack.on.terror/

[5] Michael Wesley. ‘The Elephant in the Room. Australia India Relations. The Monthly. February, 2012.

https://www.themonthly.com.au/issue/2012/february/1328594251/michael-wesley/elephant-room

[6] Manu Joseph. ‘Setting a High Bar for Poverty in India.’ The New York Times. July 9, 2014.

[7] James Lamont and James Fontanell-Khan. ‘India: Writing on the wall.’ Financial Times. March 21, 2011.

[8] Martin Jacques. When China Rules the World. The end of the Western World and the birth of a new global order. England: Penguin Books, 2012, 448.

[9] https://www.themonthly.com.au/issue/2012/february/1328594251/michael-wesley/elephant-room

This article was first posted on Geo-Strategic Orbit and has been reproduced with permission.

 

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