12 March 2019 Daily Current Affairs Analysis


 

Wind loses energy as policy paralysis blows through this renewable sector:

  • From a euphoric 5,500 MW in 2016-17 — when wind energy companies rushed to commission their projects so as to get their foot in before certain incentives expired — capacity additions have plummeted, to 1,762 MW in 2017-18 and an estimated 1,600 MW in 2018-19.
  • Unlike solar, wind power plants cannot be put up anywhere but only in locations where winds blow strong.
  • In India, there are eight States where it is economically viable to put up wind turbines —Tamil Nadu, Gujarat, Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Telangana and Andhra Pradesh.
  • For about two decades, wind energy firms (called ‘developers’) would erect the turbines at chosen sites and sell power to the electricity supply companies at prices fixed (called ‘feed-in tariffs, or FiT) by the respective State electricity regulators.
  • The developer would get the FiT for the entire power purchase agreement period, typically 25 years.
  • Because only eight States constituted the ‘market’, annual fresh capacity installations used to be in the 1,500 MW — 3,000 MW corridor.
  • Expanding the market meant that the other States also should buy wind power.
  • This could not happen because of difficulties in putting up projects in one State and selling the electricity to another.
  • That was when the Centre stepped in. As soon as the BJP came to power in 2014, it fixed a target of 1,75,000 MW of capacity for renewable energy of which 1,00,000 MW would be solar, 60,000 MW wind and the rest biomass and small hydro.
  • To make the 60,000 MW happen, the Government of India (through its new company, SECI), became a trader — it would buy power from the developers and sell it to the non-windy States, thus expanding the market.
  • Developers who offered to sell at the least prices would get to sign long-term power purchase agreements; they could put up their projects anywhere, but should deliver the power at a substation. Thus began the epochal shift from fixed FiTs to market-determined tariffs.
  • What also began was — trouble. The first round of auctions closed in February 2017.
  • Due to competition, developers offered to sell electricity at prices as low as Rs. 3.46 a kWhr; in contrast, the least FiT was Rs. 4.16 in Tamil Nadu.
  • \Now, upon seeing prices fall so low, the windy States began to ask themselves, ‘why should we buy power at the costly FiT prices; why not we also conduct our own auctions to buy cheaper power?’
  • But they didn’t know the mechanics of the auctions and had to wait for some guidelines from the central electricity regulator. As they dithered, the ‘windy State market’ vanished.
  • But the Centre too dragged its feet on further rounds of auctions. In 2017-18, just two auctions, for 2,000 MW, happened. The year ended on a dismal note.
  • In due course, activity picked up and till now, six rounds of SECI’s, and several more of different States have happened and about 13,000 MW of capacity have been awarded.
  • Prices dropped consistently, and fell to a low of Rs. 2.44 in the third round.
  • At this stage, two other problems arose. First, to be viable at such low prices, developers flocked to the two windiest States — Gujarat and Tamil Nadu.
  • All of the SECI-awarded projects (70% of all auctioned capacities) went to them, which was more than the ability of the substations to take the power.
  • Second, Gujarat frowned at 5,400 MW worth of projects coming up on its soil but all the power going to the non-windy States. Would there be any lands left for its own auctions? So, it refused to give land and came out with a policy that forced developers to put up their projects in specified ‘wind parks.’ Since the parks are not necessarily the best sites for wind projects, the developers didn’t like the policy. Negotiations began, project work got delayed.
  • The problems didn’t end there. As the best sites got taken, prices began to rise after from the fourth SECI round. Governments, suspecting a developers’ cartel, began imposing tariff caps — or the highest price they would accept. And they began cancelling auctions at ripe stages. Notably, the benefits of the low tariffs have never been passed on to the consumer — the electricity supply companies have pocketed the benefits.
  • The industry has been asking the government to do ‘substation-wise auctions’, (‘what is the cheapest best price you can offer if your wind turbines would be connected to this particular substation?’) The government is hesitating, apparently because substation-wise auctions will result in higher price quotes.
  • Of the 13,000-odd MW tendered, the deadline for completion has expired for 2,000 MW; but so far only 823 MW has come up.
  • The worst sufferers in the mess are the 4,000 SMEs who supply components to turbine manufacturers and their two million employees.

 

 

NRC won't impact voting rights in Lok Sabha polls, says Assam Chief Electoral Officer:

  • The Supreme Court on March 12, 2019 asked the Election Commission of India (ECI) to form a plan of action to address the discrepancies in voters’ list by March 28, 2019 in case a person’s name is there in the voters’ list of Assam but missing from the National Register of Citizens (NRC).
  • The Bench comprising Chief Justice of India (CJI) Ranjan Gogoi, Justice SA Nazeer and Justice Sanjeev Khanna asked the Election Commission to provide the court with complete information on the latest additions and deletions in the voters’ list by March 28.
  • The people of Assam have been in a dilemma that whether those whose names did not make it to the final draft NRC will be able to cast their votes or not.
  • The Assam NRC is scheduled to be published on July 31, 2019.

 

NRC:

  • The National Register of Citizens (NRC) is a list that contains names of Indian citizens of Assam.
  • Assam, which had faced influx of people from Bangladesh since the early 20th century, is the only state having an NRC, which was first prepared in 1951.
  • The recently updated draft of the NRC includes the names of Indian citizens who have been residing in Assam before March 25, 1971.

 

 

India is world’s second largest arms importer; Saudi Arabia tops the list: SIPRI Report

  • India was the world’s second-largest arms importer from 2014-18, ceding the long-held tag as largest importer to Saudi Arabia, which accounted for 12% of the total imports during the period.
  • However, Indian imports decreased by 24% between 2009-13 and 2014-18, partly due to delays in deliveries of arms produced under licence from foreign suppliers, such as combat aircraft ordered from Russia in 2001 and submarines ordered from France in 2008, the report stated.
  • Russia accounted for 58% of Indian arms imports in 2014–18, compared with 76% in 2009-13.
  • Israel, the U.S. and France all increased their arms exports to India in 2014-18. However, the Russian share in Indian imports is likely to go up sharply during the next five-year period as India signed several big-ticket deals recently, and more are in the pipeline. These include S-400 air defence systems, four stealth frigates, AK-203 assault rifles, a second nuclear attack submarine on lease, and deals for Kamov-226T utility helicopters, Mi-17 helicopters and short-range air defence systems.
  • The report noted that despite the long-standing conflict between India and Pakistan, arms imports decreased for both countries in 2014-18 compared with 2009-13.