Good morning! The two richest men in Asia, Mukesh Ambani and Gautam Adani, have seen the future. Both have bet on green energy as a central pillar of their sprawling conglomerates and have pledged to produce the world’s lowest cost hydrogen. The transition, even with the kind of mind-boggling ambition these two men have, to green energy for India, however, is still far out. And its need for fast growth will require significant consumption of fossil fuels. Although annual volumes are still rising, the pace of growth of India’s petroleum consumption has slowed down. Yet, it will be years before the country can wean off oil and gas from West Asia and the conflict in the region is a risk to its energy security. The World Bank’s worst-case scenario model forecasts oil prices topping $150 per barrel. Sluggish exports would mean high oil prices will wreck India’s trade balance. Today’s article examines the impact of the war on India’s energy resilience. Plus, we have curated the best longreads of the week for you. 

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Saswata Chaudhury and Sanchit S Agarwal

India’s renewable energy transition has been commendable, but the nation still relies heavily on fossil fuels.  

It is the world’s third-largest oil consumer and imports 85% of its oil supply which makes it particularly vulnerable to any market volatility. 

Around 60% of India’s oil comes from the Middle East, which means any upheaval in that region is a major cause for concern. The Israel-Hamas war in Gaza is just the kind of crisis that could lead to destabilisation in oil production and affect the world oil prices.

India is also a close ally of Israel, which could potentially affect Delhi’s trade relationship with Arab nations and therefore jeopardise oil imports, although India’s huge consumer market might shield against any harsh step by the Gulf oil states.

To complicate things, about 70% of India’s public sector refineries’ oil import is through term contracts while the rest are spot purchases. This means while supply is ensured, price and other conditions favour the sellers. 

However, the duration of any conflict becomes crucial, too. If the war does not continue beyond the duration of India’s term contracts with suppliers, everything should be fine. But if the Gaza conflict drags on like the Russia-Ukraine war, India might need to generate import alternatives, although it would have time on its side. 

India’s strategic petroleum reserve has enough crude oil supply for just 9.5 days. Private companies, on the other hand, have a cumulative reserve capacity of 64.5 days. 

Many countries have their own strategic reserve plans to secure energy supplies in a crisis. 

The US has the world’s largest reported reserve capacity of 727 million barrels, which roughly amounts to 60 days of supply. China has 475 million barrels and  Japan 324 million barrels. 

All members of the International Energy Agency, which India joined as an associate member in 2017, are required to maintain an emergency oil reserve which can be released to stabilise prices in the event of any oil shocks.

India and Israel’s bilateral trade and economic relationship began in 1992 and is now worth  about USD$11 billion. India is Israel’s second largest trade partner in Asia with USD$8.4 billion of exports and USD$2.3 billion of imports in 2022-23. Thus, any long-term conflict could be detrimental to the Israeli economy and therefore India’s balance of payments.

The Abraham peace accords, mediated by the US, and signed by Israel, the United Arab Emirates and Bahrain in September 2020 benefits India, opening doors to many multilateral agreements with other nations. 

India and Israel are also part of the I2U2 group, along with the UAE and US. The group focuses on joint investments and cooperation on water, energy, transport, space, health, and food security. 

At the G20 meet in New Delhi in September 2023, a memorandum was signed between India, the US, Saudi Arabia, UAE, France, Germany and Italy to develop the India-Middle East-Europe Economic Corridor’ (IMEEC) which would run through  Saudi Arabia to Haifa port in Israel and onward to Greece. 

The corridor would connect Mumbai and Gujarat port with the UAE through  a shipping route and then a rail network connecting UAE, Saudi Arabia, Jordan and Israel. Haifa is strategically very important as it connects to Greece and the rest of Europe. 

This proposed network could significantly enhance regional energy security. If energy security is affected by geopolitical issues like war, diversifying energy supply alternatives is a more realistic strategy. The Gaza war puts all such multilateral initiatives under strain.

Decarbonisation has received sufficient focus in Indian policy making, which was revealed by India’s nationally determined contributions, Net Zero announcement at COP 26, formulation and implementation of EV policies,  and establishment of the Bureau of Energy Efficiency (BEE) to promote renewable power and energy efficiency.

However, due to the inherent variability in generation of renewable energy, complete reliability on solar, wind and others to meet India’s huge and increasing demand for power seems far-fetched.

Energy transition through focus on renewable energy also faces other challenges in India. The major one is India’s dependency on China for renewable technologies and related important raw materials (such as rare earth materials).

Without indigenous technology development, the transition to renewable energy will merely transfer India’s dependence on oil sourced overseas to a dependence on renewable technologies and raw material from overseas.

In addition, the market for renewable technology and related raw materials is very concentrated which could lead to severe energy security threat in case of geopolitical issues.

However, a focus on green hydrogen and cross border electricity trade (CBET) could address those issues. While green hydrogen technology is still in its infancy, CBET is already taking place with Bangladesh, Bhutan and Nepal. But reaping full potential benefits of CBET requires significant infrastructure development and various other cross border common regulations.

Given all these challenges, short- or medium-term geopolitical disturbance like Gaza would not be expected to influence the momentum to India’s energy transition but India will definitely follow its own decarbonisation pathway.

Saswata Chaudhury is a Senior Fellow, The Energy and Resources Institute (TERI), New Delhi. 

Sanchit S Agarwal is an Associate Fellow, TERI.

Originally published under Creative Commons by 360info™.

TECHTONIC SHIFT

Smile, you’re on not-so-candid camera: Many people buy flagship smartphones for their camera specs. If you’re one of those people, you’ll love this week’s episode of TechTonic Shift. Not because hosts Roshni and Rajneil geek out over telephoto lenses and megapixels, but because they discuss the technology that could make specs redundant altogether. We’re talking the Pixel 8 Pro’s AI camera, the ways in which it will transform photo galleries, and the implications for human memory. Yup, it’s that big a deal. Tune in on Spotify, Apple Podcasts, Google Podcasts, Amazon Music, or wherever you get your podcasts.

ICYMI

All in or nothing: That’s the name of one of Adidas’ most expensive campaigns to date. It also applies to the sportswear giant’s approach to a lucrative, but horrifying collaboration with Ye, formerly Kanye West. Horrifying, because as The New York Times’ Megan Twohey details, Adidas tolerated a decade of abuse from the iconoclast despite making him sign a ‘morals clause’ in 2016—three years into their partnership, and three years after Ye first drew a swastika on a shoe sketch because he considered the designs offensive. Twohey, who obtained a tranche of memos, group texts, and contracts, walks us through a story that’s about how much a company will put up with for the sake of its bottom line, including risking the well-being of employees pushed to their physical, emotional, and mental brink because of Ye.

Anatomy of the Covid-19 lockdown: How effective were total shutdowns in decreasing the mortality rate of the most disruptive pandemic of our time? Short answer: not at all. Long answer: The Big Fail. The book, authored by journalists Joe Nocera and Bethany McLean, argues that much of the world was right in gauging SARS-CoV-2 risks, but wrong in its response. This is a contentious subject. But as this excerpt reveals, lockdowns didn’t save lives as much as they simply helped overburdened hospitals buy time to manage the crisis. China, whose template was followed by several countries, is one example: nearly two million people died in just two months of the strict ‘zero-Covid’ policy being lifted. Citing various epidemiologists and studies, McLean and Nocera argue that lockdowns increased the number of overall deaths in the US, that transmission rates in schools that remained open weren’t alarming, and that sociological factors (poverty, little access to quality healthcare, etc.) had a bigger impact on infection and death rates than complete shutdowns.

History time: Getting everyone on the internet to agree is tough. And yet, we’ve all agreed to hate SEO (Search Engine Optimisation) and its practitioners who’ve cluttered online search with irrelevant links. With this in mind, Amanda Lewis explores the history of internet search and its evolution in an essay on The Verge. She delves into the misalignment of incentives between SEO experts and search engines, their fraught relations, and the oncoming onslaught of zombie websites, courtesy AI. Corollary to this is the evolution of Google from an idealistic newcomer to a gatekeeper of information. Amidst heightened scrutiny, it has learned to prioritise institutional authority through its algorithmic preference for ‘E-E-A-T: Experience, Expertise, Authoritativeness, and Trustworthiness’. Along the way, we’re also introduced to colourful characters such as the “father of SEO'', making this a complex but deeply insightful read.

Dangal IRL: What does it take to change centuries of disrespect and dehumanisation? For the women in Haryana, the answer lies in grit, hard work and winning lots of medals. In the quiet village of Sisai, Usha Sharma and Sanjay Sihag established the Altius wrestling school in 2009. Here, young women aged 8-22 years live and breathe wrestling, fostering a strong sense of sisterhood. The school receives partial funding from the State government, with parents shouldering the remainder of the costs. Remarkably, former students have not only represented India on the global stage but also secured prestigious government jobs. To find out more about this initiative, read this interesting visual story in Reuters.

A broken contract: When Chinese President Xi Jinping articulated his “common prosperity” doctrine, he was trying to avoid the mistakes made elsewhere in the world where economic inequality had wreaked havoc with social cohesion. The “principal contradiction” was “between unbalanced and inadequate development and the people’s ever-growing needs for a better life”, the Financial Times points out in an in-depth analysis of what’s gone wrong with the Chinese economy. But in reality it was a not-so-subtle rebalancing of the growing power of rich, flamboyant entrepreneurs and the authority of the party. Unfortunately, Xi’s plan of cutting down private enterprise to size even while waging a trade war with the US has turned out to be counterproductive. Jobs, which the burgeoning tech and internet sectors were creating for young people, have disappeared and the crisis in the property sector has had a massive impact on middle class households. The net result is an economic crisis cutting across social strata. The diagnosis that economic inequality was rising rapidly was correct but the medicine administered has worsened the condition.

Maximum City. minimum housing: In industrial Mumbai (then Bombay) of the 19th and 20th century, two things dotted the city skyline: the smokestacks of cotton mills and the stacked floors of the mill works’ chawls. The mills are long replaced by shiny malls and office complexes, but the chawls with the one-room homes of working class families remain. This Bloomberg story breaks down the architecture of the chawl and how it evolved over time from local architectural styles to a copy of working class quarters of 1920s England. It also examines how the South Bombay chawl held its ground even as luxury skyscrapers began swallowing this rich part of the city, giving space to diverse communities and political movements, from Marathi identity champion Shiv Sena to the Buddhist followers of Maharashtra’s Ambedkarite movement. Not for long though. Ageing chawls falling into disrepair are now getting replaced by the very luxury skyscrapers they’ve defied for a century.