Good morning. If you read any newspaper last week, you would have likely noticed many headlines about Securities and Exchange Board of India chairperson Madhabi Puri Buch. But a piece of news, albeit important, most of us may have overlooked is that the share of thermal power in India’s overall power generation is reducing. India is beginning to use up more renewable energy. But this isn’t all good news. Read on to know more. 

In other news, the Pune-based Burger King won a long-fought trademark battle against its US-based namesake. Meanwhile, Taiwanese electronics manufacturer Foxconn is planning a battery plant in India.

JANUS VIEW

To Make Economic Sense, Renewable Power Needs To Come With An Intermittency Solution

Rating agency CRISIL that thermal power will account for 67% of the power generation by the end of 2025-26, down from more than 72% in 2023-24. Non-thermal power is not all renewable, however: it also has power from nuclear and hydel sources.

Power generation is, of course, different from generation capacity. Thermal capacity, including coal, gas and diesel, stands at 236,377 MW, renewable sector capacity at 144,752 MW, Hydel at 46,928 MW and Nuclear at 8,180 MW, respectively 53%, 33%, 11% and 2% of the total installed capacity of 442,856.6 MW. Power generation by renewable is far lower than its share in the installed capacity, thanks to the intermittency of generation. When the sun does not shine and when the wind does not blow, renewable power generation stops.

What this means is that renewable power, as part of the power supplied by the grid, is far more expensive than the cost of generating that renewable power. Because renewable power is not available most of the day, thermal power has to be kept available, even if a portion of it does not generate power, as the grid takes in renewable power. That means that part of the thermal power tariff, which covers the capacity charge, has to be paid, even if power generation from that capacity is forgone. That capacity charge must be added to the cost of renewable power. Further, in order to maintain stability of the grid frequency, additional kit and purchase of expensive short-term generation from gas turbines must be resorted to. This cost, too, must be added to the cost of renewable power.

In short, a rising share of renewable power in the total mix is not an unmitigated blessing.

CORE NUMBER

$1.4 billion

This is how much Foxconn, which contract manufactures iPhones for Apple, has invested in India so far. The iPhone contract manufacturer, which recently inaugurated a residential complex for female workers near its plant in Sriperumbudur, Tamil Nadu, said that its business in India has grown to over $10 billion. The company is also planning to set up a battery plant in India, eyeing the electric vehicle segment. Foxconn’s stint in India hasn’t been without controversy. Recently it faced criticism on reports that it does not hire married women in its assembly plants. Chairman Young Liu defended against the allegations this week saying Foxconn hires “regardless of gender”. 

FROM THE PERIPHERY

—🥃 International liquor company Diageo’s India unit, United Spirits, submitted financial documents to the Delhi Police in an investigation related to billing and discount practices involving government-run liquor shops in the capital. The Delhi police is investigating whether discounts offered by suppliers to government agencies running liquor stores for early payment are in line with liquor laws. 

—🍫 Despite concerns over food inflation, fast moving consumer goods (FMCG) companies are optimistic about sustaining volume growth in the coming quarters. This is thanks to a recovery in rural demand and a good monsoon. However, with coffee and cocoa prices at an all time high, and an expected price hike for cereals and grains, companies indicated that a potential increase in prices is possible. 

—🍔 Pune burgers for the win. US-based Burger King Corporation lost a 13-year long legal fight against a namesake Pune-based eatery, after a district court dismissed the company’s suit alleging trademark infringement. The court said that the Pune joint had been running since before Burger King opened in India and that it failed to prove that the Pune outlet had infringed on its trademark. According to the owners of the local eatery, there was no similarity between the two other than the name. 

—🌶️ After India’s spice brands MDH and Everest came under global scrutiny over the presence of pesticides in some of their blends, the Food Safety and Standards Authority of India (FSSAI) conducted tests. It found that 12% of all tested spice samples failed to meet safety and quality standards. The food regulator said that it was taking action on the non-conforming samples and companies involved, but did not reveal which brands’ samples had failed the tests. 

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