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Understanding ESG / Viewpoint
Climate conundrum creates vicious cycle
More heat needs more cooling, increasing energy demand, GHG emitting fuel use
Ashok Lavasa 3 May 2024

Although 2023 is believed to be the hottest year in recorded human history, according to six globally averaged datasets, the irony is that modellers would want us to believe that this could be the “coolest for those born this year”. This despite the UNFCC repository teeming with Nationally Determined Contributions from 193 countries indicating their resolve to contain the heating of the earth. More heat needs more cooling leading to heightened energy demand, which is increasing the usage of greenhouse gas (GHG) emitting fuels. The climate conundrum continues to create a vicious cycle, if not urgently attended to.

The global annual mean near-surface temperature in 2023 was 1.45 ± 0.12°C above the 1850–1900 pre-industrial average. According to the World Meteorological Organization (WMO)’s State of the Climate Report on Asia, in 2023 the mean temperature over Asia was 0.91 degree Celsius above the 1991–2020 reference period, the second highest on record.  The year saw many parts of the region experiencing extreme heat events, glaciers in high mountain Asia losing significant mass at an accelerating rate, drier conditions in the Eastern Himalayas, and the ocean around Asia continuing its warming trend. Southwest China suffered from a drought, and essential winter precipitation was below normal in the Hindu Kush region, and the rains associated with the Indian summer monsoon were insufficient. The belief is that with growing urbanization at the cost of denudation of forest cover, cities are beginning to feel like “cauldrons of heat and humidity”.

Not that this is confined to Asia. Europe is the fastest-warming continent, and its temperatures are rising at roughly twice the global average as per WMO and the European Union’s climate agency, Copernicus. The latest five-year averages show that temperatures in Europe are now running 2.3 degrees Celsius above pre-industrial levels.

The rising temperatures put additional load on the electricity system both in Europe and Asia. Even though the fuel supply disruption due to Russia’s invasion of Ukraine had already compelled the reignition of coal-fired power plants, Europe generated 43% of its electricity from renewable resources in 2023, up from 36% the year before. More energy in Europe was generated from renewables than from fossil fuels for the second year running but coal was back in business.

That unfortunately is a continuing reality in India even though India added renewable capacity of over 18 gigawatts (GW) in FY24. Renewable energy relies on variable natural factors and therefore not reliable for base load requirement. In view of this and in anticipation of the hot summer during which the peak demand is set to touch a record 260GW, the Ministry of Power invoked Section 11 of the Electricity Act, 2003 to instruct 15 imported coal-based plants to operate at full capacity till October 15 and idling gas-based thermal plants to operate from May till the end of June so that the deficit between peak demand and peak supply, which had narrowed in recent years, from an average of -5.9% between FY10 to FY19 to -1.5% between FY20 to FY24, does not increase.

The only feasible way in which the variable renewable energy generation can be relied upon is if it is backed by storage infrastructure, so that excess energy generated by solar and wind plants during non-peak hours can be stored and utilized during peak hours. The share of installed capacity of renewables like solar and wind in India has increased to nearly 29% of total capacity in FY24, compared with 20% in FY20. However, the capacity utilisation factor (CUF) of renewable energy plants depends on natural factors like irradiation and wind speeds, and ranges from 1.3% to 27% for solar and from 13.4% to 32% for wind across India.

Substantial energy storage system is therefore inevitable if renewable energy has to play an effective role in meeting energy needs on a consistent basis. As per NITI Aayog (the government’s official think-tank) estimates India’s energy storage requirement by FY30 would be approximately 60GW, including 41GW of battery energy storage systems and 19GW of pumped storage hydropower (PSH), requiring an investment of over US$30 billion. The current installed PSH capacity is merely 4.7GW and an additional 2.8GW is under construction.

A lot of this energy is required for air conditioning, which is also seeing a soaring demand with rise in global temperatures. When combined with the atmospheric impact of refrigerants, the energy consumption associated with cooling represents one of the largest end-use risks to climate. With majority of the population living in heat-stressed areas India is at the epicentre of this problem. India’s Economic Survey for 2021-2022 estimates that India could lose 5.8% of its working hours, equivalent to 34 million full-time jobs, to heat stress events by 2030. It further suggests that cooling’s share of the total electricity demand is expected to increase from 7% in 2020 to almost 20% in 2030. According to a recent United Nations Environment Programme (UNEP) and International Energy Agency report, India’s cooling demand is expected to drive an additional 800GW of power generation – more than twice the installed capacity in India today.

This increase in power generation can impair efforts to contain climate change. The transformation of cooling efficiencies in India is a necessity, which will allow for increased productivity, positive health outcomes, and accelerated economic development without warming our planet and straining our grids. Although the government of India released an India Cooling Action Plan that aims at reducing energy demand by up to 40% by 2037-38, the market is not moving fast enough to provide solutions at scale leaving decarbonizing cooling in India as a huge market waiting to be explored.

As the searing summer becomes a cause for concern for the Election Commission of India in ensuring a congenial environment for the over 970 million voters to come out and cast their vote in the general elections in April and June, the effect of climate change can be seen on the tea gardens in Bengal as changing weather patterns upset the economics of the industry. Scientists say climate change is to blame for uneven rainfall that is cutting yields and lifting costs, and the scanty rainfall and rising temperatures have created ideal conditions for pests and tea mosquitos to infest the light green tea shoots just before they are ready to be plucked for processing.

As if all this wasn’t serious enough, we are warned by Clayton Page Aldern in his book The Weight of Nature: How a Changing Climate Changes Our Brains that warmer temperatures tend to make us irritable, less efficient, more cruel, depressed and dumb, and that climate change causes amnesia. He adds: “Climate change is inside us, and is spreading.” Should the world not heed the apocalyptic exhortation that: “It wasn’t just that a warmer world would hurt us. It was that a warmer world would make us hurt one another?”

It is to time to help, not hurt.

Ashok Lavasa is a former finance secretary of India and vice-president of private sector and public-private partnership at the Asian Development Bank.

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