Green themes of 2022

A few news headlines in recent weeks show how exciting 2022 will be for the green energy economy globally and in India. Innovation and disruption will continue to drive transition, as will changing economic and political alignments. A big part of the energy story next year will still be about solar.  

First Solar secures $500 million for India manufacturing: The US International Development Finance Corp (DFC) approved the loan to support a manufacturing facility in the southern state of Tamil Nadu with a projected annual capacity of 3.3 gigawatts. The announcement used a phrase that policymakers in developing countries have been hoping to hear more often: Alternative supply chains.

“DFC is thrilled to be in a position to support First Solar’s new venture in India, which will boost solar panel manufacturing capacity for a key ally and help mobilise the industry to take up better standards that align with US values. This transaction is another milestone in the US effort to drive alternative supply chains,” Dev Jagadesan, DFC’s acting chief executive, said in a statement.
 

Domestic manufacturing of solar panels will also receive a boost from the Indian government’s production-linked incentive scheme of Rs 4,500 crore ($600 million), which may soon see a fivefold expansion in size. “The incentives are a bonus. The imposition of basic customs duty from April 2021 on modules (40 per cent) and cells (25 per cent) is driving manufacturing activity,” said Rohit Gadre, BloombergNEF’s lead solar analyst in India. Expect to see more local manufacturing announcements in 2022.

Volkswagen’s $2 billion sustainability-linked loan: The German company’s first loan linked to sustainability goals ties the interest rate on the three-year loan to progress on European fleet-emission targets. Such loans are a fast growing subset of sustainable debt, which includes green bonds as well as social bonds. Total sustainability-linked loans have already crossed the $375- billion mark this year, according to BNEF, well over double last year’s number. More activity and innovation is expected in the green financing space next year.

Sweden’s Tesla of the sea: Candela Speed Boat, a Swedish start-up making electric boats that rely on hydrofoil technology, secured funding earlier this month. Bloomberg News reported that Candela’s first model, the C-7 sportsboat, was shipped to 32 customers around the world. The company says it now has almost 100 orders for the C-8, an 8.5-metre (28 feet) day cruiser that will go into production next year.

“Merging advanced aircraft technology with software and electronics, C-8 flies above the waves in absolute silence,” the company says on its website. Los Angeles based Arc Boat, that also aims to electrify the watercraft industry, secured funding last month. There are many more, such as X shore, competing in the same space. 

Electric vertical take-off and landing (eVTOL):  BNEF tracks investment in low-carbon aviation technology start-ups, including electric, hybrid-electric or hydrogen-powered aircraft, as well as sustainable aviation fuels (SAF). The bulk of the funding since 2011 has gone to urban air mobility (eVTOL) and SAF start-ups. France will soon start testing electric air taxis in a hub outside Paris as part of the preparations for the 2024 Summer OIympics, Bloomberg News reported. Participants include Lilium, Volocopter, Airbus, Vertical Aerospace Group and Joby Aviation. 

Hands-free driving: Mercedes-Benz got regulatory approval for its “Drive Pilot” package, to be initially used on over 13,000 kilometres of the motorway network in Germany. It allows the driver to turn away from the traffic and “focus on certain secondary activities, be it communicating with colleagues via in-car office, surfing the internet or relaxing while watching a film,“ a statement from the company said. Customers will be able to buy vehicles equipped with this functionality in the first half of 2022. Test drives for this system are under way in the US and China.

Scaling up floating solar: A 600-megawatt floating solar park on the Omkareshwar dam in Madhya Pradesh will soon be open for bidding, with land for setting up manufacturing units for floaters, grid connectivity and other basic infrastructure ready for developers. “That makes a difference to project economics,” said Deepak Ushadevi, the MD and CEO of Ciel & Terre India, a manufacturer of flotation devices. “And we are in an ultra-price-sensitive market.” If the tariffs discovered are competitive, it could trigger a floating solar boom in India, given the huge number of water bodies that can host solar. The leading developer in the country is NTPC. It is using the water reservoirs at its thermal plant sites to set up floating plants, such as in Ramagundam (100 megawatts) and Kayamkulam (92 megawatts). It is also looking at bidding for projects in the Omkareshwar Park. “We have a target of 60 gigawatts of renewables by 2032. Floating solar will be an important part of our portfolio,” Mohit Bhargava, executive director, told BNEF. 

The writer is editor – global policy for BloombergNEF.  vgombar@bloomberg.net