21 April 2023

 DAILY CURRENT AFFAIRS ANALYSIS

 1 – Green Hydrogen Mission: GS II – Government Policies and Interventions

What is the Green Hydrogen Policy?

• According to the strategy, the government will create manufacturing zones for production, provide access to the ISTS (Inter-State Transmission System) priority, and offer free transmission for 25 years if the production facility is operational by June 2025.
• As a result, it won’t be necessary for a manufacturer of green hydrogen to pay any interstate transmission costs in order to construct a solar power plant in Rajasthan that will send clean energy to a green hydrogen factory in Assam.
• Additionally, producers would be allowed to build bunkers near ports to store green ammonia for export transportation.
• Renewable energy (RE) capacity can be installed anywhere by manufacturers of green hydrogen and ammonia, either directly or through another developer. They can also purchase RE through the power exchange.
• It allows producers the choice to bank any extra renewable energy they create with discoms (power distribution companies) and use it as necessary for up to 30 days.
• What is the significance of the policy?
• According to Indian Oil Corp. (IOC), the largest oil refiner in India, GHP activities are anticipated to reduce the cost of creating green hydrogen by 40–50%.
• A nation’s security of supply for renewable energy depends on fuels like green hydrogen and green ammonia.
• As a disruptive feedstock, green hydrogen will be a key component in India’s move away from coal and oil. By 2070, India has already made a commitment to having net-zero carbon emissions.
• The GHP creates a solid base for the development of a competitive green hydrogen market in India.

What problems do these solutions present?

• Transmitter payments: A 70 percent electrolyser efficiency results in a production of 1 kilogramme of green hydrogen using about 50 kWh of electricity.
• Even though India has some of the lowest average costs in the world for producing renewable energy, transferring power between the places where it is produced and where it is used comes with a number of costs.
• Less Cost-Effective Than Green Hydrogen: The cost of production for green hydrogen is based on the landed cost of power, which can be anywhere from $3.70 and $7.14 per kWh in a remotely located renewable energy plant.
• The cost of manufacturing green hydrogen will be approximately $500 per kg at this rate, which is nearly 3.5 times the cost of producing grey hydrogen.
• Therefore, the landing cost of RE from a remote source must be at least halved in order to make green hydrogen competitive with grey hydrogen.
• States’ reluctance to relinquish their distribution monopolies is reflected in the hesitation of many public energy utilities. States with a lot of real estate either stop allowing RE banking or impose regulations to curtail this practise.
• Gujarat only allows solar energy banking during the hours of 7am and 6pm and levies a price of 1.5 per unit for “high-tension” clientele.
• Rajasthan allows for up to 25% of RE generation and settlement to be banked annually, but it also levies one of the highest fees in India: 10%.
• Tamil Nadu and Andhra Pradesh both forbid RE banking.
• Additionally, most states prohibit using stored energy during periods of peak demand.
• Reduced Producer Margin: The GHP does not include any waiver of ISTS losses for green hydrogen and ammonia facilities.
• It also enables discoms to buy and distribute RE to manufacturers of green hydrogen/ammonia at procurement costs with a very small margin defined by the SERCs.
• This margin might not offer discoms a sufficient long-term incentive to source and supply RE to green hydrogen producers.
• Industries’ reluctance Industries including chemicals, fertilisers, steel, and refineries are unlikely to move to low-carbon alternatives because of the increasing costs required. These industries could be unable to change without financial incentives to reduce emissions.

Which options are available?

• Duties of state governments: The implementation of the GHP plans would require strong collaboration between the relevant SERCs and the state governments (including the allocation of land in RE parks and projected manufacturing zones).
• The GHP may not be very helpful to green hydrogen producers if the RE-rich states do not adopt the GHP’s banking requirements and uniform pricing.
• The central government’s role is to consider removing the aforementioned surcharges for open-access RE projects and capping RE-banking fees at the amount specified in the GHP in exchange for the discoms in RE-rich states agreeing to receive concessional funding to pay their debts to electricity producers.
• Demand Generation: Even if big refiners like Reliance and IOC have pledged to construct green-hydrogen production facilities, other businesses and RE developers would be hesitant to make sizable investments in the absence of demand generators.
• The GHP initiatives will enhance demand in addition to expanding the supply of green hydrogen at competitive costs.
• Promoting Industries: Hydrogen-purchase requirements or other demand-boosters are required to promote the growth of a green hydrogen ecosystem.
• To encourage fertiliser and oil refiners to develop and use green hydrogen, the Center may consider offering subsidies based on how much of it they use as feedstock.
• India would be able to achieve its goal of having net-zero emissions by 2070 thanks to this.

Source The  Hindu

2 – Purchasing Manager Index: GS III – Indian Economy

About:

• It is a survey-based indicator that asks participants about shifts in their perceptions of key business indicators from one month to the next. It acts as a barometer for recent changes in the industrial and service sectors of the economy.
• The PMI’s goal is to educate investors, analysts, and business decision-makers about the current and future business climate.
• After being calculated separately for the industrial and services sectors, a composite index is also produced.
• The PMI is an integer that ranges from 0 to 100.
• Scores above 50 suggest expansion, while scores below 50 imply contraction.
• A reading of 50 indicates no change.
• If the PMI for the previous month is higher than the PMI for the current month, the economy is said to be contracting.
• It usually makes its appearance at the start of each month. It is therefore recognised as a trustworthy leading indicator of economic activity.
• More than 40 economies around the world have their PMIs compiled by IHS Markit.
• IHS Markit is a leading global authority on data, analytics, and solutions for the crucial markets and sectors that drive economies around the world.
• IHS Markit is a component of S&P Global.
• Because official figures on manufacturing, industrial output, and Gross Domestic Product (GDP) growth are issued much later, the PMI helps people make decisions early.
• It differs from the Index of Industrial Production (IIP), a different instrument for gauging economic activity.
• IIP covers more industrial sectors than PMI does.
• However, compared to a conventional industrial production indicator, the PMI is more dynamic.

Significance of PMI:

• The PMI is one of the indicators employed globally to gauge business activity.
• It provides a reliable measure of how the economy, in general, and the manufacturing sector in particular, are doing.
• Along with academics, businesses, dealers, investors, and financial specialists keep a close eye on it as a trustworthy predictor of boom-and-bust cycles in the economy.
• The PMI is also considered a leading indicator of economic activity because it is released at the beginning of every month.
• It comes before the reported numbers for industrial production, manufacturing output, and GDP growth.
• Aids to Decision-Making: The PMI is used by central banks to determine interest rates.
• Along with the stock market, the bond and currency markets are also impacted by PMI releases.
• Improves the Appeal of the Economy
• An economy’s appeal relative to rival economies is increased by a positive PMI reading.
• In response to changes in the PMI, suppliers may adjust their prices.

Source The  Hindu

3 – Central Electricity Regulatory Commission: GS II – Statutory and Non-Statutory Bodies

About CERC:

• The CERC is a statutory organisation acting under Section 76 of the Electricity Act of 2003.

The following responsibilities are now within the Commission’s purview under the Electricity Act of 2003:

Required Activities:

• To regulate the prices producers that the government owns or has authority over charge.
• To limit the rates generating companies, as defined in clause, that are not controlled by or under the control of the Central Government, charge.
• If these power-generating companies sign a composite agreement or otherwise have a strategy for generating and trading electricity across several States.
• To regulate the transfer of power among states.
• To calculate the cost of interstate electricity transmission.
• To provide individuals permission to carry out their interstate operations as an electrical trader and transmission licensee
• Increasing the amount of information available to all parties to settle disputes about clauses involving production companies or transmission licensee.
• to charge fees in order to achieve the objectives of the Act.
• defining Grid Code while taking Grid Standards into consideration.
• to specify and uphold the standards of quality.
• Licensees offer dependability and service continuity.
• To fix the trading margin for electricity exchanged between States, if judged necessary.
• Fulfil any extra duties that the Act imposes.

Source The  Hindu

4 – Jallikattu: GS I – Indian Culture

About:

• Jallikattu is a more than 2,000-year-old tradition that honours bull owners who raise their animals for mating while also serving as a competitive sport.
• If the contestants are unsuccessful in taming the bull, the bull owner receives the reward. It is a cruel game.
• Sports: It is mainly popular in the Madurai, Tiruchirappalli, Theni, Pudukkottai, and Dindigul districts of Tamil Nadu, which is known as the “Jallikattu belt.”
• It takes place during the second week of January, during the Tamil harvest festival of Pongal.
• Importance in Tamil Culture: The farmer community uses jallikattu as a customary method of protection for their native bulls of pure ancestry.
• At a time when cattle breeding is typically an artificial process, conservationists and peasants argue that Jallikattu is a way to protect these male bulls that are otherwise used only for meat, if not for ploughing.
• Kangayam, Pulikulam, Umbalachery, Bargur, and Malai Maadu are a few of the well-known indigenous cow varieties used during Jallikattu. The owners of these rare breeds are revered by the community.
• Jallikattu legal interventions: In 2011, the Centre added bulls to the list of animals whose training and exhibition are prohibited.
• The Supreme Court banned bull-taming in 2014 in response to a petition that highlighted the 2011 warning.

Laws currently in effect regarding Jallikattu:

• The state administration has declared these activities legal, which has been challenged in court.
• In 2018, the Supreme Court referred the Jallikattu case to a Constitution Bench, which is now on hold.
• Resolution of Conflict: Whether the Jallikattu practise of Tamil Nadu may be protected as a fundamental cultural right.
• Animal rights are prohibited by Article 29 (1).
• Article 29 of the Indian Constitution provides that “Any segment of the citizens residing in the territory of India or any part thereof having a separate language, script, or culture of its own shall have the right to keep the same” (1).
• Position for Comparable Sports in Other States: A law passed in Karnataka saved the comparable sport of kambala.
• Thanks to the Supreme Court’s 2014 ban ruling, bull-taming and racing are still outlawed in all other states, including Andhra Pradesh, Punjab, and Maharashtra, with the exception of Tamil Nadu and Karnataka, where they are still organised.

Source The  Hindu