Development Watch – Week #1 December ’23
Development News
HUL explores partnerships for Net Zero Commitments
Hindustan Unilever Limited joins forces with Brookfield to establish a 45 MW solar enery park in Rajasthan. This is a move aligning with HUL’s net zero energy. HUL’s board greenlights an equity investment in a Brookfield owned Special Purpose Vehicle (SPV). The SPV is formed under the government’s Group Captive Open Access Renewable Energy Scheme. This would foster renewable energy under India’s captive renewable energy scheme. Aligned with India’s COP26 pledge, the project aids HUL’s emission reduction goals. It also expands to suppliers, contributing to environmental sustainability. The partnership aims to supply green energy to HUL and its suppliers. This supoprts the decarbonization objectives in India.
Fossil fuels leave COP28 countries divided
As the first week of COP28 draws to a close in Dubai, the issue of energy transition is dominating the talks. Fossil fuels, the principal driver of human-induced climate change, is the main fault-line. There is broad acceptance on increasing renewable energy capacity to underwrite the transition. But differences exist on detailing out the transition. There is also a growing demand for the phase out of all fossil fuels. This would include oil and gas as well. Unlike in Sharm-el-Shaikh, where India initiated the call for phasing out of fossil fuels, it has been silnet in Dubai. The UAE presidency has described the phase out of all fossil fuels as “inevitable”. But while it has been clearer about phasing out coal.
Electric vehicles accelerating the end of the oil age
There are several grievances about the slow pace of reducing consumption of fossil fuels to fight climate change at COP28. However, there is a growing fleet of electric vehicles worldwide that is already making a surprisingly big dent in demand. The Paris-based International Energy Agency (IEA), a group of 29 industrialized nations expects world oil consumption to hit its peak at the end of 2030 at 103 million barrels per day. This takes into account regular adjustments from 2017 forecast of a nearly 105 million barrels per day peak in 2040. Transportation is responsible for about 60% of world’s oil demand, with the US alone accounting for around 10%. Global EV sales now make up 13% of all vehicle sales and are likely to rise to 40-45% by 2030.
India’s construction sector scores equally with housing demand
The construction sector grew at 13.3% in July-September from last year, up from 7.9% in the previous quarter and its best performance in 5 quarters. This is as per GDP data released. Builders are also bullish on long-term with many saying the boom could last two years and some are even more optimistic. The long-awaited boom, which has created millions of jobs comes after about 6 years of debt and pandemic-induced downturn before the construction sector began to improve last year, and hitting its stride this year. It has been driven by rising incomes for many Indians, a severe housing shortage in big cities and strong population growth. The world’s most populous nation had an urban housing shortage of around 19 million units last year. This is expected to double by 2030, as per government estimates.
Railway’s Kavach Tech can be exported in 5 years
According to the Railways Minister, two multinational companies, Kyosan and Siemens, which have been developing Kavach prototypes, will likely join the race soon. Kavach will turn out to be a very large project for the railways. In 2024, we will be install Kavach in 2,500 km route, and from 2025 onwards, we will be deploying it in 5,000 km every year till we cover our entire rail network of 68,000 km. He said large electronics and telecom equipment manufacturers have shown willingness to manufacture Kavach in India. This will boost the overall capacity of the industry. It is effective, easy to implement and less costly. It was first piloted on a passenger train in 2016. It provides protection to trains against signal passing, excessive speed, and collissions.
India to be most exciting aviation market
India is expected to be the most exciting global aviation market due to investments made by Indian government on airport infrastructure. The International Air Transport Association (IATA) said in its recent announcement. IATA, which counts over 300 airlines, predicts that revenues for airlines will grow in 2024 due to continued growth in post-pandemic travel. The airline sector returned to profitability in 2023, with net profit expected at $23.3 billion on a 2.6% margin. The airline industry’s operating profit is expected to touch USD 49.3 billion in 2024 from $40.7 billion this year. In 2024, the total revenue is estimated to grow 7.6% to $964 billion compared to 2023.
Air India moves computational workload to cloud
Air India has shut down its two data centres and migrated its computational workload to tge cloud. This is helping it save nearly $1 million annually. The move, managed by Air India’s representatives in Silicon Valley, Gurgaon and Kochi, migrated from mainframes, servers, data and equipment. The closed data centres were once used for innovations and automations across commercial and financial functions. The airline has now adopted a strategic mix of Software-As-A-Service, Platform-As-a-Service and Infrastructure-As-A-Service methodologies.
Shipbuilding orders worth 6,800 Cr received in 4 years
Domestic shipyards have received orders worth Rs. 6,800 Crores in the last 4 years. This oder has been placed for 88 vessels. they have been made possible because of the Shipbuilding Finacnicla Assistance Policy (SBFAP). India’s 31 shipyards have delivered 69 vessels worth Rs. 1,145Cores to domestic and international ship owners during this period. The scheme offers financial assistance to Indian shipyards for shipbuilding contracts signed between April 1, 2016, and March 31, 2026 with rate of financal assistance starting from 20% in 2016 and decreasing to 11% in 2026. The scheme was already supporting LNG and LPG carrying vessels. Chemical tankers, floating or submersible drilling or production platforms were also getting subsidies.
Over 70% of rural households have tap water connection
As on November 29, 2023, out of 19.24 crore rural households in the country, around 13.69 crore households have tap water supply in their homes. This accounts for about 71%. The government’s flagship initiative Jal Shakti Mission, aims at providing safe and adequate drinking water through individual tap connections to all households in rural India by 2024. 9 states and UTs – Goa, Gujarat, Haryana, Himachal Pradesh, Punjab and Telangana, Andaman and Nicobar Islands, Dadra Nagar Haveli and Daman Diu and Puducherry have reported that they had provided tap water connection to all rural households as on September 30. At the time of announcement of Jal Jeevan Misison on August 15, 2019, only 3.23 Crores or 17% rural households were reported to have tap water connections.