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While clean power is better, unclean power is better than less power. Developing countries seem to have realised this very well. India, for example, expects to add almost 88 GW of fossil fuel-fired generation capacity by fiscal 2032 to meet increasing electricity demand, according to Power Minister Raj Kumar Singh.
About 27 GW of thermal capacity is under construction, 12 GW has been bid out and 19 GW of projects are in the process of obtaining clearances, Singh said Thursday, in a written reply to questions in Parliament.
Yes, out of the overall 464 GW of capacity addition planned by the year ending March 2032, 322 GW of capacity addition is via renewables. And this is not surprising, because India is likely entering a phase of demand-supply mismatch. It will be interesting to see the U-turn in other areas as well.
Note that we have seen EV adoption slowing already. On Dec. 14, we saw the news piece of how EV inventories in U.S. hit record highs as cars piled up on dealer lots. Need to see how things shape up in Asia and India. But certainly seems that fully green is not a near-term possibility.
U.S. consumers traded down. For much of the past year, consumers said they adapted their purchasing behaviour to stretch their dollars further. An online article read that as consumers’ economic challenges persist even with grocery inflation declining, brands and merchants alike are seeing consumers pull back on food and beverage purchasing.
Apparently, Nestlé observed in a presentation in September that consumers have been purchasing food and beverages less in the recent past. Recently, 77% of Americans surveyed said they took some kind of trade-down action in the past three months. More consumers said they used buy now, pay later services in the fourth quarter of 2023 than in the prior quarter—again, likely because it’s the holiday shopping season. This payment method was particularly popular with younger consumers (26% of Gen Zers and 28% of millennials said they used BNPL services as compared with 6% of baby boomers).
While this newsletter is all about curbs or restrictions or reduction in different aspects like consumption or clean power, India seems to be on a different path.
I end this newsletter by wishing everyone a very happy festive season, and a quote from a LinkedIn post of Trinh Nyugen, senior economist of Emerging Asia at Natixiz, a large global asset manager.
“India presents a positive mirror image of China’s debt, demographic and deflation woes. Corporates have deleveraged with a debt ratio of 54% of GDP (78% in 2012) versus China’s 165%. Indian households will also open their wallets and invest in the rise of the investment cycle in the country as they rotate out of deposits and gold into pensions and mutual funds. We are structurally bullish on India, which we think is only at the cusp of its investment bull run that will be beyond 2024 and whoever wins the general elections (Modi is a shoe-in).”
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