Compared to the 2G scam, the amount of this is probably nothing; but this has graver significance. A new report tells us that the subsidy on diesel has been aggressively exploited by the telecom sector, resulting in an annual loss of around Rs 2600 crore to the state exchequer.
The Greenpeace report, Dirty Talking – A case for telecom to shift from diesel to renewable builds, on the previous industry and government research which show that at current growth rates, the sector would require 26 billion KWh of electricity and 3 billion litres of diesel by 2012, contributing to a much larger carbon footprint than previously estimated.
A subsidy of Rs 7-11 per litre on diesel to artificially reduces the fuel cost by some 21 per cent, allowing it to be sold at a lower price primarily for the transport of essential goods, public transport and agriculture. Due to the absence of a dual or differential pricing for industry, the telecom sector aggressively exploited as sector consumption of diesel grew to 3 billion litres by 2010-11.
In 2008, according to the Ministry of New and Renewable Energy (MNRE), the telecom sector consumed 2 billion litres of diesel annually for running mobile towers which grew to 3 billion litres in 2010-11.
This is where the crime lies. Diesel subsidies are meant only for those who need it; certainly not for cash-rich telecom companies. While industry leaders never mince words when they speak of subsidies to the agricultural sector, it is nothing short of a crime when telecom companies make the best of the subsidy by proxy.
One might remember Union Minister for Environment and Forests Jairam Ramesh's outburst against SUV owners in December last. “We introduced the diesel subsidy for a certain economic purpose but have ended up with a wholly different purpose. Those who want to use diesel cars must pay full market price for the fuel. Why should they get subsidised fuel meant for farmers.” Industry leaders, however, forced home to beat a retreat.
Among key findings of the report:
- The telecom sector in India emitted over 5.6m tonnes of CO2 in 2008 on as a result of diesel use. Emissions have since risen, and are likely to increase significantly with the sector’s predicted growth over the next few years.
- A shift in power sourcing to renewable technologies, such as solar photovoltaic, will result in a close to 300 per cent reduction in total costs (CAPEX + OPEX) for telecom operators, in comparison to a diesel generator (DG) based tower over ten years.
- Failure of the industry in disclosing carbon emissions and committing to reduction of emissions in a public and transparent manner on a consistent basis. Major telecom companies within the sector are guilty of this.
- Similarly, telecom operators have yet to shift the sourcing of their power requirements to renewable sources at scales of significance. The investment required to power the entire network towers in the country by renewable is approximately Rs 151000 crore, which is more economically feasible than diesel based network towers in the longer run.
"With growth, the sector’s appetite for energy will increase, making it a significant source of Greenhouse gas (GHG) emissions unless the industry adopts and advocates renewable energy use and backs laws to cut global warming," according to Mrinmoy Chattaraj, Climate and Energy campaigner, Greenpeace India and co-author of the report.
Despite the clear benefits of shifting to renewable sources of energy, the sector has been reluctant to make this transition in a substantive way. "The telecom sector is well positioned to transit to a low-carbon growth trajectory. They must use their influence to promote policies that will allow them to grow responsibly without helping to fuel climate change,” says Chattaraj.
The report, however, also shows how the sector can become a transformative force by adopting renewable energy for their business operations and advocating economy wide climate and energy solutions. It builds on the Telecom Regulatory authority of India (TRAI)'s recent approach paper on Green telecommunication which stress on need to take proactive steps in disclosure of carbon emission and setting of target for clean energy purchase for mobile towers particularly in rural off-grid area where most of telecommunication expansion happening.
The telecom sector spends Rs 126 billion annually on diesel fuel. If a subsidy of 21 per cent on diesel fuel is removed for the sector, the cost of diesel fuel for it would be Rs 150 billion annually. On the other side, the cost to solarise entire network towers with initial expenditure and no or marginal operational expenditure is equivalent to the annual diesel cost for the next 10 years, says Greenpeace.
Greenpeace has already launched a campaign urging industry leader Airtel to switch over to solar-powered towers. Airtel, so far, has not responded.
And the government keeps turning a blind eye to a situation where the poor Peters are robbed to feed the stinking rich Pauls.
