PIB Summary- 12th September, 2023 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

One Sun One World One Grid

Context
A day-long conference on “Transnational Grid Interconnections for One Sun, One World, One Grid (OSOWOG)” was recently held in New Delhi.

One Sun One World One Grid (OSOWOG)

• The One Sun One World One Grid (OSOWOG) aims to connect energy grids across borders to facilitate a faster transition to the use of renewable energy.
• India had first proposed connecting solar energy supply across borders at the International Solar Alliance in 2018 to allow parts of the world with excess renewable power to send power to other countries.
• The proposal is aimed at addressing the issue of reliability of supply from solar power plants, which do not generate electricity after the sun has set.
• OSOWOG is also aimed at addressing the issue of high cost of energy storage.
• The new Global Green Grids Initiative One Sun One World One Grid (GGI-OSOWOG) is an evolution of the International Solar Alliance’s OSOWOG multilateral drive to foster interconnected solar energy infrastructure at a global scale.
• India, Bhutan, Bangladesh, Myanmar and Nepal already share transmission capacity for energy transfer across borders which can be expanded further and utilised for the transfer of solar power between these countries.

How would the OSOWOG work?

• This initiative aims to tap solar energy and have it travel seamlessly across borders. The initiative will work towards accelerating the making of large solar power stations and wind farms in the best locations, linked together by continental-scale grids crossing national borders.
• The sun offers a huge source of energy for mankind. All the energy humanity uses in a year is equal to the energy that reaches the earth from the sun in a single hour.
• Given that the sun never sets and that half the planet is always receiving sunlight, there is the potential to harness solar energy continuously across the globe and trade this energy across borders to ensure adequate energy supply to meet the needs of everyone on earth.
• A transnational grid would allow countries to source solar power from regions where it is daytime to meet their green energy needs even when their own installed solar capacity is not generating energy.
• This initiative will bring together an international coalition of national governments, financial organisations, and power system operators.

OSOWOG can help to

• Prevent dangerous climate change
• Meet the targets of the Paris Agreement
• Accelerate the clean energy transition
• Achieve the Sustainable Development Goals
• Stimulate green investments
• Create millions of good jobs

What are the challenges to the OSOWOG project?

• The project is seen as an Indian endeavour for world leadership but under Covid-19 uncertainties, the geopolitical implications of projects like OSOWOG are hard to decipher.
• The mechanism of cost-sharing will be challenging, given the varied priorities of participating countries depending on their socio-economic orders.
• In India, the major issue of renewable energy developers is to deal with different state governments and hence, different laws and regulations.
• The transmission of power across vast distances would require large capital investment to set up long transmission lines.
• Experts have pointed out that transmission across great distances can potentially be very expensive.
• There is a difference in voltage, frequency and specifications of the grid in most regions. Maintaining grid stability with just renewable generation would be technically difficult.

Sovereign Gold Bond Scheme

Context
The Reserve Bank of India (RBI) recently announced the issue price for the upcoming Sovereign Gold Bond (SGB) Tranche 2.

About Sovereign Gold Bond Scheme (SGB)

• The Sovereign Gold Bond Scheme was introduced in the Union Budget 2015-16 by the Union Cabinet which was chaired by PM Narendra Modi.
• It was launched to reduce the demand for physical gold and with an aim to invest a part of these physicals gold bars and coins that are purchased every year into financial savings in the form of gold bonds.
• Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.
• The Bond is issued by Reserve Bank on behalf of Government of India.
• Government introduced these bonds to help reduce India’s over dependence on gold imports.
• The move was also aimed at changing the habits of Indians from saving in physical form of gold to a paper form with Sovereign backing.
• The bonds will be restricted for sale to resident Indian entities, including individuals, Hindu Undivided Family (HUFs), trusts, universities and charitable institutions.
• The bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
• The tenor will be for a period of 8 years with exit option from the 5th year to be exercised on the interest payment dates.
• The minimum permissible investment limit will be 1 gram of gold, while the maximum limit will be 4 kg for individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March) notified by the government from time to time.
• In case of joint holding, the investment limit of 4 kg will be applied to the first applicant only.
• Bonds can be used as collateral for loans.
• The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.

Benefits of Sovereign Gold Bond

• As a low-risk investment, it is perfect for investors with low-risk appetite.
• Compared to physical gold, the cost to purchase or sell SGBs is quite low.
• The expense of buying or selling the SGB is also nominal in comparison to the physical gold.
• The gold bonds can be availed either in paper or in demat form as per the convenience of an individual.
• The gold bonds invested by the Investors can be gifted or transferred to others who are eligible under the scheme.
• They can also trade these bonds on stock exchanges subject to notifications of the Reserve Bank of India.
• These Gold bonds can be purchased through multiple payment modes such as cheques, cash, DDs or electronic transfer.