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Image Credits: McKinsey
India produced a record high green energy output in May with the share of power generated from renewable sources rising from 10.2% to 14.1%. This comes in the wake of the recent power crisis in April which was one of the worst in the past 6 years. The increase in the share of renewable energy directly comes from a decrease in the share of coal in power generation from 76.8% to 72.4%.
Image Credits: NITI Aayog and Rocky Mountain Institute
This increased share of renewable energy in India’s power generation capacity is in fact just a very small peek into the undergoing transition of the Indian economy. India last year announced its commitment to reach net-zero emissions by 2070 and meet 50% of its electricity requirements from renewable energy sources by 2030. A transition in India to cleaner energy could be monumental for the entire world as not only would it lay out a blueprint for the developing economies to follow in order to ensure sustainable low-carbon growth, but it would also mean that the CO2 emissions of the world’s third-largest emitter would fall significantly. Just to get a clear picture of what this means, if India is able to achieve its target of installing 500 gigawatts of renewable energy capacity by 2030, it would mean that the emissions intensity of its economy would be reduced by 45%, thus reducing a billion tonnes of CO2. In fact, India is well on its way to achieve these targets with renewable electricity growing at a faster rate in India than in any other major economy, with solar and wind energy leading this growth. India has overachieved its target of meeting 40% of its power capacity from non-fossil fuels almost 9 years ahead of schedule. Considering the fact that electricity is India’s largest greenhouse gas-emitting sector, accounting for 34 percent of total emissions (as of 2016–2017), this achievement is very consequential.
Image Credits: NITI Aayog and Rocky Mountain Institute
Further, India is also making a transition in the transportation sector, which accounts for 14% of its greenhouse emissions. It has launched the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme to support the adoption of 7,000 electric buses, 5 lakh electric three-wheelers, 55,000 electric passenger cars, and 10 lakh electric two-wheelers. The government has also created a supportive policy environment in the freight segment through Make in India, Digital India and the Logistics Efficiency Enhancement Program. India has also been actively working in reducing the cost of cleaner sources of energy, a prime example of which is the Unnat Jyoti by Affordable LEDs for All (UJALA) program which has decreased the unit cost of LED bulbs by over 75 percent in 18 months. To further this argument, consider the fact that solar and wind have become the lowest-cost electricity sources in India, even without subsidy. This implies that decarbonization and cost optimization no longer have to be mutually exclusive. In March 2019, India announced The National Mission on Transformative Mobility and Battery Storage which plans to establish a few gigawatt-scale, export-competitive integrated batteries and cell-manufacturing plants in India. This has the potential to position India for global leadership in energy storage technology and manufacturing and enhance energy system resilience as well as support greater energy security.
Image Credits: NITI Aayog and Rocky Mountain Institute
A transition to cleaner energy is a huge economic opportunity for the country to become a global leader in green hydrogen and renewable batteries which could create a market worth up to $80 billion in India by 2030. That being said, the path to a greener economy is not at all easy or cheap. The IEA estimates that on average $160 billion per year is needed across India’s energy economy between now and 2030, which is three times today’s investment levels.
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BY PRANAV ANAND
TEAM GEOSTRATA
anand.pranav20@gmail.com