India is home to about one-sixth of mankind. Though an ancient civilisation, it is a young nation with ambitious development goals. And energy is at the heart of this development. India is the third-largest consumer and importer of petroleum products, with nearly 1.4 billion barrels of annual imports. India’s energy needs matter not only to the country but also affect the entire world. It is assumed that a major share of the additional global energy demand in the next two to three decades will come from India.
Energy and development
With access to clean energy being a major Sustainable Development Goal (SDG), India has recently completed the mammoth task of taking electricity to all its households in what has been described by the International Energy Agency (IEA) as a “historically unprecedented achievement”, bettering the lives of over 500 million people in about five years. Now, the country is moving swiftly to providing clean cooking gas, cylinders, and stoves, to rural households that have been traditionally using biomass for cooking. The programme, Pradhan Mantri Ujjwala Yojana (PMUY), was launched in 2016 and 290 million households have already received connections and 100 million are slotted to be covered in the next two years, bringing the programme to near completion.
Renewable energy goals
However, while pursuing development, India is also aggressively pursuing the transition away from dependency on fossil fuels. India joined the Paris Agreement in 2016 and made ambitious Nationally Determined Commitments (NDC), including achieving 40 per cent Renewable Energy (RE) capacity by 2030, more than what many experts, then thought, would be feasible. However, India is already on its way to achieving the goal. Indian Prime Minister Narendra Modi recently announced that India has already installed 100 GW of renewable energy. He added that India is the only country among G20 nations that is progressing rapidly to meet its climate goals. “Today, India is the only country in the group of G20 countries, which is moving fast towards achieving its climate goals. India has set a target of 450 GW of renewable energy by the end of this decade – 450 GW by 2030. Of this, the target of 100 GW has been achieved by India ahead of schedule,” PM Modi said. Under the Paris Agreement, India has three quantifiable nationally determined contributions (NDCs), which include lowering the emissions intensity of its GDP by 33-35 per cent compared to 2005 levels by 2030; increasing total cumulative electricity generation from fossil free energy sources to 40 per cent by 2030; creating additional carbon sink of 2.5 to 3 billion tons through additional forest and tree cover.
Transparent and proactive policies
With a transparent, investor-friendly policy, India has been achieving its remarkable RE capacity growth through private investment in a competitive industry structure. As a result, it has also been getting the full benefit of declining costs of RE power globally. India now has the world’s fifth-largest capacity in solar as well as wind power. A report by the IEA says, “The rapid expansion of solar power combined with smart policy-making are transforming India’s electricity sector, enabling it to provide clean, affordable and reliable power to a growing number of households and businesses.” India has been supporting the growth of the Electric Vehicle (EV) market through tax breaks. Public charging stations are being installed across the country, and as these vehicles are cheaper to run on a per km-life cycle cost basis, the market for these is expected to grow rapidly in this decade. Fortunately, India has invested well in power generating capacity and there is sufficient spare capacity to take care of the surge in electricity demand that may come with EVs gaining market share. Though India has only modest hydrocarbon reserves, and thus, has been dependent on imports, it has sought energy security in traditional ways of investing overseas as well as entering into long-term contracts, especially for gas.
India is promoting investment in the production of solar power equipment as well as batteries. It is offering incentives under the Production Lined Incentive (PLI) scheme for the production of such equipment. India has been taking major initiatives towards forging international partnerships for the pursuit of the common goal of accelerating the transition towards clean energy and away from fossil fuels. India led the formation of the International Solar Alliance, which it hosts. The One Sun One World One Grid is a pioneering new initiative that was announced on August 15, 2020, by Prime Minister Modi. It seeks to extend grid connectivity across national boundaries for the optimal benefit of all.
There is the promise of a new Hydrogen Economy, which may make the complete transition away from fossil fuels easier. Hydrogen can transform India to an energy-rich country and can even make it a net exporter of energy. Green hydrogen can be made from water using renewable energy and water is freely available in abundance. It is versatile, can be stored and transported across long distances, and can be used to generate electricity. Cars, trucks, buses and trains can be run using hydrogen fuel cells. It can replace the use of fossil fuels in steel, cement and other hard-to-abate manufacturing sectors. India is launching a National Hydrogen Mission and as, an early mover, India would like to be in the forefront globally. In his Independence Day speech this year, Prime Minister Narendra Modi announced the Mission Hydrogen initiative. He outlined a vision of India becoming a global leader and enabling a substantial domestic hydrogen economy. India aims to achieve the twin objectives of rapid economic growth and a transition away from fossil fuels with increasing energy security. While there are challenges, but India is progressing rapidly to achieve this target so that the world can align climate action with inclusive and resilient economic development.