India over-achieves its COP 21- Paris Summit commitment

A bill seeking to mandate the use of non-fossil energy sources such as biomass, ethanol and green hydrogen was passed by Parliament in India this week.

The Rajya Sabha passed the Energy Conservation (Amendment) Bill, 2022, on Monday (12) clearing paving the way for “mandate use of non-fossil sources”, including green hydrogen, green ammonia, biomass and ethanol for energy and feedstock and establish carbon markets in the country.

Power Minister R.K. Singh termed the Bill, which was passed by the Lok Sabha in August, as futuristic and said it would give a boost to India’s efforts to go for greener sources of energy.

 The amendments also seek to promote renewable energy and the development of a domestic carbon market to battle climate change.
This bill will also help India achieve its international commitments on climate change.

It aims to introduce new concepts such as carbon trading and mandate the use of non-fossil sources to ensure faster decarbonisation of the Indian economy and help achieve sustainable development goals in line with the Paris Agreement.
The country also aims to be a leader in green hydrogen and the ministry has already drafted rules and the industry is going to invest to set up capacity for 25 million tonnes of green hydrogen capacity.

He also said the country would achieve over 50 per cent of its power generation capacity from non-fossil fuels by 2030.
Having recognized the importance of combatting climate change, India has set itself the target of becoming net-zero by 2070. Besides the overall goal for 2070, the country has also set targets for 2030 including meeting  50% of energy requirements from renewable energy, reaching a non-fossil fuel capacity of 500GW, reducing carbon emissions by 1 billion tons and reducing carbon intensity by 45%.
Key policy initiatives such as green hydrogen policy, offshore wind policy, promotion of electric vehicles, introduction of a green day-ahead market, and easing terms for open access to procure green energy, amply illustrate the Indian Government's seriousness in adopting green energy initiatives. However, despite the push, India's current energy reliance is primarily on coal and crude oil. It would take significant investments to replace these with clean energy sources.

India is projected to be among the fastest-growing economies globally. According to Central Electricity Authority (CEA) estimates, India would require 3.5 trillion units (TUs) of electricity by 2036-37 to support a 7.3% economic growth rate against 1.37 TUs in 2021-2024. The availability of reliable and competitively priced energy would be a fundamental prerequisite to ensuring high levels of economic growth for India, media reports suggested.

In order for India to steer towards its 2030 goals, General Electric (GE) and Ernst & Young Global Limited (EY) have recently launched a whitepaper, Decarbonisation of India's energy sector: Policy roadmap to achieve clean energy targets. It points out ways to decarbonize and suggests a strategic combination of renewables, gas and storage for an effective energy transition. It also recommends a combination of policies, technology innovations and finance solutions to help the sector achieve carbon reduction goals.

Achieving India's 2070 net-zero goal while also supporting strong economic growth is a challenge and there are multiple avenues to choose from. Given the variability and absence of round the clock energy in case of renewable sources such as wind and solar, these need to complemented with other sources like gas and supported by storage systems. Therefore, policy measures on decarbonisation must adhere to the parameters of reliability, affordability and energy independence.

Energy independence: India mainly relies on fossil fuel imports for its primary energy requirements, making the economy susceptible to volatility in global energy prices. The government needs to consider creating domestic capabilities across the clean energy value chain through initiatives like production-linked incentives (PLI) in products besides solar panels and advanced chemistry cell (ACC) batteries.
India is among the countries that will drive the acceleration of the extraordinary increase in the deployment of renewables over the next five years.

India’s announcement that it aims to reach net zero emissions by 2070 and to meet fifty percent of its electricity requirements from renewable energy sources by 2030 is a hugely significant moment for the global fight against climate change. India is pioneering a new model of economic development that could avoid the carbon-intensive approaches that many countries have pursued in the past – and provide a blueprint for other developing economies.

The scale of transformation in India is stunning. Its economic growth has been among the highest in the world over the past two decades, lifting of millions of people out of poverty. Every year, India adds a city the size of London to its urban population, involving vast construction of new buildings, factories and transportation networks. Coal and oil have so far served as bedrocks of India’s industrial growth and modernisation, giving a rising number of Indian people access to modern energy services. This includes adding new electricity connections for 50 million citizens each year over the past decade. 

The rapid growth in fossil energy consumption has also meant India’s annual CO2 emissions have risen to become the third highest in the world. However, India’s CO2 emissions per person put it near the bottom of the world’s emitters, and they are lower still if you consider historical emissions per person. The same is true of energy consumption: the average household in India consumes a tenth as much electricity as the average household in the United States.  

India’s sheer size and its huge scope for growth means that its energy demand is set to grow by more than that of any other country in the coming decades. In a pathway to net zero emissions by 2070, we estimate that most of the growth in energy demand this decade would already have to be met with low-carbon energy sources. It therefore makes sense that Prime Minister Narendra Modi has announced more ambitious targets for 2030, including installing 500 gigawatts of renewable energy capacity, reducing the emissions intensity of its economy by 45%, and reducing a billion tonnes of CO2. 

These targets are daunting, but the good news is that the clean energy transition in India is already well underway. It has overachieved its commitment made at COP 21- Paris Summit by already meeting 40% of its power capacity from non-fossil fuels- almost nine years ahead of its commitment and the share of solar and wind in India’s energy mix have grown phenomenally. Owing to technological developments, steady policy support and a vibrant private sector, solar power plants are cheaper to build than coal ones. Renewable electricity is growing at a faster rate in India than any other major economy, with new capacity additions on track to double by 2026. The country is also one of the world’s largest producers of modern bioenergy and has big ambitions to scale up its use across the economy. The IEA expects India to overtake Canada and China in the next few years to become the third largest ethanol market worldwide after the United States and Brazil. 

Achieving net zero is not just about reducing greenhouse gas emissions. India’s energy transition needs to benefit its citizens, and well-designed policies can limit the potential trade-offs between affordability, security and sustainability. Green hydrogen will play a major role in achieving the net zero and decarbonising the hard-to-abate sectors. India aims to become a global hub for green hydrogen production and exports. India could easily create 5 million tonne green hydrogen demand thereby replacing grey hydrogen in the refineries and fertiliser sector. This 5 million tonnes will result in abatement of 28 million tonnes of CO2. This proportion will grow as we fructify green hydrogen economy and will result in 400 million tonnes of CO2 abatement by 2050.

As a large developing economy with over 1.3 billion people, India’s climate adaptation and mitigation ambitions are not just transformational for India but for the entire planet.