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Climate Change: Re-making of India's Energy Basket

Published: Jan 23, 2024

By Pratap Singh, Principal CIT

CLIMATE change is a difficult phenomenon affecting the entire world and humanity at large. In broad terms, it refers to long term shifts in temperature and weather patterns and connotes global warming, wiping off glaciers, severe cyclones, epidemics and forest fire etc. India is susceptible to wide range of climate change-related risks due to its various climate zones, topography, and ecosystems. With a rising population, vehicles, industries and human activities around the globe, it is going to worsen more, in decades to come. The "Global Climate Risk Index 2021" calls India the 7th most affected nation due to climate change. As per the "State of India's Environment Report 2022", India reported 280 heatwave days (the highest in 12 years) between the period 11th March - 18th May 2022. It is therefore necessary to tackle the increasing incidents of climate-induced phenomena, otherwise the world will face severe outcomes.

India is one of the world's most vulnerable countries to climate change, and analyses of granular temperature and rainfall data indicate that extreme temperature increases and rainfall deficiencies due to climate change adversely affect agriculture yields, particularly in unirrigated regions of India (MOF, 2018). As per UNEP (2017) data, India's per capita emission of 1.6 t (CO2 equivalent) was about 38% of the World average (4.4 t) and less than one-fourth of that of China (6.6 t).

The world has seen a lot of difficulties on account of rising global temperature with, glacier melting, forest fires, air pollution and a resource crunch, in different parts. Climate change exposes vulnerable communities to dangers like disasters, diseases, loss of livelihoods, crop failures, poverty and displacement, threatening loss of biodiversity and food security more severely. International pressure for urgent climate action heightened when the first legally binding international treaty, the Kyoto Protocol containing the GHG reduction targets, came into effect in 2005. Thereafter, increased emphasis was laid upon domestic policy for climate change both at the national and state government levels along with private and civil society groups (Sharma Sonali, 2023).

In the last few years we have already seen several extreme weather events, like forest fires in different parts of the globe including Australia, US and Amazon Basin; severe cyclones and floods in different countries, onset of viral diseases, decline in agricultural production and sea level changes. If this phase of climate change and global warming continues, the world will be severely affected. India, being the second most populous country, will also face dangerous implications. Therefore the Governments and NGOs are working hard to limit the expansion of climate change. India has been in forefront in controlling and limiting the adverse effects of climate change through international collaboration and climate agreements. Though about a decade ago, it was not a matter of concern, but now looking at the implications and impacts on our day-to-day lives, everyone is talking about it. According to a report by WION, if no proper steps were taken immediately, climate change would take almost 80 million lives in 80 years. India being the second most populous country, is at the tipping point of global warming-induced natural disasters and therefore need to act faster.

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 significant step 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 global consciousness for the protection of environment in the early seventies prompted Government of India (GOI) to amend the Constitution of India in 1976, to mandate that protection and improvement of natural environment is the Duty of the State (Article 48?A - Directive Principles of State Policy) and the Fundamental Duty (Article 51?A (g)) of every citizen. In 1991, the Supreme Court even made the environment a part of the Fundamental Rights of every Citizen by declaring that, "Right to live is a fundamental right under Art. 21 of the Constitution and includes the right of enjoyment of pollution free water and air for full enjoyment of life (Subhash Kumar versus State of India and Others, 1991).

The 2030 Agenda for Sustainable Development (2030 Agenda) finalized by the United Nations includes 17 Sustainable Development Goals (SDGs) and 169 associated targets to measure the progress towards achievement of the 2030 Agenda. Specifically, SDG 7 is to: 'Ensure access to affordable, reliable, sustainable, and modern energy for all.'

The World Bank has documented the inter-connections between energy and 125 out of the 169 targets related to the 17 SDGs. Therefore, 'planning for universal access to modern energy services should be an integral part of national planning efforts to achieve the SDGs'. Subsequent to the adoption of the 2030 Agenda, India ratified the Paris Agreement on 2 October 2016 and has submitted inter alia the following NDCs to the UNFCCC for the period 2021-2030.

(i) Reduce Green House Gas (GHG) emissions intensity of India's Gross Domestic Product (GDP) by 33-35% by 2030 from the 2005 level;

(ii) Enhance generation capacity of non-fossil fuel based sources to 40% of all sources by 2030 with the help of transfer of technology and low-cost international finance including from Green Climate Fund;

(iii) Create an additional carbon sink of 2.5-3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030.

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 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.

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 formidable, 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.

India's Current Climate Change Policy :- Climate change policies in India have primarily focused on supporting synergies between development and outcomes for the climate. India was one of the few countries that passed the Energy Conservation Act in 2001 which underwent an amendment in August 2022. Some changes include consumers meeting their energy needs from non-fossil sources, application of the Energy Conservation Building Code (ECBC) to office and residential buildings for loads equal to or more than 100 KW, and specification of energy consumption standards for ships and vehicles. Under the leadership of Prime Minister Narendra Modi, many initiatives have been taken, which are discussed in the following paragraphs.

International solar Alliance (ISA)- India set up ISA, a solar power development project in collaboration with France and few other countries. Launched in 2015, it's an alliance of the "sunshine countries" with an objective of efficient utilization of solar energy. The alliance was formed with the vision of reducing the dependence on non renewable sources of energy like fossil fuels. India initiated another important project- "One sun, one world, one grid" in collaboration with UK. OSOWOG is based on the vision of building and scaling inter-regional energy grids to share solar energy across the globe. It can be the solution to most of our global problems in the energy sector. Swachh Bharat mission-The all-encompassing programme emphasized cleaning India and its cities and villages by providing toilets for every household. COP26 Glasgow summit, the biggest and most important move by Indian Prime Minister Narendra Modi on behalf of India committed; i) To take India's non-fossil fuel energy capacity to 500 GW by 2030. ii) To bring down the carbon intensity of India by more than 45% by 2030 and iii) India will achieve the target of net zero carbon emissions by 2070.

India has developed its policy response through missions and programmes to reduce its climate vulnerability. On 30th June 2008, the National Action Plan on Climate Change (NAPCC) was released. It is a national strategy of 8 sub-missions to help adapt and magnify ecological sustainability in India's development path. These are National Solar Mission (NSM), National Mission for Enhanced Energy Efficiency (NMEEE), National Mission on Sustainable Habitat (NMSH), National Water Mission (NWM), National Mission for Sustaining the Himalayan Ecosystem (NMSHE), National Mission on Strategic Knowledge for Climate Change (NMSKCC), National Mission for a Green India (GIM), and National Mission for Sustainable Agriculture (NMSA).

On 3 August 2022, the Union Cabinet under the Chairmanship of the Prime Minister passed the updated Nationally Determined Contribution (NDC) for consideration by the United Nations Framework Convention on Climate Change (UNFCCC) under the Paris Agreement, to reach India's goal of net zero emissions by 2070. This was a translation of the Panchamrit (five nectar elements) - India's action plan against climate change, announced at COP 26 in Glasgow, United Kingdom.

Table: 8.1-National Goals on Climate Change

Source: PIB, Government of India, 2023

The five-fold strategy called the panchamrita and five points that aims to achieve success are:

1. India will get its non-fossil energy capacity to 500 gigawatt (GW) by 2030

2. India will meet 50 per cent of its energy requirements from renewable energy by 2030.

3. India will reduce the total projected carbon emissions by one billion tonnes from now onwards till 2030.

4. By 2030, India will reduce the carbon intensity of its economy by less than 45 per cent.

5. By the year 2070, India will achieve the target of Net Zero.

Challenges in Climate Policy:-

However, even as it sets its sights on net zero, India faces a number of pressing near-term challenges. The sharp increase in commodity prices has made energy less affordable, and tight markets are increasing energy security risks for the world's third largest energy importer. India already has a numerous policy measures in place that - if fully implemented - could address some of these challenges by accelerating the shift to cleaner and more efficient technologies. India is also laying the groundwork to scale up important emerging technologies such as green hydrogen, battery storage, and low-carbon steel, cement and fertilisers. A transition to clean energy is also a huge economic opportunity. India is particularly well placed to become a global leader in renewable batteries and green hydrogen, with right policy frame work. These and other low-carbon technologies could create a market worth up to $80 billion in India by 2030. Support from the international community is essential to help shift India's development onto a low-carbon path. To reach net zero emissions by 2070, the IEA estimates that $160 billion per year is needed, on average, across India's energy economy between now and 2030. That's three times today's investment levels. Therefore, access to low cost long term capital is key to achieve net zero.

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.

Renewable Energy in India

With a population of 1.3 billion, India has a massive demand for energy to fuel its rapidly growing economy. From a power deficit nation at the time of Independence, the efforts to make India energy-independent have continued for over seven decades. Today, we are a power surplus nation with a total installed electricity capacity of over Four lakh MW.

Keeping in mind the sustainable development goals, India's power generation mix is rapidly shifting towards a more significant share of renewable energy. Today, India is the world's third largest producer of renewable energy, with 40% of its installed electricity capacity coming from non-fossil fuel sources.

Table 8.2: Renewable Energy Generation In India

As a developing nation at the time of Independence, India relied heavily on coal to meet its energy demands. However, India has always been committed to looking for more alternative energy sources for sustainable development. The beginning was made with hydropower, with major hydroelectric power projects appearing on the scene of India's energy arena. Over the years, many policy and regulatory initiatives have promoted hydropower development and facilitated investments. Today, we are 5th in the world regarding usable hydropower potential.

Nuclear Energy is another important area. India set up Bhabha Atomic Research Centre (BARC) in the 1950s to secure the country's long-term energy independence. Today, we are the only developing nation with indigenously developed, demonstrated and deployed nuclear reactors for electricity generation. This was made possible through several decades of extensive scientific research and technology development.

Work on wind energy began in India during the 1960s when the National Aeronautical Laboratory (NAL) developed windmills, primarily for supplying irrigation water. Today, we have the 4th largest wind power capacity in the world, blessed with a constant movement of wind, especially in the Southern, Western and North Western regions and are producing significant wind power.

Solar energy-based applications have benefited millions of Indians by meeting their cooking, lighting and other energy needs in an environment-friendly manner, over a period of time. Having achieved large-scale success in solar energy solutions, India has spearheaded the International Solar Alliance (ISA) which is an action-oriented, member-driven, collaborative platform for increased deployment of solar energy technologies. The membership of the ISA is open to all member-states of the United Nations, and 107 countries are signatories to the ISA Framework Agreement at present. The Alliance aims to efficiently utilise solar energy to reduce fossil fuel dependence, thereby creating a greener planet.

Biomass has also been an essential source of energy for India for ages. It is renewable, widely available, carbon-neutral and has the potential to provide significant employment in rural areas. Over 800 biomass power and bagasse/non-bagasse cogeneration projects have been installed in the country for feeding power to the grid.

Fig. 8.1: Renewable Power generation in India

Promoting Clean Energy and Climate Change:

India has progressively decoupled economic growth from greenhouse gas emissions. For example, to meet the Net Zero Emissions target by 2030, the Indian Railways alone will reduce emissions by 60 million tonnes annually. Similarly, India's massive UJALA LED bulb campaign is reducing emissions by 40 million tonnes annually. To further complement these ongoing efforts, India launched the National Hydrogen Mission in 2013 to make India the world's largest hydrogen hub. Even though it supports the second largest population in the world, India's sustained efforts have ensured that its per capita CO2 emissions are much lower than the global average. The US emits 14.7 tonnes per capita, China emits 7.6 tonnes per capita, while India's CO2 emissions amount to 1.8 tonnes per capita.

The global power sector is undergoing an accelerated transformation due to technological innovations and response to climate change protocols. At COP-21 in Paris in 2015, India committed to a 40% share of power generation from non-fossil fuel sources. We have achieved this target a decade ahead of the 2030 timeline. India has always shown its willingness in leadership to fight climate change. The country's vision is to achieve Net Zero Emissions by 2070, in addition to attaining the short-term targets which include: Increasing renewables capacity to 500 GW by 2030, meeting 50% of energy requirements from renewables, reducing cumulative emissions by one billion tonnes by 2030, and reducing emissions intensity of India's gross domestic product (GDP) by 45% by 2030.

To achieve the emission targets, and to promote sustainable development the following actions are desirable: (i) Incorporate new federal and state policies, incentives and innovative financing for capital investments estimated at $ 100 billion and more. (ii) Leverage a clearer understanding of consumer needs and behaviours to offer appropriate renewable solutions. This should be done by project developers, service providers, and investors. (iii) Promote and disseminate information on renewable energy through a dedicated e-portal and document the project information and its performance. (iv) Create collaboration between various stakeholders such as government, training centers and research agencies.

India has adopted the 2030 Agenda during the United Nations Summit held in September 2015. Energy is intimately connected with 74% of the 169 targets related to the 17 Sustainable Development Goals (SDGs) to be achieved by 2030. Subsequently, India has also submitted its Nationally Determined Contributions (NDCs) for the period 2021-2030 to the United Nations Framework Convention on Climate Change (UNFCCC). While the Government of India (GOI) has ambitious plans for enhancing the installed capacity of RE sources, 75% of its electricity is currently generated by coal-fired power plants. India is the third largest electricity generator in the World behind China and USA, but its per capita electricity consumption of 1117 kWh in 2017 was less than one-fourth that of China, and one-third of the World average. During the Financial Year 2017-18, coal, gas, hydro, nuclear, and Renewable Energy sources contributed: 75%, 4%, 10%, 3%, and 8%, respectively. While India continues to pursue its ambitious targets related to expansion of RE sources, the intermittent nature of solar and wind energy, inadequate availability of gas, and the endemic delays in constructing hydel and nuclear power plants due to issues related to land acquisition coupled with the energy security provided by CPPs based on domestic coal, together indicate that coal will continue to play an important role.

Enhancement of Carbon Sink:- As an integral part of its NDCs, GOI has committed to creating an additional carbon sink of 2.5-3 billion tons of CO2 equivalent through additional forest and tree cover by 2030. The National Forest Policy (NFP) aims for 33% forest cover in the country (MOEF and CC, 2015). As one of the enablers to achieve this goal, Parliament enacted the Compensatory Afforestation Fund Act of 2016.

Policy Recommendations: While the international community recognizes the progress made by India towards a cleaner energy mix (IEA, 2017), the following key recommendations are proposed to accelerate India's progress towards a low-carbon economy while simultaneously achieving the targets related to SDG 7 which is linked to several other SDGs. Therefore GOI must work closely with States.

Solar Power Capacity:

The Green India Mission meant to revive forests through afforestation activities has fallen short of its objectives by 30% from 2015-16 to 2020-21. Further States like West Bengal, J&K, and Himachal Pradesh have not yet become a part of this scheme.

Table:8.3: State-wise Achievement under Green India Mission

Source: Ministry of Environment, Forests and Climate Change statistics, 2023

According to the Economic Survey 2020-21, to achieve India's Nationally Determined Contribution goals, a financial resource of USD 2.5 trillion (INR 11 lakh crores) is needed and there is a huge gap. By 2020, developed nations were to provide USD 100 billion to developing countries which did not happen. Moreover, IFSCA Expert Committee on Sustainable Finance estimated that India needs investments of $10 trillion to make the carbon neutrality story a success by 2070. However, the Climate Policy Initiative (CPI) reported that India could raise only $44 billion (25% of the total target required each year).

COP-28: The COP-28 was organised at Dubai UAE Dec 1-2, 2023, where in a stock taking was done for NDCs and achievements so far and future road map will be drawn. Besides key decisions on loss and damages Fund and clean transition funding was also discussed.

Recommendations: India needs to do the following to achieve NDC and other climate goals.

1. India needs to see climate change as a risk to development. Therefore States should come forward to assume leadership in their efforts to attain the State Action Plan on Climate Change (SAPCC) which on a broader level adds to NAPCC. In this context, Chhattisgarh has started many cross-sectoral initiatives like Narva (rivers and streams), Ghurva (compost pit), Garva (livestock), and Bari (backyard farming). These along with the health department's target to achieve net zero emissions is a great exhibition of state-level climate leadership. Under such initiatives, priority areas like forest, livelihood, climate resilient agriculture, decarbonisation of transport and industry are covered.

2. The natural carbon-rich ecosystems such as forests and wetlands should be conserved and enhanced which in turn can boost agricultural productivity and sequester carbon dioxide.

3. India needs to expand its take on solar energy. Alternatives to solar ground mount projects like floating solar and offshore wind projects should be encouraged. These do not require large land areas and provide high energy yield. To advance its non-fossil fuel base India must develop a wider energy storage system. However, this heavily relies on the lithium battery supply chain which is a challenge to obtain owing to the global lithium market situation.

4. Climate investment planning can be understood in 3 aspects knowing planning capacity, identifying the needs of investment, and mobilizing it. India should learn from the experience of other countries like Jordan and and should assist project developers to get proper funding opportunities to decrease the funding gap.

5. Other steps which India needs to take include: developing sectoral investment and private sector engagement plans in support of NDC, strengthening national sector capacities to access and coordinate climate finance, increasing engagement of industry and financial decision-makers in the NDC process.

Conclusions:

The Government of India has undertaken to provide electricity to all household 24x7 by 2025, which is a very noble initiative. It is however seen that in 2023, India was the third biggest emitter of GHGs, after US and China though on per capita basis it was quite low. As per climate analysts and experts, India may not hit the peak of emissions by 2030, but instead, achieve the same bit later between 2040-2045. This trend may create hindrance for India's energy transition plans for the second half of this century. Therefore a pragmatic and far-sighted approach is necessary. Coal, a major player in India's energy basket, needs to be regulated and a shift towards green energy must be made to assist India in its renewable energy conversion goal. Forests which are carbon sinks need sustainable management from cooperative efforts of local communities and government. Financial, political, and policy leadership lies at the bottom of all the recommendations for a thriving climate change policy for India. Regional, state, national, and global involvements are the most effective keys for India to meet its aspirations of a climate resilient planet and achieve long-term sustainable growth.

As a large developing economy with over 1.4 billion people, India's climate adaptation and mitigation ambitions are not just transformational for India but for the entire planet. NITI Aayog and IEA are committed to work together to enable India to grow, industrialize and provide a better quality of life to its citizens without the need to carbonize.

[The views expressed are strictly personal.]