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India's Energy Transition and Innovation Collaboration
The global coal power generation nearly doubled during 2005–20, fuelled by the increasing demand for power from developed and developing economies. China, India, the US and Japan are the world’s largest coal power generating and consuming countries, accounting for a share of about 75% in the global total. There are about 8,500 coal-based power plants worldwide with an installed capacity of more than 2,000 Gigawatts (GW). With increasing greenhouse gases and coal power plants contributing to about one-fifth of these emissions, the world has started turning to renewable and sustainable power generation solutions.
India, with a large population and growing economy is the fifth most polluted country in the world. Coal and traditional power generation account for a large share in this pollution. The country mainly relies on fossil-fuel-based power generation, and more than 59% of its total installed capacity comes from coal, lignite, gas and diesel sources. The total installed capacity of India is 400 GW.
Share of power sources in India
Source: Central Electricity Authority
India’s energy transition started in the early 1980s when it set up a dedicated governing body for non-conventional energy matters, called the Ministry of New and Renewable Energy (MNRE), the first country to do so. In 1986, the country set up its first wind power plants in Maharashtra, Gujarat and Tamil Nadu, reaching total wind power installed capacity of about 13 GW by 2010. In 2009, the country set up its first solar power plant in Punjab with a capacity of two megawatts (MW). Since then, India has been working aggressively toward increasing its dependency on renewable and non-emission energy.
Growth of renewable energy in India
As a step toward growth, India started allowing private power generation from 2003. This enabled private investors to set up power plants in the country, making it a popular energy investment destination. The country eased the norms for foreign investment in power and renewable energy. This led to growth in the participation of global players in Indian non-conventional energy projects and large-scale foreign direct investment (FDI) inflow.
Growth of wind energy in India
Until 2000, India had a cumulative wind power generation capacity of 1.17 GW. Since then, renewable energy in India has grown rapidly. The total wind power capacity in the country increased at a CAGR of 17.5% to 40.4 GW in March 2022 from that in 2000.
India’s wind power growth (GW)
Source: MNRE, Ministry of Power
Growth of solar energy in India
India introduced several schemes to develop solar power and encourages investment in ultra-mega solar and renewable projects, hybrid power projects, government tenders and procurement orders through joint ventures and partnerships. This allowed small and large-scale solar players in the world to participate in the country’s growing power industry.
Since 2016, India’s solar power installed capacity has been increasing rapidly, with the country almost doubling its capacity every year. The total solar capacity increased from 500 MW in 2011 to about 6.8 GW in 2016. In 2019, this number increased more than four times to 28.2 GW. As of March 2022, India’s total solar power installed capacity stood at 54 GW, placing it among the top five global players. In the last seven years, the country witnessed a whopping CAGR of 41% in solar installations.
India’s solar power growth (GW)
Source: MNRE, Ministry of Power
Similar to wind and solar, India emphasizes its dependency on non-fossil fuel energy with many projects and growth in the biomass, cogen, waste to energy and hydropower industries.
India’s innovative collaborations
India has always focused on international collaborations and increasing partnerships with neighboring countries. The country has set up policies and incentives to ensure ease of doing business for independent power producers (IPP) and private players around the world.
In January 2022, India’s MNRE signed a partnership agreement with the International Renewable Energy Agency (IRENA) to strengthen its collaboration for renewable energy development in the country. Under this partnership, both sides will facilitate knowledge sharing and support the country’s efforts to advance cost-effective decarbonization by developing domestic green hydrogen. This will help India enable cost-effective green hydrogen production, storage, distribution and innovative technologies from IRENA.
India similarly partnered with the US to address climate change issues and support sustainability. The partnership is more than a decade old, with the two countries collaborating on natural gas, renewable energy, nuclear energy, clean energy technologies, smart grids and research on non-conventional sources of power. The countries have set up strategic clean energy partnership pillars as part of collaborative actions and recently added a fifth pillar to work together on emerging fuels. India also collaborated with several other countries such as the EU, Italy, ASEAN countries and many organisations such as International Energy Agency (IEA). Examples include British International Investment’s US$ 89 million investment plan towards India’s clean energy, the UAE’s plan to invest and collaborate and plans of several US-based solar companies to invest in Indian power companies.
India’s contribution to clean energy
India is one of the largest energy consumers and the third-largest renewable energy producer in the world. To strengthen its energy transition, the government implemented several policies and schemes to encourage manufacturing and research in renewable energy. In the recent Budget 2022–23, India allocated Rs. 19,500 crore (US$ 2.61 billion) for domestic solar cells and module manufacturing. Similarly, Rs. 1,050 crore (US$ 141 million) was allocated to the wind power sector.
The production-linked incentive (PLI) schemes will support Indian manufacturers in setting up integrated manufacturing units of high-efficiency solar modules. These initiatives are expected to boost production and export of renewable energy equipment in India.
India’s energy transition targets and the road ahead
At the COP-26 summit in November 2021, India pledged to achieve net-zero carbon emission by 2070. This involves reducing the transport, industrial and power plant emissions in the country. As India is considerably dependent on fossil-fuel based power generation, it plans to switch to non-fossil fuel in the near future.
As per a resolution passed during the UN climate change summit, India hopes to achieve an installed non-fossil fuel electricity capacity of 500 GW by 2030. The country is also considering halting operations at the ongoing coal-based power plants. By reducing the economy’s carbon intensity to less than 45%, India plans to decrease its carbon emission by 1 billion tonnes.
In August 2021, as part of the National Solar Mission, the centre set a target of achieving 300 GW of solar energy in India by 2030. With the development plans and industry growth, solar is expected to be the biggest contributor to the energy needs of India in the future. Given India’s focus on net-zero carbon emissions and innovative partnerships with international organisations and countries, the steps taken towards energy transition should lead to a greener future for the country.