IBEF: November 17, 2020
Prime Minister Mr. Narendra Modi recently announced that India’s target is to have 450 gigawatts of renewable energy by 2030 and that India’s energy sector will be industry-friendly and environmentally conscious. Modi highlighted that India’s energy plan aims to ensure energy justice while adhering to global commitments to sustainable growth.
The recent controversial statement made by democratic presidential candidate Joe Biden about his earlier purported position of ‘banning’ fracking in the second presidential debate has raised some serious thought on the need of the hour to use natural resources and energy effectively. ‘I do rule out banning fracking,’ he said, in response to a direct question on the subject by the moderator, which illustrates what the future holds for the Democrat candidate’s US$2 trillion energy initiative.
It is interesting to note that India is already geared up to continue its efforts to fight climate change.
Despite its massive coal industry, it is moving forward with ambitious clean energy initiatives. And the political parties are supportive. What is even more surprising is that India is exceeding its commitments to the Paris Agreement.
India pledged to increase the share of power-generation capacity that doesn’t use fossil fuels to 40% by 2030. Today, generation capacity from renewable, hydroelectric and nuclear sources already reaches 38%. It also committed to reducing its carbon emissions intensity of its GDP by 33–35% by 2030 from 2005 levels. As of 2015, India has already reduced this by 21%, and the fall could be by as much as 45% by 2030. Today, India’s fossil fuel power-generation capacity is about 230 gigawatts (GW), of which 205 GW come from coal. So when, in 2015, Prime Minister Mr. Modi announced plans to build 175 GW of new renewable-energy capacity by 2022, the announcement was met with scepticism.
After all, India at the time only had renewable generating capacity of 34 GW. According to NITI Aayog, the country has already installed 89 GW of renewable power capacity, and will achieve the 175 GW target by end 2022. At the September 2019 United Nations Climate Action Summit, Mr. Modi announced a new target of 450 GW of renewable energy capacity by 2030. Motivating this goal are dire pollution, the threat of devastating impacts from climate change, and the high bill for energy imports. To this end, the PM is garnering all-round support.
India’s clean energy initiatives have the wind at their back thanks to global advances in technology — especially solar power, wind power and energy storage. These technologies are progressing exponentially and have entered a virtuous cycle. As prices for these technologies fall, demand for them rises, and as production expands, prices fall, all of which contributes to accelerating adoption. When Bell Labs built its first solar photovoltaic panel in 1954, the panel cost US$ 1,000 per watt of electrical power it could generate. By 2008, the modules used in solar arrays cost US$ 3.65 per watt. By 2018, that figure had fallen to less than 40 cents.
In India that year, solar power generation crossed an important threshold — becoming cheaper than coal by 14%. Fast-plunging costs have allowed India to increase its solar power generation capacity more than tenfold since 2015. Other renewables, too, follow this trend.
Wind power became cost-competitive with coal in 2018, and costs continue to plummet. Battery technology, once the crucial weak link in renewable energy, is rapidly approaching the point where it solves a critical problem that has held most clean energy back: solar panels only generate power when the sun shines, and windmills only turn when it is windy. Until now, the dirty secret of green power has been that every gigawatt of sometimes-on, sometimes-off renewable generating capacity has required another gigawatt of fossil-fuel power generation capacity to stand by as a backup. Batteries resolve that conundrum by storing power and releasing it when needed.
India made green history this year, breaking not one, but two, records. In January, it conducted the world’s largest tender for renewable power that no longer requires fossil fuel backup. One company, Greenko, will provide 900 megawatts (MW) of uninterrupted, unsubsidised power, using a combination of solar panels and hydroelectric storage. Another, ReNew, will supply 300 MW of steady power using solar panels and battery storage. In May, ReNew made another successful bid to provide 400 MW of solar power with battery storage. At a levelised first-year cost of Rs 2.90 (US$ 0.039) per kilowatt-hour (kWh), it will be the world’s lowest rate for uninterrupted renewable power — finally making generating and storing clean energy cheaper than burning coal. As solar panels and battery storage become cheaper, a major impediment to India’s development and prosperity will be removed. That’s something Tata Power and the Rockefeller Foundation hope to accelerate. Last November, they announced a collaborative effort to set up 10,000 ‘microgrids’ in villages by 2026, connecting more than five million households to small distribution networks of local renewable power.
With costs already among the lowest in the world, India is at the cusp of an age of truly competitive, unsubsidised clean energy. When the price of solar panels and batteries falls another 50%, as is likely during the next three years, market forces will take over, and consumers will take the clean-energy mantle from the government. And help save the planet.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.