India’s clean energy transition is picking up pace

Carbon emissions of the world had already reached alarming levels when the Paris Accord was signed by more than hundred nations. Globally both developed and developing nations have adopted a definite agenda to lower their carbon footprint by shifting to green energy. Although India was a late entrant in the club, it has made notable progress in transitioning to clean energy with an unprecedented push from the government.

Clean energy traditionally encompasses solar and wind energy, while biofuels (both liquid and solid) is an emerging clean energy source. Clean energy is also being perceived as a big investment opportunity as corporates and nations have no choice but to transition to clean energy if they want to continue to inhabit planet earth.

In developed nations, national governments are vehemently pushing the clean energy agenda supported by favorable policies that catalyze and enable the transition. European and American countries are frontrunners in transitioning to green energy and the government policies have helped not only in mass adoption but also enabled the development of equipment ecosystem.

In fact, many of these equipment manufacturers who built their companies supported by government policies are now in a position to expand their footprint globally as their product and service demand is rising across the world.

Despite making a late start in clean energy transition, India is moving very fast towards achieving its green energy objectives. With India’s position improving in the global arena, the current Indian government was compelled to stay committed to its carbon emission targets in order to do its part in curbing pollution and fight climate change.

As per government announcements India’s aim is to produce 175 GW of renewable energy by 2022 and 450 GW by 2030. The government has also declared that the country’s power sector will be environment conscious and industry friendly.

With the geographical advantage and full thrust from both the state and central governments, India’s renewable energy sector is growing at an unparalleled pace. Union Minister RK Singh said that India’s renewable energy sector has attracted USD 64 billion foreign investment in the last four years.

Uptake of solar power in India has been notable in India and its viability for small scale use has increased its popularity even at commercial and retail levels, lowering the solar power tariffs to just INR 2/KWH. The wind energy sector is also experiencing a steady growth and capacity addition in the past decade as large corporates have shown considerable interest in order to leverage accelerated depreciation benefit.

While India’s carbon emissions have decreased as per the target levels, reducing dependence on fossil fuel still remains a big challenge. Indian government thus plans to curb dependence on coal by increasing the share of natural gas in the nation’s energy mix, from 6% to 15% by 2030. The government has made efforts to increase gas production and adding infrastructure and plans to add 6 additional terminals by 2027-28.

In a drive to increase the use of biofuels, India’s private power generating companies have been instructed to use biofuels for substituting 5% coal usage for co-firing. It is reported that NTPC has already called tenders for buying Biomass Pallets to substitute 5% of coal in its plants. Initiatives have also been started to use bioethanol in petrol by OMCs like HPCL and BPCL and many sugar manufacturers have started putting up units for making bioethanol from molasses, as it de-risks their business.

Solid biofuel bricks can be made from agriculture residue – something that India has in abundance, being an agrarian economy. It is estimated that India produces 500 million tons of Agri residue annually, of which about 200 million tons are wasted – that alone can generate INR 50,000 crore worth of business value. Hence the government is encouraging small scale farmers to make Biomass briquettes.

Overall, India’s transition to clean energy is gaining momentum progressively. It is being run on multiple fronts backed by government incentives, implementation of stringent environment rules and rolling out of several initiatives. Corporates are already seeing the benefits of transitioning to clean fuel and the government is trying to get more people involved in generation of biofuels which is also expected to give the rural masses a second income source.