Energy: India shovels coal out of the way

Every year at the UN Climate Change conference, there’s a star. At November’s COP21 summit in Paris, India emerged a key player, giving credence to its reconciliation of the seemingly conflicting demands of protecting the environment and reaching its development goals.

Being a primary leader of G77, India was always going to have the attention of this 134-strong group of developing nations.

“At the COP21 summit, India had the huge opportunity to positively impact climate change, while at the same time taking into account the huge cost of development and adaptation,” says Leena Srivastava, Vice-Chancellor of the Energy and Resources Institute of India and member of the advisory panel of the International Energy Agency’s (IEA) World Energy Outlook report.

“It did a good job in elucidating the challenge of balancing its need for growth and commitment on renewable energy, which is extremely ambitious by any measure,” she tells GN Focus.

The stakes could hardly be higher for India, and in effect the world. Poised to become the world’s most populous nation (probably by 2022) and the biggest economy (possibly by 2048), the energy India chooses to power itself on its way is bound to resonate around the world. Due to its sheer size, the country’s importance in the global economy can’t be negated. Yet it also has staggering rates of poverty and trails behind other emerging economies in human development indices. It is also one of the most vulnerable countries to climate change, recently suffering a litany of natural calamities, while battling an alarming decline in air quality in several cities.

Tough deal

According to IEA’s recent India Energy Outlook report, the country will be responsible for the bulk — 25 per cent — of the rise in global energy demand between now and 2040. An additional 315 million people will live in cities by then, an increase likely to accelerate the switch to modern fuels. However, it will be accompanied by more vehicles and appliances and greater demand for construction. Although the Smart Cities programme emphasises integrated planning and the provision of urban services, its success depends on various branches and levels of government. Nonetheless, in the next two decades, India will account for an anticipated 66 per cent increase in oil demand.

Prior to the Paris talks, India pledged in the form of its Intended Nationally Determined Contribution to reduce its carbon emission intensity and harness 40 per cent of its energy from non-fossil fuels by 2030. Should it be successful, it will become one of the largest green energy producers in the world.

No nation has ever expanded its renewable energy infrastructure at the speed India envisions, yet the carbon emission of the world’s third-biggest greenhouse gas emitter will continue to grow as it strives to meets its massive developmental challenges.

The country has repeatedly held it would not accept constraints on its development objectives of building new cities and bringing electricity to more than 300 million people. India will become the world’s largest coal importer within the next five years while ramping up domestic production; the country plans to more than double coal output to an annual 1.5 billion tonnes by the end of this decade. To generate electricity, it will build 455 new coal-fired electric power plants.

No easy task

India’s challenge is to enable economic growth and social upliftment while keeping carbon emissions in check. To this end, “India must invest in more renewables — solar or biomass or offshore wind,” says Sunita Narain, Director-General of the Centre for Science and Environment, a top global environmental think tank based in New Delhi.

“But, all this put together will not substantially reduce its dependence on coal, because it already faces the challenge to provide affordable power to a huge number of people,” Narain, who was among the Indian delegation to COP21, tells GN Focus. “The tough part is what begins now for the future. In all high-polluting sectors, technology options for emission reduction will be stagnant after 2020. It will be difficult for India to reduce emissions without impacting growth once it crosses the present emission efficiency technology threshold.”

India’s goal of having 175GW of renewable energy by 2022, with nearly 12GW to be installed by 2016, is ambitious and fraught with difficulties. Of the target capacity, 100GW would be from solar power, 60GW from wind, 10GW from biomass and 5GW from small hydropower, according to the Union Ministry of New and Renewable Energy.

“In order to achieve the proposed capacity of 100GW target by 2022, the overall investment required would be around Rs6 trillion (about Dh327.8 billion) at the rate of Rs60 million per MW at the present cost,” Power Minister Piyush Goyal said in reply to a question regarding the solar energy target in Parliament’s Upper House.

Who’s going to chip in?

But can this happen without significant assistance from developed nations. The US committed to support India’s efforts in renewables last year with a $4-billion (about Dh14.6 billion) deal. India has also signed an agreement with Germany to expand cooperation in solar energy. As part of this deal, Germany would provide concessional loans in the range of €1 billion (about Dh4 billion) over the next five years.

Following the recent India-Japan Strategic Energy Dialogue, Goyal said Japanese financial institutions are interested in investing in India. “The cooperation in the energy sector should be such that Japanese technology and capital can be dovetailed with Indian high-skilled human resources to create partnerships not only for mutual benefit but also to benefit the world.”

So what does India’s stance at the landmark Paris Agreement, adopted by 195 countries on December 12, mean for other developing nations?

“India embodies the entire spectrum of development stages,” says Srivastava. “What it does to meet its ambitious renewable energy target and reduce its energy intensity will throw forward several innovations in both technology and business model that would be particularly relevant to other developing countries.”

By retaining the common but differentiated responsibility principle and focusing on equity and justice, India helped the Small Island Developing States and Least Developing Countries in securing greater access to finance and technology.

“Most importantly, in facilitating an agreement, it has paved the way for more stringent commitments and a more secure planet in the medium to long term,” adds Srivastava.