‘Five Years of the Paris Agreement: India’s Green Investment’

As the world completes five years of the historic Paris Climate Agreement, India has called for greater global investment in the country’s clean energy future. 

• In the five years since nearly 200 nations signed the historic Paris Climate Agreement, the world has made major progress in transitioning to clean energy.
• India, the world’s fourth largest renewable energy market, has been one of the leaders in this transition.
• India has grown its renewables capacity by 250%in just the last five years and plans to expand it by another 500% to reach 450 gigawatts by 2030.  
• However, to meet India’s ambitious climate goals a huge increase in investmentis required.  
• Today, the world’s third largest greenhouse gas emitter, India is also one of the most vulnerablecountries when it comes to the adverse impacts of climate change.
• Investing in a green economy can accelerate recovery from the public health crisis, reduce air pollution, and help avert climate disasters such as draughts, extreme heat waves, and coastal flooding already taking a toll on life and health in the country.

What are India’s goals?

• As a signatory to the Paris Climate Agreement, India is committed to increasing its share of renewable energy capacity to 450 GW by 2030.
• As of September 30, 2020, India has an installed renewable energy capacity of 89 GW.
• Recently, at the G20 summit, Prime Minister Narendra Modisaid that India would not only meet its Paris Accord targets but will also exceed the targets. 

• India is now the 5th largest market for renewable energy in the world, 4th largest market for wind and 3rd largest market for solar in the world only behind China and US.
• As per 2019’s annual reportpublished by the Ministry of New and Renewable Energy (MNRE) – Government of India (GOI), thermal power plants accounted for a little over 63% of the total installed power capacity in the country at the end of 2018-19 fiscal year.
• Thermal power was followed by contributions from renewables other than hydro power at 21.95%, further followed by hydro power and nuclear power – standing at 12.72% and 1.93% of the total installed electricity capacity, respectively.
  

• The growth of the sector has been largely driven by a gamut of factors such as
  • favourable policy and regulatory framework for accelerated growth of renewable
  • providing incentives and subsidies for faster adoption
  • streamlining the approvals and clearance processes for land
  • regulatory and connectivity approvals

• No or low greenhouse gases: The combustion of fossil fuels for energy results in a significant amount of greenhouse gas emissionsthat contribute to global warming. Most sources of renewable energy result in little to no emissions.
• No or low air pollutants: Instead of polluting the environment, renewable energy meets the objectives of a circular economy.
• Low costs: Renewable energy is less affected by geopolitical crises, price spikes or sudden disruptions in the supply chain, as it is often produced locally.
• Employment generation: The largest part of renewable energy investments is spent on materials and workmanship to build and maintain the facilities, rather than on costly energy imports.
• Accessibility: In many parts of the world, renewables represent the lowest-cost source of new power generation technology, and costs continue to decline. Especially for cities in the developing world, renewable energy is the only way to expand energy access to all inhabitants, particularly those living in urban slums and informal settlements and in suburban and peri-urban areas.

Whilst the renewable energy sector in India has become both infrastructurally and financially healthy in the past 10 years, it also needs to overcome a few challenges to ensure continued growth.

• Uncertainty of energy source: The intermittent nature of wind and solar pose a challenge in integrating their assets into the grid and in ascertaining grid stability.
• At the mercy of nature: While conventional power plants—that are coal-based or large hydro—have the ability to vary the generation as per need, renewable generation is more at the mercy of nature.
• Lack of access to energy: There is the challenge of access to energy. The fact is that even as the grid reaches everywhere, the light does not.

• As per the International Energy Agency’s Renewables 2020 report, driven by China and the United States, net installed renewable capacity will grow by nearly 4% globally in 2020, reaching almost 200 GW.
• Globally, renewables are expected to overtake coal and become the largest source of electricity generation in 2025 and may supply one-third of the world’s electricity.
• Hence, this growing focus and shift towards renewable energy underline the relevance and importance of the green energy markets more than ever before.

Some initiatives by Government of India to boost India’s renewable energy sector are as follows:

• In August 2020, the government announced plans to offer land near its ports to companies for building solar equipment factories.
• India plans to add 30 GW of renewable energy capacity along a desert on its western border such as Gujarat and Rajasthan.
• Rajasthan Government, in Budget 2019–20, exempted solar energy from electricity duty and focused on the utilization of solar power in its agriculture and public health sectors.
• The Government of India has announced plans to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation.
• Indian Railways is taking increased efforts through sustained energy efficient measures and maximum use of clean fuel to cut down emission level by 33% by 2030.
• Real-time electricity market: India’s recently launched real-time electricity market, coupled with the green market, offers a significant opportunity to integrate renewable energy in the most efficient and competitive manner.
• High Efficiency Solar PV Modules: The Union Cabinet recently approved Rs 4,500-crore PLI scheme for ‘High Efficiency Solar PV Modules’. This money would be disbursed by to the nodal ministry of new and renewable energy (MNRE). The move is expected to give a boost to domestic manufacturers.

• Scale up investment: India needs to significantly scale up investment if it has to meet its goals of increasing renewable energy capacity fivefoldto reach 450 gigawatts by 2030.
• Robust green market: With the increasing penetration of renewable power, a robust green market is required to address the intermittency issues linked with green power adoption.
• Policy efforts: In particular, the country require concerted policy effort, including on the following:
  • demand creation for renewable energy
  • revenue certainty for renewable energy power projects
  • risk reduction for development, construction, and operation of these projects
  • system integration of variable and intermittent renewable energy supply
• Goal oriented measures: Going forward, the introduction of new segments such as green day-ahead market, long-duration green contracts, contract for difference (CfD), etc, will play a crucial role in furthering sustainability goals.
• The new segments will also ensure that all the renewable energy generated within the country is dispatched in the most efficient manner through a pan India wide exchange-based energy markets.

India's renewable energy expansion has helped bring down the costs of renewable energy worldwide. The country needs much more of the catalytic financial innovations for attracting private investment at required scale. Increasing clean energy investment in India is essential to achieve, and go beyond, its Paris Agreement goals and help the world stay on course to limiting warming to the levels where we still have a future.