Energy diversification in India

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TThere is both a close and important link between deploying a range of new types of renewable energy in India and advancing the country’s already rapid economic development. Diversification in this sector would improve energy security and accessibility in the country, as well as mitigating the effects of climate change. India is currently on the path to becoming one of the world’s leading producers of green energy, most probably as a method of combatting emissions and environmental degradation from India’s rapid economic development and could soon supersede countries like Iceland and Albania. India already has one of the most diversified power sectors in the world with sources of power generation such as coal, lignite, natural gas, oil, hydro, and nuclear power, along with wind, solar, and agricultural and domestic waste. This clear diversity of energy sources may owe to its huge demand from India’s economy and population, combined with the vast nature of the country and variations in resources, technology, and infrastructure between different areas. India is beginning to tread an even more diverse and renewable energy path post-2015 Paris Agreement, with investments in solar energy rising and those in thermal power plants slowing down. In the future, the already increasing demand for electricity in India will rise

even further, placing even more pressure on the existing energy generation capacity; massive additions will be required. The future of energy sources is becoming a contested issue and is under the spotlight now more than ever as the world begins to further advance its focus on tackling climate change at an international level, evidenced most recently by the COP26 summit in Glasgow; the main result of which being projected reduced reliance on coal. The sources of energy in India will become more prominent as the country continues to develop.

There are several advantages for future diversification of energy sources in India; growing price competitiveness is one of the main reasons behind the diversification efforts. The renewable energy sector has seen huge advancement in the whole value chain, especially the technology leap enabled by innovation. The maturing global market also has the potential to drive down the prices of renewables rapidly. This, combined with the abundance of skilled and trained workers in India and the government’s backup for the start-up segment, means India could reach a point where its need for energy can be satiated using renewable sources. Diversifying the energy sector to include a larger range of renewable sources is also significantly more beneficial in the long-term.

Once current power plants’ equipment’s ‘shelf lives’ are over, the newly upgraded solar modules or wind turbines will be more cost effective and efficient, therefore, renewables have the capacity to continue generating electricity maintaining their efficiency, which in turn further boosts competitiveness. Lastly, renewable energy, although not in abundance and completely reliable, is domestic and available in most places, whilst oil and gas sources are limited to only certain regions of the world. Diversification ensures security of energy supply and can reduce reliance on imported sources. It would replace foreign energy imports with domestically produced electricity which will also widen and diversify India’s economy, by allowing for growth of a new, highly technological industry, which had been previously existed only overseas.

As India sets out to reduce its consumption of fossil fuels like coal, which currently account for most of the country’s powergenerating capacity and diversify its energy basket to include a wider range of renewable energy sources, it will face challenges. In 2020, bids for new solar projects hit record lows in India, affirming that coal is no longer the cheapest electricity source. The country also addressed the future limitations of intermittent wind and solar by awarding supply contracts for flexible renewable power, as well as favouring cheap renewables on the grid, causing coal use to fall. All of this has put India in a strong position to prevent fossil fuel use seeing a continued growth, but despite this focus on the clean energy market, power demand is expected to triple in India by 2040 as India’s population continues to achieve upward mobility. However, there may be a cause for optimism as experts state they are starting to see a future for India in which coal is no longer dominant. ‘Despite the pandemic… the government in becoming clearer that energy transition is on track even as the economic recovery continues to take shape’ says Aarti Khosla, founder and director of Climate Trends, as Delhi based strategic communications initiative. Moreover, Prime Minister Narendra Modi, speaking at the UN Climate Ambition Summit at the end of 2020, declared India was on track to achieve Paris targets and ultimately exceed its ambitious renewable energy target.

Despite all of this projected success for energy diversification in India, there remain significant challenges, mainly due to the exponential annual population growth in India. Although the country has achieved fast and remarkable economic growth, energy is still scarce.

Strong economic growth is escalating the increasing demand for energy, combined with a yearly population growth of 1.18% and environmental deterioration means India is facing the challenge of sustainable development.

The intermittent, unpredictable nature of the electricity generated by wind and solar, compared to the stable, on-demand flow of power from traditional fossil fuel generation requires fundamental changes to how India invest in its energy grid. Not being able to fully rely on these forms of variable renewable energy will mean an increase in emissions and costs in the short term and slow the long-term growth of renewable energy in the future. Furthermore, the renewable energy market requires explicit policies and legal procedures to enhance the attention of investors; the absence of comprehensive policies and regulation frameworks in India prevents the adoption of renewable technologies. Government subsidies for example are adequately provided to

conventional fossil fuel companies, making diversification more difficult through sending the message that power from fossil fuels is of a higher priority than that from renewables.

Overall, India has been successful in achieving its post-2015 Paris Agreement aims of attempting to end its reliance on coal and investing in and diversifying its renewable energy sources. This has an array of benefits, from inevitably tackling climate change to ensuring long-term energy security. However, India’s exponential population growth and rapid economic development, projected to continue to rise in the future, will present challenges to pursuing sustainable development strategies ultimately due to the scarcity of energy and unpredictable nature of renewable energy sources such as wind. There is also the future social implications of ending coal use in India to consider;

and for many, the low skilled jobs that it provides are their only potential source of income for survival. Moreover, India’s government could pose a challenge in itself; it needs to encourage more funds and private investors to support research and innovation activities in the expensive and high value renewable sector, which would allow diversification to occur at a faster rate.

References

Jonathan Kay. (2021). Tangled Wires: Preparing India’s Power Sector for the Clean Energy Transition. Available: https://carnegieendowment. org/2021/08/04/tangled-wirespreparing-india-s-power-sector-forclean-energy-transition-pub-85072. Last accessed 23rd October 2021.

Charles Rajesh Kumar. J & M. A. Majid. (2020). Renewable energy for sustainable development in India: current status, future prospects, challenges, employment, and investment opportunities. Available: https://energsustainsoc.biomedcentral. com/articles/10.1186/s13705-0190232-1. Last accessed 23rd October 2021.

Julia Pyper. (2021). How India’s Renewable Energy Sector Survived and Thrived in a Turbulent 2020. Available: https://www. greentechmedia.com/articles/ read/india-solar-energy-transitionpandemic-2020. Last accessed 21st October 2021.

IANS. (2021). India shines in energy transition with strong renewable path. Available: https://www.businessstandard.com/article/economy-policy/ india-shines-in-energy-transitionwith-strong-renewablepath-121081400903_1.html. Last accessed 21st October 2021.

Vikram Aggarwal. (2017). Why India needs to further diversify its energy basket. Available: https:// energy.economictimes.indiatimes. com/energy-speak/why-india-needsto-further-diversify-its-energybasket/2181. Last accessed 19th October 2021.