Can India Transition To A Clean Energy Economy?
India is optimistic about its new green economy, striving for net-zero by 2070, later than many developed countries but still a huge commitment for a country with such a heavy reliance on oil and gas. The government has already made several changes to the country’s energy industry, by introducing electronic vehicle (EV) infrastructure in major cities and encouraging consumers to adopt EVs, as well as leading a new international solar project. But will this be enough to allow India to make the shift away from fossil fuels? At present, India is the world’s third-largest greenhouse gas emitter, with its emissions increasing by approximately 335 percent since 1990, producing around 2,597.4 million tonnes of CO2 waste every year. So, it came as a shock when Prime Minister Modi announced a the COP26 summit this month that India would be aiming for net-zero carbon emissions by 2070.
India had previously rejected the net-zero proposal when encouraged by the IEA and other states that have agreed to the pledge for net-zero by 2050. Just the week before COP26, India’s environment secretary R.P. Gupta stated that net-zero was not the best way to tackle climate change, explaining “It is how much carbon you are going to put in the atmosphere before reaching net zero that is more important.” So the sudden turn of events shocked many participants at the summit.
However, India has gradually been shifting its energy sector to include both fossil fuels and renewable energy sources for years. India is already adopting EV technology and encouraging consumers to make the switch, slowly transforming its major cities to become more EV-friendly. This week, state-owned Indian Oil Corporation Ltd alongside Bharat Petroleum Corporation Ltd announced they would be installing 17,000 EV charging points across their fuelling stations. Indian Oil expects to install its share, 10,000 charging points, within the next three years.
Fitch Solutions suggested that EV purchases in India between 2021 and 2023 could increase by a rate of 26 percent annually, thanks to the recent national push for greater EV uptake. Although the country’s limited manufacturing capacity under rencet pandemic restrictions has meant that domestically produced EVs are lagging. The Indian government aims for all new vehicles sold by 2032 to be electric, using higher taxes on petrol and diesel as well as tax incentives on EVs to encourage consumers to make the shift.
India has also announced it will be leading the Green Grids Initiative - ‘One Sun One World One Grid’, an international solar project that hopes to provide the first network of internationally interconnected solar power grids, harnessing the sun’s energy across multiple continents. The initiative, also supported by the U.K., Australia, France, and the USA, will rely on the contribution of several state governments to build the infrastructure required to allow the grid to span several regions across the world. The aim is to provide renewable energy from countries that have an excess to those that have not yet fully developed their renewables sector or do not have access to the same level of renewable power. For example, a solar farm positioned in a desert location could provide a huge quantity of solar power not available in other areas.
Phase one of the initiative aims to connect West, South, and Southeast Asia, which will be expanded to regions of Africa in the second phase, and eventually to a global grid system. This will be a significant test of the global will to work towards a cross-border solution to energy security in the future. India and the U.K. established the joint program in May this year, waiting for COP26 to announce their plan and foster support from other countries.
The Green Grids Initiative is just part of India’s solar ambitions. At the COP26 summit, Modi announced, “First, India will increase its non-fossil energy capacity to 500 gigawatts … Second, by 2030, 50 percent of our energy requirements will come from renewable resources.”
India is already home to the Bhadla Solar Park, the world’s largest solar farm, with 80 individual solar plants and covering an area of 160km2 in India’s Rajasthan state. The park is situated on extremely arid land, profiting from the region’s 325 sunny days every year, with the anticipated projected capacity upon its completion totaling 3.5 GW.
However, while there is significant hope for India’s renewable energy development, the fact that India continues to rely on coal for 70 percent of its electricity production, as well as its heavy reliance on oil for vehicles and industry should not be overlooked. India’s population of 1.3 billion could eventually expand to overtake China as the most populous country in the world. This coupled with India’s continued reliance on fossil fuels makes it one of the world’s biggest consumers of oil, coal, and gas, as well as one of the largest emitters of greenhouse gasses.
India’s oil demand is expected to peak around 2040, significantly later than many countries across Europe and North America. But the government must invest heavily to ensure that its renewable energy sector is well-developed enough to meet the country’s ever-growing energy demand if it hopes to achieve net-zero by 2070.
The potential for India to make the shift to green energy is significant, thanks to rising investments in the sector, the push from the government to expand the renewable energy sector, and the increasing consumer uptake of EVs. However, the Asian giant will not decrease its reliance on oil and gas any time soon, requiring ongoing production to meet national needs until at least 2040, after which time India’s renewable energy sector will have to be well-established enough to provide power to potentially the world’s biggest population if it hopes to meet its climate goals.
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