Energy Transition Opens Up Vast Opportunities for India Inc : Daily Current Affairs

Relevance: GS-3: Conservation, environmental pollution and degradation, environmental impact assessment

Key Phrases: Revamp of Global Energy Production, De-carbonization of Energy Systems, Panchamrit Statement, Inter-State Transmission System Charges, Paris Agreement, Accelerating India’s Clean Energy Transition, Paris Agreement

Context:

Climate change is one of the greatest challenges being faced by the world.
Addressing a calamity of this magnitude requires a rapid transformation towards a green economy and sustainability.

Key Highlights:

The global action required to address climate change requires a fundamental transformation of all key sectors, including energy, which accounts for a large part of greenhouse gas emissions.
There has been a strong momentum to transform the energy system in the past decade: 195 countries adopted the first-ever universal and legally binding global climate deal, the Paris Agreement, in 2015.
The set targets will require a major revamp of global energy production and consumption.
For this, attention is firmly fixed on the de-carbonisation of energy systems with renewables playing a central role.

What is the status of Energy Sector in India?

The Indian energy sector is currently in a state of transition, witnessing changes in generation and consumption patterns.
As per data from the International Energy Agency (IEA), electricity demand in India is likely to triple by 2040.
Renewables will play a critical role in meeting this demand.
Installed renewable power generation capacity in India has increased at a fast pace over the past few years.

Efforts by India towards Energy Transition:

India has laid out the country’s commitments towards scaling up climate action at the CoP-26 Summit with the Panchamrit statement.
The landmark milestone of 100GW Renewable Energy (RE) capacity has been achieved in August last year.
A total of 158GW of RE capacity projects (including large hydro) have been installed in the country.
India now stands
- fourth globally in wind power,
- fifth in solar power and
- overall fifth in installed renewables capacity.
Further, the country’s focus on energy storage, Electric Vehicles (EVs), Hydrogen and fuel cell technologies will act as a key enabler for our transition to a clean, low-carbon energy system.

What are the various initiatives to promote the RE sector in India?

India has permitted Foreign Direct Investment (FDI) up to 100% under the automatic route.
It has waived the inter-State transmission system charges for solar, wind, hydro, and green hydrogen projects until 2025 and is setting up RE parks.
Various Policy measures have been launched to reinforce the government’s commitment to renewables such as
- The Green Energy Open Access Rules 2022
- Green Hydrogen Policy
- Production-linked incentive scheme
- The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-Kusum), etc.

Few Takeaways for Energy Transition from G-7 summit

The United States and Germany, on behalf of the G7, have proposed setting up an India-G7 partnership to help fund and support India’s transition from a “fossil-based economy to a carbon-neutral economy”.
The idea is to devise an India-specific ‘Just Energy Transition Partnership (JETP)’ taking into account India’s position on ensuring climate justice while addressing climate change challenges as well as its commitments to increasing the share of renewable sources in its energy mix.
It is a two-phased approach.
- In the first phase:
  - The focus would be on reducing India’s “carbon intensity” by deploying renewable energy in power generation.
  - This would mean specific investments in modernisation of power grids and deploying energy storage besides introducing new green technology.
  - Also, the G7 has pushed on rolling back thermal plants currently in the development stage and gradually shutting down coal mines.
- In the second phase:
  - The G7 has suggested making additional efforts to widen support across a wider range of areas, including industrial and transportation de-carbonisation needs.
The partnership is based on “trust and strategic cooperation” with an ambitious energy transition plan, which will recognise a need for India to accelerate a just energy transition towards de-carbonisation to reduce their dependence on fossil-based energy generation.

Energy Transition and Economic Opportunities:

The transition to clean energy offers India a massive economic opportunity.
The overall investment required to meet the country’s target of 500GW capacity by 2030 has been estimated to be ₹20-22 trillion.
Additional investment of around ₹12-15 trillion may be needed by 2030 to augment the transmission network and storage capacity.
As per a recently released FICCI-EY report titled “Accelerating India’s Clean Energy Transition”, about 103GW of utility-scale and 11GW of distributed renewable power generation projects are in the pipeline and these would need approximately ₹4 trillion of capital investment with the potential to avoid 4,350 metric tonnes of CO2 emissions over their lifetime and create around a million job opportunities.

What are the various challenges in the energy transition?

Poor financial health of power discoms
Delay in the enactment of the Electricity Amendment Bill
Land acquisition issues
Regulatory uncertainties and non-alignment between Central and State policies still plaguing the sector.
Scaling and integrating a large share of intermittent renewable energy in the national grid without compromising its resilience and reliability.

Way Forward:

Supply Side Measures:
- Following supply side options are important to balance the grid and meet inorganic increases in energy demand:
  - Hybrid Power Plants
  - Gas-based plants
  - Hydro Power Plants
  - Battery storage etc.
Market Restructuring:
- Changing supply and demand patterns necessitate market restructuring.
- To this end, a robust transmission network to match the generation capacity with more private sector participation and proper planning is needed.
- Initiatives like ‘One Sun, One World, One Grid’ (OSOWOG) are instrumental.
Skilling of Workforce:
- Financing and workforce re-skilling in areas such as Artificial Intelligence and big data, and addressing social concerns for just transition are critical for the smooth transition.
Role of Private Sector:
- In the fight against climate change, businesses have a pivotal role to play with their actions, resources and innovation.
- It is a welcome move that Corporates are assigning importance to sustainability, which is on account of growing customer and investor focus on Environment, Sustainability and Governance (ESG) issues, coupled with regulatory and disclosure requirements.
- A growing number of Companies have announced their net-zero ambitions and formulated transition plans.
- Hindustan Unilever, for example, has announced a net zero target of 2039.
- Focus on environmental sustainability has demonstrated that such a strategy contributes to the long-term financial success and growth of the company as well as the industry.

Do you know?

India’s Panchamrita targets at the COP26:
- To increase non-fossil energy capacity to 500 Giga Watts (GW) by 2030
- To meet 50 percent of its energy requirements from renewable energy by 2030
- Reduce the total projected carbon emissions by one billion tonnes from now onwards till 2030
- By 2030, India will reduce the carbon intensity of its economy by less than 45 percent.
- India will achieve the target of Net Zero emissions by 2070.
India’s 2070 target would take up 18.1% of the carbon space, which is a little higher than our population share of 17.7%.
The COP 26 United Nations Climate Change Conference was held at Glasgow in 2021 and is popularly known as Glasgow Summit
COP27 is scheduled to be held in Egypt in 2022.
Green Grids Initiative -One Sun, One World, One Grid (GGI - OSOWOG)
- It is an initiative by International Solar Alliance (ISA), India and the United Kingdom to build a global green energy grid, primarily focusing on solar and wind energy.
- The aim of the initiative is to generate round the clock electricity from the sun, as it sets in one part of the world, and it rises in the other.
- It aims at connecting 140 countries through a “common grid” that will be used as a channel for the transfer of solar power.

Conclusion:

India’s transition journey is underway, and given the country’s size, it would be transformational for the whole world.
This transition will be driven by advanced sustainable technologies, innovative business models and reforms in our policies as well as markets.

Source: The Hindu BL

Mains Question:

Q. Discuss the efforts being made by India towards the Green Energy Transition. Also, suggest measures for its rapid transformation towards a green economy and sustainability.