As India battles climate change and looks to achieve net zero, experts agree that its top focus must be accelerating the process of decarbonisation, both in the short and long term.
To enable the country to reach targets that are internationally agreed upon, we need to consider new models and instruments, blended finance and credit enhancement. If all goes according to the plan, India could well have a major role in global energy transition.
Innovation is the key to this. Amitabh Kant, G20 Sherpa at the 22nd edition of the World Sustainable Development Summit held at New Delhi recently, underlined this by pointing out the need to draw up new and creative paradigms in our decarbonisation drive.
“…the hard-to-abate sectors have to be decarbonised. We need renewables to crack water, use electrolyzers and produce green hydrogen. India is climatically blessed and has top class entrepreneurship to be the least-cost producer of electrolyzers and green hydrogen,” said Kant.
Global energy major Schneider Electric, in a new report, titled “Path to developed and decarbonised India,” outlines how the country can drive its energy independence by 2047 and achieve net zero by 2070. India, it notes, could be at the forefront of the energy transition.
As the Indian economy grows, its energy demand is projected to go up six times by 2070, resulting in an inevitable evolution of energy systems. The increase in air-conditioning and appliances in buildings and houses, the advent of electric vehicles and enhanced manufacturing will significantly increase electricity consumption. Hydrogen is poised to play a significant role in this scenario as an alternative green fuel and is expected to play a key role in decarbonization post-2040.
“If all economic indicators were to match the current European levels, the (Indian) economy would be six times larger, steel production four times larger, residential stock four times more important and the kilometer traveled per car 10 times longer,” the report noted. .
Predicting a transformation, the report suggested that living environments get more digitized, construction industry disrupted, generation distributed, and electrification of mobility be a reality sooner than expected. While industries will improve efficiencies in their operations, there will be a competitive switch to electrification, with distributed manufacturing. Significantly, circularity will also make inroads.
India is the third largest emitter of greenhouse gases (GHG) after China and the US. As the country’s GDP grows, emissions will spike calling for a sustainable approach to reduce GHG. According to experts, decarbonization of the power sector along with increased electrification of energy demand hold the key to achieving deep-decarbonization for India. Currently, 75 per cent of the electricity is from coal and 15 per cent from renewables. The power system will need to transform to one with over 60 per cent from renewables, half of which would be from solar PV by 2040.
According to the Schneider Electric report, to decarbonize the economy by 2070, the economic investment needed would be of momentous proportions. As energy independence and decarbonisation come together, it calls for acceleration of the phasing out of fossil fuels.
A study by the US Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab), which examined India’s three most energy intensive sectors — power, transport and industry — determined that achieving energy independence will generate significant economic, environmental and energy benefits. This includes $2.5 trillion in consumer savings through 2047, reducing fossil fuel import expenditure by 90 per cent or $240 billion per year by 2047, enhancing India’s industrial competitiveness globally and enabling India’s net-zero commitment ahead of schedule.
However, given that the task is enormous and the challenges plenty, policy makers have to act swiftly and with commitment. According to experts, the absence of new financial instruments to facilitate long-term lending and bottlenecks to free trade are the key hurdles in bringing down the cost of green hydrogen. If they are addressed, then perhaps half the battle is won. Addressing problems faced by the green sector with urgency is the key to progress in a world in which climate change and related environmental concerns cannot be ignored.