BackFirms pledge investments to back renewable energy push
The deals amounting to 266 GW potentially cuts India's dependence on fossil fuels and strengthens position at global climate change negotiations
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New Delhi: India, the world’s third-largest emitter of greenhouse gases, has secured pledges from 213 companies for setting up a renewable energy capacity of 266 gigawatts (GW) over the next five years, potentially cutting its overwhelming dependence on fossil fuels and strengthening the country’s position at global climate change negotiations.
The companies—a mix of public and private entities— include state-run NTPC Ltd, which has agreed to set up 10,000 MW of renewable energy in the next five years. In the private sector, the largest commitment for generation is from SunEdison for 15,200 MW, while ReNew Power has promised 11,500 MW.
While India has so far resisted international pressure to commit to capping emissions, Prime Minister Narendra Modi has pledged to increase the country’s renewable energy capacity in a bid to reduce the use of fossil fuels. During US President Barack Obama’s trip to India last month, Modi had agreed to work together with other countries to reduce emissions, signalling that India may join an international deal on global warming.
The government is expecting an investment of $200 billion in green energy projects. This chimes in with hopes of a meaningful climate change pact at a UN climate conference in Paris in December. The summit is expected to finalize a global agreement to cut greenhouse gas emissions.
A commitment to finance renewable energy projects totalling 78 GW has also been made by financial institutions, with state-owned State Bank of India (SBI) alone committed to lend ₹ 75,000 crore towards 15,000 MW of projects.
“There is also a need to build the pieces together with the support of the society and give access to power for the most deprived section of the society. Viable business models and debt financing will have to take the driver’s seat to achieve the India’s RE (renewable energy) dreams," wrote Yes Bank in a report prepared for Re-Invest 2015.
Modi told Re-Invest 2015, India’s first global investors’ meet for green energy, that India is also working to build a consortium of some 50 countries that have abundant solar radiation. This grouping will pool research and technological advances in the field of solar energy in order to improve its accessibility among the poorest of the poor, and in the remotest of locations.
Mint reported on 2 December about the plan aimed at lowering the cost of solar energy and improving the country’s standing at global climate change and environment protection discussions. The proposal aims to bring together 56 countries who have more than 300 days of good solar radiation each.
“Today, the world is very worried about climate change. Resources are drying up. So, it is time to think about how to continue our lives without troubling the nature. In that context, we have begun with our renewable energy drive," Modi said.
“In 2000, the then prime minister Atal Bihari Vajpayee had said that renewable contribution to India’s overall power requirement should increase from 1.7% to 12% by 2012. But it is just 6.5%. Let me tell you PM Modi wants multi-fold growth to 15% in 10-12 years from now," said Piyush Goyal, minister for power, coal and new and renewable energy.
India’s National Action Plan on Climate Change recommends the country generate 10% of its power from solar, wind, hydropower and other renewable sources by 2015, and 15% by 2020. India has an installed power generation capacity of 255,013 MW.
In the run-up to the Paris summit, much international attention is focused on India’s plans.
US and China are the world’s top polluters. The two countries have signed a major bilateral climate deal in November, wherein the US will reduce its emissions by 26-28% below its 2005 level by 2025 and China will reach the peak of its harmful carbon dioxide emissions around 2030.
India, too, is gearing up to meet the climate change challenge. In November, the country’s National Green Tribunal announced that it would ban vehicles older than 15 years from New Delhi’s roads. The central government is also allotting ₹ 1,400 crore to the Indian automobile industry to promote sales of electric and hybrid vehicles.
“If anyone can show the world a way around climate change, it is India," Modi said. “I don’t want to hoist Indian flag in the world but to provide power to the poor."
India’s efforts to promote green energy has also been lauded by countries such as the US and France. Even though India claims it is under no pressure to act on climate change, the government is taking steps to voluntarily cut carbon emissions and diversify its energy mix. This comes in the backdrop of the Modi government substantially raising an earlier solar energy target of achieving 20,000 MW capacity by 2022 to 100,000 MW. The government is also targeting wind power capacity of 60,000 MW by 2022. It plans to start five funds of $5 billion each to promote green energy sources.
According to the International Energy Agency (IEA), around 300 million Indians, roughly a quarter of the country’s population, do not have access to electricity. India’s per capita power consumption, around 940 kilowatt-hour (kWh), is already among the lowest in the world. In comparison, China has a per capita consumption of 4,000kWh, and developed countries average around 15,000kWh.
Speaking at the same conference, India’s chief economic advisor Arvind Subramanian said that while discussions around new and renewable energy in India are encouraging, the country is going to be dependent on coal for its energy needs in the foreseeable future.
“Therefore, we should not lose sight on clean coal when it comes to climate change. We need to press for clean coal and investments should happen in that direction also," said Subramanian.
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