BackElection outcome may impact India’s green economy space
A Biden victory could bode well for renewable energy, while a Trump win may further aid oil, infra and defenceAnalysts they do not expect a major shift in US policy towards India, given the commonality of purpose and shared goals in Indo-Pacific region
PremiumNEW DELHI : Energy policy planners in India have been keeping a close watch on the US Presidential election, with Democrat Joe Biden promising a ‘Clean Energy Revolution’ and incumbent Donald Trump’s pull out from the Paris climate change agreement formally coming into force on Wednesday.
Trump has pulled the US out of a historic 2015 accord with the energy-rich Iran, which had been inked to curb the West Asian country’s nuclear programme in return for ending sanctions.
Biden’s campaign promise includes ensuring that the US “reaches net-zero emissions no later than 2050", recommitting to the Paris Agreement on the first day of his administration, and “a federal investment of $1.7 trillion over the next ten years."
This proposed push toward a green economy assumes importance given India’s track record and rapid pace of clean energy capacity addition. Clean energy projects now account for more than a fifth of India’s installed power generation capacity.
The country seeks to produce 100 GW from solar projects and 60 GW from wind power plants by March 2022.
India’s petroleum and natural gas minister Dharmendra Pradhan told Mint that India is looking at the US for technology, entrepreneurs and investments for its clean energy space. “India is an attractive energy investment destination for a long time," Pradhan said. He is the co-chair of India-US strategic energy partnership (SEP).
This also comes at a time when India—the world’s third-largest oil importer and the fourth-largest buyer of liquefied natural gas—has become the fourth largest-export destination for US crude and the fifth-largest for the US LNG.
Analysts said they do not expect a major shift in the US policy towards India, whatever the outcome of the election, given the commonality of purpose and shared objectives in the Indo-Pacific region.
While the defence partnership was the cornerstone around New Delhi’s engagement with Washington, the new energy sourcing arrangements are the fresh areas of cooperation between the two democracies.
With the US pitching itself as a preferred energy partner, India has been reworking its crude sourcing strategy amid growing uncertainties to buffer its consumers from sharp fluctuations in global prices.
The India-US hydrocarbon trade stood at $9.2 billion during 2019-20.
The India-US energy dialogue was elevated to a strategic energy partnership in February 2018 after the first ministerial meeting held in New Delhi on 17 April 2018 between Pradhan and then US energy secretary Rick Perry.
Some issues however remain. While the US was instrumental in getting India out of its nuclear isolation with the 2008 civil nuclear deal, India is yet to sign a final deal for planned six nuclear reactors with US-based Westinghouse Electric Co., which in 2017 filed for bankruptcy before it was acquired by Brookfield Business Partners in 2018.
Pradhan said India is focusing on areas such as green energy and natural gas in its energy engagement with the US.
Four working groups have been created under the SEP—oil and gas, power and energy efficiency, renewable energy and sustainable development.
The two countries have also set up a gas task force (GTF) on key themes such as natural gas pricing, markets and regulation, strengthening gas infrastructure and promoting demand growth.
India is also exploring the possibility of storing crude oil in the Strategic Petroleum Reserve of the US as part of its energy security strategy. Such an arrangement will help India to tackle emergency situations and help it tide over short-term supply disruptions.
Hydrogen has also become a new area of cooperation between the two countries, with a public-private Hydrogen Task Force being set up for the same. This assumes significance as India is looking to invite bids to build green hydrogen plants, which will use renewable energy sources, Mint reported earlier.
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