India commits to 50 percent non-fossil fuel energy by 2030

India would adhere to its pledge of reaching 50 percent of capacity from non-fossil fuels by 2030, emphasising India’s proactive stance in environmental preservation.

While acknowledging the significance of achieving net zero, Minister R. K. Singh emphasised the greater importance of ensuring sufficient electricity supply for India’s continued growth. He reaffirmed India’s commitment to generating 50 percent of its energy from non-fossil fuel sources by 2030, solidifying its position as a global leader in the energy transition.

Speaking at a plenary session on “Renewables: Powering the Net Zero Agenda of India” during the CII Annual Session 2023 in New Delhi, Minister R K Singh stresses, the need to continually augment India’s energy capacity to support the nation’s growth. He emphasised that meeting the energy requirements for India’s development was of utmost concern, as the electricity demand is rapidly increasing. It is projected that energy consumption will double by 2030, necessitating capacity expansion to support the nation’s growth. While achieving net zero emissions is crucial, ensuring an adequate electricity supply to enhance living standards and cater to higher per capita electricity consumption is paramount.

India had added 1.84 lakh MW of power since 2014 but acknowledged that this was not sufficient. He highlighted that India’s per capita carbon emissions were one-third of the global average, and emphasised that there would be no compromise in ensuring uninterrupted 24/7 electricity supply.

No problem in investing, the power sector is sounder than it was before
India presented a significant market for investment due to its rapid growth and escalating energy demand. Considering this, the government is encouraging investors to seize the opportunities available, emphasising that the power sector had overcome challenges related to viability and payment dues. The Minister highlighted the reduction of legacy dues to almost 50 percent of previous levels and expressed the intention to clear them within the next 8-9 months. Additionally, losses in distribution companies (DISCOMs) have been reduced, transforming the power sector and rendering it a sound investment option.

Systems to ensure the sector does not become vulnerable The Minister also emphasised the implementation of systems to safeguard the power sector from vulnerabilities. He opposed the practice of promising free power, noting that it ultimately burdened taxpayers. The Minister revealed the introduction of a system where if DISCOMs failed to pay for the electricity they consumed, the supply would be automatically disconnected without human intervention.

Looking at India’s global leadership in energy transition, the government is certain of the nation’s commitment to achieving 40 percent of its capacity from non-fossil fuels by 2030, a target already achieved in 2021, nine years ahead of schedule. He reiterated that India would adhere to its pledge of reaching 50 percent of capacity from non-fossil fuels by 2030, emphasising India’s proactive stance in environmental preservation.

Measures to ensure trajectory for a renewable energy transition
During this meeting, the Minister outlined measures taken by the government to address challenges in renewable energy capacity expansion. He mentioned the amendment to the Energy Conservation Act, which mandates state electricity regulatory commissions to align their renewable purchase obligations with the Government of India’s objectives. Failure to comply with these trajectories would result in substantial fines, ensuring their enforcement and alignment with the growing electricity demand.

Lowering costs of energy storage
In hydropower, it’s important to balance the substantial capacity additions from renewable energy sources. If we talk about the environmental benefits of Hydropower, various surveys are indicating a decrease in landslides and stabilised slopes in areas where hydro projects were implemented.

The government is making frequent additions and revisions in the policies and regulations to reduce the costs associated with energy storage. The ministry plans to customise bids according to the states’ power requirements. The minister stated, “We are taking steps to lower the cost of energy storage. We will introduce more bids with viability gap funding. Our commitment to the environment is reflected in our announcement of Net Zero. By 2030, we aim to have 50 percent of our capacity from non-fossil fuels, and potentially even more. Hopefully, by then, energy storage will also become economically viable.” The minister expressed active pursuit of diversification to address supply chain challenges and interest in alternative technologies.

India leading in Green Hydrogen With determination, the minister declared, “We will become champions in green hydrogen production.” Despite facing barriers and subsidies in the developed world, the minister affirmed India’s commitment to excelling in green hydrogen and maintaining leadership in the energy transition. Adding capacity through renewable sources and promoting indigenous manufacturing through the “Make in India” initiative are priorities.

However, we can expect forthcoming changes in bidding rules. Failing to meet the scheduled commercial operation date will render a bidder ineligible for bidding for one year, and a second failure will extend the ineligibility period to three years. So, it’s essential to pursue careful and strategic bidding.

The renewable capacity obligation is now mandatory, and distribution companies (DISCOMs) will no longer wait for lower prices in the future. A uniform rolling tariff will be implemented.

Big opportunity in transitioning to Open Access
Recognising the potential in transitioning to open access, there are opportunities for commercial and industrial sectors to adopt renewables. Even the government is encouraging the industry to procure renewable energy, highlighting its cost-effectiveness. If any DISCOM or state electricity regulatory commission (SERC) hesitates in providing open access within the specified timeframe, the government has asked the stakeholders to inform the ministry.

Regarding green hydrogen’s role in India’s energy transition plan, the minister acknowledged the country’s low renewable energy production costs but acknowledged the challenges posed by countries offering substantial subsidies. Addressing protectionism in this context is a matter that requires consideration.

Coming to the consumers’ preferences for products manufactured using green energy, the minister highlighted that a significant portion of the electricity consumed in India is already sourced from green energy. By 2030, nearly 50 percent of the electricity is projected to be green. The government is also formulating a policy to encourage states to adopt green energy practices.

Regarding research and development (R&D), there is a need for collaboration between industry, scientists, engineers, and academia to make R&D efforts effective. Furthermore, the government intends to launch green bonds as part of India’s initiatives.