Policy push needed for green energy adoption

How is India doing in terms of the goals it has set for itself at global conferences, such as achieving the target of net zero by 2070 for transiting to renewable or clean or green energy in order to do its bit along with the rest of the world to curb the global warming-induced climate change? And if it has some catching up to do, how best can it go about this task?

First, the scare of global warming is not a hobby horse, ridden by a group of voluble NGOs, which can be safely ignored while India races at the fastest possible pace to become a leading global economic power by pursuing not just high growth but also rapidly rising per capita energy consumption. It is going to hit India in the near and foreseeable future and at places where it will hurt a lot.

According to a recent study published by the journal Nature Climate Change, Chennai and Kolkata are among the leading Asian cities, along with Bangkok, Ho Chi Minh City and Manila, which face a significant risk by the turn of the century if the world continues to emit high levels of greenhouse gases.

Also at high risk are geographies like the western tropical Pacific islands and the western Indian Ocean. The study has come to these findings by combining natural sea-level fluctuations, like those caused by El Nino, with the impact of climate change. So, climate change is something that India can ignore only at a great cost to itself.

Clean energy is not a part of India’s energy mainstream. The country is the third largest emitter in the world of greenhouse gases and appears unconcerned, going by the fact that last year it announced the biggest ever auction for coal mines. Unsurprisingly, fossil fuels generate more than 70 per cent of India’s electricity. Renewable energy currently contributes only 10 per cent of the country’s electricity needs and overall energy demand will go up every year by 6 per cent for a decade.

So, India will have to rapidly keep adding to its green energy capacity in order to ensure that renewable energy does not lose market share, not to speak of gaining in it.

What does the policy needs to do to ensure that clean energy grows at a faster pace than the overall demand for energy so that it can, over time, meet a greater share of the overall energy needs?

First, a workable policy needs to be put in place to acquire land for solar and wind power projects to address resistance from local communities for whom the land is not just a source of income but also of emotional belonging. The policy also needs to address the problem of impecunious state electricity boards. With them being unable right now to pay their bills with the electricity-generating companies, there is no way they can go forward to invest in developing alternative sources of renewable energy.

Some policy push is thankfully already there, like the energy conservation legislation and directives to electricity companies to use growing amounts of renewable energy. But this is actually like ordering the end results. What is needed are policies which will not only speed up the installation of renewable energy capacity but also the setting up of storage and attendant infrastructure.

To put it simply, it is not enough to set up wind mills and solar power farms. Along with them must come large storage capacities. This is because it is not windy or sunny all the time. Hence, excess energy produced has to be stored in massive battery banks so that the power can be released into the grid when there is no production while ensuring that grid stability is maintained. This raises the total amount of investment needed per unit of renewable energy capacity.

Plus, there has to be a comprehensive policy in place to not only encourage the production of rooftop solar power by households, offices, shopping malls and the like but also to make it mandatory. This will hugely add to the installed capacity. During a sunny day, the rooftop unit will produce more power than it needs to consume, so excess power will have to be fed into the grid and after nightfall, power for consumption will have to be drawn from the grid. The consumer will have to be charged only for the amount of net units consumed which will be enabled by smart meters that provide two-way metering.

The great benefit for the consumer from this system is that it will drastically reduce his energy bill as there will be no fuel cost component in it. But that will come after a time when the whole system is in place and working. Initially, the consumer will have to make the necessary investment. To enable all this, the policy has to do two things — make the installation of rooftop solar power mandatory and provide an initial subsidy to enable the investment.

But to have a large solar power capacity, you need solar panels which constitute a major portion of the cost. India does not make most of the solar power panels it needs. So, these or the components/modules that go into making them have to be imported, which has till now been done from China.

The government has, therefore, adopted a dual policy approach. It is offering incentives to manufacture solar panels and their components at home and has levied stiff import duties on panels and components imported from China. So, import duties have to be very finely calibrated. If import duties are initially imposed to prevent a flood of cheap solar panels from making it impossible for domestic manufacturing to make a living, they can well prevent the coming in of the much-needed imports before adequate domestic capacity is in place. That is, in fact, the situation right now.

For green energy to become mainstream, two elements are vitally needed. Proper policy and regulation in itself, as also huge investment, which is significantly enabled by the right policies. The right policy package appears to be emerging, given the investment plans large corporates have announced. In the current year, the country could attract $10 billion in renewable energy investments.

So, India has a long way to go before it can carry itself off credibly before the global community on fighting climate change, but some right beginnings appear to have been made.