India’s Green Energy Transition

General Studies Paper -3

Context: The World Bank has approved a second round of 1.5 billion dollars in financing to help India accelerate the development of low-carbon energy.

Background

• In June 2023, the World Bank approved the 1.5 billion dollars for the First Low-Carbon Energy Programmatic Development Policy Operation.
• The fresh funding is expected to help India expand its green hydrogen production and boost the mobilisation of finance for low-carbon investments.

India’s Green Energy Transition

• India, as one of the world’s fastest-growing economies, faces a critical challenge in balancing economic growth with environmental sustainability.
• Central to this challenge is the transition from conventional fossil fuels to cleaner, renewable energy sources.
• This shift is not merely a trend but a necessity driven by global environmental concerns, energy security, and economic imperatives.
• India is pursuing energy transition in various sectors including electricity, industry, transport, agriculture, cooking, etc

Present Status

• India stands 4th globally in Renewable Energy Installed Capacity (including Large Hydro), 4th in Wind Power capacity & 5th in Solar Power capacity (as per REN21 Renewables 2024 Global Status Report).
• India saw the highest year-on-year growth in renewable energy additions of 9.83% in 2022.
• The installed solar energy capacity has increased by 30 times in the last 9 years and stands at 84.27 GW as of May 2024.
• India has been ranked 63rd on a global Energy Transition Index released June 2024 by the World Economic Forum.

Advantages

• Environmental: With cities grappling with severe air pollution and concerns over climate change growing, reducing dependency on coal and fossil fuels is crucial to improving air quality and mitigating global warming.
• Energy Security: Diversifying energy sources enhances India’s energy security by reducing reliance on imported fossil fuels, thus stabilising energy prices and mitigating geopolitical risks.
• Economic Opportunities: The renewable energy sector offers significant economic opportunities, including job creation, technological innovation, and attracting investments.
• India has become a global hub for solar energy manufacturing, driving down costs and increasing accessibility.
• Inspiration for World :   India can serve as an example for the world by fostering what is potentially the largest green workforce in the world and building a domestic supply of critical battery materials via recycling, contributing significantly to the fight against climate change on both national and international scales.

Challenges

• Financial Viability and Cost Competitiveness: the costs of renewable energy technologies, particularly solar and wind, have decreased significantly over the years, achieving cost competitiveness with conventional sources remains a challenge.
  • Factors such as initial capital costs, land acquisition, and financing barriers can make renewable projects financially challenging, especially for smaller developers and in rural areas.
• Infrastructure Development : Building the necessary infrastructure to support renewable energy deployment, such as transmission lines, substations, and energy storage facilities, is essential but often faces logistical and bureaucratic hurdles.
  • Delays in infrastructure development can hinder the timely commissioning of renewable projects and affect grid connectivity.
• Policy and Regulatory Framework :inconsistencies in policies across different states, regulatory delays in project approvals, and evolving regulatory frameworks pose challenges for investors and developers.
• Lack trained manpower : there is a shortage of trained professionals and technicians with specialized skills in renewable energy technologies.

Initiatives

• India has taken bold action to develop a domestic market for green hydrogen, underpinned by rapidly expanding renewable energy capacity.
  • The first tenders under the National Green Hydrogen Mission’s incentive scheme have demonstrated significant private sector interest
  • Permitting Foreign Direct Investment (FDI) up to 100 percent under the automatic route for renewable energy projects
  • Launch of Schemes such as Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM), Solar Rooftop etc.
  • Panchamrit :The country has set an enhanced target at the COP26 of 500 GW of non-fossil fuel-based energy by 2030. This has been a key pledge under the Panchamrit.
• India has implemented various measures, including the waiver of transmission system charges for inter-state solar and wind power sales, establishing renewable power purchase obligations, and creating Ultra Mega Renewable Energy Parks.
• In October 2018, Prime Minister Narendra Modi proposed the idea of One Sun, One World, One Grid (OSOWOG) for the first time at the First Assembly of the International Solar Alliance (ISA).

Way Forward

• India’s resources, including its long coastline, abundant sunshine, and various vacant lands, can facilitate renewable power generation via hydro, solar, and wind.
• The nation thus has the potential to rank among the top global producers of both wind and solar energy.
• Continued commitment to renewable energy targets, supportive policies, technological advancements, and international collaborations will be key to accelerating India’s green energy transition.
• By addressing existing challenges effectively, India can not only meet its energy needs sustainably but also emerge as a global leader in renewable energy innovation and implementation.