India faces the challenge of striking a balance on “Development vs. Environmental
Protection”. The nation has to look at the source of renewable energy to protect its environment while keeping the development wheel spinning
The success of the Paris Climate Summit should be seen in the context of how divergent views of both developed and developing countries were brought under a common framework. The sheer magnitude of the complex issues faced by developing countries like India does not offer easy solutions. The challenge India faces today is the elimination of poverty and the resources to be mobilized for various poverty alleviation programmes.
It is to the credit of the Indian Prime Minister for showing the courage to agree to reduce the emission rates, especially when fossil fuel like coal is the most viable option for providing affordable electricity to millions of people who don’t have access
to electricity.
The major shortcoming of the summit, although it does give a common framework for countries to curtail emissions, is that no mechanism has been provided for imposing penalties on countries that fail to reduce carbon emission, as the commitments made in the Paris agreement are voluntary in nature and not enforceable. Moreover, the developed countries have agreed to pledge to fund $ 100 billion a year to the developing countries only on the condition that adequate steps would be taken by them to reduce carbon emission. It is for this reason that the funds agreed at the Copenhagen summit are yet to be distributed. As of now, there is no clarity whether the developed countries who have agreed to provide US $ 100 billion every year from 2020 onwards would agree to scale it up from the year 2020, as was being demanded by developing countries.
Semantics aside, the Paris accord does give direction to countries for reducing carbon emission. It is now the prerogative of the politicians, entrepreneurs and the civil society to enforce strict measures for reducing the emission. The agreement calls for countries to prepare “long-term, low greenhouse gas development strategies” which would translate into reduction of emission by 2050. A timeline for review and upgrading of commitments every five years has been agreed, and a first stocktaking is proposed for 2018.
The agreement has come up with a compromise by fixing the target to keep global average temperature increase to “well below” 2 degrees while “pursuing efforts” to keep it below 1.5.
This article deals with the implications that the climate accord will have on India, especially the challenge of providing affordable electricity to millions of Indians, especially those living in villages. Further, India faces the challenge of striking a balance on “Development vs. Environmental Protection”. Unlike China, India is still at the nascent stage of development, and coal accounts for nearly 70% of generation of electricity, and another 30% comes from solar, wind, nuclear and hydro units. Any transition from fossil fuel to clean energy would not only enhance the cost of generation of electricity per unit, but will drive the pricing of electricity beyond the reach of the common man. Three major factors impact the cost of solar energy: 1) The cost of setting up a solar power plant 2) The amount of land required per MW of installed capacity and 3) The electricity generated per MW of installed capacity.
The cost of setting up 1 MW of Solar Power is as high as Rs. 8 crore (CERC benchmarked cost for 2013-14) as against approximately Rs. 6.5 crore for setting up 1 MW Thermal Power plant. Also, each MW of installed Solar Power capacity requires 4.5 – 5 acres of land. Given that India has set itself a target of 100 GW of Solar Power capacities, it will require 500,000 acres of land. In a country where land is already a scarce commodity, setting aside such a humongous amount of land would be indeed very difficult.
And finally on the issue of efficiency factor, as of today, Solar Power Plants operate at only about 17% efficiency; in other words, if you set up 100 GW of Solar Power Capacity, you would only be able to generate 17 GW of Power!
As a result of the 3 factors listed above, for generating 100 GW of Solar Power, India will need to invest approximately USD 725 billion and set aside approximately 30,00,000 acres of land.
Additionally, if India’s GDP grows at 8%, its power requirement will triple to 900 GW by 2030! If all of that power had to be generated from renewables, it would require another 700 GW to be set up over the next 15 years. Assuming a combination of Wind and Solar (hydel power is pretty much ruled out given the huge environmental impact and the Supreme Court’s stand on Hydel Power plants), it would mean India will need to invest close to $ 3 trillion in this endeavour!
If India’s GDP grows at 8%, its power requirement will triple to 900 GW by 2030! If all of that power had to be generated from renewables, it would require another 700 GW to be set up over the next 15 years. Assuming a combination of Wind and Solar (hydel power is pretty much ruled out given the huge environmental impact and the Supreme Court’s stand on Hydel Power plants), it would mean India will need to invest close to $ 3 trillion in this endeavour!
The national government has set a target of increasing renewable energy generation by 40 gigawatts (GW) by 2022, up from the current capacity of 15 GW, itself a threefold increase since 2005. Still, renewable sources account for just 3.5% of India’s energy generated at present, so the scale of the challenge is formidable, and the cost of meeting it will be high. A new World Bank study estimates that achieving the Indian government’s renewable energy goals for the next decade will cost $ 10 – $ 64 billion in subsidies
The approach of the developed countries is puzzling: they want India to industrialize without burning even a fraction of the fossil fuels that developed nations consumed when they industrialized.
As the costs of installing windmills, solar power stations, unlike coal fired power stations are prohibitive; India will not be in a position to switch to renewable energy unless it is able to get financial assistance and technology from the developed countries.
Although the debate between development and the environment is persuasive, the legacy that we will leave behind to our children and grandchildren, if we don’t take effective steps in reducing the carbon emission, is unimaginable.
India sought $ 2.5 trillion for achieving its Intended Nationally Determined Contributions (INDC) by 2030, so a global commitment of $ 100 billion falls short of expectations. The nations of the world know that they cannot suddenly force each other to stop emitting greenhouse gases, because fossil fuels are fundamental to the way that economies work. But many countries also want to reduce the risks posed by climate change and know that they need to find ways to work together. The Paris agreement offers a range of mechanisms to make this happen. Countries now have a framework to ensure that each is doing what it said it would; they have pledged more money to help the poorest and most vulnerable countries adapt to the effects of climate change; they have a task force for looking at the issues raised by those who cannot adapt and need to find a few places to live; and they have the basis for new carbon pricing deals. They have also agreed that big developing countries, which were largely spared by earlier deals, should consider making a greater contribution.
The national government has set a target of increasing renewable energy generation by 40 gigawatts (GW) by 2022, up from the current capacity of 15 GW, itself a threefold increase since 2005. Still, renewable sources account for just 3.5% of India’s energy generated at present, so the scale of the challenge is formidable, and the cost of meeting it will be high. A new World Bank study estimates that achieving the Indian government’s renewable energy goals for the next decade will cost $ 10 – $ 64 billion in subsidies.
The new policy of renewable energy setting a goal of 100 GW is not a small undertaking. If the government and the private sector and the financial institutions can address the cost of capital, India can achieve the goal it has set for itself. The commitment of providing 100 billion dollars a year by 2020 is only a fraction of the amount that is actually required for making investments in renewable energy.
The government is likely to set a target of 40% power generation capacity based on renewable energy technologies by 2030. This would translate to around 350 GW by 2030, pushing the country’s expected total capacity to 850 GW power generation capacities. India currently has an installed capacity of around 275 GW, with over 36 GW of renewable energy capacity, contributing around 13% of the installed base.
The huge boost in the country’s renewable energy target will mostly comprise solar (250 GW) and wind power (100 GW). The new target may be announced as part of India’s commitment for this year’s global climate change summit in Paris. The Indian Government has made it clear that it would not commit to
any emissions reduction or even peaking targets.
There are also reports that India may enhance its commitment to reduce emissions intensity. It is safe to assume that any target proposed by India would include conditions for substantial international support. Such a huge installed capacity target would require unprecedented investment in India’s renewable energy market. India is looking to raise funds through green bonds and is also looking to secure low-cost debt finance from global development banks, including the International Finance Corporation and the Asian Development Bank.
For the above cited issues, what is required is vision and planning for the financial resources and the huge land requirement to establish solar energy capacity. Government of India and all State Governments should take up the matter in right earnest to enable realize the vision by creating a platform for the generation of solar energy which addresses issues of land reservation, expert services and appropriate financing. Further, a separate Research & Development (R&D) Department should be linked with the association of experts from developed countries.