Progress and Prospects of Renewable Energy Transition in India
By Apoorva Muthukumar
India is the fastest-growing economy at a rate of an average of 5% every year and is currently the fifth-largest economy in the world (Investopedia). This growth has a lot of different facets to it that leads to certain externalities. There is an exponential rise in the consumption and manufacturing of goods and services to keep up with growing demands, but the country also has a large population in rural areas of about 288 million, that currently do not have access to grid-based electricity. In 2020, energy should be a basic human right that is available to everyone without prejudice. In the current atmosphere during COVID-19, it has been almost impossible to conduct life without access to the internet. Ultimately, everything is governed by access to electricity right now.
While India has for long invested in building solar power plants and hydropower plants, it is not without dispute. There is also a need to consider the needs of the rural communities, some of which are still using Bunsen burners and chimney lamps for light and heat, which doesn’t give much room for improvement in the quality of life. In the age where sustainable development goals are driving progress forward and many governments exploring ways in which they can attain these goals, this paper aims to review where India stands in regards to their energy policy as well as what is the pathway forward for them. Improvements are being made in outfitting rural homes with non-traditional forms of electricity, such as solar-powered household electronics such as a hurricane lamp, or a solar power stove or cooker. However, there is still a lack of access to grid electricity. This begs the question of whether these electricity alternatives empower the communities that have access to them or if it's just allowing the current policies to overlook the rural poor and cheat them out of formal grid access?
As is the trend with a lot of growing economies, a significant population from rural areas are migrating to cities in search of more opportunities and improvement in the quality of life. This not only renders those left behind in the rural areas less important but also puts a strain on the ever-increasing demand and the equal supply necessary which is expected to hit 31% of the world's energy usage by 2035. India is currently exploring transition fuels in nuclear, biomass, geothermal, and ethanol, the former's share in the energy mix will rise to 25% by 2050 (Kumar et al, 2020), but there are also investments being made in solar and wind energy infrastructure being made while the country's fossil fuel repositories are depleting.
In 1992, the Ministry of Non-Conventional Energy Sources was established to drive development and progress in the renewable energy sector. Renewable energy in the energy mix is expected to fulfill 35% of power demand by 2030 with the probability of reducing up to 45% of greenhouse emission. As there has been steady advancement in technology, it has been responsible for electricity consumption but also improving the quality of life. As the power generation system in India is centralized, governmental resources and policy tools have failed to offer power to all 1.3 billion of its people, with approximately one-third of the electricity being lost to theft. However, with the help of private governance, there is an opportunity for distribution through franchise models in urban areas. In 2009, India invested INR 135 billion in clean energy to pursue its advancement in the renewable energy transition. In addition to the Electricity Act of 2003, the National Electricity Policy (NEP) was established. By acting upon this investment and policy, it is expected that 175 GW of renewable energy capacity is set to be installed by 2022 and will increase the capacity of renewable energy electricity generation up to 40%. NEP's framework should also be focusing on building basic infrastructure and providing energy-efficient solutions in rural areas.
Transition fuels are an energy source that has been in place in the context of non-fossil fuel energy sources in India for a while. Currently, biomass is a significant source of energy for household and industrial use at more than 1% of the required electricity on a global scale. Due to the amount of food waste that is accumulated as well as the cheaper infrastructure and small area required for the proper functioning of biomass, it has been widely used across India in mostly rural areas. The Clean Development Mechanism is employed to attract more economic projects that will get incentives like subsidies.
Among different renewable energy sources, wind energy production is almost entirely governed by the private sector, however, the central government's part is to support the operation by launching an array of different financial incentives and innovative schemes that draws in the private sector in the first place. The wind power potential is at 302 GW and the industry is on its way to achieving the set goal of 60GW ahead of its 2022 goal (Kumar et al, 2019).
An important aspect of the production of non-fossil fuel electricity is the cost. The need for advanced technology and the implementation of infrastructure is expensive. In a country like India, where the wealth gap is large, the affordability of renewable energy is not possible for all communities of the country to achieve. This creates a positive feedback mechanism, wherein, the energy produced by renewable energy sources is more expensive and has been easier to lean on fossil fuels and transition fuels instead. The aforementioned policies have helped in the diversification of energy sources and the impact of FDI and subsidies have lured the private sector to invest more in the renewable energy sector. However, since the central and state governments are not working in tandem to achieve the expected low carbon energy mix, this is causing a lag in the development of the transition.
Another significant factor to include in the larger discussion of renewable energy sources is that every single one of these alternatives has externalities in different domains. The three mains solar, wind, and hydropower are land-intensive, wherein, they occupy a lot of space that would lead to habitat displacement of people and animals. Solar uses natural resources that are finite such as silicon, wind raises a lot of issues around birds and noise pollution, and hydropower, is perhaps the most contentious out of all three - displaces lives, disrupts the river ecosystem that it is built upon, and also affects the way water reaches people. Transition fuels such as biomass, nuclear, ethanol also have issues concerning waste storage and emission productions. These are some issues to consider when pursuing a low carbon economy, however, there is consensus that transition fuels are better than fossil fuels and large-scale renewable energy sources are the ultimate goal to reach the 2-degree goal.
The Indian central government and private sectors have been working hard at increasing the energy mix to reflect more renewable energy sources and thus, leaps and bounds have been made towards the progress. However, with the high costs that renewable energy poses, the risk for energy injustice is much higher. In summary, there are policies and private governance strategies that are addressing the increasing demand for energy in accordance with the energy transition, but the method in which they are also addressing that over 280 million citizens do not have access to energy is unclear. Energy justice is important not just because electricity is a human right but also lead to increased economic development as more people with access to educational tools through electricity will be able to work more skilled jobs.
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