Decisions taken now will determine climate change for a long time to come. “Money pumped into energy infrastructure across the world in the coming years will shape emissions trajectories for decades,” Aditya Valiathan Pillai, senior researcher, Centre for Policy Research, wrote in a newsletter on April 11.
Here’s what experts think India should do to chart a fresh course in energy.
Fossil fuels more volatile
For coal-based power, the last decade has been marked as a period of stressed and stranded assets. In the pre-Covid-19 economy, despite the subsidy support and high demand, investors have seen their holdings in key Indian coal mining and coal-based power companies underperform the Bombay Stock Exchange’s Sensex by an average of 10 per cent a year since 2013, costing Rs 25,000 crore ($3.5 billion) in forgone returns, according to a December 2018 study by the non-governmental environmental organisation Greenpeace.
Why invest in coal when investing in renewables will yield multiple benefits? “Building new coal and propping up the existing fleet with stimulus money would be throwing good money after bad,” Matt Gray, co-head of power and utilities at the think-tank Carbon Tracker, said at the launch of an April 8, report that he co-authored. The report evaluates the economic viability of countries investing in coal to recover from the pandemic and warns India against it.
In India (a regulated market), 2 per cent of the existing 222 GW coal fleet is running at an underlying loss; a further 66 GW is in the pipeline but 23 per cent of this will enter the market with negative cash flow, said the Carbon Tracker report. “Already 51 per cent of operating coal power costs more to run than building new renewables,” it said.
Distributed solar power
In cities and industrial clusters, rooftop solar can avoid air pollution. In remote rural hospitals where electricity supply is erratic, solar power could be used to run ventilators and other medical equipment at a lower cost, Ulka Kelkar, director, climate programme, World Resources Institute India, told IndiaSpend.
Since it is the capital costs that deter adoption of solar power, the government’s recovery package for micro, small and medium enterprises (MSMEs) could infuse capital to enable low-cost energy efficiency upgrades restricted by lack of funds and information. “Such investments will pay for themselves and save costs for MSMEs,” Kelkar said.
The government or corporate social responsibility funds could cover the upfront costs of solar power for rural hospitals, or to support solar vendors to set up such systems in rural areas and sell the power to local hospitals, homes and shops, Kelkar said.
Distributed renewable energy (DRE) sources including solar pumps and rooftop solar provide huge opportunities for growth. India has announced massive schemes including KUSUM (to promote solar pumps) and the rooftop solar programme. Ganesan of CEEW said if India could channel some of the savings that would accrue from negative oil prices and additional taxes on diesel and petrol into these sources, India’s economic recovery
would be on a better footing environmentally.
Prepare the grid
To be able to absorb variable and intermittent injections of renewable energy supply, electricity grids would have to be modernised across Indian states.
While further investment in new renewables capacity is important, it could take a few years for the projects to show economic impact. The intervening period could be used to prepare India’s grid, said Garg of IISD. “Any new investment should be in strengthening and modernisation of the grid. A modern grid can enable better absorption of variable renewable energy and for the adoption of sustainable transport,” she said.
In tandem, to prepare workers for jobs in the renewable sector, free training programmes such as the Ministry of New and Renewable Energy’s Suryamitra programme, which skills youths for solar energy, need to be expanded.
If carried out as part of an integrated new policy, these changes could help steer India on a new path that combines economic recovery
with better public health, thanks to less air pollution, and the kind of clean air that locked-down citizens have experienced for the first time in decades.
Job losses caused by the lockdown could be offset by aggressively supporting the renewable energy sector, as it is faster to build and start a renewable energy plant than fossil fuel-based plants, Sunil Dahiya, analyst, Centre for Research on Energy and Clean Air (CREA), a think-tank, told IndiaSpend. For instance, the 648-MW Kamuthi solar plant in Tamil Nadu was completed in eight months. “Therefore, any relief package directed at the power sector has to keep this in mind and divert the majority of funds towards renewable energy.”
Global coal use in electricity generation must fall 80 per cent below the 2010 levels by 2030 to limit global warming to 1.5°C, according to an analysis of recent research from the UN’s Intergovernmental Panel on Climate Change.
After the global financial crisis of 2008, global CO2 emissions from fossil fuel combustion and cement production grew 5.9 per cent in 2010, more than offsetting the 1.4 per cent decrease in 2009, said Helen Mountford, vice president, Climate & Economics, World Resources Institute.
To avoid dissipating the clean air gains due to the economic slowdown caused by Covid-19 as countries lift restrictions, some of the world’s biggest economic institutions have issued calls to invest in low-carbon and “green” pathways . Investing in renewables is not only a necessary but a smart economic choice, experts believe.
“A mounting body of evidence demonstrates that pursuing low-carbon and climate-resilient growth is the best way to unlock lasting economic and social benefits,” Mountford said.
Bold climate action could deliver at least $26 trillion in net global economic benefits between now and 2030 compared with a business-as-usual approach, according to a 2018 report by the New Climate Economy, an independent body commissioned by the governments of seven nations.
“This includes creating more than 65 million new low-carbon jobs in 2030, equivalent to the combined workforces of the United Kingdom and Egypt today,” Mountford wrote, mentioning the report by the New Climate Economy.
Decarbonisation of the global energy system can grow the global economy and create up to 28 million jobs by 2050, according to the International Renewable Energy Agency. The opportunity to rethink its approach towards fossil fuel provides India with a co-benefit: Reducing the social cost of fossil fuel usage through cleaner air. More than a million yearly deaths in India can be attributed to air pollution.
Air pollution levels in Indian cities— infamous for the worst level of pollution, specifically of dangerous particulates and nitrogen dioxide (NO2)—drastically reduced due to a fall in fossil fuel consumption in the industrial, power and transport sector, said an April 16, analysis by CREA.
Reprinted with permission from Indiaspend.org, a data-driven not for profit organisation