India's transition to renewable would need strong policy support: ETC

Energy Transition Committee (ETC), in a report last year suggested India not to make any new investment in the coal sector. ETC is now willing to work with policymakers and redesign policies, which traditionally have been ‘coal-centric’. "We are arguing that if you are building a completely new energy system, it can be fully renewable in the coming 20-25 years,” told Lord Adair Turner, chairman, ETC told Business Standard.

ETC is launching two major initiatives this year, one is de-carbonising core infrastructure sectors globally and other is to take the vision of transition to renewable in India, said Turner.

ETC is a diverse international group that has members across the energy landscape. It was convened to help identify pathways for change in energy systems to ensure both better growth and a better climate. This is inspired by the work of the New Climate Economy.

Turner said this year ETC would introduce India chapter. ETC has collaborated with TERI in India to publish the report, which focuses on de-carbonisation of core manufacturing sectors such as steel, thermal power, manufacturing, automobiles etc and also suggest a transition in the Indian electricity space.

"ETC India takes the basic proposition of switch to renewable and work out if it really works in India, in real details and specific circumstances in this country. We are looking at challenges around the electricity demand, existing coal-fired plants and ones, which will get stranded post renewable. This coupled with land and other capital availability challenge for renewable in India," said Turner.

In India, ETC is expecting to face the dilemma of energy access and renewable based energy security, along with cost efficiency. ETC and TERI in their report bat for renewable as the cheaper and more efficient option than coal. 

“Price of renewable especially solar has come below coal. Once the cost of storage plus renewable is below coal, it stands as the most viable option and meet demands of every person in the country. Existing coal capacity will continue to meet the demand till it becomes economically unviable. While new capacity will be renewable plus storage,” said Ajay Mathur, DG, TERI.

In the Paris Climate Change commitment, India has set a target of 40 per cent of its energy demand would come from non-fossil fuel sources. The Indian government, however, has maintained that coal would remain the primary source and base power for the country 

The ETC report observed that India has a 10-year window of opportunity to overcome the challenges to large-scale and economically preferential adoption of renewable energy. “The prime consideration for utilisation of renewable energy thereafter would be whether the price of ‘despatchable renewable electricity’ i.e. renewable + balancing reaches Rs 5 per unit,” said the report.

It further said while the growth in electricity demand, policy, regulatory measures, and initiatives would lead to a “pull factor”, the dovetailing of international technological cooperation and financial support so as to overcome the “humps of challenge” would enable its realisation. This, the ETC believes could provide a paradigm shift in the future of Indian electricity sector.

“In this economic transition, various kinds of issues will come up. The one currently happening is that coal capacity is suffering, because there is much greater capacity than there is demand. Solar+Wind is only 8 per cent of total electricity and PLFs are down to below 50 per cent. Challenge is how we enable the transition along with the financial health of the sector,” said Mathur.

He further said that ETC would provide policy options to meet the varied challenges when they come up during the transition to low carbon, green future.

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