India’s Clean Energy Transition

Context: India has pledged to achieve net zero emissions by 2070, with a goal to lower the emission intensity of its GDP and ensure that 50% of its power generation capacity comes from non-fossil fuel sources by 2030.

India’s Clean Energy Transition Status

• Renewable Energy (RE) Sources: As of August 2024, India’s installed renewable energy capacity, including large hydropower, stands at 199.52 GW. The breakdown of installed capacity is as follows:
  • Wind Power: 47.19 GW
  • Solar Power: 89.43 GW
  • Biomass/Co-generation: 10.35 GW
  • Small Hydro Power: 5.07 GW
  • Waste to Energy: 0.60 GW
  • Large Hydro: 46.92 GW
• Global Ranking: India ranks 4th globally in renewable energy installed capacity, 4th in wind power, and 5th in solar power.

RE Targets as per India’s Updated Nationally Determined Contributions (NDCs):

• Achieve 50% of power generation capacity from non-fossil fuel sources by 2030.
• Commission 500 GW of renewable energy capacity by 2030.
• Energy Demand Growth: India’s energy demand is projected to double over the next 25 years. Per capita energy consumption is expected to rise from 0.43 tonnes of oil equivalent (toe) in 2022 to 0.8 toe by 2047, while per capita electricity consumption is projected to increase from 1,331 kWh in 2023 to 3,675 kWh by 2047.
• Electricity’s Role: Electricity’s share in total energy demand is forecasted to rise from 18.3% in 2022 to 40.3% in 2047, facilitating a more efficient and cleaner energy system.

Benefits of the Clean Energy Transition:

• Energy Security: In 2023, India imported 88.9% of its crude oil, 43.3% of its natural gas, and 25.04% of its coal. Transitioning to renewable energy will reduce reliance on these imports.
• Environmental Sustainability: Lower emissions will promote environmental sustainability.
• Energy Access: Solar microgrids and small-hydro projects can improve electricity access in remote areas, enhancing living standards and promoting economic growth.
• Job Creation: An estimated 50 million jobs could be created, with the transition potentially contributing $15 trillion to India’s economy.
• Social Benefits: A reduction in air pollution from decreased fossil fuel use will benefit public health.

Challenges in the Clean Energy Transition:

• Investment Requirements: Achieving net zero will require an investment of $14–17 trillion between 2022 and 2070.
• High Initial Costs: The setup costs for wind farms, land acquisition, and limitations of energy storage solutions pose financial challenges.
• Intermittency of Renewables: Renewable energy sources like solar and wind are inconsistent, impacting energy supply stability.
• Dependence on Fossil Fuels: Coal still accounts for 70% of India’s power generation, and 56% of rural households rely on traditional biomass for cooking.
• Impact on Fossil Fuel-Dependent Jobs: As the economy transitions, jobs in fossil fuel sectors could decline, affecting state revenues and social welfare programs.
• Raw Material Shortages: Limited availability of key materials like solar modules, lithium, nickel, cobalt, and rare earth elements could hinder the transition.
• Environmental Concerns: Challenges include wildlife collisions with wind turbines, the impact of transmission lines on species like the Great Indian Bustard, and the significant water requirements for hydrogen production.

Way Forward:

• Domestic Manufacturing: Strengthening domestic production of key components in the renewable energy supply chain, including polysilicon, wafers, solar cells, and wind turbines, is crucial.
• Trade Barriers: Temporarily relaxing duties on imported solar cells and modules will support growth until the domestic manufacturing ecosystem matures.
• Transmission Infrastructure: Developing infrastructure for power evacuation and grid integration will be essential to handle the variable nature of renewable energy.
• Faster Project Approvals: Streamlining land acquisition and statutory approvals will help speed up renewable energy projects.
• Energy Storage Solutions: Scaling up technologies like flow batteries, sodium-ion batteries, and hydrogen storage will enhance energy reliability.
• Subsidy Reduction: Reducing subsidies and promoting solar rooftops, smart meters, and renewable energy solutions for agriculture and small businesses will aid in a smoother transition.