Calling out for fiscal supports such as a lending body, a Renewable Energy collateral fund and public-private investment on research and development, Greenpeace’s latest report talks about the future of renewable energy and how renewable energy prices could be brought down to grid parity in India.
The second edition of the Energy [R]evolution for India Report was recently released by Greenpeace in a bid to provide insights into the urgent need for an ‘energy revolution’ and a roadmap for achieving a sustainable energy system in India.
Coming on the heels of the massive power grid failure in the country which left millions without electricity, the report challenges the dominant perception that only centralized systems based on conventional sources of energy can deliver power.
Speaking about the report, Abhishek Pratap, Greenpeace senior campaigner said, “The Energy [R]evolution for India Report focuses on a practical pathway to secure energy supply, particularly electricity supply. The report deals with 2 scenarios- the first one being the reference scenario which one gets from dominant projections of energy supply and demand by the Integrated Energy Policy reports of the Planning Commission and International Energy Agency project reports while the second scenario is the Green Peace projection or the Energy [R]evolution scenario where we significantly look at demand reduction and energy efficiency measures. According to the latter scenario, we see that after 2050 in India there will be more energy efficiency and demand for conventional sources of energy will significantly go down.” According to the Energy [R]evolution scenario, as renewable energy has no fuel costs, fuel cost savings will reach a total of INR 285 trillion ($5500 billion) up to 2050 or INR 7.1trillion ($138 billion) per year. It predicts that the total fuel cost savings would cover 200% of the total additional investments compared to the Reference scenario. The costs for coal and gas on the other hand will continue rising and be a burden to the national economy.
The report stresses the need for a major haul of existing policies and regulations governing energy supply in the country.India’s short term and mid-term target to meet its climate ambitions is set at 15% of renewable energy by 2020. However, according to Greenpeace, this ambition needs to be raised to at least 20%. Pratap adds, “India has to have an aggregated standardized target. Currently there are 3 targets in place: 15% target under the National Action Plan on Climate Change, the target under MNRE is 10% and Integrated Energy Policy under Planning Commission has 6% target by 2030. There needs to be standardization in targets.”
The report also stresses the need for the government to allocate 50% of its financial allocation under Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) to grid interactive and off-grid Decentralized Renewable Energy for ensuring assured and affordable access to electricity for the rural population.
Talking about other policies which need revision and restructuring, Pratap contends that the concept of equity and common but differentiated responsibility (CBDR) needs to be held even inside the country with economically healthier states having more Renewable energy Purchase Obligations (RPOs) than their economically weaker counterparts. Also, RPOs, he says, should not be standardized throughout the country, but should be dependent on the renewable potential, consumer profile and economic status of specific states.
The report says that a huge investment is needed on renewable infrastructure starting from 2012. It also seeks to make renewables a priority lending sector.
Pointing to the silent revolution of renewable energy that has been taking place in the world, the report says that since the late 1990s, wind and solar power installations grew faster than any other power plant technology across the world, about 430,000 MW. The report also says that global new investment in renewables rose 17% to a record $ 257 billion in 2011. Interestingly, the figure is six times the investments made in renewable energy in 2004 and almost twice the investments made in 2007, the year marked out by the acute financial meltdown. Cost of renewable power equipment fell rapidly at the time and economic growth and policy priorities was uncertain. The report also calculated the net investment in renewable power capacity including large hydro power to be around $40 billion higher than net investment in fossil fuel capacity in 2011.
While a lot of initiatives have been undertaken in accelerating the renewable energy sector, what is needed is to bring this conversation in the mainstream dialogue between governments, corporates and civil society. While there is no dearth of frameworks and policies and policy recommendations, which have set the groundwork for such a trajectory, actual investments and a fundamental change in mind-set needs to be made for India to embark on a sustainable energy future.
The author Anindita Chakraborty is part of the Sustainability Outlook team.