India has taken concrete steps to reduce the impact of greenhouse gases on the environment and provide better living conditions to people. Although a lot still needs to be done, it can be said that the country is implementing the Paris Agreement in its true spirit
India’s efforts on environment protection started with the enactment of the Environment Protection Law in 1986, which was last modified in 2018 to minimize the adverse impact of human activities on the environment. Although a lot still needs to be done, it can be said that India is implementing the Paris Agreement in its true spirit. The country has taken concrete steps to reduce the impact of greenhouse gases and provide better living conditions to its people.
Let us examine the reforms carried out in the energy sector by India, which have a direct impact on the environment and the steps required to move forward.
Reforms in the energy sector
The Government of India spelt out its policy objectives in 2015 that sustainable energy should be available to all its citizens within affordable price. The reforms in the energy sector have been carried out in a phased manner by upgrading the existing non-renewable sources, generating renewable sources of energy through ‘Make in India’ to become self-reliant and permitting the best technologies to operate in the country.
To begin with, renewable energy will act as a support to the existing energy sources. However, in times to come, it will take the lead. This approach will be able to provide a systematic transformation in energy generation, enabling energy security through a unified grid.
India has been able to provide round-the-clock electricity within affordable price to around 750 million people in the last ten years. The country has also been able to reduce the conventional use of biomass by providing Liquefied Petroleum Gas (LPG) with clean cooking, thus improving the living standards of people.
Light-Emitting Diodes (LEDs) have successfully used solar energy to fulfil the demand for energy-efficient lighting with low consumption cost. Its mass production has also led to the creation of local jobs.
Notably, until 2018, India’s investment in solar power was greater than that of all fossil fuel sources of electricity combined. This was possible through large-scale auctions, which contributed to the development of renewable energy at rapidly decreasing prices. The government is attracting global companies to produce solar photovoltaic (PV), lithium batteries, solar charging, cooling, electric mobility, smart grids and advanced biofuels.
The non-renewable sources of energy in the form of fossil fuels such as coal, petroleum and natural gas are used in power plants, refineries and Liquefied Natural Gas (LNG) terminals, which have long plant life. Therefore, they cannot be completely abandoned but used in a manner such that the carbon emissions are well within the permissible levels and the output produced is environmentally complied.
Coal sector was opened around a decade back for bidding purposes but was cancelled due to defects in the selection criteria, which created a stalemate for around six years. However, on June 18th, 2020, 41 coal blocks were opened for commercial bidding.
Amid the coronavirus crisis, the power sector is facing a challenge because of lower utilization of fossil fuels and related financing issues. To meet this challenge, a comprehensive plan has been formulated by the Indian government. It is expected that the creation of a wholesale power market will be competitive and enhance the power generation capacity. To remove the imbalances and ensure national energy security, it is essential to create a single national power gird with emphasis on encouraging investments in the power sector – both greenfield and brownfield – by debottlenecking the existing plants to produce emission-free output. Private companies operating globally, which were engaged in thermal energy for installing the power plants are now actively participating in solar and hydel energy also.
To achieve an uninterrupted growth in the power sector, the existing system needs to tackle the issues of integration and flexibility by providing inter-connectivity between non-renewable and renewable energy-based power plants. The new coal-based power plants are efficient, flexible and relatively low in emissions, thereby complying with the stringent pollution norms. Such plants are in a better position due to their economic viability compared to the older ones, requiring modifications but expensive to comply with environmental standards. Therefore, there is a need to identify those plants, which can be made environment-complied and can improve system performance.
India is the fourth-largest oil refiner, a net exporter of refined products and the third-largest consumer of oil. Therefore, our dependency on oil consumption is quite high and is likely to cross China by the end of 2020. This provides an opportunity to create an attractive market investment in the refinery sector. Accordingly, the government made a long-term roadmap to expand its refining capacity by considering the current projected demand until 2040. India is unable to fulfil its local demand due to limited oil reserves and dependence on the import of crude oil (which was 80% as of 2018). To fill the gap, the government has prioritised reducing oil imports, increasing domestic upstream activities, diversifying its sources of supply and increasing investments in overseas oil fields in the Middle-East and Africa on a long-term basis to get crude at a consistent price.
India’s current strategic petroleum reserve capacity is 40 million barrels, which covers just over 10 days of current net imports. However, with the expected growth in oil consumption, this reserve will last only for four days of net imports by 2040. Therefore, it is high time to pursue the strategic stockholding policy in the next phase to have an additional 50 million barrels as reserve capacity and accordingly the government is attracting potential investors to enhance stockholding.
The current share of natural gas in the country’s energy mix is 6%, which the government aims to increase to 15% by 2030. This will provide an opportunity to improve environmental sustainability and flexibility in its energy system.
India’s domestic gas production has been below forecast levels over the past few years. Gas has been used more extensively in residential and transport sectors but it has fallen in power generation, where imported natural gas remains a second option due to the low cost of renewables and coal. Therefore, there is a good scope of opening the natural gas market by strengthening regulatory supervision of upstream, midstream and downstream activities as part of the market reform. This will bring greater efficiency, drive up demand for gas and increase investment in gas generation, transportation and distribution.
India is committed to Goal 7 of the United Nations Sustainable Development (UNSD) Goals of delivering energy access and has been able to decrease emissions by more than 20% of the Gross Domestic Product (GDP) in the past decade. However, carbon dioxide (CO2) emissions are still rising. India’s per capita emissions currently are 1.6 tons of CO2, which is still well below the global average of 4.4 tons, while its share of global total CO2 emissions is around 6.4%.
With the above position as on date, India has taken significant steps to improve energy efficiency and has been able to reduce the additional annual energy demand by 15 % (i.e. 300 million tons of CO2 emissions reduction during 2000 to 2018). Looking at the steps taken to reduce the emissions intensity and increase the share of non-fossil fuels in its power generation capacity, one can safely mention that India complies with the Nationally Determined Contribution as per the Paris Agreement.
The expected energy demand as per the current projection is likely to double by 2040, with electricity demand increasing three times due to increased use of electric appliances combined with India’s cooling needs, which may require one billion air conditioning units by 2050. If India can raise the level of its energy efficiency by 2040 by using energy-efficient tools, it will save around USD 190 billion per year in energy imports and avoid electricity generation of 875 terawatt-hours per year, almost half of India’s current annual power generation.
The way forward and recommendations
To achieve the global environmental temperature reduction of two degrees by 2050 as per the Paris Agreement of 2015, it is time to explore the warehouse of renewable energy and utilise it efficiently by opening the market for private players. However, care must be taken to provide a level playing field by creating a regulatory framework to comply fair and transparent process to avoid litigation.
Currently, India is focusing on innovative technologies as it has increased its spending two times over a period of five years under its ‘Mission innovation’ with the participation of government, public and private sector. India deployed 84 GW of grid-connected renewable electricity capacity, with total generating capacity of 366 GW in 2019 and intends to achieve 175 GW of renewables by 2022, which is possible by having a focus on the flexibility required for effective system integration.
A long-term national energy policy, private investors’ participation, enhanced dedicated emergency stock and learning from the best practices will help in achieving the targets set out in the Paris Agreement.
(The writer is Professor at the UPES School of Law)