India will adhere to its pledge of making 50% of energy from non-fossil fuels by 2030, Net Zero is important, but what is more important is that we provide enough electricity for our growth
The Union Minister for Power and New and Renewable Energy R. K. Singh has reiterated the need for India to keep adding energy capacity so that the nation can keep growing in the times to come.
“What we need to be concerned about is the requirement of energy for our growth. There can be no compromise on this. Our electricity demand is growing rapidly. By 2030, energy consumption is expected to double. We will need to add capacity so that our country can grow. Net Zero is important, but what is more important is that we ensure enough electricity for our growth. The living standards of our people will need to improve - and that will require higher per capita consumption of electricity”. The Minister said this while addressing a plenary session on “Renewables - Powering the Net Zero Agenda of India”, on the second and final day of the CII Annual Session 2023, in New Delhi yesterday.
The Power Minister recalled that the country has added 1.84 lakh MW of power from 2014 till now, but that this is not sufficient. Our per capita carbon emissions are one third of global average, and there is going to be no compromise in ensuring 24/7 electricity, said the Minister.
No Problem in Investing
The Minister assured the investor community that India is one of the fastest growing countries with fast-growing energy demand, making it a big market for investors. “The demand is there, come and invest. We have addressed the challenges. We have taken care of the challenge of viability, addressing payment of both legacy dues and current dues. We have brought down legacy dues to almost 50% of what it was earlier, and we seek to wipe it off in 8-9 months or so. Losses of discoms too have been brought down; we have transformed the power sector. There is no problem in investing in power sector now, market is growing. We have changed the systems in such a way that the sector is sounder than it was before” asserted the Minister.
Systems to Ensure Sector does not Become Vulnerable
The Minister spoke against the practice of promising free power, which he said means that taxpayers bear the brunt of the same. “There is no such thing as free power, somebody has to pay for it. State Government which announce free power will have to pay for it from their budget. We have put in place a system that if the discoms do not pay for the electricity they consume, the electricity will get cut off automatically, without any human intervention.”
The Minister pointed out to the industry that India is a world leader in energy transition. “We had pledged that by 2030, we will have 40% of our capacity from non-fossil fuels, we achieved this by 2021, nine years in advance. We have pledged that 50% of our capacity will come from non-fossil fuels by 2030. This trajectory will be adhered to.” The Minister made it clear that India is at the forefront of the transition, since “we believe in the environment”.
Measures to Ensure Trajectory for Renewable Energy Transition
The Minister said that the government has taken care of challenges in adding capacity to renewables. “There was some reluctance on the part of State Electricity Regulatory Commissions in laying down renewable purchase obligations commensurate with the Renewable Purchase Obligations of the Government of India. Amendment in Energy Conservation Act has a provision for mandatorily laying down trajectories for transition, so State Electricity Regulatory Commissions cannot set any separate trajectory, if the trajectory is not followed, there will be huge fines, so there is no question of it not being followed. And this makes sense, since the demand is bulging.”
The Minister spoke of the importance of hydro power, in balancing the huge capacity addition being made to renewable energy. Stating that hydro energy is environment-friendly, the Minister informed that results of surveys show that landslides have come down and slopes have stabilized where hydro projects came up.
Lowering Costs of Energy Storage
Elaborating about the policy approach of the government, the Minister said that the Ministry will ask the States for the type of power they will need and design bids in line with their requirements. “We are taking steps to lower cost of energy storage. We are going to come up with more bids using Viability Gap Funding. We believe in the environment. That is why we announced Net Zero. By 2030, we have said that 50% of our capacity will be from non-fossil fuels, and in fact, it will not be just 50% it will be much more; hopefully storage too would have become viable by then.” We are actively pursuing ways and means of diversification in addressing supply chain issues and we are also interested in alternative technologies, the Minister added.
We will become champion in Green Hydrogen
The Minister said that countries of the developed world which give lectures on free market have started putting up huge barriers in terms of subsidies to green hydrogen, for example. “Despite the fact that we face so many barriers, we will become a champion in green hydrogen production as well. We shall continue to be the leader in energy transition. We need to add capacity, and adding capacity by renewables with Make in India is another of our priorities.”
Explaining challenges in capacity addition, the Minister said that the government will be changing bidding rules to provide that failing in meeting Scheduled Commercial Operation Date will result in the bidder not being able to bid for one year, and failing second time will result in not being able to bid for three years. “So, when you bid, bid carefully and with foresight and deliberation.”
Speaking about reforms in the sector, the Minister informed industry that renewable capacity obligation is now obligatory and that no discom will think about waiting till price becomes lower in future because there will be a uniform rolling tariff.
Big opportunity in transitioning to Open Access
The Minister highlighted that an area of opportunity in achieving Net Zero is through transitioning the commercial and industrial sectors through open-access. He said that he wants the industry to start buying renewables. “It is much cheaper. If any discom or SERC hesitates in giving you open access within time limit, just send us a letter. The demand is there, I would urge you to come and meet it”.
Responding to a question on nuclear power, the Minister said that the country welcomes nuclear power. “It is totally clean. Most developed countries have nuclear as a part of their equation when they contemplate Net Zero.”
Speaking on the role of green hydrogen in India’s energy transition plan, the Minister said that while we have the lowest cost of producing renewable energy in the world, we cannot contend with countries which give 100% subsidy. “How to cope with protectionism is something we need to think about.”
Answering a question on how to address consumers’ preferences for products manufactured using green energy, the Minister reminded the audience that 25% of the electricity we consume today is already green. “By 2030, nearly 50% of electricity shall be green. Further, we are coming out with policy for states going green.”
On the role of R&D, the Minister said that to be effective, R&D has to be in partnership with industry, involving scientists, engineers and academia. He also said that we need to launch our own green bonds.
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