Increased generation from renewables is not the only piece of the puzzle for achieving rapid green development. Efficiency in energy distribution and use has to increase dramatically.
As the world gets dangerously warmer, and almost every country is setting targets for achieving “net zero” emission goals, developing nations face the additional challenge of lifting the material conditions of their populations. In other words, economic development has to be consistent with sustaining the planet. As the world’s most populous nation, and one with a very long way to go in reaching reasonable levels of material prosperity, what India does in the next few years will be of supreme importance. The new National Electricity Plan (NEP), released in May, gives a good sense of how India’s green transition will take place.
The core requirement for economic development is increasing the capacity to generate electric power. To be consistent with climate sustainability, this increased capacity has to be green—coming from renewable sources. India currently has about 400 Gigawatts (GW) of electric power capacity, of which about 53% is due to coal (and lignite), and almost 25% due to solar and wind, with the renewables total at 37.5%. But the usage of capacity varies across types, and over 70% of actual power generation comes from coal. With economic growth and this reliance on coal for electric power, India’s greenhouse gas emissions have been increasing, in addition to worsening air pollution. If the NEP’s goals for the next decade are achieved, the figures will be 29% coal and 64% renewables, with solar on its own accounting for 40% of the total, or well over half of the renewables contribution.
The targets imply growth rates of about 12% for wind power over the next decade, and 20% for solar. The latter number is high, and achieving it will require a concerted and rigorous implementation effort. Details in the NEP suggest that the technical, economic and (though, less so) political aspects of implementation have been given attention. It is invariably the case that unforeseen challenges will arise, but ambitious targets are better than conservative ones, for the current situation. Modelling done at the Council on Energy, Environment and Water, a New Delhi think tank, suggests that a growth rate for solar of 10% will be needed in the longer run for achieving net zero targets, but frontloading that, as the NEP does, to accelerate the green transition has multiple benefits: reducing cumulative emissions, speeding up learning by doing, and enhancing cost reduction from economies of scale.
Over the last seven decades, India’s electric power capacity has grown at an annual average of about 8%, although with significant variations over economic cycles. The plan for the next decade implies a similar overall growth rate, but the focus on solar, with its planned 20% growth rate (and to a lesser extent, wind) means that the NEP embodies a very ambitious and focused vision of green development.
An important step in this process, which captured media attention, was the scaling back of plans for expanding coal capacity. The NEP projects coal capacity growing at little over 1% a year over the next decade, with all of that coming from the existing pipeline of construction. Plans for future construction, while not abandoned, were pushed beyond the 10-year horizon of the current plan, and replaced by higher targets for battery energy storage systems (BESS).
While other storage technologies are also in the mix, expanding BESS capacity will be particularly important for making solar and wind capacity more useful, and contribute to reducing the generation vs. capacity disparity between coal and renewables, bringing it more in line with what is feasible (based on US numbers).
A rapid increase in electric power capacity and generation from renewables will also be vital to the electrification of transport, replacing fossil fuels in a sector of the economy that has to grow rapidly to support overall development, contributing to India being more economically integrated internally as well as with the rest of the world.
Increased electric power capacity from renewables is not the only piece of the puzzle of achieving rapid green economic development. Efficiency in energy distribution and use has to increase dramatically. This will include improvements in transport networks, production facilities, and residential and commercial buildings. All of these can be significant contributors to reducing overall greenhouse gas emissions.
As noted, the challenges and solutions are not only technical, but also economic and political. The NEP provides detailed discussions of technological issues, in particular, but it also considers the economics of different technologies of electricity generation. Solar power, especially with some relatively small subsidisation of storage systems, is already cost competitive with coal. There is a case for carbon pricing, to send the correct signals for reducing activities that contribute to emissions, but this is beyond the scope of the NEP, as are the political challenges of dealing with disruptions in existing ways of doing things, including the livelihoods of those in the coal industry.
Rapid green development will be harder than rapid development which ignores emissions, since it adds a constraint to the choices that will promote development. Aligning the incentives of myriad businesses and individuals with what is best for the planet will need intelligent and carefully designed policies. But the new NEP provides a strong foundation for everything else that needs to be done for achieving rapid green development.