Growth Of Renewable Energy High In India, But Pace Not Enough: Economist

Climate change action is the need of the hour and the world, including India, is taking various measures to curb emissions and switch to cleaner energy. In the launch episode of The Great Climate Change Challenge, a six-month-long movement to combat climate change, Montek Singh Ahluwalia - economist and former Deputy Chairman of the Planning Commission of India - talks about the challenges India faces in achieving its Net Zero target.  

Q. Why is the time now important for India to tackle climate change?

Mr Ahluwalia: It is not just for India, the time is now for the world because climate change - if it is not managed or limited - is going to be very damaging for the world and we are going to be one of the countries seriously affected.

We cannot control climate change by anything we do but we have to be part of an international effort, a coordinated effort where everybody does its bit. If we don't do our bit that international agreement will get eroded. So climate change is important for the world. It is especially important for India because we will be badly affected. We need to do our bit and the Prime Minister's commitment in Glasgow indicates what our bit is. That means going to Net Zero by 2070 and I think it's time we now worked out a practical strategy for implementing it”.

Q. What are the immediate targets to achieve?

Mr Ahluwalia: I think a good way of looking at that is to break down our own emissions into the different sources. About 50% of our emissions come from the generation of electricity based on fossil fuels, mainly coal. You got another 30% coming from industry using fossil fuels. Then you have got about 15-16% or something like that from different types of transport, and then little bits from different sectors. Now in all of these, the area where we clearly have available technology to make a switch to non-polluting energy is really in the power sector.

It is very important to recognize that you can always cut emissions but not grow, not have GDP, etc and be satisfied with what you have got. But that is not really the solution. We basically want to be able to grow, we want to expand our GDP, which is necessary to expand income levels but we want to do it without generating emissions.

Now, fortunately, at least let us look at electricity. You cannot develop without more energy and one way of using energy in a non-polluting way is to switch to electricity in the first place and make sure that the electricity is non-polluting. And the non-pollution of electricity comes from switching away from coal to renewable energy and a few other sources.

Q. What does decarbonizing the electricity sector mean?

Mr Ahluwalia: It means exactly what you said in practical terms which are to build up solar and wind and a couple of other things and phase down coal. Should we be optimistic? Well, it is one of those typical glasses half-full situations. If you ask if we are ramping up our renewable energy capacity, the answer is we are. As a matter of fact, the growth of renewable energy in India is at a very high rate.

Are we doing it as fast as we need to in order to go to Net Zero? The answer is no. This is because we had a top target for renewables in 2022, which is about 175 gigawatts and I think we have only got to about 100. And we need to get it to 450 by 2030.

The good news is something is happening more than something, but the not-so-good news is that if your target is serious and you want to reach where you said you will reach, you need to do a lot more.

Q. Why is the distribution of power still so difficult?

Mr Ahluwalia: It is not that you will get solar energy separately. It will be fed into the grid. The electricity people are buying today, some of it is coming from renewables they don't know, they are just paying for the electricity. Now the question really is what we need to do to accelerate the pace. The cost is very critical. The good news on cost is that if you just look at the price of electricity per kWh generated, solar electricity is already much cheaper than coal. But the problem with solar and also the wind is that it is intermittent. You don't get a steady supply during the year, so it is a big peak when the Sun is shining brightly and then it drops off.

Now to use this electricity in the grid, you need a steady supply. Initially, you can offset that just by buying more from the coal supplies because they can ramp it up a little. But increasingly, if the capacity becomes renewable energy-heavy then that is not going to work and certainly by 2030 we will need to find ways in which we can balance the renewable electricity to make it a steady supply.

How do you balance it?

Well, the most obvious thing is you put in grid-scale battery storage. So you have a larger capacity during the peak, store the electricity, and release the electricity when solar production is low. That adds cost and the present situation is that if you add the cost of storage to the cost of solar electricity the total cost is higher than it is for coal. So the economics of the switch becomes more difficult.

Q. Could there be innovations when it comes to storage?

In the solar side itself, there can be innovations because the efficiency of cells will increase. Remember this is not something that we are just doing ourselves. This is something that is going to solve the problem for the whole world so the cumulative research capacity of the world will be discussing how we improve the efficiency of solar cells.

The lesson for us is that our supply system must be sufficient and flexible to allow such new technology to come in. And that raises another set of issues.

The biggest improvement we can hope for is that the cost of battery storage may come down. Now, battery storage is already coming down for electric vehicles but the batteries you need for electric vehicles are very different. And that cost hasn't come down because the transition hasn't yet occurred.

For the world as a whole, one should assume that is going to happen and that is why we need to have access to the best technology. Over the longer run, we will be one of the largest markets for grid-scale batteries simply because of the size of the economy. So it makes sense to attract people with the technology to come and produce it here.