At the 26th Conference of Parties (COP26) of the UN Framework Convention on Climate Change (UNFCCC), held at Glasgow, Scotland, India reiterated its commitment to mitigating climate change and decarbonising the economy. It announced a net zero emissions target for 2070, backed by strong near-term goals to increase the reliance on renewables and reduce the carbon intensity of the economy.
India has set a target to augment non-fossil fuel electric capacity to 500 GW and meet 50 per cent of its energy requirements from renewables by 2030. Besides this, it has pledged to cut carbon emissions by 1 billion tonnes (bt) by 2030, setting for the first time a target in terms of absolute emissions cuts. It has also committed to lower the emissions intensity of GDP by 45 per cent by 2030.
Notably, the new targets are a level up from India’s previous Intended Nationally Determined Contributions to the UNFCC, wherein it had committed to reduce the emissions intensity of GDP by 33-35 per cent over the 2005 levels and achieve about 40 per cent electric power capacity from non-fossil fuels by 2030.
Scaling up renewable energy
Currently, India’s non-fossil fuel-based generation capacity stands at 153 GW (including 100 GW of renewable energy, 46 GW of hydropower and 7 GW of nuclear power), accounting for 40 per cent of the total capacity. Over the last deca-de or so, on the back of a strong policy and regulatory push, renewable energy capacity has expanded rapidly and accounts for a 26 per cent share. Further, around 50 GW of renewable energy capacity is at various stages of development and 30 GW is under bidding and tendering (as of August 2021). In view of this, the country’s first renewable energy target of 175 GW by 2022 seems to be on track. On the power generation front, during 2020-21, thermal generation accounted for a 75 per cent share, while hydropower and renewable energy accounted for 11 per cent each. The share of renewable energy in generation has been increasing steadily and has grown from 5.6 per cent in 2015-16 to 10.7 per cent in 2020-21.
India’s non-fossil fuel capacity target of 500 GW by 2030 at COP26 is in line with the capacity projection under the Central Electricity Authority’s (CEA) optimal energy mix up to 2029-30. The CEA estimates suggest that the country’s non-fossil fuel capacity will reach around 504 GW by 2030, including 72 GW from hydro, 263 GW from solar, 140 GW from wind and 10 GW from biomass sources. Notably, the power ministry is expected to soon release renewable purchase obligations (RPOs) till 2030, keeping in view the 500 GW renewable energy target. The new RPOs are likely to include 70-100 GW of hydropower and 450 GW of solar and wind energy.
Undoubtedly, renewable energy capacity is expected to be scaled up in a big way in the coming years; however, industry experts believe that coal-based power will continue to feed the growing energy need in the next five decades and is expected to peak only in 2040. Coal retirement is not foreseen beyond the normal end of life of power units. However, the utilisation of coal-based units will be reduced and several units will need to cycle more frequently.
The 1 bt reduction in projected emissions until 2030 is a leap forward in the country’s decarbonisation journey. This is the first time that India has set a target in terms of absolute emissions. Its CO2 emissions stood at 2.88 bt in 2020, and in a business-as-usual (BAU) scenario (considering the median annual rate of change during 2010-19), these are projected to reach 4.48 bt in 2030, as per the Centre for Science and Environment (CSE). A 1 bt reduction in CO2 emissions will require a 22 per cent reduction in emissions in a BAU scenario. Meanwhile, in per capita terms, the country would be emitting 2.31 tonnes by 2030 following a 1 bt reduction in emissions, as against 2.98 tonnes of CO2 per capita in a BAU scenario. Notably, India’s per capita consumption would be significantly lower than the estimated per capita CO2 emissions in 2030 by the US (9.42 tonnes per capita), the European Union (EU) (4.12 tonnes), the UK (2.7 tonnes) and China (8.88 tonnes).
At COP26, India also pledged to reduce the emissions intensity of its economy by 45 per cent, a more ambitious target than the previous goal of a 33-35 per cent cut from the 2005 level by 2030. This requires enhanced measures to reduce emissions from the transport sector, the energy-intensive industrial sector, etc. As per the CSE, India achieved 25 per cent emissions intensity reduction of GDP between 2005 and 2016, and is on the path to achieve more than 40 per cent by 2030.
Net zero target by 2070
With the recent pledge for net zero by 2070, India has joined over 125 countries that have committed to net zero emissions. India is the fourth-largest emitter of carbon emissions, after China, the US and the EU. However, the country’s per capita emissions are far behind those of the US, China and the EU. Although the 2070 net zero target falls behind the 2050 commitment made by the US and Europe, and the 2060 commitment made by China and Saudi Arabia, it is a significant target for a developing nation. The developed countries have used fossil fuels to power their industrialisation for centuries and, therefore, have more resources available now to transition away from them.
A study, “Implications of a Net-zero Target for India’s Sectoral Energy Transitions and Climate Policy”, published by the Council on Energy, Environment and Water, notes that India’s total installed solar power capacity would need to increase to 5,630 GW to achieve net zero CO2 emissions by 2070. Further, the report highlights that to achieve a net zero target by 2070, the use of coal, especially for power generation, would need to peak by 2040 and decline by 99 per cent between 2040 and 2060. Meanwhile, the consumption of crude oil, across sectors, would need to peak by 2050 and fall by 90 per cent between 2050 and 2070. Green hydrogen could contribute 19 per cent of the total energy needs of the industrial sector. These insights assume that hydrogen would play an integral part in this transition. Further, the report notes that if India were to attain net zero emissions by 2070, the economic cost of the transition could be around 4.1 per cent of GDP in the net zero year. A breakthrough in carbon capture and storage technology could help reduce the economic cost of the transition.
Another notable achievement of COP26 is the launch of the “Green Grids Initiative – One Sun One World One Grid” (GGI-OSOWOG) at the conference’s World Leaders Summit. GGI-OSOWOG, being spearheaded by the governments of India and the UK in partnership with the International Solar Alliance (ISA) and the World Bank Group, aims to harness solar energy wherever the sun is shining, ensuring that the electricity generated flows to areas that need it most. To help deliver the vision of One Sun One World One Grid, 80 countries have resolved to combine their efforts to create more interconnected grids, endorsing the One Sun Declaration, which will focus on building new transmission lines, crossing frontiers and connecting different time zones, creating a global ecosystem of interconnected renewables that are shared for mutual benefit and global sustainability. The ISA aims to help mobilise $1 trillion of funding by 2030 to assist developing countries in expanding their solar power grids, both in transmission and generation, to meet their energy needs.
Meeting the climate change commitments made at COP26 by India hinges, to a large extent, on the availability of climate finance. India has sought climate finance of $1 trillion from the developed nations at the earliest for meeting its commitment. “The increase in the renewable power capacity target for FY2030 to 500 GW from 450 GW earlier will strengthen the investment prospects in the renewable energy sector. This represents a fivefold increase from the current capacity of 101 GW and would entail investments of more than $300 billion, apart from additional investments in augmenting the evacuation infrastructure and building storage capabilities,” says Sabyasachi Majumdar, senior vice-president and group head, corporate ratings, ICRA Limited. The availability of adequate funding is one of the critical aspects for achieving these targets, he adds.
One of the draft agreements on the decisions proposed at COP26 notes that the current provision of climate finance is insufficient to respond to climate change impacts in developing countries and urges developed countries to provide financial resources in continuation of their existing obligations. It emphasises the need to mobilise climate finance from all sources to reach the level needed to achieve the goals of the Paris Agreement, including significantly enhanced support for developing countries beyond $100 billion per year. It calls upon the private sector, multilateral development banks and other financial institutions to enhance finance mobilisation.
While India’s commitment to achieving net zero by 2070 is a landmark announcement, the nearer-term targets of increasing the share of non-fossil fuels and lowering carbon emissions by 2030 are more tangible and realistic. Explains Dr Rahul Tongia, senior fellow, Center for Social and Economic Progress, “Prime Minister Modi’s pledges at COP26 were more than just for net zero by 2070, but the headline pledge is unlikely to dramatically change much for the electricity sector in the short run, for several reasons. First, the obvious observation that 2070 is five decades away, while power infrastructure is typically planned for about three decades. A more relevant reason for limited short-term change is the fact that the additional pledges by 2030, such as raising capacity that is not from fossil fuels, do not change India’s actions much, but rather simply deepen them. The first and foremost action that this requires is increasing the installed capacity of renewable energy by 2030. This was already in full swing, and no additional target would change the on-ground realities that integration and finance are the two real needs to achieve any high renewable energy system by 2030, regardless of whether this was 350 GW or 450 GW or 500 GW.”
However, there is a need for clarity on various technical details of the country’s climate change targets. It is not immediately clear if the 2070 net-zero target refers to only CO2 emissions, or to emissions of all greenhouse gases. “The 2030 targets are much more ambitious when we think about producing half the energy from renewable energy. We still await clarifications on whether this is total renewable energy or only energy within the electrical sector. Either way, this requires vastly more scaling up,” says Tongia.
Overall, India’s pledge at COP26 has levelled up its commitments for decarbonising the economy and expanding renewable energy. However, the availability of adequate climate finance, clarity on climate targets and on-the-ground implementation are crucial for achieving the goals.