Relevance: GS-3: Infrastructure: Energy, Ports, Roads, Airports,Railways etc.

Key phrases: Energy transition, Coal energy

Why in news?

India is gradually moving to clean energy

Analysis:

What is clean energy?

• Clean energy is the energy derived from renewable, zero-emissions sources as well as energy saved through energy efficiency measures. To be truly clean the carbon cost of production and storage needs to be zero, and this is where sources such as solar power and wind energy are seen as being truly clean and renewable
• Clean energy, comes from natural sources or processes that are constantly replenished. For example, sunlight or wind keep shining and blowing, even if their availability depends on time and weather
• Clean energy is energy gained from sources that do release air pollutants, while green energy is energy derived from natural sources. There is a subtle difference between these two energy types even though they are often spoken of as being the same.

Why this clamour for clean energy?

• India’s commitments under the Paris climate deal: Apart from decreasing the energy intensity and creation of carbon sink, India has also committed itself to meet 40% of its total energy demand from non-fossil sources
• PM has set the targets and reiterated that the Indian government is committed to increasing the share of renewable energy in India’s total energy share. Initially, the target for renewable energy was set at 175 GW, but, now it has been further revised to 450 GW by 2030
• Air Pollution: Rise in the levels of air pollution in Delhi and other major cities have led to a change in the policy direction towards clean energy driven growth in India
• India imports 84% of its oil needs. With the volatile nature of international politics in the Middle East, India constantly faces insecurity in the global oil trade. If India opts for renewable energy source, the global oil prices won’t affect India’s economy.
• As compared to the traditional sources of energy like coal-based or oil-based thermal power plants, solar energy has the advantage of almost no requirement of procurement of fuel as well as lesser wear and tear due to lack of movement of parts. Therefore, return on investment is higher in the long run.
• As renewable energy can also be decentralised, therefore, it is better placed to extend last-mile connectivity in remote areas, where it might not be financially feasible to stretch the main grid.
• Expansion of electricity coverage: Increased coverage of electricity, along with the provision of last-mile connectivity to all households under the SAUBHAGYA scheme or Sahaj Bijli Har Ghar Yojana, has led to higher demand for energy
• Economic growth: Despite the COVID-induced slowdown, India is one of the few countries which are looking at a substantial growth rate in the future, thus increasing the requirement of energy in the post-COVID world.

Status of clean energy in India

• 40 GW of solar capacity as of 2020-11 times jump from 2014-MNRE estimate-100 GW target by 2022
• 60 GW target by 2022-40 GW current capacity for wind power
• India has added 45GW of hydropower and 10 GW in last 8 years
• India is blending 10 % of ethanol in its petrol and targets to take it to 20 by 2025

Efforts of government towards clean energy

• National Clean Energy Fund: It is the fund created using the carbon tax for backing research and development of innovative eco-friendly technologies.
• National Wind-Solar Hybrid Policy: Through this policy, the government seeks to promote new renewable energy projects and hybridisation of the existing ones.
• Off-Grid and Decentralised Solar Photo Voltaic Applications Programme: This scheme aims to promote off-grid application of the Solar Photovoltaic (SPV) systems for meeting the lighting and electricity needs of the individuals
• Sustainable Rooftop Implementation for Solar Transfiguration of India (SRISTI) scheme: This scheme provides financial aids to the beneficiaries who install a solar power plant at the rooftop within the country
• FDI Policy: FDI up to 100% is allowed in the renewable energy sector under the Automatic route and no prior Government approval is needed.

India’s coal reliance

• India has total power capacity close to 400 GW and 60% of it comes from coal
• India is facilitating a 16 billion dollars Adani Carmichael coal plant in Australia which will produce 2.3 Billion tonnes of coal in its lifetime
• Government waived carbon tax from coal- Discoms owe 11 billion dollars to power generators, and laud the move
• Government sought to boost the domestic coal mining sector with a series of commercial auctions
• Government allows FDI in coal bidding - earlier prior experience in mining in India was required- important as India imported 235 MT last year for 1.7L crore due to lack of mining

Why it is difficult to make sudden transition from coal?

• 18 solar plants are required to generate capacity of one thermal plant-administrative overhead
• 25 percent lower cost per MW than solar energy in India
• Transition away from fossil fuels would not only require massive investments in alternatives and technology, but also dedicated expenditure to restore the livelihoods of those dependent on these sectors
• Estimates of India’s remaining carbon budget must factor in early emissions spent to the detriment of its economic progress. Today 38.5 per cent of districts in India have some form of coal dependency
• There is a simultaneous risk to future revenues from the tapering of fossil fuel consumption. These account for roughly one-fifth of India’s tax revenues. Moreover, the decline in tax revenues is also likely to impact sovereign credit ratings
• Around 10 per cent of commercial bank loans are to carbon intensive sectors, half of which are attributable to the power sector

Role of financing in the clean energy transition

• As per an estimate by the Council on Energy, Environment and Water, the investment requirement for meeting the net zero target will be $10.1 trillion
• Promise of $100 billion from developed countries for climate mitigation pales in comparison to the needs of developing countries such as India. Therefore, multilateral and private capital must enhance their commitments to invest in low cost technology
• Sovereign borrowing dedicated to this transition must not be discounted by ratings.
• Creating a development finance institution dedicated to low carbon transition can help accurately assess the finance required, and streamline the transition spending

Way ahead

• Balance developmental agenda and environmental concerns-. Promotion of Clean Coal Technology which is at present Cost prohibitive is the way to move ahead- coal beneficiation should be done to reduce the ash content and improve its grade.
• Government needs to reduce time taken for approval of mining leases and also easing the procedures for clearances. NITI Aayog has suggested a 180-day limit.
• There should be enhanced connectivity across mineral zones and infrastructure projects driven by PPP model-Doubling of rail routes near coal bearing areas; enhanced port capacities.

Source: Indian Express