Written by Pooja Vijay Ramamurthi.
India’s most ambitious commitment in its Intended National Determined Contributions (INDC) under the Paris Agreement is to increase its installed capacity from clean sources to 40 percent by 2030. Earlier this year, the government’s draft National Energy Plan went further; to propose that India could have more than half of its installed capacity from renewables as early as 2027. As per national inventories, electricity generation is the single largest emitting category contributing to 40 percent of India’s emissions. It makes sense therefore that India’s most ambitious mitigation policies would be targeted towards the electricity sector.
In India, climate mitigation measures also fall in line with India’s energy security aspirations.
Simultaneously, India is also striving to achieve its big energy goals of increasing energy security and providing reliable electricity to its entire population. Meeting these energy goals is important to India, as it is home to 250 million people without access to electricity, the world’s largest population without such access and simultaneously sees a steadily increasing dependence on energy imports. In this context, the question arises, can an environmental target of considerably increasing the share of renewables in its energy mix also help India meet its energy goals.
An increased share of electricity from domestic renewable sources would help India avoid a growth pathway that is completely dependent on fossil fuels. An expert report by the Indian government argued that, with the current trend of dramatically falling solar and wind prices, renewable tariffs are now comparable to those from imported coal. The report goes on to state that given the high levels of renewables planned to be installed in India, utilities could easily replace expensive power from imported coal with these clean sources by 2022. India currently imports 25 percent of its thermal coal and while renewables might not reduce this figure, they could certainly curb its rise.
However, when we look at the aspect of electricity access, the answer becomes less certain. An increase in renewables capacity does not necessarily guarantee improved electricity services to households. This is because while India has become a world leader in installed solar and wind capacity, most of these are grid-connected power plants and hence feed into the national grid. Contrary to popular belief, poor electricity access in India is not due to a lack of generation capacity. The Energy Ministry of Piyush Goyal himself claiming that there was no shortage of power in the country and it was up to states to purchase it so that every household got 24/7 electricity.
However, the real bottleneck for supplying better quality electricity are the country’s institutionally and financially weak state electricity distribution utilities. These utilities, which are already in deep financial debt are reluctant to buy power and distribute it to rural areas as it would mean additional losses as rural tariffs are often set below the cost at which utilities buy electricity. Thus, adding clean sources of power into India’s distribution system will not automatically lead to increased access for electricity poor communities.
Having said that, the direct role that renewables can play in increasing access is through off-grid solutions. Although there is high potential for off-grid solutions in rural India, there are still barriers for these systems to become viable. A recent study on renewable energy deployment conducted in the Indian state of Karnataka, found that micro-grids are unable to compete with the grid. Off-grid developer’s lack of knowledge of the state electrification roadmap means that there is no certainty as to when a village is going to be electrified. This results in off-grid systems often being set up in areas where grid extension occurs soon after. Once the national grid reaches these areas, consumers are keen to switch over rather than continue using their old off-grid systems. To mitigate this type of risk to off-grid developers, the government should create a compensation plan, where developers can be connected to the grid once it is extended to these areas. These generators can be paid according to the power that they inject into the grid. The government’s recently proposed micro and mini-grid policy addresses some of these issues and might serve to create a more viable environment for off-grid solutions.
In India, climate mitigation measures also fall in line with India’s energy security aspirations. This is good news, as India has an incentive to keep in place measures that help global efforts to combat climate change. The provision of the right incentives to off-grid renewable generators could give the government the opportunity to also utilize these climate change mitigation measures to effectively tackle issues of electricity poverty.
Pooja Vijay Ramamurthi is a Senior Policy Research Associate at the Energy Policy Institute at the University of Chicago (EPIC), based in the New Delhi. Her research interests lie at the intersection of energy, environment, and public policy. Photo credit: CC by Energy in India/ Wikimedia Commons