India, the world's third largest emitter of greenhouse gases after China and the US, is coming under mounting pressure to reduce its dependence on coal to bring down carbon emissions. But balancing the country's burgeoning energy needs with environmental demands are proving to be a major challenge.
“The increasing economic boost and energy needs along with rapid urbanisation have put the country in a tough spot,” says Kunal Sood, a social impact strategist and investor, and the founder of We The Planet, a global platform on climate change.
The International Energy Agency (IEA) forecasts that India's energy demands will grow more than any other country over the next 20 years. By 2030, it is expected to overtake the European Union as the third biggest energy consumer.
Although renewable energy’s share in India’s energy mix is increasing, coal accounts for almost 70 per cent of the country’s electricity generation, according to the IEA. It plays a major role in global warming and contributes to deadly air pollution.
“As a large developing economy and due to increasing urbanisation in India, our demands are increasing and our emissions are increasing,” says Radha Goyal, the deputy director of the Indian Pollution Control Association, a non-government organisation.
India is expanding the use of renewable energy, particularly solar energy. Prime Minister Narendra Modi has set a target of 450 gigawatts of renewable energy capacity by 2030, which is five times India’s current levels.
But the country is under pressure to do much more to tackle the issue as diplomatic pressure mounts to make a pledge on net zero carbon emissions by 2050. The Indian government is debating whether to set a net zero target for its carbon emissions by 2050, according to Bloomberg. Net zero refers to achieving a balance between greenhouse gas emissions that are produced and those that are removed from the atmosphere.
The matter also came into sharp focus during US special presidential envoy for climate John Kerry's visit to India last week. Mr Kerry described India as a “world leader in the deployment of renewable energy”. But, without mentioning India specifically, he said that the world needs to reduce its dependence on coal.
“We need to phase out coal five times faster than we have been,” Mr Kerry told attendees of the South Asia Women in Energy Leadership Summit, which was held online. But he noted that India is already making progress on this front too.
“It's already cheaper to build solar in India than anywhere else in the world,” Mr Kerry said. “That kind of urgency is exactly what we need to confront global climate change.”
Any efforts to cut emissions will need to be supported by funding though. The IEA estimates that India would need an additional funding of $1.4 trillion over the next two decades to be on a “sustainable path”.
Mr Kerry said India was a “red-hot investment opportunity” for renewable power and signalled that the US was willing to work with New Delhi to drive investment flows towards the sector.
Under President Joe Biden, the US is focusing on tackling climate change and has rejoined the Paris Agreement.
The country may not commit to a net zero target, given the pace at which its energy demands are set to rise over the coming years amid economic growth, Reuters reported. The government is aiming for India to become a $5tn economy by 2025.
“While the current government, especially Prime Minister Modi is setting high standards by promoting renewable power sources and investing in climate change and regenerative solutions, it’s a long shot from what we need here and now, as a collective globally to solve this dire issue,” says Mr Sood. “We need to harness the power of both the public and private sector to co-create novel solutions that can help protect our world.”
The challenges that India is facing in making a transition to cleaner energy sources were highlighted this month, when the country delayed the deadlines for coal-fired power plants to meet new emissions norms.
Thermal power plants had initially been given varying deadlines in different regions up until 2017 to install flue gas desulphurisation units to reduce emissions of sulphur dioxides, which contributes to air pollution. That deadline was then extended for different regions to 2022.
Now, the environment ministry says plants in densely populated urban areas have to comply by 2022, but those in less polluted areas will have until the end of 2024 to comply or they would be shut down. But industry groups have long complained about the cost of meeting these pollution standards.
In addition, despite the widespread concerns about coal's role in global warming, India is planning to stage its biggest auction of coal mines, with the coal ministry last month announcing that it would put 67 mines on the block.
A move to completely move away from coal would be “cost-intensive”, according to Ms Goyal from the Indian Pollution Control Association.
“There are lot of policies that are coming up to tackle the air pollution problem and climate change, so we can follow the low carbon path,” she says. “Right now coal is the major source, but India is trying to come up with more renewable energy sources.”
However, achieving net zero is “not very realistic” for the country, Ms Goyal says.
“We are at a stage where India's energy demands are very huge, so meeting all those demands with cleaner energy sources and making zero emission, it's not very realistic, although India's trying its best,” she says.
Comments from the Indian government have also suggested that the country may not be ready for carbon neutrality.
India's energy minister Raj Kumar Singh, speaking at an online meeting organised by the IEA at the end of last month, described net zero targets as “pie in the sky”, and that richer nations could not stop poorer countries from using fossil fuels.
India has highlighted that developed countries have a larger per capita carbon footprint than developing nations and that wealthier countries should also be doing more to address the problem.
Despite the hurdles, the renewable energy sector is upbeat about the transition to greener power in India, which is becoming more competitive due to low tariffs and the government’s efforts to encourage less polluting energy sources.
“Although India currently lags in achieving its targets, there is scope for more making up for the lag,” says Animesh Damani, the managing partner at Artha Energy Resources, a Mumbai-based advisory firm.
“If we look at the utility sector the investment environment is amazing. We have witnessed large funds, sovereign wealth funds invest in the sector, and private equity funds have taken exposure.”
He adds that these investors “have a positive outlook towards India and continue to do so”.
Reducing the country's enormous dependence on coal will require substantial investment and effort – but environmentalists and industry insiders say that these are steps that have to be taken.
“We cannot avoid the cost,” says Ashutosh Verma, the founder of Exalta India, a solar energy company. “The cost of not adopting ways to reduce our carbon footprint is way more expensive than making a change now.”