Through the commitments at CoP26 and the consequent impetus given to the transition to a carbon-neutral economy in recent policy debates and discourses, the country has embarked on a journey to tackle climate change and attain green recovery through climate policy initiatives implemented through a structured framework and planned investments. Exploring and utilising renewable energy sources, achieving energy efficiency and reducing carbon emissions remain at the forefront of this agenda. However, climate scientists have been warning the world about the long-term repercussions of continued carbon emissions under the business-as-usual scenario for at least the last decade. The Intergovernmental Panel on Climate Change (IPCC) completed the first part of its Sixth Assessment Report, focusing on The Physical Science, in August 2021, concluding that, as a result of human-induced climate change, hot extremes have become more frequent and severe across most land regions since the 1950s. This has been visible in India this summer, with the hottest March in 122 years recorded in Northwest India. The national capital Delhi and its surrounding areas were also affected, with temperatures above normal in April and today in the midst of a heatwave with temperatures forecast to rise.

Further, the occasional power shortage issues that occur are a multi-faceted problem influenced by a number of causes including an increase in natural power demand as the country recovers from the Covid-19 outbreak, as well as rising prices for imported natural gas and coal. Coastal thermal power plants that rely on imported coal have seen their electricity generation drop as import costs have risen.

India is now swiftly moving to re-examine its reliance on coal. Last year's events highlighted the volatility of the global coal and natural gas markets. In the event of a power outage, India is often forced to rely on imported coal and natural gas. The government is taking active steps to stimulate local coal manufacture by loosening coal mining regulations, it is now crucial to build upon these initiatives to address fundamental issue of continuous carbon emissions, which exacerbates climate change concerns. Experts largely believe that renewable energy provides a holistic solution; yet, such a significant shift in the country's electricity environment necessitates immediate commitment.

India's decision to go "net zero" by 2070 has been lauded as a game changer around the world. By the end of March 2022, the country will have reached about 110 GW of renewable energy. Furthermore, renewables received $ 35 billion of the $ 122 billion in energy-related investment, about twice as much as fossil fuels. Green hydrogen has also received government support, with the recent introduction of the Green Hydrogen Policy, which provides first support for green hydrogen and ammonia generation in the country. Green hydrogen will be a critical piece of the puzzle not just for achieving net zero, but also for establishing India as a global manufacturing powerhouse for green hydrogen.

The budget session 2022-2023 lays emphasis on energy transition and renewable energy, devoting major subsidies to local solar module manufacture and introducing new sectors like as battery swapping, decentralised Renewable Energy, and biomass pellet deployment in thermal plants.

Renewable energy is an important part of green recovery, particularly in a developing country like India. Because clean energy technologies like solar are significantly more labour demanding than traditional energy sources, the renewable industry is not only economically competitive, but also has enormous job-creation potential. For example, it is anticipated that if India achieves its goal of 500 GW of non-fossil fuel energy sources by 2030, it will create 3.4 million new clean energy jobs, employing over a million people. This is projected to come primarily from Distributed RE, which will offer local job possibilities. Such measures may also support the formation of new enterprises and aid in the expansion of existing ones. India could potentially become a manufacturing centre for emerging technologies such as green hydrogen and battery generation.

India's capacity building through skill development is a top priority. This will address the shortage of skilled employees in India's electricity sector, not just in the private sector but also within DISCOMs, grid management corporations, regulators, and policymakers. In India, well-designed training programmes are the need of the hour.

Thus, employment generation, infusing liquidity for financial relief, improving economic competence for enhanced trade prospects, and guaranteeing a green energy transition should be the four goals of the country’s green recovery package. A comprehensive approach that considers a variety of complementary solutions and recognises essential areas such as technological innovations, manufacturing, storage, power generation, and distribution would contribute extensively to the country’s targets in this regard.

As India, similar to other economies, begins to recover from the COVID-19 pandemic, several new challenges emerge, particularly, surrounding the country's potential impact from climate change. To properly solve the gap between ever-growing demand and restricted supply, the ongoing revamp of India's power system would be a game changer. India can fully utilise its tremendous human capital and shift the course of its development by transitioning from coal to other alternative renewable energy sources.

This has been co-authored by Ishita Sirsikar and Srijata Deb.

We are India's national investment facilitation agency.


For further queries on this subject, please get in touch with us @Invest India.
Raise your query