How India can gradually shift to Green Energy
Unprecedented changes in weather patterns as a result of human-induced climate change have become a primary concern for global policymakers and businesses. Maintaining a temperature below 1.5°C has become the primary goal for everyone on this planet. The manufacturing world is also undergoing significant changes as a result of these factors.
By and large, heavy industry (cement, steel, chemicals, and aluminium) and heavy-duty transport (shipping, commercial road transport, and aviation), which are classified as 'hard-to-abate' sectors, account for a sizable portion of India's total greenhouse gas emissions. Given India's status as a developing country, industrial sectors such as steel and cement will continue to experience rapid growth over the next few decades.
Steel and cement emissions are difficult to reduce because fossil fuels are required for production processes (for example, carbon from coal is used as a reductant in iron making) as well as to generate high heat, and cement contains a significant amount of CO2. As a result, it is difficult to meet such requirements with renewable energy. The challenge is to alter the manufacturing process and substitute green hydrogen for carbon.
There is another issue that needs to be resolved regarding the use of green hydrogen. This is to enable grid capacity on a large scale for solar energy to power electrolysers that can generate hydrogen on a large scale and thus partially replace coal. Carbon capture and sequestration experiments are also underway to supplement the use of green hydrogen.
Effective public-private partnerships are required to stimulate hydrogen demand and supply. A significant challenge is coordinating funding for heavy industry abatement. A system of incentives can be established that links tax breaks and low-cost financing to the amount of pollution abated through new technologies.
The journey has begun, but patience will be required over the next few years for technology to mature commercially and for grid scalability to be effective enough to enable high transmission industries to use green hydrogen on a large scale.
This is inextricably linked to India's strategy, which was revealed at COP26 in Glasgow. While the first goal is to install 500 GW of non-fossil fuel electricity by 2030, India's Central Electricity Authority (CEA) has projected the energy mix for 2030, the second goal is to meet 50% of energy requirements through renewables by the same year.
The third objective is to reduce projected emissions by one billion tonnes (1 Gt) from current levels (2.9 Gt), despite the fact that one projection indicates that they will be 4.5 Gt in 2030 under a business-as-usual scenario.
By 2030, the fourth objective is to achieve a 45 percent reduction in carbon intensity relative to 2005 levels. India has already achieved a 25% reduction in emission intensity of GDP between 2005 and 2016 and is well on its way to exceeding 40% by 2030. Finally, by 2070, India must achieve net zero emissions (a balance between emissions produced and emissions reduced). While these are lofty but attainable goals, massive deployment of clean energy technologies such as renewables, electric vehicles, and energy efficient building retrofits is required.
A robust network of storage batteries is required to ensure that captured solar energy is fully utilised. Thus, costs must decrease, and the trend over the last five years indicates that this will occur within the next three to five years.
However, another issue with solar energy is the large amount of land required. Acquiring large parcels of land is difficult in India and will become even more difficult over the next decade or so as the population increases, urbanisation expands, and more land becomes arable. This can be mitigated somewhat if solar panel efficiency improves from the current 19-21 percent.
Significant investment in innovation in these areas will accelerate the development of new and cost-effective technologies. Collaboration between private research and development, engineering institutes, and the solar panel manufacturing industry should be encouraged and rewarded.
Additionally, a critical enabler of the 500 GW target is grid capacity upgrade and expansion. Electrolysers' costs must be reduced in order to achieve green hydrogen's cost parity with natural gas.
The overall financial challenge is also enormous – solar power plants, a storage battery network, hydrogen electrolysers, EV charging infrastructure, and grid upgrades. Consistent with this, serious efforts should be made to secure substantial long-term financing at low interest rates. The way forward is to promote and adopt green finance. Already, significant interest in 'green bonds' has developed. As we implement technologies that continue to improve in efficiency and effectiveness, there is a need for viability gap funding – to bridge the gap between what a user can pay as a fair price and what is viable from the perspective of justifying the investment or covering the cost of capital.
India's per capita energy consumption is extremely low for a developing country: it is one-fourth that of China and one-tenth that of the United States. In order to achieve emission reductions, we must ensure that the basic and growing energy needs of the average person are met through clean but affordable energy sources. Additionally, as India transitions to a low-carbon economy, workforce transitions in fossil fuel-based industries will need to be managed with social safety nets in place, as well as to ensure that the green opportunity provides avenues for economic prosperity.
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