While inaugurating the Fourth Clean Energy Ministerial in New Delhi last week the Prime Minister of India Dr Manmohan Singh made the case for tackling climate change by adopting clean energy systems.
He followed this up with making bold promises about India’s commitment to the cause. These include a goal to double India’s renewable energy capacity from 25000 MW in 2012 to 55000 MW by 2017.
This in turn includes, for instance, the National Solar Mission which has an objective of developing 22000 MW of solar capacity by the year 2022. These are a part of India’s commitment to reduce the energy intensity of its GDP by 20-25% by 2020.
These promises – and others – aren’t new.
India formally accepted climate change as a major concern in its Five Year Plan documents, which are the guideline dossiers of government policy in India. Climate change also featured in India’s annual Economic Surveys, released prior to the annual Budgets.
India’s current Five Year Plan (2012-2017), for the first time ever, stated that sustainability will be a prominent focus. The government has in turn constituted the National and State Action Plans on Climate Change (NAPCC and SAPCC) which lay out goals and strategies to implement renewable energy sources into the energy mix, apart from other measures.
Singh told the Clean Energy Ministerial the costs of renewables were limiting their deployment across the country (Pic: UN Photos)
However, in spite of these promising measures, there is a lack of clarity as to what extent it will be able to meet its stated goals.
The government of India is pursuing a path of rapid industrialization which is fossil fuel intensive. Its flagship project, the Delhi-Mumbai Industrial Corridor, for instance, envisages the creation of an industrial zone between its two largest cities, which would be along a 1400 km long stretch.
Such industrial projects, and a steadily growing domestic per capita demand (which has been growing steadily at a compound annual growth rate of 3.1% over the past few years) will ensure that hydrocarbons play a big role in meeting India’s energy requirements. The International Energy Agency (IEA) predicts that coal will continue to be a major constituent of energy supply, even as far as in 2035.
There is also some ambiguity over in the Planning Commission report over the energy mix. While the NAPCC has called for policies to ensure renewables take 15% of the energy mix by 2020, the 12th Five Year Plan report states in two different places that it will be 9% and 12% in 2017.
It is unclear as to which of these two numbers is being targeted. Currently, renewables form 5% of the energy mix.
Red tape
This lack of clarity over the 2017 numbers is complicated by administrative and policy challenges. For one, there is a multiplicity of institutions and ministries overseeing this sector. Specifically, there are five central ministries in the Government of India which handle energy in India.
This hinders coordinated efforts in this field. Secondly, policy shortfalls are an issue, such as the local content requirements in renewables. This has been impacting growth, particularly for solar sources. The government will have to relax these requirements in order to meet its stated goals.
As a result of these issues – and general administrative lethargy – it is commonplace to find projects delayed across sectors. According to a study by the Ministry of Statistics and Programme Implementation, as of May 2012, 42% of the infrastructure projects in consideration were delayed.
Only 24% of these 564 projects were on schedule. The rest did not have a fixed date of commissioning. The Solar Mission and other projects in this sector are not immune to such delays.
Economic limits
Another issue is the precarious fiscal situation of the government. India’s GDP growth rate bottomed out at 5% in the fiscal year 2012-13. It is expected to rise to 6.3% in the current fiscal year.
The impact of this may go either way for the renewables sector. On the one hand, lowering fossil fuel subsidies and the rise of overall electricity prices (by the ways of a loan restructuring arrangement with state electricity companies) may make renewables more competitive with traditional sources.
On the other hand, conservative spending by a government with an eye on next year’s election may lead to a shortfall of assistance to the renewables sector.
Pressing issues include social security and provision of basic services, both of which it has performed poorly in. The tight fiscal situation has meant that the government will pursue relatively economical options across sectors. In the electricity sector, this would imply continuing assistance to coal and other fossil fuels.
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In part due to such constraints and shortcomings, the Prime Minister, speaking at the Clean Energy Ministerial, reiterated the standard defence that several developing countries have had over the years.
“On any principle of equity, the industrialized countries have to bear a large share of the burden,” he said. “They are historically responsible for the bulk of the accumulated GHG emissions and this alone suggests a greater responsibility. They also have high per capita incomes which give them the highest capacity to bear the burden.”
Even documents of the government of India, such as the Economic Survey of 2013, point out that India’s per capita CO2 emissions are less than one ninth of that of the USA, as its per capita electricity demand is one fourth of the world average and a thirteenth of the OECD average.
However, India would be impacted by climate change more than advanced nations would, partly due to the high levels of poverty in the country. It is imperative that there is political leadership on the issue.
It remains to be seen if the Government of India has the will and ability to implement a clean energy in practice, as it has in word.