[Model Answer QP2022 GS3] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.

Introduction

To combat climate change, India has set an ambitious target of reaching the net zero emission levels by 2070. India has also proposed a five-point strategy (Panchamrit), which includes meeting 50% of its yearly energy demand, which is 500 GW, from renewable resources by 2030. This is the world’s largest expansion plan in renewable energy.

Yes, India can meet 50 percent of its energy needs from renewable energy by 2030

1. Renewable energy sources have a combined installed capacity of 150+ GW. As of 31st August 2022, Renewable energy sources, including large hydropower, have a combined installed capacity of 163 GW.
2. 59 solar parks of aggregate capacity 40 GW have been approved in India.
3. Introduction of Sovereign Green Bonds in public sector projects.
4. By 2021, 165 GW of zero-carbon generation had already been installed in the country.
5. The Central Electricity Authority forecasts the country’s reliance on coal to drop from 53% of installed capacity in 2021 to 33% in 2030, whereas solar and wind together make up 51% by then, up from 23% in 2021.
6. Wind power generation capacity in India is the fourth largest installed wind power capacity in the world.

Challenges for India to meet 50 percent of its energy needs from renewable energy by 2030

1. India needs to massively scale up funding for renewables: India will need $223 billion of investment to meet its goal of wind and solar capacity installations by 2030, according to a new report by research company BloombergNEF (BNEF).
2. The scaling up of renewables in India faces regulatory, project and financing risks, with land acquisition and payment delays.
3. The renegotiation of the Power Purchase Agreement  (PPA) to satisfy all stakeholders is also challenging.

How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? 

1. Eliminate fossil fuels subsidies and put a price on carbon: India has cut subsidies and increased taxes on fossil fuels (petrol and diesel) turning a carbon subsidy regime into one of carbon taxation, by putting an effective price on emissions. In addition, India has increased the coal cess from Rs. 50 per ton to Rs. 100 per ton, which is equivalent to a carbon tax of about US$ 1 per ton.
2. Step up investment in energy efficiency: The Energy Conservation Act (EC Act) was enacted in 2001 with the goal of reducing energy intensity of Indian economy. Bureau of Energy Efficiency (BEE) was set up as the statutory body on 1st March 2002 at the central level to facilitate the implementation of the EC Act. 
3. Create the conditions for phasing out coal: Achieving the 1.5°C target implies that, by 2030, electricity generation from coal needs to decrease by 45% compared to today’s levels. 
4. Improve access to electricity and clean cooking: India’s massive UJALA LED bulb campaign is reducing emissions by 40 million tonnes annually.
5. Swaps are already taking place—at a national level, fossil fuel subsidies have declined while renewable investments are now greater than investments in fossil fuel-based energy generation.

Conclusion

Fossil fuel subsidies are a key barrier to a transition to a clean energy system. Although linked to a reduction in emissions, their reform alone will be unlikely to deliver the permanent emission reductions necessary to meet climate change targets. A “swap”— reallocating some of the savings from subsidy reform to fund the clean energy transition—could magnify the contributions to long-term, permanent emission reductions, the economy, jobs, public health and gender equality.