India will need to contend with goals across sectors that are at odds with each other, and resolve the contradictions. Deepak Gupta, former secretary of the Ministry of New and Renewable Energy and Kollura Krishnan, chairman of CVC India Infrastructure, provide their views in an article on the Financial Express website.
Getting it right on deep decarbonisation
We have shown in our previous articles in this newspaper how the developed economies are interpreting ‘Net Zero (NZ) by 2050′ as an universal commitment, to enforce drastic emission reductions even in emerging economies (EEs) notwithstanding the latter’s unfinished development agenda. We submit that this ‘global target’ demands that developed economies achieve NZ a decade earlier to vacate carbon space for EEs. They must also fulfill their financing and technology transfer commitments to enable other nations pursue low-carbon development. One grim inference of COP26, however, is that this may not happen to the desired degree. India, in its own interest, must pursue a deep decarbonisation strategy encompassing all pathways.
The initial goals must be pragmatic, and even incremental, as their achievement will lead to a well-calibrated, multi-sectoral decarbonisation strategy with ability to respond to changing situations. It also necessitates immediately developing an ecosystem which attracts large-scale financial and technological investment for manufacturing in India. It will need factoring in challenges faced by workers and communities whose livelihoods are tied to high-carbon industries, like coal mines. One drawback of our energy planning has been overestimation of demand leading to creation of surplus supply capacity. Ambitious targets have been announced without adequate policy enablers or wherewithal to achieve them, often within ‘silos’, making some targets mutually contradictory with others. The targets of 450 GW RE; doubling coal production and refinery capacity, EVs, energy storage, green hydrogen can’t all be met simultaneously, without creating huge and expensive stranded assets
The prerequisite of scaling up indigenous manufacturing capacity has got ignored while incentivising high-cost early deployment. This is illustrated by the initial race to set up solar capacity, irrespective of high tariffs, and the current reneging by states on offtake/payment obligations—with some even bent upon renegotiating/cancelling PPAs. It will be prudent to (a) align variable RE supplies with ability of grid to absorb this, linked to future, large-scale deployment of storage solutions (b) scale up RE generation capacity in tandem with indigenous manufacturing capacity of solar ingots/wafers/cells, electrolysers, batteries, and other elements of the value chain. There are also issues of grid stability with already-high-variability RE and the historic low CUF of coal power plants being seen currently because of excess supply. Finally, there is issue of discoms’ near-bankruptcy, accentuated with populism-driven promises of free/subsidised electricity. Lots of structural changes are required. Therefore, the coming decade must be earmarked for preparation and consolidation.
Decarbonisation of power sector has been the primary focus, as it is the easiest to mitigate with an established policy framework and the maturity of an array of renewable energy technologies. It should remain a priority while the above issues are addressed. There is also a Catch 22 situation. Till dispatchable RE has achieved scale, with indigenous production and reduction of costs in the coming decade, it is inevitable that coal-based thermal power generation will increase.
This will meet increase in demand till 2030 at least, perhaps longer, as demand also peaks. It is imperative to adopt strategic management of thermal-plant capacity, in the context of the need for high PLF as well as retirement, along with consequential impact on coal mining, with, in turn, consideration of the impact on livelihoods and forests. Our best forests must be saved. Simultaneously, we need evaluate the option of safe nuclear power with thorium fuel cycle as well as emerging small nuclear reactors, in addition to the holy grail of fusion reactors.
Furthermore, a comprehensive integrated approach to demand-side management, combining energy efficiency, electronics and digital technologies, needs to be adopted on a multi-sectoral basis, facilitated by financing and enforced through regulation. White goods in particular must become much more energy-efficient. Finally, transformation of distribution utilities is required facilitating the efficient management of decarbonised smart grids while ensuring their standalone economic viability.
Deep decarbonisation of transport, industry and buildings: The initial focus of the transport sector has been on reduction of petro-products consumption, viz BS-VI grade fuels, biofuel blending and e-mobility. Within EVs, the thrust should be on 2/3 wheelers small commercial vehicles and buses. Cars on roads should be displaced by ‘shared mobility’ options and a quantum jump in public transport. Heavy-duty applications, e.g., trucking, marine, aviation, will eventually transit to green hydrogen, but we must prepare for fuel-cell trucks quickly. Considering the transport/distribution costs and difficulties, decentralised production of green hydrogen through electrolysers as well as biomass (at points of consumption) should be incentivised.
The Indian industry has been at the forefront of energy efficiency, thanks to the PAT scheme, under Energy Conservation Act 2001; but this must be scaled up significantly. In recent years, RE sourcing has gone up, somewhat insufficiently, both for electricity and steam requirements, albeit with limitations in displacing fossil fuels within critical processes. The biggest challenge is in the hard-to-abate sectors, viz cement, steel, plastics, aluminum, which globally account for 9.3 GT CO2/year. This could be reduced to 5.6 GT just by adopting circular economy in materials as well as products, which will also create many green jobs. Further decarbonisation will come from green hydrogen, biofuels and bioplastics. But this must be kept for later years.
Buildings are a major source of GHG emissions. Deep decarbonisation must address embodied carbon in building materials, and adopt green architectural designs by mandating energy efficiency norms. Furthermore, buildings decarbonisation must extend to millions of habitats and workplaces of the low- and middle-income groups.
Deep decarbonisation of agriculture (land use & carbon removal: India’s arable land (1.75 million sqkm) and cattle population (300 million) offer huge potential for farm-based bio-economy, viz efficient production of biological resources and their conversion to food and cattle feed as well as feedstock for wide spectrum of bioenergy (power as well as biomethane and biofuels). The NZ target will require methane mitigation from agriculture (from rice cultivation and animal husbandry), which is challenging but, with right climate finance, will create many livelihoods—for instance, in seaweed cultivation for curated animal feed, manure management systems, agriculture residues depots, etc. Climate finance will also support sustainable forestry management and afforestation as well as agroforestry, resulting in enhanced carbon sinks. It will also support BECC (bioenergy with carbon capture), especially with bio methane and bio ethanol plants, which could result in negative emissions. This complex area requires an array of carefully constructed policies and actions.
We have indicated areas for action and briefly outlined approach. We will deal with these more closely in subsequent articles.