Quantcast

India's Huge Commitment to Renewable Energy Provides 'Gift to the World'

Insights + Opinion

Prime Minister Narendra Modi proclaimed India’s “megawatts to gigawatts” challenge at the Renewable Energy Investment Summit (RE-Invest) last week, building on his existing commitment to 160 gigawatts of solar and wind by 2022. Energy Minister Piyush Goyal doubled down, saying that he expected that the already ambitious goal might well be substantially increased for the third time in nine months, and told the audience that “the government stands committed to making renewable energy India’s gift to the world.” Goyal then went on to promise that India would create a consortium of the “300 days of sunshine nations” to further bring down the cost of solar power. And long time renewables advocate, Rail Minister and former Coal and Power minister Suresh Prabhu declared that the Prime Minister’s “Swach India” (Clean India) campaign needed to be matched with Swach Shakti (Clean Power).

Energy Minister Piyush Goyal doubled down, saying that he expected that the already ambitious goal might well be substantially increased for the third time in nine months, and told the audience that “the government stands committed to making renewable energy India’s gift to the world.”

The conference was India’s first big renewables trade convention, and it made lots of news. The Climate Group released a new analysis of the business opportunity from off-grid renewables in India, concluding that by 2018, in only three years, this would have become at least a $150 million dollar business, but also pointing out that the current regulatory regime makes getting to scale very difficult for businesses seeking to serve households currently denied electricity.

Anil Ambani, one of India’s major industrialists, laid out the case for solar energy in an extraordinarily informative opinion piece in the Hindustan Times, identifying with tremendous specificity exactly what it would take for India to realize its potential, arguing that “The future of energy is solar and it is very bright” and making clear that India can solve the problem of its limited unused land area by putting a full 40 percent of the country’s total solar generation on roof-tops. Ambani is not just opining. His company has committed to build 6 GW of solar power in the State of Rajasthan, which would equal all of its conventional power generating capability, making Reliance perhaps the first major fossil fuel company in the world to switch to clean energy.

And UN Secretary General’s Special Envoy for Cities and Climate Change Michael Bloomberg challenged India to recognize that the public health costs of continuing to rely primarily on coal for its electricity were no longer tolerable. Bloomberg, with whom I am working on the Envoyship, also told key Indian business and governmental leaders that they should be cautious about assuming that needed financing would be there long term for coal power, since investors were beginning to shy away—from concerns about climate implications but also because solar was clearly going to be cheaper over the next three decade. Investors, Bloomberg argued, are worried that coal plants may become stranded because they are no longer competitive.

But Bloomberg was enormously bullish about India’s clean energy opportunities.

“The fact is: People want to live in cities with clean air and water, good public transportation, and streets that are safe for walking and biking. And where people want to live, businesses want to invest. The good news is, as Prime Minister Modi is showing, confronting climate change goes hand-in-hand with smart economic growth. And from my experience, he is absolutely correct to make cities a central focus of his work.”

India is particularly vulnerable to the downside of fossil fuels and global warming. The City of Mumbai, which generates 40 percent of the nation’s tax revenues, has a larger population at risk from sea level rise and storm surge than any city on the planet—2.5 million residents are already forced to live below the high tide line at present sea level. The nation, only a year ago, was spending 5 percent of its national income importing coal and oil. Paying for imported carbon had forced the Reserve Bank of India to raise interest rates to growth-strangling levels, and the economy had tanked. Suddenly, with oil temporarily at a more reasonable price, and coal following it down, interest rates have been slashed. The Indian economy is beginning to hum again. But rates are not as low as business would like. RBI is being cautious, worrying that cheap oil and coal are a momentary relief only. If a booming India keeps relying on imported carbon to fuel its future, the cost will, indeed become unbearable, and fairly soon.

But GW of solar power don’t stoke the demand for imported coal. Nor does moving goods from trucks to railroads. Rail Minister Prabhu seems confident the next budget will give him the resources to begin rebuilding India’s rail system, which now carries only 1/3 of its goods. (In China and the U.S. rail handles 50 percent of all goods traffic.) And the main focus of Bloomberg’s India visit, Modi’s aspiration to create 100 Smart Cities, offers India a key strategy to minimize its reliance on imported fossil fuels. As Bloomberg points out, in most America cities most of the carbon pollution comes from transportation—but not NYC, where transit carries the bulk of the burden. Given the size and density of cities like Mumbai, Delhi, Calcutta and Chenai, India doesn’t have the option of adopting auto-centric growth—Delhi cannot become Houston. So New York ought to be their model. And if it is, India will need a fraction of the oil per capita that the U.S. uses, even as it catches up economically.

So India can have its Swach Shakti moment, its gigawatts of solar and wind, its high performance urban development, its inclusive, low-carbon growth. But there are two major threats.

  • As Piyush Goyal points out, low carbon development costs less long term than fossil dependence—but it takes more capital. India’s can’t finance the low carbon energy and infrastructure it needs from its own resources—it needs access to Western financial markets with their lower interest rates. Assuring that liquidity is the most important challenge facing the Global North as it gets ready for the Paris Climate Summit. In the Great Recession nations ensured banking liquidity, and justified it as self-protection. Now we need to do it for climate protection.
  • As Ambani and other Indian business leaders were reminding their political leadership this week, India still has an unfulfilled reform agenda. Regulations need to assure solar developers that if they provide power they will get paid. Rules that hamper off-grid developers from borrowing money need to be simplified. If India is to install 160 GW or more of renewable power it must make it in India. That means much easier permit processes for factories and transmission lines. If investing and building new manufacturing capacity in India continues to be a herculean task, dragged down by the relics of India’s permit raj, the 160 GW dream will remain an aspiration only.

So it is true, as the conventional wisdom has it, that India and the US have different responsibilities in combating the climate threat. What isn’t true is that the argument ought to be about who is going to sacrifice, since sacrifice is not the key to progress—collaboration and cooperation are. After the last week, I would gently suggest that it is India, not the US, which is closer to genuine climate leadership.

YOU MIGHT ALSO LIKE

Public Utilities Should Embrace Renewable Energy Revolution, Not Get Run Over By It

Why Utilities Hate the Clean Power Rule

A Modest Proposal to Suppress the Whiskey Rebellion and Heal American Politics (With Apologies to Jonathan Swift)

EcoWatch Daily Newsletter

SHEALAH CRAIGHEAD

By Elliott Negin

On July 19, President Trump hosted Apollo 11 astronauts Buzz Aldrin and Michael Collins and their families, along with the family of their deceased colleague Neil Armstrong, at a White House event to commemorate the 50th anniversary of the first manned landing on the moon.

Read More Show Less
The study looked at three groups of diverse lizards from South America. Daniel Pincheira-Donoso
  1. Cold-climate lizards that give live birth to their offspring are more likely to be driven to extinction than their egg-laying cousins as global temperatures continue to rise, new research suggests.
Read More Show Less
Sponsored
Sean Gallup / Getty Images

Denmark isn't interested in selling Greenland to the U.S., so now President Trump doesn't want to visit.

Read More Show Less
A stock photo of fire in the Amazon; a record number of fires have burned there this year. Brasil2 / E+ / Getty Images

There are a record number of wildfires burning in the Amazon rainforest, Brazil's space agency has said. Their smoke is visible from space and shrouded the city of São Paulo in darkness for about an hour Monday afternoon, CBS news reported.

Read More Show Less

Tuna auctions are a tourist spectacle in Tokyo. Outside the city's most famous fish market, long queues of visitors hoping for a glimpse of the action begin to form at 5 a.m. The attraction is so popular that last October the Tsukiji fish market, in operation since 1935, moved out from the city center to the district of Toyosu to cope with the crowds.

Read More Show Less
Sponsored

gmnicholas / E+ / Getty Images

By Nicole Greenfield

Kristan Porter grew up in a fishing family in the fishing community of Cutler, Maine, where he says all roads lead to one career path: fishing. (Porter's father was the family's lone exception. He suffered from terrible seasickness, and so became a carpenter.) The 49-year-old, who has been working on boats since he was a kid and fishing on his own since 1991, says that the recent warming of Maine's cool coastal waters has yielded unprecedented lobster landings.

Read More Show Less
TeamDAF / Getty Images Plus

The climate crisis is getting costly. Some of the world's largest companies expect to take over one trillion in losses due to climate change. Insurers are increasingly jittery and the world's largest firm has warned that the cost of premiums may soon be unaffordable for most people. Historic flooding has wiped out farmers in the Midwest.

Read More Show Less
Aerial view of lava flows from the eruption of volcano Kilauea on Hawaii, May 2018. Frizi / iStock / Getty Images

Hawaii's Kilauea volcano could be gearing up for an eruption after a pond of water was discovered inside its summit crater for the first time in recorded history, according to the AP.

Read More Show Less