Achieving an Orderly Energy Transition

19 May 2022

The world is changing rapidly and climate change and digitization are strongly influencing this change. Energy plays a key role amid this, and people, corporates, cities and countries are at different points in terms of their transformation.

If the world is to transition to limit the impact of global warming to 1.5 degree Celsius, much will depend on new innovations in clean energy, and to accelerate this transition, we need to move to enabling policies, demand creation and incentives to develop indigenous capabilities to drive affordability and wider use.

India represents 17% of the global population. However, its historical cumulative emissions are only 4%, while current annual GHG emissions are only about 5%. India has demonstrated climate leadership by announcing an ambitious aim to achieve Net Zero by 2070. This entails increasing the share of renewables in India’s energy mix to 50%; expanding installed capacity of non-fossil energy from 450 to 500 gigawatts; reducing total projected carbon emissions by one billion tonnes from now to 2030 and reducing carbon intensity of India’s economy by 45%, as compared to the previous goal of 33-35%, set at COP15 in Paris. These are poised to guide government actions in providing enabling regulations to accelerate this transition.

Increasing the share of clean sources in electricity and transport sectors, enhancing the role of gas in India’s energy transition, building a robust and regulated carbon market and implementing low carbon solutions for the hard-to-abate sector are some of key priorities for India to achieve an orderly energy transition. Given its distinct energy profile, equity, and climate justice considerations- gas in every form, along with renewables and green hydrogen have a key role to play in India’s transition.

Renewables, like solar and wind along with green hydrogen, are being supported through various Missions by providing production linked incentives (PLI), enabling regulations and mandated use in key sectors – all intended to drive affordability and self-sufficiency by 2047.

Additionally, the case for gas is compelling given its role in generating electricity to manage intermittency and in transport and industry as a fuel. The Government continues to support the increased use of gas in the energy mix.

For gas to play an enabling role in India’s energy transition we need a step change in policy. While Industry has seen significant progress, more concerted policy measures would truly unlock India’s gas potential and thereby support an orderly energy transition. To this end, expeditious implementation of unified pipeline tariff, enhancing competition by opening downstream sector and rationalization of tax structure, like including natural gas in GST, are imperative.

These are exciting times for India in the path of climate and energy sustainability. By meeting targets set at COP26 as well as addressing core issues of climate justice, funding and financial viability and implementing new technologies, India has the ability to set a strong example for the world in our quest for a cleaner, greener future.

The article has been contributed by Dr Praveer Sinha, Co-Chairman, CII National Committee on Power and CEO & Managing Director, The Tata Power Company Ltd.The article first appeared in the April 2022 issue of CII Policy Watch, Theme – Energy Transition.

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