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India’s just energy transition is more than a coal story - IAS Academy in Coimbatore

India’s just energy transition is more than a coal story

Context

Just Energy Transition Partnership (JETP)

• JETP, an initiative of the rich nations to accelerate phasing out of coal and reducing emissions.
• The JETP initiative is modeled for South Africa, to support South Africa’s decarbonisation efforts.
• It aims to reduce emissions in the energy sector and accelerate the coal phase-out process.
• Funding is made available for this purpose in identified developing countries.
• The JETP was launched at the COP26 in Glasgow with the support of the United Kingdom (UK), the United States (US), France, Germany, and the European Union (EU)
• G7 has announced a similar partnership in India, Indonesia, Senegal, and Vietnam.

 Issues that concern transitions:

• Energy transitions could give rise to intra-generational, intergenerational, and spatial equity concerns.
• Transitions affect near-term fossil-dependent jobs
• It disrupts forms of future energy access,
• It shrinks the state’s capacity to spend on welfare programmes
• It exacerbates existing economic inequities between coal and other regions.

 Existing JET-P deals:

• It pays limited attention to intra-generational inequity, such as job losses resulting from a coal phase-down.
• South Africa’s deal: It mentions a ‘just’ component — funding reskilling and alternative employment opportunities in the coal mining regions.
  • Financed as part of the initial $5(eight point five)billion mobilization.
• Other JET-Ps ( Indonesia and Vietnam) are focused on mitigation finance for sector-specific transitions.

 Challenges:

• The emphasis by developed countries’ on coal phase-down without adequate attention to country context.
  • It disregards the crucial difference in energy transition between industrialized and emerging economies
• Energy transition in the industrialized world involves a natural tapering of energy consumption alongside fuel switching to clean energy sources

 Challenges for India:

• India’s transition requires significant simultaneous growth in energy demand.
  • The Central Electricity Authority projects a near doubling of electricity demand by 2030
• Achieving cost competitiveness: Indian components are 20% costlier than Chinese components.
• Giving preference to domestic components without addressing cost competitiveness may slow down the pace of deployment.

 India’s targets:

• India has signaled a commitment to clean energy with ambitious targets like:
  • 500GW of non-fossil, including 450 GW renewable energy (RE) capacity addition
  • 43% REpurchase obligation by 2030.
• The targets are supported through:
  • complementary policy and legislative mandates (Energy Conservation (Amendment) Act)
  • missions (National Green Hydrogen Mission)
  • Fiscal incentives (production-linked incentives)
  • Market mechanisms (upcoming national carbon market).

 Paths to accelerate Renewable energy(RE) deployment:

• Shifting energy demand patterns in ways that enable faster RE capacity addition:
• Solarisation of agricultural electricity demand
• Electrification of diesel-powered Micro, Small and Medium Enterprises (MSMEs)
• Decentralised RE for residential cooking and heating.
• Domestic manufacturing of clean energy as it will;

 Benefits:

• Stimulation of energy demand through rural productivity enhancement will further aid RE acceleration
• It will help to address the rural-urban economic divide
• Create rural jobs
• Address inter-generational and spatial inequities.

Coal use:

• There is a case for re-aligning the current use of coal resources to enhance efficiencies until the period of phase-down.
• Optimize use of coal-fired power plants closer to where coal is mined rather than based on energy demand in States.

 Initiatives by India to shift to renewable energy:

• National Solar Mission (NSM): The 100 GW solar ambition at the heart of the world’s largest renewable energy expansion programme
• The Wind Energy Revolution: Leveraging India’s robust wind energy sector to boost clean energy manufacturing and the rural economy
• National Biofuels Policy and SATAT: Building value chains to reduce fuel imports, increase clean energy, manage waste, and create jobs
• Small Hydro Power (SHP): Harnessing the power of water to integrate remote communities into the economic mainstream.
• National Hydrogen Energy Mission (NHEM): Exploring the commercial viability of a versatile clean fuel
• Production-Linked Incentive (PLI) Scheme: Integrating India into the global clean energy value chains
• National Biofuels Policy and SAYAY: Building value chains to reduce fuel imports, increase clean energy, manage waste and create jobs.

What need to be done

• JET-P has significance following the insertion of the phrase ‘phase-down’ of coal in the Glasgow Pact.
  • After South Africa, Indonesia, and Vietnam, India is considered the next candidate for a JET-Partnership.
• The interventions by India show India’s serious efforts at energy transition, but additional supplementary measures are needed for a coherent JET strategy.
• Negotiate access to markets outside India as part of a JET-Partnership, to reduce the cost gap through economies of scale.
• By using coal more efficiently, this policy shift opens the door to India considering a future cap on coal-powered generation capacity.