Energy Transition and Climate Change

In the key features of the Budget 2022 document, there is the mention of the terms energy transition and climate action twice. Particularly under the goals of the Amrit Kaal and the four priorities. The Ministry of New and Renewable Energy allowance gets an allocation of ‚āĻ6,900.68 crores this year and the budget proposes to enhance domestic manufacturing of solar panels up to 280 GW of installed capacity by 2030 with a Production Linked Incentive to the tune of Rs.19,500 Crores for the manufacturing of high efficiency modules with a shift from poly-silicon to solar PV modules.

In the Budget speech Ms. Seetharaman also mentioned that the scheme has the potential to create 60 lakh new jobs and additional production of 30 lakh jobs during the next five years. While this may seem promising, there is no clarity on where these jobs will be created. Will those working in the coal sector be trained to take up these new jobs or will these jobs be offered to those who may lose their land and livelihood? will there be ample skill building and training in rural areas to address livelihoods issues? Answers to these questions remain elusive and only time will tell who will benefit from these jobs.

The budget also mentions energy saving and management measures through the energy service company business model by awareness campaigns and capacity building programmes. But it falls short of addressing energy saving measures at the city level, particularly in malls, large air-conditioned workspaces, shopping complexes, residential complexes, gated communities and townships that are energy guzzlers in many ways.

The budget mentioned a vibrant village program with distributed renewable energy projects in border villages but failed to address challenges of energy shortages in rural areas or integration of agro-photovoltaic facilities to ensure energy, nutrition, water and livelihood security in rural areas. According to a study done by CEEW, 2.4 per cent of Indian households still remain unelectrified and most of them are concentrated in the rural areas of Uttar Pradesh, Madhya Pradesh, Rajasthan, and Bihar. The Government has considered a village electrified once a power cable from the grid reaches the village and a small percentage of as low as 10% of its households and public places are connected. Most schemes announced in the past have been poorly implemented leaving many lurking in darkness. Many rural homes have been using solar lamps distributed by NGOs and other CSR programmes. The budget lacked focus on addressing a ‚Äėno one left behind‚Äô plan with assured decentralised renewable energy solutions or roof top solar which can help reach all.

The budget made a mention of the use of 5-7 percent biomass pellets in coal fired thermal power plants to reduce stubble burning, thereby making an attempt to address the problem of air pollution and as an additional income to farmers. With the country’s primary economy being agriculture, this may seem like an innovative path to having a partially bioenergy-led, sustainable development. However, the economic feasibility of using pelletized or non-pelletized biomass, their transport costs to the distant coal fired plants and potential at the state level remain decisive factors.

The budget also promised to ensure access to clean energy for about 2 lakh anganwadis. This surely is a welcome move, given that anganwadis play a crucial role in early learning and development of children in the country. But  given that most anganwadis operate during the day, the electricity would perhaps help in cooking the mid-day meals or support some audio-visual learning. However, continuous energy supply is essential in public health centres in rural areas.  While the health sector benefitted from a 16 % increase and saw the promise of a National Digital Health Ecosystem and a tele-mental health service with 23 centres, there was no assurance of a continued power supply to all rural health centres or budgetary allocations for a continuous power supply. Lack of access to continuous supply of electricity can significantly impact the quality and quantity of healthcare services in rural areas[1]. This, especially after the covid pandemic wreaked havoc in rural areas where power to run the ICU wards efficiently has been a major challenge.

The budget failed to address the needs and interests of all sections of society from the energy context. It made no mention of energy equity. Many studies have shown the skewed access to energy, and its impacts on women and children[2]. Unless budgets make allocations and detailed expenditures for projects meant for the marginalised and vulnerable sections of society, particularly women and children, all goals of energy transition and achieving SDGs and other international commitments will continue to remain on paper. In this aspect, the budget 2022 has been very inadequate.

What remains scary is the lack of clarity in many aspects of the budget at a first glance. With the proposal to digitise all land records, proposed change in the existing SEZ law and the PM’s promise of ensuring at least 50% of energy coming from non-fossil fuels at the COP26, the country will require large tracts of land. According to a report by the institute for energy Economics and Financial analysis’ (IEEFA), a maximum of 2.5 percent of India’s total landmass would be needed for solar alone. It warns that only judicious planning can help India achieve its renewable energy targets. Given that the Ministry of Environment and Forests and Climate Change (MoEF&CC) has removed solar parks from the purview of environmental clearance mechanisms, the process by which land will be chosen for the renewable energy projects is deeply worrying and should receive more critical attention.

From the track record of how land has been diverted to utility scale solar power parks in some states such as Karnataka, Madhya Pradesh, and Assam, it appears that transition to wind, solar and other renewable forms of energy may well be forced down on local communities, leaving them vulnerable and further marginalised with little power to negotiate. With the repeated mention of the Public Private Partnership model in the budget speech by Ms. Sitharaman, it appears that the government is all set to make the environment conducive for multinational corporations to set up shop in the energy transition framework and ensure the pumping of all necessary resources for their profit. Such models also keep local governments out of decision making, thereby completely violating the provisions of the 73rd and 74th Constitutional amendments.

Recalling the ‚ÄėPanchamrit‚Äô gift promised by our honourable Prime Minister at COP26 at Glasgow, the five key agenda points were to raise the non-fossil fuel based energy capacity of the country to 500 GW by 2030. By 2030, 50% of the country‚Äôs energy requirements would be met using renewable energy sources. The country will reduce the total projected carbon emission by one billion tonnes between now and the year 2030.The carbon intensity of the economy would be reduced to less than 45% by 2030. ¬†And the country would become carbon neutral and achieve net zero emissions by the year 2070. The budget also failed to provide clarity on what the government means by energy transition in the context of the above commitments.

What will an effective coal phase out program be like? What will it take for such a transition in each of the states? Who will be the major financiers? ¬†Where will the new green jobs be located? How many jobs will it will create? Will it mean that every home and every individual will have access to energy with no one left behind? These are few among many questions that remain unanswered even though the terms ‚Äėenergy transition & climate action‚Äô received repeated symbolic mentions in the budget speech made by Ms. Sitharaman.


[1] Citation: Shastry V, Rai V (2021) Reduced health services at under-electrified primary healthcare facilities: Evidence from India. PLoS ONE 16(6): e0252705.

[2] Pallavi Choudhuri, Sonalde Desai

Lack of access to clean fuel and piped water and children’s educational outcomes in rural India

World Dev, 145 (2021), 10.1016/j.worlddev.2021.105535

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