Energy Transition has been the talking point in recent years thanks to the alarming climate change events and the atmospheric CO2 levels. India has the third highest carbon emissions in the world. An effective energy transition into a zero-carbon system is absolutely necessary for India’s future. On international fora India comes across as one of the few countries with a large economy that has a ‘positive energy transition momentum’ (as quoted by World Economic Forum’s report). India has also set itself ambitious nationally determined contributions and net-zero targets. However, the reality on the ground is different. India continues to deliver poorly on energy transition and net zero targets despite the increase in renewable energy capacity. India continues to import fossil fuels from from other countries and also continues to increase its thermal power generation capacity and other fossil fuel-based industries such as PVC, petrochemicals, and coal to PVC. What is also missing in India’s grandiose pronouncements on energy transition are the voices of people and communities that are most affected.
World Economic Forum’s (WEF) Report on Fostering Effective Energy Transition
WEF is a Swiss nonprofit foundation established in 1971, based in Geneva, Switzerland. In June this year, the World Economic Forum (WEF) released a report called Fostering Effective Energy Transition. The report presents WEF’s Framework for an Energy Transition Index (currently in its 13th edition) which claims to “incorporate a wider approach of balancing the three imperatives of the energy triangle – equity, security, and sustainability – while harnessing transition enablers effectively”. The report identifies enablers including regulations and policy commitment, finance and investment, innovation, infrastructure, and Education and human capital. To understand the relevance and space this report carries, WEF is an international organisation for lobbying for multinational companies. The foundation is funded by 1000 member companies which are among the most profitable and influential industries in the regions they operate. One of the trustees of the WEF board is Mukesh Ambani, the chairman of Reliance Industries which is one of the key players in the fossil fuel sector in India. Therefore any report from such an organisation on Energy transition will be influenced by such large corporations and the profits they hope to achieve from the same.
The 2023 report ranks India is ranked 67 among all countries in Energy Transition. The 2021 ranking for India was 87th. The ETI index is split into two parts System Performance and Transition readiness. While overall it seems like India has improved in the Energy Transition Index, the improvement is primarily on the System Performance points. The transition readiness points have decreased from 2021 to 2023 and have overall been constant or reduced from 2014 (when the WEF started collecting data) to 2023. ‘System performance provides an assessment of a country’s energy system performance’. India’s improvement on this front is primarily due to an increase in renewable energy capacity. India added over 100 GW of renewable energy capacity after 2021. Transition readiness, however, assesses social, economic, and technological systems that need to co-evolve to shape the transition. India being low on this sub-index is indicative of a lack of a robust regulatory framework and low political commitment. While the report itself is a mouthpiece for large corporations, many of who will profit from the recommendations of this report being implemented, it is also suggestive when such a report indicates India’s improved performance to be just from increased capacity but not from improved transition readiness. Another important aspect that the WEF Energy Transition Index completely fails to account for is the lack of people’s voices and opinions on the pathways to Energy transition in a country
Energy Transition in India
India has a Nationally Determined Contribution (NDC) to reduce the Emissions Intensity of its GDP by 45 percent by 2030, from the 2005 level and achieve about 50 percent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. This commitment to clean energy includes ambitious targets like 500GW of non-fossil, including 450 GW Renewable Energy (RE) capacity addition and 43% RE purchase obligation by 2030. In addition to that, India has announced a goal of achieving energy independence by 2047 and of achieving carbon neutrality by 2070 as part of COP 26 commitments.
While India talks internationally about Energy transition and Net Zero targets, the country continues to expand on coal mining and promoting coal-based industries such as Coal to PVC. India also continues to import energy in the form of coal, coke, crude oil, LNG, and LPG. India’s energy imports continue to grow every year and in 2023 it is expected to be 43% higher than the previous year. India has also recently announced a number of new Thermal power plants.
India is the second largest consumer of coal, with coal accounting for 55% of the country’s energy needs and 75% of the electricity supply. This is in addition to coal being used for various material and industrial purposes. If India is to meet its nationally declared targets, the country has to reduce its dependency on coal. Towards this, in 2021 Niti Aayog released a report from the inter-ministerial committee on just transition from coal. The report estimates that coal consumption in the country is likely to peak between 2035 and 2040. After this time, phase-wise measured closure of mines is expected to take place. The report identifies the need to build policies and systems in place for communities affected by the transition out of coal. This will not be just communities around thermal power plants and coal mines. There is a whole ecosystem of sectors and related communities that depend on coal mining and all their needs have to be considered. The inter-ministerial committee proposes developing a framework for action and implementation of plans to support coal transition. However, this proposed framework does not talk about who pays for the transition from coal, which will include reclaiming land from mines and thermal power plants, cleaning up fly ash ponds, and a number of other issues that will need to be addressed. This framework is also another attempt at federalising plans for transition without addressing local and regional needs or taking into account the views of the communities that will be most affected.
The transition from coal is only one part of the energy transition story. India is also heavily dependent on other fossil fuels such as oil and gas. Increasing renewable energy capacity and large-scale RE projects can only go so far in addressing Energy transition. RE projects, particularly solar are not without their own issues in terms of intensive land and water usage, the need for unsustainable mining of rare earth minerals, etc. It is therefore important to not only consider changing the type of energy supply but also look critically into how much energy is consumed and for what.
Change in supply patterns versus change in consumption patterns
Effective energy transition is not only about changing the types of energy produced but needs to look at a 360-degree transformation of the system to ensure all issues associated with the earlier energy supply and use are addressed at all levels. Among those other things, energy transition should also be about examining and changing consumption levels and patterns. The country continues to increase its consumption of energy and electricity every year. The International Energy Agency’s India Energy Outlook, 2021 has noted that the country’s energy use has doubled since 2000. India’s consumption of electricity has a 10-13% year-on-year growth. While this is not unusual for a developing country with a growing population and a large percentage of the country still has less access to energy, what needs to be explored is where the increased energy use is being used. The current discussion on energy consumption levels in India is mainly centered around improving energy efficiency. This is of critical importance, however, that is not the same as examining energy use on its own merit.
While the country continues its path toward increasing renewable energy capacity, there is little or no talk about scrutinising energy consumption levels. The per capita consumption of energy in India is still low compared to developed countries. The increasing consumption of energy is skewed towards energy-intensive industries and highly consuming domestic and business consumers. An energy transition story for India without investigating, analysing, and altering consumption patterns would be an incomplete and ineffective endeavour.
What do the people want?
What has been lacking in the talk about energy transition in India, is the lack of people’s voices and inputs. Whether it is the Niti Aayog report on the Coal transition or the G20 deliberations on the Energy transition, there is talk of a ‘just’ energy transition but the voices of the people are not being heard. Communities directly affected by fossil fuel industries or communities that will be most affected by the impacts of climate change do not have a seat around the table to talk about their needs and views on the direction of India’s energy transition goals. Transitioning from a coal-based energy and electricity system is imperative. But what does this mean for the communities based around the thermal power plants and coal mines? What do these communities want from a transitioning out of coal?
India has no energy strategy to reach its net carbon neutrality and energy independence goals. There is a need for people’s voices and the community needs to be taken into account while we discuss energy transition pathways for India. If these voices are not considered, the energy transition plans and pathways will remain ineffective and incomplete.
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