When It Comes to Energy Transition, India Must Embrace Complexity

Shortly before COVID-19 hit the world’s economies, India was the second largest contributor to the growth of global primary energy consumption. While the timing and adequacy of its post pandemic recovery  remain to be seen, in the long-term, India’s energy needs are expected to keep growing to meet its socioeconomic goals. Along with rapid urbanization, greater energy use will increase pressures on land and water resources, with corresponding increases in greenhouse gas (GHG) emissions.

At the same time, and despite its continued reliance on fossil fuels, India has been steadily making ambitious plans to decarbonize its energy consumption and lower its emissions trajectory. The recently released International Energy Agency (IEA) report Renewables 2020 — Analysis and forecast to 2025, which assesses the impacts of COVID-19 on global renewable energy (RE) markets, underscores this message quite emphatically. Despite the pandemic, the IEA projects India to be the “largest contributor to the renewables upswing in 2021, with the country’s annual additions almost doubling from 2020.”

The IEA’s forecast reflects India’s significant achievements in the deployment of renewables in the past decade, which place the country among the top ten globally in terms of installed solar capacity. Further, in light of rapidly declining RE technology costs, the Indian government has recently announced that its target for renewable energy capacity could be revised upwards from 175 gigawatts (GW) to 220 GW by 2022, and to 450GW by 2030.

Closer examination of the progress towards meeting the country’s current 175 GW RE target by 2022 reveals that there is still much ground to be covered. Current installed RE capacity is only about 90 GW, which is just over 50% of the 2022 target. For India to reach its goal, it must double its RE capacity in the coming year. On the positive side, the cost of RE is falling dramatically, a much-needed signal for planning cost-optimal electricity generation portfolios with higher share of RE. But in terms of the actual installed capacity of projects, there are several unresolved challenges which have prevented much of the tendered capacity from translating into projects on the ground. The IEA study, for instance, points to issues such as connecting locally generated RE to the national power grid and acquiring the land needed to build solar parks. Another significant factor is the complex institutional landscape of India’s energy transition. Projects that are tendered by central agencies are often delayed or cancelled at the sub-national levels. State-run utilities, owing to their poor financial health, are reluctant to enter into power purchase agreements with RE developers. Cash-strapped utilities also pose a financial risk to projects when they delay or fail to pay RE developers their tariff dues, as witnessed in the southern state of Andhra Pradesh since 2019. This example highlights the disconnect between top-down policy planning at the centre and implementation challenges at the state level.

If we zoom in further to the places where renewable energy projects are being built, several interconnected challenges of energy and society are brought to surface. India unveiled in 2019 what was claimed to be the world’s largest solar power plant in Pavagada, an arid region in South India. Given that solar power projects are inherently land intensive (in this region about five to seven acres are required to produce one megawatt of solar energy), the government created a number of institutional mechanisms for acquiring land. The most prominent among them is acquiring community lands and the time-bound lease of land parcels for 28 years. Many land-owning farmers in this drought-prone region greatly benefited from the prospect of increased land values. But agricultural labourers and herders who have lost access to customary grazing grounds have been further marginalized. Furthermore, there are reports of overdrawing groundwater to clean the solar panels, which has amplified water stress in the region. Given the high population density in India, the clean energy transition, in addition to replacing fossil fuel industries and their resulting livelihoods, is inextricably linked to issues such as competing uses of land, forest and water resources, and the welfare of local communities where greenfield developments are planned to take place.

The COVID-19 pandemic has been a reminder that “business as usual” is not good enough, not only in terms of policy actions, but also in ways of framing the interconnected challenges of energy and society. India must move away from universalist prescriptions of how things ought to be to imagine new solutions. Recent proposals to foster a post-COVID green recovery in India have included interventions to incentivize stationary and mobile energy storage systems for accelerating the transition to cleaner fuels, financial and institutional reforms to increase the creditworthiness of implementing agencies, and strategies to decarbonize transport, to name a few. These are promising developments, but they are just not enough.  

To actualize the optimistic scenarios described in the IEA study, India needs to embrace the inherent complexities of its energy landscape, taking into account the multiplicity of challenges at various levels of implementation. It needs to address issues such as social justice, equitable access to energy services, energy adequacy for a desired quality of life, sustainable use of natural resources, and the creation of meaningful livelihoods. A crucial first step towards achieving these goals is to adopt a bottom-up view that is framed locally by the concerns of the people, places, and the unique circumstances under which RE projects are implemented. Looking from this vantage might produce creative solutions to problems which can sometimes seem intractable.

Deepthi Swamy is a Consultant with the Climate Program at World Resources Institute, India.‍