A transition to clean energy is about making an investment in our future. – Gloria Reuben
A vital aspect of sustainable development is the use of sustainable energy. Renewable energy has progressed to become a mainstream actor in the energy sector, powering robust economic growth in India. This positive development may play a fundamental role in how the economy operates in the energy sector, and help prevent catastrophic climate change. The flowering of this holistic approach of the energy sector has taken years of contemplation and has involved the improvement of previous policies.
Tracing the energy policies in the post Independence period
Shortly after Independence, one of the primary objectives in the development process was the development of the oil and gas sector as well as ensuring an adequate supply of electricity to meet the needs of the increasing population.
The Electricity Supply Act, 1948 aimed at the rationalisation of production and supply of electricity. Another pivot of planning during that time was the regulation of coal mines which had been immensely exploited after the introduction of railways (Bardhan et al., 2019).
Post-1970, the economy was beset by inflation and dawdling growth due to the global oil price shock. The ripple effect of this shock was noticeable in the food industry, with production plummeting. Thus, following this, efforts were made to bring in energy security and reduce petroleum consumption (Weinraub, 1974).
The LPG Reforms – A Turning Point
In 1991, the power sector was opened to private participation. This was done to accelerate the power generation capacity. Rising sensitisation towards sustainable policies led to the drafting of the Energy Conservation Bill. Other sustainability efforts in this period included strategies like plant renovation and modernization, new capacity creation, and private sector participation (Bardhan et al., 2019).
Since then significant progress in such efforts has been made. This can be highlighted by the notable decrease in both energy and emission intensities of India’s gross domestic product (GDP), of more than 20% over the past decade. Moreover, India’s per capita emissions are 1.6 tonnes of CO2, well below the global average of 4.4 tonnes, while its share of global total CO2 emissions is some 6.4%. Intriguingly, the government aims to increase the share of natural gas in the country’s energy mix to 15% by 2030, from 6% today. Furthermore, recent IEA analysis shows that in 2018, India’s investment in solar PV was greater than in all fossil fuel sources of electricity generation together. (IEA, 2020)
It is encouraging to see that, according to the Climate Transparency Report 2020, 2021, India’s per capita greenhouse gas emissions were below the G20 average. However, the report points out that India still needs to restrict its emissions. So, we can recognise that the current trajectory of growing emission levels in the country is not completely in sync with the ambitious net-zero target that the world seeks to achieve by 2050. To avoid the undesirable effects of getting complacent with the praise received in the report, a roadmap to harness the non-polluting green hydrogen is being discussed and framed at the national level.
Green Hydrogen Economy for India: An Effort to Go Green
The announcement of the National Hydrogen Mission in the Budget 2021-22 expresses the country’s willingness to create an economy fuelled by green hydrogen. The timing of the adoption of green hydrogen is being widely praised. This is because it is expected that being a developing nation with rapid development and increasing population, the energy demands will skyrocket in the future. Hydrogen is a versatile energy carrier and, with its application across sectors, can prove to be a game-changer for the Indian economy. In addition to acting as a fuel, hydrogen is also a feedstock for fertiliser and refining industries.
A study conducted by the Council on Energy, Environment and Water, through a spatio-temporal analysis, has estimated the hydrogen production costs for India till 2040. It states that the cost of production will continue to fall steadily over the years. The study also points out that the cost of storage would play a critical role in the overall production costs, as lack of low-cost storage can become a significant barrier in the adoption of green hydrogen. The evaluation of infrastructure costs of the hydrogen distribution network has also been stressed. Sizeable distance between the renewable energy production centres and demand centres makes planning necessary. Although it will take time for this transition to happen, it will be worth the effort because it would save billions spent on oil imports and aid the economy in being self-sufficient.
A robust supply chain is imperative to implement the project that ought to be scaled up significantly in the near future. An example of an organisation that may benefit immensely in the e-commerce sector from a powerful supply chain is that of Reliance Industries. The massive supply chain would facilitate Reliance to deliver products in a short duration of time from the nearest store. Similarly, for the green hydrogen project, a supply chain framework would constitute the arrangement to provide renewable energy at the plant where electrolysis is performed, and the facility to transfer it to the ultimate users.
That said, the projections of rising demand by the transportation and industrial sector in the near future make it the ideal time to alter the energy mix. Rigorous planning and collaborations among industries, academicians and researchers would support in finding cost-effective solutions. Hydrogen can become the fuel of the future and will have long-ranging effects in terms of improved health conditions because of cleaner air. Investments by both the public and private sector will provide the stimulus to this effort in diversifying the energy basket. Hence, the shift to this fuel holds strong potential of growth in the future.
Mansha Dhikkar is a second-year student of Economics at Indraprastha College for Women.
References
- Bardhan, R., Debnath, R., & Jana, A. (2019, September 1). Evolution of sustainable energy policies in India since 1947: A review. Wiley Interdisciplinary Reviews. https://wires.onlinelibrary.wiley.com/doi/abs/10.1002/wene.340
- Biswas, T., Yadav, D., & Baskar, A. (2020, December). A Green Hydrogen Economy for India. CEEW. https://www.ceew.in/publications/reducing-green-hydrogen-production-cost-in-india
- India 2020 – Analysis. (2020, January). IEA. https://www.iea.org/reports/india-2020
- P.I.B.D. (2021, February 9). Budget 2021–22 augments Capital of SECI and IREDA to promote development of RE sector. Ministry of New and Renewable Energy. https://pib.gov.in/PressReleasePage.aspx?PRID=1696498
- The Climate Transparency Report 2020. (2021, November 8). Climate Transparency. https://www.climate-transparency.org/g20-climate-performance/the-climate-transparency-report-2020
- Weinraub, B. (1974, January 20). India, Slow to Grasp Oil Crisis, Now Fears Severe Economic Loss. The New York Times. https://www.nytimes.com/1974/01/20/archives/india-slow-to-grasp-oil-crisis-now-fears-service-ecomomic-loss-a.html
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