India commits to 40% alternative energy by 2030

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India has pledged to source 40% of its installed electric power capacity from non-fossil fuel based energy sources by 2030, along with a 33-35% reduction in the carbon intensity of its GDP from 2005 levels.

The country submitted its Intended Nationally Determined Contribution (INDC) late on Thursday, ahead of the UN Climate Change Conference, COP21, to be held in Paris in December.

India would need at least US$2.5 trillion to meet its climate change actions up to 2030, according to its preliminary estimates.

The pledge involves more than a five-fold increase in renewable energy capacity from 35GW this year to 175GW by 2022. Within this target, the government has made its well-documented commitment to 100GW of solar energy capacity under its National Solar Mission (NSM), up from the original 20GW goal. This 100GW is now expected to be scaled up after 2022.

The energy technology targets come with the daunting prospect of India’s total electricity demand projected to nearly triple from 776TWH (in 2012) to 2,499TWH in 2030. It population is also forecast to grow from 1.2 billion to 1.5 billion alongside rapid urbanisation.

The INDC submission charts the growth of solar from 3.7MW in 2005 to around 4,060MW in 2015, although Ministry of New and Renewable Energy figures released yesterday showed it has now reached 4,262MW of installed solar capacity.

The NSM involves the development of 25 solar parks, “ultra mega” solar power projects, canal top solar projects, one hundred thousand solar pumps for farmers and using solar for all the 55,000 petrol pumps across the country, according to government documentation.

Sean Kidney, chief executive and co-founder of the Climate Bonds Initiative, which is looking to mobilise global investment in renewables, told PV Tech that India has “fantastic ambition” for renewables deployment, however, there are three main challenegs in the form of land availability, cost of capital and the health of its distribution companies (discoms).

He said cost of capital “will improve in the next couple of years because the macroeconomic settings are improving and interest rates are going to go down slightly, but it is still going to be challenging.”

Meanwhile he said there needs to be action to help discoms pay their bills in “reasonable time”.

Kidney said that India “theoretically” has enough of its own capital resources to reach its climate goals, but too much of its capital has been allocated to property and gold instead of “productive investments and infrastructure”. Therefore, in the long-term, the Indian government must animate capital markets and other forms of investment to provide an avenue to soak up that capital and stop incentivising other forms of capital allocation, he said.

Kidney added that the government needs to loosen various regulations around insurance and overseas investment to try and shift much needed overseas investment into the domestic market. This is at least for the first two years of the climate action transition, a period in which Kidney said 80% of investment needs to come from foreign sources.

More solar needed

A recent analysis from consultancy firm Bridge to India found that a 40% alternative fuels target would most likely require a target of 250GW of solar by 2030.

The Bridge to India analysis stated: “These announcements further strengthen the Indian solar story, which is already driven by strong growth in new installations. Successfully implementing such targets would mean decades of growth for the sector. However, the underlying premise of these ambitions is the belief that storage and smart grid technology will become economical and ready for implementation over the next five years.”

Key countries in the climate debate such as the US, EU and China have already published their INDCs, though only China has set out any specific solar goal in its pledges.

ActionAid India executive director Sandeep Chachra said: “Despite huge developmental challenges, India has put forward a climate action plan that is far superior to ones proposed by the US and EU. Its ambitious focus on energy efficiency and dramatic increase in renewable energy deserves credit but must lead to enhanced energy access for the poor. This clearly puts the onus on developed countries to meet their obligations of providing public finance and technology transfer to developing and least developed countries.”

“Small farmers who constitute 84% of the farming households of India are suffering the most. Changes in India's climate are leading to land and coastal degradation, soil erosion, loss of bio-diversity, all of which are already seriously aggravating food insecurity in the country.”

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