The future of the growth of energy demand will come from India

The future of the growth of energy demand will come from India
India is able on renewable. Power generating windmill turbines are pictured during the inauguration ceremony of the new 25 MW ReNew Power wind farm at Kalasar village in the western Indian state of Gujarat.Courtesy: Reuters

Union Petroleum and Natural Gas Minister Dharmendra Pradhan lays out country’s renewables roadmap hours ahead of PM Modi’s Earth Day, a virtual global summit on climate change, address.

The post Covid-19 rush for renewables is on the verge of transforming India’s clean and renewable energy sector. India is poised to become the fourth largest renewable energy market worldwide by 2030, accounting for 9% of all global renewable energy use. The potential is clear and the government’s move towards enacting key FDI reforms is attracting global funds and interest in equal measure.

The robust potential of the energy industry has garnered interest from many global players and funds including GIC Holdings, Abu Dhabi Investment Authority, SoftBank, Brookfield, CPPIB, CPDQ, ORIX, Sembcorp and APG. With the promise of luring foreign investors the authorities have rolled out initiatives – tax breaks for setting up plants for solar cells, lithium batteries, EVs and charging infrastructure.

Placing yet another statement of intent on record was Union Petroleum and Natural Gas Minister Dharmendra Pradhan who observed that India’s energy demand is all set to increase in the coming years, and that the future of the growth of energy demand will come from India.

“India is committed to decarbonising its economy as a responsible global citizen, though the country's priorities are different from the developed world,” Pradhan said in an address to the Center for Strategic and International Studies (CSIS).

We are an emerging economy. Our priority, our strategy is different from other parts of the global developed economic group.
- Union Minister, Petroleum and Natural Gas, Dharmendra Pradhan

Crucial Earth Day summit to showcase global actions

Pradhan’s announcement came hours ahead of the crucial Earth Day, virtual global summit on climate change, organized by US President Joe Biden. His comments were a virtual stage-setter for Indian prime minister Narendra Modi.

Among those scheduled to share their views in a heavyweight line up of global leaders are Narendra Modi, UN Secretary-General António Guterres, Chinese President Xi Jinping, Russian President Vladimir Putin, British Prime Minister Boris Johnson, German Chancellor Angela Merkel, French President Emmanuel Macron and Brazilian President Jair Bolsonaro.

Working on a future blueprint. Minister of State for Power, New & Renewable Energy (Independent Charge) and Skill Development & Entrepreneurship, Raj Kumar Singh in a meeting with the US Special Presidential Envoy for Climate, John Kerry.
Working on a future blueprint. Minister of State for Power, New & Renewable Energy (Independent Charge) and Skill Development & Entrepreneurship, Raj Kumar Singh in a meeting with the US Special Presidential Envoy for Climate, John Kerry.Courtesy: ANI

According to Pradhan, the incremental requirement of India’s energy would come from renewable energy, mentioning the announcement of Prime Minister Narendra Modi that by 2030, India’s energy basket would have 40% of its needs from the renewable sector.

“We are an emerging economy. Our priority, our strategy is different from other parts of the global developed economic group,” stated Pradhan.

Pradhan’s assertion was that India would “decarbonise our economy as the responsible global citizen. A decarbonised economy is based on low-carbon power sources that therefore has a minimal output of greenhouse gas (GHG) emissions into the atmosphere. In addition to traditional sectors, India is also looking at future sources of energy.

The new buzzword. Union Minister for Petroleum & Natural Gas Dharmendra Pradhan at the signing ceremony of the “Statement of Intent” between Indian Oil R&D and Greenstat Hydrogen for setting up a Centre of Excellence on Hydrogen.  India has a policy-driven model and would work with the United States in the area. India has a policy driven and will work with the US in this area.
The new buzzword. Union Minister for Petroleum & Natural Gas Dharmendra Pradhan at the signing ceremony of the “Statement of Intent” between Indian Oil R&D and Greenstat Hydrogen for setting up a Centre of Excellence on Hydrogen. India has a policy-driven model and would work with the United States in the area. India has a policy driven and will work with the US in this area.Courtesy: ANI

Hydrogen becomes the talking point

Once again identifying the priority towards the use of hydrogen Pradhan spoke about the hydrogen mission; US interest and investment in affordability of hydrogen for mass utilisation and India’s early efforts at CNG (compressed natural gas) blending with hydrogen in Delhi in the transportation sector.

Identifying the priority towards the use of hydrogen Pradhan spoke about the hydrogen mission; US interest and investment in affordability of hydrogen for mass utilisation and India’s early efforts at CNG (compressed natural gas) blending with hydrogen in Delhi in the transportation sector.

According to the minister, who also highlighted India’s market-driven reforms in energy pricing and distribution, India has a policy-driven model and would work with the United States in the area.

Pradhan’s focus towards hydrogen comes close on the development that the government has committed to spending $200 million over the next five to seven years to promote the use of hydrogen and that the Abu Dhabi National Oil Company (ADNOC) is keen to explore the hydrogen market with India’s public and private sectors to support a growing demand for energy and need for cleaner fuels. This was stated by Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Managing Director and Group CEO of ADNOC.

A view of the 750 MW Solar Power Plant Project that has been inaugurated by Prime Minister Narendra Modi last year. India is looking to gradually phase out its existing energy consumption pattern.
A view of the 750 MW Solar Power Plant Project that has been inaugurated by Prime Minister Narendra Modi last year. India is looking to gradually phase out its existing energy consumption pattern.Courtesy: ANI

“We will embrace new energy technology... Gradually we will phase out our existing energy consumption pattern. We will transit towards a greener and cleaner path. But looking into our affordability challenges, looking into more price sensitivity in our domestic economy, we are using gas as a bridge fuel,” he said. Oil and coal would continue to be in India’s energy basket for a period.

“But gradually we are making them cleaner...and we will go up to hydrogen energy. This is our roadmap,” Pradhan said. “Western world.. has lots of technology, lots of resources, and we have a market. If we can synergise in R&D and the new technology in digitalisation, you will get a market for your technology and financial investment would be safer in a policy-driven market in India,” he said.

Renewables receives a shot in the arm

The renewable energy segment, which has been identified as a sunrise industry in the country, received a shot in the arm last month when The United States Agency for International Development (USAID) and the US International Development Finance Corporation (DFC) announced a $41 million-loan guarantee program to finance investment in renewable energy solutions by Indian SMEs.

“USAID and DFC are jointly sponsoring a $41 million loan portfolio guarantee to help finance investments by Indian small and medium enterprises (SMEs) in renewable energy solutions, including rooftop solar installations. These loans will enable SMEs to access reliable power and cut costs,” USAID had said.

In an exclusive interview to India Global Business, Ramona El Hamzaoui, Acting Director of USAID’s India office laid out USAID’s priorities in India saying, “USAID supports the Government of India’s development and climate priorities through a series of programs and partnerships across climate adaptation, clean energy, sustainable landscapes, and disaster risk reduction. In partnership with the Government of India, the private sector, and national and international research organizations, USAID is implementing resilience-building activities with vulnerable communities in ecologically-sensitive regions across India.”

This runs parallel with the news, reported by India Global Business, that the India-based Adani Green Energy (AGEL) raised more than $1 billion debt package for its 1690MW renewables portfolio through agreements signed with global lenders – a major validation of the large corporate footprint in the sector. The $1.35 billion revolving project finance facility will initially fund a 1.69GW portfolio of solar and wind projects to be built by four special purpose vehicles in Rajasthan.

There is no doubting the fact that a lot of ground still needs to be covered in this sector but the fact that the scope and potential has been thrown wide open ensures that the sky is clearly the limit and India has by thought and action begun the journey towards realising its goals.

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