Making Sense of India’s Power-Backed Climate Pledge
Speaking in the COP26 on November 1, Indian Prime Minister Narendra Modi made several pledges towards climate action. A substantial part of India’s new climate pledge is dependent on a transition towards clean energy, particularly the first two of the Panchamrit (five nectar elements) offered by Mr Modi.
“India will reach its non-fossil energy capacity to 500 GW by 2030.”
“India will meet 50 percent of its energy requirements from renewable energy by 2030.”
Many have hailed this as an ambitious and determined commitment from India. How different are these targets from India’s existing energy targets? What are the implications of meeting these targets?
First, the capacity target of 500 GW is based on Mr Modi’s announcement at the 74th UN General Assembly, of an upgraded renewable energy (RE) target of 450 GW. Later it was clarified that the target does not include large hydro and will be met by 2030. The Central Electricity Authority, in a report in 2020, examined the necessary technology mix of capacity and generation (See the figures below).
Source: CEA, Report on Optimal Generation Capacity Mix for 2029-30 (New Delhi: Central Electricity Authority, 2020).
Second, the statement on “meeting 50% of energy requirements” was interpreted by many[1], including us, to be a pledge of 50 percent generation from RE by 2030, which would have been a major shift in India’s approach to RE, because it forced joint consideration of RE and coal use for electricity. However, on Nov 2, the Ministry of External Affairs (MEA) clarified this statement by saying “You would be aware also that in Paris our NDC said that 40% of our installed electricity capacity would come from non-fossil-fuel based energy sources. The PM announced today that in fact 50% would be met from renewable energy sources.”
So, what are the implications of these pledges, after the MEA’s clarification? The pledge of 500GW non-fossil fuel capacity represents an enormous commitment to spurring a RE transition in India, which, buttressed by initiatives such as the International Solar Alliance, could have global effect. At the same time, the formulation of achieving 50 percent capacity from RE sources also implies that 50 percent could be coal, gas and nuclear. Taken together, the two capacity element of the PM’s speech - 500 GW of non-fossil fuel capacity and 50% RE capacity - implies the potential for a total of just under (because of some nuclear capacity) 500 GW fossil capacity by 2030, significantly higher than CEA’s projection of 282 GW by 2030. Since current fossil capacity is 234 GW, this implies potential for a doubling and more. Given the current market conditions with limited interest in investing in new coal fired power plants, this seems an unlikely scenario to be realised. Of course, 50% pledge could have been meant to read ‘at least’ 50 percent RE, which would allow for a smaller share of future fossil fuel.
The ‘50% of generation’ interpretation, now firmly refuted by MEA, would have been far-reaching because it would have required active management of India’s coal use for electricity and a significant step up from the CEA projection of 40 percent. However, it would have been an extremely challenging target to meet, since it would essentially imply all new electricity demand would be met by RE rather than coal. According to the CEA, in 2020-21, coal-fired generation, at 1138 TWh, accounted for 45 percent of projected electrical energy requirement (2,518 TWh) in 2030; nuclear plants accounted for two percent of current generation and were projected to grow to five percent. Combined, the numbers already account for 50% of projected 2030 requirement; there is no scope for non-RE generation growth to meet projected 2030 demand.[2]
The clarification that the RE target is a capacity target continues India’s current approach of treating RE and coal investment decisions as largely separable. However, there are costs to this view. First, it obstructs an embryonic discourse on a just transition away from coal in India. While the pace may be debatable, a disruptive transition away from coal is inevitable. Second, parallel investment in coal and RE infrastructure may exacerbate the stranded assets in coal generation, while risking stranded assets in RE. This will not only create investment risks in the electricity sector, but will build economic pressures on the insolvent discoms by adding to capacity costs. Finally, the risks and costs are higher when these targets are set without proper resource planning.
[1] Mitra, A., C. Gajjar & U. Kelker. ‘COP26: Unpacking India’s Major New Climate Targets’. WRI Blog, November 02, 2021. Available at https://wri-india.org/blog/cop26-unpacking-india%E2%80%99s-major-new-climate-targets; CSE. ‘India’s enhanced climate targets and commitments: what do they mean?’. CSE Press Release. Available at www.cseindia.org/india-s-enhanced-climate-targets-and-commitments-what-do-they-mean--11043
[2] 2020-21 data from https://cea.nic.in/opm/auto-draft-309/?lang=en, 2029-30 projections from CEA, Report on Optimal Generation Capacity Mix for 2029-30 (New Delhi: Central Electricity Authority, 2020).
(Environmentality is a collection of ideas, perspectives, and commentary by researchers at the Initiative on Climate, Energy and Environment, Centre for Policy Research, New Delhi. Views and opinions expressed in this blog are solely those of the authors. They do not represent institutional views.)
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Navroz K. Dubash, 'What do we make of Mr. Modi’s speech announcing India’s pledges at COP 26' ↩
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2020-21 data from https://cea.nic.in/opm/auto-draft-309/?lang=en , 2029-30 projections from CEA, Report on Optimal Generation Capacity Mix for 2029-30 (New Delhi: Central Electricity Authority, 2020). ↩
The updated pledge reveals insights into India’s approach: one of caution and a preference to ensure over-compliance rather than under-compliance of international targets.