‘India’s net zero-by-2070 goal means that fossil fuel phase out will be inevitable’: Madhura Joshi

Madhura Joshi, senior associate – India Energy Transition Lead, Fossil Fuel Transition Team, E3G.

India is the world's third-largest energy consumer, and its energy demand is expected to grow significantly in the coming years. However, the country’s energy sector is heavily reliant on fossil fuels, which are a major source of greenhouse gas emissions and air pollution. It is also a roadblock to India’s net-zero goals.

So, an energy transition is underway from fossil fuels to renewable energy sources, such as solar and wind power. Yet phasing out fossil fuels is a complex task for countries heavily reliant on coal, especially given the imperatives of a just and fair transition for workers and communities.

To understand the concerted action required at the national level and cooperation needed at the international level for timely progress, we spoke to Madhura Joshi, senior associate – India Energy Transition Lead, Fossil Fuel Transition Team, E3G.

India is committed to achieve the net-zero emissions target by 2070, as announced by Prime Minister Narendra Modi. To this end, it plans to reach a non-fossil fuel energy capacity of 500GW and 50 percent installed capacity from renewables by 2030. Given India’s progress so far, how achievable are both the 2030 and 2070 targets?

The Prime Minister’s net-zero emissions target by 2070 was a boost for India’s energy and climate policy. It established the country’s direction of travel. Reaching net-zero goals means phasing down and out fossil fuels, increasing investments in energy efficiency, clean technology solutions across sectors, and electrifying demand where possible.

How soon we reach this goal while meeting our development and growth objectives will depend on the progress made in the next 10-15 years to secure our sustainable futures. The good news is that a majority of the clean solutions already exist. In the electricity sector, these are already available and often cheaper than new fossil alternatives.

Looking to 2030, we have an ambitious target of achieving 500GW of non-fossil capacity (of which renewables are projected to be 450GW). 500GW is more than India’s current grid size of around 425GW! While the absolute figures may vary based on the country’s future electricity demand growth, some key elements to focus on are:

Fast-tracking clean energy deployment. The Ministry of New and Renewable Energy has a goal of tendering 50GW of RE capacity annually till 2030. Meeting these tendering goals and converting them to deployment on the ground will be important.

Facilitating large-scale, low-cost finance for developers. Large-scale solar and wind projects are mature technologies and can often attract investments. However, newer technologies, such as storage, offshore wind (which don’t have demonstrable business models) and distributed renewables, will require targeted support to mitigate risk perceptions of financiers and reduce the cost of capital for these investments.

Investment in storage and grid infrastructure: A recent estimate from India’s National Electricity Plan suggests that India is likely to need around 50GW of storage by 2031-32. There are a few renewables plus storage projects and tenders underway, but progress on the ground needs to be accelerated. This also includes pilots on different storage technologies. At the same time, increasing investments to strengthen the grid, improve efficiencies and make it more resilient are important.

Preventing locked-in resources in new thermal/fossil plants: Renewables are cheaper than new thermal plants and tariffs can also be lower than some of the older thermal plants. Even renewables with storage are increasingly competitive and lower than new thermal plants. For instance, in FY2023, the average cost of coal generation was Rs 4.26/kWh, while solar and storage costs have significantly reduced, with recent successful bids indicating levelised costs of Rs 4.04-4.34/kWh. Continuing new investment in thermal plants risks locking-in resources in a sunset sector with expensive, high-emissions technologies, and reduces future competitive advantage.

What remain the country’s biggest challenges in its energy transition goals?

●    Strong consistent policies.

●    Ensuring scale and pace of developments on the ground.

●    Increasing institutional and governance capacities (bolstering existing capacity, creating new institutions) across central, state, and local levels.

●    Increasing public and private finance at scale and low-costs, and redirecting available resources towards clean energy/infrastructure investments (preventing lock-ins).

●    Planning for and financing just transitions to ensure that communities and workers benefit.

Some say that India’s priorities are misplaced, that there should be more focus on bringing efficiencies to the whole system and improving finance instead of adding more generation capacity. How accurate is this, and what needs to change?

We need both an improvement in system efficiencies and adding new renewables generating capacity to meet electricity demand growth and replacement capacity when older, inefficient plants, which have served their economic life, are retired.

However, several studies have shown that new investments in thermal capacities beyond the ones under construction are not likely to be needed in the future. Existing capacity, even when accounting for retirements, are sufficient.

So, then, how does one ensure a just and equitable clean energy transition, given the growing demand for electricity, dependence on fossil fuel to meet that demand, and the fossil fuel industry being a source of livelihood in India?

For strengthening economic competitiveness, meeting development goals, reducing local air pollution, and climate perspective, fossil fuels need to be phased down. India’s net zero-by- 2070 goal also means that fossil fuel phase out will be inevitable. This does not mean that reliance on existing fossil infrastructure will end tomorrow, but their share and use will continue to decline, hopefully at an accelerated pace, in the coming decades.

For instance, according to the International Energy Agency, even if there are no new clean energy policies, no new climate agreement, coal, oil and gas consumption will peak in 2030 as a result of technology and market developments.

In stark contrast to the historical examples of transitions, which were mainly driven by market forces and unplanned, energy transitions today are a political consensus to move towards a sustainable low-carbon future. For this reason, no historical example can provide a coherent framework for the upcoming unprecedented transitions. They can, however, provide insights into a well-managed transition and warn of the consequences of under-managing such a transition, namely political instability, economic deterioration, societal push-back and weakened trust in institutions.

Hence, planning for transitions (especially at local and state levels) is important. This needs to start decades before the actual decline of the sectors. Planning includes creating enabling participatory governance architecture, alternate economic investment strategies, investing in skill development, and ensuring social safety nets for communities and workers so that the shift is well managed and benefits all.

For a long time, the climate change argument on its own was not able to generate sufficient momentum for renewables deployment. What factors are now making renewables more attractive globally and in India?

Investing in renewables and clean energy makes economic sense. Renewables are cost-effective (new solar tariffs have been consistently lower than new coal tariffs in India), non-polluting, create more jobs, and are a route to strengthening energy security. A study by Lappeenranta-Lahti University of Technology projects that a renewables-based power system by 2050 will cost over 40 percent less than a coal-dominant electricity sector.

Distributed renewables have added advantages in helping build grid resilience, improving electricity distribution efficiencies, supporting livelihoods (solar-based appliances), and creating more jobs. For instance, studies show that per MW, rooftop solar creates 7 times more jobs than utility-scale solar, and nearly 20 times more jobs than wind projects.

There has been a push for electric vehicles in India, but they are still being powered by fossil fuels. Also, the current EV batteries are not designed for easy recycling. So, is it really sustainable and helping with decarbonisation?

Decarbonising the grid and electrifying transport are two simultaneous and necessary goals. They can’t be sequential. Electric mobility solutions (public and private 2-3-4 wheelers, buses, trains etc.), other than helping reduce reliance on fossil fuels, also help in reducing local air pollution. Estimates suggest that the transport sector can contribute between 30-40 percent to local air pollution in Indian cities. This can be higher in hyper local areas, when vehicular movement and traffic is higher.

There are new policies and emerging innovations and opportunities that can help in recycling batteries. For instance, the NITI Aayog predicts that India’s EV battery recycling market is set to expand from 2GWh in 2023 to 128GWh by 2030.

What are your expectations from COP28, with regards to energy and in particular renewables?

Building on some of the landmark decisions from G20, I would like to see progress on three things at COP28:

Tripling global renewables capacity to 11,000GW by 2030 with a strong focus on equity and doubling the rate of energy efficiency improvements by 2030. Both of which were picked up in the G20 this year. IRENA’s studies show that more than half of the world’s population received less than 15 percent of global renewables investments in 2022. Hence, the world needs both an increase in ambition, and an equitable scale of delivery to meet development and climate goals.

Finance. This includes first, progress on finance negotiations that lead to an increase in low-cost, accessible finance available at scale for emerging and developing economies to help meet ambitious renewables goals and act on just energy transitions. This includes a massive increase in both public and private funds. Second, championing reforms of the global financial architecture such that multilateral financial institutions.

Championing phasing down fossil fuels with guardrails on the use of the abatement technologies. The recently released global stocktake report shows that the world is not on track to meet temperature goals under the Paris Agreement. This requires accelerated action on phasing down fossil fuels including coal. Betting on expensive, unproven abatement technologies in the future can’t be a proxy for the deep emissions cuts required to help avoid a climate disaster. Both the UN stocktake report and IEA’s recent net-zero report highlight that abatement tech may be needed for residual industrial emissions, negative emissions, or in small applications where alternatives do not exist. But are not a solution that can help in continuing with fossil fuel expansion.