Path to Net-Zero: Challenges in India’s decarbonization journey

By Vivek Saini

As the world grapples with the urgent need to combat climate change, India stands at a pivotal juncture, committed to achieving net-zero emissions by 2070. The transition to clean energy technologies could stimulate new industries, attract investments, and create a more sustainable and resilient economy, offering a promising future for India. While the country’s journey towards a decarbonised future presents significant opportunities for economic growth, job creation, and technological leadership, it is not without its challenges. 

Heavy reliance on coal

Coal remains India’s primary energy source for power generation, accounting for over 50% of the total electricity mix. Transitioning away from coal-fired power plants towards cleaner energy sources like solar and wind requires substantial investments in renewable energy infrastructure and grid modernisation, as estimated by a study from the World Resources Institute.

Financial constraints

The large-scale deployment of clean energy technologies necessitates significant financial resources. India must attract private sector investments and explore innovative financing mechanisms like green bonds to bridge the funding gap. A report by the International Institute for Sustainable Development (IISD) estimates the annual investment requirement for India to achieve net zero by 2070 to be around USD 1.4 trillion.

Energy security concerns

A reliable and stable electricity supply is crucial for India’s economic growth. Integrating renewable energy sources with intermittent generation patterns presents a challenge, as highlighted in a recent report by the International Renewable Energy Agency (IRENA). Advancements in energy storage solutions and grid management techniques are required to address this challenge.

Livelihood dependence on fossil fuels

A crucial aspect of India’s decarbonisation journey is the transition of workers in the coal and fossil fuel sectors. Millions of people in India are employed in these sectors, and a just transition plan is essential to ensure that they are not adversely affected by the shift towards clean energy. This plan should provide opportunities for reskilling and upskilling, as highlighted in a study by the Council on Energy, Environment and Water (CEEW). The study estimates that around 5 million people are directly employed in the coal sector in India.

Expert insights on balancing decarbonization and economic growth

Dr Shailly Kedia, Associate Director with the Sustainable Development and Outreach division at TERI, Delhi, emphasized the importance of a co-benefit approach as recognised by the National Action Plan on Climate Change (NAPCC). This approach is critical to balancing decarbonisation goals with social and economic objectives. During a conversation with CFC India, Dr Kedia stated, “The private sector needs to invest in decarbonisation while public finance will continue to play a key role in adaptation.”

Dr Nandini Das, acting deputy director of the Australia and Pacific Office and climate and energy economist, pointed out that the energy transition brings numerous economic opportunities, with job creation in the renewable energy sector paramount. Dr Das told CFC India, “It also offers the chance to develop a manufacturing sector for renewable energy equipment, fostering localized solutions. She stresses that seizing these opportunities requires meticulous planning, with education as the cornerstone. Without substantial skill development and vocational training, the potential of this transition will not be fully realized.”

Minal Pathak, Associate Professor at the Global Centre for Environment and Energy at Ahmedabad University, Gujarat, highlighted that energy efficiency, electrification, and clean energy will be key pillars in India’s decarbonisation while also contributing to other development goals such as clean air, green jobs, and energy security benefits. In an exclusive interaction with CFC India, Professor Pathak mentioned, “There should be a strong focus on the demand side and achieving energy security, clean environment, and resource management.”

Emerging technologies: green hydrogen and carbon capture

India’s decarbonisation journey heavily relies on emerging technologies such as green hydrogen and carbon capture.

Green Hydrogen

Dr Kedia emphasized that no single technology should be considered a silver bullet to solve all climate change-related issues, including adaptation and mitigation. Dr Kedia stated, “A basket of technologies is needed along with means of implementation such as climate finance, technology transfer, and capacity building. For green hydrogen to compete with fossil-fuel-based hydrogen, the costs of electrolysers must be reduced, and India must become a key player in electrolyser manufacturing. According to a TERI study, green hydrogen use should be targeted for sectors where direct electrification is impossible, such as transport, steel, and chemicals. Government funding is needed for research and development, pilots, and demonstrations.”

Dr Das added that green hydrogen holds significant potential for deep decarbonisation in various industries, particularly the fertilizer industry, which is crucial for India. Dr Das explained, “The Indian government consistently pushes policies to boost green hydrogen production and its adoption across sectors. Although the current cost of green hydrogen is a barrier to widespread use, introducing production-linked incentive programs and extending a waiver on inter-state transmission charges are expected to reduce production costs by 40-50%.”

Dr Minal Pathak noted that while there has been good technological progress on green hydrogen with the government of India announcing ambitious initiatives and policies, investments should be prioritized where other cheaper and readily available decarbonisation options are unavailable, such as some difficult-to-abate industry sectors. While sharing her insights with CFC India, Professor Pathak said, “Investments should be prioritized where other cheaper and readily available decarbonisation options are not available.”

Carbon Capture, Utilization, and Storage (CCUS)

Dr Kedia highlighted that carbon capture and storage (CCS) is a vital carbon sequestration technology, along with carbon capture and use, nature-based solutions, and even negative emissions technologies such as bioenergy and CCS. In her interaction, she remarked, “Key issues relate to financial viability and storage. For CCS, international cooperation and finance will be key.”

Dr. Das mentioned that CCUS still needs to be commercially viable and remains expensive. She noted, “India’s LT-LEDS indicates that CCUS is not feasible for the power sector due to its high costs. However, many oil and gas companies view CCUS as a potential strategy for energy transition, though its commercial viability continues to be a major concern globally.”

Dr Minal Pathak warned against overreliance on these technologies, as existing scientific evidence questions their scalability. Professor Pathak cautioned while speaking to CFC India, “Some amount of carbon capture and storage or utilization and storage will certainly be required globally to achieve net-zero emissions. Investments are needed in funding research, developing demonstration projects to understand feasibility and other challenges, and building capacity. Work on these matters is progressing but needs to be scaled up rapidly.”

References

https://cea.nic.in/installed-capacity-report/?lang=en

https://www.wri.org/research/realizing-net-zero-emissions-good-practices-countries

https://www.iisd.org/taxonomy/term/119

https://www.irena.org/publications/2022/mar/world-energy-transitions-outlook-2022

https://www.ceew.in/publications/thermal-decommissioning-and-cost-efficiency-of-coal-power-plants-india

https://www.teriin.org/sites/default/files/2021-07/Report_on_The_Potential_Role_of_%20Hydrogen_in_India.pdf

Banner image:

Photo by Chris LeBoutillier on Unsplash