Extreme weather and the availability of cheap Russian oil following the Ukraine war have put pressure on India as it looks to become energy independent and falls behind on its renewable energy goals.
Earlier this spring, India faced its worst power crisis in over six years as coal shortages and an earlier-than-expected heatwave hit large parts of South Asia, causing a surge in energy demand and widespread power outages.
Alongside this, the war in Ukraine risks delaying India’s renewable energy rollout as the country benefits from cheap Russian energy imports.
India’s energy mix is currently based on coal for power generation, oil for transport and industry, and biomass for residential heating and cooking.
But New Dehli has acknowledged that rising electricity output and reducing coal consumption will require more investment in renewable energy, especially wind and solar.
This year’s shortages could be another driver for India to invest more in renewable energy capacity and secure its energy needs, according to experts.
Aiming for self-reliance
“We need to be aatmanirbhar [self-reliant] in our energy sector,” India’s Prime Minister Narendra Modi declared in a speech on 15 August, India’s Independence Day.
“From solar energy, to ‘Mission Hydrogen’, to the adoption of EVs [electric vehicles], we need to take these initiatives to the next level for energy independence,” Modi said in New Delhi.
India is moving forward not just on technology, but also in the field of science, space and ocean missions, Modi added. For instance, the country met its target to mix ethanol from sugarcane and other agricultural commodities with petrol to reduce its dependence on imports ahead of schedule.
“We were highly dependent on oil imports for our needs. We planned to blend 10% ethanol with petrol. It appeared to be a difficult task to accomplish,” Modi said.
The target was achieved in June, well before the original schedule of November 2022 and, following this, India’s government announced a target of blending petrol with ethanol making up 20% of the mix by 2025.
Falling behind on renewable energy targets
Last year, India announced it is aiming to reach net-zero carbon emissions by 2070. The country, which is the third-largest emitter of carbon dioxide after China and the US, put forward five targets, including providing half of the country’s energy from renewables by 2030, up from around 38% in 2020.
According to sources close to the Indian government, the ambitions would be even higher, but Delhi is not ready to set further targets without more financial support and the transfer of technology from richer nations.
There is already considerable investment in renewable energy in India. It hit $14.5 billion in the 2021-22 fiscal year, up 125% compared with the previous year, according to a report from the Institute for Energy Economics and Financial Analysis.
But despite this, India is set to miss its renewable energy target for this year, having installed just over half of planned capacity, a high-level parliamentary report found in August.
The target, set in January 2018, would have increased India’s renewable energy capacity to 43% of its current energy mix, but has been postponed to mid-2023.
Cheap Russian oil
The missed target is partly due to the availability of cheap Russian oil. The country is the world’s third-largest consumer of oil and imports provide over 80% of its consumption.
Although Russia has historically not been a major supplier of crude to India, New Delhi became a major purchaser of discounted crude earlier this year, with imports rising from March onwards.
Despite Western pressure, the trend is likely to continue, partly because four of India’s major public sector energy companies – ONGC Videsh Ltd., Oil India Ltd., Indian Oil Corporation Ltd., and Bharat Petro Resources Ltd. – have heavily invested in Siberian oil fields since 2016.
Other reasons include slow decision-making processes for approving solar projects and the indebtedness of state-owned energy companies to renewable energy developers, according to India’s parliamentary committee.
Meanwhile, India’s ministry of new and renewable energy, which is in charge of meeting the targets, blamed the COVID-19 pandemic.
In order for the 50% renewable energy target to be met, renewable energy capacity needs to grow by over 1,000% over the next nine years, according to a study released by the Council on Energy, Environment and Water (CEEW).
Green hydrogen could contribute 19% of the energy consumed by industry in 2070.
But, according to a recent report, expanding clean energy could have huge employment and economic potential as with reaching the goal of 500 GW of non-fossil fuel energy sources by 2030, India could create 3.4 million new clean energy jobs.
Experts believe a large part of these jobs could also create local employment opportunities and bring transition closer to communities.
At the same time, India and the EU have reaffirmed their commitment to expand collaboration on climate change, with the possible launch of a “green hydrogen alliance” on the agenda of bilateral talks next year.
With New Dehli targeting net-zero emissions by 2070, the prospect of India’s transformation into a global powerhouse for renewables could present opportunities for EU-India climate cooperation.
[Edited by Kira Taylor and Frédéric Simon]
