Green revolution 2.0: Why India needs an integrated energy policy
Coal: The challenge in weaning away from coal for power generation (accounts for 75% generation, 50% carbon emission) lies in developing round-the-clock (RTC) alternate supplies at affordable prices. While solar tariffs are competitive, for the short to medium term, the complementing low-carbon capacities for RTC supplies are currently expensive (battery), or risk laden (hydel resources). The supply security in meeting the rising demand is equally important.
For example, owing to water bodies going dry, Canada, which was dependent largely on its vast hydel resources, is now buying fossil fuel-fired electricity from across the border. The challenge on the demand side is equally of a tall order: it is fraught with the political predicament of raising electricity tariffs to align with supply costs. This calls for a larger policy framework involving electricity sector reforms to reduce appetite for coal.
To improve fuel diversity in an ‘organic’ manner, the risk models used by lenders to appraise projects are currently biased towards coal projects, needs to be reviewed. For example, according to a study, in Europe, the loan loss-provisioning for low carbon sectors is twice that for big emitters. This approach will also facilitate faster adoption of newer technologies to reduce emissions in hard-to-abate sectors like cement and steel that use coal or the petrochemical sector which uses naphtha as a feedstock.
Natural gas: As a developing country on its journey to Viksit Bharat by 2047, ‘Just’ transition is an important aspect of government policy, one that enables reasonable pricing and availability of mass consumption products. Natural gas eminently fulfils this role. In the case of the transport sector, which contributes
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