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Wednesday, December 01, 2021

India needs a coordinated approach for decarbonisation of economy

Daljit Singh writes: Long-term planning process must be changed and an autonomous, credible agency must provide independent advice, monitor progress.

Written by Daljit Singh |
Updated: November 18, 2021 7:05:42 am
Smoke rises from a coal-powered steel plant at Hehal village near Ranchi, in Jharkhand (AP)

Prime Minister Narendra Modi’s announcement of enhanced targets for climate action by India, particularly for achieving net-zero emissions by 2070, has highlighted the importance of long-term planning for decarbonising the economy. Until now, the Government of India has responded to unprecedented changes in the energy sector, particularly rapid reductions in the cost of renewable energy (RE) based power, with dramatic enhancements in the targets for RE. With this approach, India has done well and is on a path to fulfilling its Paris Agreement commitments for 2030. However, the road ahead will be challenging, and therefore, a coordinated strategy for decarbonising the economy efficiently and effectively will be required.

Changes will be required to long-term planning processes. By 2070, there will be many changes in technology, environmental conditions, and the economy. The planning horizon of about 50 years will need to be broken up into shorter periods so that new knowledge about emerging technologies can be incorporated into plans. In addition, plans will need to be monitored so that the course can be corrected to respond to any unforeseen problems. Five years, as the UK has used, seems like a reasonable “Goldilocks ideal.”

For setting interim targets and monitoring progress, an autonomous and technically credible agency, like the Climate Change Committee (CCC) in the UK, should be set up. This agency could be either a new agency or an existing one with an expanded mandate to cover climate change issues for all sectors. Its members should be recognised experts in their fields and represent a diverse mix. The agency would provide independent advice to the government on setting and meeting both long-term and interim (five-year) targets that are ambitious but also achievable. It would also monitor progress and annually report and suggest mid-course corrections.

The shorter-term targets announced by the PM to be reached by 2030 refer mostly to the power sector. This is appropriate because it is the biggest source of GHG emissions and also the easiest one to decarbonise.

The four 2030 targets — non-fossil fuel generating capacity to be 500 GW, RE capacity to be 50 per cent of all generation capacity, reduction in emission intensity by 45 per cent, and avoidance of GHG emissions by 1 billion tonnes — are inter-related. In order to decarbonise the power sector, it would be best to have a single emissions-related objective so that an optimal strategy can be developed to achieve the objective at the lowest cost. Reducing emission intensity is a good overarching objective; increased use of RE or non-fossil-fuel generation is a means to that end. Setting permissible emission intensity in terms of grammes of carbon dioxide equivalent per kWh of electricity sold, applied to all load-serving entities, would be a good option for targets in the power sector.

In a recent study, ‘Long-Term Goal-Setting and Planning for Decarbonising the Indian Power Sector — Need for a Coordinated Approach’, I found that currently there is a profusion of separate targets for almost every resource used to generate electricity. For example, there are separate renewable purchase obligations (RPOs) for solar, non-solar RE, and hydropower. The national target for solar is further divided into grid-connected and roof-top solar. Such an approach reduces the flexibility of distribution companies to select resources to meet their loads, resulting in a non-optimal resource mix, and a higher cost of electricity. The reduced flexibility could also stymie the development and deployment of emerging technologies such as battery storage and small modular nuclear reactors. Furthermore, RPOs are usually imposed to support nascent technologies, and because RE is now competitive on costs with conventional generation, the need for RPOs should be reconsidered. The use of emission intensity targets is a better approach.

The use of five-year interim targets for permissible emission intensity and the establishment of an autonomous and credible agency to advise the government on targets and policies and to monitor progress will greatly facilitate an effective, economic, and smooth transition to decarbonisation of the power sector first, and the Indian economy later by 2070.

This column first appeared in the print edition on November 17, 2021 under the title ‘Greeener and brighter’. The writer is Fellow at the Centre for Social and Economic Progress (CSEP). Views expressed are personal

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