A green transition, but not without the coal-rich states

A green transition, but not without the coal-rich states

Context: This editorial talks about how Green transition is likely to impact certain states in India and what needs to be done to protect them. We will also discuss some initiatives taken by government in its bid to secure Green/Energy Transition.

What is Energy Transition?
• Energy Transitions refers to the transformation of the energy sector from fossil-based systems of energy production and consumption to renewable energy sources. It involves a shift in the energy mix to reduce, if not eliminate, the carbon emissions (and other greenhouse gases).
• In India’s context, by 2030, solar and wind could account for 51% of generation capacity. Solar and wind’s contribution might rise from 8.3% in 2019 to 31% by 2030.

What importance does Coal hold in India’s energy mix?
• Coal remains a significant part of India’s energy landscape.
• India's intent to build new coal power plants clashes with its green commitments.
• The reliance on coal is evident in efforts to manage seasonal demand surges in electricity.

How is energy transition in India likely to impact States?
• As of August 2023, eight states generated 92.5% of all renewable energy. Mainly western and southern states are benefiting.
• Shift to Renewable energy will ensure that Coal royalties which forms a key revenue for some states will decrease. Power procurement costs will rise for these states leading to budget deficit.

What needs to be done to ensure balanced energy transition?
• It becomes vital to support the Renewable Energy(RE)-Poor States. Preferential Financial lending for RE projects can be one measure.
• Also, RE-poor states can be given a bigger voice in power discussions, possibly by reviving institutions like the Inter-State Council.
• The Finance Commission can provide explicit financial aid to RE-poor states.

What steps have been taken by India towards Energy transition?
Panchamrit (5 commitments) at COP26 session taken by India:
• To raise the non-fossil fuel based energy capacity of the country to 500 GW by 2030.
• By 2030, 50% of the country’s energy requirements would be met using renewable energy sources.
• The country will reduce the total projected carbon emission by one billion tonnes between now and the year 2030.
• The carbon intensity of the economy would be reduced to less than 45% by 2030.
• The country would become carbon neutral and achieve net zero emissions by the year 2070.

Policy measures
• India’s aim to become a Global hub for Green Hydrogen via National Green Hydrogen Mission
• India’s targets to achieve 20% Ethanol Blending in petrol by 2025-26
• The Energy Conservation (Amendment) Act
• Market mechanisms (PAT Scheme, proposed Carbon Market)
• Renewable purchase obligations - All electricity distribution licensees should purchase or produce a minimum specified quantity of their requirements from Renewable Energy Sources

Other initiatives
• FAME Scheme (Faster Adoption and Manufacturing of Electric Vehicles) was launched in April 2015 under the National Electric Mobility Mission
• Subsidies on Petrol and Diesel have been removed in the last decade
• PM Ujjawala Yojana – For transition away from traditional use of biomass

Mission Life
• A mass movement led by people “Life-Lifestyle for Environment” that propagates a healthy and sustainable way of living based on traditions and values of conservation and moderation.

Conclusion
• A transition to clean energy is a huge economic opportunity. India is particularly well placed to become a global leader in renewable batteries and green hydrogen.