India’s sustainable energy standards are sinking
Notwithstanding the people’s outrage on the fallen gross domestic product (GDP) rate for the second quarter — April-June — to five percent, Minister of Finance, Nirmala Sitaraman, continues to boast about the economy without any acknowledgement of its slowdown.
India’s current economy stands at USD 2.7 trillion and it aspires to grow to a staggering USD 5 trillion by the year 2024. This idea of USD 5 trillion economy may appear inconceivable under the light of the second quarter results but it is only entirely evasive if the country fails to grow at 9 percent in real terms. The question is from where will today’s 2.7 trillion dollar Indian economy get energy, in five years, to become a 5 trillion dollar that it predicts?
These economic goals have implication in total energy output and, since India is the third largest energy consumer in the world, It is essential that most of it comes from sustainable energy sources. India has pledged to contribute 175 GW of renewable energy to its total energy output by 2022. India’s current total energy consumption stands at around 360 GW; 35 percent of which comes from renewables — 126 GW.
Renewable energy growth trend, since 2014, has been inadequately incremental, observing a mean growth of about 8 percent every year, including the addition of 12 GW of renewable energy in 2018 alone. However, the first two quarters of this year have experienced a severe drop in renewables output — adding only 3.5 GW, making the 2022 goal highly improbable.
The followed mean growth of 8 percent per annum has the capacity to bring the total renewable energy output to only 160 GW by 2022, which fails to meet the target. For this reason, India needs to follow a mean renewable energy growth rate of 11.5 percent per annum through next three years if it sincerely wishes to meet its clean energy goal. This means adding a whooping 15 GW of renewable energy capacity every year through 2022.
While lugging ambition of shifting energy policies towards cleaner energy sources, India still derives its substantial growth from coal, more than 50 percent. Last month, Union cabinet enabled 100 percent foreign direct investment (FDI) via automatic route in coal mining and associated infrastructure to boost the coal output. Also, while 40 percent of new coal mining projects were delayed this year due to scrutinies pertaining to environmental and forest clearances, the delay led, unavailingly, to a surge in coal import, which stood at 235 million tonnes.
No fiscal modification has been announced so far to fix the deteriorating sustainable energy standards. In the clamour of India’s fallen growth results, the government is likely to encourage business as usual to improve its GDP. Mining activity and power generation observed a rise of 2.7 percent, during this quarter, from a year ago. And is believed to continue to rise as other sectors observe a protracted slowdown.