A strategy to win energy independence by 2047

May 09, 2023 08:41 PM IST

A recent study outlines a pathway for India to achieve energy independence, grounded in rapidly falling clean technology costs

2022 was a volatile year for global energy markets, along with supply chain disruptions due to several reasons. The impacts of this were more pronounced for India due to its outsized energy imports – 90% oil and 80% industrial (coking) coal – leading to a weakened trade balance and worsening the commodities inflation. In that vein, Prime Minister Narendra Modi’s clarion call for Atmanirbhar Bharat (self-reliant India), which aims to make India energy independent by 2047, seems increasingly important. As a rapidly growing economy, much of the country’s energy infrastructure will be built in the coming decades. The energy demand growth comes at a time when there have been reductions in clean energy technology costs globally, and India has successfully leveraged them to achieve the lowest solar and wind energy prices in the world with the help of significant policy innovation. As a result, solar energy is the cheapest source of new electricity generation in India, and by 2030, it will be even after accounting for energy storage costs.

India’s electricity demand is rapidly growing. Abundant and cheap solar and wind energy and increasingly cost-effective (AFP) PREMIUM
India’s electricity demand is rapidly growing. Abundant and cheap solar and wind energy and increasingly cost-effective (AFP)

A recent study by Lawrence Berkeley National Laboratory and the University of California Berkeley outlines a pathway for India to achieve energy independence by 2047, grounded in rapidly falling clean technology costs. The study focuses on India’s three most energy- and emissions-intensive sectors – power, transport, and industry – and outlines how to harness commercially available clean technology to achieve energy independence by 2047, while also exploring the associated economic, energy, and environmental benefits.

First, power. A clean power grid will be the foundation of this pathway. India’s electricity demand is rapidly growing. Abundant and cheap solar and wind energy and increasingly cost-effective offshore wind along the Tamil Nadu and Gujarat coasts can meet the evolving load at a cost lower than a coal-dominant grid. Additionally, grid-scale storage’s rapidly increasing economic viability can help avoid new thermal investments, though existing thermal assets will still be needed to maintain grid reliability.

Second, transport. For making this sector atmanirbhar, electric vehicles (EVs) will be key; for most vehicle classes, EVs are already cheaper than their petrol or diesel counterparts with respect to the total cost of ownership, as their running costs are 70-80% lower. Moreover, upfront price parity for EVs will be reached in the coming years, given current global demand and supply trajectories. A key question is whether India can manufacture lithium-ion batteries domestically. The recent discovery of lithium reserves is inferred to be 5.9 million tonnes, about three times larger than the country’s lithium needs over the next 20+ years, even if all new vehicles sold are electric from 2035 onward. To be sure, questions linger about the viability of commercial exploitation of these reserves.

The third is industry. In heavy industry such as iron and steel, which depends on imported coking coal, innovation is needed for economical, clean energy deployment but provides India with the opportunity to be a leader in technology such as green hydrogen. However, it is critical to ensure that hydrogen gets used as a feedstock or a reducing agent in industrial processes and not as an energy source, e.g., using hydrogen to generate electricity or run trucks – which would be extremely inefficient.

India’s growing energy demand offers a significant runway for existing fossil energy assets to transition. Domestic coal production or coal-based power generation, for example, does not need to reduce below current levels until the mid-2030s. New fossil assets must be avoided so they do not get stranded due to the cheaper renewable generation coming online.

Energy independence can help improve India’s balance of payments. India currently imports 90% of its crude oil demand, spending $100-200 billion ( 800K-1.6M crore) annually on oil imports. Given the rapid economic growth, India’s oil demand and imports are expected to double by 2040, the largest increase of any country. Every $10/barrel increase in crude prices leads to an additional $12.5 billion in India’s Current Account Deficit, resulting in a weaker rupee and rising inflation.

Oil prices in 2022 alone have fluctuated from $40 to $120/barrel. In contrast, EVs coupled with a clean grid can inflation-proof energy supply for freight movement and industrial use because most of their costs are towards capital investments made upfront.

The 2023 budget recognises the importance of domestic manufacturing of clean energy technologies, with large incentives allocated to expanding manufacturing capabilities in solar panels and batteries through the Production Linked Incentive scheme. The National Hydrogen Mission announced an outlay of 20,000 crore earlier this year. These investments are necessary to ensure that the Indian industry, one of the largest passenger vehicle producers in the world, stays globally competitive; 25% of the sector’s production is exported, mostly to the European Union, which has committed to phase out new petrol and diesel vehicles by 2035. It is a similar case with India’s steel industry, which is one of the largest in the world and exports heavily to countries that have committed to net-zero emissions and could enforce carbon tariffs soon. Due to consistent solar resources throughout the year in large parts of the country, green steel manufacturing in India could be cost-competitive by global standards. India has a timely opportunity to become a leader in cleantech manufacturing as the world moves away from fossil fuels.

A pathway to energy independence made imminently possible by the current clean energy landscape could also help accelerate India’s commitment to net-zero greenhouse gas emissions by 2070, without increasing consumer costs and accruing massive health co-benefits. The study estimates that over four million premature deaths due to outdoor air pollution could be avoided by 2047.

A rapid clean energy transition could marry India’s energy independence ambition with its industrial growth aspirations. India’s G20 presidency this year offers an opportunity to cement strategic partnerships to achieve India’s clean energy transition.

Priyanka Mohanty, Shruti M Deorah and Nikit Abhyankar are with the India Energy & Climate Center at the University of California, Berkeley

The views expressed are personal

Continue reading with HT Premium Subscription

Daily E Paper I Premium Articles I Brunch E Magazine I Daily Infographics
Story Saved
Live Score
Saved Articles
My Reads
Sign out
New Delhi 0C
Monday, December 11, 2023
Start 14 Days Free Trial Subscribe Now