The International Energy Agency (IEA) in an update on its Net Zero Roadmap report praised India’s efforts to reduce project risks and capital costs for utility scale solar and wind power projects.
The report emphasised that appropriate policies are needed to address causes of high cost of capital in emerging markets and developing economies. Clear national targets with an annual implementation plan, for instance through competitive auctions, would be likely to increase investor confidence, it suggested.
Citing India’s example, IEA said that an ambitious government target set for renewables capacity has been followed by central and provincial auction schedules with transparent procurement processes.
“India provides an example of policy action here too: its centralised large-scale auctions conducted by the Solar Energy Corporation of India (SECI) helped reduce project risks and lower the cost of capital for utility-scale solar PV and wind plants,” it added.
The first publication of Net Zero Roadmap by the IEA was in May 2021. The 2023 update draws from the latest data and analysis to map out what global energy sector would need to do, especially in the crucial period between now and 2030, to play its part in keeping the 1.5 °C goal in reach.
Discussing India’s commitments, the report said that the projected CO2 emissions in India in 2030 are 1.3 giga tonnes (GT) lower in the Stated Policies Scenario (STEPS) than the Pre-Paris Baseline Scenario.
The share of solar PV in power generation increases eightfold, saving nearly 400 million tonnes of emissions in 2030 in STEPS. In the Pre-Paris Baseline Scenario, wind and solar PV account for less than 10 per cent of total generation in 2030; in the STEPS, this rises to around 25 per cent.
“A key reason is the adoption in 2021 of a 500 GW target for renewable energy capacity by 2030. Compared with solar PV, wind power has made less progress, with projections for capacity deployment by 2030 in the STEPS only slightly larger than expected in Pre-Paris Baseline Scenario. This reflects a lack of progress in resolving land acquisition and tariff setting issues related to wind power developments,” it added.
Changes in macroeconomic assumptions account for part of the difference in emissions between the Pre-Paris Baseline Scenario and the STEPS, it explained.
“India’s GDP took a significant hit in the Covid-19 pandemic, and the subsequent growth projected in the STEPS is not sufficient to recover lost ground. Therefore, GDP in 2030 is slightly lower in the STEPS than in the Pre-Paris Baseline Scenario. As a result, industrial production and electricity demand are also somewhat lower, as are projected emissions in both the industry and electricity sectors,” it added.
IEA Executive Director Fatih Birol in the reports foreword said that in the last two and a half years, since the launch of the report, the strong and carbon intensive economic recovery from the Covid crisis and the global energy crisis triggered by the Russia-Ukraine war led to global energy-related carbon dioxide emissions rising to a new record in 2022 and increased investment in new fossil fuel projects.
“However, we have also seen some extremely positive developments, most notably the rapid progress of key clean energy technologies, such as solar PV and electric vehicles, backed by significant policy efforts to advance them further,” he added.
In an era of international tensions, Birol suggested that governments need to separate climate from geopolitics.
Meeting the shared goal of preventing global warming from going beyond critical thresholds requires stronger cooperation not fragmentation. Climate change is indifferent to geopolitical rivalries and national boundaries – in its causes and its effects, he added.