Prime Minister Narendra Modi’s clarion call during his Independence Day speech to make India aatmanirbhar (self-reliant) in the energy sector is set to be one of the key elements of the country’s sustainable growth agenda. India’s journey towards energy independence and its decarbonisation drive go hand in hand, and shall give rise to green growth initiatives which will be a significant economic opportunity.

The criticality of energy independence is not hard to visualise, and while decarbonisation is imperative in order to achieve climate action goals, doing so will also substantially reduce the import bill, thereby freeing up resources for other sectors. At present, India spends more than $160 billion every year on energy imports which is set to double in the next 15 years if concrete steps are not taken to stop it from ballooning.

EBP programme

In this context, policy measures are already having an impact. For example, the Ethanol Blended Petrol (EBP) programme launched by Prime Minister Narendra Modi in 2018 envisaged achieving 20 per cent ethanol blending by 2030; however, some quantity will be available in 2023 itself and the overall target has now been advanced to 2025.

The impact of the EBP programme over the last eight years is noteworthy as it has not only augmented India’s energy security but also resulted in forex savings of ₹41,500 crore, reduced GHG emissions by 27 lakh tonnes and expedited payment of ₹40,600 crore to farmers.

India’s commitment to green growth is visible from its recent updated Nationally Determined Contribution (NDC) which is to be communicated to the United Nations Framework Convention on Climate Change (UNFCCC). The commitment to reduce emissions intensity of its GDP as compared to 2005 levels has been stepped up to 45 per cent by 2030 along with a target of achieving 50 per cent electricity from non-fossil fuel based energy sources.

Though not a part of the NDC as the implementation time frame is 2021-2030, India’s intent to achieve ‘net zero’ by 2070 as committed by PM Modi at COP-26 in Glasgow is evident from such concrete actions. As such, India is now being seen as a pioneer of the non-carbon intensive growth model which other developing countries can use as a template.

Economic opportunity

It would not be out of place to state that India’s transition to clean energy is a once in a lifetime economic opportunity. According to the International Energy Agency (IEA), India has the potential to become a world leader in renewable batteries and green hydrogen; that, along with other low carbon technologies, could create a market worth $80 billion by 2030.

The IEA also estimates that $160 billion investment will be required every year between now and 2030, which is three times today’s investment levels, in order to achieve ‘net zero’ by 2070. Clearly, availability of long term low cost capital, including Green Climate Fund (GCF), from developed nations is a pre-requisite as is access to technology. However, going down this path will be rewarding as it has been estimated that India’s GDP can get a boost of 4.7 per cent by 2036 and 15 million jobs can be created by 2047.

Forward looking policies

India has distinct advantages which serve to attract foreign investment. It is the fastest growing large economy in the world as a result of forward looking policies and schemes launched by the government under PM Modi’s leadership with a focus on sustainability, ease of doing business, and technology transformation amongst others.

Moreover, investment in non-fossil fuel based electricity capacity, policies such as Faster Adoption and Manufacturing of Electric Vehicles - Phase II (FAME II), and ₹18,100 crore production linked incentive (PLI) scheme for manufacturing of advanced cell chemistry (ACC) batteries are all steps in the right direction.

Further, adoption of green hydrogen will be revolutionary as this clean energy option can play a major role in taking India towards ‘net zero’ by decarbonising hard-to-abate sectors like iron and steel and heavy transport. Going by a recent NITI Aayog report, adoption of green hydrogen will result in 3.6 giga tonnes of cumulative CO2 emissions reduction between 2020 and 2050, and energy savings ranging from $246 billion to $358 billion within the same period.

The intent to make India a global hub for production and export of green hydrogen through the National Hydrogen Mission, as envisaged by PM Modi in his address to the nation on Independence Day last year, could not have come at a better time.

What is clear is that India’s drive for energy independence is interlinked with actions related to combating climate change which will transform not just the lives of 1.3 billion Indians but, indeed, the entire planet. Doing so will also lead to huge economic opportunity which we must capitalise on as a nation to provide a boost to growth and job creation.

However, while the Government lays out its vision in this regard and provides an enabling environment, various stakeholders — especially industry — have to play their part in this important mission.

The writer is Senior Vice President of the Federation of Indian Chambers of Commerce & Industry, and Managing Director of Indian Metals & Ferro Alloys Ltd