The landfall of cyclone Biparjoy in the coastal regions of India and Pakistan has fortunately not resulted in major loss of lives.

Last year’s floods in Pakistan were much worse. Climate change has lent urgency to the need for the energy transition to net zero emissions (NZE).

The rising global temperatures have placed a premium on the limited carbon budget available. Not only the developed countries and China have exhausted 80 per cent of the available carbon space, but they are also eating into the meagre carbon budget remaining at a much higher pace since their per capita emissions are far above ours.

China is the largest emitter accounting for 30 per cent in 2021; the Indian share was 7.27 per cent. China’s relative share in the global basket will increase by 2030 as the EU and the US have already accepted capping.

Emission-free route

Moving towards a low-carbon economy essentially means bringing additional sectors of the economy under electrification produced from emission-free sources. This will increase demand for electricity much beyond historical trends. India’s electricity consumption at 1100 units per capita is one-third of the international average.

This has to grow if we are to catch up with the slow development of the past. Electricity is only 20 per cent of energy at the global level; in India, this ratio is lower at 14 per cent. Bearing this in mind, our energy consumption even at the current level is more than 5,500-7,500 units per capita.

Any mapping of India’s energy choices requires quantifying the demand for electricity at the net zero emissions NZE) stage. A Vivekananda International Foundation (VIF)-IIT Bombay study has brought out that the quantum of demand at the NZE stage will range from 24,000 to 30,000 TWhr depending upon the energy-mix. CEEW has estimated India’s energy demand at 24,000 TWhr by 2100.

Most other think-tanks and organisations have given India’s energy demand in the range from 3500 TWhr to 6000 TWhr, though they relate to different timelines. The IEA has for instance pegged India’s energy demand at 3433 TWhr by 2040. There is thus a huge difference in the assessments. Which is correct?

According to NITI Aayog data, India’s energy consumption in 2020 was 6292 TWhr. Is it possible that India’s energy consumption after two decades will be half of the present level? The estimates which peg the future energy demand in the range of 3,400-6,000 TWhr will seriously impair India’s development trajectory.

If IEA’s estimate only relates to de-carbonising the power sector, this will not achieve net zero. According to IEA figures, the power sector accounts for only 45 per cent of emissions. India does not have the sink to absorb the remaining 55 per cent.

To reach net zero emissions, our choice is limited to renewables or nuclear. There could be intermediate options that also include CCS. The choice of the energy mix will depend upon cost.

The general impression is that renewables are far cheaper. Though the solar power tariff has come down to ₹2 per unit in the past few years, the tariff structure for renewables does not capture the full cost.

Renewables need a balancing power to provide electricity when the sun is not shining and the wind is not blowing. These are not included in the tariff and are absorbed by Discoms or thermal power plants. The Forum of Regulators had estimated this cost as ₹2.12 per unit in 2021.

Tariff differentials

Added to the solar tariff, the actual cost comes to ₹4.12 per unit. This is higher than either thermal power at ₹3.25 per unit and nuclear power at ₹3.47 per unit.

It is no coincidence that Germany which has the highest renewable penetration in the world (46 per cent), also has the highest tariff. Given its continental location, it can draw electricity from the regional grid including nuclear power from the Czech Republic and France. India does not have this luxury.

A study by Vivekananda International Foundation (VIF)-IIT Bombay has brought out that the renewable high approach for reaching NZE by 2070 will be the costliest ($15.5 trillion), while the nuclear high approach will be the most cost-effective ($ 11.2 trillion) option. Renewables are also the most land-intensive solution.

An approach relying exclusively on renewables to reach NZE will require double the total surplus land (2,00,000 square km) available in India currently.

While the target of 500 GW of installed capacity based on renewables by 2030 is indeed a step in the right direction, an expansion beyond this threshold needs to take into account the cost and land constraints pointed out above. There is a need to restore the health of the Discoms as well as provide increased support for the nuclear sector.

The writer is a former Ambassador, and Coordinator, VIF Task Force on India’s Energy Transition in a Carbon-Constrained World