In June, the Centre penalised four companies, including National Thermal Power Corporation (NTPC) and UltraTech Cement, for not operationalising coal blocks and not meeting their production targets.

Consequently, Coal India Ltd (CIL), the world’s largest miner, proposed to import 12 million tonnes of coal to prevent a looming shortage of dry fuel in thermal power plants during the next one year.

In fact, CIL has been managing its inventories without importing coal since 2015.Though thermal power accounts for nearly 70 per cent of India’s energy needs, it is imperative to have a planned transition to clean/green energy in line with the United Nation’s Sustainable Development Goal 13 — Climate Action. Energy transition, essentially, involves switching towards an affordable, renewable, and sustainable energy supply-chain.

Energy market dynamics 

It is well established that coal is the single largest contributor to anthropogenic climate change (responsible for 46 per cent of CO2 emissions and accounts for 72 per cent of greenhouse gas emissions).

According to a study by the International Forum for Environment, Sustainability & Technology, nearly half of the coal mines in Jharkhand have been closed while the remaining are economically unviable.

Also, nearly 70 per cent of CIL’s coal mines are loss-making, incurring an aggregate loss of nearly ₹16,000 crore a year.

According to available data, the levelised cost of power generation is the lowest in India, in the entire Asia-Pacific region: solar power generation ($38.2 MWh), fossil fuels ($44.5 per MWh), and on-shore wind power generation ($48.9 per MWh).

But in terms of power tariff paid by consumers, Malaysia, Vietnam and China levy lower rates than India. According to a study by the World Economic Forum, India can save over $90 billion by reducing its imports between 2021 and 2030, even if half of the generated renewable power is used to substitute imported coal.

AT the COP (Conference of the Parties) 26 held in Glasgow in November 2021, Prime Minister Narendra Modi proposed ‘Panchamrit’ (five nectars) as part of India’s contribution to Climate Action: By 2070, India will achieve the target of net zero carbon emissions.

Further, India is committed to generating half of its energy from renewable sources by 2030. Hence, there is a strong economic reason to opt for environment-friendly energy transition.

Renewable energy push

Portfolios of several oil and gas MNCs such as British Petroleum, Eco-petrol, and Royal Dutch Shell have undergone significant diversification into renewables indicating a rapid change in the energy market dynamics. Back home, ONGC has been exploring geothermal opportunities in Ladakh.

CIL is planning to establish solar power plants with an installed capacity of 3,000 MW to meet its entire electricity demand.

Similarly, NTPC has set up a separate renewable energy subsidiary to build its green energy portfolio.

Further, India took the lead in forming the International Solar Alliance in 2015 to work for efficient consumption of solar energy to reduce dependence on fossil fuels. Now, India ranks fourth in the world in terms of installed renewable energy capacity.

Policy options

Proper planning, execution, and management of renewable energy can boost local employment, leading to better healthcare, improving quality of life, and ensuring community development through the following channels:

First, older and the economically unviable coal-based power plants in India should be phased-out over the next 10 years under a common law, albeit, at a differentiated rate as compared to the developed nations.

Second, all major barriers to the transition like stranded assets, loss of lives, and livelihoods need to be identified in the context of proper rehabilitation and resettlement. One possible way of compensating in this regard is to utilise the coal cess constructively.

Third, realignment of energy subsidies and economic incentives is critical since subsidies on fossil fuels are seven times higher than those of alternative sources of energy.

Fourth, a new institutional framework needs to be devised with greater participation of the community jointly with the local governments, businesses and other stakeholders in order to encourage decentralised energy provisioning.

Fifth, ‘ease of doing business’ should be ensured in respect of land acquisition and necessary steps should be taken to integrate renewable energy with the power grid.

Sixth, the Real Estate Regulation Act (RERA) may be modified by incorporating a compulsory provision for rooftop solar power.

Seventh, the agri-value chain network of Farmer Producer Organisations (FPOs) may be promoted so that gradually free power to farmers can be discontinued.

Eighth, prudent consumption of electricity through responsible lifestyle may be incentivised.

Ninth, to commercialise and scale-up renewable energy technologies, viability gap funding may be provided to manufacturers. Green finance options may be encouraged in a big way for low-cost climate technologies apart from priority sector lending.

Finally, the emphasis should be on reducing the cost of solar panels/wind turbines, etc. through Production Linked Incentive Schemes. This would fulfil India’s aspiration of becoming a manufacturing hub and result in ‘Atmanirbharta in renewable energy’.

India scored one of the lowest among 180 countries in the Environment Performance Index, 2022, published by Yale and Columbia Universities.

As there is no planet B, the green energy narrative is here to stay for the times to come as India receives abundant sunlight at least for 300 days in a year; and the country has good wind generating locations in Gujarat, Maharashtra, Rajasthan, and Tamil Nadu.

Therefore a calibrated transition towards renewables will create a salutary environment for the triple bottom-line — People, Profits and Planet.

Besides, gradual transition to renewable energy fulfils India’s aspirations: energy security, economic growth and environmental sustainability.

Srikanth is Associate Professor, Registrar, and Director (Finance), DDU-GKY, National Institute of Rural Development and Panchayati Raj, Hyderabad, and Mishra is Assistant Professor, ASCI, Hyderabad