This move away from coal is even more meaningful because it comes in the context of an increasingly energy-thirsty India. While the country’s per capita emissions are still about half of the global average, India’s population is booming. India is poised to surpass China as the world’s most populous country in the next few years, and by 2040 it will be adding the equivalent of the population of the city of Los Angeles every year. Those Indians will also be richer: they will increasingly travel by car, buy more electronics and live in homes with air conditioning. Comfortable lives need more energy: according to the IEA, by 2040, India will need to add the equivalent of the power system of the entire European Union to its current grid capacity.
To improve energy access and the living standards of a booming population while phasing down fossil fuels is an unprecedented feat. Reducing the use of fossil fuels, particularly in cities, has many immediate benefits, including easing air pollution which is responsible for millions of deaths in India every year. In the Delhi region alone, 11 coal-fired power plants are estimated to account for seven per cent of the toxic air engulfing the capital during the colder months.
India’s ambitious solar targets can help address both energy access and transition, and the country’s progress has been internationally recognised. But some analysts point out that the process is not as smooth as the government of prime minister Narendra Modi likes to present it.
“Solar growth in India is painted as a great success story, but in the last three, four years things have actually been pretty lacklustre,” says Vinay Rustagi, managing director of the consultancy Bridge to India. “Progress has been much slower than expected.” The government has been supportive, he concedes, coming up with creative solutions such as a “plug and play” scheme to incentivise solar parks, running from 2014 until this year. The government offered to provide the land and take care of transmission systems, water access, road connectivity and communication networks, so developers just needed to set up the panels. But the offer didn’t attract as many takers as expected – the policy target was 40GW of installed capacity, Rustagi says, but barely 20GW have been built so far.
Despite receiving praise for its progress, India is falling behind its targets. It had promised to reach 175GW of renewable capacity by 2022, but it has only recently reached 100GW, of which solar accounts for just over 40GW. Reaching 280GW by the end of the decade would require an explosive development that many doubt is even possible.
“The 450GW number is completely unrealistic,” Rustagi says, simply because energy demand, despite its fast growth, is unlikely to meet the government’s and IEA’s projections. “Our current energy demand in India is about 180GW,” he explains. Even considering a sustained growth in demand in the coming years, “We will probably talk about a total demand of around 300GW by 2030.”
What happened to India’s energy boom? Covid-19 is one of the main culprits for a decrease in energy demand, Rustagi says. But economic growth was slowing down even prior to the pandemic. As a result, power demand from the so-called discoms, the companies that buy electricity from generators and distribute it to homes and industries, has not grown as rapidly as expected. In the last three years, total energy demand has grown by up to three per cent a year, while the government had predicted a seven per cent growth. “Overall, we are more than 15 per cent below where we should be in terms of the government’s predicted demand,” Rustagi says.
