Paper: GS – III, Subject: Environment and Ecology, Topic: Indian Initiative, Issue: India’s energy transition strategy.
Context:
As countries prepare to submit their updated Nationally Determined Contributions (NDCs) under the Paris Agreement for the period up to 2035, India faces the twin challenge of sustaining high economic growth while accelerating its transition to a low-carbon future.
Key Highlights:
Seven-point plan:
Higher Target for Reducing Emissions Intensity of GDP:
- Current Status: India is on track to achieve its previous target of reducing the emissions intensity of GDP by 45% by 2030 compared to 2005 levels.
- Proposed Target: Aim for a 65% reduction in emissions intensity by 2035.
Increased Share of Non-Fossil Fuel-Based Power Generation:
- Current Status: India has met its earlier target of 50% non-fossil fuel-based power generation capacity by 2030.
- Proposed Target: Raise the share to 80% by 2035.
- Breakdown: Solar and wind, subject to intermittency, would contribute around 1,200 GW, increasing their share from 13.5% to 50% by 2035. Energy storage capacity should increase from less than 1 GW today to approximately 170 GW by 2035.
Phasing Down Unabated Coal-Based Generation:
- Necessity: Net-zero by 2070 necessitates phasing out coal-based thermal plants.
- Proposed Action: No new unabated coal plants should be commissioned post-2030 to ensure emissions peak around 2035.
- Projected Coal Capacity: Coal generation capacity could rise from 255 GW to a peak of 293 GW around 2030, then decline gradually to 230 GW by 2040.
- Transition Support: Coal-producing states like Jharkhand, Odisha, and Chhattisgarh should implement retraining programs, economic diversification strategies.
Electrification of Major Sectors:
- Importance: Electrification is crucial for decarbonization, particularly in the transport sector. Like Railways, Buses and Three-Wheelers.
Leveraging the Carbon Credit Trading Scheme (CCTS):
- Implementation: The CCTS becomes operational in April 2026.
- Proposed Action: Include the CCTS in India’s NDCs, with a review after two years based on experience.
Reforming Electricity Pricing:
- Challenge: Higher share of renewables leads to greater intraday and seasonal variability in electricity generation, posing grid management problems.
- Proposed Reforms: Move away from fixed power purchase agreements to exchange-based electricity trading mechanisms that allow for greater variability in prices at the wholesale level.
Securing Necessary Financing:
- Investment Requirement: Approximately $62 billion annually during 2026-2035 (about 0.84% of GDP per annum) for grid augmentation and related infrastructure.
- Funding Sources: About 80% of this amount should come from domestic sources through higher domestic savings and additional private investment.
- Role of MDBs: Expanded lending from Multilateral Development Banks (MDBs) aimed at risk mitigation can greatly facilitate this.
- Attracting Foreign Capital
Coordinated Institutional Framework for Climate Action:
- The authors suggest reviving the Prime Minister’s Council on Climate Change to serve as the central authority for approving, monitoring, and updating the national climate strategy in collaboration with states and the private sector.
By integrating these seven elements into India’s new NDCs, the country can send a powerful signal of its commitment to decarbonization while creating a clear roadmap for sustainable economic growth and climate resilience.
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