Paris Agreement to constrain India’s energy policy

Worries of India being left out of the negotiations for the Paris Agreement rulebook starting November have ended with the government moving to ratify the global climate change compact on October 2.

A ratification by adequate number of countries will bring the agreement in to force. It will become operational in 2020. Before that, countries will decide and put in place the rules to implement the agreement. India has already started taking steps to fulfil its commitments by setting up inter-ministerial committees to look at the obligations that will arise. This, senior officials involved in the exercise said, would require rules, perhaps even a new law, to mandatorily monitor and collect emission data from various sectors. So far, this was being done for submission to the UN.

India’s energy policy would have to be in tune with the international commitments on emission reduction. India is committed to ensure that 40 per cent of its installed capacity by 2030 would be from non-fossil fuel sources — wind, solar, nuclear, biogas and hydropower. The projections done to reach this number would have to be integrated into the new energy policy; the NITI Aayog has made an early draft but some refining has to be done.

The power ministry drew up two scenarios for supply and demand that meet the international commitments. It projected an annual growth of 8 per cent in gross domestic product (GDP) between now and 2030 or 8.5 per cent if manufacturing grew faster. Under the second scenario, which also includes the government’s commitment of round-the-clock electricity to all, the ministry estimated electricity-to-GDP growth elasticity of 0.9 forecasting supply requirement of 3,675 TWh and demand of 3125 GWh in 2030.

The government had committed to 100 Gw of solar power by 2022 and 60 Gw of wind power capacity. This, the government projected, would have to be increased by 25-50 Gw in case of solar and five-15 Gw in the case of wind power over eight years.

With an increase in the share of renewable portfolio, the need for balancing power would have to be kept in mind, the ministry noted, to provide a bridge between intermittent sources of power and the base load. Keeping in the mind the high costs of balancing power, the proposal is to maintain installed capacity at half of the rest or keep the actual generation from these two sources at 10-15 per cent. The power ministry has started to address the challenges in this and improving grid strength. The government will have to look for lowered costs — storage being an expensive option.

The power ministry has estimated that it could do much better than the international commitment of reducing energy intensity of its GDP by 30-35 per cent by 2030 below 2005 levels. But the challenge, an internal assessment by the government said, was the availability of international finance and prices of technology.

International negotiations over next four years are also going to be strongly focused on building a transparency and disclosure regime that can help countries such as India keep track of what are the real new funding routes open for the climate or green energy sector and where it would have to deploy its own resources. At the same time, it would have to set its own house in order and set up a regulator to pull in standardised emission data from industry and sectors to provide the inventory to the Paris Agreement on a regular basis. Negotiations over the next four years will also set the terms for how deep the scrutiny of this data would be at the international level.

International negotiations starting November 8 in Morocco are at the every least expected to set deadlines for these rules to be put in place and the manner in which they will be devised.