Article by Shwetha Sivaraman 

At the start of February, the Indian government announced it would invest 35,000 crore rupees (4.3 billion USD) in green technology, focusing on solar power and green hydrogen production, in its efforts to reach net zero emissions by 2070. However, as with most of the world, India remains heavily reliant on non-renewable energy, namely coal. Over 70 per cent of power generation in India relies on coal. In 2020, 77 per cent of electricity in the country was generated by fossil fuels, 72.5 per cent of which was coal, 4.2 per cent from natural gas, and 0.3 per cent from oil. 

At COP27, India ambitiously promised that renewable resources would produce 50 per cent of its electricity by 2030. In the previous year, at COP26, it had more narrowly declared that it would phase down coal production. But as one of the top five coal producers worldwide, even moving away from coal as an energy source is an immense difficulty for India. This is due to three main factors. First and most clearly, the coal industry is a powerhouse for India’s economy. For instance, Coal India is India’s top government-owned company that mines more than 80 per cent of the country’s coal. In 2019, it paid an estimated 500 billion rupees (6.7 billion USD) in royalties and taxes to federal, state, and local governments – almost three per cent of the federal government’s total annual revenue collection. Second, as of 2021, India’s coal industry, directly and indirectly, employs approximately four million people. As such, transitioning from coal creates severe job precarity. Second, reducing the use of coal would detrimentally impact poorer populations. With most of India’s coal reserves in Eastern states such as Jharkhand and Odisha, more impoverished communities in those regions who do not have access to electricity rely primarily on burning coal as an energy source. Hence, if the country does reduce its coal production dramatically nationwide, it is imperative that alternative, renewable energy sources are available in these areas. The economic and social benefits of mining coal have meant that the government has, rather than reducing coal production, declared public and private investments in coal worth 400,000 crore rupees (about 50 billion USD) in the last two years. The government also announced increased investments in establishing gas infrastructures and overseas oilfields. 

That said, though non-renewable resources continue to dominate, India has made efforts to reach its net zero goal, the recent 4.3 billion USD investment into green hydrogen being only one amongst them. Legislatively, the Parliament of India passed the Energy Conservation (Amendment) Bill in 2022 to enhance renewable energy sources and implement a carbon trading scheme. Financially, in the 2021-22 financial year, 14.5 billion USD was invested in renewable energy, an increase of 125 per cent from the 2020-21 financial year. A major focus has been on battery storage: a technology whereby excess energy from renewable energy sources like solar and wind power is retained and released during the right times and in the correct amounts when consumers require it. In 2019, India’s first grid-scale battery storage system was launched in New Delhi. The country’s concentration on both battery storage and green hydrogen means it has the potential to spearhead the global market in low-carbon technologies. By 2030, these and other such technologies could open up a market worth almost 80 billion USD in India. 

It is evident that investing in renewable energy sources would not only decrease emissions but would also provide valuable economic opportunities in the long term. Keeping in mind that fossil fuels remain essential for poorer areas, it is vital that the government finds a balance between the availability of coal and renewable energy sources in these communities rather than completely banning fossil fuels. Of course, the country’s significant reliance on coal anyway makes it unlikely that it would aim to wipe out fossil fuels, especially coal, as an energy source, at least in the near future. Still, investments must be redirected away from coal mines and into renewable energy sources, investing in diverse alternative sources to stay true to or at least as close as possible to its COP27 declaration.

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