The COVID-19 pandemic has caused the loss of life and economic instability (a 2.5% contraction of growth is suspected) globally at an unforeseen level. Although the initial effects threw us in an unfamiliar situation, human society was able to produce a progressive global response. Like the rest of the world, India is also witnessing a clear path to secure the economy through sustainable energy production and usage (clean energy can save $141 billion in global electricity cost by 2025).
Energy and economy are interconnected and although we as a country have moved forward towards clean energy transition ($42 billion invested in renewable energy sector in India in last 4 years), the present scenario clarifies the importance of pursuing green energy transition more aggressively. A new report by NITI Aayog and Rocky Mountain Institute (RMI) have also identified the importance and the guidelines for India to leverage strategic opportunities in this scenario to drive economic recovery and maintain momentum towards a clean energy economy.
In Path to Recovery
It is a fact that COVID-19 spread has brought significant demand- and supply-side challenges for India’s transport and power sectors. Although India announced Rs 20 lakh crore (US $266 billion) relief package in the response of the economic fallout, the merit of working towards a secure and sustainable energy solution for economic recovery is undeniable, as energy and transport sector empower and move India towards its economic goals.
And the above-stated survey advocates the importance of building a clean, resilient, and least-cost energy future for India as well (India’s RE sector can attract $10 billion foreign investment annually).
Now let us analyse a few relevant guidelines to measure their potency in bringing a change forward.
Investing in low-cost energy solutions: In the middle of the economic instability, it seems decisive to invest in low cost yet efficient and reliable energy solutions to replace the existing fossil fuel-based energy supply. We are fortunate to have already identified affordable sources (solar cost has fallen by 90% in last decade) that have proven their potential in carrying forward nation’s growing need for energy without the fear of depletion. Yes, in this case, it makes perfect reasoning to invest in manufacturing, adopting, and exporting solar to satisfy energy need of the country. For example let’s say if India establishes 20 GW of vertically integrated manufacturing facility it can tap into 60-70 GW of domestic market demand and 40-50 GW on international demand over next five years. India can save USD 30-35 Billion of forex reserves with an investment of USD 5-6 Billion in solar manufacturing. Therefore, it is pretty straight forward that move towards solar investment will add reliability of energy, reduce forex outflow, and generate revenue.
Support resilient energy systems: Considering the outcome of COVID-19, it is important for a nation to build energy systems that are low maintenance, easy to handle, and are reliable. Having such an energy system in play will reduce the risk of losing energy during a crisis that causes a lack of manpower, in-availability of technical expertise, and considerable finances. Solar: the champion of renewable energy comes with all of these attributes. Additionally, transforming the energy system could boost cumulative global GDP gains above business-as-usual by $98 trillion between now and 2050.
Making India globally competitive: Manufacturing is the key to economic growth. Fortunately, the growing global demand for solar, as clean energy replacement for fossil fuels, make it the priority industry to invest in manufacturing. Focusing on manufacturing solar will enhance India’s manufacturing prowess and technology leadership, thus flourishing industrial growth, satisfying clean energy demand within the nation and revenue generation through export markets. In a nutshell, it is following the footsteps of ‘Make in India’ while reviving and building India’s economy for a sustainable future. Not just saving money, focus on manufacturing solar can quadruple renewable energy jobs to 42 million, expand employment in energy efficiency to 21 million and add 15 million in system flexibility as well.
Upholding social and environmental equity: India has already clarified the importance of investing effort and money towards restoring the climate by leading global platforms. Now focusing on solar presents a huge opportunity for India to uphold its promises to not just improve the climate but to bring in investment and inspire emerging economies.
India has a perfect opportunity here to not just change but transform its energy scenario and by the law of association the economy through focusing on the clean energy industry. The guidelines prescribed by NITI Aayog and Rocky Mountain Institute (RMI) are sound and requires immediate action to see transformative changes happen through the crisis.
We all have to understand that India is fourth largest consumer and importer of oil and natural gas, with the fifth largest coal reserves, that fuels three quarters of our energy demand, the country is bleeding money (has a debt of 1,16 k crore in oil, $129 bn in forex outflow) and incredibly susceptible to economic downfall in crisis. It is the perfect time to think about sustainability and act towards a future that promises economic, social, and climate improvement.
A larger policy framework for Indian solar industry to support and leverage manufacturing plans can help in growth. New policies should address manufacturing issues concerning transport, infrastructure, taxation, labour laws, and power outages. Bridging the gap between having policies and implementing them aggressively can also remove confusion from the process and aid growth. Comprehensive growth in the energy transition is what is needed to see fruitful results in the improvement of lifestyle, economy, and climate. And comprehensive growth can only come from wholesome adoption of the idea in every sector.