Views of Piyush Goyal

"The climate change problem is here, now and today."

Piyush Goyal
Letter & content_c.qxp

Piyush Goyal, minister of state (independent charge) for power, coal, new and renewable energy and mines, is confident that India’s goal of 40 per cent of installed capacity from renewables by 2030 will be achieved. His views on sustainable development of the country’s energy sector, as shared at the Confederation of Indian Industry’s Eleventh Sustainability Summit recently are presented below…

At the outset, I would like to make it loud and clear that there is never a controversy about whether India will meet the targets that we have set for ourselves in the Intended Nationally Determined Contributions (INDCs). We stand committed to reduce our carbon intensity by at least 33 per cent. Internally, we are hoping and aspiring to do even better than that. We are extremely committed to ensuring that we have at least 40 per cent of our installed energy capacity coming from renewable energy sources by 2030. We are also extremely committed to looking beyond what we have stated in the INDCs, and do everything in our power to ensure sustainable and inclusive development of India.

Clearly, energy is at the fulcrum of the sustainability agenda. We have already reached a stage as a nation where we are no more an energy deficient country. We have developed adequate capacity and a framework, particularly in the transmission segment. We are addressing the last mile connectivity issues of distribution companies to make sure that India becomes a power surplus country, where hopefully every state will start delivering 24×7 power at the earliest.

The 24×7 Uninterrupted and Affordable Power for All target is the cornerstone for achieving the 17 Sustainable Development Goals (SDGs) set by the United Nations. It is the central factor to achieve a sustainable and inclusive growth profile, whether it is hunger and poverty alleviation, health and education, water and energy security, industrial and urban growth and inequality reduction.

Energy supply is a key determinant of good health and well being. We have embarked on this ambitious programme to give 50 million families LPG gas connections so that they get out of the traditional mode of burning wood or other polluting fuels for cooking. Similarly, our focus is on setting up solar-based power generation units in hospitals and schools, at least wherever possible.

India has already put up significant solar rooftop capacity and is aspiring to increase it to 40,000 MW by 2022. I do not know if there is any comparable example in the world where a scale-up of almost 130 times has ever been attempted in a span of six years. We are working very seriously to see how this can be achieved.

In the area of clean water and sanitation, there are two policy interventions in the energy sector that can help meet the drinking and cooking requirements of 150 million people. We have made waste water treatment compulsory for all coal mines. Coal companies, particularly government-owned ones, are working out plans to execute this in mission mode. We have also made it mandatory, through the Tariff Policy, for all thermal plants with effluent treatment plants located within a radius of 50 km to compulsorily procure processed water.

Industry is a key area that gets significantly impacted by the performance of the energy sector. Nobody will invest in India unless electricity is affordable and available 24×7.

In an example of inefficiency, while two-thirds of the power plants in India were starved of coal, Coal India Limited (CIL) was conducting e-auctions to get 10-15 per cent extra returns. After I put an end to this, I was told that it caused CIL a loss of more than Rs 20 billion. However, a true assessment of the loss must take into account the cost of inadequate and uncertain electricity supply to the entire nation. India needs to stop bothering about a company or a department’s profit and loss, and focus on the returns to the nation as a whole. Under SDGs, it is the fundamental job of any nation to provide affordable, sustainable, modern and uninterrupted power supply.

The world has to desire and work towards a truly sustainable and clean planet. This will not be achieved by merely making announcements in Paris. It has to be engrained in our lives. We were fortunate enough to get sustainable lifestyles incorporated into the document finalised in Paris.

India is the only country to impose a tax on carbon. The tax was Rs 50 per tonne at the time I took charge, which was increased to Rs 100 in our first budget, Rs 200 in the second and Rs 400 in the third budget. We believe that the tax augurs well for the country. It will be spent on the development of renewable energy, cleaning rivers or other environment development projects. This shows the level of commitment India has towards promoting sustainable development.

We have set a target of increasing renewable energy capacity to 175 GW by 2022, including 100 GW of solar. This is five times higher than the target of 20 GW set earlier. Notably, the 175 GW target does not include hydro projects above 25 MW capacity. If I include that, India will have an installed capacity of 225 GW of clean energy by 2022. We are currently studying the possibility of recognising large hydro as a renewable source.

I remember when I became the minister, a government company was selling 600,000 LED bulbs annually on subsidy. Today, the company is selling the same number of bulbs with 30 per cent more lumens per day. In fact, India would represent the world’s fastest conversion to LED lighting without any subsidy. I believe subsidy is detrimental to the success of any such programme because it becomes a limiting factor. Removal of subsidy from our energy efficiency programme was a defining moment that helped it take off. Two years ago, we used to purchase a 7 watt LED bulb for Rs 310; now, the government is procuring a 9 watt bulb for Rs 38. That is the kind of potential you can achieve when you scale up a programme.

When we decided the 100 GW solar plan, we had it at the back of our minds that scaling up will help bring in the best technology and bring down costs. We have been able to drive down solar power costs by 40 per cent in the past 17 months. In the last bid, a lot of people were worried whether the Rs 4.50 or Rs 5 rate would survive, but it is working wonderfully well. It is a viable proposition along with falling interest rates, and I hope interest rates continue to fall in the days to come. The low prices of renewables will do you a lot of good, because you are going to get the fruits of it for 25 years, if not longer. Even today, we are getting hydropower from the Sutlej-Beas dams and the links that were set up by Jawaharlal Nehru 60 years ago, at a cost of less than Re 1.

Piyush Goyal

Of course, one must not lose sight of our development imperatives. We need to see double-digit growth of the economy, which is sustainable and inclusive, for the next two to three decades at least if we want to move people from low-income to at least mid-income or even higher-incomes categories. For that, affordable power is going to be the driving force.

We will have to continue to depend largely on coal for our requirement of low-cost power and also for the base load. If the coal plants are shut down, we will have to abandon the renewable energy mission also, because renewable energy can only be fed into a grid that has a base load. India cannot import electricity because some other country discovered cheap shale gas and is now able to say that it is moving out of coal. We do not have gas in this country. So we will have to depend on what we have indigenously available, both for affordability and energy security reasons. So, before we insist on shutting down the coal plants, we need to find an alternative. While energy storage presents an alternative, it may work only in Europe with 18-20 cents per unit of electricity tariffs.

The world has to recognise the polluter pays principle. Even today, India consumes about as much coal per capita as was consumed in the US 151 years ago. The developed countries are emitting about 40 per cent of all greenhouse gases, compared to which India is emitting around 4 per cent or less, while supporting around 17 per cent of the world’s population.

It is important that the world starts looking at the carbon footprint of each nation based on its consumption. Material produced elsewhere and consumed in a particular country will have to be taken into account while determining the consuming country’s carbon footprint. A country cannot claim to have reduced its carbon footprint by just exporting pollution to some other manufacturing base.

Around seven or eight years ago, the concept of clean climate financing was first discussed at Kyoto. I urge everyone to please read about the commitments that the developed world made and what the reality is in terms of the availability of finance and technology for the developing world and the contributions made by the developed world. I can assure you that India is going to meet its targets, irrespective of whether they support us or not.

There was a promise of $100 billion of funds that the western world was to put down on the table annually to support a more sustainable future for the world. It’s another matter that every time the issue is raised, you are given either a platitude or told that in the past five years, funding support of $1 billion was provided, comprising largely loans, to support our clean energy efforts. This is a dichotomy that needs to be deliberated upon. There is a clear disparity in the ability of different countries to invest in clean energy and in access to available technologies, which needs to be considered.

There is the Montreal Protocol being regularly discussed now, which talks about reducing hydrofluorocarbons (HFCs). We would be the first country to agree to reducing HFCs, if it were made competitive. But here you have a situation where only two private companies in the world have the technology for HFC-free air conditioning. Are we as leaders of countries expected to be providing business or profits only to those two companies in the name of a clean environment? Should not the developed world make that an open access technology that all countries can then use, engineer and make cost-competitive? If there is truly a concern regarding reducing HFCs, I think it is enjoined on the developed world to first provide that technology in the open space with free access, rather than creating road blocks in the name of free commerce and enterprise.

Even in the case of India’s Jawaharlal Nehru National Solar Mission, they rushed to the World Trade Organization (WTO) regarding the Indian government’s 500 MW support for domestic manufacturing. It’s another matter that we found out that the US is supporting a much larger solar capacity through the domestic content requirement. Only two days ago, India filed eight cases against different states of the US for unfair trade practices as per the WTO regulations.

I personally believe the climate change problem is here, now and today. But we are still fighting about trade pacts, free enterprise and free trade. I would have thought that the world would at least say that renewable energy and related products would be outside the WTO framework. You should support and encourage people to develop, manufacture and use these products freely.

We are a signatory to the Mission Innovation programme. The world is expecting to double research and development (R&D) expenditure in the next five years. India will quadruple, if not more, its R&D expenditure in the next five years, particularly in all government companies. My comment when Mission Innovation was first discussed about a year and a half ago was that we should agree that whatever comes out of the mission should be open access technology. Why should it belong only to a few people? The commitments and promises made will have to be fulfilled on a fast-track basis both for low-cost long-tenor financing and modern technology, which can truly help us reduce the carbon footprint.

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