USAID-India Partnership in Energy: An Evolution Story

By Ipshita Nandi Banerjee, Global Communications and Gender Lead, United States Energy Association

Energy is a key strategic area bet­ween the United States and India. The strong people-to-people ties between these two allies have led to improved access to reliable and clean energy and spurred investment opportunities in India’s estimated $1 trillion energy market. Pro­gress in US-India en­e­rgy cooperation has boos­ted eco­no­mies and contributed benefits ranging from electrifying industries, powering the transport of agricultural products to enabling access of remote villages to power.

The United States Agency for Interna­tional De­velopment (USAID), an independent US federal government agency that is primarily respon­sible for civilian foreign aid and development assistance, contributes deeply to the technically and economically focused energy cooperation between the two countries. USAID’s historic relationship with India started in the late 1950s when the agency contributed to establishing the first Indian Institute of Technology, along with 14 regional engineering colleges. Support to India’s power sector in the 1970s centred around cha­m­pioning rural electrification. By the mid-1980s, USAID transferred its focus to science and te­chnology and supported the Government of India on research and develop­ment, de­ploying pilots and validating techno­logies. Since the 1990s, USAID’s partnership with India concentrated on technical assistance and ca­pacity building to enable reforms in the power sector to support India’s economic growth aspirations.

Policy Perspectives

In 2001, India’s Energy Conservation Act laid the foundation for the Bureau of Energy Efficiency, with the help of USAID, which also made some other key contributions supporting the develop­ment of the energy conservation building code, the institutionalisation of trainings for dis­tri­bu­tion utilities, and the establishment of the Cen­tre for Po­wer Efficiency and Environ­mental Pro­tection at NTPC Limited. From 2010 on­war­ds, India demonstrated rapid deve­lop­ment in its renewable energy journey. In 2010, the country’s National Solar Mission was announced, committing to achieve 20 GW of solar power by 2020. In 2015, the country set a target of adding 175 GW of renewable energy to its grid by 2022 and today India has over 160 GW of renewable en­ergy capacity. At COP26, India set an am­bitious target of achieving 500 GW of non-fossil energy with the country updating its nationally determined goal (NDC) committing to reduce the emission intensity of its GDP by 45 per cent by 2030 and achieving net-zero carbon emis­si­ons by 2070.

USAID has worked closely with the government and policymakers, central and state-level energy regulatory commi­ssions, the Ministry of Power, the Minis­try of New and Renewable Energy and, the Ministry of Environment, Forest and Climate Change and many others over the years. USAID has also reoriented its strategies and partnership model with In­dia to leverage the country’s dynamic pri­vate sector leadership. This helped the agency achieve more locally sus­ta­in­­ed results, mobilising public and private revenues, and strengthening local capa­cities. The 2018 US-India Strategic Ener­gy Partnership (SEP) that has further expan­ded how the two countries engage thro­ugh government and industry cha­nnels is a good example. Revam­ped as the US-India Stra­te­gic Clean Energy Part­ner­ship (SCEP), it is am­ong the most enduring partnerships of this cru­cial decade with USAID as a key contributor to it.

Powering Green

In 2012, USAID/India launched its technical assistance flagship programs like the Partner­ship to Advance Clean Ener­gy (PACE), which hel­ped Indian Rail­ways install rooftop solar, taking it closer to its net zero 2030 goal, in ad­dition to helping 10 Indian states to develop roof­top solar programs. Through its buildings’ en­ergy effi­ciency program Market In­tegration and Trans­formation for Energy (MAIT­REE), USAID helped the Go­vernment of India design procurement specifications for over 150,000 super-efficient ACs in bulk for sustainable cooling, in partner­ship with Energy Efficiency Services Limited (EESL), and retrofitted more than 10,000 buil­dings, including airports and metros across In­dia. With the Smart Pow­er for Advancing Reli­ability and Connec­tivity (SPARC) pro­gram, USAID supported India’s Mini­stry of Power (MoP) and the National Smart Grid Mission (NSGM) in developing the standard bidding docu­ments and consumer engagement guide­li­nes for the roll-out of 250 million smart prepaid meters in India. The Greening the Grid (GTG) Initiative worked with the MoP to make 2,120 MW of coal capacity flexible, support introduc­tion of real-time markets, develop the National Open Access Registry (NOAR), and pilot auto­ma­tic generation control and battery energy storage systems (BESS). In addition, USAID unlocked billions of dollars in clean energy financing through “Green Bonds”, expanded energy access for approximately 2 million Indians through microfinance lending, and leveraged $1.1 billion in private sector investments over a decade.

Powering Lives Beyond Borders

In its regional capacity as a long-term partner in India’s developmental agenda, USAID has prioritised energy security, cross-border power trade, clean energy access, power sector reforms and grid integration for over two decades. During 2000-2022, USAID’s South Asia Regional Initiative for Energy (SARI/E) worked with the South Asian country governments, on the one hand, to build consensus, identify potential transmission interconnections and standardise procedures, and with system operators, on the other, to enable cross-border power tra­de, enhance en­ergy se­curity, and impro­ve power system reliability in the region. Working through eight South Asian countries – Afghanistan, Bangla­desh, Bhutan, India, Pakistan, Nepal, Sri Lanka and the Maldives, the project led to trans­formative policy changes, helping raise regional power trade in South Asia to 3,900 MW – equivalent of providing electricity to 2.5 million households. The project through its lifecycle also supported key trans­mission corridors bet­ween India, Bang­ladesh, and Nepal lea­ding to trading of 18,261,000 megawatt hours (MWh) of power with reduction in greenhouse gas (GHG) emissions of 2.5 million tonnes in FY 2021 in South Asia.

Solving Critical Developmental Problems 

It is important that the US Government, through USAID, and India continue building on this partnership for fast and transformative changes. Global warming and accelerated glacier melts have destabilised the earth’s atmosphere, a world that was already struggling with post-pandemic economic meltdowns. Today more than ever, climate change and its consequences are compounding into extreme weather events, energy and fuel crisis, food insecurity, as well as health and economic insecurities. India plays a critical role in solving this crisis and USAID is steadfast in its commitment to support India in its priorities to help solve critical local, regional, and global developmental challenges, building pathways to ensure affordable, reliable, and sustainable energy for all.


 

This blog is the fourth blog in a series titled, “Catalysing South Asia’s Clean Energy Transition”. It has been led by USAID/India with facilitation support from implementing partner United States Energy Association (USEA). This blog has been published as a part of USAID’s South Asia Regional Energy Hub (SAREH) programming.

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