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.
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.
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.