India’s G20 presidency comes at both opportune and challenging times from an energy transition perspective. India has committed to moving away from its traditional dependence on fossil fuels and embracing renewable energy sources. However, this transition needs to be just and balanced; and it is not just about installing solar panels and wind turbines. It needs to provide uninterrupted and quality power to all citizens while managing the intermittency of renewable energy sources. In essence, the transition must be just and equitable.
The 2022 G20 Bali Leaders Declaration also recognised that the key lies in promoting ‘clean, sustainable, just, affordable and inclusive energy transitions and flow of sustainable investments’. More importantly, the declaration also sought to link their efforts with the Sustainable Development Goals (SDGs) , especially SDG 7.
As part of India's role in the G20 presidency, a seven-year action plan on the SDGs by the G20 countries has been prepared. Its main areas are fostering data for development, investing in women-led development and securing globally just transitions to help ensure the future survival of the planet.
India, as a signatory to these goals, has been making concerted efforts to align its national development strategies with both G20’s goals and SDGs. The energy transition in India is intrinsically linked to several SDGs, particularly SDG 7 (Affordable and clean energy), SDG 9 (Industry, innovation and infrastructure), and SDG 13 (Climate action). There are, of course, several linkages that can be fleshed out – SDG 8 (Decent work and economic growth), SDG 11 (Sustainable cities and communities) and SDG 12 (Responsible production and consumption).
SDG 13 – Climate action
It is pertinent to start with SDG 13 – Climate action – as the larger framework around which India’s efforts to mitigate the efforts of climate change. India ratified the Paris Agreement in 2016, aimed at limiting global warming to well below 2°C compared to preindustrial levels. In its Nationally Determined Contributions (NDC), India committed to reducing the emissions intensity of its GDP by 33-35% below 2005 levels by 2030. It also set a target of achieving 40% of its electricity generation capacity from non-fossil-based energy resources by 2030. India also presented the following five nectar elements (panchamrit) of India’s climate action at the 26th session of the Conference of Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC) held in Glasgow, United Kingdom.
- Reach 500 GW non-fossil energy capacity by 2030.
- 50% of its energy requirements from renewable energy by 2030.
- Reduction of total projected carbon emissions by one billion tonnes from now to 2030. • Reduction of the carbon intensity of the economy by 45% by 2030, over 2005 levels. • In 2021, India emitted 2.7 billion metric tons of CO2, accounting for 7% of the global total.
Despite this, The country has made significant progress in renewable energy capacity installation, ranking fourth in the world in 2022. The Indian government has implemented comprehensive policy measures to encourage renewable energy, including capacity targets, improvements to administrative processes, and incentives for the domestic production of solar technologies.
India's G20 presidency offers a unique chance to lead by example in climate action. It stands out as the only G20 country on track to meet its climate goals. Initiatives such as the International Solar Alliance, Coalition for Disaster Resilient Infrastructure, and National Green Hydrogen Mission further reinforce India's efforts to reduce emissions while fostering economic growth.
SDG 7 – Affordable and clean energy
Sustainable Development Goal 7 (SDG 7) aims to ‘ensure access to affordable, reliable, sustainable, and modern energy for all’ by 2030. This goal is central to India's energy transition, as the country seeks to balance its rapid economic growth and energy needs with environmental sustainability. The Indian government has set ambitious targets for renewable energy. By 2022, the goal is to achieve 175 GW of renewable energy capacity, and by 2030, the aim is to make 40% of installed power capacity come from non-fossil fuel sources. As of June 2023, India has made considerable progress towards these goals, with renewable energy capacity reaching 129.64 GW (excluding large hydro), which is about 31% of the country's total capacity. India has also achieved near-universal access to electricity, a significant milestone in its journey towards SDG 7.
However, achieving SDG 7 in India is not without challenges. The country's energy transition is taking place in the context of a rapidly growing economy and a large and diverse population with varying energy needs. Ensuring that the benefits of the energy transition are equitably distributed across the population is a key challenge.
Furthermore, the transition to renewable energy requires significant capital investment, and the availability of affordable finance is a critical factor in the pace and scale of the transition. According to the World Investment Report 2023 by UNCTAD, developing countries like India face an annual investment deficit of about USD 4 trillion as they work to achieve the SDGs by 2030. Another challenge is the intermittency of renewable energy sources, which can pose problems for grid stability and reliability. This necessitates investments in grid infrastructure, energy storage solutions and demand-side management strategies.
SDG 9 – Industry, innovation and infrastructure
Sustainable Development Goal 9 (SDG 9) aims to ‘build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation’. This goal is particularly relevant to India's energy transition, as the country seeks to build a robust energy infrastructure that can support its transition to a low-carbon economy.
India’s foreign direct investment (FDI) programme for renewable energy has been significantly reformed. As per the FDI Policy, ‘FDI with up to 100% renewable energy industry under the automatic route, with no prior government approval needed. Up to 100% FDI is allowed under the automatic route for renewable energy generation and distribution projects subject to provisions of The Electricity Act, 2003’. As of 2023, FDI in renewable energy stood at USD 2.5 billion compared to USD 1.6 billion in 2022, representing 56% year-on-year increase.
In terms of promoting inclusive and sustainable industrialisation, India has been working to promote clean and efficient energy use in its industries. This includes initiatives to promote energy efficiency and reduce emissions, through the Bureau of Energy Efficiency’s (BEE) Perform Achieve and Trade (PAT) scheme in various industrial sectors. BEE has rolled out six PAT cycles till 31 March, 2020, with a total of 1,073 designated consumers (DCs) covering 13 sectors. It is projected that total energy savings of about 26 MTOE, translating into the avoidance of more than 70 million tonnes of CO2 will be achieved by March 2023.
Innovation is also a key part of India's energy transition. The country has been fostering innovation in areas such as battery storage, smart grids and electric mobility. India's National Mission on Transformative Mobility and Battery Storage, Smart Grid Mission, implementation of Smart Meters, Faster Adoption and Manufacturing of Electricity (FAME) are some examples.
However, achieving SDG 9 in the context of India's energy transition also presents significant challenges. These include the need for large-scale investment in energy infrastructure, the need to ensure that the transition to a low-carbon economy is inclusive and does not leave behind vulnerable groups, and the need to foster innovation in a way that is responsive to India's unique energy needs and challenges.
It is also necessary to ensure that the energy transition leaves no one behind, especially women who are key actors in the clean energy value chains. They constitute and consume a significant proportion of energy. Therefore, women’s participation in the energy sector is an important component to ensure the transition is not ‘gender-neutral but must be gender-just’.
Cross cutting SDGs
SDG 8 – Decent work and economic growth: The energy transition is also creating economic opportunities. The renewable energy sector has become a significant job creator in India. As per the SDG7 Energy Compact of the Government of India, around 7,00,000 new jobs would be created by 2030. India’s RE sector employs over 1,00,000 full time skilled and unskilled workers as of 2019-20. The Government of India launched Skill Council for Green Jobs (SCGJ) in 2015 to promote skills for green business industries and integrate environmental awareness into job training across skilling programmes. SCGJ’s partnership with the International Solar Alliance (ISA) plays an important role in building green banking skills among several bankers of ISA member countries.
India has also recognised the importance of providing adequate and accessible green job skills through the Pradhan Mantri Kaushal Vikas Yojana. It can train lakhs of youth within the next three years with on job training, industry partnerships, and alignment of courses with the needs of the industry. It is further expected that the green hydrogen sector will add six lakh persons through the National Green Hydrogen Mission. Industrial production and engineering, robotics and automation, modeling, and data analytics are some key skills needed in the emerging sectors.
However, several challenges exist, a) there is a need to integrate skill training into academic curriculums, b) shift from a skill supply-driven to a skill demand process, c) as decentralized renewable energy becomes crucial for India's energy access, it's vital to bring green skills development training to remote areas, which can create job opportunities in rural regions.
SDG 11 – Sustainable cities and communities: India is focusing on sustainable urban development, which includes the promotion of renewable energy and energy-efficient solutions in urban areas. The National Solar Mission aligns with India's goal to achieve 40 GW of grid-connected rooftop solar by 2026. The Ministry of New and Renewable Energy has also launched several programmes to promote the use of renewable energy in cities. For example, the Solar City Programme, which aims to reduce the consumption of conventional energy by at least 10% in urban areas by promoting renewable energy and energy efficiency. Grid Connected Rooftop Solar Scheme that gives financial assistance for rooftop solar installations. However, there are still challenges to the widespread adoption of rooftop solar in India, including high upfront costs, lack of awareness, and regulatory and technical challenges.
SDG 12 – Responsible production and consumption: The Indian government has implemented several initiatives to promote responsible consumption. These include the Street Lighting National Program (SLNP), which has installed over 12.18 million LED streetlights, resulting in significant energy savings and greenhouse gas (GHG) emission reduction. The Standards & Labeling (S&L) programme informs consumers about the benefits of energy-efficient products, leading to a reduction of CO2 emissions by
55.0 million tonnes annually. Furthermore, the Energy Conservation Building Code 2017 (ECBC) and Eco-Niwas Samhita 2021 promote energy efficiency in commercial and residential buildings, respectively. To promote consumer efforts towards responsible consumption and lifestyle, Mission LiFE (Lifestyle for Environment) was launched. It operates in three phases: nudging individuals to practice environment friendly actions in their daily lives (Phase I), influencing industries and markets to respond and tailor supply and procurement as per the revised demands (Phase II), and triggering shifts in large-scale industrial and government policies that can support both sustainable consumption and production.
The complex relationship between SDGs and energy transition, marked by challenges such as renewable energy intermittency, substantial capital needs, and social implications of moving away from fossil fuels, requires a balanced approach. This balance must consider economic, social and environmental aspects, ensuring a just and inclusive transition.
India stands at the forefront of this global climate change mitigation effort during its G20 presidency. The forthcoming G20 Leaders’ Summit 2023 will underscore the significance of SDGs within India's and the world's energy transition. As India navigates these challenges, there is hope that it will set a precedent for others, sustaining momentum and demonstrating how to effectively address these issues.
This piece first appeared in the WindPro journal Volume: 11 | Issue: 07 | July 2023. Please refer the journal here.