How Renewables Can Power Sustainable Growth in the Indian Economy

Our thought piece for renewable energy’s sustainable growth in India by Kabir Gupta

The Solar Labs was founded to evangelize solar energy’s benefits to the world.

India boasted the fastest growing economy and was reclassified as a “lower middle-income” country by the World Bank in 2016. However, the Indian economy continues to be undermined by several issues, notably the question of sustainability. Even if double-digit economic growth is achieved, the status quo’s extensive use of fossil fuels makes India’s current trajectory largely unsustainable in the long term. India does not have the luxury of industrializing at the expense of the environment and our planet the way the West did a century earlier. While unfettered use of fossil fuel energy sources may create an abundance of jobs in the short term, its contribution to global warming will create existential threats to India’s economy and population’s wellbeing in the decades to come. Examples of this can be seen all over the country, but especially in the nation’s cities that are choked by some of the worst amounts of industrial air pollution seen in the world. Most Indian cities suffering from the problem record pollution rates frighteningly higher than the safe limits set by international agencies and even lower domestic limits. In fact, Delhi’s pollution surpassed the safe limit an estimated 14-16 times during peak times of the year in 2016, and according to a new study, the nation’s air pollution overtook China as the world’s deadliest, causing 1.1 million premature deaths each year alone. This number increased by a whopping 50% between 1990 and 2015, a time of rapid economic growth in India and an expansion of its energy needs, the majority of which was met through fossil fuel use. Urbanization and the growth in middle class purchasing power led to a sharp increase in car ownership, further contributing to the pollution problem. No economy can grow at its full potential when millions of potential workers and consumers die and fall sick each year. This phenomenon only stands to exacerbate as more Indians are lifted out of poverty and domestic energy demands grow to support increased connection to the energy grid, and demand for fossil fuel burning cars, air conditioners, etc. Furthermore, the burning of fossil fuels directly causes the warming of our planet, which could devastate India in the future. The majority of Indian river systems, such as the Brahmaputra, Indus, and the Ganges are partially fed by glacial melt water, glaciers of which are currently threatened or retreating due to a warming climate. Potential depletion of these rivers will wreak havoc in India’s dominant agricultural sector, which employs hundreds of millions of India’s citizens; this demonstrates that the current economic and energy framework in India will find it difficult to escape collapse in the long term, and thus is not sustainable.

Renewables ryan searle unsplash downThis assessment may make India’s future seem bleak. However, an economy that can create jobs and prosperity for all Indians in the close and distant future is indeed within reach through the use of alternative renewable energy sources. The Indian government recognizes this fact and is making strides in creating a renewable energy friendly environment. Despite initial skepticism, the Modi government signed onto the historic 193-country Paris Climate Accord and has pledged to increase renewables’ share of India’s total electricity generation to 40% by 2030. The government is turning its back on coal and embracing green sources like solar, with ambitious rooftop solar subsidies for residential and commercial use, aiming to sell only electric cars by 2030, and lowering coal production targets by 60 million tons. According to experts at the Energy Resources Institute, India no longer needs new coal power plants as existing plants are operating below 60% capacity. After that, India can solely rely on renewable energy to meet its future electricity needs. In recognition of this fact, the government has canceled or halted the construction of many new coal plants that are currently in the early planning stages. Thus, with powerful government institutions on its side, renewable energy has a bright future in India

In fact, the free market has joined the state in favoring sustainable renewable energy to supply India’s energy demands instead of fossil fuels. With enough investment, solar seems well poised to do so. Powerful international actors including the World Bank Group are committed to promoting solar as the growth engine of India of the future. Over fiscal year 2017, the WBG is helping Indian solar by providing over one billion dollars in lending. In addition, the WBG is throwing its weight behind the Indian –led 121 country International Solar Alliance that is working to accrue one trillion dollars in worldwide investments by 2030. This investment isn’t coming solely out of a international moral commitment to stem climate change, but rather also from the simple fact that in the coming years solar and other renewables will cost significantly less than fossil fuels. In May of 2017, the lowest bid for selling solar in India dropped from 7 rupees per kilowatt-hour to 2.44 rupees per kilowatt-hour in just five years. This latest development makes solar cheaper than coal, which currently sells at 3 rupees per kilowatt-hour. The effects of this transition can already be seen, with the Indian government canceling 13.7 gigawatts of coal fired plants in May, and indicating that an additional expenditure of 9 billion dollars on coal fired generation capacity may no longer be financially possible due to stiff competition from renewables. This can be seen in many parts of the country already, with one of the largest solar parks in the world being planned in the state of Karnataka, which is expected to electrify one million households without the dangerous and deadly effects of coal and natural gas. Because of renewable energy’s decreasing costs, the industry can grow at a much faster rate than those of other energy sources and not only get closer to universal electrification, but also create more jobs at a faster rate. In the United States, another large country balancing high power demands while transitioning to renewables, a new report showed that the solar and wind industries are each generating jobs 12 times faster than the rest of the US economy, a good sign for India’s high unemployment. Everybody knows that lack of access to electricity makes economic growth difficult by hindering entrepreneurship and productivity. India’s largely coal powered energy grid is starved of energy and suffers power shortages of roughly 20 hours a day in some regions, stunting development. Cheap solar power can fill the gaps and move India closer to universal electrification more quickly. Even in rural areas disconnected from the power grid, Solar is powering economic activity in ways coal and natural gas never will through zero-emission rooftop solar panels. Therefore, it is becoming clearer than ever that renewables are poised to occupy a commanding role in India’s electricity generation. However, with more investment, solar and other renewables can easily become the dominant driver of India’s economic growth by affording cheaper, safer and reliable power to Indians in the agricultural, manufacturing, corporate, and service sectors for decades to come. Hence, there is a pressing need to switch for renewables.[/vc_column_text][/vc_column][/vc_row]

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