Modi told the world that India has chosen renewable energy over coal, but politics has held back

PCurrent minister Narendra Modi has an opportunity to rise to a global statesman, something he so badly wants to be perceived as. But that would come with a cost that he has to pay: a refusal to succumb to the lure of easy votes.

The PM made several laudable promises at the recently concluded COP27 talks, one of which was that non-fossil fuel sources would make up half of India’s energy mix by 2030. This would certainly be a great achievement. However, at home, government officials and ministers have undermined those promises.


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The compulsions of the Modi government

It is a fact that gas prices have almost doubled in the last year. With India significantly dependent on imported gas for our gas-fired power plants, this is a bad situation to be in. Indeed, Finance Minister Nirmala Sitharaman said this, adding that we will have to take some environmentally unfriendly decisions to deal with the problem.

“At this stage, if natural gas is going to be beyond our means, obviously you’re looking to go back to coal to some extent because you need to generate the base level of electricity and that simply can’t be done through solar power.” or wind power, the finance minister said at The Brookings Institution in Washington during his October trip to the United States.

It’s not a lone voice in this. Anonymous government officials have begun testing the waters by slipping comments to reporters, saying India has no choice but to ramp up its coal production as natural gas production has been stagnant and imported gas is becoming too expensive.

These anonymous quotes are a great way for the government to gauge the reaction to a particular plan before actually making an official announcement or decision. Keep an eye out for an increase in coal production by Coal India, the largest coal producer in the country.

Now, this is where Prime Minister Modi has to rise to the occasion. It would be easy for India to keep energy inflation relatively low by using coal instead of other more expensive but cleaner sources. This is a politically attractive proposition. By continuing to import Russian oil and risking the wrath of the West, India has already made it clear to the world that cheap energy is an essential part of its national policy.


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Tough decisions make global leaders

But India has a responsibility to the world. If the Prime Minister is to be seen as a true statesman, a world leader, then he has to make the hardest choices and deliver on the promises he has made to the world, even if this does not reap political dividends at home.

The hardest choices would be to avoid coal and instead deliver on clean energy commitments. There are several ways to do this, all squarely within the realm of government policy. Let’s take nuclear energy, for example. The much celebrated 123 Agreement with the United States was ratified in 2008.

Although it was a civilian nuclear deal, not a single nuclear power plant has been installed in India since then. In fact, the country’s nuclear power capacity has grown by just 2.6 GW since 2009, a disappointing performance by any measure. In 2016, the Modi government and the United States jointly announced a deal in which the two countries agreed to proceed with the construction of six nuclear reactors in India. None of this materialized. If Modi wants a nuclear power plant, it will happen. It just depends on how much you want one.

Similarly, it is government policies that are holding back other non-fossil fuel sources of electricity. In December 2017, the government introduced a reverse auction procedure for the wind power sector whereby bidders would bid for projects based on the rate at which they would sell electricity. The lower the fare, the stronger the offer.

This new policy proved so unpopular that wind capacity addition, which averaged about 3.3 GW per year in the previous four years, fell to just 0.8 GW in 2018-19. Only about 1.1 GW of capacity was added the following year.

The fact of the matter, say wind energy industry experts, is that wind is too variable a source of energy for low bids to work. If companies compete for how little electricity they can sell, the risk is that many of their projects could become unviable if the price of wind power generation rises or if production falls.

This is an easy fix. The policy simply needs to include provisions that reduce the element of risk for wind energy developers. According to reports, the government is already working on this. But it must be done sooner rather than later.

The other area that the government needs to address is rooftop solar. Prime Minister Modi had set a target of 40 GW of rooftop solar capacity by 2022. We currently have around 7.5 GW. The main reason for this is that the states are subsidizing the price of household electricity, and therefore people are not finding it worth investing in rooftop solar systems. If you get cheap energy, why would you put a few lakhs into it to make it even cheaper?

This is a more complicated problem. Cheap electric tariffs are a favorite tool for garnering votes across party lines. Encouraging states to raise their rates will be a difficult, albeit financially necessary, task.

Completing the commitments made in Sharm El Sheikh by ramping up nuclear and renewable energy capacities would boost Prime Minister Modi’s international standing, even if it means giving up some additional votes that cheaper coal-fired power could win him. It’s time to grow from a mass leader to a global statesman.

Views are personal.

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