India is forging a new path in a world largely reliant on fossil fuels. With an ambitious goal to achieve net-zero emissions by 2070, the country is transforming its energy strategy. The latest report from the Asian Development Bank (ADB) highlights India’s significant progress, particularly an 85% reduction in fossil fuel subsidies. This transition, driven by a targeted approach, has enabled India to lessen its dependence on fossil fuels and redirect funds toward clean energy initiatives, including solar power, electric vehicles, and enhancements to the energy grid.
Over the past decade, we have witnessed substantial changes and are beginning to see the impact of initiatives launched during that time. A crucial step taken was the reduction or elimination of subsidies for fossil fuels, especially in the crude oil sector. The subsidies removed over the last decade have been redirected toward specific targets, primarily focused on clean energy infrastructure development. The changes we are currently experiencing and the recognition we are receiving are direct outcomes of these initiatives.
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The government has not only announced the removal of subsidies but has also rolled out specific schemes such as the Green Energy Corridor (GEC), the PM-KUSUM Scheme, and the National Green Hydrogen Mission, alongside implementing a cess (now GST) on coal. Additionally, the government is encouraging private sector participation through the Production-Linked Incentive (PLI) scheme for hydrogen and solar module manufacturing, as well as related ancillary units.
This strategy aims to channel both public funding and private investment into infrastructure that requires long-term financial support. The gradual returns on these investments will be bolstered by schemes like the PLI, which are designed to sustain long-term growth. Consequently, India stands out as the only country that has met its commitments made during the Paris Agreement.
Our initial objective was to reduce subsidies, which we accomplished. Following this, we set targets to capitalize on the advantages gained from our actions and invest in clean energy infrastructure. Solar energy, in particular, has emerged as a leading resource. Over the last five to six years, we have made significant strides, especially in energy storage.
Previously, solar energy was only usable during daylight hours, but advancements in storage technology now allow us to utilise solar power during evenings and at night, greatly enhancing its feasibility.
We have also established ambitious targets for electric vehicle adoption, significantly reducing our fossil fuel consumption. Using electricity from renewable sources lowers emissions, further supporting our infrastructure development in solar energy, energy storage, and electric vehicles.
I commend the progress we have made; we have transitioned from stagnation to momentum. As momentum builds, maintaining progress requires less effort. I believe that the achievements of the last five years can be doubled in the next two years due to the government’s initiatives over the past decade.
The key to the sustainability of any manufacturing or power-producing facility is commercial viability. Without it, the long-term success of such projects is uncertain. One effective way to enhance viability is through subsidies. The government, working within budget constraints, has removed subsidies from fossil fuels and introduced a cess on coal, reallocating these funds into various schemes, including the PLI scheme, which supports small-scale entrepreneurs in investing in energy units through capital subsidies. This blend of short-term and long-term support is designed to stimulate production and attract private investment. The government cannot achieve everything alone; private sector involvement is critical, and projects must be commercially viable to engage them effectively.
Currently, we have surpassed 90 GW in power production, consistently exceeding our targets. However, challenges remain regarding technology availability. For example, if an Indian manufacturer wants to produce polysilicon or solar modules, they must rely on technology predominantly sourced from China. Even European and U.S. technologies are outdated, requiring substantial investment to adapt them to Indian specifications. Unfortunately, 98% of the equipment required for solar module manufacturing is produced in China, leaving us reliant on them for critical manufacturing tools. To overcome this dependency, we must invest in research and development (R&D), with the government playing a leadership role. Such investments will benefit future manufacturers, whether from the public or private sector.
Countries like Germany, the US and China invest heavily in R&D and subsequently transfer these advancements to private companies, which then pay royalties to the government or institutions. The Indian government should adopt a similar strategy, funding R&D through a dedicated budget to ensure we remain competitive in evolving technologies such as green hydrogen, solar panels, and electric vehicles.
Looking forward, initiatives like the PM Surya Ghar Yojana, PM-KUSUM, and the National Green Hydrogen Mission will play a crucial role in shaping our future over the next decade. We are currently in the research and development phase, which will lay the groundwork for achieving our goals. While doubts may persist about our capacity to meet these targets, our performance over the last decade and the roadmaps we have developed provide confidence. The next 30 to 40 years hold promise for technological advancements and improved financing options.
The world recognises India as a leader in sustainable energy initiatives. To maintain this position, we must remain optimistic and strategic in our planning. By fostering public engagement through awareness campaigns and community involvement, we can ensure the success of our initiatives. The government has effectively integrated climate actions into budgeting and economic planning, making them a fundamental aspect of annual budgets.
Innovative approaches and support for large-scale projects like green hydrogen and solar manufacturing have been essential to our progress. The government’s commitment of time, resources, and effort through various schemes has contributed to our relative success compared to other nations. Through collaboration in the International Solar Alliance with France and over 100 member countries, India can lead efforts to support allied nations.
(The author is an advocate by profession)
