Sustainable Energy for All (India Specific)

1. Sustainable energy is opportunity – it transforms lives, economies and the planet

2. GOALS for 2030
Energy Access
Energy Efficiency
Renewable Energy

3. 100% access to electricity & modern fuels for cooking
Energy Access
•Essential to end poverty
•1.2 bln people have no access
•Pace needs to increase by
38%
•Business as usual will leave
12-16% without electricity
•2.8 bln use wood/ coal for
cooking
•Access to cleaner fuel will end 4
mln deaths/ year due to toxic
indoor smoke
•Pace needs to increase 2.5 times
•Business as usual with leave 30-
35% without access

4. Energy Efficiency
Doubling the rate of improvement in Global Energy
Efficiency

5. Renewable Energy
Doubling the share of Renewable Energy
Energy is the dominant contributor to climate change, accounting for around 60
per cent of total global greenhouse gas emissions
Reducing the carbon intensity of energy is a key objective in long-term climate
goals.

7. Expand infrastructure and improve technology for supplying sustainable energy
for everyone in developing countries, particularly the least developed ones,
landlocked developing countries, and small island developing states, with respect
to their respective support programmes.
Enhance international cooperation to facilitate access to clean energy research
and technology, including renewable energy, energy efficiency and advanced and
cleaner fossil-fuel technology, and promote investment in energy infrastructure
and clean energy technology
Introduce a country specific approach to tackle specific country related issues (I
have focused on INDIA in this project)
Way Forward…

8. India: Current Status
• Almost 400 million Indians - about a third of the subcontinent’s
population, don’t have access to electricity. This power deficit, which
includes about 100,000 un-electrified villages, places India’s per capita
electricity consumption at just 639 kWh (among the world’s lowest rates).
• The access gap is complicated by another problem: more than three-
quarters of India’s electricity is produced by burning coal and natural gas.
With India’s rapidly-growing population (currently 1.1 billion) along with
its strong economic growth in recent years, its carbon emissions were over
1.6 million kilotons in 2007 (among the world’s highest).
• This is unsustainable, not only from a climate change standpoint, but also
because India’s coal reserves are projected to run out in 45 years. India
already imports about 10% of its coal for electricity generation, and this is
expected to reach 16% this year.

9. India: Action required
• India’s national and state governments are taking action to correct this vicious
circle of power deficits and mounting carbon emissions by rolling out ambitious
plans to generate more electricity, deliver access to the poor, and do it by
replacing coal with renewable sources.
• The national government has set a target of increasing renewable energy
generation by 40 gigawatts (GW) by 2022, up from current capacity of 15 GW, itself
a threefold increase since 2005. Still, renewable sources account for just 3.5% of
India’s energy generation at present, so the scale of the challenge is formidable,
and the cost of meeting it will be high.
• A new World Bank study estimates that achieving the Indian government’s
renewable energy goals for the next decade will cost $10 - $64 billion in subsidies.
• Power generation is just part of the challenge involved in exploiting India’s
estimated 150 GW of renewable energy potential. Transmission and distribution
capacity will have to be raised to tap India’s abundant solar, wind and small
hydropower potential.

10. India: Opportunity
• By 2050, some estimates put India’s power generation requirements at
one terawatt, or one trillion watts. This would be a six-fold increase in
India’s current installed power capacity. It is a big challenge. But it is a big
opportunity too, for Indian companies, for the creation of Indian jobs, for
greater Indian prosperity. Because most of India’s power plants have yet to
be built, India has options that many countries can only dream of. Instead
of being locked into following a high-carbon energy track, India can lead
the way to a lower-carbon, renewable energy path.
• Investing in renewable energy would enable India to develop globally
competitive industries and technologies that can provide new
opportunities for growth. This should motivate the government, official
aid provider or private sector to participate.

11. Financing Challenges
• The high cost of debt, that is, high interest rates, is the most pressing problem facing
renewable energy financing in India and has significant impact on the levelized cost of
electricity. As of now, neither the cost nor the availability of equity is a major problem,
but this could change, particularly if debt becomes less available.
• General Indian financial market conditions are the main cause of high interest rates for
renewable energy. Growth, high inflation, and country risks all contribute. A shallow
bond market and regulatory restrictions on capital flows also adds to the problem.
Continued high government borrowing keeps the risk-free rate elevated.
• Regulation and the structure of the India power sector also raise significant issues.
State-level policies — including the financial weakness of the state electricity boards —
increase project risk. National policies designed to weave state policies together do not
adequately reflect the realities of financial markets or state-level risks.
• Differences in national financial markets impact renewable energy policy design and
effectiveness. Lessons learned from, and policies developed by, developed economies
may not be particularly useful given these differences in financial markets.

12. Next steps…
• Using ODA should be used to mobilize other sources of finance (public and private) and
focus on domestic resource mobilization
• Examining the design and implementation of funding mechanisms that would provide
long-term, low-cost debt — for example, by examining best practices worldwide,
including Brazil and China.
• Expanding the scope to include projects in different Indian states — to cover policy as
well as institutional variations — and other technologies, such as small hydro or
biomass. MDBs can play an important role as policy advisors.
• Extending the analysis to compare renewable energy markets and corresponding design
features — for example, how sensitive are financing costs to a price band that is
intended to provide stable price signals?
• Understanding how financiers and developers will alter their financial requirements
when investing in portfolios of projects — for example, how does the cost of increasing
development uncertainty impact willingness to invest