Renewable Energy industry in india – a Path towards Sustainability

1. Renewable Energy Industry in India – A Path towards
Sustainability
Dhitasree Guha Roy
Date: September’21

2. 2
A Glimpse of the Global Energy Sector
• The global energy market has always
been relying upon the non-renewable
energy sources which are significantly
dominated by the fossil fuels like coal,
oil and gas.
• The global primary energy consumption
had increased at the CAGR of 0.97%
between 2010 to 2020.
• In 2020, the shares of oil, coal and
natural gas were 31.21%, 27.2% and
24.72% respectively in the overall
global energy consumption.
• Between 2010 to 2020, the share of this
region in the overall global energy
consumption increased from 38.89% to
45.5%.
• Countries from the Asia-pacific region
also occupied the majority positions in
the top 5 energy consuming countries
in the world in 2020.

3. Key Features of the Global Energy Sector in the Recent Years
3
The extreme usage of fossil fuels for decades has triggered the rapid exhaustion of the global carbon reserves. Moreover, burning
fossil fuels release Carbon-dioxide (CO2) in the atmosphere which leads to widespread air pollution and affects the global climate.
Continuity of such incidents for decades led governments, businesses, investors and the public to recognize the need to decarbonize
the global economy. This is why, a slow but steady movement towards the consumption of the renewable energy sources can be
witnessed in the different parts of the world in the recent years.
The 21st Paris Climate Conference was held in 2015 where the “Paris Agreement”, the landmark international treaty on climate
change was adopted by 196 countries in Paris on 12 December 2015. The central aim of this agreement was to limit global warming
to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.
To achieve the sustainable goals of “Paris Agreement”, it is important for all the countries to launch specific policies and implement
these all accurately. So that they can be able to reduce greenhouse gas emissions, control multiple environmental degrading factors
and increase investment for preserving a low carbon future.
Countries like Sweden, Denmark, Finland, France, New Zealand etc. have shown remarkable progress in controlling the greenhouse
gas emissions in the environment by implementing appropriate clean energy initiatives.
With the execution of appropriate policies, it would be possible to achieve 90% reduction in energy-related emissions in cost-effective
ways and at the necessary speeds.
Between 2010 to 2020, the CO2 emission had increased at the CAGR of 0.31% globally. In 2019, among all the non-renewable energy
sources, coal, oil and gas had the shares of 39.41%, 33.9% and 20.9% respectively in the overall global CO2 emission.

4. 4
The Status of the Indian Energy Sector
• India, the 2nd largest populated country is also the 3rd
largest energy consumer in the world.
• The primary energy consumption had increased at the
CAGR of 3.59% in India between 2010 to 2020.
• The share of India in the overall energy consumption of the
Asia-pacific region had increased from 11.43% to 12.63%
between 2010 to 2020. The share of the country in the
global energy consumption level had also grown from
4.45% to 5.75% between the same timeframe.
• Hence, the energy demand of such rapidly growing
economy is really huge. Growing population, rapid
industrialisation, expanding infrastructural operations,
widespread agricultural activities, technological
upgradation in various sectors, rising rate of urbanisation,
greater accessibility of electrification in the rural and
remote areas etc. are some of the crucial reasons for
exorbitant energy demand in the country. These all things
make the growth of the Indian energy sector really
promising.

5. Dependence on Non-Renewable Energy Sources
5
• Just like the global energy sector, India has also been
majorly depending upon the conventional or non-
renewable energy sources like coal, oil etc. for years.
According to a report published in 2020, India is
estimated to bear US$150 billion annually, the third
highest costs from fossil fuel air pollution worldwide.
• Among all the other fossil fuels, the availability of the
coal has always been abundant in India. This is why the
usage of the coal has also been greater in the country
to meet most of the energy needs. India has the 5th
largest coal reserves in the world. In 2020, 55% of the
primary energy consumption was acquired by coal in
India.
• Moreover, due to lack of adequate petroleum reserves,
India has to depend mostly on crude oil imports. In
2020, India’s import value for Mineral Fuels, Mineral
Oils and Related Products was US$ 104.36 billion and it
was 28.4% of India’s total import value in that year.

6. Impacts of Using Non-renewable Energy Sources
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• India, the 2nd largest populated country in the world has grown significantly in
various spheres in the recent years. The country also expects to make major leaps
in its development in the coming decades and it will definitely require more energy
than India currently consumes.
• Features like rapid industrialisation, urbanisation, rising number of vehicles, poor
emission control technologies etc. produce greenhouse gases and other types of
harmful gases in the environment massively resulting unwanted rise in global
temperature. The increase in global temperature is impacting the rainfall, wind
patterns, ocean currents and ecological balance.
• Carbon-dioxide is said to be responsible for 60% of the "greenhouse effect" in the
world. Between 2010 to 2020, the Carbon-dioxide emission in India had grown at
the CAGR of 3.37%. The share of India’s carbon emission in the regional (Asia-
pacific) and global level were 13.72% and 7.13% respectively in 2020. Not only this,
India was also the 3rd largest Carbon-dioxide emitter in the same year.
• According to a recent report prepared by the experts of Pune-based Indian Institute
of Tropical Meteorology (IITM) – India’s average temperature has risen by around
0.7 degrees Celsius during 1901–2018.
• In 2020, the eastern parts of India faced devastating Cyclone Amphan. The worth of
financial damages caused by this was $14 billion.

7. Switching to Renewable Energy
7
• The expansion of the clean energy sector is crucial for India,
the 3rd largest emitter of Carbon-dioxide in tackling climate
change and reducing the consumption of fossil fuels.
• To establish a low-carbon economy, the Indian government
is committed to arrange multiple initiatives to control the
climate change. The country has a target of installing 175
GW of renewable energy capacity by the year 2022, which
includes 100 GW from solar, 60 GW from wind, 10 GW from
bio-power and 5 GW from small hydro-power.
• Between 2010 to 2020, the consumption of renewables had
increased at the CAGR of 7.96% in the country.
• The share of non-renewables in the overall energy
consumption in India had decreased from 94.06% to
90.88% between 2010 to 2020. In case of renewables, the
share had increased from 5.94% to 9.12% during the same
period.
• The renewable power generation of India had increased at
the CAGR of 16.13% between 2010 to 2020.

8. Infrastructure of the Renewable Energy Industry in India
8
• Till May’21, India became able to have 141.9 GW of
installed capacity of renewable energy.
• The installed capacity of renewables had increased at the
CAGR of 8.64% in India between May’17 to May’21.
• In May’21, the share of hydropower was maximum in
overall installed capacity of renewables in India with
33%.
• The share of solar energy in the total installed capacity of
renewables had increased the maximum (from 12.07% to
28.96%) between May’17 to May’21.
• The share of renewables in the total installed capacity of
power generation had increased from 30.84% to 37%
between May’17 to May’21. Whereas, the share of non-
renewables had decreased from 69.16% to 63% during
the mentioned period.
• In 2020, India had the 4th largest installed capacity for
the renewable energy in the world.

9. Recommendations
9
Some of the recommendations for achieving a faster growth of the renewable energy industry in India are as follows:
Greater investment in the
research and technological
developments in this area.
A comprehensive policy framework for
accelerating growth of renewable energy
in India.
Skill upgradation of the existing
manpower and training of new
professionals are essential.
Maintaining efficient funding
mechanism for renewable energy
projects.
The tariff rate of the power created from
the renewables are quite cheaper
compared to the other conventional
sources and this lower tariff requires to be
maintained for attracting more consumers
to this industry.
Sufficient budget allocation from
the government for the proper
development.
Greater availability of credit and
more participation by commercial
banks for financing the
renewable energy projects.
Reducing the import of raw materials from
foreign countries and encouraging the
domestic manufacturing.
Focusing on hybrid projects for
greater reach of the power
created from renewables.

10. 10
References:
The Paris Agreement. https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement
Assessment of climate change over the Indian region: A report of the Ministry of Earth Sciences (MoES), Government of India.
https://reliefweb.int/report/india/assessment-climate-change-over-indian-region-report-ministry-earth-sciences-moes
India plans to produce 175 GW of renewable energy by 2022. https://sustainabledevelopment.un.org/partnership/?p=34566
Benefits of Renewable Energy Use. https://www.ucsusa.org/resources/benefits-renewable-energy-use
The Global Energy Transformation. https://www.geopoliticsofrenewables.org/report/the-global-energy-transformation
Is India on track to meet its Paris commitments. https://www.downtoearth.org.in/blog/climate-change/is-india-on-track-to-meet-its-paris-commitments-67345
India’s true hydropower potential remains untapped. https://www.thehindubusinessline.com/opinion/indias-true-hydropower-potential-remains-
untapped/article31580979.ece
The Reliable And Resilient Power Of Renewable Energy. https://uswindinc.com/reliable-resilient-power-renewable-energy/
Air pollution from fossil fuels costs India ₹ 10.7 lakh crore annually, reveals a new report. https://www.greenpeace.org/india/en/press/4683/air-pollution-from-fossil-fuels-
costs-india-us150-billion-annually-reveals-a-new-report/
Cyclone Amphan Cost India $14 Billion in Damages: UN Report. https://theswaddle.com/cyclone-amphan-cost-india-14-billion-in-damages-un-
report/#:~:text=Cyclone%20Amphan%20Cost%20India%20%2414%20Billion%20in%20Damages%3A%20UN%20Report,-By%20Devrupa%20Rakshit
India has some huge renewable energy goals. But can they be achieved? https://www.cnbc.com/2020/03/03/india-has-some-huge-renewable-energy-goals-but-can-they-
be-achieved.html
A 5-point plan to maximise India’s renewable energy potential.https://www.weforum.org/agenda/2019/01/a-five-point-plan-for-maximising-indias-renewable-energy-
potential/
Renewable Energy Industry in India. https://www.ibef.org/industry/renewable-energy.aspx
2020 EPI Results. https://epi.yale.edu/epi-results/2020/component/epi
Renewable energy for sustainable development in India: current status, future prospects, challenges, employment, and investment
opportunities. https://energsustainsoc.biomedcentral.com/articles/10.1186/s13705-019-0232-1
Renewable energy sector in India gets $70 bn investment in 7 years. https://www.business-standard.com/article/economy-policy/renewable-energy-sector-in-india-gets-70-
bn-investment-in-7-years-121062500953_1.html
MNRE: YEAR END REVIEW-2020. https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=1685046

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