July 18, 2008
If India is to develop economically, it must have access to new energy resources. It's now dependent on coal. But leaders there are committed to change and to using cleaner technologies that include renewable and nuclear power.
The country is fully in tune with the concerns over global warming. Toward that end, it has laid out a plan to increase its use of wind, solar and nuclear energy -- all in an effort to move away from its reliance on fossil fuels. But it has not set any hard targets with respect to reductions in greenhouse gas emissions, noting that it requires international collaboration that involves the transfer of all modern technologies.
"A National Solar Mission will be launched to significantly increase the share of solar energy in the total energy mix while recognizing the need to expand the scope of other renewable and non-fossil options such as nuclear energy, wind energy and biomass," says India's formal Action Plan. The report goes on to say that, in time, India's per capita greenhouse gas emissions will not exceed those of the developed world.
India's announcement came in advance of the Group of Eight (G8) Summit where the world's most advanced economies met recently in Japan. While the nation is committed to reducing its level of emissions, it must still overcome plenty of hurdles. According to a recent report by McKinsey, the country will require an investment of $600 billion over the next 10 years in energy infrastructure to feed an economic growth rate of 8 percent a year. Altogether, it will need 10 times the generation capacity it has today.
The high demand for power there is driven by efforts to electrify rural regions and to fuel its growing manufacturing base. Household consumption, meantime, is up 14 percent. That's despite the fact that only about 56 percent of the homes in the country have access to electricity, says the research firm. With such strains, the firm questions whether India can fulfill the need, noting that the power sector has insufficient cash flows to attract foreign capital.
Already, power shortages and blackouts plague the country's major cities. The situation is exacerbated by the fact that India's political and economic framework belies risk takers. The government currently owns about 90 percent of the coal markets there. And, it still subsidizes electricity prices. Investors, understandably, have reservations.
Without question, the nation needs both fuel diversity and modern transport system. At least one global consultancy says that it can achieve those goals in a decade's time. PriceWaterhouseCoopers says that international pressures to curb climate change in combination with the investments in new technologies are leading to cleaner forms of generation. Renewable energy will be a part of the evolution. But so will nuclear and coal, both of which are included in the clean tech drive.
"These are profound changes with an unprecedented range of technological investment," says Manfred Wiegand, global utilities leader for PWC. "As the pressures of climate change and energy security intensify, the conditions are ripe for a diversification of generation technologies."
Energy Efficient
India is indeed at the eye of the storm. The G8 nations are split over how to treat the developing world with respect to greenhouse gas emissions. The United States, along with Canada and Russia, are dubious of making commitments themselves if major polluters such as China and India are not included in a final agreement. Developing countries, meanwhile, say that they are waiting for advanced nations to take decisive actions and to share the technologies to get the job done.
To that end, the United States joined its allies at the summit and committed to cut its greenhouse gases in half by 2050, all of which will be formally negotiated by year-end 2009. The leaders also promised to make more immediate cuts in the coming decades but said that they could not provide specifics. Under any circumstance, President Bush and other heads of state said that they expected China and India to be an integral part of the process as they are fast becoming the world's biggest carbon emitters.
Both countries said to count them in. As far as India goes, it says that it can best achieve climate change objectives if the nuclear deal it is now negotiating with the United States is approved. That pact would reverse 32 years of U.S. foreign policy and allow the sale of nuclear technologies to India for peaceful purposes. If Okayed, India says that nuclear power there could contribute far more than the 3 percent it provides today.
Beyond that, India says it will promote the development and use of solar energy and aims to increase such production to 1,000 megawatts a year. It is also implementing energy efficiency programs such as demand-side management that it says will yield savings of 10,000 MW by 2012. The government is, furthermore, mandating the retirement of inefficient coal-fired power plants and supporting the research and development of coal gasification and supercritical technologies.
"Our vision is to make India's economic development energy-efficient," says Prime Minister Manmohan Singh. "Over a period of time, we must pioneer a graduated shift from economic activity based on fossil fuels to one based on non-fossil fuels and from reliance on non-renewable and depleting sources of energy to renewable sources."
India understands that it has a major role in setting global greenhouse gas emission standards. It is acting on its convictions -- moves that are supported in large measure by advances in technology and a growing desire to combat climate change. The transition won't be easy. But India will eventually start using cleaner forms of generation.
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Ken Silverstein EnergyBiz Insider Editor-in-Chief
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