CEEW Recommends Green Energy Investments in COVID Recovery Strategy

The Council on Energy, Environment and Water (CEEW), along with the National Institute of Public Finance and Policy (NIPFP) has recently published a report that makes the case for India needing a new social contract based on a commitment to jobs, growth and sustainability, as it charts its way out of the COVID-19 pandemic.

The study ‘Jobs, Growth and Sustainability: A New Social Contract for India’s Recovery’ covers a host of avenues that it suggests will have a positive impact on the Indian economy as it attempts to come out of the pandemic. A key point the report touches on is green energy investments and policies to help revive the slumbering economy.

The study found that there are opportunities in emerging sectors such as distributed renewable energy, hybrid energy, emergency and disaster management systems, city gas distribution, urban transportation. It highlighted that 1.3 million full-time jobs would be created if India achieved 160 GW of solar and wind by 2022. Another 530,000 new jobs would be created if India supported another 130 GW of wind and 200 GW of solar by 2030. Scaling up investments in distributed renewable energy could also create thousands of new jobs. Around 110,000 skilled and unskilled jobs could be created by 20 GW of small-and large-scale micro-grids. 50,000 potential skilled and unskilled jobs would be created for each 4 GW of rooftop solar.

The report also states that India must also address political economy roadblocks to scaling up renewable energy. Projects are besieged by centre-state conflicts due to non-alignment of priorities, and states making retrospective changes in policies or threatening to renege on PPAs and/or curtailing off-take. The need for power sector reforms is well realised; but the changed scenarios due to the pandemic requires fast-tracking of reforms to address issues such as multiplicity of authorities, centre-state policy and implementation conflicts, managing depressed demand, and difficulties in revenue collection.

The report proposes a rethink of the structural framework of India’s power sector to address these myriad issues: this includes setting up a multi-stakeholder National Electricity Council (NEC), making an Integrated Energy Resource Plan (IERP), establishing a National Renewable Energy Corporation (NREC), and eventually, notifying a National Renewable Energy Policy (NREP).

CEEW’s preliminary calculations show that a cumulative amount of approximately Rs 5,200 crore (USD 690 million) over 2021-28 could facilitate an economically viable market for 28 percent of generation from onshore wind and solar PV by 2030, creating another 528,000 jobs.

The report highlights that it is a good time to promote domestic solar manufacturing. CEEW’s conservative estimate is that solar modules worth Rs 15,000 crore (USD 2 billion) would be required annually to meet the domestic demand of 10 GW per year. Meeting the bulk of this demand through domestic production (>50 percent) can avoid forex outflow of Rs 7,500 crore (USD 1 billion). In the long term, domestic manufacturers can tap the international market and supply modules to member countries of the International Solar Alliance (ISA).

Further, innovations in distributed renewable energy (DRE) can greatly enhance grid reliability through interconnected networks of micro-grid clusters, community solar systems, bioenergy, small hydro, wind and solar hybrids, and ‘behind-the-meter’ battery units and inverters. These micro-grids can disconnect from the main grid and operate autonomously and could mitigate a part of the impact in the unlikely event of a nationwide grid failure. The report proposes that the Ministry of New and Renewable Energy (MNRE) set a target to achieve 20 GW of grid-connected micro-grid capacity by 2025.

A CEEW study has found that an urban micro-grid system within the East Delhi area could provide a net benefit of around Rs 1.08 per kWh to the discom if designed to optimise for the grid.

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