Renewable Energy and Economic Development are Intertwined

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Global warming and climate change, caused by heat-producing greenhouse gases, including carbon dioxide and ozone have been a major cause of concern the world over. From erratic rain at certain places to unexpected superstorms, cyclones or heat waves at others, all of these can affect fragile economies and impact the vulnerable poor. A Reserve Bank of India study points out that the GDP growth is connected with temperature and humidity levels. Manufacturing, agriculture and the services sectors tend to dip when faced with unexpected extreme weather events. The “State of the Climate (SoC) in Asia 2020” report by the World Meteorological Organization (WMO) points out that India suffered an average annual loss of around $87 billion in 2020 due to extreme weather events, such as tropical cyclones, floods and droughts. This is because extreme weather events cause loss of life, displace millions, entail huge costs in disaster relief, and deeply impact climate-dependent sectors like agriculture, health, water and energy.

Since energy accounts for a large part of greenhouse gas emissions that cause these extreme weather events, we need to move to clean energy sources. This will help cool the earth, save lives and livelihoods, and create food and water security.

SDG-7 ascertains the need to keep clean and affordable energy at the centre of all development and innovation across the globe. The race to lighten the carbon impact has become a rallying point for leaders globally. India too has been moving fast to cut down the emissions; Prime Minister Modi announced at the COP26 Summit in Glasgow that India will increase its non-fossil energy capacity to 500 GW to meet 50 percent of its energy requirements through renewable energy by 2030.

Bundling RE along with thermal power

Going ahead, conventional (comprising the majority) and non-conventional energy (fast growing sector) will complement each other in meeting the energy needs of the country. In a remarkable progressive move towards achieving our RE goals, last year the government allowed thermal power companies to bundle RE along with thermal power and supply it to power distribution companies (discoms) under existing power purchase agreements (PPAs). “As the cost of renewable energy is less than the cost of thermal energy, the gains from the bundling of renewable energy with thermal will be shared between the generator and distribution companies/other procurers on a 50:50 basis,” the government stated. Since RE will be balanced with thermal energy, discoms do not now need to acquire any separate capacity for balancing of renewable energy. The government had earlier proposed bundling of RE with thermal power in 2020 for round-the-clock power supply. The provision to supply bundled RE under existing PPAs was added later.

Greater efficiencies in all sectors

Sustainable energy helps people, planet and profits, and makes a positive contribution in all sectors. It helps in cleaning up air, boosts employment, improves health indices and propels all-round development. The RE sector has the potential to employ around one million people by 2030, and many of the new jobs would be generated by small-scale renewable energy projects, according to a study by the Council on Energy, Environment and Water (CEEW), Natural Resources Defense Council (NRDC) and Skill Council for Green Jobs (SCGJ).

In agriculture, moving to sustainable energy leads to improved farm incomes, helps in improving soil and air quality, reduces dependence on polluting fossil fuels, minimizes adverse impacts on wildlife, water quality and other environmental resources, and promotes stable, prosperous farm communities. MSME’s which are the largest employment sector, contribute around 30% towards GDP through domestic and international trade. Looking at their large impact on the economy, the adoption of clean energy by MSMEs is certain to ensure a large chunk of the country is covered. Green energy offers the cleanest and most economical way to meet the growing energy demands in the services sector too. It is heartening to see a gradual decrease in costs of clean energy over the years. According to a 2021 report by the International Renewable Energy Agency (IRENA), costs for renewable technologies continued to fall significantly year-on-year. Concentrating solar power (CSP) fell by 16%, onshore wind by 13%, and solar PV by 7%. These winning value propositions necessitate the need to clear our paths to carbon neutrality fast.

The blending of renewable energy with thermal power to bridge the existing gaps will only not help in meeting the growing energy demand but also aid in creating a world that is much cleaner and safer for our future generations.