CDP, a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts announced its 2017 report recently. Both the operators are awaiting strong policy direction. It finds India committed to it low-carbon goals
On the capital allocation side of the economy, auctions on rights to develop solar and wind power plants received bids that finally brought some renewables to grid parity in India. Indian Renewable Energy (RE) generators are offering renewable power at some of the lowest prices in the world. Solar energy is the preferred choice of RE among developers in India with 13.1 GW of grid connected solar PV capacity installed by June 2017.
There were issues of curtailment of RE by grid operators, open access to transmission infrastructure and breach of PPAs in some States that raised questions on the future profitability of RE projects. The policy response from the Government is eagerly awaited by the industry.
India’s GDP growth had a marked slowdown in 2017 resulting in spare capacity in conventional generating assets. Many of these assets are relatively new and the Government is under tremendous pressure to utilize this excess capacity before using renewables.
Communicating NDCs (Nationally Determined Contribution) to India Inc.
To give further impetus to low carbon development in the private sector, the Government needs to start communicating NDCs to India Inc. and initiate discussions on mechanisms to allocate and track emission reduction goals across the economy.
Lack of availability of environmental data for financial analysis was identified as a gap at the G20 summit in Hamburg and the Government needs to start thinking of ways and means to put good data in the public domain that can be useful in integrating “green” in financial analysis. Implementation of TCFD (Task Force for Climate-Related Financial Disclosures) recommendations on Indian companies will be a good start.
India is a front-runner in low-carbon future
The global perception of India’s climate and energy future has changed rapidly. From a concern that India’s energy needs could jeopardize climate futures, India is increasingly seen as a front-runner in the low-carbon future. Policy scenarios suggest scope for reduced emissions growth, but this scope is more limited in national development-based scenarios than pure decarburization scenarios. According to Centre for Policy Research, a Delhi based think-tank, conditions that will drive future emissions include the energy-intensity of industries that create jobs in the future, the ability to lock-in energy efficient measures, and the sustainability of recent renewable energy price trends.
Climate action is increasingly viewed in the national interest and as an opportunity for leadership at home and abroad. Indian policymakers are firm on honoring their NDC commitments and early indications are that India might outperform these targets. The rapid growth of renewable energy in India, combined with sustained reductions in coal imports and a slowdown in coal power plant development—with many a coal-fired “ultra-mega power projects” cancelled—is a strong indication that India’s low-carbon energy transition is on track. India’s NDCs have been designed to create a blueprint for enhancing the overall climate performance of the country in its developmental perspective.
It also captures citizens’ and private sector’s contribution to combating climate change. Other ambitious actions planned include a voluntary carbon market in the next few years.
As the government’s policies and NDC targets get further translated into actions by companies, measurement, reporting and verification (MRV) will take centre stage. However, an analysis of the absolute emissions targets resulting from both 2020 and 2030 intensity targets have been ranked as ‘Medium’ by the Climate Action Tracker (CAT), an independent scientific analysis produced by three research organizations tracking climate action since 2009. Upgrading the Indian NDC to match planned policies would move its NDC significantly towards the “sufficient” rating and would place it in a leadership position globally in these models as well.