Emerging Market for Renewables

Q  Why is it in News ? 

A According to a recent report, fossil fuel electricity generation has peaked worldwide as emerging markets seize the opportunities of low-cost renewables.

• The Report was published by India’s Council on Energy, Environment and Water (CEEW) and the financial think tank Carbon Tracker (both are not-for-profit organisations).

Q What are some key findings of the report ? 

A 

• Emerging Market are Key to Global energy Transition:
• Emerging markets are key to the global energy transition, accounting for 88% of all expected growth in electricity demand from 2019-2040.
  • Overall, 82% of current emerging market electricity demand and 86% of expected demand growth comes from countries that import coal and gas, and they have powerful incentives to switch to solar and wind.
  • With the right policies in place, technology and cost barriers to change can be crossed.
  • The transition is different in emerging markets because they have electricity demand growth from a lower base as well as the need to provide access to hundreds of millions of people.
    • In developed markets, demand for fossil fuels for electricity generation has fallen by 20% since it peaked in 2007.
• Four Key Groups of Emerging Markets:
  • China, which is nearly half the electricity demand, and 39% of the expected growth.
  • Other importers of coal and gas such as India or Vietnam, which are a third of the demand and nearly half the growth.
  • Coal and gas exporters such as Russia or Indonesia, which are 16% of demand but only around 10% of the growth.
    • Resistance to the energy transition is likely to be more entrenched in coal and gas exporting countries.
• ‘Fragile’ states such as Nigeria or Iraq which are 3% of demand and around the same share of growth.
• India has set an Example:
• India, which accounts for 9% of emerging market electricity demand and 20% of expected demand growth, illustrates the speed and scale of change.
• From less than 20GW of solar in 2010, it has grown to 96GW of solar, wind biomass and small hydro in May 2021.
• Including large hydropower, renewables now provide 142GW or 37% of the country’s power capacity, and it has a target of 450GW by 2030.
• Demand for fossil fuel generation reached a plateau in 2018, and fell in 2019 and 2020.
• While fossil fuel demand might again increase in the near-term to meet latent electricity demand, India has demonstrated how a double leapfrog - connecting nearly all households to electricity and its renewable energy rollout - can be driven with policy priorities and market design.

Q What are some key suggestions of the report ? 

A 

• A supportive policy environment is the key to driving growth in renewables.
• If countries liberalise markets and introduce competitive auctions, they can cut costs and attract international finance as capital markets turn their backs on fossil fuels.
  • Auctions have helped India drive the cost of solar down to one of the world’s lowest levels.
• Developed countries can speed up the transition to renewables in emerging markets by providing policy support, technology expertise and by using development finance to reduce the cost of capital.

Q What are some Indian Initiatives for Renewable Energy ?

A Indian Initiatives for Renewable Energy

• Hydrogen Energy Mission: The Union Budget for 2021-22 has announced a National Hydrogen Energy Mission (NHM) that will draw up a road map for using hydrogen as an energy source.
  • The initiative has the potential of transforming transportation.
• Jawaharlal Nehru National Solar Mission (JNNSM):
  • It was launched in 2009 with a target for Grid Connected Solar Projects of 20,000 MW by 2022.
  • The sector has witnessed rapid development with installed solar capacity increasing rapidly from 18 MW to about 3800 MW during 2010-15.
• International Solar Alliance:
  • It was launched by the Prime Minister of India and the President of France on 30th November 2015 in Paris, France on the side-lines of the Conference of the Parties (COP-21), with 121 solar resource rich countries lying fully or partially between the tropic of Cancer and tropic of Capricorn as prospective members.
• PM- KUSUM:
  • KUSUM stands for Kisan Urja Suraksha evam Utthaan Mahabhiyan.
  • It’s objective is to provide financial and water security to farmers through harnessing solar energy capacities of 25,750 MW by 2022.
• National Wind-Solar Hybrid Policy:
  • The main objective of the policy is to provide a framework for promotion of large grid connected wind-solar photovoltaic (PV) hybrid systems for optimal and efficient utilization of wind and solar resources, transmission infrastructure and land.
  • The wind-solar PV hybrid systems will help in reducing the variability in renewable power generation and achieving better grid stability.
• Rooftop Solar Scheme:
  • Its objective is to generate solar power by installing solar panels on the roof of the houses.
  • The Ministry of New and Renewable Energy is the implementing agency of the Grid-connected Rooftop Solar Scheme (Phase II).