 Accelerating wind power growth in India and driving a green recovery with GWEC India By: Francis Jayasurya, India Director, GWEC |
As the third largest carbon emitter in the world, decarbonising India’s energy system is crucial to achieve global decarbonisation targets and support international efforts to keep global warming under 1.5°C pre-industrial levels – and wind power will play a key role for India to achieve the country’s climate targets. Wind energy kickstarted the renewable energy revolution in India and has helped the country mitigate around 50.87 million tonnes of CO2 in the past two years alone. However, wind power growth has slowed down in India recently due to regulatory barriers, with projects delayed further due to the COVID-19 crisis. The country cannot risk slowing down its wind power development now, not only to ensure that decarbonisation takes place at the necessary rate meet its goals under the Paris Agreement, but also to unlock the socioeconomic benefits of wind power to drive a green recovery. Last week during the annual Global RE-Invest conference organised by the Indian Ministry of New and Renewable Energy, GWEC announced that we will establish GWEC India, a new India-based industry platform to tap into India’s huge wind potential. The new platform will focus on building out India’s huge potential and local supply capacity, addressing regulatory bottlenecks, sharing best international practices and experience, as well as facilitating dialogue and cooperation between government and industry stakeholders. Matching ambitions with reality During the G20 Summit on 22 November, Indian Prime Minister Narendra Modi highlighted the role that renewable energy will need to play to power new jobs, investment and other socioeconomic benefits for a sustainable economic recovery from COVID-19, and reaffirming India’s ambitious renewable energy targets. Driven by rising energy demand, economic benefits and a heightened sense of urgency upon the accelerating trends of climate chance such as the recent Cyclone Nivar, it is not surprising that India has established such ambitious goals to develop renewable energy in the country. By 2022, the Indian government is targeting 175 GW of renewable energy, with wind power accounting for 60GW, and by 2030, the government is targeting a whopping 450 GW, with wind power accounting for 140 GW. Although India is already the fourth largest wind power market in the world, the country would need to nearly double its current capacity to meet its 2022 target, and GWEC Market Intelligence expects that India could fall short by up to 10 GW. Project installation has decelerated in recent years, with only 2.3 GW installed in 2019, nearly half of the 4.1 GW installed just two years earlier in 2017. This slowdown is a result of the last three central wind auctions being cancelled or undersubscribed due to low tariff caps and onerous tender conditions, as well as other market challenges such as grid and land availability and off-taker risks. According to GWEC’s Q3 2020 Market Outlook, the impacts of COVID-19 combined with market challenges in India will likely bring down onshore wind installations by 6.1 GW in the next five years compared to our pre-COVID forecasts, a reduction of 29 per cent. To achieve India’s wind power targets, efforts by the government to lower barriers around market design, grid infrastructure and land allocations must be intensified, in order to revive auction appetite and resolve the execution challenges facing India’s wind market. Through GWEC India, we will work with policymakers and industry stakeholders to find solutions around these key issues, accelerating growth of the market in years to come and unlocking India’s full wind potential. Wind power can drive a green recovery in India Throughout the COVID-19 crisis, the Indian government has highlighted the renewable energy sector as an important driver of job and investment creation to recover from the economic impacts of the crisis. In addition, the Indian government has also recognised the important role of renewables to power the economy and other industries throughout the country’s lockdown as one of the most competitive power sources through ‘round-the-clock’ power tenders for renewable energy and including bail-outs to DISCOM’s in recovery packages to create liquidity in the country’s energy market. However, perhaps the most significant initiative the government has taken so far to power a green recovery with renewables is the ‘Atma Nirbhar Bharat’ or ‘Self-reliant India’ initiative. The wind power sector has been a torch bearer ‘Atma Nirbhar Bharat’ vision, as the government looks to establish India as a renewable energy manufacturing hub to create new jobs, investment and business opportunities in the country. Currently, the wind power industry supports 58,000 jobs in the country, according to IRENA. If India achieves its 2022 renewable energy target, this could mean over 330,000 jobs in the wind and solar sector combined. Building out further manufacturing capacity in India could create even more jobs in the country, which are crucial to realise local economic recovery from the pandemic. However, in order for India to realise its vision of being a manufacturing hub, it is essential that there is long-term market visibility in order to bring in investors and encourage development of a local industry. Despite the commitment of the Indian government to renewable energy and a green recovery, investment in clean energy still lags behind these ambitions. According to the Energy Policy Tracker, India has committed at least $23.3 billion in its stimulus packages to support the energy sector, with $9.86 billion earmarked for the fossil fuel sector, a further $12.1 billion for DISCOMs, and a meagre $1.3 billion for clean energy in comparison. If India is serious about accelerating renewable energy growth and reaping the associated socioeconomic benefits, then investment will need to reflect these ambitions. This is more important than ever as the industry can be a critical driver of jobs and investment, while delivering low-cost power to energy-intensive industries, to power an economic recovery from COVID-19. Realising India’s wind power potential with GWEC India The time is now ripe to accelerate the energy transition in India, and GWEC India will play a key role in creating a framework for a government-industry partnership to resolve current challenges and tap into the economic benefits of wind power in order to ensure the country meet its ambitious renewable energy targets. GWEC has a proven track record working with stakeholders to address regulatory barriers and unlock growth potential in emerging markets across the world. GWEC India will leverage the expertise of GWEC’s global network to draw from international best practices, publish market analysis and support policymakers in shaping a sustainable wind sector. With over 300 GW of onshore wind potential and a further 195 GW of offshore wind potential, we have only begun to scratch the surface of India’s wind power capability. GWEC India will be an indispensable platform for policymakers and the industry to come together and turn these ambitions into reality, and I am thrilled to be part of this important initiative. |
