45 minute read
Multi-Dimensional Growth of Indian Economy Over the Last 75 Years
On August 15, 2021, our country has entered into the 75th year of its Independence. The Union Government had in March this year, announced Amrut Mahotsav. This is a two-year-long countrywide initiative to remember the milestone. The country’s economic journey since 1947 has witnessed its vast share of ups and downs. Gone are the days when our country was termed as a ‘third world country’, a term often used for poor developing nation-states that has now fallen into neglect, our country is now among the biggest economies of the world. Although, there is still a long journey to cover up for India, but its achievement as of now cannot be ignored.
The economic journey of India may be summarized as follows:
Advertisement
Gross Domestic Product: Our Country’s GDP stood at INR 2.7 lakh crore at Independence. Almost 74 years on, it has reached INR 135.13 lakh crore. India is now the 6th largest economy in the world and is on its way to becoming the third-largest by 2031, as per Bank of America. An omissible fact is that there has been a 10- fold increase in the GDP since the reform process began in 1991.
US dollar to Rupee: Contrary to a popular 2013 forward which had pegged USD1 to INR 1, a US dollar was equal to INR 3.30 in 1947. Notably, India’s rupee was pegged to the UK Pound Sterling, not the US Dollar. In August 2021, USD1 is equal to INR 74.
Food Production: Achieving “selfsufficiency” in food grains has been Independent India’s biggest achievement. From receiving food aid in the 1950s and 1960s to becoming a net exporter, India has seen a turnaround in food production. The total food production, which stood at 54.92 million tonnes in 1950, rose to 305.44 million FOREX in 2020-21.
OREX: India’s FOREX reserves (In foreign currencies and other assets like gold) stood at a meager INR 1,029 crore in 1950-51. In fact, India’s low forex reserves played the catalytically role in kick starting the economic reforms. With just USD1.2 billion worth of forex reserves in 1991, India just had enough reserves to finance 3 weeks of imports. Three decades since the reform process began, The FOREX reserves of the country now stand at INR 46.17 lakh
crore – Fifth largest in the world.
Indian Railways: India already possessed one of the biggest railway lines in the early years of Independence. In Independent India, the Indian Railways has focused on unifying all rail gauges, electrification of railway lines and connecting northeast India to the mainland. Moreover, the railway line has expanded by over 14,000 kilometers, reaching 67,956 kilometers in route length by 2020.
Access to Electricity: Providing rural India with access to electricity has been one of the goals of India’s socio-economic policymaking. According to the Ministry of Power, only 3,061 villages had access to electricity in 1950. In 2018, the Indian government announced that all of India’s villages – 5,97,464 in total – had been electrified. However, given the criteria to declare a village electrified – 10 per cent of households in a village having access to electricity, there are millions who still live without electricity.
Foreign Direct Investment: In the pre-liberalized ‘license raj’ India, foreign investment was limited if not non-existent. In 1948, the total foreign investment in India stood at INR 256 crore. However, since the 1991 liberalisation, FDI has become the buzzword of India’s economic story. In 2020-21, India received a record USD 81.72 billion in Foreign Direct Investment.
Roadways: Roads have expanded exponentially in the last 75 years. In 1950, as per government figures, India only had 0.4 million kilometres of roadways, which has grown to 6.4 million kilometres in 2021. This is a 16-fold rise in the total length of roadways, making India’s road network the second largest in the world.
UNION GOVT PLANS TO INSERT G-SEC IN GLOBAL BOND INDICES
The Union Government has planned to start trade and settlement of debt securities on the global Euroclear platform. This is being considered as a significant move that will make the way easier for insertion of G-sec in global bond indices in days to come. When asked, a senior authority from the Union Finance Ministry said, “Most of the bond platform needs have been met and we have made all arrangements. If everything goes well, it must open another channel to attract overseas capital in Indian debt markets”.
Issues related to taxation like: the exemption from capital gains on the international transactions has been cordially dealt with. the authority added, “The business tycoons and experts believes that at their next review of index constituents, entities like JP Morgan and Barclays must be able to take in Indian gilts in their indices, giving access to investors to participate in our market”.
The plan to list a set of government securities in global bond indices has been in the works for many years now. In the Union budget 2014-2015, the then Finance Minister, Arun Jaitley, had proposed the allowing of international settlement of Indian debt securities, as it was supposed to result in a decrease in bond yields and a growth in liquidity in domestic bond markets. India’s Union Budget 2020-21 had planned to take away limit on foreign investment in some government securities, as a first step towards their inclusion in global bond indices. Consequently, the Reserve Bank of India had on March 30, 2021 notified a completely reachable route for investment by non-residents in government securities without any ceilings.
The RBI, in coordination with the Union Finance Ministry, has planned to put caps on the amount of particular securities. These would be allowed to be traded on the Euroclear platform under the fully reachable route.
As the financial shortfall increasing sharply after the deadly coronavirus hit the world economy, the additional sources of funding into government debt market are expected to aid the Union Government’s increased borrowing program of more than Rs 12 lakh crore every year. The Reserve Bank of India’s Financial Markets Regulation Department that is somehow responsible for the development & regulation and surveillance of G-secs market has created a scaffold for global settlement of gilts. It will permit the foreign investors to put money in government debt papers without the requirement of registration as FPIs.
During the month of July 2021, the RBI launched a scheme permitting the domestic retail investors to directly participate in the G-sec market. They can open and maintain a ‘Retail Direct Gilt Account’ with the RBI through a portal that can also offer access to primary issuance of G-Secs and the secondary market as well.
Insertion in bond indices, along with these measures, is mainly focused on supporting the borrowing program of government. The Financial Markets Regulation Department of the RBI, which is entrusted with the development and regulation and surveillance of G-secs market, has created a framework for international settlement of gilts. This would allow overseas investors to put money in government debt papers without the need to register as FPIs.
In an annual report released by the India’s central bank on May 27, 2021, it has said, “The Department initiated the process of international settlement of Indian government securities through International Central Securities Depository (ICSD) in consultation with the Government of India, ICSDs and other stakeholders. Clients of ICSDs would be able to invest in Indian G-sec without registering themselves as foreign portfolio investors.
OMCS MAINTAIN BENEFITS, AMID FALL IN GLOBAL CRUDE OIL PRICES
Petrol and diesel prices, despite being at the record high levels across the country, the international crude oil has gone down by 13.9 per cent right from the beginning of August 2021. Sources revealed that the Oil Marketing Companies (OMCs) could be maintaining portion of the benefit from the fall in global prices to compensate for under recoveries during recent periods. The Union Finance Minister, Nirmala Sitharaman, ruled out minimizing Central taxes on petrol and diesel, referred to the economic burden of having to pay interest payments on oil bonds issued to OMCs for earlier under recoveries by the Congress-led UPA government. An unpredicted build-up of fuel catalogs in the United States and concerns about the spread of the Delta variant pushed Brent crude to $65.63/ barrel on August 20, 2021, its lowest level since May this year. A Public Sector OMC authority said, “Under recoveries initially, like state elections as increased prices were held back, is likely the reason that OMCs are being slow in passing on the benefit of lower global prices to consumers”. Practically, the full impact of changes to crude oil prices is often seen with a lag as domestic rates are benchmarked to a 15-day rolling average of global prices of petrol and diesel. Industry sources said the full impact of lower global prices would be felt sooner in diesel than petrol as under recoveries for the former were significantly lower than the latter, and were likely to be recouped soon if the current trend of low prices continues. The analysts highlighted that with no excise duty cut expected and OMCs withholding portion of the benefit of lower global prices, consumers would only benefit from lower fuel prices if crude oil prices continued
to remain at lower levels for a sustained period. Even though the prices of petrol and diesel are deregulated and can be revised daily, OMCs had, in March and April 2021, stopped hikes as a number of states had on electoral processes. The OMCs had also held prices constant for over 80 days from March 16, 2020 as crude fell stridently because of the deadly coronavirus pandemic. “The analysts asserted said the decision to hold prices steady, during the period when crude touched lows of around $20/barrel, led to far higher marketing margins for OMCs during the financial year 2021. The OMCs have also held the price of petrol constant for the past 34 days and cut the price of diesel by about 60 paise/lt over the past three days after holding steady for 33 days. Petrol is retailing at Rs 101.8/lt in the Capital, while diesel was at Rs 89.27. Growing crude prices, coupled with high taxes on fuel, have led to a 21.7 per cent increase in the pump price of petrol and a 20.8 per cent jump in diesel from the beginning of the year. Growing taxes on petrol and diesel have also been key contributors to record high prices. During 2020, the Union government
hiked Central levies by Rs 13/ lt on petrol and Rs 16 on diesel to shore up revenues as Coronavirus caused a sharp fall in financial functioning. One, Vivekanand Subbaraman, an analyst at Ambit Capital said, “The Union government is willing to make sure that the earnings of the OMCs are protected as they are key investors in important infrastructure like: pipelines, fresh refineries and LPG infrastructure”. Subbaraman also said that margins for the OMCs were increasing steadily over the past few years as their profits were rising even though their sales volumes had remained relatively stable. Besides few others, the Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd did not respond to emailed requests for comment.
SC DENIES AIRTEL’S PLEA, DIRECTS TELECOM MAJOR TO APPROACH TDSAT
The Apex Court had on August 24, 2021 asked Department of Telecommunications (DoT) not to invoke the bank guarantees of Bharti Airtel for three weeks so as to recover a sum of INR 1,376 crore in AGR-related dues of Videocon Telecom Ltd that had sold its spectrum to the Bharti group. The SC denied to entertain on the plea of Airtel that VTL dues are not payable by it and directed the telecom major to approach the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) with the complaint.
A Supreme Court bench comprising justices, L Nageswara Rao, S Abdul Nazeer and M R Shah, said in its order, “The DoT shall not invoke the bank guarantee of Bharti Airtel for the period of three weeks from August 24, 2021”. In the beginning, the bench made clarified the counsel appearing for Airtel that it would not obstruct the earlier judgment. The bench stressed, "We are already clarified that that we will not interfere with the judgment and we will give you the liberty to withdraw to approach the appropriate forum”. The bench also highlighted that the submissions of Solicitor General Tushar Mehta, appearing for the Department of Telecom, that the DoT would be permitted to raise all the grounds including the objection to the jurisdiction, if any, before the forum to be chosen Airtel.
Airtel said that the DoT had on August 17, 2021 directed it to pay AGR related dues of VTL within a week, failing which the BGs. Divan referred to the various documents including the spectrum trading directions and added that the dues arising from the Adjusted Gross Revenue of VTL, the seller of the spectrum - were known during the sale and therefore the seller and not the buyer can be fastened with the liability to pay. The bench headed by Justice, L Nageswara Rao, while pronouncing the order said, “All the miscellaneous applications are dismissed”. The telecom companies had submitted before the top court that arithmetical errors in the calculation be rectified and there are cases of duplication of entries.
The VTL had sold its spectrum to Bharti Airtel in the pursuance of agreements entered into them in 2016. The Bharti group has already paid INR 18,004 crore in AGRrelated dues to DoT by March 31, 2021 which is much more than 10 per cent of its total AGR dues of over INR 43,000 crore, he said. In its September 2020 order, the Apex Court had said that telecom operators should make the payment of 10 per cent of the total dues as demanded by the DoT by March 31, 2021 and the rest be paid through annual installments from April 1, 2021 to March 31, 2031.
Divan argued that Airtel should not be proceeded against without being granted a reasonable opportunity to raise the grievances before an appropriate forum. The bench then suggested the DoT saying, "We will permit him to take out and go before the TDSAT and hold your hand for 2-3 weeks”. The SC had on July 23, this year, rejected the applications filed by telecom majors, including Vodafone Idea and Bharti Airtel.
The Court had sought rectification of the alleged errors in computation of AGR related dues payable by them. The telecom companies had submitted before the top court that arithmetical errors in the calculation be rectified and there are cases of duplication of entries. The SC had in September 2020 given a time period of 10 years to telecom service providers struggling to pay INR 93,520 crore of AGR related dues to clear their outstanding amount to the government.
The top court, which had held that demand raised by the DoT in respect of AGR dues will be final, had said there shall be no dispute raised by the telcos and there shall not be any re-assessment. The top court had in October 2019 delivered its verdict on the AGR issue. The DoT had in, March 2020, moved a plea in the top court in which it had sought permission for allowing staggered payment of the dues by telcos over a period of 20 years.
INDIA'S POWER REFORMS
The Power sector of Indian has witnessed a major transformation in terms of power supply, demand of energy, fuel mix and operations of market. The country now turned to be the third-largest power generating nation in the world. The total installed capacity in the country has grown up at an outstanding pace of 7.96 per cent during the financial years 2010 to the period of the financial year 2020. Our country had a total installed capacity of 375.32 GW till December 31, 2020 and hence jumping from a power-deficit country to a country with surplus power. In India, the power sector has been characterized through its broaden fuel sources that comprise of ecologically sustainable sources like: solar, wind, and small hydro plants, along with conventional sources like coal, oil, and gas. As per the data, the thermal power was the predominant type of installed capacity in India and it is responsible for almost 62.31 per cent share of the entire installed capacity in the financial year 2020. The launching of enormous Ultra Mega Power Projects (UMPPs) based on thermal power attributed to the largest share of thermal power in the energy mix of the country. The renewable energy was the second-leading energy source in India, capturing 23.51 per cent of the total installed capacity in India in FY 2020. The Government of India’s promising target of installing 175 GW of renewable energy, capacity attached with the establishment of solar parks & the solar city program pushed the growth of clean energy in India. In addition, the financial incentives provided by the government are likely to encourage state-owned operators to invest in Clean Energy Parks and Ultra-Mega Renewable Energy Power Parks (UMREPPs).
Growing demand from the industrial and domestic classes has been the significant driving issue for the growth of the power sector of India. The industrial sector of the country extended enormously in the past few years. It has been noticed by the constant increase in the index of industrial production (IIP) for the electricity domain from 126.6 in the financial year 2015 to 158.4 in the financial year 2020. According to
SOME OF THE IMPORTANT SECTOR COMPANIES OF INDIA ARE AS FOLLOWS:
ADANI POWER LIMITED CESC LIMITED NHPC LIMITED NTPC LIMITED SJVN LIMITED SUZLON ENERGY TATA POWER LIMITED DAMODAR VALLEY CORPORATION (DVC) WEBSOL ENERGY SYSTEM LIMITED AND NUCLEAR POWER CORPORATION OF INDIA LIMITED (NPCIL)
Growing demand from the industrial and domestic classes has been the significant driving issue for the growth of the power sector of India
the report, the industries have been the largest power consumer across the country and this is responsible for about 42.69 per cent of the total power consumption in the financial year 2020. Besides, the consumption from the domestic sector grew at a fast pace of 7.96 per cent from financial year 2010 to the financial year 2020.
Significant development in access to electricity a surge in the sale of white goods, and higher demand for LED bulbs have driven demand from the domestic sector. In addition, supportive government policies like: UDAY 2.0, 24x7 - Power for All, Subhagya, Ujala Scheme, Green Energy Corridor and vehicle electrification have helped to boost the Indian power sector. The limited supply of raw material poses a substantial challenge to the Indian power sector. Market players have been under pressure to acquire raw material for power generation owing to the erratic domestic supply of coal, fluctuations in international coal prices, and shortage of natural gas. In addition, the weak infrastructure of the transmission and distribution (T&D) system leads to transmission and distribution losses (T&D losses) that affect the power sector. The T&D loss in India is around 20 per cent, significantly higher than in other Asian countries. The thermal power sector has been experiencing challenges in recent years, owing to its environmental impact, tariff structure, and difficulty in acquiring power purchase agreements (PPA). But during the COVID-19 pandemic, the growth rate of the Country’s power sector was hindered with the beginning of the pandemic and the ensuing lockdown measures.
The shutdown of industrial activities as an effect of the lockdown announced on March 25, 2020, led to a widespread fall in power consumption in the industrial and commercial sectors. The vertical decline in demand, coupled with a liquidity crunch, has crippled the financials of power generating and power distribution companies. The unprecedented impact of the pandemic has highlighted the need for structural changes in the industry. As such the sudden crisis taught a big lesson to the concerned companies and ushered in policy reforms, boost private sector participation, lead to a focus on an efficient power trading system, bring in investments for infrastructure development, and most importantly, eased digital transformation.
RENEWABLE ENERGY
PLAYS PIVOTAL ROLE IN SUSTAINABLE FINANCIAL GROWTH
The main reason behind installing renewable energy in the country is enhance economic growth and development, increasing energy security, strengthen access to energy and alleviate climate change. Sustainable growth and development could be possible through sustainable energy and by ensuring access to reasonable, consistent, sustainable and latest energy system for citizens. Healthy government support & the growing opportunities to enhance financial scenario have pushed India to be one of the top leaders in the most attractive renewable energy markets of the world. The government has designed policies, programs and a moderate environment to attract foreign investments to ramp up the country in the renewable energy market at a rapid rate. It is predictable that the renewable energy sector can create a large number of domestic jobs over the following years. This paper aims to present major achievements, prospects, projections, generation of electricity, as well as challenges and investment and employment opportunities due to the development of renewable energy in India.
Here, we have identified multiple of obstacles faced by the renewable sector. The recommendations based on the review outcomes will offer helpful information for policymakers, innovators, project developers, investors, industries, associated stakeholders and departments, researchers, and scientists. The various sources of electricity production like: coal, oil, and natural gas have contributed to one-third of global greenhouse gas emissions. This is important to raise the standard of living by offering cleaner and more reliable electricity. Our country has widespread energy demand to accomplish the financial development plans that are being executed. The National Electricity Plan framed by the Ministry of Power was coined with the objective to provide electricity across the country and has prepared a further plan to make sure that power is supplied to the citizens efficiently and at a reasonable cost.
As per the World Resource Institute Report 2017, India is responsible for almost 6.65 per cent of total global carbon emissions, ranked fourth next to China (26.83 per cent), the USA (14.36 per cent), and the EU (9.66 per cent). Climate change could also change the ecological balance in the world. Intended Nationally Determined Contributions have been submitted to the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement. The latter has hoped to achieve the goal of limiting the rise in global temperature to well below 2 °C. As per the World Energy Council forecast, global electricity demand will peak in 2030. Our nation would emerge as one of the largest coal consumers in the world and imports costly fossil fuel. Almost 74 per cent of the energy demand is supplied by coal and oil. According to a report from the Center for monitoring Indian economy, the country imported 171 million tons of coal in 2013–2014, 215 million tons in 2014–2015, 207 million tons in 2015–2016, 195 million tons in 2016–2017, and 213 million tons in 2017–2018. cheaper. India is planning to attain 175 GW of renewable energy which would consist of 100 GW from solar energy, 10 GW from biopower, 60 GW from wind power and 5 GW from small hydropower plants by the year 2022. Investors have promised to achieve more than 270 GW, which is significantly above the ambitious targets. The promises are as follows: 58 GW by foreign companies, 191 GW by private companies, 18 GW by private sectors, and 5 GW by the Indian Railways. Earlier estimates show that in 2047, solar potential will be more than 750 GW and wind potential will be 410 GW. In a view to reach the ambitious targets of generating 175 GW of renewable energy by 2022, it is essential that the government creates 330,000 new jobs and livelihood opportunities. A combination of push & pull policies, with specific strategies can promote the growth of renewable energy technologies. Improvement in technology, proper regulatory policies, tax deduction, and efforts in the growth of competence due to research and development are among the few pathways to conservation
As such, India will have a speedy and global transition to renewable energy technologies to attain sustainable growth and avoid catastrophic climate change. Renewable energy sources play a vital role in securing sustainable energy with lower emissions. This is often expected that renewable energy technologies could immensely cover the electricity demand and reduce emissions. Recently, the country has developed a sustainable path for its energy supply. Awareness of saving energy has been promoted among citizens to augment the use of solar, wind, biomass, waste and hydropower energies. It is evident that clean energy is less harmful and often of energy and environment which can promise that renewable resource bases are used in a cost-effective and quick manner. Hence, strategies to promote investment opportunities in the renewable energy sector along with jobs for the unskilled workers, technicians and contractors must be taken in priority. Growth of renewable technology has come across stiff obstacles and hence, there is a need to discuss these barriers. In addition, it would be also important to discover possible solutions to conquer these barriers and hence proper recommendations are suggested for the solid growth of renewable power.
ENERGY SECURITY REMAINS IN ‘FOREFRONT’
OF PM’S INDEPENDENCE DAY SPEECH
India All Set to Meet Climate Goals
Meanwhile, PM Modi set the country a target for 100th year of Independence in 2047. “The 100th year of freedom from British rule must achieve self-reliance in energy production”, PM said, India is the only country among the G-20 nations that is on the path of meeting its climate goals.
From the ramparts of the historic Red Fort in Delhi, Modi also announced the BJP Government's decision to set up the National Hydrogen Mission, with an aim for India to become a fresh global hub and the renowned exporter of green hydrogen. He said that not only would green hydrogen be the basis of green growth through green jobs but it would also set an example for the world towards clean energy transition. “When our country will observe its 100th Independence day, it would certainly achieve self-reliance in energy production
With the entire nation celebrating 75th Independence Day on August 15, 2021, Prime Minister, Narendra Modi, hoisted the national flag and addressed the country on various burning and relevant issues including COVID-19, climate change, national education policy, agricultural reforms and many others.
The theme of India’s 75th Independence Day celebrations at the Red Fort, from where PM Modi addressed the nation was the ‘Nation First, Always First’. All the Olympians who won medals at the 2020 Tokyo Games were sent been sent special invitations for the event. PM Modi said that in the 21st century no one could stop the development of India and the actual strength of all Indians lie in their striving capacity, unity and keeping the country atop. PM Modi continues, "Sri Aurobindo used to say that we must be more strong than before, change our habits, and with a new heart we must kindle our consciousness. This recalls us to what we also owe to our country”. PM said, rights are important, but now duties must be prioritized, and every citizen must own this sense of duty.
He said that he believed in the power of youth and that when 2047 comes around, whoever will be the Prime Minister then would mention the achievements of the resolve that we made today. Calling for Environmental Security, PM Modi admitted that India was not energy independent and often spent over INR 12 lakh crores annually for energy requirements. He also asserted that the country must resolve to make India energy independent. He added, "Our vehicle scrap policy is important in this direction, and among G-20 economies, India is one of the few who are speeding towards their climate protection goals”. He said that a green hydrogen sector would give us a quantum jump in climate goals. He declared a National Hydrogen Mission for making India a hub for production and export of green hydrogen.
PM Modi stressed, it would be the base of green growth via green jobs. Just like After the World War II, there was a change in the world order, after COVID-19 too, such a change in the world is likely. “The ease of living, ease of doing business are both important, and that labor codes, tax compliance have been simplified”, PM Modi said.He says that income support for farmers is underway, and upto INR 2 lakh crore has been transferred so far.
PM calls for the strengthening of the co-operative movement. He says that capitalism, communism are all discussions in economics of the country, but, "In India cooperative movement is important. Cooperatives are a spirit, a set of values, and collective will”. He says that this movement needs to be strengthened and a separate ministry has been created for this purpose. through a mix of electric mobility, gasbased economy, doping ethanol in petrol to make the country a hub for hydrogen production”, PM Modi stressed.
The roadmap for that is to increase usage of natural gas in the economy, setting up a network of CNG and piped natural gas networks across India, blending 20 per cent ethanol in petrol and electric mobility.
“Our country has already achieved a milestone of 100 gigawatts of renewable energy capacity ahead of the target of 450 gigawatts by 2030, the Prime Minister said adding that the entire world believed in India's leadership, particularly in environmental issues and International Solar Alliance. He also said the country aims to become a net-zero carbon emitter by 2030.
“Our actions today will determine our future. Our today will set the theme of our 100 years of India's Independence”, PM Modi said while concluding his speech.
RECENT POLICY ON BIO-FUELS
GLOBAL UTILIZATIONS OF PRIMARY ENERGY
The overall growth and developments in modern era have created an opportunity for a steady change in the utilization of Bio-energy. In May 2018, the MNRE amended the incumbent policy for Biomass. This policy showed the CFA for projects using Biomass like: agriculturebased industrial residues, wood produced through energy plantations, bagasse, crop residues, wood waste generated from industrial operations, and weeds. Under the purview of this policy, the CFA will be offered to the projects at the rate of INR 2.5 million per MW for bagasse cogeneration and INR 5 million per MW for non-bagasse cogeneration.
The MNRE also announced a memorandum in November 2018 considering the continuation of the concessional customs duty certificate to set up projects for the production of energy using nonconventional materials such as Biowaste, agricultural, forestry, poultry litter, agro-industrial, industrial, municipal, and urban wastes. The union government in recent times established the National policy on Bio-fuels in August 2018. A program to encourage the promotion of Biomass-based cogeneration in sugar mills and other industries was also launched in May 2018.
The National Biogas and manure management program was unveiled in 2012–2013. The main focus was to offer a clean gaseous fuel for cooking, where the remaining slurry was organic Bio-manure which is rich in nitrogen, phosphorus, and potassium. Further, 47.5 lakh cumulative Biogas plants were completed in 2014, and increased to 49.8 lakh. During 2017–2018, the target was to establish 1.10 lakh Biogas
A program to encourage the promotion of Biomassbased cogeneration in sugar mills and other industries was also launched in May 2018
plants but resulted in 0.15 lakh. In this way, the cost of refilling the gas cylinders with liquefied petroleum gas (LPG) was greatly reduced. Likewise, tons timbers were protected from being axed, as wood is traditionally used as a fuel in rural and semi-urban households. Biogas is a viable alternative to traditional cooking fuels. The scheme generated employment for almost 300 skilled laborers for setting up the Biogas plants.
By 30th of May 2018, the Ministry had issued guiding principles for the implementation of the NNBOMP during the period 2017–2018 to 2019–2020. The program deals with the energy demand through the consumption of solar lanterns, solar streetlights, solar home lights, and solar pumps. The plan intended to reach 118 MWp of off-grid PV capacity by 2020. The sanctioning target proposed outlay was 50 MWp by 2017–2018 and 68 MWp by 2019–2020. The total estimated cost amounted to INR 1895 crore and the ministry wanted to support 637 crores by its central economic assistance. Solar power plants with a 25 KWp size were promoted in those areas where grid power does not reach households or is not reliable. Normally, the public service institutions, schools, panchayats, hostels, as well as police stations will benefit from this scheme. Solar study lamps were also comprised a component in the program. Almost 30 per cent of financial assistance was given to solar power plants. Every student should bear 15 per cent of the cost of lamp, and the ministry wanted to support the remaining 85 per cent. Lantern and lamps of more than 40 Lakhs home lights of 16.72 lakhs number, street lights of 6.40 lakhs, solar pumps of 1.96 lakhs and 187.99 MWp stand-alone equipments were installed.
Sources of energy are often considered as one of the most important elements for socioeconomic development of a country. The growing economic conditions over the past few decades have mainly been witnessed among the developing countries and it has caused an accelerated development in energy consumption. It is expected to grow vastly in days to come. Significant forecast of future power consumption in days to come is important for the investigation of sufficient environmental and economic policies in the same way, viewpoint on future power consumption helps to decide future investments in renewable energy.
The supplies of energy and security have not only grown up the essential issues for the development of human society but also for their worldwide political and economic patterns. As such, proper measurement of global consumptions may help us to understand the present, past and future consumptions of power.
CONTRIBUTIONS OF RENEWABLE SOURCES & ENERGY GENERATIONS
POSSIBLE CONSUMPTIONS DURING 1990 – 2040
Despite, we have achieved speedy and considerable economic growth, the country is still facing scarce of energy. Country’s strong economic growth is increasing the demand for energy and more energy sources are needed to fulfill the demand. Meanwhile, due to the growing population and environmental deterioration, the country faces the challenge of sustainable development. The gap between demand and supply of power is supposed to grow in days to come.
The average power generation in the country has grown exponentially. Between 2014–2015 and 2015–2016, it achieved 1110.458 BU and 1173.603 BU, respectively. The same was recorded with 1241.689 BU and 1306.614 BU during 2015–2016 and 1306.614 BU from 2016–2017 and 2017–2018, respectively. The rise accounted for 6.47 per cent in 2015–2016 and 24.88 per cent in 2017–2018, respectively. Remarkably, the energy generation from conventional sources reached 811.143 BU and from renewable sources 9.860 BU in 2010 compared to 1.206.306 BU and 88.945 BU in 2017, respectively. It is observed that the price of electricity production using renewable technologies is higher than that for conventional generation technologies, but is likely to fall with increasing experience in the techniques involved. According to the estimation of gross electricity generation from renewable energy based on NITI Aayog Report 2015, the share of renewable power will be 10.2 per cent by 2022, but renewable power technologies contributed a record of 13.4 per cent to the cumulative power production in India as of the 31st of August 2018.
On the other hands, the power ministry report shows that India generated 122.10 TWh and out of the total electricity produced, renewable generated 16.30 TWh as on the 31st of August 2018. According to the India Brand Equity Foundation report, it is anticipated that by the year 2040, around 49 per cent of total electricity will be produced using renewable energy.
Reports suggest that an estimation of an energy consumption of global level basically shows that energy consumption in India is regularly rising and is likely to hold its position even in 2035/2040. Abrupt growth in the energy consumption of the country would push its share of global energy demand to 11 per cent by 2040 from 5 per cent in 2016. The rising economies of the world like: China, India or Brazil have witnessed a process of speedy industrialization. These nations have also have increased their share in the global market. Besides, they are exporting huge volumes of manufactured products to developed countries. Basically demands of energy any country depends of the size and growth of its population. With respect to populations growth our country has been ranked second as of January 2019. The annual growth rate is 1.18 per cent and represents almost 17.74 per cent of the world’s population. This is supposed to have more than 1.383 billion, 1.512 billion, 1.605 billion, 1.658 billion people by the end of 2020, 2030, 2040, and 2050, respectively. As per data, India adds a higher number of people to the world than any other nations every year. Its growth of energy consumption is likely to be the fastest among all major economic players by 2040. As coal meets most of this demand followed by renewable energy, it turns to be the second most significant source of domestic power production, overtaking gas and then oil, by 2020. The demand for renewable in India will have a significant growth of 256 Mtoe in 2040.
RECENT GROWTH & DEVELOPMENT
Our country has conducted a significant journey in renewable energy over the past 4 years. The growing financial structure and technological advancements have helped India in the promotion of renewable energy and diversification of its energy. The nation is now engaged in expanding the use of clean energy sources and has already undertaken several large-scale sustainable energy projects to ascertain a massive growth of green energy.
Our country has multiplied its renewable power capacity in the last 4 years. The cumulative renewable power capacity in 2013–2014 reached 35,500 MW and rose to 70,000 MW in 2017–2018. It stands in the fourth and sixth position regarding the cumulative installed capacity in the wind and solar sector, respectively. Furthermore, its cumulative installed renewable capacity stands in fifth position globally as of the 31st of December 2018. As per the report, the cumulative renewable energy capacity target for 2022 is given as 175 GW. For 2017–2018, the cumulative installed capacity amounted to 70 GW, the capacity under implementation is 15 GW and the tendered capacity was 25 GW. There is tremendous growth in solar power. The cumulative installed solar capacity increased by more than eight times in the last 4 years from 2.630 GW to 22 GW. As of the 31st of December 2018, the installed capacity amounted to 25.2122 GW.
INDIA ATTAINS EMISSION
REDUCTION LEVELS OF 28 PER CENT, AGAINST TARGET OF 35 PER CENT BY 2030
Our country has already attained emission reduction of 28 per cent over 2005 levels as against the target of 35 per cent by 2030, committed in its Nationally Determined Contributions (NDC). It has brought our nation among one of the few countries globally that has kept to its Paris Climate Change (COP21) commitments along with an exponential increase in renewable energy capacity. Taking a view of the pace of growth in the energy sector, India is firm not only to attain, but also to exceed its NDC commitments well within the committed time frame.
These were asserted by the Union Minister of Power and New & Renewable Energy and President of International Solar Alliance, RK Singh, during his keynote address at the ‘INDIA-ISA Energy Transition Dialogue 2021’. The program was organized by the International Solar Alliance (ISA) and the Union Ministry of New and Renewable Energy (MNRE), Government of India in New Delhi on August 24, 2021. While, the opening remarks were passed by Secretary, MNRE, Indu Shekhar Chaturvedi, the context setting was conducted by the Director General, ISA, Dr. Ajay Mathur, during this inaugural session. “The Government of India has enacted favorable polices and regulations to boost the clean energy sector from time-to-time. India has been aggressively pushing for energy efficiency improvements for the past two decades through a combination of innovative market mechanisms and business models, institutional strengthening and capacity building, as well as demand creation measures”, the Union Minister said. He further added that the key is to
allow the regulatory and policy support to keep the sector afloat till the supply-side strengthens, technology develops and competitive market takes root resulting in a fall in prices, and the industry becomes self-sustainable. He said that it is anticipated that by 2050, 80-85 per cent of India’s overall power capacity will come from renewable. India has already touched 200 GW of peak demand. The demand had crossed what it was during pre-COVID time
and it is expected that electricity demand will continue to rise. This gives us the space for adding more renewable capacity, but it will call for power system flexibility and introduction of various storage technologies.
It is a matter of immense pleasure and pride for the Indian Power Sector to have achieved the coveted milestone of 100 GW of installed Renewable Energy Capacity. While 100 GW of capacity has been installed and operationalized, 50 GW of additional capacity is under installation and another 27 GW is under tendering process as on July 31, 2021, 38.5 per cent of India’s installed power generation capacity is based on clean renewable energy sources and with this pace we will reach the target of 40 per cent by 2023. At present our country stands at 4th position in the world in terms of installed RE capacity 5th in Solar and 4th in Wind energy capacity. He further said that under the visionary leadership of Prime Minister, Narendra Modi, the Government of India plans to continue this momentum in the clean energy sector by systematically scaling up its targets to install 450 GW of renewable energy capacity by 2030 from its existing
target of 175 GW by 2022.The 100 GW achievement not only marks an important milestone in India’s journey towards its target of 450 GW by 2030, but also builds upon the confidence to achieve more and be among the leading countries embarking on a path towards energy transition globally. The minister said that active private sector continued to strengthen the supply side through capacity building exercises. The story is expected to be repeated in the years to come with advanced technologies, such as energy storage and green hydrogen. Dedicated Green Energy Corridors initiated by the MNRE have made it easier for renewable energy developers to avail grid connectivity and evacuate up to 40,000 MW of large-scale renewable energy from renewable energy-rich parts of India. Going ahead, similar initiatives would be employed to push for adoption and installation of floating solar power plants in water bodies and reservoirs across the country. India, as a global champion for the Energy Transition, is taking the lead to support a global energy transition that is just, inclusive, and equitable and it will be pleasure to discuss with other countries as to what paths they are adopting for decarbonization.
The minister urged countries from around the world to have discussions on core issues and embark upon ways to facilitate realistic energy transition and high renewable energy penetration. “I hope this dialogue kicks-off an exchange of best practices between India and ISA Member countries, while also outlining the future roadmap as a collective step towards achieving climate goals. I hope this makes the road to transition easier for many countries where many communities still rely on fossil fuels and need national decarbonization strategies to transition smoothly”, the Minister added. The Dialogue featured two panel discussions and a presentation by the Ministry of New and Renewable Energy (MNRE) on Citizen Centric Energy Transition- India Story. India’s energy transition journey was highlighted in the presentation. The Deputy Director General, International Renewable Energy Agency (IRENA), Gauri Singh, moderated the theme of the first panel discussion - “Addressing grid integration issues to facilitate high renewable energy transition”. On the other hands, the theme of the second panel discussion – ‘Frameworks for accelerating RE’, was moderated by Dr. Amit Jain, the Senior Energy Specialist, World Bank Group. Representatives of ISA member countries, senior government officials Government of India, industry partners, academicians, innovators, researchers and various financial institutions from across the world were among those attended the program. It facilitated interventions between global renewable energy stakeholders to accelerate Energy Transition in ISA Member Countries and enable member countries to re-look at their national strategies for energy transition.
UK WILLING TO COLLABORATE WITH INDIA ON GREEN HYDROGEN
India has already retired 16369 MW of inefficient thermal units till March, 2021, said the Union Minister of Power and Renewable Energy, RK Singh. Singh was talking to the officials during a meeting with Alok Sharma, the COP 26 President on August 17, 2021 in New Delhi. The COP26 President had raised the issue related to phasing out of coal fired power plants. Sharma also stressed on UK’s willingness for collaborating with India on Green Hydrogen. The UK side also requested India’s support for organizing a successful COP26.
Singh also expressed India’s interest in collaborating with the UK on offshore wind. He also stressed on the need of the developed and developing countries to work together for bringing down the cost of storage. He informed the delegation that India is the only G20 country whose actions are in accordance with the NDCs set by them under the Paris Agreement.
As a part of ‘Azadi Ka Amrit Mahotsav’, the Union Ministry of Power had on August 18, 2021 organized an event to issue Energy Saving Certificates (ESC) to the best performing Industrial units. The Secretary, Ministry of Power, Alok Kumar, issued more than 57 lacs Energy Saving Certificates to 349 industrial units as they saved more energy than they had targeted. These units will be able to trade certificates through Power Exchange Portal after a month to those units who could not achieve their targets.
These initiatives will go a long way to make India more energy-efficient, and it will form a replicable model across the globe. Large numbers of industries are taking energy efficiency measures by upgrading their technologies. Kumar outlined the leadership role being played in the energy transition efforts and India, being the only G-20 country that is on the track for below 2 degree rise as per the Paris agreement. Various related industry leaders appreciated the efforts of Union Ministry of Power and assured all possible contribution for making the industrial sector cleaner and efficient During the meeting, discussions were held on the need of increasing storage capacity in view of India’s ambitious target of having 450 GW of installed Renewable Capacity by
in coming years. Ministry of Power has taken several initiatives to enhance energy efficiency of major industrial sectors. The objective is to reduce consumption of fossil fuel, coal, oil and gas thereby leading to low carbon economy. This will not only enhance energy security for India but will also contribute towards climate goals as per the Paris Agreement.
One of the flagship initiatives, known as ‘Perform, Achieve and Trade’ (PAT), was implemented under Cycle II (during 201619) covering 621 large industries from 11 sectors. Bureau of Energy Efficiency that is piloting this initiative completed the verification of energy savings achieved by these industries called as Designated Consumers (DCs). As per the audit reports received by BEE, total energy saving was more than 14 million tonne of oil equivalent (MTOE) which has also avoided 66 million tonnes CO2 emission. This initiative has resulted in energy saving of Rs. 31,445 crores and industries have reported an investment of over Rs. 43,721 crores. In order to incentivise the exemplary performance, Ministry of Power issued 2030.The UK side was invited to participate in the upcoming bids for Green Hydrogen and lithium-ion.
NATIONAL GRID’S INTER-REGIONAL POWER TRANSFER CAPACITY REACHES 110750 MW
Power Grid Corporation of India Limited has commissioned the 765 Kilo Volt (kV) Double Circuit (D/C) Vindhyachal –Varanasi Transmission Line. This has been done by its wholly owned subsidiary PVTSL as per scheduled target. This transmission line corridor shall provide a strong connectivity between Northern Region (NR) and Western Region (WR) and facilitate reliable flow of power, benefitting the overall social and economic system, by enabling reliable flow of power to industries and households in Northern Region, Western Region and the entire country. With the commissioning of this link, the inter-regional power transfer capacity of national grid has enhanced by 4200 MW, taking the total capacity to 110750 MW in the country.
The 190-km long transmission line would transverse tough geographical areas and crosses four rivers Ganga, Gopad, Meyar & Sone. The 92-km portion of this transmission line passes through Madhya Pradesh and the remaining 98-km passes through Uttar Pradesh. This project has been acquired by POWERGRID under Tariff Based Competitive Bidding (TBCB). Recently, POWERGRID through its subsidiary, POWERGRID Jawaharpur Firozabad Transmission Ltd, has commissioned Transmission system for Evacuation of Power from 2x660 MW Jawaharpur Thermal Power Project and constructed 400 kV Sub-station at Firozabad along with associated transmission lines. The POWERGRID presently has 172,154 ckm of transmission lines, 262 Sub-stations and more than 446,940 MVA of transformation capacity. With the adoption of latest technological tools and techniques, enhanced use of automation and digital solutions, POWERGRID has been able to maintain average transmission system availability over 99 per cent.
Energy Saving Certificates (ESCerts) to those units who exceeded their targets. The PAT scheme as a market-based mechanism, under National Mission for Enhanced Energy Efficiency (NMEEE) is to enhance cost effectiveness through certification of excess energy savings in energy intensive industries that can be traded. The scheme seeks to reduce the specific energy consumption (SEC). Under this scheme, an Energy Audit is done to verify the baseline data (current level of efficiency) and thereafter energy saving targets are given.
Energy Saving Certificates (ESCerts) are issued to those plants that have achieved excess energy savings over their targets. Units that are unable to meet the targets either through their own actions or through purchase of ESCerts are liable to financial penalty under the Energy Conservation Act, 2001. After Issuance of ESCerts DCs are required to register with the Registry as Eligible Entity before registering with the power exchanges for trading of ESCerts and book keeping of ESCerts. The Trading of ESCerts takes place on the Power Exchange platform. Noticeably, ‘Azadi Ka Amrit Mahotsav’ is the Union Government's initiative to mark 75 years of India's Independence. The idea behind the Mahotsav that starts the celebration of 75 years of India's Independence 75 weeks before August 15, 2022 and extends up to Independence Day 2023 is to showcase accomplishments since 1947 so as to instill a sense of pride and to create a vision for 'India@2047'. The commemorations will include 75 events for 75 weeks with one prominent event every week. The Government of India has set up the Bureau of Energy Efficiency (BEE) on 1st March 2002 under the provision of the Energy Conservation Act, 2001. The mission of the Bureau of Energy Efficiency is to assist in developing policies and strategies with a thrust on self-regulation and market principles with the primary objective of reducing energy intensity of the Indian economy within the overall framework of the Energy Conservation Act, 2001. This will be achieved with active participation of all stakeholders, resulting in accelerated and sustained adoption of energy efficiency in all sectors.
