It is better to under promise and over deliver. India’s clean power industry is finally making good on that dictum.
For several years, the country has fallen well short of the rosy visions proclaimed by its leaders. India should become the first major economy to industrialize without carbonizing, to paraphrase its G20 Sherpa Amitabh Kant. Indian Prime Minister Narendra Modi promised to connect 500 gigawatts (GW) of clean energy by 2030, equivalent to all the generators in France, Germany and Italy put together.
The picture on the ground has, until recently, been very different. A previous aspiration to hit 175GW by 2022 came in 40 percent below target, and had to be fudged to avoid embarrassment. Ill-advised tariffs on solar panels, combined with contractual and political support for fossil fuels and constant changes to the rules of renewable power auctions, made matters worse.
Amid this policy chaos, wind and solar installations fell 19 percent last year to 13GW. That is less than one-third the level that would be needed for the country to be on track for Modi’s 2030 plan. Coal, the dirtiest fuel and the most readily available alternative to renewables in India, took up the slack: Usage by power plants jumped 8.8 percent in the latest fiscal year through March. Plenty of analysts (including me) despaired about the prospects for a reversal.
However, the logjam appears to be breaking. Solar panels and wind turbines have been springing up this year like seedlings after the breaking of a drought. In the first eight months of this year, 18.8GW of new renewable generators were connected, more than in the whole of last year. Over the full year, that figure would increase to about 34GW, the International Energy Agency forecast last week, before nearly doubling to 62GW in 2030. Growth rates are set to overtake China in the second half of the decade and become the most rapid of any major nation, the agency wrote.
The trend looks set to extend into next year as well. Tenders for renewable projects, a useful leading indicator, showed 70GW of announcements and 33GW of awards in the first half of the year alone, according to S&P Global Commodity Insights.
Projects already in train would bring the total to 430GW, Indian Minister of New and Renewable Energy Pralhad Joshi told the Indian parliament in August. All but 76GW of the total is either operating or under construction, sharply reducing the risk this is the same old case of over promising and under delivering.
Solar module manufacturers, encouraged by those counterproductive tariffs, have been busy building out factories. By 2026, the country would be able to assemble 172GW of panels per year, according to Mercom India Research, a renewables consultancy. That is sufficient to meet its own projected needs well into the 2040s, even on a pathway that takes the world to zero emissions.
While the Reserve Bank of India kept rates on hold last week, an easing of its monetary policy stance opens the way to cuts by the end of the year, which should also help: Finance costs have been one of the biggest factors holding back further renewable development.
The implications of all this could be profound. Rich countries and China each account for roughly one-third of the world’s greenhouse pollution, but emissions from the former group have been declining for nearly two decades and China is likely to hit its peak this year. India, as the world’s most populous and fastest-growing major economy, is likely to be the biggest factor pushing up the world’s carbon footprint over the decades ahead.
That might be excusable in moral terms: India has barely contributed to the global climate problem so far, so it could argue that countries that have been spewing carbon dioxide for centuries should cut it some slack. However, such rationalizations do not offer much comfort to farmers in Uttar Pradesh hospitalized or killed by blistering summer heat waves, or software developers in Bengaluru having to depend on water trucks because climate change is drying up the aquifers needed to keep India’s cities watered. What they need are signs that the upward trajectory of emissions is finally heading downward.
We might be on the brink of that future. BloombergNEF estimates that an Indian power sector that was on track to install 506GW of clean energy by the start of 2030 would see its own carbon footprint begin to decline as soon as 2026, putting the world as a whole on track to net zero emissions. Globally, we are already installing enough solar and buying enough electric vehicles to avoid catastrophic climate change. Hitting Modi’s 500GW target would be one more piece of the puzzle to avert that outcome.
Since coal furnaces kicked off Britain’s industrial revolution, it has been an accepted fact that economic growth can only be bought at the cost of environmental damage. With the UK’s last coal-fired power station closing last month, that argument has been looking threadbare — and if India can now get rich without belching carbon, it might be dealt a decisive blow. For other emerging economies hoping to follow India’s development path, that would be a powerful lesson. The centuries-old nexus between pollution and wealth is finally being broken.
David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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