INDIA’S MARCH TOWARDS RENEWABLES

Scope for India–Japan Cooperation in the RE Sphere

The world is undergoing an energy transformation wherein a majority of the countries across the world are recognizing and accepting the need for such a change. This transformation is characterized by renewable energy sources with their promise of extending access to affordable, reliable, and cleaner sources of energy.

INDIA’S ENERGY POLICY FRAMEWORK

A defining moment in India’s renewable energy came with the first National Action Plan on Climate Change (NAPCC) which outlined India’s existing and future policies and programmes directed towards climate change mitigation and adaptation. The plan outlines ‘Eight National Missions’, and out of these the National Solar Mission directly influences renewable energy.

The recent Draft National Electricity Policy by NITI Aayog states that by 2040 a likely capacity of 597–710 GW within renewable energy sector is expected to be achieved. Tariff policy support for financial strengthening of the sector as well as role of state governments and technological advancement has been highlighted by NITI Aayog while charting the future course of renewable energy in the country.

International cooperation has an important role in accelerating renewable energy transition. India has been significantly benefitted from bilateral and multilateral cooperation in the form of soft credit, technical assistance, and capacity building.

JAPAN’S INITIATIVES TOWARDS INDIAN RENEWABLE ENERGY BUILD-UP

Japan and India among other members of the international community have begun to strive towards achieving their path towards a renewable future.

With the turn of the 21st century, Japan–India relations witnessed what has been called the ‘dawn of a new age’. The Tokyo Declaration signed by the Japanese Prime Minister Mr Shinzō Abe and the Indian Prime Minister Shri Narendra Modi in September 2014 envisages the future course for the enhancement of the bilateral relationship. This document recognizes the critical dependence of both the economies on energy imports and the volatility and vulnerability it creates. The Japanese have had success in realizing energy efficiency as well as cutting costs and making business out of it by utilizing technology policy and this can be used in the energy sector, especially in countries like India which are in need for fast evolving low-cost technologies that can also simultaneously aid economic growth. This has led the two countries to affirm strengthening their energy cooperation through Japan–India Energy Dialogue.

The recent Japan–India Energy Dialogue held in New Delhi in 2018 reinstated the resolve to transition towards ‘reliable, clean and economical energy’ as pertinent for economic growth. Further, both countries agreed to initiate discussion on electric vehicles while working together to promote well-functioning energy markets.

Japan International Cooperation Agency (JICA) and India have had a long-standing relationship and one of the prime sectors of investment for Japan in India has been the energy sector. The overview of JICA’s assistance wards the energy sector includes the strengthening of electricity supply, energy efficiency, and conservation. JICA has also had a commitment towards aiding the energy sector in its recipient country. At a glance, by 2015, JICA’s cooperation for power sector in India had contributed about 1.1 trillion Japanese Yen (US$ 11 billion) in finances and 25% of JICA’s total commitment was to India and as a result about 5% of the total generation capacity has been generated wherein JICA has focused on transmission and distribution in recent years, but is now also looking towards strengthening its assistance to generation, including coal-fired power and renewable energy. Moreover around 60 billion Yen has been committed since 2011–15, for 21 subprojects in wind, solar, and small hydro.

It is through JICA’s ODA loan support that Indian Renewable Energy Development Agency (IREDA) has been providing innovative and customized financing to renewable energy projects in various sectors, including solar, wind, small hydro, and cogeneration. Since such projects entail high investment and a gestation period, ‘soft loans’ (with low interest and long repayment period) from JICA have enhanced the viability of such projects.

The example of Andhra Pradesh is one where significant change from the previous situation was achieved due to JICA’s involvement. As a part of the JICA’s ‘Rural Electrification Project,’ the low voltage distribution system in rural Andhra Pradesh has been converted to a high voltage distribution system, through installation of over 69,000 km of high voltage distribution lines and over 195,000 transformer units. The achievements of JICA projects in the energy sector stand with the fact that such projects have contributed about 9.3 GW to India’s total installed capacity of about 245.4 GW, which is about 4% of the total generation capacity as on January 31, 2016. Thus, foundation of a conducive and successful energy collaboration between the two countries has already been laid.

INDIA–JAPAN COLLABORATION: A RENEWABLE ENERGY DRIVEN FUTURE

The International Renewable Energy agency in its report titled, ‘RE-thinking Energy 2017: Accelerating the global energy transformation’ states that globally jobs in solar energy have witnessed fastest growth since 2011 among various renewable energy sectors and that Asia has harnessed maximum, that is, 60% employment potential. Japan, given its expertise and experience, can perform a crucial role in developing competitive PV manufacturing eco-system in India.

The three common pillars upholding the energy policy of India and Japan are:
Energy security, environmental protection and sustainability, and economic development. India’s large labour force and market, Japan’s high technology skills, and the need of both countries to evolve a green economy can provide healthy grounds where both can teach as well as learn from one another. In July 2018, the Japanese Government approved the country’s 5th Strategic Energy Plan while the Ministry of Economy, Trade and Industry (METI) maintained the same energy ratio for 2030 as mentioned in the previous Strategic Energy Plan 2013 and in its long-term energy supply and demand outlook of 2015. One key difference has been the designation of renewables as the ‘main source of power generation’. Renewable energy already had reached a share of 15% by 2017 and it is expected that Japan would meet its target of 20–22% by 2030. On the other hand, India has pledged to have 40% of installed power generation capacity based on clean sources and 175 GW capacity to be installed by 2022. As on May 31, 2019, India’s renewable power installed capacity has already reached over 80 GW. Given the achievements and commitment of both the countries on their respective paths to renewable energy, it becomes evident that collaborative approach will further provide an impetus to accomplish mutual vision of a sustainable society.

Source: Ms Parul Bakshi, Centre for East Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi.