“The world agrees that lifestyle plays a very important role in climate change. I would like to suggest a one-word movement in the context of climate which can become a key basis for one world. This word is LIFE — Lifestyle for Environment. It can become a mass movement for an environmentally conscious lifestyle.” PM Shri Modi at COP 26, Nov 2021.
INTRODUCTION
1. PM Shri Modi made a commitment of five nectar elements ‘Panchamrit’ at Global Climate Change meet attended by all Global leaders (except Russia & China) at COP 26, Glasgow. India will increase its non-fossil fuel energy capacity to 500 GW by 2030 (increasing from earlier target of 450 GW), with 50% of Energy requirements met from Renewable sources by then. India will reduce its total carbon projection till 2030 by 1 Billion Tonnes (BT). India will lessen its carbon intensity by 45% by 2030 (with respect to 2005 level). India will become a net-(carbon) zero country by 2070. These ‘Panchamrits’ will be an unprecedented contribution of India to climate action.
2. The above commitments, for implementation, will require review of background issues & constraints with some recommendations as under.
GLOBAL WARMING & NEED TO CONTAIN GLOBAL EMISSIONS
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8. The target set by PM (500 GW by 2030) capacity level for non fossil fuel, and RE contribution being more than 50% from non fossil fuels, it appears, can be achieved. The average emission factor is likely to reduce to 0.511 kg CO2 / kWh by the year 2029-30 from 0.705 kg / kWh in the year 2017-18 i.e. 29.61% reduction.
9. Presently the indigenous manufacturing capacity annually for solar cells/ modules is hardly 5000 MW to 7,000 MW capacity. The PLI initiatives announced do not cover full capacity additions against annual requirement of 35,000 MW (including requirements for Green Hydrogen production) to meet target of 2030. Also focus is on small scale production by large no of firms. Hence there is a case for the Govt to invite major FDI, either 100% or in JV with Indian PSUs like BHEL etc. to build ‘Scale” which can bring down costs to meet global competition and facilitate indigenous R&D. This is besides Reliance Jio announcement to enter solar projects/indigenous manufacture of cells in a big way. It is important that Aatma Nirbhar initiatives in solar cell manufacture are hastened to avoid set back to solar program in India.
10. As solar generation is in day only, some Lithium ion Battery storage back up will be called for at mini, regional and national grid levels, adding to costs. China has been cornering strategic reserves of Lithium. Alternatives to Lithium may have to be pursued and India may need to support some R&D with firms globally in this regard. In seeking alternative approaches many feasible solutions should be tried instead of confining to one option. Besides use of more pumped storage Hydel plants, compressed air storage etc may have to be considered to increase mechanical inertia in storage backup. There is also need to bring in a PLI initiative on Power Electronic devices manufacture as Ministry of Electronics focus in PLI has been on Mobiles, Computers, Light electronics/components.
11. Due to the intermittent/ variable nature of renewable power, there is need for introduction of “Smart Grids” from Micro to National Grid level, to allow balancing with base load thermal power, to ensure Power stability. While some small pilot projects are under implementation, the work has to be progressed on priority at full scale level.
12. It is more important for Coal India & the Coal sector/ NTPC to invest substantially in Clean Coal / Carbon Capture, Storage & Utilization (CCSU) technologies in coal based thermal generation to extend use of India’s coal reserves. There is a case for Integrated Combined Cycle plants, generating Power and Syn Gas that can be used for fertilizer/chemical production or in Direct Reduction Steel furnaces. The Govt plans for 100 MT coal gasification with gas grid by 2030 to facilitate small Direct Steel Reduction units is welcome. JSPL has set up a 2.3 MT unit at Angul with coal gasification.
13. Ministry of Power has brought out a good scheme KUSUM for solar pumps, stand alone or grid connected installations for farmers, with centre/ state subsidy & easy credit for balance. The farmers may be given attractive feed in tariff for their surplus power, to incentivize reduced consumption. This will considerably help in reducing AT&C losses and sickness in State Electricity Board (SEB’s). The Distribution reforms through recent Electricity Act Amendment may be expedited. An advance deposit scheme (1 or 2 months) may be mandated for consumers against supplies from Discoms and the later for their bulk supply from generation companies. Discom overdues now have reached Rs one lakh Cr level.
14. One of the constraints in boosting Solar Generation is availability of Land. In this context, there is a case to encourage Roof Top Solar Generation in a very big way. Presently no. of hurdles is raised by Discoms in feed in tariff. State Govts may bring in supportive regulations to facilitate Roof Tops and any losses of Discoms suffer may be compensated by the Govt. Discoms will have to play a facilitator role in aggregating solar power.
15. Before solar cells became popular, (with prices coming down), projects were being developed globally (USA, Israel etc.) using Concentrated Solar Thermal Technology (CST) for heating water for industrial applications etc. The potential of above technology may be re-examined.
Issues & Challenges in Wind Energy Growth in India
17. The country currently has the fourth highest wind installed capacity in the world (39.87 GW as on 30th Sep 2021) which is about 66% of the wind capacity target of 60 GW under 175 GW RE target by 2022. The country has a manufacturing base of 10,000+ MW per annum, now suffering for want of orders, with all focus now shifting to solar energy.
18. The challenges to 140 GW level of wind energy contribution in 2030 have to be addressed in the context of only around 4.5 GW materializing in 5 years of reverse auction regime (since Feb 2017) when out of 28.1 GW bids 19.7 GW were finalized only for the highest PLF states to keep below Rs. 3 per Kwh. States like MP, Rajasthan and Maharashtra were unable to compete despite land availability. To reach a minimum 15/20 GW annual capacity addition, projects will need to be distributed all round the windy states. It is there for recommended the reverse auction scheme is replaced by the competitive bidding process, allowing tariff variations keeping in view difference in PLF (35-47%) in states. Discoms will have to be mandated to procure a stipulated percentage of wind energy in their total procurement. A close coordination with state govts will help. During evening peak between 5:00 to 8:00 PM, wind energy contributes substantial energy; there is need for introducing “time of the day” concept in net metering tariff.
19. There is need to give more importance to wind energy now, in the immediate few years ahead, allowing time for Aatma Nirbhar initiatives in annual rate of Solar Cell manufacture to pick up to meet country’s 2030 target. It is recommended the share of wind energy in 2030 target may be increased to take advantage of existing indigenous manufacturing base.
20. To give momentum to the wind energy build up, it is essential that the states are associated with regard to formulation of policies, incentives, norms and regulations from the very beginning.
21. There is also need to encourage offshore wind energy projects (2-4 GW) especially in view of higher capacity utilization factor. Nearer ports such clusters can also help in production of green Hydrogen (as in Spain) for Export.
22. The GST rate on wind turbine has been increased from 5% to 12% (1st Oct 21) which has become an additional 7% cost in the wind turbine as there is no pass through. A 5% GST should be introduced on sale of Renewable Power. This will complete the loop as currently there is no GST cost pass through.
Transportation: Hastening Electric Mobility
23. It is nice to see production & demand for Electric two wheelers picking up. Govt has floated global tender for 5400 Electric buses. Diesel / Petrol - Private cars / SUVs should attract higher taxes, to help shift to Electrics. Extensive Charging Infrastructure must be facilitated. Battery swapping concept can help reduce upfront payment by consumers. Govt has done well to introduce substantial PLI initiatives for Batteries and components. The incentives for Electrics must focus on most polluted cities.
24. It may be pointed out that support to Electric Mobility in Urban areas emanated from pollution mitigation angle. Main gains, from carbon emission angle, will result, when Electric Mobility in Highways are encouraged, with percentage of renewable contribution in power generation mix progressively increasing. MoRTH may consider some pilot projects with Trolley bus type overhead electrification of some high density Freight/Passenger high ways. Germany is considering above in some stretches in its Auto Bahn network. Sweden is experimenting stretches, which will permit charging on the run.
25. There is very strong case for progressive, planned compulsory shift of medium distance Heavy Freight on Roads to Railways. Economic Survey Budget 2019 stresses shift from Road freight to Railways to increase the share from 29% now to 45% by 2030. Railways consume only one sixth of energy compared to roads in transportation. Further, with 100% electrification of Railways and RE share in Power generation going up to 50% by 2030, there will be further reduction in carbon emissions. NITI Aayog has advocated focus on multimodal transport in India. European Union is considering higher tolls on road traffic for shift towards Railways.
Reducing Industrial Emissions: Emerging role of Hydrogen
27. Presently cost of production of Green hydrogen (e.g. produced by Electrolysis of water, Electrolyzer supplied with Green power like Solar power) is around $5 to $6 per kg but expected to go down to 1or 2 dollars/kg with scaling up (2030). Cost of production of Grey Hydrogen (produced from use of Natural gas/ LNG or through Coal route with different degrees of carbon emission) could be three times cheaper. Removing carbon emissions from Grey hydrogen process by Carbon Capture, Storage & Utilization (CCSU) could result in Blue hydrogen classification but process comes with attendant complexities and costs.
Planning for Hydrogen Production in India
28. IOC has planned to set up a 40 MW electrolyzer at Mathura refinery and a 15 MW unit at Panipat unit & is targeting to produce 70,000 tonnes a year of green hydrogen by 2030. NTPC is experimenting small prototype electrolyzer at Simhadri and also Carbon Capture Storage from flue gases at Vindhyachal power plant to produce methane. Scaling up this methane production unit in NTPC thermal plants will help in production of large quantities methane (90% presently imported) required for the Indian industry. It can also help in petrol blending later, if ethanol production through sugarcane route is affected by water scarcity due to climate change. The main gain will be reduction of carbon emission in thermal plant substantially enabling longer use of indigenous coal. Development of small electrolyzers is also important, when hydrogen is introduced in the highways as distribution costs will be high when hydrogen is distributed from large plants, far away Coal India, GAIL etc. have also announced plans for green Hydrogen.
29. L&T has entered into a MoU with HydrogenPro AS, a Norway-based leading Electrolyzer technology company. MoP has also brought out recently some guide lines waiving interstate transmission charges for Green Hydrogen/ Ammonia production for projects setup before 2025. Govt has announced overall plans for India to setup annual capacity of 50 MT Hydrogen with 10 MT planned for export (Japan South Korea etc.).
30. Considering financial constraints in India and the high cost of Green Hydrogen in the initial stages, production of green Hydrogen may be restricted to exports only. With 50 Kg hydrogen requirement/ tonne of steel production, Hydrogen @ 6 dollar/kg or Rs 450/Kg, Hydrogen cost will amount to Rs22,500/t of steel. This will lead to 20% increase in price.
31. The coal or biomass pathway to Hydrogen is in nascent / experimental stage and special gasification with Carbon Capture Storage & Utilization technologies will have to be developed, appropriate to end products besides Hydrogen, by use of Syn gas. Compared to green Hydrogen costing Rs500 to 600 per kg (zero emission), Steam Methane Reformation costing 200-300/ kg (emission 8.07 kg CO2 per kg of Hydrogen), Methane Cracking (new process) costing Rs200/kg (emission 1.67 kg CO2 per kg of Hydrogen), Coal pathway is estimated to cost Rs120/kg (21 kg CO2 per kg) and biomass pathway Rs120/kg (net carbon neutral).
32. The Aatma Nirbhar initiative for coal and biomass pathway will require support from Govt in a big way. A technical committee has also been formed by the Govt to go into the issue. It is recommended a PSU consortium with Coal India, NTPC, BHEL, Steel/ Fertilizer/ Chemical PSU’s with R&D support from Dept of Science & Technology & CSIR laboratories be formed to progress the issue from design/ prototype model to full scale production.
33. Bulk of the production of Hydrogen, initially, can be through the Grey route including using gas, indigenous coal and biomass. The low cost grey Hydrogen can be used for initial projects in steel cement, chemical, fertilizer and refinery sectors to reduce carbon emission in big way and help Indian industry learn & stabilize technology to keep cost down. Fossil fuels can be used to produce electricity to run electrolyzers for Green Hydrogen, enabling quick building scale of manufacture for electrolyzers thereby bringing down cost.
34. On the lines of new European Union policy initiatives (R&D for Coal & Steel, European Clean Steel Partnership with funding of Euro 1 billion by industry and Euro 700 million by EU, further funding for scaling up from R&D to production stage), there will be need for the Govt to form partnership with different PSUs/industry in initial stages. EU is also bringing a cross border adjustment tax for protection against imported steel not having gone through the green route. EU is also considering public procurement policy to provide a market for high cost green products. India needs to consider similar initiatives. India’s focus now onwards should be on costlier value added steel when using hydrogen.
35. As Power & Transportation routes have alternatives in use of RE, in initial years, Hydrogen production can be focused on the Industrial sector and heavy duty trucks on the road. Hydrogen is best used to power hard-to-electrify sectors.
Focusing on Afforestation/ Reforestation towards creation of Carbon Sinks
36. Increased funding for afforestation to create 1 BT carbon sink by 2030 will not only meet Climate Change commitment but also provide for generation of jobs in rural/ tribal areas. Funding estimates vary from Rs.60,000 Cr to 1 Lakh Cr annually. MoEF will have to establish cost on basis of site specific projects. Funding will have to be supported by raising rates for compensatory afforestation (CAMPA) fund, by carbon tax funds (cess on coal of Rs 400/T already exists) & external assistance. Availability of land will also be a major constraint. Integration with soil, water conservation and watershed improvements will be essential. To give momentum, it is important to have a participatory and incentivising approach with stake holders/ local population extending joint forestry/ social forestry concepts. State Govts support is essential.
37. In raising biomass for carbon capture, it may be ensured that the species mix, spacing and management models are in consonance with the ecology of the site, the interests of biodiversity conservation, and support to livelihoods and ecological security of local communities.
38. While Govt has given some priority to timber production in above thrust, need for focusing on biomass/ fuel wood/ pelletization etc. is advocated considering depletion of fossil fuel/coal resources. Agro-forestry, biomass production, urban forestry and concentrated forestry around environmental hot spots are specially recommended. Degraded/ waste land reclamation may be intensified.
39. It would however appear that Agro-forestry, urban tree cover & plantation coverage will not be taken as forest cover under UNFCCC interpretation. This issue will need to be pursued. National Highways (Green corridors), Railways, PSU’s, Corporates may substantially contribute to tree cover.
Addressing India’s Water Security Challenges under Climate Change
40. Out of utilizable water potential of around 700 BCMs annually, India has built/building storage to a level of 290 BCM only so far through small, medium, large storage dams. With 450 BCM storage potential, there is very urgent need, to build another 150 BCMs storage in next 15 years, to stave off water crisis due to Climate Change. The multipurpose storage dams, besides flood control and release of water for irrigation etc. also produce more hydro electric
41. Progress of Hydro projects in the past have suffered extra ordinary delays on account of agitations by foreign funded activists, Relief and Rehabilitation (R&R) issues, land acquisition problems, environmental and forest clearances, law and order issues, interstate accords for sharing of waters etc. With a liberal R&R intervention and monitoring of other issues above, there is a need to expedite Hydro projects. It is important to focus on North East Brahmaputra projects (MW) - Tawang 1(600), Tawang 2 (800), Kolai (1200), Etalin (3097), Subansiri Lower (2000), Lower Siang (2700), Dibang (2880), Demwe Lower
(1750), Naying (1000). International border projects Santosh/ Manas with Bhutan and Pancheshwar in Nepal will need to be followed up. Ground water recharge measures are also important. More desalination plants will have to be setup in coastal regions.
Reducing Agricultural emissions: Building Sustainable / Resilient Agriculture in context of climate change
42. With increasing needs of food security, increased agricultural production & livestock management brings in attendant issues of increased emissions (methane etc). The agriculture sector in the year 2016, emitted 4,07,821 Gg of CO2, which amounted to around 14% of the emissions of India for that year - Break up: 54.6% - enteric fermentation in cattle, 19.07% - agricultural soils, 17.49%- rice cultivation, 6.68%- manure management, 2.17%- burning of crop residues.
43. Improving soil health addressing distortions in NPK ratio, low carbon content in soil, proper pesticide management, promoting crops that are salinitytolerant, encouraging water conservation techniques e.g. use of micro/ drip irrigation etc., making good quality seeds affordable, developing bio-fortified cereals are important areas to be pursued.
44. There is need to introduce high yield crops, climate resilient low water requiring crops etc. There are discussions on Meat alternatives, reduced emissions from Agricultural equipment, Methane Inhibitors, Anaerobic manure processing, support to Bio Engineering etc. There is a case for setting up in a big way Bio digesters in all villages to treat manure/ agricultural residues, to reduce methane emission by 50-70%. Reducing GHG emissions from rice growing ecologies e.g. direct seeding of rice with aerobic rice varieties and alternate wetting & drying; rice cultivars with low CH4 emitting potential, midseason drainage and real-time Nitrogen management are important initiatives.
45. Half of the potential reduction could be achieved cost-effectively by efficiently utilizing fertilizers, adopting zero-tillage (propagated in USA to save fuel emission from mechanization) and managing water in rice cultivation. System of Rice Intensification (SRI) cultivation of rice leading to higher yields has been experimented successfully in Cauvery delta. Organic farming currently covers only 2.8 Mha — or two per cent of India’s net sown area of 140 Mha. Crop residue burning in North India is a serious pollution issue and needs to be tackle by incentivization for ploughing stock into soil.
46. Sustainable agriculture is far from mainstream in India, with only 5 (crop rotation; agro-forestry; rainwater harvesting; mulching and precision) Sustainable Agriculture Practices and Systems (SAPS) scaling beyond 5 per cent of the net sown area.
47. Reducing emissions in livestock through feed management - increase in quality green fodder can decrease methane production by 5 to 7%; increase in concentrate can reduce methane emission by 15–32%; increasing dietary fat content- A unit percent increase of dietary fat can reduce enteric methane emissions by 4 to 5%. Promotion of feed supplements, methane Inhibitorspotential to reduce methane production up to 50% in ruminants.
48. Climate-Resilient Agriculture (CRA) is an approach that includes sustainably using existing natural resources through crop and livestock production systems to achieve long-term higher productivity and farm incomes under climate variabilities.
49. Scaling up of Climate Resilient technologies e.g. Short duration drought tolerant cultivars of soybean (JS 9305/9560), onion (Phule Samarth), chickpea (Digvijay), Intercropping of pearl millet + moth bean (2:1) are important.
50. Bringing behavioral changes in large number of marginal farmers with low land holdings will require considerable education and motivation. Farmers will need to be incentivized for diversification of crops, adapting to new hybrids, changing practices and their income protected during transition. Performance Linked Incentives (PLI) schemes for agriculture will have to be introduced, keeping in view large no of marginal farmers. Pradhan Mantri Fasal Bima Yojna (PMFB) will need to be strengthening.
51. There is urgent need to undertake diversification of crops in the Punjab, with ground water depletion reaching alarming levels. Growing sugar cane in water scarce Maharashtra, Karnataka & Tamil Nadu are not sustainable practices A second Green Revolution will need to be introduced in the Eastern Sector, with good water availability, with focus on Rice production, Sugar cane and Ethanol production.
52. Yield can also be increased by growing short duration intermediate crops, to derive full benefit of short rainfall season in Rainfed areas. Compensation to farmers for introducing ecologically useful crops should be arranged. From a national water scarcity perspective export of water intensive rice, sugar will need to be critically analyzed; rather import of rice from neighbor countries can be examined. There is need to evolve climate smart agriculture with focus on policies derived from research conducted over longer periods. Agricultural Research must be funded substantially for developing climate resilient crops.
Contingency planning for Climate Change Impact
54. Continuous population growth negates all benefits of development efforts. Efforts must be made for stricter population control through voluntary acceptance.
55. India can request for large grants & soft loans with low interest rates for its Hydrogen program in this decade. India will, notwithstanding above, will have to press at the UNFCCC for more time for peaking carbon emissions (beyond 2040 but within 2070 target) and demand developed countries to reduce carbon emission in a big way and at faster pace. IPCC Report 2022 urges global emission peaking by 2025, reduction in carbon emission by 43% by 2030 and reduction of methane emission by one third. The developed countries have to contribute in a substantial way.
56. There is need to estimate India’s fund requirements in stages up to 2070. CEEW paper estimates overall requirement of 10.1Trillion dollars from 2020 up to 2070, i.e. annually 200 Billion dollars (Rs15 lakh cr). This is based on a scenario of carbon peaking by 2040/zero emission by 2070. The Power mix for 2070 is based on 7,753 (GW) :-
Hydrogen production will progressively rise to 134 MT by2070. Standard Chartered Bank UK recent report on India’s Climate finance mentions 12.4 Trillion dollar requirement up to 2070.
57. In the background of Govts annual capital funds are of the order of Rs 7.5 lakh Cr only it is advisable that the limited climate resources are focused on reaching level of 500 GW RE, making beginning on both Green & Grey Hydrogen (coal / biomass) production, support experimental hydrogen interventions in industrial sectors-Steel, Cement, Fertilizer, chemicals, Refineries, support carbon emission reduction in coal based generation and afforestation for 2030.
58. Presently funds for Climate Change mitigation measures (8 pillars) are being made within annual Budget but progress has been slow. There is need for separate funding for Climate Change initiatives through non lapsable funds. Raising resources through imposition of carbon tax (green taxonomy) has been planned in developed countries and India will have to introduce carbon taxation (rationalizing adhoc interventions like cess on coal) and carbon pricing (cap & trade) in harmony with international practice.
59. Govt may prescribe minimum lending percentage for green finance and regulators announce guide lines. Allowing Corporates to invest on Climate Change themes, allied to their business with tax breaks (with regulatory oversight) may be one efficient route. Payments to ESG funds, Green bonds by retail investors may be considered for some tax relief. ESG aligned MNC’s may be invited to invest in Indian initiatives.
Key Macro Recommendation
60. There is urgent need for setting up a high level Climate Change mitigation authority to monitor Climate Initiatives 24x7. Close involvement of State Govts is essential.
61. There is need for the Department of Science & Technology and CSIR institutions to earmark some of their existing resources to Climate Change/ R&D initiatives – Clean Coal / CCSU technologies, Hydrogen development especially through the Coal and Biomass route, Reduction in carbon emissions in thermal, steel, cement, refineries, fertilizers etc. Fertilizer & Chemicals through Coal route should also be focused. Coal India, NTPC and other central PSU’s in different industrial sectors must join in these efforts for building prototypes and commercialization.
62. India should strive to progressively intensify more on knowledge building initiatives, R&D etc. so that this not only enables the GDP to rise at a faster pace but also help in reducing carbon intensity in our GDP. India needs to transit towards knowledge economy faster.
63. Message of PM at COP26 for adapting one’s Life style changes in harmony with Environment will need to be spread countrywide. It is important for individuals to reduce their needs and wants and consumption levels.
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