At the recently concluded COP 27 meeting, India reiterated its commitment to achieving net zero emissions by 2070. Recent policy initiatives support that commitment.
The government launched the National Hydrogen Mission in 2021, followed by the green hydrogen and green ammonia policy in February 2022. Such plans focus on reducing the dependence on fossil fuels, providing clean fuel and making India a major exporter of green hydrogen and ammonia.
The Energy Conservation (Amendment) Bill, 2022 (bill), amends the Energy Conservation Act, 2001 (act), with the aim of meeting this target of a net zero economy by 2070. The government may impose the use of non-fossil energy on various industrial sectors, the transport sector and commercial buildings, with a penalty of up to INR1 million for a breach. The bill specifies the standards for energy efficiency of appliances, buildings and industries with a connected load of more than 100 kilowatts and the scope of the act will be expanded to include vehicles and vessels.
The Central Electricity Authority (CEA) announced a draft National Electricity Plan (NEP 2022) in September 2022, under which India plans to boost solar and wind capacity considerably by 333 gigawatts (GW) and 134 GW respectively by 2031-32. By September 2022, India had doubled its 2016 figure of the total installed capacity of renewables, excluding large hydroelectricity schemes, to more than 118 GW, or 29% of total capacity. This included 58 GW of solar and 41 GW of wind energy, with a net capacity of 22.5 GW of solar and 3 GW of onshore wind added between 2020 and 2022.
Renewable energy certificates (REC) promote renewable energy and facilitate renewable purchase obligations (RPO) that require a certain percentage of electricity to be produced from renewable energy sources. The Ministry of Power has increased the RPO rate from 24.6% in 2023 to 43.33% in 2030. India has also introduced an energy storage obligation (ESO), specifying that renewable energy storage will be set at 1% in 2023-2024 with a gradual rise to 4% of the total to be provided by solar and wind by 2029-2030.
Focusing on making the vehicle industry, especially two- and three-wheelers, wholly electric-powered by 2026, India signed the 100% electric vehicle declaration at the COP 26 meeting. Initiatives have been undertaken to use alternative fuels, including the blending of 20% of ethanol into petrol.
India-Japan Clean Energy Partnership:
Acknowledging the efforts undertaken by India in the renewable energy sector, and to achieve the common goal of net zero, Japan entered into the Clean Energy Partnership with India in March 2022. This collaboration was built on the work already carried out by the respective countries in the India-Japan dialogue established in 2007.
Soon after the announcement of this partnership, the Japan International Cooperation Agency signed a grant agreement with the government of India to provide aid of up to JPY4 billion (USD29.5 million) to improve power supplies in the Andaman and Nicobar Islands. These islands are among the most isolated areas in India and therefore rely significantly on non-renewable resources of energy. Under this initiative, renewable energy will be made available, thus helping the islands to transition to cleaner energy sources. This will be made possible by the use of innovative technology, which will allow the transfer of renewable resources to the Andaman and Nicobar Islands in the form of storage batteries.
Another example of India-Japan collaboration in this sector is the renewable energy project partnership between ReNew Power India and Mitsui & Co Limited. This project aims to set up wind farms and solar energy together with battery storage farms across the states of Rajasthan, Karnataka and Maharashtra.
The Clean Energy Partnership between India and Japan is an admirable initiative that has enhanced bilateral co-operation in the development of renewable energy and will continue to do so. It will speed up clean and sustainable energy development while boosting job creation and innovation. As India assumes the presidency of the G20 under the banner of One Earth, One Family, One Future, this relationship underscores the reality that the fight against climate change has to be undertaken, not alone, but by the entire world as one family.
Manish Dembla is a Partner and Srishti Kanwar is a Senior Associate at Kochhar & Co.
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