Turbulent Times, Green Goals: Evaluating the Resilience of India’s Net Zero Plan

Amid concerns about the future discourse of the United States administration's policies under Donald Trump's presidency, his major announcements may augur well for India, including those related to oil and gas production, according to Dr Anil Kumar Jain, a key figure in India's energy sector. The former coal secretary has worked earlier with NITI Aayog. He is the current chairperson of Petroleum and Natural Gas Regulatory Board (PNGRB).

In an exclusive interaction with Vaibhav Chowdhary at The Energy Transition Dialogues powered by Ashoka Centre for a People-Centric Energy Transition (ACPET), Anil Jain shared his insights into Net Zero 2070 targets and milestones achieved by the government in popularising solar energy in India.

Dr Jain also touched on the key areas that need working upon for India's smoother and efficient transition into clean energy, while helping us understand India's position in the current geopolitical scenario. Here's an edited excerpt:

Question. What is this Net Zero 2070? How is it related to energy transition?

Answer: "Net zero is a very technical term, which the scientists and top-level energy experts probably know much better. In easier terms, it means that whatever emissions an economy does, it should be able to negate that or reverse that by capturing carbon from the air and plantation of trees, etc."

"It is an agenda to cut down on fossil fuels, to move to energy efficiency, promote renewable energy, adopt electric mobility, get into hydrogen in the industrial processes. So, in very simple terms, the net zero agenda is how to enable all the energy consumers, largely divided energy consumers, into different segments. These segments are industry, transport, buildings, general assorted usages and agriculture."

"Now, in these four end-users, whatever present-day consumption patterns are, they were oblivious, agnostic to whether it came from carbon or came from clean sources. But now the emphasis is that all these four sets of large energy consumers, wherever they may lie, should move to non-fossil-oriented footprints in the way they consume their energy. I think this is something which we need to propagate, and the ordinary man would very well gel with."

Question. With this Net Zero Pathways to the future, is there also a risk of energy security? India is hugely dependent on imports, so if we wish to achieve Net Zero, aren't we more vulnerable to these imports from China and other countries?

Answer: "Energy is a subject of such vital importance to society, corporations, ordinary citizens and everybody. It has been much studied and the more you study, the more PhDs you produce, the more you obfuscate, and you confuse the matter."

"We need to move towards cleaner sources of energy because the climate is a common concern. You've seen the heat waves and the kind of rainfall, it comes in few spurts and then it floods everything. So even, and then cheaper sources of energy."

"The price of solar energy, which was at one point in time, was Rs 17/ kilowatt hour, is today being bid at Rs 2.50/ kilowatt hour. So, we also need to have a nimble energy system that can jettison expensive forms of energy and adopt cheap forms of energy. So that is also a part of the energy security debate."

Question: In the context of energy transition, we might need additional funding. Where is this money going to come from?

Answer: "An equivalent amount of energy to be obtained from a solar plant would probably cost around Rs 12 crores or even Rs 15 crores against thermal asset which would cost you Rs 8-9 crores. Now what happens is that in the case of a solar plant the raw material cost or the fuel cost is virtually nil. But in the case of a coal-fired power plant, it's an expensive proposition to keep getting coal, and the prices will keep rising. In India, we don't factor in the price of emissions into the price of coal," he said.

"Should that happen, it will become even more expensive. The same is the story for an electric vehicle. Now the Olas and the Ubers, they might come as an expensive electric car, but the arbitrage lies in the fuel cost."

"If an electric car runs maybe 200 km (nominal capacity of Ola or an Uber), it is a money saver as compared to a petrol car. So maybe for people like you and me who just come from home to our office and then park the car and take back, it may, in the immediate, be a little more expensive because the real value comes from the running of the car," explained Jain.

Addressing the question on additional funding for energy transition, Jain said, "If you want an ordinary middle-class family to start buying electric cars instead of buying a CNG car, they will need some incentive or some sweetener and you have been seeing that all across the West."

"Governments have been doling out subsidies for the purchase of electric cars. Similarly, for solar assets, the government gives all kinds of sops, including the electricity transmission cost. If a solar plant is I think that the sunset window is closing. But till date, the number of solar power plants that have been installed, to transmit their electricity from the power station, the transmission costs have not been factored in. Those costs have been added to coal-fired electricity.

Shedding light on the resource and funding constraints related to energy transition, Dr Anil Kumar Jain, said, "If the whole economy were to quickly transition to a clean energy agenda, there would be a lot of money required. And if that money comes from our resources, what we use for our developmental needs - rural housing, food and even health and rural development -money will have to be taken from there. This is the dilemma and these are the dialogues between the climate and the COP talks with the governments too."

Question: Do you see some role of private institutions, private banks, investors in filling this gap of financing that is required?

Answer: "As I mentioned that the cost of acquisition of a clean energy technology or an asset is high. But when you take out the net present value over a lifetime, clean energy assets are cheaper. A solar plant or an electric car may initially be expensive, but over time, they will be cheaper as compared to fossil-fuel technologies. Having said that, there is merit in financing it. So even if you are a private bank, private financier, NBFC or you are in a finance department, financing will make a lot of business.

"The debate of private sector versus public sector is mainly in developing countries like India. But it is not the same in Western countries like America. Take the example of Tesla's Elon Musk. In the US, development related to renewable energy, hydrogen, etc, has the significant involvement of the private sector."

He also added that the younger generation is in a favourable situation because they are likely to witness the clean energy transition, which will increase job, opportunities as innovators and investors in this field.

Question: ⁠Considering Mr Jain's expertise on policy making and matters related to policy. There are so many ministries which are looking at driving energy transition as an issue in the Indian context and often they have their individual incentives, vision and targets. I feel there's is no SHARED VISION, so how does one resolve this matter?

Answer: "The Integrated Energy Policy issued, I think, in 2009 gave some signal to all the ministries in the energy domain as to how to move in that direction. There are national commitments as well, which are made when the Prime Minister committed at Glasgow during COP-26 that India will become net-zero in 2070. Now countries have been asked to present their details on how they wish to progress towards the 2030 commitments"

Underlining NITI Aayog's efforts to streamline the energy transition goal across government ministries, Jain said, "NITI Aayog has, as an umbrella, put together different departments. There are chances that government departments have set different targets and have different timelines. For example, the Ministry of Coal could have fixed a different timeline of the plateauing of coal demand, whereas the Ministry of Power could have a different vision. But then, healthy debate: that is what a democracy is all about."

"I don't think it is a matter of great concern, but it has to be debated, discussed in the public domain and course correction needs to be done time to time."

Question: ⁠You talked about Integrated Energy Policy, that came into play in 2008-09, World really has changed in the last decade and half. You think NITI AYOG is looking at reviving this policy which looks at Net Zero as a primary objective?

Answer: "What I do know is that various chapters written for coal, renewable energy, etc, which were the public domain because there was a consultation on them, ministries have independently worked on them. So, what policy measures we need are very well known; there is the issue of technologies. Let's say now we might like to have a very speedy conversion to CNG, we might want to have piped gas into people's homes in place of LPG."

"But it would be difficult to suddenly transition into clean energy, considering our Maharatna companies, which have invested in infrastructure projects for a long time, have set up pipelines, refineries, etc, giving it the direction of clean energy is not easy. National Energy Policy is meant to create an atmosphere and environment, and the best thing is if the markets themselves start giving the right cues."

While shedding light on the government's success on popularising solar energy over the past few decades, he mentioned, "Solar energy generated electricity was sold for Rs 16-17 per unit in 2003-4 or 2007-8, but now it is sold at a lower cost of Rs 2.5 per unit. It indicates that the policy has succeeded."

"The same situation is occurring for electric mobility and hydrogen energy. Hence, we need an integrated policy, and I am sure NITI Ayog is considering it," he said, adding that he is personally unaware about the progress of this idea and the timeline about its execution.

Question: My final question and reason I'm asking you this is because you have written extensively and recently (referring to Dr Jain's article in Mint) on the geopolitics around energy, we all know what is happening, the world is moving in a VUCA environment, there's Russia - Ukraine war, Israel- Palestine conflict and now Trump has resumed as the president of The United States. Do you see these changes as an opportunity or as a challenge for India?

Answer: "Since you mentioned my writings on this subject, my recent article in the Mint precisely responds to this question. See what has happened in the world. Russia, Ukraine, is three years old, and Israeli Gaza business thankfully did not impact the oil production in the Gulf or the oil trade."

"The major event which has now happened is the happening of President Trump, if I may say so. Now, President Trump's recent policy announcements, formal announcements or informal announcements, all augur very well for India."

"Let me pick up three-four strands of his announcements. Firstly, he is a great believer in the US continuing to produce oil and gas as long as the markets can support it. So his famous quote, "drill baby, drill". Now, if that happens, it enhances the availability of oil and gas in the market. We are 87% oil dependent and more than 50% gas dependent. So, you know, we might instead of being a seller's market, it might become a buyer's market. So, until the energy transition happens and we can move away from the intoxication of oil, this is very good news for us."

"The second thing which he has said is that he will lift the embargoes on the setting up of fresh LNG terminals at the same time. The second move, if I may join hands with another move, he has threatened Europe that they should buy more of his oil and gas."

"For us, the Gulf oil and gas is the best opportunity because we don't have to pay much ocean freight, especially after the Houthis' problems in the Red Sea. If we were importing anything from West Africa or from, you know, the North Sea or from the US, and it was coming through the Suez Canal, then ocean freight would have been too much. We should buy oil and gas from the Gulf. If Gulf supplies reduce in Europe because they move towards the US because of Trump, then all the better for us.

"And the third point is that he has walked out of Paris, which is not a very good thing for the world as a whole. But you see, India's commitment to clean energy remains in place because we have 300 clear sunny days."

"Solar is a great way to go. The day the technology costs come down, battery technology costs come down, we won't need coal energy anymore as solar energy will be cheaper." He also mentioned that the pressure on India on international platforms related to carbon emissions will also reduce in such a scenario.

"India has always advocated for the adoption of clean energy based on country-specific needs. So to my mind, geopolitics right now affirms India's position so far, and it augurs well for the future as well," he said.